Name: Allergan Inc. (NYSE:AGN.) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Allergan Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Net earnings	1,528,800)	988,700)	1,102,500)	938,100)	4,900)
Depreciation and amortization	248,100)	254,600)	256,600)	253,400)	257,100)
Amortization of original issue discount and debt issuance costs	2,800)	2,600)	1,900)	9,700)	28,400)
Amortization of net realized gain on interest rate swap	(15,000)	(14,400)	(7,700)	(1,300)	(1,300)
Deferred income tax benefit	(79,800)	(192,200)	(88,300)	(68,900)	(249,100)
Loss on disposal and impairment of assets	29,800)	5,800)	5,700)	—)	17,900)
Unrealized (gain) loss on derivative instruments	(37,200)	(10,400)	15,300)	(11,100)	7,600)
Expense of share-based compensation plans	159,700)	114,400)	109,100)	86,300)	73,900)
Loss on sale of discontinued operations	—)	408,200)	—)	—)	—)
Legal settlement	—)	—)	—)	—)	15,200)
Impairment of intangible assets and related costs	—)	11,400)	22,300)	20,400)	369,100)
(Income) expense from changes in fair value of contingent consideration	(15,100)	70,700)	5,400)	11,900)	7,900)
Provision for losses on trade receivables in Venezuela	37,300)	—)	—)	—)	—)
Restructuring charges	246,400)	5,500)	5,700)	4,600)	300)
Loss on investments, net	3,100)	3,700)	—)	1,300)	—)
Pension and other post-retirement benefit plans settlements and curtailments	12,100)	—)	—)	—)	—)
Non-cash items included in net earnings	592,200)	659,900)	326,000)	306,300)	527,000)
Trade receivables	(115,700)	(139,600)	(34,300)	(105,600)	(71,400)
Inventories	(43,800)	(26,900)	(7,300)	(24,000)	(5,600)
Other current assets	(23,300)	(800)	(16,000)	(33,100)	7,300)
Other non-current assets	(29,700)	(15,500)	44,100)	(13,400)	(18,600)
Accounts payable	1,900)	37,400)	32,700)	(19,300)	8,600)
Accrued expenses	115,900)	110,200)	73,100)	39,100)	34,400)
Income taxes	(124,000)	64,900)	52,400)	(19,800)	(17,600)
Other liabilities	25,500)	17,100)	26,700)	13,600)	(5,100)
Changes in operating assets and liabilities	(193,200)	46,800)	171,400)	(162,500)	(68,000)
Net cash provided by operating activities	1,927,800)	1,695,400)	1,599,900)	1,081,900)	463,900)
Purchases of short-term investments	(1,269,800)	(1,025,600)	(865,200)	(571,100)	(824,100)
Purchases of equity investments	(20,300)	—)	—)	—)	—)
Acquisitions, net of cash acquired	(67,500)	(892,100)	(349,200)	(101,400)	(69,800)
Additions to property, plant and equipment	(243,900)	(171,900)	(143,300)	(118,600)	(102,800)
Additions to capitalized software	(19,000)	(11,800)	(13,900)	(11,200)	(13,300)
Additions to intangible assets	(15,000)	(300)	(4,100)	(300)	(40,900)
Contractual purchase price adjustment to prior acquisition	—)	—)	—)	—)	(1,700)
Proceeds from maturities of short-term investments	1,815,900)	683,200)	784,600)	1,140,300)	75,000)
Proceeds from sale of business	1,800)	42,700)	—)	—)	—)
Proceeds from sale of equity investments	—)	—)	—)	1,900)	—)
Proceeds from sale of property, plant and equipment	500)	500)	1,800)	1,200)	400)
Net cash (used in) provided by investing activities	182,700)	(1,375,300)	(589,300)	340,800)	(977,200)
Repayments of convertible borrowings	—)	—)	—)	(808,900)	—)
Dividends to stockholders	(59,600)	(59,400)	(60,400)	(61,100)	(60,600)
Payments to acquire treasury stock	(839,200)	(650,700)	(909,000)	(461,700)	(286,000)
Purchase of noncontrolling interest in a subsidiary	—)	(18,000)	—)	—)	—)
Payments of contingent consideration	(10,200)	(61,200)	(5,100)	(3,000)	—)
Net borrowings (repayments) of notes payable	16,500)	6,800)	(35,100)	30,700)	6,600)
Debt issuance costs	—)	(4,800)	—)	—)	(6,100)
Proceeds from issuance of senior notes, net of discount	—)	598,500)	—)	—)	648,000)
Sale of stock to employees	521,000)	179,300)	246,400)	264,000)	234,000)
Excess tax benefits from share-based compensation	167,500)	37,700)	45,700)	37,700)	27,100)
Net cash provided by (used in) financing activities	(204,000)	28,200)	(717,500)	(1,002,300)	563,000)
Effect of exchange rate changes on cash and equivalents	(41,200)	(4,000)	2,600)	(5,500)	(5,600)
Net increase (decrease) in cash and equivalents	1,865,300)	344,300)	295,700)	414,900)	44,100)
Cash and equivalents at beginning of period	3,046,100)	2,701,800)	2,406,100)	1,991,200)	1,947,100)
Cash and equivalents at end of period	4,911,400)	3,046,100)	2,701,800)	2,406,100)	1,991,200)

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).

Operating cash flow demonstrates a strong and consistent upward trajectory over the five-year period, increasing from 463.9 million US dollars in 2010 to 1.93 billion US dollars in 2014. This growth is primarily driven by a substantial rise in net earnings, which scaled from 4.9 million US dollars in 2010 to 1.53 billion US dollars in 2014. The alignment between net earnings and operating cash flow suggests high quality of earnings, although non-cash adjustments remained significant, particularly the consistent impact of depreciation and amortization which averaged approximately 250 million US dollars annually.

Operating Cash Flow Dynamics: A steady increase in cash provided by operations is observed, with the most significant jump occurring between 2010 and 2011. Working capital management shows a consistent drain on cash through trade receivables and inventories, particularly in 2014 where inventories reached a five-year high expenditure of 43.8 million US dollars. These outflows were partially mitigated by increases in accrued expenses, which grew from 34.4 million US dollars in 2010 to 115.9 million US dollars in 2014.
Investment and Capital Allocation: Capital expenditures for property, plant, and equipment exhibit a clear growth trend, rising from 102.8 million US dollars in 2010 to 243.9 million US dollars in 2014, indicating an expansion of physical infrastructure. Strategic acquisitions peaked in 2013 with a cash outflow of 892.1 million US dollars. The company also maintained a highly active short-term investment strategy, characterized by large outflows for purchases and corresponding large inflows from maturities, notably in 2014 where 1.82 billion US dollars were realized from short-term investment maturities.
Financing Activities and Shareholder Returns: The company prioritized shareholder returns through aggressive share repurchases, with payments to acquire treasury stock remaining high throughout the period, peaking at 909 million US dollars in 2012. In contrast, dividend payments remained remarkably flat, hovering around 60 million US dollars annually. Financing was supplemented by the issuance of senior notes in 2010 and 2013, and a consistent influx of cash from the sale of stock to employees, which spiked to 521 million US dollars in 2014.
Liquidity and Cash Position: The overall liquidity position strengthened significantly over the analyzed period. Cash and equivalents at the end of the period grew from 1.99 billion US dollars in 2010 to 4.91 billion US dollars in 2014. The most substantial increase in the cash balance occurred in 2014, resulting from the combination of record operating cash flows and high proceeds from the maturity of short-term investments.

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