Johnson & Johnson (JNJ)

Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)

Johnson & Johnson, EBITDA calculation

USD $ in millions

12 months ended	Dec 30, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Net earnings attributable to Johnson & Johnson	10,853	9,672	13,334	12,266	12,949
Net loss attributable to noncontrolling interest	(339)	–	–	–	–
Interest expense, net of portion capitalized	532	571	455	451	435
Income tax expense (benefit)	3,261	2,689	3,613	3,489	3,980
Earnings before interest and tax (EBIT)	14,307	12,932	17,402	16,206	17,364
Depreciation and amortization of property and intangibles	3,666	3,158	2,939	2,774	2,832
Earnings before interest, tax, depreciation and amortization (EBITDA)	17,973	16,090	20,341	18,980	20,196

Item	Description	The company
EBITDA	To calculate EBITDA analysts start with net earnings. To that earnings number, interest, taxes, depreciation, and amortization are added. EBITDA as a pre-interest number is a flow to all providers of capital.	Johnson & Johnson's EBITDA declined from 2010 to 2011 but then slightly increased from 2011 to 2012.

Johnson & Johnson, current EV/EBITDA

	Johnson & Johnson	Health Care
Selected Financial Data (USD $ in millions)
Enterprise value (EV)	241,092
Earnings before interest, tax, depreciation and amortization (EBITDA)	17,973
Ratio
EV/EBITDA	13.41	10.07

If company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.

Otherwise, if company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.

Johnson & Johnson, EV/EBITDA calculation

	Dec 30, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data (USD $ in millions)
Enterprise value (EV)¹	208,219	166,071	152,243	169,561	150,194
Earnings before interest, tax, depreciation and amortization (EBITDA)²	17,973	16,090	20,341	18,980	20,196
EV/EBITDA, Comparison to Industry
Johnson & Johnson³	11.59	10.32	7.48	8.93	7.44
Industry, Health Care	9.28	7.90	8.16	7.35	7.02

2012 Calculations

³ EV/EBITDA = EV ÷ EBITDA
= 208,219 ÷ 17,973 = 11.59

Ratio	Description	The company
EV/EBITDA	EV/EBITDA is a valuation indicator for the overall company rather than common stock.	Johnson & Johnson's EV/EBITDA ratio increased from 2010 to 2011 and from 2011 to 2012.