Enterprise Value to FCFF (EV/FCFF)
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Free Cash Flow to The Firm (FCFF)
Allergan Inc., FCFF calculation
US$ in thousands
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, 2 See details »
- Net cash provided by operating activities
- There is a consistent upward trend in net cash provided by operating activities over the five-year period. It started at 463,900 thousand US dollars in 2010 and increased significantly to 1,927,800 thousand US dollars by 2014. The most notable growth occurred between 2010 and 2011, where the value more than doubled. Subsequent years showed steady increases, indicating strong operational cash generation capacity.
- Free cash flow to the firm (FCFF)
- Free cash flow to the firm also demonstrates a strong positive trend, mirroring the pattern seen in operating cash flows. Beginning at 308,707 thousand US dollars in 2010, FCFF rose dramatically to 1,718,930 thousand US dollars in 2014. The largest increase was observed between 2010 and 2011, with more moderate yet consistent growth in the following years. This suggests improving efficiency in cash flow management and possibly controlled capital expenditures relative to cash generated from operations.
- Overall Insights
- The data indicates robust financial health with heightened cash generation from core business activities, as well as increasing free cash flow over the evaluated period. This consistent improvement suggests effective operational performance and capital management, enhancing the firm's capability to invest, repay debt, or return value to shareholders. The rate of growth slowed after the initial leap between 2010 and 2011, but the sustained upward movement remains positive.
Interest Paid, Net of Tax
Allergan Inc., interest paid, net of tax calculation
US$ in thousands
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).
2 2014 Calculation
Cash paid for interest, net of amount capitalized, tax = Cash paid for interest, net of amount capitalized × EITR
= × =
3 2014 Calculation
Interest capitalized, tax = Interest capitalized × EITR
= × =
- Effective Income Tax Rate (EITR) Trends
-
The effective income tax rate exhibited significant variability over the analyzed period. In 2010, the rate was exceptionally high at 97.1%, indicating an unusual tax expense relative to pre-tax income. However, from 2011 onwards, the rate stabilized within a narrower range, decreasing gradually from 27.8% in 2011 to 23.0% by the end of 2014. This trend suggests improved tax efficiency or changes in tax planning strategies during these years.
- Cash Paid for Interest, Net of Amount Capitalized and Tax
-
The cash outflow related to interest payments showed a marked upward trend. Starting from a relatively low value of approximately $1.39 million in 2010, amounts escalated significantly to exceed $64 million by 2014. This continuous increase may reflect a rising debt burden, higher interest rates, or changes in financing activities.
- Interest Capitalized, Net of Tax
-
Interest capitalized, net of tax, displayed fluctuation with an overall increasing tendency. The amount was minimal in 2010 at $14 thousand, rose sharply in 2011 to $722 thousand, then decreased in 2012 before rising again in 2013 and substantially increasing in 2014 to $4.31 million. This pattern indicates variability in capital projects or asset capitalization policies affecting interest capitalization levels.
- Summary of Financial Trends
-
Overall, the company experienced notable changes in financial metrics related to interest and tax expenses. The effective tax rate improved substantially after 2010, moving into a more normalized range. The significant increase in cash paid for interest suggests either increased borrowing or higher interest costs. Concurrently, the growth in capitalized interest points to active investment in capital expenditures, with potential implications for future depreciation and amortization expenses.
Enterprise Value to FCFF Ratio, Current
Allergan Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| 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).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Allergan Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| 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-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).
3 2014 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value has shown a consistent and substantial increase over the five-year period. Starting from approximately 21.8 billion US dollars at the end of 2010, the value rose steadily each year, reaching nearly 66.6 billion by the end of 2014. This represents more than a threefold increase, indicating significant growth in the overall market valuation of the firm.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm also demonstrated a positive trend over the period. Beginning at around 309 million US dollars in 2010, it increased markedly to over 1.7 billion US dollars by the end of 2014. This upward movement suggests improving operational efficiency and cash generation capabilities.
- EV/FCFF Ratio
- The ratio of enterprise value to free cash flow to the firm, which can be used as a valuation metric, displayed considerable fluctuation. It fell sharply from 70.53 in 2010 to 20.53 in 2012, indicating that the firm's valuation relative to its cash flow improved, potentially implying undervaluation or improved cash generation. However, the ratio then increased to 38.74 by the end of 2014, suggesting a tightening of valuation multiples or a relative increase in enterprise value compared to cash flow. Despite this rise, the 2014 ratio remained below the 2010 peak, reflecting a longer-term trend of valuation normalization.