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Johnson & Johnson (JNJ) | Analysis of Debt

Total Debt Disclosure

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Johnson & Johnson, Statement of Financial Position, Debt

USD $ in millions

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    Dec 31, 2010 Dec 31, 2009 Dec 31, 2008 Dec 31, 2007 Dec 31, 2006
Loans and notes payable
Long-term debt
Total debt
Item Description The company
Total debt Sum of the carrying values as of the balance sheet date of all debt plus capital lease obligations. Johnson & Johnson's total debt increased from 2008 to 2009 and from 2009 to 2010.

Interest Costs Incurred

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Johnson & Johnson

USD $ in millions

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  12 months ended Dec 31, 2010 Dec 31, 2009 Dec 31, 2008 Dec 31, 2007 Dec 31, 2006
Interest expense, net of portion capitalized
Interest expense capitalized
Interest costs incurred

Source: Based on data from Johnson & Johnson, Annual Reports

Item Description The company
Interest expense, net of portion capitalized Represents the portion of interest incurred in the period on debt arrangements that was charged against earnings. Johnson & Johnson's interest expense, net of portion capitalized increased from 2008 to 2009 and from 2009 to 2010.
Interest expense capitalized The amount of interest that was capitalized during the period. Johnson & Johnson's interest expense capitalized declined from 2008 to 2009 and from 2009 to 2010.
Interest costs incurred Total interest costs incurred during the period and either capitalized or charged against earnings. Johnson & Johnson's interest costs incurred declined from 2008 to 2009 and from 2009 to 2010.

Adjusted Interest Coverage Ratio

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    Dec 31, 2010 Dec 31, 2009 Dec 31, 2008 Dec 31, 2007 Dec 31, 2006
  Selected Financial Data (USD $ in millions)
Net earnings
Add: Interest expense, net of portion capitalized
Add: Income tax expense (benefit)
Earnings before interest and tax (EBIT)
   
Interest costs incurred
  Ratio With and Without Capitalized Interest
Interest coverage ratio (excluding capitalized interest)1
Adjusted interest coverage ratio (including capitalized interest)2

2010 Calculations

1 Interest coverage ratio (excluding capitalized interest) = EBIT ÷ Interest expense, net of portion capitalized
= ÷ =

2 Adjusted interest coverage ratio (including capitalized interest) = EBIT ÷ Interest costs incurred
= ÷ =

Ratio Description The company
Adjusted interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments (including capitalized interest). Johnson & Johnson's adjusted interest coverage ratio deteriorated from 2008 to 2009 but then improved from 2009 to 2010 exceeding 2008 level.

February 7, 2012

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