Allergan PLC (AGN)

Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement and tax basis of assets and liabilities at the applicable tax rates. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Allergan evaluates the realizability of its deferred tax assets by assessing its valuation allowance and by adjusting the amount of such allowance, if necessary. The factors used to assess the likelihood of realization include Allergan’s forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. Failure to achieve forecasted taxable income in applicable tax jurisdictions could affect the ultimate realization of deferred tax assets and could result in an increase in Allergan’s effective tax rate on future earnings.

Income tax positions must meet a more-likely-than-not recognition threshold to be recognized. Income tax positions that previously failed to meet the more-likely-than-not threshold are recognized in the first financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not threshold are derecognized in the first financial reporting period in which that threshold is no longer met. Allergan recognizes potential accrued interest and penalties related to unrecognized tax benefits within the consolidated statements of operations as income tax expense.

The income tax effects of the TCJA have been initially accounted for on a provisional basis pursuant to the guidance in Staff Accouting Bulletin ("SAB") 118. Reasonable estimates for all material tax effects of the TCJA (other than amounts related to accounting policy elections) have been provided and adjustments to provisional amounts will be made in subsequent reporting periods as information becomes available to complete provisional computations. The provisional impact of the TCJA for the Federal tax rate change and the resulting deferred tax liability for unremitted earnings will be completed in subsequent measurement periods when the required computations for the 2017 tax year and the related tax returns for the relevant entities have been completed. The final amount for the toll charge is dependent on amounts that cannot be determined until the 2018 financial results of certain non-US subsidiaries are completed. In addition, the IRS continues to issue interpretive guidance on the computation of the tax on deferred foreign earnings and therefore the computations cannot be finalized until all relevant IRS guidance has been promulgated and its impact assessed.

The TCJA introduced an additional U.S. tax on certain non-U.S. subsidiaries’ earnings which are considered to be Global Intangible Low Taxed Income (referred to as "GILTI"). Under this provision, the amount of GILTI included by a U.S. shareholder will be taxed at a rate of 10.5% for tax years beginning after December 31, 2017 (increasing to 13.125% for tax years beginning after December 31, 2025) with a partial offset for foreign tax credits.

Due to the complexity of the new GILTI tax rules, Allergan is continuing to evaluate this provision of the TCJA and the application of ASC 740 and is considering if deferred tax amounts should be recorded for this provision. The accounting policies depend, in part, on analyzing the global income to determine whether Allergan expects material tax liabilities resulting from the application of this provision, and, if so, whether and when to record related current and deferred income taxes and whether such amounts can be reasonably estimated. Anticipated further guidance from the IRS will also clarify the manner in which the GILTI tax is computed. For these reasons, Allergan has not recorded a deferred tax expense or benefit relating to potential GILTI tax in the 2017 consolidated financial statements and has not made a policy election regarding whether to record deferred taxes on GILTI or account for the GILTI entirely as a period cost.

Source: 10-K (filing date: 2018-02-16).

Allergan PLC, income tax expense (benefit), continuing operations

USD $ in thousands

	12 months ended	Dec 31, 2017		Dec 31, 2016		Dec 31, 2015		Dec 31, 2014		Dec 31, 2013
	U.S. federal
	U.S. state
	Non-U.S.
	Current provision
	U.S. federal
	U.S. state
	Non-U.S.
	Deferred benefit
	Provision (benefit) for income taxes

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-18), 10-K (filing date: 2014-02-25).

Allergan PLC, effective income tax rate (EITR) reconciliation

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Statutory tax rate
	Effective income tax rate

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-18), 10-K (filing date: 2014-02-25).

Allergan PLC, components of deferred tax assets and liabilities

USD $ in thousands

		Dec 31, 2017		Dec 31, 2016		Dec 31, 2015		Dec 31, 2014		Dec 31, 2013
	Benefits from net operating and capital losses and tax credit carryfowards
	Inventories, receivables and accruals
	Basis differences in investments
	Outside basis differences
	Share-based and other compensation
	Other
	Deferred tax asset, gross
	Valuation allowance
	Deferred tax asset, net
	Property, equipment and intangible assets
	Outside basis differences
	Investment in subsidiaries
	Basis difference in debt
	Other
	Deferred tax liabilities
	Deferred taxes

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-18), 10-K (filing date: 2014-02-25).

Allergan PLC, deferred tax assets and liabilities, classification

USD $ in thousands

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Current deferred tax assets
	Non-current deferred tax assets
	Current deferred tax liabilities
	Non-current deferred tax liabilities

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-18), 10-K (filing date: 2014-02-25).

Allergan PLC, adjustments to financial data

USD $ in thousands

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Adjustment to Current Assets
	Current assets (as reported)
	Less: Current deferred tax assets, net
	Current assets (adjusted)
	Adjustment to Total Assets
	Total assets (as reported)
	Less: Current deferred tax assets, net
	Less: Noncurrent deferred tax assets, net
	Total assets (adjusted)
	Adjustment to Current Liabilities
	Current liabilities (as reported)
	Less: Current deferred tax liabilities, net
	Current liabilities (adjusted)
	Adjustment to Total Liabilities
	Total liabilities (as reported)
	Less: Current deferred tax liabilities, net
	Less: Noncurrent deferred tax liabilities, net
	Total liabilities (adjusted)
	Adjustment to Shareholders’ Equity
	Shareholders’ equity (as reported)
	Less: Net deferred tax assets (liabilities)
	Shareholders’ equity (adjusted)
	Adjustment to Net Income (loss) Attributable To Shareholders
	Net income (loss) attributable to shareholders (as reported)
	Add: Deferred income tax expense (benefit)
	Net income (loss) attributable to shareholders (adjusted)

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-18), 10-K (filing date: 2014-02-25).

Allergan PLC, Financial Data: Reported vs. Adjusted

Allergan PLC, adjusted ratios

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Current Ratio
	Reported current ratio
	Adjusted current ratio
	Net Profit Margin
	Reported net profit margin
	Adjusted net profit margin
	Total Asset Turnover
	Reported total asset turnover
	Adjusted total asset turnover
	Financial Leverage
	Reported financial leverage
	Adjusted financial leverage
	Return on Equity (ROE)
	Reported ROE
	Adjusted ROE
	Return on Assets (ROA)
	Reported ROA
	Adjusted ROA

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-18), 10-K (filing date: 2014-02-25).

Allergan PLC, Ratios: Reported vs. Adjusted

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Selected Financial Data (USD $ in thousands)
	Current assets
	Current liabilities
	Ratio
	Current ratio1
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in thousands)
	Adjusted current assets
	Adjusted current liabilities
	Ratio
	Adjusted current ratio2

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-18), 10-K (filing date: 2014-02-25).

2017 Calculations

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Selected Financial Data (USD $ in thousands)
	Net income (loss) attributable to shareholders
	Net revenues
	Ratio
	Net profit margin1
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in thousands)
	Adjusted net income (loss) attributable to shareholders
	Net revenues
	Ratio
	Adjusted net profit margin2

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-18), 10-K (filing date: 2014-02-25).

2017 Calculations

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Selected Financial Data (USD $ in thousands)
	Net revenues
	Total assets
	Ratio
	Total asset turnover1
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in thousands)
	Net revenues
	Adjusted total assets
	Ratio
	Adjusted total asset turnover2

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-18), 10-K (filing date: 2014-02-25).

2017 Calculations

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Selected Financial Data (USD $ in thousands)
	Total assets
	Shareholders’ equity
	Ratio
	Financial leverage1
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in thousands)
	Adjusted total assets
	Adjusted shareholders’ equity
	Ratio
	Adjusted financial leverage2

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-18), 10-K (filing date: 2014-02-25).

2017 Calculations

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Selected Financial Data (USD $ in thousands)
	Net income (loss) attributable to shareholders
	Shareholders’ equity
	Ratio
	ROE1
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in thousands)
	Adjusted net income (loss) attributable to shareholders
	Adjusted shareholders’ equity
	Ratio
	Adjusted ROE2

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-18), 10-K (filing date: 2014-02-25).

2017 Calculations

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Selected Financial Data (USD $ in thousands)
	Net income (loss) attributable to shareholders
	Total assets
	Ratio
	ROA1
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in thousands)
	Adjusted net income (loss) attributable to shareholders
	Adjusted total assets
	Ratio
	Adjusted ROA2

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-24), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-18), 10-K (filing date: 2014-02-25).

2017 Calculations