JOHNSON & JOHNSON
`
`FORM 10-K
`
`(Annual Report)
`
`Filed 02/24/15 for the Period Ending 12/28/14
`
`
`
`Address ONE JOHNSON & JOHNSON PLZ
`NEW BRUNSWICK, NJ 08933
`732-524-2455
`Telephone
`0000200406
`CIK
`JNJ
`Symbol
`2834 - Pharmaceutical Preparations
`SIC Code
`Biotechnology & Drugs
`Industry
`Sector Healthcare
`Fiscal Year
`12/12
`
`http://www.edgar-online.com
`© Copyright 2015, EDGAR Online, Inc. All Rights Reserved.
`Distr bution and use of this document restricted under EDGAR Online, Inc. Terms of Use.
`
`Lupin Ex. 1093 (Page 1 of 107)
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`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`FORM 10-K
`ANNUAL REPORT PURSUANT TO SECTION 13 OF
`THE SECURITIES EXCHANGE ACT OF 1934
`
`For the fiscal year ended December 28, 2014
`
`Commission file number 1-3215
`
`JOHNSON & JOHNSON
`
`(Exact name of registrant as specified in its charter)
`
`
`
`
`New Jersey
`(State of incorporation)
`One Johnson & Johnson Plaza
`08933
`New Brunswick, New Jersey
`
`(Address of principal executive offices)
`
`(Zip Code)
`Registrant’s telephone number, including area code: (732) 524-0400
`
`SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT
`
`22-1024240
`(I R S Employer Identification No )
`
`
`
`Name of each exchange on which registered
`Title of each class
`Common Stock, Par Value $1.00
`New York Stock Exchange
`4.75% Notes Due November 2019
`New York Stock Exchange
`5.50% Notes Due November 2024
`
`New York Stock Exchange
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes (cid:1) No
`Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes No
`(cid:1)
`Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the
`preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
`for the past 90 days. Yes (cid:1) No
`Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File
`required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the
`registrant was required to submit and post such files). Yes (cid:1) No
`Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,
`to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any
`amendment to this Form 10-K. (cid:1)
`Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
`company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
`Large accelerated filer (cid:1) Accelerated filer Non-accelerated filer Smaller reporting company
`(Do not check if a smaller reporting company)
`Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No (cid:1)
`The aggregate market value of the Common Stock held by non-affiliates computed by reference to the price at which the Common Stock was last
`sold as of the last business day of the registrant’s most recently completed second fiscal quarter was approximately $296 billion.
`On February 17, 2015, there were 2,780,488,708 shares of Common Stock outstanding.
`DOCUMENTS INCORPORATED BY REFERENCE
`
`Parts I, II and III:
`Parts I and III:
`
`
`
` Portions of registrant’s annual report to shareholders for fiscal year 2014 (the "Annual Report").
`Portions of registrant’s proxy statement for its 2015 annual meeting of shareholders filed within 120 days after the close of
`the registrant’s fiscal year (the "Proxy Statement").
`
`
`
`Lupin Ex. 1093 (Page 2 of 107)
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`
`
`Item
`
`1
`
`
`
`
`
`
`
`
`
`
`
`
`1A.
`1B.
`2
`3
`4
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`
`
`5
`6
`7
`7A.
`8
`9
`9A.
`9B.
`
`
`10
`11
`12
`13
`14
`
`
`15
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`
`
`
`
`
`PART I
`
`Page
`
`Business
`General
`Segments of Business
`Geographic Areas
`Raw Materials
`Patents
`Trademarks
`Seasonality
`Competition
`Research and Development
`Environment
`Regulation
`Available Information
`Risk Factors
`Unresolved Staff Comments
`Properties
`Legal Proceedings
`Mine Safety Disclosures
`Executive Officers of the Registrant
`
`PART II
`Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
`Selected Financial Data
`Management’s Discussion and Analysis of Financial Condition and Results of Operations
`Quantitative and Qualitative Disclosures About Market Risk
`Financial Statements and Supplementary Data
`Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
`Controls and Procedures
`Other Information
`
`PART III
`
`Directors, Executive Officers and Corporate Governance
`Executive Compensation
`Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
`Certain Relationships and Related Transactions, and Director Independence
`Principal Accountant Fees and Services
`
`Exhibits and Financial Statement Schedules
`Signatures
`Exhibit Index
`
`PART IV
`
`1
`1
`1
`2
`2
`2
`3
`3
`3
`3
`3
`3
`4
`4
`4
`5
`6
`6
`6
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`7
`8
`8
`8
`8
`8
`8
`9
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`9
`9
`9
`10
`10
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`11
`12
`14
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`Lupin Ex. 1093 (Page 3 of 107)
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`Table of Contents
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`
`Item 1.
`
`BUSINESS
`
`General
`
`PART I
`
`
`Johnson & Johnson and its subsidiaries (the "Company") have approximately 126,500 employees worldwide engaged in the research and
`development, manufacture and sale of a broad range of products in the health care field. Johnson & Johnson is a holding company, which has more than
`265 operating companies conducting business in virtually all countries of the world. The Company’s primary focus is products related to human health
`and well-being. Johnson & Johnson was incorporated in the State of New Jersey in 1887.
`
`The Company’s structure is based on the principle of decentralized management. The Executive Committee of Johnson & Johnson is the
`principal management group responsible for the strategic operations and allocation of the resources of the Company. This Committee oversees and
`coordinates the activities of the Consumer, Pharmaceutical and Medical Devices (previously referred to as Medical Devices and Diagnostics) business
`segments. Within the strategic parameters provided by the Committee, senior management groups at U.S. and international operating companies are
`each responsible for their own strategic plans, as well as the day-to-day operations of those companies, and each subsidiary within the business segments
`is, with some exceptions, managed by citizens of the country where it is located.
`
`Segments of Business
`
`The Company is organized into three business segments: Consumer, Pharmaceutical and Medical Devices. Additional information required by
`this item is incorporated herein by reference to the narrative and tabular descriptions of segments and operating results under the caption “Management’s
`Discussion and Analysis of Results of Operations and Financial Condition” and Note 18 “Segments of Business and Geographic Areas” under “Notes to
`Consolidated Financial Statements” of the Annual Report, filed as Exhibit 13 to this Report on Form 10-K.
`
`Consumer
`
`The Consumer segment includes a broad range of products used in the baby care, oral care, skin care, over-the-counter pharmaceutical,
`women’s health and wound care markets. Baby Care includes the JOHNSON’S ® Baby line of products. Oral Care includes the LISTERINE ® product
`line. Major brands in Skin Care include the AVEENO ® ; CLEAN & CLEAR ® ; DABAO ™ ; JOHNSON’S ® Adult; LE PETITE MARSEILLAIS ® ;
`LUBRIDERM ® ; NEUTROGENA ® ; and RoC ® product lines. Over-the-counter medicines include the broad family of TYLENOL ® acetaminophen
`products; SUDAFED ® cold, flu and allergy products; BENADRYL ® and ZYRTEC ® allergy products; MOTRIN ® IB ibuprofen products; and the
`PEPCID ® line of heartburn products. Major brands in Women’s Health outside of North America are STAYFREE ® and CAREFREE ® sanitary pad and
`o.b. ® tampon brands. Wound Care brands include the BAND-AID ® Brand Adhesive Bandages and NEOSPORIN ® First Aid product lines. The
`principal nutritional line is SPLENDA ® No Calorie Sweetener. These products are marketed to the general public and sold both to retail outlets and
`distributors throughout the world.
`
`Pharmaceutical
`
`The Pharmaceutical segment is focused on five therapeutic areas, including immunology (e.g., rheumatoid arthritis, inflammatory bowel
`disease, psoriasis and pulmonary diseases), infectious diseases (e.g., HIV, hepatitis, respiratory infections, tuberculosis and vaccines), neuroscience (e.g.,
`Alzheimer's disease, mood disorders, schizophrenia and pain), oncology (e.g., prostate cancer, multiple myeloma, hematologic malignancies and lung
`cancer), and cardiovascular and metabolic diseases (e.g., thrombosis and diabetes). Products in this segment are distributed directly to retailers,
`wholesalers, hospitals and health care professionals for prescription use. Key products in the Pharmaceutical segment include: REMICADE ®
`(infliximab), a treatment for a number of immune-mediated inflammatory diseases; SIMPONI ® (golimumab), a subcutaneous treatment for adults with
`moderate to severe rheumatoid arthritis, active psoriatic arthritis, active ankylosing spondylitis and moderately active to severely active ulcerative
`colitis; SIMPONI ARIA ® (golimumab) an intravenous treatment for adults with moderate to severe rheumatoid arthritis; STELARA ® (ustekinumab), a
`treatment for adults with moderate to severe plaque psoriasis and active psoriatic arthritis; INCIVO ® (telaprevir), for the treatment of hepatitis C;
`OLYSIO ® /SOVRIAD ® (simeprevir), for combination treatment of chronic hepatitis C in adult patients; PREZISTA ® (darunavir), a treatment for
`HIV/AIDS; EDURANT ® (rilpivirine), for the treatment of HIV; CONCERTA ® (methylphenidate HCl) extended-release tablets CII, a treatment for
`attention deficit hyperactivity disorder; INVEGA ® (paliperidone) extended-release tablets, for the treatment of schizophrenia and schizoaffective
`disorder; INVEGA SUSTENNA ® /XEPLION ® (paliperidone palmitate), for the treatment of schizophrenia and schizoaffective disorder in adults;
`RISPERDAL CONSTA ® (risperidone long-acting injection), for the treatment of schizophrenia and the maintenance treatment of Bipolar I Disorder in
`adults; VELCADE ® (bortezomib), a treatment for multiple myeloma; ZYTIGA ® (abiraterone acetate), a treatment for metastatic castration-resistant
`prostate cancer; IMBRUVICA ® (ibrutinib), an oral, once-daily therapy approved for use in treating certain B-cell malignancies, or blood
`
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`Table of Contents
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`cancers; PROCRIT ® (epoetin alfa, sold outside the U.S. as EPREX ® ), to stimulate red blood cell production; XARELTO ® (rivaroxaban), an oral
`anticoagulant for the prevention of deep vein thrombosis (DVT), which may lead to pulmonary embolism (PE) in patients undergoing hip or knee
`replacement surgery, to reduce the risk of stroke and systemic embolism in patients with nonvalvular atrial fibrillation, for the treatment of DVT and PE,
`and for the reduction in the risk of recurrence of DVT and PE; and INVOKANA ® (canagliflozin), for the treatment of adults with type 2 diabetes. Many
`of these products were developed in collaboration with strategic partners or are licensed from other companies.
`
`Medical Devices
`
`The Medical Devices (previously referred to as Medical Devices and Diagnostics) segment includes a broad range of products used in the
`orthopaedic, surgical care, specialty surgery, cardiovascular care, diagnostics, diabetes care, and vision care markets, which are distributed to
`wholesalers, hospitals and retailers, and used principally in the professional fields by physicians, nurses, hospitals, and clinics. These include
`orthopaedic, trauma and neurological products; general surgery, biosurgical and energy products; products to treat cardiovascular disease; infection
`prevention products; diagnostics products; blood glucose monitoring and insulin delivery products; and disposable contact lenses. The Company
`completed the divestiture of its Ortho-Clinical Diagnostics business in June 2014.
`
`Geographic Areas
`
`The business of Johnson & Johnson is conducted by more than 265 operating companies located in 60 countries, including the U.S., which
`conduct business in virtually all countries throughout the world. The products made and sold in the international business include many of those
`described above under “- Segments of Business - Consumer,” “- Pharmaceutical” and “- Medical Devices.” However, the principal markets, products
`and methods of distribution in the international business vary with the country and the culture. The products sold in international business include not
`only those developed in the United States, but also those developed by subsidiaries abroad.
`
`Investments and activities in some countries outside the U.S. are subject to higher risks than comparable U.S. activities because the investment
`and commercial climate may be influenced by financial instability in international economies, restrictive economic policies and political and legal
`system uncertainties.
`
`Raw Materials
`
`Raw materials essential to the Company's business are generally readily available from multiple sources. Where there are exceptions, the
`temporary unavailability of those raw materials would not likely have a material adverse effect on the financial results of the Company.
`
`Patents
`
`The Company's subsidiaries have made a practice of obtaining patent protection on their products and processes where possible. They own or
`are licensed under a number of patents relating to their products and manufacturing processes, which in the aggregate are believed to be of material
`importance to the Company in the operation of its businesses. Sales of the Company’s largest product, REMICADE ® (infliximab), accounted for
`approximately 9.2% of the Company's total revenues for fiscal 2014. Accordingly, the patents related to this product are believed to be material to the
`Company.
`
`
`There are two sets of patents related to REMICADE ® (infliximab). The first set of patents is co-owned by Janssen Biotech, Inc., a wholly-
`owned subsidiary of Johnson & Johnson, and NYU Langone Medical Center (NYU). Janssen Biotech, Inc. has an exclusive license to NYU's interests in
`the patents. Patents have been granted in the United States, certain countries in the European Union (certain of these patents have been extended by
`Supplementary Patent Certificates), and Australia. In the United States, the latest patent expires in September 2018. The patent expired in Canada in
`March 2012. In certain countries in Europe the patent was extended to February 2015 (Germany, Spain, United Kingdom, Sweden, Austria, Belgium,
`Switzerland, Denmark, France, Greece, Italy, Luxembourg and the Netherlands). In Australia, the patent expires in August 2015. In the United States,
`the patent expiring in 2018 is subject to reexamination proceedings instituted by a third party. Those proceedings are on-going.
`
`
`The second set of patents related to REMICADE ® was granted to the Kennedy Institute of Rheumatology in the United Kingdom in Europe,
`Canada, Australia and the United States. Janssen Biotech, Inc. has licenses (exclusive for human anti-TNF antibodies and semi-exclusive for non-human
`anti-TNF antibodies) to these patents that expire in 2017 outside of the United States and 2018 in the United States. The validity of these patents has
`been challenged. Certain claims have been invalidated and others are under review in various patent offices around the world and are also subject to
`litigation in Canada.
`
`
`The Company does not expect that any additional extensions will be available for the patents related to REMICADE ® . Loss of exclusivity will
`likely result in a reduction in sales as biosimilar versions of REMICADE ® are introduced to the market.
`
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`For legal matters regarding the patents related to REMICADE ® , see Note 21 “Legal Proceedings” under “Notes to Consolidated Financial Statements”
`of the Annual Report, filed as Exhibit 13 to this Report on Form 10-K, under the heading “Intellectual Property - Pharmaceutical - REMICADE ®
`Related Cases”.
`
`
`In addition to competing in the immunology market with REMICADE ® , the Company is currently marketing STELARA ® (ustekinumab),
`SIMPONI ® (golimumab) and SIMPONI ARIA ® (golimumab), next generation immunology products with remaining patent lives of up to nine years.
`
`Trademarks
`
`The Company’s subsidiaries have made a practice of selling their products under trademarks and of obtaining protection for these trademarks
`by all available means. These trademarks are protected by registration in the United States and other countries where such products are marketed. The
`Company considers these trademarks in the aggregate to be of material importance in the operation of its businesses.
`
`Seasonality
`
`Worldwide sales do not reflect any significant degree of seasonality; however, spending has been heavier in the fourth quarter of each year than
`in other quarters. This reflects increased spending decisions, principally for advertising and research and development activity.
`
`Competition
`
`In all of their product lines, the Company's subsidiaries compete with companies both locally and globally, throughout the world. Competition
`exists in all product lines without regard to the number and size of the competing companies involved. Competition in research, both internally and
`externally sourced, involving the development and the improvement of new and existing products and processes, is particularly significant. The
`development of new and innovative products is important to the Company’s success in all areas of its business. This also includes protecting the
`Company’s portfolio of intellectual property. The competitive environment requires substantial investments in continuing research. In addition, the
`development and maintenance of customer demand for the Company’s consumer products involves significant expenditures for advertising and
`promotion.
`
`Research and Development
`
`Research activities represent a significant part of the Company’s businesses. Research and development expenditures relate to the processes of
`discovering, testing and developing new products, improving existing products, as well as demonstrating product efficacy and regulatory compliance
`prior to launch. The Company remains committed to investing in research and development with the aim of delivering high quality and innovative
`products. Worldwide costs of research and development activities amounted to $8.5 billion, $8.2 billion and $7.7 billion for fiscal years 2014, 2013 and
`2012, respectively. Major research facilities are located not only in the United States, but also in Belgium, Brazil, Canada, China, France, Germany,
`India, Israel, Japan, the Netherlands, Singapore, Switzerland and the United Kingdom.
`
`Environment
`
`The Company is subject to a variety of U.S. and international environmental protection measures. The Company believes that its operations
`comply in all material respects with applicable environmental laws and regulations. The Company’s compliance with these requirements did not during
`the past year, and is not expected to, have a material effect upon its capital expenditures, cash flows, earnings or competitive position.
`
`Regulation
`
`Most of the Company’s businesses are subject to varying degrees of governmental regulation in the countries in which operations are
`conducted, and the general trend is toward increasingly stringent regulation. In the U.S., the drug, device, diagnostics and cosmetic industries have long
`been subject to regulation by various federal and state agencies, primarily as to product safety, efficacy, manufacturing, advertising, labeling and safety
`reporting. The exercise of broad regulatory powers by the U.S. Food and Drug Administration (the "FDA") continues to result in increases in the
`amounts of testing and documentation required for FDA clearance of new drugs and devices and a corresponding increase in the expense of product
`introduction. Similar trends are also evident in major markets outside of the U.S.
`
`The costs of human health care have been and continue to be a subject of study, investigation and regulation by governmental agencies and
`legislative bodies around the world. In the U.S., attention has been focused on drug prices and profits and programs that encourage doctors to write
`prescriptions for particular drugs or recommend, use or purchase particular medical devices. Payers have become a more potent force in the market place
`and increased attention is being paid to
`
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`drug and medical device pricing, appropriate drug and medical device utilization and the quality and costs of health care generally.
`
`Following the U.S. Supreme Court decision in June 2012 upholding the Patient Protection and Affordable Care Act (the "ACA"), there has
`been an increase in the pace of regulatory issuances by those U.S. government agencies designated to carry out the extensive requirements of the ACA.
`These have both positive and negative impacts on the U.S. healthcare industry with much remaining uncertain as to how various provisions of the ACA
`will ultimately affect the industry.
`
`The regulatory agencies under whose purview the Company operates have administrative powers that may subject it to actions such as product
`withdrawals, recalls, seizure of products and other civil and criminal sanctions. In some cases, the Company’s subsidiaries may deem it advisable to
`initiate product recalls.
`
`In addition, business practices in the health care industry have come under increased scrutiny, particularly in the United States, by government
`agencies and state attorneys general, and resulting investigations and prosecutions carry the risk of significant civil and criminal penalties.
`
`Further, the Company relies on global supply chains, and production and distribution processes, that are complex, are subject to increasing
`regulatory requirements that may affect sourcing, supply and pricing of materials used in the Company's products, and which are subject to lengthy
`regulatory approvals.
`
`Available Information
`
`The Company’s main corporate website address is www.jnj.com. Copies of the Company’s Quarterly Reports on Form 10-Q, Annual Report on
`Form 10-K and Current Reports on Form 8-K filed or furnished to the U.S. Securities and Exchange Commission (the "SEC"), and any amendments to
`the foregoing, will be provided without charge to any shareholder submitting a written request to the Secretary at the principal executive offices of the
`Company or by calling 1-800-950-5089. All of the Company’s SEC filings are also available on the Company’s website at
`www.investor.jnj.com/governance/sec-filings.cfm , as soon as reasonably practicable after having been electronically filed or furnished to the SEC. All
`SEC filings are also available at the SEC’s website at www.sec.gov . In addition, the written charters of the Audit Committee, the Compensation &
`Benefits Committee, the Nominating & Corporate Governance Committee, the Regulatory, Compliance & Government Affairs Committee and the
`Science, Technology & Sustainability Committee of the Board of Directors and the Company’s Principles of Corporate Governance, Policy on Business
`Conduct for employees, Code of Business Conduct & Ethics for Members of the Board of Directors and Executive Officers, and other corporate
`governance materials, are available at www.investor.jnj.com/governance/materials.cfm on the Company's website and will be provided without charge to
`any shareholder submitting a written request, as provided above. The information on the Company’s website is not, and will not be deemed, a part of
`this Report on Form 10-K or incorporated into any other filings the Company makes with the SEC.
`
`Item 1A. RISK FACTORS
`
`The Company faces a number of uncertainties and risks that are difficult to predict and many of which are outside of the Company's control. In
`addition to the other information in this Report and the Company’s other filings with the SEC, investors should consider carefully the factors set forth in
`Exhibit 99 to this Report on Form 10-K. Investors should realize that if known or unknown risks or uncertainties materialize, the Company’s business,
`results of operations or financial condition could be adversely affected.
`
`Item 1B. UNRESOLVED STAFF COMMENTS
`
`Not applicable.
`
`
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`Item 2.
`
`PROPERTIES
`
`The Company's subsidiaries operate 134 manufacturing facilities occupying approximately 21.5 million square feet of floor space. The
`manufacturing facilities are used by the industry segments of the Company’s business approximately as follows:
`
`Segment
`Consumer
`Pharmaceutical
`Medical Devices
`Worldwide Total
`
`
`
`
`
`
`
`
`Square Feet
`(in thousands)
`7,213
`7,404
`6,850
`21,467
`
`Within the United States, eight facilities are used by the Consumer segment, eight by the Pharmaceutical segment and 26 by the Medical
`Devices segment. The Company’s manufacturing operations outside the United States are often conducted in facilities that serve more than one business
`segment.
`
`In 2014, the divestiture of the Ortho-Clinical Diagnostics business resulted in the sale of eight manufacturing facilities, seven in the United
`States and one in Europe.
`
`The locations of the manufacturing facilities by major geographic areas of the world are as follows:
`
`Geographic Area
`United States
`Europe
`Western Hemisphere, excluding U.S.
`Africa, Asia and Pacific
`Worldwide Total
`
` Number of Facilities
`
`
`42
`
`41
`
`
`15
`
`36
`
`
`134
`
`
`
`
`
`Square Feet
`(in thousands)
`5,892
`7,673
`3,005
`4,897
`21,467
`
`In addition to the manufacturing facilities discussed above, the Company maintains numerous office and warehouse facilities throughout the
`world. Research facilities are also discussed in Item 1 under “Business — Research and Development.”
`
`The Company's subsidiaries generally seek to own their manufacturing facilities, although some, principally in non-U.S. locations, are leased.
`Office and warehouse facilities are often leased.
`
`The Company is committed to maintaining all of its properties in good operating condition and repair, and the facilities are well utilized.
`
`McNEIL-PPC, Inc. continues to operate under a consent decree, signed in 2011 with the FDA, which governs certain McNeil Consumer
`Healthcare manufacturing operations (the “Consent Decree”). The Consent Decree requires McNEIL-PPC to remediate the facilities it operates in
`Lancaster, Pennsylvania, Fort Washington, Pennsylvania, and Las Piedras, Puerto Rico. The Fort Washington facility, which was voluntarily shut down
`in April 2010, will remain shut down until a third-party current Good Manufacturing Practices (cGMP) expert certifies that its operations are in
`compliance with applicable law, and the FDA concurs with the third-party certification. Many products previously made in Fort Washington have been
`transferred to other manufacturing sites and successfully reintroduced to the market. The Lancaster and Las Piedras facilities continue to manufacture
`and distribute drugs with third-party oversight. Third-party oversight will cease once the FDA has determined that the facilities appear to be in
`compliance with applicable law. Each facility operating under the Consent Decree is subject to a five-year audit period by a third-party cGMP expert
`after the facility has been deemed by the FDA to be in apparent compliance with applicable law. McNeil has successfully completed all requirements
`contained in the Consent Decree Workplan for the Lancaster and Las Piedras manufacturing sites and has completed the steps required for third-party
`certification of the Fort Washington plant. In February 2015, the third-party cGMP expert submitted written certification to the FDA for all three
`manufacturing sites. The timeline for completion of any FDA inspection is within the FDA's discretion. A discussion of legal proceedings related to this
`matter can be found under the heading “Government Proceedings - McNeil Consumer Healthcare” in Note 21 “Legal Proceedings” under “Notes to
`Consolidated Financial Statements” of the Annual Report, filed as Exhibit 13 to this Report on Form 10-K.
`
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`For information regarding lease obligations, see Note 16 “Rental Expense and Lease Commitments” under “Notes to Consolidated Financial
`Statements” of the Annual Report, filed as Exhibit 13 to this Report on Form 10-K. Segment information on additions to property, plant and equipment
`is contained in Note 18 “Segments of Business and Geographic Areas” under “Notes to Consolidated Financial Statements” of the Annual Report, filed
`as Exhibit 13 to this Report on Form 10-K.
`
`Item 3.
`
`LEGAL PROCEEDINGS
`
`The following information is incorporated herein by reference: the information set forth in Note 21 “Legal Proceedings” under “Notes to
`Consolidated Financial Statements” of the Annual Report filed as Exhibit 13 to this Report on Form 10-K.
`
`In addition, Johnson & Johnson and its subsidiaries are from time to time party to government investigations, inspections or other proceedings
`relating to environmental matters, including their compliance with applicable environmental laws. In connection with a routine inspection of a
`subsidiary's manufacturing facility, the California Department of Toxic Substances Control alleged violation of regulations dealing with the handling of
`certain wastes. In the fourth quarter of 2014, the subsidiary entered into a settlement agreement with the State of California and agreed to perform
`certain remedial actions and pay approximately $400,000 to settle the claim.
`
`Item 4. MINE SAFETY DISCLOSURES
`
`Not applicable.
`
`EXECUTIVE OFFICERS OF THE REGISTRANT
`
`Listed below are the executive officers of the Company as of February 23, 2015. There are no family relationships between any of the
`executive officers, and there is no arrangement or understanding between any executive officer and any other person pursuant to which the executive
`officer was selected. At the annual meeting of the Board of Directors, the executive officers are elected by the Board to hold office for one year and until
`their respective successors are elected and qualified, or until earlier resignation or removal.
`
`Information with regard to the Directors of the Company, including information for Alex Gorsky, is incorporated herein by reference to the
`material captioned “Item 1: Election of Directors” in the Proxy Statement.
`
`Name
`Dominic J. Caruso
`Peter M. Fasolo
`Alex Gorsky
`Sandra E. Peterson
`Paulus Stoffels
`
` Age
`Position
` 57 Member, Executive Committee; Vice President, Finance; Chief Financial Officer(a)
` 52 Member, Executive Committee; Vice President, Global Human Resources(b)
` 54 Chairman, Board of Directors; Chairman, Executive Committee; Chief Executive Officer
` 56 Member, Executive Committee; Group Worldwide Chairman(c)
`53
`Member, Executive Committee; Chief Scientific Officer; Worldwide Chairman,
`Pharmaceuticals(d)
`
`
` 56 Member, Executive Committee; Vice President, General Counsel(e)
`
`Michael H. Ullmann
`_______________________________________
`
`
`(a)
`
`(b)
`
`(c)
`
`
`
`Mr. D. J. Caruso joined the Company in 1999 when the Company acquired Centocor, Inc. At the time of that acquisition, he had been Senior
`Vice President, Finance of Centocor. Mr. Caruso was named Vice President, Finance of Ortho-