Document: SEC Filing

Company: Johnson & Johnson
Ticker: JNJ
CIK: 200406
Form Type: 10-K
Filing Date: 2026-02-11
Accession Number: 0000200406-26-000016
Source: 10-K_2026-02-11_0000200406-26-000016.txt

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 
10-K

☑ ANNUAL REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended
December 28
, 2025

or
☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from            to

Commission file number
1-3215

Johnson & Johnson

(Exact name of registrant as specified in its charter)
New Jersey 22-1024240
(State of incorporation) (I.R.S. Employer Identification No.)
One Johnson & Johnson Plaza New Brunswick, New Jersey 08933
(Address of principal executive offices) (Zip Code)

One Johnson & Johnson Plaza

New Brunswick
,
New Jersey

08933

(Address of principal executive offices)
Registrant’s telephone number, including area code: (
732
) 
524-0400

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT
Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, Par Value $1.00 JNJ New York Stock Exchange
1.150% Notes Due November 2028 JNJ28 New York Stock Exchange
2.700% Notes Due February 2029 JNJ29B New York Stock Exchange
3.20% Notes Due June 2032 JNJ32 New York Stock Exchange
3.050% Notes Due February 2033 JNJ33B New York Stock Exchange
1.650% Notes Due May 2035 JNJ35 New York Stock Exchange
3.350% Notes Due June 2036 JNJ36A New York Stock Exchange
3.350% Notes Due February 2037 JNJ37B New York Stock Exchange
3.550% Notes Due June 2044 JNJ44 New York Stock Exchange
3.600% Notes Due February 2045 JNJ45 New York Stock Exchange
3.700% Notes Due February 2055 JNJ55 New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  
Yes
 
þ
     No 
o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.  Yes 
o
     
No
 
þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  
Yes
 
þ
     No 
o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  
Yes
 
þ
     No 
o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange  Act.
Large accelerated filer ☑ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
o
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes 
☑
     No 
o
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
o
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes 
☐
     No 
þ
The aggregate market value of the Common Stock held by non-affiliates computed by reference to the price at which the Common Stock was last sold as of the last business day of the registrant’s most recently completed second fiscal quarter was approximately $
367
billion.
On February 6, 2026, there were
2,409,898,936
shares of Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Part III: Portions of the registrant’s proxy statement for its 2026 annual meeting of shareholders to be filed within 120 days after the close of the registrant’s fiscal year (the “Proxy Statement”), are incorporated by reference to this report on Form 10-K (this “Report”).

Item Page
P art I
1 Business 1
General 1
Segments of business 1
Geographic areas 2
Raw materials 3
Patents 3
Trademarks 3
Seasonality 3
Competition 4
Environment 4
Regulation 4
Employees and human capital management 6
Available information 8
1A. Risk factors 9
1B. Unresolved staff comments 17
1C. Cybersecurity 17
2 Properties 18
3 Legal proceedings 18
4 Mine safety disclosures 18
Executive officers of the registrant 19
P art II
5 Market for r egistrant’s c ommon e quity, r elated s tockholder m atters and i ssuer p urchases of e quity s ecurities 21
6 (Reserved) 21
7 Management’s discussion and analysis of results of operations and financial condition 22
7A. Quantitative and qualitative disclosures about market risk 41
8 Financial statements and supplementary data 42
9 Changes in and disagreements with accountants on accounting and financial disclosure 114
9A. Controls and procedures 114
9B. Other information 114
9C. Disclosure regarding foreign jurisdictions that prevent inspections 114
P art III
10 Directors, executive officers and corporate governance 115
11 Executive compensation 115
12 Security ownership of certain beneficial owners and management and related stockholder matters 115
13 Certain relationships and related transactions, and director independence 116
14 Principal accountant fees and services 116
P art IV
15 Exhibits and financial statement schedules 117
16 Form 10-K summary 117
Signatures 118
Exhibit index 120

Cautionary note regarding forward-looking statements
This Annual Report on Form 10-K and Johnson & Johnson’s other publicly available documents contain “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Management and representatives of Johnson & Johnson and its subsidiaries (the Company) also may from time to time make forward-looking statements. Forward-looking statements do not relate strictly to historical or current facts and reflect management’s assumptions, views, plans, objectives and projections about the future. Forward-looking statements may be identified by the use of words such as “plans,” “expects,” “will,” “anticipates,” “estimates” and other words of similar meaning in conjunction with, among other things: discussions of future operations; expected operating results and financial performance; impact of planned acquisitions and dispositions; impact and timing of restructuring initiatives, including associated cost savings and other benefits; the Company’s strategy for growth; product development activities; regulatory approvals; market position and expenditures.
Because forward-looking statements are based on current beliefs, expectations and assumptions regarding future events, they are subject to uncertainties, risks and changes that are difficult to predict and many of which are outside of the Company’s control. Investors should realize that if underlying assumptions prove inaccurate, or known or unknown risks or uncertainties materialize, the Company’s actual results and financial condition could vary materially from expectations and projections expressed or implied in its forward-looking statements. Investors are therefore cautioned not to rely on these forward-looking statements. Risks and uncertainties include, but are not limited to:
Risks related to product development, market success and competition
•
Challenges and uncertainties inherent in innovation and development of new and improved products and technologies on which the Company’s continued growth and success depend, including uncertainty of clinical outcomes, additional analysis of existing clinical data, obtaining regulatory approvals, health plan coverage and customer access, and initial and continued commercial success;
•
Challenges to the Company’s ability to secure and maintain adequate patent and other intellectual property rights for new and existing products and technologies in the United States and other important markets;
•
The impact of patent expirations, typically followed by the introduction of competing generic, biosimilar or other products and resulting revenue and market share losses;
•
Increasingly aggressive and frequent challenges to the Company’s patents by competitors and others seeking to launch competing generic, biosimilar or other products and increased receptivity of courts, the United States Patent and Trademark Office and other decision makers to such challenges, potentially resulting in loss of market exclusivity and rapid decline in sales for the relevant product sooner than expected;
•
Competition in research and development of new and improved products, processes and technologies, which can result in product and process obsolescence;
•
Competition to reach agreement with third parties for collaboration, licensing, development and marketing agreements for products and technologies;
•
Competition based on cost-effectiveness, product performance, technological advances and patents attained by competitors; and
•
Allegations that the Company’s products infringe the patents and other intellectual property rights of third parties, which could adversely affect the Company’s ability to sell the products in question and require the payment of money damages and future royalties.
Risks related to product liability, litigation and regulatory activity
•
Product efficacy or safety concerns, whether or not based on scientific evidence, potentially resulting in product withdrawals, recalls, regulatory action on the part of the United States Food and Drug Administration (U.S. FDA) (or international counterparts), declining sales, reputational damage, increased litigation expense and share price impact;
•
The impact, including declining sales and reputational damage, of significant litigation or government action adverse to the Company, including product liability claims and allegations related to pharmaceutical marketing practices and contracting strategies;
•
The impact of an adverse judgment or settlement and the adequacy of reserves related to legal proceedings, including patent litigation, product liability, personal injury claims, securities class actions, government investigations, employment and other legal proceedings;
•
Increased scrutiny of the healthcare industry by government agencies and state attorneys general resulting in investigations and prosecutions, which carry the risk of significant civil and criminal penalties, including, but not limited to, debarment from government business;
•
Failure to meet compliance obligations in compliance agreements with governments or government agencies, which could result in significant sanctions;
•
Potential changes to applicable laws and regulations affecting United States and international operations, including relating to: approval of new products; licensing and patent rights; sales and promotion of healthcare products; access to, and reimbursement and pricing for, healthcare products and services; environmental protection; and sourcing of raw materials;
•
Compliance with local regulations and laws that may restrict the Company’s ability to manufacture or sell its products in relevant markets, including requirements to comply with medical device reporting regulations and other requirements such as the European Union’s Medical Devices Regulation;
•
Changes in domestic and international tax laws and regulations, increasing audit scrutiny by tax authorities around the world may cause exposures to additional tax liabilities potentially in excess of existing reserves; and
•
The issuance of new or revised accounting standards by the Financial Accounting Standards Board and regulations by the Securities and Exchange Commission.
Risks related to the Company’s strategic initiatives, healthcare market trends and the planned separation of the Company's Orthopaedics Business
•
Pricing pressures resulting from trends toward healthcare cost containment, including the continued consolidation among healthcare providers and other market participants, trends toward managed care, the shift toward governments increasingly becoming the primary payors of healthcare expenses, significant new entrants to the healthcare markets seeking to reduce costs and government pressure on companies to voluntarily reduce costs and price increases;
•
Restricted spending patterns of individual, institutional and governmental purchasers of healthcare products and services due to economic hardship and budgetary constraints;
•
Challenges to the Company’s ability to realize its strategy for growth including through externally sourced innovations, such as development collaborations, strategic acquisitions, licensing and marketing agreements, and the potential heightened costs of any such external arrangements due to competitive pressures;
•
The potential that the expected strategic benefits and opportunities from any planned or completed acquisition or divestiture by the Company may not be realized or may take longer to realize than expected;
•
The potential that the expected benefits and opportunities related to past and ongoing restructuring actions may not be realized or may take longer to realize than expected;
•
The Company’s ability to satisfy the necessary conditions to consummate the planned separation of the Company’s Orthopaedics business on a timely basis or at all;
•
The Company’s ability to successfully separate the Company’s Orthopaedics business and realize the anticipated benefits from the planned separation; and
•
The structure of the separation transaction and the future operating and financial performance, market position and business strategy for each company.
Risks related to economic conditions, financial markets and operating internationally
•
The risks associated with global operations on the Company and its customers and suppliers, including foreign governments in countries in which the Company operates;
•
The impact of inflation and fluctuations in interest rates and currency exchange rates and the potential effect of such fluctuations on revenues, expenses and resulting margins;
•
Potential changes in export/import and trade laws, regulations and policies of the United States and other countries, including any increased trade restrictions or tariffs and potential drug reimportation legislation, and the impact of such changes on raw material prices, supply chains market volatility and the pace of product development;
•
The impact on international operations from financial instability in international economies, sovereign risk, possible imposition of governmental controls and restrictive economic policies, and unstable international governments and legal systems;
•
The impact of global public health crises and pandemics;
•
Changes to global climate, extreme weather and natural disasters that could affect demand for the Company’s products and services, cause disruptions in manufacturing and distribution networks, alter the availability of goods and services within the supply chain, and affect the overall design and integrity of the Company’s products and operations;
•
The impact of global or economic changes or events, including global tensions and war; and
•
The impact of armed conflicts and terrorist attacks in the United States and other parts of the world, including social and economic disruptions and instability of financial and other markets.
Risks related to supply chain and operations
•
Difficulties and delays in manufacturing, internally, through third-party providers or otherwise within the supply chain, that may lead to voluntary or involuntary business interruptions or shutdowns, product shortages, withdrawals or suspensions of products from the market, and potential regulatory action;
•
Interruptions and breaches of the Company’s information technology systems or those of the Company’s vendors, which could result in reputational, competitive, operational or other business harm as well as financial costs and regulatory action;
•
Reliance on global supply chains and production and distribution processes that are complex and subject to increasing regulatory requirements that may adversely affect supply, sourcing and pricing of materials used in the Company’s products; and
•
The potential that the expected benefits and opportunities related to restructuring actions may not be realized or may take longer to realize than expected, including due to any required approvals from applicable regulatory authorities.
Investors also should carefully read the risk factors described in Item 1A of this Annual Report on Form 10-K for a description of certain risks that could, among other things, cause the Company’s actual results to differ materially from those expressed in its forward-looking statements. Investors should understand that it is not possible to predict or identify all such factors and should not consider the risks described above and in Item 1A to be a complete statement of all potential risks and uncertainties. The Company does not undertake to publicly update any forward-looking statement that may be made from time to time, whether as a result of new information or future events or developments.
Part I
Item 1. Business
General
Johnson & Johnson and its subsidiaries (the Company) have approximately 138,200 employees worldwide engaged in the research and development, manufacture and sale of a broad range of products in the healthcare field. Johnson & Johnson is a holding company, with operating companies conducting business in virtually all countries of the world. The Company’s primary focus is products related to human health and well-being. Johnson & Johnson was incorporated in the State of New Jersey in 1887.
The Chief Operating Decision Maker (CODM) is the Company's Chief Executive Officer (Principal Executive Officer). The Executive Committee is Johnson & Johnson’s senior leadership team responsible for setting the strategy and priorities of the Company and driving accountability at all levels. Within the strategic parameters provided by the Executive Committee, senior management groups at U.S. and international operating companies are each responsible for their own strategic plans and the day-to-day operations of those companies.
Segments of business
The Company is organized into two business segments: Innovative Medicine and MedTech. Additional information required by this item is incorporated herein by reference to the narrative and tabular descriptions of segments and operating results under: Item 7. Management’s discussion and analysis of results of operations and financial condition of this Report; and Note 17 Segments of business and geographic areas of the notes to consolidated financial statements included in Item 8 of this Report.
Innovative Medicine
The Innovative Medicine segment is focused on the following therapeutic areas: Oncology (e.g., prostate cancer, hematologic malignancies, lung cancer and bladder cancer), Immunology (e.g., rheumatoid arthritis, psoriatic arthritis, inflammatory bowel disease and psoriasis), Neuroscience (e.g., mood disorders, neurodegenerative disorders and schizophrenia), Pulmonary Hypertension (e.g., Pulmonary Arterial Hypertension), Infectious Diseases (e.g., HIV/AIDS) and Cardiovascular and Metabolism (e.g., thrombosis, diabetes and macular degeneration). Medicines in this segment are distributed directly to retailers, wholesalers, distributors, hospitals and healthcare professionals for prescription use. Key products in the Innovative Medicine segment include: CARVYKTI (ciltacabtagene autoleucel), a chimeric antigen receptor (CAR)-T-cell therapy for the treatment of patients with relapsed/refractory multiple myeloma; DARZALEX (daratumumab), a treatment for multiple myeloma; DARZALEX FASPRO (daratumumab and hyaluronidase-fihj), a treatment for multiple myeloma and light chain (AL) Amyloidosis; ERLEADA (apalutamide), a next-generation androgen receptor inhibitor for the treatment of patients with prostate cancer; IMBRUVICA (ibrutinib), a treatment for certain B-cell malignancies, or blood cancers and chronic graft versus host disease; RYBREVANT (amivantamab), a fully-human bispecific antibody for adults with EGFR-mutated non-small cell lung cancer and LAZCLUZE (lazertinib), an oral, brain-penetrant EGFR tyrosine kinase inhibitor for non-small cell lung cancer; RYBREVANT FASPRO (amivantamab and hyaluronidase-lpuj), a subcutaneous therapy for patients with non-small cell lung cancer; TALVEY (talquetamab-tgvs) a bispecific antibody for adults with relapsed or refractory multiple myeloma who have received at least four prior lines of therapy; TECVAYLI (teclistamab-cqyv), a bispecific antibody for adults with relapsed or refractory multiple myeloma who have received at least four prior lines of therapy; ZYTIGA (abiraterone acetate), a treatment for patients with prostate cancer; REMICADE (infliximab), a treatment for a number of immune-mediated inflammatory diseases; SIMPONI (golimumab), a subcutaneous treatment for adults with moderate to severe rheumatoid arthritis, active psoriatic arthritis, active ankylosing spondylitis and moderately active to severely active ulcerative colitis; SIMPONI ARIA (golimumab), an intravenous treatment for adults with moderate to severe rheumatoid arthritis, active psoriatic arthritis and active ankylosing spondylitis and active polyarticular juvenile idiopathic arthritis (pJIA) in people 2 years of age and older; STELARA (ustekinumab), a treatment for adults and children with moderate to severe plaque psoriasis, for adults with active psoriatic arthritis, for adults with moderately to severely active Crohn's disease and treatment of moderately to severely active
2025 Annual Report 1

ulcerative colitis; TREMFYA (guselkumab), a treatment for patients with moderate-to-severe plaque psoriasis, active psoriatic arthritis, moderate-to-severe Crohn’s disease and moderate-to-severe ulcerative colitis; CAPLYTA (lumateperone) is used in adults along with an antidepressant to treat major depressive disorder (MDD), depressive episodes associated with bipolar I or bipolar II disorder (bipolar depression) alone or with lithium or valproate; or to treat schizophrenia; CONCERTA (methylphenidate HCl) extended-release tablets CII, a treatment for attention deficit hyperactivity disorder; INVEGA SUSTENNA/XEPLION (paliperidone palmitate), for the treatment of schizophrenia and schizoaffective disorder in adults; INVEGA TRINZA/TREVICTA (paliperidone palmitate), for the treatment of schizophrenia in patients after they have been adequately treated with INVEGA SUSTENNA for at least four months; SPRAVATO (Esketamine), a nasal spray, used along with an oral antidepressant, to treat adults with treatment-resistant depression (TRD) and depressive symptoms in adults with major depressive disorder (MDD) with suicidal thoughts or actions; EDURANT (rilpivirine), PREZISTA (darunavir) and PREZCOBIX/REZOLSTA (darunavir/cobicistat), antiretroviral medicines for the treatment of human immunodeficiency virus (HIV) in combination with other antiretroviral products and SYMTUZA (darunavir/cobicistat/emtricitabine/tenofovir alafenamide), a once-daily single tablet regimen for the treatment of HIV; OPSUMIT (macitentan)/OPSYNVI (macitentan/tadalafil) as monotherapy or in combination, indicated for the long-term treatment of pulmonary arterial hypertension (PAH); UPTRAVI (selexipag), the only approved oral and intravenous, selective IP receptor agonist targeting a prostacyclin pathway in PAH; XARELTO (rivaroxaban), an oral anticoagulant for the prevention of deep vein thrombosis (DVT), which may lead to pulmonary embolism (PE) in patients undergoing hip or knee replacement surgery, to reduce the risk of stroke and systemic embolism in patients with nonvalvular atrial fibrillation, and for the treatment and reduction of risk of recurrence of DVT and PE to reduce the risk of major cardiovascular events in patients with coronary artery disease (CAD) and peripheral artery disease (PAD), for the treatment and secondary prevention of thromboembolism in pediatric patients, and for thromboprophylaxis in pediatric patients following the Fontan procedure. Many of these medicines were developed in collaboration with strategic partners or are licensed from other companies and maintain active lifecycle development programs.
MedTech
The MedTech segment develops and manufactures a broad portfolio of products used in cardiovascular, orthopaedics, surgery, and vision supporting physicians, hospitals, eye care professionals and healthcare systems across a wide range of acute and elective procedures. These products are designed to address disease states where procedural intervention plays a central role in treatment and patient outcomes. The Cardiovascular portfolio includes electrophysiology products used to diagnose and treat heart rhythm disorders, mechanical circulatory support technologies (Abiomed) used in patients with cardiogenic shock or those undergoing a high-risk percutaneous coronary intervention (PCI), circulatory restoration products (Shockwave) for the treatment of calcified coronary artery disease (CAD) and peripheral artery disease (PAD), and neurovascular care that treats stroke and other conditions. These offerings are primarily delivered through minimally invasive, catheter based approaches and are used by interventional cardiologists, electrophysiologists and neurointerventional specialists. The Orthopaedics portfolio includes products and enabling technologies that support joint reconstruction, trauma, spine, sports-related injuries, and others. The Surgery portfolio includes a range of surgical products and enabling technologies for use across open, laparoscopic and robotic surgical procedures. This portfolio includes instrumentation, energy devices, stapling systems, wound closure, biosurgery products, and digital and robotic technologies designed to support procedural consistency and efficiency across multiple surgical specialties. The Surgery portfolio also includes solutions that focus on breast aesthetics and reconstruction (Mentor). These products are used in hospitals and surgical centers worldwide and are supported by ongoing development of surgical techniques and clinical evidence. The Vision portfolio includes contact lenses marketed under the ACUVUE brand, TECNIS premium intraocular lenses for cataract surgery, and other products used in cataract and refractive procedures. Vision products are used by eye care professionals and ophthalmic surgeons and span both corrective and surgical vision care. These MedTech products are distributed to wholesalers, hospitals, and retailers and are used predominantly in the professional fields by physicians, nurses, hospitals, eye care professionals, and clinics.
In October 2025, the Company announced its intention to separate its Orthopaedics business. The Company intends to explore multiple paths to effect the planned separation with a targeted completion within 18 to 24 months after the initial announcement.
Geographic areas
The Company conducts business in virtually all countries of the world with the primary focus on products related to human health and well-being. The products made and sold in the international business include many of those described above under Segments of Business – Innovative Medicine and MedTech. However, the principal markets, products and methods of distribution in the international business vary with the country and the culture. The products sold in the international business include those developed in the U.S. and by subsidiaries abroad.
2

Investments and activities in some countries outside the U.S. are subject to higher risks than comparable U.S. activities because the investment and commercial climate may be influenced by financial instability in international economies, restrictive economic policies and political and legal system uncertainties.
Raw materials
Raw materials essential to the Company's business are generally readily available from multiple sources. Where there are exceptions, the temporary unavailability of those raw materials would not likely have a material adverse effect on the financial results of the Company.
Patents
The Company's subsidiaries have made a practice of obtaining patent protection on their products and processes where possible. They own, or are licensed under, a significant number of patents in the U.S. and other countries relating to their products, product uses, formulations and manufacturing processes. The Company’s subsidiaries face patent challenges from third parties, including challenges seeking to manufacture and market generic and biosimilar versions of the Company's key pharmaceutical products prior to expiration of the applicable patents covering those products. Significant legal proceedings and claims involving the Company's patent and other intellectual property are described in Note 19 Legal proceedings—Intellectual property of the Notes to Consolidated Financial Statements included in Item 8 of this Report.
Sales of the Company’s largest product, collectively DARZALEX (daratumumab) and DARZALEX FASPRO (daratumumab and hyaluronidase-fihj), accounted for approximately 15.0% of the Company's total revenues for fiscal 2025. Genmab A/S owns two patent families related to DARZALEX, and Janssen Biotech, Inc. (a wholly-owned subsidiary of the Company) has an exclusive license to those patent families. Royalty rate ranges from 12% to 20% of total DARZALEX net sales. For the fiscal 2025 and 2024, royalty amounts to Genmab were approximately $2.4 billion and $2.0 billion, respectively. The two patent families both expire in the United States in 2029, and in Europe, compound/use patent protection in select countries extends to 2031/2032. Janssen Biotech, Inc. owns separate patent portfolios related to DARZALEX FASPRO and DARZALEX IV.
Sales of the Company’s second largest product, STELARA (ustekinumab) accounted for approximately 6.5% of the Company's total revenues for fiscal 2025. Third parties have filed biologics license applications with the U.S. FDA, the European Medicines Agency, and other government authorities seeking approval to market biosimilar versions of STELARA around the globe. The Company expects continued launches of biosimilar versions of STELARA globally which will continue to negatively impact the Company’s sales of STELARA.
Sales of the Company’s third largest product, TREMFYA (guselkumab), accounted for approximately 5.5% of the Company's total revenues for fiscal 2025. Janssen Biotech, Inc. owns multiple patent families related to TREMFYA, including a composition patent family projected to expire in the United States in 2031. In addition, Janssen Biotech, Inc. is a party to license agreements related to TREMFYA with an aggregate royalty rate of approximately 5.0% of total TREMFYA net sales payable to third parties.
Trademarks
The Company’s subsidiaries have made a practice of selling their products under trademarks and of obtaining protection for these trademarks by all available means. These trademarks are protected by registration in the U.S. and other countries where such products are marketed.
Seasonality
Worldwide sales do not reflect any significant degree of seasonality; however, spending has typically been heavier in the fourth quarter of each year than in other quarters. This reflects increased spending decisions, principally for advertising and research and development activity.
2025 Annual Report 3

Competition
In all of their product lines, the Company's subsidiaries compete with companies both locally and globally. Competition exists in all product lines without regard to the number and size of the competing companies involved. Competition in research, both internally and externally sourced, involving the development and the improvement of new and existing products and processes, is particularly significant. The development of new and innovative products, as well as protecting the underlying intellectual property of the Company’s product portfolio, is important to the Company's success in all areas of its business. The competitive environment requires substantial investments in continuing research.
Environment
The Company is subject to a variety of environmental laws and regulations in the United States and other jurisdictions. The Company believes that its operations comply in all material respects with applicable environmental laws and regulations. The Company’s compliance with these requirements is not expected to have a material effect upon its capital expenditures, cash flows, earnings or competitive position.
Regulation
The Company’s businesses are subject to varying degrees of governmental regulation in the countries in which operations are conducted, and the general trend is toward increasingly stringent regulation and enforcement. The Company is subject to costly and complex U.S. and foreign laws and governmental regulations, and any adverse regulatory action may materially adversely affect the Company's financial condition and business operations. In the U.S., the pharmaceutical product and medical technology industries have long been subject to regulation by various federal and state agencies, primarily as to product safety, efficacy, manufacturing, advertising, labeling and safety reporting. The exercise of broad regulatory powers by the U.S. Food and Drug Administration (the U.S. FDA) continues to result in increases in the amounts of testing and documentation required for U.S. FDA approval of new drugs and devices and a corresponding increase in the expense of product introduction. Similar trends are also evident in major markets outside of the U.S.
The medical device regulatory framework and the evolving privacy, data localization, and emerging cyber security laws and regulations around the world are examples of such increased regulation. Within the U.S., an increasing number of U.S. States have enacted comprehensive privacy laws, and federal regulators (e.g., the U.S. FDA, FTC and HHS) continue to stress the intersection of health and privacy as a compliance and enforcement priority. In the EU, multiple directives and laws (including NIS2, EHDS, the Data Act, the Cyber Resilience Act, and the AI Act) are rapidly changing privacy and cybersecurity compliance requirements while introducing new enforcement risks. In addition, China has introduced broad personal information protection and data security regulations, with more anticipated, thereby increasing China’s scrutiny of company compliance and data transfer practices. With other jurisdictions enacting similar privacy laws, local data protection authorities will force greater accountability on the collection, access and use of personal data in the healthcare industry. These laws can also restrict transfers of data across borders, potentially impacting how data-driven health care solutions are developed and deployed globally in a compliant manner. Moreover, as a result of the broad scale release and availability of Artificial Intelligence (AI) technologies such as generative AI, a global trend towards more comprehensive and nuanced regulation to ensure the ethical use, privacy, and security of AI is underway that includes standards for transparency, accountability, and fairness, which will require compliance developments or enhancements.
The regulatory agencies under whose purview the Company operates have administrative powers that may subject it to actions such as product withdrawals, recalls, seizure of products and other civil and criminal sanctions. In some cases, the Company’s subsidiaries may deem it advisable to initiate field actions, such as product recalls, regardless of whether it has been required or directed to.
The U.S. FDA and regulatory agencies around the globe are also increasing their enforcement activities. If the U.S. FDA were to conclude that we are not in compliance with applicable laws or regulations, or that any of our pharmaceutical products or medical technologies are ineffective or pose an unreasonable safety risk, the U.S. FDA could ban such products, detain or seize adulterated or misbranded products, order a recall, repair, replacement, or refund of such products, withdraw approval/clearance/classification for such products, refuse to grant pending applications for marketing authorization or require certificates of foreign governments for exports, and/or require us to notify health professionals and others that the products present unreasonable risks of substantial harm to the public health. The U.S. FDA may also assess civil or criminal penalties against us, our officers or employees and impose operating restrictions on a company-wide basis, or enjoin and/or restrain certain conduct resulting in violations of applicable law. The U.S. FDA may also recommend prosecution to the U.S.
4

Department of Justice. Any adverse regulatory action, depending on its magnitude, may restrict us from effectively marketing and selling our products and limit our ability to obtain future clearances, classifications or approvals, and could result in a substantial modification to our business practices and operations. Equivalent enforcement mechanisms exist in different countries in which we conduct business.
The costs of human healthcare have been and continue to be a subject of study, investigation and regulation by governmental agencies and legislative bodies around the world. In the U.S., attention has been focused by states, regulatory agencies and Congress on prices, profits, overutilization and the quality and costs of healthcare generally. Laws and regulations have been enacted to require adherence to strict compliance standards and prevent fraud and abuse in the healthcare industry. There is increased focus on interactions and financial relationships between healthcare companies and healthcare providers. Various state and federal transparency laws and regulations require disclosures of payments and other transfers of value made to certain healthcare practitioners, including physicians, teaching hospitals, and certain non-physician practitioners. Federal and foreign laws governing international business practices require strict compliance with anti-corruption standards and certain prohibitions with respect to payments to any foreign government official. Payors and Pharmacy Benefit Managers (PBMs) are a potent force in the marketplace, and increased attention is being paid to the impact of PBM practices on healthcare cost and access in the U.S.
Our business has been and continues to be affected by federal and state legislation that alters the pricing, coverage, and reimbursement landscape. The federal Inflation Reduction Act of 2022 (IRA) includes provisions that effectively authorize the government to establish prices for certain high-spend single-source drugs and biologics reimbursed by the Medicare program, starting in 2026 for Medicare Part D drugs and 2028 for Medicare Part B drugs. In 2023, the Centers for Medicare & Medicaid Services (CMS) published the first “Selected Drug” list, which includes XARELTO and STELARA as well as IMBRUVICA, which is developed in collaboration and co-commercialized in the U.S. with Pharmacyclics LLC, an AbbVie company. The IRA specifies a ceiling price but not a minimum price for selected drugs and does not require CMS to use a specific framework for determining selected drug prices. The selected products are subject to a government-established price for the Medicare population beginning in 2026. CMS has indicated that, beginning in 2027, it will remove Xarelto and Stelara from the Selected Drug List, such that the products will no longer be subject to the IRA's minimum pricing provisions. In January 2026, CMS published the Selected Drug list for 2028, which includes ERLEADA.
The IRA also contains provisions that impose rebates if certain prices increase at a rate that outpaces the rate of inflation, beginning October 1, 2022, for Medicare Part D drugs and January 1, 2023, for Medicare Part B drugs. Separate IRA provisions redesign the Medicare Part D benefit in various ways, including by shifting a greater portion of costs to manufacturers within certain coverage phases and replacing the Part D coverage gap discount program with a new manufacturer discounting program. Failure to comply with IRA provisions may subject manufacturers to various penalties, including civil monetary penalties.
In July 2023, Janssen Pharmaceuticals, Inc. (Janssen) filed litigation against the U.S. Department of Health and Human Services as well as the Centers for Medicare and Medicaid Services challenging the constitutionality of the IRA's Medicare Drug Price Negotiation Program. The litigation requests a declaration that the IRA violates Janssen’s rights under the First Amendment and the Fifth Amendment to the Constitution and therefore that Janssen is not subject to the IRA’s mandatory pricing scheme. While the impact of the IRA on our business and the broader pharmaceutical industry remains uncertain, as litigation filed by Janssen and other pharmaceutical companies remains ongoing, CMS has publicly announced the maximum fair price for each of the selected drugs and has recently begun implementing the program. In December 2025, Janssen sought review by the U.S. Supreme Court of the Third Circuit majority's affirmance of the district court's denial of its summary judgment motion.
In January 2026, the Company reached an agreement with the U.S. Administration to improve access to medicines and lower costs for U.S. patients.
Additionally, we expect continued scrutiny on drug pricing and government price reporting from Congress, agencies, and other bodies at the federal and state levels, which may result in additional regulations, including models or other mechanisms to increase pricing controls and/or transparency.
There are a number of additional bills pending in Congress and healthcare reform proposals at the state level that would affect drug pricing, including in the Medicare and Medicaid programs. This changing legal landscape has both positive and negative impacts on the U.S. healthcare industry with much remaining uncertain as to how various provisions of federal and state law, and potential modification or repeal of these laws, will ultimately affect the industry. The IRA and any other federal or state legislative change could affect the pricing and market conditions for our products.
In addition, business practices in the healthcare industry have come under increased scrutiny, particularly in the U.S., by government agencies and state attorneys general, and resulting investigations and prosecutions carry the risk of significant civil and criminal penalties. Of note is the increased enforcement activity by data protection authorities in various jurisdictions,
2025 Annual Report 5

particularly in the European Union, where significant fines have been levied on companies for data breaches, violations of privacy requirements, and unlawful cross-border data transfers. In the U.S., the Federal Trade Commission has stepped up enforcement of data privacy with several significant settlements (including settlements concerning the downstream sharing of personal information and use and disclosure of personal health data) and there have been a material increase in class-action lawsuits linked to the collection and use of biometric data and use of tracking technologies.
Further, the Company relies on global supply chains, and production and distribution processes, that are complex, and subject to increasing regulatory requirements that may affect sourcing, supply and pricing of materials used in the Company's products. These processes also are subject to complex and lengthy regulatory approvals.
Employees and human capital management
As of December 28, 2025 and December 29, 2024 the number of employees was approximately:
2025 2024
Employees (1) 140,800 139,800
Full-time equivalent (FTE) positions (2) 138,200 138,100

(1)
“Employee” is defined as an individual working full-time or part-time, excluding fixed term employees, interns and co-op employees. Employee data may not include full population from more recently acquired companies and individuals on long-term disability are excluded. Contingent workers, contractors and subcontractors are also excluded.
(2)
FTE represents the total number of full-time equivalent positions and does not reflect the total number of individual employees as some work part-time.
Employees by region (in percentages)
Strategy
The Company believes that its employees are critical to its continued success and are an essential element of its long-term strategy. Management is responsible for ensuring that its policies and processes reflect and reinforce the Company's desired corporate culture, including policies and processes related to strategy, risk management, and ethics and compliance. The Company’s human capital management strategy is built on three fundamental focus areas:
•
Attracting and recruiting top talent
•
Developing and retaining top talent
•
Empowering and inspiring talent
Underpinning these focus areas are ongoing efforts to cultivate and foster a culture built on innovation, health, well-being and safety, inclusion and belonging where the Company's employees are encouraged to succeed both professionally and personally while helping the Company achieve its business goals.
6

Culture and employee engagement
At Johnson & Johnson, employees are guided by Our Credo, which sets forth the Company's responsibilities to patients, consumers, customers, healthcare professionals, employees, communities and shareholders. Employees worldwide must adhere to the Company’s Code of Business Conduct, which sets fundamental requirements and serves as a foundation for the Company policies, procedures and guidelines, all of which provide additional guidance on expected employee behaviors in every market where it operates. The Company conducts global surveys that offer its employees the ability to provide feedback and valuable insight to help address potential human resources risks and identify opportunities to improve. In 2025, 95% of global employees across 73 countries participated in Our Credo Survey which was offered in 36 languages.
Growth and development
To lead in the changing healthcare landscape, it is crucial that the Company continue to attract and retain top talent. In 2025, the Company's voluntary turnover rate was 5.8%. The Company believes that its employees must be equipped with the right knowledge and skills and be provided with opportunities to grow and develop in their careers. Accordingly, professional development programs and educational resources are available to all employees. The Company's objective is to foster a learning culture that helps shape each person’s unique career path while creating a robust pipeline of talent to deliver on the Company’s long-term strategies. In furtherance of this objective, the Company deploys a global approach to ensure development is for everyone, regardless of where they are on their career journey. To prioritize learning, the Company has an annual Global Learning Day in which employees are encouraged to set aside a full day to explore skill-building courses on its state-of-the-art learning platform, J&J Learn.
Our workforce
As stated in Our Credo, we are responsible to our employees who work with us throughout the world. As a result, and as guided by applicable laws, external insights and employee feedback, we continually strive to meet the needs of our global workforce of individuals from many different backgrounds, abilities, cultures and perspectives. We are committed to cultivating an inclusive, Credo‑based work environment where employees are recognized and rewarded based on merit.
Compensation and benefits
As part of the Company's total rewards philosophy, the Company offers competitive compensation and benefits to attract and retain top talent. The Company is committed to fair treatment in its compensation and benefits for employees at all levels. The Company observes legal minimum wage provisions and exceeds them where possible. The Company's total rewards offerings include an array of programs to support its employees' well-being, including annual performance incentive opportunities, pension and retirement savings programs, health and welfare benefits, paid time off, leave programs, flexible work schedules and employee assistance programs.
Health, wellness and safety
The Company’s investment in employee health, well-being and safety is built on its conviction that advancing health for humanity starts with advancing the health of its employees. With the right awareness, focus, practices and tools, the Company works to ensure that all its employees around the world, as well as contingent workers, contractors and visitors to the Company's sites, can work safely. The Company has continuously expanded health and well-being programs throughout the Company and across the globe, incorporating new thinking and technologies to keep its offerings best-in-class and to help employees achieve their personal health goals. The programs and practices the Company provides—physical, mental, emotional and financial—help promote holistic employee health. The Company continues to address our employees needs through J&J Flex, a hybrid model that empowers the Company’s office-based employees to find a balance of in-person and remote work, while preserving the Company's culture and need for face-to-face engagement and leadership.
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Available information
The Company’s main corporate website address is
www.jnj.com
. The Company makes its SEC filings available on the Company’s website at
www.investor.jnj.com/financials/sec-filings
, as soon as reasonably practicable after having been electronically filed or furnished to the SEC. The Company's SEC filings are also available at the SEC’s website at
www.sec.gov
.
Investors and the public should note that the Company also announces information through its press releases and media statements at
www.jnj.com/media-center
,
investor.jnj.com
and
www.factsabouttalc.com
. We use these websites to communicate with investors and the public about our products, litigation and other matters. It is possible that the information we post to these websites could be deemed to be material information. Therefore, we encourage investors and others interested in the Company to review the information posted to these websites in conjunction with
www.jnj.com
, the Company's SEC filings, press releases, public conference calls and webcasts.
In addition, the Restated Certificate of Incorporation, as amended, Amended and Restated By-Laws, the written charters of the Audit Committee, the Compensation & Benefits Committee, the Nominating & Corporate Governance Committee, the Regulatory Compliance & Sustainability Committee, and the Science & Technology Committee of the Board of Directors, and the Company’s Principles of Corporate Governance, Code of Business Conduct (for employees), Code of Business Conduct & Ethics for Members of the Board of Directors and Executive Officers, and other corporate governance materials are available on the Company's website at
www.investor.jnj.com/governance/corporate-governance-overview

and will be provided without charge to any shareholder submitting a written request, as provided above. The information on
www.jnj.com
,
investor.jnj.com
and
www.factsabouttalc.com
is not, and will not be deemed, a part of this Report or incorporated into any other filings the Company makes with the SEC.
8

Item 1A. Risk factors
An investment in the Company’s common stock or debt securities involves risks and uncertainties. The Company seeks to identify, manage and mitigate risks to our business, but uncertainties and risks are difficult to predict and many are outside of the Company’s control and cannot therefore be eliminated. In addition to the other information in this report and the Company’s other filings with the SEC, investors should consider carefully the factors set forth below. Investors should be aware that it is not possible to predict or identify all such factors and that the following is not meant to be a complete discussion of all potential risks or uncertainties. If known or unknown risks or uncertainties materialize, the Company’s business, results of operations or financial condition could be adversely affected, potentially in a material way.
Risks related to our business, industry and operations
The Company’s businesses operate in highly competitive product markets and competitive pressures could adversely affect the Company’s earnings.
The Company faces substantial competition in its two operating segments and in all geographic markets. The Company’s businesses compete with companies of all sizes on the basis of cost-effectiveness, technological innovations, intellectual property rights, product performance, real or perceived product advantages, pricing and availability and rate of reimbursement. The Company also competes with other market participants in securing rights to acquisitions, collaborations and licensing agreements with third parties. Competition for rights to product candidates and technologies may result in significant investment and acquisition costs and onerous agreement terms for the Company. Competitors’ development of more effective or less costly products, and/or their ability to secure patent and other intellectual property rights and successfully market products ahead of the Company, could negatively impact sales of the Company’s existing products as well as its ability to bring new products to market despite significant prior investment in the related product development. The Company may also experience operational and financial risk in connection with acquisitions if we are unable to fully identify potential risks and liabilities associated with acquired businesses or products, successfully integrate operations and employees, and successfully identify and realize synergies with existing businesses while containing acquisition-related strain on our management, operations and financial resources.
For the Company’s Innovative Medicine businesses, loss of patent exclusivity for a product often is followed by a substantial reduction in sales as competitors gain regulatory approval for generic, biosimilar and other competing products and enter the market. For the Company’s MedTech businesses, technological innovation, product quality, reputation and customer service are especially important to competitiveness. Development by other companies of new or improved products, processes and technologies could threaten to make the Company’s products or technologies less desirable, less economical or obsolete. The Company’s business and operations will be negatively impacted if we are unable to introduce new products or technological advances that are safe, more effective, more effectively marketed or otherwise outperform those of our competitors.
Interruptions and delays in manufacturing operations could adversely affect the Company’s business, sales and reputation.
The Company’s manufacturing of products requires the timely delivery of sufficient amounts of complex, high-quality components and materials. The Company’s subsidiaries operate 63 manufacturing facilities as well as sourcing from thousands of suppliers around the world. The Company has in the past, and may in the future, face unanticipated interruptions and delays in manufacturing through its internal or external supply chain. Manufacturing disruptions can occur for many reasons including regulatory action, production quality deviations or safety issues, labor disputes, labor shortages, site-specific incidents (such as fires), natural disasters such as hurricanes and other severe weather events, raw material shortages, lack of available inspectors, political unrest, terrorist attacks and epidemics or pandemics. Such delays and difficulties in manufacturing can result in product shortages, declines in sales and reputational impact as well as significant remediation and related costs associated with addressing the shortage.
The Company relies on third parties to manufacture and supply certain of our products. Any failure by or loss of a third-party manufacturer or supplier could result in delays and increased costs, which may adversely affect our business.
The Company relies on third parties to manufacture and supply certain of our raw materials, component parts and products. We depend on these third-party manufacturers to allocate to us a portion of their manufacturing capacity sufficient to meet our needs, to produce products of acceptable quality and at acceptable manufacturing yields and to deliver those products to us on a timely basis and at acceptable prices. However, we cannot guarantee that these third-party manufacturers will be able to meet our near-term or long-term manufacturing requirements, which could result in lost sales and have an adverse effect on our business.
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Other risks associated with our reliance on third parties to manufacture these products include reliance on the third party for regulatory compliance and quality assurance, misappropriation of the Company’s intellectual property, limited ability to manage our inventory, possible breach of the manufacturing agreement by the third party and the possible termination or nonrenewal of the manufacturing agreement by the third party at a time that is costly or inconvenient for us. Moreover, if any of our third-party manufacturers suffers any damage to facilities, loses benefits under material agreements, experiences power outages, encounters financial difficulties, is unable to secure necessary raw materials from its suppliers or suffers any other reduction in efficiency, the Company may experience significant business disruption. In the event of any such disruption, the Company would need to seek and source other qualified third-party manufacturers, likely resulting in further delays and increased costs which could affect our business adversely.
Counterfeit versions of our products could harm our patients and have a negative impact on our revenues, earnings, reputation and business.
Our industry continues to be challenged by the vulnerability of distribution channels to illegal counterfeiting and the presence of counterfeit products in a growing number of markets and over the Internet. Third parties may illegally distribute and sell counterfeit versions of our products, which do not meet our rigorous manufacturing and testing standards. To distributors and patients, counterfeit products may be visually indistinguishable from the authentic version. Counterfeit medicines pose a risk to patient health and safety because of the conditions under which they are manufactured – often in unregulated, unlicensed, uninspected and unsanitary sites – as well as the lack of regulation of their contents.
The threat of counterfeit medicines could adversely impact our business and reputation by impacting patient confidence in our authentic products, potentially resulting in lost sales, product recalls, and an increased threat of litigation. In addition, diversion of our products from their authorized market into other channels may result in reduced revenues and negatively affect our profitability.
Global health crises, pandemics, epidemics, or other outbreaks could adversely disrupt or impact certain aspects of the Company’s business, results of operations and financial condition.
We are subject to risks associated with global health crises, epidemics, pandemics and other outbreaks (such incident(s), a health crisis or health crises). The spread of health crises have caused and may cause the Company to modify its business practices, and take further actions as may be required by government authorities or as the Company determines are in the best interests of our patients, customers, employees and business partners under such circumstances. Impacts to the Company have included and may include adverse impacts to results of operations and financial condition, including lower sales and reduced customer demand and usage of certain of our products. While the Company has robust business continuity plans in place across our global supply chain network designed to help mitigate the impact of health crises, these efforts may not completely prevent our business from being adversely affected in the event of a health crisis. Health crises could adversely impact the Company’s operations, including, among other things, our manufacturing operations, supply chain, third-party suppliers, sales and marketing, and clinical trial operations. Any of these factors could adversely affect the Company’s business, financial results, and global economic conditions generally.
Risks related to government regulation and legal proceedings
Global sales in the Company’s Innovative Medicine and MedTech segments may be negatively impacted by healthcare reforms and increasing pricing pressures.
Sales of the Company’s Innovative Medicine and MedTech products are significantly affected by reimbursements by third-party payors such as government healthcare programs, private insurance plans and managed care organizations. As part of various efforts to contain healthcare costs, these payors are putting downward pressure on prices at which products will be reimbursed. In the U.S., increased purchasing power of entities that negotiate on behalf of Medicare, Medicaid, and private sector beneficiaries, in part due to continued consolidation among healthcare providers, could result in further pricing pressures. In addition, recent legislation and ongoing political scrutiny on pricing, coverage and reimbursement could result in additional pricing pressures. Specifically, the Inflation Reduction Act of 2022 (IRA) has changed Medicare Part D benefit design and has subjected certain of the Company's products to government-established pricing beginning in 2026 and may subject additional products in the future. Failure to adhere to the government's interpretations of the law pending ongoing litigation may expose the Company to penalties. In addition, change to Medicare Part D could have a negative impact on U.S. Innovative Medicine sales. Further, increased third-party utilization of the 340B Federal Drug Discount Program from expanded interpretations of the statute and program abuse may have a negative impact on the Company's financial performance. Outside the U.S., numerous major markets, including the EU, United Kingdom, Japan and China, have pervasive government involvement in funding healthcare and, in that regard, directly or indirectly impose price controls, limit access to, or reimbursement for, the Company’s products, or reduce the value of its intellectual property protection.
10

The Company is subject to an increasing number of costly and complex governmental regulations in the countries in which operations are conducted which may have a material adverse affect on the Company’s financial condition and business operations.
As described in Item 1. Business, the Company is subject to an increasing number of extensive government laws and regulations, investigations and legal action by national, state and local government agencies in the U.S. and other countries in which it operates. For example, changes to the U.S. FDA’s timing or requirements for approval or clearance of our products may have a negative impact on our ability to bring new products to market. New and changing laws, regulations, executive orders and other directives may also impose deadlines on the Company, or its third-party suppliers, manufacturers or other partners and providers, for which there may be insufficient time to implement changes to comply with such new regulations and may result in manufacturing delays or other supply chain constraints. If the Company is unable to identify ways to mitigate these delays or constraints, there may be an adverse effect on sales and access to our products.
The Company is subject to significant legal proceedings that can result in significant expenses, fines and reputational damage.
In the ordinary course of business, Johnson & Johnson and its subsidiaries are subject to numerous claims and lawsuits involving various issues such as product liability, patent disputes and claims that their product sales, marketing and pricing practices violate various antitrust, unfair trade practices and/or consumer protection laws. The Company’s more significant legal proceedings are described in Note 19 Legal proceedings under Notes to the Consolidated Financial Statements included in Item 8 of this Report. Litigation, in general, and securities, derivative action, class action and multi-district litigation, in particular, can be expensive and disruptive. Some of these matters may include thousands of plaintiffs, may involve parties seeking large and/or indeterminate amounts, including punitive or exemplary damages, and may remain unresolved for several years. For example, the Company is a defendant in numerous lawsuits arising out of the use of body powders containing talc, primarily JOHNSON’S Baby Powder. While the Company believes it has substantial defenses in these matters, it is not feasible to predict the ultimate outcome of litigation. The Company has been and could in the future be required to pay significant amounts as a result of settlements or judgments in these matters, potentially in excess of accruals, including matters where the Company could be held jointly and severally liable among other defendants. The resolution of, or increase in accruals for, one or more of these matters in any reporting period could have a material adverse effect on the Company’s results of operations and cash flows for that period. The Company does not purchase third-party product liability insurance; however, the Company utilizes a wholly owned captive insurance company subject to certain limits.
Product reliability, safety and effectiveness concerns can have significant negative impacts on sales and results of operations, lead to litigation and cause reputational damage.
Product concerns, whether raised internally or by litigants, regulators or consumer advocates, and whether or not based on scientific evidence, can result in safety alerts, field actions, such as product recalls, governmental investigations, regulatory action on the part of the U.S. FDA (or its counterpart in other countries), private claims and lawsuits, payment of fines and settlements, declining sales and reputational damage. These circumstances can also result in damage to brand image, brand equity and consumer trust in the Company’s products. Product recalls have in the past, and could in the future, prompt government investigations and inspections, the shutdown of manufacturing facilities, continued product shortages and related sales declines, significant remediation costs, reputational damage, possible civil penalties and criminal prosecution.
The Company faces significant regulatory scrutiny, which imposes significant compliance costs and exposes the Company to government investigations, legal actions and penalties.
The rapid increase in new government laws and regulations imposes significant compliance costs to the Company and a failure of the Company to timely implement changes to comply with these new laws may expose the Company to investigations, legal actions or penalties. Regulatory issues regarding compliance with current Good Manufacturing Practices (cGMP) (and comparable quality regulations in foreign countries) by manufacturers of drugs and devices can lead to fines and penalties, product recalls, product shortages, interruptions in production, delays in new product approvals and litigation. In addition, the marketing, pricing and sale of the Company’s products are subject to regulation, investigations and legal actions including under the Federal Food, Drug, and Cosmetic Act, the Medicaid Rebate Program, federal and state false claims acts, state unfair trade practices acts and consumer protection laws. Scrutiny of healthcare industry business practices by government agencies and state attorneys general in the U.S., and any resulting investigations and prosecutions, carry risk of significant civil and criminal penalties including, but not limited to, debarment from participation in government healthcare programs. Any such debarment could have a material adverse effect on the Company’s business and results of operations. The most significant current investigations and litigation brought by government agencies are described in Note 19 Legal proceedings—Government proceedings under Notes to the Consolidated Financial Statements included in Item 8 of this Report.
2025 Annual Report 11

Changes in tax laws or exposures to additional tax liabilities could negatively impact the Company’s operating results.
Changes in tax laws or regulations in the U.S. and around the world, including global minimum taxes could negatively impact the Company’s effective tax rate and results of operations. A change in statutory tax rate or certain international tax provisions in any country would result in the revaluation of the Company’s deferred tax assets and liabilities related to that particular jurisdiction in the period in which the new tax law is enacted. This change would result in an expense or benefit recorded in the Company’s Consolidated Statement of Earnings. The Company closely monitors these proposals as they arise in the countries where it operates. Changes to tax laws or regulations may occur at any time, and any related expense or benefit recorded may be material to the fiscal quarter and year in which the law change is enacted.
See Note 8 Income taxes under Notes to the Consolidated Financial Statements included in Item 8 of this Report for additional information.
The Company conducts business and files tax returns in numerous countries and is addressing tax audits and disputes with many tax authorities. In connection with various government initiatives, companies are required to disclose more information to tax authorities on operations around the world, which may lead to greater audit scrutiny of profits earned in other countries. The Company regularly assesses the likely outcomes of its tax audits and disputes to determine the appropriateness of its tax reserves. However, any tax authority could take a position on tax treatment that is contrary to the Company’s expectations, which could result in tax liabilities in excess of reserves.
Risks related to our intellectual property
The Company faces increased challenges to intellectual property rights central to its business.
The Company owns or licenses a significant number of patents and other proprietary rights relating to its products and manufacturing processes. These rights are essential to the Company’s businesses and the inability of the Company to secure and maintain these rights may have a detrimental impact on the Company’s financial results. Public policy, both within and outside the U.S., has become increasingly unfavorable toward intellectual property rights. The Company cannot be certain that it will secure and maintain adequate patent protection for new products and technologies in the United States and other important markets.
Competitors routinely challenge the validity or extent of the Company’s owned or licensed patents and proprietary rights through litigation, interferences, oppositions and other proceedings, such as inter partes review (IPR) proceedings before the United States Patent & Trademark Office (USPTO). These proceedings absorb resources and can be protracted as well as unpredictable. In addition, others may claim the Company has infringed their intellectual property rights, including copyrights, patents, or trademarks, and/or has misappropriated their trade secrets, any of which could result in an injunction and/or the need to pay past damages and future royalties and adversely affect the competitive position and sales of our products.
The Company has faced increasing patent challenges from third parties seeking to manufacture and market generic and biosimilar versions of the Company’s key pharmaceutical products prior to expiration of the applicable patents covering those products. In the event the Company is not successful in defending its patents against such challenges, or upon the “at-risk” launch by the generic or biosimilar firm of its product, the Company can lose a major portion of revenues for the referenced product in a very short period of time. Current legal proceedings involving the Company’s patents and other intellectual property rights are described in Note 19 Legal proceedings—Intellectual property under Notes to the Consolidated Financial Statements included in Item 8 of this Report.
12

Risks related to product development, regulatory approval and commercialization
Significant challenges or delays in the Company’s innovation, development and implementation of new products, technologies and indications could have an adverse impact on the Company’s long-term success.
The Company’s continued growth and success depends on its ability to innovate and develop new and differentiated products and services that address the evolving healthcare needs of patients, providers and consumers. Development of successful products and technologies is also necessary to offset revenue losses when the Company’s existing products lose market share due to various factors such as competition and loss of patent exclusivity. New products introduced within the past five years accounted for approximately 25% of 2025 sales. The Company cannot be certain when or whether it will be able to develop, license or otherwise acquire companies, products and technologies, whether particular product candidates will be granted regulatory approval, and, if approved, whether the products will be commercially successful.
The Company pursues product development through internal research and development as well as through collaborations, acquisitions, joint ventures and licensing or other arrangements with third parties. In all of these contexts, developing new products, particularly pharmaceutical and biotechnology products and medical devices, requires significant investment of resources over many years. Only a very few biopharmaceutical research and development programs result in commercially viable products. The process depends on many factors including the ability to: discern patients’ and healthcare providers’ future needs; develop promising new compounds, strategies and technologies; achieve successful clinical trial results; secure effective intellectual property protection; obtain regulatory approvals on a timely basis; and, if and when they reach the market, successfully differentiate the Company’s products from competing products and approaches to treatment. Moreover, the development and regulatory approval of new products may be delayed due to limits on federal agency budgets or personnel, including reductions to the U.S. FDA’s budget, employees, and operations, which may lead to slower response times and longer review periods. After approval, new products or enhancements to existing products may not be accepted quickly or significantly in the marketplace due to product and price competition, changes in customer preferences or healthcare purchasing patterns, resistance by healthcare providers or uncertainty over third-party reimbursement. Even following initial regulatory approval, the success of a product can be adversely impacted by safety and efficacy findings in larger real-world patient populations, as well as market entry of competitive products.
The Company leverages the use of data science, machine learning and other forms of AI and emerging technologies across varying parts of its business and operations, and the introduction and incorporation of AI may result in unintended consequences or other new or expanded risks and liabilities. AI technology is continuously evolving, and the AI technologies we develop and adopt may become obsolete earlier than planned. Our investments in these technologies may not result in the benefits we anticipate or enable us to obtain or maintain a competitive advantage. The application of AI in our business is emerging and evolving alongside new laws and regulations that may entail significant costs or ultimately limit our ability to continue the use of these technologies. These technologies also carry inherent risks related to data privacy and security further described below.
Risks related to financial and economic market conditions
The Company faces a variety of financial, economic, legal, social and political risks associated with conducting business internationally.
The Company’s extensive operations and business activity throughout the world are accompanied by certain financial, economic, legal, social and political risks, including those listed below.
Foreign currency exchange
: In fiscal 2025, approximately 43% of the Company’s sales occurred outside of the U.S., with approximately 23% in Europe, 5% in the Western Hemisphere, excluding the U.S., and 15% in the Asia-Pacific and Africa region. Changes in non-U.S. currencies relative to the U.S. dollar impact the Company’s revenues and expenses. While the Company uses financial instruments to mitigate the impact of fluctuations in currency exchange rates on its cash flows, unhedged exposures continue to be subject to currency fluctuations. In addition, the weakening or strengthening of the U.S. dollar may result in significant favorable or unfavorable translation effects when the operating results of the Company’s non-U.S. business activity are translated into U.S. dollars.
Inflation and currency devaluation risks
: The Company faces challenges in maintaining profitability of operations in economies experiencing high inflation rates. Specifically, the Company has accounted for operations in Argentina, Turkey, Venezuela and Egypt as highly inflationary, as the prior three-year cumulative inflation rate surpassed 100%. While the Company strives to maintain profit margins in these areas through cost reduction programs, productivity improvements and periodic price increases, it might experience operating losses as a result of continued inflation.
2025 Annual Report 13

In addition, the impact of currency devaluations in countries experiencing high inflation rates or significant currency exchange fluctuations could negatively impact the Company’s operating results.
Illegal importation of pharmaceutical products
: The illegal importation of pharmaceutical products from countries where government price controls or other market dynamics result in lower prices may adversely affect the Company’s sales and profitability in the U.S. and other countries in which the Company operates. With the exception of limited quantities of prescription drugs for personal use, foreign imports of pharmaceutical products are illegal under current U.S. law. However, the volume of illegal imports continues to rise as the ability of patients and other customers to obtain the lower-priced imports has grown significantly.
Anti-corruption and other regulations
: The Company is subject to various federal and foreign laws that govern its international business practices with respect to payments to government officials. Those laws include the U.S. Foreign Corrupt Practices Act (FCPA), which prohibits U.S. publicly traded companies from promising, offering, or giving anything of value to foreign officials with the corrupt intent of influencing the foreign official for the purpose of helping the Company obtain or retain business or gain any improper advantage. The Company’s business is heavily regulated and therefore involves significant interaction with foreign officials. Also, in many countries outside the U.S., the healthcare providers who prescribe human pharmaceuticals are employed by the government and the purchasers of human pharmaceuticals are government entities; therefore, the Company’s interactions with these prescribers and purchasers are subject to regulation under the FCPA. In addition to the U.S. application and enforcement of the FCPA, various jurisdictions in which the Company operates have laws and regulations, including the U.K. Bribery Act 2010, aimed at preventing and penalizing corrupt and anticompetitive behavior. Enforcement activities under these laws could subject the Company to additional administrative and legal proceedings and actions, which could include claims for civil penalties, criminal sanctions, and administrative remedies, including exclusion from healthcare programs.
Other financial, economic, legal, social and political risks
. Other risks inherent in conducting business globally include:
•
local and regional economic environments and policies in the markets that we serve, including interest rates, monetary policy, inflation, economic growth, recession, commodity prices, and currency controls or other limitations on the ability to expatriate cash;
•
protective economic policies taken by governments, such as trade protection measures, increased antitrust reporting requirements and enforcement activity, and import/export licensing requirements;
•
compliance with local regulations and laws including, in some countries, regulatory requirements restricting the Company’s ability to manufacture or sell its products in the relevant market;
•
diminished protection of intellectual property and contractual rights in certain jurisdictions;
•
potential nationalization or expropriation of the Company’s foreign assets;
•
political or social upheavals, economic instability, repression, or human rights issues; and
•
geopolitical events, including natural disasters, disruptions to markets due to war, armed conflict, terrorism, epidemics or pandemics.
Due to the international nature of the Company's business, geopolitical or economic changes or events, including global tensions and war, could adversely affect our business, results of operations or financial condition.
As described above, the Company has extensive operations and business activity throughout the world. Global tensions, conflict and/or war among any of the countries in which we conduct business or distribute our products may result in foreign currency volatility, decreased demand for our products in affected countries, and challenges to our global supply chain related to increased costs of materials and other inputs for our products and suppliers.
Most recently, we have experienced, and expect to continue to experience, impacts to the Company's business resulting from the Russia-Ukraine war, conflict in the Middle East as well as increasing tensions between the U.S. and China. In response to heightened conflict, such as the Russia-
Ukraine war, governments may impose export controls and broad financial and economic sanctions. Our business and operations may be further impacted by the imposition of tariffs, trade protection measures or other policies - including data localization laws and restrictions on data transfers - adopted by any country that favor domestic companies and technologies over foreign competitors. Additional sanctions or other measures may be imposed by the global community, including but not limited to limitations on our ability to file, prosecute and maintain patents, trademarks and other intellectual property rights. Furthermore, in some countries, action may be taken that allows companies and individuals to exploit inventions owned by patent holders from the United States and many other countries without consent or compensation and we may not be able to prevent third parties from practicing the Company's inventions or from selling or importing products. In addition, the U.S. government has imposed and/or announced the potential imposition of tariffs on products manufactured in other jurisdictions.
14

While certain of the announced tariffs have been delayed, the U.S. government may in the future pause, reimpose or increase tariffs, and countries subject to such tariffs have and in the future may impose reciprocal tariffs or other restrictive trade measures in response. Any of these actions could increase uncertainties and associated risks relating to the Company’s global operations.
Weak financial performance, failure to maintain a satisfactory credit rating or disruptions in the financial markets could adversely affect our liquidity, capital position, borrowing costs and access to capital markets.
We currently maintain investment grade credit ratings with Moody’s Investors Service and Standard & Poor’s Ratings Services. Rating agencies routinely evaluate us, and their ratings of our long-term and short-term debt are based on a number of factors. Any downgrade of our credit ratings by a credit rating agency, whether as a result of our actions or factors which are beyond our control, can increase the cost of borrowing under any indebtedness we may incur, reduce market capacity for our commercial paper or require the posting of additional collateral under our derivative contracts. There can be no assurance that we will be able to maintain our credit ratings, and any additional actual or anticipated changes or downgrades in our credit ratings, including any announcement that our ratings are under review for a downgrade, may have a negative impact on our liquidity, capital position and access to capital markets.
Risks related to the planned separation of our Orthopaedics business
The planned separation of the Company's Orthopaedics business may not be completed on the terms or timeline currently contemplated, if at all, and may not achieve the expected results
In October 2025, the Company announced its intention to separate the Company's Orthopaedics business. The Company is targeting completion of the planned separation in 18 to 24 months after initial announcement. Completion of the planned separation will be subject to the satisfaction of certain conditions, including, among others, consultations with works councils and other employee representative bodies, as may be required, final approval of the Company's Board of Directors, and receipt of other regulatory approvals. There can be no assurance regarding the ultimate timing of the planned separation or that such separation will be completed. Unanticipated developments could delay, prevent or otherwise adversely affect the planned separation, including but not limited to disruptions in general or financial market conditions or potential problems or delays in obtaining various regulatory approvals or clearances.
The costs to complete the planned separation will be significant. In addition, the Company may be unable to achieve some of the strategic and financial benefits that it expects to achieve from the planned separation of the Company's Orthopaedics business
The Company will incur significant expenses in connection with the planned separation. In addition, the Company may not be able to achieve the full strategic and financial benefits that are expected to result from the planned separation. The anticipated benefits of the planned separation are based on a number of assumptions, some of which may prove incorrect.
Following the planned separation, the price of shares of the Company's common stock may fluctuate significantly
The Company cannot predict the effect of the planned separation on the trading price of shares of its common stock, and market value of shares of its common stock may be less than, equal to or greater than the market value of shares of its common stock prior to the planned separation. In addition, the price of the Company's common stock may be more volatile around the time of the planned separation.
Other risks
Our business depends on our ability to recruit and retain talented and highly skilled employees.
Our continued growth requires us to recruit and retain talented employees representing many different backgrounds, experiences, and skill sets. The market for highly skilled workers and leaders in our industry is extremely competitive and our ability to compete depends on our ability to hire, develop and motivate highly skilled personnel in all areas of our organization. Maintaining our brand and reputation, as well as a credo-based work environment enables us to attract top talent. If we are less successful in our recruiting efforts, or if we cannot retain highly skilled workers and key leaders, our ability to develop and deliver successful products and services may be adversely affected. In addition, effective succession planning is important to our long-term success. Any unsuccessful implementation of our succession plans or failure to ensure effective transfer of knowledge and smooth transitions involving key employees could adversely affect our business, financial condition, or results of operations.
2025 Annual Report 15

Climate change or legal, regulatory or market measures to address climate change may negatively affect our business and results of operations.
Climate change resulting from increased concentrations of carbon dioxide and other greenhouse gases in the atmosphere could present risks to our operations, including an adverse impact on global temperatures, weather patterns and the frequency and severity of extreme weather and natural disasters. Natural disasters and extreme weather conditions, such as a hurricane, tornado, earthquake, wildfire or flooding, may pose physical risks to our facilities and disrupt the operation of our supply chain. The impacts of the changing climate on water resources may result in water scarcity, limiting our ability to access sufficient high-quality water in certain locations, which may increase operational costs.
Concern over climate change may also result in new or additional legal or regulatory requirements designed to reduce greenhouse gas emissions and/or mitigate the effects of climate change on the environment. If such laws or regulations are more stringent than current legal or regulatory obligations, we may experience disruption in, or an increase in the costs associated with sourcing, manufacturing and distribution of our products, which may adversely affect our business, results of operations or financial condition. Further, the impacts of climate change have an influence on customer preferences, and failure to provide climate-friendly products could potentially result in loss of market share.
An information security incident, including a cybersecurity breach, could have a negative impact on the Company’s business or reputation.
To meet business objectives, the Company relies on both internal information technology (IT) systems and networks, and those of third parties and their vendors, to process and store sensitive data (including confidential research, business plans, financial information, intellectual property, and personal data that may be subject to legal protection) to ensure the continuity of the Company’s supply chain and operations, and as part of many of the products we deliver to customers. The extensive range of information security and cybersecurity threats, which affect companies globally, pose a persistent risk to the security and availability of these systems and networks, including to customer products that are connected to or rely on such systems and networks, and the confidentiality, integrity, and availability of the Company’s sensitive data. The Company assesses these threats, responds to attacks and breaches that it has experienced, and makes investments to increase internal protection, detection, and response capabilities, as well as ensure the Company’s third-party providers have required capabilities and controls, to address this risk. Because of the frequently changing attack techniques, along with the increased volume and sophistication of the attacks and increasing use and reliance on third parties, there is the potential for the Company to be adversely impacted. This impact could result in reputational, competitive, operational or other business harm as well as financial costs and regulatory action. The increasing use of AI and other emerging technology could also increase these risks. The Company maintains cybersecurity insurance in the event of an information security or cyber incident; however, the coverage may not be sufficient to cover all financial, legal, business or reputational losses.
As a result of increased global tensions, the Company expects there will continue to be, an increased risk of information security or cybersecurity incidents, including cyberattacks perpetrated by adversaries of countries where the Company maintains operations. Given the potential sophistication of these attacks, the Company may not be able to address the threat of information security or cybersecurity incidents proactively or implement adequate preventative measures and we may not be able to detect and address any such disruption or security breach promptly, or at all, which could adversely affect customers that use our products, our business, results of operations or financial condition. Moreover, these threats could also impact our third-party partners resulting in compromise of the Company's IT systems, networks and data which could negatively affect the Company.
A breach of privacy laws or unauthorized access, loss or misuse of personal data could have a negative impact on the Company’s business or reputation.
The Company is subject to privacy and data protection laws and regulations across the globe that impose broad compliance obligations on the collection, possession, use, storage, access, disclosure, transfer, deletion and protection of personal data. Breach of the requirements of these laws and regulations could result in substantial fines, penalties, governmental actions, private right of actions, including class actions, and damage to our reputation and business. New privacy laws are expected globally, together with greater privacy enforcement by governmental authorities globally, particularly on data localization requirements and data transfers including international data flows. The Company has established privacy compliance programs and controls with which our businesses worldwide are required to comply. However, with many technology and data-driven initiatives evolving across the Company, involving multiple vendors and third parties, there are threats that could impact our business operations and research activities, including potential risks of unauthorized access and loss of personal data as well as legislative actions imposing limitations and controls on the use and sharing of personal data as well as on cross border data flows.
16

Item 1B. Unresolved staff comments
Not applicable.
Item 1C. Cybersecurity
Risk management and strategy
The Company has documented cybersecurity policies and standards, assesses risks from cybersecurity threats, and monitors information systems for potential cybersecurity issues. To protect the Company’s information systems from cybersecurity threats, the Company uses various security tools supporting protection, detection, and response capabilities.
The Company maintains a cybersecurity incident response plan to help ensure a timely, consistent response to actual or attempted cybersecurity incidents impacting the Company.

The Company also identifies and assesses third-party risks within the enterprise, and through the Company's use of third-party service providers, across a range of areas including data security and supply chain through a structured third-party risk management program.

The Company maintains a formal information security training program for all employees that includes training on matters such as phishing and email security best practices. Employees are also required to complete mandatory training on data privacy.
To evaluate and enhance its cybersecurity program, the Company periodically utilizes third-party experts to undertake maturity assessments of the Company’s information security program.
To date, the Company is not aware of any cybersecurity incident that has had or is reasonably likely to have a material impact on the Company’s business or operations; however, because of the frequently changing attack techniques, along with the increased volume and sophistication of the attacks, there is the potential for the Company to be adversely impacted.
This impact could result in reputational, competitive, operational or other business harm as well as financial costs and regulatory action. Refer to the risk factor captioned
An information security incident, including a cybersecurity breach, could have a negative impact to the Company’s business or reputation
in Part I, Item 1A. Risk factors for additional description of cybersecurity risks and potential related impacts on the Company.
Governance - management’s responsibility
The Company takes a risk-based approach to cybersecurity and has implemented cybersecurity controls designed to address cybersecurity threats and risks. The
Chief Information Officer (CIO), who is a member of the Company’s Executive Committee, and the Chief Information Security Officer (CISO)
are responsible for assessing and managing cybersecurity risks, including security incident detection, response, and recovery.
The Company’s CISO, in coordination with the CIO, is responsible for leading the Company’s cybersecurity program and management of cybersecurity risk.
The current CISO has over twenty-five years of experience in information security, and his background includes technical experience, strategy and architecture focused roles, cyber and threat experience, and various leadership roles.
Governance - board oversight
The Company’s
Board of Directors
oversees the overall risk management process, including cybersecurity risks, directly and through its committees. The Regulatory Compliance & Sustainability Committee (RCSC) of the board is primarily responsible for oversight of risk from cybersecurity threats and oversees compliance with applicable laws, regulations and Company policies related to, among others, privacy and cybersecurity.

RCSC meetings include discussions of specific risk areas throughout the year including, among others, those relating to cybersecurity. The CISO provides quarterly updates each year to RCSC on cybersecurity matters. These reports include an overview of the cybersecurity threat landscape, key cybersecurity initiatives to improve the Company’s risk posture, changes in the legal and regulatory landscape relative to cybersecurity, and overviews of certain cybersecurity incidents that have occurred within the Company and within the industry.
2025 Annual Report 17

Item 2. Properties
The Company's subsidiaries operate 63 manufacturing facilities occupying approximately 10.4 million square feet of floor space. The manufacturing facilities are used by the industry segments of the Company’s business approximately as follows:
Segment Square Feet (in thousands)
Innovative Medicine 5,245
MedTech 5,118
Worldwide Total 10,363

Within the U.S., three facilities are used by the Innovative Medicine segment and 19 by the MedTech segment. Outside of the U.S., 16 facilities are used by the Innovative Medicine segment and 25 by the MedTech segment.
The locations of the manufacturing facilities by major geographic areas of the world are as follows:
Geographic Area Number of Facilities Square Feet (in thousands)
United States 22 3,037
Europe 22 5,035
Western Hemisphere, excluding U.S. 7 1,054
Africa, Asia and Pacific 12 1,237
Worldwide Total 63 10,363

In addition to the manufacturing facilities discussed above, the Company maintains numerous office, research and development and warehouse facilities throughout the world.
The Company's subsidiaries generally seek to own, rather than lease, their manufacturing facilities, although some, principally in non-U.S. locations, are leased. Office and warehouse facilities are often leased. The Company also engages contract manufacturers.
The Company is committed to maintaining all of its properties in good operating condition.
Segment information on additions to property, plant and equipment is contained in Note 17 Segments of business and geographic areas of the Notes to Consolidated Financial Statements included in Item 8 of this Report.
Item 3. Legal proceedings
The information called for by this item is incorporated herein by reference to the information set forth in Note 19 Legal proceedings of the Notes to Consolidated Financial Statements included in Item 8 of this Report.
Item 4. Mine safety disclosures
Not applicable.
18

Executive officers of the registrant
Listed below are the executive officers of the Company. There are no family relationships between any of the executive officers, and there is no arrangement or understanding between any executive officer and any other person pursuant to which the executive officer was selected. At the annual meeting of the Board of Directors, the executive officers are elected by the Board to hold office for one year and until their respective successors are elected and qualified, or until earlier resignation or removal.
Vanessa Broadhurst, 57 Member, Executive Committee; Executive Vice President, Global Corporate Affairs Ms. V. Broadhurst was named Executive Vice President, Global Corporate Affairs and appointed to the Executive Committee in 2022. Ms. Broadhurst rejoined the Company in 2017 and was appointed Company Group Chairman, Global Commercial Strategy Organization in 2018. From 2013 to 2017, she held General Manager roles at Amgen in Inflammation & Cardiovascular, and Cardiovascular & Bone. Prior to her roles at Amgen, she served in various leadership roles at the Company from 2005-2013.
Joaquin Duato, 63 Chairman of the Board; Chief Executive Officer Mr. J. Duato became Chairman of the Board of Directors in 2023 subsequent to his appointments as Chief Executive Officer and Director in 2022. Mr. Duato was appointed to the Executive Committee in 2016 when he was named Executive Vice President, Worldwide Chairman, Pharmaceuticals and subsequently served as Vice Chairman of the Executive Committee. Mr. Duato first joined the Company in 1989 with Janssen-Farmaceutica S.A. (Spain), a subsidiary of the Company, and held executive positions of increasing responsibility in all business sectors and across multiple geographies and functions.
Elizabeth Forminard, 55 Member, Executive Committee; Executive Vice President, Chief Legal Officer Ms. E. Forminard was appointed Executive Vice President, Chief Legal Officer and a member of the Executive Committee in 2022. Ms. Forminard joined the Company in 2006, serving in roles of increasing responsibility including General Counsel Medical Devices & Diagnostics, General Counsel Consumer Group & Supply Chain, Worldwide Vice President Corporate Governance, and in her immediate past role as General Counsel Pharmaceuticals.
Kristen Mulholland, 59 Member, Executive Committee; Executive Vice President, Chief Human Resources Officer Ms. K. Mulholland was appointed Executive Vice President, Chief Human Resources Officer and appointed to the Executive Committee in 2024. She joined the company in 2005 and has held HR leadership positions across the full breadth of the company including MedTech, Innovative Medicines, our Corporate Functions and Corporate HR Services including Performance and Development and most recently, Global Total Rewards.
John C. Reed, M.D., Ph.D., 67 Member, Executive Committee; Executive Vice President, Innovative Medicine, R&D Dr. J. C. Reed joined the Company in 2023 as Executive Vice President, Innovative Medicine, R&D and a member of the Executive Committee. Prior to joining the Company, Dr. Reed held executive leadership positions at Sanofi (2018-2022) and Roche (2013-2018), serving on their respective executive committees. He also served as CEO of Sanford-Burnham Medical Research Institute (now Sanford Burnham Prebys) where he established multiple therapeutic area-aligned research centers and platform technology centers.

2025 Annual Report 19

Tim Schmid, 56 Member, Executive Committee; Executive Vice President, Worldwide Chairman, MedTech Mr. T. Schmid was appointed Executive Vice President, Worldwide Chairman, MedTech and a member of the Executive Committee in 2023. He joined the Company in 1993 and has served in leadership positions throughout Johnson & Johnson MedTech, including Chief Strategic Customer Officer and President of Ethicon, and most recently served as Company Group Chairman MedTech Asia Pacific from 2018-2023.
James Swanson, 60 Member, Executive Committee; Executive Vice President, Chief Information Officer Mr. J. Swanson was appointed Executive Vice President, Chief Information Officer and a member of the Executive Committee in 2022. He rejoined the Company in 2019 as Chief Information Officer of Johnson & Johnson from Bayer Crop Science, where he served as a member of the Executive Leadership Team and as Chief Information Officer and Head of Digital Transformation. From 1996 to 2005, Mr. Swanson held positions of increasing responsibility at the Company, including Project Manager, Director IT, Sr. Director IT and Vice President, Chief Information Officer.
Jennifer L. Taubert, 62 Member, Executive Committee; Executive Vice President, Worldwide Chairman, Innovative Medicine Ms. J. L. Taubert was appointed Executive Vice President, Worldwide Chairman, Innovative Medicine and a member of the Executive Committee in 2018. She joined the Company in 2005 as Worldwide Vice President and held several executive positions of increasing responsibility in the Pharmaceuticals sector, including Company Group Chairman, North America, and Company Group Chairman, The Americas from 2012-2018.
Kathryn E. Wengel, 60 Member, Executive Committee; Executive Vice President, Chief Technical Operations & Risk Officer Ms. K. E. Wengel was appointed Executive Vice President, Chief Technical Operations & Risk Officer in 2023, subsequent to her appointment to the Executive Committee in 2018 when she was named as Executive Vice President, Chief Global Supply Chain Officer. Ms. Wengel first joined the Company in 1988 as Project Engineer and Engineering Supervisor at Janssen, a subsidiary of the Company. During her tenure with the Company, she has held a variety of strategic leadership and executive positions, including in roles within operations, quality, engineering, new products, information technology, and other technical and business functions.
Joseph J. Wolk, 59 Member, Executive Committee; Executive Vice President, Chief Financial Officer Mr. J. J. Wolk was appointed Executive Vice President, Chief Financial Officer and a member of the Executive Committee in 2018. He first joined the Company in 1998 as Finance Manager, Business Development for Ortho-McNeil, a subsidiary of the Company. During his tenure at the Company, he has held a variety of senior leadership roles in several segments and functions across the Company's subsidiaries, including Vice President, Finance and Chief Financial Officer of the Janssen Pharmaceutical Companies, and Vice President, Investor Relations.

20

Part II
Item 5. Market for registrant’s common equity, related stockholder matters and issuer purchases of equity securities
As of February 4, 2026, there were 108,358 record holders of common stock of the Company. Additional information called for by this item is incorporated herein by reference to the following sections of this Report: Note 16 “Common Stock, Stock Option Plans and Stock Compensation Agreements” of the Notes to Consolidated Financial Statements included in Item 8; and Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters – Equity Compensation Plan Information.”
Issuer purchases of equity securities
The following table provides information with respect to common stock purchases by the Company during the fiscal fourth quarter of 2025. Common stock purchases on the open market are made as part of a systematic plan to meet the needs of the Company’s compensation programs. The repurchases below also include the stock-for-stock option exercises that settled in the fiscal fourth quarter.
Fiscal Period Total Number of Shares Purchased (1) Avg. Price Paid Per Share Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
September 29, 2025 through October 26, 2025 3,806,577 192.15 — —
October 27, 2025 through November 23, 2025 1,690,213 193.54 — —
November 24, 2025 through December 28, 2025 4,225,966 204.81 — —
Total 9,722,756 —

(1)
During the fiscal fourth quarter of 2025, the Company repurchased an aggregate of 9,722,756 shares of Johnson & Johnson Common Stock in open-market transactions, all of which were purchased as part of a systematic plan to meet the needs of the Company’s compensation programs.
Item 6. Reserved
2025 Annual Report 21

Item 7. Management’s discussion and analysis of results of operations and financial condition
Organization and business segments
Description of the company and business segments
Johnson & Johnson and its subsidiaries (the Company) have approximately 138,200 employees worldwide engaged in the research and development, manufacture and sale of a broad range of products in the healthcare field. The Company conducts business in virtually all countries of the world with the primary focus on products related to human health and well-being.
The Company is organized into two business segments: Innovative Medicine and MedTech. The Innovative Medicine segment is focused on the following therapeutic areas: Oncology, Immunology, Neuroscience, Pulmonary Hypertension, Infectious Diseases, and Cardiovascular and Metabolism. Products in this segment are distributed directly to retailers, wholesalers, distributors, hospitals and healthcare professionals for prescription use. The MedTech segment includes a broad portfolio of products used in the Surgery, Orthopaedic, Cardiovascular and Vision fields. These products are distributed to wholesalers, hospitals and retailers, and used principally in the professional fields by physicians, nurses, hospitals, eye care professionals and clinics.
In October 2025, the Company announced its intention to separate its Orthopaedics business. The Company intends to explore multiple paths to effect the planned separation with a targeted completion within 18 to 24 months after the initial announcement.
The Chief Operating Decision Maker (CODM) is the Company's Chief Executive Officer (Principal Executive Officer). The Executive Committee is Johnson & Johnson’s senior leadership team responsible for setting the strategy and priorities of the Company and driving accountability at all levels. Within the strategic parameters provided by the Executive Committee, senior management groups at U.S. and international operating companies are each responsible for their own strategic plans and the day-to-day operations of those companies.
In all of its product lines, the Company competes with other companies both locally and globally, throughout the world. Competition exists in all product lines without regard to the number and size of the competing companies involved. Competition in research, involving the development and the improvement of new and existing products and processes, is particularly significant. The development of new and innovative products, as well as protecting the underlying intellectual property of the Company's product portfolio, is important to the Company’s success in all areas of its business. The competitive environment requires substantial investments in continuing research.
Management’s objectives
With Our Credo as the foundation, the Company believes health is everything. The Company's strength in healthcare innovation empowers us to build a world where complex diseases are prevented, treated, and cured, where treatments are smarter and less invasive, and solutions are personal. Through the Company's expertise in Innovative Medicine and MedTech, the Company is uniquely positioned to innovate across the full spectrum of healthcare solutions today to deliver the breakthroughs of tomorrow, and profoundly impact health for humanity.
New products introduced within the past five years accounted for approximately 25% of 2025 sales. In 2025, $14.7 billion was invested in research and development reflecting management’s commitment to create life-enhancing innovations and to create value through partnerships that will profoundly impact of health for humanity.
Our approximately 138,200 employees are critical drivers of the Company’s success. Employees are empowered and inspired to lead with Our Credo and purpose as guides. This allows every employee to use the Company’s reach and size to advance the Company’s purpose, and to also lead with agility and urgency. Leveraging the extensive resources across the enterprise enables the Company to innovate and execute with excellence. This ensures the Company can remain focused on addressing the unmet needs of society every day and invest for an enduring impact, ultimately delivering value to its patients, consumers and healthcare professionals, employees, communities and shareholders.
22

Research &
development
Acquisitions*
(net of cash acquired)
Dividends paid
per share
*    Includes business combinations and asset acquisitions
Results of operations
Analysis of consolidated sales
For discussion on results of operations and financial condition pertaining to the fiscal years 2024 and 2023 see the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2024, Item 7. Management's discussion and analysis of results of operations and financial condition.
In 2025, worldwide sales increased 6.0% to $94.2 billion as compared to an increase of 4.3% in 2024. These sales changes consisted of the following:
Sales increase/(decrease) due to: 2025 2024
Volume 8.4 % 5.9 %
Price (3.1) 0.0
Currency 0.7 (1.6)
Total 6.0 % 4.3 %

The net impact of acquisitions and divestitures on the worldwide sales growth was a positive impact of 1.1% in 2025, primarily related to CAPLYTA and Shockwave and a positive impact of 0.5% in 2024 primarily related to Shockwave.
Sales by U.S. companies were $53.8 billion in 2025 and $50.3 billion in 2024. This represents increases of 6.9% in 2025 and 8.3% in 2024. In the fiscal year 2025, acquisitions and divestitures had a net positive impact of 2.0% on the U.S. sales growth primarily related to CAPLYTA and Shockwave. Sales by international companies were $40.4 billion in 2025 and $38.5 billion in 2024. This represents an increase of 5.0% in 2025, and a decrease of 0.5% in 2024. In fiscal 2025, acquisitions and divestitures had a net positive impact of 0.1% on the international operational* sales growth, primarily related to Shockwave. In the fiscal year 2025, the negative impact of the STELARA sales decline, due to biosimilar competition, was approximately 6.2%, 7.6% and 4.4% on worldwide, U.S. and international operational sales, respectively.
The five-year compound annual growth rates for worldwide, U.S. and international sales were 6.7%, 7.9% and 5.2%, respectively. The ten-year compound annual growth rates for worldwide, U.S. and international sales were 5.2%, 5.8% and 4.5%, respectively.
2025 Annual Report 23

In 2025, sales by companies in Europe achieved growth of 6.5% as compared to the prior year, which included operational growth of 2.4% and a positive currency impact of 4.1%. Sales by companies in the Western Hemisphere, excluding the U.S., achieved growth of 3.4% as compared to the prior year, which included operational growth of 8.4%, and a negative currency impact of 5.0%. Sales by companies in the Asia-Pacific, Africa region achieved growth of 3.2% as compared to the prior year, including operational growth of 3.1% and a positive currency impact of 0.1%.
In 2025, the Company utilized three wholesalers distributing products for both segments that represented approximately 21.8%, 15.5% and 11.1% of the total gross revenues. In 2024, the Company had three wholesalers distributing products for both segments that represented approximately 20.5%, 15.6% and 12.3% of the total gross revenues.
2025 Sales by geographic region (in billions)
2025 Sales by segment (in billions)
Note: values may have been rounded
*operational excludes the effect of translational currency
Analysis of sales by business segments
Innovative Medicine segment
Innovative Medicine segment sales in 2025 were $60.4 billion, an increase of 6.0% from 2024, which included operational growth of 5.3% and a positive currency impact of 0.7%. U.S. sales were $36.3 billion, an increase of 7.0%. International sales were $24.1 billion, an increase of 4.6%, which included operational growth of 2.9% and a positive currency impact of 1.7%. In 2025, the net impact of acquisitions and divestitures on the worldwide Innovative Medicine segment operational sales growth was a positive 1.2%, related to CAPLYTA. In 2025, the negative impact of the STELARA sales decline, primarily due to biosimilar competition, was an approximate 10.4%, 12.3% and 7.9% on worldwide, U.S. and international Innovative Medicine segment operational sales, respectively.
24

Major Innovative Medicine therapeutic area sales:
(Dollars in Millions) 2025 2024 Total Change Operations Change Currency Change
Total Oncology $25,380 $20,781 22.1 % 20.9 % 1.2 %
CARVYKTI 1,887 963 95.9 94.3 1.6
DARZALEX 14,351 11,670 23.0 22.0 1.0
ERLEADA 3,574 2,999 19.2 17.2 2.0
IMBRUVICA 2,823 3,038 (7.1) (8.6) 1.5
RYBREVANT/ LAZCLUZE (1) 734 327 * * *
TALVEY (2) 463 287 61.3 60.3 1.0
TECVAYLI 670 549 22.1 21.5 0.6
ZYTIGA /abiraterone acetate 502 631 (20.4) (21.2) 0.8
Other Oncology 376 317 18.5 17.5 1.0
Total Immunology 15,728 17,828 (11.8) (12.0) 0.2
REMICADE 1,768 1,605 10.2 10.5 (0.3)
SIMPONI/SIMPONI ARIA 2,668 2,190 21.8 21.7 0.1
STELARA 6,078 10,361 (41.3) (41.5) 0.2
TREMFYA 5,155 3,670 40.5 39.8 0.7
Other Immunology 61 3 * * *
Total Neuroscience 7,837 7,115 10.1 9.9 0.2
CAPLYTA (3) 700 — * * —
CONCERTA/methylphenidate 584 641 (9.0) (8.6) (0.4)
INVEGA SUSTENNA/XEPLION/INVEGA TRINZA/TREVICTA 3,810 4,222 (9.8) (9.9) 0.1
SPRAVATO 1,696 1,077 57.4 57.0 0.4
Other Neuroscience 1,048 1,175 (10.9) (11.5) 0.6
Total Pulmonary Hypertension 4,437 4,282 3.6 3.2 0.4
OPSUMIT/OPSYNVI (4) 2,325 2,225 4.5 4.0 0.5
UPTRAVI 1,902 1,817 4.7 4.3 0.4
Other Pulmonary Hypertension 209 240 (12.7) (13.0) 0.3
Total Infectious Diseases 3,241 3,396 (4.6) (6.5) 1.9
EDURANT/rilpivirine 1,486 1,272 16.9 12.2 4.7
PREZISTA/PREZCOBIX/REZOLSTA/SYMTUZA 1,579 1,712 (7.7) (8.1) 0.4
Other Infectious Diseases (5) 175 412 (57.5) (57.7) 0.2
Total Cardiovascular / Metabolism / Other 3,778 3,562 6.1 6.0 0.1
XARELTO 2,633 2,373 11.0 11.0 —
Other 1,145 1,189 (3.7) (4.0) 0.3
Total Innovative Medicine Sales $60,401 56,964 6.0 % 5.3 % 0.7 %

2025 Annual Report 25

(1)
Previously in Other Oncology, Includes the sales of RYBREVANT and RYBREVANT + LAZCLUZE
(2)
Previously in Other Oncology
(3)
Acquired with Intra-Cellular Therapies on April 2, 2025
(4)
OPSYNVI was previously in Other Pulmonary Hypertension
(5)
Includes the Covid-19 Vaccine in 2024
*    Percentage greater than 100% or not meaningful
Oncology products achieved sales of $25.4 billion in 2025, representing an increase of 22.1% as compared to the prior year. Strong sales of DARZALEX (daratumumab) were driven by continued share gains and market growth. Growth of ERLEADA (apalutamide) was primarily due to continued share gains and market growth partially offset by the impact of Medicare Part D redesign. Increased sales of CARVYKTI (ciltacabtagene autoleucel) were driven by continued share gains and capacity expansion. Additionally, sales from the ongoing launches and share gains of TECVAYLI (teclistamab-cqyv), TALVEY (talquetamab-tgvs) and RYBREVANT (amivantamab)/LAZCLUZE (lazertinib) contributed to the growth. Growth was partially offset by ZYTIGA (abiraterone acetate) due to loss of exclusivity and IMBRUVICA (ibrutinib) due to competitive pressures and the impact of Medicare Part D redesign.
Immunology products sales were $15.7 billion in 2025, a decline of 11.8% as compared to the prior year primarily due to the decline of STELARA (ustekinumab) sales driven by the impact of biosimilar competition and Medicare Part D redesign. The growth of TREMFYA (guselkumab) was due to share gains and market growth. The increase in SIMPONI/SIMPONI ARIA sales was primarily driven by the Merck, Sharp & Dohme return of rights in Europe in the fiscal fourth quarter of 2024. The increase in REMICADE (infliximab) sales was due to favorable patient mix, market growth and the Merck, Sharp & Dohme return of rights in Europe in the fiscal fourth quarter of 2024, partially offset by continued biosimilar competition.
Sales of STELARA in the United States were approximately $3.8 billion in fiscal 2025. Third parties have filed biologics license applications with the U.S. FDA, the European Medicines Agency, and other government authorities seeking approval to market biosimilar versions of STELARA around the globe. The Company expects continued launches of biosimilar versions of STELARA globally which will continue to negatively impact the Company’s sales of STELARA.
At least two biosimilars are pursuing regulatory approval for a SIMPONI biosimilar in the United States, which would likely result in a significant reduction in future sales.
Neuroscience products, which include sales of CAPLYTA (lumateperone) acquired with the Intra-Cellular Therapies (Intra-
Cellular) acquisition on April 2, 2025, achieved sales of $7.8 billion in 2025, representing an increase of 10.1% as compared to the prior year. Growth of SPRAVATO (esketamine) was driven by continued increased physician and patient demand. Growth was partially offset by the sales decline of INVEGA SUSTENNA / XEPLION / INVEGA TRINZA / TREVICTA primarily due to the impact of Medicare Part D redesign.
Pulmonary Hypertension products achieved sales of $4.4 billion, representing an increase of 3.6% as compared to the prior year. Sales growth of OPSUMIT (macitentan)/OPSYNVI (macitentan/tadalafil) was driven by share gains and market growth partially offset by the impact of Medicare Part D redesign and UPTRAVI (selexipag) was driven by market growth partially offset by the impact of Medicare Part D redesign. The Company expects generic competition for OPSUMIT in 2026, which would likely result in a significant reduction in future sales.
Infectious disease products sales were $3.2 billion in 2025, a decline of 4.6% as compared to the prior year primarily driven by declines across the portfolio including COVID-19 vaccine revenue in Other Infectious Diseases. The decline was partially offset by growth of EDURANT/rilpivirine.
Cardiovascular/Metabolism/Other products achieved sales were $3.8 billion, representing an increase of 6.1% as compared to the prior year. The growth of XARELTO (rivaroxaban) sales was primarily driven by the impact of Medicare Part D redesign and market growth partially offset by continued share loss.
The Company maintains a policy that no end customer will be permitted direct delivery of product to a location other than the billing location. This policy impacts contract pharmacy transactions involving non-grantee 340B covered entities for most of the Company’s drugs, subject to multiple exceptions. Both grantee and non-grantee covered entities can maintain certain contract pharmacy arrangements under policy exceptions. The Company has been and will continue to offer 340B discounts to covered entities on all of its covered outpatient drugs, and it believes its policy will improve its ability to identify inappropriate duplicate discounts and diversion prohibited by the 340B statute. The 340B Drug Pricing Program is a U.S. federal government program requiring drug manufacturers to provide significant discounts on covered outpatient drugs to covered entities.
26

During 2025, the Company advanced its pipeline with several regulatory submissions and approvals for new drugs and additional indications for existing drugs as follows:
Product Name (Chemical Name) Indication US Approval EU Approval US Filing EU Filing
AKEEGA (niraparib/abiraterone) Treatment of patients with M1 Metastatic Castration-Sensitive Prostate Cancer (AMPLITUDE) • •
CAPLYTA (lumateperone) Adjunctive treatment for Major Depressive Disorder •
DARZALEX (daratumumab) Treatment for frontline multiple myeloma transplant ineligible (CEPHEUS) • •
DARZALEX (daratumumab) Treatment as subcutaneous monotherapy for high-risk smoldering multiple myeloma (AQUILA) • •
ICOTYDE (icotrokinra) Treatment for Psoriasis (ICONIC) • •
INLEXZO (gemcitabine intravesical system) Treatment for non muscle invasive bladder cancer (SunRISe-1) •
IMAAVY (nipocalimab) Treatment for Generalized Myasthenia Gravis (Vivacity MG3) • •
IMAAVY (nipocalimab) Treatment for Generalized Myasthenia Gravis Pediatrics (VIBRANCE MG) •
IMBRUVICA (ibrutinib) Treatment for frontline MCL (Triangle) •
RYBREVANT (amivantamab) Treatment for subcutaneous (PALOMA-3) • •
SIMPONI (golimumab) Treatment of Patients with Pediatric Ulcerative Colitis (PURSUIT 2) • •
SPRAVATO (esketamine) Treatment of Patients with Treatment Resistant Depression monotherapy (TRD4005) •
STELARA (ustekinumab) Treatment of Patients with Pediatric Crohn's Disease • •
STELARA (ustekinumab) Treatment of Patients with Pediatric Ulcerative Colitis (UNIFI JR) • •
TECVAYLI (teclistamab) Multiple Myeloma 1-3PLs (MajesTEC-3) •
TREMFYA (guselkumab) Treatment of Patients with Ulcerative Colitis (QUASAR) •
TREMFYA (guselkumab) Subcutaneous Induction for treatment of patients with Ulcerative Colitis (ASTRO) • •
TREMFYA (guselkumab) Subcutaneous Induction for treatment of patients with Crohn's Disease (GRAVITI) • •
TREMFYA (guselkumab) Treatment of Patients with Crohn's Disease (GALAXI) • •
TREMFYA (guselkumab) Treatment of Patients with Pediatric Psoriasis (PROTOSTAR) • •
TREMFYA (guselkumab) Treatment of patients with Psoriatic Arthritis Structural Damage (APEX) •
TREMFYA (guselkumab) Treatment of Patients with Pediatric Juvenile Psoriatic Arthritis •

2025 Annual Report 27

MedTech segment
The MedTech segment sales in 2025 were $33.8 billion, an increase of 6.1% from 2024, which included operational growth of 5.4% and a positive currency impact of 0.7%. U.S. sales were $17.4 billion, an increase of 6.6% as compared to the prior year. International sales were $16.4 billion, an increase of 5.5% as compared to the prior year, which included operational growth of 4.1% and a positive currency impact of 1.4%. In 2025, the net impact of acquisitions and divestitures on the MedTech segment worldwide operational sales growth was a positive 1.1% primarily related to the Shockwave acquisition.
Major MedTech franchise sales:
(Dollars in Millions) 2025 2024 Total Change Operations Change Currency Change
Surgery $10,137 9,845 3.0 % 2.5 % 0.5 %
Advanced 4,577 4,488 2.0 1.5 0.5
General 5,560 5,358 3.8 3.3 0.5
Orthopaedics 9,258 9,158 1.1 0.3 0.8
Hips 1,674 1,638 2.1 1.4 0.7
Knees 1,587 1,545 2.7 2.0 0.7
Trauma 3,146 3,049 3.2 2.4 0.8
Spine, Sports & Other 2,852 2,926 (2.5) (3.5) 1.0
Cardiovascular 8,928 7,707 15.8 15.2 0.6
Electrophysiology 5,634 5,267 7.0 6.4 0.6
Abiomed 1,751 1,496 17.1 16.2 0.9
Shockwave (1) 1,146 564 * * *
Other Cardiovascular 397 380 4.3 3.8 0.5
Vision 5,468 5,146 6.3 5.3 1.0
Contact Lenses/Other 3,910 3,733 4.8 3.6 1.2
Surgical 1,558 1,413 10.2 9.9 0.3
Total MedTech Sales $33,792 31,857 6.1 % 5.4 % 0.7 %

(1)
Acquired on May 31, 2024
*    Percentage greater than 100% or not meaningful
The Surgery franchise achieved sales of $10.1 billion in 2025, representing an increase of 3.0% from 2024. Growth in Advanced Surgery was primarily due to the strength of the portfolio and commercial execution in Biosurgery as well as new products in Endocutters. This was partially offset by China volume-based procurement across all platforms and competitive pressures in Energy and Endocutters. Growth in General Surgery was primarily driven by technology penetration and upgrades within the differentiated Wound Closure portfolio. This growth was partially offset by the impact from divestitures.
The Orthopaedics franchise achieved sales of $9.3 billion in 2025, representing an increase of 1.1% from 2024. All platforms were negatively impacted by revenue disruption from the previously announced Orthopaedics restructuring, which is now substantially complete, the negative impact of volume-based procurement in China and selling days. The growth in Hips was primarily due to new product launches. The growth in Knees was primarily driven by the ATTUNE portfolio, pull through related to the VELYS Robotic assisted solution. Growth in Trauma was driven by the adoption of recently launched products and commercial execution. The decline in Spine, Sports & Other was primarily driven by competitive pressures and price pressures in the U.S. Early Interventional segment partially offset by new product launches.
In October 2025, the Company announced its intention to separate its Orthopaedics business. The Company intends to explore multiple paths to effect the planned separation with a targeted completion within 18 to 24 months after the initial announcement.
28

The Cardiovascular franchise achieved sales of $8.9 billion in 2025, representing an increase of 15.8% from 2024. Electrophysiology growth was driven by procedure growth, new product performance and commercial execution. This was partially offset by competitive pressures in Pulsed Field Ablation catheters. Abiomed sales reflect the continued strong adoption of Impella 5.5 and Impella CP. Shockwave sales growth was driven by Coronary and Peripheral portfolios and new product launches.
The Vision franchise achieved sales of $5.5 billion in 2025, representing an increase of 6.3% from 2024. Contact Lenses/Other growth was primarily driven by market growth, continued strong performance in the ACUVUE OASYS 1-Day family of products (including recent launches) and strategic price actions. Surgical growth was primarily driven by the continued strength of recent product innovations, robust demand and commercial execution.
Analysis of consolidated earnings before provision for taxes on income
Consolidated earnings before provision for taxes on income was $32.6 billion and $16.7 billion for the years 2025 and 2024, respectively. As a percent to sales, consolidated earnings before provision for taxes on income was 34.6% and 18.8%, in 2025 and 2024, respectively.
Earnings before provision for taxes
(Dollars in billions. Percentages in chart are as a percent to total sales)
Cost of products sold and selling, marketing and administrative expenses:
Cost of products sold
Selling, marketing & administrative
(Dollars in billions. Percentages in chart are as a percent to total sales)
2025 Annual Report 29

Cost of products sold:
Cost of products sold increased as a percent to sales driven by:
•
Unfavorable product mix driven by the decline of STELARA sales and unfavorable transactional currency in the Innovative Medicine business
•
Tariffs, unfavorable transactional currency and macroeconomic factors in the MedTech business
partially offset by
•
Non-recurring, acquisition related fair value Inventory step-up of $0.1 billion in 2025 versus $0.4 billion in 2024 related to the business combination accounting associated with the Shockwave acquisition in the MedTech business
The intangible asset amortization expense included in cost of products sold was $4.6 billion in fiscal 2025 and $4.5 billion in fiscal 2024.
Selling, Marketing and Administrative expense:
Selling, Marketing and Administrative Expenses decreased as a percent to sales driven by:
•
Corporate administrative expense rationalization
•
Planned leverage in the Innovative Medicine business
partially offset by
•
Increased investment related to the acquisition of Intra-Cellular (CAPLYTA)
Research and Development expense:
Research and development expense by segment of business was as follows:
2025 2024
(Dollars in Millions) Amount % of Sales* Amount % of Sales*
Innovative Medicine $11,827 19.6 % $13,529 23.8 %
MedTech 2,838 8.4 3,703 11.6
Total research and development expense $14,665 15.6 % $17,232 19.4 %
Percent increase/(decrease) over the prior year (14.9 %) 14.2 %
*As a percent to segment sales

Research and development activities represent a significant part of the Company's business. These expenditures relate to the processes of discovering, testing and developing new products, upfront payments and developmental milestones, improving existing products, as well as ensuring product efficacy and regulatory compliance prior to launch. The Company remains committed to investing in research and development with the aim of delivering high quality and innovative products.
Research and Development decreased as a percent to sales primarily driven by:
•
Acquired in-process research & development expense of $1.25 billion to secure the global rights to the NM26 bispecific antibody (Yellow Jersey acquisition) in the Innovative Medicine business in 2024
•
Acquired in-process research & development expense of $0.5 billion from the V-Wave acquisition and a Laminar milestone of $0.3 billion in the MedTech business in 2024
•
Leverage resulting from investment prioritization in the Innovative Medicine business
In-Process Research and Development Impairments (IPR&D):
In the fiscal year 2025, the Company recorded a charge of approximately $0.1 billion primarily related to a non-strategic asset acquired with Abiomed in 2022. In the fiscal year 2024, the Company recorded a charge of approximately $0.2 billion primarily associated with the M710 (biosimilar) asset acquired as part of the acquisition of Momenta Pharmaceuticals in 2020. There was also a partial impairment of this asset for $0.2 billion in the fiscal 2023. This asset is fully impaired.
30

Other (Income) Expense, Net:
 Other (income) expense, net is the account where the Company records gains and losses related to the sale and write-down of certain investments in equity securities held by Johnson & Johnson Innovation - JJDC, Inc. (JJDC), changes in the fair value of securities, investment (income)/loss related to employee benefit programs, gains and losses on divestitures, certain transactional currency gains and losses, acquisition and divestiture related costs, litigation accruals and settlements, as well as royalty income.
Other (income) expense, net for the fiscal year 2025 reflected an increase in income of $11.9 billion as compared to the prior year primarily due to the following:
(Dollars in Billions)(Income)/Expense 2025 2024 Change
Litigation related (1) $ (6.0) 5.5 (11.5)
Employee benefit plan related (0.5) (0.9) 0.4
Changes in the fair value of securities (2) (0.4) 0.3 (0.7)
Acquisition, Integration and Divestiture related (3) 0.2 0.8 (0.6)
Monetization of royalty rights 0.0 (0.3) 0.3
Other (0.5) (0.7) 0.2
Total Other (Income) Expense, Net $ (7.2) 4.7 (11.9)

(1)
The fiscal year 2025 includes the reversal of approximately $7.0 billion, a significant portion of the previously accrued talc reserve and an expense of $0.8 billion for the Auris shareholder litigation. The fiscal year 2024 includes charges of approximately $5.1 billion for talc matters (See Note 19 to the Consolidated Financial Statements for additional details).
(2)
The fiscal year 2024 includes the loss of $0.4 billion on the completion of the debt for equity exchange of the retained stake in Kenvue.
(3)
The fiscal year 2025 is primarily related to the acquisitions of Intra-Cellular (CAPLYTA) and Halda Therapeutics partially offset by the reduction of the Abiomed contingent value right (CVR) liability. The fiscal year 2024 is primarily related to the acquisition of Shockwave.
Interest (Income) Expense:
 Interest income in the fiscal year 2025 was $1.1 billion as compared to $1.3 billion in 2024. Interest income decreased as compared to the prior year driven by lower interest rates earned on cash balances. Interest expense in the fiscal year 2025 was $1.0 billion as compared to $0.8 billion in 2024. Interest expense was higher as compared to the prior year due to a higher average debt balance. Cash, cash equivalents and marketable securities totaled $20.1 billion at the end of 2025, and averaged $22.3 billion as compared to the cash, cash equivalents and marketable securities total of $24.5 billion and $23.7 billion average balance in 2024. The total debt balance at the end of 2025 was $47.9 billion with an average debt balance of $42.3 billion as compared to $36.6 billion at the end of 2024 and an average debt balance of $33.0 billion. The higher debt balance was due to the senior unsecured notes issued by the Company in the fiscal first quarter of 2025. The net proceeds from this offering were used to fund the Intra-Cellular Therapies, Inc. acquisition which closed on April 2, 2025 and for general corporate purposes.
Income before tax by segment
Income before tax by segment of business was as follows:
Income Before Tax Segment Sales Percent of Segment Sales
(Dollars in Millions) 2025 2024 2025 2024 2025 2024
Innovative Medicine $ 22,266 18,919 60,401 56,964 36.9 % 33.2
MedTech 4,113 3,740 33,792 31,857 12.2 11.7
Segment earnings before tax (1) 26,379 22,659 94,193 88,821 28.0 25.5
(Income) Expenses not allocated to segments (2) (6,202) 5,972
Worldwide income before tax $ 32,581 16,687 94,193 88,821 34.6 % 18.8

(1)
See Note 17 to the Consolidated Financial Statements for more details.
(2)
Amounts not allocated to segments include interest (income) expense and general corporate (income) expense. The fiscal year 2025 includes the reversal of approximately $7.0 billion, a significant portion of the previously accrued talc reserve. The fiscal year 2024 includes charges for talc matters of approximately $5.1 billion and a loss of approximately $0.4 billion related to the debt to equity exchange of the Company's remaining shares of Kenvue Common Stock.
2025 Annual Report 31

Innovative Medicine segment:
In 2025, the Innovative Medicine segment income before tax as a percent to sales was 36.9% versus 33.2% in 2024. The increase in the income before tax as a percent of sales was primarily driven by the following:
•
Acquired in-process research and development expense of $1.25 billion to secure the global rights to the NM26 bispecific antibody (Yellow Jersey acquisition) in 2024
•
Litigation income of $0.1 billion in 2025 versus expense of $0.4 billion in 2024, primarily related to Risperdal Gynecomastia
•
Research & development leverage resulting from investment prioritization
partially offset by
•
Acquisition, integration and divestiture related net expense of $0.4 billion in 2025 primarily related to Intra-Cellular and Halda Therapeutics and $0.1 billion in 2024
•
Monetization of royalty rights of $0.3 billion in 2024
•
Unfavorable Product mix, the impact of Medicare Part D redesign and unfavorable transactional currency
•
Increased investment related to the acquisition of Intra-Cellular (CAPLYTA)
MedTech segment:
In 2025, the MedTech segment income before tax as a percent to sales was 12.2% versus 11.7% in 2024. The increase in the income before tax as a percent to sales was primarily driven by the following:
•
Acquisition, integration and divestiture related net income of $0.2 billion in 2025 primarily driven by a contingent value right liability reduction associated with Abiomed versus net costs of $1.0 billion in 2024 primarily related to the Shockwave acquisition
•
Acquired in-process research and development expense of $0.5 billion from the V-Wave acquisition and $0.3 billion for a Laminar milestone in 2024
•
Gain on the sale of securities of $0.2 billion in 2025
partially offset by
•
Litigation expense of $0.9 billion in 2025, primarily related to Auris shareholder litigation
•
Higher restructuring related costs of $0.5 billion in 2025 versus $0.2 billion in 2024
•
Tariffs, unfavorable transactional currency and macroeconomic factors in Cost of products sold
Restructuring:
 In fiscal 2025, the company initiated a restructuring program of its Surgery franchise within the MedTech segment to simplify and focus operations by exiting certain non-strategic product lines and optimize select sites across the network. The pre-tax restructuring expense was $205 million in the fiscal year 2025, of which $76 million was recorded in Restructuring, $122 million in Other income and expense and $7 million in Cost of products sold on the Consolidated Statement of Earnings. The pre-tax restructuring expense in the fiscal year 2025 primarily included costs related to asset impairments as well as product exits. The estimated costs of the total program are between $0.9 billion - $1.0 billion and is expected to be substantially completed by the end of fiscal year 2026.
In fiscal 2023, the Company initiated a restructuring program of its Orthopaedics franchise within its MedTech segment to streamline operations by exiting certain markets, product lines and distribution network arrangements. The pretax restructuring expense was $307 million in the fiscal year 2025, of which $152 million was recorded in Restructuring, $84 million in Cost of products sold and $71 million in Other (Income)/Expense on the Consolidated Statement of Earnings primarily for costs related to asset impairments as well as market and product exits. The pre-tax restructuring expense was $167 million in the fiscal year 2024, of which $132 million was recorded in Restructuring and $35 million was recorded in Cost of products sold on the Consolidated Statement of Earnings, primarily included costs related to market and product exits. The pre-tax restructuring expense was $319 million in the fiscal year 2023, of which $40 million was recorded in Restructuring and $279 million was recorded in Cost of products sold on the Consolidated Statement of Earnings, primarily included inventory and instrument charges related to market and product exits. Total project costs of approximately $0.8 billion have been recorded since the restructuring was announced and the program has been substantially completed in the fiscal year 2025.
32

In fiscal 2023, the Company completed a prioritization of its research and development (R&D) investment within the Innovative Medicine segment to focus on the most promising medicines with the greatest benefit to patients. This resulted in the exit of certain programs within therapeutic areas. The pre-tax restructuring charge of $102 million in the fiscal year 2024 was recorded in Restructuring on the Consolidated Statement of Earnings, and included the termination of partnered and non-partnered development program costs, asset impairments and asset divestments. The pre-tax restructuring expense was $479 million in the fiscal year 2023, of which $449 million was recorded in Restructuring and $30 million was recorded in Cost of products sold on the Consolidated Statement of Earnings included the termination of partnered and non-partnered program costs and asset impairments. Total project costs of approximately $0.6 billion have been recorded since the restructuring was announced and the program was completed in the fiscal fourth quarter of 2024.
See Note 20 to the Consolidated Financial Statements for additional details related to the restructuring programs.
Provision for Taxes on Income:
 The worldwide effective income tax rate from continuing operations was 17.7% in 2025 and 15.7% in 2024. For discussion related to the fiscal year 2025 provision for taxes refer to Note 8 to the Consolidated Financial Statements.
On December 15, 2022, the European Union (EU) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development (OECD) Pillar Two Framework that was supported by over 130 countries worldwide. Several EU and non-EU countries have enacted Pillar Two legislation with an initial effective date of January 1, 2024, with other aspects of the law effective in 2025 or later. While countries continue to enact new provisions or issue new regulations this could have an impact to the Company’s effective tax rate. The Company will continue to monitor further developments to determine any potential impact in the countries in which we operate, such as the recently issued administrative guidance on the side-by-side system that will fully exclude U.S. parented groups from certain provisions of the Pillar Two Framework.
Liquidity and capital resources
Liquidity & cash flows
Cash and cash equivalents were $19.7 billion at the end of 2025 as compared to $24.1 billion at the end of 2024.
The primary sources and uses of cash that contributed to the $4.4 billion decrease were:
(Dollars in billions)
$24.1 Q4 2024 Cash and cash equivalents balance
24.5 cash generated from operating activities
(23.6) net cash used for investing activities
(5.5) net cash used for financing activities
0.2 effect of exchange rate and rounding
$19.7 Q4 2025 Cash and cash equivalents balance

In addition, the Company had $0.4 billion in marketable securities at the end of fiscal year 2025 and $0.4 billion at the end of fiscal year 2024. See Note 1 to the Consolidated Financial Statements for additional details on cash, cash equivalents and marketable securities.
2025 Annual Report 33

Cash flow from operations of $24.5 billion was the result of:
(Dollars In billions)
$26.8 Net Earnings
10.4 non-cash expenses and other adjustments primarily for depreciation and amortization, stock-based compensation, asset write-downs, charges for acquired in-process research and development and deferred tax provision partially offset by net gain on sale of assets/businesses
(6.2) an increase in other current and non-current assets
(5.7) a decrease in other current and non-current liabilities
2.4 an increase in accounts payable and accrued liabilities
(3.2) an increase in accounts receivable and inventories
$24.5 Cash flow from operations

Cash flow used for investing activities of $23.6 billion was primarily due to:
(Dollars in billions)
$(4.8) additions to property, plant and equipment
(17.5) acquisitions, net of cash acquired
0.7 proceeds from the disposal of assets/businesses, net
(0.4) acquired in-process research and development /related milestones
0.7 net sales of investments
(2.1) credit support agreements activity, net
(0.2) other (including capitalized licenses and milestones)
$(23.6) Net cash used for investing activities

Cash flow used for financing activities of $5.5 billion was primarily due to:
(Dollars in billions)
$(12.4) dividends to shareholders
(6.0) repurchase of common stock
9.6 net proceeds from short and long-term debt
3.4 proceeds from stock options exercised/employee withholding tax on stock awards, net
(0.2) credit support agreements activity, net
0.1 other and rounding
$(5.5) Net cash used for financing activities

As of December 28, 2025, the Company's notes payable and long-term debt was in excess of cash, cash equivalents and marketable securities. As of December 28, 2025, the net debt position was $27.8 billion as compared to the prior year of $12.1 billion. The debt balance at the end of 2025 was $47.9 billion as compared to $36.6 billion in 2024. In the fiscal first quarter of 2025, the Company issued senior unsecured notes for a total of $9.2 billion. For additional details on borrowings, see Note 7 to the Consolidated Financial Statements. The net proceeds from this offering were used to fund the Intra-Cellular Therapies, Inc. acquisition for approximately $14.5 billion which closed on April 2, 2025, and for general corporate purposes. Considering recent market conditions, the Company has re-evaluated its operating cash flows and liquidity profile and does not foresee any significant incremental risk. The Company anticipates that operating cash flows, the ability to raise funds from external sources, borrowing capacity from existing committed credit facilities and access to the commercial paper markets will continue to provide sufficient resources to fund operating needs, including the Company’s reserve balance of approximately $3.4 billion related to talc matters, $2.0 billion related to the current portion of Corporate bonds due and the remaining
34

approximately $1.1 billion to settle opioid litigation (See Note 19 to the Consolidated Financial Statements for additional details). In addition, the Company monitors the global capital markets on an ongoing basis and from time to time may raise capital when market conditions are favorable.
The following table summarizes the Company’s material contractual obligations and their aggregate maturities as of December 28, 2025: To satisfy these obligations, the Company intends to use cash from operations.
(Dollars in Millions) Debt Obligations Interest on Debt Obligations Total
2026 2,000 1,458 3,458
2027 3,216 1,368 4,584
2028 3,128 1,273 4,401
2029 2,153 1,208 3,361
2030 2,689 1,118 3,807
After 2030 28,252 10,306 38,558
Total 41,438 16,731 58,169

For tax matters, see Note 8 to the Consolidated Financial Statements. For talc matters, see Note 19 to the Consolidated Financial Statements.
Financing and market risk
The Company uses financial instruments to manage the impact of foreign exchange rate changes on cash flows. Accordingly, the Company enters into forward foreign exchange contracts to protect the value of certain foreign currency assets and liabilities and to hedge future foreign currency transactions primarily related to product costs. Gains or losses on these contracts are offset by the gains or losses on the underlying transactions. A 10% appreciation of the U.S. Dollar from the December 28, 2025 market rates would increase the unrealized value of the Company’s forward contracts by approximately $0.2 billion. Conversely, a 10% depreciation of the U.S. Dollar from the December 28, 2025 market rates would decrease the unrealized value of the Company’s forward contracts by approximately $0.3 billion. In either scenario, the gain or loss on the forward contract would be offset by the gain or loss on the underlying transaction, and therefore, would have no impact on future anticipated earnings and cash flows.
The Company hedges the exposure to fluctuations in currency exchange rates, and the effect on certain assets and liabilities in foreign currency, by entering into currency swap contracts. A 1% change in the spread between U.S. and foreign interest rates on the Company’s interest rate sensitive financial instruments would either increase or decrease the unrealized value of the Company’s swap contracts by approximately $1.5 billion. In either scenario, at maturity, the gain or loss on the swap contract would be offset by the gain or loss on the underlying transaction, and therefore, would have no impact on future anticipated cash flows.
The Company does not enter into financial instruments for trading or speculative purposes. Further, the Company has a policy of only entering into contracts with parties that have at least an investment grade credit rating. The counterparties to these contracts are major financial institutions and there is no significant concentration of exposure with any one counterparty. Management believes the risk of loss is remote. The Company entered into credit support agreements (CSA) with certain derivative counterparties establishing collateral thresholds based on respective credit ratings and netting agreements. See Note 6 to the Consolidated Financial Statements for additional details on credit support agreements.
The Company invests in both fixed rate and floating rate interest earning securities which carry a degree of interest rate risk. The fair market value of fixed rate securities may be adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than predicted if interest rates fall. A 1% (100 basis points) change in spread on the Company’s interest rate sensitive investments would either increase or decrease the unrealized value of cash equivalents and current marketable securities by less than $5.0 million.
The Company has access to substantial sources of funds at numerous banks worldwide. In June 2025, the Company secured a new 364-day Credit Facility of $10 billion, which expires on June 24, 2026. Interest charged on borrowings under the credit line agreement is based on either Secured Overnight Financing Rate (SOFR) Reference Rate or other applicable market rate as allowed plus applicable margins. Commitment fees under the agreement are not material.
2025 Annual Report 35

Total borrowings at the end of 2025 and 2024 were $47.9 billion and $36.6 billion, respectively. The increase in the borrowings was primarily due to the issuance of new debt in the fiscal first quarter of 2025. The Company issued senior unsecured notes for approximately $9.2 billion. The net proceeds from this offering were used to fund the Intra-Cellular Therapies, Inc. acquisition for approximately $14.5 billion which closed on April 2, 2025, and for general corporate purposes. In 2025, net debt (cash and current marketable securities, net of debt) was $27.8 billion compared to net debt of $12.1 billion in 2024. Total debt represented 37.0% of total capital (shareholders’ equity and total debt) in 2025 and 34.0% of total capital in 2024. Shareholders’ equity per share at the end of 2025 was $33.86 compared to $29.70 at year-end 2024.
A summary of borrowings can be found in Note 7 to the Consolidated Financial Statements.
Dividends
The Company increased its dividend in 2025 for the 63
rd
 consecutive year. Cash dividends paid were $5.14 per share in 2025 and $4.91 per share in 2024.
On January 2, 2026, the Board of Directors declared a regular cash dividend of $1.30 per share, payable on March 10, 2026 to shareholders of record as of February 24, 2026.
Other information
Critical accounting policies and estimates
Management’s discussion and analysis of results of operations and financial condition are based on the Company’s consolidated financial statements that have been prepared in accordance with accounting principles generally accepted in the U.S. (GAAP). The preparation of these financial statements requires that management make estimates and assumptions that affect the amounts reported for revenues, expenses, assets, liabilities and other related disclosures. Actual results may or may not differ from these estimates. The Company believes that the understanding of certain key accounting policies and estimates are essential in achieving more insight into the Company’s operating results and financial condition. These key accounting policies include revenue recognition, income taxes, legal and self-insurance contingencies, valuation of long-lived assets, assumptions used to determine the amounts recorded for pensions and other employee benefit plans and accounting for stock based awards.
Revenue Recognition:
 The Company recognizes revenue from product sales when obligations under the terms of a contract with the customer are satisfied; generally, this occurs with the transfer of control of the goods to customers. The Company's global payment terms are typically between 30 to 90 days. Provisions for certain rebates, sales incentives, trade promotions, coupons, product returns, discounts to customers and governmental clawback provisions are accounted for as variable consideration and recorded as a reduction in sales.
Product discounts granted are based on the terms of arrangements with direct, indirect and other market participants, as well as market conditions, including consideration of competitor pricing. Rebates and discounts are estimated based on contractual terms, historical experience, patient outcomes, trend analysis and projected market conditions in the various markets served. The Company evaluates market conditions for products or groups of products primarily through the analysis of wholesaler and other third-party sell-through and market research data, as well as internally generated information.
Sales returns are estimated and recorded based on historical sales and returns information. Products that have lost patent exclusivity, or that otherwise exhibit unusual sales or return patterns due to dating, competition or other marketing matters are specifically investigated and analyzed as part of the accounting for sales return accruals.
Sales returns allowances represent a reserve for products that may be returned due to expiration, destruction in the field, or in specific areas, product recall. In accordance with the Company’s accounting policies, the Company generally issues credit to customers for returned goods. The Company’s sales returns reserves are accounted for in accordance with the U.S. GAAP guidance for revenue recognition when right of return exists. Sales returns reserves are recorded at full sales value. Sales returns in the Innovative Medicine segment are almost exclusively not resalable. Sales returns for certain franchises in the MedTech segment are typically resalable but are not material. The Company infrequently exchanges products from inventory for returned products. The sales returns reserve for the total Company has been approximately 1.0% of annual net trade sales during the fiscal years 2025, 2024 and 2023.
36

Promotional programs are recorded in the same period as related sales and include volume-based sales incentive programs. Volume-based incentive programs are based on the estimated sales volumes for the incentive period and are recorded as products are sold. These arrangements are evaluated to determine the appropriate amounts to be deferred or recorded as a reduction of revenue. The Company also earns profit-share payments through collaborative arrangements of certain products, which are included in sales to customers. Profit-share payments were less than 2.0% of the total revenues in the fiscal year 2025, 2024 and 2023.
In addition, the Company enters into collaboration arrangements that contain multiple performance obligations. Amounts due from collaborative partners for these arrangements are recognized as each performance obligation is satisfied, based on the relative selling price. Upfront fees received as part of these arrangements are generally deferred and recognized over the performance period. See Note 1 to the Consolidated Financial Statements for additional disclosures on collaborations.
Reasonably likely changes to assumptions used to calculate the accruals for rebates, returns and promotions are not anticipated to have a material effect on the financial statements. The Company currently discloses the impact of changes to assumptions in the quarterly or annual filing in which there is a material financial statement impact.
Below are tables that show the progression of accrued rebates, returns, promotions, reserve for doubtful accounts and reserve for cash discounts by segment of business for the fiscal years ended December 28, 2025 and December 29, 2024.
Innovative Medicine segment
(Dollars in Millions) Balance at Beginning of Period Accruals Payments/ Credits (2) Balance at End of Period
2025
Accrued rebates (1) $15,780 56,819 (55,071) 17,528
Accrued returns 1,124 197 (341) 980
Accrued promotions 3 1 (4) 0
Subtotal $16,907 57,017 (55,416) 18,508
Reserve for doubtful accounts 41 0 (3) 38
Reserve for cash discounts 109 1,314 (1,300) 123
Total $17,057 58,331 (56,719) 18,669
2024
Accrued rebates (1) $14,661 52,786 (51,667) 15,780
Accrued returns 634 845 (355) 1,124
Accrued promotions 6 3 (6) 3
Subtotal $15,301 53,634 (52,028) 16,907
Reserve for doubtful accounts 33 14 (6) 41
Reserve for cash discounts 111 1,493 (1,495) 109
Total $15,445 55,141 (53,529) 17,057

(1)
Includes reserve for customer rebates of $262 million at December 28, 2025 and $187 million at December 29, 2024, recorded as a contra asset.
(2)
Includes adjustments to revenue recognized as a result of changes in estimates for prior year transactions
2025 Annual Report 37

MedTech segment
(Dollars in Millions) Balance at Beginning of Period Accruals Payments/ Credits Balance at End of Period
2025
Accrued rebates (1) $1,424 6,446 (6,377) 1,493
Accrued returns 118 548 (538) 128
Accrued promotions 22 88 (86) 24
Subtotal $1,564 7,082 (7,001) 1,645
Reserve for doubtful accounts 126 33 (14) 145
Reserve for cash discounts 6 89 (88) 7
Total $1,696 7,204 (7,103) 1,797
2024
Accrued rebates (1) $1,455 5,955 (5,986) 1,424
Accrued returns 125 543 (550) 118
Accrued promotions 25 62 (65) 22
Subtotal $1,605 6,560 (6,601) 1,564
Reserve for doubtful accounts 133 31 (38) 126
Reserve for cash discounts 5 92 (91) 6
Total $1,743 6,683 (6,730) 1,696

(1)
Includes reserve for customer rebates of $767 million at December 28, 2025 and $704 million at December 29, 2024, recorded as a contra asset.
Income Taxes:
 Income taxes are recorded based on amounts refundable or payable for the current year and include the results of any difference between U.S. GAAP accounting and tax reporting, recorded as deferred tax assets or liabilities. The Company estimates deferred tax assets and liabilities based on enacted tax law and rates. Future changes in tax laws and rates may affect recorded deferred tax assets and liabilities in the future.
The Company records unrecognized tax benefits for uncertain tax positions. The Company follows U.S. GAAP which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Management believes that changes in these estimates would not have a material effect on the Company's results of operations, cash flows or financial position.
The Company has not provided deferred taxes on the undistributed earnings on certain international subsidiaries where the earnings are considered to be indefinitely reinvested. The Company intends to continue to reinvest these earnings in those international operations. If the Company decides at a later date to repatriate these earnings to the U.S., the Company would be required to record the net tax effects on these amounts. The Company estimates that the tax effect of this repatriation would be approximately $0.6 billion under currently enacted tax laws and regulations and at current currency exchange rates. This amount does not include the possible benefit of U.S. foreign tax credits, which may substantially offset this cost.
See Note 1 and Note 8 to the Consolidated Financial Statements for further information regarding income taxes.
Legal and Self Insurance Contingencies: 
The Company records accruals for various contingencies, including legal proceedings and product liability claims as these arise in the normal course of business. The accruals are based on management’s judgment as to the probability of losses and, where applicable, actuarially determined estimates. The Company has self insurance through a wholly-owned captive insurance company. In addition to accruals in the self insurance program, claims that exceed the insurance coverage are accrued when losses are probable and amounts can be reasonably estimated.
See Notes 1 and 19 to the Consolidated Financial Statements for further information regarding product liability and legal proceedings.
38

Long-Lived and Intangible Assets:
 The Company assesses changes, both qualitatively and quantitatively, in economic conditions and makes assumptions regarding estimated future cash flows in evaluating the value of the Company’s property, plant and equipment, goodwill and intangible assets. As these assumptions and estimates may change over time, it may or may not be necessary for the Company to record impairment charges.
Employee Benefit Plans:
 The Company sponsors various retirement and pension plans, including defined benefit, defined contribution and termination indemnity plans, which cover most employees worldwide. These plans are based on assumptions for the discount rate, expected return on plan assets, mortality rates, expected salary increases, healthcare cost trend rates and attrition rates. See Note 10 to the Consolidated Financial Statements for further details on these rates.
Stock Based Compensation:
 The Company recognizes compensation expense associated with the issuance of equity instruments to employees for their services. Based on the type of equity instrument, the fair value is estimated on the date of grant using either the Black-Scholes option valuation model or a combination of both the Black-Scholes option valuation model and Monte Carlo valuation model, and is expensed in the financial statements over the service period. The input assumptions used in determining fair value are the expected life, expected volatility, risk-free rate and expected dividend yield. For performance share units, the fair market value is calculated for the two component goals at the date of grant: adjusted operational earnings per share and relative total shareholder return. The fair values for the earnings per share goal of each performance share unit was estimated on the date of grant using the fair market value of the shares at the time of the award, discounted for dividends, which are not paid on the performance share units during the vesting period. The fair value for the relative total shareholder return goal of each performance share unit was estimated on the date of grant using the Monte Carlo valuation model. See Note 16 to the Consolidated Financial Statements for additional information.
New accounting pronouncements
Refer to Note 1 to the Consolidated Financial Statements for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of December 28, 2025.
Economic and market factors
The Company is aware that its products are used in an environment where, for more than a decade, policymakers, consumers and businesses have expressed concerns about the rising cost of healthcare. In response to these concerns, the Company has a long-standing policy of pricing products responsibly. For the period 2015 - 2025, in the U.S., the weighted average compound annual growth rate of the Company’s net price increases for healthcare products (prescription and over-the-counter drugs, hospital and professional products) was below the U.S. Consumer Price Index (CPI).
The Company operates in certain countries where the economic conditions continue to present significant challenges. The Company continues to monitor these situations and take appropriate actions. Inflation rates continue to have an effect on worldwide economies and, consequently, on the way companies operate. The Company has accounted for operations in Argentina, Venezuela, Turkey and Egypt (beginning in the fiscal fourth quarter of 2024) as highly inflationary, as the prior three-year cumulative inflation rate surpassed 100%. This did not have a material impact to the Company's results in the period. In the face of increasing costs, the Company strives to maintain its profit margins through cost reduction programs, productivity improvements and periodic price increases.
In July 2023, Janssen Pharmaceuticals, Inc. (Janssen) filed litigation against the U.S. Department of Health and Human Services as well as the Centers for Medicare and Medicaid Services challenging the constitutionality of the IRA's Medicare Drug Price Negotiation Program. The litigation requests a declaration that the IRA violates Janssen’s rights under the First Amendment and the Fifth Amendment to the Constitution and therefore that Janssen is not subject to the IRA’s mandatory pricing scheme. While the impact of the IRA on our business and the broader pharmaceutical industry remains uncertain, as litigation filed by Janssen and other pharmaceutical companies remains ongoing, CMS has publicly announced the maximum fair price for each of the selected drugs and has recently begun implementing the program. In December 2025, Janssen sought review by the U.S. Supreme Court of the Third Circuit's majority affirmance of the district court’s ruling in favor of the government.
The long-term implications of regional conflicts on the Company are difficult to predict. The financial impact of known existing conflicts in the fiscal 2025 was not material.
2025 Annual Report 39

The Company is exposed to fluctuations in currency exchange rates. A 1% change in the value of the U.S. Dollar as compared to all foreign currencies in which the Company had sales, income or expense in 2025 would have increased or decreased the translation of foreign sales by approximately $0.4 billion and net income by approximately $0.2 billion.
Governments around the world consider various proposals to make changes to tax laws, which may include increasing or decreasing existing statutory tax rates. In connection with various government initiatives, companies are required to disclose more information to tax authorities on operations around the world, which may lead to greater audit scrutiny of profits earned in other countries. A change in statutory tax rate in any country would result in the revaluation of the Company’s deferred tax assets and liabilities related to that particular jurisdiction in the period in which the new tax law is enacted. This change would result in an expense or benefit recorded to the Company’s Consolidated Statement of Earnings. The Company closely monitors these proposals as they arise in the countries where it operates. Changes to the statutory tax rate may occur at any time, and any related expense or benefit recorded may be material to the fiscal quarter and year in which the law change is enacted.
The Company may be further impacted by the imposition of tariffs, trade protection measures or other policies adopted by any jurisdiction that favor domestic companies and technologies over foreign competitors.
The Company faces various worldwide healthcare changes that may continue to result in pricing pressures that include healthcare cost containment and government legislation relating to sales, promotions, pricing and reimbursement of healthcare products.
Changes in the behavior and spending patterns of purchasers of healthcare products and services, including delaying medical procedures, rationing prescription medications, reducing the frequency of physician visits and foregoing healthcare insurance coverage may continue to impact the Company’s businesses.
The Company also operates in an environment increasingly hostile to intellectual property rights. Firms have filed Abbreviated New Drug Applications or Biosimilar Biological Product Applications with the U.S. FDA or otherwise challenged the coverage and/or validity of the Company's patents, seeking to market generic or biosimilar forms of many of the Company’s key pharmaceutical products prior to expiration of the applicable patents covering those products. In the event the Company is not successful in defending the patent claims challenged in the resulting lawsuits, generic or biosimilar versions of the products at issue will be introduced to the market, resulting in the potential for substantial market share and revenue losses for those products, and which may result in a non-cash impairment charge in any associated intangible asset. There is also a risk that one or more competitors could launch a generic or biosimilar version of the product at issue following regulatory approval even though one or more valid patents are in place.
Legal proceedings
Johnson & Johnson and certain of its subsidiaries are involved in various lawsuits and claims regarding product liability, intellectual property, commercial, employment, indemnification and other matters; governmental investigations; and other legal proceedings that arise from time to time in the ordinary course of business.
The Company records accruals for loss contingencies associated with these legal matters when it is probable that a liability will be incurred and the amount of the loss can be reasonably estimated. As of December 28, 2025, the Company has determined that the liabilities associated with certain litigation matters are probable and can be reasonably estimated. The Company has accrued for these matters and will continue to monitor each related legal issue and adjust accruals as might be warranted based on new information and further developments in accordance with ASC 450-20-25, Contingencies. For these and other litigation and regulatory matters discussed below for which a loss is probable or reasonably possible, the Company is unable to estimate the possible loss or range of loss beyond the amounts accrued. Amounts accrued for legal contingencies often result from a complex series of judgments about future events and uncertainties that rely heavily on estimates and assumptions including timing of related payments. The ability to make such estimates and judgments can be affected by various factors including, among other things, whether damages sought in the proceedings are unsubstantiated or indeterminate; scientific and legal discovery has not commenced or is not complete; proceedings are in early stages; matters present legal uncertainties; there are significant facts in dispute; procedural or jurisdictional issues; the uncertainty and unpredictability of the number of potential claims; ability to achieve comprehensive multi-party settlements; complexity of related cross-claims and counterclaims; and/or there are numerous parties involved. To the extent adverse awards, judgments or verdicts have been rendered against the Company, the Company does not record an accrual until a loss is determined to be probable and can be reasonably estimated.
40

In the Company's opinion, based on its examination of these matters, its experience to date and discussions with counsel, the ultimate outcome of legal proceedings, net of liabilities accrued in the Company's balance sheet, is not expected to have a material adverse effect on the Company's financial position. However, the resolution of, or increase in accruals for, one or more of these matters in any reporting period may have a material adverse effect on the Company's results of operations and cash flows for that period.
See Note 19 to the Consolidated Financial Statements included in Item 8 of this report for further information regarding legal proceedings.
Common stock
The Company’s Common Stock is listed on the New York Stock Exchange under the symbol JNJ. As of February 4, 2026, there were 108,358 record holders of Common Stock of the Company.
Item 7A. Quantitative and qualitative disclosures about market risk
The information called for by this item is incorporated herein by reference to Item 7. Management’s discussion and analysis of results of operations and financial condition - Liquidity and capital resources - Financing and market risk of this Report; and Note 1 Summary of significant accounting policies - Financial instruments of the Notes to Consolidated Financial Statements included in Item 8 of this Report.
2025 Annual Report 41

Item 8. Financial statements and supplementary data
Index to audited Consolidated Financial Statements
Consolidated balance sheets 43
Consolidated statements of earnings 44
Consolidated statements of comprehensive income 45
Consolidated statements of equity 46
Consolidated statements of cash flows 47
Notes to consolidated financial statements 49
Report of independent registered public accounting firm (PCAOB ID 238 ) 108
Management’s report on internal control over financial reporting 111

42

Johnson & Johnson and subsidiaries consolidated balance sheets
At December 28, 2025 and December 29, 2024
(Dollars in Millions Except Share and Per Share Amounts) (Note 1)
2025 2024
Assets
Current assets
Cash and cash equivalents (Notes 1 and 2) $ 19,709 24,105
Marketable securities (Notes 1 and 2) 393 417
Accounts receivable trade, less allowances $ 183 (2024, $ 167 ) 17,178 14,842
Inventories (Notes 1 and 3) 14,191 12,444
Prepaid expenses and other receivables 4,153 4,085
Total current assets 55,624 55,893
Property, plant and equipment, net (Notes 1 and 4) 23,169 20,518
Intangible assets, net (Notes 1 and 5) 50,403 37,618
Goodwill (Notes 1 and 5) 48,772 44,200
Deferred taxes on income (Note 8) 6,874 10,461
Other assets 14,368 11,414
Total assets $ 199,210 180,104
Liabilities and Shareholders’ Equity
Current liabilities
Loans and notes payable (Note 7) $ 8,495 5,983
Accounts payable 11,991 10,311
Accrued liabilities 8,594 8,549
Accrued rebates, returns and promotions 19,124 17,580
Accrued compensation and employee related obligations 4,534 4,126
Accrued taxes on income (Note 8) 1,388 3,772
Total current liabilities 54,126 50,321
Long-term debt (Note 7) 39,438 30,651
Deferred taxes on income (Note 8) 6,791 2,448
Employee related obligations (Notes 9 and 10) 6,957 7,255
Long-term taxes payable (Note 1) 486 390
Other liabilities 9,868 17,549
Total liabilities 117,666 108,614
Commitments and Contingencies (Note 19)
Shareholders’ equity
Preferred stock — without par value (authorized and unissued 2,000,000 shares) — —
Common stock — par value $ 1.00 per share (Note 12) (authorized 4,320,000,000 shares; issued 3,119,843,000 shares) 3,120 3,120
Accumulated other comprehensive income (loss) (Note 13) ( 14,930 ) ( 11,741 )
Retained earnings and Additional-paid-in-capital 168,978 155,791
Less: common stock held in treasury, at cost (Note 12) ( 711,904,000 shares and 712,921,000 shares) 75,624 75,680
Total shareholders’ equity 81,544 71,490
Total liabilities and shareholders’ equity $ 199,210 180,104

See Notes to Consolidated Financial Statements
2025 Annual Report 43

Johnson & Johnson and subsidiaries consolidated statements of earnings
(Dollars and Shares in Millions Except Per Share Amounts) (Note 1)
2025 2024 2023
Sales to customers $ 94,193 88,821 85,159
Cost of products sold 30,256 27,471 26,553
Gross profit 63,937 61,350 58,606
Selling, marketing and administrative expenses 23,676 22,869 21,512
Research and development expense 14,665 17,232 15,085
In-process research and development impairments 81 211 313
Interest income ( 1,056 ) ( 1,332 ) ( 1,261 )
Interest expense, net of portion capitalized (Note 4) 971 755 772
Other (income) expense, net ( 7,209 ) 4,694 6,634
Restructuring (Note 20) 228 234 489
Earnings before provision for taxes on income 32,581 16,687 15,062
Provision for taxes on income (Note 8) 5,777 2,621 1,736
Net earnings from continuing operations 26,804 14,066 13,326
Net earnings from discontinued operations, net of tax (Note 21) — — 21,827
Net earnings $ 26,804 14,066 35,153
Net earnings per share (Notes 1 and 15)
Continuing operations - basic $ 11.13 5.84 5.26
Discontinued operations - basic — — 8.62
Total net earnings per share - basic $ 11.13 5.84 13.88
Continuing operations - diluted $ 11.03 5.79 5.20
Discontinued operations - diluted — — 8.52
Total net earnings per share - diluted $ 11.03 5.79 13.72
Average shares outstanding (Notes 1 and 15)
Basic 2,407.4 2,407.3 2,533.5
Diluted 2,429.4 2,429.4 2,560.4

See Notes to Consolidated Financial Statements
44

Johnson & Johnson and subsidiaries consolidated statements of comprehensive income
(Dollars in Millions) (Note 1)
2025 2024 2023
Net earnings $ 26,804 14,066 35,153
Other comprehensive income (loss), net of tax
Foreign currency translation ( 5,506 ) 1,708 ( 3,221 )
Securities:
Unrealized holding gain (loss) arising during period ( 1 ) 2 26
Reclassifications to earnings — — —
Net change ( 1 ) 2 26
Employee benefit plans:
Prior service credit (cost), net of amortization ( 144 ) ( 154 ) ( 149 )
Gain (loss), net of amortization 1,130 541 ( 1,183 )
Consumer settlement/ curtailment — — 23
Effect of exchange rates ( 128 ) 62 ( 90 )
Net change 858 449 ( 1,399 )
Derivatives & hedges:
Unrealized gain (loss) arising during period 1,953 ( 511 ) 422
Reclassifications to earnings ( 493 ) ( 862 ) ( 569 )
Net change 1,460 ( 1,373 ) ( 147 )
Other comprehensive income (loss) ( 3,189 ) 786 ( 4,741 )
Comprehensive income $ 23,615 14,852 30,412

The tax cost/(benefit) effects in other comprehensive income for the fiscal years 2025, 2024 and 2023 respectively: Foreign Currency Translation; $
2.5
billion, $(
1.1
) billion and $
797
million; Employee Benefit Plans: $
214
million, $
86
million and $(
289
) million, Derivatives & Hedges: $
388
million, $(
365
) million and $(
39
) million.
See Notes to Consolidated Financial Statements
Amounts presented for 2023 have not been recast to exclude discontinued operations
2025 Annual Report 45

Johnson & Johnson and subsidiaries consolidated statements of equity
(Dollars in Millions) (Note 1)
Total Retained Earnings and Additional paid-in capital Accumulated Other Comprehensive Income (Loss) Common Stock Issued Amount Treasury Stock Amount
Balance, January 1, 2023 $ 76,804 128,345 ( 12,967 ) 3,120 ( 41,694 )
Net earnings 35,153 35,153
Cash dividends paid ($ 4.70 per share) ( 11,770 ) ( 11,770 )
Employee compensation and stock option plans 2,193 ( 336 ) 2,529
Repurchase of common stock ( 5,054 ) ( 5,054 )
Other ( 25 ) ( 25 )
Kenvue Separation /IPO (Note 21) ( 23,786 ) 2,451 5,181 ( 31,418 )
Other comprehensive income (loss), net of tax ( 4,741 ) ( 4,741 )
Balance, December 31, 2023 68,774 153,843 ( 12,527 ) 3,120 ( 75,662 )
Net earnings 14,066 14,066
Cash dividends paid ($ 4.91 per share) ( 11,823 ) ( 11,823 )
Employee compensation and stock option plans 2,094 ( 295 ) 2,389
Repurchase of common stock ( 2,407 ) ( 2,407 )
Other comprehensive income (loss), net of tax 786 786
Balance, December 29, 2024 71,490 155,791 ( 11,741 ) 3,120 ( 75,680 )
Net earnings 26,804 26,804
Cash dividends paid ($ 5.14 per share) ( 12,381 ) ( 12,381 )
Employee compensation and stock option plans 4,773 ( 1,236 ) 6,009
Repurchase of common stock ( 5,953 ) ( 5,953 )
Other comprehensive income (loss), net of tax ( 3,189 ) ( 3,189 )
Balance, December 28, 2025 $ 81,544 168,978 ( 14,930 ) 3,120 ( 75,624 )

See Notes to Consolidated Financial Statements
46

Johnson & Johnson and subsidiaries consolidated statements of cash flows
(Dollars in Millions) (Note 1)
2025 2024 2023
Cash flows from operating activities
Net earnings $ 26,804 14,066 35,153
Adjustments to reconcile net earnings to cash flows from operating activities:
Depreciation and amortization of property and intangibles 7,503 7,339 7,486
Stock based compensation 1,354 1,176 1,162
Asset write-downs 204 405 1,295
Charges for acquired in-process research and development 109 1,841 483
Gain on Kenvue separation — — ( 20,984 )
Net gain on sale of assets/businesses ( 263 ) ( 226 ) ( 117 )
Deferred tax provision 1,538 ( 2,183 ) ( 4,194 )
Credit losses and accounts receivable allowances ( 1 ) 11 —
Changes in assets and liabilities, net of effects from acquisitions and divestitures:
Increase in accounts receivable ( 1,781 ) ( 406 ) ( 624 )
Increase in inventories ( 1,450 ) ( 1,128 ) ( 1,323 )
Increase in accounts payable and accrued liabilities 2,377 1,621 2,346
(Increase)/Decrease in other current and non-current assets ( 6,167 ) 1,717 ( 3,480 )
(Decrease)/Increase in other current and non-current liabilities ( 5,697 ) 33 5,588
Net cash flows from operating activities 24,530 24,266 22,791
Cash flows (used by) from investing activities
Additions to property, plant and equipment ( 4,832 ) ( 4,424 ) ( 4,543 )
Proceeds from the disposal of assets/businesses, net 720 675 358
Acquisitions, net of cash acquired (Note 18) ( 17,541 ) ( 15,146 ) —
Acquired in-process research and development/related milestones (Note 18) ( 385 ) ( 1,783 ) ( 470 )
Purchases of investments ( 920 ) ( 1,726 ) ( 10,906 )
Sales of investments 1,661 2,462 19,390
Credit support agreements activity, net ( 2,129 ) 1,517 ( 2,963 )
Other (including capitalized licenses and milestones) ( 162 ) ( 174 ) 12
Net cash (used by)/from investing activities ( 23,588 ) ( 18,599 ) 878
Cash flows (used by) from financing activities
Dividends to shareholders ( 12,381 ) ( 11,823 ) ( 11,770 )
Repurchase of common stock ( 5,953 ) ( 2,432 ) ( 5,054 )
Proceeds from short-term debt 14,586 15,277 13,743
Repayment of short-term debt ( 12,330 ) ( 9,463 ) ( 22,973 )
Proceeds from long-term debt, net of issuance costs 9,138 6,660 —
Repayment of long-term debt ( 1,757 ) ( 1,453 ) ( 1,551 )
Proceeds from the exercise of stock options/employee withholding tax on stock awards, net 3,418 838 1,094
Credit support agreements activity, net ( 226 ) 272 ( 219 )

2025 Annual Report 47

2025 2024 2023
Settlement of convertible debt acquired from Shockwave — ( 970 ) —
Proceeds of short and long-term debt, net of issuance cost, related to the debt that transferred to Kenvue at separation — — 8,047
Proceeds from Kenvue initial public offering — — 4,241
Cash transferred to Kenvue at separation — — ( 1,114 )
Other ( 34 ) ( 38 ) ( 269 )
Net cash used by financing activities ( 5,539 ) ( 3,132 ) ( 15,825 )
Effect of exchange rate changes on cash and cash equivalents 201 ( 289 ) ( 112 )
(Decrease)/Increase in cash and cash equivalents ( 4,396 ) 2,246 7,732
Cash and cash equivalents from continuing operations, beginning of period 24,105 21,859 12,889
Cash and cash equivalents from discontinued operations, beginning of period — — 1,238
Cash and cash equivalents, beginning of year (Note 1) 24,105 21,859 14,127
Cash and cash equivalents from continuing operations, end of period 19,709 24,105 21,859
Cash and cash equivalents from discontinued operations, end of period — — —
Cash and cash equivalents, end of year (Note 1) $ 19,709 24,105 21,859
Supplemental cash flow data
Cash paid during the year for:
Interest $ 1,977 1,990 1,836
Interest, net of amount capitalized 1,863 1,911 1,766
Income taxes, inclusive of discontinued operations 6,539 6,714 8,574
Supplemental schedule of non-cash investing and financing activities
Treasury stock issued for employee compensation and stock option plans, net of cash proceeds/ employee withholding tax on stock awards $ 2,591 1,551 1,435

See Notes to Consolidated Financial Statements
Amounts presented for 2023 have not been recast to exclude discontinued operations.
48

Notes to consolidated financial statements
1. 
Summary of significant accounting policies
Principles of consolidation
The consolidated financial statements include the accounts of Johnson & Johnson and its subsidiaries (the Company). Intercompany accounts and transactions are eliminated. Columns and rows within tables may not add due to rounding. Percentages have been calculated using actual, non-rounded figures.
Description of the company
The Company has approximately
138,200
 employees worldwide engaged in the research and development, manufacture and sale of a broad range of products in the healthcare field. The Company conducts business in virtually all countries of the world and its primary focus is on products related to human health and well-being.
Business segments
The Company is organized into
two
business segments: Innovative Medicine and MedTech. The Innovative Medicine segment is focused on the following therapeutic areas: Oncology, Immunology, Neuroscience, Pulmonary Hypertension, Infectious Diseases, and Cardiovascular and Metabolic. Products in this segment are distributed directly to retailers, wholesalers, distributors, hospitals and healthcare professionals for prescription use. The MedTech segment includes a broad portfolio of products used in the Surgery, Orthopaedic, Cardiovascular and Vision fields. These products are distributed to wholesalers, hospitals and retailers, and used principally in the professional fields by physicians, nurses, hospitals, eye care professionals and clinics. In October 2025, the Company announced its intention to separate its Orthopaedics business. The Company intends to explore multiple paths to effect the planned separation with a targeted completion within 18 to 24 months after the initial announcement.
New accounting standards
Recently adopted accounting standards
ASU 2023-09: Income Taxes (Topic 740) - Improvements to Income Tax Disclosures
This update standardizes categories for the effective tax rate reconciliation, requires disaggregation of income taxes and additional income tax-related disclosures. The Company adopted this standard prospectively for fiscal year 2025. As this accounting standard only impacts disclosures, it did not have an impact on the Company’s consolidated financial results. See Note 8 to the Company's financial statements for the required disclosures.
Recently issued accounting standards
Not adopted as of December 28, 2025
ASU 2024-03: Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses
This update requires disclosure of disaggregated information about certain income statement expense line items on an annual and interim basis. This update will be effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. As this accounting standard only impacts disclosures, it will not have a material impact on the Company’s Consolidated Financial Statements.
2025 Annual Report 49

Cash equivalents
The Company classifies all highly liquid investments with stated maturities of three months or less from date of purchase as cash equivalents and all highly liquid investments with stated maturities of greater than three months from the date of purchase as current marketable securities. The Company has a policy of making investments only with commercial institutions that have at least an investment grade credit rating. The Company invests its cash primarily in government securities and obligations, corporate debt securities, money market funds and reverse repurchase agreements (RRAs).
RRAs are collateralized by deposits in the form of Government Securities and Obligations for an amount not less than
102
% of their value. The Company does not record an asset or liability as the Company is not permitted to sell or repledge the associated collateral. The Company has a policy that the collateral has at least an A (or equivalent) credit rating. The Company utilizes a third party custodian to manage the exchange of funds and ensure that collateral received is maintained at
102
% of the value of the RRAs on a daily basis. RRAs with stated maturities of greater than three months from the date of purchase are classified as marketable securities.
Investments
Investments classified as held to maturity investments are reported at amortized cost and realized gains or losses are reported in earnings. Investments classified as available-for-sale debt securities are carried at estimated fair value with unrealized gains and losses recorded as a component of accumulated other comprehensive income. Available-for-sale securities available for current operations are classified as current assets; otherwise, they are classified as long term. Management determines the appropriate classification of its investment in debt and equity securities at the time of purchase and re-evaluates such determination at each balance sheet date. The Company reviews its investments for impairment and adjusts these investments to fair value through earnings, as required. 
The Company holds equity investments with readily determinable fair values and equity investments without readily determinable fair values. The Company measures equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.
Property, plant and equipment and depreciation
Property, plant and equipment are stated at cost. The Company utilizes the straight-line method of depreciation over the estimated useful lives of the assets:
Building and building equipment 30 years
Land and leasehold improvements 10 - 20 years
Machinery and equipment 2 - 13 years

The Company capitalizes certain computer software and development costs, included in machinery and equipment, when incurred in connection with developing or obtaining computer software for internal use. Capitalized software costs are amortized over the estimated useful lives of the software, which generally range from
5
to
8
 years.
The Company reviews long-lived assets to assess recoverability using undiscounted cash flows. When certain events or changes in operating or economic conditions occur, an impairment assessment may be performed on the recoverability of the carrying value of these assets. If the asset is determined to be impaired, the loss is measured based on the difference between the asset’s fair value and its carrying value. If quoted market prices are not available, the Company will estimate fair value using a discounted value of estimated future cash flows.
50

Revenue recognition
The Company recognizes revenue from product sales when obligations under the terms of a contract with the customer are satisfied; generally, this occurs with the transfer of control of the goods to customers. The Company's global payment terms are typically between
30
to
90
days. Provisions for certain rebates, sales incentives, trade promotions, coupons, product returns, discounts to customers and governmental clawback provisions are accounted for as variable consideration and recorded as a reduction in sales. The liability is recognized within Accrued rebates, returns, and promotions on the consolidated balance sheet.
Adjustments to revenue recognized as a result of changes in estimates for the Company's most significant U.S. rebates and discounts liability balances for products shipped in previous periods were approximately
3.0
% and
2.0
% of U.S. Innovative Medicine revenue during the fiscal years 2025 and 2024, respectively.
Product discounts granted are based on the terms of arrangements with direct, indirect and other market participants, as well as market conditions, including consideration of competitor pricing. Rebates and discounts are estimated based on contractual terms, historical experience, patient outcomes, trend analysis and projected market conditions in the various markets served. A significant portion of the liability related to rebates is from the sale of the Company's pharmaceutical products within the U.S., primarily the Managed Care, Medicare and Medicaid programs, which amounted to $
13.0
billion and $
12.3
billion as of December 28, 2025 and December 29, 2024, respectively. The Company evaluates market conditions for products or groups of products primarily through the analysis of wholesaler and other third-party sell-through and market research data, as well as internally generated information.
Sales returns are estimated and recorded based on historical sales and returns information. Products that have lost patent exclusivity, or that otherwise exhibit unusual sales or return patterns due to dating, competition or other marketing matters are specifically investigated and analyzed as part of the accounting for sales return accruals.
Sales returns allowances represent a reserve for products that may be returned due to expiration, destruction in the field, or in specific areas, product recall. In accordance with the Company’s accounting policies, the Company generally issues credit to customers for returned goods. The Company’s sales returns reserves are accounted for in accordance with the U.S. GAAP guidance for revenue recognition when right of return exists. Sales returns reserves are recorded at full sales value. Sales returns in the Innovative Medicine segment are almost exclusively not resalable. Sales returns for certain franchises in the MedTech segment are typically resalable but are not material. The Company infrequently exchanges products from inventory for returned products. The sales returns reserve for the total Company has been approximately
1.0
% of annual net trade sales during each of the fiscal years 2025, 2024 and 2023.
Promotional programs are recorded in the same period as related sales and include volume-
based sales incentive programs. Volume-based incentive programs are based on the estimated sales volumes for the incentive period and are recorded as products are sold. These arrangements are evaluated to determine the appropriate amounts to be deferred or recorded as a reduction of revenue. The Company also earns profit-share payments through collaborative arrangements of certain products, which are included in sales to customers. Profit-share payments were less than
2.0
% of the total revenues in the fiscal year 2025, 2024 and 2023.
See Note 17 to the Consolidated Financial Statements for further disaggregation of revenue.
Shipping and handling
Shipping and handling costs incurred were $
0.9
billion during each of the fiscal years 2025, 2024 and 2023, and are included in selling, marketing and administrative expense. The amount of revenue received for shipping and handling is less than
1.0
% of sales to customers for all periods presented.
Inventories
Inventories are stated at the lower of cost or net realizable value determined by the first-in, first-out method.
2025 Annual Report 51

Intangible assets and goodwill
The authoritative literature on U.S. GAAP requires that goodwill and intangible assets with indefinite lives be assessed annually for impairment. The Company completed its annual impairment test for 2025 in the fiscal fourth quarter, which did not result in an impairment. Future impairment tests will be performed annually in the fiscal fourth quarter, or sooner if warranted. In-process research and development purchased as part of a business combination is accounted for as an indefinite lived intangible asset until the underlying project is completed, at which point the intangible asset will be accounted for as a definite lived intangible asset. If warranted the purchased in-process research and development could be written off or partially impaired depending on the underlying program.
Intangible assets that have finite useful lives continue to be amortized over their useful lives and are reviewed for impairment when facts or circumstances indicate that the carrying value of the assets may not be recoverable. See Note 5 for further details on Intangible Assets and Goodwill.
Financial instruments
As required by U.S. GAAP, all derivative instruments are recorded on the balance sheet at fair value. Fair value is the exit price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement determined using assumptions that market participants would use in pricing an asset or liability. The authoritative literature establishes a three-level hierarchy to prioritize the inputs used in measuring fair value, with Level 1 having the highest priority and Level 3 having the lowest. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether the derivative is designated as part of a hedge transaction, and if so, the type of hedge transaction.
The Company documents all relationships between hedged items and derivatives. The overall risk management strategy includes reasons for undertaking hedge transactions and entering into derivatives. The objectives of this strategy are: (1) minimize foreign currency exposure’s impact on the Company’s financial performance; (2) protect the Company’s cash flow from adverse movements in foreign exchange rates; (3) ensure the appropriateness of financial instruments; and (4) manage the enterprise risk associated with financial institutions. See Note 6 for additional information on Financial Instruments.
Leases
The Company determines whether an arrangement is a lease at contract inception by establishing if the contract conveys the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. Right of Use (ROU) Assets and Lease Liabilities for operating leases are included in
Other assets
,
Accrued liabilities
, and Other liabilities on the consolidated balance sheet. The ROU Assets represent the right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. Commitments under finance leases are not significant.
ROU Assets and Lease Liabilities are recognized at the lease commencement date based on the present value of all minimum lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments, when the implicit rate is not readily determinable. Lease terms may include options to extend or terminate the lease. These options are included in the lease term when it is reasonably certain that the Company will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term. The Company has elected the following policy elections: use of portfolio approach on leases of assets under master service agreements, exclusion of short term leases on the balance sheet, and not separating lease and non-lease components.
The Company primarily has operating lease for space, vehicles, manufacturing equipment and data processing equipment. The ROU asset pertaining to leases was $
1.3
 billion and $
1.1
 billion in fiscal years 2025 and 2024, respectively. The lease liability was $
1.4
 billion and $
1.2
 billion in fiscal years 2025 and 2024, respectively. The operating lease costs from continuing operations were $
0.2
 billion in fiscal years 2025, 2024 and 2023. Cash paid for amounts included in the measurement of lease liabilities from continuing operations were $
0.3
 billion in 2025 and $
0.2
 billion in fiscal years 2024 and 2023.
52

Product liability
Accruals for product liability claims are recorded, on an undiscounted basis, when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on existing information and actuarially determined estimates where applicable. The accruals are adjusted periodically as additional information becomes available. The Company accrues an estimate of the legal defense costs needed to defend each matter when those costs are probable and can be reasonably estimated. To the extent adverse verdicts have been rendered against the Company, the Company does not record an accrual until a loss is determined to be probable and can be reasonably estimated.
The Company has self insurance through a wholly-owned captive insurance company. In addition to accruals in the self insurance program, claims that exceed the insurance coverage are accrued when losses are probable and amounts can be reasonably estimated.
Research and development
Research and development expenses are expensed as incurred in accordance with ASC 730, Research and Development. Upfront and milestone payments made to third parties in connection with research and development collaborations are expensed as incurred up to the point of regulatory approval. Payments made to third parties subsequent to regulatory approval are capitalized and amortized over the remaining useful life of the related product. Amounts capitalized for such payments are included in other intangibles, net of accumulated amortization.
The Company enters into collaborative arrangements, typically with other pharmaceutical or biotechnology companies, to develop and commercialize drug candidates or intellectual property. These arrangements typically involve two (or more) parties who are active participants in the collaboration and are exposed to significant risks and rewards dependent on the commercial success of the activities. These collaborations usually involve various activities by one or more parties, including research and development, marketing and selling and distribution. Often, these collaborations require upfront, milestone and royalty or profit share payments, contingent upon the occurrence of certain future events linked to the success of the asset in development. Amounts due from collaborative partners related to development activities are generally reflected as a reduction of research and development expense because the performance of contract development services is not central to the Company’s operations. In general, the income statement presentation for these collaborations is as follows:
Nature/Type of Collaboration Statement of Earnings Presentation
Third-party sale of product & profit share payments received Sales to customers
Royalties/milestones paid to collaborative partner (post-regulatory approval)* Cost of products sold
Royalties received from collaborative partner Other income (expense), net
Upfront payments & milestones paid to collaborative partner (pre-regulatory approval) Research and development expense
Research and development payments to collaborative partner Research and development expense
Research and development payments received from collaborative partner or government entity Reduction of Research and development expense

*    Milestones are capitalized as intangible assets and amortized to cost of products sold over the useful life.
For all years presented, there was no individual project that represented greater than
5
% of the total annual consolidated research and development expense other than the acquired in-process research & development expense of $
1.25
 billion to secure the global rights to the NM26 bispecific antibody (Yellow Jersey acquisition) in fiscal year 2024.
The Company has a number of products and compounds developed in collaboration with strategic partners including XARELTO, co-developed with Bayer HealthCare AG, IMBRUVICA, developed in collaboration and co-marketed with Pharmacyclics LLC, an AbbVie company and CARVYKTI, licensed and developed in collaboration with Legend Biotech USA Inc. and Legend Biotech Ireland Limited.
Separately, the Company has a number of licensing arrangements for products and compounds including DARZALEX, licensed from Genmab A/S.
2025 Annual Report 53

Advertising
Costs associated with advertising are expensed in the year incurred and are included in selling, marketing and administrative expenses. Advertising expenses worldwide, which comprised television, radio, print media and Internet advertising, were $
1.6
billion, $
0.6
billion and $
0.5
billion in fiscal years 2025, 2024 and 2023, respectively.
Income taxes
Income taxes are recorded based on amounts refundable or payable for the current year and include the results of any difference between U.S. GAAP accounting and tax reporting, recorded as deferred tax assets or liabilities. The Company estimates deferred tax assets and liabilities based on enacted tax law and rates. Future changes in tax laws and rates may affect recorded deferred tax assets and liabilities in the future.
The Company records unrecognized tax benefits for uncertain tax positions. The Company follows U.S. GAAP which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Management believes that changes in these estimates would not have a material effect on the Company's results of operations, cash flows or financial position.
The United States enacted into law on July 4, 2025, the One Big Beautiful Bill Act, (OBBBA). The OBBBA includes provisions modifying the corporate income tax code, including the immediate expensing of domestic research and development expenditures for tax purposes, 100% bonus depreciation for qualified assets, and an increase in the statutory tax rate on foreign earnings from 10.5% to 12.6%. The law also renamed the provision for taxes on foreign earnings from Global Intangible Low-Taxed Income (GILTI) to Net Controlled Foreign Corporation (CFC) Tested Income (NCTI). The Company will continue to account for NCTI under the deferred method as discussed below under the previous U.S. Tax Cuts and Jobs Act (TCJA) provisions.
Previous to the OBBBA, the United States had passed legislative changes in 2017, the TCJA which included provisions for a comprehensive overhaul of the corporate income tax code, including a reduction of the statutory corporate tax rate from
35
% to
21
%, effective on January 1, 2018. The TCJA included a provision for a tax on all previously undistributed earnings of U.S. companies located in foreign jurisdictions. Undistributed earnings in the form of cash and cash equivalents were taxed at a rate of
15.5
% and all other earnings were taxed at a rate of
8.0
%. This tax is payable over
8
years and did not accrue interest. The final payment of $
2.5
 billion was made in fiscal year 2025.
The TCJA also included provisions for a tax on GILTI, which is described as the excess of a U.S. shareholder’s total net foreign income over a deemed return on tangible assets, as provided by the TCJA. In January 2018, the FASB issued guidance that allows companies to elect as an accounting policy whether to record the tax effects of GILTI in the period the tax liability is generated (i.e., period cost) or provide for deferred tax assets and liabilities related to basis differences that exist and are expected to affect the amount of GILTI inclusion in future years upon reversal (i.e., deferred method). The Company has elected to account for GILTI, now NCTI, under the deferred method. The deferred tax amounts recorded are based on the evaluation of temporary differences that are expected to reverse as NCTI is incurred in future periods.
The Company has not provided deferred taxes on the undistributed earnings on certain international subsidiaries where the earnings are considered to be indefinitely reinvested. The Company intends to continue to reinvest these earnings in those international operations. If the Company decides at a later date to repatriate these earnings to the U.S., the Company would be required to record the net tax effects on these amounts. The Company estimates that the tax effect of this repatriation would be approximately $
0.6
 billion under currently enacted tax laws and regulations and at current currency exchange rates. This amount does not include the possible benefit of U.S. foreign tax credits, which may substantially offset this cost.
See Note 8 to the Consolidated Financial Statements for further information regarding income taxes.
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, withholding taxes, depreciation, amortization, employee benefits, contingencies and intangible asset and liability valuations. Actual results may or may not differ from those estimates.
54

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.
Supplier finance program obligations
The Company has agreements for supplier finance programs with third-party financial institutions. These programs provide participating suppliers the ability to finance payment obligations from the Company with the third-party financial institutions. The Company is not a party to the arrangements between the suppliers and the third-party financial institutions. The Company’s obligations to its suppliers, including amounts due, and scheduled payment dates (which have general payment terms of
90
days), are not affected by a participating supplier’s decision to participate in the program.

Confirmed obligations under the program as of December 28, 2025, and December 29, 2024, were $
0.8
 billion and $
0.8
 billion, respectively. The obligations are presented as
Accounts payable
on the Consolidated Balance Sheets.
The rollforward of the Company's valid obligations under the program were as follows:
2025 2024
(Dollars in Millions)
Confirmed obligations - beginning of the year $ 788 704
Invoices confirmed during the year 2,997 3,048
Confirmed invoices paid during the year 3,016 2,964
Effect of exchange rates 15 —
Confirmed obligations - end of the year $ 784 788

Kenvue IPO/separation and discontinued operations
On May 8, 2023, Kenvue, completed an initial public offering (the IPO) resulting in the issuance of
198,734,444
shares of its common stock, par value $
0.01
per share (the Kenvue Common Stock), at an initial public offering of $
22.00
per share for net proceeds of $
4.2
 billion. The excess of the net proceeds from the IPO over the net book value of the Johnson & Johnson divested interest was $
2.5
 billion and was recorded to additional paid-in capital. As of the closing of the IPO, Johnson & Johnson owned approximately
89.6
% of the total outstanding shares of Kenvue Common Stock.
On August 23, 2023, Johnson & Johnson completed the disposition of an additional
80.1
% ownership of the shares of Kenvue through an exchange offer. Following the exchange offer, the Company owned
9.5
% of the shares of Kenvue which were accounted for as an equity investment carried at fair value within continuing operations. The historical results of the Consumer Health business (which previously represented the Consumer Health business segment) are reflected as discontinued operations in the Company’s Consolidated Financial Statements through the date of the exchange offer (see Note 21 for additional details). Unless otherwise indicated, the information in the notes to the Consolidated Financial Statements refer only to Johnson & Johnson’s continuing operations.
In the fiscal second quarter of 2024 the Company completed a debt for equity exchange of the retained stake in Kenvue. Upon completion of the debt for equity exchange, the Company no longer owns any shares of Kenvue Common Stock.
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, and therefore includes additional shipping days, as was the case in fiscal year 2020, and will be the case again in fiscal year 2026.
2025 Annual Report 55

2. 
Cash, cash equivalents and current marketable securities
At the end of the fiscal year 2025 and 2024, cash, cash equivalents and current marketable securities comprised:
(Dollars in Millions) 2025
Carrying Amount Estimated Fair Value Cash & Cash Equivalents Current Marketable Securities
Cash $ 3,299 3,299 3,299 —
U.S. Reverse repurchase agreements 7,063 7,063 7,063 —
Money market funds 5,993 5,993 5,993 —
Time deposits (1) 893 893 893 —
Subtotal $ 17,248 17,248 17,248 —
U.S. Gov't Securities $ 2,365 2,365 2,324 41
Other Sovereign Securities 260 260 102 158
Corporate and other debt securities 229 229 35 194
Subtotal available for sale (2) $ 2,854 2,854 2,461 393
Total cash, cash equivalents and current marketable securities $ 19,709 393

(Dollars in Millions) 2024
Carrying Amount Unrecognized Gain Estimated Fair Value Cash & Cash Equivalents Current Marketable Securities
Cash $ 2,918 — 2,918 2,918 —
Non-U.S. Sovereign Securities (1) 120 — 120 — 120
U.S. Reverse repurchase agreements 7,100 — 7,100 7,100 —
Money market funds 6,123 — 6,123 6,123 —
Time deposits (1) 1,045 — 1,045 1,045 —
Subtotal 17,306 — 17,306 17,186 120
U.S. Gov't Securities $ 6,815 1 6,816 6,796 20
Other Sovereign Securities 176 — 176 83 93
Corporate and other debt securities 224 — 224 40 184
Subtotal available for sale (2) $ 7,215 1 7,216 6,919 297
Total cash, cash equivalents and current marketable securities $ 24,105 417

(1)
Held to maturity investments are reported at amortized cost and realized gains or losses are reported in earnings.
(2)
Available for sale debt securities are reported at fair value with unrealized gains and losses reported net of taxes in other comprehensive income.
Fair value of government securities and obligations and corporate debt securities were estimated using quoted broker prices and significant other observable inputs.
56

The contractual maturities of the available for sale debt securities at December 28, 2025 are as follows:
(Dollars in Millions) Cost Basis Fair Value
Due within one year $ 2,829 2,829
Due after one year through five years 25 25
Due after five years through ten years — —
Total debt securities $ 2,854 2,854

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 investment grade credit rating.
3. 
Inventories
At the end of fiscal years 2025 and 2024, inventories comprised:
(Dollars in Millions) 2025 2024
Raw materials and supplies $ 2,530 2,337
Goods in process 3,828 2,815
Finished goods 7,833 7,292
Total inventories $ 14,191 12,444

4. 
Property, plant and equipment
At the end of fiscal years 2025 and 2024, property, plant and equipment at cost and accumulated depreciation were:
(Dollars in Millions) 2025 2024
Land and land improvements $ 701 718
Buildings and building equipment 13,429 12,317
Machinery and equipment 32,873 29,444
Construction in progress 7,361 6,289
Total property, plant and equipment, gross $ 54,364 48,768
Less accumulated depreciation 31,195 28,250
Total property, plant and equipment, net $ 23,169 20,518

The Company capitalizes interest expense as part of the cost of construction of facilities and equipment. Interest expense capitalized in fiscal years 2025, 2024 and 2023 was $
114
million, $
79
million and $
70
million, respectively.
Depreciation expense, including the amortization of capitalized interest in fiscal years 2025, 2024 and 2023 was $
2.9
billion, $
2.8
billion and $
2.6
billion, respectively.
Upon retirement or other disposal of property, plant and equipment, the costs and related amounts of accumulated depreciation or amortization are eliminated from the asset and accumulated depreciation accounts, respectively. The difference, if any, between the net asset value and the proceeds are recorded in earnings.
2025 Annual Report 57

5. 
Intangible assets and goodwill
At the end of fiscal years 2025 and 2024, the gross and net amounts of intangible assets were:
(Dollars in Millions) 2025 2024
Intangible assets with definite lives:
Patents and trademarks — gross (1) $ 59,156 44,695
Less accumulated amortization ( 32,507 ) ( 26,124 )
Patents and trademarks — net $ 26,649 18,571
Customer relationships and other intangibles — gross $ 21,361 20,310
Less accumulated amortization ( 14,998 ) ( 13,544 )
Customer relationships and other intangibles — net (2) $ 6,363 6,766
Intangible assets with indefinite lives:
Trademarks (3) 1,772 —
Purchased in-process research and development 15,619 12,281
Total intangible assets with indefinite lives $ 17,391 12,281
Total intangible assets — net $ 50,403 37,618

(1)
See Note 18 to the Consolidated Financial Statements for additional details related to acquisitions and divestitures.
(2)
The majority is comprised of customer relationships.
(3)
In October 2025, the Company announced its intention to separate its Orthopaedics business, to be named DePuy Synthes. In connection with this strategic decision, the Company determined the DePuy Synthes trademarks will continue to be used on existing and future products. Therefore, $
1.7
 billion of trademarks associated with the DePuy Synthes brand were reclassified from definite lived to indefinite lived. This reclassification reflects management’s revised expectations regarding the future economic life and continued use of these trademarks through and following the planned separation. Based on a qualitative assessment, the Company concluded that the trademarks are not impaired.
Goodwill as of December 28, 2025 and December 29, 2024, as allocated by segment of business, was as follows:
(Dollars in Millions) Innovative Medicine MedTech Total
Goodwill at December 31, 2023 $ 10,407 26,151 36,558
Goodwill, related to acquisitions 640 7,569 8,209
Goodwill, related to divestitures — ( 56 ) ( 56 )
Currency translation/other ( 355 ) ( 156 ) ( 511 )
Goodwill at December 29, 2024 10,692 33,508 44,200
Goodwill, related to acquisitions 3,488 — 3,488
Goodwill, related to divestitures — ( 29 ) ( 29 )
Currency translation/other 787 326 1,113
Goodwill at December 28, 2025 $ 14,967 33,805 48,772

The weighted average amortization period for patents and trademarks is approximately
12
years. The weighted average amortization period for customer relationships and other intangible assets is approximately
19
years. The amortization expense of amortizable assets included in Cost of products sold was $
4.6
billion, $
4.5
billion and $
4.5
billion before tax, for the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023, respectively. Intangible asset write-downs are included in Other (income) expense, net.
58

The estimated amortization expense related to intangible assets for approved products, before tax, for the five succeeding years is approximately:
(Dollars in Millions)
2026 2027 2028 2029 2030
$ 5,100 4,400 3,700 3,600 3,500

See Note 18 to the Consolidated Financial Statements for additional details related to acquisitions and divestitures.
6. 
Fair value measurements
The Company uses forward foreign exchange contracts to manage its exposure to the variability of cash flows, primarily related to the foreign exchange rate changes of future intercompany products and third-party purchases of materials denominated in a foreign currency. The Company uses cross currency interest rate swaps to manage currency risk primarily related to borrowings. Both types of derivatives are designated as cash flow hedges.
Additionally, the Company uses interest rate swaps as an instrument to manage interest rate risk related to fixed rate borrowings. These derivatives are designated as fair value hedges. The Company uses cross currency interest rate swaps and forward foreign exchange contracts designated as net investment hedges. Additionally, the Company uses forward foreign exchange contracts to offset its exposure to certain foreign currency assets and liabilities. These forward foreign exchange contracts are not designated as hedges and therefore, changes in the fair values of these derivatives are recognized in earnings, thereby offsetting the current earnings effect of the related foreign currency assets and liabilities.
The Company does not enter into derivative financial instruments for trading or speculative purposes, or that contain credit risk related contingent features. The Company maintains credit support agreements (CSA) with certain derivative counterparties establishing collateral thresholds based on respective credit ratings and netting agreements. As of December 28, 2025 and December 29, 2024, the total amount of cash collateral paid by the Company under the CSA amounted to $
4.6
billion and $
2.2
billion net respectively, related to net investment and cash flow hedges. On an ongoing basis, the Company monitors counter-party credit ratings. The Company considers credit non-performance risk to be low, because the Company primarily enters into agreements with commercial institutions that have at least an investment grade credit rating. Refer to the table on significant financial assets and liabilities measured at fair value contained in this footnote for receivables and payables with these commercial institutions. As of December 28, 2025, the Company had notional amounts outstanding for forward foreign exchange contracts, cross currency interest rate swaps and interest rate swaps of $
40.6
billion, $
38.9
billion and $
8.0
billion, respectively. As of December 29, 2024, the Company had notional amounts outstanding for forward foreign exchange contracts, cross currency interest rate swaps and interest rate swaps of $
45.1
billion, $
40.5
billion and $
9.0
billion, respectively.
All derivative instruments are recorded on the balance sheet at fair value. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether the derivative is designated as part of a hedge transaction, and if so, the type of hedge transaction. Cash exchanged for derivatives is primarily in cash flows from operating activities.
The designation as a cash flow hedge is made at the entrance date of the derivative contract. At inception, all derivatives are expected to be highly effective. Foreign exchange contracts designated as cash flow hedges are accounted for under the forward method and all gains/losses associated with these contracts will be recognized in the income statement when the hedged item impacts earnings. Changes in the fair value of these derivatives are recorded in accumulated other comprehensive income until the underlying transaction affects earnings, and are then reclassified to earnings in the same account as the hedged transaction.
Gains and losses associated with interest rate swaps and changes in fair value of hedged debt attributable to changes in interest rates are recorded to interest expense in the period in which they occur. Gains and losses on net investment hedges are accounted through the currency translation account within accumulated other comprehensive income. The portion excluded from effectiveness testing is recorded through interest (income) expense using the spot method. On an ongoing basis, the Company assesses whether each derivative continues to be highly effective in offsetting changes of hedged items. If and when a derivative is no longer expected to be highly effective, hedge accounting is discontinued.
The Company designated its Euro denominated notes with due dates ranging from 2028 to 2055 as a net investment hedge of the Company's investments in certain of its international subsidiaries that use the Euro as their functional currency in order to reduce the volatility caused by changes in exchange rates.
2025 Annual Report 59

As of December 28, 2025, the balance of deferred net loss on derivatives included in accumulated other comprehensive income was $
0.3
billion after-tax. For additional information, see the Consolidated Statements of Comprehensive Income and Note 13. The Company expects that substantially all of the amounts related to forward foreign exchange contracts will be reclassified into earnings over the
next 12 months
as a result of transactions that are expected to occur over that period. The maximum length of time over which the Company is hedging transaction exposure is
18
months, excluding interest rate contracts and net investment hedges. The amount ultimately realized in earnings may differ as foreign exchange rates change. Realized gains and losses are ultimately determined by actual exchange rates at maturity of the derivative.
The following table is a summary of the activity related to derivatives and hedges for the fiscal years ended December 28, 2025 and December 29, 2024, net of tax:
December 28, 2025 December 29, 2024
(Dollars in Millions) Sales Cost of Products Sold R&D Expense Interest (Income) Expense Other (Income) Expense Sales Cost of Products Sold R&D Expense Interest (Income) Expense Other (Income) Expense
The effects of fair value, net investment and cash flow hedging:
Gain (Loss) on fair value hedging relationship:
Interest rate swaps contracts:
Hedged items $ — — — 338 — — — — 64 —
Derivatives designated as hedging instruments — — — ( 338 ) — — — — ( 64 ) —
Gain (Loss) on net investment hedging relationship:
Cross currency interest rate swaps contracts:
Amount of gain or (loss) recognized in income on derivative amount excluded from effectiveness testing $ — — — 193 — — — — 148 —
Amount of gain or (loss) recognized in AOCI — — — 193 — — — — 148 —
Gain (Loss) on cash flow hedging relationship:
Forward foreign exchange contracts:
Amount of gain or (loss) reclassified from AOCI into income 4 41 ( 52 ) — ( 19 ) 2 426 33 — 6
Amount of gain or (loss) recognized in AOCI 11 715 ( 109 ) — ( 44 ) ( 7 ) ( 156 ) 80 — 21
Cross currency interest rate swaps contracts:
Amount of gain or (loss) reclassified from AOCI into income — — — 326 — — — — 247 —
Amount of gain or (loss) recognized in AOCI $ — — — 1,187 — — — — ( 597 ) —

60

As of December 28, 2025 and December 29, 2024, the following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustment for fair value hedges:
Line item in the Consolidated Balance Sheet in which the hedged item is included Carrying Amount of the Hedged Liability Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability
(Dollars in Millions) December 28, 2025 December 29, 2024 December 28, 2025 December 29, 2024
Long-term Debt $ 8,318 $ 7,935 $( 694 ) $( 1,132 )

The following table is the effect of derivatives not designated as hedging instrument for the fiscal years ended
December 28, 2025 and December 29, 2024:
(Dollars in Millions) Location of Gain /(Loss) Recognized in Income on Derivative Gain/(Loss) Recognized In Income on Derivative
Derivatives Not Designated as Hedging Instruments December 28, 2025 December 29, 2024
Foreign Exchange Contracts Other (income) expense $( 265 ) 8

The following table is the effect of net investment hedges for the fiscal years ended December 28, 2025 and
December 29, 2024:
Gain/(Loss) Recognized In Accumulated OCI Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income Into Income Gain/(Loss) Reclassified from Accumulated OCI Into Income
(Dollars in Millions) December 28, 2025 December 29, 2024 December 28, 2025 December 29, 2024
Debt $ ( 1,190 ) 282 Interest (income) expense — —
Cross Currency interest rate swaps $ 277 955 Interest (income) expense — —

The following table is a summary of the activity related to equity investments for the fiscal years ended December 28, 2025 and December 29, 2024:
December 29, 2024 December 28, 2025
(Dollars in Millions) Carrying Value Changes in Fair Value Reflected in Net Income (1) Sales/ Purchases/ Other (2) Carrying Value Non-Current Other Assets
Equity Investments with readily determinable value $ 451 230 ( 16 ) 665 665
Equity Investments without readily determinable value $ 773 253 ( 116 ) 910 910

2025 Annual Report 61

December 31, 2023 December 29, 2024
(Dollars in Millions) Carrying Value Changes in Fair Value Reflected in Net Income (1) Sales/ Purchases/ Other (2) Carrying Value Non-Current Other Assets
Equity Investments with readily determinable value* $ 4,473 ( 17 ) ( 4,005 ) 451 451
Equity Investments without readily determinable value $ 696 ( 197 ) 274 773 773

(1)
Recorded in Other Income/Expense
(2)
Other includes impact of currency
*    The December 31, 2023 balance includes the
9.5
% remaining stake in Kenvue. A debt-for-equity exchange was completed in the fiscal second quarter of 2024.
On May 15, 2024, the Company issued $
3.6
billion aggregate principal amount of commercial paper and received $
3.6
 billion of net cash proceeds to be used for general corporate purposes. On May 17, 2024, the Company completed a Debt-for-Equity Exchange of its remaining
182,329,550
shares of Kenvue Common Stock for the outstanding Commercial Paper. Upon completion of the Debt-for-Equity Exchange, the Commercial Paper was satisfied and discharged, and the Company no longer owns any shares of Kenvue Common Stock. This exchange resulted in a loss of approximately $
0.4
 billion recorded in Other (income) expense.
For the fiscal years ended December 28, 2025 and December 29, 2024 for equity investments without readily determinable market values, $
115
million and $
171
million, respectively, of the changes in fair value reflected in net income were the result of impairments. There were impacts of $
368
million and $
26
million, respectively, of changes in the fair value reflected in net income due to changes in observable prices and gains on the disposal of investments.
Fair value is the exit price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement determined using assumptions that market participants would use in pricing an asset or liability. In accordance with ASC 820, a three-level hierarchy to prioritize the inputs used in measuring fair value. The levels within the hierarchy are described below with Level 1 having the highest priority and Level 3 having the lowest.
The fair value of a derivative financial instrument (i.e., forward foreign exchange contracts, interest rate contracts) is the aggregation by currency of all future cash flows discounted to its present value at the prevailing market interest rates and subsequently converted to the U.S. Dollar at the current spot foreign exchange rate. The Company does not believe that fair values of these derivative instruments materially differ from the amounts that could be realized upon settlement or maturity, or that the changes in fair value will have a material effect on the Company’s results of operations, cash flows or financial position. The Company also holds equity investments which are classified as Level 1 and debt securities which are classified as Level 2. The Company holds acquisition related contingent liabilities based upon certain regulatory and commercial events, which are classified as Level 3, whose values are determined using discounted cash flow methodologies or similar techniques for which the determination of fair value requires significant judgment or estimations.
The following three levels of inputs are used to measure fair value:
Level 1 — Quoted prices in active markets for identical assets and liabilities.
Level 2 — Significant other observable inputs.
Level 3 — Significant unobservable inputs.
62

The Company’s significant financial assets and liabilities measured at fair value as of the fiscal year ended December 28, 2025 and December 29, 2024 were as follows:
2025 2024
(Dollars in Millions) Level 1 Level 2 Level 3 Total Total (1)
Derivatives designated as hedging instruments:
Assets:
Forward foreign exchange contracts $ — 686 — 686 660
Interest rate contracts (2) — 589 — 589 1,484
Total $ — 1,275 — 1,275 2,144
Liabilities:
Forward foreign exchange contracts — 413 — 413 794
Interest rate contracts (2) — 5,848 — 5,848 3,753
Total $ — 6,261 — 6,261 4,547
Derivatives not designated as hedging instruments:
Assets:
Forward foreign exchange contracts $ — 38 — 38 50
Liabilities:
Forward foreign exchange contracts — 46 — 46 17
Available For Sale Other Investments:
Equity investments (3) 665 — — 665 451
Debt securities (4) — 2,854 — 2,854 7,216
Other Liabilities
Contingent Consideration (5) $ 753 753 1,217

Gross to Net Derivative Reconciliation 2025 2024
(Dollars in Millions)
Total Gross Assets $ 1,313 2,194
Credit Support Agreements (CSA) ( 1,308 ) ( 2,172 )
Total Net Asset 5 22
Total Gross Liabilities 6,307 4,564
Credit Support Agreements (CSA) ( 5,903 ) ( 4,412 )
Total Net Liabilities $ 404 152

2025 Annual Report 63

Summarized information about changes in liabilities for contingent consideration is as follows:
2025 2024 2023
(Dollars in Millions)
Beginning Balance $ 1,217 1,092 1,120
Changes in estimated fair value (6) ( 387 ) 88 29
Additions (7) — 112 —
Payments/Other ( 77 ) ( 75 ) ( 57 )
Ending Balance (5) $ 753 1,217 1,092

(1)
2024 assets and liabilities are all classified as Level 2 with the exception of equity investments of $
451
million, which are classified as Level 1 and contingent consideration of $
1,217
million, classified as Level 3.
(2)
Includes cross currency interest rate swaps and interest rate swaps.
(3)
Classified as non-current other assets.
(4)
Classified as cash equivalents and current marketable securities.
(5)
Includes $
753
million, $
1,217
million and $
1,092
million, classified as non-current other liabilities as of December 28, 2025,
December 29, 2024 and December 31, 2023, respectively.
(6)
In fiscal year 2025, the Company recorded a reduction of $
364
 million to the CVR liability associated with the 2022 Abiomed acquisition based on the reduced probability of the achievement of certain developmental and commercial milestones by the dates required in the CVR agreement. The remaining CVR balance is $
0.4
 billion.
(7)
In fiscal year 2024, the Company recorded $
105
 million of contingent consideration related to Proteologix.
As of December 28, 2025 and December 29, 2024, cash and cash equivalents includes money market funds of $
5,993
million and $
6,123
million, respectively, which would be considered level 1 in the fair value hierarchy

See Notes 2 and 7 for financial assets and liabilities held at carrying amount on the Consolidated Balance Sheet.
64

7. 
Borrowings
The components of long-term debt are as follows:
(Dollars in Millions) 2025 2024
2.625 % Notes due 2025 $ — 750
0.55 % Notes due 2025 — 999
2.45 % Notes due 2026 2,000 1,999
2.95 % Notes due 2027 968 927
0.95 % Notes due 2027 1,499 1,458
4.50 % Notes due 2027 (4) 749 —
1.150 % Notes due 2028 ( 750 MM Euro 1.1785 ) (1) /( 750 MM Euro 1.0401 ) (2) 882 777
2.90 % Notes due 2028 1,498 1,498
4.55 % Notes due 2028 (4) 748 —
6.95 % Notes due 2029 299 298
4.80 % Notes due 2029 1,147 1,146
2.70 % Notes due 2029 (4) ( 600 MM Euro 1.1785 ) (1) 707 —
1.30 % Notes due 2030 1,693 1,646
4.70 % Notes due 2030 (4) 996 —
4.90 % Notes due 2031 1,146 1,145
3.20 % Notes due 2032 ( 700 MM Euro 1.1785 ) (1) /($ 700 MM Euro 1.0401 ) (2) 822 725
4.85 % Notes due 2032 (4) 1,243 —
4.95 % Notes due 2033 499 499
4.375 % Notes due 2033 853 854
3.05 % Notes due 2033 (4) ( 700 MM Euro 1.1785 ) (1) 823 —
4.95 % Notes due 2034 847 846
1.650 % Notes due 2035 ( 1.5 B Euro 1.1785 ) (1) /( 1.5 B Euro 1.0401 ) (2) 1,758 1,550
5.00 % Notes due 2035 (4) 1,244 —
3.35 % Notes due 2036 ( 800 MM Euro 1.1785 ) (1) ( 800 MM Euro 1.0401 ) (2) 938 827
3.587 % Notes due 2036 919 869
5.95 % Notes due 2037 995 994
3.625 % Notes due 2037 1,409 1,358
3.35 % Notes due 2037 (4) ( 1 B Euro 1.1785 ) (1) 1,176 —
5.85 % Notes due 2038 697 697
3.40 % Notes due 2038 994 993
4.50 % Notes due 2040 542 541
2.10 % Notes due 2040 898 845
4.85 % Notes due 2041 298 297
4.50 % Notes due 2043 497 496
3.55 % Notes due 2044 ( 1 B Euro 1.1785 ) (1) ( 1 B Euro 1.0401 ) (2) 1,168 1,030
3.60 % Notes due 2045 (4) ( 700 MM Euro 1.1785 ) (1) 819 —
3.73 % Notes due 2046 1,979 1,978
3.75 % Notes due 2047 876 822
3.50 % Notes due 2048 744 744

2025 Annual Report 65

2.25 % Notes due 2050 861 808
5.25 % Notes due 2054 843 843
3.70 % Notes due 2055 (4) ( 1 B Euro 1.1785 ) (1) 1,173 —
2.45 % Notes due 2060 1,112 1,058
Other 79 83
Subtotal 41,438 (3) 32,400 (3)
Less current portion 2,000 1,749
Total long-term debt $ 39,438 $ 30,651

(1)
Translation rate at December 28, 2025.
(2)
Translation rate at December 29, 2024.
(3)
The excess of the carrying value over the fair value of debt was $
1.7
billion and $
2.0
 billion at the end of the fiscal year 2025 and the fiscal year 2024, respectively.
(4)
In the fiscal first quarter of 2025, the Company issued senior unsecured notes for approximately $
9.2
 billion. The net proceeds from this offering were used to fund the Intra-Cellular Therapies, Inc. acquisition which closed on April 2, 2025, and for general corporate purposes.

Fair value of the long-term debt was estimated using market prices, which were corroborated by quoted broker prices and significant other observable inputs.
The Company has access to substantial sources of funds at numerous banks worldwide. In June 2025, the Company secured a new 364-day Credit Facility of $
10
billion, which expires on June 24, 2026. Interest charged on borrowings under the credit line agreement is based on either the Term SOFR Reference Rate or other applicable market rates as allowed under the terms of the agreement, plus applicable margins. Commitment fees under the agreements are not material.
Throughout fiscal years 2025 and 2024, the Company continued to have access to liquidity through the commercial paper market. Short-term borrowings and the current portion of long-term debt amounted to approximately $
8.5
billion and $
6.0
billion at the end of fiscal years 2025 and 2024, respectively. The current portion of the long-term debt was $
2.0
billion and $
1.7
billion in 2025 and 2024, respectively, and the remainder is commercial paper and local borrowing by international subsidiaries.
The current debt balance as of December 28, 2025 includes $
6.5
 billion of commercial paper which has a weighted average interest rate of
3.81
% and a weighted average maturity of approximately
two months
. The current debt balance as of December 29, 2024 includes $
4.1
 billion of commercial paper which has a weighted average interest rate of
4.46
% and a weighted average maturity of approximately
two months
.
Aggregate maturities of long-term debt obligations commencing in 2026 are:
(Dollars in Millions)
2026 2027 2028 2029 2030 After 2030
$ 2,000 3,216 3,128 2,153 2,689 28,252

66

8. 
Income taxes
The provision for taxes on income on continuing operations consists of:
(Dollars in Millions) 2025 2024 2023
Currently payable:
U.S. taxes $ 1,163 2,200 2,705
International taxes 3,076 2,604 3,090
Total currently payable 4,239 4,804 5,795
Deferred:
U.S. taxes 2,008 ( 2,539 ) ( 3,440 )
International taxes ( 470 ) 356 ( 619 )
Total deferred 1,538 ( 2,183 ) ( 4,059 )
Provision for taxes on income $ 5,777 2,621 1,736

2025 Annual Report 67

Below is a tabular rate reconciliation of the U.S. statutory income tax rate of
21
% to the Company's effective income tax rate for the fiscal year 2025, pursuant to the new disclosure requirements of ASU 2023-09 (See Note 1 of the Consolidated Financial Statements):
(Dollars in Millions) 2025
U.S. $ 15,254
International 17,327
Earnings before taxes on income: 32,581
Tax rates:
U.S. federal statutory rate 6,842 21.0 %
State & local taxes: (1) 162 0.5
Foreign tax effects: ( 861 ) ( 2.7 )
Ireland
Statutory tax rate difference between Ireland & U.S. ( 473 ) ( 1.5 )
Other ( 11 ) ( 0.0 )
Switzerland
Statutory tax rate difference between Switzerland & U.S. ( 607 ) ( 1.9 )
Other 283 0.9
All Other Jurisdictions ( 53 ) ( 0.2 )
Effects of changes in tax laws or rates enacted in the current period: 1,003 3.1
OBBBA Deferred NCTI Remeasurement 1,003 3.1
Effects of cross border tax laws: 1,601 4.9
NCTI (2) 999 3.1
Subpart F 522 1.6
Other 80 0.2
Tax credits: ( 2,455 ) ( 7.6 )
NCTI foreign tax credits (2) ( 1,324 ) ( 4.1 )
Subpart F foreign tax credits ( 656 ) ( 2.0 )
All other tax credits ( 475 ) ( 1.5 )
Changes in valuation allowances: 136 0.4
Nontaxable or nondeductible items: 55 0.2
Changes in unrecognized tax benefits: ( 111 ) ( 0.3 )
Other adjustments: ( 595 ) ( 1.8 )
Net tax benefit on ordinary losses ( 595 ) ( 1.8 )
Effective Rate $ 5,777 17.7 %

(1)
Majority of state taxes are in the following states AL, CA, FL, IL, IN, KY, MA, MI, NJ, NY, PA, TN, VA, WI
(2)
NCTI includes $(
0.6
) billion of accrued benefits as the Company has elected to account for NCTI under the deferred method. (See Note 1 to the Consolidated Financial Statements)
68

The fiscal year 2025 effective tax rate increased by
2.0
% as compared to fiscal year 2024 effective tax rate.
The increase in the worldwide effective tax rate is primarily due to the United States enacting OBBBA (see Note 1). As a result, the Company remeasured its deferred tax balances related to NCTI for the changes in the tax rate and recorded a one-time re-measurement cost of approximately $
1.0
 billion which is reflected in the effective tax rate table under effects of changes in tax laws or rates enacted in the current period.
The Company’s 2025 effective tax rate was also unfavorably impacted by more income in higher tax jurisdictions, specifically in the U.S. In fiscal year 2025, the Company reversed previously accrued reserves of approximately $
7.0
 billion for the Talc settlement proposal versus a charge of $
5.1
 billion recorded in fiscal 2024 for the Talc settlement proposal. Both were recorded at an effective rate for U.S. federal and state tax of approximately
22
% (for further information see Note 19 to the Consolidated Financial Statements).
The Company’s 2025 effective tax rate was favorably impacted by a tax benefit as a result of ordinary losses attributed to certain international subsidiaries which is reflected in the other adjustments category in the effective tax rate table and favorable changes in unrecognized tax benefit positions due to expiration of statute of limitations.
The below comparison table is a rate reconciliation of the U.S. statutory rate of
21
% to the Company's effective tax rate for fiscal years 2024 and 2023:
(Dollars in Millions) 2024 2023
U.S. $( 458 ) ( 2,033 )
International 17,145 17,095
Earnings before taxes on income: $ 16,687 15,062
Tax rates:
U.S. statutory rate 21.0 % 21.0
International operations (1) ( 5.2 ) ( 8.1 )
U.S. tax settlements 1.0 ( 3.0 )
U.S. taxes on international income (2) ( 2.6 ) ( 0.3 )
U.S. state taxes 1.5 1.0
Tax benefits on share-based compensation ( 0.6 ) ( 0.8 )
All other 0.6 1.7
Effective Rate 15.7 % 11.5

(1)
International operations reflect the impacts of operations in jurisdictions with statutory tax rates different than the U.S., particularly Ireland, Switzerland, and Belgium, which is a favorable impact on the effective tax rate as compared with the U.S. statutory rate.
(2)
Includes the net impact of the GILTI tax, the Foreign-Derived Intangible Income deduction and other foreign income that is taxable under the U.S. tax code as well as related foreign tax credits.
The fiscal year 2024 effective tax rate increased
4.2
% as compared to the fiscal year 2023 effective tax rate. The primary drivers of this change are discussed below.
In fiscal year 2024, The Company had more income in higher tax jurisdictions compared to fiscal year 2023, primarily in the U.S. where the Company recorded a charge of approximately $
5.1
 billion in the fiscal year of 2024 versus approximately $
7.0
 billion in the fiscal year of 2023, both for the talc matters in the United States. Both charges were recorded at an effective U.S. tax rate of approximately
22
% (for further information see Note 19 to the Consolidated Financial Statements).
Additionally in the fiscal year 2024, the effective tax rate was unfavorably impacted by legislative changes that went into effect for Pillar Two in some of the Company's foreign jurisdictions which are reflected in International operations on the Company’s effective tax rate reconciliation. Also in fiscal year 2024, the Company generated incremental U.S. foreign tax credits related to income sourced and taxed outside the United States and is reflected in U.S. taxes on international income on the Company’s effective tax rate reconciliation. In 2024, the Company finalized multi-year transfer pricing agreements with the U.S. Internal Revenue Service (IRS) and certain other foreign jurisdictions. The U.S portion of the agreements were partially offset by the related tax adjustments in the foreign jurisdictions which are reflected in U.S tax settlements and International operations, respectively, on the Company’s effective rate reconciliation.
2025 Annual Report 69

Temporary differences and carryforwards at the end of fiscal years 2025 and 2024 were as follows:
2025 Deferred Tax 2024 Deferred Tax
(Dollars in Millions) Asset Liability Asset Liability
Employee related obligations $ 54 372
Stock based compensation 651 717
Depreciation of property, plant and equipment ( 929 ) ( 833 )
Goodwill and intangibles ( 6,154 ) ( 3,261 )
R&D capitalized for tax 4,752 4,398
Reserves & liabilities 2,433 4,444
Inventory related 378 371
Net operating loss & tax credit carryforwards 3,561 2,658
Undistributed foreign earnings 1,718 ( 2,969 ) 2,668 ( 1,492 )
NCTI (Net CFC Tested Income) ( 2,495 ) ( 1,589 )
Miscellaneous international 620 852
Miscellaneous U.S. 300 346
Total deferred income taxes 14,467 ( 12,547 ) 16,826 ( 7,175 )
Valuation allowances ( 1,837 ) ( 1,638 )
Total deferred income taxes net of valuation allowances $ 12,630 ( 12,547 ) 15,188 ( 7,175 )

The Company has wholly-owned international subsidiaries that have cumulative losses that result in deferred tax assets. The Company believes that it is more likely than not that these subsidiaries will generate future taxable income sufficient to partially utilize these deferred tax assets. Net operating loss carryforwards for certain international subsidiaries that do not have an indefinite carryforward period will begin to expire in 2026.
Valuation allowances have been recorded against deferred tax assets that are not more likely than not to be realized.
The following table summarizes the activity related to valuation allowances for continuing operations:
(Dollars in Millions) 2025 2024
Beginning of year $ 1,638 1,149
Provision 129 451
Utilization ( 70 ) —
Foreign currency translation 90 ( 46 )
Net acquisitions / (dispositions/liquidations) 50 84
End of year $ 1,837 $ 1,638

70

The following table summarizes income taxes paid net of tax refunds:
(Dollars in Millions) 2025 2024 2023
U.S. Federal (1) $ 3,577 3,815 4,722
U.S. State and Local taxes 169 341 236
Total U.S. 3,746 4,156 4,958
Total Foreign (2) 2,793 2,558 3,616
Total income taxes paid net of tax refunds $ 6,539 6,714 8,574

(1)
Includes TCJA foreign undistributed earnings payments of $
2.5
 billion, $
2.0
 billion and $
1.5
 billion in fiscal years 2025, 2024 and 2023, respectively
(2)
Included in foreign income taxes paid net of refunds are payments made in 2025 to Ireland for $
0.6
 billion and Switzerland for $
0.5
 billion
The following table summarizes the activity related to unrecognized tax benefits for continuing operations:
(Dollars in Millions) 2025 2024 2023
Beginning of year $ 2,020 2,485 3,716
Increases related to current year tax positions 87 176 239
Increases related to prior period tax positions 925 129 244
Decreases related to prior period tax positions ( 160 ) ( 147 ) ( 781 )
Settlements ( 10 ) ( 583 ) ( 880 )
Lapse of statute of limitations ( 200 ) ( 40 ) ( 53 )
End of year $ 2,662 2,020 2,485

As of December 28, 2025 the Company had approximately $
2.7
billion of unrecognized tax benefits. The Company conducts business and files tax returns in numerous countries and currently has tax audits in progress with a number of tax authorities. With respect to the United States, the Internal Revenue Service has completed its audit for the tax years through 2016 and has commenced the audit for tax years 2017 through 2020.
In other major jurisdictions where the Company conducts business, the years that remain open to tax audit go back to the year 2014. The Company believes it is possible that tax audits may be completed over the next twelve months by taxing authorities in some jurisdictions outside of the United States.
The Company classifies liabilities for unrecognized tax benefits and related interest and penalties as long-term liabilities. Interest income and expense along with penalties related to unrecognized tax benefits are presented in the provision for income taxes. The Company recognized net after tax interest expense of $
64
million, $
217
million and $
99
million in fiscal years 2025, 2024 and 2023, respectively. The total amount of accrued interest was $
336
 million and $
274
million in fiscal years 2025 and 2024, respectively.
2025 Annual Report 71

9. 
Employee related obligations
At the end of fiscal 2025 and fiscal 2024, employee related obligations recorded on the Consolidated Balance Sheets were:
(Dollars in Millions) 2025 2024
Pension benefits $ 2,917 2,968
Postretirement benefits 1,774 1,920
Postemployment benefits 2,798 2,910
Deferred compensation 44 49
Total employee obligations 7,533 7,847
Less current benefits payable 576 592
Employee related obligations — non-current $ 6,957 7,255

Prepaid employee related obligations of $
7.3
billion and $
6.0
billion for 2025 and 2024, respectively, are included in Other assets on the Consolidated Balance Sheets.
10. 
Pensions and other benefit plans
The Company sponsors various retirement and pension plans, including defined benefit, defined contribution and termination indemnity plans, which cover most employees worldwide. The Company also provides post-retirement benefits, primarily healthcare, to all eligible U.S. retired employees and their dependents.
Many international employees are covered by government-sponsored programs and the cost to the Company is not significant.
In the U.S., non-union pension benefits for employees hired before January 1, 2015 are primarily based on the employee’s compensation during the last
five years
before retirement and the number of years of service (the Final Average Pay formula). U.S. pension benefits for employees hired after 2014, are calculated using a different formula based on employee compensation over total years of service (the Retirement Value formula).
In January 2021, the Company announced that, effective on January 1, 2026, all eligible U.S. non-union employees, regardless of hire date, will earn benefits under the Retirement Value formula. This amendment does not affect the benefits accrued under the Final Average Pay formula for service before January 1, 2026.
International subsidiaries have plans under which funds are deposited with trustees, annuities are purchased under group contracts, or reserves are provided.
The Company does not fund retiree healthcare benefits in advance and has the right to modify these plans in the future.
In 2025 and 2024 the Company used December 31, 2025 and December 31, 2024, respectively, as the measurement date for all U.S. and international retirement and other benefit plans.
Net periodic benefit costs for the Company’s defined benefit retirement plans and other benefit plans for 2025, 2024 and 2023 include the following components:
Retirement Plans Other Benefit Plans
(Dollars in Millions) 2025 2024 2023 2025 2024 2023
Service cost $ 928 948 893 288 277 264
Interest cost 1,423 1,402 1,437 215 209 214
Expected return on plan assets ( 2,392 ) ( 2,560 ) ( 2,716 ) ( 7 ) ( 7 ) ( 7 )
Amortization of prior service cost ( 184 ) ( 184 ) ( 184 ) ( 2 ) ( 2 ) ( 2 )
Recognized actuarial losses (gains) 339 174 ( 199 ) 62 53 23
Curtailments and settlements — ( 2 ) 93 — — ( 5 )
Net periodic benefit cost (credit) $ 114 ( 222 ) ( 676 ) 556 530 487

72

The service cost component of net periodic benefit cost is presented in the same line items on the Consolidated Statement of Earnings where other employee compensation costs are reported, including Cost of products sold, Research and development expense, Selling, marketing and administrative expenses, and Net earnings from discontinued operations, net of taxes if related to the separation of Kenvue. All other components of net periodic benefit cost are presented as part of Other (income) expense, net on the Consolidated Statement of Earnings, with the exception of certain amounts for curtailments and settlements, which are reported in Net earnings from discontinued operations, net of taxes if related to the separation of Kenvue (as noted above).
Unrecognized gains and losses for the U.S. pension plans are amortized over the average remaining future service for each plan. For plans with no active employees, they are amortized over the average life expectancy. The amortization of gains and losses for the other U.S. benefit plans is determined by using a
10
% corridor of the greater of the market value of assets or the accumulated postretirement benefit obligation. Total unamortized gains and losses in excess of the corridor are amortized over the average remaining future service.
Prior service costs/benefits for the U.S. pension plans are amortized over the average remaining future service of plan participants at the time of the plan amendment. Prior service cost/benefit for the other U.S. benefit plans is amortized over the average remaining service to full eligibility age of plan participants at the time of the plan amendment.
The following table represents the weighted-average actuarial assumptions:
Retirement Plans Other Benefit Plans
Worldwide Benefit Plans 2025 2024 2023 2025 2024 2023
Net Periodic Benefit Cost
Service cost discount rate 4.57 % 4.39 4.85 5.51 5.09 5.40
Interest cost discount rate 5.33 % 4.95 5.25 5.45 5.12 5.43
Rate of increase in compensation levels 3.69 % 3.70 3.71 4.22 4.22 4.22
Expected long-term rate of return on plan assets 7.21 % 7.25 7.21
Benefit Obligation
Discount rate 5.03 % 4.95 4.58 5.31 5.54 5.11
Rate of increase in compensation levels 3.69 % 3.70 3.69 4.26 4.22 4.22

The Company’s discount rates are determined by considering current yield curves representing high quality, long-term fixed income instruments. The resulting discount rates are consistent with the duration of plan liabilities. The Company's methodology in determining service and interest cost uses duration specific spot rates along that yield curve to the plans' liability cash flows.
The expected rates of return on plan asset assumptions represent the Company's assessment of long-term returns on diversified investment portfolios globally. The assessment is determined using projections from external financial sources, long-term historical averages, actual returns by asset class and the various asset class allocations by market.
The following table displays the assumed healthcare cost trend rates, for all individuals:
Healthcare Plans 2025 2024
Healthcare cost trend rate assumed for next year 13.90 % 9.33 %
Rate to which the cost trend rate is assumed to decline (ultimate trend) 4.01 % 4.02 %
Year the rate reaches the ultimate trend rate 2050 2048

2025 Annual Report 73

The following table sets forth information related to the benefit obligation and the fair value of plan assets at fiscal year-end 2025 and 2024 for the Company’s defined benefit retirement plans and other post-retirement plans:
Retirement Plans Other Benefit Plans
(Dollars in Millions) 2025 2024 2025 2024
Change in Benefit Obligation
Projected benefit obligation — beginning of year $ 30,317 31,744 4,425 4,108
Service cost 928 948 288 277
Interest cost 1,423 1,402 215 209
Plan participant contributions 82 75 — —
Actuarial (gains) losses (1) ( 245 ) ( 1,245 ) ( 12 ) 398
Divestitures & acquisitions 1 — — —
Curtailments, settlements & restructuring ( 11 ) ( 121 ) — —
Benefits paid from plan (2) ( 1,436 ) ( 1,801 ) ( 787 ) ( 556 )
Effect of exchange rates 1,185 ( 685 ) 9 ( 11 )
Projected benefit obligation — end of year $ 32,244 30,317 4,138 4,425
Change in Plan Assets
Plan assets at fair value — beginning of year $ 33,395 33,607 93 86
Actual return (loss) on plan assets 3,133 2,113 13 15
Company contributions 244 229 780 548
Plan participant contributions 82 75 — —
Settlements ( 11 ) ( 114 ) — —
Benefits paid from plan assets (2) ( 1,436 ) ( 1,801 ) ( 787 ) ( 556 )
Effect of exchange rates 1,251 ( 714 ) — —
Plan assets at fair value — end of year $ 36,658 33,395 99 93
Funded status — end of year $ 4,414 3,078 ( 4,039 ) ( 4,332 )
Amounts Recognized in the Company’s Balance Sheet consist of the following:
Non-current assets $ 7,331 6,046 — —
Current liabilities ( 144 ) ( 136 ) ( 432 ) ( 453 )
Non-current liabilities ( 2,773 ) ( 2,832 ) ( 3,607 ) ( 3,879 )
Total recognized in the consolidated balance sheet — end of year $ 4,414 3,078 ( 4,039 ) ( 4,332 )
Amounts Recognized in Accumulated Other Comprehensive Income consist of the following:
Net actuarial loss $ 2,727 3,903 609 691
Prior service cost (credit) ( 867 ) ( 1,051 ) ( 2 ) ( 4 )
Unrecognized net transition obligation — — — —
Total before tax effects $ 1,860 2,852 607 687
Accumulated Benefit Obligations — end of year $ 30,999 28,883
(1) The actuarial (gains)/losses for retirement plans in 2025 and 2024 were primarily driven by changes in the discount rates. (2) The fiscal year 2024 includes approximately $ 400 million transferred to a group annuity contract issued by a third-party insurer for the U.S. Salaried Pension.

74

Retirement Plans Other Benefit Plans
(Dollars in Millions) 2025 2024 2025 2024
Amounts Recognized in Net Periodic Benefit Cost and Other Comprehensive Income
Net periodic benefit cost (credit) $ 114 ( 222 ) 556 530
Net actuarial (gain) loss ( 985 ) ( 807 ) ( 19 ) 389
Amortization of net actuarial loss ( 339 ) ( 172 ) ( 62 ) ( 53 )
Prior service cost (credit) — — — —
Amortization of prior service (cost) credit 184 184 2 2
Effect of exchange rates 148 ( 79 ) ( 1 ) 1
Total loss/(income) recognized in other comprehensive income, before tax $( 992 ) ( 874 ) ( 80 ) 339
Total recognized in net periodic benefit cost and other comprehensive income $( 878 ) ( 1,096 ) 476 869

The Company plans to continue to fund its U.S. Qualified Plans to comply with the Pension Protection Act of 2006. International Plans are funded in accordance with local regulations. Additional discretionary contributions are made when deemed appropriate to meet the long-term obligations of the plans. For certain plans, funding is not a common practice, as funding provides no economic benefit. Consequently, the Company has several pension plans that are not funded.
In 2025, the Company contributed $
138
million and $
106
million to its U.S. and international pension plans, respectively.
The following table displays the funded status of the Company's U.S. Qualified & Non-Qualified pension plans and international funded and unfunded pension plans at December 31, 2025 and December 31, 2024, respectively:
U.S. Plans International Plans
Qualified Plans Non-Qualified Plans Funded Plans Unfunded Plans
(Dollars in Millions) 2025 2024 2025 2024 2025 2024 2025 2024
Plan Assets $ 24,057 22,250 — — 12,601 11,145 — —
Projected Benefit Obligation 19,111 18,146 2,084 1,990 10,910 10,069 139 112
Accumulated Benefit Obligation 18,867 17,726 2,064 1,949 9,957 9,115 111 93
Over (Under) Funded Status
Projected Benefit Obligation $ 4,946 4,104 ( 2,084 ) ( 1,990 ) 1,691 1,076 ( 139 ) ( 112 )
Accumulated Benefit Obligation 5,190 4,524 ( 2,064 ) ( 1,949 ) 2,644 2,030 ( 111 ) ( 93 )

Plans with accumulated benefit obligations in excess of plan assets have an accumulated benefit obligation, projected benefit obligation and plan assets of $
3.0
billion, $
3.1
billion and $
0.3
billion, respectively, at the end of 2025, and $
5.8
billion, $
6.1
billion and $
3.2
billion, respectively, at the end of 2024.
The following table displays the projected future benefit payments from the Company’s retirement and other benefit plans:
(Dollars in Millions) 2026 2027 2028 2029 2030 2031-2035
Projected future benefit payments
Retirement plans $ 1,678 1,698 1,798 1,890 1,996 11,386
Other benefit plans $ 444 401 414 427 443 2,425

2025 Annual Report 75

The following table displays the projected future minimum contributions to the unfunded retirement plans. These amounts do not include any discretionary contributions that the Company may elect to make in the future.
(Dollars in Millions) 2026 2027 2028 2029 2030 2031-2035
Projected future contributions $ 142 148 152 156 163 878

Each pension plan is overseen by a local committee or board that is responsible for the overall administration and investment of the pension plans. In determining investment policies, strategies and goals, each committee or board considers factors including, local pension rules and regulations; local tax regulations; availability of investment vehicles (separate accounts, commingled accounts, insurance funds, etc.); funded status of the plans; ratio of actives to retirees; duration of liabilities; and other relevant factors including: diversification, liquidity of local markets and liquidity of base currency. A majority of the Company’s pension funds are open to new entrants and are expected to be on-going plans. Permitted investments are primarily liquid and/or listed, with little reliance on illiquid and non-traditional investments such as hedge funds.
The Company’s retirement plan asset allocation at the end of 2025 and 2024 and target allocations for 2026 are as follows:
Percent of Plan Assets Target Allocation
Worldwide Retirement Plans 2025 2024 2026
Equity securities 55 % 55 % 54 %
Debt securities 45 45 46
Total plan assets 100 % 100 % 100 %

Determination of fair value of plan assets
The Plan has an established and well-documented process for determining fair values. Fair value is based upon quoted market prices, where available. If listed prices or quotes are not available, fair value is based upon models that primarily use, as inputs, market-based or independently sourced market parameters, including yield curves, interest rates, volatilities, equity or debt prices, foreign exchange rates and credit curves.
While the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.
Valuation hierarchy
The authoritative literature establishes a three-level hierarchy to prioritize the inputs used in measuring fair value. The levels within the hierarchy are described in the table below with Level 1 having the highest priority and Level 3 having the lowest.
The Net Asset Value (NAV) is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding.
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Following is a description of the valuation methodologies used for the investments measured at fair value.
•
Short-term investment funds
 — Cash and quoted short-term instruments are valued at the closing price or the amount held on deposit by the custodian bank. Other investments are through investment vehicles valued using the NAV provided by the administrator of the fund. The NAV is a quoted price in a market that is not active and classified as Level 2.
•
Government and agency securities
 — A limited number of these investments are valued at the closing price reported on the major market on which the individual securities are traded. Where quoted prices are available in an active market, the investments are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available for the specific security, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. When quoted market prices for a security are not available in an active market, they are classified as Level 2.
76

•
Debt instruments
 — A limited number of these investments are valued at the closing price reported on the major market on which the individual securities are traded. Where quoted prices are available in an active market, the investments are classified as Level 1. If quoted market prices are not available for the specific security, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows and are classified as Level 2.
•
Equity securities
 — Equity securities are valued at the closing price reported on the major market on which the individual securities are traded. Substantially all equity securities are classified within Level 1 of the valuation hierarchy.
•
Commingled funds
 — These investment vehicles are valued using the NAV provided by the fund administrator. Assets in the Level 2 category have a quoted market price.
•
Other assets
 — Other assets are represented primarily by limited partnerships. These investment vehicles are valued using the NAV provided by the fund administrator. Other assets that are exchange listed and actively traded are classified as Level 1, while inactively traded assets are classified as Level 2. Level 3 other assets are priced based on unobservable inputs.
The following table sets forth the Retirement Plans' investments measured at fair value as of December 31, 2025 and December 31, 2024:
Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (1) Investments Measured at Net Asset Value
(Level 1) (Level 2) (Level 3) Total Assets
(Dollars in Millions) 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024
Short-term investment funds $ 57 — 677 511 — — — — 734 511
Government and agency securities — — 9,149 7,885 — — — — 9,149 7,885
Debt instruments — — 2,310 2,321 — — — — 2,310 2,321
Equity securities 6,647 7,144 — — 1 — — — 6,648 7,144
Commingled funds — — 6,105 5,004 — 37 6,105 6,190 12,210 11,231
Other assets — — 567 88 108 128 4,932 4,087 5,607 4,303
Investments at fair value $ 6,704 7,144 18,808 15,809 109 165 11,037 10,277 36,658 33,395

(1)
The activity for the Level 3 assets is not significant for all years presented.
The Company's Other Benefit Plans are unfunded except for U.S. commingled funds (Level 2) of $
99
million and $
93
million at December 31, 2025 and December 31, 2024, respectively.
The fair value of Johnson & Johnson Common Stock directly held in plan assets was $
17
million at December 31, 2025 and $
13
million at December 31, 2024.

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 the employee is eligible. Total Company matching contributions to the plans were $
277
million, $
282
million and $
263
million in fiscal years 2025, 2024 and 2023, respectively.
2025 Annual Report 77

12. 
Capital and treasury stock
Changes in treasury stock were:
Treasury Stock
(Amounts in Millions Except Treasury Stock Shares in Thousands) Shares Amount
Balance at January 1, 2023 506,246 $ 41,694
Employee compensation and stock option plans ( 15,521 ) ( 2,529 )
Repurchase of common stock 31,085 5,079
Kenvue share exchange (Note 21) 190,955 31,418
Balance at December 31, 2023 712,765 75,662
Employee compensation and stock option plans ( 15,027 ) ( 2,389 )
Repurchase of common stock 15,183 2,407
Balance at December 29, 2024 712,921 75,680
Employee compensation and stock option plans ( 34,920 ) ( 6,009 )
Repurchase of common stock 33,903 5,953
Balance at December 28, 2025 711,904 $ 75,624

Aggregate shares of common stock issued were approximately
3,119,843,000
 shares at the end of fiscal years 2025, 2024 and 2023.
Cash dividends paid were $
5.14
per share in fiscal year 2025, compared with dividends of $
4.91
per share in fiscal year 2024, and $
4.70
per share in fiscal year 2023.
On January 2, 2026, the Board of Directors declared a regular cash dividend of $
1.30
per share, payable on March 10, 2026 to shareholders of record as of February 24, 2026.
13. 
Accumulated other comprehensive income (loss)
Components of other comprehensive income (loss) consist of the following:
(Dollars in Millions) Foreign Currency Translation Gain/(loss) On Securities Employee Benefit Plans Gain/ (Loss) On Derivatives & Hedges Total Accumulated Other Comprehensive Income (Loss)
January 1, 2023 $( 11,813 ) ( 27 ) ( 897 ) ( 230 ) ( 12,967 )
Net 2023 changes ( 3,221 ) 26 ( 1,399 ) ( 147 ) ( 4,741 )
Kenvue Separation/IPO 4,885 — 296 * — 5,181
December 31, 2023 ( 10,149 ) ( 1 ) ( 2,000 ) ( 377 ) ( 12,527 )
Net 2024 changes 1,708 2 449 ( 1,373 ) 786
December 29, 2024 ( 8,441 ) 1 ( 1,551 ) ( 1,750 ) ( 11,741 )
Net 2025 changes ( 5,506 ) ( 1 ) 858 1,460 ( 3,189 )
December 28, 2025 $( 13,947 ) — ( 693 ) ( 290 ) ( 14,930 )

78

Amounts in accumulated other comprehensive income are presented net of the related tax impact. Foreign currency translation is not adjusted for income taxes where it relates to permanent investments in international subsidiaries. For additional details on comprehensive income see the Consolidated Statements of Comprehensive Income.
Details on reclassifications out of Accumulated Other Comprehensive Income:
Gain/(Loss) On Securities - reclassifications released to Other (income) expense, net.
Employee Benefit Plans - reclassifications are included in net periodic benefit cost. See Note 10 for additional details.
Gain/(Loss) On Derivatives & Hedges - reclassifications to earnings are recorded in the same account as the hedged transaction. See Note 6 for additional details.
*    Includes impact of curtailments and settlements in connection with the separation of Kenvue.

14. 
International currency translation
For translation of its subsidiaries operating in non-U.S. Dollar currencies, the Company has determined that the local currencies of its international subsidiaries are the functional currencies except those in highly inflationary economies, which are defined as those which have had compound cumulative rates of inflation of 100% or more during the past three years, or where a substantial portion of its cash flows are not in the local currency. For the majority of the Company's subsidiaries the local currency is the functional currency.
In consolidating international subsidiaries, balance sheet currency effects are recorded as a component of accumulated other comprehensive income. The other current and non-current assets line within the Statement of Cash flows includes the impact of foreign currency translation. This equity account includes the results of translating certain balance sheet assets and liabilities at current exchange rates and some accounts at historical rates, except for those located in highly inflationary economies (Argentina, Egypt, Turkey and Venezuela). The translation of balance sheet accounts for highly inflationary economies are reflected in the operating results.
A rollforward of the changes during fiscal years 2025, 2024 and 2023 for foreign currency translation adjustments is included in Note 13.
Net currency transaction gains and losses included in Other (income) expense were losses of $
254
million, $
214
million and $
366
million in fiscal years 2025, 2024 and 2023, respectively.
2025 Annual Report 79

15. 
Earnings per share
The following is a reconciliation of basic net earnings per share to diluted net earnings per share for the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023:
(In Millions Except Per Share Amounts) 2025 2024 2023
Basic net earnings per share from continuing operations $ 11.13 5.84 5.26
Basic net earnings per share from discontinued operations — — 8.62
Total net earnings per share - basic 11.13 5.84 13.88
Average shares outstanding — basic 2,407.4 2,407.3 2,533.5
Potential shares exercisable under stock option plans 124.1 77.7 94.1
Less: shares repurchased under treasury stock method ( 102.1 ) ( 55.6 ) ( 67.2 )
Adjusted average shares outstanding — diluted 2,429.4 2,429.4 2,560.4
Diluted net earnings per share from continuing operations 11.03 5.79 5.20
Diluted net earnings per share from discontinuing operations — — 8.52
Total net earnings per share - diluted $ 11.03 5.79 13.72
(Shares in Millions)
The diluted net earnings per share calculation excluded the following number of shares related to stock options, as the exercise price of these options was greater than the average market value of the Company’s stock. — 54.1 43.0

16. 
Common stock, stock option plans and stock compensation agreements
At December 28, 2025, the Company had
one
active stock-based compensation plan, the 2022 Long-Term Incentive Plan. The shares outstanding are for contracts under the Company's 2012 Long-Term Incentive Plan and 2022 Long-Term Incentive Plan. The 2012 Long-Term Incentive Plan expired on April 26, 2022. All awards (stock options, restricted shares units and performance share units) granted subsequent to that date were under the 2022 Long-Term Incentive Plan. Under the 2022 Long-Term Incentive Plan, the Company may issue up to
150
 million shares of common stock, of which up to
110
 million shares of common stock may be issued subject to stock options or stock appreciation rights and up to
40
 million shares of common stock may be issued subject to full value awards. Awards will generally be counted on a 1-for-1 basis against the share reserve, provided that if more than
40
 million full value awards are granted, each full value award in excess of
40
 million will be counted on a 5-for-1 basis against the share reserve. Shares available for future grants under the 2022 Long-Term Incentive Plan were
93
million at the end of fiscal year 2025.
The compensation cost that has been charged against income for these plans was $
1.4
billion, $
1.2
billion and $
1.1
billion for fiscal years 2025, 2024 and 2023, respectively. The total income tax benefit recognized in the income statement for share-based compensation costs was $
283
million, $
251
million and $
221
million for fiscal years 2025, 2024 and 2023, respectively. The Company also recognized additional income tax benefits of $
215
 million, $
94
 million and $
126
 million for fiscal years 2025, 2024 and 2023, respectively, for which options were exercised or restricted shares were vested. The total unrecognized compensation cost was $
1.1
billion, $
1.0
billion and $
0.9
billion for fiscal years 2025, 2024 and 2023, respectively. The weighted average period for this cost to be recognized was
1.76
 years,
1.81
 years and
1.80
 years for fiscal years 2025, 2024, and 2023, respectively. Share-based compensation costs capitalized as part of inventory were insignificant in all periods.
The Company settles employee benefit equity issuances with treasury shares. Treasury shares are replenished through market purchases throughout the year for the number of shares used to settle employee benefit equity issuances.
80

Stock options
Stock options expire
10
years from the date of grant and vest over service periods that range from
6
months to
3
years. Options granted under the 2012 Long-Term Incentive Plan were granted at the average of the high and low prices of the Company’s Common Stock on the New York Stock Exchange on the date of grant. Options granted under the 2022 Long-Term incentive Plan were granted at the closing price of the Company’s Common Stock on the New York Stock Exchange on the date of grant.
The fair value of each option award was estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table. For 2025, 2024, and 2023 grants, expected volatility represents a blended rate of a 10-year weekly historical overall volatility rate, and a 5-week average implied volatility rate based on at-the-money traded Johnson & Johnson options with a life of 2 years. For all grants, historical data is used to determine the expected life of the option. The risk-free rate was based on the U.S. Treasury yield curve in effect at the time of grant.
The average fair value of options granted was $
27.07
, $
27.67
and $
27.85
, in fiscal years 2025, 2024 and 2023, respectively. The fair value was estimated based on the weighted average assumptions of:
2025 2024 2023
Risk-free rate 4.33 % 4.15 % 3.74 %
Expected volatility 17.99 % 17.85 % 17.69 %
Expected life (in years) 7.0 7.0 7.0
Expected dividend yield 3.30 % 3.10 % 2.90 %

A summary of option activity under the Plan as of December 28, 2025, is presented below:
(Shares in Thousands) Outstanding Shares Weighted Average Exercise Price Aggregate Intrinsic Value (Dollars in Millions)
Shares at December 29, 2024 112,629 $ 144.69 $ 1,129
Options granted 12,367 156.15
Options exercised ( 29,742 ) 128.09
Options canceled/forfeited ( 2,182 ) 160.90
Shares at December 28, 2025 93,072 $ 151.14 $ 5,257

The total intrinsic value of options exercised was $
1,442
million, $
560
million and $
729
million in fiscal years 2025, 2024 and 2023, respectively.
2025 Annual Report 81

The following table summarizes stock options outstanding and exercisable at December 28, 2025:
(Shares in Thousands) Outstanding Exercisable
Exercise Price Range Options Average Life (1) Weighted Average Exercise Price Options Weighted Average Exercise Price
$ 101.87 - $ 115.67 7,570 0.9 $ 112.45 7,570 $ 112.45
$ 129.51 - $ 131.94 15,519 2.7 130.89 15,518 130.89
$ 141.06 - $ 156.15 23,178 6.7 153.84 11,307 151.41
$ 157.92 - $ 162.75 23,350 7.6 160.27 10,318 161.13
$ 164.62 - $ 165.89 23,455 5.6 165.29 22,799 165.27
93,072 5.5 $ 151.14 67,512 $ 148.49

(1)
Average contractual life remaining in years.
Stock options outstanding at December 29, 2024 and December 31, 2023 were
112,629
and an average life of
5.3
years and
112,238
and an average life of
5.5
 years, respectively. Stock options exercisable at December 29, 2024 and December 31, 2023 were
74,683
at an average price of $
135.72
and
66,998
at an average price of $
123.39
, respectively.
Restricted share units and performance share units
The Company grants restricted share units which vest over service periods that range from
6
months to
3
years. The Company also grants performance share units, which are paid in shares of Johnson & Johnson Common Stock after the end of a
three-year
performance period. Performance shares were granted with two equally-weighted goals that directly align with or help drive long-term total shareholder return: adjusted operational earnings per share and relative total shareholder return. The number of shares actually earned at the end of the
three-year
period will vary, based only on actual performance, from
0
% to
200
% of the target number of performance share units granted.
A summary of the restricted share units and performance share units activity under the Plans as of December 28, 2025 is presented below:
(Shares in Thousands) Outstanding Restricted Share Units Outstanding Performance Share Units
Shares at December 29, 2024 13,041 2,013
Granted 7,146 597
Issued ( 7,267 ) ( 406 )
Canceled/forfeited/adjusted ( 784 ) ( 93 )
Shares at December 28, 2025 12,136 2,111

The average fair value of the restricted share units granted was $
146.95
, $
147.51
and $
152.63
in fiscal years 2025, 2024 and 2023, respectively, using the fair market value at the date of grant. The fair value of restricted share units was discounted for dividends, which are not paid on the restricted share units during the vesting period. The fair value of restricted share units issued was $
1,104
million, $
833
million and $
605
million in 2025, 2024 and 2023, respectively.
The weighted average fair value of the performance share units granted was $
155.71
, $
133.76
and $
145.17
in fiscal years 2025, 2024 and 2023, calculated using the weighted average fair market value for each of the component goals at the date of grant.
The fair values for the earnings per share goals of each performance share unit were estimated on the date of grant using the fair market value of the shares at the time of the award discounted for dividends, which are not paid on the performance share units during the vesting period. The fair value for the relative total shareholder return goal of each performance share unit was estimated on the date of grant using the Monte Carlo valuation model. The fair value of performance share units issued was $
67
million, $
146
million and $
140
million in fiscal years 2025, 2024 and 2023, respectively.
82

17. 
Segments of business and geographic areas
Following the separation of the Consumer Health business in the fiscal third quarter of 2023, the Company is now organized into
two
reportable segments: Innovative Medicine and MedTech.
The Company’s chief operating decision maker (CODM) is the Chief Executive Officer (Principal Executive Officer). For the Innovative Medicine and MedTech segments, the CODM uses segment income before tax to allocate resources (including employees, financial, and capital resources) for each segment predominantly in the annual forecasting process. The CODM considers planning-to-actual variances on a quarterly basis to assess performance and make decisions about allocating resources to the segments.
Sales to Customers % Change
(Dollars in Millions) 2025 2024 2023 ’25 vs. ’24 ’24 vs. ’23
INNOVATIVE MEDICINE
Oncology
U.S. $ 13,659 10,854 8,462 25.8 % 28.3
International 11,721 9,926 9,199 18.1 7.9
Worldwide 25,380 20,781 17,661 22.1 17.7
CARVYKTI
U.S. 1,492 869 469 71.6 85.2
International 395 94 30 * *
Worldwide 1,887 963 500 95.9 92.7
DARZALEX
U.S. 8,266 6,588 5,277 25.5 24.8
International 6,085 5,082 4,467 19.7 13.8
Worldwide 14,351 11,670 9,744 23.0 19.8
ERLEADA
U.S. 1,453 1,282 1,065 13.4 20.3
International 2,121 1,717 1,322 23.5 29.8
Worldwide 3,574 2,999 2,387 19.2 25.6
IMBRUVICA
U.S. 892 1,020 1,051 ( 12.5 ) ( 3.0 )
International 1,931 2,018 2,214 ( 4.3 ) ( 8.8 )
Worldwide 2,823 3,038 3,264 ( 7.1 ) ( 6.9 )
RYBREVANT/ LAZCLUZE (1)
U.S. 534 257 66 * *
International 200 70 27 * *
Worldwide 734 327 93 * *
TALVEY (2)
U.S. 340 241 56 40.9 *
International 123 46 7 * *
Worldwide 463 287 63 61.3 *
TECVAYLI
U.S. 444 418 334 6.3 25.3
International 226 131 61 72.8 *
Worldwide 670 549 395 22.1 38.8

2025 Annual Report 83

Sales to Customers % Change
(Dollars in Millions) 2025 2024 2023 ’25 vs. ’24 ’24 vs. ’23
ZYTIGA /abiraterone acetate
U.S. 23 34 50 ( 33.2 ) ( 32.2 )
International 480 597 837 ( 19.7 ) ( 28.6 )
Worldwide 502 631 887 ( 20.4 ) ( 28.8 )
OTHER ONCOLOGY
U.S. 214 145 93 47.5 55.9
International 162 172 235 ( 6.0 ) ( 26.8 )
Worldwide 376 317 328 18.5 ( 3.4 )
Immunology
U.S. 9,872 11,355 11,539 ( 13.1 ) ( 1.6 )
International 5,856 6,473 6,513 ( 9.5 ) ( 0.6 )
Worldwide 15,728 17,828 18,052 ( 11.8 ) ( 1.2 )
REMICADE
U.S. 1,171 1,009 1,143 16.0 ( 11.7 )
U.S. Exports 74 98 147 ( 24.8 ) ( 33.0 )
International 523 497 549 5.3 ( 9.5 )
Worldwide 1,768 1,605 1,839 10.2 ( 12.8 )
SIMPONI / SIMPONI ARIA
U.S. 1,193 1,082 1,124 10.3 ( 3.8 )
International 1,475 1,108 1,073 33.1 3.3
Worldwide 2,668 2,190 2,197 21.8 ( 0.3 )
STELARA
U.S. 3,847 6,720 6,966 ( 42.7 ) ( 3.5 )
International 2,230 3,641 3,892 ( 38.7 ) ( 6.4 )
Worldwide 6,078 10,361 10,858 ( 41.3 ) ( 4.6 )
TREMFYA
U.S. 3,529 2,443 2,147 44.5 13.7
International 1,626 1,227 999 32.5 22.8
Worldwide 5,155 3,670 3,147 40.5 16.6
OTHER IMMUNOLOGY
U.S. 59 3 11 * ( 74.1 )
International 2 0 0 * —
Worldwide 61 3 11 * ( 74.1 )
Neuroscience
U.S. 5,151 4,398 4,065 17.1 8.2
International 2,686 2,718 3,076 ( 1.2 ) ( 11.6 )
Worldwide 7,837 7,115 7,140 10.1 ( 0.4 )
CAPLYTA (3)
U.S. 700 — — * —
International — — — — —
Worldwide 700 — — * —

84

Sales to Customers % Change
(Dollars in Millions) 2025 2024 2023 ’25 vs. ’24 ’24 vs. ’23
CONCERTA / methylphenidate
U.S. 82 134 230 ( 38.6 ) ( 41.7 )
International 502 507 554 ( 1.2 ) ( 8.4 )
Worldwide 584 641 783 ( 9.0 ) ( 18.1 )
INVEGA SUSTENNA / XEPLION / INVEGA TRINZA / TREVICTA
U.S. 2,725 3,125 2,897 ( 12.8 ) 7.9
International 1,085 1,097 1,218 ( 1.1 ) ( 9.9 )
Worldwide 3,810 4,222 4,115 ( 9.8 ) 2.6
SPRAVATO
U.S. 1,485 929 589 59.9 57.8
International 210 148 100 41.9 48.2
Worldwide 1,696 1,077 689 57.4 56.4
OTHER NEUROSCIENCE
U.S. 159 210 349 ( 24.5 ) ( 39.8 )
International 889 965 1,204 ( 7.9 ) ( 19.8 )
Worldwide 1,048 1,175 1,553 ( 10.9 ) ( 24.3 )
Pulmonary Hypertension
U.S. 3,223 3,143 2,697 2.6 16.5
International 1,214 1,140 1,117 6.5 2.0
Worldwide 4,437 4,282 3,815 3.6 12.3
OPSUMIT/OPSYNVI (4)
U.S. 1,633 1,557 1,292 4.8 20.5
International 692 668 681 3.7 ( 1.9 )
Worldwide 2,325 2,225 1,973 4.5 12.8
UPTRAVI
U.S. 1,536 1,511 1,326 1.7 13.9
International 366 307 255 19.4 20.1
Worldwide 1,902 1,817 1,582 4.7 14.9
OTHER PULMONARY HYPERTENSION
U.S. 54 75 79 ( 27.0 ) ( 5.1 )
International 155 165 182 ( 6.2 ) ( 9.3 )
Worldwide 209 240 260 ( 12.7 ) ( 7.7 )
Infectious Diseases
U.S. 1,264 1,354 1,500 ( 6.6 ) ( 9.8 )
International 1,977 2,042 2,918 ( 3.2 ) ( 30.0 )
Worldwide 3,241 3,396 4,418 ( 4.6 ) ( 23.1 )
EDURANT / rilpivirine
U.S. 26 31 35 ( 18.4 ) ( 10.0 )

2025 Annual Report 85

Sales to Customers % Change
(Dollars in Millions) 2025 2024 2023 ’25 vs. ’24 ’24 vs. ’23
International 1,461 1,241 1,115 17.7 11.2
Worldwide 1,486 1,272 1,150 16.9 10.6
PREZISTA / PREZCOBIX / REZOLSTA / SYMTUZA
U.S. 1,226 1,311 1,446 ( 6.5 ) ( 9.4 )
International 353 401 408 ( 11.9 ) ( 1.7 )
Worldwide 1,579 1,712 1,854 ( 7.7 ) ( 7.7 )
OTHER INFECTIOUS DISEASES (5)
U.S. 12 11 19 6.6 ( 41.0 )
International 163 401 1,395 ( 59.3 ) *
Worldwide 175 412 1,414 ( 57.5 ) *
Cardiovascular / Metabolism / Other
U.S. 3,175 2,866 2,906 10.8 ( 1.4 )
International 603 696 765 ( 13.3 ) ( 9.1 )
Worldwide 3,778 3,562 3,671 6.1 ( 3.0 )
XARELTO
U.S. 2,633 2,373 2,365 11.0 0.3
International — — — — —
Worldwide 2,633 2,373 2,365 11.0 0.3
OTHER
U.S. 542 494 541 9.8 ( 8.8 )
International 603 696 765 ( 13.3 ) ( 9.1 )
Worldwide 1,145 1,189 1,306 ( 3.7 ) ( 8.9 )
TOTAL INNOVATIVE MEDICINE
U.S. 36,344 33,970 31,169 7.0 9.0
International 24,057 22,994 23,590 4.6 ( 2.5 )
Worldwide 60,401 56,964 54,759 6.0 4.0
MEDTECH
Cardiovascular
U.S. 5,305 4,513 3,633 17.5 24.2
International 3,623 3,194 2,717 13.4 17.6
Worldwide 8,928 7,707 6,350 15.8 21.4
ELECTROPHYSIOLOGY
U.S. 2,891 2,738 2,458 5.6 11.4
International 2,743 2,529 2,230 8.5 13.4
Worldwide 5,634 5,267 4,688 7.0 12.3
ABIOMED
U.S. 1,393 1,213 1,066 14.9 13.7
International 358 284 240 26.4 18.2
Worldwide 1,751 1,496 1,306 17.1 14.5

86

Sales to Customers % Change
(Dollars in Millions) 2025 2024 2023 ’25 vs. ’24 ’24 vs. ’23
SHOCKWAVE (6)
U.S. 897 442 — * *
International 249 122 — * *
Worldwide 1,146 564 — * *
OTHER CARDIOVASCULAR
U.S. 124 120 109 3.1 10.7
International 273 260 247 4.9 5.3
Worldwide 397 380 356 4.3 6.9
Orthopaedics
U.S. 5,720 5,689 5,525 0.5 3.0
International 3,538 3,470 3,417 2.0 1.5
Worldwide 9,258 9,158 8,942 1.1 2.4
HIPS
U.S. 1,080 1,057 996 2.1 6.2
International 594 581 564 2.2 3.0
Worldwide 1,674 1,638 1,560 2.1 5.0
KNEES
U.S. 924 922 896 0.2 2.9
International 663 623 559 6.5 11.3
Worldwide 1,587 1,545 1,456 2.7 6.1
TRAUMA
U.S. 2,058 2,013 1,949 2.2 3.3
International 1,088 1,036 1,030 5.0 0.6
Worldwide 3,146 3,049 2,979 3.2 2.3
SPINE, SPORTS & OTHER
U.S. 1,658 1,696 1,684 ( 2.2 ) 0.7
International 1,193 1,230 1,263 ( 3.0 ) ( 2.6 )
Worldwide 2,852 2,926 2,947 ( 2.5 ) ( 0.7 )
Surgery
U.S. 4,157 4,003 4,031 3.9 ( 0.7 )
International 5,980 5,842 6,006 2.4 ( 2.7 )
Worldwide 10,137 9,845 10,037 3.0 ( 1.9 )
ADVANCED
U.S. 1,900 1,838 1,833 3.4 0.2
International 2,678 2,650 2,837 1.0 ( 6.6 )
Worldwide 4,577 4,488 4,671 2.0 ( 3.9 )
GENERAL
U.S. 2,258 2,165 2,198 4.3 ( 1.5 )
International 3,302 3,192 3,168 3.4 0.8
Worldwide 5,560 5,358 5,366 3.8 ( 0.2 )

2025 Annual Report 87

Sales to Customers % Change
(Dollars in Millions) 2025 2024 2023 ’25 vs. ’24 ’24 vs. ’23
Vision
U.S. 2,225 2,128 2,086 4.6 2.0
International 3,243 3,018 2,986 7.4 1.1
Worldwide 5,468 5,146 5,072 6.3 1.5
CONTACT LENSES / OTHER
U.S. 1,754 1,684 1,626 4.1 3.6
International 2,157 2,049 2,076 5.3 ( 1.3 )
Worldwide 3,910 3,733 3,702 4.8 0.8
SURGICAL
U.S. 471 444 460 6.1 ( 3.4 )
International 1,086 969 910 12.1 6.5
Worldwide 1,558 1,413 1,370 10.2 3.2
TOTAL MEDTECH
U.S. 17,408 16,332 15,275 6.6 6.9
International 16,384 15,525 15,125 5.5 2.6
Worldwide 33,792 31,857 30,400 6.1 4.8
WORLDWIDE
U.S. 53,752 50,302 46,444 6.9 8.3
International 40,441 38,519 38,715 5.0 ( 0.5 )
Worldwide $ 94,193 88,821 85,159 6.0 % 4.3

*    percentage greater than 100% or not meaningful
(1)
Previously in Other Oncology, Includes the sales of RYBREVANT and RYBREVANT + LAZCLUZE
(2)
Previously in Other Oncology
(3)
Acquired with the Intra-Cellular Therapies acquisition on April 2, 2025
(4)
In 2024 OPSYNVI was in Other Pulmonary Hypertension
(5)
Includes the Covid-19 Vaccine in 2024 and 2023
(6)
Acquired on May 31, 2024
88

Income Before Tax by Segment
(Dollars in Millions) 2025 (3) 2024 (4) 2023 (5)
Innovative Medicine MedTech Total Innovative Medicine MedTech Total Innovative Medicine MedTech Total
Sales to customers $ 60,401 33,792 56,964 31,857 54,759 30,400
Cost of products sold 15,646 14,549 14,036 13,345 13,715 12,722
Selling, marketing and administrative 11,375 11,354 10,906 10,812 9,842 10,476
Research and development expense 11,827 2,838 13,529 3,703 11,963 3,122
Other segment items (1) ( 713 ) 938 ( 426 ) 257 993 ( 589 )
Segment income before tax $ 22,266 4,113 26,379 18,919 3,740 22,659 18,246 4,669 22,915
(Income) Expense not allocated to segments (2) ( 6,202 ) 5,972 7,853
Worldwide total $ 32,581 16,687 15,062

Identifiable Assets
(Dollars in Millions) 2025 2024
Innovative Medicine $ 78,057 57,070
MedTech 86,482 84,322
Total 164,539 141,392
General corporate (6) 34,671 38,712
Worldwide total $ 199,210 180,104

Additions to Property, Plant & Equipment Depreciation and Amortization
(Dollars in Millions) 2025 2024 2023 2025 2024 2023
Innovative Medicine $ 2,076 1,710 1,653 $ 3,772 3,760 3,847
MedTech 2,501 2,443 2,372 3,490 3,237 2,943
Segments total 4,577 4,153 4,025 7,262 6,997 6,790
Discontinued operations — — 162 — — 383
General corporate 255 271 356 241 342 313
Worldwide total $ 4,832 4,424 4,543 $ 7,503 7,339 7,486

2025 Annual Report 89

Sales to Customers Long-Lived Assets (7)
(Dollars in Millions) 2025 2024 2023 2025 2024
United States $ 53,752 50,302 46,444 $ 89,392 70,670
Europe 21,535 20,212 20,410 27,987 27,267
Western Hemisphere excluding U.S. 4,875 4,714 4,549 2,204 1,728
Asia-Pacific, Africa 14,031 13,593 13,756 1,544 1,454
Segments total 94,193 88,821 85,159 121,127 101,119
General corporate 1,217 1,217
Other non long-lived assets 76,866 77,768
Worldwide total $ 94,193 88,821 85,159 $ 199,210 180,104

See Note 1 for a description of the segments in which the Company operates.
Export sales are not significant. In fiscal year 2025, the Company utilized three wholesalers distributing products for both segments that represented approximately
21.8
%,
15.5
% and
11.1
% of the total gross revenues. In fiscal year 2024, the Company had three wholesalers distributing products for both segments that represented approximately
20.5
%,
15.6
% and
12.3
% of the total gross revenues. In fiscal year 2023, the Company had three wholesalers distributing products for both segments that represented approximately
18.2
%,
15.1
%, and
14.2
% of the total gross revenues.
(1)
Other segment expenses
for each reportable segment include charges related to other income and expenses, restructuring activities and impairment charges related to in-process research and development.
(2)
Amounts not allocated to segments include interest (income)/expense and general corporate (income)/expense. The fiscal year 2025 includes the reversal of approximately $
7.0
 billion, a significant portion of the previously accrued talc reserve. The fiscal years 2024 and 2023 include charges for talc matters of approximately $
5.1
 billion and $
7.0
 billion, respectively (See Note 19, Legal proceedings, for additional details). The fiscal year 2024 includes a loss of approximately $
0.4
 billion related to the debt to equity exchange of the Company's remaining shares of Kenvue Common Stock. The fiscal year 2023 includes the unfavorable change in the fair value of the retained stake in Kenvue of approximately $
0.4
 billion.
(3)
Innovative Medicine segment income before tax includes:
•
Acquisition, integration and divestiture related net expense of $
0.4
 billion primarily related to the Intra-Cellular and Halda acquisitions
MedTech segment income before tax includes:
•
Litigation expense of $
0.9
 billion primarily related to the Auris shareholder litigation
•
Acquisition, integration and divestiture related net income of $
0.2
 billion, primarily driven by a contingent value right liability reduction associated with Abiomed
•
A restructuring related charge of $
0.5
 billion
•
A gain on the sale of securities of $
0.2
 billion
(4)
Innovative Medicine segment income before tax includes:
•
Acquired in-process research & development expense of $
1.25
 billion to secure the global rights to the NM26 bispecific antibody (Yellow Jersey acquisition)
•
Monetization of royalty rights of $
0.3
 billion
•
Litigation expense of $
0.3
 billion primarily related to Risperdal Gynecomastia
•
An intangible asset impairment charge of approximately $
0.2
 billion associated with the M710 (biosimilar) asset acquired as part of the acquisition of Momenta Pharmaceuticals in 2020.
•
A restructuring related charge of $
0.1
 billion
•
One-time COVID-19 Vaccine manufacturing exit related costs of $
0.1
 billion
•
Favorable changes in the fair value of securities of $
0.1
 billion
MedTech segment income before tax includes:
•
Acquisition and integration related costs of $
1.0
 billion primarily related to the acquisition of Shockwave
•
Acquired in-process research and development expense of $
0.5
 billion from the V-Wave acquisition
90

•
A gain of $
0.2
 billion related to the Acclarent divestiture
•
A Medical Device Regulation charge of $
0.2
 billion
•
A restructuring related charge of $
0.2
 billion
(5)
Innovative Medicine segment income before tax includes:
•
One-time COVID-19 Vaccine manufacturing exit related costs of $
0.7
 billion
•
A restructuring related charge of $
0.5
 billion
•
Unfavorable changes in the fair value of securities of $
0.4
 billion
•
Favorable litigation related items of $
0.1
 billion
•
Loss on divestiture of $
0.2
 billion.
•
An intangible asset impairment charge of approximately $
0.2
 billion related to market dynamics associated with a non-strategic asset (M710) acquired as part of the acquisition of Momenta Pharmaceuticals in 2020.
MedTech segment income before tax includes:
•
Acquired in-process research and development expense of $
0.4
 billion related to the Laminar acquisition in 2023
•
A restructuring related charge of $
0.3
 billion
•
Acquisition and integration related costs of $
0.2
 billion primarily related to the acquisition of Abiomed
•
A Medical Device Regulation charge of $
0.3
 billion
•
Income from litigation settlements of $
0.1
 billion
(6)
General corporate includes cash, cash equivalents, marketable securities and other corporate assets.
(7)
Long-lived assets include property, plant and equipment, net for fiscal years 2025, and 2024 of $
23,169
and $
20,518
, respectively, and intangible assets and goodwill, net for fiscal years 2025 and 2024 of $
99,175
and $
81,818
, respectively.
2025 Annual Report 91

18. 
Acquisitions and divestitures
Business combinations
Acquisitions of a business are accounted for as business combinations applying the acquisition method of accounting. Under this method, the assets acquired and liabilities assumed are recorded at their respective fair values as of the acquisition date in the Company’s consolidated financial statements. The excess of the purchase price over the fair value of the acquired net assets, where applicable, is recorded as goodwill. The results of operations of these acquisitions have been included in the Company’s financial statements from their respective dates of acquisition.
2025 Transactions
During the fiscal year 2025, the Company acquired Intra-Cellular Therapies, Inc. (Intra-Cellular) and Halda Therapeutics OpCo, Inc. (Halda Therapeutics) for a total of $
17.5
 billion, net of cash acquired.
Halda Therapeutics
On December 26, 2025, the Company completed the acquisition of Halda Therapeutics, a clinical-stage biotechnology company with proprietary Regulated Induced Proximity TArgeting Chimera (RIPTAC
TM
) platform to develop oral, targeting therapies for multiple types of solid tumors, including prostate cancer, in an all-cash merger transaction for total consideration transferred of approximately $
3.05
 billion, net of cash acquired. The acquisition was accounted for as a business combination and the results of operations and goodwill are included in the Innovative Medicine segment as of the acquisition date. Included in the total consideration transferred is $
0.2
 billion of acquisition-related costs, primarily related to post-closing compensation
expense due to the acceleration of equity awards. This expense was recorded in Other (income) expense, net.
The fair value of the assets acquired is $
3.4
 billion, which primarily relates to acquired in-process research and development (IPR&D) of $
2.8
 billion and goodwill of $
0.6
 billion. The fair value of the liabilities assumed is $
0.6
 billion, primarily related to deferred taxes. These values are preliminary and based on the best estimate of management, which is subject to change within the measurement period. The acquired in-process research and development includes two assets, HLD-0915 and HLD-0117, that are being studied to treat prostate cancer and breast cancer, respectively. The fair value of the IPR&D assets were calculated assuming a discount rate of
17
% and
17.5
%, respectively. Additionally, the cash flow projections assumed a probability of success factor of approximately
47
%-
68
% (depending on indication being studied) for HLD-0915 and approximately
17
% for HLD-0117. The goodwill is
not
deductible for tax purposes and is primarily attributable to intangible assets that did not qualify for separate recognition and currently unidentified projects and products, which will be developed using the RIPTAC
TM
platform.
Intra-Cellular
On April 2, 2025, the Company completed the acquisition of Intra-Cellular, a biopharmaceutical company focused on the development and commercialization of therapeutics for central nervous system disorders. This acquisition advances the Company’s industry-leading portfolio in mental health with the addition of CAPLYTA (lumateperone), the first and only U.S. FDA-approved treatment for bipolar I and II depression as an adjunctive therapy and monotherapy and is also approved for the treatment of schizophrenia in adults. During the fiscal fourth quarter of 2025, the U.S. FDA approved CAPLYTA as an adjunctive therapy with anti-depressants for the treatment of major depressive disorder in adults. This IPR&D asset was reclassified to a definite lived asset and began amortizing in the fiscal fourth quarter of 2025. This acquisition also includes a promising clinical-stage pipeline with best-in-class potential in generalized anxiety disorder and Alzheimer’s disease-related psychosis and agitation.
The Company acquired all the outstanding shares of Intra-Cellular’s common stock for $
132.00
per share in an all-cash merger transaction for total consideration transferred of $
14.5
 billion. The acquisition was accounted for as a business combination and the results of operations and goodwill are included in the Innovative Medicine segment as of the acquisition date. In addition, acquisition-related costs before tax incurred during the fiscal 2025 were $
0.4
 billion, of which $
0.1
 billion related to post-closing compensation expense due to the acceleration of equity awards and were recorded to Other (income) expense, net.
92

The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date and is based on the best estimate of management, which is subject to change within the measurement period. As of the fiscal year ended December 28, 2025, there have been no material measurement period adjustments.
(Dollars in Billions) April 2, 2025
Assets acquired:
Cash and cash equivalents $ 0.2
Marketable securities 0.6
Other current & non-current assets 0.3
Amortizable intangible asset (1) 5.2
Acquired in-process research and development (1) 8.3
Goodwill (2) 2.9
Total assets acquired $ 17.5
Liabilities assumed:
Deferred taxes $ 2.8
Other current & non-current liabilities 0.2
Total liabilities assumed $ 3.0
Total assets acquired and liabilities assumed $ 14.5

(1)
The estimated fair values of the intangible assets acquired were determined using the multi-period excess earnings method. The amortizable intangible asset relates to the currently marketed product, CAPLYTA, which has an estimated useful life of
8
years. The acquired in-process research and development includes
two
assets, one related to certain unapproved indications of lumateperone and another related to a compound being studied to treat psychosis and agitation in patients with Alzheimer’s disease and generalized anxiety disorder. The fair value of the in-process research and development assets were calculated assuming a discount rate of
11.5
% and
12.5
%, respectively. Additionally, the cash flow projections assumed a probability of success factor of
95
% and approximately
34
%-
50
% (depending on indication being studied), respectively.
(2)
Goodwill is primarily attributable to intangible assets that did not qualify for separate recognition and future projects or products currently unidentified. Goodwill is not expected to be deductible for tax purposes.
2024 Transactions
During the fiscal year 2024, certain businesses were acquired for $
15.1
 billion, net of cash acquired. The fiscal year 2024 acquisitions primarily included; Ambrx Biopharma, Inc., Shockwave Medical Inc., and Proteologix, Inc. The remaining acquisitions were not material.
On June 20, 2024, the Company completed the acquisition of Proteologix, Inc., a privately held biotechnology company focused on bispecific antibodies for immune-mediated diseases, in an all-cash merger transaction for total consideration of approximately $
0.8
 billion net of cash acquired, with potential for an additional milestone payment. The results of operations are included in the Innovative Medicine segment as of the acquisition date. The fair value of the acquisition was allocated to assets acquired of $
1.2
 billion, primarily non-amortizable intangible assets, inclusive of purchased IPR&D, for $
0.9
 billion, goodwill for $
0.3
 billion, and liabilities assumed of $
0.3
 billion, including $
0.1
 billion of contingent consideration. The goodwill is not deductible for tax purposes. Acquisition related costs before tax for the fiscal years 2025 and 2024 were
not
material.
On May 31, 2024, the Company acquired all the outstanding shares of Shockwave Medical Inc. (SWAV), a leading, first-to-market provider of innovative intravascular lithotripsy (IVL) technology for the treatment of calcified coronary artery disease (CAD) and peripheral artery disease (PAD), in an all-cash merger transaction for total consideration of $
12.6
 billion, ($
11.5
 billion, net of cash acquired). The results of operations were included in the MedTech segment as of the acquisition date. The fair value of the acquisition was allocated to assets acquired of $
14.4
 billion primarily amortizable intangible assets of $
5.3
 billion, purchased IPR&D of $
0.6
 billion, goodwill for $
7.6
 billion, $
0.5
 billion of inventory and $
0.4
 billion of other assets, and liabilities assumed of $
2.9
 billion. The goodwill is not deductible for tax purposes. Acquisition related costs before tax were not material for the fiscal 2025 and were $
0.9
 billion for the fiscal 2024.
2025 Annual Report 93

On March 7, 2024, the Company completed the acquisition of Ambrx Biopharma, Inc., (Ambrx), a clinical-stage biopharmaceutical company with a proprietary synthetic biology technology platform to design and develop next-generation antibody drug conjugates (ADCs), in an all-cash merger transaction for a total consideration of approximately $
1.8
 billion net of cash acquired. The results of operations were included in the Innovative Medicine segment as of the acquisition date. The fair value of the acquisition was allocated to assets acquired of $
2.3
 billion, primarily non-amortizable intangible assets, inclusive of purchased IPR&D, for $
1.9
 billion, goodwill for $
0.3
 billion and liabilities assumed of $
0.5
 billion. The goodwill is not deductible for tax purposes. Acquisition related costs before tax for the fiscal years 2025 and 2024 were not material.
2023 Transactions
During the fiscal year 2023, the Company did not make any acquisitions that qualified as a business combination. In accordance with U.S. GAAP standards related to business combinations, and goodwill and other intangible assets, supplemental pro forma information for fiscal years 2025, 2024 and 2023 is not provided, as the impact of the aforementioned acquisitions did not have a material effect on the Company’s results of operations.
Asset acquisitions
If it is determined that the acquired set does not meet the definition of a business under the acquisition method of accounting, the transaction is accounted for as an asset acquisition. In this case, no goodwill is recorded, acquired in-process research and development (IPR&D) with no alternative future use is immediately recorded as research and development expense and contingent consideration is recorded when the related event occurs.
2025 Transactions
There were no material asset acquisitions in the fiscal 2025.
2024 Transactions
The fiscal year 2024 asset acquisitions expensed as research and development included V-Wave Ltd. and the global rights to the NM26 bispecific antibody (Yellow Jersey acquisition). The remaining activity was not material.
On October 8, 2024, the Company completed the acquisition of V-Wave Ltd, a privately-held company focused on developing innovative treatment options for patients with heart failure, for an upfront payment of $
0.6
 billion, with the potential for additional regulatory and commercial milestone payments up to approximately $
1.1
 billion. The Company recorded an IPR&D charge of approximately $
0.5
 billion, net of a gain recorded on the Company's existing investment in V-Wave and the results of operations are included in the MedTech segment as of the acquisition date.
On July 11, 2024, the Company completed the acquisition of Yellow Jersey, a demerged subsidiary of Numab Therapeutics AG, to secure the global rights to NM26, a novel, investigational first-in-class bispecific antibody targeting two clinically proven pathways in atopic dermatitis (AD), in an all-cash transaction for approximately $
1.25
 billion. The Company recorded an IPR&D charge of approximately $
1.25
 billion, and the results of operations are included in the Innovative Medicine segment as of the acquisition date. In 2025, the results of a planned interim analysis of the Phase 2b Duplex-AD proof-of-concept study met prespecified criteria for early termination of the study.
2023 Transactions
The fiscal year 2023 asset acquisitions expensed as research and development included Laminar Inc. The remaining activity was not material.
During the fiscal year 2023, the Company completed the acquisition of Laminar Inc., a privately-held medical device company focused on eliminating the left atrial appendage (LAA) in patients with non-valvular atrial fibrillation (AFib), for an upfront payment of $
0.4
 billion. The Company recorded an IPR&D charge of approximately $
0.4
 billion and the results of operations are included in the MedTech segment as of the acquisition date. During 2025, the Company, in consultation with the Independent Data Safety Monitoring Board, suspended the pivotal investigational device exemption study.
Divestitures
There were no material divestitures in the fiscal year 2025.
94

During the fiscal year 2024, the Company completed the divestiture of Acclarent resulting in approximately $
0.3
 billion in proceeds and the divestiture of Ponvory outside of the U.S. resulting in approximately $
0.2
 billion in proceeds. All other divestitures were not material.
There were no material divestitures in the fiscal year 2023.
19. 
Legal proceedings
Johnson & Johnson and certain of its subsidiaries are involved in various lawsuits and claims regarding product liability; intellectual property; commercial; indemnification and other matters; governmental investigations; and other legal proceedings that arise from time to time in the ordinary course of their business.
The Company records accruals for loss contingencies associated with these legal matters when it is probable that a liability will be incurred, and the amount of the loss can be reasonably estimated. As of December 28, 2025, the Company has determined that the liabilities associated with certain litigation matters are probable and can be reasonably estimated. The Company has accrued for these matters and will continue to monitor each related legal issue and adjust accruals as might be warranted based on new information and further developments in accordance with ASC 450-20-25. For these and other litigation and regulatory matters discussed below for which a loss is probable or reasonably possible, the Company is unable to estimate the possible loss or range of loss beyond the amounts accrued. Amounts accrued for legal contingencies often result from a complex series of judgments about future events and uncertainties that rely heavily on estimates and assumptions including timing of related payments. The ability to make such estimates and judgments can be affected by various factors including, among other things, whether damages sought in the proceedings are unsubstantiated or indeterminate; scientific and legal discovery has not commenced or is not complete; proceedings are in early stages; matters present legal uncertainties; there are significant facts in dispute; procedural or jurisdictional issues; the uncertainty and unpredictability of the number of potential claims; ability to achieve comprehensive multi-party settlements; complexity of related cross-claims and counterclaims; and/or there are numerous parties involved. To the extent adverse awards, judgments or verdicts have been rendered against the Company, the Company does not record an accrual until a loss is determined to be probable and can be reasonably estimated.
In the Company’s opinion, based on its examination of these matters, its experience to date and discussions with counsel, the ultimate outcome of legal proceedings, net of liabilities accrued in the Company’s balance sheet, is not expected to have a material adverse effect on the Company’s financial position. However, the resolution of, or increase in accruals for, one or more of these matters in any reporting period may have a material adverse effect on the Company’s results of operations and cash flows for that period.
Matters concerning talc
A significant number of personal injury claims alleging that talc causes cancer have been asserted against the Company and its affiliates arising out of the use of body powders containing talc, primarily JOHNSON’S Baby Powder.
In talc cases that have gone to trial, the Company has obtained a number of defense verdicts, but there also have been verdicts against the Company, many of which have been reversed on appeal. In June 2020, the Missouri Court of Appeals reversed in part and affirmed in part a July 2018 verdict of $
4.7
 billion in Ingham v. Johnson & Johnson, et al., No. ED 207476 (Mo. App.), reducing the overall award to $
2.1
 billion. An application for transfer of the case to the Missouri Supreme Court was subsequently denied and, in June 2021, a petition for certiorari, seeking a review of the Ingham decision by the United States Supreme Court, was denied. In June 2021, the Company paid the award, which, including interest, totaled approximately $
2.5
 billion. The facts and circumstances, including the terms of the award, were unique to the Ingham decision and not representative of other claims brought against the Company. The Company continues to believe that it has strong legal grounds to contest all the talc verdicts that it has appealed. Notwithstanding the Company’s confidence in the safety of its talc products, in certain circumstances the Company has settled cases.
In an effort to expeditiously resolve the litigation for the overwhelming majority of claimants, beginning in October 2021, Johnson & Johnson Consumer Inc. (Old JJCI) implemented a corporate restructuring, through which Old JJCI ceased to exist and three new entities were created: (a) LTL Management LLC, a North Carolina limited liability company (LTL or Debtor); (b) Royalty A&M LLC, a North Carolina limited liability company and a direct subsidiary of LTL (RAM); and (c) the Debtor’s direct parent, Johnson & Johnson Consumer Inc., a New Jersey company (New JJCI). The Debtor received certain of Old JJCI’s assets and became solely responsible for the talc-related liabilities of Old JJCI, including all liabilities related in any way to injury or damage, or alleged injury or damage, sustained or incurred in the purchase or use of, or exposure to, talc, including talc
2025 Annual Report 95

contained in any product, or to the risk of, or responsibility for, any such damage or injury, except for any liabilities for which the exclusive remedy is provided under a workers’ compensation statute or act (the Talc-Related Liabilities).
Following the 2021 Corporate Restructuring, Debtor and the Company attempted to achieve a full and comprehensive resolution of the Talc-Related Liabilities. Debtor filed voluntary petitions for Bankruptcy pursuant to Chapter 11 of the Bankruptcy Code in October 2021 and again in April 2023; both petitions were dismissed.
In October 2023, the Company stated that it was pursuing the following four parallel and alternative pathways to achieve a comprehensive and final resolution of the talc claims: (i) the appeal of the LTL 2 dismissal decision; (ii) pursuing a consensual “prepackaged” bankruptcy case, as “strongly encouraged” by the Bankruptcy Court in its dismissal decision; (iii) aggressively litigating the talc claims in the tort system; and (iv) pursuing affirmative claims against experts for false and defamatory narratives regarding the Company’s talc powder products. In December 2023, LTL changed its state of formation to Texas and its name to LLT Management LLC (LLT).
In May 2024, the Company commenced a
three-month
solicitation period of its proposed consensual “prepackaged” Chapter 11 bankruptcy plan (the Proposed Plan) for the comprehensive and final resolution of all current and future claims related to cosmetic talc in the United States, excluding claims related to mesothelioma or State consumer protection claims, in exchange for the payment by the Company of present value of approximately $
6.475
 billion payable over
25
years (nominal value of approximately $
8.0
 billion, discounted at a rate of
4.4
%). The claims encompassed by the Proposed Plan constituted
99.75
% of then-pending lawsuits against the Company relating to its talc powder products.
In August 2024, LLT engaged in a restructuring that resulted in the creation of three new Texas limited liability companies: (a) Red River Talc, LLC (Red River); (b) Pecos River Talc LLC (Pecos River); and (3) New Holdco (Texas) LLC. As a result of this restructuring, all claims related to ovarian and other gynecological cancers were separated and allocated to Red River, and mesothelioma, governmental unit and certain other claims were allocated to Pecos River.
While the Company had resolved
95
% of the mesothelioma lawsuits filed to date as of August 2024, cases continue to be filed. Trial activity has continued in various state courts.
In September 2024, while reiterating the Company's continued confidence in the safety of its talc products, Red River filed a voluntary petition with the United States Bankruptcy Court for the Southern District of Texas, seeking relief under Chapter 11 of the Bankruptcy Code (the Red River Bankruptcy Case), in furtherance of the Company's consensual "prepackaged" Proposed Plan. Shortly thereafter, as a consequence of this filing, the Company withdrew its appeal of the LTL 2 dismissal decision.
To account for the contemplated comprehensive resolution through the Proposed Plan, the Company recorded a cumulative incremental charge of approximately $
5.0
 billion during fiscal year 2024. As of the end of fiscal year 2024, the total present value of the reserve was approximately $
11.6
 billion (or nominal value of approximately $
13.5
 billion).
In March 2025, the Texas Bankruptcy Court issued an order dismissing the case (the Texas dismissal) and, as a result, the Company reversed substantially all, or approximately $
7
 billion, from amounts previously reserved for the bankruptcy resolution. As of the fourth quarter 2025, the total present value of the reserve is approximately $
3.4
 billion, comprising previously executed settlement agreements, litigation defense and other costs. Approximately one-third of the reserve is recorded as a current liability.
After the Texas dismissal, the Company announced it would not appeal the decision and returned to the tort system to litigate the talc claims and defend the safety of its products. Ovarian cancer trials are being scheduled in various state courts throughout 2026 and beyond. In the MDL, the court is addressing the Company's Daubert motions related to general causation, specific causation, and certain asbestos testing methods. In January 2026, the Special Master issued her Report and Recommendation related to general causation, excluding certain opinions by plaintiff experts, but also allowing other opinions to proceed. The Company will file an appeal of the Report and Recommendation to the District Court. The remaining Daubert motions are expected to be decided in the first half of 2026.
In February 2019, the Company’s talc supplier, Imerys Talc America, Inc., and two of its affiliates, Imerys Talc Vermont, Inc. and Imerys Talc Canada, Inc. (collectively, Imerys), filed voluntary petitions for relief under Chapter 11 of the United States Code (the Bankruptcy Code) in the United States Bankruptcy Court for the District of Delaware (Imerys Bankruptcy).
In February 2021, Cyprus Mines Corporation (Cyprus), which sold certain talc mines and assets to Imerys, filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the Delaware Bankruptcy Court.
96

In July 2024, the Company, Imerys, and Cyprus and certain of their affiliates (including their parent entities), and the tort claimants' committees and future claimants' representatives appointed in the Imerys debtors' and Cyprus debtors' respective Chapter 11 cases, entered into a global settlement agreement (the Imerys Settlement Agreement) to resolve the parties' ongoing disputes, including disputes raised in the Imerys and Cyprus bankruptcies regarding (i) the Company's alleged obligations to indemnify Imerys and Cyprus for personal injury claims allegedly caused by exposure to talc contained in the Company's products and (ii) entitlements to proceeds of certain of the Company's insurance policies. In October 2024, the Delaware Bankruptcy Court entered an order approving the Imerys Settlement Agreement (the Settlement Order).
Certain insurers have appealed the Settlement Order and sought a stay of the Settlement Order pending appeal, which the Delaware Bankruptcy Court denied in January 2025. In August 2025, the District Court denied the insurers' appeal of the Settlement Order. The insurers have appealed that decision to the Third Circuit. Briefing is expected to be completed in February 2026.
Imerys and Cyprus have both proposed Chapter 11 plans, which contemplate talc claims being channeled to a trust and resolved in accordance with distribution procedures. A joint confirmation hearing for the plans began in April 2025 and is scheduled to continue in February 2026.
In February 2018, a securities class action lawsuit was filed against the Company and certain named officers in the United States District Court for the District of New Jersey, alleging that the Company violated the federal securities laws by failing to disclose alleged asbestos contamination in body powders containing talc, primarily JOHNSON’S Baby Powder, and that purchasers of the Company’s shares suffered losses as a result. In April 2019, the Company moved to dismiss the complaint. In December 2019, the court denied, in part, the motion to dismiss. In December 2023, the court granted Plaintiff’s motion for class certification. In January 2024, Defendants filed a petition with the Third Circuit under Federal Rule of Civil Procedure 23(f) for permission to appeal the court’s order granting class certification, and in February 2024, the Third Circuit granted Defendants' petition. In February 2024, fact discovery closed, the court ordered the parties to mediate, and stayed the case pending mediation. In May 2024, the parties participated in an unsuccessful mediation. In June 2024, at the parties' request, the court lifted the stay for certain limited discovery, but otherwise kept the stay in place pending a decision from the Third Circuit on the 23(f) petition. Briefing on the 23(f) petition was completed in September 2024, and in March 2025, the Third Circuit heard oral argument. In July 2025, the Third Circuit affirmed the court's order granting class certification. In September 2025, Defendants petitioned the Third Circuit for rehearing or rehearing en banc, which was denied in October 2025. In February 2026, the Company filed a writ of certiorari with the United States Supreme Court. In December 2025, the District Court set deadlines for expert discovery through August 2026.
Matters concerning opioids
Beginning in 2014 and continuing to the present, the Company and Janssen Pharmaceuticals, Inc. (JPI), along with other pharmaceutical companies, have been named in close to
3,500
lawsuits related to the marketing of opioids, including DURAGESIC, NUCYNTA and NUCYNTA ER. Similar lawsuits have also been filed by private plaintiffs and organizations, including but not limited to the following: individual plaintiffs on behalf of children born with Neonatal Abstinence Syndrome (NAS); hospitals; and health insurers/payors.
To date, the Company and JPI have litigated two of the cases to judgment and have prevailed in both, either at trial or on appeal.
In July 2021, the Company announced finalization of an agreement to settle the state and subdivision claims for up to $
5.0
 billion. Approximately
80
% of the all-in settlement was paid by the end of fiscal year 2025. A few government entities opted out of the settlement. In September 2024, the Company reached an agreement to resolve the hospital cases.
The Company and JPI continue to defend the cases brought by the remaining government entity litigants as well as the cases brought by private litigants. In total, there are approximately
23
remaining opioid cases against the Company and JPI in various state courts,
285
remaining cases in the Ohio multi-district litigation (MDL), and
3
additional cases in other federal courts.
In addition, the Province of British Columbia filed suit against the Company and its Canadian affiliate, Janssen Inc., and many other industry members, in Canada. That action was certified as an opt in class action on behalf of other provincial/territorial and the federal governments in Canada in January 2025. The defendants, including the Company, filed appeals from the certification order in late February 2025. That appeal was heard in December 2025. A common issues trial has been scheduled in 2028. Additional proposed class actions have been filed in Canada against the Company and Janssen Inc., and many other industry members, by and on behalf of people who used opioids (for personal injuries), municipalities and First Nations bands. The proposed class action in Quebec on behalf of residents diagnosed with opioid use disorder was authorized to proceed against Janssen Inc. and other industry members in April 2024; and leave to appeal was denied in October 2024.
2025 Annual Report 97

Product liability
The Company and certain of its subsidiaries are involved in numerous product liability claims and lawsuits involving multiple products. Claimants in these cases seek substantial compensatory and, where available, punitive damages. While the Company believes it has substantial defenses, it is not feasible to predict the ultimate outcome of litigation. From time to time, even if it has substantial defenses, the Company considers isolated settlements based on a variety of circumstances. The Company has accrued for these matters and will continue to monitor each related legal issue and adjust accruals as might be warranted based on new information and further developments in accordance with ASC 450-20-25, Contingencies. The Company accrues an estimate of the legal defense costs needed to defend each matter when those costs are probable and can be reasonably estimated. For certain of these matters, the Company has accrued additional amounts such as estimated costs associated with settlements, damages and other losses. Product liability accruals can represent projected product liability for thousands of claims around the world, each in different litigation environments and with different fact patterns. Changes to the accruals may be required in the future as additional information becomes available.
The table below contains the most significant of these cases and provides the approximate number of plaintiffs in the United States with direct claims in pending lawsuits regarding injuries allegedly due to the relevant product or product category as of December 28, 2025.
Product or product category Number of plaintiffs
Body powders containing talc, primarily JOHNSON’S Baby Powder 74,360
DePuy ASR XL Acetabular System and DePuy ASR Hip Resurfacing System 30
PINNACLE Acetabular Cup System 680
Pelvic meshes 5,190
ETHICON PHYSIOMESH Flexible Composite Mesh 110
ELMIRON 790

The number of pending lawsuits is expected to fluctuate as certain lawsuits are settled or dismissed and additional lawsuits are filed. There may be additional claims that have not yet been filed.
MedTech
DePuy ASR XL Acetabular System and ASR Hip Resurfacing System
In August 2010, DePuy Orthopaedics, Inc. (DePuy) announced a worldwide voluntary recall of its ASR XL Acetabular System and DePuy ASR Hip Resurfacing System (ASR Hip) used in hip replacement surgery. Claims for personal injury have been made against DePuy and the Company. Cases filed in federal courts in the United States have been organized as a multi-district litigation in the United States District Court for the Northern District of Ohio. In November 2013, DePuy reached an agreement with a Court-appointed committee of lawyers representing ASR Hip plaintiffs to establish a program to settle claims with eligible ASR Hip patients in the United States. This settlement program has resolved more than
10,000
claims, thereby bringing to resolution significant ASR Hip litigation activity in the United States. A small number of lawsuits, however, remain active throughout the world, including individual actions in the United States, Ireland, and India, among others. The Company continues to receive information with respect to potential additional costs associated with these outstanding actions and has established accruals for the remaining worldwide litigation and recall costs.
DePuy PINNACLE Acetabular Cup System
Claims for personal injury have also been made against DePuy Orthopaedics, Inc. and the Company (collectively, DePuy) relating to the PINNACLE Acetabular Cup System used in hip replacement surgery. Product liability lawsuits continue to be filed, and the Company continues to receive information with respect to potential costs and the anticipated number of cases. Most cases filed in federal courts in the United States have been organized as a multi-district litigation in the United States District Court for the Northern District of Texas (Texas MDL). Beginning in June 2022, the Judicial Panel on Multidistrict Litigation ceased transfer of new cases into the Texas MDL, and there are now cases pending in federal court outside the Texas MDL. Litigation also has been filed in state courts and in countries outside of the United States. During the first quarter of 2019, DePuy established a United States settlement program to resolve these cases. As part of the settlement program, adverse verdicts have been settled. The Company has established an accrual for product liability litigation associated with the PINNACLE Acetabular Cup System and the related settlement program.
98

Ethicon Pelvic Mesh
Claims for personal injury have been made against Ethicon, Inc. (Ethicon) and the Company arising out of Ethicon’s pelvic mesh devices used to treat stress urinary incontinence and pelvic organ prolapse. The Company continues to receive information with respect to potential costs and additional cases. Cases filed in federal courts in the United States had been organized as a multi-district litigation (MDL) in the United States District Court for the Southern District of West Virginia. In March 2021, the MDL Court entered an order closing the MDL. The MDL Court has remanded cases for trial to the jurisdictions where the case was originally filed and additional pelvic mesh lawsuits have been filed, and remain, outside of the MDL. The Company has settled or otherwise resolved the majority of the United States cases and the estimated costs associated with these settlements and the remaining cases are reflected in the Company’s accruals. In addition, class actions and individual personal injury cases or claims seeking damages for alleged injury resulting from Ethicon’s pelvic mesh devices have been commenced in various countries outside of the United States, including claims and cases in the United Kingdom, the Netherlands, and Ireland, and class actions in Israel, Australia, Canada and South Africa. The vast majority of these actions are now resolved. The Company has established accruals with respect to product liability litigation associated with Ethicon’s pelvic mesh products.
Ethicon Physiomesh
Following a June 2016 worldwide market withdrawal of Ethicon Physiomesh Flexible Composite Mesh (Physiomesh), claims for personal injury have been made against Ethicon, Inc. (Ethicon) and the Company alleging personal injury arising out of the use of this hernia mesh device. Cases filed in federal courts in the United States have been organized as a multi-district litigation (MDL) in the United States District Court for the Northern District of Georgia. A multi-county litigation (MCL) also has been formed in New Jersey state court and assigned to Atlantic County for cases pending in New Jersey. In addition to the matters in the MDL and MCL, there are additional lawsuits pending in the United States District Court for the Southern District of Ohio, which are part of the MDL for polypropylene mesh devices manufactured by C.R. Bard, Inc., and lawsuits pending in two New Jersey MCLs formed for Proceed/Proceed Ventral Patch and Prolene Hernia systems, and lawsuits pending outside the United States. In May 2021, Ethicon and lead counsel for the plaintiffs entered into a term sheet to resolve approximately
3,600
Physiomesh cases (covering approximately
4,300
plaintiffs) pending in the MDL and MCL at that time. A master settlement agreement (MSA) was entered into in September 2021 and includes
3,729
cases in the MDL and MCL. Other than a small number of cases still pending in the MDL, all Physiomesh matters in the United States have been resolved or are undergoing formal review for purposes of settlement.
Claims have also been filed against Ethicon and the Company alleging personal injuries arising from the PROCEED Mesh and PROCEED Ventral Patch hernia mesh products. In March 2019, the New Jersey Supreme Court entered an order consolidating these cases pending in New Jersey as an MCL in Atlantic County Superior Court. Additional cases have been filed in various federal and state courts in the United States, and in jurisdictions outside the United States.
Ethicon and the Company also have been subject to claims for personal injuries arising from the PROLENE Polypropylene Hernia System. In January 2020, the New Jersey Supreme Court created an MCL in Atlantic County Superior Court to handle such cases. Cases involving this product have also been filed in other federal and state courts in the United States.
In October 2022, an agreement in principle, subject to various conditions, was reached to settle the majority of the pending cases involving Proceed, Proceed Ventral Patch, Prolene Hernia System and related multi-layered mesh products, as well as a number of unfiled claims. All litigation activities in the two New Jersey MCLs are stayed pending effectuation of the proposed settlement. Future cases that are filed in the New Jersey MCLs will be subject to docket control orders requiring early expert reports and discovery requirements.
The Company has established accruals with respect to product liability litigation associated with Ethicon Physiomesh Flexible Composite Mesh, PROCEED Mesh and PROCEED Ventral Patch, and PROLENE Polypropylene Hernia System products.
Innovative Medicine
ELMIRON
Claims for personal injury have been made against a number of Johnson & Johnson companies, including Janssen Pharmaceuticals, Inc. and the Company, arising out of the use of ELMIRON, a prescription medication indicated for the relief of bladder pain or discomfort associated with interstitial cystitis. These lawsuits, which allege that ELMIRON contributes to the development of permanent retinal injury and vision loss, have been filed in both state and federal courts across the United States. In December 2020, lawsuits filed in federal courts in the United States, including putative class action cases seeking medical monitoring, were organized as a multi-district litigation in the United States District Court for the District of New Jersey (MDL). In addition, cases have been filed in various state courts of New Jersey, which have been coordinated in a multi-
county litigation in Bergen County, as well as the Court of Common Pleas in Philadelphia, which have been coordinated
2025 Annual Report 99

and granted mass tort designation. In addition, three class action lawsuits have been filed in Canada. The Company continues to defend ELMIRON product liability lawsuits and continues to evaluate potential costs related to those claims. All U.S. based ELMIRON matters have been resolved or are undergoing formal review for purposes of settlement. The Company has established accruals for defense and indemnity costs associated with ELMIRON related product liability litigation.
Intellectual property
Certain subsidiaries of the Company are subject, from time to time, to legal proceedings and claims related to patent, trademark and other intellectual property matters arising out of their businesses. Many of these matters involve challenges to the scope and/or validity of patents that relate to various products and allegations that certain of the Company’s products infringe the intellectual property rights of third parties. Although these subsidiaries believe that they have substantial defenses to these challenges and allegations with respect to all significant patents, there can be no assurance as to the outcome of these matters. A loss in any of these cases could adversely affect the ability of these subsidiaries to sell their products, result in loss of sales due to loss of market exclusivity, require the payment of past damages and future royalties, and may result in a non-cash impairment charge for any associated intangible asset.
The Company’s Innovative Medicine subsidiaries have brought lawsuits against generic companies that have filed ANDAs with the U.S. FDA (or similar lawsuits outside of the United States) seeking to market generic versions of products sold by various subsidiaries of the Company prior to expiration of the applicable patents covering those products. These lawsuits typically include allegations of non-infringement and/or invalidity of patents listed in FDA’s publication “Approved Drug Products with Therapeutic Equivalence Evaluations” (commonly known as the Orange Book). In each of these lawsuits, the Company’s subsidiaries are seeking an order enjoining the defendant from marketing a generic version of a product before the expiration of the relevant patents (Orange Book Listed Patents). In the event the Company’s subsidiaries are not successful in an action, or any automatic statutory stay expires before the court rulings are obtained, the generic companies involved would have the ability, upon regulatory approval, to introduce generic versions of their products to the market, resulting in the potential for substantial market share and revenue losses for the applicable products, and which may result in a non-cash impairment charge in any associated intangible asset. In addition, from time to time, the Company’s subsidiaries may settle these types of actions and such settlements can involve the introduction of generic versions of the products at issue to the market prior to the expiration of the relevant patents.
The Inter Partes Review (IPR) process with the United States Patent and Trademark Office (USPTO), created under the 2011 America Invents Act, is also being used at times by generic companies in conjunction with ANDAs and lawsuits to challenge the applicable patents.
Innovative Medicine
XARELTO
Beginning in March 2021, Janssen Pharmaceuticals, Inc., Bayer Pharma AG, Bayer AG, and Bayer Intellectual Property GmbH filed patent infringement lawsuits in United States district courts against generic manufacturers who have filed ANDAs seeking approval to market generic versions of XARELTO before expiration of certain Orange Book Listed Patents. The following entities are named defendants: Dr. Reddy’s Laboratories, Inc.; Dr. Reddy’s Laboratories, Ltd.; Lupin Limited; Lupin Pharmaceuticals, Inc.; Taro Pharmaceutical Industries Ltd.; Taro Pharmaceuticals U.S.A., Inc.; Teva Pharmaceuticals USA, Inc.; Mylan Pharmaceuticals Inc.; Mylan Inc.; Mankind Pharma Limited; Apotex Inc.; Apotex Corp.; Cipla Ltd.; Cipla USA Inc.; InvaGen Pharmaceuticals, Inc.; and Prinston Pharmaceuticals, Inc. The following U.S. patents are included in one or more cases: 9,539,218 and 10,828,310. In December 2025 and January 2026, the cases against Dr. Reddy's Laboratories, Inc.; Dr. Reddy's Laboratories, Ltd.; Lupin Limited; Lupin Pharmaceuticals, Inc.; Taro Pharmaceutical Industries Ltd.; Taro Pharmaceuticals U.S.A., Inc.; Teva Pharmaceuticals USA, Inc.; Mylan Pharmaceuticals Inc.; Mylan Inc.; Mankind Pharma Limited; Apotex Inc.; Apotex Corp.; Cipla Ltd.; Cipla USA Inc.; InvaGen Pharmaceuticals, Inc.; and Prinston Pharmaceuticals, Inc. were dismissed with prejudice. In January 2026, the Company entered into a confidential settlement agreement with Mankind Pharma Limited.
U.S. Patent No. 10,828,310 was also under consideration by the USPTO in an IPR proceeding. In July 2023, the USPTO issued a final written decision finding the claims of the patent invalid. In September 2023, Bayer Pharma AG filed an appeal to the U.S. Court of Appeals for the Federal Circuit. In September 2025, the Federal Circuit entered a decision affirming-in-part, vacating-
in-part, and remanding for further proceedings. In January 2026, the USPTO entered judgment against petitioners upon remand.
100

INVEGA SUSTENNA
Beginning in January 2018, Janssen Pharmaceutica NV and Janssen Pharmaceuticals, Inc. filed patent infringement lawsuits in United States district courts against generic manufacturers who have filed ANDAs seeking approval to market generic versions of INVEGA SUSTENNA before expiration of the Orange Book Listed Patent. The following entities are named defendants: Pharmascience Inc.; Mallinckrodt PLC; Specgx LLC; Tolmar, Inc.; Accord Healthcare, Inc.; Qilu Pharmaceutical Co. Ltd.; Qilu Pharma Inc.; Sun Pharmaceutical Industries Ltd.; and Sun Pharmaceutical Industries, Inc. The following U.S. patent is included in one or more cases: 9,439,906. In February 2024, the district court issued a decision in the case against Tolmar Inc. finding that United States Patent No. 9,439,906 is not invalid. Tolmar previously stipulated to infringement of a subset of the claims, and based on a claim construction ruling, the district court entered a non-infringement order with respect to the remaining asserted claims. Tolmar has appealed the validity decision, and Janssen appealed the non-infringement decision. In November 2025, the court entered judgments against the Accord and Qilu defendants. In December 2025, Janssen and the Sun defendants entered into a confidential settlement agreement and a consent judgment was entered by the court.
Beginning in February 2018, Janssen Inc. and Janssen Pharmaceutica NV initiated a Statement of Claim under Section 6 of the Patented Medicines (Notice of Compliance) Regulations against generic manufacturers who have filed ANDSs seeking approval to market generic versions of INVEGA SUSTENNA before expiration of the listed patent. The following entities are named defendants: Pharmascience Inc. and Apotex Inc. The following Canadian patent is included in one or more cases: 2,655,335. In June 2024, the Supreme Court dismissed the Apotex case. In September 2024, the Supreme Court granted Pharmascience's motion to appeal the Federal Court's decision that the 2,655,335 Patent is not invalid.
ERLEADA
In January 2025, Aragon Pharmaceuticals, Inc., Janssen Inc., (collectively, Janssen Inc.) and Sloan-Kettering Institute for Cancer Research (SKI) initiated Statements of Claims under Section 6 of the Patented Medicines (Notice of Compliance) Regulations against Sandoz Canada Inc. (Sandoz) in response to Sandoz’s filing of an ANDS seeking approval to market a generic version of ERLEADA before the expiration of CA Patent Nos. 3,008,345 (the ’345 patent), 2,875,767 (the ’767 patent), 2,885,415 (the ’415 patent), and 3,128,331 (the ’331 patent). Janssen Inc. and SKI are seeking an order enjoining Sandoz from marketing a generic version of ERLEADA before the expiration of the relevant patents.
Beginning in April 2025, Aragon Pharmaceuticals, Inc., Janssen Biotech, Inc., The Regents of the University of California, and Sloan-Kettering Institute for Cancer Research variously initiated patent infringement lawsuits in U.S. District Court for the District of New Jersey against generic manufacturers who have filed ANDAs seeking approval to market generic versions of ERLEADA before the expiration of certain Orange Book Listed Patents. The following entities are named defendants: Lupin Limited; Lupin Pharmaceuticals, Inc.; Hetero Labs Limited Unit V; and Hetero USA, Inc. The following U.S. patents are included in one or more cases: 8,445,507; 8,802,689; 9,338,159; 9,987,261; 9,481,663; 9,884,054; RE49,353; 10,849,888; 10,702,508; and 11,963,952. Aragon Pharmaceuticals, Inc., Janssen Biotech, Inc. and the Lupin parties entered into a confidential settlement in August 2025, and the case was dismissed.
SPRAVATO
Beginning in May 2023, Janssen Pharmaceuticals, Inc. and Janssen Pharmaceutica NV filed patent infringement lawsuits in United States district courts against generic manufacturers who have filed ANDAs seeking approval to market generic versions of SPRAVATO before expiration of certain Orange Book Listed Patents. The following entities are named defendants: Sandoz Inc.; Hikma Pharmaceuticals Inc. USA; Hikma Pharmaceuticals PLC; and Alkem Laboratories Ltd. The following U.S. patents are included in one or more cases: 10,869,844; 11,173,134; 11,311,500; and 11,446,260. In January 2026, Janssen and Hikma entered into a confidential settlement agreement, and a consent judgment was entered by the court. A trial against Sandoz is scheduled to begin in February 2026.
CAPLYTA

Beginning in March 2024, Intra-Cellular Therapies, Inc. (Intra-Cellular) filed patent infringement lawsuits in the United States District Court for the District of New Jersey against generic manufacturers who have filed ANDAs seeking approval to market generic versions of CAPLYTA before expiration of certain Orange Book Listed Patents. The following entities are named defendants: Aurobindo Pharma Ltd., Aurobindo Pharma USA, Inc., Alkem Laboratories Ltd., Dr. Reddy’s Laboratories Inc., Dr. Reddy’s Laboratories Ltd., MSN Laboratories Private Ltd., Zydus Pharmaceuticals (USA) Inc., and Zydus Lifesciences Ltd. The following U.S. Patents are included in one or more cases: US RE 48,825; RE 48,839; 8,648,077; 9,168,258; 9,199,995; 9,616,061; 9,956,227; 10,117,867; 10,464,938; 10,960,009; 11,026,951; 11,753,419; 11,980,617; 12,070,459; 12,090,155; 12,122,792; 12,128,043; 12,409,176; and 12,410,195. In December 2025, Intra-Cellular, Dr. Reddy's Laboratories Inc., and Dr. Reddy's Laboratories Ltd. entered into a confidential settlement agreement, and the case was dismissed.
2025 Annual Report 101

UPTRAVI
Beginning in September 2025, Actelion Pharmaceuticals Ltd, Actelion Pharmaceuticals US, Inc., and Nippon Shinyaku Co. Ltd. filed a patent infringement lawsuit in the United States District Court for the District of New Jersey against generic manufacturers who have filed ANDAs seeking approval to market generic versions of UPTRAVI before expiration of certain Orange Book Listed Patents. The following entities are named defendants: VGYAAN Pharmaceuticals LLC, RK Pharma, Inc., Apotex Inc., and Apotex Corp. The following patents are included in one or more cases: 7,205,302; 8,791,122; and 9,284,280. In November 2025, Actelion, Nippon Shinyaku Co. Ltd., VGYAAN Pharmaceuticals LLC, and RK Pharma Inc. entered into a confidential settlement agreement, and the court entered a consent judgment ending the action.
CARVYKTI
In January 2026, 2seventy bio, Inc. filed suit in the Unitary Patent Court, Local Division of Brussels, against Johnson & Johnson, Janssen Biotech, Inc., Janssen Pharmaceuticals Inc., Janssen-Cilag International NV, Janssen Pharmaceutica NV, Janssen-Cilag NV, Janssen Biologics B.V., Janssen-Cilag B.V., Janssen-Cilag GmbH, Janssen-Cilag, Janssen-Cilag SpA, Janssen-Cilag A/S, Janssen-Cilag Aktiebolag, Janssen-Cilag Farmaceutica Lda., Legend Biotech Corporation, Legend Biotech USA Inc., Legend Biotech Ireland Limited, and Legend Biotech Belgium BV. alleging that the manufacture and sale of CARVYKTI infringes EU Patent No. 3 689 383.

In the suit, 2seventy bio, Inc. seeks damages and an injunction.
MedTech
In March 2016, Abiomed, Inc. filed a declaratory judgment action against Maquet Cardiovascular LLC (Maquet) in the U.S. District Court for the District of Massachusetts seeking a declaration that certain Impella products do not infringe Maquet patents, including U.S. Patent Nos. 7,022,100 (’100 patent); 8,888,728; and 9,327,068. Maquet counterclaimed for infringement of those patents against Abiomed, Inc., Abiomed Europe GmbH, and Abiomed R&D, Inc. (collectively, Abiomed), and later added claims for infringement of U.S. Patent Nos. 9,545,468; 9,561,314; and 9,597,437. After claim construction, Maquet alleged infringement of only the ’100 patent. In September 2021, the court granted Abiomed’s motion for summary judgment of non-infringement of the ’100 patent and, in September 2023, the district court entered final judgment in favor of Abiomed on all patents-in-suit. Maquet appealed. In February 2026, the U.S. Court of Appeals for the Federal Circuit affirmed-in-part, vacated-in-part, and remanded to the District Court.
In November 2017, Maquet Cardiovascular LLC filed suit against Abiomed, Inc., Abiomed R&D, Inc., and Abiomed Europe GmbH (collectively, Abiomed) in the U.S. District Court for the District of Massachusetts, alleging that certain Impella products infringe U.S. Patent No. 9,789,238 (’238 patent). Maquet subsequently added U.S. Patent No. 10,238,783 (’783 patent). After claim construction, the court entered a stipulated judgment of non-infringement of both patents. Maquet appealed. In March 2025, the U.S. Court of Appeals for the Federal Circuit left undisturbed the judgment on non-infringement of the ’238 patent, vacated the judgment regarding the ’783 patent, and remanded the case to the District Court for further proceedings on the ’783 patent. Trial is scheduled to begin in May 2026.
Government proceedings
Like other companies in the pharmaceutical and medical technologies industries, the Company and certain of its subsidiaries are subject to extensive regulation by national, state and local government agencies in the United States and other countries in which they operate. Such regulation has been the basis of government investigations and litigations. The most significant litigation brought by, and investigations conducted by, government agencies are listed below. It is possible that criminal charges and substantial fines and/or civil penalties or damages could result from government investigations or litigation.
MedTech
In July 2023, the DOJ issued Civil Investigative Demands to the Company, Johnson & Johnson Surgical Vision, Inc., and Johnson & Johnson Vision Care, Inc. (collectively, J&J Vision) in connection with a civil investigation under the False Claims Act relating to free or discounted intraocular lenses and equipment used in eye surgery, such as phacoemulsification and laser systems. J&J Vision has provided documents and information responsive to the Civil Investigative Demands and is continuing to cooperate with the DOJ regarding its inquiry.
Innovative Medicine
In July 2016, the Company and Janssen Products, LP were served with a qui tam complaint pursuant to the False Claims Act filed in the United States District Court for the District of New Jersey alleging the off-label promotion of two HIV products, PREZISTA and INTELENCE, and anti-kickback violations in connection with the promotion of these products. The complaint was filed under seal in December 2012. The federal and state governments have declined to intervene, and the lawsuit is being
102

prosecuted by the relators. The Court denied summary judgment on all claims in December 2021. Daubert motions were granted in part and denied in part in January 2022, and trial commenced in May 2024. In June 2024, a jury found no liability regarding the anti-kickback violations but found liability for a portion of the off-label promotion claims. The Company challenged the verdict on the off-label claims in post-trial briefing. In March 2025, the court dismissed the state law portion of the claims but entered judgment on the federal claims. The Company appealed the remainder of the verdict to the Third Circuit. Briefing is complete and oral argument is scheduled for March 2026.
In March 2017, Janssen Biotech, Inc. (JBI) received a Civil Investigative Demand from the United States Department of Justice regarding a False Claims Act investigation concerning management and advisory services provided to rheumatology and gastroenterology practices that purchased REMICADE or SIMPONI ARIA. In August 2019, the United States Department of Justice notified JBI that it was closing the investigation. Subsequently, the United States District Court for the District of Massachusetts unsealed a qui tam False Claims Act complaint, which was served on the Company. The Department of Justice had declined to intervene in the qui tam lawsuit in August 2019. The Company filed a motion to dismiss, which was granted in part and denied in part. Discovery is underway.
General litigation
The Company or its subsidiaries regularly face claims in legal proceedings related to contracts, trade secrets, antitrust, unfair competition, consumer protection, and environmental issues, the most significant of which are listed below.

Although the Company and its subsidiaries believe that they have substantial defenses to these cases, there can be no assurance as to the outcome of these matters.

A loss in any of these cases could require the payment of damages, injunctions, and/or other relief.
In October 2017, certain United States service members and their families brought a complaint against a number of pharmaceutical and medical devices companies, including Johnson & Johnson and certain of its subsidiaries in United States District Court for the District of Columbia, alleging that the defendants violated the United States Anti-Terrorism Act. The complaint alleges that the defendants provided funding for terrorist organizations through their sales practices pursuant to pharmaceutical and medical device contracts with the Iraqi Ministry of Health. In July 2020, the District Court dismissed the complaint. In January 2022, the United States Court of Appeals for the District of Columbia Circuit reversed the District Court’s decision. In June 2024, the Supreme Court vacated the D.C. Circuit's decision and remanded the case to the D.C. Circuit for reconsideration. In January 2026, the D.C. Circuit affirmed its reversal of the District Court's dismissal of the complaint.
In February 2024, a putative class action was filed against the Company and the Pension & Benefits Committee of Johnson & Johnson (Committee) in United States District Court for the District of New Jersey. The complaint alleges that defendants breached fiduciary duties under the Employee Retirement Income Security Act (ERISA) by allegedly mismanaging the Company’s prescription-drug benefits program. The complaint seeks damages and other relief. In January 2025, the court granted in part and denied in part defendants’ motion to dismiss, with leave to replead. In March 2025, plaintiffs filed a second amended complaint. In April 2025, defendants filed a motion to dismiss plaintiffs' fiduciary duty claims. In November 2025, the court granted defendants' motion to dismiss plaintiffs' fiduciary duty claims.

Plaintiffs voluntarily withdrew their remaining claim, and the court entered final judgment in defendants' favor in January 2026.

Plaintiffs have filed a notice of appeal to the United States Court of Appeals for the Third Circuit.
MedTech
In October 2020, Fortis Advisors LLC (Fortis), in its capacity as representative of the former stockholders of Auris Health Inc. (Auris), filed a complaint against the Company, Ethicon Inc., and certain named officers and employees (collectively, Ethicon) in the Court of Chancery of the State of Delaware. The complaint alleges breach of contract, fraud, and other causes of action against Ethicon in connection with Ethicon’s acquisition of Auris in 2019. The complaint seeks damages and other relief. In December 2021, the court granted in part and denied in part defendants’ motion to dismiss certain causes of action. All claims against the individual defendants were dismissed. Trial occurred in January 2024. In September 2024, the court found liability with respect to certain claims and no liability with respect to other claims. In January 2026, the Delaware Supreme Court reversed in part and affirmed in part the Chancery Court's decision, including a $
0.8
 billion judgment against the Company that was accrued in the fiscal fourth quarter of 2025 and subsequently paid in January 2026.
In October 2019, Innovative Health, LLC filed a complaint against Biosense Webster, Inc. (BWI) in the United States District Court for the Central District of California. The complaint alleges that certain of BWI's business practices and contractual terms violate the antitrust laws of the United States and the State of California by restricting competition in the sale of High Density Mapping Catheters and Ultrasound Catheters. In May 2025, a jury returned its verdict in favor of Innovative Health. In August 2025, the court issued a permanent injunction concerning BWI's business practices. BWI appealed both the jury verdict and the permanent injunction.
2025 Annual Report 103

Innovative Medicine
In October 2018, two separate putative class actions were filed against Actelion Pharmaceutical Ltd., Actelion Pharmaceuticals U.S., Inc. and Actelion Clinical Research, Inc. (collectively, Actelion) in United States District Court for the District of Maryland and United States District Court for the District of Columbia. The complaints allege that Actelion violated state and federal antitrust and unfair competition laws by allegedly refusing to supply generic pharmaceutical manufacturers with samples of TRACLEER. TRACLEER is subject to a Risk Evaluation and Mitigation Strategy required by the U.S. Food and Drug Administration, which imposes restrictions on distribution of the product. In January 2019, the plaintiffs dismissed the District of Columbia case and filed a consolidated complaint in the United States District Court for the District of Maryland. In September 2024, the district court granted plaintiffs' motion for class certification. Trial is scheduled for March 2026.
In December 2023, a putative class action lawsuit was filed against the Company and Janssen Biotech Inc. (collectively, Janssen) in the United States District Court for the Eastern District of Virginia. The complaint alleges that Janssen violated federal and state antitrust laws and other state laws by delaying biosimilar competition with STELARA through Janssen's enforcement of patent rights covering STELARA. The complaint seeks damages and other relief. In February 2024, plaintiffs filed an amended complaint, which Janssen moved to dismiss in March 2024. In August 2024, the court granted in part and denied in part Janssen's motion to dismiss. In December 2025, the court granted plaintiffs' motion for class certification. In January 2026, the court granted summary judgment for Janssen on plaintiffs' claim regarding patents obtained through the acquisition of Momenta Pharmaceuticals, Inc. in 2020.
In December 2018, Janssen Biotech, Inc., Janssen Oncology, Inc., Janssen Research & Development, LLC, and Johnson & Johnson (collectively, Janssen) were served with a qui tam complaint on behalf of the United States, certain states, and the District of Columbia. The complaint alleges that Janssen violated the federal False Claims Act and state law when providing pricing information for ZYTIGA to the government in connection with direct sales and reimbursement programs. At this time, the federal and state governments have declined to intervene. In December 2021, the United States District Court for the District of New Jersey denied Janssen's motion to dismiss.
In August 2025, Xoma Corporation (Xoma) filed a complaint against Janssen Biotech, Inc. (Janssen) in the United States District Court for the Eastern District of Pennsylvania. The complaint alleges breach of contract, unjust enrichment, and declaratory relief claims against Janssen regarding the alleged failure to obtain a license from Xoma in connection with Janssen's commercialization of TREMFYA. In December 2025, the court denied Janssen's motion to dismiss the complaint.
20. 
Restructuring
In fiscal 2025, the company initiated a restructuring program of its Surgery franchise within the MedTech segment to simplify and focus operations by exiting certain non-strategic product lines and optimize select sites across the network. The pre-tax restructuring expense of $
0.2
 billion in the fiscal year 2025, primarily included costs related to asset impairments as well as product exits. The estimated costs of the total program are between $
0.9
 billion - $
1.0
 billion and is expected to be substantially completed by the end of fiscal year 2026.
In fiscal 2023, the Company initiated a restructuring program of its Orthopaedics franchise within the MedTech segment to streamline operations by exiting certain markets, product lines and distribution network arrangements. The pre-tax restructuring expense of $
0.3
 billion in the fiscal year 2025 primarily included costs related asset impairments as well as market and product exits. The pre-tax restructuring expense of $
0.2
 billion in the fiscal year 2024 primarily included costs related to market and product exits. The pre-tax restructuring expense of $
0.3
 billion in the fiscal year 2023 primarily included inventory and instrument charges related to market and product exits. Total project costs of approximately $
0.8
 billion have been recorded since the restructuring was announced and the program has been substantially completed in the fiscal year 2025.
In fiscal 2023, the Company completed a prioritization of its research and development (R&D) investment within its Innovative Medicine segment to focus on the most promising medicines with the greatest benefit to patients. This resulted in the exit of certain programs within certain therapeutic areas. The R&D program exits are primarily in infectious diseases and vaccines including the discontinuation of its respiratory syncytial virus (RSV) adult vaccine program, hepatitis and HIV development. Pre-tax Restructuring expenses of $
0.1
 billion in the fiscal year 2024 included the termination of partnered and non-partnered development program costs, asset impairments and asset divestments. Pre-tax Restructuring expenses of $
0.5
 billion in the fiscal year 2023 included the termination of partnered and non-partnered development program costs and asset impairments. Total project costs of approximately $
0.6
 billion have been recorded since the restructuring was announced and the program was completed in the fiscal fourth quarter of 2024.
104

The following table summarizes the restructuring expenses for the fiscal years 2025, 2024 and 2023:
(Pre-tax Dollars in Millions) 2025 2024 2023
MedTech Segment Surgery franchise (1) $ 205 — —
MedTech Segment Orthopaedics franchise (2) 307 167 319
Innovative Medicine Segment (3) — 102 479
Total Programs $ 512 269 798

(1)
The fiscal year of 2025 included $
76
 million in restructuring, $
122
 million in Other income and expense and $
7
 million in Cost of products sold on the Consolidated Statement of Earnings
(2)
The fiscal year of 2025 included $
152
 million in restructuring, $
71
 million in Other income and expense and $
84
 million in Cost of products sold on the Consolidated Statement of Earning The fiscal year of 2024 included $
132
 million in Restructuring and $
35
 million in Cost of products sold on the Consolidated Statement of Earnings. The fiscal year of 2023 Included $
40
 million in Restructuring and $
279
 million in Cost of products sold on the Consolidated Statement of Earnings. This program was substantially completed in the fiscal year 2025.
(3)
The fiscal year of 2024 included $
102
 million in Restructuring on the Consolidated Statement of Earnings. The fiscal year of 2023 included $
449
 million in Restructuring and $
30
 million in Cost of products sold on the Consolidated Statement of Earnings. This program was completed in the fiscal fourth quarter of 2024.

Restructuring reserves as of December 28, 2025, December 29, 2024 and December 31, 2023 were insignificant.

2025 Annual Report 105

21. 
Kenvue separation and discontinued operations
The results of the Consumer Health business (previously reported as a separate business segment) have been reflected as discontinued operations in the Company’s consolidated statements of earnings as Net earnings from discontinued operations, net of taxes through August 23, 2023, the date of the exchange offer.
On May 15, 2024, the Company issued $
3.6
 billion aggregate principal amount of commercial paper and received $
3.6
 billion of net cash proceeds to be used for general corporate purposes. On May 17, 2024, the Company completed a Debt-for-Equity Exchange of its remaining
182,329,550
shares of Kenvue Common Stock for the outstanding Commercial Paper. Upon completion of the Debt-for-Equity Exchange, the Commercial Paper was satisfied and discharged and the Company no longer owns any shares of Kenvue Common Stock. This exchange resulted in a loss of approximately $
0.4
 billion recorded in Other (income) expense.
On May 8, 2023, Kenvue, completed an initial public offering (the IPO) resulting in the issuance of
198,734,444
shares of its common stock, par value $
0.01
per share (the Kenvue Common Stock), at an initial public offering of $
22.00
per share for net proceeds of $
4.2
 billion. The excess of the net proceeds from the IPO over the net book value of the Johnson & Johnson divested interest was $
2.5
 billion and was recorded to additional paid-in capital. As of the closing of the IPO, Johnson & Johnson owned approximately
89.6
% of the total outstanding shares of Kenvue Common Stock and at July 2, 2023, the non-controlling interest of $
1.3
 billion associated with Kenvue was reflected in equity attributable to non-controlling interests in the consolidated balance sheet in the fiscal second quarter of 2023.
On August 23, 2023, Johnson & Johnson completed the disposition of an additional
80.1
% ownership of Kenvue Common Stock through an exchange offer, which resulted in Johnson & Johnson acquiring
190,955,436
shares of the Company’s common stock in exchange for
1,533,830,450
shares of Kenvue Common Stock. The $
31.4
 billion of Johnson & Johnson common stock received in the exchange offer is recorded in Treasury stock. Following the exchange offer, the Company owned
9.5
% of the total outstanding shares of Kenvue Common Stock that was recorded in other assets within continuing operations at the fair market value of $
4.3
 billion as of August 23, 2023. Subsequent changes are reflected in other income/expense and amounted to $
0.4
 billion expense through December 31, 2023.
Johnson & Johnson divested net assets of $
11.6
 billion as of August 23, 2023, and the accumulated other comprehensive loss attributable to the Consumer Health business at that date was $
4.3
 billion. Additionally, at the date of the exchange offer, Johnson & Johnson decreased the non-controlling interest by $
1.2
 billion to record the deconsolidation of Kenvue. This resulted in a non-cash gain on the exchange offer of $
21.0
 billion that was recorded in Net earnings from discontinued operations, net of taxes in the consolidated statements of earnings for the fiscal third quarter of 2023. This one-time gain includes a gain of $
2.8
 billion on the Kenvue Common Stock retained by Johnson & Johnson. The gain on the exchange offer qualifies as a tax-free transaction for U.S. federal income tax purposes.
Also in connection with the separation, Johnson & Johnson and Kenvue entered into a separation agreement and also entered into various other agreements that provide for certain transactions to effect the transfer of the assets and liabilities of the Consumer Health business to Kenvue and to govern various interim and ongoing relationships between Kenvue and Johnson & Johnson following the completion of the Kenvue IPO, including transition services agreements (TSAs), transition manufacturing agreements (TMAs), trademark agreements, intellectual property agreements, an employee matters agreement, and a tax matters agreement. Under the TSAs, Johnson & Johnson will provide Kenvue various services and, similarly, Kenvue will provide Johnson & Johnson various services. The provision of the majority of services under the TSAs generally terminated
24
months following the Kenvue IPO. Additionally, Johnson & Johnson and Kenvue entered into TMAs pursuant to which Johnson & Johnson will manufacture and supply to Kenvue certain products and, similarly, Kenvue will manufacture and supply to Johnson & Johnson certain products. The terms of the TMAs range in initial duration from
3
months to
5
years.
Amounts related to the TSAs and TMAs included in the consolidated statements of earnings were immaterial for fiscal years 2025, 2024 and 2023. Additionally, the amounts due to and from Kenvue for the above agreements was not material as of December 28, 2025.
The results of the Consumer Health business (previously reported as a separate business segment), as well as the associated gain, have been reflected as discontinued operations in the Company’s consolidated statements of earnings as Net earnings from discontinued operations, net of taxes. As a result of the separation of Kenvue, Johnson & Johnson incurred separation costs of $
145
 million in the fiscal year 2024, which was included in Net Earnings and incurred separation costs of $
986
 million in the fiscal year 2023, which were included in Net earnings from discontinued operations, net of taxes. These costs were primarily related to external advisory, legal, accounting, contractor and other incremental costs directly related to separation activities.
106

Details of Net Earnings from Discontinued Operations, net of taxes are as follows:
(Dollars in Millions) 2023 (1)
Sales to customers $ 10,036
Cost of products sold 4,369
Gross profit 5,667
Selling, marketing and administrative expenses 3,085
Research and development expense 258
Interest Income ( 117 )
Interest expense, net of portion capitalized 199
Other (income) expense, net 1,092
(Gain) on separation of Kenvue ( 20,984 )
Earnings from Discontinued Operations Before Provision for Taxes on Income 22,134
Provision for taxes on income 307
Net earnings from Discontinued Operations $ 21,827

(1)
The Company ceased consolidating the results of the Consumer Health business on August 23, 2023, the date of the exchange offer, but continued to reflect any separation costs incurred as part of discontinued operations through the end of the fiscal fourth quarter.
The following table presents depreciation, amortization and capital expenditures of the discontinued operations related to Kenvue:
(Dollars in Millions) 2023 (1)
Depreciation and Amortization $ 383
Capital expenditures $ 162

2025 Annual Report 107

Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Johnson & Johnson
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Johnson & Johnson and its subsidiaries (the "Company") as of December 28, 2025 and December 29, 2024, and the related consolidated statements of earnings, of comprehensive income, of equity and of cash flows for each of the three fiscal years in the period ended December 28, 2025, including the related notes (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 28, 2025, based on criteria established in
Internal Control - Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 28, 2025 and December 29, 2024, and the results of its operations and its cash flows for each of the three fiscal years in the period ended December 28, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 28, 2025, based on criteria established in
Internal Control - Integrated Framework
(2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
As described in Management’s Report on Internal control over Financial Reporting, management has excluded Intra-Cellular Therapies, Inc. (“Intra-Cellular”), from its assessment of internal control over financial reporting as of December 28, 2025 because it was acquired by the Company in a purchase business combination during 2025. We have also excluded Intra-Cellular from our audit of internal control over financial reporting. Intra-Cellular is a wholly-owned subsidiary whose total assets and total sales excluded from management’s assessment and our audit of internal control over financial reporting represent less than 1% of each of the related consolidated financial statement amounts as of and for the fiscal year ended December 28, 2025.
108

Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
U.S. Innovative Medicine Rebate Reserves – Managed Care, Medicare and Medicaid
As described in Note 1 to the consolidated financial statements, the Company recognizes revenue from product sales when obligations under the terms of a contract with the customer are satisfied. Rebates and discounts provided to customers are accounted for as variable consideration and recorded as a reduction in sales. The liability for such rebates and discounts is recognized within Accrued rebates, returns, and promotions on the consolidated balance sheet. A significant portion of the liability related to rebates is from the sale of pharmaceutical products within the U.S., primarily the Managed Care, Medicare and Medicaid programs, which amounted to $13.0 billion as of December 28, 2025. Rebates estimated by management are based on contractual terms, historical experience, patient outcomes, trend analysis, and projected market conditions in the various markets served.
The principal considerations for our determination that performing procedures relating to U.S. Innovative Medicine rebate reserves - Managed Care, Medicare and Medicaid is a critical audit matter are (i) the significant judgment by management due to the significant measurement uncertainty when developing the estimate of these reserves and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating the assumptions related to contractual terms, historical experience, patient outcomes, trend analysis, and projected market conditions in the U.S. pharmaceutical market.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s estimate of the U.S. Innovative Medicine rebate reserves - Managed Care, Medicare and Medicaid, including controls over the assumptions used to estimate these rebates. These procedures also included, among others (i) developing an independent estimate of the rebates by utilizing third party information on price and market conditions in the U.S. pharmaceutical market, the contractual terms of the specific rebate programs, and the historical experience, patient outcomes, and trend analysis of actual rebate claims paid; (ii) testing, on a sample basis, rebate claims processed by the Company, including evaluating those claims for consistency with the contractual terms of the Company’s rebate arrangements; and (iii) comparing the independent estimates to management’s estimates to evaluate the reasonableness of management’s estimates.
2025 Annual Report 109

Litigation Contingencies – Talc
As described in Notes 1 and 19 to the consolidated financial statements, a significant number of personal injury claims alleging that talc causes cancer have been asserted against the Company and its affiliates arising out of the use of body powders containing talc, primarily JOHNSON’S Baby Powder. The Company records accruals for loss contingencies associated with legal matters, including talc, when it is probable that a liability will be incurred and the amount of the loss can be reasonably estimated. To the extent adverse awards, judgments, or verdicts have been rendered against the Company, management does not record an accrual until a loss is determined to be probable and can be reasonably estimated. For these matters, management is unable to estimate the possible loss or range of loss beyond the amounts accrued. Amounts accrued for legal contingencies often result from a complex series of judgments about future events and uncertainties that rely heavily on estimates and assumptions including timing of related payments. The ability to make such estimates and judgments can be affected by various factors, including, among other things, whether damages sought in the proceedings are unsubstantiated or indeterminate; scientific and legal discovery has not commenced or is not complete; proceedings are in early stages; matters present legal uncertainties; there are significant facts in dispute; procedural or jurisdictional issues; the uncertainty and unpredictability of the number of potential claims; ability to achieve comprehensive multi-party settlements; complexity of related cross-claims and counterclaims; and/or there are numerous parties involved. As of December 28, 2025, the total present value of the reserve to resolve the talc claims is approximately $3.4 billion, comprising previously executed settlement agreements, litigation defense, and other costs.
The principal considerations for our determination that performing procedures relating to the litigation contingencies – talc is a critical audit matter are (i) the significant judgment by management when assessing the likelihood of a loss being incurred for the remaining unresolved talc claims and when determining whether a reasonable estimate of the loss or range of loss for the remaining unresolved talc claims can be made and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to management’s assessment of the litigation contingencies associated with the unresolved talc claims.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s assessment of the litigation contingencies – talc claims, including controls over determining whether a loss is probable and whether the amount of loss can be reasonably estimated, as well as financial statement disclosures. These procedures also included, among others (i) testing management’s process for developing the estimated loss contingency related to the talc claims; (ii) evaluating the appropriateness of the methodology used by management to develop the estimated loss or range of loss; (iii) obtaining and evaluating certain executed settlement agreements related to the talc litigation; (iv) testing a sample of payments for litigation defense and other costs; (v) discussing the status of significant known actual and potential litigation and settlements activity with the Company’s internal legal counsel; (vi) confirming with internal and external legal counsel the possibility or probability of an unfavorable outcome and the extent to which the loss or range of loss is reasonably estimable related to talc claims; (vii) evaluating the reasonableness of management’s assessment regarding whether an unfavorable outcome is reasonably possible or probable and reasonably estimable; and (viii) evaluating the sufficiency of the Company’s litigation contingencies disclosures.
/s/

PricewaterhouseCoopers LLP
Florham Park, New Jersey

February 11, 2026
We have served as the Company’s auditor since at least 1920. We have not been able to determine the specific year we began serving as auditor of the Company.
110

Management’s report on internal control over financial reporting
Under Section 404 of the Sarbanes-Oxley Act of 2002, management is required to assess the effectiveness of the Company’s internal control over financial reporting as of the end of each fiscal year and report, based on that assessment, whether the Company’s internal control over financial reporting is effective.
Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is designed to provide reasonable assurance as to the reliability of the Company’s financial reporting and the preparation of external financial statements in accordance with generally accepted accounting principles.
Internal controls over financial reporting, no matter how well designed, have inherent limitations. Therefore, internal control over financial reporting determined to be effective can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect all misstatements. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Company’s management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 28, 2025. In making this assessment, the Company used the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control-Integrated Framework (2013).” These criteria are in the areas of control environment, risk assessment, control activities, information and communication, and monitoring. The Company’s assessment included extensive documenting, evaluating and testing the design and operating effectiveness of its internal controls over financial reporting.
The Company acquired Intra-Cellular Therapies, Inc. (Intra-Cellular), in a business combination in April 2025. Intra-Cellular's total assets, excluding intangible assets and goodwill, and total sales represented less than 1% of each of the related consolidated financial statement amounts as of and for the fiscal year ended December 28, 2025. As the acquisition occurred in the fiscal year 2025, the scope of the Company's assessment of the design and effectiveness of internal control over financial reporting for the fiscal year 2025 excluded the above mentioned acquisition. This exclusion is in accordance with the SEC's general guidance that an assessment of a recently acquired business may be omitted from the scope in the year of acquisition.
Based on the Company’s processes and assessment, as described above, management has concluded that, as of December 28, 2025, the Company’s internal control over financial reporting was effective.
The effectiveness of the Company’s internal control over financial reporting as of December 28, 2025 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which appears herein.
/s/ J. Duato /s/ J. J. Wolk
Joaquin Duato Joseph J. Wolk
Chairman, Board of Directors Executive Vice President, Chief Financial Officer
Chief Executive Officer

2025 Annual Report 111

Shareholder return performance graphs
Set forth below are line graphs comparing the cumulative total shareholder return on the Company’s Common Stock for periods of five years and ten years ending December 31, 2025, against the cumulative total return of the Standard & Poor’s 500 Stock Index, the Standard & Poor’s Pharmaceutical Index and the Standard & Poor’s Healthcare Equipment Index. The graphs and tables assume that $100 was invested on December 31, 2020 and December 31, 2015 in each of the Company’s Common Stock, the Standard & Poor’s 500 Stock Index, the Standard & Poor’s Pharmaceutical Index and the Standard & Poor’s Healthcare Equipment Index and that all dividends were reinvested.
5 Year Shareholder Return Performance J&J vs. Indices
Johnson & Johnson
S&P 500 Index
S&P Pharmaceutical Index
S&P Healthcare Equipment Index

5-year CAGR
J&J 8.7 %
S&P 500 14.4 %
S&P Pharm 13.5 %
S&P H/C Equip 4.9 %

2020 2021 2022 2023 2024 2025
Johnson & Johnson $100.00 $111.40 $118.08 $107.93 $102.75 $151.55
S&P 500 Index $100.00 $128.70 $105.41 $133.13 $166.41 $196.20
S&P Pharmaceutical Index $100.00 $125.90 $136.60 $137.01 $148.25 $188.57
S&P Healthcare Equipment Index $100.00 $119.40 $96.83 $105.55 $117.05 $126.77

112

10 Year Shareholder Return Performance J&J vs. Indices
Johnson & Johnson
S&P 500 Index
S&P Pharmaceutical Index
S&P Healthcare Equipment Index

10-year CAGR
J&J 10.3 %
S&P 500 14.8 %
S&P Pharm 10.8 %
S&P H/C Equip 12.1 %

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Johnson & Johnson $100.00 $115.30 $143.43 $136.12 $158.17 $175.41 $195.41 $207.13 $189.32 $180.23 $265.84
S&P 500 Index $100.00 $112.00 $136.42 $130.41 $171.49 $203.05 $261.32 $214.02 $270.31 $337.89 $398.37
S&P Pharmaceutical Index $100.00 $98.40 $110.80 $119.77 $137.86 $148.20 $186.58 $202.44 $203.05 $219.70 $279.46
S&P Healthcare Equipment Index $100.00 $106.50 $139.41 $161.99 $209.46 $246.32 $294.11 $238.52 $259.99 $288.33 $312.26

2025 Annual Report 113

Item 9. Changes in and disagreements with accountants on accounting and financial disclosure
Not applicable.
Item 9A. Controls and procedures
Disclosure controls and procedures.
At the end of the period covered by this Report, the Company evaluated the effectiveness of the design and operation of its disclosure controls and procedures. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Joaquin Duato, Chairman and Chief Executive Officer, and Joseph J. Wolk, Executive Vice President, Chief Financial Officer, reviewed and participated in this evaluation. Based on this evaluation, Messrs. Duato and Wolk concluded that, as of the end of the period covered by this Report, the Company’s disclosure controls and procedures were effective.
Reports on internal control over financial reporting.
The information called for by this item is incorporated herein by reference to Management’s report on internal control over financial reporting, and the attestation regarding internal controls over financial reporting included in the report of independent registered public accounting firm included in Item 8 of this Report.
Changes in internal control over financial reporting.
During the fiscal quarter ended December 28, 2025, there were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required under Rules 13a-15 and 15d-15 under the Exchange Act that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company continues to monitor and assess the effectiveness of the design and operation of its disclosure controls and procedures.
The Company is implementing a multi-year, enterprise-wide initiative to integrate, simplify and standardize processes and systems for the human resources, information technology, procurement, supply chain and finance functions. These are enhancements to support the growth of the Company’s financial shared service capabilities and standardize financial systems. This initiative is not in response to any identified deficiency or weakness in the Company’s internal control over financial reporting. In response to this initiative, the Company has and will continue to align and streamline the design and operation of its financial control environment.
Item 9B. Other information
Securities trading plans of Directors and Executive Officers
. During the fiscal fourth quarter of 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) informed us of the
adoption
or
termination
of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” each as defined in Item 408 of Regulation S-K.
Item 9C. Disclosure regarding foreign jurisdictions that prevent inspections
Not applicable.
114

Part III
Item 10. Directors, executive officers and corporate governance
The information called for by this item is incorporated herein by reference to the discussion of the Audit Committee under the caption Item 1. Election of Directors - Board committees; and the material under the captions Item 1. Election of Directors and, if applicable, Delinquent Section 16(a) reporting in the Proxy Statement; and the material under the caption “Executive Officers of the Registrant” in Part I of this Report.
The Company’s Code of Business Conduct, which covers all employees (including the Chief Executive Officer, Chief Financial Officer and Controller), meets the requirements of the SEC rules promulgated under Section 406 of the Sarbanes-Oxley Act of 2002. The Code of Business Conduct is available on the Company’s website at
www.jnj.com/code-of-business-conduct
, and copies are available to shareholders without charge upon written request to the Secretary at the Company’s principal executive offices. Any substantive amendment to the Code of Business Conduct or any waiver of the Code granted to the Chief Executive Officer, the Chief Financial Officer or the Controller will be posted on the Company’s website at
www.jnj.com/code-of-business-conduct
within five business days (and retained on the website for at least one year).
In addition, the Company has adopted a Code of Business Conduct & Ethics for Members of the Board of Directors and Executive Officers. The Code of Business Conduct & Ethics for Members of the Board of Directors and Executive Officers is available on the Company’s website at
www.investor.jnj.com/governance/corporate-governance-overview/code-of-business-conduct--ethics
, and copies are available to shareholders without charge upon written request to the Secretary at the Company’s principal executive offices. Any substantive amendment to the Code or any waiver of the Code granted to any member of the Board of Directors or any executive officer will be posted on the Company’s website at
www.investor.jnj.com/governance/corporate-governance-overview/code-of-business-conduct--ethics
within five business days (and retained on the website for at least one year).
In addition to the prohibition on insider trading for all employees covered in our Code of Business Conduct, the Company has
adopted
an insider trading policy governing the purchase, sale and other dispositions of its securities by directors, officers and certain other insiders that is reasonably designed to promote compliance with insider trading laws, rules and regulations and any applicable listing standards. A copy of this policy is filed with this Annual Report on Form 10-K as Exhibit 19.
Item 11. Executive compensation
The information called for by this item is incorporated herein by reference to the material under the captions Item 1. Election of Directors – Director compensation, and Item 2. Compensation Committee report, Compensation discussion and analysis and Executive compensation tables in the Proxy Statement.
The material incorporated herein by reference to the material under the caption Compensation Committee report in the Proxy Statement shall be deemed furnished, and not filed, in this Report and shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, as a result of this furnishing, except to the extent that the Company specifically incorporates it by reference.
Item 12. Security ownership of certain beneficial owners and management and related stockholder matters
The information called for by this item is incorporated herein by reference to the material under the caption Stock ownership in the Proxy Statement; and Note 16 Common stock, stock option plans and stock compensation agreements of the Notes to Consolidated Financial Statements in Item 8 of this Report.
2025 Annual Report 115

Equity compensation plan information
The following table provides certain information as of December 28, 2025 concerning the shares of the Company’s Common Stock that may be issued under existing equity compensation plans.
Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options and Rights Weighted Average Exercise Price of Outstanding Options and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (2)(3)
Equity Compensation Plans Approved by Security Holders (1) 107,318,427 $131.08 93,216,941
Equity Compensation Plans Not Approved by Security Holders — — —
Total 107,318,427 $131.08 93,216,941

(1)
Included in this category are the following equity compensation plans which have been approved by the Company’s shareholders: 2012 Long-Term Incentive Plan and 2022 Long-Term Incentive Plan.
(2)
This column excludes shares reflected under the column “Number of Securities to be Issued Upon Exercise of Outstanding Options and Rights.”
(3)
The 2012 Long-Term Incentive Plan expired April 26, 2022. All options and restricted shares granted subsequent to that date were under the 2022 Long-Term Incentive Plan.
Item 13. Certain relationships and related transactions, and director independence
The information called for by this item is incorporated herein by reference to the material under the captions Item 1. Election of Directors - Related person transactions & Director independence in the Proxy Statement.
Item 14. Principal accountant fees and services
The information called for by this item is incorporated herein by reference to the material under the caption Item 3. Ratification of appointment of independent registered public accounting firm in the Proxy Statement.
116

Part IV
Item 15. Exhibits and financial statement schedules
The following documents are filed as part of this report:
1.
Financial Statements
Consolidated balance sheets at end of fiscal years 2025 and 2024
Consolidated statements of earnings for fiscal years 2025, 2024 and 2023
Consolidated statements of comprehensive income for fiscal years 2025, 2024 and 2023
Consolidated statements of equity for fiscal years 2025, 2024 and 2023
Consolidated statements of cash flows for fiscal years 2025, 2024 and 2023
Notes to Consolidated Financial Statements
Report of independent registered public accounting firm
All schedules are omitted because they are not applicable, not material or the required information is included in the financial statements or notes.
2.
Exhibits required to be filed by item 60l of regulation S-K
The information called for by this item is incorporated herein by reference to the Exhibit Index in this Report.
Item 16. Form 10-K summary
Registrants may voluntarily include a summary of information required by Form 10-K under this Item 16. The Company has elected not to include such summary information.
2025 Annual Report 117

Signatures
Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: February 11, 2026
JOHNSON & JOHNSON
(Registrant)

By /s/ J. Duato
J. Duato , Chairman of the Board and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ J. Duato Chairman of the Board February 11, 2026
J. Duato Chief Executive Officer (Principal Executive Officer)
/s/ J. J. Wolk Chief Financial Officer February 11, 2026
J. J. Wolk (Principal Financial Officer)
/s/ R. J. Decker Jr. Controller and Chief Accounting Officer February 11, 2026
R. J. Decker Jr. (Principal Accounting Officer)
/s/ M. C. Beckerle Director February 11, 2026
M. C. Beckerle
/s/ J. A. Doudna Director February 11, 2026
J. A. Doudna
/s/ M. A. Hewson Director February 11, 2026
M. A. Hewson

118

Signature Title Date
/s/ P. A. Johnson Director February 11, 2026
P. A. Johnson
/s/ H. Joly Director February 11, 2026
H. Joly
/s/ M. B. McClellan Director February 11, 2026
M. B. McClellan
/s/ J. G. Morikis Director February 11, 2026
J. G. Morikis
/s/ D. E. Pinto Director February 11, 2026
D. E. Pinto
/s/ M. A. Weinberger Director February 11, 2026
M. A. Weinberger
/s/ N. Y. West Director February 11, 2026
N. Y. West
/s/ E. A. Woods Director February 11, 2026
E. A. Woods

2025 Annual Report 119

Exhibit index
Reg. S-K Exhibit Table Item No. Description of Exhibit
2(i) Agreement and Plan of Merger, dated as of October 31, 2022, by and among Johnson & Johnson, Athos Merger Sub, Inc. and ABIOMED, Inc. – Incorporated herein by reference to Exhibit 2.1 of the Registrant’s Form 8-K Current Report filed November 1, 2022.†
3(i) Restated Certificate of Incorporation effective February 19, 2016 — Incorporated herein by reference to Exhibit 3(i) of the Registrant’s Form 10-K Annual Report for the fiscal year ended January 3, 2016.
3(ii) Certificate of Amendment to the Certificate of Incorporation of Johnson & Johnson effective April 30, 2020 — Incorporated herein by reference to Exhibit 3.1 of the Registrant's Form 8-K Current Report filed April 29, 2020.
3(iii) Amended and Restated By-Laws of the Company, as amended effective April 25, 2024 — Incorporated herein by reference to Exhibit 3.1 of the Registrant’s Form 8-K Current Report filed April 29, 2024.
4(a) Upon the request of the Securities and Exchange Commission, the Registrant will furnish a copy of all instruments defining the rights of holders of long-term debt of the Registrant.
4(b) Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 — Filed with this document.
4(c)** Indenture, dated as of September 15, 1987 – Incorporated herein by reference to Exhibit 4(a) to the Registrant’s Form S-3 Registration Statement filed on October 11, 1994
4(d)** First Supplemental Indenture, dated as of September 1, 1990 – Incorporated herein by reference to Exhibit 4(b) to the Registrant’s Form S-3 Registration Statement filed on October 11, 1994
4(e) Second Supplemental Indenture, dated as of November 9, 2017 – Incorporated herein by reference to Exhibit 4.1 to the Registrant’s Form 8-K Current Report filed on November 13, 2017
10(a) 2012 Long-Term Incentive Plan — Incorporated herein by reference to Appendix A of the Registrant’s Proxy Statement filed on March 15, 2012.*
10(b) Form of Stock Option Certificate under the 2012 Long-Term Incentive Plan — Incorporated herein by reference to Exhibit 10.2 of the Registrant’s Form 10-Q Quarterly Report for the quarter ended April 1, 2012.*
10(c) Global NonQualified Stock Option Award Agreement under the 2012 Long-Term Incentive Plan — Incorporated herein by reference to Exhibit 10.1 of the Registrant’s Form 10-Q Quarterly Report for the quarter ended April 1, 2018.*
10(d) Global Restricted Share Unit Award Agreement under the 2012 Long-Term Incentive Plan — Incorporated herein by reference to Exhibit 10.2 of the Registrant’s Form 10-Q Quarterly Report for the quarter ended April 1, 2018.*
10(e) Global Performance Share Unit Award Agreement under the 2012 Long-Term Incentive Plan — Incorporated herein by reference to Exhibit 10.3 of the Registrant’s Form 10-Q Quarterly Report for the quarter ended April 1, 2018.*
10(f) Global Restricted Share Unit Award Agreement granted to John Reed on May 1, 2023 under the 2022 Long-Term Incentive Plan — Incorporated herein by reference to Exhibit 10(h) of the Registrant’s Form 10-K Annual Report for the fiscal year ended December 31, 2023*
10(g) Domestic Deferred Compensation (Certificate of Extra Compensation) Plan — Incorporated herein by reference to Exhibit 10(g) of the Registrant’s Form 10-K Annual Report for the year ended December 28, 2003.*
10(h) Amendments to the Certificate of Extra Compensation Plan effective as of January 1, 2009 — Incorporated herein by reference to Exhibit 10(j) of the Registrant’s Form 10-K Annual Report for the year ended December 28, 2008.*
10(i) Amended and Restated Deferred Fee Plan for Directors (Amended as of January 17, 2012) — Incorporated herein by reference to Exhibit 10(k) of the Registrant's Form 10-K Annual Report for the fiscal year ended January 1, 2012.*

120

Reg. S-K Exhibit Table Item No. Description of Exhibit
10(j) The Johnson & Johnson Executive Income Deferral Plan Amended and Restated Effective January 1, 2010 — Incorporated herein by reference to Exhibit 10.1 of the Registrant’s Form 10-Q Quarterly Report for the quarter ended September 30, 2012.*
10(k) The Johnson & Johnson Excess Savings Plan (amended and restated as of January 1, 2022) — Incorporated herein by reference to Exhibit 10(l) of the Registrant’s Form 10-K Annual Report for the fiscal year ended January 1, 2023.*
10(l) Excess Benefit Plan of Johnson & Johnson and Affiliated Companies (amended and restated as of January 1, 2020) — incorporated by reference to Exhibit 10(m) of the Registrant’s Form 10-K Annual Report for the fiscal year ended January 3, 2021.
10(m)** Executive Life Plan Agreement — Incorporated herein by reference to Exhibit 10(i) of the Registrant’s Form 10-K Annual Report for the fiscal year ended January 3, 1993.*
10(n) Executive Life Plan Agreement Closure Letter — Incorporated herein by reference to Exhibit 10.1 of the Registrant’s Form 10-Q Quarterly Report for the quarter ended March 29, 2015.*
10(o) 2022 Long-Term Incentive Plan — Incorporated by reference to Appendix A of the Registrant’s Proxy Statement filed on March 16, 2022.*
10(p) Severance Pay Plan of Johnson & Johnson and U.S. Affiliated Companies, Amended and Restated as of October 1, 2014 — Incorporated herein by reference to Exhibit 10.1 of the Registrant's Form 10-Q Quarterly Report for the quarter ended September 28, 2014.*
10(q) First Amendment to the Severance Pay Plan of Johnson & Johnson and U.S. Affiliated Companies (as amended and restated effective October 1, 2014) — Incorporated herein by reference to Exhibit 10.1 of the Registrant's Form 10-Q Quarterly Report for the quarter ended June 28, 2015.*
10(r) Second Amendment to the Severance Pay Plan of Johnson & Johnson and U.S. Affiliated Companies (as amended and restated effective October 1, 2014) — Incorporated herein by reference to Exhibit 10(x) of the Registrant's Form 10-K Annual Report for the fiscal year ended January 3, 2016.*
10(s) Contingent Value Rights Agreement, dated as of December 22, 2022, by and between Johnson & Johnson and American Stock Transfer & Trust Company, LLC – Incorporated herein by reference to Exhibit 10.1 of the Registrant’s Form 8-K Current Report filed December 22, 2022.†
10(t) Intellectual Property Agreement, dated as of May 3, 2023, by and between Johnson & Johnson and Kenvue Inc. — Incorporated herein by reference to Exhibit 10.4 of the Registrant's Form 8-K Current Report filed May 8, 2023.
10(u) Trademark Phase-Out License Agreement, dated as of April 3, 2023, by and between Johnson & Johnson and Johnson & Johnson Consumer Inc. — Incorporated herein by reference to Exhibit 10.5 of the Registrant's Form 8-K Current Report filed May 8, 2023.
10( v) Johnson & Johnson Deferred Compensation Plan — Incorporated herein by reference to Exhibit 10.1 of the Registrant's Form 8-K Current Report filed November 27, 2023.*
10(w) Global Performance Share Unit Award Agreement under the Johnson & Johnson 2022 Long-Term Incentive Plan — Incorporated herein by reference to Exhibit 10.1 of the Registrant’s Form 10-Q Quarterly Report for the quarter year ended April 2, 2023.*
10(x) Global Restricted Share Unit Award Agreement under the Johnson & Johnson 2022 Long-Term Incentive Plan — Incorporated herein by reference to Exhibit 10.2 of the Registrant’s Form 10-Q Quarterly Report for the quarter year ended April 2, 2023.*
10(y) Global Nonqualified Stock Option Award Agreement under the Johnson & Johnson 2022 Long-Term Incentive Plan — Incorporated herein by reference to Exhibit 10.3 of the Registrant’s Form 10-Q Quarterly Report for the quarter year ended April 2, 2023.*
10(z) Amendment One to the Johnson & Johnson Excess Savings Plan (amended and restated effective as of January 1, 2022) — Incorporated herein by reference to Exhibit 10.1 of the Registrant’s Form 10-Q Quarterly Report for the quarter ended October 1, 2023.*

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Reg. S-K Exhibit Table Item No. Description of Exhibit
10(aa) Johnson & Johnson Executive Incentive Plan (Amended as of September 7, 2023) — Incorporated herein by reference to Exhibit 10.2 of the Registrant’s Form 10-Q Quarterly Report for the quarter ended October 1, 2023.*
10(ab) Johnson & Johnson Executive Officer Cash Severance Policy — Incorporated herein by reference to Exhibit 10(ab) of the Registrant's Form 10-K Annual Report for the fiscal year ended December 29, 2024.*
19 Johnson & Johnson Stock Trading Policy for Directors, Executive Officers and Insiders (Amended as of April 27, 2023) — Incorporated herein by reference to Exhibit 19 of the Registrant’s Form 10-K Annual Report for the fiscal year ended December 31, 2023.
21 Subsidiaries — Filed with this document.
23 Consent of Independent Registered Public Accounting Firm — Filed with this document.
31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act — Filed with this document.
31.2 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act — Filed with this document.
32.1 Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act — Furnished with this document.
32.2 Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act — Furnished with this document.
97 Johnson & Johnson Clawback Policy (effective as of August 8, 2023) — Incorporated herein by reference to Exhibit 97 of the Registrant’s Form 10-K Annual Report for the fiscal year ended December 31, 2023.
Exhibit 101:
EX-101.INS Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
EX-101.SCH Inline XBRL Taxonomy Extension Schema
EX-101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase
EX-101.LAB Inline XBRL Taxonomy Extension Label Linkbase
EX-101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase
EX-101.DEF Inline XBRL Taxonomy Extension Definition Document
Exhibit 104: Cover Page Interactive Data File––the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

* Management contract or compensatory plan.
** Paper filing.
† Certain exhibits and schedules have been omitted pursuant to Item 601(b)(2)(ii) or 601(b)(10)(iv) of Regulation S-K, as applicable.

A copy of any of the Exhibits listed above will be provided without charge to any shareholder submitting a written request specifying the desired exhibit(s) to the Secretary at the principal executive offices of the Company. Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, the Company has not filed as exhibits to this Form 10-K certain long-term debt instruments, under which the total amount of securities authorized does not exceed 10% of the total assets of the Company and its subsidiaries on a consolidated basis. The Company hereby agrees to furnish a copy of any such instrument to the SEC upon request.
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