SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
------------------------------
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-3215
------------------------------
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
(Full title of the Plan)
JOHNSON & JOHNSON
ONE JOHNSON & JOHNSON PLAZA
NEW BRUNSWICK, NEW JERSEY 08933
(Name of issuer of the securities held pursuant to the Plan
and the address of its principal executive office)
Item 4. Financial Statements and Exhibits
Report of Independent Registered Public Accounting Firm
Statement of Net Assets Available for Benefits
Statement of Changes in Net Assets Available for Benefits
Notes to Financial Statements
Supplemental Schedule:
Schedule of Assets Held for Investment Purposes
Consent of Morris, Davis & Chan, LLP, dated June 18, 2004
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
ALZA CORPORATION TAX DEFERRAL
INVESTMENT PLAN
By: /s/ D.R. Hoffmann
--------------------------
D.R. Hoffmann, Trustee
June 24, 2004
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
-----------------
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULE
AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 2003 AND 2002
ALZA CORPORATION TAX DEFERRAL
INVESTMENT PLAN
TABLE OF CONTENTS
Report of Independent Registered Public Accounting Firm 1
Statement of Net Assets Available for Benefits 2
Statement of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-10
Supplemental Schedule: 11
Schedule of Assets Held for Investment Purposes 12-24
i
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Pension Committee
Johnson & Johnson
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
We have audited the accompanying statement of net assets available for benefits
of the ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN (the Plan) as of December
31, 2003 and 2002, and the related statement of changes in net assets available
for benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2003 and 2002, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedule of
assets held for investment purposes as of December 31, 2003 is presented for the
purpose of complying with the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974, and is not a required part of the basic financial statements. The
supplemental schedule has been subjected to the auditing procedures applied in
our audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
June 18, 2004
Oakland, California
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
Statement of Net Assets Available for Benefits
December 31, 2003 and 2002
2003 2002
------------ ------------
Investments at fair value:
Mutual funds:
Merrill Lynch Ready Asset Trust $ 16,216,024 $ 18,006,196
Merrill Lynch Basic Value 13,108,200 10,130,993
Merrill Lynch Corporate Bond 4,515,648 4,384,311
Merrill Lynch Balanced Capital 3,735,789 3,197,689
Merrill Lynch Global Allocation 3,801,829 3,209,991
John Hancock Emerging Growth 2,319,984 1,940,668
Templeton International 2,145,532 1,653,964
Alliance New Europe 106,673 82,426
Alliance Premier Growth 908,971 804,500
Fidelity Advisor Overseas 311,924 130,143
Franklin California Growth 2,488,012 1,505,786
Merrill Lynch Healthcare 1,629,900 1,313,207
Merrill Lynch International Index 416,048 305,220
Merrill Lynch Pacific 281,205 62,981
Merrill Lynch Small Cap Index 744,425 297,577
Merrill Lynch S&P 500 Index 8,050,054 6,001,171
Merrill Lynch Fundamental Growth 6,494,062 5,198,889
Munder NetNet 762,088 315,956
PIMCO Small Cap Value 1,099,099 801,285
Other investments:
Retirement Cash Management Account 25,206,774 24,584,885
Johnson & Johnson Common Stock 40,127,924 46,203,705
Participant loans 1,230,808 1,052,603
------------ ------------
Total investments 135,700,973 131,184,146
Cash 42,953 754,256
Employer contributions receivable -- 1,717,217
Accrued interest and dividends receivable 24,844 24,463
Receivable for investment sold 43,934 --
------------ ------------
Net assets available for benefits $135,812,704 $133,680,082
============ ============
See accompanying notes to financial statements.
2
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
Statement of Changes in Net Assets Available for Benefits
Years Ended December 31, 2003 and 2002
2003 2002
------------- -------------
Additions to net assets attributed to:
Investment income:
Net realized and unrealized appreciation
(depreciation) in fair value of investments $ 11,396,535 $ (20,140,653)
Interest and dividends 1,679,266 1,941,730
------------- -------------
13,075,801 (18,198,923)
Employer contributions -- 2,691,099
Participant salary reduction contributions -- 8,001,584
Participant rollover contributions 658,545 2,116,540
------------- -------------
Net additions 13,734,346 (5,389,700)
------------- -------------
Deductions from net assets attributed to:
Distributions 11,598,464 18,758,242
Administrative expenses 3,260 2,894
------------- -------------
Net deductions 11,601,724 18,761,136
------------- -------------
Increase (decrease) in net assets 2,132,622 (24,150,836)
Net assets available for benefits:
Beginning of year 133,680,082 157,830,918
------------- -------------
End of year $ 135,812,704 $ 133,680,082
============= =============
See accompanying notes to financial statements.
3
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
Notes to Financial Statements
December 31, 2003 and 2002
1. DESCRIPTION OF PLAN
The following description of the ALZA CORPORATION TAX DEFERRAL INVESTMENT
PLAN (the Plan) provides only general information. Participants should
refer to the Summary Plan Description for a more complete description of
the Plan's provisions.
General
The Plan is a defined contribution plan. ALZA Corporation (the Company or
ALZA) remits to the Trust created by the Plan such amounts as are
voluntarily elected by participants and Company contributions. The Plan is
subject to the Employee Retirement Income Security Act of 1974 (ERISA).
On June 22, 2001, a merger between Johnson & Johnson and ALZA Corporation
was completed. Effective January 1, 2003, the Johnson & Johnson Pension
Committee has the responsibility of making decisions with respect to the
Plan. There were no participant salary reduction or Company contributions
during 2003. Additionally, during 2003 the Johnson & Johnson Pension
Committee approved the following:
1) Freeze all new investments into the Retirement Cash Management
Account option as soon as administratively feasible.
2) The merger of the Plan into the Johnson & Johnson Salaried Savings
Plan upon completion of a compliance audit and any necessary and
appropriate corrections.
Contributions
Prior to January 1, 2003, participants may make elective salary reduction
contributions which are tax deferred and are, therefore, not included in a
participant's compensation for federal income tax purposes until
distributed to the participant. Under the Plan, participants may elect to
contribute through bi-weekly payroll deductions a fixed dollar amount up
to a maximum of $11,000 for participants under age 50, or $12,000 for
participants age 50 and up in 2002. Further restrictions may be imposed on
highly compensated individuals and Plan participants who also participate
in the ALZA Retirement Plan.
For the year ended December 31, 2002 the Company made a contribution of
$20 each pay period for each employee (thereby making all ALZA employees
participants) to begin an account and encourage employees to participate
further in the Plan. The Company also made a matching contribution at 50%
of participant contributions. The maximum Company contribution was $2,000
for each participant.
4
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
Notes to Financial Statements
December 31, 2003 and 2002
1. DESCRIPTION OF PLAN (continued)
Participant Accounts
Each participant's account is credited with 100% of the contributions made
by the participant through a salary deferral agreement. The Company will
suspend the pretax salary deferral agreement of any participant if it
determines that a participant's annual contribution limitation, as
described in the Internal Revenue Code, will be exceeded.
Participants are allowed to make rollover contributions of amounts
received from other qualified employer-sponsored retirement plans. Such
contributions are deposited in the appropriate investment funds in
accordance with the participant's directions and the Plan's provisions.
Participants allocate their contributions for investment into mutual funds
and other investment vehicles (see Note 5). Earnings and losses of the
investments are allocated to participants in accordance with the Plan's
provisions.
Vesting
Participant account balances are 100% vested at all times.
Distribution of Benefits
Distributions from the Plan are available to a participant (or the
beneficiary) in any of the following situations: termination of employment
with the Company, retirement, total disability, death, reaching age
59-1/2, or a qualified financial hardship. The participant (or the
beneficiary) may elect to receive a lump sum distribution of the value of
his account, or he or she may choose to have the funds remain in the Plan.
Loans
A participant who is employed by the Company and meets certain Plan
requirements may elect to borrow funds from his or her account. The
borrowings are evidenced by notes that bear interest at the published
prime rate plus 1% and have repayment terms of one to 30 years, depending
on the purpose of the loans. Such repayments and interest thereon are
credited to the borrower's account and reinvested in the same manner as
current contributions.
5
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
Notes to Financial Statements
December 31, 2003 and 2002
1. DESCRIPTION OF PLAN (Continued)
Income Tax Status
The Plan obtained its latest determination letter on March 11, 2002, in
which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with the applicable requirements of the Internal Revenue
Code. The Plan has been amended since receiving the determination letter.
However, the Plan Administrator and the Plan's tax counsel believe that
the Plan is currently designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code. Therefore, no
provision for income taxes has been included in the Plan's financial
statements.
Administrative Expenses
Although not required to do so, the Company has paid all of the expenses
(except for certain broker fees on transactions executed at the
participant's discretion, and loan fees) associated with administering the
Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The Plan's financial statements are prepared on the accrual basis of
accounting in accordance with accounting principles generally accepted in
the United States of America. Revenues are recognized as earned. Expenses
are recorded as incurred.
Investment Valuation and Income Recognition
Investments in mutual funds are valued at the published fair value as
reported by the fund manager which represents the net asset value of
shares held by the Plan at year end. Other investments are valued at the
published fair value as reported. The participant loans receivable is
valued at cost which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded
on the ex-dividend date.
Estimates
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America requires the
Plan management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results may differ
from those estimates.
6
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
Notes to Financial Statements
December 31, 2003 and 2002
3. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Merrill
Lynch Trust Company of California. Merrill Lynch Trust Company of
California is the trustee as defined by the Plan and, therefore, these
transactions qualify as party-in-interest transactions. Fees for the
investment management services are paid by ALZA.
4. PLAN TERMINATION
The Company has the right under the Plan to terminate the Plan at any time
subject to the provisions of ERISA.
5. INVESTMENT FUND ACTIVITY
The following are investment options under the Plan:
Mutual Funds
Merrill Lynch Ready Asset Trust - A money market fund.
Merrill Lynch Basic Value Fund- A fund of equity securities that
management of the fund believes are undervalued and represent basic
investment value.
Merrill Lynch Corporate Bond Fund - A fund of long-term corporate
fixed-income securities, including corporate bonds and notes, convertible
securities and preferred stocks.
Merrill Lynch Balanced Capital Fund - A fund of equity, debt and
convertible securities that seeks to achieve the highest total return
consistent with prudent risk.
Merrill Lynch Global Allocation Fund - A fund investing in domestic and
foreign equities, debt, and money markets seeking total return consistent
with prudent risk.
John Hancock Emerging Growth Fund - A fund investing in emerging-growth
companies.
Templeton International Fund - A fund investing in equity securities
trading on foreign markets seeking long term growth of capital.
7
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
Notes to Financial Statements
December 31, 2003 and 2002
5. INVESTMENT FUND ACTIVITY (Continued)
Mutual Funds (continued)
Alliance New Europe Fund - This fund seeks long-term capital appreciation
by investing at least 65% of its total assets in the equity securities of
European companies.
Alliance Premier Growth Fund - This fund seeks long-term growth of capital
by investing at least 85% of its total assets in the equity securities of
large, carefully selected, U.S. companies.
Fidelity Advisor Overseas Fund - This fund seeks capital growth by
investing at least 65% of its total assets in foreign securities.
Franklin California Growth Fund - This fund seeks capital appreciation by
investing in equity securities of companies that maintain their
headquarters or conduct a majority of their operations in California.
Merrill Lynch Healthcare Fund - This fund seeks long-term capital
appreciation through worldwide investment in equity securities of
companies that derive a substantial portion of their sales from products
and services in health care.
Merrill Lynch International Index Fund - This fund seeks to provide
investment results that, before expenses, replicate the total return of
the Morgan Stanley Capital International EAFE Index.
Merrill Lynch Pacific Fund - This fund seeks long-term capital
appreciation by investing primarily in equities of corporations domiciled
in Far Eastern or Western Pacific countries.
Merrill Lynch Small Cap Index Fund - This fund seeks to provide investment
results that, before expenses, replicate the total return of the Russell
2000 Index.
Merrill Lynch S&P 500 Index Fund - This fund seeks to provide investment
results that, before expenses, replicate the total return of the Standard
& Poor's 500(TM) Composite Stock Price Index.
Merrill Lynch Fundamental Growth Fund - This fund seeks long-term growth
of capital by investing at least 65% of assets in equities issued by
medium and large capitalization companies.
8
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
Notes to Financial Statements
December 31, 2003 and 2002
5. INVESTMENT FUND ACTIVITY (Continued)
Mutual Funds (continued)
Munder NetNet Fund - This fund seeks long-term capital appreciation by
investing at least 65% of its total assets in equity securities.
PIMCO Small Cap Value Fund - This fund seeks long-term growth of capital
by investing at least 65% of its total assets in the common stocks of
companies with market capitalizations between $50 million and $1 billion.
Other Investments
Retirement Cash Management Account (RCMA) - A self-directed brokerage
account that enables participants to choose from a wide variety of
investments.
Johnson & Johnson Common Stock Fund - As a result of the merger on June
22, 2001, between Johnson & Johnson and ALZA Corporation, holders of ALZA
common stock received 0.98 of a share of Johnson & Johnson common stock
for each share of ALZA common stock.
Investments representing 5% or more of the Plan's net assets were as
follows:
December 31,
---------------------------
2003 2002
---- ----
Merrill Lynch Ready Asset Trust $16,216,024 $18,006,196
Merrill Lynch Basic Value Fund 13,108,200 10,130,993
Merrill Lynch S&P 500 Index Fund 8,050,054 --
Johnson & Johnson Common Stock
Held in Johnson & Johnson Common Stock Fund 40,127,924 46,203,705
Held in Retirement Cash Management Account 2,489,684 3,432,181
6. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
Included in net assets available for benefits at December 31, 2003 and
2002 are benefits due to terminated participants of $65,504 and $0,
respectively.
In accordance with generally accepted accounting principles, benefits due
to terminated participants are included in net assets available for
benefits.
9
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
Notes to Financial Statements
December 31, 2003 and 2002
6. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 (Continued)
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500 as of December 31, 2003:
Net assets available for benefits per the financial statements $ 135,812,704
Amounts allocated to withdrawing participants (65,504)
-------------
Net assets available for benefits per Form 5500 $ 135,747,200
=============
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500 for the year ended December 31, 2003:
Benefits paid to participants per the financial statements $ 11,598,464
Add: Amounts allocated to withdrawing participants at
end of year 65,504
Less: Amounts allocated to withdrawing participants at
beginning of year --
-------------
Benefits paid to participants per Form 5500 $ 11,663,968
=============
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to year
end but not yet distributed.
7. RECLASSIFICATION
Certain amounts in the prior year financial statements have been reclassified to
conform to the current year presentation.
10
SUPPLEMENTAL SCHEDULE
11
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2003
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par, or Maturity Value Cost Current Value
------------------------ ---------------------------------- ---- -------------
Alliance New Europe Fund $ 117,640 $ 106,673
Alliance Premier Growth Fund 1,284,215 908,971
Fidelity Advisor Overseas Fund 303,890 311,924
Franklin California Growth Fund 2,686,337 2,488,012
John Hancock Emerging Growth Fund 2,966,637 2,319,984
* Merrill Lynch Global Allocation Fund 3,333,503 3,801,829
* Merrill Lynch Fundamental Growth Fund 9,313,355 6,494,062
* Merrill Lynch Healthcare Fund 1,598,965 1,629,900
* Merrill Lynch Basic Value Fund 13,574,032 13,108,200
* Merrill Lynch Balanced Capital Fund 4,151,056 3,735,789
* Merrill Lynch S&P 500 Index Fund 8,953,236 8,050,054
* Merrill Lynch Small Cap Index Fund 645,934 744,425
* Merrill Lynch International Index Fund 447,046 416,048
* Merrill Lynch Pacific Fund 268,363 281,205
* Merrill Lynch Corporate Bond Fund 4,326,262 4,515,648
* Merrill Lynch Ready Asset Trust Fund 16,216,024 16,216,024
Munder NetNet Fund 937,388 762,088
PIMCO Small Cap Value Fund 865,463 1,099,099
Templeton International Fund 1,943,521 2,145,532
* Johnson & Johnson Common Stock 776,770 shares 7,774,469 40,127,924
Retirement Cash Management Account
24/7 Real Media Inc. Common Stock 2,500 shares 3,115 3,350
3Com Corp. Common Stock 110 shares 509 899
3M Company Common Stock 210 shares 25,893 17,856
4 Kids Entertainment Inc. Common Stock 1,000 shares 22,080 26,020
Abbey Natl. Common Stock 376 shares 6,981 7,148
Abbott Labs Common Stock 700 shares 31,244 32,620
Abgenix Inc. Common Stock 257 shares 1,894 3,174
ABN-Amro Holding Common Stock 339 shares 6,276 7,960
Adaptec Inc. Common Stock 700 shares 3,955 6,188
ADC Telecommunications Inc. Common Stock 1000 shares 2,090 2,970
Adobe Systems Inc. Common Stock 100 shares 4,378 3,908
Advance Auto Parts Inc. Common Stock 55 shares 4,522 4,477
Advance PCS Common Stock 70 shares 4,080 3,695
Advanced Fibre Communication Common Stock 100 shares 1,868 2,015
Advanced Medical Inc. Common Stock 500 shares 885 1,695
Advanced Micro Devices Inc. Common Stock 2307 shares 14,903 34,374
Aegon Common Stock 522 shares 7,847 7,726
Affymetrix Inc. Common Stock 1,068 shares 27,069 26,283
Agere Systems Inc. Cl A Common Stock 18 shares 32 55
Agere Systems Inc. Cl B Common Stock 524 shares 885 1,520
Agilent Technologies Inc. Common Stock 446 shares 9,307 13,041
AKZO Common Stock 240 shares 8,566 9,170
Alcoa Inc. Common Stock 2,362 shares 63,167 89,756
Alkermes Inc. Common Stock 1,000 shares 12,272 13,500
Allied Irish Banks Common Stock 500 shares 13,440 15,870
Allstate Corp. Common Stock 120 shares 4,439 5,162
Altera Corp. Common Stock 3,500 shares 51,705 79,275
Altria Group Inc. Common Stock 217 shares 9,850 11,831
Amazon.com Common Stock 300 shares 8,829 15,786
Amerada Hess Corp. Common Stock 1,500 shares 82,517 79,755
America Movil Common Stock 600 shares 10,248 16,404
American Bank Common Stock 4,000 shares 2,880 6,120
American International Group Inc. Common Stock 753 shares 47,864 49,909
American Tower Corp. Common Stock 325 shares 3,611 3,517
Ameritrade Hldg Corp. Common Stock 425 shares 4,841 5,996
* Represents parties-in-interest
12
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2003
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par, or Maturity Value Cost Current Value
------------------------ ---------------------------------- ---- -------------
Amgen Inc. Common Stock 1,133 shares $ 61,731 $ 70,008
Amkor Tech Inc. Common Stock 200 shares 3,707 3,628
Amr. Corp. Common Stock 46 shares 639 596
Anadarko Pete Corp. Common Stock 500 shares 25,321 25,505
Andrex Group Common Stock 100 shares 1,705 2,404
Anheusr Busch Cos Inc. Common Stock 575 shares 27,830 30,291
Apollo Group Inc. Common Stock 65 shares 3,299 4,408
Apple Computer Inc. Common Stock 632 shares 11,452 13,506
Applebees International Inc. Common Stock 60 shares 2,001 2,360
Applied Digital Solutions Common Stock 1,500 shares 615 707
Applied Materials Inc. Common Stock 13,243 shares 202,110 297,173
Aradigm Corp. Common Stock 8,500 shares 17,765 14,535
Archer Daniels Common Stock 74 shares 1,090 1,126
Ariad Pharmaceuticals Inc. Common Stock 100 shares 232 745
Ariba Inc. Common Stock 500 shares 1,240 1,500
Asml Hldng Common Stock 240 shares 4,625 4,812
AT&T Wireless Common Stock 269 shares 1,734 2,149
AT&T Corp. Common Stock 168 shares 4,725 3,410
Atmel Corp. Common Stock 550 shares 1,556 3,305
Avanex Corp. Common Stock 1,000 shares 1,771 4,990
Avaya Inc. Common Stock 163 shares 609 2,109
Avon Prod. Inc. Common Stock 218 shares 13,203 14,713
Bae System Common Stock 866 shares 7,953 10,433
Baker Hughes Inc. Common Stock 83 shares 2,874 2,669
Ballard Pwr Sys. Inc. Common Stock 500 shares 6,124 5,915
Bank of America Corp. Common Stock 675 shares 54,880 54,290
Bank of NY Common Stock 45 shares 1,497 1,490
Bank One Corp. Common Stock 59 shares 2,637 2,690
BARR Pharmaceuticals Inc. Common Stock 55 shares 4,572 4,232
Barrick Gold Corp. Common Stock 1,000 shares 21,890 22,710
BASF Ag Common Stock 312 shares 13,655 17,394
BEA Sys. Inc. Common Stock 1,000 shares 11,470 12,300
Bed Bath & Beyond Inc. Common Stock 125 shares 4,914 5,419
Bellsouth Corp. Common Stock 1,000 shares 27,946 28,300
Berkshire Hathaway Inc. Common Stock 20 shares 48,460 56,300
Best Buy Co. Inc. Common Stock 187 shares 6,072 9,769
BHP Billiton Ltd. Common Stock 555 shares 7,721 10,134
Biogen Inc. Common Stock 26 shares 1,025 954
BJS Wholesale Club Inc. Common Stock 1,000 shares 18,300 22,960
Block H&R Inc. Common Stock 55 shares 304 3,045
BMC Software Inc. Common Stock 1,039 shares 19,618 19,377
Boeing Company Common Stock 250 shares 8,247 10,535
Bookham Tech. Common Stock 1,000 shares 2,559 2,500
Boston Scientific Corp. Common Stock 400 shares 17,008 14,704
Bowater Inc. Common Stock 18 shares 863 834
Boykin Lodging Co. Common Stock 6,000 shares 55,980 54,900
BP Plc Common Stock 2,857 shares 135,517 140,993
Bristol Myers Squibb Co. Common Stock 386 shares 8,964 11,032
Broadcom Corp. Common Stock 385 shares 9,531 13,098
Broadvision Inc. Common Stock 111 shares 426 473
Brocade Communications Sys. Common Stock 1,000 shares 4,140 5,780
Cable & Wireless Pub Ltd. Co. Common Stock 200 shares 466 1,402
Cable Design Technologies Co. Common Stock 300 shares 1,770 2,697
Cadbury Schweppes Common Stock 586 shares 16,749 17,516
California Water Svc Group Common Stock 1,000 shares 23,650 27,400
Cam Comm Solutions Inc. Common Stock 500 shares 1,770 3,550
* Represents parties-in-interest
13
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2003
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par, or Maturity Value Cost Current Value
------------------------ ---------------------------------- ---- -------------
Canon Inc. Common Stock 267 shares $ 11,103 $ 12,720
Capital One Financial Common Stock 75 shares 5,015 4,597
Catalytica Energy Sys. Common Stock 1,001 shares 2,763 3,503
Cedar Fair Common Stock 5,000 shares 118,000 153,750
Central Coast Bancorp Ca. Common Stock 330 shares 6,190 5,950
Cepheid Inc. Common Stock 100 shares 510 958
Chesapeake Energy Common Stock 230 shares - 3,123
ChevronTexaco Corp. Common Stock 916 shares 68,760 79,140
Chicos Fas Inc. Common Stock 110 shares 404 4,065
China Mobile HK Common Stock 100 shares 1,208 1,553
Ciena Corp. Common Stock 500 shares 2,853 3,280
Cisco Systems Inc. Common Stock 24,385 shares 385,905 590,849
Citigroup Inc. Common Stock 3,796 shares 152,528 184,258
Citrix Systems Inc. Common Stock 1,510 shares 23,515 31,952
Clear Channel Communications Common Stock 43 shares 2,057 2,014
CMGI Common Stock 450 shares 520 801
Coach Inc. Common Stock 165 shares 6,265 6,229
Coca Cola Co. Common Stock 257 shares 11,252 13,023
Cognizant Technology Solution Common Stock 80 shares 4,114 3,651
Colonial Properties Common Stock 1,250 shares 47,228 49,500
Comcast Corp. Class A Common Stock 270 shares 7,244 8,853
Comcast Corp. Class A SPCL Common Stock 71 shares 1,946 2,222
Comp Financial Common Stock 315 shares 6,523 7,565
Conagra Inc. Common Stock 1,000 shares 26,075 26,390
Connectics Corp. Common Stock 2,000 shares 24,040 36,320
Conocophillips Common Stock 3,093 shares 194,871 202,808
Copper Mtn. Networks Inc. Common Stock 80 shares 341 862
Corning Inc. Common Stock 593 shares 4,530 6,185
Corporate High Yld Common Stock 3,000 shares 20,550 26,340
Correctional Properties Trust Common Stock 6,000 shares 130,200 172,800
Costco Wholesale Common Stock 60 shares 1,976 2,231
Countrywide Financial Common Stock 60 shares 6,542 4,551
Coventry Health Care Inc. Common Stock 85 shares 4,753 5,482
Covis Corp. Common Stock 1,093 shares 776 1,858
COX Communications Inc. Common Stock 300 shares 9,404 10,335
CSX Corp. Common Stock 46 shares 1,613 1,653
Cypress Semiconductor Common Stock 200 shares 4,181 4,272
Danaher Corp. Common Stock 50 shares 3,790 4,588
Danske Bank Common Stock 812 shares 16,085 19,051
Deere Co. Common Stock 63 shares 3,826 4,098
Del Monte Foods Co. Common Stock 89 shares 685 926
Dell Inc. Common Stock 5,517 shares 166,168 187,468
Deutsche Bank Common Stock 127 shares 6,808 10,441
Developers Diversified Rlty. Common Stock 5,365 shares 140,146 180,103
Diageo Common Stock 317 shares 15,547 16,757
Diametrics Med. Common Stock 200 shares 330 55
Digital Lightwave Inc. Common Stock 100 shares 123 81
Digital Video Systems Common Stock 500 shares 1,060 1,300
Ditech Communications Common Stock 185 shares 403 3,533
DNX Corp. Common Stock 78 shares 7,814 8,156
Donaldson Co. Inc. Common Stock 400 shares 14,400 23,664
Doubleclick Inc. Common Stock 3 shares 38 31
Dover Corp. Common Stock 120 shares 4,895 4,770
DSL Net Inc. Common Stock 200 shares 98 120
DSM Common Stock 593 shares 7,975 7,298
Duke Realty Corp. Common Stock 1,000 shares 28,533 31,000
* Represents parties-in-interest
14
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2003
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par, or Maturity Value Cost Current Value
------------------------ ---------------------------------- ---- -------------
Dupont Common Stock 646 shares $ 30,402 $ 29,645
Durect Corp. Common Stock 1,500 shares 3,030 3,750
E Trade Group Inc. Common Stock 903 shares 7,135 11,423
Eaton Corp. Common Stock 13 shares 1,323 1,404
Edison International Common Stock 238 shares 2,819 5,217
Egain Communications Corp. Common Stock 60 shares 216 123
Eisai Ltd. Common Stock 562 shares 14,128 15,155
Elan Corp. Common Stock 400 shares 1,259 2,756
Eloyalty Corp. Common Stock 30 shares 124 110
EMC Corp. Common Stock 7,466 shares 81,306 96,461
Emerson Elec. Co. Common Stock 16 shares 976 1,036
Encana Corp. Common Stock 184 shares 7,521 7,257
Endesa Common Stock 1,245 shares 16,434 23,780
Engage Technologies Inc. Common Stock 250 shares 32 1
Eni Common Stock 173 shares 15,212 16,432
Enron Corp. Common Stock 330 shares 4,620 5,910
Enterasys Networks Inc. Common Stock 500 shares 2,411 1,875
Entrada Networks Inc. Common Stock 50 shares 7 7
Equity Residential Properties Common Stock 1,000 shares 27,514 29,510
Ericsson Common Stock 12 shares 81 212
Essex Property Inc. Common Stock 900 shares 51,512 57,798
Everest Common Stock 35 shares 3,221 2,961
Excelligence Learning Common Stock 125 shares 362 762
Extreme Networks Inc. Common Stock 100 shares 327 721
Exxon Mobil Corp. Common Stock 2,415 shares 94,640 99,015
Fannie Mae Common Stock 155 shares 9,999 11,667
FedEx Corp. Common Stock 25 shares 1,355 1,687
Fibercore Inc. Common Stock 1,100 shares 231 5
Finisar Corp. Common Stock 1,175 shares 1,116 3,678
First Data Corp. Common Stock 650 shares 25,920 26,709
Five Star Quality Care Common Stock 186 shares 255 818
FleetBoston Finl Corp. Common Stock 37 shares 1,245 1,615
Flextronics International Ltd. Common Stock 1,562 shares 17,318 23,118
Fluor Corp. Common Stock 200 shares 5,600 7,928
Forest Labs Inc. Common Stock 400 shares 22,102 24,720
Fortune Brands Inc. Common Stock 45 shares 3,491 3,217
Foundry Networks Inc. Common Stock 365 shares 5,763 9,975
France Telecom Common Stock 100 shares 1,777 2,859
Freeprt-McMran Copper & Gold Common Stock 75 shares 3,402 3,160
Fuji Photo Film Common Stock 637 shares 21,502 20,894
Gannett Co. Common Stock 500 shares 40,334 44,580
Gap Inc. Common Stock 1,093 shares 19,692 25,369
Genaera Corp. Common Stock 1,000 shares 2,378 3,270
Genentech Inc. Common Stock 400 shares 16,986 37,428
General Electric Common Stock 8,122 shares 222,843 251,605
General Mills Common Stock 25 shares 1,291 1,133
General Motors Corp. Common Stock 100 shares 3,686 5,340
General Dynamics Corp. Common Stock 100 shares 7,937 9,039
Genzyme Corp. Common Stock 65 shares 3,215 3,204
Geron Corp. Common Stock 1,000 shares 3,600 9,970
Gillette Co. Common Stock 127 shares 4,370 4,665
Glaxosmithkline Common Stock 901 shares 37,929 42,005
Globalstar Telecomm Common Stock 200 shares 10 5
Great Lakes REIT Inc. Common Stock 2,000 shares 33,300 31,400
Green Star Prods Inc. Common Stock 4,400 shares 108 330
Gtech Holdings Corp. Common Stock 90 shares 4,765 4,454
* Represents parties-in-interest
15
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2003
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par, or Maturity Value Cost Current Value
------------------------ ---------------------------------- ---- -------------
Guidant Corp. Common Stock 600 shares $ 18,510 $ 36,120
Harley Davidson Inc. Common Stock 800 shares 36,960 38,024
Harmonic Lightwaves Inc. Common Stock 400 shares 920 2,900
Harmony Gold Common Stock 1,000 shares 17,002 16,230
Health Care Property Invs. Common Stock 4,000 shares 153,200 203,200
Health Care REIT Inc. Common Stock 6,000 shares 162,300 216,000
Health Grades Inc. Common Stock 2,000 shares 60 1,200
Health Mgmt Assoc. Inc. Common Stock 500 shares 8,950 12,000
Healthcare Rlty Common Stock 5,000 shares 146,250 178,750
Heinz H J Co. Common Stock 200 shares 6,574 7,286
Hewlett Packard Co. Common Stock 819 shares 16,088 18,812
Hitachi Ltd. Common Stock 173 shares 7,478 10,392
Home Depot Inc. Common Stock 1,803 shares 49,672 63,988
Hospitality Properties Common Stock 2,000 shares 70,400 82,560
HRPT Properties Common Stock 28,600 shares 268,278 288,574
HSBC Hldg Common Stock 161 shares 10,113 12,690
Humphrey Hospitality Common Stock 10,000 shares 19,600 46,100
I2 Technologies Inc. Common Stock 610 shares 702 1,013
Ibis Technology Corp. Common Stock 30 shares 141 338
Icos Corp. Common Stock 500 shares 13,925 20,640
Identix Inc. Common Stock 134 shares 690 596
Illinois Tool Works Inc. Common Stock 25 shares 1,974 2,098
Illumina Inc. Common Stock 230 shares 775 1,622
Inamed Corp. Common Stock 75 shares 5,180 3,604
Incyte Corp. Common Stock 60 shares 274 410
Infocus Corp. Common Stock 1,000 shares 6,160 9,680
Ing Groep Common Stock 675 shares 11,311 15,802
Innkeepers USA Common Stock 5,000 shares 38,300 41,850
Insignia Solutions Common Stock 3,000 shares 4,601 2,730
Integrated Device Tech Common Stock 100 shares 1,274 1,717
Intel Corp. Common Stock 21,288 shares 414,564 682,270
Interferon Common Stock 3,000 shares 135 90
Internet Architecture Common Stock 200 shares 5,156 7,202
Internet Cap Group Inc. Common Stock 912 shares 360 315
Interwave Communications
International Common Stock 5 shares 15 22
International Business Mach. Common Stock 1,950 shares 169,099 180,726
International Game Technologies Common Stock 100 shares 8,872 3,570
International Paper Co. Common Stock 68 shares 2,984 2,931
Intuit Inc. Common Stock 200 shares 10,177 10,572
Invitrogen Common Stock 55 shares 4,197 3,845
Iomega Corp. Common Stock 200 shares 1,570 1,196
Ishares TS and P Common Stock 65 shares 7,896 8,710
Isis Pharmaceuticals Common Stock 2,000 shares 13,180 13,000
Ivoice Inc. Common Stock 3,000 shares 5 8
Jabil Circuit Inc. Common Stock 120 shares 3,054 3,396
Jacobs Engineering Group Inc. Common Stock 120 shares 5,097 5,761
JC Penney Co. Common Stock 2,000 shares 46,020 52,560
JDS Uniphase Corp. Common Stock 5,500 shares 15,577 20,020
JM Smucker Co. Common Stock 12 shares 532 543
JMAR Inds Inc. Common Stock 150 shares 153 352
* Johnson & Johnson Common Stock 48,194 shares 2,835,661 2,489,684
JP Morgan Chase and Co. Common Stock 1,591 shares 44,610 58,437
Juniper Networks Inc. Common Stock 1,190 shares 11,833 22,229
Kaneb Pipe Line Partners LP Common Stock 4,000 shares 139,400 203,200
Kao Corp. Common Stock 44 shares 10,548 8,950
Kingfisher Common Stock 1,249 shares 12,469 12,802
* Represents parties-in-interest
16
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2003
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par, or Maturity Value Cost Current Value
------------------------ ---------------------------------- ---- -------------
KLA Tencor Corp. Common Stock 55 shares $ 2,259 $ 3,220
Knight Trading Group Inc. Common Stock 335 shares 4,388 4,911
Koninklijke Philips Electronics Common Stock 404 shares 8,312 11,752
Korea Elec Pwr Common Stock 720 shares 6,864 7,481
KPNQWest Common Stock 600 shares 13,282 11,442
Kraft Foods Inc. Common Stock 59 shares 1,926 1,901
Kulicke & Soffa Indust Common Stock 2,000 shares 11,440 28,760
Lam Research Corp. Common Stock 250 shares 2,700 8,075
Lexmark International Group Inc. Common Stock 40 shares 3,225 3,146
Limited Brands Inc. Common Stock 103 shares 1,811 1,857
Lockheed Martin Corp. Common Stock 100 shares 5,775 5,140
Loral Space & Comm Ltd. Common Stock 307 shares 1,047 97
Lowe's Companies Inc. Common Stock 200 shares 9,792 11,078
LSI Logic Corp. Common Stock 4,700 shares 33,037 41,689
LTX Corp. Common Stock 500 shares 3,015 7,515
Lucent Technologies Inc. Common Stock 2,512 shares 3,874 7,134
Marks & Spencer Ltd. Common Stock 197 shares 6,603 6,115
Martha Stewart Common Stock 200 shares 1,974 1,970
Massey Energy Co. Common Stock 400 shares 3,888 8,320
Maxim Integrated Prods. Common Stock 1,000 shares 37,971 49,580
Maxygen Inc. Common Stock 500 shares 4,632 5,315
MBNA Corp. Common Stock 38 shares 976 944
McData Corp. Common Stock 88 shares 1,167 839
Medco Health Solutions Common Stock 182 shares 7,488 6,189
Medtronic Inc. Common Stock 1,350 shares 68,086 65,623
Mellon Financial Corp. Common Stock 83 shares 2,815 2,665
Merck & Co. Inc. Common Stock 1,558 shares 95,267 71,973
Mercury Interactive Corp. Common Stock 75 shares 2,636 3,648
* Merrill Lynch & Co. Common Stock 400 shares 17,513 23,460
Micromuse Inc. Common Stock 70 shares 267 483
Micron Technology Inc. Common Stock 200 shares 1,948 2,694
Microsoft Inc. Common Stock 10,509 shares 300,243 287,620
Millea Health Solutions Common Stock 108 shares 6,842 7,248
Millennium Pharmaceuticals Common Stock 800 shares 9,586 14,920
MIM Corp. Common Stock 100 shares 580 703
MIPS Techs Inc. Common Stock 13 shares 45 72
Molecular Diagnostics Common Stock 491 shares 79 79
Monsanto Co. Common Stock 57 shares 1,391 1,640
Motorola Inc. Common Stock 1,154 shares 12,041 16,156
Nasdaq-100 Common Stock 3,474 shares 99,648 126,662
Nationwide Health Properties Common Stock 9,500 shares 141,835 185,725
National Australia Common Stock 84 shares 8,476 9,412
Navistar International Corp. Common Stock 71 shares 2,965 3,400
Nektar Therapeutics Common Stock 500 shares 3,847 6,805
Nestle S A Common Stock 325 shares 19,236 20,300
Netflix Com Inc. Common Stock 500 shares 8,938 27,345
Network Appliance Inc. Common Stock 1,690 shares 22,105 34,544
New Focus Inc. Common Stock 760 shares 2,918 3,815
Newell Rubbermaid Inc. Common Stock 37 shares 967 842
Newmont Mining Corp. Common Stock 1,029 shares 48,673 50,020
News Corp. Ltd. Common Stock 1,000 shares 26,250 36,100
Nexprise Inc. Common Stock 36 shares 50 45
Nextel Partners Inc. Common Stock 380 shares 4,650 5,111
NII Hldgs Inc. Common Stock 45 shares 3,470 3,358
Nike Inc. Common Stock 33 shares 2,055 2,259
Nintendo Ltd. Common Stock 986 shares 12,077 11,500
* Represents parties-in-interest
17
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2003
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par, or Maturity Value Cost Current Value
------------------------ ---------------------------------- ---- -------------
Nippon Teleg & Tel Corp. Common Stock 510 shares $ 10,253 $ 12,526
Nokia Corp. Common Stock 8,125 shares 139,740 138,129
Norsk Hydro Common Stock 400 shares 17,764 24,720
Nortel Networks Corp. Common Stock 1,500 shares 3,629 6,346
Nova Chemicals Corp. Common Stock 100 shares 1,830 2,695
Novartis Common Stock 506 shares 20,694 23,220
Novell Inc. Common Stock 300 shares 1,002 3,159
Novellys Sys Inc. Common Stock 1,400 shares 45,167 58,870
Nuvelo Inc. Common Stock 200 shares 244 700
Office Depot Inc. Common Stock 150 shares 2,463 2,507
Omnicom Group Common Stock 40 shares 3,823 3,493
Open TV Corp. Common Stock 50 shares 59 167
Oracle Corp. Common Stock 20,000 shares 243,439 264,600
Pacific Aerospace & Eltr Inc. Common Stock 10 shares - 1
Paccar Inc. Common Stock 55 shares 4,348 4,682
Pacific Sunwear Cal Inc. Common Stock 250 shares 6,852 5,275
PalmOne Inc. Common Stock 50 shares 843 587
Palmsource Inc. Common Stock 15 shares - 327
Parker Hannifin Corp. Common Stock 25 shares 1,307 1,488
Paychex Inc. Common Stock 220 shares 7,757 8,184
Peoplesoft Inc. Common Stock 190 shares 4,092 4,330
Pepsico Inc. Common Stock 1,867 shares 87,580 87,040
Peregrine Pharmactls Inc. Common Stock 1,000 shares 780 2,210
Petsmart Inc. Common Stock 170 shares 4,966 4,046
Pfizer Inc. Common Stock 5,173 shares 179,983 182,765
PG&E Corp. Common Stock 370 shares 5,146 10,282
Pharmaceutical Res Inc. Common Stock 45 shares 3,328 2,932
Pitney Bowes Inc. Common Stock 100 shares 3,266 4,062
Pixar Common Stock 200 shares 11,975 13,858
Plantronics Inc. Common Stock 700 shares 10,591 22,855
Plum Creek Timber Co. Inc. Common Stock 1,070 shares 28,440 32,582
PMI Group Inc. Common Stock 115 shares 4,820 4,281
Pogo Producing Co. Common Stock 60 shares 288 2,898
Polycom Inc. Common Stock 245 shares 4,774 4,782
Portugal Telecom Common Stock 835 shares 6,535 8,367
Potash Corp. of Saskatchewan Inc. Common Stock 17 shares 1,377 1,470
Praxair Inc. Common Stock 56 shares 3,720 2,139
Preferred Income Common Stock 8,000 shares 220,297 188,000
Procter & Gamble Common Stock 200 shares 19,175 19,976
Progress Energy Inc. Common Stock 227 shares 10,838 10,274
Providian Finl Corp. Common Stock 200 shares 1,882 2,328
Proxim Inc. Common Stock 188 shares 164 314
Qlogic Corp. Common Stock 360 shares 14,273 18,565
Qualcomm Inc. Common Stock 196 shares 7,132 10,570
RailAmerica Inc. Common Stock 533 shares 3,822 6,289
Real Networks Inc. Common Stock 500 shares 1,905 2,855
Redback Networks Inc. Common Stock 315 shares 272 73
Reed Elsevier Common Stock 204 shares 7,614 6,875
Repsol Common Stock 402 shares 6,040 7,859
RF Micro Devices Inc. Common Stock 400 shares 3,567 4,024
Rite Aid Corp. Common Stock 250 shares 612 1,510
Riverstone Networks Inc. Common Stock 856 shares 1,872 950
RobertHalf International Inc. Common Stock 195 shares 4,626 4,551
Roche Hldg Ltd. Common Stock 115 shares 8,642 11,600
Rohm and Haas Common Stock 33 shares 1,318 1,409
Rouge Wave Software Common Stock 200 shares 356 1,330
* Represents parties-in-interest
18
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2003
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par, or Maturity Value Cost Current Value
------------------------ ---------------------------------- ---- -------------
Roxio Inc. Common Stock 114 shares $ 544 $ 547
Royal Caribbean Cruises Common Stock 125 shares 4,021 4,349
Royal Dutch Petroleum Co. Common Stock 1,500 shares 77,998 78,585
RSA Security Inc. Common Stock 300 shares 1,797 4,275
Saba Software Inc. Common Stock 37 shares 165 128
Safenet Inc. Common Stock 170 shares 4,441 5,214
San Paolo-Imi Common Stock 319 shares 4,922 8,272
Sandisk Corp. Common Stock 115 shares 4,239 7,038
Sanmina-Sci Corp. Common Stock 575 shares 4,636 7,245
Save the Worldair Inc. Common Stock 530 shares 185 715
Savient Pharmaceuticals Inc. Common Stock 500 shares 1,830 2,305
SBC Communications Inc. Common Stock 60 shares 1,553 1,564
Schering Plough Corp. Common Stock 178 shares 3,222 3,095
Schlumberger Ltd. Common Stock 130 shares 6,358 7,114
Scottish Power Common Stock 634 shares 16,245 17,232
Sector Spdr Consumers Stpl. Common Stock 100 shares 1,994 2,178
Sector Spdr Technology Common Stock 125 shares 1,850 2,547
Select Medical Corp. Common Stock 260 shares 9,602 4,233
Serologicals Corp. Common Stock 150 shares 1,650 2,790
Shell Trns & Trdng Common Stock 328 shares 14,235 14,770
Siebel Sys Inc. Common Stock 1,800 shares 16,695 25,056
Silicon Graphics Inc. Common Stock 1,608 shares 2,036 2,203
Sina Corp. Common Stock 200 shares 4,221 6,750
Smith Micro Software Inc. Common Stock 1,500 shares 6,198 2,985
Societe Generale France Common Stock 987 shares 13,230 17,429
Solectron Corp. Common Stock 2,200 shares 7,810 13,002
Sonus Networks Inc. Common Stock 180 shares 315 1,357
Sony Corp. Common Stock 426 shares 15,933 14,769
Sorrento Networks Corp. Common Stock 10 shares 41 30
Sovran Self Storage Inc. Common Stock 5,000 shares 141,800 185,750
Sprint Corp. Common Stock 740 shares 3,241 4,159
Standard&Poors Common Stock 272 shares 30,175 30,268
Staples Inc. Common Stock 213 shares 4,793 5,815
Starbucks Corp. Common Stock 150 shares 3,689 4,974
Statoil ASA Common Stock 1,001 shares 9,403 11,311
Stellent Inc. Common Stock 38 shares 169 377
Stemcells Inc. Common Stock 1,000 shares 1,090 1,980
Stora Enso Common Stock 967 shares 11,146 13,113
Stratex Networks Inc. Common Stock 50 shares 110 215
Sun Microsystems Inc. Common Stock 15,646 shares 58,236 69,938
Superconductor Technologies Common Stock 100 shares 94 556
Supergen Inc. Common Stock 1,125 shares 5,315 12,375
Symantec Corp. Common Stock 550 shares 25,495 18,975
Symyx Tech Inc. Common Stock 300 shares 4,635 6,165
Syngenta Common Stock 948 shares 11,215 12,779
Taiwan Manufacturing Common Stock 237 shares 1,671 2,427
Target Corp. Common Stock 67 shares 2,844 2,573
TDK Corp. Common Stock 134 shares 6,216 9,617
Telefonos M SA RP L Common Stock 1,035 shares 36,367 34,186
Telik Inc. Common Stock 380 shares 5,377 8,740
Teradyne Inc. Common Stock 49 shares 1,092 1,247
Teraforce Tech Corp. Common Stock 4,200 shares 672 1,050
Texas Instruments Common Stock 7,700 shares 115,577 226,226
Tibco Software Inc. Common Stock 45 shares 308 305
Time Warner Inc. Common Stock 1,558 shares 23,197 28,028
Topps Inc. Common Stock 500 shares 4,350 5,130
* Represents parties-in-interest
19
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2003
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par, or Maturity Value Cost Current Value
----- ------------------------ ---------------------------------- ---- -------------
Total SA Common Stock 205 shares $ 16,543 $ 18,965
Toyota Motor Corp. Common Stock 140 shares 8,378 9,625
TPG Common Stock 345 shares 7,766 8,139
Transcanada Corp. Common Stock 500 shares 8,325 10,755
Transmeta Corp. Common Stock 140 shares 164 476
Travelers Property A Common Stock 133 shares 2,170 2,232
Travelers Property B Common Stock 278 shares 4,542 4,718
Tribune Co. Common Stock 52 shares 2,581 2,683
Tyco International Ltd. Common Stock 226 shares 4,759 5,989
UAL Corp. Common Stock 200 shares 286 324
Union Pacific Corp. Common Stock 225 shares 15,034 15,631
United Parcel Services Common Stock 282 shares 19,867 21,012
Universal Health Svcs Common Stock 200 shares 9,020 10,744
Univision Communications Common Stock 75 shares 2,313 2,977
Upgrade International Corp. Common Stock 50 shares 9 11
UPM Kymmene Oy Common Stock 446 shares 7,538 8,586
UTS Motorola Inc. Common Stock 235 shares 7,520 10,206
UTStarcom Inc. Common Stock 130 shares 5,094 4,819
Varco International Inc. Common Stock 1,000 shares 17,400 20,630
Verisign Inc. Common Stock 322 shares 2,582 5,249
Veritas Software Co. Common Stock 169 shares 3,269 6,256
Verizon Communications Common Stock 326 shares 13,453 11,436
VF Corp. Common Stock 32 shares 1,390 1,384
Viacom Inc. Common Stock 287 shares 13,113 12,705
Viacom Inc. Cl B Common Stock 390 shares 15,896 17,308
Vicon Indust Inc. Common Stock 500 shares 1,800 2,340
Visx Inc. Common Stock 200 shares 1,916 4,630
Vodafone Group Common Stock 500 shares 9,060 12,520
Volvo Aktiebolaget Common Stock 391 shares 7,661 11,972
Wachovia Corp. Common Stock 56 shares 2,542 2,609
Wal-Mart Stores Inc. Common Stock 1,465 shares 81,726 77,718
Walt Disney Company Common Stock 7,181 shares 169,732 167,533
Wast Management Inc. Common Stock 45 shares 1,287 1,332
Wellpoint Health Networks Inc. Common Stock 230 shares 18,571 22,308
Wells Fargo & Co. Common Stock 35 shares 1,961 2,061
Westell Technologies Inc. Common Stock 300 shares 360 1,893
Western Wireless Common Stock 235 shares 3,318 4,315
Westpac Banking Corp. Common Stock 5,625 shares 50,292 67,768
Weyerhaeuser Co. Common Stock 20 shares 1,312 1,280
Wind River Systems Inc. Common Stock 1,450 shares 5,946 12,702
Worldcom Inc. Common Stock 2,560 shares 316 34
Worldcom Inc.-MCI Group Common Stock 1,050 shares 164 51
Worldwide Restauarant Common Stock 2,000 shares 5,301 5,600
Wyeth Common Stock 31 shares 1,574 1,316
Xcel Energy Inc. Common Stock 200 shares 2,538 3,396
Xerox Corp. Common Stock 961 shares 9,518 13,262
Xilinx Inc. Common Stock 200 shares 4,121 7,726
XM Satelte Radio Hldgs Common Stock 115 shares 2,215 3,023
Yahoo Inc. Common Stock 440 shares 9,179 19,813
Yellow Roadway Corp. Common Stock 85 shares - 3,074
Zimmer Holdings Inc. Common Stock 95 shares 4,746 6,691
Zurich Finl Svcs Common Stock 677 shares 7,286 9,744
Alltel Corp. Preferred Stock 145 shares 7,443 7,206
Amerada Hess Corp. Preferred Stock 155 shares 8,748 8,502
Baxter International Preferred Stock 210 shares 11,839 11,603
Bethlehem Steel Corp. Preferred Stock 174 shares 38 3
* Represents parties-in-interest
20
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2003
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par, or Maturity Value Cost Current Value
----- ------------------------ ---------------------------------- ---- -------------
Centurytel Inc. Preferred Stock 290 shares $ 7,872 $ 7,830
Chubb Corp. Preferred Stock 290 shares 9,078 8,282
Constellation Brands Inc. Preferred Stock 295 shares 8,533 9,080
Electronic Data Systems Preferred Stock 285 shares 6,244 6,535
Ford Motor Co. Preferred Stock 340 shares 13,889 19,023
General Motors Corp. Preferred Stock 555 shares 13,459 14,874
Harris Preferred Cap Preferred Stock 400 shares 10,040 10,064
Kerr McKee Corp. Preferred Stock 160 shares 8,063 7,984
MCI Capital Preferred Stock 500 shares 2,750 5,315
* Merrill Lynch Preferred Stock 3,000 shares 79,230 81,960
National Australia Bank Preferred Stock 660 shares 23,991 25,212
Northrop Grumman Corp. Preferred Stock 60 shares 6,464 6,222
Prudential Financial Inc. Preferred Stock 95 shares 5,799 6,185
Raytheon Company Preferred Stock 120 shares 6,552 6,514
Simon Property Group Inc. Preferred Stock 1,500 shares 40,155 40,950
Teekay Shipping Preferred Stock 265 shares 8,089 9,500
Travelers Property Preferred Stock 300 shares 6,705 7,350
Xerox Corp. Preferred Stock 80 shares 9,445 10,380
Aim Aggressive Growth Fund 14,585 18,575
Aim Balanced Fund 18,026 20,702
Aim Basic Value Fund 47,674 63,769
Aim Blue Chip Fund 79,333 99,388
Aim Equity Constellation Fund 12,143 13,915
Aim European Growth Fund 6,991 10,006
Aim Premier Equity Fund 16,131 20,148
Alger MidCap Growth Institutional Portfolio 112,312 123,766
Alger LargeCap Growth Fund 2,031 1,909
Alger MidCap Growth Fund 1,419 2,964
Alliance Premier Growth Fund 72,863 89,409
Alliance Technology Fund 105,887 118,683
AM Washington Mutual Investors Fund 23,115 25,222
American Growth Fund of America 55,514 55,293
Blackrock Low Duration Fund 138,443 125,140
Capital World Growth and Income Fund 2,492 3,347
Davis NY Venture Fund 80,904 106,134
Federated European Equity Fund 9,340 12,190
Federated International Small Co. Fund 17,195 26,460
Federated Kaufman Fund 5,155 7,385
Fidelity High Income Fund 48,815 55,676
Fidelity Equity Growth Fund 24,465 32,253
Fidelity MidCap Fund 8,277 11,898
Fidelity Dividend Growth Fund 19,997 24,427
Franklin FlexCap Growth Fund 141,222 198,386
Hochkis & Wily LargeCap Value Fund 6,518 9,154
Ing International SmallCap Growth Fund 29,258 37,012
Invesco Technology Fund 12,499 11,348
John Hancock US Global Lrds Gr Fund 5,009 5,026
John Hancock Bond Fund 36,263 33,714
John Hancock International Fund 13,776 14,184
Lord Abbett Developing Growth Fund 4,589 6,428
Mass Investors Growth Stock Fund 55,084 67,556
Mass Investors Trust Fund 15,129 18,348
MFS High Income Fund 21,446 21,746
MFS MidCap Growth Fund 1,332 1,837
MFS Research Fund 6,968 8,607
* Merrill Lynch Balanced Capital Fund 49,404 58,493
* Represents parties-in-interest
21
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2003
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par, or Maturity Value Cost Current Value
----- ------------------------ ---------------------------------- ---- -------------
* Merrill Lynch Basic Value Fund $ 250,632 $ 289,487
* Merrill Lynch Bond Core Fund 40,156 36,947
* Merrill Lynch Bond High Income Fund 72,477 78,534
* Merrill Lynch Dragon Fund 15,282 19,080
* Merrill Lynch Euro Fund 24,429 32,287
* Merrill Lynch Fundamental Growth Fund 8,946 11,475
* Merrill Lynch Global Allocation Fund 702,813 797,711
* Merrill Lynch Global Growth Fund 156,050 185,750
* Merrill Lynch Global Technology Fund 38,471 52,502
* Merrill Lynch Global Value Fund 25,954 31,941
* Merrill Lynch Healtcare Fund 29,607 30,853
* Merrill Lynch Latin American Fund 14,402 20,368
* Merrill Lynch Pacific Fund 16,726 20,289
* Merrill Lynch S&P 500 Index Fund 420,033 460,999
* Merrill Lynch SmallCap Value Fund 122,871 149,105
Munder NetNet Fund 80,709 135,676
Oppenheimer International Growth Fund 2,806 4,221
PIMCO CCM Capital Appreciation Fund 17,028 21,567
PIMCO High Yield Fund 20,613 23,518
PIMCO Innovation Fund 27,099 37,065
PIMCO Renaissance Fund 37,515 51,124
PIMCO Real Return Bond Fund 88,180 77,949
PIMCO SmallCap Value Fund 15,178 19,277
PIMCO Total Return Fund 7,537 7,563
Pioneer High Yield Fund 83,935 80,629
Seligman Communications Information Fund 22,977 32,709
State Street Government Income Fund 70,523 68,711
Templeton Developing Markets Fund 12,541 18,799
Templeton Foreign Fund 27,615 31,261
Managers Fund Fixed Income Sec Fund 3,502 3,665
Managers Special Equity Fund 5,801 8,267
Oakmark Equity and Income Fund 53,148 64,925
Oakmark Select Fund 26,328 29,879
Van Kampen Emerging Growth Fund 10,319 13,192
Van Kampen Comstock Fund 4,137 5,338
Van Kampen Equity & Income Fund 83,872 81,871
Capital Crossing Bank Certificate of Deposit 108,816 98,703
Fremont Investment & Loan Certificate of Deposit 108,819 98,723
CMA Money Market Fund 5,167,836 5,167,836
Federal Home Ln Mtg Corp. 6.875% Due 2010 3,846 3,485
Federal National Mtg Assoc. 6.625% Due 2030 6,258 5,684
Federal National Mtg Assoc. 7.250% Due 2010 10,497 9,432
Federal National Mtg Assoc. 6.125% Due 2012 - 2,227
Federal Home Ln Mtg Corp. 6.000% Due 2033 9,621 8,407
Federal National Mtg Assoc. 5.000% Due 2018 9,948 8,888
Federal National Mtg Assoc. 6.500% Due 2032 11,469 8,957
United States Treasury Bond 7.500% Due 2016 8,583 7,639
United States Treasury Bond 5.250% Due 2029 2,188 2,017
United States Treasury Bond 8.125% Due 2021 70,801 62,730
United States Treasury Bond 8.000% Due 2021 12,005 10,805
United States Treasury Note 6.500% Due 2005 87,492 76,946
United States Treasury Note 4.750% Due 2008 80,905 71,730
United States Treasury Note 5.875% Due 2004 23,644 20,800
United States Treasury Note 5.750% Due 2010 11,337 10,091
United States Treasury Note 4.875% Due 2012 34,580 30,711
United States Treasury Note 3.250% Due 2004 18,010 16,144
* Represents parties-in-interest
22
ALZA CORPORATION TAX DEFERRAL INVESTMENT PLAN
EIN 77-00142070 PLAN NO. 002
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2003
( a ) ( b ) ( c ) ( d ) ( e )
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest,
Lessor, or Similar Party Collateral, Par, or Maturity Value Cost Current Value
----- ------------------------ ---------------------------------- ---- -------------
Agilent Technologies Inc. Corporate Bond VAR%Due 12/1/2021 $ 9,261 $ 8,740
AT&T Corp. Corporate Bond 3.250%Due 3/15/2031 8,800 8,320
Barnes & Noble Inc. Corporate Bond 5.250%Due 3/15/2009 8,480 7,568
Carnival Corp. Corporate Bond 2.000%Due 4/15/2021 4,190 4,705
Cendant Corp. Corporate Bond 0.000%Due 2/13/2021 8,326 8,250
Centerpoint Energy Inc. Corporate Bond 2.000%Due 9/15/2029 8,026 9,030
Comverse Technology Inc. Corporate Bond 0.000%Due 5/15/2023 8,674 8,225
Countrywide Corporate Bond 0.000%Due 2/8/2031 6,460 9,630
Cypress Semiconductor Corporate Bond 1.250%Due 6/15/2008 9,229 9,172
Duke Energy Corporate Bond 7.200%Due 9/30/2037 24,990 25,250
Enterprise Cap Tr III Corporate Bond 7.250%Due 6/30/2047 22,750 25,050
Enterprise Cap Trsti SRA Corporate Bond 7.440%Due 3/31/2047 5,109 5,028
First Data Corp. Corporate Bond 2.000%Due 3/1/2008 5,625 5,350
Gap Inc. Corporate Bond 5.750%Due 3/15/2009 8,732 10,736
General Mills Inc. Corporate Bond 0.000%Due 10/28/2022 8,492 7,700
Hartford Life Corporate Bond 7.200%Due 6/30/2038 25,360 25,450
Inco Ltd. Corporate Bond 1.000%Due 3/14/2023 9,395 9,721
International Game Technology Corporate Bond 0.000%Due 1/29/2033 8,789 9,554
L-3 Communications Hldg. Corporate Bond 5.250%Due 6/1/2009 9,262 8,838
Manpower Inc. Corporate Bond 0.000%Due 8/17/2021 8,393 8,324
* Merrill Lynch Corporate Bond 7.000% 56,299 53,480
Pep Boys-Manny Moe Jack Corporate Bond 4.250%Due 6/1/2007 8,841 8,338
Photronics Inc. Corporate Bond 4.750%Due 12/15/2006 1,657 1,980
Pride International Inc. Corporate Bond 2.500%Due 3/1/2007 9,311 8,645
Providian Finl Corp. Corporate Bond 4.000%Due 5/15/2008 8,890 8,085
Royal Caribbean Cruise Corporate Bond 0.000%Due 2/2/2021 7,268 8,117
Symantec Corp. Corporate Bond 3.000%Due 11/1/2006 8,452 12,306
Telefonos DE Mexico Corporate Bond 4.250%Due 6/15/2004 7,162 6,840
Teva Pharmaceutical Fin Inv Corporate Bond 0.750%Due 8/15/2021 7,937 8,040
Tyco International Group Corporate Bond 2.750%Due 1/15/2018 12,179 12,762
Unit Washington Mutual Corporate Bond 5.375% 15,562 16,548
Universal Health Servicees Corporate Bond 0.426%Due 6/23/2020 8,651 7,904
USD Stmicroelectronics Corporate Bond 0.000%Due 7/5/2013 8,208 7,497
Walt Disney Company Corporate Bond 2.125%Due 4/15/2023 7,744 7,411
--------------- -------------
Total Retirement Cash Management Account 22,929,316 25,206,774
--------------- -------------
* Participant Loans 6% - 10.5% - 1,230,808
--------------- -------------
Total $ 104,636,652 $ 135,700,973
=============== =============
* Represents parties-in-interest
23
CONSENT OF MORRIS, DAVIS & CHAN,
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statement on
Form S-8 (No. 333-87736) of Johnson & Johnson pertaining to the ALZA Corporation
Tax Deferral Investment Plan of our report dated June 18, 2004 with respect to
the financial statements and schedules of the ALZA Corporation Tax Deferral
Investment Plan included in this Annual Report (Form 11-K) for the year ended
December 31, 2003.
/s/ Morris, Davis & Chan
June 18, 2004
Oakland, California