Allergan 10-K 26 Feb 10 2009 FY Annual report Financial data

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
Current assets:
Cash and equivalents	1947.1	1110.4
Trade receivables, net	576.6	538.4
Inventories	213.9	262.5
Other current assets	368.7	359.3
Total current assets	3106.3	2270.6
Investments and other assets	266.7	272.1
Property, plant and equipment, net	808.1	775.4
Goodwill	1998.3	1981.8
Intangibles, net	1357.2	1491.9
Total assets	7536.6	6791.8
Current liabilities:
Notes payable	18.1	4.4
Accounts payable	204	173.9
Accrued compensation	164.3	132.6
Other accrued expenses	382.7	336.7
Income taxes	42.5	49.4
Total current liabilities	811.6	697
Long-term debt	874	885.3
Long-term convertible notes	617.3	685.2
Deferred tax liabilities	1.4	69
Other liabilities	388.4	402.8
Allergan, Inc. stockholders' equity:
Preferred stock, $.01 par value; authorized 5,000,000 shares; none issued	0	0
Common stock, $.01 par value; authorized 500,000,000 shares; issued 307,512,000 shares as of December 31, 2009 and 2008	3.1	3.1
Additional paid-in capital	2730.3	2596.6
Accumulated other comprehensive loss	-102.8	-198.7
Retained earnings	2356.7	1842.1
Stockholders Equity Subtotal Before Treasury Stock, Total	4987.3	4243.1
Less treasury stock, at cost (3,079,000 and 3,424,000 shares as of December 31, 2009 and 2008, respectively)	-164.5	-192.4
Total stockholders' equity	4822.8	4050.7
Noncontrolling interest	21.1	1.8
Total equity	4843.9	4052.5
Total liabilities and equity	7536.6	6791.8

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
	Dec. 31, 2009	Dec. 31, 2008
Preferred stock, par value	0.01	0.01
Preferred stock, authorized	5,000,000	5,000,000
Preferred stock, issued	0	0
Common stock, par value	0.01	0.01
Common stock, authorized	500,000,000	500,000,000
Common stock, issued	307,512,000	307,512,000
Treasury stock, shares	3,079,000	3,424,000

Statement Of Income Alternative

Statement Of Income Alternative (USD $)
In Millions, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Revenues:
Product net sales	4447.6	4339.7	$3,879
Other revenues	56	63.7	59.9
Total revenues	4503.6	4403.4	3938.9
Operating costs and expenses:
Cost of sales (excludes amortization of acquired intangible assets)	750.9	761.2	673.2
Selling, general and administrative	1921.5	1856.1	1680.2
Research and development	706	797.9	718.1
Amortization of acquired intangible assets	146.3	150.9	121.3
Restructuring charges	50.9	41.3	26.8
Operating income	928	796	719.3
Non-operating income (expense):
Interest income	7	33.5	65.3
Interest expense	-76.9	-85.5	-94.6
Unrealized (loss) gain on derivative instruments, net	-13.6	14.8	-0.4
Gain on investments, net	24.6	0	0
Other, net	-20.6	3.4	-25.2
Nonoperating Income (Expense), Total	-79.5	-33.8	-54.9
Earnings from continuing operations before income taxes	848.5	762.2	664.4
Provision for income taxes	224.7	197.5	177.4
Earnings from continuing operations	623.8	564.7	487
Discontinued operations:
Loss from discontinued operations, net of applicable income tax benefit of $0.4 million	0	0	-0.7
Loss on sale of discontinued operations, net of applicable income tax benefit of $0.3 million	0	0	(1)
Discontinued operations	0	0	-1.7
Net earnings	623.8	564.7	485.3
Net earnings attributable to noncontrolling interest	2.5	1.6	0.5
Net earnings attributable to Allergan, Inc.	621.3	563.1	484.8
Basic earnings per share attributable to Allergan, Inc. stockholders:
Continuing operations	2.05	1.85	1.59
Discontinued operations	$0	$0	$0
Net basic earnings per share attributable to Allergan, Inc. stockholders	2.05	1.85	1.59
Diluted earnings per share attributable to Allergan, Inc. stockholders:
Continuing operations	2.03	1.84	1.58
Discontinued operations	$0	$0	-0.01
Net diluted earnings per share attributable to Allergan, Inc. stockholders	2.03	1.84	1.57

2_Statement Of Income Alternati

Statement Of Income Alternative (Parenthetical) (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Loss from discontinued operations, applicable income tax benefit	$0	$0	0.4
Loss on sale of discontinued operations, applicable income tax benefit	$0	$0	0.3

Statement Of Shareholders Equit

Statement Of Shareholders Equity And Other Comprehensive Income (USD $)
In Millions	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Retained Earnings	Treasury Stock	Noncontrolling Interest	Total
Beginning Balance at Dec. 31, 2006	3.1	2438.4	-127.4	1055.7	-156.3	1.5	$3,215
Beginning Balance (in shares) at Dec. 31, 2006	307.5				(3)
Comprehensive income
Net earnings				484.8		0.5	485.3
Pension and postretirement benefit plan adjustments:
Net gain (losses)			38.5
Amortization			7.5
Foreign currency translation adjustments			46.9			0.2
Amortization of deferred holding gains on derivatives designated as cash flow hedges			-0.8
Unrealized gain (loss) on investments			0.5
Other comprehensive income (loss)							92.8
Dividends ($0.20 per share in 2007, 2008 and 2009)				-61.2			-61.2
Stock options exercised (in shares)					3.9
Stock options exercised		36		-76.4	213.9		173.5
Activity under other stock plans (in shares)					0.3
Activity under other stock plans				1.1	15.2		16.3
Purchase of treasury stock (in shares)					(3)
Purchase of treasury stock					-186.5		-186.5
Stock-based award activity (in shares)					0.2
Stock-based award activity		56.4		-0.7	10.1		65.8
Adjustment upon adoption of guidance for uncertainty in income taxes				-4.3			-4.3
Dividends to noncontrolling interest						-0.7	-0.7
Ending Balance (in shares) at Dec. 31, 2007	307.5				-1.6
Ending Balance at Dec. 31, 2007	3.1	2530.8	-34.8	1,399	-103.6	1.5	3,796
Comprehensive income
Net earnings				563.1		1.6	564.7
Pension and postretirement benefit plan adjustments:
Net gain (losses)			-125.8
Amortization			3.9
Foreign currency translation adjustments			-39.1			-0.4
Amortization of deferred holding gains on derivatives designated as cash flow hedges			-0.8
Unrealized gain (loss) on investments			-3.1
Other comprehensive income (loss)							-165.3
Adjustment, net of tax, upon adoption of the measurement date provision of guidance for pension and postretirement plans			1	-4.6			-3.6
Dividends ($0.20 per share in 2007, 2008 and 2009)				(61)			(61)
Stock options exercised (in shares)					1.5
Stock options exercised		11.1		-45.5	97.4		63
Activity under other stock plans (in shares)					0.4
Activity under other stock plans				-6.1	26.2		20.1
Purchase of treasury stock (in shares)					(4)
Purchase of treasury stock					-230.1		-230.1
Stock-based award activity (in shares)					0.3
Stock-based award activity		54.7		-2.8	17.7		69.6
Dividends to noncontrolling interest						-0.9	-0.9
Ending Balance (in shares) at Dec. 31, 2008	307.5				-3.4
Ending Balance at Dec. 31, 2008	3.1	2596.6	-198.7	1842.1	-192.4	1.8	4052.5
Comprehensive income
Net earnings				621.3		2.5	623.8
Pension and postretirement benefit plan adjustments:
Net gain (losses)			49.9
Amortization			8.2
Foreign currency translation adjustments			37.2			1.7
Amortization of deferred holding gains on derivatives designated as cash flow hedges			-0.8
Unrealized gain (loss) on investments			1.4
Other comprehensive income (loss)							97.6
Dividends ($0.20 per share in 2007, 2008 and 2009)				-60.9			-60.9
Stock options exercised (in shares)					2.2
Stock options exercised		7.3		-35.5	101		72.8
Activity under other stock plans (in shares)					0.2
Activity under other stock plans				-2.6	11.5		8.9
Purchase of treasury stock (in shares)					(2)
Purchase of treasury stock					-105.5		-105.5
Stock-based award activity (in shares)					-0.1
Stock-based award activity		126.4		-7.7	20.9		139.6
Noncontrolling interest from an acquisition						16.7	16.7
Dividends to noncontrolling interest						-1.6	-1.6
Ending Balance (in shares) at Dec. 31, 2009	307.5				-3.1
Ending Balance at Dec. 31, 2009	3.1	2730.3	-102.8	2356.7	-164.5	21.1	4843.9

3_Statement Of Shareholders Equ

Statement Of Shareholders Equity And Other Comprehensive Income (Parenthetical) (USD $)
	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Dividends, per share	0.2	0.2	0.2

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Cash flows from operating activities:
Net earnings	623.8	564.7	485.3
Non-cash items included in net earnings:
In-process research and development charge	0	0	72
Depreciation and amortization	262.1	264.4	215.5
Settlement of a pre-existing distribution agreement in a business combination	0	0	2.3
Amortization of original issue discount and debt issuance costs	27.5	29.4	28.5
Amortization of net realized gain on interest rate swap	-1.3	-1.3	-1.3
Deferred income tax benefit	-112.8	(101)	(91)
Loss on disposal and impairment of assets	3.8	11.5	4.3
Loss on extinguishment of convertible debt	5.3	0	0
Loss on sale of discontinued operations	0	0	1.3
Unrealized loss (gain) on derivative instruments	13.6	-14.8	0.4
Expense of share-based compensation plans	151.9	93.1	81.7
Restructuring charges	50.9	41.3	26.8
Gain on investments, net	-24.6	0	0
Changes in assets and liabilities:
Trade receivables	-17.7	-114.5	-46.4
Inventories	67.7	(48)	-22.6
Other current assets	4.9	4.6	-20.7
Other non-current assets	-20.3	-2.9	-34.3
Accounts payable	22.5	-32.9	51.8
Accrued expenses	16.2	14	32.7
Income taxes	-1.6	35.3	-18.7
Other liabilities	41.4	-60.4	25.6
Net cash provided by operating activities	1113.3	682.5	793.2
Cash flows from investing activities:
Acquisitions, net of cash acquired	-12.8	-150.1	-683.7
Additions to property, plant and equipment	-95.8	-190.8	-142.5
Additions to capitalized software	-26.6	-56.3	-30.7
Additions to intangible assets	-3.3	-69.8	(10)
Contractual purchase price adjustments to prior acquisitions	11.6	0	0
Proceeds from sale of investments	28.2	0	0
Proceeds from sale of business and assets	0	6.1	23.9
Proceeds from sale of property, plant and equipment	0	1.2	9.2
Net cash used in investing activities	-98.7	-459.7	-833.8
Cash flows from financing activities:
Net borrowings (repayments) of notes payable	12.1	-34.7	-108.5
Payments to acquire treasury stock	-105.5	-230.1	-186.5
Dividends to stockholders	-60.6	-60.7	-60.8
Repayments of convertible borrowings	-98.3	0	0
Sale of stock to employees	63.5	51.6	137.4
Excess tax benefits from share-based compensation	7.3	11.1	36
Net cash used in financing activities	-181.5	-262.8	-182.4
Effect of exchange rates on cash and equivalents	3.6	-7.5	11.5
Net increase (decrease) in cash and equivalents	836.7	-47.5	-211.5
Cash and equivalents at beginning of year	1110.4	1157.9	1369.4
Cash and equivalents at end of year	1947.1	1110.4	1157.9
Cash paid during the year for:
Interest (net of amount capitalized)	53.7	60.7	63.1
Income taxes, net of refunds	332.6	261.4	$238

Supplemental Cash Flow Note

Supplemental Cash Flow Note
	12 Months Ended Dec. 31, 2009 USD / shares
Supplemental Cash Flow Note	In 2009, the Company acquired an office building contiguous to its main facility in Irvine, California for approximately $20.7 million. The Company assumed a mortgage of $20.0 million and paid $0.7 million in cash.

Summary of Significant Accounti

Summary of Significant Accounting Policies
	12 Months Ended Dec. 31, 2009 USD / shares
Summary of Significant Accounting Policies	Note1:Summary of Significant Accounting Policies The consolidated financial statements include the accounts of Allergan, Inc. (Allergan or the Company) and all of its subsidiaries. All significant intercompany transactions and balances among the consolidated entities have been eliminated from the consolidated financial statements. Use of Estimates The financial statements have been prepared in conformity with accounting principles generally accepted in the United States and, as such, include amounts based on informed estimates and judgments of management. Actual results could differ materially from those estimates. Foreign Currency Translation The financial position and results of operations of the Companys foreign subsidiaries are generally determined using local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at the exchange rate in effect at each year end. Income statement accounts are translated at the average rate of exchange prevailing during the year. Adjustments arising from the use of differing exchange rates from period to period are included in accumulated other comprehensive loss in equity. Net gains (losses) resulting from foreign currency transactions of approximately $(15.3)million, $2.9million and $(25.0)million for the years ended December31, 2009, 2008 and 2007, respectively, are included in Other, net in the Companys consolidated statements of earnings. Cash and Equivalents The Company considers cash in banks, repurchase agreements, commercial paper and deposits with financial institutions with maturities of three months or less when purchased and that can be liquidated without prior notice or penalty, to be cash and equivalents. Investments The Company has non-marketable equity investments in conjunction with its various collaboration arrangements. The non-marketable equity investments represent investments in start-up technology companies or partnerships that invest in start-up technology companies and are recorded at cost. The non-marketable equity investments are evaluated periodically for impairment. If it is determined that a decline of any investment is other than temporary, then the investment basis would be written down to fair value and the write-down would be included in earnings as a loss. Inventories Inventories are valued at the lower of cost or market (net realizable value). Cost is determined by the first-in, first-out method. Long-Lived Assets Property, plant and equipment are stated at cost. Additions, major renewals and improvements are capitalized, while maintenance and repairs are expensed. Upon disposition, the net book value of assets is relieved and resulting gains or losses are reflected in earnings. For financial reporting purposes, depreciation is generally provided on the straight-line method over the useful life of the related asset. The useful lives for buildings, including building improvements, range from seven years to 40years and, for machinery and equipment, three years to 15 years. Leasehold improvements are amortized over the shorter of their economic lives or lease terms. Accelerated depreciation metho

Acquisitions

Acquisitions
	12 Months Ended Dec. 31, 2009 USD / shares
Acquisitions	Note 2:Acquisitions Samil Acquisition On July7, 2009, the Company and Samil Pharmaceutical Co. Ltd. entered into a joint venture, Samil Allergan Ophthalmic Joint Venture Company (Samil) in Korea by integrating the Samil Eyecare division with the Companys Korean ophthalmology products. In addition, the Company paid approximately $16.7 million ($12.8 million, net of cash acquired) to Samil Pharmaceutical Co. Ltd. to acquire the Companys joint venture investment and received a 50.005% stockholder interest (50% plus one share) in the joint venture. The acquisition was funded from cash and equivalents balances. The Company accounted for the Samil acquisition as a business combination. In connection with the Samil acquisition, the Company acquired assets with a fair value of $41.4 million, including goodwill of $23.0 million, intangible assets of $5.1 million, cash of $3.9 million and other assets of $9.4 million, and assumed liabilities of $8.1 million. The Company believes the fair values assigned to the assets acquired and liabilities assumed were based on reasonable assumptions. Aczone Asset Purchase On July11, 2008, the Company completed the acquisition of assets related to Aczone (dapsone)gel 5%, a topical treatment for acne vulgaris, from QLT USA, Inc. (QLT) for approximately $150.0million. The acquisition was funded from cash and equivalents balances. The Company acquired QLTs right, title and interest in and to the intellectual property, assigned contracts, registrations and inventories related to Aczone, which is approved for sale in both the United States and Canada for the treatment of certain dermatological conditions. The Company accounted for the acquisition as a purchase of net assets. The Company determined that the assets acquired consist of product rights for developed technology for Aczone of $145.6 million and inventories of $4.4 million. The useful life of the developed technology was determined to be approximately eight years. The Company believes the fair values assigned to the assets acquired were based on reasonable assumptions. Esprit Acquisition On October16, 2007, the Company completed the acquisition of Esprit, a pharmaceutical company based in the United States with expertise in the genitourinary market, for an aggregate purchase price of approximately $370.8million, net of cash acquired. The acquisition was funded from cash and equivalents balances. Prior to and in anticipation of the acquisition, the Company loaned Esprit $74.8million in August 2007, the proceeds of which were used by Esprit to fund a milestone payment to a third party and to repay certain outstanding obligations to third-party lenders. The loan was secured by all of Esprits assets. The loan terms were at fair value. The loan and accrued interest of $0.9million were effectively settled upon the acquisition with no resulting gain or loss. The Company accounted for the Esprit acquisition as a business combination. In connection with the Esprit acquisition, the Company acquired assets with a fair value of $525.4million and assumed liabilities of $154.6million. The Esprit acquisition provides the Company with a dedicated urologics

Discontinued Operations

Discontinued Operations
	12 Months Ended Dec. 31, 2009 USD / shares
Discontinued Operations	Note3:Discontinued Operations On July2, 2007, the Company completed the sale of the ophthalmic surgical device business that it acquired as a part of the Cornal acquisition in January 2007, for $28.6million. The net assets of the disposed business consisted of current assets of $24.3million, non-current assets of $9.8million and current liabilities of $4.2million. The Company recorded a pre-tax loss of $1.3million ($1.0million net of tax) associated with the sale. The following amounts related to the ophthalmic surgical device business have been segregated from continuing operations and reported as discontinued operations through the date of disposition. The Company did not account for its ophthalmic surgical device business as a separate legal entity. Therefore, the following selected financial data for the Companys discontinued operations is presented for informational purposes only and does not necessarily reflect what the net sales or earnings would have been had the business operated as a stand-alone entity. The financial information for the Companys discontinued operations includes allocations of certain expenses to the ophthalmic surgical device business. These amounts have been allocated to the Companys discontinued operations on the basis that is considered by management to reflect most fairly or reasonably the utilization of the services provided to, or the benefit obtained by, the ophthalmic surgical device business. The following table sets forth selected financial data of the Companys discontinued operations for 2007. Selected Financial Data for Discontinued Operations (inmillions) Product net sales $ 20.0 Loss from discontinued operations before income taxes $ (1.1 ) Loss from discontinued operations $ (0.7 )

Restructuring Charges and Integ

Restructuring Charges and Integration Costs
	12 Months Ended Dec. 31, 2009 USD / shares
Restructuring Charges and Integration Costs	Note4:Restructuring Charges and Integration Costs 2009 Restructuring Plan On February4, 2009, the Company announced a restructuring plan that involved a workforce reduction of approximately 460 employees, primarily in the United States and Europe. The majority of the employees affected by the restructuring plan were U.S. urology sales and marketing personnel as a result of the Companys decision to focus on the urology specialty and to seek a partner to promote Sanctura XR to general practitioners, and marketing personnel in the United States and Europe as the Company adjusted its back-office structures to a reduced short-term sales outlook for some businesses. The restructuring plan also included modest workforce reductions in other functions as the Company re-engineered its processes to increase efficiency and productivity. As part of the restructuring plan, the Company modified the outstanding stock options issued in its February 2008 full-round employee stock option grant. The stock options were originally granted with an exercise price of $64.47 with a standard four year graded vesting term, a ten year contractual term, and standard 90 day expiration upon termination of employment provisions. These options were modified to be immediately vested in full and to remove the 90 day expiration upon termination of employment provision. Because the modified awards became fully vested and there was no future derived service period, all unamortized compensation expense related to the original grant and the additional compensation expense attributable to the modification of the awards was recognized in full on the modification date. In addition, the contractual provisions of outstanding stock options, other than the February 2008 full-round employee stock option grant, held by employees impacted by the workforce reduction were modified to extend the stock option expiration dates. Under the original contractual provisions, outstanding stock options held by employees involved in a workforce reduction automatically become fully vested upon termination of employment and the stock options expire after the earlier of 90 days from termination of employment or the remaining stock option contractual term. Under the modified terms, stock options for the impacted employees will expire after the earlier of three years from termination of employment or the remaining contractual term. All unamortized compensation expense related to the original stock option awards plus the incremental compensation expense associated with the modifications will be recognized ratably from the modification date to the employees expected termination date. The fair value of the modifications to all share-based awards was generally estimated using a lattice model. The total incremental pre-tax compensation expense associated with the modifications attributable to the 2009 restructuring plan was $11.0 million. The Company began to record costs associated with the 2009 restructuring plan in the first quarter of 2009 and substantially completed all activities related to the restructuring plan in the second quarter of 2009. The restructuring charges primarily consist of emplo

Composition of Certain Financia

Composition of Certain Financial Statement Captions
	12 Months Ended Dec. 31, 2009 USD / shares
Composition of Certain Financial Statement Captions	Note5:Composition of Certain Financial Statement Captions December31, 2009 2008 (in millions) Trade receivables, net Trade receivables $ 627.6 $ 587.6 Less allowance for sales returns medical device products 20.7 17.8 Less allowance for doubtful accounts 30.3 31.4 $ 576.6 $ 538.4 Inventories Finished products $ 137.9 $ 174.9 Work in process 34.9 36.8 Raw materials 41.1 50.8 $ 213.9 $ 262.5 Other current assets Prepaid expenses $ 71.2 $ 80.2 Deferred taxes 252.9 238.2 Other 44.6 40.9 $ 368.7 $ 359.3 Investments and other assets Deferred executive compensation investments $ 56.2 $ 48.4 Capitalized software 87.3 85.8 Prepaid pensions 24.6 0.9 Prepaid royalties 10.0 20.0 Interest rate swap fair value 30.4 61.9 Debt issuance costs 7.5 10.9 Equity investments 5.1 5.9 Other 45.6 38.3 $ 266.7 $ 272.1 Property, plant and equipment, net Land $ 58.2 $ 51.8 Buildings 737.8 689.4 Machinery and equipment 571.3 535.5 1,367.3 1,276.7 Less accumulated depreciation 559.2 501.3 $ 808.1 $ 775.4 Other accrued expenses Sales rebates and other incentive programs $ 158.6 $ 102.0 Restructuring charges 12.6 18.9 Royalties 33.8 52.1 Accrued interest 10.8 13.6 Sales returns specialty pharmaceutical products 20.8 7.5 Product warranties breast implant products 6.7 6.3 Other 139.4 136.3 $ 382.7 $ 336.7 December31, 2009 2008 (in millions) Other liabilities Postretirement benefit plan $ 41.0 $ 39.0 Qualified and non-qualified pension plans 117.7 156.2 Deferred executive compensation 59.8 51.6 Deferred income 95.0 80.8 Product warranties breast implant products 22.7 23.2 Unrecognized tax benefit liabilities 23.2 22.4 Other 29.0 29.6 $ 388.4 $ 402.8 Accumulated other comprehensive loss Foreign currency translation adjustments $ 21.3 $ (15.9 ) Deferredholdinggainsonderivative instruments, net of taxes of $3.3million and $3.8million for 2009 and 2008, respectively 4.9 5.7 Actuarial losses not yet recognized as a component of pension and postretirement benefit plan costs, net of taxes of $76.9million and $98.1million for 2009 and 2008, respectively (129.0 ) (187.1 ) Unrealized loss on investments, net of applicable income tax benefit of $1.5 million (1.4 ) $ (102.8 ) $ (198.7 ) At Decemb

Intangibles and Goodwill

Intangibles and Goodwill
	12 Months Ended Dec. 31, 2009 USD / shares
Intangibles and Goodwill	Note6:Intangibles and Goodwill At December31, 2009 and 2008, the components of amortizable and unamortizable intangibles and goodwill and certain other related information were as follows: Intangibles December31, 2009 December31, 2008 Gross Amount Accumulated Amortization Weighted Average Amortization Period Gross Amount Accumulated Amortization Weighted Average Amortization Period (in millions) (in years) (in millions) (in years) Amortizable Intangible Assets: Developed technology $ 1,396.4 $ (317.2 ) 14.3 $ 1,390.8 $ (215.0 ) 14.3 Customer relationships 42.3 (42.0 ) 3.1 42.3 (37.8 ) 3.1 Licensing 224.7 (102.3 ) 10.0 223.5 (78.9 ) 10.0 Trademarks 27.5 (19.6 ) 6.3 27.3 (14.9 ) 6.3 Core technology 191.7 (49.5 ) 15.2 190.4 (36.5 ) 15.2 Other 5.6 (0.4 ) 7.1 1,888.2 (531.0 ) 13.5 1,874.3 (383.1 ) 13.5 UnamortizableIntangibleAssets: Business licenses 0.7 $ 1,888.2 $ (531.0 ) $ 1,875.0 $ (383.1 ) Developed technology consists primarily of current product offerings, primarily saline and silicone gel breast implants, obesity intervention products, dermal fillers, skin care and urologics products acquired in connection with business combinations and asset acquisitions. Customer relationship assets consist of the estimated value of relationships with customers acquired in connection with the Inamed acquisition, primarily in the breast implant market in the United States. Licensing assets consist primarily of capitalized payments to third party licensors related to the achievement of regulatory approvals to commercialize products in specified markets and up-front payments associated with royalty obligations for products that have achieved regulatory approval for marketing. Core technology consists of proprietary technology associated with silicone gel breast implants, gastric bands and intragastric balloon systems acquired in connection with the Inamed acquisition, dermal filler technology acquired in connection with the Cornal acquisition, gastric band technology acquired in connection with the EndoArt acquisition, and a drug delivery technology acquired in connection with the Companys 2003 acquisition of Oculex Pharmaceuticals, Inc. Other intangible assets consist of acquired product registration rights and distributor relationships. The following table provides amortization expense by major categories of acquired amortizable intangible assets for the years ended December31, 2009, 2008 and 2007, respectively: 2009 2008 2007 (in millions) Developed technology $ 101.4 $ 98.7 $ 71.5 Customer relationships 4.2 13.6 13.6 Licensing 23.2 20.9 19.0 Trademarks 4.4 4.8 4.8 Core technology

Notes Payable and Long-Term Deb

Notes Payable and Long-Term Debt
	12 Months Ended Dec. 31, 2009 USD / shares
Notes Payable and Long-Term Debt	Note7:Notes Payable and Long-Term Debt 2009 Average Effective Interest Rate December31, 2009 2008 Average Effective Interest Rate December31, 2008 (in millions) (in millions) Bank loans 2.59 % $ 18.1 3.14 % $ 4.4 Medium term notes; maturing 2012 7.47 % 25.0 7.47 % 25.0 Real estate mortgage; maturing 2017 5.65 % 20.0 Senior notes due 2016 5.79 % 798.6 5.79 % 798.4 Interest rateswapfairvalueadjustment 30.4 61.9 892.1 889.7 Less current maturities 18.1 4.4 Total long-term debt $ 874.0 $ 885.3 At December31, 2009, the Company had a committed long-term credit facility, a commercial paper program, a medium-term note program, an unused shelf registration statement that allows the Company to issue additional securities, including debt securities, in one or more offerings from time to time, a real estate mortgage and various foreign bank facilities. The committed long-term credit facility expires in May 2012. The termination date can be further extended from time to time upon the Companys request and acceptance by the issuer of the facility for a period of one year from the last scheduled termination date for each request accepted. The committed long-term credit facility allows for borrowings of up to $800million. The commercial paper program also provides for up to $600million in borrowings. Borrowings under the committed long-term credit facility and medium-term note program are subject to certain financial and operating covenants that include, among other provisions, maximum leverage ratios. Certain covenants also limit subsidiary debt. The Company was in compliance with these covenants at December31, 2009. As of December31, 2009, the Company had no borrowings under its committed long-term credit facility, $25.0million in borrowings outstanding under the medium-term note program, $20.0 million in borrowings outstanding under the real estate mortgage, $18.1million in borrowings outstanding under various foreign bank facilities and no borrowings under the commercial paper program. Commercial paper, when outstanding, is issued at current short-term interest rates. Additionally, any future borrowings that are outstanding under the long-term credit facility will be subject to a floating interest rate. The Company may from time to time seek to retire or purchase its outstanding debt. On April12, 2006, the Company completed concurrent private placements of $800.0million in aggregate principal amount of 5.75%Senior Notes due 2016 (2016 Notes) and $750.0million in aggregate principal amount of the 2026 Convertible Notes. (See Note8, Convertible Notes, for a description of the 2026 Convertible Notes.) The 2016 Notes, which were sold at 99.717% of par value with an effective interest rate of 5.79%, are unsecured a

Convertible Notes

Convertible Notes
	12 Months Ended Dec. 31, 2009 USD / shares
Convertible Notes	Note8:Convertible Notes In 2006, the Company issued the 2026 Convertible Notes for an aggregate principal amount of $750.0 million. The 2026 Convertible Notes are unsecured and pay interest semi-annually on the principal amount of the notes at a rate of 1.50%per annum. The 2026 Convertible Notes will be convertible into cash and, if applicable, shares of the Companys common stock based on an initial conversion rate of 15.7904shares of the Companys common stock per $1,000 principal amount of the 2026 Convertible Notes if the Companys stock price reaches certain specified thresholds. As of December31, 2009, the conversion criteria had not been met. The Company is permitted to redeem the 2026 Convertible Notes from and after April5, 2009 to April4, 2011 if the closing price of its common stock reaches a specified threshold, and will be permitted to redeem the 2026 Convertible Notes at any time on or after April5, 2011. Holders of the 2026 Convertible Notes will also be able to require the Company to redeem the 2026 Convertible Notes on April1, 2011, April1, 2016 and April1, 2021 or upon a change in control of the Company. The 2026 Convertible Notes mature on April1, 2026, unless previously redeemed by the Company or earlier converted by the note holders. The Company separately measures and accounts for the liability and equity components of the 2026 Convertible Notes. As of December31, 2009, the carrying value of the liability component is $617.3 million with an effective interest rate of 5.59%. The difference between the carrying value of the liability component and the principal amount of the 2026 Convertible Notes of $649.7 million is recorded as debt discount and is being amortized to interest expense through the first note holder put date in April 2011. In the first quarter of 2009, the Company paid $98.3 million to repurchase $100.3 million principal amount of the 2026 Convertible Notes with a carrying value of $92.3 million and a calculated fair value of approximately $97.0 million. The Company recognized a $4.7 million loss on extinguishment of the convertible debt. In addition, the Company wrote off $0.6 million of related unamortized deferred debt issuances costs as loss on extinguishment of the convertible debt. The difference between the amount paid to repurchase the 2026 Convertible Notes and the calculated fair value of the liability component was recognized as a reduction to additional paid in capital, net of the effect of deferred taxes.

Income Taxes

Income Taxes
	12 Months Ended Dec. 31, 2009 USD / shares
Income Taxes	Note9:Income Taxes The components of earnings from continuing operations before income taxes were: Year Ended December31, 2009 2008 2007 (in millions) U.S. $ 394.3 $ 346.2 $ 364.9 Non-U.S. 454.2 416.0 299.5 Total $ 848.5 $ 762.2 $ 664.4 The provision for income taxes consists of the following: Year Ended December31, 2009 2008 2007 (in millions) Current U.S. federal $ 234.7 $ 207.6 $ 186.0 U.S. state 41.5 46.5 29.8 Non-U.S. 61.3 44.4 52.6 Total current 337.5 298.5 268.4 Deferred U.S. federal (87.8 ) (86.8 ) (99.8 ) U.S. state (17.7 ) (3.0 ) 8.4 Non-U.S. (7.3 ) (11.2 ) 0.4 Total deferred (112.8 ) (101.0 ) (91.0 ) Total $ 224.7 $ 197.5 $ 177.4 The current provision for income taxes does not reflect the tax benefit of $7.3million, $11.1million and $36.0million for the years ended December31, 2009, 2008 and 2007, respectively, related to the exercise of employee stock options recorded directly to Additional paid-in capital in the consolidated balance sheets. The reconciliations of the U.S.federal statutory tax rate to the combined effective tax rate follow: 2009 2008 2007 Statutory rate of tax expense 35.0 % 35.0 % 35.0 % State taxes, net of U.S. tax benefit 3.3 4.4 4.0 Tax differential on foreign earnings (11.2 ) (14.4 ) (18.6 ) U.S.taxeffectofforeignearningsanddividends,netofforeigntaxcredits 1.7 1.6 0.4 Other credits (RD) (4.3 ) (3.7 ) (3.8 ) In-process research and development 10.8 Tax audit settlements/adjustments 1.3 2.1 (0.6 ) Change in valuation allowance (0.7 ) Other 0.7 0.9 0.2 Effective tax rate 26.5 % 25.9 % 26.7 % Withholding and U.S.taxes have not been provided on approximately $2,184.5million of unremitted earnings of certain non-U.S.subsidiaries because the Company has currently reinvested these earnings indefinitely in such operations, or the U.S.taxes on such earnings will be offset by appropriate credits for foreign income taxes paid. Such earnings would become taxable upon the sale or liquidation of these non-U.S.subsidiaries or upon the remittance of dividends. It is not practicable to estimate the amount of the deferred tax liability on such unremitted earnings. Upon remittance, certain foreign countries impose withholding taxes that are then available, subject to certain limitations, for use as credits against the Companys U.S.tax liability, if any. The Company and its domestic subsidiaries file a consolidated U.S.federal income tax return. During the first quarter of 2008, the Company completed the federal income tax audit by the

Employee Retirement and Other B

Employee Retirement and Other Benefit Plans
	12 Months Ended Dec. 31, 2009 USD / shares
Employee Retirement and Other Benefit Plans	Note10:Employee Retirement and Other Benefit Plans Pension and Postretirement Benefit Plans The Company sponsors various qualified defined benefit pension plans covering a substantial portion of its employees. In addition, the Company sponsors two supplemental nonqualified plans covering certain management employees and officers. U.S.pension benefits are based on years of service and compensation during the five highest consecutive earnings years. Foreign pension benefits are based on various formulas that consider years of service, average or highest earnings during specified periods of employment and other criteria. The Company also has one retiree health plan that covers U.S.retirees and dependents. Retiree contributions are required depending on the year of retirement and the number of years of service at the time of retirement. Disbursements exceed retiree contributions and the plan currently has no assets. The accounting for the retiree health care plan anticipates future cost-sharing changes to the written plan that are consistent with the Companys past practice and managements intent to manage plan costs. The Companys history of retiree medical plan modifications indicates a consistent approach to increasing the cost sharing provisions of the plan. Accounting for Defined Benefit Pension and Other Postretirement Plans The Company recognizes on its balance sheet an asset or liability equal to the over- or under-funded benefit obligation of each defined benefit pension and other postretirement plan. Actuarial gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit cost are recognized, net of tax, as a component of other comprehensive income. In the first quarter of 2008, the Company changed the measurement date for its defined benefit pension and other postretirement plans from September30 to December31 in accordance with the authoritative guidance issued by the FASB with regard to measurement dates for pension and other postretirement plans. As a result, the Company recognized an increase of $5.2 million in its net pension liability, an increase of $1.6 million in related deferred income tax assets, a reduction of $4.6 million in its beginning retained earnings and an increase of $1.0 million in accumulated other comprehensive income. Included in accumulated other comprehensive loss as of December31, 2009 and 2008 are unrecognized actuarial losses of $202.9million and $282.1million, respectively, related to the Companys pension plans. Of the December31, 2009 amount, the Company expects to recognize approximately $10.2 million in net periodic benefit cost during 2010. Also included in accumulated other comprehensive loss at December31, 2009 and 2008 are unrecognized prior service credits of $1.7million and $1.9million, respectively, and unrecognized actuarial losses of $4.7million and $5.0million, respectively, related to the Companys retiree health plan. Of the December31, 2009 amounts, the Company expects to recognize $0.3million of the unrecognized prior service credits and $0.1million of the unrecognized actuarial losses in net per

Employee Stock Plans

Employee Stock Plans
	12 Months Ended Dec. 31, 2009 USD / shares
Employee Stock Plans	Note11:Employee Stock Plans The Company has an incentive award plan that provides for the granting of non-qualified stock options, incentive stock options, stock appreciation rights, performance shares, restricted stock and restricted stock units to officers, key employees and non-employee directors. Stock option grants to officers and key employees under the incentive award plan are generally granted at an exercise price equal to the fair market value at the date of grant, generally expire ten years after their original date of grant and generally become vested and exercisable at a rate of 25%per year beginning twelve months after the date of grant. Restricted share awards to officers and key employees generally become fully vested and free of restrictions four years from the date of grant, except for restricted stock grants pursuant to the Companys management bonus plan, which generally become fully vested and free of restrictions two years from the date of grant. Under the terms of the incentive award plan, each eligible non-employee director is granted non-qualified stock options on the date of each regular annual meeting of stockholders at which the directors are to be elected. Non-qualified stock options to non-employee directors become fully vested and exercisable one year from the date of grant. In addition, each eligible non-employee director receives a restricted share award upon election, reelection or appointment to the board of directors. Restricted share awards to non-employee directors generally vest and become free of restrictions at the rate of 331/3%per year beginning twelve months after the date of grant. At December31, 2009, the aggregate number of shares available for future grant under the incentive award plan for stock options and restricted share awards was approximately 16.3million shares. Share-Based Award Activity and Balances The following table summarizes the Companys stock option activity: 2009 2008 2007 Number of Shares Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price (in thousands, except option exercise price and fair value data) Outstanding, beginning of year 21,238 $ 48.96 18,695 $ 44.50 20,241 $ 41.03 Options granted 5,790 40.73 4,643 63.33 4,067 59.07 Options exercised (1,835 ) 35.68 (1,511 ) 34.35 (3,920 ) 35.08 Options cancelled (296 ) 52.01 (589 ) 57.41 (1,693 ) 59.88 Outstanding, end of year 24,897 47.99 21,238 48.96 18,695 44.50 Exercisable, end of year 16,628 48.98 11,481 40.90 9,434 36.76 Weighted average per share fair value of options granted during the year $15.44 $19.82 $17.27 The aggregate intrinsic value of stock options exercised in 2009, 2008 and 2007 was $35.9million, $39.2million and $106.2million, respectively. As of December31

Financial Instruments

Financial Instruments
	12 Months Ended Dec. 31, 2009 USD / shares
Financial Instruments	Note12:Financial Instruments In the normal course of business, operations of the Company are exposed to risks associated with fluctuations in interest rates and foreign currency exchange rates. The Company addresses these risks through controlled risk management that includes the use of derivative financial instruments to economically hedge or reduce these exposures. The Company does not enter into derivative financial instruments for trading or speculative purposes. The Company has not experienced any losses to date on its derivative financial instruments due to counterparty credit risk. To ensure the adequacy and effectiveness of its interest rate and foreign exchange hedge positions, the Company continually monitors its interest rate swap positions and foreign exchange forward and option positions both on a stand-alone basis and in conjunction with its underlying interest rate and foreign currency exposures, from an accounting and economic perspective. However, given the inherent limitations of forecasting and the anticipatory nature of the exposures intended to be hedged, the Company cannot assure that such programs will offset more than a portion of the adverse financial impact resulting from unfavorable movements in either interest or foreign exchange rates. In addition, the timing of the accounting for recognition of gains and losses related to mark-to-market instruments for any given period may not coincide with the timing of gains and losses related to the underlying economic exposures and, therefore, may adversely affect the Companys consolidated operating results and financial position. Interest Rate Risk Management The Companys interest income and expense is more sensitive to fluctuations in the general level of U.S.interest rates than to changes in rates in other markets. Changes in U.S.interest rates affect the interest earned on cash and equivalents, interest expense on debt as well as costs associated with foreign currency contracts. For a discussion of the Companys interest rate swap activities, see Note 7, Notes Payable and Long-Term Debt. Foreign Exchange Risk Management Overall, the Company is a net recipient of currencies other than the U.S.dollar and, as such, benefits from a weaker dollar and is adversely affected by a stronger dollar relative to major currencies worldwide. Accordingly, changes in exchange rates, and in particular a strengthening of the U.S.dollar, may negatively affect the Companys consolidated revenues or operating costs and expenses as expressed in U.S.dollars. From time to time, the Company enters into foreign currency option and forward contracts to reduce earnings and cash flow volatility associated with foreign exchange rate changes to allow management to focus its attention on its core business issues. Accordingly, the Company enters into various contracts which change in value as foreign exchange rates change to economically offset the effect of changes in the value of foreign currency assets and liabilities, commitments and anticipated foreign currency denominated sales and operating expenses. The Company enters into foreign currency option and forward contracts in amount

Fair Value Measurements

Fair Value Measurements
	12 Months Ended Dec. 31, 2009 USD / shares
Fair Value Measurements	Note13:Fair Value Measurements The Company measures fair value based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. Assets and Liabilities Measured at Fair Value on a Recurring Basis As of December31, 2009, the Company has certain assets and liabilities that are required to be measured at fair value on a recurring basis. These include commercial paper and foreign time deposits classified as cash equivalents, other cash equivalents, foreign exchange derivatives and the interest rate swap with a $300.0million notional amount. These assets and liabilities are classified in the table below in one of the three categories of the fair value hierarchy described above. Total Level1 Level2 Level3 (in millions) Assets Commercial paper $ 574.6 $ 574.6 $ $ Foreign time deposits 156.9 156.9 Other cash equivalents 1,108.6 1,108.6 Foreign exchange derivative assets 15.0 15.0 Interest rate swap derivative asset 30.4 30.4 $ 1,885.5 $ 1,840.1 $ 45.4 $ Liabilities Interest rate swap derivative liability $ 30.4 $ $ 30.4 $ Commercial paper, foreign time deposits and other cash equivalents are valued at cost, which approximates fair value due to the short-term maturities of these instruments. Foreign currency derivative assets and liabilities are valued using quoted forward foreign exchange prices and option volatility at the reporting date. The interest rate swap derivative asset and liability are valued using LIBOR yield curves at the reporting date. The Company believes the fair values assigned to its derivative instruments as of December31, 2009 are based upon reasonable estimates and assumptions.

Legal Proceedings

Legal Proceedings
	12 Months Ended Dec. 31, 2009 USD / shares
Legal Proceedings	Note14:Legal Proceedings The Company is involved in various lawsuits and claims arising in the ordinary course of business. Clayworth v. Allergan, et al. In August 2004, James Clayworth, R.Ph., doing business as Clayworth Pharmacy, filed a complaint entitled Clayworth v. Allergan, et al. in the Superior Court of the State of California for the County of Alameda. The complaint, as amended, named the Company and 12 other defendants and alleged unfair business practices, including a price fixing conspiracy relating to the reimportation of pharmaceuticals from Canada. The complaint sought damages, equitable relief, attorneys fees and costs. In January2007, the court entered a notice of entry of judgment of dismissal against the plaintiffs, dismissing the plaintiffs complaint. On the same date, the plaintiffs filed a notice of appeal with the Court of Appeal of the State of California. In April2007, the plaintiffs filed an opening brief with the court of appeal. The defendants filed their joint opposition in July2007, and the plaintiffs filed their reply in August2007. In May2008, the court of appeal heard oral arguments and took the matter under submission. In July2008, the court of appeal affirmed the superior courts ruling, granting the Companys motion for summary judgment. In August2008, the plaintiffs filed a petition for rehearing with the court of appeal, which the court denied. In September2008, the plaintiffs filed a petition for review with the Supreme Court of the State of California, which the supreme court granted in November2008. In February2009, the plaintiffs filed their opening brief on the merits with the supreme court and defendants filed their answer brief in May2009. In June2009, the plaintiffs filed their reply brief on the merits with the supreme court. Kramer et al. v. Allergan, Inc. In July 2008, a complaint entitled Kramer, Bryant, Spears, Doolittle, Clark, Whidden, Powell, Moore, Hennessey, Sody, Breeding, Downey, Underwood-Boswell, Reed-Momot, Purdon Hahn v. Allergan, Inc. was filed in the Superior Court for the State of California for the County of Orange. The complaint makes allegations relating to Botox and Botox Cosmetic including failure to warn, manufacturing defects, negligence, breach of implied and express warranties, deceit by concealment and negligent misrepresentation and seeks damages, attorneys fees and costs. In 2009, the plaintiffs Hennessey, Hahn, Underwood-Boswell, Purdon, Moore, Clark, Reed-Momot and Whidden were dismissed without prejudice. In October2009, the Company filed a motion for summary judgment against plaintiff Dee Spears, which the court denied in December 2009. The trial related to plaintiff Dee Spears began in January 2010 and is in progress. Government Investigations In March 2008, the Company received service of a Subpoena Duces Tecum from the U.S. Attorney, U.S. Department of Justice, Northern District of Georgia, or DOJ. The subpoena requests the production of documents relating to the Companys sales and marketing practices in connection with Botox. In December 2009, the DOJ served us with a Supplemental Subpoena Duces Tecum requesting the production of additional

Commitments and Contingencies

Commitments and Contingencies
	12 Months Ended Dec. 31, 2009 USD / shares
Commitments and Contingencies	Note15:Commitments and Contingencies Operating Lease Obligations The Company leases certain facilities, office equipment and automobiles and provides for payment of taxes, insurance and other charges on certain of these leases. Rental expense was $57.9million in 2009, $50.9million in 2008 and $41.9million in 2007. Future minimum rental payments under non-cancelable operating lease commitments with a term of more than one year as of December31, 2009 are as follows: $51.3million in 2010, $38.5million in 2011, $22.7million in 2012, $16.8million in 2013, $12.2million in 2014 and $36.7million thereafter. Contingencies During 2009 and 2008, the Company incurred approximately $32.2 million and $25.7 million, respectively, of costs associated with the DOJs inquiry related to Botox discussed in Note 14, Legal Proceedings. Costs associated with responding to the DOJ investigation during fiscal year 2010 are expected to total approximately $30.0 million to $40.0 million (unaudited). Estimated costs include attorneys fees and costs associated with document production, imaging and information services support. Because of the uncertainties related to the incurrence, amount and range of loss, if any, that might be incurred related to this inquiry, management is currently unable to predict the ultimate outcome or determine whether a liability has been incurred or make an estimate of the reasonably possible liability that could result from an unfavorable outcome associated with this inquiry. During 2009, the Company established a reserve totaling $9.9 million for a contingent liability associated with regulation changes resulting from a final rule issued by the U.S. Department of Defense (DoD) that placed retroactive and prospective pricing limits on certain branded pharmaceuticals under the TRICARE Retail Pharmacy Program, even though such branded pharmaceuticals have not historically been subject to a contract with the Company. The Company is currently in negotiations with the DoD to seek a waiver of retroactive rebates.

Guarantees

Guarantees
	12 Months Ended Dec. 31, 2009 USD / shares
Guarantees	Note16:Guarantees The Companys Restated Certificate of Incorporation, as amended, provides that the Company will indemnify, to the fullest extent permitted by the Delaware General Corporation Law, each person that is involved in or is, or is threatened to be, made a party to any action, suit or proceeding by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Company or was serving at the request of the Company as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise. The Company has also entered into contractual indemnity agreements with each of its directors and executive officers pursuant to which, among other things, the Company has agreed to indemnify such directors and executive officers against any payments they are required to make as a result of a claim brought against such executive officer or director in such capacity, excluding claims (i)relating to the action or inaction of a director or executive officer that resulted in such director or executive officer gaining illegal personal profit or advantage, (ii)for an accounting of profits made from the purchase or sale of securities of the Company within the meaning of Section16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of any state law or (iii)that are based upon or arise out of such directors or executive officers knowingly fraudulent, deliberately dishonest or willful misconduct. The maximum potential amount of future payments that the Company could be required to make under these indemnification provisions is unlimited. However, the Company has purchased directors and officers liability insurance policies intended to reduce the Companys monetary exposure and to enable the Company to recover a portion of any future amounts paid. The Company has not previously paid any material amounts to defend lawsuits or settle claims as a result of these indemnification provisions. As a result, the Company believes the estimated fair value of these indemnification arrangements is minimal. The Company customarily agrees in the ordinary course of its business to indemnification provisions in agreements with clinical trials investigators in its drug, biologics and medical device development programs, in sponsored research agreements with academic and not-for-profit institutions, in various comparable agreements involving parties performing services for the Company in the ordinary course of business, and in its real estate leases. The Company also customarily agrees to certain indemnification provisions in its discovery and development collaboration agreements. With respect to the Companys clinical trials and sponsored research agreements, these indemnification provisions typically apply to any claim asserted against the investigator or the investigators institution relating to personal injury or property damage, violations of law or certain breaches of the Companys contractual obligations arising out of the research or clinical testing of the Companys products, compounds or drug candidates. With respect to rea

Product Warranties

Product Warranties
	12 Months Ended Dec. 31, 2009 USD / shares
Product Warranties	Note17:Product Warranties The Company provides warranty programs for breast implant sales primarily in the United States, Europe and certain other countries. Management estimates the amount of potential future claims from these warranty programs based on actuarial analyses. Expected future obligations are determined based on the history of product shipments and claims and are discounted to a current value. The liability is included in both current and long-term liabilities in the Companys consolidated balance sheets. The U.S.programs include the ConfidencePlus and ConfidencePlus Premier warranty programs. The ConfidencePlus program currently provides lifetime product replacement, $1,200 of financial assistance for surgical procedures within ten years of implantation and contralateral implant replacement. The ConfidencePlus Premier program, which normally requires a low additional enrollment fee, generally provides lifetime product replacement, $2,400 of financial assistance for saline breast implants and $3,500 of financial assistance for silicone gel breast implants for surgical procedures within ten years of implantation and contralateral implant replacement. The enrollment fee is deferred and recognized as income over the ten year warranty period for financial assistance. The warranty programs in non-U.S.markets have similar terms and conditions to the U.S.programs. The Company does not warrant any level of aesthetic result and, as required by government regulation, makes extensive disclosures concerning the risks of the use of its products and breast implant surgery. Changes to actual warranty claims incurred and interest rates could have a material impact on the actuarial analysis and the Companys estimated liabilities. A large majority of the product warranty liability arises from the U.S.warranty programs. The Company does not currently offer any similar warranty program on any other product. The following table provides a reconciliation of the change in estimated product warranty liabilities for the years ended December31, 2009 and 2008: 2009 2008 (in millions) Balance, beginning of year $ 29.5 $ 28.0 Provision for warranties issued during the year 5.5 6.5 Settlements made during the year (5.6 ) (5.8 ) Increases in warranty estimates 0.8 Balance, end of year $ 29.4 $ 29.5 Current portion $ 6.7 $ 6.3 Non-current portion 22.7 23.2 Total $ 29.4 $ 29.5

Business Segment Information

Business Segment Information
	12 Months Ended Dec. 31, 2009 USD / shares
Business Segment Information	Note18:Business Segment Information The Company operates its business on the basis of two reportable segments specialty pharmaceuticals and medical devices. The specialty pharmaceuticals segment produces a broad range of pharmaceutical products, including: ophthalmic products for glaucoma therapy, ocular inflammation, infection, allergy and chronic dry eye; Botox for certain therapeutic and aesthetic indications; skin care products for acne, psoriasis, eyelash growth and other prescription and over-the-counter skin care products; and urologics products. The medical devices segment produces a broad range of medical devices, including: breast implants for augmentation, revision and reconstructive surgery; obesity intervention products, including the Lap-Band System and the Orbera Intragastric Balloon System (formerly known as the BIB System); and facial aesthetics products. The Company provides global marketing strategy teams to ensure development and execution of a consistent marketing strategy for its products in all geographic regions that share similar distribution channels and customers. The Company evaluates segment performance on a revenue and operating income basis exclusive of general and administrative expenses and other indirect costs, restructuring charges, in-process research and development expenses, amortization of identifiable intangible assets related to business combinations and asset acquisitions and certain other adjustments, which are not allocated to the Companys segments for performance assessment by the Companys chief operating decision maker. Other adjustments excluded from the Companys segments for performance assessment represent income or expenses that do not reflect, according to established Company- defined criteria, operating income or expenses associated with the Companys core business activities. Because operating segments are generally defined by the products they design and sell, they do not make sales to each other. The Company does not discretely allocate assets to its operating segments, nor does the Companys chief operating decision maker evaluate operating segments using discrete asset information. Operating Segments 2009 2008 2007 (in millions) Product net sales: Specialty pharmaceuticals $ 3,683.8 $ 3,502.3 $ 3,105.0 Medical devices 763.8 837.4 774.0 Total product net sales 4,447.6 4,339.7 3,879.0 Other corporate and indirect revenues 56.0 63.7 59.9 Total revenues $ 4,503.6 $ 4,403.4 $ 3,938.9 Operating income: Specialty pharmaceuticals $ 1,370.8 $ 1,220.1 $ 1,047.9 Medical devices 189.2 222.0 207.1 Total segments 1,560.0 1,442.1 1,255.0 General and administrative expenses, other indirect costs and other adjustments 456.7 475.2 337.0 In-process research and development 72.0 Amortization of acquired intangible assets (a) 124.4 129.6 99.9 Restructuring charges 50.9 41.3 26

Earnings Per Share

Earnings Per Share
	12 Months Ended Dec. 31, 2009 USD / shares
Earnings Per Share	Note 19:Earnings Per Share The table below presents the computation of basic and diluted earnings per share: Year Ended December31, 2009 2008 2007 (in millions, except per share amounts) Net earnings attributable to Allergan, Inc.: Earnings from continuing operations $ 621.3 $ 563.1 $ 486.5 Loss from discontinued operations (1.7 ) Net earnings attributable to Allergan, Inc. $ 621.3 $ 563.1 $ 484.8 Weighted average number of shares issued 303.6 304.1 305.1 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 2.2 2.3 3.5 Dilutive effect of assumed conversion of convertible notes outstanding 0.1 Diluted shares 305.8 306.4 308.7 Basic earnings per share attributable to Allergan, Inc. stockholders: Continuing operations $ 2.05 $ 1.85 $ 1.59 Discontinued operations Net basic earnings per share attributable to Allergan, Inc. stockholders $ 2.05 $ 1.85 $ 1.59 Diluted earnings per share attributable to Allergan, Inc. stockholders: Continuing operations $ 2.03 $ 1.84 $ 1.58 Discontinued operations (0.01 ) Net diluted earnings per share attributable to Allergan, Inc. stockholders $ 2.03 $ 1.84 $ 1.57 For the year ended December31, 2009, options to purchase 13.2million shares of common stock at exercise prices ranging from $39.67 to $65.63 per share were outstanding but were not included in the computation of diluted earnings per share because the effect from the assumed exercise of these options calculated under the treasury stock method would be anti-dilutive. There were no potentially diluted common shares related to the Companys 2026 Convertible Notes for the year ended December31, 2009, as the Companys average stock price for the period was less than the conversion price of the notes. For the year ended December31, 2008, options to purchase 11.4million shares of common stock at exercise prices ranging from $47.32 to $65.63 per share were outstanding but were not included in the computation of diluted earnings per share because the effect from the assumed exercise of these options calculated under the treasury stock method would be anti-dilutive. There were no potentially diluted common shares related to the Companys 2026 Convertible Notes for the year ended December31, 2008, as the Companys average stock price for the period was less than the conversion price of the notes. For the year ended December31, 2007, options to purchase 4.1million shares of common stock at exercise prices ranging from $48.07 to $65.21 per share were outstanding but were not included in the computation of diluted earnings per share because the effect from the assumed exercise

Comprehensive Income

Comprehensive Income (Loss)
	12 Months Ended Dec. 31, 2009 USD / shares
Comprehensive Income (Loss)	Note 20:Comprehensive Income (Loss) The following table summarizes the components of comprehensive income (loss) for the years ended December31: 2009 2008 2007 Before Tax Amount Tax (Expense) or Benefit Net-of- Tax Amount Before Tax Amount Tax (Expense) or Benefit Net-of- Tax Amount Before Tax Amount Tax (Expense) or Benefit Net-of- Tax Amount (in millions) Foreign currency translation adjustments $ 38.9 $ $ 38.9 $ (39.5 ) $ $ (39.5 ) $ 47.1 $ $ 47.1 Amortizationof deferredholdinggains on derivatives designated as cash flow hedges (1.3 ) 0.5 (0.8 ) (1.3 ) 0.5 (0.8 ) (1.3 ) 0.5 (0.8 ) Pension and postretirement benefit plan adjustments: Net gain (loss) 66.7 (17.8 ) 48.9 (190.3 ) 64.5 (125.8 ) 53.7 (15.2 ) 38.5 Amortization 12.6 (3.4 ) 9.2 6.5 (2.6 ) 3.9 11.4 (3.9 ) 7.5 Unrealized holding gain (loss) on available-for-sale securities 2.9 (1.5 ) 1.4 (5.8 ) 2.7 (3.1 ) 0.8 (0.3 ) 0.5 Other comprehensive income (loss) $ 119.8 $ (22.2 ) 97.6 $ (230.4 ) $ 65.1 (165.3 ) $ 111.7 $ (18.9 ) 92.8 Net earnings 623.8 564.7 485.3 Total comprehensive income 721.4 399.4 578.1 Comprehensive income attributable to noncontrolling interest 4.2 1.2 0.7 Comprehensive income attributable to Allergan, Inc. $ 717.2 $ 398.2 $ 577.4

Subsequent Event

Subsequent Event
	12 Months Ended Dec. 31, 2009 USD / shares
Subsequent Event	Note21:Subsequent Event On January15, 2010, the Company completed the acquisition of Serica Technologies, Inc., a medical device company focused on the development of biodegradable silk-based scaffolds for use in tissue regeneration, including breast augmentation, revision and reconstruction and bariatric applications, for an aggregate purchase price of approximately $70.0 million.

VALUATION AND QUALIFYING ACCOUN

VALUATION AND QUALIFYING ACCOUNTS
	12 Months Ended Dec. 31, 2009 USD / shares
VALUATION AND QUALIFYING ACCOUNTS	SCHEDULEII ALLERGAN, INC. VALUATION AND QUALIFYING ACCOUNTS Years Ended December31, 2009, 2008 and 2007 Allowance for Doubtful Accounts Deducted from Trade Receivables Balanceat Beginning of Year Additions(a) Deductions(b) Other(c) Balance at End ofYear (in millions) 2009 $ 31.4 $ 10.8 $ (11.9 ) $ $ 30.3 2008 21.4 12.6 (2.6 ) 31.4 2007 15.8 5.3 (3.4 ) 3.7 21.4 (a) Provision charged to earnings. (b) Accounts written off, net of recoveries. (c) Allowance for doubtful accounts acquired as part of the Esprit and Cornal acquisitions, net of amounts disposed as part of discontinued operations, as applicable.

Document Information

Document Information
	12 Months Ended Dec. 31, 2009 USD / shares
Document Type	10-K
Amendment Flag	false
Document Period End Date	2009-12-31

Entity Information

Entity Information (USD $)
	12 Months Ended Dec. 31, 2009	Feb. 19, 2010	Jun. 30, 2009
Trading Symbol	AGN
Entity Registrant Name	ALLERGAN INC
Entity Central Index Key	0000850693
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		307,511,888
Entity Public Float			$14,430,000,000