Analysis of Geographic Areas
Allergan Inc. operates in 5 regions: United States; Europe; Latin America; Asia Pacific; and Other.
Area Asset Turnover
Allergan Inc., asset turnover by geographic area
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | |
|---|---|---|---|---|---|
| United States | 1.01 | 0.90 | 0.94 | 0.92 | 0.94 |
| Europe | 2.25 | 2.17 | 2.08 | 2.16 | 1.65 |
| Latin America | 7.73 | 7.34 | 7.18 | 6.58 | 4.98 |
| Asia Pacific | 10.83 | 9.06 | 8.34 | 7.67 | 5.93 |
| Other | 158.42 | 195.14 | 118.59 | 85.54 | 57.70 |
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).
An analysis of geographic asset turnover reveals a general upward trend in operational efficiency across most regions between 2010 and 2014. There is a marked disparity in asset utilization between the domestic United States market and international territories, with the latter demonstrating significantly higher turnover ratios and more aggressive growth patterns.
- United States
- Asset turnover in the United States remained relatively stagnant throughout the period. The ratio fluctuated slightly, dipping to 0.90 in 2013 before recovering to a peak of 1.01 in 2014. This represents the lowest efficiency of all reported geographic areas.
- Europe
- A steady increase in asset utilization is observed in Europe. The ratio rose from 1.65 in 2010 to 2.25 in 2014, indicating a consistent improvement in the ability to generate revenue from the asset base in this region.
- Latin America and Asia Pacific
- Both regions exhibited strong and continuous growth in turnover efficiency. Latin America increased from 4.98 to 7.73, while Asia Pacific showed more pronounced acceleration, rising from 5.93 in 2010 to 10.83 by 2014. These trends suggest highly efficient asset deployment and rapid revenue scaling in these emerging markets.
- Other Regions
- The "Other" category maintained the highest turnover ratios by a significant margin. A period of exponential growth was observed from 2010 to 2013, where the ratio climbed from 57.70 to 195.14, followed by a contraction to 158.42 in 2014. The extreme scale of these ratios suggests a very lean asset footprint relative to the revenue generated in these areas.
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Area Asset Turnover: United States
Allergan Inc.; United States; area asset turnover calculation
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Product net sales | 4,520,500) | 3,839,400) | 3,478,400) | 3,221,600) | 3,017,000) |
| Long-lived assets | 4,497,000) | 4,274,700) | 3,718,600) | 3,500,900) | 3,222,400) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 1.01 | 0.90 | 0.94 | 0.92 | 0.94 |
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).
1 2014 Calculation
Area asset turnover = Product net sales ÷ Long-lived assets
= 4,520,500 ÷ 4,497,000 = 1.01
Between 2010 and 2014, the United States segment demonstrated a consistent upward trajectory in revenue generation and a corresponding expansion of the asset base, culminating in a marked improvement in operational efficiency by the end of the period.
- Product Net Sales Trend
- Net sales in the United States exhibited uninterrupted growth over the five-year period, increasing from 3,017,000 thousand US dollars in 2010 to 4,520,500 thousand US dollars in 2014. The most pronounced acceleration in revenue occurred between 2013 and 2014, reflecting a significant increase in market performance during the final year of the analysis.
- Long-lived Assets Expansion
- The investment in long-lived assets grew steadily from 3,222,400 thousand US dollars in 2010 to 4,497,000 thousand US dollars in 2014. This growth pattern suggests a strategic alignment where capacity and infrastructure were expanded to support the increasing volume of product sales.
- Area Asset Turnover Analysis
- The area asset turnover ratio experienced minor fluctuations between 2010 and 2013, maintaining a range between 0.90 and 0.94. A pivotal shift occurred in 2014, when the ratio rose to 1.01. This indicates that sales growth finally outpaced asset accumulation, resulting in a higher level of productivity per unit of long-lived asset and marking the first instance in the period where the ratio exceeded 1.0.
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Area Asset Turnover: Europe
Allergan Inc.; Europe; area asset turnover calculation
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Product net sales | 1,410,300) | 1,237,800) | 1,121,400) | 1,086,600) | 931,600) |
| Long-lived assets | 627,100) | 569,900) | 538,600) | 502,000) | 563,100) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 2.25 | 2.17 | 2.08 | 2.16 | 1.65 |
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).
1 2014 Calculation
Area asset turnover = Product net sales ÷ Long-lived assets
= 1,410,300 ÷ 627,100 = 2.25
Between 2010 and 2014, the European geographic area demonstrated a consistent upward trajectory in revenue generation and a general improvement in asset utilization efficiency.
- Product Net Sales Trends
- A steady increase in product net sales is observed throughout the analyzed period. Revenue grew from 931.6 million US dollars in 2010 to 1.41 billion US dollars by 2014, reflecting a continuous expansion of sales volume or pricing within the region.
- Long-lived Assets Management
- The asset base experienced a contraction in 2011, decreasing from 563.1 million US dollars to 502 million US dollars. Following this dip, long-lived assets entered a period of sustained growth, reaching 627.1 million US dollars by the end of 2014. The growth in assets during the final three years was more moderate compared to the growth rate of net sales.
- Area Asset Turnover Performance
- The area asset turnover ratio improved from 1.65 in 2010 to a peak of 2.25 in 2014. A significant efficiency gain occurred in 2011, where the ratio jumped to 2.16 due to the combination of rising sales and a reduced asset base. Despite a slight correction to 2.08 in 2012, the ratio trended upward in the subsequent years, indicating that the European operations became increasingly effective at generating revenue relative to their long-lived asset investments.
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Area Asset Turnover: Latin America
Allergan Inc.; Latin America; area asset turnover calculation
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Product net sales | 382,000) | 383,000) | 399,200) | 390,700) | 323,700) |
| Long-lived assets | 49,400) | 52,200) | 55,600) | 59,400) | 65,000) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 7.73 | 7.34 | 7.18 | 6.58 | 4.98 |
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).
1 2014 Calculation
Area asset turnover = Product net sales ÷ Long-lived assets
= 382,000 ÷ 49,400 = 7.73
The financial performance of the Latin American region from 2010 to 2014 is characterized by a consistent increase in asset utilization efficiency, despite a stagnation in revenue growth during the latter half of the period. A divergent trend is observed between the contraction of the asset base and the trajectory of net sales, resulting in a steady improvement in the area asset turnover ratio.
- Product Net Sales Trends
- Revenue experienced significant growth between 2010 and 2012, rising from 323,700 thousand US$ to a peak of 399,200 thousand US$. However, this growth phase was followed by a period of marginal decline and stabilization, with sales ending at 382,000 thousand US$ by December 31, 2014. This indicates a transition from an expansionary phase to a plateau in market demand or pricing within the region.
- Long-lived Assets Trajectory
- A continuous downward trend in long-lived assets is evident throughout the five-year period. Assets decreased annually from 65,000 thousand US$ in 2010 to 49,400 thousand US$ in 2014. This systematic reduction suggests either an aggressive depreciation strategy, the divestment of unproductive assets, or a shift toward a leaner operational model in Latin America.
- Area Asset Turnover Analysis
- The area asset turnover ratio improved consistently every year, increasing from 4.98 in 2010 to 7.73 in 2014. The initial surge in the ratio was driven by the simultaneous increase in sales and decrease in assets. In the subsequent years, from 2012 to 2014, the ratio continued to rise even as net sales slightly declined; this was due to the rate of asset reduction outpacing the decline in revenue, thereby enhancing the mathematical efficiency of the remaining asset base.
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Area Asset Turnover: Asia Pacific
Allergan Inc.; Asia Pacific; area asset turnover calculation
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Product net sales | 512,300) | 464,100) | 448,900) | 408,700) | 333,800) |
| Long-lived assets | 47,300) | 51,200) | 53,800) | 53,300) | 56,300) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 10.83 | 9.06 | 8.34 | 7.67 | 5.93 |
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).
1 2014 Calculation
Area asset turnover = Product net sales ÷ Long-lived assets
= 512,300 ÷ 47,300 = 10.83
Between 2010 and 2014, the Asia Pacific region demonstrated a consistent improvement in operational efficiency and revenue generation. The financial trajectory is characterized by a steady increase in product net sales paired with a simultaneous reduction in the long-lived asset base, resulting in a significant upward trend in asset utilization.
- Product Net Sales Trend
- A consistent growth pattern is observed in product net sales, which rose from 333,800 thousand US dollars in 2010 to 512,300 thousand US dollars by 2014. This represents a sustained increase in market penetration or demand within the region over the five-year period.
- Long-lived Assets Management
- Long-lived assets exhibited a general downward trend, decreasing from 56,300 thousand US dollars in 2010 to 47,300 thousand US dollars in 2014. Despite a marginal increase in 2012, the overall trend indicates a reduction in the capital intensity required to sustain regional operations.
- Area Asset Turnover Performance
- The area asset turnover ratio increased linearly every year, rising from 5.93 in 2010 to 10.83 in 2014. This acceleration is the result of the dual impact of increasing revenue and a shrinking asset base, signaling a substantial increase in the efficiency with which assets are employed to generate sales.
The data indicates that the region has transitioned toward a more lean operating model. The ability to generate higher sales volumes while reducing the associated long-lived asset base suggests high scalability and optimized resource allocation in the Asia Pacific market.
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Area Asset Turnover: Other
Allergan Inc.; Other; area asset turnover calculation
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Product net sales | 301,000) | 273,200) | 260,900) | 239,500) | 213,500) |
| Long-lived assets | 1,900) | 1,400) | 2,200) | 2,800) | 3,700) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 158.42 | 195.14 | 118.59 | 85.54 | 57.70 |
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).
1 2014 Calculation
Area asset turnover = Product net sales ÷ Long-lived assets
= 301,000 ÷ 1,900 = 158.42
Between 2010 and 2014, there was a consistent upward trajectory in product net sales, which grew from 213,500 thousand USD to 301,000 thousand USD. During the same period, long-lived assets generally decreased, moving from 3,700 thousand USD in 2010 to a minimum of 1,400 thousand USD in 2013, before recording a moderate increase to 1,900 thousand USD in 2014.
- Product Net Sales Performance
- A steady growth pattern is observed, with sales increasing every year throughout the analyzed period. The total increase from 2010 to 2014 represents a significant expansion in revenue generation within the specified geographic area.
- Long-lived Assets Trend
- A contraction in the asset base occurred between 2010 and 2013, with values decreasing from 3,700 thousand USD to 1,400 thousand USD. This downward trend was interrupted in 2014 when assets rose to 1,900 thousand USD, suggesting a reinvestment in long-term resources.
- Area Asset Turnover Efficiency
- The area asset turnover ratio exhibited a sharp increase from 57.70 in 2010 to a peak of 195.14 in 2013. This trend indicates a substantial improvement in asset efficiency, as higher revenues were generated from a diminishing asset base. In 2014, the ratio declined to 158.42, a result of the increase in long-lived assets outpacing the growth rate of net sales for that specific year.
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Area Capital Expenditures to Depreciation
Allergan Inc., capital expenditures to depreciation by geographic area
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | |
|---|---|---|---|---|---|
| United States | 0.53 | 0.45 | 0.39 | 0.34 | 0.31 |
| Europe | 2.81 | 1.61 | 1.24 | 0.92 | 0.70 |
| Latin America | 0.97 | 0.99 | 0.71 | 0.67 | 0.81 |
| Asia Pacific | 0.46 | 0.46 | 0.43 | 0.47 | 1.03 |
| Other | 0.00 | 0.00 | 0.13 | 0.00 | 0.13 |
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).
An analysis of capital expenditures relative to depreciation across different geographic segments reveals divergent investment strategies between 2010 and 2014. While some regions demonstrate an aggressive expansion of the asset base, others exhibit a focus on maintenance or a reduction in relative investment levels.
- Europe
- This region shows the most significant growth in investment intensity. The ratio increased consistently from 0.70 in 2010 to 2.81 in 2014. A critical inflection point occurred in 2012, when the ratio surpassed 1.0, indicating that capital expenditures began to exceed depreciation. The accelerating upward trajectory suggests a period of rapid infrastructure expansion or significant asset upgrades within the European market.
- United States
- A steady and consistent upward trend is observed in the United States. The ratio rose incrementally from 0.31 in 2010 to 0.53 in 2014. Although the growth is linear, the ratio remained well below 1.0 throughout the period, suggesting that investments in the U.S. were primarily directed toward replacing worn-out assets rather than expanding the overall capacity of the asset base.
- Latin America
- Investment levels in Latin America remained relatively stable with minor fluctuations. After a slight decrease from 0.81 in 2010 to 0.67 in 2011, the ratio trended upward to peak at 0.99 in 2013 before settling at 0.97 in 2014. This indicates a balanced approach where capital expenditures closely mirrored depreciation by the end of the analyzed period.
- Asia Pacific
- A sharp contraction in investment intensity occurred following 2010. The ratio dropped from 1.03 in 2010 to 0.47 in 2011 and remained stagnant between 0.43 and 0.46 through 2014. This pattern suggests a shift from an initial expansion phase to a long-term maintenance phase, where new investments represent less than half of the annual depreciation charge.
- Other Regions
- The available data for other regions indicates a negligible and stagnant investment ratio of 0.13, reflecting minimal capital activity relative to depreciation in these territories.
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Area Capital Expenditures to Depreciation: United States
Allergan Inc.; United States; area capital expenditures to depreciation calculation
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Capital expenditures | 98,400) | 82,300) | 75,700) | 63,600) | 62,800) |
| Depreciation and amortization | 187,300) | 181,200) | 194,700) | 187,900) | 202,200) |
| Area Financial Ratio | |||||
| Area capital expenditures to depreciation1 | 0.53 | 0.45 | 0.39 | 0.34 | 0.31 |
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).
1 2014 Calculation
Area capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= 98,400 ÷ 187,300 = 0.53
Between 2010 and 2014, there was a consistent and accelerating increase in capital investment relative to the depreciation of assets within the United States. While the absolute level of investment remained below the annual depreciation charge throughout the period, the trajectory indicates a strategic shift toward increased asset acquisition and modernization.
- Capital Expenditures Trend
- Annual capital expenditures grew steadily from 62,800 thousand US dollars in 2010 to 98,400 thousand US dollars in 2014. This represents a total increase of approximately 56.7% over the five-year period, with the most significant growth occurring between 2013 and 2014.
- Depreciation and Amortization Stability
- Depreciation and amortization expenses remained relatively stable, fluctuating within a narrow range between 181,200 thousand US dollars and 202,200 thousand US dollars. The lack of significant growth in depreciation relative to the rise in capital expenditures suggests that the older asset base was declining or stabilizing while new investments were being integrated.
- Analysis of the Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation exhibited a continuous upward trend, rising from 0.31 in 2010 to 0.53 in 2014. This progressive increase indicates that a larger portion of the annual depreciation cost is being offset by new capital investments each year. Although the ratio remains below 1.0—suggesting that the company is not fully replacing its depreciating assets on a one-to-one basis—the steady growth in this metric reflects an intensifying commitment to expanding or upgrading the domestic infrastructure.
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Area Capital Expenditures to Depreciation: Europe
Allergan Inc.; Europe; area capital expenditures to depreciation calculation
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Capital expenditures | 136,400) | 79,700) | 59,500) | 46,300) | 29,300) |
| Depreciation and amortization | 48,500) | 49,600) | 48,100) | 50,300) | 42,000) |
| Area Financial Ratio | |||||
| Area capital expenditures to depreciation1 | 2.81 | 1.61 | 1.24 | 0.92 | 0.70 |
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).
1 2014 Calculation
Area capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= 136,400 ÷ 48,500 = 2.81
The financial trajectory for European operations between 2010 and 2014 is characterized by a significant and accelerating increase in capital investment relative to the depreciation of existing assets. This shift indicates a transition from a period of asset maintenance to a period of aggressive expansion and infrastructure growth.
- Capital Expenditures Trend
- A consistent upward trend in capital spending is observed, with expenditures rising from 29.3 million US dollars in 2010 to 136.4 million US dollars by 2014. The growth accelerated notably in the final year of the period, where expenditures increased by approximately 71% compared to the previous year.
- Depreciation and Amortization Stability
- Depreciation and amortization remained relatively stagnant over the five-year period, fluctuating within a narrow range between 42.0 million and 50.3 million US dollars. The lack of significant variance in these figures suggests that the depreciation of the historical asset base remained constant, and the impact of recent capital injections had not yet substantially altered the annual amortization expense.
- Capital Expenditure to Depreciation Ratio
- The ratio of capital expenditures to depreciation experienced a steady and substantial increase, climbing from 0.70 in 2010 to 2.81 in 2014. While a ratio below 1.0 in 2010 and 2011 indicated that investment was lower than the consumption of existing assets, the crossing of the 1.0 threshold in 2012 marked a pivot toward net asset growth. By 2014, the ratio indicated that capital investments were nearly triple the annual depreciation, signaling a period of intense capitalization in the European market.
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Area Capital Expenditures to Depreciation: Latin America
Allergan Inc.; Latin America; area capital expenditures to depreciation calculation
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Capital expenditures | 6,900) | 7,600) | 6,000) | 6,600) | 6,700) |
| Depreciation and amortization | 7,100) | 7,700) | 8,400) | 9,800) | 8,300) |
| Area Financial Ratio | |||||
| Area capital expenditures to depreciation1 | 0.97 | 0.99 | 0.71 | 0.67 | 0.81 |
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).
1 2014 Calculation
Area capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= 6,900 ÷ 7,100 = 0.97
The financial trajectory for the Latin American region between 2010 and 2014 reflects a period of fluctuating investment levels and a shifting balance between asset acquisition and depreciation.
- Capital Expenditure Patterns
- Annual expenditures remained relatively stable, oscillating within a range of 6,000 to 7,600 US$ thousand. A notable peak occurred in 2013, representing the highest investment level in the five-year period, followed by a moderate reduction to 6,900 US$ thousand in 2014.
- Depreciation and Amortization Trends
- Depreciation and amortization expenses reached a peak of 9,800 US$ thousand in 2011. Following this peak, a consistent downward trend is observed, with expenses declining annually to reach 7,100 US$ thousand by the end of 2014. This suggests a reduction in the depreciable asset base or the full amortization of significant prior investments.
- Capital Expenditures to Depreciation Ratio Analysis
- The ratio exhibited a V-shaped recovery pattern. After starting at 0.81 in 2010, the ratio declined to its lowest point of 0.67 in 2011, indicating that capital reinvestment was significantly lower than the rate of asset consumption. A subsequent upward trend led to a ratio of 0.99 in 2013 and 0.97 in 2014. The movement toward parity (1.0) demonstrates a strategic shift toward maintaining the asset base by replacing depreciating assets at nearly the same rate they are written off.
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Area Capital Expenditures to Depreciation: Asia Pacific
Allergan Inc.; Asia Pacific; area capital expenditures to depreciation calculation
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Capital expenditures | 2,200) | 2,300) | 2,000) | 2,100) | 3,900) |
| Depreciation and amortization | 4,800) | 5,000) | 4,600) | 4,500) | 3,800) |
| Area Financial Ratio | |||||
| Area capital expenditures to depreciation1 | 0.46 | 0.46 | 0.43 | 0.47 | 1.03 |
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).
1 2014 Calculation
Area capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= 2,200 ÷ 4,800 = 0.46
The financial data for the Asia Pacific region indicates a significant shift in investment strategy and asset management between 2010 and 2014. While the period began with capital expenditures exceeding depreciation, the subsequent four years were characterized by a substantial reduction in new investments relative to the wear and tear of existing assets.
- Capital Expenditures
- A sharp decline in capital spending occurred between 2010 and 2011, falling from 3,900 thousand US$ to 2,100 thousand US$. Following this initial drop, expenditures remained relatively stable, fluctuating within a narrow range between 2,000 thousand US$ and 2,300 thousand US$ through 2014.
- Depreciation and Amortization
- An overall upward trend in depreciation and amortization was observed for the majority of the period. Values increased steadily from 3,800 thousand US$ in 2010 to a peak of 5,000 thousand US$ in 2013, before experiencing a slight decrease to 4,800 thousand US$ in 2014.
- Area Capital Expenditures to Depreciation Ratio
- The ratio experienced a primary contraction after 2010, dropping from 1.03 to 0.47 in 2011. For the remainder of the period, the ratio remained consistently low, stabilizing between 0.43 and 0.46. This sustained level below 1.0 indicates that capital reinvestment in the Asia Pacific region has been insufficient to offset the annual depreciation of its asset base, suggesting a period of capital contraction or a transition toward utilizing existing infrastructure rather than expanding.
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Area Capital Expenditures to Depreciation: Other
Allergan Inc.; Other; area capital expenditures to depreciation calculation
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Capital expenditures | —) | —) | 100) | —) | 100) |
| Depreciation and amortization | 400) | 600) | 800) | 900) | 800) |
| Area Financial Ratio | |||||
| Area capital expenditures to depreciation1 | 0.00 | 0.00 | 0.13 | 0.00 | 0.13 |
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).
1 2014 Calculation
Area capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= 0 ÷ 400 = 0.00
The analysis of capital allocation relative to asset depreciation reveals a significant disparity between investment in new assets and the consumption of existing ones. There is a clear pattern of under-investment in capital expenditures compared to the levels of depreciation and amortization recorded over the five-year period.
- Capital Expenditure Trends
- Investment in capital assets remained minimal and inconsistent, with expenditures of 100 thousand US dollars recorded only in 2010 and 2012. The absence of recorded expenditures in 2011, 2013, and 2014 suggests a period of stagnant capital growth or a strategy of minimal reinvestment in this specific area.
- Depreciation and Amortization Patterns
- A general downward trend is observed in depreciation and amortization expenses following a peak of 900 thousand US dollars in 2011. Expenses decreased steadily to 800 thousand US dollars in 2012, 600 thousand US dollars in 2013, and reached a low of 400 thousand US dollars by December 31, 2014. This decline indicates a reducing base of depreciable assets over time.
- Area Capital Expenditures to Depreciation Ratio
- The ratio remained constant at 0.13 during the years where capital expenditures were reported. This value, being significantly below 1.0, indicates that the company spent only 13% of its depreciation amount on new capital assets. Such a low ratio suggests that the company is not replacing its assets as they wear out, leading to a gradual depletion of the capital base in this category.
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Product net sales
Allergan Inc., product net sales by geographic area
US$ in thousands
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | |
|---|---|---|---|---|---|
| United States | 4,520,500) | 3,839,400) | 3,478,400) | 3,221,600) | 3,017,000) |
| Europe | 1,410,300) | 1,237,800) | 1,121,400) | 1,086,600) | 931,600) |
| Latin America | 382,000) | 383,000) | 399,200) | 390,700) | 323,700) |
| Asia Pacific | 512,300) | 464,100) | 448,900) | 408,700) | 333,800) |
| Other | 301,000) | 273,200) | 260,900) | 239,500) | 213,500) |
| Total | 7,126,100) | 6,197,500) | 5,708,800) | 5,347,100) | 4,819,600) |
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).
Total product net sales exhibited a consistent upward trajectory over the five-year period from 2010 to 2014, increasing from US$ 4,819,600 thousand to US$ 7,126,100 thousand. This represents a total growth of approximately 47.8%, with the most significant annual increase occurring between 2013 and 2014.
- United States Market Dominance
- The United States remains the primary revenue driver, accounting for the largest portion of net sales throughout the period. Sales in this region grew from US$ 3,017,000 thousand in 2010 to US$ 4,520,500 thousand in 2014. A notable acceleration in growth is observed in the final year, with an increase of approximately 18% between 2013 and 2014.
- Growth in Europe and Asia Pacific
- Europe and the Asia Pacific regions demonstrated steady expansion. European sales rose from US$ 931,600 thousand to US$ 1,410,300 thousand, while Asia Pacific sales grew from US$ 333,800 thousand to US$ 512,300 thousand. Both regions contributed consistently to the overall increase in international revenue.
- Latin American Performance Plateau
- Latin American net sales experienced an initial increase from 2010 to 2012, peaking at US$ 399,200 thousand. However, a downward trend followed, with sales declining slightly to US$ 382,000 thousand by 2014, indicating a stagnation in market growth within this region.
- Other Geographic Contributions
- Revenue from other unspecified territories showed a gradual and consistent increase, rising from US$ 213,500 thousand in 2010 to US$ 301,000 thousand in 2014.
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Long-lived assets
Allergan Inc., long-lived assets by geographic area
US$ in thousands
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | |
|---|---|---|---|---|---|
| United States | 4,497,000) | 4,274,700) | 3,718,600) | 3,500,900) | 3,222,400) |
| Europe | 627,100) | 569,900) | 538,600) | 502,000) | 563,100) |
| Latin America | 49,400) | 52,200) | 55,600) | 59,400) | 65,000) |
| Asia Pacific | 47,300) | 51,200) | 53,800) | 53,300) | 56,300) |
| Other | 1,900) | 1,400) | 2,200) | 2,800) | 3,700) |
| Total | 5,222,700) | 4,949,400) | 4,368,800) | 4,118,400) | 3,910,500) |
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).
Total long-lived assets exhibited a consistent upward trajectory between 2010 and 2014, increasing from 3,910,500 thousand USD to 5,222,700 thousand USD. This growth was primarily driven by substantial investment in the United States market, which consistently accounted for the vast majority of the asset base throughout the period.
- North American and European Growth
- The United States experienced significant expansion, with assets rising from 3,222,400 thousand USD in 2010 to 4,497,000 thousand USD by 2014, representing a growth of approximately 39.6%. European assets remained relatively stable, showing a slight dip in 2011 before recovering and reaching 627,100 thousand USD by the end of 2014.
- International Market Contraction
- A sustained downward trend is observed in Latin America and the Asia Pacific regions. Long-lived assets in Latin America declined annually, falling from 65,000 thousand USD in 2010 to 49,400 thousand USD in 2014. Similarly, assets in the Asia Pacific region decreased from 56,300 thousand USD to 47,300 thousand USD over the same period. The "Other" category also saw a general reduction, ending at 1,900 thousand USD.
- Geographic Concentration Analysis
- There is a clear trend toward increased geographic concentration. In 2010, the United States represented approximately 82.4% of total long-lived assets; by 2014, this proportion increased to approximately 86.1%. This shift indicates a strategic reallocation of resources or a focus on intensifying domestic operations while reducing the asset footprint in emerging international markets.
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Depreciation and amortization
Allergan Inc., depreciation and amortization by geographic area
US$ in thousands
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | |
|---|---|---|---|---|---|
| United States | 187,300) | 181,200) | 194,700) | 187,900) | 202,200) |
| Europe | 48,500) | 49,600) | 48,100) | 50,300) | 42,000) |
| Latin America | 7,100) | 7,700) | 8,400) | 9,800) | 8,300) |
| Asia Pacific | 4,800) | 5,000) | 4,600) | 4,500) | 3,800) |
| Other | 400) | 600) | 800) | 900) | 800) |
| Total | 248,100) | 244,100) | 256,600) | 253,400) | 257,100) |
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).
Total depreciation and amortization expenses remained relatively stable between 2010 and 2014, fluctuating within a narrow range from a high of $257.1 million to a low of $244.1 million. The expenditure is heavily concentrated in the United States, which consistently represents the primary driver of the total cost across all observed years.
- United States Regional Analysis
- A general downward trend is observed in the United States, where expenses decreased from $202.2 million in 2010 to $187.3 million in 2014. Although a temporary increase occurred in 2012, reaching $194.7 million, the overall movement suggests a reduction in the depreciable asset base or the completion of specific amortization schedules within the domestic market.
- European and Asia Pacific Trends
- The European market experienced an initial increase from $42.0 million in 2010 to $50.3 million in 2011, thereafter stabilizing around the $48 million to $50 million range. The Asia Pacific region showed consistent growth for most of the period, rising from $3.8 million in 2010 to a peak of $5.0 million in 2013, before a slight correction to $4.8 million in 2014.
- Latin America and Minor Geographic Segments
- Latin American expenses peaked in 2011 at $9.8 million before entering a period of steady decline, ending at $7.1 million in 2014. Similarly, the "Other" category exhibited a consistent contraction, falling from $800 thousand in 2010 to $400 thousand in 2014, indicating a diminishing allocation of amortizable assets in these secondary regions.
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Capital expenditures
Allergan Inc., capital expenditures by geographic area
US$ in thousands
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | |
|---|---|---|---|---|---|
| United States | 98,400) | 82,300) | 75,700) | 63,600) | 62,800) |
| Europe | 136,400) | 79,700) | 59,500) | 46,300) | 29,300) |
| Latin America | 6,900) | 7,600) | 6,000) | 6,600) | 6,700) |
| Asia Pacific | 2,200) | 2,300) | 2,000) | 2,100) | 3,900) |
| Other | —) | —) | 100) | —) | 100) |
| Total | 243,900) | 171,900) | 143,300) | 118,600) | 102,800) |
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).
Total capital expenditures exhibit a consistent and accelerating upward trajectory between 2010 and 2014. Total investment increased from 102,800 thousand USD to 243,900 thousand USD, representing a total growth of approximately 137% over the five-year period.
- European Market Expansion
- The most significant growth is observed in Europe, where capital expenditures rose from 29,300 thousand USD in 2010 to 136,400 thousand USD in 2014. This region experienced a nearly five-fold increase in investment and, by 2014, surpassed the United States as the primary destination for capital allocation.
- United States Investment Trends
- Capital spending in the United States grew steadily from 62,800 thousand USD in 2010 to 98,400 thousand USD in 2014. While the absolute values increased consistently year-over-year, the United States' share of total capital expenditures declined as the company pivoted toward more aggressive investment in the European theater.
- Emerging Markets Performance
- Investment in Latin America and the Asia Pacific region remained relatively stagnant or declined. Latin American expenditures fluctuated slightly, ending at 6,900 thousand USD in 2014 compared to 6,700 thousand USD in 2010. The Asia Pacific region showed a downward trend, with spending decreasing from 3,900 thousand USD in 2010 to 2,200 thousand USD in 2014.
The shift in capital allocation suggests a strategic prioritization of developed markets, specifically Europe, which drove the majority of the overall increase in the company's capital expenditure budget toward the end of the period.
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