Allergan Reports Third Quarter 2009 Operating Results

http://www.businesswire.com/news/home/20091029005344/en

* Board of Directors Declares Third Quarter Dividend

IRVINE, Calif.--(Business Wire)--
Allergan, Inc. (NYSE: AGN) today announced operating results for the quarter
ended September 30, 2009. Allergan also announced that its Board of Directors
has declared a third quarter dividend of $0.05 per share, payable on November
30, 2009 to stockholders of record on November 9, 2009.

Operating Results Attributable to Stockholders

For the quarter ended September 30, 2009:

* Allergan reported $0.58 diluted earnings per share attributable to
stockholders compared to $0.54 diluted earnings per share attributable to
stockholders reported for the third quarter of 2008.
* Allergan`s non-GAAP diluted earnings per share attributable to stockholders
were $0.70 in the third quarter of 2009, compared to non-GAAP diluted earnings
per share attributable to stockholders of $0.65 in the third quarter of 2008, a
7.7 percent increase.

Product Sales

For the quarter ended September 30, 2009:

* Allergan`s total product net sales were $1,127.8 million. Total product net
sales increased 4.2 percent compared to total product net sales in the third
quarter of 2008. On a constant currency basis, total product net sales increased
7.0 percent compared to total product net sales in the third quarter of 2008.

* Total specialty pharmaceuticals net sales increased 7.8 percent, or 10.7
percent on a constant currency basis, compared to total specialty
pharmaceuticals net sales in the third quarter of 2008.
* Total medical devices net sales decreased 10.6 percent, or 8.3 percent on a
constant currency basis, compared to total medical devices net sales in the
third quarter of 2008.

"We are pleased with our continued operational performance during the third
quarter as our businesses are performing better than was expected at the
beginning of 2009," said David E.I. Pyott, Allergan`s Chairman of the Board and
Chief Executive Officer. "With this strength in our businesses, we made the
strategic decision to invest in increased Direct to Consumer advertising
programs in the U.S. as we anticipate recovery from the recession. We are also
pleased that we filed, with the U.S. Food and Drug Administration (FDA), BOTOX
(onabotulinumtoxinA) for chronic migraine as well as for upper limb spasticity."

Product and Pipeline Update

During the third quarter of 2009:

* On July 7, 2009, a joint venture was created in Korea with Samil
Pharmaceutical Co. Ltd. following decades of partnership to establish a leading
position in ophthalmic pharmaceuticals.

* On July 7, 2009, Senju Pharmaceutical Co., Ltd received approval from the
Japanese Ministry of Health, Labour and Welfare for LUMIGAN Ophthalmic Solution
0.03% for the treatment of glaucoma or ocular hypertension. Allergan and Senju
had previously entered into an exclusive licensing agreement in Japan to market
and develop LUMIGAN within the ophthalmic specialty area. Senju will pay
Allergan a royalty based on LUMIGAN sales in Japan.
* On July 14, 2009, Allergan announced Korea Food and Drug Administration (KFDA)
approval of LATISSE (bimatoprost ophthalmic solution) 0.03%, a novel treatment
for eyelash hypotrichosis, or inadequate eyelashes. LATISSE is the first and
only science-based treatment approved by the FDA and KFDA to enhance eyelash
prominence as measured by increases in length, thickness and darkness of
eyelashes.
* On July 23, 2009, Allergan announced FDA approval of ACUVAIL (ketorolac
tromethamine ophthalmic solution) 0.45%, an advanced, preservative-free
formulation of ketorolac, a nonsteroidal anti-inflammatory drug indicated for
the treatment of pain and inflammation following cataract surgery.
* On September 15, 2009, a collaboration agreement with Pieris AG was announced
that combines Pieris' proprietary Anticalin technology with Allergan's expertise
in drug delivery and ophthalmic drug development with a goal of developing
agents for the treatment of serious ocular disorders.
* On September 25, 2009, Allergan and Quintiles Transnational Corp. announced an
agreement under which Quintiles will co-promote Allergan's SANCTURA XR (trospium
chloride extended release capsules), an anticholinergic approved for the
treatment of overactive bladder, predominantly to primary care physicians in the
United States.
* Allergan filed a supplemental Biologics License Application (sBLA) with the
FDA for the use of BOTOX (onabotulinumtoxinA) to treat chronic migraine.
* Allergan submitted to the FDA the additional information requested by the FDA
in its complete response letter regarding Allergan's sBLA for BOTOX to treat
upper limb spasticity.
* Allergan filed a supplemental Premarket Approval application with the FDA for
the LAP-BAND System to treat weight reduction for severely obese adolescent
patients (ages 14-17).

Following the end of the third quarter of 2009:

* On October 1, 2009, Allergan filed a declaratory relief action in the United
States District Court for the District of Columbia to seek a ruling that would
allow the company to proactively share truthful and relevant information with
the medical community regarding the safe use of BOTOX for certain therapeutic
off-label treatments.

* On October 23, 2009, Allergan announced that the Committee for Medicinal
Products for Human Use recommended granting a Marketing Authorization for
LUMIGAN (bimatoprost ophthalmic solution) 0.01% in the 27 member states of the
European Union.
* On October 23, 2009, Allergan announced that the United States District Court
for the District of Delaware ruled in favor of Allergan, Inc. in its patent
infringement suit against Exela PharmSci, Inc., Exela PharmSci Pvt., Ltd.,
Apotex, Inc. and Apotex Corp. (collectively, the "Defendants") finding that the
patents are valid and enforceable against the Defendants and that the
Defendants` proposed generic versions of Allergan`s ALPHAGAN P (brimonidine
tartrate ophthalmic solution) 0.1% and 0.15% products infringe Allergan`s
patents. Pursuant to the Hatch-Waxman Act, the FDA is required to delay approval
of the Defendants` proposed generic products until after Allergan`s last
applicable patent expires in 2022.
* Allergan filed a supplemental New Drug Application with the FDA for the
approval of OZURDEX (dexamethasone intravitreal implant) 0.7 mg to treat
non-infectious intermediate and posterior uveitis.

Outlook

For the full year of 2009, Allergan estimates:

* Total product net sales between $4,350 million and $4,400 million.

* Total specialty pharmaceuticals net sales between $3,635 million and $3,655
million.
* Total medical devices net sales between $715 million and $745 million.
* ALPHAGANfranchise product net sales between $380 million and $390 million.
* LUMIGANfranchise product netsales between $450 million and $460 million.
* RESTASIS product netsales between $500 million and $510 million.
* SANCTURA franchise product netsales at approximately $70 million.
* BOTOX product netsales between $1,280 million and $1,290 million.
* LATISSE product netsales at approximately $70 million.
* Breast aestheticsproduct netsales between $270 million and $280 million.
* Obesity intervention product netsales between $245 million and $255 million.
* Facial aesthetics product netsales between $200 million and $210 million.

* Non-GAAP cost of sales to product net sales ratio between 16.5% and 17.0%.
* Other revenue at approximately $60 million.
* Non-GAAP selling, general and administrative expenses to product net sales
ratio between 40% and 41%.
* Non-GAAP research and development expenses to product net sales ratio between
15% and 16%.
* Non-GAAP amortization of acquired intangible assets at approximately $20
million. This guidance excludes the amortization of acquired intangible assets
associated with the Inamed, Cornéal, EndoArt, Esprit, and Samil acquisitions and
the ACZONE asset purchase.
* Non-GAAP diluted earnings per share attributable to stockholders guidance
between $2.75 and $2.77.
* Diluted shares outstanding between approximately 304 million and 306 million.
* Effective tax rate on non-GAAP earnings between 28% and 29%.

For the fourth quarter of 2009, Allergan estimates:

* Total product net sales between $1,110 million and $1,160 million.
* Non-GAAP diluted earnings per share attributable to stockholders guidance
between $0.75 and $0.77.

On January 1, 2009, Allergan adopted the update to Financial Accounting
Standards Board (FASB) guidance related to the accounting for convertible debt
instruments that may be settled fully or partially in cash upon conversion,
which requires retrospective application to prior periods. The impact from the
adoption of this guidance on the previously reported GAAP results for the third
quarter and first nine months of 2008 was a reduction of diluted earnings per
share attributable to stockholders of $0.01 and $0.03, respectively, from the
amounts previously reported. Non-GAAP diluted earnings per share attributable to
stockholders for the third quarter and first nine months of 2008 were not
impacted.

Historical non-GAAP basic and diluted earnings per share attributable to
stockholders and guidance amounts for non-GAAP diluted earnings per share
attributable to stockholders, non-GAAP cost of sales, non-GAAP selling, general
and administrative expenses, non-GAAP research and development expenses,
non-GAAP amortization of acquired intangible assets as well as non-GAAP net
sales reported in constant currency are each reconciled to the most directly
comparable GAAP financial measure in the financial tables of this press release
and the accompanying footnotes. The reconciliation for the guidance amounts in
the financial tables includes historical non-GAAP adjustments and an estimate of
the future effect from amortization of acquired intangible assets and non-cash
interest expense associated with amortization of convertible debt discount.

All prior period information in the financial tables of this press release has
been retrospectively adjusted to reflect the impact of the adoptions in the
first quarter of 2009 of updates to FASB guidance related to the accounting for
convertible debt instruments that may be settled fully or partially in cash upon
conversion and the accounting and financial reporting of noncontrolling
ownership interests in subsidiaries held by parties other than the parent.

Forward-Looking Statements

In this press release, the statements regarding product development, market
potential, expected growth, anticipated product filings, approvals and labeling,
the statements by Mr. Pyott as well as Allergan`s earnings per share, product
net sales, revenue forecasts and any other statements that refer to Allergan`s
expected, estimated or anticipated future results, are forward-looking
statements. Because forecasts are inherently estimates that cannot be made with
precision, Allergan`s performance at times differs materially from its estimates
and targets, and Allergan often does not know what the actual results will be
until after the end of the applicable reporting period. Therefore, Allergan will
not report or comment on its progress during a current quarter except through
public announcement. Any statement made by others with respect to progress
during a current quarter cannot be attributed to Allergan.

All forward-looking statements in this press release reflect Allergan`s current
analysis of existing trends and information and represent Allergan`s judgment
only as of the date of this press release. Actual results may differ materially
from current expectations based on a number of factors affecting Allergan`s
businesses, including, among other things the following: changing competitive,
market and regulatory conditions; the timing and uncertainty of the results of
both the R&D and regulatory processes; domestic and foreign health care and cost
containment reforms, including government pricing and reimbursement policies;
technological advances and patents obtained by competitors; the performance,
including the approval, introduction, and consumer and physician acceptance of
new products and the continuing acceptance of currently marketed products; the
effectiveness of advertising and other promotional campaigns; the timely and
successful implementation of strategic initiatives; the results of any pending
or future litigation, investigations or claims; the uncertainty associated with
the identification of and successful consummation and execution of external
corporate development initiatives and strategic partnering transactions; and
Allergan`s ability to obtain and successfully maintain a sufficient supply of
products to meet market demand in a timely manner. In addition, U.S. and
international economic conditions, including higher unemployment, financial
hardship, consumer confidence and debt levels, taxation, changes in interest and
currency exchange rates, international relations, capital and credit
availability, the status of financial markets and institutions, as well as the
general impact of the current economic crisis, can materially affect Allergan`s
results. Therefore, the reader is cautioned not to rely on these forward-looking
statements. Allergan expressly disclaims any intent or obligation to update
these forward-looking statements except as required to do so by law.

Additional information concerning the above-referenced risk factors and other
risk factors can be found in press releases issued by Allergan, as well as
Allergan`s public periodic filings with the Securities and Exchange Commission,
including the discussion under the heading "Risk Factors" in Allergan`s 2008
Form 10-K and Allergan`s Forms 10-Q for the quarters ended March 31, 2009 and
June 30, 2009. Copies of Allergan`s press releases and additional information
about Allergan is available at www.allergan.com or you can contact the Allergan
Investor Relations Department by calling 714-246-4636.

About Allergan, Inc.

Founded in 1950, Allergan, Inc., with headquarters in Irvine, California, is a
multi-specialty health care company that discovers, develops and commercializes
innovative pharmaceuticals, biologics and medical devices that enable people to
live life to its greatest potential - to see more clearly, move more freely,
express themselves more fully. The Company employs more than 8,000 people
worldwide and operates state-of-the-art R&D facilities and world-class
manufacturing plants. In addition to its discovery-to-development research
organization, Allergan has global marketing and sales capabilities with a
presence in more than 100 countries.

and Marks owned by Allergan, Inc.

ALLERGAN, INC.
Condensed Consolidated Statements of Earnings and
Reconciliation of Non-GAAP Adjustments
(Unaudited)

Three months ended
In millions, except per share amounts September 30, 2009 September 30, 2008

GAAP Non-GAAP Non-GAAP GAAP Non-GAAP Non-GAAP
Adjustments Adjustments
Revenues
Product net sales $1,127.8 $ -- $1,127.8 $1,081.9 $ -- $1,081.9
Other revenues 13.5 -- 13.5 16.3 -- 16.3
1,141.3 -- 1,141.3 1,098.2 -- 1,098.2

Operating costs and expenses
Cost of sales (excludes amortization of 190.2 (3.6) (a)(b) 186.6 194.7 (4.6) (n) 190.1
acquired intangible assets)
Selling, general and administrative 497.5 (27.2) (b)(c)(d)(e)(f) 470.3 440.4 (6.3) (n)(o)(p)(q) 434.1
Research and development 176.9 (10.2) (c)(g) 166.7 186.6 (6.4) (n)(r) 180.2
Amortization of acquired intangible assets 36.0 (30.5) (h) 5.5 39.3 (33.8) (h) 5.5
Restructuring charges 4.2 (4.2) (i) -- (0.2) 0.2 (i) --

Operating income 236.5 75.7 312.2 237.4 50.9 288.3

Non-operating income (expense)
Interest income 1.4 -- 1.4 6.5 -- 6.5
Interest expense (17.8) 6.0 (j) (11.8) (20.8) 6.3 (j) (14.5)
Unrealized (loss) gain on derivative instruments, net (2.7) 2.7 (k) -- 7.9 (7.9) (k) --
Gain on investments, net 24.6 (24.6) (l) -- -- -- --
Other, net (9.7) -- (9.7) 2.0 -- 2.0
(4.2) (15.9) (20.1) (4.4) (1.6) (6.0)

Earnings before income taxes 232.3 59.8 292.1 233.0 49.3 282.3

Provision for income taxes 53.1 23.4 (m) 76.5 67.0 14.3 (s) 81.3

Net earnings 179.2 36.4 215.6 166.0 35.0 201.0

Net earnings attributable to noncontrolling interest 0.2 -- 0.2 0.6 -- 0.6

Net earnings attributable to Allergan, Inc. $179.0 $36.4 $215.4 $165.4 $35.0 $200.4

Net earnings per share attributable to Allergan, Inc. stockholders:
Basic $ 0.59 $ 0.71 $ 0.54 $ 0.66
Diluted $ 0.58 $ 0.70 $ 0.54 $ 0.65

Weighted average number of common
shares outstanding:
Basic 303.5 303.5 303.8 303.8
Diluted 306.0 306.0 306.3 306.3

Selected ratios as a percentage of product net sales

Cost of sales (excludes amortization of acquired intangible assets) 16.9% 16.5% 18.0% 17.6%
Selling, general and administrative 44.1% 41.7% 40.7% 40.1%
Research and development 15.7% 14.8% 17.2% 16.7%

(a) Rollout of retention termination benefits and accelerated depreciation costs capitalized in inventory related to the phased closure of the Arklow, Ireland breast implant manufacturing facility of $2.8 million
(b) Samil fair market value inventory adjustment rollout of $0.8 million included in cost of sales and transaction related costs of $0.2 million included in selling, general and administrative expenses
(c) Compensation expense from stock option modifications related to the restructuring plan announced in February 2009 of $0.7 million, consisting of selling, general and administrative expenses of $0.5 million and research and development expenses of $0.2 million
(d) Accelerated depreciation costs related to the 2009 restructuring plan of $0.1 million
(e) External costs of approximately $8.4 million associated with responding to the U.S. Department of Justice (DOJ) subpoena announced in a company press release on March 3, 2008
(f) Contribution to Allergan Foundation of $18.0 million
(g) Upfront payment of $10.0 million for a license and development agreement with Pieris AG for technology that has not achieved regulatory approval
(h) Amortization of acquired intangible assets related to business combinations and asset acquisitions
(i) Net restructuring charges
(j) Non-cash interest expense associated with amortization of convertible debt discount
(k) Unrealized (loss) gain on the mark-to-market adjustment to derivative instruments
(l) Net gain on sale of investments
(m) Total tax effect for non-GAAP pre-tax adjustments and other income tax adjustments, consisting of the following amounts (in millions):

Tax effect
Non-GAAP pre-tax adjustments of $59.8 million $(16.7)
Foreign R&D tax credits received for tax years prior to 2008 (6.7)
$(23.4)

(n) One-time termination benefits and rollout of retention termination benefits and accelerated depreciation costs capitalized in inventory related to the phased closure of the Arklow, Ireland breast implant manufacturing facility of $4.8 million, consisting of cost of sales of $4.6 million, selling, general and administrative expenses of $0.1 million and research and development expenses of $0.1 million
(o) Integration and transition costs related to the acquisitions of Esprit and Cornéal of $0.1 million
(p) External costs of approximately $6.7 million associated with responding to DOJ subpoena and ACZONE transaction costs of $0.3 million
(q) Gain on sale of technology and fixed assets of $0.9 million related to the phased closure of the collagen manufacturing facility in Fremont, California
(r) Upfront payment of $6.3 million for in-licensing of Asterand technology that has not achieved regulatory approval
(s) Total tax effect for non-GAAP pre-tax adjustments.

"GAAP" refers to financial information presented in accordance with generally
accepted accounting principles in the United States.

This press release includes non-GAAP financial measures, as defined in
Regulation G promulgated by the Securities and Exchange Commission, with respect
to the three and nine months ended September 30, 2009 and September 30, 2008 and
with respect to anticipated results for the fourth quarter and full year of
2009. Allergan believes that its presentation of non-GAAP financial measures
provides useful supplementary information to investors regarding its operational
performance because it enhances an investor`s overall understanding of the
financial performance and prospects for the future of Allergan`s core business
activities by providing a basis for the comparison of results of core business
operations between current, past and future periods. The presentation of
historical non-GAAP financial measures is not meant to be considered in
isolation from or as a substitute for results as reported under GAAP.

In this press release, Allergan reported the non-GAAP financial measures
"non-GAAP earnings attributable to Allergan, Inc." and "non-GAAP basic and
diluted earnings per share attributable to Allergan, Inc. stockholders" as well
as "non-GAAP cost of sales," "non-GAAP selling, general and administrative
expenses," "non-GAAP research and development expenses," "non-GAAP amortization
of acquired intangible assets," "non-GAAP restructuring charges," "non-GAAP
operating income," "non-GAAP interest expense," "non-GAAP unrealized (loss) gain
on derivative instruments," "non-GAAP gain on investments, net," "non-GAAP
earnings before income taxes" and "non-GAAP provision for income taxes."
Allergan uses non-GAAP earnings to enhance the investor`s overall understanding
of the financial performance and prospects for the future of Allergan`s core
business activities. Non-GAAP earnings is one of the primary indicators
management uses for planning and forecasting in future periods, including
trending and analyzing the core operating performance of Allergan`s business
from period to period without the effect of the non-core business items
indicated. Management uses non-GAAP earnings to prepare operating budgets and
forecasts and to measure Allergan`s performance against those budgets and
forecasts on a corporate and segment level. Allergan also uses non-GAAP earnings
for evaluating management performance for compensation purposes.

Despite the importance of non-GAAP earnings in analyzing Allergan`s underlying
business, the budgeting and forecasting process and designing incentive
compensation, non-GAAP earnings has no standardized meaning defined by GAAP.
Therefore, non-GAAP earnings has limitations as an analytical tool, and should
not be considered in isolation, or as a substitute for analysis of Allergan`s
results as reported under GAAP. Some of these limitations are:

* it does not reflect cash expenditures, or future requirements, for
expenditures relating to restructurings, and certain acquisitions, including
severance and facility transition costs associated with acquisitions;
* it does not reflect gains or losses on the disposition of assets associated
with restructuring and business exit activities;
* it does not reflect the tax benefit or tax expense associated with the items
indicated;
* it does not reflect the impact on earnings of charges resulting from certain
matters Allergan considers not to be indicative of its on-going operations; and
* other companies in Allergan`s industry may calculate non-GAAP earnings
differently than it does, which may limit its usefulness as a comparative
measure.

Allergan compensates for these limitations by using non-GAAP earnings only to
supplement net earnings on a basis prepared in conformance with GAAP in order to
provide a more complete understanding of the factors and trends affecting its
business. Allergan strongly encourages investors to consider both net earnings
and cash flows determined under GAAP as compared to non-GAAP earnings, and to
perform their own analysis, as appropriate.

Allergan uses the financial measures non-GAAP basic and diluted earnings per
share attributable to Allergan, Inc. stockholders and non-GAAP earnings
attributable to Allergan, Inc. and its subcomponents non-GAAP cost of sales,
non-GAAP selling, general and administrative expenses, non-GAAP research and
development expenses, non-GAAP amortization of acquired intangible assets, and
non-GAAP provision for income taxes, for its full year 2009 guidance to provide
a more complete understanding of the cost components affecting its business.
Allergan includes these financial measures in the determination of non-GAAP
earnings to evaluate its management`s performance for compensation purposes and
to assist in comparing certain of its costs to its competitors` costs.These
non-GAAP cost measures do not take into account the non-core business items
removed in its calculations of non-GAAP earnings and non-GAAP basic and diluted
earnings per share and, therefore, are subject to the same limitations discussed
above. Allergan strongly encourages investors to consider both cost of sales,
selling, general and administrative expenses, research and development expenses,
amortization of acquired intangible assets and provision for income taxes
determined under GAAP as compared to the non-GAAP amounts included in this press
release.

In this press release, Allergan also reported sales performance using the
non-GAAP financial measure of constant currency sales. Constant currency sales
represent current period reported sales adjusted for the translation effect of
changes in average foreign exchange rates between the current period and the
corresponding period in the prior year. Allergan calculates the currency effect
by comparing adjusted current period reported amounts, calculated using the
monthly average foreign exchange rates for the corresponding period in the prior
year, to the actual current period reported amounts. Management refers to growth
rates at constant currency so that sales results can be viewed without the
impact of changing foreign currency exchange rates, thereby facilitating
period-to-period comparisons of Allergan`s sales. Generally, when the dollar
either strengthens or weakens against other currencies, the growth at constant
currency rates will be higher or lower, respectively, than growth reported at
actual exchange rates.

Reporting sales performance using constant currency sales has the limitation of
excluding currency effects from the comparison of sales results over various
periods, even though the effect of changing foreign currency exchange rates has
an actual effect on Allergan`s operating results. Investors should consider
these effects in their overall analysis of Allergan`s operating results.

ALLERGAN, INC.
Condensed Consolidated Statements of Earnings and
Reconciliation of Non-GAAP Adjustments
(Unaudited)

Nine months ended
In millions, except per share amounts September 30, 2009 September 30, 2008

GAAP Non-GAAP Non-GAAP GAAP Non-GAAP Non-GAAP
Adjustments Adjustments
Revenues
Product net sales $3,241.1 $ -- $3,241.1 $3,298.7 $ -- $3,298.7
Other revenues 38.2 -- 38.2 48.1 -- 48.1
3,279.3 -- 3,279.3 3,346.8 -- 3,346.8

Operating costs and expenses
Cost of sales (excludes amortization of 566.3 (20.2) (a)(c)(e) 546.1 574.4 (16.5) (p)(q)(r) 557.9
acquired intangible assets)
Selling, general and administrative 1,423.9 (97.2) (a)(b)(d)(e)(f)(g) 1,326.7 1,429.5 (18.1) (q)(r)(s)(t) 1,411.4
Research and development 520.6 (30.9) (a)(c)(h) 489.7 582.9 (20.5) (q)(u)(v) 562.4
Amortization of acquired intangible assets 110.1 (93.7) (i) 16.4 110.0 (94.2) (i) 15.8
Restructuring charges 47.3 (47.3) (j) -- 37.6 (37.6) (j) --

Operating income 611.1 289.3 900.4 612.4 186.9 799.3

Non-operating income (expense)
Interest income 5.6 -- 5.6 28.0 -- 28.0
Interest expense (55.7) 18.4 (k) (37.3) (63.3) 18.6 (k) (44.7)
Unrealized (loss) gain on derivative instruments, net (17.2) 17.2 (l) -- 4.4 (4.4) (l) --
Gain on investments, net 24.6 (24.6) (m) -- -- -- --
Other, net (15.7) 5.3 (n) (10.4) (9.1) -- (9.1)
(58.4) 16.3 (42.1) (40.0) 14.2 (25.8)

Earnings before income taxes 552.7 305.6 858.3 572.4 201.1 773.5

Provision for income taxes 151.7 93.7 (o) 245.4 154.7 60.9 (w) 215.6

Net earnings 401.0 211.9 612.9 417.7 140.2 557.9

Net earnings attributable to noncontrolling interest 1.2 -- 1.2 1.2 -- 1.2

Net earnings attributable to Allergan, Inc. $399.8 $211.9 $611.7 $416.5 $140.2 $556.7

Net earnings per share attributable to Allergan, Inc. stockholders:
Basic $ 1.32 $ 2.01 $ 1.37 $ 1.83
Diluted $ 1.31 $ 2.00 $ 1.36 $ 1.81

Weighted average number of common
shares outstanding:
Basic 303.7 303.7 304.4 304.4
Diluted 305.4 305.4 307.2 307.2

Selected ratios as a percentage of product net sales

Cost of sales (excludes amortization of acquired intangible assets) 17.5% 16.8% 17.4% 16.9%
Selling, general and administrative 43.9% 40.9% 43.3% 42.8%
Research and development 16.1% 15.1% 17.7% 17.0%

(a) Compensation expense from stock option modifications related to the restructuring plan announced in February 2009 of $78.3 million, consisting of cost of sales of $5.0 million, selling, general and administrative expenses of $52.5 million and research and development expenses of $20.8 million
(b) Asset impairments and accelerated depreciation costs related to the 2009 restructuring plan of $2.3 million
(c) Rollout of retention termination benefits and accelerated depreciation costs capitalized in inventory of $14.4 million included in cost of sales and one-time termination benefits of $0.1 million included in research and development expenses related to the phased closure of the Arklow, Ireland breast implant manufacturing facility
(d) External costs of approximately $23.6 million associated with responding to DOJ subpoena
(e) Samil fair market value inventory adjustment rollout of $0.8 million included in cost of sales and transaction related costs of $0.4 million included in selling, general and administrative expenses
(f) Integration and transition costs related to the acquisition of Cornéal of $0.4 million
(g) Contribution to Allergan Foundation of $18.0 million
(h) Upfront payment of $10.0 million for a license and development agreement with Pieris AG for technology that has not achieved regulatory approval
(i) Amortization of acquired intangible assets related to business combinations and asset acquisitions
(j) Net restructuring charges
(k) Non-cash interest expense associated with amortization of convertible debt discount
(l) Unrealized (loss) gain on the mark-to-market adjustment to derivative instruments
(m) Net gain on sale of investments
(n) Loss on extinguishment of convertible debt
(o) Total tax effect for non-GAAP pre-tax adjustments and other income tax adjustments, consisting of the following amounts (in millions):

Tax effect
Non-GAAP pre-tax adjustments of $305.6 million $(96.3)
Change in estimated taxes related to pre-acquisition periods associated with business combinations and uncertain tax positions included in prior year filings, and foreign R&D tax credits received for tax years prior to 2008 2.6
$(93.7)

(p) Esprit fair market value inventory rollout adjustment of $11.7 million
(q) One-time termination benefits, asset impairments and rollout of retention termination benefits and accelerated depreciation costs capitalized in inventory related to the phased closure of the Arklow, Ireland breast implant manufacturing facility of $5.8 million, consisting of cost of sales of $4.7 million, selling, general and administrative expenses of $0.8 million and research and development expenses of $0.3 million
(r) Integration and transition costs related to the acquisitions of Esprit and Cornéal, consisting of cost of sales of $0.1 million and selling, general and administrative expenses of $1.9 million
(s) External costs of approximately $15.7 million associated with responding to DOJ subpoena and ACZONE transaction costs of $0.6 million
(t) Gain on sale of technology and fixed assets of $0.9 million related to the phased closure of the collagen manufacturing facility in Fremont, California
(u) Upfront payment of $13.9 million for in-licensing of Canadian Sanctura product rights that have not achieved regulatory approval
(v) Upfront payment of $6.3 million for in-licensing of Asterand technology that has not achieved regulatory approval
(w) Total tax effect for non-GAAP pre-tax adjustments and other income tax adjustments, consisting of the following amounts (in millions):

Tax effect
Non-GAAP pre-tax adjustments of $201.1 million $(58.5)
US state and federal deferred tax benefit from legal entity integration of Esprit and Inamed (2.4)
$(60.9)

ALLERGAN, INC.
Condensed Consolidated Balance Sheets
(Unaudited)

in millions September 30, December 31,
2009 2008

Assets

Cash and equivalents $1,698.6 $1,110.4
Trade receivables, net 574.8 538.4
Inventories 229.5 262.5
Other current assets 318.3 359.3

Total current assets 2,821.2 2,270.6

Property, plant and equipment, net 785.2 775.4
Intangible assets, net 1,391.7 1,491.9
Goodwill 2,000.1 1,981.8
Other noncurrent assets 264.8 272.1

Total assets $7,263.0 $6,791.8

Liabilities and equity

Notes payable $ 16.3 $ 4.4
Accounts payable 229.6 173.9
Accrued expenses and income taxes 510.5 518.7

Total current liabilities 756.4 697.0

Long-term debt 1,492.8 1,570.5
Other liabilities 446.6 471.8

Equity:
Allergan, Inc. stockholders` equity 4,546.9 4,050.7
Noncontrolling interest 20.3 1.8
Total equity 4,567.2 4,052.5

Total liabilities and equity $7,263.0 $6,791.8

DSO 47 47

DOH 110 128

Cash and equivalents $1,698.6 $1,110.4
Total notes payable and long-term debt (1,509.1) (1,574.9)
Cash, net of debt $ 189.5 $ (464.5)

Debt-to-capital percentage 24.8% 28.0%

ALLERGAN, INC.
Reconciliation of Non-GAAP Earnings and Diluted Earnings Per
Share Attributable to Allergan, Inc. Stockholders
(Unaudited)

In millions, except per share amounts Three months ended
September 30, 2009 September 30, 2008

Net earnings attributable to Allergan, Inc. $ 179.0 $ 165.4

Non-GAAP pre-tax adjustments:
Net restructuring charges 4.2 (0.2 )
Amortization of acquired intangible assets 30.5 33.8
External costs associated with responding to DOJ subpoena 8.4 6.7
Upfront payment for in-licensing of Asterand technology that has not
achieved regulatory approval -- 6.3
ACZONE transaction costs -- 0.3
Cornéal integration and transition costs -- 0.2
Esprit integration and transition costs -- (0.1 )
Arklow rollout of retention termination benefits and accelerated
depreciation costs capitalized in inventory and other one-time
termination benefits 2.8 4.8
Non-cash interest expense associated with amortization of convertible
debt discount 6.0 6.3
Gain on sale of technology and fixed assets related to the phased
closure of the collagen manufacturing facility in Fremont, California -- (0.9 )
Samil fair market value inventory adjustment rollout and transaction
related costs 1.0 --
Net gain on sale of investments (24.6 ) --
Contribution to Allergan Foundation 18.0 --
Upfront payment for a license and development agreement with Pieris
AG for technology that has not achieved regulatory approval 10.0 --
Compensation expense from stock option modifications related to the
2009 restructuring plan 0.7 --
Accelerated depreciation costs related to the 2009 restructuring plan 0.1 --
Unrealized loss (gain) on derivative instruments 2.7 (7.9 )
238.8 214.7

Tax effect for above items (16.7 ) (14.3 )
Foreign R&D tax credits received for tax years prior to 2008 (6.7 ) --
Non-GAAP earnings attributable to Allergan, Inc. $ 215.4 $ 200.4

Weighted average number of shares issued 303.5 303.8

Net shares assumed issued using the treasury stock method for
options and non-vested equity shares and share units outstanding
during each period based on average market price 2.5 2.5

306.0 306.3

Diluted earnings per share attributable to Allergan, Inc. stockholders $ 0.58 $ 0.54

Non-GAAP earnings per share adjustments:
Net restructuring charges 0.01 --
Amortization of acquired intangible assets 0.06 0.07
External costs associated with responding to DOJ subpoena 0.02 0.01
Upfront payment for in-licensing of Asterand technology that has not
achieved regulatory approval -- 0.02
Arklow rollout of retention termination benefits and accelerated
depreciation costs capitalized in inventory and other one-time
termination benefits 0.01 0.02
Non-cash interest expense associated with amortization of convertible
debt discount 0.01 0.01
Net gain on sale of investments (0.05 ) --
Contribution to Allergan Foundation 0.04 --
Upfront payment for a license and development agreement with Pieris
AG for technology that has not achieved regulatory approval 0.03 --
Compensation expense from stock option modifications related to the
2009 restructuring plan -- --
Unrealized loss (gain) on derivative instruments 0.01 (0.02 )
Foreign R&D tax credits received for tax years prior to 2008 (0.02 ) --
Non-GAAP diluted earnings per share attributable to Allergan, Inc.
stockholders $ 0.70 $ 0.65
Year over year change 7.7%

ALLERGAN, INC.
Reconciliation of Non-GAAP Earnings and Diluted Earnings Per
Share Attributable to Allergan, Inc. Stockholders
(Unaudited)

In millions, except per share amounts Nine months ended
September 30, 2009 September 30, 2008

Net earnings attributable to Allergan, Inc. $ 399.8 $ 416.5

Non-GAAP pre-tax adjustments:
Net restructuring charges 47.3 37.6
Amortization of acquired intangible assets 93.7 94.2
External costs associated with responding to DOJ subpoena 23.6 15.7
Upfront payment for in-licensing of Canadian Sanctura
products rights that have not achieved regulatory
approval -- 13.9
Upfront payment for in-licensing of Asterand
technology that has not achieved regulatory approval -- 6.3
ACZONE transaction costs -- 0.6
Cornéal integration and transition costs 0.4 1.3
Esprit integration and transition costs -- 0.7
Esprit fair market value inventory adjustment rollout -- 11.7
Arklow rollout of retention termination benefits and
accelerated depreciation costs capitalized in
inventory, and other one-time termination benefits
and asset impairments 14.5 5.8
Non-cash interest expense associated with
amortization of convertible debt discount 18.4 18.6
Gain on sale of technology and fixed assets related
to the phased closure of the collagen manufacturing
facility in Fremont, California -- (0.9 )
Loss on extinguishment of convertible debt 5.3 --
Net gain on sale of investments (24.6 ) --
Contribution to Allergan Foundation 18.0 --
Upfront payment for a license and development
agreement with Pieris AG for technology that has not
achieved regulatory approval 10.0 --
Samil fair market value inventory adjustment rollout
and transaction related costs 1.2 --
Compensation expense from stock option modifications
related to the 2009 restructuring plan 78.3 --
Asset impairments and accelerated depreciation costs
related to the 2009 restructuring plan 2.3 --
Unrealized loss (gain) on derivative instruments 17.2 (4.4 )

705.4 617.6

Tax effect for above items (96.3 ) (58.5 )
Change in estimated taxes related to pre-acquisition periods associated
with business combinations and uncertain tax positions included in
prior year filings, and foreign R&D tax credits received for tax years
prior to 2008 2.6 --
US state and federal deferred tax benefit from legal entity integration of
Esprit and Inamed -- (2.4 )

Non-GAAP earnings attributable to Allergan, Inc. $ 611.7 $ 556.7

Weighted average number of shares issued 303.7 304.4

Net shares assumed issued using the treasury stock method for
options and non-vested equity shares and share units outstanding
during each period based on average market price 1.7 2.8

305.4 307.2

Diluted earnings per share attributable to Allergan, Inc. stockholders $ 1.31 $ 1.36

Non-GAAP earnings per share adjustments:
Net restructuring charges 0.12 0.11
Amortization of acquired intangible assets 0.20 0.20
External costs associated with responding to DOJ subpoena 0.05 0.03
Upfront payment for in-licensing of Canadian Sanctura products
rights that have not achieved regulatory approval -- 0.03
Upfront payment for in-licensing of Asterand technology that
has not achieved regulatory approval -- 0.02
Esprit fair market value inventory adjustment rollout -- 0.03
Arklow rollout of retention termination benefits and
accelerated depreciation costs capitalized in inventory, and
other one-time termination benefits and asset impairments 0.04 0.02
Non-cash interest expense associated with amortization of
convertible debt discount 0.04 0.03
Loss on extinguishment of convertible debt 0.01 --
Net gain on sale of investments (0.05 ) --
Contribution to Allergan Foundation 0.04 --
Upfront payment for a license and development agreement with
Pieris AG for technology that has not achieved regulatory
approval 0.03 --
Compensation expense from stock option modifications related
to the 2009 restructuring plan 0.17 --
Unrealized loss (gain) on derivative instruments 0.03 (0.01 )
Change in estimated taxes related to pre-acquisition periods
associated with business combinations and uncertain tax
positions included in prior year filings, and foreign R&D tax
credits received for tax years prior to 2008. 0.01 --
US state and federal deferred tax benefit from legal entity
integration of Esprit and Inamed -- (0.01 )

Non-GAAP diluted earnings per share attributable to Allergan, Inc. stockholders $ 2.00 $ 1.81

Year over year change 10.5%

ALLERGAN, INC.
Supplemental Non-GAAP Information
(Unaudited)

Three months ended
September 30, September 30, $ change in net sales Percent change in net sales
2009 2008 Total Performance Currency Total Performance Currency
in millions
Eye Care Pharmaceuticals $ 535.1 $ 510.4 $ 24.7 $ 41.0 $ (16.3 ) 4.8 % 8.0 % (3.2 )%
Botox/Neuromodulator 327.8 318.4 9.4 18.4 (9.0 ) 3.0 % 5.8 % (2.8 )%
Skin Care 62.9 26.7 36.2 36.3 (0.1 ) 135.6 % 136.0 % (0.4 )%
Urologics 14.8 17.0 (2.2 ) (2.2 ) -- (12.9 )% (12.9 )% --
Total Specialty Pharmaceuticals 940.6 872.5 68.1 93.5 (25.4 ) 7.8 % 10.7 % (2.9 )%

Breast Aesthetics 69.0 72.1 (3.1 ) (1.3 ) (1.8 ) (4.3 )% (1.8 )% (2.5 )%
Obesity Intervention 64.5 79.0 (14.5 ) (13.2 ) (1.3 ) (18.4 )% (16.7 )% (1.7 )%
Facial Aesthetics 53.7 58.3 (4.6 ) (2.9 ) (1.7 ) (7.9 )% (5.0 )% (2.9 )%
Total Medical Devices 187.2 209.4 (22.2 ) (17.4 ) (4.8 ) (10.6 )% (8.3 )% (2.3 )%

Product net sales $1,127.8 $1,081.9 $ 45.9 $ 76.1 $ (30.2 ) 4.2 % 7.0 % (2.8 )%

Alphagan P, Alphagan, and Combigan $ 104.9 $ 107.1 $ (2.2 ) $ 0.7 $ (2.9 ) (2.0 )% 0.7 % (2.7 )%
Lumigan Franchise 115.5 107.8 7.7 12.3 (4.6 ) 7.2 % 11.4 % (4.2 )%
Other Glaucoma 2.8 3.7 (0.9 ) (0.8 ) (0.1 ) (26.0 )% (20.5 )% (5.5 )%
Restasis 128.5 107.1 21.4 21.7 (0.3 ) 19.9 % 20.2 % (0.3 )%
Sanctura Franchise 14.7 17.0 (2.3 ) (2.3 ) -- (13.0 )% (13.0 )% --
Latisse 22.3 -- 22.3 22.3 -- -- -- --

Domestic 64.9 % 64.1 %
International 35.1 % 35.9 %

ALLERGAN, INC.
Supplemental Non-GAAP Information
(Unaudited)

Nine months ended
September 30, September 30, $ change in net sales Percent change in net sales
2009 2008 Total Performance Currency Total Performance Currency
in millions
Eye Care Pharmaceuticals $1,534.7 $1,542.2 $ (7.5 ) $ 67.9 $ (75.4 ) (0.5 )% 4.4 % (4.9 )%
Botox/Neuromodulator 961.9 981.7 (19.8 ) 30.1 (49.9 ) (2.0 )% 3.1 % (5.1 )%
Skin Care 143.5 81.0 62.5 63.0 (0.5 ) 77.2 % 77.8 % (0.6 )%
Urologics 48.6 51.6 (3.0 ) (3.0 ) -- (5.8 )% (5.8 )% --
Total Specialty Pharmaceuticals 2,688.7 2,656.5 32.2 158.0 (125.8 ) 1.2 % 5.9 % (4.7 )%

Breast Aesthetics 209.7 239.1 (29.4 ) (19.0 ) (10.4 ) (12.3 )% (7.9 )% (4.4 )%
Obesity Intervention 190.6 227.5 (36.9 ) (28.6 ) (8.3 ) (16.2 )% (12.6 )% (3.6 )%
Facial Aesthetics 152.1 175.6 (23.5 ) (13.0 ) (10.5 ) (13.4 )% (7.4 )% (6.0 )%
Total Medical Devices 552.4 642.2 (89.8 ) (60.6 ) (29.2 ) (14.0 )% (9.4 )% (4.6 )%

Product net sales $3,241.1 $3,298.7 $ (57.6 ) $ 97.4 $ (155.0 ) (1.7 )% 3.0 % (4.7 )%

Alphagan P, Alphagan, and Combigan $311.8 $ 307.4 $ 4.4 $ 18.9 $ (14.5 ) 1.4 % 6.1 % (4.7 )%
Lumigan Franchise 333.9 327.8 6.1 28.5 (22.4 ) 1.9 % 8.7 % (6.8 )%
Other Glaucoma 8.9 11.9 (3.0 ) (1.9 ) (1.1 ) (25.4 )% (15.9 )% (9.5 )%
Restasis 359.6 327.3 32.3 32.9 (0.6 ) 9.8 % 10.0 % (0.2 )%
Sanctura Franchise 48.6 51.2 (2.6 ) (2.6 ) -- (5.1 )% (5.1 )% --
Latisse 47.7 -- 47.7 47.7 -- -- -- --

Domestic 65.8 % 63.8 %
International 34.2 % 36.2 %

ALLERGAN, INC.
Reconciliation of GAAP Diluted Earnings Per Share Guidance
To Non-GAAP Diluted Earnings Per Share Guidance
(Unaudited)

Fourth Quarter 2009
Low High

GAAP diluted earnings per share attributable to Allergan, Inc. stockholders guidance (a) $ 0.68 $ 0.70

Amortization of acquired intangible assets 0.06 0.06
Non-cash interest expense associated with amortization of convertible debt discount 0.01 0.01
Non-GAAP diluted earnings per share guidance $ 0.75 $ 0.77

Full Year 2009
Low High

GAAP diluted earnings per share attributable to Allergan, Inc. stockholders guidance (a) $ 1.98 $ 2.00

Net restructuring charges 0.12 0.12
External costs associated with responding to DOJ subpoena 0.05 0.05
Arklow rollout of termination benefits and accelerated depreciation costs capitalized in inventory and other one-time termination benefits 0.04 0.04
Loss on extinguishment of convertible debt 0.01 0.01
Unrealized loss on derivative instruments 0.03 0.03
Compensation expense from stock option modifications related to the 2009 restructuring plan 0.17 0.17
Amortization of acquired intangible assets 0.27 0.27
Non-cash interest expense associated with amortization of convertible debt discount 0.05 0.05
Net gain on sale of investments (0.05 ) (0.05 )
Contribution to Allergan Foundation 0.04 0.04
Upfront payment for a license and development agreement with Pieris AG for technology that has not achieved regulatory approval 0.03 0.03
Change in estimated taxes related to pre-acquisition periods associated with business combinations and uncertain tax positions included in prior year filings, and foreign R&D tax credits for tax years prior to 2008 0.01 0.01
Non-GAAP diluted earnings per share guidance $ 2.75 $ 2.77

(a) GAAP diluted earnings per share guidance excludes any potential impact of future unrealized gains or losses on derivative instruments, restructuring charges (including, without limitation, the impact of the phased closure of the Arklow, Ireland facility and the 2009 restructuring plan), external costs associated with responding to the DOJ subpoena, Samil transaction related costs and compensation expense from stock option modifications related to the 2009 restructuring plan that may occur but that are not
currently known or determinable.

Allergan Contacts
Jim Hindman (714) 246-4636 (investors)
Joann Bradley (714) 246-4766 (investors)
Emil Schultz (714) 246-4474 (investors)
Caroline Van Hove (714) 246-5134 (media)

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