What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-11 compared with 2025-02-13 · 565 added, 610 removed, 1865 unchanged (39% of the section changed)

9 unchanged sentences

Management’s report on internal control over financial reporting

2024 Annual Report

Johnson & Johnson and subsidiaries consolidated balance sheets

42 unchanged sentences

See Notes to Consolidated Financial Statements

2025 Annual Report

Johnson & Johnson and subsidiaries consolidated statements of earnings

27 unchanged sentences

See Notes to Consolidated Financial Statements

2024 Annual Report

Johnson & Johnson and subsidiaries consolidated statements of comprehensive income

21 unchanged sentences

Foreign Currency Translation;

$( 1.1 ) billion, $ 797 million and $( 460 ) million;

$ 2.5 billion, $( 1.1 ) billion and $ 797 million;

Employee Benefit Plans:

2 unchanged sentences

See Notes to Consolidated Financial Statements

Amounts presented for 2023 and 2022 have not been recast to exclude discontinued operations

Amounts presented for 2023 have not been recast to exclude discontinued operations

2025 Annual Report

Johnson & Johnson and subsidiaries consolidated statements of equity

11 unchanged sentences

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, January 1, 2023 76,804 128,345 ( 12,967 ) 3,120 ( 41,694 )

Balance, December 31, 2023 68,774 153,843 ( 12,527 ) 3,120 ( 75,662 )

Net earnings 14,066 14,066

3 unchanged sentences

Repurchase of common stock ( 2,407 ) ( 2,407 )

Other ( 25 ) ( 25 )

Kenvue Separation /IPO (Note 21) ( 23,786 ) 2,451 5,181 ( 31,418 )

Other comprehensive income (loss), net of tax 786 786

8 unchanged sentences

See Notes to Consolidated Financial Statements

2024 Annual Report

Johnson & Johnson and subsidiaries consolidated statements of cash flows

7 unchanged sentences

Asset write-downs 204 405 1,295

Charges for acquired in-process research and development assets 1,841 483 —

Charges for acquired in-process research and development 109 1,841 483

Gain on Kenvue separation — — ( 20,984 )

6 unchanged sentences

Increase in accounts payable and accrued liabilities 2,377 1,621 2,346

Decrease/(Increase) in other current and non-current assets 1,717 ( 3,480 ) 687

Increase/(Decrease) in other current and non-current liabilities 33 5,588 ( 1,979 )

(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 from investing activities

Cash flows (used by) from investing activities

Additions to property, plant and equipment ( 4,832 ) ( 4,424 ) ( 4,543 )

1 unchanged sentence

Acquisitions, net of cash acquired (Note 18) ( 17,541 ) ( 15,146 ) —

Acquired in-process research and development assets (Note 18) ( 1,783 ) ( 470 ) —

Acquired in-process research and development/related milestones (Note 18) ( 385 ) ( 1,783 ) ( 470 )

Purchases of investments ( 920 ) ( 1,726 ) ( 10,906 )

3 unchanged sentences

Net cash (used by)/from investing activities ( 23,588 ) ( 18,599 ) 878

Cash flows from financing activities

Cash flows (used by) from financing activities

Dividends to shareholders ( 12,381 ) ( 11,823 ) ( 11,770 )

6 unchanged sentences

Credit support agreements activity, net ( 226 ) 272 ( 219 )

2025 Annual Report

2025 2024 2023

6 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents 201 ( 289 ) ( 112 )

Increase/(Decrease) in cash and cash equivalents 2,246 7,732 ( 360 )

(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

11 unchanged sentences

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

Fair value of assets acquired $ 16,091 — 18,710

Fair value of liabilities assumed ( 1,632 ) — ( 1,058 )

Net cash paid for acquisitions (Note 18) $ 14,459 — 17,652

See Notes to Consolidated Financial Statements

Amounts presented for 2023 and 2022 have not been recast to exclude discontinued operations.

2024 Annual Report

Amounts presented for 2023 have not been recast to exclude discontinued operations.

Notes to consolidated financial statements

8 unchanged sentences

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.

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 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 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.

Business segments

2 unchanged sentences

The Innovative Medicine segment is focused on the following therapeutic areas:

Immunology, Infectious Diseases, Neuroscience, Oncology, Pulmonary Hypertension, and Cardiovascular and Metabolic.

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 Orthopaedic, Surgery, Cardiovascular (previously referred to as Interventional Solutions) and Vision fields.

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

Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures

The Company adopted the standard in the fiscal year 2024, which requires expanded annual and interim disclosures for significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss.

The standard was applied retrospectively to all periods presented in the financial statements.

As this accounting standard only impacts disclosures, it did not have a material impact on the Company’s Consolidated Financial Statements.

See Note 17 for the required disclosures.

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

6 unchanged sentences

As this accounting standard only impacts disclosures, it will not have a material impact on the Company’s Consolidated Financial Statements.

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.

This update is required to be effective for the Company for fiscal periods beginning after December 15, 2024.

As this accounting standard only impacts disclosures, it will not have a material impact on the Company’s Consolidated Financial Statements.

2025 Annual Report

Cash equivalents

13 unchanged sentences

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

7 unchanged sentences

Capitalized software costs are amortized over the estimated useful lives of the software, which generally range from 5 to 8 years.

2024 Annual Report

The Company reviews long-lived assets to assess recoverability using undiscounted cash flows.

8 unchanged sentences

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.

13 unchanged sentences

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, such as product listing allowances are recorded in the same period as related sales and include

volume-based sales incentive programs.

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.

1 unchanged sentence

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 2024 and 2023, respectively, and less than 3.0 % of total revenues in the fiscal year 2022 and 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, $ 0.9 billion and $ 0.8 billion in fiscal years 2024, 2023 and 2022, respectively, and are included in selling, marketing and administrative expense.

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 are stated at the lower of cost or net realizable value determined by the first-in, first-out method.

2025 Annual Report

Intangible assets and goodwill

1 unchanged sentence

GAAP requires that goodwill and intangible assets with indefinite lives be assessed annually for impairment.

The Company completed its annual impairment test for 2024 in the fiscal fourth quarter.

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.

1 unchanged sentence

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 warranted by economic conditions.

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.

17 unchanged sentences

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, and are included in Property, plant and equipment, Loans and notes payable, and Long-term debt on the consolidated balance sheet.

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.

3 unchanged sentences

Operating lease expense is recognized on a straight-line basis over the lease term.

The Company has elected the following policy elections on adoption:

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 from continuing operations was $ 1.1 billion and $ 1.0 billion in fiscal years 2024 and 2023, respectively.

The lease liability from continuing operations was $ 1.2 billion and $ 1.1 billion in fiscal years 2024 and 2023, respectively.

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 $ 0.2 billion in fiscal years 2024, 2023 and 2022.

2024 Annual Report

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.

Product liability

28 unchanged sentences

Separately, the Company has a number of licensing arrangements for products and compounds including DARZALEX, licensed from Genmab A/S.

2025 Annual Report

Costs associated with advertising are expensed in the year incurred and are included in selling, marketing and administrative expenses.

2 unchanged sentences

GAAP accounting and tax reporting, recorded as deferred tax assets or liabilities.

The Company estimates deferred tax assets and liabilities based on enacted tax regulations and rates.

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 has unrecognized tax benefits for uncertain tax positions.

The Company records unrecognized tax benefits for uncertain tax positions.

The Company follows U.S.

1 unchanged sentence

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.

In 2017, the United States enacted into law new U.S.

tax legislation, the U.S.

Tax Cuts and Jobs Act (TCJA).

This law 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 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.

1 unchanged sentence

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 will not accrue interest.

These payments began in fiscal year 2018 and will continue through 2025.

The final payment of $ 2.5 billion will be made in fiscal year 2025.

The TCJA also includes provisions for a tax on global intangible low-taxed income (GILTI).

GILTI is described as the excess of a U.S.

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 under the deferred method.

The deferred tax amounts recorded are based on the evaluation of temporary differences that are expected to reverse as GILTI is incurred in future periods.

The Company has recorded deferred tax liabilities on all undistributed earnings prior to December 31, 2017 from its international subsidiaries.

The Company has not provided deferred taxes on the undistributed earnings subsequent to January 1, 2018 from certain international subsidiaries where the earnings are considered to be indefinitely reinvested.

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 provide for the net tax effects on these amounts.

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.

10 unchanged sentences

Actual results may or may not differ from those estimates.

2024 Annual Report

The Company follows the provisions of U.S.

15 unchanged sentences

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.

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

1 unchanged sentence

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

Cash, cash equivalents and current marketable securities

1 unchanged sentence

(Dollars in Millions) 2025

Amount Unrecognized

Gain Estimated

Amount Estimated

Fair Value Cash & Cash

1 unchanged sentence

Cash $ 3,299 3,299 3,299 —

Sovereign Securities (1)

120 — 120 — 120

Reverse repurchase agreements 7,063 7,063 7,063 —

10 unchanged sentences

(Dollars in Millions) 2024

Carrying Amount Unrecognized

Loss Estimated Fair Value Cash & Cash Equivalents Current Marketable Securities

Amount Unrecognized

Gain Estimated

Fair Value Cash & Cash

Equivalents Current

Cash $ 2,918 — 2,918 2,918 —

2 unchanged sentences

Reverse repurchase agreements 7,100 — 7,100 7,100 —

Corporate debt securities (1)

338 — 338 189 149

Money market funds 6,123 — 6,123 6,123 —

3 unchanged sentences

Gov't Securities $ 6,815 1 6,816 6,796 20

Gov't Agencies 71 ( 1 ) 70 — 70

Other Sovereign Securities 176 — 176 83 93

3 unchanged sentences

Total cash, cash equivalents and current marketable securities

$ 21,859 1,068

(1) Held to maturity investments are reported at amortized cost and realized gains or losses are reported in earnings.

1 unchanged sentence

Fair value of government securities and obligations and corporate debt securities were estimated using quoted broker prices and significant other observable inputs.

2024 Annual Report

The contractual maturities of the available for sale debt securities at December 28, 2025 are as follows:

27 unchanged sentences

The difference, if any, between the net asset value and the proceeds are recorded in earnings.

2025 Annual Report

Intangible assets and goodwill

15 unchanged sentences

Total intangible assets — net $ 50,403 37,618

(1) In September 2024, the Company announced changes to its MedTech brand identity and the $ 1.7 billion of trademarks associated with the DePuy Synthes business were reclassified from indefinite lived to definite lived and will be amortized over a 25 year period.

(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:

1 unchanged sentence

Medicine MedTech Total

Goodwill at January 1, 2023 $ 10,184 25,863 36,047

Goodwill at December 31, 2023 $ 10,407 26,151 36,558

Goodwill, related to acquisitions 640 7,569 8,209

6 unchanged sentences

Goodwill at December 28, 2025 $ 14,967 33,805 48,772

* Includes purchase price allocation adjustments for Abiomed

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 $ 4.5 billion, $ 4.5 billion and $ 3.9 billion before tax, for the fiscal years ended December 29, 2024, December 31, 2023 and January 1, 2023, respectively.

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.

4 unchanged sentences

See Note 18 to the Consolidated Financial Statements for additional details related to acquisitions and divestitures.

2024 Annual Report

Fair value measurements

28 unchanged sentences

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

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.

28 unchanged sentences

Amount of gain or (loss) recognized in AOCI $ — — — 1,187 — — — — ( 597 ) —

2024 Annual Report

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:

19 unchanged sentences

(Loss) Reclassified

from Accumulated Other Comprehensive Income Into Income Gain/(Loss)

from Accumulated

Other Comprehensive

Income Into Income

Reclassified from

3 unchanged sentences

Cross Currency interest rate swaps $ 277 955 Interest (income) expense — —

The Company holds equity investments with readily determinable fair values and equity investments without readily determinable fair values.

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:

6 unchanged sentences

Equity Investments without readily determinable value $ 773 253 ( 116 ) 910 910

January 1, 2023 December 31, 2023

2025 Annual Report

December 31, 2023 December 29, 2024

(Dollars in Millions) Carrying Value Changes in Fair

27 unchanged sentences

Level 3 — Significant unobservable inputs.

2024 Annual Report

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:

28 unchanged sentences

Total Net Liabilities $ 404 152

2025 Annual Report

Summarized information about changes in liabilities for contingent consideration is as follows:

2 unchanged sentences

Beginning Balance

$ 1,217 1,092 1,120

Changes in estimated fair value (6)

( 387 ) 88 29

Additions (7)

Payments/Other

( 77 ) ( 75 ) ( 57 )

Ending Balance (5)

5 unchanged sentences

(5) Includes $ 753 million, $ 1,217 million and $ 1,092 million, classified as non-current other liabilities as of December 28, 2025,

December 31, 2023 and January 1, 2023, respectively.

Includes $ 4 million classified as current liabilities as of January 1, 2023.

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.

In fiscal year 2022, the Company recorded $ 704 million of contingent consideration related to Abiomed.

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.

2024 Annual Report

The components of long-term debt are as follows:

(Dollars in Millions) 2024 Effective

% 2023 Effective

(Dollars in Millions) 2025 2024

2.625 % Notes due 2025

( 750 MM Euro 1.1090 ) (3)

$ — — % $ 831 (3)

0.55 % Notes due 2025

( 500 MM GBP 1.2756 ) (3)

2.45 % Notes due 2026

750 2.63 750 2.63

2.95 % Notes due 2027

999 0.57 950 0.57

0.95 % Notes due 2027

1,999 2.47 1,997 2.47

4.50 % Notes due 2027 (4)

927 2.96 900 2.96

1.150 % Notes due 2028 ( 750 MM Euro 1.1785 ) (1) /( 750 MM Euro 1.0401 ) (2)

2.90 % Notes due 2028

1,458 0.96 1,419 0.96

4.55 % Notes due 2028 (4)

( 750 MM Euro 1.0401 ) (2) /( 750 MM Euro 1.1090 ) (3)

6.95 % Notes due 2029

1,498 2.91 1,497 2.91

4.80 % Notes due 2029

298 7.14 298 7.14

4.80 % Debentures due 2029

1,146 4.83 — —

2.70 % Notes due 2029 (4) ( 600 MM Euro 1.1785 ) (1)

1.30 % Notes due 2030

1,646 1.30 1,630 1.30

4.90 % Debentures due 2031

1,145 4.92 — —

3.20 % Debenture due 2032

( 700 M EUR 1.0401 ) (2)

4.95 % Debentures due 2033

499 4.95 499 4.95

4.70 % Notes due 2030 (4)

854 4.24 854 4.24

4.95 % Debentures due 2034

4.90 % Notes due 2031

( 1.5 B Euro 1.0401 ) (2) /( 1.5 B Euro 1.1090 ) (3)

1.68 1,652 (3)

3.35 % Debentures due 2036

( 800 MM EUR 1.0401 ) (2)

3.20 % Notes due 2032 ( 700 MM Euro 1.1785 ) (1) /($ 700 MM Euro 1.0401 ) (2)

4.85 % Notes due 2032 (4)

869 3.59 864 3.59

4.95 % Notes due 2033

994 5.99 994 5.99

4.375 % Notes due 2033

1,358 3.64 1,357 3.64

5.85 % Debentures due 2038

697 5.85 697 5.85

3.05 % Notes due 2033 (4) ( 700 MM Euro 1.1785 ) (1)

4.95 % Notes due 2034

993 3.42 993 3.42

4.50 % Debentures due 2040

541 4.63 541 4.63

1.650 % Notes due 2035 ( 1.5 B Euro 1.1785 ) (1) /( 1.5 B Euro 1.0401 ) (2)

5.00 % Notes due 2035 (4)

845 2.14 849 2.14

3.35 % Notes due 2036 ( 800 MM Euro 1.1785 ) (1) ( 800 MM Euro 1.0401 ) (2)

3.587 % Notes due 2036

297 4.89 297 4.89

5.95 % Notes due 2037

496 4.52 496 4.52

3.55 % Debentures due 2044

( 1 B EUR 1.0401 ) (2)

3.625 % Notes due 2037

1,978 3.74 1,977 3.74

3.35 % Notes due 2037 (4) ( 1 B Euro 1.1785 ) (1)

5.85 % Notes due 2038

822 3.76 832 3.76

3.40 % Notes due 2038

744 3.52 743 3.52

4.50 % Notes due 2040

808 2.29 826 2.29

5.25 % Debentures due 2054

2.10 % Notes due 2040

1,058 2.49 1,073 2.49

Other 83 — 69 —

4.85 % Notes due 2041

4.50 % Notes due 2043

3.55 % Notes due 2044 ( 1 B Euro 1.1785 ) (1) ( 1 B Euro 1.0401 ) (2)

3.60 % Notes due 2045 (4) ( 700 MM Euro 1.1785 ) (1)

3.73 % Notes due 2046

3.75 % Notes due 2047

3.50 % Notes due 2048

2025 Annual Report

2.25 % Notes due 2050

5.25 % Notes due 2054

3.70 % Notes due 2055 (4) ( 1 B Euro 1.1785 ) (1)

2.45 % Notes due 2060

Subtotal 41,438 (3)

1 unchanged sentence

Total long-term debt $ 39,438 $ 30,651

(1) Weighted average effective rate.

(1) Translation rate at December 28, 2025.

(2) Translation rate at December 29, 2024.

(4) The excess of the carrying value over the fair value of debt was $ 2.0 billion and $ 1.0 billion at the end of fiscal year 2024 and fiscal year 2023, respectively.

(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.

23 unchanged sentences

2025 Annual Report

A comparison of income tax expense at the U.S.

statutory rate of 21 % in fiscal years 2024, 2023 and 2022, to the Company’s effective tax rate is as follows:

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

International 17,327

Earnings before taxes on income:

federal statutory rate 6,842 21.0 %

State & local taxes:

Foreign tax effects:

( 861 ) ( 2.7 )

Statutory tax rate difference between Ireland & U.S.

( 473 ) ( 1.5 )

Other ( 11 ) ( 0.0 )

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:

OBBBA Deferred NCTI Remeasurement 1,003 3.1

Effects of cross border tax laws:

Subpart F 522 1.6

( 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:

Nontaxable or nondeductible items:

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)

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

$( 458 ) ( 2,033 )

International 17,145 17,095

28 unchanged sentences

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.

The fiscal year 2023 effective tax rate decreased 3.9 % as compared to the fiscal year 2022 effective tax rate as the Company recorded certain non-recurring favorable tax items in fiscal year 2023 when compared to the prior fiscal year.

In the fiscal fourth quarter of 2023, the Company settled the U.S.

Internal Revenue Service audit for tax years 2013 through 2016 which resulted in a favorable impact to the rate of 3.0 %.

This settlement was partially offset by the Company recording a $ 0.4 billion decrease in expected U.S.

foreign tax credits, an unfavorable effective rate impact of 2.6 %, which has been reflected as a current tax expense in U.S.

taxes on international income on the Company’s effective tax rate reconciliation.

In the fiscal year 2023, the Company had certain non-recurring impacts as a result of legislative tax elections made in certain international subsidiaries which resulted in a change in the Company’s tax basis in certain assets resulting in deferred tax re-measurements.

The net impact of these non-recurring items is a net benefit of 3.4 % to the Company’s annual effective tax rate, comprised of the following items:

• approximately $ 0.3 billion of tax benefit on local deferred tax assets to record the remeasurement of the increased tax basis, this benefit has been reflected as International operations on the Company’s effective tax rate reconciliation.

This benefit was offset by approximately $ 0.1 billion of U.S.

deferred tax expense on the GILTI deferred tax liability resulting from the remeasurement of these deferred tax assets.

This has been reflected in the “U.S.

tax on international income” on the Company’s effective tax rate reconciliation.

• approximately $ 0.3 billion of U.S.

deferred tax benefit on the GILTI deferred tax related to an election made by an international subsidiary resulting in a decrease in local deferred tax assets.

This has been reflected in the U.S.

taxes on international income on the Company’s effective tax rate reconciliation.

The Company also had lower income in higher tax jurisdictions vs.

fiscal year 2022, primarily in the U.S.

where the Company recorded an approximately $ 7.0 billion charge related to talc matters in the United States at an effective tax rate of 21.1 % (for further information see Note 19 to the Consolidated Financial Statements).

2025 Annual Report

Temporary differences and carryforwards at the end of fiscal years 2025 and 2024 were as follows:

8 unchanged sentences

Inventory related 378 371

Operating loss carryforwards 2,298 2,145

Net operating loss & tax credit carryforwards 3,561 2,658

Undistributed foreign earnings 1,718 ( 2,969 ) 2,668 ( 1,492 )

Global intangible low-taxed income ( 1,589 ) ( 2,731 )

NCTI (Net CFC Tested Income) ( 2,495 ) ( 1,589 )

Miscellaneous international 620 852

3 unchanged sentences

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 net losses.

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.

In certain jurisdictions, valuation allowances have been recorded against deferred tax assets for loss carryforwards that are not more likely than not to be realized.

The net operating loss carryforwards for these international subsidiaries that do not have an indefinite carryforward period will begin to expire in 2025 for various amounts.

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:

6 unchanged sentences

End of year $ 1,837 $ 1,638

2024 Annual Report

The following table summarizes income taxes paid net of tax refunds:

(Dollars in Millions) 2025 2024 2023

$ 3,577 3,815 4,722

State and Local taxes 169 341 236

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:

9 unchanged sentences

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 (IRS) has completed its audit for the tax years through 2016 and has commenced the audit for tax years 2017 through 2020.

The Company recently finalized multi-year transfer pricing agreements with the IRS and certain other foreign jurisdictions in the fiscal fourth quarter of 2024.

In other major jurisdictions where the Company conducts business, the years that remain open to tax audits go back to the year 2013.

The Company believes it is possible that some tax audits may be completed over the next twelve months by taxing authorities in some jurisdictions.

The Company anticipates a change in uncertain tax positions of approximately $ 200 million in certain jurisdictions in the next twelve months due to the expected expiration of the statute of limitations.

However, generally the Company is not able to provide a reasonably reliable estimate of the timing of any other future tax payments, audit settlements, or changes in uncertain tax positions.

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 expense and penalties related to unrecognized tax benefits are classified as income tax expense.

The Company recognized after tax interest expense of $ 217 million, $ 99 million and $ 136 million in fiscal years 2024, 2023 and 2022, respectively.

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

Employee related obligations

8 unchanged sentences

Employee related obligations — non-current $ 6,957 7,255

Prepaid employee related obligations of $ 6,046 million and $ 4,992 million for 2024 and 2023, respectively, are included in Other assets on the Consolidated Balance Sheets.

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.

Pensions and other benefit plans

34 unchanged sentences

benefit plans is amortized over the average remaining service to full eligibility age of plan participants at the time of the plan amendment.

2024 Annual Report

The following table represents the weighted-average actuarial assumptions:

19 unchanged sentences

Year the rate reaches the ultimate trend rate 2050 2048

2025 Annual Report

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:

6 unchanged sentences

Plan participant contributions 82 75 — —

Amendments — ( 6 ) — —

Actuarial (gains) losses (1)

1 unchanged sentence

Divestitures & acquisitions 1 — — —

— ( 352 ) — 1

Curtailments, settlements & restructuring ( 11 ) ( 121 ) — —

9 unchanged sentences

Settlements ( 11 ) ( 114 ) — —

Divestitures & acquisitions (2)

— ( 509 ) — —

Benefits paid from plan assets (2)

15 unchanged sentences

(1) The actuarial (gains)/losses for retirement plans in 2025 and 2024 were primarily driven by changes in the discount rates.

(2) Driven by the Kenvue separation.

(3) The fiscal years 2024 and 2023 includes approximately $ 400 million and $ 800 million, respectively, transferred to a group annuity contract issued by a third-party insurer for the U.S.

Salaried Pension Plan.

(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.

Retirement Plans Other Benefit Plans

9 unchanged sentences

Total recognized in net periodic benefit cost and other comprehensive income $( 878 ) ( 1,096 ) 476 869

2024 Annual Report

The Company plans to continue to fund its U.S.

23 unchanged sentences

Other benefit plans $ 444 401 414 427 443 2,425

2025 Annual Report

The following table displays the projected future minimum contributions to the unfunded retirement plans.

40 unchanged sentences

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.

Level 3 debt instruments are priced based on unobservable inputs.

• Equity securities — Equity securities are valued at the closing price reported on the major market on which the individual securities are traded.

5 unchanged sentences

Other assets that are exchange listed and actively traded are classified as Level 1, while inactively traded assets are classified as Level 2.

2024 Annual Report

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:

19 unchanged sentences

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

Capital and treasury stock

5 unchanged sentences

Repurchase of common stock 31,085 5,079

Balance at January 1, 2023 506,246 41,694

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

Kenvue share exchange (Note 21) 190,955 31,418

Balance at December 29, 2024 712,921 75,680

5 unchanged sentences

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.

On September 14, 2022, the Company announced that its Board of Directors approved a share repurchase program, authorizing the Company to purchase up to $ 5.0 billion of the Company's shares of common stock.

The repurchase program was completed during the fiscal first quarter of 2023.

Accumulated other comprehensive income (loss)

1 unchanged sentence

(Dollars in Millions) Foreign

Translation Gain/

Securities Employee

Translation Gain/(loss)

On Securities Employee

Benefit Plans Gain/

4 unchanged sentences

Net 2023 changes ( 3,221 ) 26 ( 1,399 ) ( 147 ) ( 4,741 )

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

2 unchanged sentences

December 29, 2024 ( 8,441 ) 1 ( 1,551 ) ( 1,750 ) ( 11,741 )

2024 Annual Report

Net 2025 changes ( 5,506 ) ( 1 ) 858 1,460 ( 3,189 )

December 28, 2025 $( 13,947 ) — ( 693 ) ( 290 ) ( 14,930 )

Amounts in accumulated other comprehensive income are presented net of the related tax impact.

7 unchanged sentences

See Note 6 for additional details.

* Includes impact of curtailments and settlements in connection with separation from Kenvue.

* Includes impact of curtailments and settlements in connection with the separation of Kenvue.

International currency translation

4 unchanged sentences

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, Turkey and Venezuela).

Beginning in the fiscal fourth quarter of 2024, the Company also accounted for operations in Egypt as highly inflationary.

The translation of balance sheet accounts for highly inflationary economies are reflected in the operating results.

1 unchanged sentence

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

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 29, 2024, December 31, 2023 and January 1, 2023:

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

11 unchanged sentences

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 0.0

Common stock, stock option plans and stock compensation agreements

6 unchanged sentences

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 $ 1,176 million, $ 1,087 million and $ 1,028 million for fiscal years 2024, 2023 and 2022, respectively.

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 $ 1,002 million, $ 907 million and $ 866 million for fiscal years 2024, 2023 and 2022, respectively.

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.

2 unchanged sentences

Treasury shares are replenished through market purchases throughout the year for the number of shares used to settle employee benefit equity issuances.

2024 Annual Report

Stock options

3 unchanged sentences

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 2024, 2023, and 2022 grants, expected volatility represents a blended rate of 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 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.

20 unchanged sentences

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

The following table summarizes stock options outstanding and exercisable at December 28, 2025:

15 unchanged sentences

(1) Average contractual life remaining in years.

Stock options outstanding at December 31, 2023 and January 1, 2023 were 112,238 and an average life of 5.5 years and 118,672 and an average life of 5.8 years, respectively.

Stock options exercisable at December 31, 2023 and January 1, 2023 were 66,998 at an average price of $ 123.39 and 63,661 at an average price of $ 113.06 , respectively.

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

20 unchanged sentences

The fair value of performance share units issued was $ 67 million, $ 146 million and $ 140 million in fiscal years 2025, 2024 and 2023, respectively.

2024 Annual Report

Segments of business and geographic areas

1 unchanged sentence

Innovative Medicine and MedTech.

The segment results have been recast for all periods to reflect the continuing operations of the Company.

The Company’s chief operating decision maker (CODM) is the Chief Executive Officer (Principal Executive Officer).

8 unchanged sentences

1,492 869 469 71.6 85.2

Exports 98 147 204 ( 33.0 ) ( 28.0 )

International 395 94 30 * *

Worldwide 1,887 963 500 95.9 92.7

SIMPONI / SIMPONI ARIA

8,266 6,588 5,277 25.5 24.8

7 unchanged sentences

Worldwide 2,823 3,038 3,264 ( 7.1 ) ( 6.9 )

OTHER IMMUNOLOGY

RYBREVANT/ LAZCLUZE (1)

534 257 66 * *

1 unchanged sentence

Worldwide 734 327 93 * *

Infectious Diseases

340 241 56 40.9 *

1 unchanged sentence

Worldwide 463 287 63 61.3 *

COVID-19 VACCINE

444 418 334 6.3 25.3

International 226 131 61 72.8 *

Worldwide 670 549 395 22.1 38.8

2025 Annual Report

Sales to Customers % Change

(Dollars in Millions) 2025 2024 2023 ’25 vs.

Worldwide 198 1,117 2,179 ( 82.4 ) ( 48.8 )

EDURANT / rilpivirine

ZYTIGA /abiraterone acetate

23 34 50 ( 33.2 ) ( 32.2 )

1 unchanged sentence

Worldwide 502 631 887 ( 20.4 ) ( 28.8 )

PREZISTA / PREZCOBIX /

REZOLSTA / SYMTUZA

OTHER ONCOLOGY

214 145 93 47.5 55.9

1 unchanged sentence

Worldwide 376 317 328 18.5 ( 3.4 )

OTHER INFECTIOUS DISEASES

9,872 11,355 11,539 ( 13.1 ) ( 1.6 )

2 unchanged sentences

1,171 1,009 1,143 16.0 ( 11.7 )

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 )

CONCERTA / methylphenidate

SIMPONI / SIMPONI ARIA

1,193 1,082 1,124 10.3 ( 3.8 )

1 unchanged sentence

Worldwide 2,668 2,190 2,197 21.8 ( 0.3 )

INVEGA SUSTENNA / XEPLION / INVEGA TRINZA / TREVICTA

3,847 6,720 6,966 ( 42.7 ) ( 3.5 )

4 unchanged sentences

Worldwide 5,155 3,670 3,147 40.5 16.6

OTHER NEUROSCIENCE

OTHER IMMUNOLOGY

59 3 11 * ( 74.1 )

4 unchanged sentences

Worldwide 7,837 7,115 7,140 10.1 ( 0.4 )

869 469 133 85.2 *

International — — — — —

2024 Annual Report

Worldwide 700 — — * —

Sales to Customers % Change

(Dollars in Millions) 2025 2024 2023 ’25 vs.

CONCERTA / methylphenidate

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

2,725 3,125 2,897 ( 12.8 ) 7.9

4 unchanged sentences

Worldwide 1,696 1,077 689 57.4 56.4

OTHER NEUROSCIENCE

159 210 349 ( 24.5 ) ( 39.8 )

1 unchanged sentence

Worldwide 1,048 1,175 1,553 ( 10.9 ) ( 24.3 )

Pulmonary Hypertension

3,223 3,143 2,697 2.6 16.5

1 unchanged sentence

Worldwide 4,437 4,282 3,815 3.6 12.3

ZYTIGA /abiraterone acetate

OPSUMIT/OPSYNVI (4)

1,633 1,557 1,292 4.8 20.5

1 unchanged sentence

Worldwide 2,325 2,225 1,973 4.5 12.8

OTHER ONCOLOGY

1,536 1,511 1,326 1.7 13.9

1 unchanged sentence

Worldwide 1,902 1,817 1,582 4.7 14.9

Pulmonary Hypertension

OTHER PULMONARY HYPERTENSION

54 75 79 ( 27.0 ) ( 5.1 )

1 unchanged sentence

Worldwide 209 240 260 ( 12.7 ) ( 7.7 )

Infectious Diseases

1,264 1,354 1,500 ( 6.6 ) ( 9.8 )

1 unchanged sentence

Worldwide 3,241 3,396 4,418 ( 4.6 ) ( 23.1 )

EDURANT / rilpivirine

26 31 35 ( 18.4 ) ( 10.0 )

2025 Annual Report

Sales to Customers % Change

(Dollars in Millions) 2025 2024 2023 ’25 vs.

International 1,461 1,241 1,115 17.7 11.2

Worldwide 1,486 1,272 1,150 16.9 10.6

OTHER PULMONARY HYPERTENSION

PREZISTA / PREZCOBIX /

REZOLSTA / SYMTUZA

1,226 1,311 1,446 ( 6.5 ) ( 9.4 )

1 unchanged sentence

Worldwide 1,579 1,712 1,854 ( 7.7 ) ( 7.7 )

Sales to Customers % Change

(Dollars in Millions) 2024 2023 2022 ’24 vs.

OTHER INFECTIOUS DISEASES (5)

12 11 19 6.6 ( 41.0 )

International 163 401 1,395 ( 59.3 ) *

Worldwide 175 412 1,414 ( 57.5 ) *

Cardiovascular / Metabolism / Other

23 unchanged sentences

Worldwide 1,751 1,496 1,306 17.1 14.5

Sales to Customers % Change

(Dollars in Millions) 2025 2024 2023 ’25 vs.

SHOCKWAVE (6)

897 442 — * *

International 249 122 — * *

7 unchanged sentences

Worldwide 9,258 9,158 8,942 1.1 2.4

2024 Annual Report

Sales to Customers % Change

(Dollars in Millions) 2024 2023 2022 ’24 vs.

1,080 1,057 996 2.1 6.2

20 unchanged sentences

Worldwide 5,560 5,358 5,366 3.8 ( 0.2 )

2025 Annual Report

Sales to Customers % Change

(Dollars in Millions) 2025 2024 2023 ’25 vs.

2,225 2,128 2,086 4.6 2.0

8 unchanged sentences

Worldwide 1,558 1,413 1,370 10.2 3.2

Sales to Customers % Change

(Dollars in Millions) 2024 2023 2022 ’24 vs.

TOTAL MEDTECH

6 unchanged sentences

* percentage greater than 100% or not meaningful

(1) Previously referred to as Interventional Solutions

(2) Acquired on December 22, 2022

(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

11 unchanged sentences

Segment income before tax $ 22,266 4,113 26,379 18,919 3,740 22,659 18,246 4,669 22,915

Expense not allocated to segments (2)

(Income) Expense not allocated to segments (2)

( 6,202 ) 5,972 7,853

8 unchanged sentences

Worldwide total $ 199,210 180,104

2024 Annual Report

Additions to Property,

7 unchanged sentences

Worldwide total $ 4,832 4,424 4,543 $ 7,503 7,339 7,486

2025 Annual Report

Sales to Customers Long-Lived Assets (7)

13 unchanged sentences

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 2022, the Company had three wholesalers distributing products for all three segments that represented approximately 18.9 %, 15.0 %, and 13.8 % 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).

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(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)

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• Income from litigation settlements of $ 0.1 billion

(5) Innovative Medicine segment income before tax includes:

• One-time COVID-19 Vaccine manufacturing exit related costs of $ 1.5 billion

• An intangible asset impairment charge of approximately $ 0.8 billion related to an in-process research and development asset, bermekimab (JnJ-77474462), an investigational drug for the treatment of Atopic Dermatitis (AD) and Hidradenitis Suppurativa (HS) acquired with the acquisition of XBiotech, Inc.

in the fiscal year 2020.

Additional information regarding efficacy of the AD and HS indications became available which led the Company to the decision to terminate the development of bermekimab for AD and HS

• Litigation expense of $ 0.1 billion

• Unfavorable changes in the fair value of securities of $ 0.7 billion

• A restructuring related charge of $ 0.1 billion

MedTech segment income before tax includes:

• Litigation expense of $ 0.6 billion primarily for pelvic mesh related costs

• A restructuring related charge of $ 0.3 billion

• Acquisition and integration related costs of $ 0.3 billion primarily related to the acquisition of Abiomed

• A Medical Device Regulation charge of $ 0.3 billion

(6) General corporate includes cash, cash equivalents, marketable securities and other corporate assets.

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Acquisitions and divestitures

Subsequent to the fiscal year end 2024, the Company announced it has entered into a definitive agreement to acquire Intra-Cellular Therapies, Inc.

ITCI), a biopharmaceutical company focused on the development and commercialization of therapeutics for central nervous system (CNS) disorders, for $ 132.00 per share in cash for a total equity value of approximately $ 14.6 billion.

The Company expects to fund the transaction through a combination of cash on hand and debt.

The closing of the transaction is expected to occur later this year subject to applicable regulatory approvals, approval by Intra-Cellular Therapies’ stockholders and other customary closing conditions for a transaction of this type.

The results of operations will be included in the Innovative Medicine segment beginning on the acquisition date.

Business combinations

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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.

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

Amortizable intangible asset (1)

Acquired in-process research and development (1)

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.

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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, for approximately $ 0.8 billion net of cash acquired, with potential for an additional milestone payment.

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 $ 0.3 billion of liabilities assumed which included $ 0.1 billion related to a contingent consideration.

The preliminary purchase price allocation is subject to any subsequent valuation adjustments within the measurement period.

A probability of success factor ranging from 30 % to 45 % was used in the fair value calculation to reflect inherent regulatory and commercial risk of the IPR&D.

The discount rate applied was approximately 16 %.

The goodwill is primarily attributable to synergies expected to arise from the business acquisition and is not expected to be deductible for tax purposes.

Acquisition related costs before tax for the fiscal 2024 were not material.

On May 31, 2024, the Company completed the acquisition of Shockwave Medical Inc.

(SWAV)(Shockwave), 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.

The Company acquired all the outstanding shares of Shockwave’s common stock for $ 335.00 per share through a merger of Shockwave with a subsidiary of the Company.

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.

Details of the fair value amounts recognized for assets acquired and liabilities assumed as of the purchase date and at the end of fiscal year 2024, which includes measurement period adjustments, are included in the table below.

As the acquisition occurred in May 2024, the Company is still finalizing the allocation of the purchase price to the individual assets acquired and liabilities assumed.

The allocation of the purchase price included in the current period balance sheet is based on the best estimate of management and is preliminary and subject to change.

(Dollars in Billions) May 31, 2024 December 29, 2024

Assets acquired:

Cash $ 1.1 $ 1.1

Goodwill 7.5 7.6

Amortizable intangibles 5.3 5.3

IPR&D 0.6 0.6

Inventory 0.5 0.5

Other assets 0.5 0.4

Total assets acquired $ 15.5 $ 15.5

Liabilities assumed:

Deferred taxes $ 1.5 $ 1.5

Notes payable* 1.0 1.0

Accrued liabilities** 0.4 0.4

Total liabilities assumed $ 2.9 $ 2.9

Net assets acquired $ 12.6 $ 12.6

Net assets acquired as of May 31, 2024 $ 12.6

Cash acquired 1.1

Equity awards settled 0.6

Settlement of Note payable* 1.0

Total enterprise value as of June 30, 2024 $ 13.1

* Represents the convertible debt which was subsequently paid in the fiscal second quarter of 2024.

** Includes $ 0.2 billion of equity awards

The goodwill is primarily attributable to synergies expected to arise from the business acquisition and is not expected to be deductible for tax purposes.

Acquisition related costs before tax for the fiscal 2024 were $ 0.9 billion of which $ 0.4 billion was related to the fair value of the inventory step-up and was recorded in Cost of products sold and $ 0.5 billion primarily related to equity awards and was recorded in Other (income) expense.

The amortizable intangible assets were primarily comprised of already in-market CAD and PAD IVL products with the average weighted lives of 14 years.

The IPR&D assets were valued for technology programs for unapproved products.

The value of the IPR&D was calculated using a probability-adjusted cash flow projection discounted for the risk inherent in such projects with the weighted average probability of success factors of approximately 50 %.

The discount rate applied was 9.0 %.

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 equity value of approximately $ 2.0 billion, or $ 1.8 billion net of cash acquired.

The Company acquired all of the outstanding shares of Ambrx’s common stock for $ 28.00 per share through a merger of Ambrx with a subsidiary of the Company.

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, which includes deferred taxes of $ 0.4 billion.

The preliminary purchase price allocation is subject to any subsequent valuation adjustments within the measurement period.

A probability of success factor ranging from 40 % to

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

70 % was used in the fair value calculation to reflect inherent regulatory and commercial risk of the IPR&D.

The discount rate applied was approximately 17 %.

The goodwill is primarily attributable to synergies expected to arise from the business acquisition and is not expected to be deductible for tax purposes.

Acquisition related costs before tax for the fiscal year 2024 were not material.

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 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.

During the fiscal year 2022, certain businesses were acquired for $ 17.7 billion, net of cash acquired.

The fiscal year 2022 acquisitions primarily included Abiomed, Inc.

The remaining acquisitions were not material.

On December 22, 2022, the Company completed the acquisition of Abiomed, a leading, first-to-market provider of cardiovascular medical technology with a first-in-kind portfolio for the treatment of coronary artery disease and heart failure which also has an extensive innovation pipeline of life-saving technologies.

The transaction broadens the Company’s position as a growing cardiovascular innovator, advancing the standard of care in heart failure and recovery, one of healthcare’s largest areas of unmet need.

The results of operations were included in the MedTech segment as of the date of the acquisition.

The acquisition was completed through a tender offer for all outstanding shares.

The consideration paid in the acquisition consisted of an upfront payment of $ 380.00 per share in cash, amounting to $ 17.1 billion, net of cash acquired, as well as a non-tradeable contingent value right (“CVR”) entitling the holder to receive up to $ 35.00 per share in cash (which with respect to the CVRs total approximately $ 1.6 billion in the aggregate) if certain commercial and clinical milestones are achieved.

The corresponding enterprise value (without taking into account the CVRs) of approximately $ 16.5 billion includes cash, cash equivalents and marketable securities acquired.

The milestones of the CVR consist of:

$ 17.50 per share, payable if net sales for Abiomed products exceeds $ 3.7 billion during Johnson & Johnson’s fiscal second quarter of 2027 through fiscal first quarter of 2028, or if this threshold is not met during this period and is subsequently met during any rolling four quarter period up to the end of Johnson & Johnson’s fiscal first quarter of 2029, $ 8.75 per share;

$ 7.50 per share payable upon FDA premarket application approval of the use of Impella® products in ST-elevated myocardial infarction (STEMI) patients without cardiogenic shock by January 1, 2028;

$ 10.00 per share payable upon the first publication of a Class I recommendation for the use of Impella® products in high risk PCI or STEMI with or without cardiogenic shock within four years from their respective clinical endpoint publication dates, but in all cases no later than December 31, 2029.

During the fiscal fourth quarter of 2023, the Company finalized the purchase price allocation.

In fiscal 2023, there were purchase price allocation adjustments netting to approximately $ 0.2 billion with an offsetting increase to goodwill.

The fair value of the acquisition was allocated to assets acquired of $ 20.1 billion (net of $ 0.3 billion cash acquired), primarily to goodwill for $ 11.1 billion, amortizable intangible assets for $ 6.6 billion, IPR&D for $ 1.1 billion, marketable securities of $ 0.6 billion and liabilities assumed of $ 3.0 billion, which includes the fair value of the contingent consideration mentioned above for $ 0.7 billion and deferred taxes of $ 2.0 billion.

The goodwill is primarily attributable to the commercial acceleration and expansion of the portfolio and is not expected to be deductible for tax purposes.

The contingent consideration was recorded in Other Liabilities and adjusted to fair value through the fiscal year end 2024 on the Consolidated Balance Sheet.

The amortizable intangible assets were primarily comprised of already in-market products of the Impella® platform with an average weighted life of 14 years.

The IPR&D assets were valued for technology programs for unapproved products.

The value of the IPR&D was calculated using probability-adjusted cash flow projections discounted for the risk inherent in such projects.

The probability of success factor ranged from 52 % to 70 %.

The discount rate applied was 9.5 %.

In the fiscal years 2024, 2023 and 2022, the Company recorded acquisition related costs before tax of approximately $ 0.3 billion, $ 0.2 billion and $ 0.3 billion, which was primarily recorded in Other (income)/expense.

In accordance with U.S.

1 unchanged sentence

Asset acquisitions

Acquired In-process research and development (IPR&D) in an asset acquisition is immediately expensed as research and development expense in the Company's consolidated financial statements.

Milestone payments incurred prior to regulatory approval are expensed as research and development expense when the milestone event occurs.

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.

5 unchanged sentences

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.

2 unchanged sentences

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.

There were no significant asset acquisitions in 2022.

During 2025, the Company, in consultation with the Independent Data Safety Monitoring Board, suspended the pivotal investigational device exemption study.

There were no material divestitures in the fiscal year 2025.

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.

1 unchanged sentence

All other divestitures were not material.

During the fiscal year 2023, the Company executed divestitures resulting in approximately $ 0.2 billion in proceeds resulting in gains or losses that were not material.

At fiscal year end 2023, the Company held assets, primarily intangibles, on its Consolidated Balance Sheet of approximately $ 0.3 billion, primarily related to Acclarent and Ponvory, that were subsequently divested in fiscal 2024.

During fiscal year 2022, the Company did not make any material divestitures.

There were no material divestitures in the fiscal year 2023.

Legal proceedings

15 unchanged sentences

procedural or jurisdictional issues;

the uncertainty and unpredictability of the number of

2024 Annual Report

potential claims;

the uncertainty and unpredictability of the number of potential claims;

ability to achieve comprehensive multi-party settlements;

14 unchanged sentences

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 the other talc verdicts that it has appealed.

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 June 2014, the Mississippi Attorney General filed a complaint against the Company alleging violation of the Mississippi Consumer Protection Act by failing to disclose alleged health risks associated with female consumers’ use of talc contained in JOHNSON’S Baby Powder and JOHNSON’S Shower to Shower (a product divested in 2012).

The Company has reached an agreement to resolve this matter.

In January 2020, the State of New Mexico filed a consumer protection case alleging that the Company deceptively marketed and sold its talcum powder products by making misrepresentations about the safety of the products and the presence of carcinogens, including asbestos.

The Company has reached an agreement to resolve this matter.

Forty-two states and the District of Columbia commenced a joint investigation into the Company’s marketing of its talcum powder products.

In January 2024, the Company reached an agreement in principle with the multi-state group of state Attorneys General, subject to ongoing negotiation of non-monetary terms.

In June 2024, the settlements were finalized.

In October 2021, Johnson & Johnson Consumer Inc.

(Old JJCI) implemented a corporate restructuring (the 2021 Corporate Restructuring).

As a result of that restructuring, Old JJCI ceased to exist and three new entities were created:

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);

1 unchanged sentence

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 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).

In October 2021, notwithstanding the Company’s confidence in the safety of its talc products, the Debtor filed a voluntary petition with the United States Bankruptcy Court for the Western District of North Carolina, Charlotte Division, seeking relief under Chapter 11 of the Bankruptcy Code (the LTL Bankruptcy Case).

All litigation against LTL, Old JJCI, New JJCI, the Company, other of their corporate affiliates, identified retailers, insurance companies, and certain other parties (the Protected Parties) was stayed.

The LTL Bankruptcy Case was transferred to the United States Bankruptcy Court for the District of New Jersey.

Claimants filed motions to dismiss the LTL Bankruptcy Case and, following a multiple day hearing, the New Jersey Bankruptcy Court denied those motions in March 2022.

The claimants subsequently filed notices of appeal as to the denial of the motions to dismiss the LTL Bankruptcy Case and the extension of the stay to the Protected Parties.

On January 30, 2023, the Third Circuit reversed the Bankruptcy Court’s ruling and remanded to the Bankruptcy Court to dismiss the LTL bankruptcy.

In April 2023, the New Jersey Bankruptcy Court dismissed the LTL Bankruptcy Case, effectively lifting the stay as to all parties and returning the talc litigation to the tort system.

LTL re-filed in the United States Bankruptcy Court for the District of New Jersey seeking relief under Chapter 11 of the Bankruptcy Code (the LTL 2 Bankruptcy Case).

As a result of the new filing, all talc claims against LTL were again automatically stayed pursuant to section 362 of the Bankruptcy Code.

Additionally, the New Jersey Bankruptcy Court issued a temporary restraining order staying all litigation as to LTL, Old JJCI, New JJCI, the Company, identified retailers, and certain other parties (the New Protected Parties).

Also in April 2023, the New Jersey Bankruptcy Court issued a decision that granted limited injunctive relief to the Company and the New Protected Parties (the LTL 2 Preliminary Injunction).

The LTL 2 Preliminary Injunction remained in force until late August 2023, following the Bankruptcy Court’s extension of the initial LTL 2 Preliminary Injunction in June 2023.

Under the LTL 2 Preliminary Injunction, except for those cases filed in the federal court ovarian cancer multi-district litigation, discovery in all personal injury and wrongful death matters was permitted to proceed.

Furthermore, in April 2023, the Talc Claimants' Committee filed a motion to dismiss the LTL 2 Bankruptcy followed by similar motions from other claimants.

Hearings on the motions to dismiss occurred in June 2023.

In July 2023, the court dismissed the LTL 2 Bankruptcy case and, the same day, the Company stated its intent to appeal the decision and to continue its efforts to obtain a resolution of the talc claims.

In September 2023, the Bankruptcy Court entered an order granting LTL leave to seek a direct appeal to the Third Circuit Court of Appeals.

In October 2023, the Third Circuit granted LTL’s petition for a direct appeal.

In July 2024, the Third Circuit issued a non-precedential opinion affirming the Bankruptcy Court's decision to dismiss the LTL Bankruptcy case.

2025 Annual Report

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:

4 unchanged sentences

In December 2023, LTL changed its state of formation to Texas and its name to LLT Management LLC (LLT).

Following the dismissal of LTL 2, new lawsuits were filed, cases across the country that had been stayed were reactivated, and trials have commenced.

The majority of the cases are pending in federal court, organized in a multi-district litigation (MDL) in the United States District Court for the District of New Jersey.

In the MDL, case-specific discovery proceeded.

The MDL proceedings have been stayed by order of the bankruptcy court in the Red River Bankruptcy case discussed below.

In March 2024, the court granted the Company's motion for a renewed Daubert hearing prior to the trial.

The briefing on the renewed Daubert issues was completed in August 2024.

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 constitute 99.75 % of pending lawsuits against the Company relating to its talc powder products.

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:

3 unchanged sentences

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.

Red River also filed a motion for a temporary restraining order, seeking to extend the automatic stay to additional non-debtor entities.

Prior to filing, the initial proposed plan was amended to, among other things, increase the proposed resolution by $ 1.75 billion.

2024 Annual Report

Shortly after Red River filed its Chapter 11 petition, the U.S.

Trustee's office filed a motion to transfer venue in the New Jersey Bankruptcy Court, and thereafter, a motion to transfer venue and a motion to dismiss in the Texas Bankruptcy Court.

A coalition of six plaintiff law firms also filed a motion to transfer venue and a motion to dismiss in the Texas Bankruptcy Court.

In September 2024, the Texas Bankruptcy Court entered a temporary order enjoining the commencement or prosecution of all claims against Red River and certain non-debtor entities, including the Company, until October 11, 2024.

The temporary order was extended in October 2024 and again in December 2024.

The commencement and prosecution of all claims against Red River and certain non-debtor entities are currently enjoined until March 15, 2025.

Also in September 2024, the New Jersey Bankruptcy Court denied the U.S.

Trustee's motion to transfer venue without prejudice.

In October 2024, the Texas Bankruptcy Court denied the motion to transfer venue from Texas to New Jersey Bankruptcy Court.

A consolidated hearing to address, among other things, the motions to dismiss and plan confirmation is currently scheduled to begin on February 18, 2025.

Mesothelioma and State consumer protection claims are being addressed outside the Proposed Plan.

The Company separately has resolved 95 % of the mesothelioma lawsuits filed to date and has resolved the State claims.

To account for these settlements and the contemplated comprehensive resolution through the Proposed Plan, the Company recorded a cumulative incremental charge of approximately $ 5.0 billion, through the fourth fiscal quarter 2024.

As of December 29, 2024, the total present value of the reserve is approximately $ 11.6 billion (or nominal value of approximately $ 13.5 billion), net of payments made in fiscal 2024.

Approximately ten percent of the reserve is recorded as a current liability.

The recorded amount remains the Company's best estimate of probable loss.

In February 2019, the Company’s talc supplier, Imerys Talc America, Inc.

and two of its affiliates, Imerys Talc Vermont, Inc.

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 a voluntary petition 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).

The Imerys Bankruptcy relates to Imerys’s potential liability for personal injury from exposure to talcum powder sold by Imerys.

In its bankruptcy, Imerys alleges it has claims against the Company for indemnification and rights to joint insurance proceeds.

In its bankruptcy, Imerys proposed a Chapter 11 plan (the Imerys Plan) that contemplated all talc-related claims against it being channeled to a trust along with its alleged indemnification rights against the Company.

Following confirmation and consummation of the plan, the trust would pay talc claims pursuant to proposed trust distribution procedures (the TDP) and then seek indemnification from the Company.

In February 2021, Cyprus Mines Corporation (Cyprus), which had owned certain Imerys talc mines, filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code and filed its Disclosure Statement and Plan (the Cyprus Plan).

The Cyprus Plan contemplates a settlement with Imerys and talc claimants where Cyprus would make a monetary contribution to a trust established under the Imerys Plan in exchange for an injunction against talc claims asserted against it and certain affiliated parties.

Cyprus also asserts it has claims for indemnity against the Company arising out of talc personal injury claims.

Under the Cyprus Plan, Cyprus would also contribute its alleged indemnification rights to the trust.

In September 2023, Imerys and Cyprus filed amended plans of reorganization.

The amended plans contemplate a similar construct as the prior Imerys and Cyprus Plans, including all talc claims against Imerys and Cyprus (and certain other protected parties) being channeled to a trust along with Imerys’s and Cyprus’s alleged indemnification rights against the Company.

The Company opposed both plans on the basis that the plans inflated Imerys’s and Cyprus’s liability for talc claims and had the potential effect of imposing those inflated liabilities on the Company through the Company’s alleged indemnification obligations.

In August 2024, Imerys and Cyprus filed amended Chapter 11 plans and disclosure statements incorporating the terms of the settlement with the Company.

In October 2024, the Imerys Bankruptcy Court entered an order approving the Imerys Settlement Agreement (the Settlement Order).

The effectiveness of certain provisions of the settlement, including mutual releases, are subject to certain conditions, including the Imerys and Cyprus Plans being accepted by a sufficient number and amount of voting creditors to be confirmed under the Bankruptcy Code.

Certain insurers have appealed the Settlement Order and sought a stay of the order pending appeal, which the Court denied on January 13, 2025.

The briefing of the appeal in the District Court is scheduled to be completed in April 2025.

On January 5, 2025, Imerys and Cyprus each filed a certification of voting results, indicating that their respective plan had been accepted by each voting class of creditors.

A joint confirmation hearing for the plans is scheduled for April 2025.

(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.

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.

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In December 2019, the court denied, in part, the motion to dismiss.

The case was stayed in May 2022 pursuant to the LTL Bankruptcy Case and was reopened in May 2023.

In December 2023, the court granted Plaintiff’s motion for class certification.

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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.

In January 2025, the Third Circuit listed the appeal for oral argument in March 2025.

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

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In July 2021, the Company announced finalization of an agreement to settle the state and subdivision claims for up to $ 5.0 billion.

Approximately 70 % of the all-in settlement was paid by the end of fiscal fourth quarter 2024.

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.

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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.

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and leave to appeal was denied in October 2024.

Starting in November 2019, a series of shareholder derivative complaints were filed against the Company as the nominal defendant and certain current and former directors and officers as defendants in the Superior Court of New Jersey.

The complaint alleges breaches of fiduciary duties related to the marketing of opioids, and that the Company has suffered damages as a result of those alleged breaches.

As of September 2024, all the complaints had been dismissed, and all appeals exhausted.

2025 Annual Report

Product liability

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Changes to the accruals may be required in the future as additional information becomes available.

2024 Annual Report

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.

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ETHICON PHYSIOMESH Flexible Composite Mesh 110

ELMIRON 2,170

The number of pending lawsuits is expected to fluctuate as certain lawsuits are settled or dismissed and additional lawsuits are filed.

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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.

Litigation has also been filed in countries outside of the United States, primarily in the United Kingdom, Ireland, India and Italy.

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.

However, lawsuits in the United States remain, and the settlement program does not address litigation outside of the United States.

The Company continues to receive information with respect to potential additional costs associated with this recall on a worldwide basis.

The Company has established accruals for the costs associated with the United States settlement program and ASR Hip-related product liability litigation.

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

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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 on June 1, 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.

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.

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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.

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.

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Innovative Medicine

Claims for personal injury have been made against Janssen Pharmaceuticals, Inc.

and the Company arising out of the use of RISPERDAL, and related compounds, indicated for the treatment of schizophrenia, acute manic or mixed episodes associated with bipolar I disorder and irritability associated with autism.

Lawsuits primarily have been filed in state courts in Pennsylvania, California, and Missouri.

Other actions are pending in various courts in the United States and Canada.

The Company continues to defend RISPERDAL product liability lawsuits, and continues to evaluate potential costs related to those claims.

The Company has successfully defended a number of these cases but there have been verdicts against the Company, including a verdict in October 2019 of $ 8.0 billion of punitive damages related to one plaintiff, which the trial judge reduced to $ 6.8 million in January 2020.

In September 2021, the Company entered into a settlement in principle with the counsel representing plaintiffs in this matter and in substantially all of the outstanding cases in the United States.

The costs associated with this and other settlements are reflected in the Company's accruals.

Claims for personal injury have been made against a number of Johnson & Johnson companies, including Janssen Pharmaceuticals, Inc.

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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

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

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 and granted mass tort designation.

and granted mass tort designation.

In addition, three class action lawsuits have been filed in Canada.

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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.

Innovative Medicine - litigation against filers of abbreviated new drug applications (ANDAs)

The Company’s subsidiaries have brought lawsuits against generic companies that have filed ANDAs with the U.S.

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.

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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.

Beginning in March 2021, Janssen Pharmaceuticals, Inc.;

Bayer Pharma 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.

Innovative Medicine

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:

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Apotex Corp.;

Auson Pharmaceuticals Inc.;

Shanghai Auson Pharmaceuticals Co.

Cipla USA Inc.;

InvaGen Pharmaceuticals, Inc.;

Prinston Pharmaceuticals, Inc.;

Ascent Pharmaceuticals, Inc.;

and Hetero Labs Limited.

In October 2024, the Company entered into a confidential settlement agreement with Auson Pharmaceuticals Inc.

and Shanghai Auson Pharmaceuticals Co., Ltd.

and the case was dismissed.

In November 2024, the Company entered into confidential settlement agreements with Ascent Pharmaceuticals Inc.

that resulted in dismissal of litigation against Ascent Pharmaceuticals, Inc.

and Hetero Labs Limited.

In January 2025, the Company entered into a confidential settlement agreement with Prinston Pharmaceutical, Inc.

and Prinston Pharmaceuticals, Inc.

The following U.S.

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9,539,218 and 10,828,310.

In December 2025 and January 2026, the cases against Dr.

Reddy's Laboratories, Inc.;

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.;

Mankind Pharma Limited;

Apotex Corp.;

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.

10,828,310 was also under consideration by the USPTO in an IPR proceeding.

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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.

INVEGA SUSTENNA

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The following entities are named defendants:

Teva Pharmaceuticals USA, Inc.;

Mylan Laboratories Limited;

Pharmascience Inc.;

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Qilu Pharmaceutical Co.

and Qilu Pharma Inc.

Qilu Pharma Inc.;

Sun Pharmaceutical Industries Ltd.;

and Sun Pharmaceutical Industries, Inc.

The following U.S.

patent is included in one or more cases:

In October 2020, the district court issued a decision in the case against Teva Pharmaceuticals USA, Inc., finding that United States Patent No.

9,439,906 is not invalid.

Teva previously stipulated to infringement.

Teva appealed the decision, and, in April 2024, the United States Court of Appeals for the Federal Circuit vacated and remanded the case to the district court for further proceedings.

In November 2024, the district court issued its decision on remand, finding that United States Patent No.

9,439,906 is not invalid.

Teva appealed to the Court of Appeals for the Federal Circuit, and oral argument is scheduled for April 2025.

In February 2024, the district court issued a decision in the case against Tolmar Inc.

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9,439,906 is not invalid.

Tolmar previously stipulated to infringement.

Tolmar has appealed the decision.

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.

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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.

INVEGA TRINZA

Beginning in September 2020, Janssen Pharmaceuticals, Inc., Janssen Pharmaceutica NV, and Janssen Research & Development, LLC filed patent infringement lawsuits in United States district courts against generic manufacturers who have filed ANDAs seeking approval to market generic versions of INVEGA TRINZA before expiration of the Orange Book Listed Patent.

The following entities are named defendants:

Mylan Laboratories Limited;

Mylan Pharmaceuticals Inc.;

and Mylan Institutional LLC.

The following U.S.

patent is included in one or more cases:

In May 2023, the District Court issued a decision finding that Mylan’s proposed generic product infringes the asserted patent and that the patent is not invalid.

Mylan has appealed the decision.

Oral argument before the Court of Appeals for the Federal Circuit was held in February 2025.

Beginning in November 2021, Janssen Products, L.P., Janssen Sciences Ireland Unlimited Company, Gilead Sciences, Inc.

and Gilead Sciences Ireland UC filed patent infringement lawsuits in United States district courts against generic manufacturers who have filed ANDAs seeking approval to market generic versions of SYMTUZA before expiration of certain Orange Book Listed Patents.

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).

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:

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Lupin Pharmaceuticals, Inc.;

MSN Laboratories Private Ltd.;

MSN Life Sciences Private Ltd.;

MSN Pharmaceuticals Inc.;

and Apotex Corp.

The following U.S.

patents are included in one or more cases:

10,039,718 and 10,786,518.

A trial is scheduled to begin in February 2025.

Beginning in May 2022, Aragon Pharmaceuticals, Inc., Janssen Biotech, Inc.

(collectively, Janssen), Sloan Kettering Institute for Cancer Research (SKI) and The Regents of the University of California filed patent infringement lawsuits in United States district courts against generic manufacturers who have filed ANDAs seeking approval to market generic versions of ERLEADA before expiration of certain Orange Book Listed Patents.

The following entities are named defendants:

Zydus Worldwide DMCC;

Zydus Pharmaceuticals (USA), Inc.;

Zydus Lifesciences Limited;

Hetero Labs Limited Unit V;

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patents are included in one or more cases:

10,052,314 (which reissued as RE49,353);

and 11,963,952.

In October 2024, Janssen, The Regents of the University of California, SKI, Hetero Labs Limited Unit V, and Hetero USA, Inc.

entered into a confidential settlement, and the case was dismissed.

In November 2024, Janssen, The Regents of the University of California, Zydus Worldwide DMCC, Zydus Pharmaceuticals (USA), Inc., and Zydus Lifesciences Limited entered into confidential settlements, and the cases were dismissed.

Aragon Pharmaceuticals, Inc., Janssen Biotech, Inc.

and the Lupin parties entered into a confidential settlement in August 2025, and the case was dismissed.

Beginning in May 2023, Janssen Pharmaceuticals, Inc.

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The following entities are named defendants:

2024 Annual Report

Hikma Pharmaceuticals Inc.

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and 11,446,260.

Beginning in January 2024, Janssen Inc.

and Mitsubishi Tanabe Pharma Corporation initiated Statements of Claim under Section 6 of the Patented Medicines (Notice of Compliance) Regulations against generic manufacturers who filed ANDSs seeking approval to market generic versions of INVOKANA before expiration of the listed patents.

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.

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:

Jamp Pharma Corporation and Apotex Inc.

The following Canadian patents are included in one or more cases:

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;

and 12,410,195.

Trial in the Jamp action is scheduled for September 2025, and trial in the Apotex action is scheduled for December 2025.

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

Beginning in September 2025, Actelion Pharmaceuticals Ltd, Actelion Pharmaceuticals US, Inc., and Nippon Shinyaku Co.

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:

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.

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.

In the suit, 2seventy bio, Inc.

seeks damages and an injunction.

In March 2016, Abiomed, Inc.

(Abiomed) filed a declaratory judgment action against Maquet Cardiovascular LLC (Maquet) in U.S.

District Court for the District of Massachusetts seeking a declaration that the Impella does not infringe certain Maquet patents, currently U.S.

7,022,100 (’100);

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.

7,022,100 (’100 patent);

and 9,327,068.

Maquet counterclaimed for infringement of each of those patents.

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.

and 9,597,437.

After claim construction, Maquet alleged infringement of only the ’100 patent.

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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.

9,789,238 (’238 patent).

Maquet subsequently added U.S.

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

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It is possible that criminal charges and substantial fines and/or civil penalties or damages could result from government investigations or litigation.

In July 2018, the Public Prosecution Service in Rio de Janeiro and representatives from the Brazilian antitrust authority CADE inspected the offices of more than 30 companies including Johnson & Johnson do Brasil Indústria e Comércio de Produtos para Saúde Ltda.

The authorities appear to be investigating allegations of possible anti-competitive behavior and possible improper payments in the medical device industry.

The Company continues to respond to inquiries regarding the Foreign Corrupt Practices Act from the United States Department of Justice (DOJ) and the United States Securities and Exchange Commission.

The Company has been informed DOJ has closed its investigation.

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 begun producing documents and information responsive to the Civil Investigative Demands.

J&J Vision is in ongoing discussions with the DOJ regarding its inquiry.

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

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The complaint was filed under seal in December 2012.

The federal and state governments have declined to intervene, and the lawsuit is being prosecuted by the relators.

The federal and state governments have declined to intervene, and the lawsuit is being

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.

On June 13, 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 is pursuing post-trial briefing challenging the verdict on the off-label claims.

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.

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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 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.

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General litigation

The Company or its subsidiaries are also parties to various proceedings brought under the Comprehensive Environmental Response, Compensation, and Liability Act, commonly known as Superfund, and comparable state, local or foreign laws in which the primary relief sought is the Company’s agreement to implement remediation activities at designated hazardous waste sites or to reimburse the government or third parties for the costs they have incurred in performing remediation as such sites.

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.

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In January 2022, the United States Court of Appeals for the District of Columbia Circuit reversed the District Court’s decision.

In June 2023, defendants filed a petition for a writ of certiorari to the United States Supreme Court.

In June 2024, the Supreme Court vacated the D.C.

Circuit's decision and remanded the case to the D.C.

Oral argument was held in November 2024.

In February 2024, a putative class action was filed against the Company, the Pension & Benefits Committee of Johnson & Johnson (Committee), and certain named officers and employees, in United States District Court for the District of New Jersey.

In May 2024, the plaintiff filed an amended complaint against the Company and the Committee.

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.

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.

In October 2020, Fortis Advisors LLC (Fortis), in its capacity as representative of the former stockholders of Auris Health Inc.

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All claims against the individual defendants were dismissed.

The trial occurred in January 2024.

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.

The Company has appealed the decision.

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.

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.

Trial is scheduled for April 2025.

Innovative Medicine

In June 2019, the United States Federal Trade Commission (FTC) issued a Civil Investigative Demand to the Company and Janssen Biotech, Inc.

(collectively, Janssen) in connection with its investigation of whether Janssen’s REMICADE contracting practices violate federal antitrust laws.

The Company has produced documents and information responsive to the Civil Investigative Demand.

Janssen is in ongoing discussions with the FTC staff regarding its inquiry.

In February 2022, the United States Federal Trade Commission (FTC) issued Civil Investigative Demands to Johnson & Johnson and Janssen Biotech, Inc.

(collectively, Janssen) in connection with its investigation of whether advertising practices for REMICADE violate federal law.

Janssen has produced documents and information responsive to the Civil Investigative Demands.

In January 2025, the FTC Bureau of Consumer Protection informed Janssen that it was closing its investigation.

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

In October 2018, two separate putative class actions were filed against Actelion Pharmaceutical Ltd., Actelion Pharmaceuticals U.S., Inc., and Actelion Clinical Research, Inc.

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.

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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 plaintiff's motion for class certification.

In September 2024, the district court granted plaintiffs' motion for class certification.

Trial is scheduled for March 2026.

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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 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.

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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.

Restructuring

In fiscal 2023, the Company commenced restructuring actions within its Innovative Medicine and MedTech segments.

The amounts and details of the current year programs are included below.

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.

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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.

The program was completed in the fiscal fourth quarter of 2024.

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 $ 0.5 billion have been recorded since the restructuring was announced.

The estimated costs of the total program are between $ 0.7 billion - $ 0.8 billion and is expected to be completed by the end of fiscal year 2025.

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.

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)

MedTech Segment Orthopaedics franchise (2)

Innovative Medicine Segment (3)

MedTech Segment (2)

Total Programs $ 512 269 798

(1) 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.

(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.

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

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

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.

Prior periods have been recast to reflect this presentation.

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.

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Under the TSAs, Johnson & Johnson will provide Kenvue various services and, similarly, Kenvue will provide Johnson & Johnson various services.

The provision of services under the TSAs generally will terminate within 24 months following the Kenvue IPO.

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 both fiscal years 2024 and 2023.

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 and $ 1,089 million in the fiscal years 2023 and 2022, respectively, 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

2024 Annual Report

incremental costs directly related to separation activities.

In the fiscal 2022, as part of the planned separation of the Company’s Consumer Health business, the Company recognized approximately $ 0.5 billion in net incremental tax costs.

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.

Details of Net Earnings from Discontinued Operations, net of taxes are as follows:

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(Gain) on separation of Kenvue ( 20,984 )

Restructuring — 46

Earnings from Discontinued Operations Before Provision for Taxes on Income 22,134

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Capital expenditures $ 162

2025 Annual Report

Report of Independent Registered Public Accounting Firm

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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 Shockwave Medical, Inc., (“Shockwave”) from its assessment of internal control over financial reporting as of December 29, 2024 because it was acquired by the Company in a purchase business combination during 2024.

We have also excluded Shockwave from our audit of internal control over financial reporting.

Shockwave 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 29, 2024.

2024 Annual Report

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.

Definition and Limitations of Internal Control over Financial Reporting

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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.

For significant rebate programs, which include the U.S.

Managed Care, Medicare and Medicaid rebate programs, rebates and discounts estimated by management are based on contractual terms, historical experience, patient outcomes, trend analysis, and projected market conditions in the various markets served.

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.

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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 terms of the specific rebate programs, and the historical experience 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 and mandated terms of the Company’s rebate arrangements;

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

Litigation Contingencies – Talc

As described in Notes 1 and 19 to the consolidated financial statements, 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.

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.

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and/or there are numerous parties involved.

Management continues to believe that the Company has strong legal grounds to contest the talc verdicts it has appealed.

Notwithstanding management’s confidence in the safety of the Company’s talc products, in certain circumstances the Company has settled cases.

In May 2024, the Company proposed a consensual “prepackaged” Chapter 11 bankruptcy plan (the “Proposed Plan”) for the 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 September 2024, the Company’s subsidiary Red River Talc, LLC filed a voluntary petition, seeking relief under Chapter 11 of the Bankruptcy Code, in furtherance of the Company’s consensual “prepackaged” Proposed Plan.

As of December 29, 2024, the total present value of the reserve to resolve the talc claims is approximately $11.6 billion, of which approximately ten percent is recorded as a current liability.

The recorded amount remains the Company's best estimate of probable loss.

The Company is unable to estimate the possible loss or range of loss beyond the amounts accrued.

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, when determining whether a reasonable estimate of the loss or range of loss for the remaining unresolved talc claims can be made, and when determining the timing of settlement payments for the remaining unresolved talc claims, 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 loss contingencies associated with the talc litigation.

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, 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) gaining an understanding of the Company’s process around the accounting and reporting for the talc litigation;

(ii) obtaining and evaluating certain executed settlement agreements related to the talc litigation;

(iii) discussing the status of significant known actual and potential litigation and settlements activity with the Company’s in-house legal counsel, as well as external counsel when deemed necessary;

(iv) obtaining and evaluating the letters of audit inquiry with internal and external legal counsel related to the talc litigation;

(v) evaluating the reasonableness of management’s assessment regarding whether an unfavorable outcome is reasonably possible or probable and reasonably estimable;

and (vi) evaluating the sufficiency of the Company’s litigation contingencies disclosures.

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

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We have not been able to determine the specific year we began serving as auditor of the Company.

2024 Annual Report

Management’s report on internal control over financial reporting

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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 Shockwave Medical, Inc.

(Shockwave), in a business combination in May 2024.

Shockwave’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 29, 2024.

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.

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Chief Executive Officer

2025 Annual Report

Shareholder return performance graphs

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S&P Healthcare Equipment Index $100.00 $119.40 $96.83 $105.55 $117.05 $126.77

2024 Annual Report

10 Year Shareholder Return Performance J&J vs.

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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

Changes in and disagreements with accountants on accounting and financial disclosure

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data