Allergan (FRA:AG4) Operating Income : €1,537 Mil (TTM As of Dec. 2014)

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What is Allergan Operating Income?

Allergan's Operating Income for the three months ended in Dec. 2014 was €508 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Dec. 2014 was €1,537 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Allergan's Operating Income for the three months ended in Dec. 2014 was €508 Mil. Allergan's Revenue for the three months ended in Dec. 2014 was €1,549 Mil. Therefore, Allergan's Operating Margin % for the quarter that ended in Dec. 2014 was 32.80%.

Allergan's 5-Year average Growth Rate for Operating Margin % was 0.00% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Allergan's annualized ROC % for the quarter that ended in Dec. 2014 was 36.82%. Allergan's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2014 was 187.08%.

Allergan Operating Income Historical Data

The historical data trend for Allergan's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Allergan Operating Income Chart

Allergan Annual Data

Trend

Dec05

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Dec14

Operating Income

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195.50

1,037.48

1,227.58

1,320.79

1,629.54

Allergan Quarterly Data
	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14
Operating Income	Get a 7-Day Free Trial															332.00	276.11	447.41	304.81	508.25

Allergan Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Dec. 2014 adds up the quarterly data reported by the company within the most recent 12 months, which was €1,537 Mil.

Allergan (FRA:AG4) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

Allergan's annualized ROC % for the quarter that ended in Dec. 2014 is calculated as:

	ROC % (Q: Dec. 2014 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2014 )	+	Invested Capital (Q: Dec. 2014 ))	/ count )
=	2033.016 * ( 1 - 14.4% )	/	( (4616.58	+	4836.886)	/ 2 )
=	1740.261696	/	4726.733
=	36.82 %

where

	Invested Capital		(Q: Sep. 2014 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	9037.141	-	1172.691	-	( 3247.87	-	max(0, 1215.992	-	4736.549	+	3247.87	))
=	4616.58

	Invested Capital		(Q: Dec. 2014 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	10069.133	-	1204.497	-	( 4027.75	-	max(0, 1262.97	-	5572.543	+	4027.75	))
=	4836.886

Note: The Operating Income data used here is four times the quarterly (Dec. 2014) data.

2. Joel Greenblatt's definition of Return on Capital:

Allergan's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2014 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Dec. 2014 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Sep. 2014		Q: Dec. 2014
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	2106.976	/	( ( (780.113 + max(315.988, 0))	+	(816.109 + max(340.296, 0)) )	/	2 )
=	2106.976	/	( ( 1096.101	+	1156.405 )	/	2 )
=	2106.976	/	1126.253
=	187.08 %

where Working Capital is:

	Working Capital		(Q: Sep. 2014 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(750.702	+	231.015	+	506.962)	-	(1172.691	+	0	+	0)
=	315.988

	Working Capital		(Q: Dec. 2014 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(741.659	+	240.056	+	563.078)	-	(1204.497	+	0	+	0)
=	340.296

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Dec. 2014) EBIT data.

3. Operating Income is also linked to Operating Margin %:

Allergan's Operating Margin % for the quarter that ended in Dec. 2014 is calculated as:

Operating Margin %	=	Operating Income (Q: Dec. 2014 )	/	Revenue (Q: Dec. 2014 )
	=	508.254	/	1549.415
	=	32.80 %

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

Allergan Operating Income Related Terms

Thank you for viewing the detailed overview of Allergan's Operating Income provided by GuruFocus.com. Please click on the following links to see related term pages.

Allergan (FRA:AG4) Business Description

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Allergan IncÂ incorporated in Delaware in 1977.Â It is a multi-specialty health care company. The Company is engaged in the developing and commercializing pharmaceuticals, biologics, medical devices and over-the-counter products that enable people to live life to its full potential - to see more clearly, move more freely and express themselves more fully. It offers products for the ophthalmic, neurological, medical aesthetics, medical dermatology, breast aesthetics, urological and other specialty markets in more than 100 countries around the world. It is also engaged in specialty pharmaceutical, biologic and medical device research and development. The Company's business segments are specialty pharmaceuticals and medical devices. The specialty pharmaceuticals segment produces pharmaceutical products, including: ophthalmic products for dry eye, glaucoma, inflammation, infection, allergy and retinal disease;Â BotoxÂ for certain therapeutic and aesthetic indications; skin care products for acne, psoriasis, eyelash growth and other prescription and over-the-counter skin care products; and urologics products. The medical devices segment produces medical devices, including: breast implants for augmentation, revision and reconstructive surgery and tissue expanders; and facial aesthetics products. The Company sells its products directly through itsÂ own sales subsidiaries in approximately 40 countries and, supplemented by independent distributors, in over 100 countries.Â Its products are sold to drug wholesalers, independent and chain drug stores, pharmacies, commercial optical chains, opticians, mass merchandisers, food stores, hospitals, group purchasing organizations, integrated direct hospital networks, ambulatory surgery centers, government purchasing agencies and medical practitioners. The Company also utilize distributors for its products in smaller international markets.Â The Company's competitors include Akorn, Inc., Alcon Laboratories, Inc./Novartis AG, Abbott Laboratories, Alimera Sciences, Inc., BauschÂ & Lomb, Inc., a division of Valeant, Genentech/Hoffmann La Roche AG, MerckÂ & Co., Pfizer Inc., Regeneron Pharmaceuticals, Inc. and Santen Seiyaku. Mentor and Sientra, Inc., or Sientra, a partner of Silimed, LifeCell Corporation, CR Bard Inc. The Company's operations are subject to federal, state, local and foreign environmental laws and regulations, including the U.S. Occupational Safety and Health Act, the U.S. Toxic Substances Control Act, the U.S. Resource Conservation and Recovery Act, Superfund Amendments and Reauthorization Act, Comprehensive Environmental Response, Compensation and Liability Act and other current and potential future federal, state or local regulations.

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