Allergan Announces Increase in Q4 and Full Year 2005 Earnings Per Share Following Agreement with U.S. Internal Revenue Service.IRVINE Irvine, town, Scotland Irvine (ûr`vĭn), town (1991 pop. 32,507), North Ayrshire, SW Scotland, on the Irvine River estuary. Industries include iron and brass foundries. Other products are chemicals, electric goods, and clothing. , Calif. -- Allergan Allergan, Inc., is a global specialty pharmaceutical company. Their product ranges include ophthalmic pharmaceuticals, dermatology products, and neurological products. The company's most notable neurologic product is Botox, used around the world to treat a variety of debilitating , Inc. (NYSE NYSE See: New York Stock Exchange :AGN AGN Again (Amateur Radio) AGN Active Galactic Nucleus AGN Acute Glomerulonephritis AGN Accountants Global Network AGN Air Gabon (ICAO code) ) today announced that on March 1, 2006, after the publication of Allergan's fourth quarter and full year earnings release but before the filing of Allergan's 2005 Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , Allergan and the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Internal Revenue Service entered into an agreement resolving certain tax disputes and permitting Allergan to release a valuation allowance taken in the fourth quarter of 2005 and certain tax contingencies Contingencies (ISSN 1048-9851) is the bimonthly magazine of the American Academy of Actuaries, providing a large and diverse readership with general interest and technical articles on a wide range of issues related to the actuarial profession. established in prior periods. As a result of the settlement with the Internal Revenue Service and the reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its of these allowances and contingencies, the Company's fourth quarter and full year 2005 GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of ("EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ") reported in the yet-to-be-filed 2005 Form 10-K will increase 13 cents from $0.90 and $2.88 as was reported in the Company's February February: see month. 2, 2006 earnings release to $1.03 and $3.01, respectively. In the fourth quarter of 2005, Allergan determined that it was required to record a valuation allowance against a deferred tax asset associated with the 2001 acquisition of Allergan Specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. Therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. , Inc. ("ASTI"). After the close of the fourth quarter of 2005, but prior to the filing of Allergan's 2005 Form 10-K, Allergan held a settlement conference with the Internal Revenue Service and negotiated a settlement with respect to the issue underlying the requirement to record the deferred tax asset valuation allowance. As a result of the settlement, Allergan determined that it is no longer required to record a valuation allowance against the deferred tax asset, which has the effect of increasing the Company's reported GAAP diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. EPS by 9 cents. Likewise, because the Company's current written policy for determining adjusted EPS does not contemplate an intra-quarter tax adjustment such as this, the reversal of the allowance has the effect of increasing adjusted diluted EPS by 9 cents as well. Due to this settlement, adjusted diluted EPS in 2005 grew by 23% in comparison to 2004. Had the Company not obtained this settlement, and thus maintained the established valuation allowance, 2005 adjusted diluted EPS would have been $3.29, a 20% increase over 2004 adjusted diluted EPS; likewise, the Company's projected 2006 EPS guidance of $3.76 to $3.82, which excludes a $0.20 negative impact related to the expensing of stock options in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment, represents a 14%-16% increase over the pre-settlement EPS number for 2005. In addition, as part of the settlement noted above, the Company will be releasing $5.9 million of accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. reserves for income tax contingencies related to certain other related issues associated with the acquisition of ASTI. The diluted EPS impact of 4 cents for this adjustment will be reflected in the Company's GAAP earnings reported in the 2005 Form 10-K, but will not have an impact on the Company's adjusted diluted EPS. About Allergan, Inc. Allergan, Inc., with headquarters in Irvine, California Irvine is an incorporated city in Orange County, California, United States. It is a planned city, mainly developed by the Irvine Company since the 1960s. Formally incorporated on December 28 1971, the 69.7 square mile (180.5 km²) city has a population of 202,079 (as of 2007). , is a technology-driven, global health care company providing specialty pharmaceutical products worldwide. Allergan develops and commercializes products in the ophthalmology ophthalmology (ŏf'thălmŏl`əjē), branch of medicine specializing in the anatomy, function and diseases of the eye. Ophthalmologists specialize in the medical and surgical treatment of eye disorders, vision measurements for , neurosciences, medical dermatology dermatology (dûrmətŏl`əjē), branch of medicine concerned with diagnosis and treatment of diseases and disorders of the skin. , medical aesthetics aesthetics (ĕsthĕt`ĭks), the branch of philosophy that is concerned with the nature of art and the criteria of artistic judgment. and other specialty markets that deliver value to its customers, satisfy unmet un·met adj. Not satisfied or fulfilled: unmet demands. medical needs, and improve patients' lives. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains "forward-looking statements" regarding Allergan's earnings for 2005 and the fourth quarter of 2005. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. , actual results could vary materially from Allergan's expectations and projections. Risks and uncertainties include additional adjustments that may be required to be made to historical operating results and management's judgments regarding contingencies reflected in Allergan's financial statements. Additional information concerning these and other risk factors can be found in press releases issued by Allergan, as well as Allergan's public periodic filings with the Securities and Exchange Commission, including the discussion under the heading "Certain Factors and Trends Affecting Allergan and its Businesses" in Allergan's 2004 Form 10-K and Allergan's Form 10-Q Form 10-Q See 10-Q. for the quarter ended September September: see month. 30, 2005. Copies of Allergan's press releases and additional information about Allergan is available on the World Wide Web at www.allergan.com or you can contact the Allergan Investor Relations Investor relations The process by which the corporation communicates with its investors. Department by calling 1-714-246-4636.
ALLERGAN, INC.
Condensed Consolidated Statements of Earnings and
Reconciliation of Non-GAAP Adjustments
(Unaudited)
Three months ended
-------------------------------------
in millions, except per share December 31, 2005
amounts
-------------------------------- -------------------------------------
Non-GAAP
GAAP Adjustments Adjusted
------- -------------------- --------
Product sales
Net sales $594.9 $-- $594.9
Cost of sales 95.3 (0.1)(a)(c) 95.2
------- -------- --------
Product gross margin 499.6 0.1 499.7
Selling, general and
administrative 224.4 (1.8)(a)(b)(g)(h) 222.6
Research and development 107.5 (0.4)(a) 107.1
Restructuring charges 6.2 (6.2)(c) --
------- -------- --------
Operating income 161.5 8.5 170.0
Interest income 12.4 -- 12.4
Interest expense (4.9) (0.8)(k) (5.7)
Unrealized gain (loss) on
derivative instruments, net 0.1 (0.1)(d) --
Gain on investments -- -- --
Other, net 0.4 -- 0.4
------- -------- --------
8.0 (0.9) 7.1
------- -------- --------
Earnings before income taxes and
minority interest 169.5 7.6 177.1
Provision for income taxes 29.2 11.6 (f) 40.8
Minority interest 0.2 -- 0.2
------- -------- --------
Net earnings $140.1 $(4.0) $136.1
======= ======== ========
Net earnings per share:
Basic $1.06 $1.03
Diluted $1.03 $1.00
======= ========
Weighted average number of
common shares outstanding:
Basic 132.0 132.0
Diluted 136.3 136.3
Selected ratios as a percentage
of net sales
--------------------------------
Gross profit 84.0% 84.0%
Selling, general and
administrative 37.7% 37.4%
Research and development 18.1% 18.0%
Three months ended
-------------------------------
in millions, except per share amounts December 31, 2004
-------------------------------------- -------------------------------
Non-GAAP
GAAP Adjustments Adjusted
------- -------------- --------
Product sales
Net sales $556.2 $-- $556.2
Cost of sales 103.8 -- 103.8
------- ----------- --------
Product gross margin 452.4 -- 452.4
Selling, general and administrative 206.1 -- 206.1
Research and development 88.0 -- 88.0
Restructuring charges 7.0 (7.0)(i) --
------- ----------- --------
Operating income 151.3 7.0 158.3
Interest income 7.3 -- 7.3
Interest expense (3.9) -- (3.9)
Unrealized gain (loss) on derivative
instruments, net (0.5) 0.5 (d) --
Gain on investments 0.3 -- 0.3
Other, net 6.5 (6.5)(e) --
------- ----------- --------
9.7 (6.0) (3.7)
------- ----------- --------
Earnings before income taxes and
minority interest 161.0 1.0 162.0
Provision for income taxes 48.2 (1.4)(j) 46.8
Minority interest 0.3 -- 0.3
------- ----------- --------
Net earnings $112.5 $2.4 $114.9
======= =========== ========
Net earnings per share:
Basic $0.86 $0.88
Diluted $0.85 $0.86
======= ========
Weighted average number of common
shares outstanding:
Basic 131.3 131.3
Diluted 133.0 133.0
Selected ratios as a percentage of net
sales
--------------------------------------
Gross profit 81.3% 81.3%
Selling, general and administrative 37.1% 37.1%
Research and development 15.8% 15.8%
(a) Transition/duplicate operating expenses, consisting of Cost of
sales of $0.2 million; Selling, general and administrative expense
of $1.9 million and Research and development expense of $0.4
million
(b) Costs related to the pending acquisition of Inamed of $0.4 million
(c) Restructuring charge of $6.2 million and related inventory
adjustment of $(0.1) million
(d) Unrealized loss on the mark-to-market adjustment to derivative
instruments
(e) Income from revised Vitrase collaboration agreement with ISTA
pharmaceuticals
(f) 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 $7.6 million $(2.4)
Resolution of uncertain tax positions (4.6)
Extraordinary dividends of $674 million under the American
Jobs Creation Act of 2004 (2.9)
Additional repatriation of foreign earnings of $85.8 million
above extraordinary dividends amount (1.7)
----------
$(11.6)
==========
(g) Gain on sale of a former manufacturing plant in Argentina of $0.6
million
(h) Loss on sales of assets primarily used for AMO Contract
Manufacturing of $0.1 million
(i) Restructuring charge related to the scheduled termination of
Allergan's manufacturing and supply agreement with AMO
(j) Tax effect for non-GAAP adjustments
(k) Reversal of interest expense related to tax settlements
"GAAP" refers to financial information presented in accordance with
generally accepted accounting principles in the United States.
This press release includes historical non-GAAP financial measures, as
defined in Regulation G promulgated by the Securities and Exchange
Commission, with respect to the three and twelve months ended December
31, 2005 and December 31, 2004. Allergan believes that its
presentation of historical non-GAAP financial measures provides useful
supplementary information to investors. The presentation of historical
non-GAAP financial measures is not meant to be considered in isolation
from or as a substitute for results prepared in accordance with
accounting principles generally accepted in the United States.
In this press release, Allergan reported the non-GAAP financial
measure "adjusted earnings" and related "adjusted diluted earnings per
share." Allergan uses adjusted earnings to enhance the investor's
overall understanding of the financial performance and prospects for
the future of Allergan's core business activities. Specifically,
Allergan believes that a report of adjusted earnings provides
consistency in its financial reporting and facilitates the comparison
of results of core business operations between its current, past and
future periods. Adjusted earnings is one of the primary indicators
management uses for planning and forecasting in future periods.
Allergan also uses adjusted earnings for evaluating management
performance for compensation purposes.
ALLERGAN, INC.
Condensed Consolidated Statements of Earnings and
Reconciliation of Non-GAAP Adjustments
(Unaudited)
Twelve months ended
-----------------------------------
in millions, except per share December 31, 2005
amounts
---------------------------------- -----------------------------------
Non-GAAP
GAAP Adjustments Adjusted
--------- --------------- ---------
Product sales
Net sales $2,319.2 $-- $2,319.2
Cost of sales 399.6 (0.5)(a)(c) 399.1
--------- ------ ---------
Product gross margin 1,919.6 0.5 1,920.1
Selling, general and
administrative 913.9 10.0 (a)(j)(n) 923.9
Research and development 391.0 (4.5)(a)(b) 386.5
Restructuring charges 43.8 (43.8)(c) --
--------- ------ ---------
Operating income 570.9 38.8 609.7
Interest income 35.4 (2.2)(d)(f) 33.2
Interest expense (12.4) (7.3)(d) (19.7)
Unrealized gain (loss) on
derivative instruments, net 1.1 (1.1)(e) --
Gain on investments 0.8 (0.8)(l) --
Other, net 3.4 (3.5)(f) (0.1)
--------- ------ ---------
28.3 (14.9) 13.4
--------- ------ ---------
Earnings before income taxes and
minority interest 599.2 23.9 623.1
Provision for income taxes 192.4 (22.4)(g) 170.0
Minority interest 2.9 (3.1)(m) (0.2)
--------- ------ ---------
Net earnings $403.9 $49.4 $453.3
========= ====== =========
Net earnings per share:
Basic $3.08 $3.46
Diluted $3.01 $3.38
========= =========
Weighted average number of common
shares outstanding:
Basic 131.1 131.1
Diluted 134.0 134.0
Selected ratios as a percentage of
net sales
----------------------------------
Gross profit 82.8% 82.8%
Selling, general and
administrative 39.4% 39.8%
Research and development 16.9% 16.7%
Twelve months ended
----------------------------------
in millions, except per share December 31, 2004
amounts
----------------------------------- ----------------------------------
Non-GAAP
GAAP Adjustments Adjusted
--------- -------------- ---------
Product sales
Net sales $2,045.6 $-- $2,045.6
Cost of sales 386.7 -- 386.7
--------- ----------- ---------
Product gross margin 1,658.9 -- 1,658.9
Selling, general and administrative 778.9 2.4 (h) 781.3
Research and development 345.6 -- 345.6
Restructuring charges 7.0 (7.0)(o) --
--------- ----------- ---------
Operating income 527.4 4.6 532.0
Interest income 14.1 -- 14.1
Interest expense (18.1) -- (18.1)
Unrealized gain (loss) on
derivative instruments, net (0.4) 0.4 (e) --
Gain on investments 0.3 -- 0.3
Other, net 8.8 (11.5)(k) (2.7)
--------- ----------- ---------
4.7 (11.1) (6.4)
--------- ----------- ---------
Earnings before income taxes and
minority interest 532.1 (6.5) 525.6
Provision for income taxes 154.0 1.8 (i) 155.8
Minority interest 1.0 -- 1.0
--------- ----------- ---------
Net earnings $377.1 $(8.3) $368.8
========= =========== =========
Net earnings per share:
Basic $2.87 $2.81
Diluted $2.82 $2.75
========= =========
Weighted average number of common
shares outstanding:
Basic 131.3 131.3
Diluted 133.9 133.9
Selected ratios as a percentage of
net sales
-----------------------------------
Gross profit 81.1% 81.1%
Selling, general and administrative 38.1% 38.2%
Research and development 16.9% 16.9%
(a) Transition/duplicate operating expenses, consisting of Cost of
sales of $0.3 million; Selling, general and administrative expense
of $3.8 million and Research and development expense of $1.5
million
(b) Buy-out of license agreement with Johns Hopkins
(c) Restructuring charge of $43.8 million and related inventory
write-offs of $0.2 million
(d) Interest income related to previously paid state income taxes and
reversal of interest expense related to tax settlements
(e) Unrealized gain on the mark-to-market adjustment to derivative
instrument
(f) Termination of ISTA Vitrase collaboration agreement (including
interest income of $0.1 million)
(g) 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 $23.9 million $(1.7)
Additional benefit for state income taxes (1.4)
Resolution of uncertain tax positions (24.1)
Extraordinary dividends of $674 million under the American
Jobs Creation Act of 2004 29.9
Additional repatriation of foreign earnings of $85.8 million
above extraordinary dividends amount 19.7
----------
$22.4
==========
(h) Patent infringement settlement
(i) Income tax benefit for previously paid state income taxes and tax
effect for non-GAAP adjustments
(j) Gain on sale of assets primarily used for AMO contract
manufacturing ($5.7 million), gain on sale of distribution
business in India ($7.9 million), and gain on sale of a former
manufacturing plant in Argentina ($0.6 million)
(k) Technology transfer fee and income from revised Vitrase
collaboration agreement with ISTA pharmaceuticals
(l) Gain on sale of third party equity investment
(m) Minority interest related to gain on sale of distribution business
in India
(n) Costs related to the pending acquisition of Inamed of $0.4 million
(o) Restructuring charge related to the scheduled termination of
Allergan's manufacturing and supply agreement with AMO
"GAAP" refers to financial information presented in accordance with
generally accepted accounting principles in the United States. See
non-GAAP financial measures disclosure on previous page.
ALLERGAN, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
in millions December 31, December 31,
2005 2004
-------------------------------------------- ------------ ------------
Assets
Cash and equivalents $1,296.3 $894.8
Trade receivables, net 246.1 243.5
Inventories 90.1 89.9
Other current assets 193.1 147.8
------------ ------------
Total current assets 1,825.6 1,376.0
Property, plant and equipment, net 494.0 468.5
Other noncurrent assets 530.9 412.5
------------ ------------
Total assets $2,850.5 $2,257.0
============ ============
Liabilities and stockholders' equity
Notes payable $169.6 $13.1
Convertible notes, net of discount 520.0 --
Accounts payable 92.3 97.9
Accrued expenses and income taxes 262.1 348.6
------------ ------------
Total current liabilities 1,044.0 459.6
Long-term debt 57.5 56.5
Long-term convertible notes, net of discount -- 513.6
Other liabilities 182.1 111.1
Stockholders' equity 1,566.9 1,116.2
------------ ------------
Total liabilities and stockholders' equity $2,850.5 $2,257.0
============ ============
Days on Hand (DOH) 86 79
Days Sales Outstanding (DSO) 38 40
Cash, net of debt $549.2 $311.6
Debt-to-capital percentage 32.3% 34.3%
ALLERGAN, INC.
Reconciliation of Diluted Earnings Per Share
(Unaudited)
in millions, except per share
amounts Three months ended Twelve months ended
------------------------------- ------------------ -------------------
December December December December
31, 31, 31, 31,
2005 2004 2005 2004
--------- -------- ---------- --------
Net earnings, as reported $140.1 $112.5 $403.9 $377.1
Non-GAAP earnings per share
adjustments:
Restructuring charge (a) 6.1 7.0 44.0 7.0
Inamed transaction costs 0.4 -- 0.4 --
Sale of former manufacturing
plant in Argentina (0.6) -- (0.6) --
Transition/duplicate
operating expense 2.5 -- 5.6 --
Buy-out of license agreement
with Johns Hopkins -- -- 3.0 --
Gain on sale of distribution
business in India -- -- (7.9) --
Loss/(gain) on sale of
assets primarily used for
AMO contract manufacturing 0.1 -- (5.7) --
Termination of ISTA Vitrase
collaboration agreement -- -- (3.6) --
Gain on sale of equity
investment -- -- (0.8) --
Interest related to
previously paid state
income taxes and income tax
settlements (0.8) -- (9.4) --
Technology transfer fee -- -- -- (5.0)
Income from ISTA Vitrase
collaboration -- (6.5) -- (6.5)
Patent infringement
settlement -- -- -- (2.4)
Unrealized (gain) loss on
derivative instruments (0.1) 0.5 (1.1) 0.4
--------- -------- ---------- --------
147.7 113.5 427.8 370.6
Tax effect for above items (2.4) 1.4 (1.7) 4.3
Resolution of uncertain tax
positions (4.6) -- (24.1) --
Tax effect of dividend
repatriation (4.6) -- 49.6 --
State income tax recovery -- -- (1.4) (6.1)
Minority interest effect of
sale of distribution business
in India -- -- 3.1 --
--------- -------- ---------- --------
Adjusted diluted earnings $136.1 $114.9 $453.3 $368.8
========= ======== ========== ========
Weighted average number of
shares issued 132.0 131.3 131.1 131.3
Net shares assumed issued using
the treasury stock method for
options outstanding during
each period based on average
market price 2.3 1.2 1.7 1.6
Dilutive effect of assumed
conversion of convertible
subordinated notes outstanding 2.0 0.5 1.2 1.0
--------- -------- ---------- --------
136.3 133.0 134.0 133.9
========= ======== ========== ========
Diluted earnings per share, as
reported $1.03 $0.85 $3.01 $2.82
Non-GAAP earnings per share
adjustments:
Restructuring charge (a) 0.03 0.04 0.28 0.04
Transition/duplicate
operating expense 0.01 -- 0.03 --
Buy-out of license agreement
with Johns Hopkins -- -- 0.02 --
Gain on sale of distribution
business in India -- -- (0.05) --
Loss/(gain) on sale of
assets primarily used for
AMO contract manufacturing -- -- (0.04) --
Termination of ISTA Vitrase
collaboration agreement -- -- (0.03) --
Interest related to
previously paid state
income taxes and income tax
settlements -- -- (0.04) --
Technology transfer fee -- -- -- (0.02)
Patent infringement
settlement -- -- -- (0.01)
Income from ISTA Vitrase
collaboration -- (0.03) -- (0.03)
Unrealized (gain) loss on
derivative instruments -- -- -- --
Resolution of uncertain tax
positions (0.03) -- (0.18) --
Tax effect of dividend
repatriation (0.04) -- 0.37 --
State income tax recovery -- -- (0.01) (0.05)
Minority interest effect of
sale of distribution
business in India -- -- 0.02 --
--------- -------- ---------- --------
Adjusted diluted earnings per
share $1.00 $0.86 $3.38 $2.75
========= ======== ========== ========
Year over year change 16.3% 22.9%
================== ===================
(a) Including inventory adjustments reported in cost of sales of
$(0.1) million and $0.2 million for the three and twelve month
periods ending December 31, 2005, respectively.
ALLERGAN, INC.
Reconciliation of Diluted Earnings Per Share
(Unaudited)
(As previously reported in press release dated February 2, 2006)
in millions, except per share
amounts Three months ended Twelve months ended
------------------------------- ------------------ -------------------
December December December December
31, 31, 31, 31,
2005 2004 2005 2004
--------- -------- --------- ---------
Net earnings, as reported $122.0 $112.5 $385.8 $377.1
Non-GAAP earnings per share
adjustments:
Restructuring charge (a) 6.1 7.0 44.0 7.0
Inamed transaction costs 0.4 -- 0.4 --
Sale of former manufacturing
plant in Argentina (0.6) -- (0.6) --
Transition/duplicate
operating expense 2.5 -- 5.6 --
Buy-out of license agreement
with Johns Hopkins -- -- 3.0 --
Gain on sale of distribution
business in India -- -- (7.9) --
Loss/(gain) on sale of
assets primarily used for
AMO contract manufacturing 0.1 -- (5.7) --
Termination of ISTA Vitrase
collaboration agreement -- -- (3.6) --
Gain on sale of equity
investment -- -- (0.8) --
Interest related to
previously paid state
income taxes and income tax
settlements -- -- (8.6) --
Technology transfer fee -- -- -- (5.0)
Income from ISTA Vitrase
collaboration -- (6.5) -- (6.5)
Patent infringement
settlement -- -- -- (2.4)
Unrealized (gain) loss on
derivative instruments (0.1) 0.5 (1.1) 0.4
--------- -------- --------- ---------
130.4 113.5 410.5 370.6
Tax effect for above items (2.8) 1.4 (2.1) 4.3
Resolution of uncertain tax
positions 1.3 -- (18.2) --
Tax effect of dividend
repatriation (4.6) -- 49.6 --
State income tax recovery -- -- (1.4) (6.1)
Minority interest effect of
sale of distribution business
in India -- -- 3.1 --
--------- -------- --------- ---------
Adjusted diluted earnings $124.3 $114.9 $441.5 $368.8
========= ======== ========= =========
Weighted average number of
shares issued 132.0 131.3 131.1 131.3
Net shares assumed issued using
the treasury stock method for
options outstanding during
each period based on average
market price 2.3 1.2 1.7 1.6
Dilutive effect of assumed
conversion of convertible
subordinated notes outstanding 2.0 0.5 1.2 1.0
--------- -------- --------- ---------
136.3 133.0 134.0 133.9
========= ======== ========= =========
Diluted earnings per share, as
reported $0.90 $0.85 $2.88 $2.82
Non-GAAP earnings per share
adjustments:
Restructuring charge (a) 0.03 0.04 0.28 0.04
Transition/duplicate
operating expense 0.01 -- 0.03 --
Buy-out of license agreement
with Johns Hopkins -- -- 0.02 --
Gain on sale of distribution
business in India -- -- (0.05) --
Loss/(gain) on sale of
assets primarily used for
AMO contract manufacturing -- -- (0.04) --
Termination of ISTA Vitrase
collaboration agreement -- -- (0.03) --
Interest related to
previously paid state
income taxes and income tax
settlements -- -- (0.04) --
Technology transfer fee -- -- -- (0.02)
Patent infringement
settlement -- -- -- (0.01)
Income from ISTA Vitrase
collaboration -- (0.03) -- (0.03)
Unrealized (gain) loss on
derivative instruments -- -- -- --
Resolution of uncertain tax
positions 0.01 -- (0.14) --
Tax effect of dividend
repatriation (0.04) -- 0.37 --
State income tax recovery -- -- (0.01) (0.05)
Minority interest effect of
sale of distribution
business in India -- -- 0.02 --
--------- -------- --------- ---------
Adjusted diluted earnings per
share $0.91 $0.86 $3.29 $2.75
========= ======== ========= =========
Year over year change 5.8% 19.6%
================== ===================
(a) Including inventory adjustments reported in cost of sales of
$(0.1) million and $0.2 million for the three and twelve month
periods ending December 31, 2005, respectively.
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