Allergan Reports Third Quarter 2012 Operating Results

  Allergan Reports Third Quarter 2012 Operating Results

Business Wire

IRVINE, Calif. -- October 30, 2012

Allergan, Inc. (NYSE: AGN) today announced operating results for the quarter
ended September 30, 2012. Allergan also announced that its Board of Directors
has declared a third quarter dividend of $0.05 per share, payable on December
12, 2012 to stockholders of record on November 21, 2012.

Operating Results Attributable to Stockholders

For the quarter ended September 30, 2012:

  *Allergan reported $0.82 diluted earnings per share attributable to
    stockholders compared to $0.81 diluted earnings per share attributable to
    stockholders for the third quarter of 2011.
  *Allergan reported $1.06 non-GAAP diluted earnings per share attributable
    to stockholders compared to $0.92 non-GAAP diluted earnings per share
    attributable to stockholders for the third quarter of 2011, a 15.2 percent
    increase.

Product Sales

For the quarter ended September 30, 2012:

  *Allergan reported $1,391.1 million total product net sales. Total product
    net sales increased 6.1 percent compared to total product net sales in the
    third quarter of 2011. On a constant currency basis, total product net
    sales increased 9.4 percent compared to total product net sales in the
    third quarter of 2011.

       *Total specialty pharmaceuticals net sales increased 8.1 percent, or
         11.4 percent on a constant currency basis, compared to total
         specialty pharmaceuticals net sales in the third quarter of 2011.
       *Total medical devices net sales decreased 4.0 percent, or 0.3 percent
         on a constant currency basis, compared to total medical devices net
         sales in the third quarter of 2011.

“In the third quarter, Allergan again delivered solid earnings growth in spite
of the strong U.S. Dollar relative to virtually all major currencies,” said
David E.I. Pyott, Allergan’s Chairman of the Board, President and Chief
Executive Officer. “In addition, we were pleased to mark the opening of our
new R&D facility in New Jersey, as well as to announce the expansion of our
relationship with Molecular Partners.”

Product and Pipeline Update

During the third quarter of 2012:

  *On August 21, 2012, Allergan and Molecular Partners AG announced that they
    have significantly expanded their existing relationship by entering into
    two separate agreements to discover, develop, and commercialize
    proprietary therapeutic DARPin® products for the treatment of serious
    ophthalmic diseases. The first agreement is an exclusive license agreement
    for the design, development and commercialization of a potent dual
    anti-VEGF-A/PDGF-B DARPin® (“MP0260”) and its corresponding backups for
    the treatment of exudative (wet) age-related macular degeneration (AMD)
    and related conditions. The second agreement is an exclusive discovery
    alliance agreement under which the parties are collaborating to design and
    develop DARPin® products against selected targets that are implicated in
    causing serious diseases of the eye.
  *On September 4, 2012, Allergan marked the opening of the company’s first
    large facility in the state of New Jersey. The new Research & Development
    Center, which will be specifically focused on clinical development, is a
    significant expansion of the company’s footprint in New Jersey and is
    expected to eventually house several hundred employees.
  *On September 28, 2012, Allergan received approval from the Japanese
    Ministry of Health, Labor and Welfare (MHLW) for the NATRELLE® line of
    round silicone gel-filled breast implants and Style 133 tissue expanders.
    Allergan is the first company to receive approval from MHLW in Japan for
    breast implants for women undergoing breast augmentation, revision or
    reconstructive surgery.

Following the end of the third quarter of 2012:

  *Allergan is exploring strategic options for maximizing the value of its
    obesity intervention business, including among other things, a potential
    sale of that business unit. To the extent Allergan elects to pursue such a
    strategic option, the company intends to offset any potential earnings
    dilution related to the transaction.
  *On October 1, 2012, U.S. District Judge Andrew J. Guilford entered an
    order providing that the injunction against Merz Aesthetics prohibiting it
    from, among other things, selling or soliciting purchases of its product
    Xeomin® in the facial aesthetics market, shall remain in place until
    January 9, 2013. The order also provides that the terms of the injunction
    that restrict Merz Aesthetics’ ability to sell and solicit purchases of
    its dermal fillers, as well as the terms that restrict Merz
    Pharmaceuticals’ ability to sell and solicit purchases of Xeomin® in the
    therapeutic market, shall remain in place until November 1, 2012.
  *On October 12, 2012, the U.S. District Court in Santa Ana, California
    denied a motion by Athena Cosmetics, Inc. for reconsideration of the
    court’s decision to grant Allergan’s motion for summary judgment against
    Athena Cosmetics, Inc. on our unfair competition cause of action. In July
    2012, the court granted Allergan’s summary judgment motion, finding that
    Athena’s Revitalash® line of products are drugs sold without approval and
    are therefore misbranded in violation of California law as well as the
    federal statutes which California law incorporates.

Outlook

For the full year of 2012, Allergan expects:

  *Total product net sales between $5,695 million and $5,770 million.

       *Total specialty pharmaceuticals net sales between $4,775 million and
         $4,830 million.
       *Total medical devices net sales between $920 million and $940
         million.
       *ALPHAGAN®  franchise product net sales between $440 million and $450
         million.
       *LUMIGAN®  franchise product net  sales between $600 million and $620
         million.
       *RESTASIS® product net  sales between $780 million and $800 million.
       *BOTOX® product net  sales between $1,760 million and $1,800 million.
       *LATISSE® product net  sales at approximately $100 million.
       *Breast aesthetics  product net  sales between $380 million and $390
         million.
       *Obesity intervention product net  sales at approximately $160
         million.
       *Facial aesthetics product net  sales between $380 million and $390
         million.

  *Non-GAAP cost of sales to product net sales ratio at approximately 14%.
  *Non-GAAP other revenue at approximately $90 million.
  *Non-GAAP selling, general and administrative expenses to product net sales
    ratio at approximately 39%.
  *Non-GAAP research and development expenses to product net sales ratio at
    approximately 16%.
  *Non-GAAP amortization of acquired intangible assets at approximately $25
    million. This expectation excludes the amortization of certain acquired
    intangible assets associated with business combinations, asset purchases
    and product licenses.
  *Non-GAAP diluted earnings per share attributable to stockholders between
    $4.17 and $4.19.
  *Diluted shares outstanding at approximately 308 million.
  *Effective tax rate on non-GAAP earnings between 27% and 28%.

For the fourth quarter of 2012, Allergan expects:

  *Total product net sales between $1,470 million and $1,545 million.
  *Non-GAAP diluted earnings per share attributable to stockholders between
    $1.18 and $1.20.

In this press release, Allergan reports certain historical and expected
non-GAAP results, including earnings attributable to Allergan, Inc., non-GAAP
basic and diluted earnings per share attributable to stockholders as well as
non-GAAP other revenue, 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 impairment of intangible
assets and related costs, non-GAAP restructuring charges, non-GAAP interest
expense, non-GAAP other, net, non-GAAP earnings before income taxes, non-GAAP
provision for income taxes, non-GAAP net earnings and non-GAAP net sales
reported in constant currency. Non-GAAP financial measures are reconciled to
the most directly comparable GAAP financial measure in the financial tables of
this press release and the accompanying footnotes. The information that
accompanies the financial tables of this press release also includes an
explanation of why Allergan uses these non-GAAP financial measures, certain
limitations associated with the use of these non-GAAP financial measures, the
manner in which Allergan management compensates for those limitations, and the
reasons why Allergan management believes that these non-GAAP financial
measures provide useful information to investors.

Forward-Looking Statements

This press release contains forward-looking statements, including but not
limited to the statements by Mr. Pyott and other statements regarding product
development, external corporate development initiatives and strategic
partnering transactions, market potential, expected growth and regulatory
approvals 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. 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 research and development and regulatory processes;
domestic and foreign health care and cost containment reforms, including
government pricing, tax 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, fluctuations
or devaluations in the value of sovereign government debt, as well as the
general impact of continued economic volatility, 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 U.S. Securities and Exchange
Commission, including the discussion under the heading “Risk Factors” in
Allergan’s 2011 Annual Report on Form 10-K and subsequent Quarterly Reports on
Form 10-Q. Copies of Allergan’s press releases and additional information
about Allergan are available at www.allergan.com or you can contact the
Allergan Investor Relations Department by calling 714-246-4636.

About Allergan, Inc.

Allergan is a multi-specialty health care company established more than 60
years ago with a commitment to uncover the best of science and develop and
deliver innovative and meaningful treatments to help people reach their life’s
potential. Today, we have approximately 10,500 highly dedicated and talented
employees, global marketing and sales capabilities with a presence in more
than 100 countries, a rich and ever-evolving portfolio of pharmaceuticals,
biologics, medical devices and over-the-counter consumer products, and
state-of-the-art resources in R&D, manufacturing and safety surveillance that
help millions of patients see more clearly, move more freely and express
themselves more fully. From our beginnings as an eye care company to our focus
today on several medical specialties, including eye care, neurosciences,
medical aesthetics, medical dermatology, breast aesthetics, obesity
intervention and urologics, Allergan is proud to celebrate more than 60 years
of medical advances and proud to support the patients and physicians who rely
on our products and the employees and communities in which we live and work.
For more information regarding Allergan, go to: www.allergan.com.

® and ™ marks owned by Allergan, Inc.

DARPin® is a registered trademark of Molecular Partners AG

Xeomin® is a registered trademark of Merz Pharma Gmbh & Co.

Revitalash®  is a registered trademark of Athena Cosmetics, Inc.

ALLERGAN, INC.
Condensed Consolidated Statements of Earnings and
Reconciliation of Non-GAAP Adjustments
(Unaudited)
                
                   Three months ended
In millions,
except per         September 30, 2012                                           September 30, 2011
share amounts
                                                                                                                   
                   GAAP            Non-GAAP                      Non-GAAP          GAAP            Non-GAAP                   Non-GAAP
                                   Adjustments                                                     Adjustments
Revenues                                                                                                     
Product net        $ 1,391.1       $ --                         $ 1,391.1         $ 1,311.1       $ --                       $ 1,311.1
sales
Other revenues      22.8          --                           22.8            17.3          --                        17.3    
                     1,413.9         --                            1,413.9           1,328.4         --                         1,328.4
                                                                                                                              
Operating
costs and
expenses
Cost of sales
(excludes
amortization
of                   188.8           --                            188.8             188.1           (0.4  )   ^(i)             187.7

acquired
intangible
assets)
Selling,
general and          540.8           (3.6  )   ^(a)(b)(c)(d)       537.2             538.5           (21.4 )   ^(j)(k)(l)       517.1
administrative
Research and         293.3           (62.5 )   ^(d)                230.8             221.3           --                         221.3
development
Amortization
of acquired          33.2            (27.4 )   ^(e)                5.8               31.9            (26.0 )   ^(e)             5.9
intangible
assets
Impairment of
intangible           --              --                            --                4.3             (4.3  )   ^(m)             --
assets and
related costs
Restructuring
charges             3.8           (3.8  )   ^(f)               --              (0.1    )      0.1      ^(f)            --      
(reversal)
                                                                                                                              
Operating            354.0           97.3                          451.3             344.4           52.0                       396.4
income
                                                                                                                              
Non-operating
income
(expense)
Interest             1.9             --                            1.9               1.8             --                         1.8
income
Interest             (15.9   )       --                            (15.9   )         (15.2   )       --                         (15.2   )
expense
Other, net          (9.2    )      7.1       ^(g)               (2.1    )        25.8         (17.3   )   ^(n)(o)         8.5     
                    (23.2   )      7.1                          (16.1   )        12.4          (17.3 )                  (4.9    )
                                                                                                                              
Earnings
before income        330.8           104.4                         435.2             356.8           34.7                       391.5
taxes
                                                                                                                              
Provision for       80.2          28.8      ^(h)               109.0           105.8         0.4       ^(p)            106.2   
income taxes
                                                                                                                              
Net earnings         250.6           75.6                          326.2             251.0           34.3                       285.3
                                                                                                                              
Net earnings
attributable
to                  1.2           --                           1.2             1.2           --                        1.2     
noncontrolling
interest
                                                                                                                              
Net earnings
attributable       $ 249.4        $ 75.6                        $ 325.0          $ 249.8        $ 34.3                     $ 284.1   
to Allergan,
Inc.
                                                                                                                              
Net earnings
per share
attributable
to

Allergan, Inc.
stockholders:
Basic              $ 0.83                                       $ 1.08           $ 0.82                                    $ 0.93    
Diluted            $ 0.82                                       $ 1.06           $ 0.81                                    $ 0.92    
                                                                                                                              
Weighted
average number
of common

shares
outstanding:
Basic                300.1                                        300.1             304.2                                     304.2
Diluted              305.3                                        305.3             309.8                                     309.8
                                                                                                                              
Selected
ratios as a
percentage of
product net
sales
                                                                                                                              
Cost of sales
(excludes
amortization         13.6    %                                     13.6    %         14.3    %                                  14.3    %
of acquired
intangible
assets)
Selling,
general and          38.9    %                                     38.6    %         41.1    %                                  39.4    %
administrative
Research and         21.1    %                                     16.6    %         16.9    %                                  16.9    %
development
                                                                                                                                        

(a)     Expenses from changes in fair value of contingent consideration of
            $2.4 million associated with business combinations
            External costs of $0.5 million for stockholder derivative
(b)         litigation costs associated with the U.S. Department of Justice
            (DOJ) settlement announced in September 2010
            Expenses related to the realignment of various business functions
(c)         and the restructuring of the obesity intervention business of $0.6
            million
            Upfront licensing fees of $62.5 million included in research and
            development expenses associated with the license and collaboration
(d)         agreements with Molecular Partners AG for technology that has not
            achieved regulatory approval and related transaction costs of $0.1
            million included in selling, general and administrative expenses
(e)         Amortization of certain acquired intangible assets related to
            business combinations, asset acquisitions and product licenses
(f)         Net restructuring charges (reversal)
(g)         Unrealized loss on the mark-to-market adjustment to derivative
            instruments
(h)         Total tax effect for non-GAAP pre-tax adjustments
            Fair market value inventory adjustment rollout associated with the
(i)         purchase of a distributor’s business in South Africa related to
            Allergan’s products
(j)         Transaction costs of $0.6 million associated with business
            combinations
            External costs of $0.8 million for stockholder derivative
(k)         litigation costs associated with the DOJ settlement announced in
            September 2010
            Milestone payment of $20.0 million for the United States Food and
(l)         Drug Administration (FDA) acceptance of an New Drug Application
            (NDA) filing for technology associated with a collaboration and
            co-promotion agreement with MAP Pharmaceuticals, Inc.
            Impairment of an in-process research and development asset related
(m)         to a tissue reinforcement technology acquired in connection with
            the 2010 acquisition of Serica Technologies, Inc.
(n)         Unrealized gain on the mark-to-market adjustment to derivative
            instruments of $16.8 million
(o)         Gain on sale of investments of $0.5 million
            Total tax effect for non-GAAP pre-tax adjustments and other income
(p)         tax adjustments, consisting of the following amounts (in
            millions):

                                                                  Tax effect
Non-GAAP pre-tax adjustments of $34.7 million                       $  (10.2 )
Change in estimated tax benefit associated with the upfront            11.7
licensing fee paid to Molecular Partners AG
Change in estimated taxes related to uncertain tax positions          (1.9  )
and tax credits included in prior year filings
                                                                    $  (0.4  )

“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 U.S. Securities and Exchange Commission, with
respect to the three and nine months ended September 30, 2012 and September
30, 2011 and with respect to anticipated results for the fourth quarter and
full year of 2012. 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 basic and diluted earnings per share attributable to Allergan, Inc.
stockholders” and “non-GAAP earnings attributable to Allergan, Inc.” and its
subcomponents “non-GAAP other revenue,” “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 impairment of intangible assets and related costs,” ”non-GAAP
restructuring charges,” “non-GAAP operating income,” “non-GAAP interest
expense,” “non-GAAP other, net,” “non-GAAP earnings before income taxes,”
“non-GAAP provision for income taxes,” and “non-GAAP net earnings.” 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, legal settlements, and certain
    acquisitions, including severance and facility transition costs associated
    with acquisitions;
  *it does not reflect asset impairment charges or 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 or income 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.

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         September 30, 2012                                           September 30, 2011
share amounts
                                                                                                                         
                   GAAP            Non-GAAP                      Non-GAAP          GAAP            Non-GAAP                         Non-GAAP
                                   Adjustments                                                     Adjustments
Revenues
Product net        $ 4,224.2       $ --                         $ 4,224.2         $ 3,964.3       $ --                             $ 3,964.3
sales
Other revenues      73.0          --                           73.0            52.5          --                              52.5    
                     4,297.2         --                            4,297.2           4,016.8         --                               4,016.8
                                                                                                                                    
Operating
costs and
expenses
Cost of sales
(excludes
amortization         586.3           (0.4  )   ^(a)(b)             585.9             566.7           (0.4  )   ^(k)                   566.3
of acquired
intangible
assets)
Selling,
general and          1,710.5         (26.4 )   ^(b)(c)(d)(e)       1,684.1           1,694.7       (80.4   )   ^(l)(m)(n)(o)(p)       1,614.3
administrative
Research and         750.3           (62.8 )   ^(d)(e)             687.5             676.4         (45.0   )   ^(n)                   631.4
development
Amortization
of acquired          98.1            (80.4 )   ^(f)                17.7              95.6            (77.9 )   ^(f)                   17.7
intangible
assets
Impairment of
intangible           --              --                            --                23.7          (23.7   )   ^(o)(q)(r)             --
assets and
related costs
Restructuring       4.7           (4.7  )   ^(g)               --              4.6           (4.6  )   ^(g)                  --      
charges
                                                                                                                                    
Operating            1,147.3         174.7                         1,322.0           955.1           232.0                            1,187.1
income
                                                                                                                                    
Non-operating
income
(expense)
Interest             4.8             --                            4.8               5.6             --                               5.6
income
Interest             (48.8   )       0.8       ^(h)                (48.0   )         (55.1   )       7.3       ^(s)                   (47.8   )
expense
Other, net          (19.3   )      15.2      ^(i)               (4.1    )        10.4         (13.4   )   ^(t)(u)               (3.0    )
                    (63.3   )      16.0                        (47.3   )        (39.1   )      (6.1  )                        (45.2   )
                                                                                                                                    
Earnings
before income        1,084.0         190.7                         1,274.7           916.0           225.9                            1,141.9
taxes
                                                                                                                                    
Provision for       306.7         44.2      ^(j)               350.9           257.6        59.9        ^(v)                  317.5   
income taxes
                                                                                                                                    
Net earnings         777.3           146.5                         923.8             658.4           166.0                            824.4
                                                                                                                                    
Net earnings
attributable
to                  2.7           --                           2.7             3.7           --                              3.7     
noncontrolling
interest
                                                                                                                                    
Net earnings
attributable       $ 774.6        $ 146.5                       $ 921.1          $ 654.7        $ 166.0                          $ 820.7   
to Allergan,
Inc.
                                                                                                                                    
Net earnings
per share
attributable
to

Allergan, Inc.
stockholders:
Basic              $ 2.56                                       $ 3.05           $ 2.15                                          $ 2.70    
Diluted            $ 2.52                                       $ 2.99           $ 2.11                                          $ 2.64    
                                                                                                                                    
Weighted
average number
of common

shares
outstanding:
Basic                302.1                                        302.1             304.4                                           304.4
Diluted              307.7                                        307.7             310.3                                           310.3
                                                                                                                                    
Selected
ratios as a
percentage of
product net
sales
                                                                                                                                    
Cost of sales
(excludes
amortization         13.9    %                                     13.9    %         14.3    %                                        14.3    %
of acquired
intangible
assets)
Selling,
general and          40.5    %                                     39.9    %         42.7    %                                        40.7    %
administrative
Research and         17.8    %                                     16.3    %         17.1    %                                        15.9    %
development
                                                                                                                                              

          Fair market value inventory adjustment rollout of $0.3 million
(a)    associated with the purchase of a distributor’s business in Russia
          related to Allergan’s products
          Expenses from changes in fair value of contingent consideration of
          $15.8 million and integration and transaction costs of $0.6 million
(b)       associated with business combinations, consisting of cost of sales
          of $0.1 million and selling, general and administrative expenses of
          $0.5 million
          Aggregate charges of $8.9 million for external costs for stockholder
(c)       derivative litigation associated with the DOJ settlement announced
          in September 2010 and other legal contingency expenses
          Expenses related to the realignment of various business functions
          and the restructuring of the obesity intervention business of $1.4
(d)       million, consisting of selling, general and administrative expenses
          of $1.1 million and research and development expenses of $0.3
          million
          Upfront licensing fees of $62.5 million included in research and
          development expenses associated with the license and collaboration
(e)       agreements with Molecular Partners AG for technology that has not
          achieved regulatory approval and related transaction costs of $0.1
          million included in selling, general and administrative expenses
(f)       Amortization of certain acquired intangible assets related to
          business combinations, asset acquisitions and product licenses
(g)       Net restructuring charges
(h)       Interest expense associated with changes in estimated taxes related
          to uncertain tax positions included in prior year filings
(i)       Unrealized loss on the mark-to-market adjustment to derivative
          instruments
(j)       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 $190.7 million                      $  (50.9 )
Change in estimated taxes related to uncertain tax positions          6.7   
included in prior year filings
                                                                    $  (44.2 )

          Fair market value inventory adjustment rollout associated with the
(k)    purchase of a distributor’s business in South Africa related to
          Allergan’s products
          Expenses from changes in fair value of contingent consideration of
(l)       $2.3 million and integration and transaction costs of $1.5 million
          associated with business combinations
(m)       External costs of $3.1 million for stockholder derivative litigation
          costs associated with the DOJ settlement announced in September 2010
          Upfront licensing fee of $45.0 million included in research and
          development expenses associated with a license and collaboration
(n)       agreement with Molecular Partners AG for technology that has not
          achieved regulatory approval and related transaction costs of $0.1
          million included in selling, general and administrative expenses
          Fixed asset impairment of $2.2 million and a gain of $9.4 million
          from the substantially complete liquidation of Allergan’s investment
          in a foreign subsidiary included in selling, general and
(o)       administrative expenses, and intangible asset impairment of $16.1
          million resulting from the discontinued development of the
          Easyband^TM Remote Adjustable Gastric Band System, a technology
          acquired by Allergan in the 2007 EndoArt SA acquisition
          Upfront payment of $60.0 million and subsequent milestone payment of
          $20.0 million for the FDA acceptance of an NDA filing for technology
(p)       that has not achieved regulatory approval associated with a
          collaboration and co-promotion agreement with MAP Pharmaceuticals,
          Inc. and related transaction costs of $0.6 million
          Impairment of an in-process research and development asset related
(q)       to a tissue reinforcement technology acquired in connection with the
          2010 acquisition of Serica Technologies, Inc. of $4.3 million
          Additional costs of $3.3 million for the termination of a
(r)       third-party agreement primarily related to the promotion of Sanctura
          XR^® associated with the impairment of the Sanctura^® assets in the
          third quarter of 2010
(s)       Non-cash interest expense associated with amortization of
          convertible debt discount
(t)       Unrealized gain on the mark-to-market adjustment to derivative
          instruments of $12.0 million
(u)       Gain on sale of investments of $1.4 million
(v)       Total tax effect for non-GAAP pre-tax adjustments
          

ALLERGAN, INC.
Condensed Consolidated Balance Sheets
(Unaudited)

                                              September 30,       December 31,
in millions                                                 
                                              2012                2011
                                                                  
Assets
                                                                  
Cash and equivalents                          $  2,655.0          $ 2,406.1
Short-term investments                           279.9              179.9
Trade receivables, net                           872.6              730.6
Inventories                                      265.1              249.7
Other current assets                            463.2            482.0    
                                                                  
Total current assets                             4,535.8            4,048.3
                                                                  
Property, plant and equipment, net               822.8              807.0
Intangible assets, net                           1,079.4            1,165.2
Goodwill                                         2,092.9            2,088.4
Other noncurrent assets                         380.0            399.7    
                                                                  
Total assets                                  $  8,910.9         $ 8,508.6  
                                                                  
                                                                  
Liabilities and equity
                                                                  
Notes payable                                 $  40.7             $ 83.9
Accounts payable                                 210.6              200.4
Other accrued expenses and income taxes         803.6            670.7    
                                                                  
Total current liabilities                        1,054.9            955.0
                                                                  
Long-term debt                                   1,515.5            1,515.4
Other liabilities                                746.2              705.8
                                                                  
Equity:
Allergan, Inc. stockholders’ equity              5,569.6            5,309.6
Noncontrolling interest                         24.7             22.8     
Total equity                                    5,594.3          5,332.4  
                                                                  
Total liabilities and equity                  $  8,910.9         $ 8,508.6  
                                                                  
DSO                                              57                 48
                                                                  
DOH                                              128                125
                                                                  
Cash and equivalents and short-term           $  2,934.9          $ 2,586.0
investments
Total notes payable and long-term debt          (1,556.2 )        (1,599.3 )
Cash and equivalents and short-term           $  1,378.7         $ 986.7    
investments, net of debt
                                                                  
Debt-to-capital percentage                       21.8     %         23.1     %
                                                                             

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

In millions, except per share        Three months ended
amounts
                                        September 30,            September 30,
                                                      
                                        2012                     2011
                                                                 
Net earnings attributable to            $   249.4                $   249.8
Allergan, Inc.
                                                                 
Non-GAAP pre-tax adjustments:
Expenses from changes in fair
value of contingent consideration
and integration and transaction             2.4                      0.6
costs associated with business
combinations
External costs for stockholder
derivative litigation associated            0.5                      0.8
with the DOJ settlement
Expenses related to the
realignment of various business
functions and the restructuring             0.6                      --
of the obesity intervention
business
Research and development expenses
related to upfront licensing fees
associated with the license and                                     
collaboration agreements with
Molecular Partners AG for                   62.6                     --
technology that has not achieved
regulatory approval and related
transaction costs
Amortization of acquired                    27.4                     26.0
intangible assets
Net restructuring charges                   3.8                      (0.1   )
(reversal)
Unrealized loss (gain) on                   7.1                      (16.8  )
derivative instruments
Fair market value inventory
adjustment rollout associated
with the purchase of a                      --                       0.4
distributor’s business in South
Africa
Milestone payment for the FDA
acceptance of an NDA filing for
technology associated with a                --                       20.0
collaboration and co-promotion
agreement with MAP
Pharmaceuticals, Inc.
Impairment of an in-process
research and development asset                                      
related to a tissue reinforcement
technology acquired in connection           --                       4.3
with the 2010 acquisition of
Serica Technologies, Inc.
Gain on sale of investments                --                     (0.5   )
                                            353.8                    284.5
                                                                 
Tax effect for above items                  (28.8  )                 (10.2  )
Change in estimated tax benefit
associated with the upfront                 --                       11.7
licensing fee paid to Molecular
Partners AG
Change in estimated taxes related
to uncertain tax positions and             --                     (1.9   )
tax credits included in prior
year filings
Non-GAAP earnings attributable to       $   325.0               $   284.1  
Allergan, Inc.
                                                                 
Weighted average number of shares           300.1                    304.2
outstanding
                                                                 
Net shares assumed issued using
the treasury stock method for                                       
options and non-vested equity                                            
shares and share units                      5.2                      5.6
outstanding during each period
based on average market price
                                           305.3                  309.8  
                                                                            
Diluted earnings per share
attributable to Allergan, Inc.          $   0.82                 $   0.81
stockholders
                                                                 
Non-GAAP earnings per share
adjustments:
Expenses from changes in fair
value of contingent consideration
and integration and transaction             0.01                     --
costs associated with business
combinations
Research and development expenses
related to upfront licensing fees
associated with the license and                                     
collaboration agreements with
Molecular Partners AG for                   0.15                     --
technology that has not achieved
regulatory approval and related
transaction costs
Amortization of acquired                    0.06                     0.06
intangible assets
Net restructuring charges                   0.01                     --
(reversal)
Unrealized loss (gain) on                   0.01                     (0.03  )
derivative instruments
Milestone payment for the FDA
acceptance of an NDA filing for
technology associated with a                --                       0.04
collaboration and co-promotion
agreement with MAP
Pharmaceuticals, Inc.
Impairment of an in-process
research and development asset                                      
related to a tissue reinforcement
technology acquired in connection           --                       0.01
with the 2010 acquisition of
Serica Technologies, Inc.
Change in estimated tax benefit
associated with the upfront                 --                       0.04
licensing fee paid to Molecular
Partners AG
Change in estimated taxes related
to uncertain tax positions and             --                     (0.01  )
tax credits included in prior
year filings
                                                                 
Non-GAAP diluted earnings per
share attributable to Allergan,         $   1.06                $   0.92   
Inc. stockholders
                                                                 
Year over year change                                     15.2 %
                                                                 

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,   September 30,
                                                              
                                                 2012            2011
                                                                 
Net earnings attributable to Allergan, Inc.      $   774.6       $   654.7
                                                                 
Non-GAAP pre-tax adjustments:
Fair market value inventory adjustment rollout
associated with the purchases of distributor         0.3             0.4
businesses
Expenses from changes in fair value of
contingent consideration and integration and         16.4            3.8
transaction costs associated with business
combinations
Aggregate charges for external costs for
stockholder derivative litigation associated         8.9             3.1
with the DOJ settlement and other legal
contingency expenses
Expenses related to the realignment of various
business functions and the restructuring of          1.4             --
the obesity intervention business
Research and development expenses related to
upfront licensing fees associated with the                          
license and collaboration agreements with
Molecular Partners AG for technology that has        62.6            45.1
not achieved regulatory approval and related
transaction costs
Amortization of acquired intangible assets           80.4            77.9
Net restructuring charges                            4.7             4.6
Interest expense associated with changes in
estimated taxes related to uncertain tax             0.8             --
positions included in prior year filings
Unrealized loss (gain) on derivative                 15.2            (12.0  )
instruments
Cumulative net expense for fixed asset
impairment, a gain from the substantially                           
complete liquidation of Allergan’s investment
in a foreign subsidiary and intangible asset                        
impairment resulting from the discontinued
development of the Easyband^TM Remote                --              8.9
Adjustable Gastric Band System
Upfront payment and subsequent milestone
payment for the FDA acceptance of an NDA                            
filing for technology that has not achieved
regulatory approval associated with a                               
collaboration and co-promotion agreement with
MAP Pharmaceuticals, Inc. and related                --              80.6
transaction costs
Impairment of an in-process research and
development asset related to a tissue                               
reinforcement technology acquired in
connection with the 2010 acquisition of Serica       --              4.3
Technologies, Inc.
Additional costs for the termination of a
third-party agreement primarily related to the       --              3.3
promotion of Sanctura XR^®
Non-cash interest expense associated with            --              7.3
amortization of convertible debt discount
Gain on sale of investments                         --            (1.4   )
                                                     965.3           880.6
                                                                 
Tax effect for above items                           (50.9  )        (59.9  )
Change in estimated taxes related to uncertain      6.7           --     
tax positions included in prior year filings
Non-GAAP earnings attributable to Allergan,      $   921.1      $   820.7  
Inc.
                                                                 
Weighted average number of shares outstanding        302.1           304.4
                                                                 
Net shares assumed issued using the treasury                        
stock method for options and non-vested equity
shares and share units outstanding during each       5.6             5.5
period based on average market price
                                                                 
Dilutive effect of assumed conversion of            --            0.4    
convertible notes outstanding
                                                    307.7         310.3  
                                                                            

Diluted earnings per share attributable to Allergan,  $ 2.52        $ 2.11
Inc. stockholders
                                                                     
Non-GAAP earnings per share adjustments:
Expenses from changes in fair value of contingent
consideration and integration and transaction costs      0.05          0.01
associated with business combinations
Aggregate charges for external costs for stockholder
derivative litigation associated with the DOJ            0.03          --
settlement and other legal contingency expenses
Research and development expenses related to upfront
licensing fees associated with the license and                        
collaboration agreements with Molecular Partners AG
for technology that has not achieved regulatory          0.15          0.13
approval and related transaction costs
Amortization of acquired intangible assets               0.18          0.17
Net restructuring charges                                0.01          0.02
Unrealized loss (gain) on derivative instruments         0.03          (0.02 )
Cumulative net expense for fixed asset impairment, a                  
gain from the substantially complete liquidation of
Allergan’s investment in a foreign subsidiary and                     
intangible asset impairment resulting from the
discontinued development of the Easyband^TM Remote       --            0.03
Adjustable Gastric Band System
Upfront payment and subsequent milestone payment for                  
the FDA acceptance of an NDA filing for technology
that has not achieved regulatory approval associated                  
with a collaboration and co-promotion agreement with
MAP Pharmaceuticals, Inc. and related transaction        --            0.16
costs
Impairment of an in-process research and development                  
asset related to a tissue reinforcement technology
acquired in connection with the 2010 acquisition of      --            0.01
Serica Technologies, Inc.
Additional costs for the termination of a
third-party agreement primarily related to the           --            0.01
promotion of Sanctura XR^®
Non-cash interest expense associated with                --            0.01
amortization of convertible debt discount
Change in estimated taxes related to uncertain tax      0.02         --    
positions included in prior year filings
                                                                     
Non-GAAP diluted earnings per share attributable to    $ 2.99        $ 2.64  
Allergan, Inc. stockholders
                                                                     
Year over year change                                         13.3 %
                                                                     

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

                        Three months ended                                                                            
                           September    September       $ change in net sales                         Percent change in net sales
                           30,             30,
                             2012           2011        Total        Performance     Currency     Total      Performance     Currency
in millions
Eye Care                   $ 663.2         $ 611.6         $ 51.6        $  76.2          $  (24.6 )     8.4   %      12.5    %        (4.1  )%
Pharmaceuticals
Botox/Neuromodulator         431.6           396.7           34.9           45.8             (10.9 )     8.8   %      11.5    %        (2.7  )%
Skin Care                    74.0            66.4            7.6            7.8              (0.2  )     11.4  %      11.7    %        (0.3  )%
Urologics                   9.7           15.0          (5.3  )       (5.3   )        --         (35.3 )%     (35.3   )%       --
Total Specialty             1,178.5       1,089.7       88.8         124.5          (35.7 )     8.1   %      11.4    %        (3.3  )%
Pharmaceuticals
                                                                                                                                       
Breast Aesthetics            86.1            83.3            2.8            5.9              (3.1  )     3.4   %      7.1     %        (3.7  )%
Obesity Intervention         37.4            49.7            (12.3 )        (11.0  )         (1.3  )     (24.7 )%     (22.1   )%       (2.6  )%
Facial Aesthetics           89.1          88.4          0.7          4.4            (3.7  )     0.8   %      5.0     %        (4.2  )%
Total Medical               212.6         221.4         (8.8  )       (0.7   )        (8.1  )     (4.0  )%     (0.3    )%       (3.7  )%
Devices
                                                                                                                                       
Product net sales          $ 1,391.1      $ 1,311.1      $ 80.0       $  123.8        $  (43.8 )     6.1   %      9.4     %        (3.3  )%
                                                                                                                                       
Selected Product Net
Sales (a):
Alphagan P,
Alphagan, and              $ 111.3         $ 100.5         $ 10.8        $  14.3          $  (3.5  )     10.8  %      14.3    %        (3.5  )%

Combigan
Lumigan Franchise            152.0           147.0           5.0            12.0             (7.0  )     3.4   %      8.2     %        (4.8  )%
Restasis                     198.3           166.1           32.2           32.7             (0.5  )     19.4  %      19.7    %        (0.3  )%
Latisse                      23.4            21.8            1.6            1.8              (0.2  )     7.2   %      7.9     %        (0.7  )%
                                                                                                                                       
Domestic                     62.1    %       59.3    %
International                37.9    %       40.7    %
                                                                                                                                       

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

                      Nine months ended                                                                     
                       September    September     $ change in net sales                    Percent change in net sales
                       30,           30,
                       2012          2011          Total       Performance   Currency      Total     Performance   Currency
in millions
Eye Care               $ 1,986.1     $ 1,861.1     $ 125.0     $  190.2      $ (65.2  )     6.7   %    10.2    %      (3.5  )%
Pharmaceuticals
Botox/Neuromodulator     1,291.7       1,179.6       112.1        140.9        (28.8  )     9.5   %    11.9    %      (2.4  )%
Skin Care                221.0         190.4         30.6         31.1         (0.5   )     16.1  %    16.3    %      (0.2  )%
Urologics               31.8        42.3        (10.5 )     (10.5  )    --          (24.8 )%   (24.8   )%     --
Total Specialty         3,530.6     3,273.4     257.2      351.7      (94.5  )     7.9   %    10.7    %      (2.8  )%
Pharmaceuticals
                                                                                                                      
Breast Aesthetics        285.7         262.9         22.8         31.1         (8.3   )     8.7   %    11.8    %      (3.1  )%
Obesity Intervention     122.7         156.2         (33.5 )      (30.5  )     (3.0   )     (21.4 )%   (19.5   )%     (1.9  )%
Facial Aesthetics       285.2       271.8       13.4       23.7       (10.3  )     4.9   %    8.7     %      (3.8  )%
Total Medical           693.6       690.9       2.7        24.3       (21.6  )     0.4   %    3.5     %      (3.1  )%
Devices
                                                                                                                      
Product net sales      $ 4,224.2    $ 3,964.3    $ 259.9    $  376.0     $ (116.1 )     6.6   %    9.5     %      (2.9  )%
                                                                                                                      
Selected Product Net
Sales (a):
Alphagan P,
Alphagan, and          $ 334.7       $ 309.2       $ 25.5      $  35.1       $ (9.6   )     8.3   %    11.4    %      (3.1  )%

Combigan
Lumigan Franchise        452.4         452.9         (0.5  )      17.5         (18.0  )     (0.1  )%   3.9     %      (4.0  )%
Restasis                 580.0         501.1         78.9         81.3         (2.4   )     15.7  %    16.2    %      (0.5  )%
Latisse                  72.4          69.0          3.4          3.9          (0.5   )     5.0   %    5.6     %      (0.6  )%
                                                                                                                      
Domestic                 60.9    %     59.6    %
International            39.1    %     40.4    %

(a)   Percentage change in selected product net sales is calculated on
        amounts reported to the nearest whole dollar.
        

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

                                                          Fourth Quarter 2012
                                                           Low        High
                                                                       
GAAP diluted earnings per share attributable to            $  1.12     $  1.14
Allergan, Inc. stockholders expectations ^(a)
                                                                       
Amortization of acquired intangible assets                   0.06       0.06
Non-GAAP diluted earnings per share expectations           $  1.18     $  1.20
                                                                       
                                                                       
                                                           Full Year 2012
                                                           Low         High
                                                                       
GAAP diluted earnings per share attributable to            $  3.64     $  3.66
Allergan, Inc. stockholders expectations ^(a)
                                                                       
Expenses from changes in fair value of contingent
consideration and integration and transaction costs           0.05        0.05
associated with business combinations
Aggregate charges for external costs for stockholder
derivative litigation associated with the DOJ settlement      0.03        0.03
and other legal contingency expenses
Research and development expenses related to upfront
licensing fees associated with the license and                           
collaboration agreements with Molecular Partners AG for
technology that has not achieved regulatory approval and      0.15        0.15
related transaction costs
Net restructuring charges                                     0.01        0.01
Amortization of acquired intangible assets                    0.24        0.24
Unrealized loss on derivative instruments                     0.03        0.03
Change in estimated taxes related to uncertain tax           0.02       0.02
positions included in prior year filings
Non-GAAP diluted earnings per share expectations           $  4.17     $  4.19

        GAAP diluted earnings per share expectations exclude any potential
        impact of future unrealized gains or losses on derivative instruments,
(a)   changes in contingent consideration, restructuring charges and
        stockholder derivative litigation costs related to the 2010 DOJ
        settlement and other legal contingency expenses that may occur but
        that are not currently known or determinable.

Contact:

Allergan, Inc.
Jim Hindman (714) 246-4636 (investors)
Joann Bradley (714) 246-4766 (investors)
David Nakasone (714) 246-6376 (investors)
Bonnie Jacobs (714) 246-5134 (media)
Cathy Taylor (714) 246-5551 (media)
 
Press spacebar to pause and continue. Press esc to stop.