Condensed Consolidated Statements of Operations
and Reconciliation of Non-GAAP Adjustments

	VIEW PAST YEARS 2007  |  2006  |  2005  |  2004  |  2003
In millions, except per share data		Year Ended December 31, 2007
	GAAP			Non-GAAP Adjustments			Adjusted
REVENUES
Specialty pharmaceuticals product net sales	$	3,105.0		$	—		$	3,105.0
Medical devices product net sales		774.0			—			774.0
Product net sales		3,879.0			—			3,879.0
Other revenues		59.9			—			59.9
Research service revenues		—			—			—
Total		3,938.9			—			3,938.9
OPERATING COSTS AND EXPENSES
Cost of product sales (excludes amortization
of acquired intangible assets)		673.2			(3.5	)(a)(b)		669.7
Cost of research services		—			—			—
Selling, general and administrative		1,680.1			(23.2	)(b)(c)		1,656.9
Research and development		718.1			(72.0	)(d)		646.1
Amortization of acquired intangible assets		121.3			(99.9	)(e)		21.4
Restructuring charge (reversal)
and asset write-offs		26.8			(26.8	)(f)		—
Operating income (loss)		719.4			225.4			944.8
Interest income		65.3			(0.4	)(g)		64.9
Interest expense		(71.4	)		—			(71.4	)
Gain (loss) on investments		—			—			—
Unrealized (loss) gain on
derivative instruments, net		(0.4	)		0.4	(h)		—
Other, net		(25.2	)		—			(25.2	)
		(31.7	)		—			(31.7	)
Earnings (loss) from continuing operations
before income taxes and minority interest		687.7			225.4			913.1
Provision for income taxes		186.2			53.5	(i)		239.7
Minority interest		0.5			—			0.5
Earnings (loss) from continuing operations	$	501.0		$	171.9		$	672.9
Basic earnings (loss) per share:
Continuing operations	$	1.64		$	0.57		$	2.21
Diluted earnings (loss) per share
Continuing operations	$	1.62		$	0.56		$	2.18
Total product net sales	$	3,879.0		$	(87.4	)(ak)	$	3,791.6

	VIEW PAST YEARS 2007  |  2006  |  2005  |  2004  |  2003
In millions, except per share data		Year Ended December 31, 2006
	GAAP			Non-GAAP Adjustments			Adjusted
REVENUES
Specialty pharmaceuticals product net sales	$	2,638.5		$	—		$	2,638.5
Medical devices product net sales		371.6			—			371.6
Product net sales		3,010.1			—			3,010.1
Other revenues		53.2			—			53.2
Research service revenues		—			—			—
Total		3,063.3			—			3,063.3
OPERATING COSTS AND EXPENSES
Cost of product sales (excludes amortization
of acquired intangible assets)		575.7			(48.8	)(j)(k)		526.9
Cost of research services		—			—			—
Selling, general and administrative		1,333.4			(53.9	)(j)(l)(m)(n)		1,279.5
Research and development		1,055.5			(580.0	)(j)(m)(o)		475.5
Amortization of acquired intangible assets		79.6			(58.6	)(p)		21.0
Restructuring charge (reversal)
and asset write-offs		22.3			(22.3	)(f)		—
Operating income (loss)		(3.2	)		763.6			760.4
Interest income		48.9			4.9	(q)		53.8
Interest expense		(60.2	)		(4.9	)(q)		(65.1	)
Gain (loss) on investments		0.3			—			0.3
Unrealized (loss) gain on
derivative instruments, net		(0.3	)		0.3	(h)		—
Other, net		(5.0	)		2.7	(r)		(2.3	)
		(16.3	)		3.0			(13.3	)
Earnings (loss) from continuing operations
before income taxes and minority interest		(19.5	)		766.6			747.1
Provision for income taxes		107.5			92.0	(s)		199.5
Minority interest		0.4			—			0.4
Earnings (loss) from continuing operations	$	(127.4	)	$	674.6		$	547.2
Basic earnings (loss) per share:
Continuing operations	$	(0.43	)	$	2.29		$	1.86
Diluted earnings (loss) per share
Continuing operations	$	(0.43	)	$	2.26		$	1.83
Total product net sales	$	3,010.1		$	(15.2	)(ak)	$	2,994.9

	VIEW PAST YEARS 2007  |  2006  |  2005  |  2004  |  2003
In millions, except per share data		Year Ended December 31, 2005
	GAAP			Non-GAAP Adjustments			Adjusted
REVENUES
Specialty pharmaceuticals product net sales	$	2,319.2		$	—		$	2,319.2
Medical devices product net sales		—			—			—
Product net sales		2,319.2			—			2,319.2
Other revenues		23.4			—			23.4
Research service revenues		—			—			—
Total		2,342.6			—			2,342.6
OPERATING COSTS AND EXPENSES
Cost of product sales (excludes amortization
of acquired intangible assets)		385.3			(0.05	)(t)(u)		384.8
Cost of research services		—			—			—
Selling, general and administrative		936.8			10.0	(t)(v)(w)		946.8
Research and development		388.3			(4.5	)(t)(x)		383.8
Amortization of acquired intangible assets		17.5			—			17.5
Restructuring charge (reversal)
and asset write-offs		43.8			(43.8	)(u)		—
Operating income (loss)		570.9			38.8			609.7
Interest income		35.4			(2.2	)(y)(z)		33.2
Interest expense		(12.4	)		(7.3	)(y)		(19.7	)
Gain (loss) on investments		0.8			(0.8	)(aa)		—
Unrealized (loss) gain on
derivative instruments, net		1.1			(1.1	)(h)		—
Other, net		3.4			(3.5	)(z)		(0.1	)
		28.3			(14.9	)		13.4
Earnings (loss) from continuing operations
before income taxes and minority interest		599.2			23.9			623.1
Provision for income taxes		192.4			(22.4	)(ab)		170.0
Minority interest		2.9			(3.1	)(ac)		(0.2	)
Earnings (loss) from continuing operations	$	403.9		$	49.4		$	453.3
Basic earnings (loss) per share:
Continuing operations	$	1.54		$	0.19		$	1.73
Diluted earnings (loss) per share
Continuing operations	$	1.51		$	0.18		$	1.69
Total product net sales	$	2,319.2		$	(22.3	)(ak)	$	2,296.9

	VIEW PAST YEARS 2007  |  2006  |  2005  |  2004  |  2003
In millions, except per share data		Year Ended December 31, 2004
	GAAP			Non-GAAP Adjustments			Adjusted
REVENUES
Specialty pharmaceuticals product net sales	$	2,045.6		$	—		$	2,045.6
Medical devices product net sales		—			—			—
Product net sales		2,045.6			—			2,045.6
Other revenues		13.3			—			13.3
Research service revenues		—			—			—
Total		2,058.9			—			2,058.9
OPERATING COSTS AND EXPENSES
Cost of product sales (excludes amortization
of acquired intangible assets)		381.7			—			381.7
Cost of research services		—			—			—
Selling, general and administrative		791.7			2.4	(ad)		794.1
Research and development		342.9			—			342.9
Amortization of acquired intangible assets		8.2			—			8.2
Restructuring charge (reversal)
and asset write-offs		7.0			(7.0	)(ah)		—
Operating income (loss)		572.4			4.6			532.0
Interest income		14.1			—			14.1
Interest expense		(18.1	)		—			(18.1	)
Gain (loss) on investments		0.3			—			0.3
Unrealized (loss) gain on
derivative instruments, net		(0.4	)		0.4	(h)		—
Other, net		8.8			(11.5	)(ae)		(2.7	)
		4.7			(11.1	)		6.4
Earnings (loss) from continuing operations
before income taxes and minority interest		532.1			(6.5	)		525.6
Provision for income taxes		154.0			1.8	(af)		155.8
Minority interest		1.0			—			1.0
Earnings (loss) from continuing operations	$	377.1		$	(8.3	)	$	368.8
Basic earnings (loss) per share:
Continuing operations	$	1.44		$	(0.04	)	$	1.40
Diluted earnings (loss) per share
Continuing operations	$	1.41		$	(0.03	)	$	1.38
Total product net sales	$	2,045.6		$	(41.9	)(ak)	$	2,003.7

	VIEW PAST YEARS 2007  |  2006  |  2005  |  2004  |  2003
In millions, except per share data		Year Ended December 31, 2003
	GAAP			Non-GAAP Adjustments			Adjusted
REVENUES
Specialty pharmaceuticals product net sales	$	1,755.4		$	—		$	1,755.4
Medical devices product net sales		—			—			—
Product net sales		1,755.4			—			1,755.4
Other revenues		9.4			—			9.4
Research service revenues		16.0			—			16.0
Total		1,780.8			—			1,780.8
OPERATING COSTS AND EXPENSES
Cost of product sales (excludes amortization
of acquired intangible assets)		316.9			—			316.9
Cost of research services		14.5			—			14.5
Selling, general and administrative		705.9			—			705.9
Research and development		762.6			(458.0	)(ag)		304.6
Amortization of acquired intangible assets		5.0			—			5.0
Restructuring charge (reversal)
and asset write-offs		(0.4	)		0.4	(ah)		—
Operating income (loss)		(23.7	)		457.6			433.9
Interest income		13.0			—			13.0
Interest expense		(15.6	)		—			(15.6	)
Gain (loss) on investments		—			—			—
Unrealized (loss) gain on
derivative instruments, net		(0.3	)		0.3	(h)		—
Other, net		(2.9	)		0.9	(ai)		(2.0	)
		(5.8	)		1.2			(4.6	)
Earnings (loss) from continuing operations
before income taxes and minority interest		(29.5	)		458.8			429.3
Provision for income taxes		22.2			101.1	(aj)		123.3
Minority interest		0.8			—			0.8
Earnings (loss) from continuing operations	$	(52.5	)	$	357.7		$	305.2
Basic earnings (loss) per share:
Continuing operations	$	(0.20	)	$	1.37		$	1.17
Diluted earnings (loss) per share
Continuing operations	$	(0.20	)	$	1.35		$	1.15
Total product net sales	$	1,755.4		$	(45.9	)(ak)	$	1,709.5

All per share data reflect the effect of Allergan’s June 2007 two-for-one stock split for all periods presented.

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

In this Annual Report, Allergan included historical non-GAAP financial measures, as defined in Regulation G promulgated by the Securities and Exchange Commission, with respect to the year ended December 31, 2007, as well as the corresponding periods for 2006 through 2003. Allergan believes that its presentation of historical 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 prepared in accordance with accounting principles generally accepted in the United States.

In this Annual Report, Allergan reported the non-GAAP financial measure “adjusted earnings” and related “adjusted basic and 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. Adjusted 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 adjusted 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 adjusted earnings for evaluating management performance for compensation purposes.

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

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

Allergan compensates for these limitations by using adjusted earnings only to supplement net earnings (loss) 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 net earnings (loss) determined under GAAP as compared to adjusted earnings, and to perform their own analysis, as appropriate.

In this Annual Report, Allergan also reported sales performance using the non-GAAP financial measure of constant currency sales. Constant currency sales represent current year reported sales adjusted for the translation effect of changes in average foreign currency exchange rates between the current year and the corresponding prior year. Allergan calculates the currency effect by comparing adjusted current year reported amounts, calculated using the monthly average foreign exchange rates for the corresponding prior year, to the actual current year reported amounts. Management refers to growth rates in 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.