Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Allergan Inc., solvency ratios (quarterly data)
Based on: 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
- Debt to Equity Ratio
- The debt to equity ratio showed a general downward trend from March 2011 to December 2012, declining from 0.46 to 0.27. This trend indicates a gradual reduction in financial leverage during this period. However, beginning in March 2013, the ratio increased again, peaking at 0.41, before steadily declining once more to 0.28 by the end of 2014. This pattern suggests fluctuations in the company’s capital structure, with periods of increased leverage followed by deleveraging.
- Debt to Capital Ratio
- The debt to capital ratio followed a similar pattern to the debt to equity ratio. It decreased consistently from 0.31 in March 2011 to a low of 0.21 in December 2012, indicating a stronger capital base relative to debt. Following this, the ratio rose to 0.29 in March 2013, then gradually declined to 0.22 by December 2014. The fluctuations were less pronounced than those observed in the debt to equity ratio but signified similar capital management dynamics.
- Debt to Assets Ratio
- This ratio mirrored the trends of other debt ratios, decreasing from 0.26 in March 2011 to 0.17 in December 2012, demonstrating a reduction in debt relative to total assets. After an increase to 0.23 in March 2013, the ratio steadily declined to 0.17 by the end of 2014, denoting improved asset financing through means other than debt over time.
- Financial Leverage
- Financial leverage remained relatively stable throughout the period, with minor fluctuations around the 1.6 to 1.7 range. Starting at 1.72 in March 2011, it decreased slightly to 1.57 by December 2012 and then increased again, peaking at 1.73 in March 2013. Subsequently, it experienced small oscillations, finishing at 1.60 by the end of 2014. The stability suggests consistent use of equity and debt financing proportions with limited volatility.
- Interest Coverage Ratio
- The interest coverage ratio exhibited a remarkable increase early in the time frame, rising from 2.77 in March 2011 to a dramatic jump of 16.07 in September 2011 and further up to 25.11 by December 2012. After a slight dip in 2013, the ratio maintained strong coverage levels between 24.08 and 29.66 through to December 2014. This indicates significant improvement in the company’s ability to meet interest obligations from operating earnings, reflecting enhanced earnings or reduced interest expenses.
Debt Ratios
Coverage Ratios
Debt to Equity
Allergan Inc., debt to equity calculation (quarterly data)
| Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Notes payable | 72,100) | 55,800) | 60,900) | 61,100) | 55,600) | 37,200) | 51,600) | 57,200) | 48,800) | 40,700) | 42,400) | 87,700) | 83,900) | 78,800) | 76,100) | 36,300) | |||||
| Convertible notes | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | 648,900) | |||||
| Long-term debt, excluding current maturities | 2,085,300) | 2,088,600) | 2,091,800) | 2,095,100) | 2,098,300) | 2,101,500) | 2,104,600) | 2,107,700) | 1,512,400) | 1,515,500) | 1,514,900) | 1,514,700) | 1,515,400) | 1,516,200) | 1,510,300) | 1,529,500) | |||||
| Long-term convertible notes | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | |||||
| Total debt | 2,157,400) | 2,144,400) | 2,152,700) | 2,156,200) | 2,153,900) | 2,138,700) | 2,156,200) | 2,164,900) | 1,561,200) | 1,556,200) | 1,557,300) | 1,602,400) | 1,599,300) | 1,595,000) | 1,586,400) | 2,214,700) | |||||
| Total Allergan, Inc. stockholders’ equity | 7,753,000) | 7,110,700) | 6,786,000) | 6,617,900) | 6,463,200) | 6,085,900) | 5,721,900) | 5,337,100) | 5,837,100) | 5,569,600) | 5,438,800) | 5,458,600) | 5,309,600) | 5,105,700) | 4,963,900) | 4,865,700) | |||||
| Solvency Ratio | |||||||||||||||||||||
| Debt to equity1 | 0.28 | 0.30 | 0.32 | 0.33 | 0.33 | 0.35 | 0.38 | 0.41 | 0.27 | 0.28 | 0.29 | 0.29 | 0.30 | 0.31 | 0.32 | 0.46 | |||||
| Benchmarks | |||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||
| AbbVie Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Amgen Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Bristol-Myers Squibb Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Danaher Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Eli Lilly & Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Gilead Sciences Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Johnson & Johnson | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Merck & Co. Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Pfizer Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Regeneron Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Thermo Fisher Scientific Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Vertex Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
Based on: 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q4 2014 Calculation
Debt to equity = Total debt ÷ Total Allergan, Inc. stockholders’ equity
= 2,157,400 ÷ 7,753,000 = 0.28
2 Click competitor name to see calculations.
The analysis of the financial data over the periods from March 2011 to December 2014 reveals several key trends in the company's capital structure and leverage ratios.
- Total Debt
- Total debt exhibited a significant decline from March 2011 (approximately $2.21 billion) to June 2011 (around $1.59 billion), stabilizing near this lower level throughout the remainder of 2011 and much of 2012. However, starting in the first quarter of 2013, total debt increased markedly, reaching over $2.16 billion by the end of 2014. This indicates a renewed increase in borrowing or debt accumulation after a prolonged period of relative debt stability.
- Total Stockholders’ Equity
- Equity demonstrated consistent growth over the entire period analyzed. Beginning from approximately $4.87 billion in March 2011, equity increased steadily each quarter, reaching close to $7.75 billion by December 2014. The steady equity growth suggests reinvestment of earnings or other equity-boosting activities, contributing to a stronger capital base.
- Debt to Equity Ratio
- The debt to equity ratio declined substantially from 0.46 in March 2011 to a low of 0.27 by December 2012, reflecting the earlier decrease in debt and continuous equity growth, which together improved the company’s leverage position. From 2013 onwards, the ratio showed a gradual upward trend, peaking at 0.41 in March 2013, followed by a steady decline back to 0.28 by December 2014. Despite fluctuations, the overall trend from 2011 to 2014 indicates an improvement in leverage, pointing towards a cautious approach to debt financing relative to equity.
In summary, the financial profile reflects an initial phase of deleveraging and equity strengthening until late 2012, succeeded by increased borrowing in early 2013. Nonetheless, equity continued its upward trajectory, and leverage ratios were managed prudently, culminating in a healthier balance sheet by the end of 2014.
Debt to Capital
Allergan Inc., debt to capital calculation (quarterly data)
| Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Notes payable | 72,100) | 55,800) | 60,900) | 61,100) | 55,600) | 37,200) | 51,600) | 57,200) | 48,800) | 40,700) | 42,400) | 87,700) | 83,900) | 78,800) | 76,100) | 36,300) | |||||
| Convertible notes | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | 648,900) | |||||
| Long-term debt, excluding current maturities | 2,085,300) | 2,088,600) | 2,091,800) | 2,095,100) | 2,098,300) | 2,101,500) | 2,104,600) | 2,107,700) | 1,512,400) | 1,515,500) | 1,514,900) | 1,514,700) | 1,515,400) | 1,516,200) | 1,510,300) | 1,529,500) | |||||
| Long-term convertible notes | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | |||||
| Total debt | 2,157,400) | 2,144,400) | 2,152,700) | 2,156,200) | 2,153,900) | 2,138,700) | 2,156,200) | 2,164,900) | 1,561,200) | 1,556,200) | 1,557,300) | 1,602,400) | 1,599,300) | 1,595,000) | 1,586,400) | 2,214,700) | |||||
| Total Allergan, Inc. stockholders’ equity | 7,753,000) | 7,110,700) | 6,786,000) | 6,617,900) | 6,463,200) | 6,085,900) | 5,721,900) | 5,337,100) | 5,837,100) | 5,569,600) | 5,438,800) | 5,458,600) | 5,309,600) | 5,105,700) | 4,963,900) | 4,865,700) | |||||
| Total capital | 9,910,400) | 9,255,100) | 8,938,700) | 8,774,100) | 8,617,100) | 8,224,600) | 7,878,100) | 7,502,000) | 7,398,300) | 7,125,800) | 6,996,100) | 7,061,000) | 6,908,900) | 6,700,700) | 6,550,300) | 7,080,400) | |||||
| Solvency Ratio | |||||||||||||||||||||
| Debt to capital1 | 0.22 | 0.23 | 0.24 | 0.25 | 0.25 | 0.26 | 0.27 | 0.29 | 0.21 | 0.22 | 0.22 | 0.23 | 0.23 | 0.24 | 0.24 | 0.31 | |||||
| Benchmarks | |||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||
| AbbVie Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Amgen Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Bristol-Myers Squibb Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Danaher Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Eli Lilly & Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Gilead Sciences Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Johnson & Johnson | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Merck & Co. Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Pfizer Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Regeneron Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Thermo Fisher Scientific Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Vertex Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
Based on: 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q4 2014 Calculation
Debt to capital = Total debt ÷ Total capital
= 2,157,400 ÷ 9,910,400 = 0.22
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals distinct trends in the company's leverage and capital structure over the observed periods.
- Total Debt
- Total debt showed a notable decline from approximately $2.21 billion at the beginning of 2011 to around $1.56 billion by the end of 2012. This reduction indicates a deliberate deleveraging effort or repayment activity during this timeframe. However, starting in the first quarter of 2013, total debt increased sharply to about $2.16 billion and remained relatively stable with minor fluctuations through the end of 2014, fluctuating just above $2.14 billion. This suggests a shift in strategy where the company sustained higher debt levels after 2012.
- Total Capital
- Total capital demonstrated an overall upward trend from roughly $7.08 billion in early 2011 to nearly $9.91 billion by the last quarter of 2014. The progression included both gradual and accelerated growth phases, with more pronounced increases observed in 2013 and 2014. This consistent capital expansion might reflect ongoing investments, retained earnings accumulation, or equity issuances aimed at supporting business growth and strengthening the financial base.
- Debt to Capital Ratio
- The debt to capital ratio steadily decreased from 0.31 in March 2011 to a low point of 0.21 by the end of 2012, aligning with the decline in total debt and growth in capital. This reduction signals a lower reliance on debt financing relative to the company's total capital. During 2013 and 2014, the ratio increased moderately to around 0.25 initially and then gradually declined again to 0.22 by the last quarter of 2014. These variations suggest that while the company assumed higher debt levels post-2012, it also maintained capital growth sufficient to prevent significant leverage escalation.
Overall, the data indicates a strategic reduction of debt through 2012, followed by stabilization of higher debt levels accompanied by expanding total capital. The company's leverage, as measured by the debt to capital ratio, improved initially and remained relatively controlled despite increased absolute debt amounts in later periods. This pattern reflects a balanced approach to managing financing sources while supporting capital growth.
Debt to Assets
Allergan Inc., debt to assets calculation (quarterly data)
| Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Notes payable | 72,100) | 55,800) | 60,900) | 61,100) | 55,600) | 37,200) | 51,600) | 57,200) | 48,800) | 40,700) | 42,400) | 87,700) | 83,900) | 78,800) | 76,100) | 36,300) | |||||
| Convertible notes | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | 648,900) | |||||
| Long-term debt, excluding current maturities | 2,085,300) | 2,088,600) | 2,091,800) | 2,095,100) | 2,098,300) | 2,101,500) | 2,104,600) | 2,107,700) | 1,512,400) | 1,515,500) | 1,514,900) | 1,514,700) | 1,515,400) | 1,516,200) | 1,510,300) | 1,529,500) | |||||
| Long-term convertible notes | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | |||||
| Total debt | 2,157,400) | 2,144,400) | 2,152,700) | 2,156,200) | 2,153,900) | 2,138,700) | 2,156,200) | 2,164,900) | 1,561,200) | 1,556,200) | 1,557,300) | 1,602,400) | 1,599,300) | 1,595,000) | 1,586,400) | 2,214,700) | |||||
| Total assets | 12,415,700) | 11,645,800) | 10,990,800) | 10,720,200) | 10,574,300) | 10,144,600) | 9,675,000) | 9,250,500) | 9,179,300) | 8,910,900) | 8,673,400) | 8,684,200) | 8,508,600) | 8,184,000) | 7,879,600) | 8,370,700) | |||||
| Solvency Ratio | |||||||||||||||||||||
| Debt to assets1 | 0.17 | 0.18 | 0.20 | 0.20 | 0.20 | 0.21 | 0.22 | 0.23 | 0.17 | 0.17 | 0.18 | 0.18 | 0.19 | 0.19 | 0.20 | 0.26 | |||||
| Benchmarks | |||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||
| AbbVie Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Amgen Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Bristol-Myers Squibb Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Danaher Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Eli Lilly & Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Gilead Sciences Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Johnson & Johnson | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Merck & Co. Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Pfizer Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Regeneron Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Thermo Fisher Scientific Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Vertex Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
Based on: 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q4 2014 Calculation
Debt to assets = Total debt ÷ Total assets
= 2,157,400 ÷ 12,415,700 = 0.17
2 Click competitor name to see calculations.
- Debt Levels
- Over the observed periods, total debt exhibited variability with two distinct phases. Initially, from March 2011 to December 2012, total debt decreased from approximately $2.21 billion to about $1.56 billion. Subsequently, from March 2013 onwards, a notable increase was observed, with debt levels rising again toward $2.16 billion by the end of 2014, roughly returning to the initial March 2011 level.
- Asset Growth
- Total assets consistently trended upward throughout the entire period. Starting at about $8.37 billion in March 2011, assets grew steadily each quarter, culminating in a significant increase to around $12.42 billion by December 2014. The growth pace accelerated notably after mid-2013, indicating a period of substantial asset expansion.
- Debt-to-Assets Ratio
- The debt-to-assets ratio demonstrates an overall decline, reflecting an improvement in the company's leverage position relative to its asset base. Initially recorded at 0.26 in March 2011, the ratio decreased steadily to 0.17 by December 2012, correlating with the reduction in total debt and stable asset growth. In the subsequent period, the ratio increased slightly reaching around 0.23 in early 2013 but then resumed a downward trend to 0.17 by the end of 2014. This indicates that despite the rise in nominal debt levels after 2012, assets grew faster, resulting in relatively lower leverage.
- Summary Insights
- The data reveals a strategic period of debt reduction coupled with asset accumulation in the early years, followed by a phase of increased debt coinciding with accelerated asset growth. The declining debt-to-assets ratio throughout most of the period suggests improved financial stability and a stronger capital structure. While total debt returned nearly to its initial level by the end of 2014, the substantial increase in total assets implies enhanced borrowing capacity and potentially improved creditworthiness.
Financial Leverage
Allergan Inc., financial leverage calculation (quarterly data)
| Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Total assets | 12,415,700) | 11,645,800) | 10,990,800) | 10,720,200) | 10,574,300) | 10,144,600) | 9,675,000) | 9,250,500) | 9,179,300) | 8,910,900) | 8,673,400) | 8,684,200) | 8,508,600) | 8,184,000) | 7,879,600) | 8,370,700) | |||||
| Total Allergan, Inc. stockholders’ equity | 7,753,000) | 7,110,700) | 6,786,000) | 6,617,900) | 6,463,200) | 6,085,900) | 5,721,900) | 5,337,100) | 5,837,100) | 5,569,600) | 5,438,800) | 5,458,600) | 5,309,600) | 5,105,700) | 4,963,900) | 4,865,700) | |||||
| Solvency Ratio | |||||||||||||||||||||
| Financial leverage1 | 1.60 | 1.64 | 1.62 | 1.62 | 1.64 | 1.67 | 1.69 | 1.73 | 1.57 | 1.60 | 1.59 | 1.59 | 1.60 | 1.60 | 1.59 | 1.72 | |||||
| Benchmarks | |||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||
| AbbVie Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Amgen Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Bristol-Myers Squibb Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Danaher Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Eli Lilly & Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Gilead Sciences Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Johnson & Johnson | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Merck & Co. Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Pfizer Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Regeneron Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Thermo Fisher Scientific Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Vertex Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
Based on: 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q4 2014 Calculation
Financial leverage = Total assets ÷ Total Allergan, Inc. stockholders’ equity
= 12,415,700 ÷ 7,753,000 = 1.60
2 Click competitor name to see calculations.
The financial data over the periods from March 2011 through December 2014 reveal several notable trends in the company’s asset base, equity position, and financial leverage.
- Total assets
- Total assets demonstrated a generally upward trajectory throughout the timeframe. Starting at approximately 8.37 billion US dollars in March 2011, the asset base experienced some fluctuations in the short term but showed consistent growth from early 2012 onward. By December 2014, total assets had increased significantly to about 12.42 billion US dollars, indicating expansion and possibly acquisitions or increased capital investments over time.
- Total stockholders’ equity
- Stockholders' equity exhibited a steady increase across the quarters, growing from around 4.87 billion US dollars in March 2011 to approximately 7.75 billion US dollars by December 2014. Although there was a decline around early 2013, equity recovered and continued to grow steadily thereafter. This growth reflects retained earnings accumulation and possibly other comprehensive income or equity issuances, contributing to a strengthening equity base.
- Financial leverage (ratio)
- The financial leverage ratio fluctuated within a relatively narrow band, ranging between approximately 1.57 and 1.73. The ratio started at 1.72 in March 2011, slightly decreased and stabilized near 1.6 for most of 2011 and 2012, increased again in early 2013 to a peak of 1.73, then gradually declined to around 1.60 by the end of 2014. These variations suggest a consistent use of debt relative to equity, with minor adjustments reflecting changes in the company’s financing structure but no drastic shifts in leverage policy.
Overall, the data indicates a company that steadily increased its asset base and equity capital while maintaining a relatively stable financial leverage. The equity growth outpaced asset growth in some periods, reducing leverage slightly toward the end of the observed timeframe. This pattern points to a balance between growth and prudent financial management.
Interest Coverage
Allergan Inc., interest coverage calculation (quarterly data)
| Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Net earnings (loss) attributable to Allergan, Inc. | 537,200) | 312,500) | 417,200) | 257,300) | 312,900) | 299,800) | 359,900) | 12,500) | 324,200) | 249,400) | 295,400) | 229,800) | 279,800) | 249,800) | 246,600) | 158,300) | |||||
| Add: Net income attributable to noncontrolling interest | 1,900) | 900) | 1,200) | 600) | (600) | 1,000) | 1,300) | 1,900) | 1,000) | 1,200) | 1,000) | 500) | (100) | 1,200) | 2,000) | 500) | |||||
| Less: Discontinued operations | (3,500) | 300) | —) | (600) | (300) | (32,100) | 7,200) | (258,600) | —) | —) | —) | —) | —) | —) | —) | —) | |||||
| Add: Income tax expense | 91,300) | 106,300) | 156,000) | 103,100) | 128,400) | 123,900) | 132,400) | 73,600) | 124,100) | 80,200) | 132,000) | 94,500) | 104,000) | 105,800) | 95,400) | 56,400) | |||||
| Add: Interest expense | 15,600) | 18,400) | 19,700) | 15,700) | 18,200) | 19,400) | 20,000) | 17,400) | 14,800) | 15,900) | 17,100) | 15,800) | 16,700) | 15,200) | 15,200) | 24,700) | |||||
| Earnings before interest and tax (EBIT) | 649,500) | 437,800) | 594,100) | 377,300) | 459,200) | 476,200) | 506,400) | 364,000) | 464,100) | 346,700) | 445,500) | 340,600) | 400,400) | 372,000) | 359,200) | 239,900) | |||||
| Solvency Ratio | |||||||||||||||||||||
| Interest coverage1 | 29.66 | 25.95 | 26.12 | 24.82 | 24.08 | 25.29 | 24.69 | 24.85 | 25.11 | 23.41 | 24.05 | 23.41 | 19.10 | 16.07 | 2.87 | 2.77 | |||||
| Benchmarks | |||||||||||||||||||||
| Interest Coverage, Competitors2 | |||||||||||||||||||||
| Amgen Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Danaher Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Gilead Sciences Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Johnson & Johnson | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Regeneron Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Thermo Fisher Scientific Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Vertex Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
Based on: 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q4 2014 Calculation
Interest coverage
= (EBITQ4 2014
+ EBITQ3 2014
+ EBITQ2 2014
+ EBITQ1 2014)
÷ (Interest expenseQ4 2014
+ Interest expenseQ3 2014
+ Interest expenseQ2 2014
+ Interest expenseQ1 2014)
= (649,500 + 437,800 + 594,100 + 377,300)
÷ (15,600 + 18,400 + 19,700 + 15,700)
= 29.66
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
-
The EBIT figures demonstrate a generally upward trend over the observed periods, with some fluctuations. Starting at 239,900 thousand US dollars in March 2011, EBIT reached a peak of 649,500 thousand US dollars by December 2014. Quarterly variations are evident, notably with significant increases during the second and fourth quarters of most years. For example, in 2011, EBIT rose from 239,900 thousand US dollars in the first quarter to 400,400 thousand US dollars by the fourth quarter, indicating seasonality or operational scale variations. The data from 2012 displays a dip in the third quarter followed by recovery by year-end, and a similar pattern is repeated in 2014 with a decline in the third quarter before reaching the highest recorded EBIT in the final quarter.
- Interest expense
-
Interest expenses show less variability compared to EBIT, fluctuating within a narrower band. Throughout the period, interest expenses generally ranged between 14,800 thousand and 20,000 thousand US dollars, with occasional slight increases or decreases. There is no clear upward or downward trend, suggesting that the company maintained a relatively stable level of debt servicing costs during these years despite changes in earnings. The lowest interest expenses occurred in the late 2012 quarters, while minor spikes occurred in mid-2013 and mid-2014.
- Interest coverage ratio
-
The interest coverage ratio indicated a strong and improving capacity to meet interest obligations from operating earnings. Starting at a ratio of 2.77 in March 2011, the ratio dramatically improved over the observed years, exceeding 20 from late 2011 onwards and peaking at 29.66 in December 2014. This substantial increase reflects a significant strengthening in operating earnings relative to interest costs. The ratio maintained generally high levels post-2011, consistently above 20, highlighting a robust buffer and reduced financial risk in terms of interest payment obligations.
- Overall Analysis
-
Collectively, the financial data indicate that the company improved its operational profitability over the period, achieving consistently higher EBIT. Interest expenses remained relatively stable, which, combined with increased EBIT, led to much stronger interest coverage ratios. These developments suggest enhanced financial health and creditworthiness, with greater earnings available to service debt. The seasonal or quarterly fluctuations in EBIT may warrant further operational analysis, but the overall trajectory is positive and indicative of growing operational efficiency and financial stability.