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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
COMMISSION FILE NO.1-10269
ALLERGAN, INC.
(Exact name of Registrant as Specified in its Charter)
DELAWARE 95-1622442
(State of Incorporation) (I.R.S. Employer
Identification No.)
2525 DUPONT DRIVE
IRVINE, CALIFORNIA 92715-1599
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (714) 752-4500
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which each class registered
Common Stock, $0.01 par value New York Stock Exchange
Preferred Share Purchase Rights
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days.
Yes E No____
The aggregate market value of the registrant's voting stock held by
non-affiliates was approximately $1,400,000,000 on February 28, 1994, based
upon the closing price on the New York Stock Exchange on such date.
Common Stock outstanding as of February 28, 1994 - 63,904,229 shares
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendement to this Form 10-K. [ ]
DOCUMENTS INCORPORATED BY REFERENCE
Parts I, II and IV incorporate certain information by reference from
the registrant's Annual Report to Stockholders for the fiscal year ended
December 31, 1993. With the exception of the sections of the Annual Report
specifically incorporated by reference herein, the Annual Report is not deemed
filed as part of this Report on Form 10-K.
Part III incorporates certain information by reference from the
registrant's definitive proxy statement for the annual meeting of stockholders
to be held on April 19, 1994, which proxy statement will be filed no later than
120 days after the close of the registrant's fiscal year ended December 31,
1993.
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TABLE OF CONTENTS
PART I PAGE
Item 1. Business................................................................. 1
Item 2. Properties............................................................... 7
Item 3. Legal Proceedings........................................................ 8
Item 4. Submission of Matters to a Vote of Security Holders...................... 9
Item I-A. Executive Officers of Allergan, Inc. .................................... 9
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters......................................................... 12
Item 6. Selected Financial Data..................................................... 12
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations......................................... 12
Item 8. Financial Statements and Supplementary Data................................. 12
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure......................................... 12
PART III
Item 10. Directors and Executive Officers of Allergan, Inc. ......................... 13
Item 11. Executive Compensation...................................................... 13
Item 12. Security Ownership of Certain Beneficial Owners and
Management.................................................................. 13
Item 13. Certain Relationships and Related Transactions.............................. 13
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K................................................................. 14
SIGNATURES............................................................................... 15
INDEX OF EXHIBITS........................................................................ 19
INDEPENDENT AUDITORS' REPORTS ON SCHEDULES............................................... 20
SCHEDULES................................................................................ S-1
EXHIBITS.........................................................................(Attached to this
Report on Form 10-K)
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PART I
ITEM 1. BUSINESS
GENERAL DEVELOPMENT OF BUSINESS
Allergan, Inc. ("Allergan" or the "Company") is a global provider of
specialty therapeutic products principally in the areas of eye and skin care.
Its worldwide consolidated revenues are generated by prescription and
non-prescription pharmaceutical products in the areas of ophthalmology and
dermatology, intraocular lenses (IOLs) and other ophthalmic surgical products,
and contact lens care products.
Allergan was incorporated in California in 1948 and reincorporated in
Delaware in 1977. In 1980, the Company was acquired by SmithKline Beckman
Corporation (then known as "SmithKline Corporation" and herein "SmithKline").
The Company operated as a wholly- owned subsidiary of SmithKline from 1980
until July 27, 1989 when Allergan again became a stand-alone public company
through a spin- off distribution by SmithKline.
During the fourth quarter of 1991, the Company divested its computer-based
ophthalmic diagnostic instrument business, Allergan Humphrey. In November
1992, the Company sold its contact lens business in North and South America.
In August 1993, the Company sold its contact lens business outside of the
Americas.
ALLERGAN BUSINESSES
The following table sets forth, for the periods indicated, the net sales
from continuing operations for each of the Company's specialty therapeutics
businesses:
____ Year Ended December 31_____
----------------------------------------
1993 1992 1991
------------------------------
(in millions)
Specialty Pharmaceuticals
Eye Care $386.2 $359.2 $317.7
Skin Care 32.4 37.3 36.5
--------- -------- --------
418.6 396.5 354.2
Surgical 115.3 111.8 108.2
Optical Lens Care 325.0 322.4 299.3
----- ----- -----
TOTAL $858.9 $830.7 $761.7
====== ====== ======
Domestic
47.5% 47.9% 50.4%
International 52.5% 52.1% 49.6%
The foregoing table does not include sales of discontinued operations.
See Note 10 of Notes to Consolidated Financial Statements on page 46 of the
1993 Annual Report for further information concerning foreign and domestic
operations.
Specialty Pharmaceuticals
Allergan develops, manufactures and markets a broad range of prescription
ophthalmic products designed to treat diseases and disorders of the eye,
including glaucoma, inflammation,
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infection, allergy and ophthalmic muscle disorders. In addition, the specialty
over-the-counter ("OTC") product line consists of
products designed to treat ocular surface disease, including artificial tears
and ocular decongestants.
The largest segment of the market for ophthalmic prescription drugs is for
the treatment of glaucoma, a sight-threatening disease characterized by
elevated intraocular pressure. For initial treatment of glaucoma, Allergan
sells BETAGAN(R) ophthalmic solution, a beta adrenergic blocking agent;
BETAGAN(R) is Allergan's largest selling pharmaceutical product. PROPINE(R)
ophthalmic solution is the product which is used alone or in combination with
other drugs when initial drug therapy for glaucoma becomes inadequate. Patent
protection for both products expired in the United States in 1991. Although
the Company has not experienced generic competition to date, such competition
is expected to develop in 1994. In 1993, Allergan entered into an agreement
with Schein Pharmaceutical, Inc. whereby Schein will market generic versions of
certain Allergan products that are off- patent in the U.S.; in March 1994,
Schein began marketing a generic version of BETAGAN(R) . Also in March 1994,
Bausch & Lomb announced that it had obtained approval from the United States
Food and Drug Administration ("FDA") to market a generic version of BETAGAN(R)
.
Allergan holds a major share of the U.S. market for ophthalmic steroids.
The Company's PRED FORTE(R) product is widely prescribed to fight ocular
inflammation.
In 1993, Allergan entered into a strategic alliance with Fisons
Corporation to co-promote certain ophthalmic pharmaceuticals in the United
States. The alliance currently involves Allergan's ACULAR(R) 1 ophthalmic
solution for the relief of itch associated with seasonal allergic
conjunctivitis. Later, under the terms of the alliance, co-promotion is
planned to expand to include Fisons' OPTICROM(R) 2 ophthalmic solution and
nedocromil sodium ophthalmic solution.
Allergan's specialty pharmaceuticals include BOTOX(R) (Botulinum Toxin
Type A) purified neurotoxin complex for the treatment of certain neuromuscular
disorders which are characterized by involuntary muscle contractions or spasms.
BOTOX(R) purified neurotoxin complex is being marketed in the United States,
Canada, Germany, France, Italy, New Zealand and a number of other countries for
the treatment of blepharospasm (the uncontrollable abnormal contraction of the
eyelid muscles which can force the eye closed) and strabismus (misalignment of
the eyes) in people 12 years of age and over. In March 1991, an application
was filed with United States FDA for approval of a nonophthalmic claim for an
indication related to a neck and shoulder neuromuscular disorder known as
cervical dystonia (torticollis). Allergan has been asked to provide
supplemental clinical data to support the torticollis filing.
Building upon its strength in marketing to medical specialties and taking
advantage of synergies in research and development, Allergan's skin care
division (known as Allergan Herbert) develops, manufactures and markets a line
of therapeutic skin care products primarily to dermatologists in the United
States. Its product line includes GRIS-PEG(R) tablets, a systemic anti-fungal
product, ELIMITE(R) cream for the treatment of scabies and NAFTIN(R) , a
topical anti-fungal gel and cream.
___________________________________
(1)ACULAR(R) is a registered trademark, which is llicensed from Syntex (U.S.A.)
Inc.
(2)OPTICROM(R) is a registered trademark of Fisons Corporation.
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Surgical
Allergan's surgical division (known as Allergan Medical Optics or AMO)
develops, manufactures and markets intraocular lenses (IOLs), surgically
related pharmaceuticals, phacoemulsification equipment and other ophthalmic
surgical products.
The largest segment of the surgical market is for the treatment of
cataracts. IOLs are used to replace the natural lens of a cataract patient
when it has become clouded. To meet the wide range of IOL products demanded by
the market, Allergan currently offers a variety of models, including rigid
multi-piece and single-piece and small incision designs. Lenses for small
incision surgery include the AMO(R) PHACOFLEX(R) small incision IOL,
introduced in 1989, and the AMO(R) Foldable PHACOFLEX(R) II SI-30NB(TM) small
incision IOL, introduced in April 1993. Small incision IOLs continue to grow
in popularity along with increasing use of phacoemulsification, a method of
cataract extraction that uses ultrasound waves to break the natural lens into
small fragments that can be removed through a hollow needle.
Phacoemulsification requires only a 3 to 4 millimeter incision, compared to
incisions of up to 12 millimeters for other techniques. In 1993, AMO
introduced the AMO(R) PRESTIGE(TM), which Allergan believes represents a
significant technological advance in phacoemulsification equipment.
Sales growth of IOLs in the U.S. has been adversely impacted by price
erosion resulting from competitive pressures.
Optical
The Company has been in the contact lens care market since 1960. It
develops, manufactures and markets a broad range of products worldwide for use
with every available type of contact lens. These products include daily
cleaners to remove undesirable film and deposits from hard, rigid gas permeable
and soft contact lenses; enzymatic cleaners to remove protein deposits from the
surface of contact lenses; and disinfecting solutions to destroy harmful
microorganisms on the surface of contact lenses. Allergan offers products that
can be used in each of the three disinfecting systems now available: heat
systems, cold chemical systems and hydrogen peroxide systems. ULTRACARE(R)
neutralizer/disinfectant, Allergan's one-step hydrogen peroxide disinfection
system, was approved by the FDA in March 1992 for general marketing in the U.S.
COMPLETE(R) , a one-bottle "cold chemical" disinfection system for soft contact
lenses was launched in several countries in the Pan-Asia and Europe regions
during 1993. The U.S. filing for marketing approval of COMPLETE(R) was made
with the FDA in December 1991.
Sales of the Company's proprietary enzymatic cleaners represented 12%, 11%
and 11% of total Company sales in 1991, 1992 and 1993, respectively, and sales
of the Company's hydrogen peroxide disinfection systems represented 14%, 13%
and 14% of total Company sales in 1991, 1992 and 1993, respectively.
EMPLOYEE RELATIONS
At December 31, 1993 the Company employed approximately 4,749 persons
throughout the world, including approximately 2,185 in the United States. None
of the Company's U.S.-based employees are represented by unions. The Company
considers that its relations with its employees are, in general, very good.
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INTERNATIONAL OPERATIONS
The Company believes that international markets represent a significant
opportunity for continued growth. Allergan believes that its well-established
international market presence provides it with a competitive advantage,
enabling the Company to maximize the return on its investment in research,
product development and manufacturing.
Allergan established its first foreign subsidiary in 1964 and currently
sells products in approximately 100 countries. Marketing activities are
coordinated on a worldwide basis and resident management teams provide
leadership and infrastructure for customer focused rapid introduction of new
products in their local markets.
In Japan, the second largest eye care market in the world, certain of
Allergan's eye care pharmaceutical products are licensed to Santen
Pharmaceuticals (the largest eye care pharmaceutical manufacturer in Japan),
and Allergan's contact lens care products are sold through a joint venture
between Santen and Allergan. IOLs and other eye care surgical products are
sold directly in Japan.
SALES AND MARKETING
Allergan maintains global marketing and regional sales organizations.
Supplementing the sales efforts and promotional activities aimed at eye and
skin care professionals, as well as neurologists outside the U.S., who use,
prescribe and recommend its products, Allergan has been shifting its resources
increasingly toward managed care providers. In addition, Allergan advertises
in professional journals and has an extensive direct mail program of
descriptive product literature and scientific information to specialists in the
ophthalmic and dermatological fields. The Company's specialty therapeutic
products are sold to drug wholesalers, independent and chain drug stores,
commercial optical chains, mass merchandisers, food stores, hospitals,
ambulatory surgery centers (ASCs) and medical practitioners, including
neurologists. At December 31, 1993 the Company employed approximately 800
sales representatives throughout the world.
RESEARCH AND DEVELOPMENT
The Company's global research and development efforts focus on eye care,
skin care and neuromuscular products that are safe, effective, convenient and
have an economic benefit. The Company's own research and development
activities are supplemented by a commitment to identifying and obtaining new
technologies through in-licensing, joint ventures and acquisition efforts
including the establishment of research relationships with academic
institutions and individual researchers.
Research and development efforts for specialty pharmaceuticals focus
primarily on new therapeutic products for glaucoma, inflammation, dry eye,
allergy, dystonias and other neuromuscular disorders, and new anti-infective
pharmaceuticals for eye care, acne, inflammation and psoriasis. During the
first quarter of 1993, Allergan began Phase III clinical trials with its
proprietary topical retinoid tarazotene (AGN190168) for both acne and
psoriasis. The results of these trials are expected to be available beginning
in the middle of 1994.
Research and development activities for the surgical division concentrate
on improved cataract surgical systems, implantation instruments and methods,
and new IOL materials and designs, including the AMO(R) ARRAY(R) multifocal
IOL, designed to allow patients to see well over a range of distances.
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Research and development in the contact lens care product area is aimed at
care systems which, without sacrificing efficacy or antimicrobial activity,
will be more convenient for patients to use and thus lead to a higher rate of
compliance with recommended lens care procedures. Improved compliance can
enhance safety and extend the time a patient will be a contact lens wearer.
The Company believes that continued development and commercialization of
disinfection systems that are both easy-to-use and efficacious will be
important for the future success of this part of the Company's business.
During 1992, the Company entered into a joint venture with Ligand
Pharmaceuticals Corporation to combine Ligand's knowledge of intracellular
receptor technology with the Company's experience in receptor-selective
retinoids for topical use. The joint venture filed an Investigational New Drug
Application with the FDA in November 1993 for the use of 9-cis Retinoic acid
(LGD1057) to be given orally for cancer therapy. In 1993, the Company signed
an agreement with Sandoz Pharmaceuticals Corporation to develop, manufacture
and market cyclosporine A for all topical ophthalmic uses. In addition, the
Company has entered into a number of collaborative arrangements with academic
institutions.
The continuing introduction of new products supplied by the Company's
research and development efforts and in-licensing opportunities is critical to
the success of the Company. Delays or failures in one or more significant
research projects could have a material adverse impact on the future operations
of the Company.
At December 31, 1993 there were an aggregate of approximately 630 people
involved in the Company's research and development efforts. The Company's
research and development expenditures associated with continuing operations for
1991, 1992 and 1993 were $70.4 million, $89.5 million and $102.5 million
respectively.
COMPETITION
Allergan faces strong competition in all of its markets. Numerous
companies are engaged in the development, manufacture and marketing of health
care products competitive with those manufactured by Allergan, although these
companies do not necessarily compete in all of Allergan's product lines. Major
eye care competitors include Merck, Alcon Laboratories (a subsidiary of
Nestle), Bausch & Lomb, Ciba Vision Corp. (a subsidiary of Ciba-Geigy), IOLab
(a subsidiary of Johnson & Johnson), Pharmacia Ophthalmics (a subsidiary of
Kabi Pharmacia), Sola/Barnes-Hind (a subsidary of Pilkington plc) and
Wessley-Jessen, Inc. (a subsidiary of Schering- Plough Corporation). These
competitors have equivalent or greater resources than Allergan. The Company's
skin care business competes against a number of companies which have greater
resources than Allergan. In marketing its products to health care
professionals, the Company competes primarily on the basis of product
technology, service and price.
GOVERNMENT REGULATION
Drugs, biologics and medical devices, including IOLs and contact lens care
products, are subject to regulation by the FDA, state agencies and, in varying
degrees, by foreign health agencies. FDA regulation of many of the Company's
products generally requires extensive testing of new products and filing
applications for approval by the FDA prior to sale in the United States. The
FDA reviews these applications and determines whether the product is safe and
effective. The process of developing data to support a pre-market application
and FDA review can be costly and take many years to complete.
Manufacturers of drugs, medical devices and biologics are operating in a
more rigorous regulatory environment than has been the case in previous years.
Several legislative and administrative measures to strengthen government
regulation of medical devices and drugs have
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recently been implemented in the United States, such as the Safe Medical
Devices Act of 1990, which among other things, increased reporting requirements
of adverse events associated with medical devices, and the Prescription Drug
Law Fee Act of 1992, which requires payment of substantial fees to the FDA for
new drug applications. Other measures are pending or have been proposed. In
addition, there has been increased scrutiny of drug and device manufacturers by
the FDA as a result of a scandal in the generic drug industry and controversies
surrounding the safety of certain medical devices. While the Company is not
primarily involved in these areas of business, the impact of increased FDA
scrutiny is felt by all companies in the drug and device industries. Moreover,
in Europe and other major Allergan markets, the regulation of drugs and medical
devices is likewise increasing. The Company is working to ensure that its
operations remain in compliance with FDA and other regulatory requirements.
The total cost of providing health care services has been and will
continue to be subject to review by governmental agencies and legislative
bodies in the major world markets, including the United States, which are faced
with significant pressure to lower health care costs. Prices for some of the
Company's products, specifically IOLs and pharmaceutical products, accounting
for approximately 60% of the Company's 1993 sales, are expected to come under
increased pressure as governments and managed care providers generally increase
their efforts to contain health care costs.
In the United States, a significant percentage of the patients who receive
the Company's IOLs are covered by the federal Medicare program. When a
cataract extraction with IOL implantation is performed in an ambulatory surgery
center ("ASC"), Medicare provides the ASC with a fixed $150 allowance to cover
the cost of the IOL. When the procedure is performed in a hospital outpatient
department, the hospital's reimbursement is determined using a complex formula
that blends the hospital's costs with the $150 allowance paid to ASCs. In
November 1990, the U.S. Health Care Financing Administration (HCFA) issued
proposed regulations under which Medicare would not recognize hospitals'
expenditures for IOLs implanted during outpatient cataract surgery to the
extent that those expenditures exceed the ASC allowance. The Company cannot
predict whether HCFA will promulgate a final regulation imposing this
limitation.
The cost of prescription drugs is receiving substantial attention in the
United States Congress. Legislation enacted in 1990, and amended and
strengthened in 1992, requires pharmaceutical manufacturers to rebate to the
government a portion of their revenues from drugs furnished to Medicaid
patients. In 1992, legislation was enacted that extends these requirements to
covered outpatient pharmaceuticals, and also mandates a reduction in
pharmaceutical prices charged to certain federally-funded facilities as well as
to certain hospitals serving a disproportionate share of low-income patients.
A provision of the Omnibus Budget Reconciliation Act of 1993 limits tax
benefits currently realized by U.S. manufacturers as a result of the
manufacture of certain products in Puerto Rico, beginning in 1994. It is
likely that Congressional attention will continue to focus on the costs of
drugs generally, and particularly on increases in drug prices in excess of the
rate of inflation, given the current government initiatives pertaining to the
overall reform of the U.S. health care system, and those specifically directed
at lowering total costs. The Clinton Administration's health reform bill would
provide all Medicare beneficiaries with a comprehensive drug benefit; however,
manufacturers would be required to pay a "rebate" to the government based on
the volume of a manufacturer's products sold to Medicare beneficiaries. The
Company cannot predict the likelihood of passage of these or other similar or
related bills.
Congress also devoted significant attention in 1992 and in preceding years
to proposing amendments to the Orphan Drug Act. Under one proposal, once
cumulative sales of an orphan drug exceed a designated dollar amount the FDA
would be authorized to approve competitors' marketing applications. The
Company currently markets one orphan drug product, BOTOX (Botulinum Toxin Type
A) purified neurotoxin complex.
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The Company cannot predict what effect these measures would have if they
were ultimately enacted into law. Nor can it predict whether or in what form
health care legislation being formulated by the new Administration will be
passed. However, in general, the adoption of such measures can be expected to
have an adverse impact on the Company's business.
PATENTS, TRADEMARKS AND LICENSES
Allergan owns or is licensed under numerous patents relating to its
products, product uses and manufacturing processes. It now has numerous
patents issued in the United States and corresponding foreign patents issued in
the major countries in which it does business. Allergan believes that its
patents and licenses are important to its business, but that with the exception
of those relating to hydrogen peroxide disinfection systems, no one patent or
license is currently of material importance in relation to its business as a
whole.
Allergan markets its products under various trademarks and considers these
trademarks to be valuable because of their contribution to the market
identification of the various products.
ENVIRONMENTAL MATTERS
The Company is subject to federal, state, local and foreign environmental
laws and regulations. The Company believes that its operations comply in all
material respects with applicable environmental laws and regulations in each
country where the Company has a business presence. Although Allergan continues
to make capital expenditures for environmental protection, it does not
anticipate any significant expenditures in order to comply with such laws and
regulations which would have a material impact on the Company's capital
expenditures, earnings or competitive position. The Company is not aware of
any pending litigation or significant financial obligations arising from
current or past environmental practices. There can be no assurance, however,
that environmental problems relating to properties owned or operated by the
Company will not develop in the future, and the Company cannot predict whether
any such problems, if they were to develop, could require significant
expenditures on the part of the Company. In addition, the Company is unable to
predict what legislation or regulations may be adopted or enacted in the future
with respect to environmental protection and waste disposal.
ITEM 2. PROPERTIES
Allergan's operations are conducted in owned and leased facilities located
throughout the world. Its primary administrative and research facilities are
located in Irvine, California. The following table describes the general
character of the major existing facilities as of February 28, 1994:
Location Primary Function Interest
- -------- ---------------- --------
Irvine, California Headquarters, research and development,
manufacturing, administrative Owned/
Leased
Santa Ana, California Manufacturing, warehousing Owned
Berkeley, California Manufacturing, warehousing,
administrative Leased
Waco, Texas Manufacturing, warehousing Owned
Lenoir, North Carolina Manufacturing, administrative, warehousing Owned
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Hormigueros, Puerto Rico Manufacturing, warehousing Owned
Anasco, Puerto Rico Manufacturing, warehousing Leased
Buenos Aires, Argentina Administrative, manufacturing,
warehousing Owned
Markham, Canada Administrative, warehousing Leased
County Mayo, Ireland Administrative, manufacturing,
warehousing Owned
High Wycombe, U.K. Administrative, warehousing Leased
Sophia Antipolis, France Administrative, warehousing Leased
Pomezia, Italy Administrative, manufacturing, Owned
research and development,
warehousing
Madrid, Spain Administrative, warehousing Owned
Ettlingen, Germany Administrative, warehousing Owned
Zaventem, Belgium Administrative, warehousing Leased
Sao Paulo, Brazil Administrative, manufacturing, Owned
warehousing
Johannesburg, South Africa Administrative, warehousing Leased
Sydney, Australia Administrative, warehousing Owned/
Leased
The company believes its present facilities are adequate for its current
needs.
ITEM 3. LEGAL PROCEEDINGS
Securities Litigation
On November 29,1993, the United States District Court for the Central District
of California granted the Company's Motion for Summary Judgment in the case
captioned, "In Re Allergan Shareholders Litigation," SACV 89-643 AHS (RWRx),
described in the Annual Report on Form 10-K for the year ended December 31,
1992 (the "1992 10-K"), dismissing all of plaintiffs' claims pending against
the Company and the other defendants. Plaintiffs subsequently filed a Notice
of Appeal in the United States Court of Appeals for the Ninth Circuit. During
March 1994, the parties, and others, entered into an agreement (the
"Settlement") as a result of which the appeal was dismissed with prejudice and
the litigation brought to an end. Additionally, the Settlement brought to an
end the derivative action captioned Peter Stuyvesant, Ltd. v. Herbert, et al.,
No. B009384, described in the 1992 10-K.
Other Litigation
The Company and its subsidiaries are involved in various litigation and
claims arising in the normal course of business which Allergan considers to be
normal in view of the size and nature of its business.
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***
Although the ultimate outcome of pending litigation cannot be precisely
ascertained at this time, Allergan believes that any liability resulting from
the aggregate amount of uninsured damages for outstanding lawsuits and claims
will not have a material adverse effect on its consolidated financial position.
However, in view of the unpredictable nature of litigation, no assurances can
be given in this regard.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company did not submit any matter during the fourth quarter of the
fiscal year covered by this report to a vote of security holders, through the
solicitation of proxies or otherwise.
ITEM I-A. EXECUTIVE OFFICERS OF ALLERGAN, INC.
The executive officers of the Company and their ages as of February 28, 1994
are as follows:
Vicente Anido, Jr., Ph.D. 41 Corporate Vice President and President, Americas Region
Edgar J. Cummins 50 Corporate Vice President and Chief Financial Officer
Jeffrey B. D'Eliscu 43 Corporate Vice President, Corporate Communications
Michael J. Donohoe 51 Corporate Vice President and President, Europe Region
Richard M. Haugen 41 Executive Vice President and Chief Operating Officer
Gavin S. Herbert 61 Chairman of the Board
Richard J. Hilles 51 Corporate Vice President, Human Resources
Lester J. Kaplan, Ph.D. 43 Corporate Vice President, Research and Development
Benjamin F. McGraw III, 44 Corporate Vice President, Corporate Development
Pharm.D.
Diethart Reichardt 51 Corporate Vice President, Optical
Jacqueline J. Schiavo 45 Corporate Vice President, Worldwide Operations
William C. Shepherd 55 President and Chief Executive Officer
Francis R. Tunney, Jr. 46 Corporate Vice President, General Counsel and Secretary
Dwight J. Yoder 49 Vice President, Controller
Officers are appointed by and hold office at the pleasure of the Board of
Directors.
Dr. Anido has been Corporate Vice President and President, Americas Region
since June 1993. Prior thereto, he had 18 years of experience with
pharmaceutical companies. Dr. Anido was Vice President, Business Management of
the U.S. Prescription Products Division of Marion Merrell Dow, Inc. from 1991
to 1993, President and General Manager (1990-1991) and Vice President, Sales &
Marketing (1989-1990) of Nordic Laboratories, Inc. He also held various
management positions with Marion Laboratories, Inc.
Mr. Cummins has been Corporate Vice President and Chief Financial Officer of
the Company since 1991 and had been Senior Vice President, Finance and Chief
Financial Officer from 1986 to 1991. Mr. Cummins was Treasurer from 1986 to
1989. Prior thereto he held various senior level
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financial positions with American Hospital Supply/Baxter Travenol. Mr. Cummins
is a Director of OSI Corp.
Mr. D'Eliscu has been Corporate Vice President, Corporate Communications since
1992 and was Vice President, Investor Relations and Public Communications from
1991. Mr. D'Eliscu had been Senior Director, Investor Relations of the Company
from June 1989 to February 1991 and prior thereto, he had been Director of
Business Development from 1988 and Senior Product Manager from December 1985.
Mr. D'Eliscu first joined the Company in 1979.
Mr. Donohoe has been Corporate Vice President and President, Europe Region
since 1992. Prior thereto, he was Corporate Vice President and President,
Optical, Consumer/OTC Group from 1991. Mr. Donohoe was Senior Vice President
and General Manager, Contact Lenses from 1990 to 1991 and Area Vice President,
Northern Europe from 1989 to 1990. Mr. Donohoe held the position of Senior
Vice President, Worldwide Marketing for the Optical Division from 1988 to 1989
and was Vice President, International Marketing from 1987 to 1988. Mr. Donohoe
first joined the Company in 1987.
Mr. Haugen has been Executive Vice President and Chief Operating Officer since
April 1992 and had been Corporate Vice President of the Company and President,
Worldwide Eye Marketing and Sales & Operations since January 1992. Prior
thereto, Mr. Haugen was Corporate Vice President and President, Americas Region
in 1991 and had been President of Allergan Optical and Senior Vice President of
the Company from 1989 to 1991. Prior thereto he was Senior Vice President and
President of Allergan Pharmaceuticals from 1988 to 1989 and was Senior Vice
President, Planning and Business Development since 1987. Mr. Haugen first
joined the Company in 1976.
Mr. Herbert has been Chairman of the Board since 1977 and was also Chief
Executive Officer from 1977 to 1991. Prior thereto, Mr. Herbert had been
President and Chief Executive Officer of the Company since 1961. He was
Executive Vice President of SmithKline Beckman Corporation from 1986 to 1989
and President of SmithKline Beckman Corporation's Eye and Skin Care Products
Operations from 1981 to 1989. Mr. Herbert was a founder of the Company in
1950.
Mr. Hilles has been Corporate Vice President, Human Resources since 1991 and
prior thereto was Senior Vice President, Human Resources from 1986 to 1991. He
was Vice President, Human Resources from 1981 to 1986. Mr. Hilles first joined
SmithKline Beckman Corporation in 1965.
Dr. Kaplan has been Corporate Vice President, Research and Development since
1992. He had been Senior Vice President, Pharmaceutical Research and
Development since 1991, Senior Vice President, Research and Development since
1989 and Vice President since 1988. Dr. Kaplan had served as Senior Director
in Group Research and Development from 1986 to 1988 and as Associate Director,
Discovery Research from 1984 to 1986. Dr. Kaplan first joined the Company in
1983.
Dr. McGraw has been Corporate Vice President, Corporate Development since April
1993. Prior thereto, he was President of Carerra Capital Management, Inc., an
investment firm, from 1991 to 1993 and President of MedTech Trends, Inc., an
investment analysis firm, from 1990 to 1993. During the period from 1978 to
1990, Dr. McGraw held various management positions, including Vice President,
Development, with Marion Merrell Dow, Inc. and Marion Laboratories, Inc.,
pharmaceutical companies.
Mr. Reichardt has been Corporate Vice President, Optical since 1992. Prior
thereto, he was Senior Vice President, Marketing/Business Development, Optical
from 1991 and Senior Vice President, Northern Europe from 1983. Mr. Reichardt
first joined the Company in 1972.
10
13
Ms. Schiavo has been Corporate Vice President, Worldwide Operations since 1992.
She was Senior Vice President, Operations from 1991 and Vice President,
Operations from 1989. Prior thereto, she was Senior Director, Operations from
1988 to 1989. Ms. Schiavo first joined the Company in 1980.
Mr. Shepherd has been President and Chief Executive Officer of the Company
since 1992 and prior thereto had been President and Chief Operating Officer
from 1984 to 1991. Prior to 1984, Mr. Shepherd was President of Allergan U.S.,
Senior Vice President, U.S. Operations and Vice President, Operations.
Mr. Shepherd first joined the Company in 1966.
Mr. Tunney has been Corporate Vice President, General Counsel and Secretary of
the Company since 1991 and prior thereto was Senior Vice President, General
Counsel and Secretary from 1989 to 1991. Mr. Tunney had served as Vice
President, General Counsel and Assistant Secretary of the Company since 1986,
and as Associate General Counsel of the Company since 1985. Prior thereto he
was Senior International Attorney for SmithKline Beckman Corporation which he
joined in 1979.
Mr. Yoder has been Vice President and Controller of the Company since 1990.
Prior thereto, Mr. Yoder held various management positions with Del Taco, Inc.
from 1983 to 1989, including Vice President, Finance of Del Taco/Naugles
Restaurants and Vice President, Controller of Del Taco, Inc. Mr. Yoder first
joined the Company in 1990.
The information required by Item 405 of Regulation S-K is included on page 7 of
the Proxy Statement and is incorporated herein by reference.
11
14
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The sections entitled "Shareholder Information" and "Stock Listing" on
page 54 of the Annual Report are incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The table entitled "Summary of Selected Financial Data" on page 51 of the
Annual Report is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The section entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations for the Three Year Period Ended December
31, 1993" on pages 25-30 of the Annual Report is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements, including the notes thereto, together with the
sections entitled "Independent Auditors' Report" and "Quarterly Results
(unaudited)" of the Annual Report included on pages 31-47, 49 and 50,
respectively, are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The section entitled "Independent Auditors" on page 26 of the Proxy
Statement is incorporated herein by reference.
12
15
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF ALLERGAN, INC.
Information under this Item is included on pages 2-4 of the Proxy
Statement and such information is incorporated herein by reference.
Information with respect to executive officers is included on pages 11-13 of
this Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
The section entitled "Executive Compensation," and the subsection
entitled "Director Compensation" included in the Proxy Statement on pages 11-15
and 6-7, respectively, are incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The common stock information in the section entitled "Security Ownership
of Certain Beneficial Owners and Management" on pages 8-10 of the Proxy
Statement is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The subsections entitled "Other Matters" and "Compensation Committee
Interlocks and Insider Participation" on pages 7 and 19, respectively, of the
Proxy Statement are incorporated herein by reference.
13
16
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Index to Financial Statements * Page in
----------------------------- -------
Annual Report
-------------
1. Financial Statements included in Part II of this report:
--------------------------------------------------------
Independent Auditors' Report 49
Consolidated Balance Sheets at December 31, 1993 and
December 31, 1992 31
Consolidated Statements of Earnings for Each of the
Years in the Three Year Period Ended December 31, 1993 32
Consolidated Statements of Cash Flows for Each of the 33
Years in the Three Year Period Ended December 31, 1993
Notes to Consolidated Financial Statements 34-47
* Incorporated by reference from the indicated pages of the Company's Annual
Report to Shareholders for the fiscal year ended December 31, 1993 (and except
for these pages, the Company's Annual Report to Shareholders for the fiscal
year ended December 31, 1993, is not deemed filed as part of this report).
2. Schedules Supporting the Consolidated Financial Statements: Page in
----------------------------------------------------------- -------
This Report
-----------
Independent Auditors' Reports on Schedules 20
Schedules numbered in accordance with Rule 5.04 of
Regulation S-X:
II Loans Outstanding to Employees..................................... S-1
V Property, Plant and Equipment...................................... S-2
VI Accumulated Depreciation of Property, Plant and Equipment.......... S-3
VIII Allowance for Doubtful Accounts.................................... S-4
IX Short-Term Borrowings 1991, 1992 and 1993.......................... S-5
X Supplementary Income Statement Information....................... .. S-6
All other schedules have been omitted for the reason that the
required information is presented in financial statements or notes thereto, the
amounts involved are not significant or the schedules are not applicable
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the last quarter of
1993.
(c) Item 601 Exhibits
Reference is made to the Index of Exhibits beginning at page 17 of
this report.
(d) Other Financial Statements
There are no financial statements required to be filed by
Regulation S-X which are excluded from the annual report to shareholders by
Rule 14 a-3(b)(1).
14
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Date: March 22, 1994 ALLERGAN, INC.
By /S/ WILLIAM C. SHEPHERD
William C. Shepherd
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
Date: March 22, 1994 By /S/ WILLIAM C. SHEPHERD
William C. Shepherd
President and Chief
Executive Officer
Date: March 22,1994 By /S/ EDGAR J. CUMMINS
Edgar J. Cummins
Corporate Vice President/
Chief Financial Officer
Date: March 22, 1994 By /S/ TAMARA J. ERICKSON
Tamara J. Erickson,
Director
Date: March 22, 1994 By /S/ HANDEL E. EVANS
Handel E. Evans, Director
Date: March 22, 1994 By /S/ WILLIAM R. GRANT
William R. Grant,
Director
Date: March 22, 1994 By /S/ HOWARD E. GREENE,JR.
Howard E. Greene, Jr.,
Director
Date: March 22, 1994 By /S/ RICHARD M. HAUGEN
Richard M. Haugen,
Director
Date: March 22, 1994 By /S/ GAVIN S.HERBERT
Gavin S. Herbert
Chairman of the Board
15
18
Date: March 23, 1994 By /S/ KENNETH N. KERMES
Kenneth N. Kermes,
Director
Date: March 22,1994 By /S/ LESLIE G. MCCRAW
Leslie G. McCraw,
Director
Date: March 22, 1994 By /S/ LOUIS T. ROSSO
Louis T. Rosso, Director
Date: March 22, 1994 By /S/ LEONARD D. SCHAEFFER
Leonard D. Schaeffer,
Director
Date: March __, 1994 By _______________________
Henry Wendt, Director
16
19
INDEX OF EXHIBITS
Sequentially
Exhibit Numbered
Number Description Page
3.1 Restated Certificate of Incorporation of the Company as filed with
the State of Delaware on May 22, 1989 (incorporated by reference to
Exhibit 3.1 to Registration Statement on Form S-1 No. 33-28855,
filed May 24, 1989).................
3.2 Bylaws of the Company (incorporated by reference to Exhibit 3 to
Form 8-K filed March 3, 1994)..............................
4.1 Certificate of Designation, Preferences and Rights of Series A
Participating Preferred Stock as filed with the State of Delaware on
May 22, 1989 (incorporated by reference to Exhibit 4.1 to
Registration Statement on Form S-1 No. 33-28855, filed May 24,
1989).......................................
4.2 Rights Agreement, dated as of May 18, 1989, between Allergan, Inc.
and First Chicago Trust Company of New York (as successor Rights
Agent to Morgan Shareholder Services Trust Company (incorporated by
reference to Exhibit 4.2 to Registration Statement on Form S-1 No.
33-28855, filed May 24, 1989).......................................
4.3 Amendment to Rights Agreement, dated as of September 28, 1993
between Allergan, Inc. and First Chicago Trust Company of New York
(as successor Rights Agent to Morgan Shareholder Services Trust
Company) (incorporated by reference to Exhibit 4 to Form 8-K, filed
March 3, 1994).......................................
10.1 Form of director and executive officer Indemnity Agreement
incorporated by reference to Exhibit 10.4 to the Company's Report on
Form 10-K for the Fiscal Year ended December 31,
1992)......................................................
10.2 Allergan, Inc. 1989 Nonemployee Director Stock Plan , as amended and
restated (incorporated by reference to Exhibit A to the Company's
Proxy Statement dated March 17, 1994, filed in definitive form on
March 16, 1994)................................................
10.3 Allergan, Inc. Deferred Directors' Fee Program (incorporated by
reference to Exhibit 10.6 to the Company's Report on Form 10-K for
the Fiscal Year ended December 31, 1991).......................
17
20
INDEX OF EXHIBITS
Exhibit Sequentially
Number Description Numbered
Page
10.4 Allergan, Inc. 1989 Incentive Compensation Plan , as amended April
1992 (incorporated by reference to Exhibit 10.2 to the Company's
Report on Form 10-Q for the Quarter ended March 31,
1992)..............................................................
10.5 Restated Allergan, Inc. Employee Stock Ownership Plan ("ESOP")
(incorporated by reference to Exhibit 10.1 to the Company's Report
on Form 10-Q for the Quarter ended June 30,
1993).........................................................
10.6 Restated Allergan, Inc. Savings and Investment Plan (incorporated by
reference to Exhibit 10.2 to the Company's Report on Form 10-Q for
the Quarter ended June 30, ...................................
10.7 Form of Allergan change in control severance agreement (replaces the
document filed as Exhibit 10.8 to Registration Statement on Form
S-1 No. 33-28855) (incorporated by reference to Exhibit 10.13 to the
Company's Report on Form 10-K for the Fiscal Year ended December 31,
1989).....................................................
10.8 $150,000,000 Credit Agreement dated as of December 22, 1993 among
the Company, the Banks Listed Therein, Morgan Guaranty Trust
Company of New York, as Agent and Bank of America National Trust and
Savings Association, as Co-Agent..........................
10.9 $50,000,000 Credit Agreement dated as of December 22, 1993 among the
Company, the Banks Listed Therein, Morgan Guaranty Trust Company of
New York, as Agent and Bank of America National Trust and Savings
Association, as Co-Agent..........................
10.10 Restated Allergan, Inc. Pension Plan ("Pension Plan) (incorporated
by reference to Exhibit 10.3 to the Company's Report on Form 10-Q
for the Quarter ended June 30, 1993)..............................
10.11 Allergan, Inc. Supplemental Retirement Income Plan (incorporated by
reference to Exhibit 10.16 to the Company's Report on Form 10-K for
the Fiscal Year ended December 31, 1989).........................
10.12 Allergan, Inc. Supplemental Executive Benefit Plan (incorporated by
reference to Exhibit 10.17 to the Company's Report on Form 10-K for
the Fiscal Year ended December 31, 1989).........................
10.13 Allergan, Inc. Management Bonus Plan (incorporated by reference to
Exhibit 10.4 to the Company's Report on Form 10-Q for the Quarter
ended June 30, 1993)............................................
10.14 Distribution Agreement dated March 4, 1994 between Allergan, Inc.
and Merrill Lynch & Co. and J.P. Morgan Securities Inc. ........
18
21
INDEX OF EXHIBITS
Sequentially
Exhibit Numbered
Number Page
11 Statement re Computation of Earnings Per
Share..............................
13 The Company's Annual Report to Shareholders for the fiscal year
ended December 31, 1993 (with the exception of the information
incorporated by reference into Items 5, 6, 7 and 8 of this report,
the Annual Report to Shareholders is not deemed to be filed as part
of this report)..............
22 List of Subsidiaries of the
Company.........................................
23 Consent of KPMG Peat Marwick to the incorporation of their reports
herein to Registration Statements Nos. 33-29528, 33-29527, 33-44770,
33-48908 and 33-66874....................
19
22
INDEPENDENT AUDITORS' REPORT ON SCHEDULES
To the Stockholders and Board of Directors of Allergan, Inc.:
Under date of January 24, 1994, we reported on the consolidated balance sheets
of Allergan, Inc. and subsidiaries as of December 31, 1993 and 1992, and the
related consolidated statements of earnings and cash flows for each of the
years in the two-year period ended December 31, 1993, which are included in the
1993 Annual Report to Stockholders. These consolidated financial statements
and our report thereon are incorporated by reference in the Company's Annual
Report on Form 10-K for the year 1993. In connection with our audit of the
aforementioned consolidated financial statements, we also audited the related
1993 and 1992 consolidated financial statement schedules in the Form 10-K.
These consolidated financial statement schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statement schedules based on our audits.
In our opinion, such schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly, in all
material respects, the information set forth therein.
As discussed in note 5 to the consolidated financial statements, the Company
changed its method of accounting for income taxes in 1992 to adopt the
provisions of the Financial Accounting Standards Board's Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes." As discussed in
note 7 to the consolidated financial statement, the Company also adopted the
provisions of the Financial Accounting Standards Board's Statement of Financial
Accounting Standards No. 106, "Employer's Accounting for Postretirement
Benefits Other Than Pensions, " in 1992.
KPMG PEAT MARWICK
Orange County, California
January 24, 1994
20
23
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and Board of Directors of Allergan, Inc.
We have audited the consolidated financial statements and the financial
statement schedules of Allergan, Inc. and Subsidiaries listed in the index on
page 14 of this Form 10-K as of December 31, 1991 and for the year ended
December 31, 1991. These financial statements and financial statement
schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated results of operations and cash flows of
Allergan, Inc. and Subsidiaries for the year ended December 31, 1991 in
conformity with generally accepted accounting principles. In addition, in our
opinion, the financial statement schedules referred to above, when considered
in relation to the basic financial statements taken as a whole present fairly,
in all material respects, the information required to be included therein.
COOPERS & LYBRAND
Newport Beach, California
February 24, 1992
21
24
SCHEDULE II
ALLERGAN, INC.
Loans Outstanding to Employees
(in thousands)
Balance at end of
Period
Balance at ====================
Beginning Amount Amount Not
of Period Additions Collected Written Off Current Current
========= ========= ========= =========== ======= =======
For the year ended December 31, 1993
Richard Hilles $ 15 $ - $ 15 $ - $ - $ - Secured by real estate.
For the year ended December 31, 1992
David Bruns $130 $ - $130 $ - $ - $ - See Footnote A.
Richard Hilles 35 - 20 - - $15 Secured by real estate.
For the year ended December 31, 1991
David Bruns $130 $ - $ - $ - $130 $ - See Footnote A.
Richard Hilles 150 - 115 - - 35 Secured by real estate.
Loans to employees for items arising in the ordinary course of business
including loans in connection with the Company's employee relocation program
and expatriate tax equalization program are excluded from the above schedule.
Footnote A: Collateralized by American Depository Receipts of SmithKline
Beecham at 6% annual interest rate.
S-1
25
SCHEDULE V
ALLERGAN, INC.
Property, Plant and Equipment
Years ended December 31, 1993, 1992 and 1991
(Dollars in millions)
Balance at (a) Balance
Beginning Retirements Other Changes at end
of Year Additions or Sales Add (Deduct) of Year
------- --------- -------- ------------ -------
>
1993
Land . . . . . . . . . $ 14.4 $ 0.1 $ - $ (0.5) $ 14.0
Buildings . . . . . . . 205.7 23.8 0.5 (8.3) 220.7
Machinery & equipment . 186.1 36.6 10.1 (6.3) 206.3
------ ------- --------- --------- --------
$406.2 $ 60.5 $ 10.6 $ (15.1 $ 441.0
======== ======= ======= ========= ========
1992
Land . . . . . . . . . $ 12.3 $ 0.8 $ - $ 1.3 $ 14.4
Buildings . . . . . . . 171.7 41.3 2.8 (4.5) 205.7
Machinery & equipment . 181.5 24.9 6.5 (13.8) 186.1
------- -------- ------------ ------- -------
$365.5 $ 67.0 $ 9.3 $ (17.0) $ 406.2
========= ======== =========== ========= ========
1991
Land . . . . . . . . . $ 10.1 $ 1.5 $ - $ 0.7 $ 12.3
Buildings . . . . . . . 154.2 26.6 9.0 (0.1) 171.7
Machinery & equipment . 186.9 24.1 23.9 (5.6) 181.5
-------------------- --------------- --------- -------
$351.2 $ 52.2 $ 32.9 $ (5.0) $ 365.5
========== ========== =========== ========= ========
_________________________
(a) Includes adjustments from translating at current exchange rates,
transfers to and from other accounts and assets of businesses sold
or acquired.
S-2
26
SCHEDULE VI
ALLERGAN, INC.
Accumulated Depreciation of Property, Plant and Equipment
Years ended December 31, 1993, 1992 and 1991
(Dollars in millions)
Balance at (a) Balance
Beginning Retirements Other Changes at end
of Year Additions or Sales Add(Deduct) of Year
------- --------- -------- ------------ ------
- --
1993
Buildings . . . . . . . $ 30.3 $ 6.6 $ 0.2 $ 0.7 $ 37.4
Machinery & equipment . 107.3 23.6 8.6 (6.8) 115.5
-------- ------- ------- -------- -------
$137.6 $30.2 $ 8.8 $ (6.1) $152.9
====== ===== ====== ======== =======
1992
Buildings . . . . . . . $ 25.7 $ 5.6 $ 0.8 $ (0.2) $ 30.3
Machinery & equipment . 102.6 22.2 4.8 (12.7) 107.3
---------- ------- -------- -------- -------
$128.3 $27.8 $ 5.6 $(12.9) $137.6
====== ===== ====== ====== ======
1991
Buildings . . . . . . . $ 24.4 $ 6.0 $ 4.5 $ (0.2) $ 25.7
Machinery & equipment . 95.8 23.4 15.1 (1.5) 102.6
-------- ------ ------ -------- -------
$120.2 $29.4 $19.6 $ (1.7) $128.3
====== ===== ===== ======= ======
_________________________
(a) Includes adjustments from translating at current exchange rates,
transfers to and from other accounts and assets of businesses sold
or acquired.
S-3
27
SCHEDULE VIII
ALLERGAN, INC.
Allowance for Doubtful Accounts
Years Ended December 31, 1993, 1992 and 1991
(Dollars in millions)
Balance at Balance
Beginning at End
of Year Additions Deductions of Year
======= ========= ========== =======
1993 $0.4(c)
2.5(b)
-----
$7.0 $1.7(a) $2.9 $5.8
==== ==== ==== ====
1992 $0.5(c)
3.3(b)
-----
$10.4 $0.4(a) $3.8 $7.0
===== ==== ==== ====
1991 $0.9(c)
3.6(b)
-----
$10.6 $4.3(a) $4.5 $10.4
===== ==== ==== =====
_________________________
(a) Provision charged to earnings.
(b) Accounts written off.
(c) Allowance of business sold.
S-4
28
SCHEDULE IX
ALLERGAN, INC.
Short-Term Borrowings 1993, 1992 and 1991
(Dollars in millions)
Weighted
Balance Weighted Maximum Amount Average Amount Average
at End Average Outstanding Outstanding Interest Rate
of Year Interest Rate During the Year During the Year During the Year
======= ============= =============== =============== ===============
1993
Bank Loans $ 4.0 7.3% $ 6.5 $ 4.9 7.4%
Commercial Paper $102.9 3.5% $ 123.0 $ 91 .1 3.2%
1992
Bank Loans $ 3.6 5.9% $ 5.1 $ 3.5 6.7%
Commercial Paper $ 72.7 3.5% $114.0 $ 92.0 5.2%
1991
Bank Loans $13.6 12.5% $ 13.5 $ 7.3 14.6%
Commercial Paper $81.7 6.5% $148.5 $125.4 6.6%
At the end of each year presented, $30 million of commercial
paper was classified as short-term borrowings while $72.9
million, $42.7 million and $51.7 million, at December 31,
1993, 1992 and 1991 respectively, was classified as long-term
debt because the Company has the ability to refinance this
debt on a long-term basis under the terms of the revolving
credit facility described below. Interest rate calculations
and amounts outstanding during the year are based on the full
amount of commercial paper outstanding.
The average amounts outstanding during the year were computed
using month-end balances.
The weighted average interest rates during the year were
computed by dividing the associated interest expense for the
period by the average amount of borrowings outstanding during
the year.
The Company has various short-term lines of credit at its
foreign subsidiaries used in the normal course of business.
In December 1993, the Company entered into a domestic $200
million revolving credit facility with several banks. A $50
million portion of the facility expires in December 1994 while
the remaining $150 million expires in December 1998. This
credit facility replaced a similar facility entered into in
July 1989. The facility offers various interest rates at the
Company's option based on a percentage of prime or the London
interbank borrowing rates, or other negotiated rates, and is
used to support general corporate purposes and the issuance of
commercial paper in the United States.
S-5
29
SCHEDULE X
ALLERGAN, INC.
Supplementary Income Statement Information
Years Ended December 31, 1993, 1992 and 1991
(Dollars in millions)
The following amounts have been charged to earnings:
1993 1992 1991
==== ==== ====
Advertising and promotion costs $75.3 $71.2 $69.9
Royalty expense $25.6 $21.0 $19.9
S-6