10-KPeriod: FY2013

JOHNSON & JOHNSON Annual Report, Year Ended Dec 29, 2013

Filed February 21, 2014For Securities:JNJ

Summary

Johnson & Johnson's 2013 10-K filing highlights a diversified healthcare business structured across three key segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. The company operates with a decentralized management approach, overseeing over 275 operating companies globally. A significant focus for investors is the substantial commitment to research and development, with R&D expenditures totaling $8.2 billion in fiscal year 2013, underscoring the company's strategy of innovation and product improvement across all segments. The filing also touches upon key product lines, including prominent brands like JOHNSON’S® Baby, AVEENO®, LISTERINE®, TYLENOL®, and prescription drugs such as REMICADE®, STELARA®, and XARELTO®. While the company emphasizes the material importance of its patents and trademarks, it acknowledges potential risks associated with patent expirations, particularly for its leading product, REMICADE®. Investors should note the company's ongoing compliance efforts with environmental and governmental regulations, which are generally not expected to have a material adverse effect.

Financial Highlights

54 data points
Beta

Revenue

$71.31B

68.7% Gross Margin

Net Income

$13.83B

19.4% Net Margin

EPS (Diluted)

$4.81

Total Assets

$132.68B

Cash & Equivalents

$20.93B

Free Cash Flow

$13.82B

Financial Statements
Beta
Revenue$71.31B
Cost of Revenue$22.34B
Gross Profit$48.97B
SG&A Expenses$21.83B
Operating Income$16.41B
Interest Expense$482.00M
Net Income$13.83B
EPS (Basic)$4.92
EPS (Diluted)$4.81
Shares Outstanding (Basic)2.81B
Shares Outstanding (Diluted)2.88B

Key Highlights

  • 1Johnson & Johnson operates a globally diversified healthcare business across Consumer, Pharmaceutical, and Medical Devices and Diagnostics segments.
  • 2The company significantly invests in innovation, with R&D expenditures reaching $8.2 billion in fiscal year 2013.
  • 3Key product lines include well-known consumer brands and significant pharmaceutical products like REMICADE®, STELARA®, and XARELTO®.
  • 4The company acknowledges the material importance of its patent portfolio, with REMICADE® patents expiring in the coming years, a factor that could impact future sales.
  • 5Operations are spread across more than 275 subsidiaries in 60 countries, indicating a broad global reach.
  • 6The company's manufacturing footprint includes 144 facilities worldwide, with substantial space dedicated to each of its three business segments.
  • 7Disclosure controls and procedures were deemed effective by management at the end of the fiscal year 2013.

Frequently Asked Questions

Johnson & Johnson is organized into three main business segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. The Consumer segment offers products for baby care, skin care, oral care, wound care, women's health, nutritionals, and over-the-counter medicines. The Pharmaceutical segment focuses on prescription products for areas like immunology, oncology, neurology, and infectious diseases. The Medical Devices and Diagnostics segment provides products for cardiovascular disease, orthopaedics, neurological conditions, diabetes monitoring, general surgery, and diagnostic tools.

Johnson & Johnson demonstrates a strong commitment to innovation through substantial investment in research and development. In fiscal year 2013, the company spent $8.2 billion on R&D activities aimed at discovering, testing, and developing new products, as well as improving existing ones. This ongoing investment is crucial for maintaining competitiveness and delivering high-quality, innovative healthcare solutions.

The company considers its patent portfolio to be of material importance. For its significant product REMICADE®, patents are set to expire in the United States in September 2018 and in some European countries in February 2015, with others expiring in 2017. While J&J is marketing newer immunology products, the loss of exclusivity for REMICADE® in these markets could lead to a reduction in sales, posing a potential risk to future revenues.

Johnson & Johnson operates in a highly regulated industry and is subject to various governmental regulations globally. The company believes its operations comply with applicable environmental laws and regulations, and compliance generally does not materially affect its financial condition. It also notes that McNeil-PPC, Inc. is operating under an FDA consent decree, but significant progress has been made in remediation. The company generally does not expect current legal proceedings or regulatory matters to have a material adverse impact.