Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Allergan Inc., balance sheet: goodwill and intangible assets

US$ in thousands

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Developed technology	648,500)	647,700)	1,202,800)	1,111,000)	1,129,600)
Customer relationships	54,200)	54,700)	54,500)	42,300)	42,300)
Licensing	190,500)	185,800)	185,900)	185,800)	185,600)
Trademarks	89,100)	89,600)	87,900)	26,700)	27,400)
Technology, related assets	335,300)	327,500)	182,000)	181,300)	189,600)
Other	29,000)	30,700)	43,900)	38,500)	17,000)
Amortizable intangible assets, gross amount	1,346,600)	1,336,000)	1,757,000)	1,585,600)	1,591,500)
Accumulated amortization	(739,200)	(639,800)	(807,200)	(716,400)	(599,800)
Amortizable intangible assets, net	607,400)	696,200)	949,800)	869,200)	991,700)
In-process research and development	1,179,100)	953,800)	279,300)	296,000)	4,300)
Unamortizable intangible assets	1,179,100)	953,800)	279,300)	296,000)	4,300)
Intangibles	1,786,500)	1,650,000)	1,229,100)	1,165,200)	996,000)
Goodwill	2,392,900)	2,339,400)	2,239,500)	2,088,400)	2,038,500)
Intangibles and goodwill	4,179,400)	3,989,400)	3,468,600)	3,253,600)	3,034,500)

Based on: 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).

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Item	Description	The company
Intangibles	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Allergan Inc. intangibles increased from 2012 to 2013 and from 2013 to 2014.
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	Allergan Inc. goodwill increased from 2012 to 2013 and from 2013 to 2014.
Intangibles and goodwill	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Allergan Inc. intangibles and goodwill increased from 2012 to 2013 and from 2013 to 2014.

Allergan Inc., adjustments to financial statements

US$ in thousands

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Adjustment to Total Assets
Total assets (as reported)	12,415,700)	10,574,300)	9,179,300)	8,508,600)	8,308,100)
Less: Goodwill	2,392,900)	2,339,400)	2,239,500)	2,088,400)	2,038,500)
Total assets (adjusted)	10,022,800)	8,234,900)	6,939,800)	6,420,200)	6,269,600)
Adjustment to Total Allergan, Inc. Stockholders’ Equity
Total Allergan, Inc. stockholders’ equity (as reported)	7,753,000)	6,463,200)	5,837,100)	5,309,600)	4,757,700)
Less: Goodwill	2,392,900)	2,339,400)	2,239,500)	2,088,400)	2,038,500)
Total Allergan, Inc. stockholders’ equity (adjusted)	5,360,100)	4,123,800)	3,597,600)	3,221,200)	2,719,200)

Based on: 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).

Allergan Inc., Financial Data: Reported vs. Adjusted

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Allergan Inc., adjusted financial ratios

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Total Asset Turnover
Reported total asset turnover	0.57	0.59	0.62	0.63	0.58
Adjusted total asset turnover	0.71	0.75	0.82	0.83	0.77
Financial Leverage
Reported financial leverage	1.60	1.64	1.57	1.60	1.75
Adjusted financial leverage	1.87	2.00	1.93	1.99	2.31
Return on Equity (ROE)
Reported ROE	19.66%	15.24%	18.82%	17.60%	0.01%
Adjusted ROE	28.44%	23.89%	30.54%	29.01%	0.02%
Return on Assets (ROA)
Reported ROA	12.28%	9.32%	11.97%	10.98%	0.01%
Adjusted ROA	15.21%	11.96%	15.83%	14.56%	0.01%

Based on: 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Allergan Inc. adjusted total asset turnover ratio deteriorated from 2012 to 2013 and from 2013 to 2014.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Allergan Inc. adjusted financial leverage ratio increased from 2012 to 2013 but then decreased significantly from 2013 to 2014.
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Allergan Inc. adjusted ROE deteriorated from 2012 to 2013 but then improved from 2013 to 2014 not reaching 2012 level.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Allergan Inc. adjusted ROA deteriorated from 2012 to 2013 but then improved from 2013 to 2014 not reaching 2012 level.

Allergan Inc., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
As Reported
Selected Financial Data (US$ in thousands)
Product net sales	7,126,100)	6,197,500)	5,708,800)	5,347,100)	4,819,600)
Total assets	12,415,700)	10,574,300)	9,179,300)	8,508,600)	8,308,100)
Activity Ratio
Total asset turnover¹	0.57	0.59	0.62	0.63	0.58
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Product net sales	7,126,100)	6,197,500)	5,708,800)	5,347,100)	4,819,600)
Adjusted total assets	10,022,800)	8,234,900)	6,939,800)	6,420,200)	6,269,600)
Activity Ratio
Adjusted total asset turnover²	0.71	0.75	0.82	0.83	0.77

Based on: 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).

2014 Calculations

¹ Total asset turnover = Product net sales ÷ Total assets
= 7,126,100 ÷ 12,415,700 = 0.57

² Adjusted total asset turnover = Product net sales ÷ Adjusted total assets
= 7,126,100 ÷ 10,022,800 = 0.71

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Allergan Inc. adjusted total asset turnover ratio deteriorated from 2012 to 2013 and from 2013 to 2014.

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
As Reported
Selected Financial Data (US$ in thousands)
Total assets	12,415,700)	10,574,300)	9,179,300)	8,508,600)	8,308,100)
Total Allergan, Inc. stockholders’ equity	7,753,000)	6,463,200)	5,837,100)	5,309,600)	4,757,700)
Solvency Ratio
Financial leverage¹	1.60	1.64	1.57	1.60	1.75
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted total assets	10,022,800)	8,234,900)	6,939,800)	6,420,200)	6,269,600)
Adjusted total Allergan, Inc. stockholders’ equity	5,360,100)	4,123,800)	3,597,600)	3,221,200)	2,719,200)
Solvency Ratio
Adjusted financial leverage²	1.87	2.00	1.93	1.99	2.31

Based on: 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).

2014 Calculations

¹ Financial leverage = Total assets ÷ Total Allergan, Inc. stockholders’ equity
= 12,415,700 ÷ 7,753,000 = 1.60

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Allergan, Inc. stockholders’ equity
= 10,022,800 ÷ 5,360,100 = 1.87

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Allergan Inc. adjusted financial leverage ratio increased from 2012 to 2013 but then decreased significantly from 2013 to 2014.

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
As Reported
Selected Financial Data (US$ in thousands)
Net earnings attributable to Allergan, Inc.	1,524,200)	985,100)	1,098,800)	934,500)	600)
Total Allergan, Inc. stockholders’ equity	7,753,000)	6,463,200)	5,837,100)	5,309,600)	4,757,700)
Profitability Ratio
ROE¹	19.66%	15.24%	18.82%	17.60%	0.01%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net earnings attributable to Allergan, Inc.	1,524,200)	985,100)	1,098,800)	934,500)	600)
Adjusted total Allergan, Inc. stockholders’ equity	5,360,100)	4,123,800)	3,597,600)	3,221,200)	2,719,200)
Profitability Ratio
Adjusted ROE²	28.44%	23.89%	30.54%	29.01%	0.02%

Based on: 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).

2014 Calculations

¹ ROE = 100 × Net earnings attributable to Allergan, Inc. ÷ Total Allergan, Inc. stockholders’ equity
= 100 × 1,524,200 ÷ 7,753,000 = 19.66%

² Adjusted ROE = 100 × Net earnings attributable to Allergan, Inc. ÷ Adjusted total Allergan, Inc. stockholders’ equity
= 100 × 1,524,200 ÷ 5,360,100 = 28.44%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Allergan Inc. adjusted ROE deteriorated from 2012 to 2013 but then improved from 2013 to 2014 not reaching 2012 level.

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
As Reported
Selected Financial Data (US$ in thousands)
Net earnings attributable to Allergan, Inc.	1,524,200)	985,100)	1,098,800)	934,500)	600)
Total assets	12,415,700)	10,574,300)	9,179,300)	8,508,600)	8,308,100)
Profitability Ratio
ROA¹	12.28%	9.32%	11.97%	10.98%	0.01%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net earnings attributable to Allergan, Inc.	1,524,200)	985,100)	1,098,800)	934,500)	600)
Adjusted total assets	10,022,800)	8,234,900)	6,939,800)	6,420,200)	6,269,600)
Profitability Ratio
Adjusted ROA²	15.21%	11.96%	15.83%	14.56%	0.01%

Based on: 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).

2014 Calculations

¹ ROA = 100 × Net earnings attributable to Allergan, Inc. ÷ Total assets
= 100 × 1,524,200 ÷ 12,415,700 = 12.28%

² Adjusted ROA = 100 × Net earnings attributable to Allergan, Inc. ÷ Adjusted total assets
= 100 × 1,524,200 ÷ 10,022,800 = 15.21%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Allergan Inc. adjusted ROA deteriorated from 2012 to 2013 but then improved from 2013 to 2014 not reaching 2012 level.

Allergan Inc. (NYSE:AGN.)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

Allergan Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Allergan Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)