Allergan Inc., balance sheet: debt

US$ in thousands

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Notes payable	72,100)	55,600)	48,800)	83,900)	28,100)
Convertible notes	—)	—)	—)	—)	642,500)
Long-term debt, excluding current maturities	2,085,300)	2,098,300)	1,512,400)	1,515,400)	1,534,200)
Total notes payable and long-term debt (carrying amount)	2,157,400)	2,153,900)	1,561,200)	1,599,300)	2,204,800)

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Debt item	Description	The company
Total notes payable and long-term debt (carrying amount)	Sum of the carrying values as of the balance sheet date of all debt plus capital lease obligations.	Allergan Inc. total debt increased from 2012 to 2013 and from 2013 to 2014.

	Dec 31, 2014
Selected Financial Data (US$ in thousands)
Notes payable	72,100)
Convertible notes	—)
Long-term debt	2,095,500)
Total notes payable and long-term debt (fair value)	2,167,600)
Financial Ratio
Debt, fair value to carrying amount ratio	1.00

Weighted-average effective interest rate on debt: 3.49%

Interest rate	Debt amount¹	Interest rate × Debt amount
8.83%	72,100)	6,366)
5.65%	20,000)	1,130)
3.94%	817,500)	32,210)
1.39%	249,700)	3,471)
3.41%	648,900)	22,127)
2.83%	349,200)	9,882)
Total	2,157,400)	75,187)
3.49%

¹ US$ in thousands

² Weighted-average interest rate = 100 × 75,187 ÷ 2,157,400 = 3.49%

Allergan Inc., interest costs incurred

US$ in thousands

12 months ended:	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Interest expense	69,400)	75,000)	63,600)	71,800)	78,700)
Interest capitalized	5,600)	1,800)	900)	1,000)	500)
Interest costs incurred	75,000)	76,800)	64,500)	72,800)	79,200)

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Debt item	Description	The company
Interest expense	Amount of the cost of borrowed funds accounted for as interest expense for debt.	Allergan Inc. interest expense increased from 2012 to 2013 but then slightly decreased from 2013 to 2014.
Interest capitalized	Amount of interest costs capitalized disclosed as an adjusting item to interest costs incurred.	Allergan Inc. interest capitalized increased from 2012 to 2013 and from 2013 to 2014.
Interest costs incurred	Total interest costs incurred during the period and either capitalized or charged against earnings.	Allergan Inc. interest costs incurred increased from 2012 to 2013 but then slightly decreased from 2013 to 2014.

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Selected Financial Data (US$ in thousands)
Net earnings attributable to Allergan, Inc.	1,524,200)	985,100)	1,098,800)	934,500)	600)
Add: Net income attributable to noncontrolling interest	4,600)	3,600)	3,700)	3,600)	4,300)
Less: Discontinued operations	(3,800)	(283,800)	—)	—)	—)
Add: Income tax expense	456,700)	458,300)	430,800)	361,600)	165,900)
Add: Interest expense	69,400)	75,000)	63,600)	71,800)	78,700)
Earnings before interest and tax (EBIT)	2,058,700)	1,805,800)	1,596,900)	1,371,500)	249,500)

Interest costs incurred	75,000)	76,800)	64,500)	72,800)	79,200)
Financial Ratio With and Without Capitalized Interest
Interest coverage ratio (without capitalized interest)¹	29.66	24.08	25.11	19.10	3.17
Adjusted interest coverage ratio (with capitalized interest)²	27.45	23.51	24.76	18.84	3.15

2014 Calculations

¹ Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= 2,058,700 ÷ 69,400 = 29.66

² Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= 2,058,700 ÷ 75,000 = 27.45

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Solvency ratio	Description	The company
Adjusted interest coverage ratio	A solvency ratio calculated as EBIT divided by interest payments (including capitalized interest).	Allergan Inc. adjusted interest coverage ratio deteriorated from 2012 to 2013 but then improved from 2013 to 2014 exceeding 2012 level.

Allergan Inc. (NYSE:AGN.)

Analysis of Debt