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•Insurance contracts – The instruments are issued by insurance companies. The fair value is based on negotiated value
and the underlying investments held in separate account portfolios as well as considering the credit worthiness of the
issuer. The underlying investments are government, asset-backed and fixed income securities. In general, insurance
contracts are classified as Level 3 as there are no quoted prices nor other observable inputs for pricing.
•Other assets – Other assets are represented primarily by limited partnerships and real estate investments, as well as
commercial loans and commercial mortgages that are not classified as corporate debt. Other assets that are exchange
listed and actively traded are classified as Level 1, while inactively traded assets are classified as Level 2. Most limited
partnerships represent investments in private equity and similar funds that are valued by the general partners. Certain of
these limited partnerships, as well as any other assets valued using unobservable inputs, are classified as Level 3.
The following table sets forth the Retirement Plans’ investments measured at fair value as of December 31, 2015 and
December 28, 2014:
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3) Total Assets
(Dollars in Millions) 2015 2014 2015 2014 2015 2014 2015 2014
Short-term investment funds $184 168 312 551 – – 496 719
Government and agency securities – – 1,767 1,934 – – 1,767 1,934
Debt instruments – – 1,050 1,143 1 1 1,051 1,144
Equity securities 11,317 11,204 11 21 – – 11,328 11,225
Commingled funds – – 7,189 7,205 33 46 7,222 7,251
Insurance contracts – – – – 23 24 23 24
Other assets – 1 314 214 53 63 367 278
Investments at fair value $11,501 11,373 10,643 11,068 110 134 22,254 22,575
The Company’s Other Benefit Plans are unfunded except for U.S. commingled funds (Level 2) of $74 million and $79
million at December 31, 2015 and December 28, 2014, respectively.
The fair value of Johnson & Johnson Common Stock directly held in plan assets was $751 million ( 3.4% of total plan
assets) at December 31, 2015 and $778 million ( 3.4% of total plan assets) at December 28, 2014.
Level 3 Gains and Losses
The table below sets forth a summary of changes in the fair value of the Plan’s Level 3 assets for the years ended
December 31, 2015 and December 28, 2014:
(Dollars in Millions)
Debt
Instruments
Equity
Securities
Commingled
Funds
Insurance
Contracts
Other
Assets
Total
Level 3
Balance December 29, 2013 $1 4 44 23 69 141
Realized gains (losses) – – – – (5) (5)
Unrealized gains (losses) – – 2 – – 2
Purchases, sales, issuances and settlements,
net – – (2) 3 (1) –
Transfers in/out and exchange rate changes – (4) 2 (2) – (4)
Balance December 28, 2014 1 – 46 24 63 134
Realized gains (losses) – – 1 – (2) (1)
Unrealized gains (losses) – – (11) – (5) (16)
Purchases, sales, issuances and settlements,
net – – (2) 1 (2) (3)
Transfers in/out and exchange rate changes – – (1) (2) (1) (4)
Balance December 31, 2015 $1 – 33 23 53 110
Johnson & Johnson 2015 Annual Report •55