Balance Sheet: Liabilities and Stockholders’ Equity

The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

Allergan Inc., consolidated balance sheet: liabilities and stockholders’ equity

US$ in thousands

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Notes payable	72,100)	55,600)	48,800)	83,900)	28,100)
Convertible notes	—)	—)	—)	—)	642,500)
Accounts payable	287,400)	283,200)	233,100)	200,400)	222,500)
Accrued compensation	292,800)	269,100)	223,700)	200,600)	182,400)
Sales rebates and other incentive programs	372,100)	279,300)	270,600)	249,100)	186,500)
Royalties	27,300)	26,200)	26,000)	27,000)	34,600)
Interest	22,000)	22,000)	18,200)	15,000)	17,300)
Sales returns, specialty pharmaceutical products	60,400)	56,500)	50,000)	37,300)	29,200)
Legal settlement expenses	—)	—)	—)	—)	15,200)
Product warranties, breast implant products	7,700)	7,600)	6,700)	6,500)	6,700)
Contingent consideration	53,800)	9,900)	59,000)	4,900)	—)
Investment bank advisory fees	24,000)	—)	—)	—)	—)
Annual branded prescription drug fee	34,100)	6,100)	—)	—)	—)
Restructuring charges	109,600)	—)	—)	—)	—)
Other	194,000)	189,900)	159,100)	130,300)	147,300)
Other accrued expenses	905,000)	597,500)	589,600)	470,100)	436,800)
Income taxes	—)	38,900)	—)	—)	16,100)
Current liabilities	1,557,300)	1,244,300)	1,095,200)	955,000)	1,528,400)
Long-term debt, excluding current maturities	2,085,300)	2,098,300)	1,512,400)	1,515,400)	1,534,200)
Postretirement benefit plan	56,500)	44,300)	46,600)	41,300)	56,500)
Qualified and non-qualified pension plans	267,300)	194,500)	218,300)	204,400)	152,100)
Deferred executive compensation	116,300)	105,300)	85,300)	75,000)	68,900)
Deferred income	72,800)	67,000)	75,100)	81,100)	87,800)
Contingent consideration	312,100)	215,300)	165,300)	209,700)	41,300)
Product warranties, breast implant products	28,500)	26,000)	27,700)	26,100)	23,400)
Unrecognized tax benefit liabilities	82,600)	67,700)	53,800)	39,300)	15,900)
Other	74,000)	42,100)	37,000)	28,900)	18,500)
Other liabilities	1,010,100)	762,200)	709,100)	705,800)	464,400)
Non-current liabilities	3,095,400)	2,860,500)	2,221,500)	2,221,200)	1,998,600)
Total liabilities	4,652,700)	4,104,800)	3,316,700)	3,176,200)	3,527,000)
Preferred stock, $.01 par value; none issued	—)	—)	—)	—)	—)
Common stock, $.01 par value	3,100)	3,100)	3,100)	3,100)	3,100)
Additional paid-in capital	3,353,700)	3,032,800)	2,900,600)	2,761,800)	2,815,500)
Accumulated other comprehensive loss	(408,600)	(226,600)	(244,600)	(241,400)	(152,900)
Retained earnings	5,894,800)	4,646,700)	3,832,100)	2,969,300)	2,225,900)
Treasury stock, at cost	(1,090,000)	(992,800)	(654,100)	(183,200)	(133,900)
Total Allergan, Inc. stockholders’ equity	7,753,000)	6,463,200)	5,837,100)	5,309,600)	4,757,700)
Noncontrolling interest	10,000)	6,300)	25,500)	22,800)	23,400)
Total equity	7,763,000)	6,469,500)	5,862,600)	5,332,400)	4,781,100)
Total liabilities and equity	12,415,700)	10,574,300)	9,179,300)	8,508,600)	8,308,100)

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).

Current Liabilities: Current liabilities displayed fluctuations over the observed period. After a peak in 2010 at $1,528,400 thousand, current liabilities decreased significantly in 2011 to $955,000 thousand, before trending upwards again to reach $1,557,300 thousand by 2014. This increase was supported by a rise in accounts payable, accrued compensation, and sales rebates, indicating increasing operational obligations.
Long-term Debt: Long-term debt remained relatively steady from 2010 through 2012 at approximately $1,512,000 thousand, but surged notably to over $2 billion in 2013 and remained around this level in 2014. This suggests increased leverage or financing activities in the recent years assessed.
Other Accrued Expenses and Other Liabilities: Other accrued expenses showed a strong upward trajectory, particularly between 2013 and 2014, when they jumped sharply from $597,500 thousand to $905,000 thousand. Similarly, other liabilities increased steadily throughout the period, reflecting growing obligations that may be linked to operational or non-operational commitments.
Contingent Consideration: Contingent consideration exhibited significant volatility, starting from no reported amounts in 2010, rising sharply to $209,700 thousand in 2011, fluctuating in subsequent years, and reaching $312,100 thousand by 2014, highlighting potential acquisition-related liabilities or other contingent events.
Total Liabilities: Total liabilities declined from $3,527,000 thousand in 2010 to $3,176,200 thousand in 2011, then increased consistently, reaching $4,652,700 thousand in 2014. The overall upward trend, especially post-2011, indicates growing financial obligations.
Stockholders’ Equity: Stockholders’ equity generally increased over the period, rising from $4,757,700 thousand in 2010 to $7,753,000 thousand in 2014, demonstrating growth in net assets attributable to shareholders. This growth was primarily driven by increased retained earnings and additional paid-in capital.
Retained Earnings and Additional Paid-in Capital: Retained earnings showed strong and consistent growth each year, from $2,225,900 thousand in 2010 to $5,894,800 thousand in 2014, reflecting cumulative profitability. Additional paid-in capital also increased steadily, indicating ongoing equity financing or capital contributions.
Treasury Stock: Treasury stock increased significantly in absolute terms (negative values increasing), indicating substantial repurchase of shares during the period, which could be a strategy for capital structure management or stock price support.
Accumulated Other Comprehensive Loss: The accumulated other comprehensive loss deepened over the years, particularly notable in 2014 with a $408,600 thousand loss. This suggests increased unrealized losses or accounting adjustments affecting comprehensive income.
Noncontrolling Interest: Noncontrolling interest remained low in absolute terms but exhibited some fluctuation, decreasing notably in 2013 and recovering slightly afterward, indicating changes in ownership interest of subsidiaries.
Other Expense and Income Items: Sales rebates and incentive programs showed a strong upward trend, particularly rising sharply in 2014, which may impact net sales recognition and margins. Sales returns of specialty pharmaceutical products also increased consistently, indicating potential shifts in product performance or customer returns. Interest expenses generally increased, reflecting higher debt levels. Legal settlement expenses appear only once in 2010, suggesting a one-time charge. Restructuring charges appeared substantially in 2014, indicating cost-saving initiatives or organizational changes.
Summary of Observations: Overall, the data reflects a company experiencing growth in financial scale with increasing liabilities and equity, consistent profit retention, and strategic financing activities. The rising debt levels alongside increased accrued expenses and contingent liabilities suggest expanding operations or investments funded partly through debt. The increasing treasury stock and restructuring charges indicate active capital and operational management efforts.

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Allergan Inc. (NYSE:AGN.)

Balance Sheet: Liabilities and Stockholders’ Equity