Exhibit 99(a)(ii)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the Fiscal Year Ended December 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission File Number 1-3215
JOHNSON & JOHNSON
RETIREMENT SAVINGS PLAN
(Full title of the Plan)
JOHNSON & JOHNSON
ONE JOHNSON & JOHNSON PLAZA
NEW BRUNSWICK, NEW JERSEY 08933
(Name of issuer of the securities held pursuant to the Plan
and the address of its principal executive office)
Item 4. Financial Statements and Exhibits
Report of Independent Accountants
Financial Statements:
Statements of Net Assets Available for Benefits with
Fund Information as of December 31, 2000 and 1999
Statements of Changes in Net Assets Available for
Benefits with Fund Information for the Years Ended
December 31, 2000 and 1999
Notes to Financial Statements
Supplemental Schedules:
Form 5500 Schedule H -- Part IV -- 4I - Schedule of Assets
(Held at End of Year) at December 31, 2000
Form 5500 Schedule H -- Part IV -- 4J - Schedule of
Reportable Transactions for the Year Ended December 31, 2000
Consent of PricewaterhouseCoopers LLP, dated June 25, 2001
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
By: /s/ R. J. Darretta
----------------------------
R. J. Darretta
Chairman, Pension Committee
June 25, 2001
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULES
As of and for the years ended
December 31, 2000 and 1999
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
INDEX
Report of Independent Accountants 2
Financial Statements:
Statements of Net Assets Available for Benefits with
Fund Information as of December 31, 2000 and 1999 3
Statements of Changes in Net Assets Available for
Benefits with Fund Information for the Years Ended
December 31, 2000 and 1999 4
Notes to Financial Statements 5-10
Supplemental Schedules:
Form 5500 Schedule H - Part IV- 4I - Schedule of Assets
(Held at End of Year) at December 31, 2000 11
Form 5500 Schedule H - Part IV - 4J - Schedule of
Reportable Transactions for the Year Ended December 31, 2000 12
1
REPORT OF INDEPENDENT ACCOUNTANTS
To the Pension and Benefits Committees of
Johnson & Johnson
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Johnson & Johnson Retirement Savings Plan (the "Plan") at December 31,
2000 and 1999, and the changes in net assets available for benefits for the
years then ended in conformity with accounting principles generally accepted in
the United States of America. These financial statements are the responsibility
of the Plan's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes and schedule of reportable transactions are presented
for the purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
June 15, 2001
2
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION
As of December 31, 2000 and 1999
See Notes to Financial Statements
3
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
with FUND INFORMATION
For The Years Ended December 31, 2000 and 1999
See Notes to Financial Statements
4
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. Organization:
The Johnson & Johnson Retirement Savings Plan (the "Plan") is a defined
contribution plan which was established on March 1, 1990 for eligible
employees of certain subsidiaries of Johnson & Johnson ("J&J" or the
"Company") located in Puerto Rico which have adopted the Plan. The Plan
was designed to provide eligible employees with an opportunity to
strengthen their financial security at retirement by providing an
incentive to save and invest regularly. The funding of the Plan is made
through employee and Company contributions. The assets of the Plan are
maintained and transactions therein are executed by the trustee, Banco
Popular de Puerto Rico.
2. Summary of Significant Accounting Policies:
Valuation of Investments:
Equity investments in the Johnson & Johnson Stock Fund, administered by
Banco Popular de Puerto Rico, are valued at the closing market price on
the last business day of the year. Equity investments in the Equity
Fund, managed by the Capital Research and Management Company, represent
shares of a registered investment company and are valued at the quoted
market price which represents the net asset value of shares held by the
Plan at year-end.
The cost of equity investments in the Johnson & Johnson Stock Fund is
recorded at the average market price of the stock transactions for the
month during which the contribution is made. Units in the Equity Fund
are purchased throughout the month at the prevailing quoted market
price on those dates.
Deposits in short-term investments in the Short-Term Investment Fund
are principally purchases of shares of the Prime Portfolio of Vanguard
Money Market Reserves, Inc. The Portfolio invests in securities which
mature in less than one year. The value of this portfolio is the market
value on the last business day of the year.
Temporary cash investments are stated at redemption value which
approximates fair value.
Transfers:
Transfers among funds, which are made at the participant's election,
have been presented as assets transferred in the Statement of Changes
in Net Assets Available for Benefits with Fund Information.
5
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
2. Summary of Significant Accounting Policies (Continued):
Use of Estimates:
The preparation of the Plan's financial statements in conformity with
accounting principles generally accepted in the United States of
America requires the plan administrator to make estimates and
assumptions that affect the reported amounts of net assets available
for benefits at the date of the financial statements and the changes in
net assets available for benefits during the reporting period and, when
applicable, disclosures of contingent assets and liabilities at the
date of the financial statements. Actual results could differ from
those estimates.
Risks and Uncertainties:
The Plan provides for various participant investment options in funds
which can invest in any combination of stocks, bonds, fixed income
securities, mutual funds, and other investment securities. Investment
securities are exposed to various risks, such as interest rate, market
and credit. Due to the level of risk associated with certain investment
securities and the level of uncertainty related to changes in the value
of investment securities, it is at least reasonably possible that
changes in risks in the near term would materially affect participants'
account balances and the amounts reported in the Statements of Net
Assets Available for Benefits with Fund Information and the Statements
of Changes in Net Assets Available for Benefits with Fund Information.
Other:
Interest and dividend income are recorded as earned on the accrual
basis. Purchases and sales of investment securities are reflected on a
trade-date basis. Gains and losses on sales of investment securities
are determined on the average cost method.
All third party administrative expenses are paid by the Plan, except
costs of entering new investment vehicles which are paid primarily by
J&J.
3. Contributions:
Participating employees may contribute a minimum of 3% up to a maximum
of 10% pre-tax and/or 1% to 10% post-tax of their base salary. Annual
pre-tax contributions may not exceed $8,000 in 2000 or 1999 under
Puerto Rico law. In 2000, the Company contributes to the Plan, out of
current or accumulated profits, an amount equal to 75% of the
employee's pre-tax contributions for the Plan year up to a maximum of
6% and in 1999, the company contributes to the Plan, out of current or
accumulated profits, an amount equal to 66-2/3% of the employee's
pre-tax contributions for the Plan year.
Contributions are made to the Plan by participants through payroll
deductions and by the Company on behalf of participants. Employee
contributions are to be invested in any of the three investment funds
at the direction of the participating employees. All Company
contributions are made to the J&J Stock Fund, except for participants
over the age of 50, who may choose the alternative investments.
6
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
4. Participant Accounts and Benefits:
All participants are fully vested in their contributions and the
Company match. The benefit to which a Plan participant is entitled is
the amount provided by contributions (Company and participant) and
investment earnings thereon (including net realized and unrealized
investment gains and losses) which have been allocated to such
participant's account balance. Allocations are based on participant's
earnings or account balance, as defined.
Participants are allowed to withdraw their after-tax contributions and
earnings thereon, at any time. Participants may withdraw before-tax
contributions only upon meeting certain hardship conditions.
7
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
5. Investments held by the Plan as of December 31, 2000 and 1999 are
summarized as follows:
8
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
5. Investments (Continued):
9
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
6. Tax Status:
The Plan constitutes as a qualified plan under Section 165(a) of the
Puerto Rico Income Tax Act of 1954 as amended, (the "ITA"), and the
Plan and the related trust accounts are exempt from Puerto Rico income
taxes under Section 165(a) and 165(e) of the ITA.
The Plan has been amended since receiving the determination letter.
However, the Plan administrator and the Plan's tax counsel believe that
the Plan is currently designed and operated in compliance with the
applicable requirements of the Puerto Rico tax code. Therefore, no
provision for income taxes has been included in the Plan's financial
statements.
7. Termination Priorities:
The Company has the right to terminate the Plan at any time and in the
event the Plan is terminated, subject to conditions set forth in ERISA,
the amount of each participant's account balance in the Plan is fully
vested.
8. Reconciliation of Financial Statements to Form 5500:
The following is a reconciliation of net assets available for benefits
per the financial statements to the Form 5500:
Amounts allocated to the withdrawing participants are recorded on the
Form 5500 for benefit claims that have been processed and approved for
payment prior to December 31, 2000 and 1999 but not yet paid as of that
date.
9. Subsequent Events:
On April 26, 2001, the Company announced a two-for-one stock split to
holders of record on May 22, 2001 and effective on June 12, 2001.
However, all share information in these financial statements have been
adjusted to reflect the two-for-one stock split effective June 12,
2001.
10
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
FORM 5500 SCHEDULE H - PART IV- 4I
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AT DECEMBER 31, 2000
11
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
FORM 5500 SCHEDULE H - PART IV- 4J
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2000
12
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (File No. 33-32875) of Johnson & Johnson of our report
dated June 15, 2001 relating to the financial statements and financial statement
schedules of the Johnson & Johnson Retirement Savings Plan, which appears in
this Form 11-K.
PricewaterhouseCoopers LLP
Florham Park, New Jersey
June 25, 2001