Exhibit 99.1

 

ALLERGAN REPORTS THIRD QUARTER 2012 OPERATING RESULTS

(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.”

 

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Product and Pipeline Update

During the third quarter of 2012:

 

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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.

 

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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.

 

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Outlook

For the full year of 2012, Allergan expects:

 

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

 

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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.

 

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Facial aesthetics product net sales between $380 million and $390 million.

 

•

Non-GAAP cost of sales to product net sales ratio at approximately 14%.

 

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Non-GAAP other revenue at approximately $90 million.

 

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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

 

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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.

 

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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.

Allergan Contacts

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)

^® 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.

 

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ALLERGAN, INC.

Condensed Consolidated Statements of Earnings and

Reconciliation of Non-GAAP Adjustments

(Unaudited)

 

		Three months ended
In millions, except per share amounts		September 30, 2012												September 30, 2011
		GAAP				Non-GAAP Adjustments				Non-GAAP				GAAP				Non-GAAP Adjustments				Non-GAAP
Revenues
Product net sales		$	1,391.1			$	–			$	1,391.1			$	1,311.1			$	–			$	1,311.1
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 acquired intangible assets)			188.8				–				188.8				188.1				(0.4	)(i)			187.7
Selling, general and administrative			540.8				(3.6	)(a)(b)(c)(d)			537.2				538.5				(21.4	)(j)(k)(l)			517.1
Research and development			293.3				(62.5	)(d)			230.8				221.3				–				221.3
Amortization of acquired intangible assets			33.2				(27.4	)(e)			5.8				31.9				(26.0	)(e)			5.9
Impairment of intangible assets and related costs			–				–				–				4.3				(4.3	)(m)			–
Restructuring charges (reversal)			3.8				(3.8	)(f)			–				(0.1	)			0.1	(f)			–
Operating income			354.0				97.3				451.3				344.4				52.0				396.4
Non-operating income (expense)
Interest income			1.9				–				1.9				1.8				–				1.8
Interest expense			(15.9	)			–				(15.9	)			(15.2	)			–				(15.2	)
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 taxes			330.8				104.4				435.2				356.8				34.7				391.5
Provision for income taxes			80.2				28.8	(h)			109.0				105.8				0.4	(p)			106.2
Net earnings			250.6				75.6				326.2				251.0				34.3				285.3
Net earnings attributable to noncontrolling interest			1.2				–				1.2				1.2				–				1.2
Net earnings attributable to Allergan, Inc.		$	249.4			$	75.6			$	325.0			$	249.8			$	34.3			$	284.1
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 of acquired intangible assets)			13.6	%							13.6	%			14.3	%							14.3	%
Selling, general and administrative			38.9	%							38.6	%			41.1	%							39.4	%
Research and development			21.1	%							16.6	%			16.9	%							16.9	%

 

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(a)	Expenses from changes in fair value of contingent consideration of $2.4 million associated with business combinations

(b)	External costs of $0.5 million for stockholder derivative litigation costs associated with the U.S. Department of Justice (DOJ) settlement announced in September 2010

(c)	Expenses related to the realignment of various business functions and the restructuring of the obesity intervention business of $0.6 million

(d)

Upfront licensing fees of $62.5 million included in research and development expenses associated with the license and collaboration 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

(i)	Fair market value inventory adjustment rollout associated with the 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

(k)	External costs of $0.8 million for stockholder derivative litigation costs associated with the DOJ settlement announced in September 2010

(l)	Milestone payment of $20.0 million for the United States Food and 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.

(m)	Impairment of an in-process research and development asset related 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

(p)	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 $34.7 million		$	(10.2	)
Change in estimated tax benefit associated with the upfront licensing fee paid to Molecular Partners AG			11.7
Change in estimated taxes related to uncertain tax positions and tax credits included in prior year filings			(1.9	)
		$	(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:

 

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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

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other companies in Allergan’s industry may calculate non-GAAP earnings differently than it does, which may limit its usefulness as a comparative measure.

 

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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.

 

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ALLERGAN, INC.

Condensed Consolidated Statements of Earnings and

Reconciliation of Non-GAAP Adjustments

(Unaudited)

 

		Nine months ended
In millions, except per share amounts		September 30, 2012												September 30, 2011
		GAAP				Non-GAAP Adjustments				Non-GAAP				GAAP				Non-GAAP Adjustments				Non-GAAP
Revenues
Product net sales		$	4,224.2			$	–			$	4,224.2			$	3,964.3			$	–			$	3,964.3
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 of acquired intangible assets)			586.3				(0.4	)(a)(b)			585.9				566.7				(0.4	)(k)			566.3
Selling, general and administrative			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
Research and development			750.3				(62.8	)(d)(e)			687.5				676.4				(45.0	)(n)			631.4
Amortization of acquired intangible assets			98.1				(80.4	)(f)			17.7				95.6				(77.9	)(f)			17.7
Impairment of intangible assets and related costs			–				–				–				23.7				(23.7	)(o)(q)(r)			–
Restructuring charges			4.7				(4.7	)(g)			–				4.6				(4.6	)(g)			–
Operating income			1,147.3				174.7				1,322.0				955.1				232.0				1,187.1
Non-operating income (expense)
Interest income			4.8				–				4.8				5.6				–				5.6
Interest expense			(48.8	)			0.8	(h)			(48.0	)			(55.1	)			7.3	(s)			(47.8	)
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 taxes			1,084.0				190.7				1,274.7				916.0				225.9				1,141.9
Provision for income taxes			306.7				44.2	(j)			350.9				257.6				59.9	(v)			317.5
Net earnings			777.3				146.5				923.8				658.4				166.0				824.4
Net earnings attributable to noncontrolling interest			2.7				–				2.7				3.7				–				3.7
Net earnings attributable to Allergan, Inc.		$	774.6			$	146.5			$	921.1			$	654.7			$	166.0			$	820.7
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 of acquired intangible assets)			13.9	%							13.9	%			14.3	%							14.3	%
Selling, general and administrative			40.5	%							39.9	%			42.7	%							40.7	%
Research and development			17.8	%							16.3	%			17.1	%							15.9	%

 

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(a)	Fair market value inventory adjustment rollout of $0.3 million associated with the purchase of a distributor’s business in Russia related to Allergan’s products

(b)	Expenses from changes in fair value of contingent consideration of $15.8 million and integration and transaction costs of $0.6 million associated with business combinations, consisting of cost of sales of $0.1 million and selling, general and administrative expenses of $0.5 million

(c)	Aggregate charges of $8.9 million for external costs for stockholder derivative litigation associated with the DOJ settlement announced in September 2010 and other legal contingency expenses

(d)	Expenses related to the realignment of various business functions and the restructuring of the obesity intervention business of $1.4 million, consisting of selling, general and administrative expenses of $1.1 million and research and development expenses of $0.3 million

(e)

Upfront licensing fees of $62.5 million included in research and development expenses associated with the license and collaboration 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 included in prior year filings			6.7
		$	(44.2	)

 

(k)	Fair market value inventory adjustment rollout associated with the purchase of a distributor’s business in South Africa related to Allergan’s products

(l)	Expenses from changes in fair value of contingent consideration of $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

(n)

Upfront licensing fee of $45.0 million included in research and development expenses associated with a license and collaboration 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

(o)

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 administrative expenses, and intangible asset impairment of $16.1 million resulting from the discontinued development of the Easyband™ Remote Adjustable Gastric Band System, a technology acquired by Allergan in the 2007 EndoArt SA acquisition

(p)

Upfront payment of $60.0 million and subsequent milestone payment of $20.0 million 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 costs of $0.6 million

(q)	Impairment of an in-process research and development asset related to a tissue reinforcement technology acquired in connection with the 2010 acquisition of Serica Technologies, Inc. of $4.3 million

(r)	Additional costs of $3.3 million for the termination of a 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

 

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11-11-11

 

ALLERGAN, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

 

in millions						September 30, 2012														December 31, 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 investments						$	2,934.9													$	2,586.0
Total notes payable and long-term debt							(1,556.2	)													(1,599.3	)
Cash and equivalents and short-term investments, net of debt						$	1,378.7													$	986.7
Debt-to-capital percentage							21.8	%													23.1	%

 

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12-12-12

 

ALLERGAN, INC.

Reconciliation of Non-GAAP Earnings and Diluted Earnings Per Share Attributable to Allergan, Inc. Stockholders

(Unaudited)

 

In millions, except per share amounts		Three months ended
		September 30, 2012								September 30, 2011
Net earnings attributable to Allergan, Inc.		$	249.4							$	249.8
Non-GAAP pre-tax adjustments:
Expenses from changes in fair value of contingent consideration and integration and transaction costs associated with business combinations			2.4								0.6
External costs for stockholder derivative litigation associated with the DOJ settlement			0.5								0.8
Expenses related to the realignment of various business functions and the restructuring of the obesity intervention business			0.6								–
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 related transaction costs			62.6								–
Amortization of acquired intangible assets			27.4								26.0
Net restructuring charges (reversal)			3.8								(0.1	)
Unrealized loss (gain) on derivative instruments			7.1								(16.8	)
Fair market value inventory adjustment rollout associated with the purchase of a distributor’s business in South Africa			–								0.4
Milestone payment for the FDA acceptance of an NDA filing for technology associated with a collaboration and co-promotion agreement with MAP Pharmaceuticals, Inc.			–								20.0
Impairment of an in-process research and development asset related to a tissue reinforcement technology acquired in connection with the 2010 acquisition of Serica Technologies, Inc.			–								4.3
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 licensing fee paid to Molecular Partners AG			–								11.7
Change in estimated taxes related to uncertain tax positions and tax credits included in prior year filings			–								(1.9	)
Non-GAAP earnings attributable to Allergan, Inc.		$	325.0							$	284.1
Weighted average number of shares outstanding			300.1								304.2
Net shares assumed issued using the treasury stock method for options and non-vested equity shares and share units outstanding during each period based on average market price			5.2								5.6
			305.3								309.8
Diluted earnings per share attributable to Allergan, Inc. stockholders		$	0.82							$	0.81
Non-GAAP earnings per share adjustments:
Expenses from changes in fair value of contingent consideration and integration and transaction costs associated with business combinations			0.01								–
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 related transaction costs			0.15								–
Amortization of acquired intangible assets			0.06								0.06
Net restructuring charges (reversal)			0.01								–
Unrealized loss (gain) on derivative instruments			0.01								(0.03	)
Milestone payment for the FDA acceptance of an NDA filing for technology associated with a collaboration and co-promotion agreement with MAP Pharmaceuticals, Inc.			–								0.04
Impairment of an in-process research and development asset related to a tissue reinforcement technology acquired in connection with the 2010 acquisition of Serica Technologies, Inc.			–								0.01
Change in estimated tax benefit associated with the upfront licensing fee paid to Molecular Partners AG			–								0.04
Change in estimated taxes related to uncertain tax positions and tax credits included in prior year filings			–								(0.01	)
Non-GAAP diluted earnings per share attributable to Allergan, Inc. stockholders		$	1.06							$	0.92
Year over year change							15.2	%

 

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13-13-13

 

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, 2012						September 30, 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 businesses			0.3						0.4
Expenses from changes in fair value of contingent consideration and integration and transaction costs associated with business combinations			16.4						3.8
Aggregate charges for external costs for stockholder derivative litigation associated with the DOJ settlement and other legal contingency expenses			8.9						3.1
Expenses related to the realignment of various business functions and the restructuring of the obesity intervention business			1.4						–
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 related transaction costs			62.6						45.1
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 positions included in prior year filings			0.8						–
Unrealized loss (gain) on derivative instruments			15.2						(12.0	)
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™ Remote Adjustable Gastric Band System			–						8.9
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 costs			–						80.6
Impairment of an in-process research and development asset related to a tissue reinforcement technology acquired in connection with the 2010 acquisition of Serica Technologies, Inc.			–						4.3
Additional costs for the termination of a third-party agreement primarily related to the promotion of Sanctura XR®			–						3.3
Non-cash interest expense associated with amortization of convertible debt discount			–						7.3
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 tax positions included in prior year filings			6.7						–
Non-GAAP earnings attributable to Allergan, Inc.		$	921.1					$	820.7
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 period based on average market price			5.6						5.5
Dilutive effect of assumed conversion of convertible notes outstanding			–						0.4
			307.7						310.3

 

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14-14-14

 

Diluted earnings per share attributable to Allergan, Inc. stockholders		$	2.52							$	2.11
Non-GAAP earnings per share adjustments:
Expenses from changes in fair value of contingent consideration and integration and transaction costs associated with business combinations			0.05								0.01
Aggregate charges for external costs for stockholder derivative litigation associated with the DOJ settlement and other legal contingency expenses			0.03								–
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 related transaction costs			0.15								0.13
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™ Remote Adjustable Gastric Band System			–								0.03
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 costs			–								0.16
Impairment of an in-process research and development asset related to a tissue reinforcement technology acquired in connection with the 2010 acquisition of Serica Technologies, Inc.			–								0.01
Additional costs for the termination of a third-party agreement primarily related to the promotion of Sanctura XR®			–								0.01
Non-cash interest expense associated with amortization of convertible debt discount			–								0.01
Change in estimated taxes related to uncertain tax positions included in prior year filings			0.02								–
Non-GAAP diluted earnings per share attributable to Allergan, Inc. stockholders		$	2.99							$	2.64
Year over year change							13.3	%

 

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15-15-15

 

ALLERGAN, INC.

Supplemental Non-GAAP Information

(Unaudited)

 

 

		Three months ended
		September 30, 2012				September 30, 2011				$ change in net sales														Percent change in net sales
										Total				Performance				Currency						Total				Performance				Currency
in millions
Eye Care Pharmaceuticals		$	663.2			$	611.6			$	51.6			$	76.2			$	(24.6	)					8.4	%			12.5	%			(4.1	)%
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 Pharmaceuticals			1,178.5				1,089.7				88.8				124.5				(35.7	)					8.1	%			11.4	%			(3.3	)%
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 Devices			212.6				221.4				(8.8	)			(0.7	)			(8.1	)					(4.0	)%			(0.3	)%			(3.7	)%
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 Combigan		$	111.3			$	100.5			$	10.8			$	14.3			$	(3.5	)					10.8	%			14.3	%			(3.5	)%
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 30, 2012				September 30, 2011				$ change in net sales														Percent change in net sales
										Total				Performance				Currency						Total				Performance				Currency
in millions
Eye Care Pharmaceuticals		$	1,986.1			$	1,861.1			$	125.0			$	190.2			$	(65.2	)					6.7	%			10.2	%			(3.5	)%
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 Pharmaceuticals			3,530.6				3,273.4				257.2				351.7				(94.5	)					7.9	%			10.7	%			(2.8	)%
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 Devices			693.6				690.9				2.7				24.3				(21.6	)					0.4	%			3.5	%			(3.1	)%
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 Combigan		$	334.7			$	309.2			$	25.5			$	35.1			$	(9.6	)					8.3	%			11.4	%			(3.1	)%
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.

 

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16-16-16

 

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 Allergan, Inc. stockholders expectations (a)						$	1.12											$	1.14
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 Allergan, Inc. stockholders expectations (a)						$	3.64											$	3.66
Expenses from changes in fair value of contingent consideration and integration and transaction costs associated with business combinations							0.05												0.05
Aggregate charges for external costs for stockholder derivative litigation associated with the DOJ settlement and other legal contingency expenses							0.03												0.03
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 related transaction costs							0.15												0.15
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 positions included in prior year filings							0.02												0.02
Non-GAAP diluted earnings per share expectations						$	4.17											$	4.19

 

(a)

GAAP diluted earnings per share expectations exclude any potential impact of future unrealized gains or losses on derivative instruments, 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.

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