| Consolidated Balance Sheets (USD $) | ||
| In Millions | Dec. 28, 2008
| Dec. 30, 2007
|
| Cash and Cash Equivalents, at Carrying Value [Abstract] | ||
| Cash and cash equivalents | $10,768 | $7,770 |
| Available-for-sale Securities, Current [Abstract] | ||
| Marketable securities | 2,041 | 1,545 |
| Accounts Receivable, Net, Current [Abstract] | ||
| Accounts receivable trade, less allowances for doubtful accounts $268 (2007, $193) | 9,719 | 9,444 |
| Inventory, Net [Abstract] | ||
| Inventories | 5,052 | 5,110 |
| Deferred taxes on income | 3,430 | 2,609 |
| Prepaid expenses and other receivables | 3,367 | 3,467 |
| Total current assets | 34,377 | 29,945 |
| Available-for-sale Securities, Noncurrent [Abstract] | ||
| Marketable securities, non-current | 4 | 2 |
| Property, Plant and Equipment, Gross [Abstract] | ||
| Property, plant and equipment, gross | 27,392 | 26,466 |
| Accumulated Depreciation | (13,027) | (12,281) |
| Property, plant and equipment, net | 14,365 | 14,185 |
| Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
| Intangible assets, net | 13,976 | 14,640 |
| Goodwill, net | 13,719 | 14,123 |
| Deferred taxes on income | 5,841 | 4,889 |
| Other assets | 2,630 | 3,170 |
| Total assets | 84,912 | 80,954 |
| Short-term Borrowings [Abstract] | ||
| Loans and notes payable | 3,732 | 2,463 |
| Accounts Payable and Accrued Liabilities [Abstract] | ||
| Accounts payable | 7,503 | 6,909 |
| Accrued liabilities | 5,531 | 6,412 |
| Accrued rebates, returns and promotions | 2,237 | 2,318 |
| Accrued salaries, wages and commissions | 1,432 | 1,512 |
| Taxes Payable [Abstract] | ||
| Accrued taxes on income | 417 | 223 |
| Total current liabilities | 20,852 | 19,837 |
| Long-term Debt, Noncurrent [Abstract] | ||
| Long-term debt | 8,120 | 7,074 |
| Deferred tax on income | 1,432 | 1,493 |
| Employee related obligations | 7,791 | 5,402 |
| Other liabilities | 4,206 | 3,829 |
| Total liabilities | 42,401 | 37,635 |
| Stockholders' Equity [Abstract] | ||
| Preferred stock - without par value (authorized and unissued 2,000,000 shares) | 0 | 0 |
| Common stock - par value $1.00 per share (authorized 4,320,000,000 shares; issued 3,119,843,000 shares) | 3,120 | 3,120 |
| Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
| Accumulated other comprehensive income | (4,955) | (693) |
| Retained Earnings (Accumulated Deficit) [Abstract] | ||
| Retained earnings | 63,379 | 55,280 |
| Shareholders' equity before treasury stock | 61,544 | 57,707 |
| Less - common stock held in treasury, at cost (350,665,000 and 279,620,000) | 19,033 | 14,388 |
| Total shareholders' equity | 42,511 | 43,319 |
| Total liabilities and shareholders' equity | $84,912 | $80,954 |
| Consolidated Balance Sheets (Parenthetical) (USD $) | ||
| In Millions, except Share data | Dec. 28, 2008
| Dec. 30, 2007
|
| Consolidated Balance Sheet (Parenthetical) | ||
| Allowance for doubtful accounts | ($268) | ($193) |
| Preferred stock, par value | 0 | 0 |
| Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
| Preferred stock, shares issued | 0 | 0 |
| Common stock, par value | 1 | 1 |
| Common stock, shares authorized | 4,320,000,000 | 4,320,000,000 |
| Common stock, shares issued | 3,119,843,000 | 3,119,843,000 |
| Treasury stock, shares | 350,665,000 | 279,620,000 |
| Consolidated Statements of Earnings (Income) (USD $) | |||
| In Millions, except Per Share data | 12 Months Ended
Dec. 28, 2008 | 12 Months Ended
Dec. 30, 2007 | 12 Months Ended
Dec. 31, 2006 |
| Sales Revenue, Goods, Net [Abstract] | |||
| Sales to customers | $63,747 | $61,095 | $53,324 |
| Cost of Goods Sold [Abstract] | |||
| Cost of products sold | 18,511 | 17,751 | 15,057 |
| Gross profit | 45,236 | 43,344 | 38,267 |
| Selling, General and Administrative Expense [Abstract] | |||
| Selling, marketing and administrative expenses | 21,490 | 20,451 | 17,433 |
| Research and Development Expense [Abstract] | |||
| Research expense | 7,577 | 7,680 | 7,125 |
| In-process research and development (IPRD) | 181 | 807 | 559 |
| Restructuring Charges [Abstract] | |||
| Restructuring | 0 | 745 | 0 |
| Investment Income, Interest and Dividend [Abstract] | |||
| Interest income | (361) | (452) | (829) |
| Interest Expense [Abstract] | |||
| Interest expense, net of portion capitalized | 435 | 296 | 63 |
| Other Nonoperating Income (Expense) [Abstract] | |||
| Other (income) expense, net | (1,015) | 534 | (671) |
| Expenses, net, excluding cost of products sold | 28,307 | 30,061 | 23,680 |
| Earnings before provision for taxes on income | 16,929 | 13,283 | 14,587 |
| Income Tax Expense (Benefit) [Abstract] | |||
| Provision for taxes on income | 3,980 | 2,707 | 3,534 |
| Net earnings | $12,949 | $10,576 | $11,053 |
| Earnings Per Share [Abstract] | |||
| Net earnings per share, Basic | 4.62 | 3.67 | 3.76 |
| Net earnings per share, Diluted | 4.57 | 3.63 | 3.73 |
| Statement of Shareholders' Equity and Other Comprehensive Income (USD $) | |||||
| In Millions | Common Stock Issued
| Treasury Stock
| Retained Earnings
| Accumulated Other Comprehensive Income
| Total
|
| Beginning Balance at Dec. 31, 2005 | $3,120 | ($5,965) | $42,310 | ($755) | $38,710 |
| Net Income (Loss) [Abstract] | |||||
| Net earnings | 11,053 | 11,053 | |||
| Cash dividends paid | (4,267) | (4,267) | |||
| Employee compensation and stock option plans | 1,677 | 181 | 1,858 | ||
| Conversion of subordinated debentures | 36 | (10) | 26 | ||
| Repurchase of common stock | (6,722) | (6,722) | |||
| Adoption of FIN 48 | 0 | 0 | |||
| Other | 23 | 23 | |||
| Other Comprehensive Income, Foreign Currency Transaction and Translation Adjustment, Net of Tax, Period Increase (Decrease) [Abstract] | |||||
| Currency translation adjustment | 362 | 362 | |||
| Other Comprehensive Income, Available-for-sale Securities Adjustment, Net of Tax, Period Increase (Decrease) [Abstract] | |||||
| Unrealized (losses) gains on securities | (9) | (9) | |||
| Employee benefit plans | (1,710) | (1,710) | |||
| Gains (losses) on derivatives and hedges | (6) | (6) | |||
| Ending Balance at Dec. 31, 2006 | 3,120 | (10,974) | 49,290 | (2,118) | 39,318 |
| Net Income (Loss) [Abstract] | |||||
| Net earnings | 10,576 | 10,576 | |||
| Cash dividends paid | (4,670) | (4,670) | |||
| Employee compensation and stock option plans | 2,180 | 131 | 2,311 | ||
| Conversion of subordinated debentures | 13 | (4) | 9 | ||
| Repurchase of common stock | (5,607) | (5,607) | |||
| Adoption of FIN 48 | (19) | (19) | |||
| Other | (24) | (24) | |||
| Other Comprehensive Income, Foreign Currency Transaction and Translation Adjustment, Net of Tax, Period Increase (Decrease) [Abstract] | |||||
| Currency translation adjustment | 786 | 786 | |||
| Other Comprehensive Income, Available-for-sale Securities Adjustment, Net of Tax, Period Increase (Decrease) [Abstract] | |||||
| Unrealized (losses) gains on securities | 23 | 23 | |||
| Employee benefit plans | 670 | 670 | |||
| Gains (losses) on derivatives and hedges | (54) | (54) | |||
| Ending Balance at Dec. 30, 2007 | 3,120 | (14,388) | 55,280 | (693) | 43,319 |
| Net Income (Loss) [Abstract] | |||||
| Net earnings | 12,949 | 12,949 | |||
| Cash dividends paid | (5,024) | (5,024) | |||
| Employee compensation and stock option plans | 2,005 | 175 | 2,180 | ||
| Conversion of subordinated debentures | 1 | (1) | 0 | ||
| Repurchase of common stock | (6,651) | (6,651) | |||
| Adoption of FIN 48 | 0 | 0 | |||
| Other | 0 | 0 | |||
| Other Comprehensive Income, Foreign Currency Transaction and Translation Adjustment, Net of Tax, Period Increase (Decrease) [Abstract] | |||||
| Currency translation adjustment | (2,499) | (2,499) | |||
| Other Comprehensive Income, Available-for-sale Securities Adjustment, Net of Tax, Period Increase (Decrease) [Abstract] | |||||
| Unrealized (losses) gains on securities | (59) | (59) | |||
| Employee benefit plans | (1,870) | (1,870) | |||
| Gains (losses) on derivatives and hedges | 166 | 166 | |||
| Ending Balance at Dec. 28, 2008 | $3,120 | ($19,033) | $63,379 | ($4,955) | $42,511 |
| Consolidated Statements of Cash Flows (USD $) | |||
| In Millions | 12 Months Ended
Dec. 28, 2008 | 12 Months Ended
Dec. 30, 2007 | 12 Months Ended
Dec. 31, 2006 |
| Income (Loss) from Continuing Operations [Abstract] | |||
| Net earnings | $12,949 | $10,576 | $11,053 |
| Depreciation and Amortization [Abstract] | |||
| Depreciation and amortization of property and intangibles | 2,832 | 2,777 | 2,177 |
| Share-based Compensation [Abstract] | |||
| Stock based compensation | 627 | 698 | 659 |
| In-process research and development (IPRD) | 181 | 807 | 559 |
| Intangible asset write-down (NATRECOR) | 0 | 678 | 0 |
| Deferred Income Taxes and Tax Credits [Abstract] | |||
| Decrease/(increase) in deferred tax provision | 22 | (1,762) | (1,168) |
| Accounts receivable allowances | 86 | 22 | (14) |
| Increase (Decrease) in Receivables [Abstract] | |||
| Increase in accounts receivable | (736) | (416) | (699) |
| Increase (Decrease) in Inventories [Abstract] | |||
| (Increase)/decrease in inventories | (101) | 14 | (210) |
| Increase (Decrease) in Accounts Payable and Accrued Liabilities [Abstract] | |||
| (Decrease)/increase in accounts payable and accrued liabilities | (272) | 2,642 | 1,750 |
| Increase in other current and non-current assets | (1,600) | (1,578) | (269) |
| Increase in other current and non-current liabilities | 984 | 564 | 410 |
| Net cash flows from operating activities | 14,972 | 15,022 | 14,248 |
| Payments to Acquire Property, Plant, and Equipment [Abstract] | |||
| Additions to property, plant and equipment | (3,066) | (2,942) | (2,666) |
| Proceeds from Sale of Productive Assets [Abstract] | |||
| Proceeds from the disposal of assets, net | 785 | 457 | 511 |
| Payments to Acquire Businesses, Net of Cash Acquired [Abstract] | |||
| Acquisitions, net of cash acquired | (1,214) | (1,388) | (18,023) |
| Payments to Acquire Investments [Abstract] | |||
| Purchases of investments | (3,668) | (9,659) | (467) |
| Proceeds from Sale, Maturity and Collections of Investments [Abstract] | |||
| Sales of investments | 3,059 | 7,988 | 426 |
| Other (primarily intangibles) | (83) | (368) | (72) |
| Net cash (used by) investing activities | (4,187) | (5,912) | (20,291) |
| Payments of Ordinary Dividends [Abstract] | |||
| Dividends to shareholders | (5,024) | (4,670) | (4,267) |
| Repurchase of common stock | (6,651) | (5,607) | (6,722) |
| Proceeds from Short-term Debt [Abstract] | |||
| Proceeds from short-term debt | 8,430 | 19,626 | 6,385 |
| Repayments of Short-term Debt [Abstract] | |||
| Retirement of short-term debt | (7,319) | (21,691) | (2,633) |
| Proceeds from Issuance of Long-term Debt [Abstract] | |||
| Proceeds from long-term debt | 1,638 | 5,100 | 6 |
| Repayments of Long-term Debt [Abstract] | |||
| Retirement of long-term debt | (24) | (18) | (13) |
| Proceeds from Issuance or Sale of Equity [Abstract] | |||
| Proceeds from the exercise of stock options/excess tax benefits | 1,486 | 1,562 | 1,135 |
| Net cash used by financing activities | (7,464) | (5,698) | (6,109) |
| Effect of Exchange Rate on Cash and Cash Equivalents [Abstract] | |||
| Effect of exchange rate changes on cash and cash equivalents | (323) | 275 | 180 |
| Increase/(decrease) in cash and cash equivalents | 2,998 | 3,687 | (11,972) |
| Cash and cash equivalents, beginning of period | 7,770 | 4,083 | 16,055 |
| Cash and cash equivalents, end of period | 10,768 | 7,770 | 4,083 |
| Supplemental Cash Flow Data | |||
| Interest | 525 | 314 | 143 |
| Income taxes | 4,068 | 4,099 | 4,250 |
| Supplemental schedule of noncash investing and financing activities | |||
| Treasury stock issued for employee compensation and stock option plans, net of cash proceeds | 593 | 738 | 622 |
| Conversion of subordinated debentures | 0 | 9 | 26 |
| Acquisitions | |||
| Fair value of assets acquired | 1,328 | 1,620 | 19,306 |
| Fair value of liabilities assumed | (114) | (232) | (1,283) |
| Net cash paid for acquisitions | $1,214 | $1,388 | $18,023 |
| Notes to Consolidated Financial Statements | |
| 12 Months Ended
Dec. 28, 2008 USD / shares | |
| Notes to Consolidated Financial Statements | |
| Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of Johnson Johnson and subsidiaries (the Company). Inter-company accounts and transactions are eliminated. DESCRIPTION OF THE COMPANY AND BUSINESS SEGMENTS The Company has approximately 118,700 employees worldwide engaged in the research and development, manufacture and sale of a broad range of products in the health care field. The Company conducts business in virtually all countries of the world and its primary focus is on products related to human health and well-being. The Company is organized into three business segments: Consumer, Pharmaceutical and Medical Devices and Diagnostics. The Consumer segment manufactures and markets a broad range of products used in the baby care, skin care, oral care, wound care and womens health care fields, as well as nutritional and over-the-counter pharmaceutical products. These products are marketed to the general public and sold both to distributors and directly to independent and chain retail outlets throughout the world. The Pharmaceutical segment includes products in the following therapeutic areas: anti-infective, antipsychotic, cardiovascular, contraceptive, dermatology, gastrointestinal, hematology, immunology, neurology, oncology, pain management, urology and virology. These products are distributed directly to retailers, wholesalers and health care professionals for prescription use. The Medical Devices and Diagnostics segment includes a broad range of products used principally in the professional fields by physicians, nurses, therapists, hospitals, diagnostic laboratories and clinics. These products include Cordis circulatory disease management products; DePuys orthopaedic joint reconstruction, spinal care and sports medicine products; Ethicons surgical care and womens health products; Ethicon Endo-Surgerys minimally invasive surgical products; LifeScans blood glucose monitoring and insulin delivery products; Ortho-Clinical Diagnostics professional diagnostic products and Vistakons disposable contact lenses. NEW ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS In September2006, the Financial Accounting Standards Board (FASB)issued Statement of Financial Accounting Standards (SFAS)No.157, Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The statement was effective in the fiscal first quarter of 2008 except for non-financial assets and liabilities recognized or disclosed at fair value on a recurring basis, for which the effective date is for fiscal years beginning after November15, 2008. The Company adopted SFAS No.157 in the fiscal first quarter of 2008, the impact of which is discussed in Note 23. In February2007, the FASB issued SFAS No.159, Fair Value Option for Financial Assets and Financial Liabilities, which permits an entity to measure certain financial assets and financial liabilities at fair value. SFAS No.159 was effective for fiscal year 2008 and the C |
| Inventories | 2. Inventories At the end of 2008 and 2007, inventories were comprised of: (Dollars in Millions) 2008 2007 Raw materials and supplies $ 839 905 Goods in process 1,372 1,384 Finished goods 2,841 2,821 $ 5,052 5,110 |
| Property, Plant and Equipment | 3. Property, Plant and Equipment At the end of 2008 and 2007, property, plant and equipment at cost and accumulated depreciation were: (Dollars in Millions) 2008 2007 Land and land improvements $ 886 756 Buildings and building equipment 7,720 7,913 Machinery and equipment 15,234 14,554 Construction in progress 3,552 3,243 27,392 26,466 Less accumulated depreciation 13,027 12,281 $ 14,365 14,185 The Company capitalizes interest expense as part of the cost of construction of facilities and equipment. Interest expense capitalized in 2008, 2007 and 2006 was $147million, $130million and $118million, respectively. Depreciation expense, including the amortization of capitalized interest in 2008, 2007 and 2006, was $2.0billion, $1.9billion and $1.6billion, respectively. Upon retirement or other disposal of property, plant and equipment, the costs and related amounts of accumulated depreciation or amortization are eliminated from the asset and accumulated depreciation accounts, respectively. The difference, if any, between the net asset value and the proceeds are recorded in earnings. |
| Rental Expense and Lease Commitments | 4. Rental Expense and Lease Commitments Rentals of space, vehicles, manufacturing equipment and office and data processing equipment under operating leases were approximately $309million in 2008, $302million in 2007 and $285million in 2006. The approximate minimum rental payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year at December28, 2008 are: (Dollars in Millions) After 2009 2010 2011 2012 2013 2013 Total $171 145 123 107 89 93 728 Commitments under capital leases are not significant. |
| Employee Related Obligations | 5. Employee Related Obligations At the end of 2008 and 2007, employee related obligations were: (Dollars in Millions) 2008 2007 Pension benefits $ 4,382 2,014 Postretirement benefits 2,217 2,134 Postemployment benefits 870 1,119 Deferred compensation 772 740 Total employee obligations 8,241 6,007 Less current benefits payable 450 605 Employee related obligations long-term $ 7,791 5,402 Prepaid employee related obligations of $136million and $481million for 2008 and 2007, respectively, are included in other assets on the consolidated balance sheet. |
| Borrowings | 6. Borrowings The components of long-term debt are as follows: Effective Effective (Dollars in Millions) 2008 Rate % 2007 Rate % 3% Zero Coupon Convertible Subordinated Debentures due 2020 $ 183 3.00 % 178 3.00 4.95% Debentures due 2033 500 4.95 500 4.95 3.80% Debentures due 2013 500 3.82 500 3.82 6.95% Notes due 2029 294 7.14 294 7.14 6.73% Debentures due 2023 250 6.73 250 6.73 6.625% Notes due 2009 199 6.80 199 6.80 5.55% Debentures due 2017 1,000 5.55 1,000 5.55 5.95% Notes due 2037 995 5.99 995 5.99 5.50% Notes due 2024 (500GBP1.4759)(2)/(500GBP1.9944)(3) 731 (2) 5.71 989 (3) 5.71 4.75% Notes due 2019 (1BEuro 1.4000)(2)/ (1BEuro 1.4573)(3) 1,390 (2) 5.35 1,447 (3) 5.35 5.15% Debentures due 2012 599 5.18 599 5.18 5.86% Debentures due 2038 700 5.86 5.15% Debentures due 2018 898 5.15 Other (Includes Industrial Revenue Bonds) 102 132 8,341 (4) 5.46 (1) 7,083 (4) 5.47 (1) Less current portion 221 9 $ 8,120 7,074 (1) Weighted average effective rate. (2) Translation rate at December28, 2008. (3) Translation rate at December30, 2007. (4) The excess of the fair value over the carrying value of debt was $1.4billion in 2008 and $0.3billion in 2007. The Company has access to substantial sources of funds at numerous banks worldwide. In September 2008, the Company secured a new 364-day and 5-year Credit Facility. Total credit available to the Company approximates $7.7billion of which $6.3billion expires September24, 2009, and $1.4 billion expires September25, 2013. Interest charged on borrowings under the credit line agreements is based on either bids provided by banks, the prime rate or London Interbank Offered Rates (LIBOR), plus applicable margins. Commitment fees under the agreements are not material. The Company filed a shelf registration with the Securities and Exchange Commission that became effective March11, 2008 which enables the Company to issue an unlimited aggregate principal amount in debt securities and warrants to purchase debt securities. The Company issued bonds in June2008 for a total of $1.6billion for general corporate purposes. On July28, 2000, ALZA Corporation, a subsidiary of the Company, completed a private offering of the 3% Zero Coupon Convertible Subordinated Debentures, which were issued at a price of $551.26 per $1,000 principal amount at maturity. Under the terms of the 3% Debentures, holders are entitled to convert their debentures into approximately 15.0million shares of Johnson Johnson stock at a price of $40.102 per share. Approximately 11.4million shares have been issued as of December28, 2008, due to voluntary conver |
| Intangible Assets and Goodwill | 7. Intangible Assets and Goodwill At the end of 2008 and 2007, the gross and net amounts of intangible assets and goodwill were: (Dollars in Millions) 2008 2007 Trademarks (non-amortizable) gross $ 5,879 6,457 Less accumulated amortization 145 144 Trademarks (non-amortizable) net $ 5,734 6,313 Patents and trademarks gross $ 5,119 4,597 Less accumulated amortization 1,820 1,615 Patents and trademarks net $ 3,299 2,982 Other intangibles gross $ 7,376 7,399 Less accumulated amortization 2,433 2,054 Other intangibles net $ 4,943 5,345 Subtotal intangible assets gross $ 18,374 18,453 Less accumulated amortization 4,398 3,813 Subtotal intangible assets net $ 13,976 14,640 Goodwill gross $ 14,441 14,866 Less accumulated amortization 722 743 Goodwill net $ 13,719 14,123 Total intangible assets and goodwill gross $ 32,815 33,319 Less accumulated amortization 5,120 4,556 Total intangible assets and goodwill net $ 27,695 28,763 Goodwill as of December28, 2008 and December30, 2007, as allocated by segment of business is as follows: Med Dev (Dollars in Millions) Consumer Pharm and Diag Total Goodwill at December31, 2006 $ 7,866 902 4,572 13,340 Acquisitions 3 449 452 Translation/other 256 62 13 331 Goodwill at December30, 2007 $ 8,125 964 5,034 14,123 Acquisitions 191 286 477 Translation/other (842 ) (1 ) (38 ) (881 ) Goodwill at December28, 2008 $ 7,474 963 5,282 13,719 The weighted average amortization periods for patents and trademarks and other intangible assets are 16years and 28years, respectively. The amortization expense of amortizable assets for the fiscal years ended December28, 2008, December30, 2007 and December31, 2006 was $788million, $844million and $594million before tax, respectively. Certain patents and intangible assets were written down to fair value during fiscal years 2008, 2007 and 2006, with the resulting charge included in amortization expense. The estimated amortization expense for the five succeeding years approximates $814million before tax, per year. Substantially all of the amortization expense is included in cost of products sold. |
| Income Taxes | 8. Income Taxes The provision for taxes on income consists of: (Dollars in Millions) 2008 2007 2006 Currently payable: U.S. taxes $ 2,334 2,990 3,625 International taxes 1,624 1,479 1,077 3,958 4,469 4,702 Deferred: U.S. taxes 126 (722 ) (726 ) International taxes (104 ) (1,040 ) (442 ) 22 (1,762 ) (1,168 ) $ 3,980 2,707 3,534 A comparison of income tax expense at the U.S. statutory rate of 35% in 2008, 2007 and 2006, to the Companys effective tax rate is as follows: (Dollars in Millions) 2008 2007 2006 U.S. $ 6,579 5,237 8,110 International 10,350 8,046 6,477 Earnings before taxes on income: $ 16,929 13,283 14,587 Tax rates: U.S. statutory rate 35.0 % 35.0 35.0 Puerto Rico and Ireland operations (6.8 ) (8.8 ) (7.5 ) Research and orphan drug tax credits (0.6 ) (0.8 ) (0.7 ) U.S. state and local 1.6 2.1 1.6 International subsidiaries excluding Ireland (5.6 ) (7.3 ) (3.5 ) U.S. manufacturing deduction (0.4 ) (0.3 ) (0.2 ) In process research and development (IPRD) 0.4 2.1 0.6 U.S. Tax international income (0.5 ) (1.9 ) (0.7 ) All other 0.4 0.3 (0.4 ) Effective tax rate 23.5 % 20.4 24.2 The Company has subsidiaries manufacturing in Ireland under an incentive tax rate. In addition, the Company has subsidiaries operating in Puerto Rico under various tax incentive grants. The increase in the 2008 tax rate was mainly attributed to increases in taxable income in higher tax jurisdictions relative to taxable income in lower jurisdictions. The decrease in the 2007 tax rate was mainly attributed to a business restructuring of certain international subsidiaries, resulting in a one-time benefit of $267million, which reduced the effective tax rate by 2%. Temporary differences and carry forwards for 2008 and 2007 are as follows: 2008 2007 Deferred Tax Deferred Tax (Dollars in Millions) Asset Liability Asset Liability Employee related obligations $ 2,615 1,727 Stock based compensation 1,296 1,173 Depreciation (523 ) (463 ) Non-deductible intangibles (1,791 ) (1,554 ) International RD capitalized for tax 1,914 1,773 Reserves liabilities 688 1,155 Income reported for tax purposes 629 487 Miscellaneous i |
| International Currency Translation | 9. International Currency Translation For translation of its subsidiaries operating in non-U.S. Dollar currencies, the Company has determined that the local currencies of its international subsidiaries are the functional currencies except those in highly inflationary economies, which are defined as those which have had compound cumulative rates of inflation of 100% or more during the past three years, or where a substantial portion of its cash flows are not in the local currency. In consolidating international subsidiaries, balance sheet currency effects are recorded as a component of accumulated other comprehensive income. This equity account includes the results of translating all balance sheet assets and liabilities at current exchange rates, except for those located in highly inflationary economies. The translation of balance sheet accounts for highly inflationary economies are reflected in the operating results. An analysis of the changes during 2008, 2007 and 2006 for foreign currency translation adjustments is included in Note 12. Net currency transaction and translation gains and losses included in other (income)expense were losses of $31million, $23million and $18million in 2008, 2007 and 2006, respectively. |
| Common Stock, Stock Option Plans and Stock Compensation Agreements | 10. Common Stock, Stock Option Plans and Stock Compensation Agreements STOCK OPTIONS At December28, 2008, the Company had 14 stock-based compensation plans. The shares outstanding are for contracts under the Companys 1995 and 2000 Stock Option Plans, the 2005 Long-Term Incentive Plan, the 1997 Non-Employee Directors Plan and the Centocor, Innovasive Devices, ALZA, Inverness, and Scios Stock Option Plans. During 2008, no options or restricted shares were granted under any of these plans except under the 2005 Long-Term Incentive Plan. The compensation cost recorded under SFAS No.123(R) that has been charged against income for these plans was $627million for 2008, $698million for 2007 and $659million for 2006. The total income tax benefit recognized in the income statement for share-based compensation costs was $210 million for 2008, $238million for 2007 and $228million for 2006. Share-based compensation costs capitalized as part of inventory were insignificant in all periods. Stock options expire 10years from the date of grant and vest over service periods that range from six months to five years. All options are granted at the average of the high and low prices of the Companys common stock on the New York Stock Exchange on the date of grant. Under the 2005 Long-Term Incentive Plan, the Company may issue up to 260million shares of common stock. Shares available for future grants under the 2005 Long-Term Incentive Plan were 167.6million at the end of 2008. The Company settles employee stock option exercises with treasury shares. Treasury shares are replenished throughout the year for the number of shares used to settle employee stock option exercises. The fair value of each option award was estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table. Expected volatility represents a blended rate of 4-year daily historical average volatility rate, and a 5-week average implied volatility rate based on at-the-money traded Johnson Johnson options with a life of 2 years. Historical data is used to determine the expected life of the option. The risk-free rate was based on the U.S. Treasury yield curve in effect at the time of grant. The average fair value of options granted was $7.66, $11.67 and $12.22 in 2008, 2007 and 2006, respectively. The fair value was estimated based on the weighted average assumptions of: 2008 2007 2006 Risk-free rate 2.97 % 4.78 % 4.60 % Expected volatility 15.0 % 14.7 % 19.6 % Expected life 6.0 yrs 6.0 yrs 6.0 yrs Dividend yield 2.90 % 2.50 % 2.50 % A summary of option activity under the Plan as of December28, 2008, December30, 2007 and December 31, 2006 and changes during the years ending on those dates is presented below: Aggregate Weighted Intrinsic Outstanding Average Value (Shares in Thousands) Shares Exercise Price (Dollars in Millions) Shares at January1, 2006 248,542 |
| Segments of Business and Geographic Areas | 11. Segments of Business(1) and Geographic Areas Sales to Customers(2) (Dollars in Millions) 2008 2007 2006 Consumer United States $ 6,937 6,408 4,573 International 9,117 8,085 5,201 Total 16,054 14,493 9,774 Pharmaceutical United States 14,831 15,603 15,092 International 9,736 9,263 8,175 Total 24,567 24,866 23,267 Medical Devices and Diagnostics United States 10,541 10,433 10,110 International 12,585 11,303 10,173 Total 23,126 21,736 20,283 Worldwide total $ 63,747 61,095 53,324 Operating Profit Identifiable Assets (Dollars in Millions) 2008 (5) 2007 (6) 2006 (7) 2008 2007 2006 Consumer $ 2,674 2,277 1,374 $ 23,765 26,550 25,380 Pharmaceutical 7,605 6,540 6,894 19,544 19,780 18,799 Medical Devices and Diagnostics 7,223 4,846 6,126 20,779 19,978 18,601 Total 17,502 13,663 14,394 64,088 66,308 62,780 Less: (Income) Expense not allocated to segments(3) 573 380 (193 ) General corporate(4) 20,824 14,646 7,776 Worldwide total $ 16,929 13,283 14,587 $ 84,912 80,954 70,556 Additions to Property, Depreciation and Plant Equipment Amortization (Dollars in Millions) 2008 2007 2006 2008 2007 2006 Consumer $ 499 504 344 $ 489 472 255 Pharmaceutical 920 1,137 1,246 986 1,033 929 Medical Devices and Diagnostics 1,251 919 823 1,146 1,080 861 Segments total 2,670 2,560 2,413 2,621 2,585 2,045 General corporate 396 382 253 211 192 132 Worldwide total $ 3,066 2,942 2,666 $ 2,832 2,777 2,177 Sales to Customers(2) Long-Lived Assets(8) (Dollars in Millions) 2008 2007 2006 2008 2007 2006 United States $ 32,309 32,444 29,775 $ 21,674 21,685 22,4 |
| Accumulated Other Comprehensive Income | 12. Accumulated Other Comprehensive Income Components of other comprehensive income/(loss) consist of the following: Total Unrealized Gains/ Accumulated Foreign Gains/ (Losses) on Other Currency (Losses) on Employee Derivatives Comprehensive (Dollars in Millions) Translation Securities Benefit Plans Hedges Income/(Loss ) January1, 2006 $ (520 ) 70 (320 ) 15 (755 ) 2006 changes Net change due to hedging transactions 17 Net amount reclassed to net earnings (23 ) Net 2006 changes 362 (9 ) (1,710 ) (6 ) (1,363 ) December31, 2006 $ (158 ) 61 (2,030 ) 9 (2,118 ) 2007 changes Net change due to hedging transactions (78 ) Net amount reclassed to net earnings 24 Net 2007 changes 786 23 670 (54 ) 1,425 December30, 2007 $ 628 84 (1,360 ) (45 ) (693 ) 2008 changes Net change due to hedging transactions 94 Net amount reclassed to net earnings 72 Net 2008 changes (2,499 ) (59 ) (1,870 ) 166 (4,262 ) December28, 2008 $ (1,871 ) 25 (3,230 ) 121 (4,955 ) Total comprehensive income for 2008 includes reclassification adjustment gains of $41million realized from the sale of equity securities and the associated tax expense of $14million. Total comprehensive income for 2007 includes reclassification adjustment gains of $7million realized from the sale of equity securities and the associated tax expense of $2million. Total other comprehensive income for 2006 includes reclassification adjustment gains of $13 million realized from the sale of equity securities and the associated tax expense of $4million. The tax effect on the unrealized gains/(losses) on the equity securities was an expense of $14 million, $46million and $33million in 2008, 2007 and 2006, respectively. The tax effect related to employee benefit plans was $1,090million, $349million and $891million in 2008, 2007 and 2006, respectively. The tax effect on the gains/(losses) on derivatives and hedges are losses of $70 million in 2008, gains of $24million in 2007, and losses of $4million in 2006. See Note 15 for additional information relating to derivatives and hedging. The currency translation adjustments are not currently adjusted for income taxes as they relate to permanent investments in international subsidiaries. |
| Pensions and Other Benefit Plans | 13. Pensions and Other Benefit Plans The Company sponsors various retirement and pension plans, including defined benefit, defined contribution and termination indemnity plans, which cover most employees worldwide. The Company also provides postretirement benefits, primarily health care, to all U.S. retired employees and their dependents. Many international employees are covered by government-sponsored programs and the cost to the Company is not significant. Retirement plan benefits are primarily based on the employees compensation during the last three to five years before retirement and the number of years of service. International subsidiaries have plans under which funds are deposited with trustees, annuities are purchased under group contracts, or reserves are provided. The Company does not fund retiree health care benefits in advance and has the right to modify these plans in the future. The Company uses the date of its consolidated financial statements (December28, 2008 and December30, 2007, respectively) as the measurement date for all U.S. and international retirement and other benefit plans. In September2006, Statement of Financial Accounting Standards (SFAS)No.158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans was issued and amends further the disclosure requirements for pensions and other postretirement benefits. This Statement was an amendment of FASB Statements No.87, 88, 106 and 132(R). The incremental effect of applying FASB No.158 was a $1.7billion reduction in Shareholder Equity, net of deferred taxes. Net periodic benefit costs for the Companys defined benefit retirement plans and other benefit plans for 2008, 2007 and 2006 include the following components: Retirement Plans Other Benefit Plans (Dollars in Millions) 2008 2007 2006 2008 2007 2006 Service cost $ 545 597 552 $ 142 140 122 Interest cost 701 656 570 166 149 136 Expected return on plan assets (876 ) (809 ) (701 ) (2 ) (2 ) (3 ) Amortization of prior service cost 10 10 10 (4 ) (7 ) (7 ) Amortization of net transition asset 2 1 (1 ) Recognized actuarial losses 62 186 251 64 66 74 Curtailments and settlements 7 5 4 Net periodic benefit cost $ 451 646 685 $ 366 346 322 The net periodic benefit cost attributable to U.S. retirement plans was $220million, $379million and $423million in 2008, 2007 and 2006, respectively. Amounts expected to be recognized in net periodic benefit cost in the coming year for the Companys defined benefit retirement plans and other postretirement plans: (Dollars in Millions) Amortization of net transition obligation $ 1 Amortization |
| Cash, Cash Equivalents and Marketable Securities | 14. Cash, Cash Equivalents and Marketable Securities December 28, 2008 December 30, 2007 Amortized Unrealized Estimated Amortized Unrealized Estimated (Dollars in Millions) Cost Gains/(Losses) Fair Value Cost Gains/(Losses) Fair Value Current Investments Cash $ 3,276 3,276 2,978 2,978 Government securities and obligations 7,486 4 7,490 2,722 1 2,723 Corporate debt securities 627 1 628 1,805 3 1,808 Money market funds 813 813 407 407 Time deposits 607 607 1,403 1,403 Total cash, cash equivalents and current marketable securities $ 12,809 5 12,814 9,315 4 9,319 Non-Current Investments Marketable securities $ 4 4 2 2 As of December28, 2008, current marketable securities consist of $1,663million, $342million and $36million of government securities and obligations, corporate debt securities and time deposits, respectively. As of December30, 2007, current marketable securities consist of $251million and $1,294 million of government securities and obligations and corporate debt, respectively. CONCENTRATION OF CREDIT RISK The Company invests its excess cash in both deposits with major banks throughout the world and other high-quality money market instruments. The Company has a policy of making investments only with commercial institutions that have at least an A (or equivalent) credit rating. |
| Financial Instruments | 15. Financial Instruments All derivative instruments are recorded on the balance sheet at fair value. See Note 23 for additional details. As of December28, 2008, the balance of deferred net gains on derivatives included in accumulated other comprehensive income was $121million after-tax. For additional information, see Note 12. The Company expects that substantially all of this amount will be reclassified into earnings over the next 12months as a result of transactions that are expected to occur over that period. The maximum length of time over which the Company is hedging transaction exposure is 18 months. The amount ultimately realized in earnings will differ as foreign exchange rates change. Realized gains and losses are ultimately determined by actual exchange rates at maturity of the derivative. Derivative gains/(losses), initially reported as a component of other comprehensive income, are reclassified to earnings in the period when the forecasted transactions affect earnings. For the fiscal years ended December28, 2008, December30, 2007 and December31, 2006, the net impact of hedge ineffectiveness, transactions not qualifying for hedge accounting and discontinuance of hedges, to the Companys financial statements, was insignificant. Refer to Note 12 for disclosures of movements in Accumulated Other Comprehensive Income. |
| Savings Plan | 16. Savings Plan The Company has voluntary 401 (k)savings plans designed to enhance the existing retirement programs covering eligible employees. The Company matches a percentage of each employees contributions consistent with the provisions of the plan for which he/she is eligible. Total Company matching contributions to the plans were $166million in 2008, $169million in 2007 and $158million in 2006. |
| Mergers, Acquisitions And Divestitures | 17. Mergers, Acquisitions and Divestitures Certain businesses were acquired for $1,214million in cash and $114million of liabilities assumed during 2008. These acquisitions were accounted for by the purchase method and, accordingly, results of operations have been included in the financial statements from their respective dates of acquisition. The 2008 acquisitions included: Amic AB, a privately held Swedish developer of in vitro diagnostic technologies for use in point-of-care and near-patient settings; Beijing Dabao Cosmetics Co., Ltd., a company that sells personal care brands in China; SurgRx, Inc., a privately held developer of the advanced bipolar tissue sealing system used in the ENSEAL family of devices; HealthMedia, Inc., a privately held company that creates web-based behavior change interventions; LGE Performance Systems, Inc., a privately held company known as Human Performance Institute, which develops science-based training programs to improve employee engagement and productivity and Omrix Biopharmaceuticals, Inc., a fully integrated biopharmaceutical company that develops and markets biosurgical and immunotherapy products. The excess of purchase price over the estimated fair value of tangible assets acquired amounted to $891million and has been assigned to identifiable intangible assets, with any residual recorded to goodwill. Approximately $181million has been identified as the value of IPRD associated with the acquisitions of Omrix Biopharmaceuticals, Inc., Amic AB, SurgRx, Inc. and HealthMedia, Inc. The IPRD charge related to the acquisition of Omrix Biopharmaceuticals, Inc. was $127million and is associated with stand-alone and combination biosurgical technologies used to achieve hemostasis. The value of the IPRD was calculated using cash flow projections discounted for the risk inherent in such projects. Probability of success factors ranging from 60 90% were used to reflect inherent clinical and regulatory risk. The discount rate applied was 14%. As of the end of the 2008 fiscal year, 97.8% of the outstanding shares of Common Stock of Omrix Biopharmaceuticals, Inc. had been tendered by stockholders. Excluding shares that were tendered subject to guaranteed delivery procedures, 90.2% of the outstanding shares of Common Stock had been tendered. On December 30, 2008 the Company completed the acquisition of Omrix Biopharmaceuticals, Inc. The IPRD charge related to the acquisition of Amic AB was $40million and is associated with point-of-care device and 4CAST Chip technologies. The value of the IPRD was calculated using cash flow projections discounted for the risk inherent in such projects. The discount rate applied was 20%. The IPRD charge related to the acquisition of SurgRx, Inc. was $7million and is associated with vessel cutting and sealing surgical devices. The value of the IPRD was calculated using cash flow projections discounted for the risk inherent in such projects. Probability of success factors ranging from 90 95% were used to reflect inherent clinical and regulatory risk. The discount rate applied was 18%. The IPRD charge related to the acquisition of HealthMedia, Inc. was $7million and is |
| Legal Proceedings | 18. Legal Proceedings PRODUCT LIABILITY The Companys subsidiaries are involved in numerous product liability cases in the United States, many of which concern alleged adverse reactions to drugs and medical devices. The damages claimed are substantial, and while the Company is confident of the adequacy of the warnings and instructions for use that accompany such products, it is not feasible to predict the ultimate outcome of litigation. However, the Company believes that if any product liability results from such cases, it will be substantially covered by existing amounts accrued in the Companys balance sheet and, where available, by third-party product liability insurance. Multiple products of Johnson Johnson subsidiaries are subject to numerous product liability claims and lawsuits, including ORTHO EVRA, RISPERDAL, DURAGESIC, CYPHER Stent and the CHARIT Artificial Disc. There are approximately 900 claimants who have pending lawsuits or claims regarding injuries allegedly due to ORTHO EVRA, 507 with respect to RISPERDAL, 267 with respect to CHARIT, 85 with respect to CYPHER and 65 with respect to DURAGESIC. These claimants seek substantial compensatory and, where available, punitive damages. With respect to RISPERDAL, the Attorneys General of eight states and the Office of General Counsel of the Commonwealth of Pennsylvania have filed actions seeking reimbursement of Medicaid or other public funds for RISPERDAL prescriptions written for off-label use, compensation for treating their citizens for alleged adverse reactions to RISPERDAL, civil fines or penalties, punitive damages, or other relief. The Attorney General of Texas has joined a qui tam action in that state seeking similar relief. Certain of these actions also seek injunctive relief relating to the promotion of RISPERDAL. The Attorneys General of more than 40 other states have indicated a potential interest in pursuing similar litigation against the Companys Janssen subsidiary (now Ortho-McNeil-Janssen Pharmaceuticals Inc.) (OMJPI), and have obtained a tolling agreement staying the running of the statute of limitations while they inquire into the issues. In addition, there are six cases filed by union health plans seeking damages for alleged overpayments for RISPERDAL, several of which seek certification as class actions. In the case brought by the Attorney General of West Virginia, based on claims for alleged consumer fraud as to DURAGESIC as well as RISPERDAL, Janssen was found liable on motion, and damages are likely to be assessed at less than $20million. Janssen intends to seek to appeal. Numerous claims and lawsuits in the United States relating to the drug PROPULSID, withdrawn from general sale by the Companys Janssen subsidiary in 2000, have been resolved or are currently enrolled in settlement programs with an aggregate cap below $100million. Litigation concerning PROPULSID is pending in Canada, where a class action of persons alleging adverse reactions to the drug has been certified. AFFIRMATIVE STENT PATENT LITIGATION In patent infringement actions tried in Delaware Federal District Court in late 2000, Cordis Corporation (Cordis), a subsidiary of John |
| Earnings Per Share | 19. Earnings Per Share The following is a reconciliation of basic net earnings per share to diluted net earnings per share for the fiscal years ended December28, 2008, December30, 2007 and December31, 2006: (Shares in Millions Except Per Share Data) 2008 2007 2006 Basic net earnings per share $ 4.62 3.67 3.76 Average shares outstanding basic 2,802.5 2,882.9 2,936.4 Potential shares exercisable under stock option plans 179.0 178.6 207.0 Less: shares repurchased under treasury stock method (149.6 ) (154.5 ) (186.3 ) Convertible debt shares 3.7 3.7 3.9 Adjusted average shares outstanding diluted 2,835.6 2,910.7 2,961.0 Diluted net earnings per share $ 4.57 3.63 3.73 The diluted net earnings per share calculation includes the dilutive effect of convertible debt that is offset by the related reduction in interest expense of $4million after tax for years 2008, 2007 and 2006. Diluted net earnings per share excludes 59million, 64million and 43million shares underlying stock options for 2008, 2007 and 2006, respectively, as the exercise price of these options was greater than their average market value, which would result in an anti-dilutive effect on diluted earnings per share. |
| Capital and Treasury Stock | 20. Capital and Treasury Stock Changes in treasury stock were: (Amounts in Millions Except Treasury Stock Treasury Stock Number of Shares in Thousands) Shares Amount Balance at January1, 2006 145,364 $ 5,965 Employee compensation and stock option plans (26,526 ) (1,677 ) Conversion of subordinated debentures (540 ) (36 ) Repurchase of common stock 108,314 6,722 Balance at December31, 2006 226,612 10,974 Employee compensation and stock option plans (33,296 ) (2,180 ) Conversion of subordinated debentures (194 ) (13 ) Repurchase of common stock 86,498 5,607 Balance at December30, 2007 279,620 14,388 Employee compensation and stock option plans (29,906 ) (2,005 ) Conversion of subordinated debentures (19 ) (1 ) Repurchase of common stock 100,970 6,651 Balance at December28, 2008 350,665 $ 19,033 Aggregate shares of Common Stock issued were approximately 3,120million shares at the end of 2008, 2007 and 2006. Cash dividends paid were $1.795 per share in 2008, compared with dividends of $1.620 per share in 2007 and $1.455 per share in 2006. |
| Selected Quarterly Financial Data (unaudited) | 21. Selected Quarterly Financial Data (unaudited) Selected unaudited quarterly financial data for the years 2008 and 2007 are summarized below: 2008 2007 First Second Third Fourth First Second Third Fourth (Dollars in Millions Except Per Share Data) Quarter Quarter (1) Quarter Quarter (2) Quarter (3) Quarter Quarter (4) Quarter (5) Segment sales to customers Consumer $ 4,064 4,036 4,099 3,855 3,496 3,564 3,623 3,810 Pharmaceutical 6,429 6,340 6,113 5,685 6,221 6,149 6,099 6,397 Med Devices Diagnostics 5,701 6,074 5,709 5,642 5,320 5,418 5,248 5,750 Total sales $ 16,194 16,450 15,921 15,182 15,037 15,131 14,970 15,957 Gross profit 11,580 11,699 11,147 10,810 10,652 10,773 10,696 11,223 Earnings before provision for taxes on income 4,747 4,375 4,290 3,517 3,652 4,031 3,268 2,332 Net earnings 3,598 3,327 3,310 2,714 2,573 3,081 2,548 2,374 Basic net earnings per share $ 1.27 1.18 1.19 0.98 0.89 1.06 0.88 0.83 Diluted net earnings per share $ 1.26 1.17 1.17 0.97 0.88 1.05 0.88 0.82 (1) The second quarter of 2008 includes an after-tax charge of $40million for IPRD. (2) The fourth quarter of 2008 includes an after-tax charge of $141million for IPRD, $229million after-tax of income from net litigation and $331million after-tax gain on the divestiture of the Professional Wound Care business of Ethicon, Inc. The gain from the divestiture of the Professional Wound Care business of Ethicon, Inc. was reinvested in the business. (3) The first quarter of 2007 includes an after-tax charge of $807million for IPRD. (4) The third quarter of 2007 includes an after-tax charge of $528million for restructuring. (5) The fourth quarter of 2007 includes an after-tax charge of $441million for the NATRECOR intangible asset write-down and a one-time tax gain of $267million for restructuring. The lower tax rate is due to increases in taxable income in lower tax jurisdictions relative to taxable income in higher tax jurisdictions. |
| Restructuring | 22. Restructuring In the third quarter of 2007, the Company announced restructuring initiatives in an effort to improve its overall cost structure. This action was taken to offset the anticipated negative impacts associated with generic competition in the Pharmaceutical segment and challenges in the drug-eluting stent market. The Companys Pharmaceuticals segment has reduced its cost base by consolidating certain operations, while continuing to invest in recently launched products and its late-stage pipeline of new products. The Cordis franchise has moved to a more integrated business model to address the market changes underway with drug-eluting stents and to better serve the broad spectrum of its patients cardiovascular needs, while reducing its cost base. This program allowed the Company to accelerate steps to standardize and streamline certain aspects of its enterprise-wide functions such as human resources, finance and information technology to support growth across the business, while also leveraging its scale more effectively in areas such as procurement to benefit its operating companies. Additionally, as part of this program the Company plans to eliminate approximately 4,400 positions of which approximately 3,500 have been eliminated since the restructuring initiative was announced in 2007. During the fiscal third quarter of 2007, the Company recorded $745million in related pre-tax charges, of which, approximately $500million of the pre-tax restructuring charges are expected to require cash payments. The $745million of restructuring charges consists of severance costs of $450million, asset write-offs of $272million and $23million related to leasehold obligations. The $272million of asset write-offs relate to property, plant and equipment of $166million, intangible assets of $48million and other assets of $58million. The following table summarizes the severance charges and the associated spending: (Dollars in Millions) Severance 2007 severance charge $ 450 Cash outlays (46 ) Reserve balance, December30, 2007 404 Cash outlays (226 ) Reserve balance, December28, 2008* $ 178 * Remaining reserve balance for severance is expected to be paid in accordance with the Companys plans and local laws. For additional information on the restructuring as it relates to the segments, see Note 11. |
| Fair Value Measurements | 23. Fair Value Measurements During the fiscal first quarter of 2008, the Company adopted SFAS No.157, Fair Value Measurements except for non-financial assets and liabilities recognized or disclosed at fair value on a non-recurring basis, for which the effective date is fiscal years beginning after November15, 2008. SFAS No.157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. During the fiscal first quarter of 2008, the Company adopted SFAS No.159, Fair Value Option for Financial Assets and Financial Liabilities. SFAS No.159 permits the Company to measure certain financial assets and financial liabilities at fair value. The Company assessed the fair value option made available upon adopting SFAS No.159, and has elected not to apply the fair value option to any financial instruments that were not already recognized at fair value. SFAS No.157 defines fair value as the exit price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an asset or liability. The statement establishes a three-level hierarchy to prioritize the inputs used in measuring fair value. The levels within the hierarchy are described in the table below with level 1 having the highest priority and level 3 having the lowest. The following table provides a summary of the significant assets and liabilities that are measured at fair value as of December28, 2008. Quoted prices in active Significant markets for other Significant identical observable unobservable assets inputs inputs (Dollars in Millions) December 28, 2008 Level 1 Level 2 Level 3 Assets: Derivative instruments $ 1,432 $ 1,432 Liabilities: Derivative instruments $ 2,378 $ 2,378 The Company uses forward exchange contracts to manage its exposure to the variability of cash flows, primarily related to the foreign exchange rate changes on future intercompany and third-party purchases of raw materials denominated in foreign currency. The Company also uses currency swaps to manage currency risk primarily related to borrowings. The fair value of derivative instruments is the aggregation, by currency, of all future cash flows discounted to present value at prevailing market interest rates, and subsequently converted to the United States dollar at the current spot foreign exchange rate. The Company does not believe that fair values of these derivative instruments materially differ from the amounts that could be realized upon settlement or maturity, or that the changes in fair value will have a material effect on the Companys results of operations, cash flows or financial position. The Company did not have any other significant financial assets or liabilities, which would require revised valuations under SFAS No.157 that are recognized at fair value. |
| Subsequent Events | 24. Subsequent Events On January23, 2009, the Company completed the acquisition of Mentor Corporation for a net purchase price of $1.1billion. Mentor Corporation is a leading supplier of medical products for the global aesthetic market. |
| Document and Entity Information (USD $) | ||
| In Billions, except Share data | 12 Months Ended
Dec. 28, 2008 | Feb. 09, 2009
|
| Document and Entity Information | ||
| Entity Registrant Name | JOHNSON & JOHNSON | |
| Entity Central Index Key | 0000200406 | |
| Document Type | 10-K | |
| Document Period End Date | 2008-12-28 | |
| Amendment Flag | false | |
| Current Fiscal Year End Date | --12-28 | |
| Amendment Description | Not applicable | |
| Entity Well-known Seasoned Issuer | Yes | |
| Entity Voluntary Filers | No | |
| Entity Current Reporting Status | Yes | |
| Entity Filer Category | Large Accelerated Filer | |
| Entity Public Float | $178 | |
| Entity Common Stock, Shares Outstanding (actual number of shares) | 2,765,804,457 |
