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 PLC, solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31).
The analysis of the financial leverage and debt-related ratios over the observed quarters reveals a generally stable capital structure with some minor fluctuations in debt levels relative to equity, capital, and assets.
- Debt to Equity
- This ratio shows a trend of gradual decline from 0.55 at the beginning of the period to 0.34 by the last recorded quarter, indicating a decrease in reliance on equity financing relative to debt. The ratio, including operating lease liabilities, mirrors this pattern closely, with a slight increase in one of the later quarters but ultimately remaining lower than initial values.
- Debt to Capital
- The debt to capital ratio declined steadily from 0.35 to 0.25 over the time frame, suggesting a reduction in total debt relative to overall capital. Including operating lease liabilities, the ratio also remains relatively stable with a minor uptick near the end but still lower than the starting point, consistent with a conservative approach to leverage.
- Debt to Assets
- This ratio decreased modestly from 0.31 to 0.22, signaling that debt constitutes a smaller fraction of total assets as time progresses. Incorporating operating lease liabilities shows a very similar trend, indicating consistent treatment of these liabilities across periods.
- Financial Leverage
- Financial leverage followed a declining trend from 1.76 to 1.52, implying a reduction in the extent to which assets are financed by debt, supporting the observations in the debt-related ratios.
- Interest Coverage
- Interest coverage ratios were consistently negative throughout the periods, ranging between roughly -1.14 and -11.84, displaying a high level of interest expense relative to earnings before interest and taxes (EBIT). This persistent negative coverage highlights challenges in covering interest obligations from earnings and indicates potential financial stress or operational difficulties affecting profitability.
In summary, leverage and debt ratios demonstrate a slight but consistent decline overall, indicating cautious debt management or repayment efforts. However, the persistently negative interest coverage ratios suggest ongoing struggles with earnings adequacy relative to interest expenses, which warrants attention regarding operational efficiency and profitability improvement strategies.
Debt Ratios
Coverage Ratios
Debt to Equity
Allergan PLC, debt to equity calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Current portion of long-term debt | 1,950,700) | 4,532,500) | 3,739,200) | 3,094,200) | 3,971,800) | 868,300) | 1,351,600) | 1,348,500) | 626,200) | 4,231,800) | 3,797,000) | 3,795,000) | 5,526,400) | 2,797,900) | 1,591,800) | 2,506,600) | 4,015,700) | ||||||
| Long-term debt, excluding current portion | 17,599,000) | 18,116,500) | 18,786,000) | 19,609,300) | 19,554,100) | 22,929,400) | 22,231,800) | 24,002,000) | 25,936,400) | 25,843,500) | 26,539,100) | 26,443,300) | 26,223,000) | 29,970,800) | 31,178,200) | 37,075,100) | 38,551,800) | ||||||
| Total debt | 19,549,700) | 22,649,000) | 22,525,200) | 22,703,500) | 23,525,900) | 23,797,700) | 23,583,400) | 25,350,500) | 26,562,600) | 30,075,300) | 30,336,100) | 30,238,300) | 31,749,400) | 32,768,700) | 32,770,000) | 39,581,700) | 42,567,500) | ||||||
| Shareholders’ equity | 57,997,700) | 58,173,600) | 58,475,200) | 59,674,700) | 61,542,000) | 65,114,100) | 70,507,800) | 71,243,500) | 72,327,900) | 73,821,100) | 71,159,400) | 75,220,400) | 75,188,400) | 76,192,700) | 89,725,900) | 76,643,900) | 77,450,000) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to equity1 | 0.34 | 0.39 | 0.39 | 0.38 | 0.38 | 0.37 | 0.33 | 0.36 | 0.37 | 0.41 | 0.43 | 0.40 | 0.42 | 0.43 | 0.37 | 0.52 | 0.55 | ||||||
| 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-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31).
1 Q1 2020 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= 19,549,700 ÷ 57,997,700 = 0.34
2 Click competitor name to see calculations.
- Total debt
- Over the observed periods, total debt demonstrated a general downward trend. Starting at approximately 42.57 billion USD at the end of Q1 2016, it decreased significantly across the years, reaching about 19.55 billion USD by Q1 2020. This reduction was relatively consistent, with notable declines in 2017 and further steady decreases through to early 2020. The most substantial drop occurred between Q4 2018 and Q1 2020.
- Shareholders’ equity
- Shareholders’ equity exhibited fluctuations throughout the periods covered. Initially, equity was around 77.45 billion USD in Q1 2016, with a peak near 89.73 billion USD in Q3 2016. However, from late 2016 onward, the equity values generally declined, with some intermittent increases, notably in Q4 2017. By Q1 2020, shareholders’ equity had decreased to approximately 5.80 billion USD, marking a significant overall reduction from the initial value at the beginning of the period.
- Debt to equity ratio
- The debt to equity ratio showed variability but generally tended downward towards the end of the period. Initially, the ratio was about 0.55 in Q1 2016, indicating a moderate level of leverage. It declined sharply to around 0.37 by Q3 2016, then fluctuated modestly between 0.36 and 0.43 for most of the timeframe. In the last four quarters observed, there was a slight increase followed by a decrease, ending at 0.34 in Q1 2020. This suggests a reduction in leverage relative to equity over time despite fluctuations.
Debt to Equity (including Operating Lease Liability)
Allergan PLC, debt to equity (including operating lease liability) calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Current portion of long-term debt | 1,950,700) | 4,532,500) | 3,739,200) | 3,094,200) | 3,971,800) | 868,300) | 1,351,600) | 1,348,500) | 626,200) | 4,231,800) | 3,797,000) | 3,795,000) | 5,526,400) | 2,797,900) | 1,591,800) | 2,506,600) | 4,015,700) | ||||||
| Long-term debt, excluding current portion | 17,599,000) | 18,116,500) | 18,786,000) | 19,609,300) | 19,554,100) | 22,929,400) | 22,231,800) | 24,002,000) | 25,936,400) | 25,843,500) | 26,539,100) | 26,443,300) | 26,223,000) | 29,970,800) | 31,178,200) | 37,075,100) | 38,551,800) | ||||||
| Total debt | 19,549,700) | 22,649,000) | 22,525,200) | 22,703,500) | 23,525,900) | 23,797,700) | 23,583,400) | 25,350,500) | 26,562,600) | 30,075,300) | 30,336,100) | 30,238,300) | 31,749,400) | 32,768,700) | 32,770,000) | 39,581,700) | 42,567,500) | ||||||
| Current portion of lease liability, operating | 119,800) | 124,400) | 118,400) | 123,200) | 116,100) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Lease liability, operating, excluding current portion | 438,300) | 446,100) | 437,400) | 414,800) | 415,200) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Total debt (including operating lease liability) | 20,107,800) | 23,219,500) | 23,081,000) | 23,241,500) | 24,057,200) | 23,797,700) | 23,583,400) | 25,350,500) | 26,562,600) | 30,075,300) | 30,336,100) | 30,238,300) | 31,749,400) | 32,768,700) | 32,770,000) | 39,581,700) | 42,567,500) | ||||||
| Shareholders’ equity | 57,997,700) | 58,173,600) | 58,475,200) | 59,674,700) | 61,542,000) | 65,114,100) | 70,507,800) | 71,243,500) | 72,327,900) | 73,821,100) | 71,159,400) | 75,220,400) | 75,188,400) | 76,192,700) | 89,725,900) | 76,643,900) | 77,450,000) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to equity (including operating lease liability)1 | 0.35 | 0.40 | 0.39 | 0.39 | 0.39 | 0.37 | 0.33 | 0.36 | 0.37 | 0.41 | 0.43 | 0.40 | 0.42 | 0.43 | 0.37 | 0.52 | 0.55 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | |||||||||||||||||||||||
| Vertex Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31).
1 Q1 2020 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Shareholders’ equity
= 20,107,800 ÷ 57,997,700 = 0.35
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- The total debt decreased significantly from approximately $42.57 billion at the end of Q1 2016 to about $20.11 billion by Q1 2020. The largest reductions were observed between mid-2016 and early 2018, after which the debt levels stabilized with minor fluctuations. This downward trend indicates a consistent effort to reduce leverage over the analyzed period.
- Shareholders’ Equity
- Shareholders’ equity exhibited fluctuations throughout the period. Starting at roughly $77.45 billion in Q1 2016, it increased sharply to around $89.73 billion in Q3 2016, followed by a decline and relative stabilization mostly in the $58-$75 billion range from 2017 onward. Notably, there was a gradual decreasing trend in equity from early 2018 through Q1 2020, suggesting potential impacts from losses, dividends, or share buybacks affecting the equity base.
- Debt to Equity Ratio (Including Operating Lease Liability)
- The debt to equity ratio decreased from 0.55 in Q1 2016 to a low of 0.33 in Q3 2018, indicating improved leverage and a stronger equity position relative to debt. After that, the ratio showed a moderate increase, fluctuating around 0.39–0.40 before decreasing again to 0.35 by Q1 2020. Overall, this ratio reflects a strengthening balance sheet with controlled debt levels relative to equity.
- Summary
- Overall, the financial data reveals a strategic reduction in total debt, contributing to an improved debt-to-equity ratio over the years. While shareholders’ equity experienced volatility, the general trend from 2018 onward denotes a contraction in equity, which did not offset the substantial debt reductions. The improved leverage position suggests a focus on financial stability and risk mitigation during the examined timeframe.
Debt to Capital
Allergan PLC, debt to capital calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Current portion of long-term debt | 1,950,700) | 4,532,500) | 3,739,200) | 3,094,200) | 3,971,800) | 868,300) | 1,351,600) | 1,348,500) | 626,200) | 4,231,800) | 3,797,000) | 3,795,000) | 5,526,400) | 2,797,900) | 1,591,800) | 2,506,600) | 4,015,700) | ||||||
| Long-term debt, excluding current portion | 17,599,000) | 18,116,500) | 18,786,000) | 19,609,300) | 19,554,100) | 22,929,400) | 22,231,800) | 24,002,000) | 25,936,400) | 25,843,500) | 26,539,100) | 26,443,300) | 26,223,000) | 29,970,800) | 31,178,200) | 37,075,100) | 38,551,800) | ||||||
| Total debt | 19,549,700) | 22,649,000) | 22,525,200) | 22,703,500) | 23,525,900) | 23,797,700) | 23,583,400) | 25,350,500) | 26,562,600) | 30,075,300) | 30,336,100) | 30,238,300) | 31,749,400) | 32,768,700) | 32,770,000) | 39,581,700) | 42,567,500) | ||||||
| Shareholders’ equity | 57,997,700) | 58,173,600) | 58,475,200) | 59,674,700) | 61,542,000) | 65,114,100) | 70,507,800) | 71,243,500) | 72,327,900) | 73,821,100) | 71,159,400) | 75,220,400) | 75,188,400) | 76,192,700) | 89,725,900) | 76,643,900) | 77,450,000) | ||||||
| Total capital | 77,547,400) | 80,822,600) | 81,000,400) | 82,378,200) | 85,067,900) | 88,911,800) | 94,091,200) | 96,594,000) | 98,890,500) | 103,896,400) | 101,495,500) | 105,458,700) | 106,937,800) | 108,961,400) | 122,495,900) | 116,225,600) | 120,017,500) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to capital1 | 0.25 | 0.28 | 0.28 | 0.28 | 0.28 | 0.27 | 0.25 | 0.26 | 0.27 | 0.29 | 0.30 | 0.29 | 0.30 | 0.30 | 0.27 | 0.34 | 0.35 | ||||||
| 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-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31).
1 Q1 2020 Calculation
Debt to capital = Total debt ÷ Total capital
= 19,549,700 ÷ 77,547,400 = 0.25
2 Click competitor name to see calculations.
The quarterly financial data reveals several notable trends regarding the company's debt structure and overall capital from the first quarter of 2016 through the first quarter of 2020.
- Total Debt
- There is a marked downward trend in total debt over the period analyzed. Beginning at approximately 42.57 billion USD in March 2016, total debt has gradually decreased to about 19.55 billion USD by March 2020. This indicates a consistent reduction in leverage, reflecting possible debt repayments or refinancings aimed at lowering overall liabilities.
- Total Capital
- Total capital also exhibits a declining trajectory, dropping from around 120.02 billion USD at the start of 2016 to roughly 77.55 billion USD by the end of the first quarter in 2020. This decline in capital, while less steep in relative terms compared to total debt, suggests a contraction that could arise from decreased equity, asset base, or other capital components.
- Debt to Capital Ratio
- The debt-to-capital ratio fluctuates moderately throughout the timeframe, ranging from a high of 0.35 to a low of 0.25. Initially, the ratio declines sharply from 0.35 in early 2016 to about 0.27 by the end of the same year, indicating an improvement in the capital structure with reduced dependence on debt. For several subsequent quarters, the ratio stabilizes around the 0.28 mark before dropping again to 0.25 in the first quarter of 2020. This declining ratio aligns with the decreased absolute debt levels, reflecting a strengthening in the company's balance sheet by lowering financial risk.
In summary, the company has systematically reduced its total debt over the five-year period, which has contributed to a decreased debt-to-capital ratio and a more conservative leverage position. Despite the reductions in total capital, the overall financial structure appears to be moving toward lower financial risk through the consistent deleveraging effort observed.
Debt to Capital (including Operating Lease Liability)
Allergan PLC, debt to capital (including operating lease liability) calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Current portion of long-term debt | 1,950,700) | 4,532,500) | 3,739,200) | 3,094,200) | 3,971,800) | 868,300) | 1,351,600) | 1,348,500) | 626,200) | 4,231,800) | 3,797,000) | 3,795,000) | 5,526,400) | 2,797,900) | 1,591,800) | 2,506,600) | 4,015,700) | ||||||
| Long-term debt, excluding current portion | 17,599,000) | 18,116,500) | 18,786,000) | 19,609,300) | 19,554,100) | 22,929,400) | 22,231,800) | 24,002,000) | 25,936,400) | 25,843,500) | 26,539,100) | 26,443,300) | 26,223,000) | 29,970,800) | 31,178,200) | 37,075,100) | 38,551,800) | ||||||
| Total debt | 19,549,700) | 22,649,000) | 22,525,200) | 22,703,500) | 23,525,900) | 23,797,700) | 23,583,400) | 25,350,500) | 26,562,600) | 30,075,300) | 30,336,100) | 30,238,300) | 31,749,400) | 32,768,700) | 32,770,000) | 39,581,700) | 42,567,500) | ||||||
| Current portion of lease liability, operating | 119,800) | 124,400) | 118,400) | 123,200) | 116,100) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Lease liability, operating, excluding current portion | 438,300) | 446,100) | 437,400) | 414,800) | 415,200) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Total debt (including operating lease liability) | 20,107,800) | 23,219,500) | 23,081,000) | 23,241,500) | 24,057,200) | 23,797,700) | 23,583,400) | 25,350,500) | 26,562,600) | 30,075,300) | 30,336,100) | 30,238,300) | 31,749,400) | 32,768,700) | 32,770,000) | 39,581,700) | 42,567,500) | ||||||
| Shareholders’ equity | 57,997,700) | 58,173,600) | 58,475,200) | 59,674,700) | 61,542,000) | 65,114,100) | 70,507,800) | 71,243,500) | 72,327,900) | 73,821,100) | 71,159,400) | 75,220,400) | 75,188,400) | 76,192,700) | 89,725,900) | 76,643,900) | 77,450,000) | ||||||
| Total capital (including operating lease liability) | 78,105,500) | 81,393,100) | 81,556,200) | 82,916,200) | 85,599,200) | 88,911,800) | 94,091,200) | 96,594,000) | 98,890,500) | 103,896,400) | 101,495,500) | 105,458,700) | 106,937,800) | 108,961,400) | 122,495,900) | 116,225,600) | 120,017,500) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to capital (including operating lease liability)1 | 0.26 | 0.29 | 0.28 | 0.28 | 0.28 | 0.27 | 0.25 | 0.26 | 0.27 | 0.29 | 0.30 | 0.29 | 0.30 | 0.30 | 0.27 | 0.34 | 0.35 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | |||||||||||||||||||||||
| Vertex Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31).
1 Q1 2020 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 20,107,800 ÷ 78,105,500 = 0.26
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- The total debt level demonstrated a general declining trend from March 31, 2016, through March 31, 2020. Starting at approximately $42.57 billion, the debt decreased notably over the period, reaching around $20.11 billion by March 31, 2020. This reduction was relatively steady across the quarters with occasional minor fluctuations, reflecting a disciplined approach to debt management or amortization of existing liabilities.
- Total Capital (Including Operating Lease Liability)
- Total capital similarly trended downward over the observed quarters. The figure reduced from approximately $120.02 billion in March 2016 to about $78.11 billion by March 2020. The decline was consistent, especially pronounced after mid-2017, indicating potential asset disposals, lower equity capital, or other factors contributing to a decrease in overall capital base.
- Debt to Capital Ratio (Including Operating Lease Liability)
- The debt to capital ratio exhibited relative stability throughout the period, fluctuating between 0.25 and 0.35. Initially, the ratio was 0.35 in March 2016, before declining to a low near 0.25 in late 2018, suggesting an improvement in capital structure with debt comprising a smaller share of total capital. However, in 2019, the ratio increased slightly to around 0.28–0.29, indicating a modest rise in the proportion of debt. By March 2020, the ratio declined again to approximately 0.26, reflecting the continuing reduction in debt and capital levels.
- Overall Observations
- The data illustrates a strategic reduction in both total debt and total capital over the four-year period, with the debt to capital ratio holding relatively steady, implying that debt and capital diminished proportionally. This pattern may suggest an operational focus on balance sheet consolidation or restructuring. The stability in leverage ratio indicates maintained credit risk levels despite the shrinking capital base.
Debt to Assets
Allergan PLC, debt to assets calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Current portion of long-term debt | 1,950,700) | 4,532,500) | 3,739,200) | 3,094,200) | 3,971,800) | 868,300) | 1,351,600) | 1,348,500) | 626,200) | 4,231,800) | 3,797,000) | 3,795,000) | 5,526,400) | 2,797,900) | 1,591,800) | 2,506,600) | 4,015,700) | ||||||
| Long-term debt, excluding current portion | 17,599,000) | 18,116,500) | 18,786,000) | 19,609,300) | 19,554,100) | 22,929,400) | 22,231,800) | 24,002,000) | 25,936,400) | 25,843,500) | 26,539,100) | 26,443,300) | 26,223,000) | 29,970,800) | 31,178,200) | 37,075,100) | 38,551,800) | ||||||
| Total debt | 19,549,700) | 22,649,000) | 22,525,200) | 22,703,500) | 23,525,900) | 23,797,700) | 23,583,400) | 25,350,500) | 26,562,600) | 30,075,300) | 30,336,100) | 30,238,300) | 31,749,400) | 32,768,700) | 32,770,000) | 39,581,700) | 42,567,500) | ||||||
| Total assets | 88,426,200) | 94,699,100) | 94,408,900) | 95,480,700) | 98,036,300) | 101,787,600) | 106,542,500) | 108,858,800) | 112,021,300) | 118,341,900) | 118,992,800) | 124,734,800) | 126,836,900) | 128,986,300) | 143,607,700) | 132,619,100) | 136,073,700) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to assets1 | 0.22 | 0.24 | 0.24 | 0.24 | 0.24 | 0.23 | 0.22 | 0.23 | 0.24 | 0.25 | 0.25 | 0.24 | 0.25 | 0.25 | 0.23 | 0.30 | 0.31 | ||||||
| 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-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31).
1 Q1 2020 Calculation
Debt to assets = Total debt ÷ Total assets
= 19,549,700 ÷ 88,426,200 = 0.22
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibits a clear downward trend over the examined period. Starting at approximately 42.6 billion USD, the debt decreases steadily with a few minor fluctuations, reaching around 19.5 billion USD by the end of the period. This represents a significant reduction in the company's leverage, indicating an active effort to lower debt levels over time.
- Total Assets
- Total assets show a declining pattern throughout the analyzed quarters. Beginning at about 136.1 billion USD, the assets consistently decrease each quarter, ending near 88.4 billion USD. This decline suggests possible asset sales, depreciation, or other balance sheet adjustments that reduced the overall asset base during the period.
- Debt to Assets Ratio
- The debt to assets ratio remains relatively stable across the timeline, fluctuating mainly between 0.22 and 0.31. Initially, the ratio is around 0.31 but declines to approximately 0.22 towards the end. Despite the reductions in both debt and assets, the ratio's stability implies that the company managed to reduce its debt levels in proportion to the decline in assets, maintaining a consistent leverage profile.
- Overall Insights
- The company appears to prioritize deleveraging, as evidenced by the steady reduction in total debt. Although the asset base is also diminishing, the proportionate decreases in both debt and assets have helped maintain a stable leverage ratio. This balanced approach likely reflects strategic financial management aimed at strengthening the balance sheet while controlling risks associated with high leverage. The consistent decrease in assets might warrant further analysis to understand the underlying causes, such as divestitures or impairments.
Debt to Assets (including Operating Lease Liability)
Allergan PLC, debt to assets (including operating lease liability) calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Current portion of long-term debt | 1,950,700) | 4,532,500) | 3,739,200) | 3,094,200) | 3,971,800) | 868,300) | 1,351,600) | 1,348,500) | 626,200) | 4,231,800) | 3,797,000) | 3,795,000) | 5,526,400) | 2,797,900) | 1,591,800) | 2,506,600) | 4,015,700) | ||||||
| Long-term debt, excluding current portion | 17,599,000) | 18,116,500) | 18,786,000) | 19,609,300) | 19,554,100) | 22,929,400) | 22,231,800) | 24,002,000) | 25,936,400) | 25,843,500) | 26,539,100) | 26,443,300) | 26,223,000) | 29,970,800) | 31,178,200) | 37,075,100) | 38,551,800) | ||||||
| Total debt | 19,549,700) | 22,649,000) | 22,525,200) | 22,703,500) | 23,525,900) | 23,797,700) | 23,583,400) | 25,350,500) | 26,562,600) | 30,075,300) | 30,336,100) | 30,238,300) | 31,749,400) | 32,768,700) | 32,770,000) | 39,581,700) | 42,567,500) | ||||||
| Current portion of lease liability, operating | 119,800) | 124,400) | 118,400) | 123,200) | 116,100) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Lease liability, operating, excluding current portion | 438,300) | 446,100) | 437,400) | 414,800) | 415,200) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Total debt (including operating lease liability) | 20,107,800) | 23,219,500) | 23,081,000) | 23,241,500) | 24,057,200) | 23,797,700) | 23,583,400) | 25,350,500) | 26,562,600) | 30,075,300) | 30,336,100) | 30,238,300) | 31,749,400) | 32,768,700) | 32,770,000) | 39,581,700) | 42,567,500) | ||||||
| Total assets | 88,426,200) | 94,699,100) | 94,408,900) | 95,480,700) | 98,036,300) | 101,787,600) | 106,542,500) | 108,858,800) | 112,021,300) | 118,341,900) | 118,992,800) | 124,734,800) | 126,836,900) | 128,986,300) | 143,607,700) | 132,619,100) | 136,073,700) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to assets (including operating lease liability)1 | 0.23 | 0.25 | 0.24 | 0.24 | 0.25 | 0.23 | 0.22 | 0.23 | 0.24 | 0.25 | 0.25 | 0.24 | 0.25 | 0.25 | 0.23 | 0.30 | 0.31 | ||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | |||||||||||||||||||||||
| Vertex Pharmaceuticals Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31).
1 Q1 2020 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 20,107,800 ÷ 88,426,200 = 0.23
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- The total debt demonstrates a gradual and consistent decline over the observed period. Starting at approximately $42.57 billion, the debt level steadily decreased to around $20.11 billion by the end of the period. This downward trend suggests a deliberate effort to reduce leverage or pay down borrowings over time. Notably, the largest reductions seem to have occurred between early 2016 and late 2018, with the pace of decline moderating somewhat thereafter.
- Total Assets
- The total assets also show a decreasing pattern throughout the time frame. Initial asset values of about $136.07 billion declined to approximately $88.43 billion by the last date. The reduction is relatively consistent, indicating possible divestitures, depreciation, or usage of assets in operations without offsetting additions. The decline in assets correlates with the decrease in total debt, possibly reflecting overall balance sheet contraction or asset sales.
- Debt to Assets Ratio (including operating lease liability)
- The debt to assets ratio fluctuated modestly within a narrow range from 0.31 to 0.23. The ratio decreased sharply from 0.31 at the beginning to around 0.23-0.25 in the middle periods, indicating improved leverage position. The ratio stabilized around 0.23 to 0.25 for the remainder of the period, suggesting that while debt and assets both declined, they did so in roughly proportional measures. This stable leverage ratio implies maintained financial structure and risk profile over time, despite decreases in absolute debt and asset values.
- Summary
- Overall, the financial data displays a trend of decreasing debt and assets, accompanied by a relatively stable debt to asset ratio. This suggests deliberate deleveraging combined with a reduction in asset base. The stable leverage ratio indicates consistent balance sheet management, maintaining the relative risk despite shrinking scale. There are no abrupt changes or anomalies in the debt to asset ratio, meaning the company sustained a steady approach in managing its financing and resource deployment during these periods.
Financial Leverage
Allergan PLC, financial leverage calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Total assets | 88,426,200) | 94,699,100) | 94,408,900) | 95,480,700) | 98,036,300) | 101,787,600) | 106,542,500) | 108,858,800) | 112,021,300) | 118,341,900) | 118,992,800) | 124,734,800) | 126,836,900) | 128,986,300) | 143,607,700) | 132,619,100) | 136,073,700) | ||||||
| Shareholders’ equity | 57,997,700) | 58,173,600) | 58,475,200) | 59,674,700) | 61,542,000) | 65,114,100) | 70,507,800) | 71,243,500) | 72,327,900) | 73,821,100) | 71,159,400) | 75,220,400) | 75,188,400) | 76,192,700) | 89,725,900) | 76,643,900) | 77,450,000) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Financial leverage1 | 1.52 | 1.63 | 1.61 | 1.60 | 1.59 | 1.56 | 1.51 | 1.53 | 1.55 | 1.60 | 1.67 | 1.66 | 1.69 | 1.69 | 1.60 | 1.73 | 1.76 | ||||||
| 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-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31).
1 Q1 2020 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= 88,426,200 ÷ 57,997,700 = 1.52
2 Click competitor name to see calculations.
- Total Assets
- The total assets exhibit a general downward trend over the examined periods. Beginning at approximately 136 billion US dollars in the first quarter of 2016, the total assets decreased intermittently, falling to around 88 billion US dollars by the first quarter of 2020. Notably, the decline appears most pronounced between late 2018 and early 2020, reflecting a reduction in the asset base by nearly 20%, which may suggest divestitures, asset impairments, or other structural changes.
- Shareholders’ Equity
- Shareholders’ equity shows a similar declining trajectory throughout the periods analyzed. Starting at approximately 77 billion US dollars in early 2016, equity levels experienced fluctuations with peaks near 89.7 billion US dollars occurring around the third quarter of 2016, followed by a consistent decline. By the first quarter of 2020, shareholders’ equity had diminished to approximately 58 billion US dollars. The decrease in equity aligns with the decline in total assets, indicating possible retained earnings losses, dividend payments, share repurchases, or other equity reductions.
- Financial Leverage Ratio
- The financial leverage ratio, defined as the ratio of total assets to shareholders’ equity, displays moderate variation across the timeframe. It started at 1.76 in the first quarter of 2016, trending downward to a low of 1.51 in the third quarter of 2018, before gradually increasing again to around 1.63 by the end of 2019, and dropping to 1.52 by the first quarter of 2020. This pattern suggests a period of deleveraging followed by a slight increase in leverage, and then a reduction again. Overall, the leverage levels indicate a relatively stable capital structure with moderate use of debt relative to equity.
- Overall Observations
- The analysis reveals a consistent contraction in the company's balance sheet size, accompanied by reductions in shareholders’ equity. The financial leverage ratio fluctuations indicate ongoing adjustments to the capital structure but remain within a narrow range, reflecting an effort to balance debt and equity financing prudently. The downward trends in assets and equity may warrant further investigation into operational performance, asset management decisions, and capital allocation strategies to understand underlying causes and potential impacts on financial health.
Interest Coverage
Allergan PLC, interest coverage calculation (quarterly data)
| Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Net income (loss) attributable to shareholders | 378,000) | (317,200) | (786,800) | (1,759,000) | (2,408,000) | (4,299,900) | (37,900) | (472,500) | (286,100) | 3,121,300) | (3,955,700) | (725,900) | (2,565,200) | (600) | 15,220,000) | (501,700) | 255,700) | ||||||
| Add: Net income attributable to noncontrolling interest | 1,000) | (100) | 1,200) | 4,100) | 700) | 4,000) | 1,600) | 2,400) | 2,200) | 1,900) | 1,700) | 2,000) | 1,000) | 1,800) | 1,800) | 1,800) | 700) | ||||||
| Less: Income (loss) from discontinued operations, net of tax | —) | —) | —) | —) | —) | —) | —) | —) | —) | (385,300) | (6,100) | (8,400) | (3,100) | 41,300) | 15,601,900) | (77,300) | 348,600) | ||||||
| Add: Income tax expense | (1,866,800) | (104,700) | 18,100) | 301,600) | (68,600) | (1,296,700) | 213,400) | (5,200) | (682,200) | (3,918,300) | (1,638,800) | (581,200) | (532,100) | (1,071,200) | (158,900) | (258,200) | (408,700) | ||||||
| Add: Interest expense | 184,500) | 191,900) | 193,900) | 195,400) | 201,800) | 210,200) | 220,400) | 230,000) | 250,600) | 263,300) | 265,200) | 277,400) | 289,700) | 292,700) | 324,300) | 345,800) | 332,800) | ||||||
| Earnings before interest and tax (EBIT) | (1,303,300) | (230,100) | (573,600) | (1,257,900) | (2,274,100) | (5,382,400) | 397,500) | (245,300) | (715,500) | (146,500) | (5,321,500) | (1,019,300) | (2,803,500) | (818,600) | (214,700) | (335,000) | (168,100) | ||||||
| Solvency Ratio | |||||||||||||||||||||||
| Interest coverage1 | -4.39 | -5.54 | -11.84 | -10.29 | -8.70 | -6.53 | -0.74 | -6.37 | -6.82 | -8.48 | -8.86 | -4.10 | -3.33 | -1.19 | -1.14 | -1.95 | -1.87 | ||||||
| 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-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31).
1 Q1 2020 Calculation
Interest coverage
= (EBITQ1 2020
+ EBITQ4 2019
+ EBITQ3 2019
+ EBITQ2 2019)
÷ (Interest expenseQ1 2020
+ Interest expenseQ4 2019
+ Interest expenseQ3 2019
+ Interest expenseQ2 2019)
= (-1,303,300 + -230,100 + -573,600 + -1,257,900)
÷ (184,500 + 191,900 + 193,900 + 195,400)
= -4.39
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- Earnings Before Interest and Tax (EBIT)
-
Over the examined periods, EBIT exhibited significant volatility with overall negative values dominating most quarters. The first quarter of 2016 starts with a negative EBIT of -168.1 million US dollars, plunging further in mid-2017 and especially in the third quarter of 2017 with a sharp decline to -5.3215 billion US dollars. A brief positive spike is observed in the third quarter of 2018 (397.5 thousand), but this is followed by another steep drop to -5.3824 billion US dollars in the fourth quarter of 2018. The subsequent years continue to reflect negative EBIT values with fluctuations around -1 billion to -2.3 billion US dollars, indicating persistent operating losses and unstable operating performance across most quarters.
- Interest Expense
-
Interest expense demonstrates a consistent downward trend throughout the time frame. Starting at 332.8 million US dollars in the first quarter of 2016, it gradually decreases nearly every quarter, reaching 184.5 million US dollars by the first quarter of 2020. The steady reduction in interest costs may indicate efforts to reduce debt or refinancing activities resulting in lower interest rates or principal amounts.
- Interest Coverage Ratio
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The interest coverage ratio remains negative for all periods, highlighting that EBIT is consistently insufficient to cover interest expenses. The ratio deteriorates significantly in 2017, reaching as low as -8.86 in the third quarter, implying a severe inability to meet interest obligations from operating earnings. Although there is some improvement towards the end of 2018 and early 2020, the ratio never approaches positive territory, reflecting ongoing financial strain and vulnerability in servicing debt through operating income.