Exhibit 28(b)
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, 1995
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:
Balance Sheets as of December 31, 1995 and 1994
Statements of Operations and Changes in Plan Equity for the years
ended December 31, 1995 and 1994
Notes to Financial Statements
Supplemental Schedules:
Schedule of Investments at December 31, 1995
Schedule of 5% Reportable Transactions for the year ended
December 31, 1995
Schedule of Party-In-Interest Transactions for the year ended
December 31, 1995
Consent of Coopers & Lybrand L.L.P., dated June 26, 1996
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
caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
By: /s/ C. H. JOHNSON
---------------------------------
C. H. Johnson
Chairman, Pension Committee
June 27, 1996
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
-----------
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULES
as of and for the years ended
December 31, 1995 and 1994
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
INDEX
Report of Independent Accountants 2
Financial Statements:
Balance Sheets as of December 31, 1995 and 1994 3
Statements of Operations and Changes in Plan
Equity for the years ended December 31, 1995
and 1994 4
Notes to Financial Statements 5-10
Supplemental Schedules:
Schedule of Investments at December 31, 1995 11
Schedule of 5% Reportable Transactions for
the year ended December 31, 1995 12
Schedule of Party-In-Interest Transactions for
the year ended December 31, 1995 13
1
COOPERS & LYBRAND L.L.P. LETTERHEAD
REPORT OF INDEPENDENT ACCOUNTANTS
To the Pension Committee of
Johnson & Johnson Retirement Savings Plan
We have audited the accompanying balance sheets of the Johnson & Johnson
Retirement Savings Plan as of December 31, 1995 and 1994, and the related
statements of operations and changes in plan equity for the years then ended.
These financial statements are the responsibility of the Savings Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Johnson & Johnson
Retirement Savings Plan as of December 31, 1995 and 1994 and the results of its
operations and changes in plan equity for the years then ended, in conformity
with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules as listed in
the accompanying index on page 1 are presented for purposes 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. The fund information in the balance sheets and the related
statements of operations and changes in plan equity is presented for purposes of
additional analysis rather than to present the balance sheets and statements of
operations and changes in plan equity for each fund. The supplemental schedules
and Fund Information 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.
COOPERS & LYBRAND L.L.P.
Parsippany, New Jersey
May 22, 1996
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
BALANCE SHEETS
as of December 31, 1995 and 1994
PARTICIPANT DIRECTED
----------------------------------------------------------------
1995
----------------------------------------------------------------
Short-Term
Investment J&J Total
Fund Stock Fund Equity Fund Savings Plan
------------ ---------- ----------- ------------
ASSETS
- ------
Investments at Fair Value (Notes 2 and 5) $4,200,145 $27,975,661 $2,498,934 $34,674,740
Accrued Dividends and Interest Receivable
Assets Designated for Transfer (Note 2)
---------- ----------- ---------- -----------
Total Assets $4,200,145 $27,975,661 $2,498,934 $34,674,740
========== =========== ========== ===========
LIABILITIES AND PLAN EQUITY
- ---------------------------
Accrued Expenses $ 6,212 $ 32,552 $ 3,632 $ 42,396
Plan Equity 4,193,933 27,943,109 2,495,302 34,632,344
---------- ----------- ---------- -----------
Total Liabilities and Plan Equity $4,200,145 $27,975,661 $2,498,934 $34,674,740
========== =========== ========== ===========
PARTICIPANT DIRECTED
----------------------------------------------------------------
1994
----------------------------------------------------------------
Short-Term
Investment J&J Total
Fund Stock Fund Equity Fund Savings Plan
------------ ---------- ----------- ------------
ASSETS
- ------
Investments at Fair Value (Notes 2 and 5) $3,565,823 $15,728,253 $1,666,824 $20,960,900
Accrued Dividends and Interest Receivable 942 942
Assets Designated for Transfer (Note 2) 1,300 1,900 (3,200)
---------- ----------- ---------- -----------
Total Assets $3,567,123 $15,731,095 $1,663,624 $20,961,842
========== =========== ========== ===========
LIABILITIES AND PLAN EQUITY
- ---------------------------
Accrued Expenses $ 3,932 $ 14,382 $ 1,756 $ 20,070
Plan Equity 3,563,191 15,716,713 1,661,868 20,941,772
---------- ----------- ---------- -----------
Total Liabilities and Plan Equity $3,567,123 $15,731,095 $1,663,624 $20,961,842
========== =========== ========== ===========
See Notes to Financial Statements
3
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
STATEMENTS OF OPERATIONS AND CHANGES IN PLAN EQUITY
For The Years Ended December 31, 1995 and 1994
PARTICIPANT DIRECTED
--------------------------------------------------------------
1995
--------------------------------------------------------------
Short-Term
Investment J&J Total
Fund Stock Fund Equity Fund Savings Plan
------------- ---------- ----------- ------------
Employee Contributions (Note 3) $1,125,304 $ 3,134,488 $ 756,415 $ 5,016,207
Employer Contributions (Note 3) 29,966 2,473,034 3,362 2,506,362
Interest Income 223,363 9,783 233,146
Dividend Income 388,679 150,646 539,325
---------- ----------- ---------- -----------
1,378,633 6,005,984 910,423 8,295,040
Payments to Participants (Note 4) (599,412) (3,278,025) (347,865) (4,225,302)
Change in Unrealized
Appreciation of Investment 8,432,570 358,732 8,791,302
Realized Gain on Sale of Investments 834,352 31,250 865,602
Realized Gain on Stock Distributed 96,951 96,951
Administrative Expenses (20,779) (101,336) (10,906) (133,021)
Assets Transferred (Note 2) (127,700) 235,900 (108,200)
---------- ----------- ---------- -----------
$ 630,742 $12,226,396 $ 833,434 $13,690,572
Plan Equity, Beginning of Period 3,563,191 15,716,713 1,661,868 20,941,772
---------- ----------- ---------- -----------
Plan Equity, End of Period $4,193,933 $27,943,109 $2,495,302 $34,632,344
========== =========== ========== ===========
PARTICIPANT DIRECTED
--------------------------------------------------------------
1994
--------------------------------------------------------------
Short-Term
Investment J&J Total
Fund Stock Fund Equity Fund Savings Plan
------------- ---------- ----------- ------------
Employee Contributions (Note 3) $1,069,280 $ 2,651,463 $ 724,681 $ 4,445,424
Employer Contributions (Note 3) 34,131 1,971,679 3,869 2,009,679
Interest Income 130,236 5,037 135,273
Dividend Income 284,206 91,069 375,275
---------- ----------- ---------- -----------
1,233,647 4,912,385 819,619 6,965,651
Payments to Participants (Note 4) (570,666) (2,277,808) (280,021) (3,128,495)
Change in Unrealized
Appreciation of Investment 2,725,697 (99,131) 2,626,566
Realized Gain on Sale of Investments 28,701 11,632 40,333
Realized Gain on Stock Distributed 18,162 18,162
Administrative Expenses (10,862) (39,597) (4,843) (55,302)
Assets Transferred (Note 2) 28,500 (12,600) (15,900)
---------- ----------- ---------- -----------
$ 680,619 $ 5,354,940 $ 431,356 $ 6,466,915
Plan Equity, Beginning of Period 2,882,572 10,361,773 1,230,512 14,474,857
---------- ----------- ---------- -----------
Plan Equity, End of Period $3,563,191 $15,716,713 $1,661,868 $20,941,772
========== =========== ========== ===========
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" - a defined
contribution plan) was established on March 1, 1990 for eligible employees
of certain subsidiaries of Johnson & Johnson (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 the
Banco Popular de Puerto Rico, are valued at the average of the high and low
market price on the last business day of the year. Equity investments in
the Equity Fund, managed by the Capital Research and Management Company,
are traded on a national securities exchange, and are valued at the last
reported market price on the last business day of the year. Temporary cash
investments are stated at redemption value.
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 the month of purchase. Units in the Equity Fund are purchased
throughout the month at the prevailing costs 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.
Transfers:
Transfers among funds, which are made at the participant's election have
been presented as assets transferred.
Continued
5
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies, (continued)
------------------------------------------
Use of Estimates:
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported. Actual results are not
expected to differ from those estimates.
Risks and Uncertainties:
The Plan provides for various investment options 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 statement of
net assets available for plan benefits and the statement of changes in net
assets available for plan benefits.
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 administrative expenses are paid by the Trust except for certain
salaried employees and the recordkeeping system used by the Plan which are
paid by the Company.
3. Contributions:
--------------
Participating employees may contribute a minimum of 3% up to a maximum of
6% pre-tax and 10% post-tax of their base salary. Pre-tax contributions may
not exceed $7,000 under Puerto Rico law. 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.
Continued
6
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
3. Contributions, (continued)
-------------
The number of participants invested in each fund at December 31, 1995 and
1994 was:
1995 1994
---- ----
Johnson & Johnson Stock Fund 3,009 2,931
Diversified Equity Fund 1,245 1,218
Short-term Investments Fund 1,735 1,721
Participants may elect to invest in more than one fund. A total of 3,260
and 3,112 active and former employees had investments in the Plan for 1995
and 1994, respectively.
4. 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.
Continued
7
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
5. Investments:
------------
Investments held by the Plan as of December 31, 1995 and 1994 are
summarized as follows:
1995
---------------------------------------------------------------
Short-Term Johnson & Johnson
Investment Fund Stock Fund
------------------------- --------------------------
Fair Value Cost Fair Value Cost
---------- ---------- ----------- -----------
Common Stocks:
Johnson & Johnson $27,664,893 $16,203,106
Mutual Funds
Temporary Cash
Investment $4,200,145 $4,200,145 310,768 310,768
---------- ---------- ----------- -----------
$4,200,145 $4,200,145 $27,975,661 $16,513,874
========== ========== =========== ===========
1995
---------------------------------------------------------------
Equity Fund Total
------------------------- --------------------------
Fair Value Cost Fair Value Cost
---------- ---------- ----------- -----------
Common Stocks:
Johnson & Johnson $27,664,893 $16,203,106
Mutual Funds $2,498,934 $2,143,580 2,498,934 2,143,580
Temporary Cash
Investment 4,510,913 4,510,913
----------- ---------- ----------- -----------
$2,498,934 $2,143,580 $34,674,740 $22,857,599
========== ========== =========== ===========
Continued
8
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
5. Investments, (continued):
------------
1994
---------------------------------------------------------------
Short-Term Johnson & Johnson
Investment Fund Stock Fund
------------------------- --------------------------
Fair Value Cost Fair Value Cost
---------- ---------- ----------- -----------
Common Stocks:
Johnson & Johnson $15,495,345 $12,467,071
Mutual Funds
Temporary Cash
Investment $3,565,823 $3,565,823 232,908 232,908
---------- ---------- ----------- -----------
$3,565,823 $3,565,823 $15,728,253 $12,699,979
========== ========== =========== ===========
1994
---------------------------------------------------------------
Equity Fund Total
------------------------- --------------------------
Fair Value Cost Fair Value Cost
---------- ---------- ----------- -----------
Common Stocks:
Johnson & Johnson $15,495,345 $12,467,071
Mutual Funds $1,666,824 $1,670,202 1,666,824 1,670,202
Temporary Cash
Investment 3,798,731 3,798,731
---------- ---------- ----------- -----------
$1,666,824 $1,670,202 $20,960,900 $17,936,004
========== ========== =========== ===========
Realized gains (losses), net of investments sold and distributed during the
years ended December 31, 1995 and 1994 are summarized as follows:
J&J Stock Fund Equity Fund
------------------------------------------ ------------------------------------
Book Value Proceeds Gain/(Loss) Book Value Proceeds Gain
---------- ---------- ----------- ---------- --------- -------
1995 $3,212,490 $4,143,793 $931,303 $393,174 $424,424 $31,250
1994 3,190,219 3,237,082 46,863 237,574 249,206 11,632
Continued
9
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
6. Tax Status:
-----------
The Plan constitutes a qualified plan under Section 165(a) of the Puerto
Rico Income Tax Act of 1954 as amended, (the "ITA"), and the Trust is
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 Plan Equity per the financial
statements to the Form 5500:
December 31,
-----------------------------
1995 1994
----------- -----------
Plan Equity Per the Financial Statements $34,632,344 $20,941,772
Amounts Allocated to Withdrawing Participants (346,911) (449,666)
----------- -----------
Plan Equity Per the Form 5500 $34,285,433 $20,492,106
=========== ===========
Year Ended
December 31,
1995
------------
Benefits Paid to Participants Per the Financial Statements $4,225,302
Add: Amounts Allocated to Withdrawing Participants at
December 31, 1995 346,911
Less: Amounts Allocated to Withdrawing Participants
at December 31, 1994 (449,666)
-----------
Benefits Paid to Participants Per the Form 5500 $4,122,547
==========
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, 1995 but not yet paid as of that date.
Continued
10
Supplemental Schedule
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT
AS OF DECEMBER 31, 1995
FACE AMOUNT
OR SHARES ISSUES COST FAIR VALUE
- --------- ------ ---- ----------
J&J STOCK FUND
Common Stock
------------
323,566 shs. Johnson & Johnson $16,203,106 $27,664,893
Temporary Investments
---------------------
$ 310,768 U.S. Treasury Obligations 310,768 310,768
----------- -----------
Total J&J Stock Fund $16,513,874 $27,975,661
=========== ===========
SHORT-TERM INVESTMENT FUND
Money Market funds
------------------
Vanguard Money Market
Reserves Prime
$ 4,200,145 Portfolio 12/31/95 $ 4,200,145 $ 4,200,145
=========== ===========
EQUITY FUND
Mutual Funds
------------
115,637.849 shs. Investment Company of America $ 2,143,580 $ 2,498,934
=========== ===========
Continued
11
Supplemental Schedule
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
ITEM 27d - SCHEDULE OF 5% REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
DISPOSED ACQUIRED
------------------------- -----------------------
SECURITY/PARTY
DESCRIPTION SALES PROCEEDS PURCHASES COST GAIN (LOSS)
- -------------- ----- -------- --------- ---- -----------
(# of Transactions) (# of Transactions)
SERIES OF TRANSACTIONS:
Johnson & Johnson 72 $3,093,487 0
The Vanguard Group 26 $667,373 60 $1,301,403 0
Continued
12
Supplemental Schedule
JOHNSON & JOHNSON RETIREMENT SAVINGS PLAN
ITEM 27e - SCHEDULE OF PARTY IN-INTEREST TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
PURCHASES
NAME AFFILIATION COST
- ---- ----------- ---------
Johnson & Johnson
Common Stock Plan Administrator $3,282,971
13
COOPERS & LYBRAND L.L.P. LETTERHEAD
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Johnson and Johnson Retirement Savings Plan on Form S-8 (File No. 33-32875) of
our report dated May 22, 1996, on our audits of the financial statements and
financial statement schedules of Johnson and Johnson Retirement Savings Plan
as of December 31, 1995 and 1994, and for the years ended December 31, 1995 and
1994, which report is included in the Form 11-K.
COOPERS & LYBRAND L.L.P.
Parsippany, New Jersey
June 26, 1996