Exhibit 99(a)(iii)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
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[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
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JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
(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 SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
By: /s/ R. J. Darretta
------------------------------------
R. J. Darretta
Chairman, Pension Committee
June 25, 2001
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
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FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULES
AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 2000 AND 1999
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
INDEX
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 Savings Plan for Union Represented Employees (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 SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION
As of December 31, 2000
See Notes to Financial Statements
3
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION
As of December 31, 1999
See Notes to Financial Statements
4
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION
For The Year Ended December 31, 2000
See Notes to Financial Statements
5
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS with FUND INFORMATION
For The Year Ended December 31, 1999
See Notes to Financial Statements
6
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
1. Organization:
The Johnson & Johnson Savings Plan for Union Represented Employees (the
"Plan") is a defined contribution plan which was established on January
1, 1993 by Johnson & Johnson ("J&J" or the "Company"). The Plan was
designed to enhance the existing retirement program of eligible
employees covered under collective bargaining agreements with the
Company. The funding of the Plan is made through employee and Company
contributions. The assets of the Plan are maintained in the Johnson &
Johnson Savings Plan Master Trust (the "Trust") and transactions therein
are executed by the trustee, Bankers Trust Company ("Bankers Trust").
The Johnson & Johnson Savings Plan Trust is allocated based upon the
total of each individual participant's share of the Trust.
2. Summary of Significant Accounting Policies:
Valuation of Investments:
Equity investments in the Johnson & Johnson Stock Fund, administered by
Bankers Trust, are valued at the average of the high and low market
price on the last business day of the year. The cost of equity
investments in the Johnson & Johnson Stock Fund are recorded at the
average market price of the stock transactions for the month during
which the contribution is made.
The investments in the U.S. Government Securities ("USGS"), Fixed
Interest and Diversified Equity Funds represent the Plan's share of
assets in the Johnson & Johnson Savings Plan Trust. The USGS Fund
consists of short-term obligations that are issued or guaranteed by the
U.S. Government. Investments are valued at cost, which approximates
market value. Deposits in group annuity contracts in the Fixed Interest
Fund are recorded at their contract value, which approximates fair
value, because these investments have fully benefit-responsive features.
Contract value represents contributions and reinvested income, less any
withdrawals plus accrued interest. Participants may direct the
withdrawal or transfer of all or a portion of their investment at
contract value. However, withdrawals influenced by employer initiated
events, such as in connection with the sale of a business, may result in
a distribution at other than contract value. There are no reserves
against contract values for credit risk of contract issuers or
otherwise. The average yield and crediting interest rate of the Fixed
Interest Fund was 6.05% for 2000 and 5.99% for 1999. The crediting
interest rate for the investment contracts is either agreed-to in
advance with the issuer or varies based on an agreed-to formula, but
cannot be less than zero.
7
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS, Continued
2. Summary of Significant Accounting Policies (Continued):
Equity investments and corporate obligations in the Diversified Equity
Fund, managed by the Capital Guardian Trust Company and J.P. Morgan
Investment Management, Inc., are traded on a national securities
exchange and are valued at the last reported market sales price on the
last business day of the year. Investments in the Diversified Equity
Fund are purchased periodically by Capital Guardian Trust Company and
J.P. Morgan Investment Management, Inc. based on the prevailing market
values of the underlying investments.
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.
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, disclosure 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.
8
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS, Continued
New Accounting Pronouncement:
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities"
("SFAS No. 133"). SFAS No. 133 requires that an entity recognize all
derivatives and measure those instruments at fair value.
SFAS No. 133 is effective for fiscal years beginning after June 15,
2000. Pursuant to SFAS No. 137, which amended SFAS No. 133, the Plan is
required to adopt SFAS No. 133 effective January 1, 2001. Management
has not yet been able to determine the impact of SFAS No. 133 on the
Plan financial statements as a result of the inconsistency in
accounting literature between SFAS No. 133, requiring derivatives to be
measured at fair value, and the AICPA Audit and Accounting Guide on
"Audits of Employee Benefits Plans" and Statement of Position 94-4,
"Reporting of Investment Contracts Held by Health and Welfare Benefit
Plans and Defined Contribution Pension Plans", requiring benefit
responsive investment contracts (including synthetic GICs) to be
measured at contract value. Until this discrepancy is resolved,
management is unable to determine the impact that SFAS 133 will have on
the Plan financial statements. The contract value of those instruments
is $2,243,829 at December 31, 2000. The actual impact on the Plan's net
asset available for plan benefits of adopting SFAS No. 133 will be made
based on the derivative positions and hedging relationships at the date
of adoption.
Other:
Interest and dividend income is 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. Third party administrative
expenses are paid by the Plan, except costs of entering new investment
vehicles which will be paid primarily by the Company.
9
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS, Continued
3. Contributions:
Participating employees may contribute a minimum of $0.16 per hour up to
a maximum of $1.60 per hour, depending on the negotiated contract rate,
of the first forty hours worked in each payroll week. All contributions
are on a pre-tax basis. Annual pre-tax contributions may not exceed
$10,500 in 2000 or $10,000 in 1999. The Company contributes to the Plan,
out of current or accumulated profits, an amount equal to 25% or 40%
(depending on the negotiated collective bargaining agreement) of the
employee directed contributions on the first $0.16 to $0.80 per hour,
directly into J&J common stock.
Contributions are made to the Plan by participants through payroll
deductions and by the Company on behalf of the participants. Employee
contributions are to be invested in any of the four investment funds at
the direction of the participating employees. All Company contributions
are made to the J&J Stock Fund.
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
balances, as defined.
Participants may withdraw before-tax contributions only upon meeting
certain hardship conditions.
10
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS, Continued
5. Investments:
Investments held by the Plan as of December 31, 2000 are summarized as
follows:
The investments in the USGS, Fixed Interest, and the Diversified Equity
Funds reflected in the accompanying Statement of Net Assets Available for
Benefits represent the Plan's share of investments (approximately 0.6% of
fair value) held by the Johnson & Johnson Savings Plan Trust. Total
investments held by the Savings Plan Trust on behalf of the Plan and the
Johnson & Johnson Savings Plan (for salaried and non-union hourly
employees of the Company) are summarized as follows:
* Other consists of interest and/or dividends receivable and/or
brokers payable.
11
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS, Continued
5. Investments (Continued):
------------------------
Investments held by the Plan as of December 31, 1999 are summarized as
follows:
The investments in the USGS, Fixed Interest, and the Diversified Equity
Funds reflected in the accompanying Statement of Net Assets Available for
Benefits represent the Plan's share of investments (approximately 0.6% of
fair value) held by the Johnson & Johnson Savings Plan Trust. Total
investments held by the Trust on behalf of the Plan and the Johnson &
Johnson Savings Plan (for salaried and non-union hourly employees of the
Company) are summarized as follows:
* Other consists of interest and/or dividends receivable.
12
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS, Continued
6. Tax Status:
The Internal Revenue Service has determined and informed the Company by a
letter dated April 26, 1996, that the Plan and the Trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC). The
Plan has been amended since receiving the determination letter. However,
the Plan administrator believes that the Plan is designed and is currently
being operated in compliance with applicable requirements of the IRC.
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. Concentrations of Credit Risk:
Financial instruments which potentially subject the Plan to concentrations
of credit risk consist principally of the Fixed Interest Fund holdings in
fully benefit-responsive group annuity contracts with insurance and other
financial institutions.
The Fund places its fully benefit-responsive group annuity contracts with
high-credit quality institutions and, by policy, limits the amount of
credit exposure to any one financial institution. If any of the insurance
companies that the group annuity contracts are invested with fail to
perform according to the contract, the asset value of the Plan could be
impaired.
9. 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:
13
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS, Continued
9. Reconciliation of Financial Statements to Form 5500 (Continued):
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.
10. Subsequent Events:
On January 1, 2001, the trustee for the Johnson & Johnson Savings Plan for
Union Represented Employees changed to State Street Bank from Bankers
Trust. This change has no affect on the Plan's participants or the Plan's
funds.
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. The
stock split does not impact the value of any of the Plan's investment
funds. However, all shares information in these financial statements have
been retroactively adjusted to reflect the two-for-one stock split
effective June 12, 2001.
14
Supplemental Schedule
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
FORM 5500 SCHEDULE H - PART IV - 4I
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AT DECEMBER 31, 2000
15
Supplemental Schedule
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
FORM 5500 SCHEDULE H - PART IV - 4J
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2000
(a) Trustee is unable to provide detailed information on the number of
transactions.
16
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (File No. 33-52252) of Johnson & Johnson of our report
dated June 15, 2001 relating to the financial statements and financial statement
schedules of the Johnson & Johnson Savings Plan for Union Represented Employees,
which appears in this Form 11-K.
/s/ PricewaterhouseCoopers LLP
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PricewaterhouseCoopers LLP
Florham Park, New Jersey
June 25, 2001