Allergan Inc. (NYSE:AGN.)

The financial data indicates significant fluctuations and trends in the company's intangible assets over the five-year period ending December 31, 2014.

Developed Technology

This asset category experienced an increase from 1,129,600 thousand USD in 2010 to a peak of 1,202,800 thousand USD in 2012, followed by a sharp decline to approximately 648,000 thousand USD in 2013 and 2014. This suggests a substantial write-down, sale, or reclassification of developed technology assets during the latter years.

Customer Relationships

Customer relationships remained relatively stable across the period, with values around 42,300 to 54,700 thousand USD, indicating consistent recognition of this intangible without significant impairment or addition.

Licensing

Licensing assets showed minimal change, maintaining a consistent value near 185,000 to 190,500 thousand USD, reflecting steady licensing agreements without major acquisitions or disposals.

Trademarks

Trademarks experienced a notable increase between 2011 and 2012, from 26,700 to 87,900 thousand USD, and then stabilized around 89,000 thousand USD through 2014. This could indicate new trademark acquisitions or revaluations during that period.

Technology, Related Assets

Technology-related assets decreased slightly from 189,600 thousand USD in 2010 to 181,300 thousand USD in 2011 and remained relatively stable before increasing significantly to 335,300 thousand USD in 2014, possibly signaling new technology investments or reclassification.

Other Intangible Assets

The 'Other' category fluctuated, rising from 17,000 thousand USD in 2010 to 43,900 thousand USD in 2012, then declining to 29,000 thousand USD by 2014. These variations may reflect miscellaneous intangible asset transactions.

Amortizable Intangible Assets, Gross Amount

The gross amount peaked at 1,757,000 thousand USD in 2012 before decreasing sharply to 1,336,000 thousand USD in 2013 and remaining at a similar level in 2014. This trend aligns with the reduction observed in developed technology, indicating asset disposals or impairments.

Accumulated Amortization

Accumulated amortization steadily increased from -599,800 thousand USD in 2010 to a high of -807,200 thousand USD in 2012, then decreased to -639,800 thousand USD in 2013, before rising again to -739,200 thousand USD in 2014. The decrease in 2013 suggests possible asset disposals reducing the amortization base, while the subsequent increase may result from amortization on remaining assets.

Amortizable Intangible Assets, Net

The net amount decreased notably from 991,700 thousand USD in 2010 to 696,200 thousand USD in 2013 and further to 607,400 thousand USD in 2014. This reflects both the decline in the gross asset base and ongoing amortization, indicating a reduction in intangible asset net book value over the analyzed period.

In-Process Research and Development (IPR&D) / Unamortizable Intangibles

Both categories increased substantially, from 4,300 thousand USD in 2010 to 1,179,100 thousand USD in 2014. The sharp rise, particularly after 2011, suggests significant capitalized investments or acquisitions of IPR&D assets, which are not subject to amortization and therefore represent ongoing or anticipated future value.

Total Intangibles

The total intangible assets increased from 996,000 thousand USD in 2010 to 1,786,500 thousand USD in 2014, driven primarily by the rise in unamortizable IPR&D, despite the decline in amortizable intangible net assets.

Goodwill

Goodwill steadily grew from 2,038,500 thousand USD in 2010 to 2,392,900 thousand USD in 2014. This consistent upward trend indicates ongoing business acquisitions or revaluations that increased the excess purchase price over net identifiable assets.

Total Intangibles and Goodwill

The combination of intangibles and goodwill rose from 3,034,500 thousand USD in 2010 to 4,179,400 thousand USD in 2014, reflecting overall growth in intangible asset base and goodwill by approximately 38%. This increase highlights the company's strategy involving acquisitions and capital investments in intangible assets over the five-year period.

The financial data over the five-year period reveals a consistent upward trend in both total assets and stockholders’ equity, regardless of whether the values are reported or adjusted for goodwill.

Total Assets

The reported total assets increased steadily from approximately 8.31 billion US dollars in 2010 to about 12.42 billion US dollars in 2014. This represents a growth of nearly 49.5% over the period.

The adjusted total assets, which exclude goodwill, also showed a consistent increase, rising from about 6.27 billion US dollars in 2010 to around 10.02 billion US dollars in 2014. This indicates a growth of roughly 60%, suggesting that the asset base net of goodwill expanded at a faster rate than the reported assets overall.

Stockholders’ Equity

The reported total stockholders’ equity increased from 4.76 billion US dollars in 2010 to 7.75 billion US dollars in 2014, corresponding to a cumulative increase of approximately 62.8%. This shows a healthy strengthening of the company's equity position over these years.

Adjusted stockholders’ equity, excluding goodwill, also grew from about 2.72 billion US dollars in 2010 to roughly 5.36 billion US dollars in 2014, representing an increase of nearly 97.2%. This substantial growth suggests significant value creation in the company’s tangible equity base.

The divergence between reported and adjusted figures for both assets and equity highlights the impact of goodwill on the balance sheet. The goodwill-adjusted assets and equity rose at a higher percentage rate compared to the reported figures, indicating that the company's organic growth and non-goodwill asset base have been strong drivers of overall financial improvement.

Overall, the company demonstrated solid growth in asset accumulation and equity strengthening over the period, with the adjusted metrics indicating a particularly robust expansion of tangible value. This trend suggests enhanced financial stability and potentially improved capacity for future investment and growth.

Total Asset Turnover

The reported total asset turnover exhibits a modest decline over the analyzed period, beginning at 0.58 in 2010, peaking at 0.63 in 2011, and gradually decreasing to 0.57 by 2014. In contrast, the adjusted total asset turnover, which accounts for goodwill, demonstrates a higher efficiency level, starting at 0.77 in 2010, reaching 0.83 in 2011, and then declining to 0.71 by 2014. Both reported and adjusted figures suggest a slight reduction in asset utilization efficiency in more recent years.

Financial Leverage

The reported financial leverage ratio shows a general downward trend from 1.75 in 2010 to 1.60 in 2014, with a minor peak at 1.64 in 2013. The adjusted financial leverage, which adjusts for goodwill, follows a similar decreasing pattern, beginning at a higher level of 2.31 in 2010 and reducing to 1.87 by 2014. This decline indicates a moderate reduction in reliance on debt or leverage over time.

Return on Equity (ROE)

Reported ROE rises sharply from near zero in 2010 to 17.6% in 2011, with a generally positive trend culminating in 19.66% by 2014, despite a dip to 15.24% in 2013. The adjusted ROE, excluding goodwill effects, consistently exceeds reported figures and follows a similar pattern; it starts near zero, peaks at 30.54% in 2012, and remains strong at 28.44% in 2014. The data suggests improved profitability from shareholders' equity, particularly when adjusted for goodwill.

Return on Assets (ROA)

Reported ROA improves significantly from virtually zero in 2010 to 12.28% in 2014, with fluctuations reflecting a decrease in 2013. The adjusted ROA also shows higher returns compared to reported figures, starting near zero, peaking at 15.83% in 2012, with a slight decline but recovery to 15.21% in 2014. This indicates enhanced effectiveness in asset utilization to generate profits, amplified after goodwill adjustment.

Overall Insights

When adjusting for goodwill, there is a clear trend of higher asset turnover, financial leverage, and returns on equity and assets, highlighting the impact of goodwill on financial metrics. Despite a slight decline in asset turnover and financial leverage ratios over time, profitability measures (ROE and ROA) show significant improvement, reflecting effective management and operational performance. The dip observed around 2013 appears temporary, with recovery in subsequent years, reinforcing the overall trend of enhanced financial performance.

Reported Total Assets

The reported total assets exhibit a consistent upward trend over the five-year period, increasing from approximately US$8.31 billion at the end of 2010 to US$12.42 billion by the end of 2014. This growth reflects a substantial expansion in the company's asset base, suggesting ongoing investments or acquisitions.

Adjusted Total Assets

Adjusted total assets, which exclude goodwill, also show a steady increase from about US$6.27 billion in 2010 to over US$10.02 billion in 2014. This rise aligns with the reported total assets trend but at lower absolute values, reflecting a significant goodwill component within total assets. The growth in adjusted assets indicates underlying asset growth aside from goodwill adjustments.

Reported Total Asset Turnover

The reported total asset turnover ratio starts at 0.58 in 2010, peaking slightly at 0.63 in 2011, and then follows a downward trend, declining to 0.57 by 2014. This trend suggests that the efficiency with which the company generated revenue from its reported assets diminished over the latter years, despite the increasing asset base.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio is consistently higher than the reported ratio, beginning at 0.77 in 2010 and reaching a peak of 0.83 in 2011. After 2011, this ratio declines steadily to 0.71 by 2014. This pattern indicates that when excluding goodwill, asset utilization efficiency declined somewhat but remained higher than the reported asset turnover, highlighting the impact of goodwill on the turnover calculation.

Overall Observations

Across the period, the company experienced growth in both reported and adjusted asset bases, with reported assets growing at a faster pace due to goodwill inclusion. Efficiency ratios based on turnover reveal a peak in asset utilization around 2011, followed by a gradual decline through 2014. The adjusted turnover consistently outperforms the reported ratio, emphasizing the distorting effect goodwill has on asset efficiency measures. These trends suggest expanding asset scale accompanied by a moderate reduction in the efficiency of asset use over time.

The financial data reveals evolving asset and equity positions over a five-year period ending in 2014. Both reported and adjusted total assets increased consistently each year, indicating an overall growth in the company's asset base. Reported total assets rose from approximately $8.31 billion in 2010 to about $12.42 billion in 2014, while the adjusted figures, which exclude goodwill, moved from roughly $6.27 billion to around $10.02 billion within the same timeframe. This suggests a significant portion of the company's asset growth includes goodwill or intangible assets.

Stockholders' equity followed a similar upward trajectory. Reported equity increased each year, climbing from $4.76 billion in 2010 to $7.75 billion in 2014. The adjusted equity, excluding goodwill, also showed steady growth but at a consistently lower level, moving from $2.72 billion to $5.36 billion over the period. The gap between reported and adjusted equity highlights the impact of goodwill on the equity base.

Financial leverage ratios provide insights into the company’s capital structure and risk profile. Reported financial leverage decreased slightly from 1.75 in 2010 to 1.60 in 2014, indicating a marginal reduction in reliance on debt relative to equity. The adjusted financial leverage, which reflects the capital structure excluding goodwill, also declined from 2.31 to 1.87 during the same period. Despite the decrease, adjusted leverage remains higher than the reported figure, suggesting that goodwill adjustments reveal a more leveraged financial structure.

Overall, the data indicates continuous asset growth and an expanding equity base, with goodwill representing a notable component of reported figures. The reduction in financial leverage ratios implies cautious capital management, though adjusted leverage levels present a relatively higher gearing when intangible assets are excluded.

Stockholders’ Equity Trends

There is a consistent upward trend in both reported and adjusted total stockholders’ equity from 2010 through 2014. Reported equity increased from approximately 4.76 billion US dollars in 2010 to 7.75 billion US dollars in 2014, representing substantial growth over the five-year period. Similarly, adjusted equity, which excludes goodwill, rose from about 2.72 billion US dollars to 5.36 billion US dollars in the same timeframe. While the reported equity values are significantly higher due to the inclusion of goodwill, adjusted equity also shows robust growth, reflecting strengthening of the core equity position.

Return on Equity (ROE) Patterns

The reported ROE demonstrates considerable improvement from a near-zero value (0.01%) in 2010 to a peak of 19.66% in 2014, with some fluctuation over the years. Similarly, adjusted ROE, which removes the impact of goodwill, exhibits a higher level of performance, starting at 0.02% in 2010 and reaching 28.44% in 2014. Adjusted ROE peaks in 2012 at 30.54% before slightly declining in 2013 and recovering somewhat in 2014. The higher adjusted ROE figures indicate that the company’s underlying operational profitability, exclusive of goodwill effects, was significantly strong.

Comparative Insights Between Reported and Adjusted Measures

The adjusted measures, both for total equity and ROE, are consistently lower in absolute terms for equity but higher in terms of ROE percentages compared to the reported figures. This suggests that goodwill constitutes a substantial component of the total equity reported but that excluding it provides a clearer view of the company’s earnings efficiency relative to tangible equity. The growth in adjusted equity and the sustained high adjusted ROE imply robust profitability on the company's core assets, highlighting effective capital utilization when intangible assets are excluded.

Overall Observations

The data reflects a company improving its equity base and profitability from 2010 to 2014. Both reported and adjusted financial metrics show encouraging growth trends, with adjusted ROE indicating particularly strong profitability relative to tangible equity. The flow of increasing stockholders’ equity, coupled with rising ROE levels, signals successful financial management and operational performance throughout the observed period.

Total Assets

The reported total assets demonstrate a consistent upward trend from 8,308,100 thousand US dollars in 2010 to 12,415,700 thousand US dollars in 2014. This represents a significant increase in the asset base over the five-year period. Adjusted total assets, which exclude goodwill, also show a steady rise from 6,269,600 thousand US dollars in 2010 to 10,022,800 thousand US dollars in 2014. Notably, the growth rate of adjusted total assets appears slightly more pronounced in the later years, indicating ongoing asset accumulation excluding goodwill contributions.

Return on Assets (ROA)

The reported ROA exhibits volatility but an overall upward trend, starting from a negligible 0.01% in 2010, then dramatically increasing to 10.98% in 2011, peaking at 11.97% in 2012, followed by a decrease to 9.32% in 2013, and then recovering to 12.28% in 2014. This pattern suggests fluctuations in profitability efficiency relative to asset size, with a recovery in the final year assessed.

The adjusted ROA, which excludes goodwill effects, reflects a similarly volatile but generally higher profitability profile. Starting at 0.01% in 2010, it quickly rises to 14.56% in 2011 and peaks at 15.83% in 2012. A decline follows in 2013 to 11.96%, but it rebounds to a high of 15.21% in 2014. The consistently higher adjusted ROA compared to the reported ROA implies that goodwill reductions positively affect the perceived return on assets, indicating that excluding goodwill results in a more favorable assessment of asset profitability.

Summary of Trends and Insights

Over the examined period, total assets have expanded substantially, indicating growth and increased resource capacity. The adjusted asset figures, while lower due to the exclusion of goodwill, mirror the overall asset growth pattern, suggesting that the core assets of the company have grown significantly.

Profitability as measured by ROA is subject to noticeable fluctuations but generally improves over time. The adjusted ROA figures signal stronger profitability performance when goodwill is removed from the asset base, suggesting that goodwill may temper the apparent asset efficiency in earnings generation.

These trends collectively suggest a company experiencing asset growth and improving core profitability, with the adjusted metrics providing a more optimistic and possibly more accurate indication of operational performance."