Johnson & Johnson is a global American pharmaceutical and consumer goods company with headquarters in New Brunswick, New Jersey. The company is listed in the Dow Jones Industrial Average.
1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 28, 1997 COMMISSION FILE NUMBER 1-3215 JOHNSON & JOHNSON (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) <TABLE> <S> <C> NEW JERSEY 22-1024240 (State of (I.R.S. Employer Incorporation) Identification No.) ONE JOHNSON & JOHNSON PLAZA NEW BRUNSWICK, NEW JERSEY 08933 (Address of principal executive offices) (Zip Code) </TABLE> Registrant's telephone number, including area code (732) 524-0400 SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT <TABLE> <CAPTION> TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED ------------------- ----------------------------------------- <S> <C> Common Stock, Par Value $1.00 New York Stock Exchange </TABLE> Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] The aggregate market value of the voting stock held by non-affiliates of the registrant on February 24, 1998 was approximately $97.4 billion. On February 24, 1998 there were 1,346,454,644 shares of Common Stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE <TABLE> <S> <C> Parts I and Portions of registrant's annual report to shareowners for II: fiscal year 1997. Part III: Portions of registrant's proxy statement for its 1998 annual meeting of shareowners. </TABLE> Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K [X] ================================================================================
2 PART I <TABLE> <CAPTION> ITEM PAGE - - ---- ---- <C> <S> <C> l. Business.................................................... 1 General..................................................... 1 Segments of Business; Geographic Areas...................... 1 Consumer.................................................... 1 Pharmaceutical.............................................. 1 Professional................................................ 2 International............................................... 2 Raw Materials............................................... 2 Patents and Trademarks...................................... 2 Seasonality................................................. 2 Competition................................................. 3 Research.................................................... 3 Environment................................................. 3 Regulation.................................................. 3 2. Properties.................................................. 4 3. Legal Proceedings........................................... 4 4. Submission of Matters to a Vote of Security Holders......... 5 Executive Officers of the Registrant........................ 5 PART II 5. Market for the Registrant's Common Equity and Related Shareowner Matters.......................................... 6 6. Selected Financial Data..................................... 6 7. Management's Discussion and Analysis of Financial Condition and Results of Operations................................... 6 8. Financial Statements and Supplementary Data................. 6 9. Disagreements on Accounting and Financial Disclosure........ 6 PART III 10. Directors and Executive Officers of the Registrant.......... 6 11. Executive Compensation...................................... 6 12. Security Ownership of Certain Beneficial Owners and Management.................................................. 6 13. Certain Relationships and Related Transactions.............. 6 PART IV 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K......................................................... 7 Signatures.................................................. 9 Report of Independent Auditors.............................. 11 Consent of Independent Auditors............................. 12 Exhibit Index............................................... 13 </TABLE> Form 10-Q Quarterly Reports Available. A copy of Johnson & Johnson's Quarterly Report on Form 10-Q for any of the first three quarters of the current fiscal year, without exhibits, will be provided without charge to any shareowner submitting a written request to the Secretary at the principal executive offices of the Company or by calling 800-328-9033. Each report will be available about 45 days after the end of the quarter to which it relates.
3 PART I ITEM 1. BUSINESS GENERAL Johnson & Johnson, employing approximately 90,500 people worldwide, is engaged in the manufacture and sale of a broad range of products in the health care field in many countries of the world. Johnson & Johnson's primary interest, both historically and currently, has been in products related to health and well-being. Johnson & Johnson was organized in the State of New Jersey in 1887. Johnson & Johnson is organized on the principles of decentralized management. The Executive Committee of Johnson & Johnson is the principal management group responsible for the operations of Johnson & Johnson. In addition, three Executive Committee members are Chairmen of Group Operating Committees, which are comprised of managers who represent key operations within the group, as well as management expertise in other specialized functions. These Committees oversee and coordinate the activities of domestic and international companies related to each of the Consumer, Pharmaceutical and Professional businesses. Operating management of each company is headed by a Chairman, President, General Manager or Managing Director who reports directly to or through a Company Group Chairman. In line with this policy of decentralization, each international subsidiary is, with some exceptions, managed by citizens of the country where it is located. SEGMENTS OF BUSINESS; GEOGRAPHIC AREAS Johnson & Johnson's worldwide business is divided into three segments: Consumer, Pharmaceutical and Professional. Johnson & Johnson further categorizes its sales and operating profit by major geographic areas of the world. The narrative and tabular (but not the graphic) descriptions of segments and geographic categories captioned "Management's Discussion and Analysis of Results of Operations and Financial Condition -- Segments of Business, Consumer, Pharmaceutical, Professional and Geographic Areas" on pages 29 through 31 and 44 of Johnson & Johnson's Annual Report to Shareowners for fiscal year 1997 are incorporated herein by reference thereto. CONSUMER The Consumer segment's principal products are personal care and hygienic products, including oral and baby care products, first aid products, nonprescription drugs, sanitary protection products and adult skin and hair care products. Major brands include ACT Fluoride Rinse; BAND-AID Brand Adhesive Bandages; CAREFREE Panty Shields; JOHNSON'S CLEAN & CLEAR Skin Care Products; IMODIUM A-D, an antidiarrheal; JOHNSON'S Baby line of products; JOHNSON'S pH 5.5 skin and hair care products; MONISTAT, a remedy for vaginal yeast infections; MYLANTA gastrointestinal products and PEPCID AC Acid Controller from Johnson & Johnson - Merck Consumer Pharmaceuticals Co.; NEUTROGENA skin and hair care products; NICOTROL smoking cessation products; 'o.b.' Tampons; PENATEN and NATUSAN baby care products; PIZ BUIN and SUNDOWN sun care products; REACH toothbrushes; RoC skin care products; SHOWER TO SHOWER personal care products; STAYFREE and SURE & NATURAL sanitary protection products; and the broad family of TYLENOL acetaminophen products. These products are marketed principally to the general public and distributed both to wholesalers and directly to independent and chain retail outlets. PHARMACEUTICAL The Pharmaceutical segment's principal worldwide franchises are in the allergy, antibacterial, antifungal, antianemia, central nervous system, contraceptive, dermatology, gastrointestinal, and pain management fields. These products are distributed both directly and through wholesalers for use by health care professionals and the general public. Prescription drugs include DURAGESIC, a transdermal patch for chronic pain; EPREX (sold in the U.S. under the trademark PROCRIT), a biotechnology derived version of the human hormone erythropoietin, which stimulates red blood cell production; ERGAMISOL, a colon cancer drug; FLOXIN
4 and LEVAQUIN, both antibacterials; HISMANAL, the once-a-day less sedating antihistamine; IMODIUM, an antidiarrheal; LEUSTATIN, for hairy cell leukemia; MOTILIUM, a gastrointestinal mobilizer; NIZORAL, SPORANOX and TERAZOL, antifungals; ORTHOCLONE OKT-3, for reversing the rejection of kidney, heart and liver transplants; ORTHO-NOVUM group of oral contraceptives; PREPULSID (sold in the U.S. under the trademark PROPULSID), a gastrointestinal prokinetic; RETIN-A, a dermatological cream for acne; RENOVA, a dermatological cream for photo aging; RISPERDAL, an antipsychotic drug; and ULTRAM, a centrally acting prescription analgesic for moderate to moderately severe pain. PROFESSIONAL The Professional segment includes suture and mechanical wound closure products, minimally invasive surgical instruments, diagnostic products, cardiology products, medical equipment and devices, disposable contact lenses, surgical instruments, joint replacements and products for wound management and infection prevention. These products are used principally in the professional fields by physicians, nurses, therapists, hospitals, diagnostic laboratories and clinics. Distribution to these markets is done both directly and through surgical supply and other dealers. INTERNATIONAL The international business of Johnson & Johnson is conducted by subsidiaries manufacturing in 35 countries outside the United States and selling in over 175 countries throughout the world. The products made and sold in the international business include many of those described above under "Business -- Consumer, Pharmaceutical and Professional." However, the principal markets, products and methods of distribution in the international business vary with the country and the culture. The products sold in the international business include not only those which were developed in the United States but also those which were developed by subsidiaries abroad. Investments and activities in some countries outside the United States are subject to higher risks than comparable domestic activities because the investment and commercial climate is influenced by restrictive economic policies and political uncertainties. RAW MATERIALS Raw materials essential to Johnson & Johnson's business are generally readily available from multiple sources. PATENTS AND TRADEMARKS Johnson & Johnson has made a practice of obtaining patent protection on its products and processes where possible. Johnson & Johnson owns or is licensed under a number of patents relating to its products and manufacturing processes, which in the aggregate are believed to be of material importance in the operation of its business. However, it is believed that no single patent or related group of patents is material in relation to Johnson & Johnson as a whole. Johnson & Johnson has made a practice of selling its products under trademarks and of obtaining protection for these trademarks by all available means. Johnson & Johnson's trademarks are protected by registration in the United States and other countries where its products are marketed. Johnson & Johnson considers these trademarks in the aggregate to be of material importance in the operation of its business. SEASONALITY Worldwide sales do not reflect any significant degree of seasonality; however spending has been heavier in the fourth quarter of each year than in other quarters. This reflects increased spending decisions, principally for advertising and research grants. 2
5 COMPETITION In all its product lines, Johnson & Johnson companies compete with companies both large and small, located in the United States and abroad. Competition is strong in all lines without regard to the number and size of the competing companies involved. Competition in research, involving the development of new products and processes and the improvement of existing products and processes, is particularly significant and results from time to time in product and process obsolescence. The development of new and improved products is important to Johnson & Johnson's success in all areas of its business. This competitive environment requires substantial investments in continuing research and in multiple sales forces. In addition, the winning and retention of customer acceptance of Johnson & Johnson's consumer products involve heavy expenditures for advertising, promotion and selling. RESEARCH Research activities are important to all segments of Johnson & Johnson's business. Major research facilities are located not only in the United States but also in Australia, Belgium, Brazil, Canada, Germany, Switzerland and the United Kingdom. The costs of Johnson & Johnson's worldwide research activities relating to the development of new products, the improvement of existing products, technical support of products and compliance with governmental regulations for the protection of the consumer amounted to $2,140, $1,905 and $1,634 million for fiscal years 1997, 1996 and 1995, respectively. These costs are charged directly to income in the year in which incurred. All research was sponsored by Johnson & Johnson. ENVIRONMENT During the past year Johnson & Johnson was subject to a variety of federal, state and local environmental protection measures. Johnson & Johnson believes that its operations comply in all material respects with applicable environmental laws and regulations. Johnson & Johnson's compliance with these requirements did not and is not expected to have a material effect upon its capital expenditures, earnings or competitive position. REGULATION Most of Johnson & Johnson's business is subject to varying degrees of governmental regulation in the countries in which operations are conducted, and the general trend is toward regulation of increasing stringency. In the United States, the drug, device, diagnostics and cosmetic industries have long been subject to regulation by various federal, state and local agencies, primarily as to product safety, efficacy, advertising and labeling. The exercise of broad regulatory powers by the Food and Drug Administration (the "FDA") continues to result in increases in the amounts of testing and documentation required for FDA clearance of new drugs and devices and a corresponding increase in the expense of product introduction. Similar trends toward product and process regulation are also evident in a number of major countries outside of the United States, especially in the European Economic Community where efforts are continuing to harmonize the internal regulatory systems. The costs of human health care have been and continue to be a subject of study, investigation and regulation by governmental agencies and legislative bodies in the United States and other countries. In the United States, attention has been focused on drug prices and profits and programs that encourage doctors to write prescriptions for particular drugs or recommend particular medical devices. Even in the absence of new government regulation, managed care has become a more potent force in the market place and it is likely that increased attention will be paid to drug pricing, appropriate drug utilization and the quality of health care. The regulatory agencies under whose purview Johnson & Johnson operates have administrative powers that may subject Johnson & Johnson to such actions as product recalls, seizure of products and other civil and criminal sanctions. In some cases Johnson & Johnson may deem it advisable to initiate product recalls voluntarily. 3
6 ITEM 2. PROPERTIES Johnson & Johnson and its worldwide subsidiaries operate 171 manufacturing facilities occupying approximately 17.0 million square feet of floor space. The manufacturing facilities are used by the industry segments of Johnson & Johnson's business approximately as follows: <TABLE> <CAPTION> SQUARE FEET SEGMENT (IN THOUSANDS) ------- -------------- <S> <C> Consumer.................................................... 5,860 Pharmaceutical.............................................. 4,131 Professional................................................ 6,980 ------ Worldwide total................................... 16,971 ====== </TABLE> Within the United States, 10 facilities are used by the Consumer segment, 9 by the Pharmaceutical segment and 48 by the Professional segment. Johnson & Johnson's manufacturing operations outside the United States are often conducted in facilities which serve more than one segment of the business. The locations of the manufacturing facilities by major geographic areas of the world are as follows: <TABLE> <CAPTION> NUMBER OF SQUARE FEET GEOGRAPHIC AREA FACILITIES (IN THOUSANDS) --------------- ---------- -------------- <S> <C> <C> United States............................................... 67 7,562 Europe...................................................... 44 4,612 Western Hemisphere excluding U.S.A.......................... 21 2,350 Africa, Asia and Pacific.................................... 39 2,447 --- ------ Worldwide total................................... 171 16,971 === ====== </TABLE> In addition to the manufacturing facilities discussed above, Johnson & Johnson maintains numerous office and warehouse facilities throughout the world. Research facilities are also discussed under "Business -- Research." Johnson & Johnson generally seeks to own its manufacturing facilities, although some, principally in locations abroad, are leased. Office and warehouse facilities are often leased. Johnson & Johnson's properties are maintained in good operating condition and repair and are well utilized. For information regarding lease obligations see Note 9 "Rental Expense and Lease Commitments" under "Johnson & Johnson and Subsidiaries -- Notes to Consolidated Financial Statements" on page 37 of Johnson & Johnson's Annual Report to Shareowners for fiscal year 1997. Segment information on additions to Johnson & Johnson's property, plant and equipment is contained on page 44 of Johnson & Johnson's Annual Report to Shareowners for fiscal year 1997. ITEM 3. LEGAL PROCEEDINGS The information set forth in Note 18 "Pending Legal Proceedings" under "Johnson & Johnson and Subsidiaries -- Notes to Consolidated Financial Statements" on page 42 of Johnson & Johnson's Annual Report to Shareowners for fiscal year 1997 is incorporated herein by reference. The Company or its subsidiaries are parties to a number of proceedings brought under the Comprehensive Environmental Response, Compensation, and Liability Act, commonly known as Superfund, and comparable state laws in which the primary relief sought is the cost of past and future remediation. While it is not feasible to predict or determine the outcome of these proceedings, in the opinion of the Company, such proceedings would not have a material adverse effect on the results of operations, cash flows or financial position of the Company. 4
7 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. EXECUTIVE OFFICERS OF THE REGISTRANT Listed below are the executive officers of Johnson & Johnson as of March 25, 1998, each of whom, unless otherwise indicated below, has been an employee of the Company or its affiliates and held the position indicated during the past five years. There are no family relationships between any of the executive officers, and there is no arrangement or understanding between any executive officer and any other person pursuant to which the executive officer was selected. At the annual meeting of the Board of Directors which follows the Annual Meeting of Shareowners executive officers are elected by the Board to hold office for one year and until their respective successors are elected and qualified, or until earlier resignation or removal. Information with regard to the directors of the Company, including those of the following executive officers who are directors, is incorporated herein by reference to pages 3 through 6 of Johnson & Johnson's Proxy Statement dated March 11, 1998. <TABLE> <CAPTION> NAME AGE POSITION ---- --- -------- <S> <C> <C> Robert J. Darretta..................... 51 Member, Executive Committee; Vice President, Finance(a) Russell C. Deyo........................ 48 Member, Executive Committee; Vice President, Administration(b) Roger S. Fine.......................... 55 Member, Executive Committee; Vice President, General Counsel(c) Ronald G. Gelbman...................... 50 Member, Executive Committee; Worldwide Chairman, Pharmaceutical and Diagnostics Group(d) JoAnn Heffernan Heisen................. 48 Member, Executive Committee; Vice President, Chief Information Officer(e) Christian A. Koffmann.................. 57 Member, Executive Committee; Worldwide Chairman, Consumer and Personal Care Group(f) Ralph S. Larsen........................ 59 Chairman, Board of Directors and Chief Executive Officer; Chairman, Executive Committee James T. Lenehan....................... 49 Member, Executive Committee; Worldwide Chairman, Consumer, Pharmaceuticals and Professional Group(g) Robert N. Wilson....................... 57 Vice-Chairman, Board of Directors; Vice-Chairman Executive Committee </TABLE> - - --------------- (a) Mr. R. J. Darretta joined the Company in 1968 and held various positions before becoming President of Iolab Corporation in 1988 and Treasurer of the Company in 1995. He became a Member of the Executive Committee and Vice President, Finance in March 1997. (b) Mr. R. C. Deyo joined the Company in 1985 and became Associate General Counsel in 1991. He became a Member of the Executive Committee and Vice President, Administration in October 1996. (c) Mr. R. S. Fine joined the Company in 1974 and became Assistant General Counsel in 1978 and Associate General Counsel in 1984. He became a Member of the Executive Committee and Vice President, Administration in 1991 and became Vice President, General Counsel in October 1996. (d) Mr. R. G. Gelbman joined the Company in 1972 and became a Company Group Chairman in 1987. He became a Member of the Executive Committee and Worldwide Chairman, Pharmaceutical and Diagnostics Group in 1994. (e) Ms. J. H. Heisen joined the Company in 1989 as Assistant Treasurer and became Vice President, Investor Relations in 1990, Treasurer in 1991 and Controller in 1995. She became a Member of the Executive Committee and Vice President, Chief Information Officer in January 1997. (f) Mr. C. A. Koffmann joined the Company in 1989 as a Company Group Chairman. He became a Member of the Executive Committee and Worldwide Chairman, Consumer and Personal Care Group in 1995. (g) Mr. J. T. Lenehan joined the Company in 1976 and became a Company Group Chairman in 1993. He became a Member of the Executive Committee and Worldwide Chairman, Consumer, Pharmaceuticals and Professional Group in 1994. 5
8 PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREOWNER MATTERS The information called for by this item is incorporated herein by reference to the material captioned "Management's Discussion and Analysis of Results of Operations and Financial Condition--Common Stock Market Prices"and "Cash Dividends Paid" on page 27 of Johnson & Johnson's Annual Report to Shareowners for fiscal year 1997. ITEM 6. SELECTED FINANCIAL DATA The information called for by this item is incorporated herein by reference to the material captioned "Summary of Operations and Statistical Data 1987-1997" on page 45 of Johnson & Johnson's Annual Report to Shareowners for fiscal year 1997. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information called for by this item is incorporated herein by reference to the material captioned "Management's Discussion and Analysis of Results of Operations and Financial Condition--Overview, Sales and Earnings, Costs and Expenses, Liquidity and Capital Resources and Changing Prices and Inflation" on pages 26 through 28 of Johnson & Johnson's Annual Report to Shareowners for fiscal year 1997. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information called for by this item is incorporated herein by reference to the consolidated financial statements and the notes thereto and the material captioned "Independent Auditor's Report" on pages 32 through 43 of Johnson & Johnson's Annual Report to Shareowners for fiscal year 1997. ITEM 9. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information with respect to executive officers is presented at the end of Part I hereof. Information with respect to directors is incorporated herein by reference to the material captioned "Election of Directors--Nominees" on pages 2 through 6 of Johnson & Johnson's Proxy Statement dated March 11, 1998. ITEM 11. EXECUTIVE COMPENSATION The information called for by this item is incorporated herein by reference to the material captioned "Election of Directors--Directors' Fees, Committees and Meetings" and "Executive Compensation" on pages 7 and 8, and 13 through 16 of Johnson & Johnson's Proxy Statement dated March 11, 1998. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information called for by this item is incorporated herein by reference to the material captioned "Election of Directors--Stock Ownership/Control" on page 7 of Johnson & Johnson's Proxy Statement dated March 11, 1998. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Not applicable. 6
9 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) 1. Financial Statements The financial statements to be included in this report are incorporated in Part II, Item 8 hereof by reference to Johnson & Johnson's Annual Report to Shareowners for fiscal year 1997. 2. Financial Statement Schedules Schedule II -- Valuation and Qualifying Accounts Schedules other than those listed above are omitted because they are not required or are not applicable. 3. Exhibits Required to be Filed by Item 60l of Regulation S-K The information called for by this paragraph is incorporated herein by reference to the Exhibit Index of this report. (b) Reports on Form 8-K No reports on Form 8-K were filed during the last quarter of 1997. 7
10 JOHNSON & JOHNSON AND SUBSIDIARIES SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS FISCAL YEARS ENDED DECEMBER 28, 1997, DECEMBER 29, 1996 AND DECEMBER 31, 1995 (DOLLARS IN MILLIONS) <TABLE> <CAPTION> DEDUCTIONS FROM RESERVES ADDITIONS --------------------------------------------------- BALANCE AT CHARGED BALANCE BEGINNING TO COSTS AND AT END OF PERIOD EXPENSES(A) DESCRIPTION AMOUNT OF PERIOD ---------- ------------ ----------- ------ --------- <S> <C> <C> <C> <C> <C> 1997 Reserves deducted from accounts receivable, trade Reserve for doubtful accounts............... $141 49 Write-offs less recoveries..... 29 Currency adjustments........... 9 152 Reserve for customer rebates................ 129 855 Customer rebates allowed....... 813 Currency adjustments........... 7 164 Cash discounts allowed......... 341 Reserve for cash discounts.............. 39 352 Currency adjustments........... 8 42 ---- ----- ----- --- $309 1,256 1,207 358 ==== ===== ===== === 1996 Reserves deducted from accounts receivable, trade Reserve for doubtful accounts............... $109 60 Write-offs less recoveries..... 27 Currency adjustments........... 1 141 Reserve for customer rebates................ 115 686 Customer rebates allowed....... 671 Currency adjustments........... 1 129 Reserve for cash discounts.............. 34 388 Cash discounts allowed......... 383 39 ---- ----- ----- --- $258 1,134 1,083 309 ==== ===== ===== === 1995 Reserves deducted from accounts receivable, trade Reserve for doubtful accounts............... $ 77 46 Write-offs less recoveries..... 15 Currency adjustments........... (1) 109 Reserve for customer rebates................ 93 575 Customer rebates allowed....... 553 115 Reserve for cash discounts.............. 30 355 Cash discounts allowed......... 351 34 ---- ----- ----- --- $200 976 918 258 ==== ===== ===== === </TABLE> - - --------------- (A) Charges related to customer rebates and cash discounts are reflected as reductions of sales to customers. 8
11 SIGNATURES Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: March 20, 1998 JOHNSON & JOHNSON -------------------------------------- (Registrant) By /s/ R. S. LARSEN ------------------------------------ R. S. Larsen, Chairman, Board of Directors and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been duly signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. <TABLE> <CAPTION> SIGNATURE TITLE DATE --------- ----- ---- <C> <S> <C> /s/ R. S. LARSEN Chairman, Board of Directors and March 20, 1998 - - ------------------------------------------ Chief Executive Officer, and R. S. Larsen Director (Principal Executive Officer) /s/ R. J. DARRETTA Vice President -- Finance March 19, 1998 - - ------------------------------------------ (Principal Financial Officer) R. J. Darretta /s/ C. E. LOCKETT Controller March 21, 1998 - - ------------------------------------------ C. E. Lockett /s/ G. N. BURROW Director March 23, 1998 - - ------------------------------------------ G. N. Burrow /s/ J. G. COONEY Director March 22, 1998 - - ------------------------------------------ J. G. Cooney /s/ J. G. CULLEN Director March 20, 1998 - - ------------------------------------------ J. G. Cullen /s/ M. J. FOLKMAN Director March 23, 1998 - - ------------------------------------------ M. J. Folkman Director March , 1998 - - ------------------------------------------ P. M. Hawley /s/ A. D. JORDAN Director March 19, 1998 - - ------------------------------------------ A. D. Jordan /s/ A. G. LANGBO Director March 21, 1998 - - ------------------------------------------ A. G. Langbo </TABLE> 9
12 <TABLE> <CAPTION> SIGNATURE TITLE DATE --------- ----- ---- <C> <S> <C> /s/ J. S. MAYO Director March 21, 1998 - - ------------------------------------------ J. S. Mayo /s/ T. S. MURPHY Director March 22, 1998 - - ------------------------------------------ T. S. Murphy /s/ P. J. RIZZO Director March 22, 1998 - - ------------------------------------------ P. J. Rizzo /s/ H. B. SCHACHT Director March 22, 1998 - - ------------------------------------------ H. B. Schacht /s/ M. F. SINGER Director March 20, 1998 - - ------------------------------------------ M. F. Singer /s/ R. B. SMITH Director March 22, 1998 - - ------------------------------------------ R. B. Smith /s/ R. N. WILSON Vice Chairman, Board of Directors March 23, 1998 - - ------------------------------------------ and Director R. N. Wilson </TABLE> 10
13 REPORT OF INDEPENDENT AUDITORS To the Shareowners and Board of Directors of Johnson & Johnson: Our report on the consolidated financial statements of Johnson & Johnson and subsidiaries has been incorporated by reference in this Form 10-K from the Johnson & Johnson 1997 Annual Report to Shareowners and appears on page 43 therein. In connection with our audits of such financial statements, we have also audited the related financial statement schedule listed in the index in Item 14 of this Form 10-K. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information required to be included therein. /s/ COOPERS & LYBRAND L.L.P. COOPERS & LYBRAND L.L.P. New York, New York January 19, 1998 11
14 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in Registration Statements No. 33-52252, 33-40294, 33-40295, 33-32875, 33-7634, 033-59009, 333-38055, 333-40681 and 333-26979 on Form S-8, No. 33-55977 and 33-47424 on Form S-3 and No. 33-57583, 333-00391, 333-38097 and 333-30081 on Form S-4 and related Prospectuses of our reports dated January 19, 1998, on our audits of the consolidated financial statements and financial statement schedule of Johnson & Johnson and subsidiaries as of December 28, 1997 and December 29, 1996, and for each of the three years in the period ended December 28, 1997, which reports are included or incorporated by reference in this Annual Report on Form 10-K. /s/ COOPERS & LYBRAND L.L.P. COOPERS & LYBRAND L.L.P. New York, New York March 27, 1998 12
15 EXHIBIT INDEX <TABLE> <CAPTION> REG. S-K EXHIBIT TABLE DESCRIPTION ITEM NO. OF EXHIBIT - - ------------- ----------- <C> <S> 3(a)(i) Restated Certificate of Incorporation dated April 26, 1990 -- Incorporated herein by reference to Exhibit 3(a) of the Registrant's Form 10-K Annual Report for the year ended December 30, 1990. 3(a)(ii) Certificate of Amendment to the Restated Certificate of Incorporation of the Company dated May 20, 1992 -- Incorporated herein by reference to Exhibit 3(a) of the Registrant's Form 10-K Annual Report for the year ended January 3, 1993. 3(a)(iii) Certificate of Amendment to the Restated Certificate of Incorporation of the Company dated May 21, 1996 -- Incorporated herein by reference to Exhibit 3(a)(iii) of the Registrant's Form 10-K Annual Report for the year ended December 29, 1996. 3(b) By-Laws of the Company, as amended October 20, 1997 -- Filed with this document. 4(a) Upon the request of the Securities and Exchange Commission, the Registrant will furnish a copy of all instruments defining the rights of holders of long term debt of the Registrant. 10(a) Stock Option Plan for Non-Employee Directors -- Incorporated herein by reference to Exhibit 10(a) of the Registrant's Form 10-K Annual Report for the year ended December 29, 1996.* 10(b) 1995 Stock Option Plan (as amended) -- Filed with this document.* 10(c) 1991 Stock Option Plan (as amended) -- Filed with this document.* 10(d) 1986 Stock Option Plan (as amended) -- Filed with this document.* 10(e) 1995 Stock Compensation Plan -- Incorporated herein by reference to Exhibit 10(e) of the Registrant's Form 10-K Annual Report for the year ended December 31, 1995.* 10(f) Executive Incentive Plan -- Incorporated herein by reference to Exhibit 10(f) of the Registrant's Form 10-K Annual Report for the year ended December 29, 1996.* 10(g) Domestic Deferred Compensation Plan (as amended) -- Incorporated herein by reference to Exhibit 10(g) of the Registrant's Form 10-K Annual Report for the year ended December 29, 1996.* 10(h) Deferred Fee Plan for Directors (as amended) -- Incorporated herein by reference to Exhibit 10(h) of the Registrant's Form 10-K Annual Report for the year ended December 29, 1996.* 10(i) Executive Income Deferral Plan -- Filed with this document.* 10(j) Excess Savings Plan -- Incorporated herein by reference to Exhibit 10(j) of the Registrant's Form 10-K Annual Report for the year ended December 29, 1996.* 10(k) Supplemental Retirement Plan -- Incorporated herein by reference to Exhibit 10(h) of the Registrant's Form 10-K Annual Report for the year ended January 3, 1993.* 10(l) Executive Life Insurance Plan -- Incorporated herein by reference to Exhibit 10(i) of the Registrant's Form 10-K Annual Report for the year ended January 3, 1993.* 11 -- Calculation of Earnings Per Share -- Filed with this document. 12 -- Statement of Computation of Ratio of Earnings to Fixed Charges -- Filed with this document. 13 -- Pages 26-45 of the Company's Annual Report to Shareowners for fiscal year 1997 (only those portions of the Annual Report incorporated by reference in this document are deemed "filed") -- Filed with this document. 21 -- Subsidiaries -- Filed with this document. 27 -- Financial Data Schedule for Year Ended December 28, 1997 -- Filed with this document. </TABLE> 13
16 <TABLE> <CAPTION> REG. S-K EXHIBIT TABLE DESCRIPTION ITEM NO. OF EXHIBIT - - ------------- ----------- <C> <S> 99(a) -- Annual Reports on Form 11-K for the Johnson & Johnson Savings Plans, to be filed on or before June 30, 1998. 99(b) -- Cautionary Statement under Private Securities Litigation Reform Act of 1995: "Safe Harbor" for Forward-Looking Statements -- Filed with this document. </TABLE> - - --------------- * Management contracts and compensatory plans and arrangements required to be filed as Exhibits to this form pursuant to Item 14(c) of the report. A copy of any of the Exhibits listed above will be provided without charge to any shareowner submitting a written request specifying the desired exhibit(s) to the Secretary at the principal executive offices of the Company. 14