UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2004
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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)
REQUIRED INFORMATION
Item 4. Financial Statements and Exhibits
Financial statements prepared in accordance with the financial reporting
requirements of ERISA filed herewith are listed below in lieu of the
requirements of Items 1 to 3.
Report of Independent Registered Public Accounting Firm
Financial Statements:
Statements of Net Assets Available for Benefits
Statement of Changes in Net Assets Available for Benefits
Notes to Financial Statements
Schedules required by Section 2520.103.10 of the Department of Labor's Rules and
Regulations for Reporting and Disclosure under ERISA have been omitted because
they are not required or are not applicable.
Exhibits:
23. Consent of PricewaterhouseCoopers LLP, dated June 24, 2005
SIGNATURES
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 27, 2005
JOHNSON & JOHNSON SAVINGS PLAN
FOR UNION REPRESENTED EMPLOYEES
FINANCIAL STATEMENTS
DECEMBER 31, 2004 AND 2003
JOHNSON & JOHNSON
SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES
INDEX TO FINANCIAL STATEMENTS
DECEMBER 31, 2004 AND 2003
PAGE(s)
Report of Independent Registered Public Accounting Firm 1
Financial Statements:
Statements of Net Assets Available for Benefits 2
Statement of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4 - 9
Schedules required by Section 2520.103.10 of the Department of Labor's Rules and
Regulations for Reporting and Disclosure under ERISA have been omitted because
they are not required or are not applicable.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Participants, the Pension Committee and the
Compensation & Benefits Committee of the
Johnson & Johnson Savings Plan for
Union Represented Employees:
In our opinion, the accompanying statements of net assets available for benefits
and the related statement 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") as of December 31, 2004 and 2003, and the changes in net assets
available for benefits for the year ended December 31, 2004 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 the
standards of the Public Company Accounting Oversight Board (United States).
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, 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.
/s/ PricewaterhouseCoopers LLP
Florham Park, New Jersey
June 24, 2005
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JOHNSON & JOHNSON
SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2004 AND 2003
2004 2003
ASSETS
Interest in Johnson & Johnson Pension
and Savings Plans Master Trust, at fair value $40,301,895 $35,397,567
----------- -----------
Total investments 40,301,895 35,397,567
Receivables
Employee contributions 35,337 35,169
Employer contributions 8,411 9,455
----------- -----------
Total receivables 43,748 44,624
----------- -----------
Total assets 40,345,643 35,442,191
=========== ===========
LIABILITIES
Accrued expenses 17,357 37,122
----------- -----------
Total liabilities 17,357 37,122
=========== ===========
Net assets available for benefits $40,328,286 $35,405,069
=========== ===========
The accompanying notes are an integral part of these financial statements.
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JOHNSON & JOHNSON
SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2004
ADDITIONS TO NET ASSETS ATTRIBUTED TO
Investment income
Plan's interest in the Johnson & Johnson Pension
and Savings Plans Master Trust net appreciation $ 6,023,508
Interest 163,845
Dividends 588,168
Contributions
Employee contributions 2,891,408
Employer contributions 707,567
-----------
Total additions 10,374,496
-----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO
Payments to participants 5,304,629
Administrative expenses 146,650
-----------
Total deductions 5,451,279
-----------
Net increase 4,923,217
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 35,405,069
-----------
End of year $40,328,286
===========
The accompanying notes are an integral part of these financial statements.
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JOHNSON & JOHNSON
SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
GENERAL
The Johnson & Johnson Savings Plan for Union Represented Employees (the
"Plan") is a participant directed 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 net assets of the Plan are held in
the Johnson & Johnson Pension and Savings Plans Master Trust (the
"Trust"). Transactions in the Trust are executed by the trustee, State
Street Trust Company ("State Street" or "Trustee"). The Plan's interest in
the Trust is allocated to the Plan based upon the total of each
participant's share of the Trust.
This brief description of the Plan is provided for general information
purposes only. Participants should refer to the Plan document for complete
information.
CONTRIBUTIONS
In general, full-time employees represented by a collective bargaining
unit participating in the Plan with at least one year of eligible service
can contribute to the Plan.
Contributions are made to the Plan by participants through payroll
deductions and by the Company on behalf of participants. Participating
employees may contribute a minimum of $0.16 per hour up to a maximum of
$2.40 per hour of the first forty hours worked in each payroll week,
depending on the negotiated contract rate. All contributions are on a
pre-tax basis and may not exceed $13,000 in 2004.
Participant contributions are invested in any of the four investment funds
offered by the Plan at the direction of the participating employees.
Effective July 1, 2002, participants age 50 and over are eligible to
contribute extra pre-tax contributions ("catch-up contribution") above the
annual IRS limitations up to $3,000 in 2004. Participants can elect an
amount to be contributed from each paycheck as their catch-up
contribution. This amount will be in addition to the pre-tax cents per
hour contribution that participants have elected.
After one year of eligible service, the Company contributes to the Plan an
amount equal to 25% or 50% of the employee directed contributions on the
first $0.16 to $1.20 per hour (depending on the negotiated collective
bargaining agreement), directly into the J&J Stock Fund. Participants have
the option to elect that the Company matching contribution be invested in
the current investment fund mix chosen by the participant.
INVESTMENTS
Participants may invest in one or more of the four investment funds
offered by the Plan. The investment mix chosen by the participant will
apply to employee contributions while Company matching contributions are
invested in the Johnson & Johnson Company Stock Fund unless participant
elects to diversify.
VESTING
A participant's plan account, including participant contributions, company
contributions and earnings thereon, is always fully vested. As a result,
there are no forfeitures under the Plan.
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JOHNSON & JOHNSON
SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
PAYMENT OF BENEFITS
Benefits are paid to participants upon termination, retirement, long-term
disability or death. Participants can elect to defer payment until age 65.
Distributions are paid in a lump sum payment for all fund balances.
A participant's account may be distributed to their beneficiaries upon the
participant's death in the same manner described for participants.
Participants may withdraw pre-tax contributions only upon meeting certain
hardship conditions. Participants are entitled to benefits provided by
contributions (Company and participant) and investment earnings thereon,
including realized and unrealized gains and losses, which have been
allocated to the participant's account balance. Participants have the
option of receiving all or part of their balance in the Johnson & Johnson
Stock Fund as either cash or in shares of Johnson & Johnson common stock
(plus cash for fractional shares) for distributions other than a hardship.
ADMINISTRATIVE EXPENSES
All third party administrative expenses are paid by the Plan, unless
otherwise provided for by the Company.
TERMINATION
Although it has not expressed an intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of a
partial or full Plan termination, all Plan funds must be used exclusively
for the benefit of the Plan participants.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the accrual method
of accounting in accordance with accounting principles generally accepted
in the United States of America.
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's interest in the Trust is stated at fair value. Generally, it
represents securities traded on a national securities exchange, which are
valued at the last reported sales price on the last business day of the
year. Securities not traded on a national securities exchange are valued
using external pricing vendors based on the frequency of their valuations.
Benefit responsive guaranteed and synthetic investment contracts are
recorded at contract value, which approximates fair value (Note 4).
As the investment funds contain various underlying assets such as stock
and short-term investments, the participant's account balance is reported
in units of participation, which allows for immediate transfers in and out
of the funds. The purchase or redemption price of the units is determined
by the trustee, based on the current market value of the underlying assets
of the funds. Each fund's net asset value is the value of a single unit,
which is computed by adding the value of the fund's investments, cash and
other assets, and subtracting liabilities, then dividing the result by the
number of units outstanding.
Purchases and sales of securities are recorded on a trade-date basis.
Gains and losses on the sale of investment securities are determined on
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JOHNSON & JOHNSON
SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
the average cost method. Dividend income is recorded on the ex-dividend
date. Interest income is recorded as earned on an accrual basis.
NET APPRECIATION (DEPRECIATION)
The Plan presents in the Statement of Changes in Net Assets Available for
Benefits the Plan's interest in the Trust and includes the net
appreciation (depreciation) in the fair value of investments held in the
Trust, which consists of unrealized appreciation (depreciation) of the
underlying investments and realized gains and losses on sales of
investments.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
USE OF ESTIMATES
The preparation of the Plan's financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of net assets
available for benefits at the date of the financial statements and the
changes in net assets available for benefits during the reporting period
and when applicable disclosures of contingent assets and liabilities at
the date of the financial statements. Actual results could differ from
those estimates.
RISK AND UNCERTAINTIES
The Plan provides for various investment options in funds which can
invest in a combination of equity and fixed income securities. Investments
are exposed to various risks, such as interest rate, market and credit.
Due to the level of risk associated with certain investments, it is at
least reasonably possible that changes in risks in the near term could
materially affect participants' account balances and the amounts reported
in the Statements of Net Assets Available for Benefits and the Statement
of Changes in Net Assets Available for Benefits.
RECLASSIFICATION
Certain prior year amounts have been reclassified to conform to current
year presentation.
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JOHNSON & JOHNSON
SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
3. INVESTMENTS IN PLAN MASTER TRUSTS
Effective January 1, 2003, the Johnson & Johnson Savings Plan Trust merged
with the Johnson & Johnson Pension Trust Fund to form a single Master
Trust, the Johnson & Johnson Pension and Savings Plans Master Trust ("the
Trust"). The Plan holds approximately 0.38% and 0.39%, respectively, of
the Trust's net assets as of December 31, 2004 and 2003.
Net assets, income, and expenses are allocated to the Plan based on the
total of each participant's share in the respective funds.
The following table represents the total value of investments in the
Trust:
AS OF DECEMBER 31,
-----------------------------------------
2004 2003
Investments at fair value
Short term investment funds $ 551,013,386 $ 251,872,480
U.S. Government and Agency securities 856,971,117 688,955,151
Corporate debt 313,196,278 305,698,696
Preferred stocks 11,061,328 10,536,822
Common stocks 6,822,053,563 4,890,705,529
Equitites and other 1,348,404,513 2,074,484,099
Investments at contract value
Deposits in group annuity contracts and synthetic GICs 973,552,848 924,152,802
----------------- -----------------
Total Master Trust investments 10,876,253,033 9,146,405,579
Receivables 75,006,869 179,120,628
Liabilities (211,812,708) (230,499,957)
----------------- -----------------
Net assets held in Master Trust, at fair value $ 10,739,447,194 $ 9,095,026,250
================= =================
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JOHNSON & JOHNSON
SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
The net investment income of the Johnson & Johnson Pension and Savings
Plans Master Trust was composed of the following:
FOR THE
YEAR ENDED
DECEMBER 31,
2004
Net appreciation in fair value of investments
Short term investment funds $ 326,060
U.S. Government and Agency securities 3,465,629
Corporate debt 8,776,223
Preferred stocks 579,384
Common stocks 1,094,390,127
Equities and other 39,969,617
-----------------
1,147,507,040
-----------------
Interest 96,085,856
Dividends 101,802,719
-----------------
Net investment gain $ 1,345,395,615
=================
4. GUARANTEED AND SYNTHETIC INVESTMENT CONTRACTS
The Trust holds investments in guaranteed and synthetic investment
contracts. These investments are recorded at their contract values. This
represents cost plus accrued interest of guaranteed investment contracts
and fair value of the collateral plus the benefit responsive wrap value
for synthetics, as the contracts are fully benefit-responsive.
Participants may ordinarily direct the withdraw or transfer of all or a
portion of their investment at contract value. There are currently no
reserves against contract values for credit risk of the contract issuers
or otherwise.
The average yield of these contracts was approximately 4.12% and 4.86% for
2004 and 2003, respectively. The crediting interest rate was approximately
4.22% for 2004 and 4.96% for 2003. The crediting interest rate of these
contracts is the annual return of the contracts before plan expenses,
while the average yield includes plan expenses. The crediting interest
rate for the investment contracts is either agreed upon in advance with
the issuer or varies based on an agreed upon formula, but cannot be less
than zero. The fair value of guaranteed and synthetic investment contracts
at December 31, 2004 and 2003 was $3,712,423 and $3,112,400, respectively.
5. TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated December 31, 2002, that the Plan and the Trust are in
compliance with applicable sections of the Internal Revenue Code ("IRC").
Although the Plan has been amended since receiving the determination
letter, the Plan administrator and the Plan's tax counsel believe that the
Plan is currently designed and is currently being operated in compliance
with the applicable requirements of the IRC.
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JOHNSON & JOHNSON
SAVINGS PLAN FOR UNION REPRESENTED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
6. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by State
Street Global Advisors. State Street is the trustee as defined by the Plan
and, therefore, these transactions qualify as party-in-interest
transactions.
The Plan also invests in shares of the Company. The Company is the plan
sponsor and, therefore, these transactions qualify as party-in-interest
transactions.
7. 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:
DECEMBER 31,
2004 2003
Net assets available for benefits per the financial
statements $ 40,328,286 $ 35,405,069
Amounts allocated to withdrawing participants - (37,952)
------------- -------------
Net assets available for benefits per the Form 5500 $ 40,328,286 $ 35,367,117
------------- -------------
YEAR ENDED
DECEMBER 31,
2004
Benefits paid to participants per the financial statements $ 5,304,629
Add: Amounts allocated to withdrawing participants at
December 31, 2004 -
Less: Amounts allocated to withdrawing participants at
December 31, 2003 (37,952)
------------
Benefits paid to participants per the Form 5500 $ 5,266,677
------------
Amounts allocated to the withdrawing participants are recorded on the Form
5500 for benefit payments that have been processed and approved for
payment prior to December 31, 2004, but not yet paid as of that date.
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