Johnson and Johnson 2013 Annual Report Download - page 53

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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’ trust investments measured at fair value as of December 29, 2013 and
December 30, 2012:
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) 2013 2012 2013 2012 2013 2012 2013 2012
Short-term investment funds $304 155 561 627 – – 865 782
Government and agency securities – 53 1,965 1,706 – – 1,965 1,759
Debt instruments – 2 1,215 1,641 1 3 1,216 1,646
Equity securities 10,526 8,104 23 1 4 4 10,553 8,109
Commingled funds – 11 5,846 4,985 44 50 5,890 5,046
Insurance contracts – – 2 – 23 24 25 24
Other assets 4 – 314 101 69 69 387 170
Trust investments at fair value $10,834 8,325 9,926 9,061 141 150 20,901 17,536
The Company’s Other Benefit Plans are unfunded except for U.S. commingled funds (Level 2) of $76 million and $67
million at December 29, 2013 and December 30, 2012, respectively, and $11 million and $55 million of U.S. short-term-
investment funds (Level 2) at December 29, 2013 and December 30, 2012, respectively.
The fair value of Johnson & Johnson Common Stock directly held in plan assets was $671 million (3.2% of total plan
assets) at December 29, 2013 and $512 million (2.9% of total plan assets) at December 30, 2012.
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 29, 2013 and December 30, 2012:
(Dollars in Millions)
Debt
Instruments
Equity
Securities
Commingled
Funds
Insurance
Contracts
Other
Assets
Total
Level 3
Balance January 1, 2012 $9 16 33 25 65 148
Realized gains (losses) – (1) – – (5) (6)
Unrealized gains (losses) – – – – – –
Purchases, sales, issuances and settlements, net (6) (11) 17 (1) 9 8
Balance December 30, 2012 3 4 50 24 69 150
Realized gains (losses) – – – – (5) (5)
Unrealized gains (losses) – (1) – (1) – (2)
Purchases, sales, issuances and settlements, net (2) 1 (6) – 5 (2)
Balance December 29, 2013 $1 4 44 23 69 141
11. Savings Plan
The Company has voluntary 401(k) savings plans designed to enhance the existing retirement programs covering eligible
employees. The Company matches a percentage of each employee’s contributions consistent with the provisions of the
plan for which he/she is eligible. Total Company matching contributions to the plans were $164 million, $160 million and
$157 million in 2013, 2012 and 2011, respectively.
Johnson & Johnson 2013 Annual Report •43