Exhibit 1 is an excerpt from Note 6 of Johnson & Johnson’s (NYSE: JNJ) 2008 financial statements that illustrates financial statement disclosure for long-term debt, including type and nature of long-term debt, effective interest rates, and required payments over the next five years. Johnson & Johnson reports its debt at amortised cost.

The Company has access to substantial sources of funds at numerous banks worldwide. In September 2008, the Company secured a new 364-day and 5-year Credit Facility. Total credit available to the Company approximates $7.7 billion of which $6.3 billion expires September 24, 2009, and $1.4 billion expires September 25, 2013. Interest charged on borrowings under the credit line agreements is based on either bids provided by banks, the prime rate or London Interbank Offered Rates (Libor), plus applicable margins. Commitment fees under the agreements are not material.

. . .

Aggregate maturities of long-term obligations commencing in 2007 are (dollars in millions):

Use the information in Exhibit 1 to answer the following questions:
1. Why are the effective interest rates unchanged from 2007 and 2008 for the first 11 borrowings listed?
2. Why does the carrying amount of the “4.95% Debentures due 2033” remain the same in 2007 and 2008?
3. Why does the carrying amount of the “4.75% Notes due 2019” decrease from 2007 to 2008?

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EXHIBIT 1 Johnson & Johnson Excerpt from 6. Borrowings The components of long-term debt are as follows: (Dollars in Millions) 3% Zero Coupon Convertible Subordinated Debentures due 2020 4.95% Debentures due 2033 3.80% Debentures due 2013 6.95% Notes due 2029 6.73% Debentures due 2023 6.625% Notes due 2009 5.55% Debentures due 2017 5.95% Notes due 2037 5.50% Notes due 2024 (500 GBP 1.4759) (500 GBP 1.9944) 4.75% Notes due 2019 (1B Euro 1.4000) (1B Euro 1.4573) 5.15% Debentures due 2012 5.86% Debentures due 2038 5.15% Debentures due 2018 Other (Includes Industrial Revenue Bonds) 2008 $183 500 500 294 250 199 1,000 995 731 1,390 599 700 898 102 8,341 Effective Rate % 3 4.95 3.82 7.14 6.73 6.8 5.55 5.99 5.71 5.35 5.18 5.86 5.15 5.46 2007 178 500 500 294 250 199 1,000 995 989 1,447 599 132 7,083d Effective Rate % 3 4.95 3.82 7.14 6.73 6.8 5.55 5.99 5.71 5.35 5.18 5.47