Johnson and Johnson 2013 Annual Report Download - page 40

Net Earnings Per Share
Basic earnings per share is computed by dividing net earnings available to common shareholders by the weighted average
number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could
occur if securities were exercised or converted into common stock using the treasury stock method.
Use of Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the
U.S. requires management to make estimates and assumptions that affect the amounts reported. Estimates are used when
accounting for sales discounts, rebates, allowances and incentives, product liabilities, income taxes, depreciation,
amortization, employee benefits, contingencies and intangible asset and liability valuations. Actual results may or may not
differ from those estimates.
The Company follows the provisions of U.S. GAAP when recording litigation related contingencies. A liability is recorded
when a loss is probable and can be reasonably estimated. The best estimate of a loss within a range is accrued; however,
if no estimate in the range is better than any other, the minimum amount is accrued.
Annual Closing Date
The Company follows the concept of a fiscal year, which ends on the Sunday nearest to the end of the month of
December. Normally each fiscal year consists of 52 weeks, but every five or six years the fiscal year consists of 53 weeks,
as was the case in 2009, and will be the case again in 2015.
Reclassification
Certain prior period amounts have been reclassified to conform to current year presentation.
2. Cash, Cash Equivalents and Current Marketable Securities
At the end of 2013 and 2012, cash, cash equivalents and current marketable securities were comprised of:
(Dollars in Millions) 2013 2012
Cash $2,789 3,032
Government securities and obligations 7,632 7,622
Reverse repurchase agreements 15,006 7,701
Corporate debt securities 1,467 622
Money market funds 1,886 1,406
Time deposits 426 706
Total cash, cash equivalents and current marketable securities $29,206 21,089
The estimated fair value was the same as the amortized cost as of December 29, 2013 and December 30, 2012.
As of December 29, 2013, current marketable securities consisted of $6,160 million, $1,100 million and $1,019 million of
government securities and obligations, reverse repurchase agreements and corporate debt securities, respectively.
As of December 30, 2012, current marketable securities consisted of $5,226 million, $500 million and $452 million of
government securities and obligations, reverse repurchase agreements and corporate debt securities, respectively.
Fair value of government securities and obligations and corporate debt securities were estimated using quoted broker
prices and significant other observable inputs.
The Company invests its excess cash in both deposits with major banks throughout the world and other high-quality
money market instruments. The Company has a policy of making investments only with commercial institutions that have at
least an “A” (or equivalent) credit rating.
30 •Johnson & Johnson 2013 Annual Report