An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.

Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)
Adjustments to Financial Statements for Operating Leases
Adjusted Financial Ratios for Operating Leases (Summary)
Adjusted Total Asset Turnover
Adjusted Debt to Equity
Adjusted Return on Assets (ROA)

Allergan Inc., future operating lease payments (before adoption of FASB Topic 842)

US$ in thousands

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Total undiscounted future operating lease payments	227,200)	232,100)	245,400)	183,900)	175,000)
Discount rate¹	3.49%	3.38%	3.81%	4.98%	5.05%

Total present value of future operating lease payments	202,630)	206,703)	214,794)	156,187)	150,099)

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 Weighted-average interest rate for Allergan Inc. debt

2014 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 3.49%
2015	60,200)	2015	60,200)	58,170)
2016	47,100)	2016	47,100)	43,977)
2017	32,700)	2017	32,700)	29,502)
2018	20,600)	2018	20,600)	17,959)
2019	15,500)	2019	15,500)	13,057)
2020 and thereafter	51,100)	2020	15,500)	12,617)
		2021	15,500)	12,191)
		2022	15,500)	11,780)
		2023	4,600)	3,378)
Total:	227,200)		227,200)	202,630)

Based on: 10-K (reporting date: 2014-12-31).

2013 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 3.38%
2014	67,800)	2014	67,800)	65,583)
2015	47,600)	2015	47,600)	44,538)
2016	31,100)	2016	31,100)	28,148)
2017	17,100)	2017	17,100)	14,971)
2018	11,400)	2018	11,400)	9,654)
2019 and thereafter	57,100)	2019	11,400)	9,339)
		2020	11,400)	9,033)
		2021	11,400)	8,738)
		2022	11,400)	8,452)
		2023	11,400)	8,176)
		2024	100)	69)
Total:	232,100)		232,100)	206,703)

Based on: 10-K (reporting date: 2013-12-31).

2012 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 3.81%
2013	66,200)	2013	66,200)	63,770)
2014	51,100)	2014	51,100)	47,418)
2015	32,000)	2015	32,000)	28,604)
2016	20,000)	2016	20,000)	17,222)
2017	13,100)	2017	13,100)	10,866)
2018 and thereafter	63,000)	2018	13,100)	10,467)
		2019	13,100)	10,083)
		2020	13,100)	9,713)
		2021	13,100)	9,357)
		2022	10,600)	7,293)
Total:	245,400)		245,400)	214,794)

Based on: 10-K (reporting date: 2012-12-31).

2011 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 4.98%
2012	47,200)	2012	47,200)	44,961)
2013	38,000)	2013	38,000)	34,480)
2014	29,600)	2014	29,600)	25,584)
2015	14,000)	2015	14,000)	11,527)
2016	12,000)	2016	12,000)	9,411)
2017 and thereafter	43,100)	2017	12,000)	8,965)
		2018	12,000)	8,540)
		2019	12,000)	8,134)
		2020	7,100)	4,585)
Total:	183,900)		183,900)	156,187)

Based on: 10-K (reporting date: 2011-12-31).

2010 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 5.05%
2011	48,300)	2011	48,300)	45,978)
2012	37,900)	2012	37,900)	34,344)
2013	27,800)	2013	27,800)	23,980)
2014	16,900)	2014	16,900)	13,877)
2015	10,600)	2015	10,600)	8,286)
2016 and thereafter	33,500)	2016	10,600)	7,887)
		2017	10,600)	7,508)
		2018	10,600)	7,147)
		2019	1,700)	1,091)
Total:	175,000)		175,000)	150,099)

Based on: 10-K (reporting date: 2010-12-31).

Download chart

Allergan Inc., adjustments to financial statements

US$ in thousands

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Adjustment to Total Assets
Total assets (as reported)	12,415,700)	10,574,300)	9,179,300)	8,508,600)	8,308,100)
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	202,630)	206,703)	214,794)	156,187)	150,099)
Total assets (adjusted)	12,618,330)	10,781,003)	9,394,094)	8,664,787)	8,458,199)
Adjustment to Total Debt
Total debt (as reported)	2,157,400)	2,153,900)	1,561,200)	1,599,300)	2,204,800)
Add: Operating lease liability (before adoption of FASB Topic 842)²	202,630)	206,703)	214,794)	156,187)	150,099)
Total debt (adjusted)	2,360,030)	2,360,603)	1,775,994)	1,755,487)	2,354,899)

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} Equal to total present value of future operating lease payments.

Allergan Inc., Financial Data: Reported vs. Adjusted

Download chart

Allergan Inc., adjusted financial ratios

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Total Asset Turnover¹
Reported total asset turnover	0.57	0.59	0.62	0.63	0.58
Adjusted total asset turnover	0.56	0.57	0.61	0.62	0.57
Debt to Equity²
Reported debt to equity	0.28	0.33	0.27	0.30	0.46
Adjusted debt to equity	0.30	0.37	0.30	0.33	0.49
Return on Assets³ (ROA)
Reported ROA	12.28%	9.32%	11.97%	10.98%	0.01%
Adjusted ROA	12.08%	9.14%	11.70%	10.79%	0.01%

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 See details »

² See details »

³ See details »

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Allergan Inc. adjusted total asset turnover ratio deteriorated from 2012 to 2013 and from 2013 to 2014.
Adjusted debt to equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Allergan Inc. adjusted debt to equity ratio deteriorated from 2012 to 2013 but then improved from 2013 to 2014 not reaching 2012 level.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Allergan Inc. adjusted ROA deteriorated from 2012 to 2013 but then improved from 2013 to 2014 exceeding 2012 level.

Allergan Inc., Financial Ratios: Reported vs. Adjusted

Download chart

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
As Reported
Selected Financial Data (US$ in thousands)
Product net sales	7,126,100)	6,197,500)	5,708,800)	5,347,100)	4,819,600)
Total assets	12,415,700)	10,574,300)	9,179,300)	8,508,600)	8,308,100)
Activity Ratio
Total asset turnover¹	0.57	0.59	0.62	0.63	0.58
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Product net sales	7,126,100)	6,197,500)	5,708,800)	5,347,100)	4,819,600)
Adjusted total assets	12,618,330)	10,781,003)	9,394,094)	8,664,787)	8,458,199)
Activity Ratio
Adjusted total asset turnover²	0.56	0.57	0.61	0.62	0.57

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).

2014 Calculations

¹ Total asset turnover = Product net sales ÷ Total assets
= 7,126,100 ÷ 12,415,700 = 0.57

² Adjusted total asset turnover = Product net sales ÷ Adjusted total assets
= 7,126,100 ÷ 12,618,330 = 0.56

Download chart

Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Allergan Inc. adjusted total asset turnover ratio deteriorated from 2012 to 2013 and from 2013 to 2014.

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
As Reported
Selected Financial Data (US$ in thousands)
Total debt	2,157,400)	2,153,900)	1,561,200)	1,599,300)	2,204,800)
Total Allergan, Inc. stockholders’ equity	7,753,000)	6,463,200)	5,837,100)	5,309,600)	4,757,700)
Solvency Ratio
Debt to equity¹	0.28	0.33	0.27	0.30	0.46
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Adjusted total debt	2,360,030)	2,360,603)	1,775,994)	1,755,487)	2,354,899)
Total Allergan, Inc. stockholders’ equity	7,753,000)	6,463,200)	5,837,100)	5,309,600)	4,757,700)
Solvency Ratio
Adjusted debt to equity²	0.30	0.37	0.30	0.33	0.49

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).

2014 Calculations

¹ Debt to equity = Total debt ÷ Total Allergan, Inc. stockholders’ equity
= 2,157,400 ÷ 7,753,000 = 0.28

² Adjusted debt to equity = Adjusted total debt ÷ Total Allergan, Inc. stockholders’ equity
= 2,360,030 ÷ 7,753,000 = 0.30

Download chart

Solvency ratio	Description	The company
Adjusted debt-to-equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Allergan Inc. adjusted debt-to-equity ratio deteriorated from 2012 to 2013 but then improved from 2013 to 2014 not reaching 2012 level.

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
As Reported
Selected Financial Data (US$ in thousands)
Net earnings attributable to Allergan, Inc.	1,524,200)	985,100)	1,098,800)	934,500)	600)
Total assets	12,415,700)	10,574,300)	9,179,300)	8,508,600)	8,308,100)
Profitability Ratio
ROA¹	12.28%	9.32%	11.97%	10.98%	0.01%
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Net earnings attributable to Allergan, Inc.	1,524,200)	985,100)	1,098,800)	934,500)	600)
Adjusted total assets	12,618,330)	10,781,003)	9,394,094)	8,664,787)	8,458,199)
Profitability Ratio
Adjusted ROA²	12.08%	9.14%	11.70%	10.79%	0.01%

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).

2014 Calculations

¹ ROA = 100 × Net earnings attributable to Allergan, Inc. ÷ Total assets
= 100 × 1,524,200 ÷ 12,415,700 = 12.28%

² Adjusted ROA = 100 × Net earnings attributable to Allergan, Inc. ÷ Adjusted total assets
= 100 × 1,524,200 ÷ 12,618,330 = 12.08%

Download chart

Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Allergan Inc. adjusted ROA deteriorated from 2012 to 2013 but then improved from 2013 to 2014 exceeding 2012 level.

Allergan Inc. (NYSE:AGN.)

Analysis of Operating Leases

Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)

Adjustments to Financial Statements for Operating Leases

Allergan Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios for Operating Leases (Summary)

Allergan Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Debt to Equity

Adjusted Return on Assets (ROA)