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 PLC, future operating lease payments (before adoption of FASB Topic 842)

US$ in thousands

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Total undiscounted future operating lease payments	—	419,000)	453,000)	352,100)	190,600)
Discount rate¹	—	3.47%	3.45%	3.61%	3.67%

Total present value of future operating lease payments	—	356,873)	382,081)	290,222)	162,581)

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

¹ Weighted-average interest rate for Allergan PLC debt

2018 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 3.47%
2019	62,500)	2019	62,500)	60,404)
2020	52,500)	2020	52,500)	49,038)
2021	47,900)	2021	47,900)	43,241)
2022	43,300)	2022	43,300)	37,777)
2023	39,000)	2023	39,000)	32,885)
2024 and thereafter	173,800)	2024	39,000)	31,782)
		2025	39,000)	30,716)
		2026	39,000)	29,686)
		2027	39,000)	28,690)
		2028	17,800)	12,655)
Total:	419,000)		419,000)	356,873)

Based on: 10-K (reporting date: 2018-12-31).

2017 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 3.45%
2018	53,500)	2018	53,500)	51,716)
2019	59,100)	2019	59,100)	55,224)
2020	46,500)	2020	46,500)	42,001)
2021	44,900)	2021	44,900)	39,203)
2022	42,900)	2022	42,900)	36,208)
2023 and thereafter	206,100)	2023	42,900)	35,001)
		2024	42,900)	33,833)
		2025	42,900)	32,705)
		2026	42,900)	31,614)
		2027	34,500)	24,576)
Total:	453,000)		453,000)	382,081)

Based on: 10-K (reporting date: 2017-12-31).

2016 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 3.61%
2017	48,100)	2017	48,100)	46,424)
2018	37,100)	2018	37,100)	34,560)
2019	37,800)	2019	37,800)	33,985)
2020	29,100)	2020	29,100)	25,251)
2021	27,200)	2021	27,200)	22,780)
2022 and thereafter	172,800)	2022	27,200)	21,987)
		2023	27,200)	21,221)
		2024	27,200)	20,481)
		2025	27,200)	19,768)
		2026	27,200)	19,079)
		2027	27,200)	18,414)
		2028	9,600)	6,273)
Total:	352,100)		352,100)	290,222)

Based on: 10-K (reporting date: 2016-12-31).

2015 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 3.67%
2016	29,900)	2016	29,900)	28,842)
2017	27,700)	2017	27,700)	25,774)
2018	23,600)	2018	23,600)	21,181)
2019	21,600)	2019	21,600)	18,700)
2020	17,000)	2020	17,000)	14,197)
2021 and thereafter	70,800)	2021	17,000)	13,694)
		2022	17,000)	13,209)
		2023	17,000)	12,742)
		2024	17,000)	12,291)
		2025	2,800)	1,953)
Total:	190,600)		190,600)	162,581)

Based on: 10-K (reporting date: 2015-12-31).

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Allergan PLC, adjustments to financial statements

US$ in thousands

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Adjustment to Total Assets
Total assets (as reported)	94,699,100)	101,787,600)	118,341,900)	128,986,300)	135,840,700)
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	—)	356,873)	382,081)	290,222)	162,581)
Total assets (adjusted)	94,699,100)	102,144,473)	118,723,981)	129,276,522)	136,003,281)
Adjustment to Total Debt
Total debt (as reported)	22,649,000)	23,797,700)	30,075,300)	32,768,700)	42,726,200)
Add: Operating lease liability (before adoption of FASB Topic 842)²	—)	356,873)	382,081)	290,222)	162,581)
Add: Current portion of lease liability, operating	124,400)	—)	—)	—)	—)
Add: Lease liability, operating, excluding current portion	446,100)	—)	—)	—)	—)
Total debt (adjusted)	23,219,500)	24,154,573)	30,457,381)	33,058,922)	42,888,781)

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

^{1, 2} Equal to total present value of future operating lease payments.

Allergan PLC, Financial Data: Reported vs. Adjusted

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Allergan PLC, adjusted financial ratios

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Total Asset Turnover¹
Reported total asset turnover	0.17	0.16	0.13	0.11	0.11
Adjusted total asset turnover	0.17	0.15	0.13	0.11	0.11
Debt to Equity²
Reported debt to equity	0.39	0.37	0.41	0.43	0.56
Adjusted debt to equity	0.40	0.37	0.41	0.43	0.56
Return on Assets³ (ROA)
Reported ROA	-5.57%	-5.01%	-3.49%	11.61%	2.88%
Adjusted ROA	-5.57%	-4.99%	-3.47%	11.58%	2.88%

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

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 PLC adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted debt to equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Allergan PLC adjusted debt to equity ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Allergan PLC adjusted ROA deteriorated from 2017 to 2018 and from 2018 to 2019.

Allergan PLC, Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
As Reported
Selected Financial Data (US$ in thousands)
Net revenues	16,088,900)	15,787,400)	15,940,700)	14,570,600)	15,071,000)
Total assets	94,699,100)	101,787,600)	118,341,900)	128,986,300)	135,840,700)
Activity Ratio
Total asset turnover¹	0.17	0.16	0.13	0.11	0.11
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Net revenues	16,088,900)	15,787,400)	15,940,700)	14,570,600)	15,071,000)
Adjusted total assets	94,699,100)	102,144,473)	118,723,981)	129,276,522)	136,003,281)
Activity Ratio
Adjusted total asset turnover²	0.17	0.15	0.13	0.11	0.11

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

2019 Calculations

¹ Total asset turnover = Net revenues ÷ Total assets
= 16,088,900 ÷ 94,699,100 = 0.17

² Adjusted total asset turnover = Net revenues ÷ Adjusted total assets
= 16,088,900 ÷ 94,699,100 = 0.17

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Allergan PLC adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
As Reported
Selected Financial Data (US$ in thousands)
Total debt	22,649,000)	23,797,700)	30,075,300)	32,768,700)	42,726,200)
Shareholders’ equity	58,173,600)	65,114,100)	73,821,100)	76,192,700)	76,591,400)
Solvency Ratio
Debt to equity¹	0.39	0.37	0.41	0.43	0.56
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Adjusted total debt	23,219,500)	24,154,573)	30,457,381)	33,058,922)	42,888,781)
Shareholders’ equity	58,173,600)	65,114,100)	73,821,100)	76,192,700)	76,591,400)
Solvency Ratio
Adjusted debt to equity²	0.40	0.37	0.41	0.43	0.56

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

2019 Calculations

¹ Debt to equity = Total debt ÷ Shareholders’ equity
= 22,649,000 ÷ 58,173,600 = 0.39

² Adjusted debt to equity = Adjusted total debt ÷ Shareholders’ equity
= 23,219,500 ÷ 58,173,600 = 0.40

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Solvency ratio	Description	The company
Adjusted debt-to-equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Allergan PLC adjusted debt-to-equity ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
As Reported
Selected Financial Data (US$ in thousands)
Net income (loss) attributable to shareholders	(5,271,000)	(5,096,400)	(4,125,500)	14,973,400)	3,915,200)
Total assets	94,699,100)	101,787,600)	118,341,900)	128,986,300)	135,840,700)
Profitability Ratio
ROA¹	-5.57%	-5.01%	-3.49%	11.61%	2.88%
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Net income (loss) attributable to shareholders	(5,271,000)	(5,096,400)	(4,125,500)	14,973,400)	3,915,200)
Adjusted total assets	94,699,100)	102,144,473)	118,723,981)	129,276,522)	136,003,281)
Profitability Ratio
Adjusted ROA²	-5.57%	-4.99%	-3.47%	11.58%	2.88%

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

2019 Calculations

¹ ROA = 100 × Net income (loss) attributable to shareholders ÷ Total assets
= 100 × -5,271,000 ÷ 94,699,100 = -5.57%

² Adjusted ROA = 100 × Net income (loss) attributable to shareholders ÷ Adjusted total assets
= 100 × -5,271,000 ÷ 94,699,100 = -5.57%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Allergan PLC adjusted ROA deteriorated from 2017 to 2018 and from 2018 to 2019.

Allergan PLC (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 PLC, Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios for Operating Leases (Summary)

Allergan PLC, Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Debt to Equity

Adjusted Return on Assets (ROA)