Allergan Inc., FCFF calculation

US$ in thousands

12 months ended:	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Net earnings attributable to Allergan, Inc.	1,524,200)	985,100)	1,098,800)	934,500)	600)
Net earnings attributable to noncontrolling interest	4,600)	3,600)	3,700)	3,600)	4,300)
Net noncash charges	592,200)	659,900)	326,000)	306,300)	527,000)
Changes in operating assets and liabilities	(193,200)	46,800)	171,400)	(162,500)	(68,000)
Net cash provided by operating activities	1,927,800)	1,695,400)	1,599,900)	1,081,900)	463,900)
Cash paid for interest, net of amount capitalized, net of tax¹	64,218)	61,226)	46,160)	46,569)	1,392)
Interest capitalized, net of tax²	4,312)	1,323)	647)	722)	14)
Additions to property, plant and equipment	(243,900)	(171,900)	(143,300)	(118,600)	(102,800)
Additions to capitalized software	(19,000)	(11,800)	(13,900)	(11,200)	(13,300)
Additions to intangible assets	(15,000)	(300)	(4,100)	(300)	(40,900)
Proceeds from sale of property, plant and equipment	500)	500)	1,800)	1,200)	400)
Free cash flow to the firm (FCFF)	1,718,930)	1,574,449)	1,487,207)	1,000,291)	308,707)

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).

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Item	Description	The company
FCFF	Free cash flow to the firm is the cash flow available to the Allergan Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Allergan Inc. FCFF increased from 2012 to 2013 and from 2013 to 2014.

Allergan Inc., interest paid, net of tax calculation

US$ in thousands

12 months ended:	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Effective Income Tax Rate (EITR)
EITR¹	23.00%	26.50%	28.10%	27.80%	97.10%
Interest Paid, Net of Tax
Cash paid for interest, net of amount capitalized, before tax	83,400)	83,300)	64,200)	64,500)	48,000)
Less: Cash paid for interest, net of amount capitalized, tax²	19,182)	22,075)	18,040)	17,931)	46,608)
Cash paid for interest, net of amount capitalized, net of tax	64,218)	61,226)	46,160)	46,569)	1,392)
Interest Costs Capitalized, Net of Tax
Interest capitalized, before tax	5,600)	1,800)	900)	1,000)	500)
Less: Interest capitalized, tax³	1,288)	477)	253)	278)	486)
Interest capitalized, net of tax	4,312)	1,323)	647)	722)	14)

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 2014 Calculation
Cash paid for interest, net of amount capitalized, tax = Cash paid for interest, net of amount capitalized × EITR
= 83,400 × 23.00% = 19,182

³ 2014 Calculation
Interest capitalized, tax = Interest capitalized × EITR
= 5,600 × 23.00% = 1,288

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Allergan Inc., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in thousands)
Enterprise value (EV)	66,591,934)
Free cash flow to the firm (FCFF)	1,718,930)
Valuation Ratio
EV/FCFF	38.74
Benchmarks
EV/FCFF, Competitors¹
AbbVie Inc.	14.30
Amgen Inc.	22.15
Bristol-Myers Squibb Co.	10.51
Danaher Corp.	33.21
Eli Lilly & Co.	661.15
Gilead Sciences Inc.	15.72
Johnson & Johnson	18.87
Merck & Co. Inc.	29.32
Moderna Inc.	—
Pfizer Inc.	30.11
Regeneron Pharmaceuticals Inc.	18.65
Thermo Fisher Scientific Inc.	26.75

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.

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	66,591,936)	35,980,729)	30,534,136)	26,076,707)	21,771,762)
Free cash flow to the firm (FCFF)²	1,718,930)	1,574,449)	1,487,207)	1,000,291)	308,707)
Valuation Ratio
EV/FCFF³	38.74	22.85	20.53	26.07	70.53
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.	—	—	—	—	—
Moderna Inc.	—	—	—	—	—
Pfizer Inc.	—	—	—	—	—
Regeneron Pharmaceuticals Inc.	—	—	—	—	—
Thermo Fisher Scientific 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).

¹ See details »

² See details »

³ 2014 Calculation
EV/FCFF = EV ÷ FCFF
= 66,591,936 ÷ 1,718,930 = 38.74

⁴ Click competitor name to see calculations.

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Valuation ratio	Description	The company
EV/FCFF	Enterprise value to free cash flow to the firm is whole company valuation indicator.	Allergan Inc. EV/FCFF ratio increased from 2012 to 2013 and from 2013 to 2014.

Allergan Inc. (NYSE:AGN.)

Enterprise Value to FCFF (EV/FCFF)

Free Cash Flow to The Firm (FCFF)

Interest Paid, Net of Tax

Enterprise Value to FCFF Ratio, Current

Enterprise Value to FCFF Ratio, Historical