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JOHNSON & JOHNSON Annual Report, Year Ended Dec 30, 2001

Filing Date
Filed March 20, 2002
Period End
December 30, 2001
Security
JNJ
In the record · 2016–202610-K1110-Q338-K134

JNJ filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 134 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Jun ’17Jun ’17
  2. FY2018 annual report10-K · Feb ’19Feb ’19
  3. Leadership change8-K · Oct ’21Oct ’21
  4. Leadership change8-K · Sep ’25Sep ’25

01—Abstract

Summary

Summary of the 10-K filed March 20, 2002. Cited figures are marked; the original filing is the authoritative source.

Johnson & Johnson's fiscal 2001 10-K reports record results, led by the Pharmaceutical and Medical Devices & Diagnostics segments.

Worldwide sales rose 10.6% to $33.0 billiona (13.2% excluding currency effects), marking the 69th consecutive year of sales growth. Net earnings grew 14.4% to $5.7 billion, or $1.84 diluted EPS. Excluding special charges tied to the ALZA merger and in-process R&D from the Inverness and TERAMed acquisitions, EPS was $1.91, up 17.2%.

Operating cash flow reached a record $8.9 billionb, and the company held $8.0 billion in cash and current marketable securities against $2.8 billion of total borrowings, leaving a net cash position of $5.2 billion. Growth was concentrated in Pharmaceuticals, whose sales rose 17.3% to $14.9 billion on strong performance from PROCRIT/EPREX, RISPERDAL, DURAGESIC, CONCERTA, REMICADE, and ULTRAM. Medical Devices & Diagnostics grew 8.9% to $11.2 billion, while Consumer was nearly flat at $7.0 billion.

Investors should note several risks disclosed in the filing: PROCRIT/EPREX is 10.4% of revenue and subject to an Amgen arbitration over U.S. license rights, with a decision expected around April 2002; roughly 950 PROPULSID lawsuits are pending, including a $100 millionc jury verdict in Mississippi; and a $5 billion share repurchase program was authorized in February 2002. The company also highlighted upcoming accounting changes (EITF 00-14 and 00-25) that will reduce reported sales by about $678 million annually, though the impact is on presentation rather than earnings.

02—Key points

Key Highlights

  1. Record sales of $33.0 billion, up 10.6% (13.2% ex-currency), the 69th consecutive year of sales growth.
  2. Net earnings of $5.7 billion (up 14.4%); diluted EPS of $1.84, or $1.91 excluding special charges (up 17.2%).
  3. Pharmaceutical segment sales rose 17.3% to $14.9 billion, now 45% of total sales; PROCRIT/EPREX alone is 10.4% of revenue.
  4. Record operating cash flow of $8.9 billion; cash and current marketable securities of $8.0 billion against $2.8 billion total borrowings.
  5. Triple A credit rating retained; 39th consecutive year of dividend increases, with 2001 dividends of $0.70 per share (up 12.9%).
  6. New $5 billion share repurchase program authorized in February 2002; 13.4 million shares bought back through March 15, 2002 at an average of $60.83.
  7. Key risks: Amgen arbitration over PROCRIT/EPREX U.S. license rights, roughly 950 PROPULSID lawsuits (including a $100 million jury verdict), and a $160 million-plus EITF reclassification reducing reported sales.

03—Questions

Frequently Asked Questions

  1. How did Johnson & Johnson perform financially in 2001?

    Sales reached $33.0 billion, up 10.6%, and net earnings were $5.7 billion, up 14.4%. Diluted EPS was $1.84, or $1.91 before special charges from the ALZA merger and in-process R&D write-offs. Operating cash flow was a record $8.9 billion.

  2. Which business segments drove growth?

    The Pharmaceutical segment led with 17.3% growth to $14.9 billion, driven by PROCRIT/EPREX, RISPERDAL, DURAGESIC, CONCERTA, REMICADE and ULTRAM. Medical Devices & Diagnostics grew 8.9% to $11.2 billion, while Consumer grew only 0.8% to $7.0 billion.

  3. What are the most significant legal risks disclosed?

    Amgen is arbitrating to terminate Ortho Biotech's U.S. PROCRIT/EPREX license, a decision expected around April 2002, which the company calls material. About 950 PROPULSID lawsuits are pending, and a Mississippi jury awarded $100 million in compensatory damages that the company intends to contest. Cordis also holds stent patent verdicts of $324 million and $271 million against competitors, but no gain has been recorded.

  4. How much debt does the company carry and how strong is its balance sheet?

    Total borrowings fell to $2.8 billion from $4.7 billion, and net cash (cash and current marketable securities less debt) was $5.2 billion. Debt represented 10.3% of total capital. The company has about $3.0 billion of unused credit and retains a Triple A rating.

  5. Will the new accounting rules change reported results?

    EITF 00-14 and 00-25 take effect in 2002 and will reduce reported sales and matching expenses by an estimated $678 million for 2001 (about $160 million and $518 million respectively). The filing states this is a reclassification with no material effect on net earnings or financial position.

04—Continue

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