1168335--3/14/2006--ADVANCED_MEDICAL_OPTICS

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Risks Relating to Our Business We may not successfully make or integrate acquisitions or enter into strategic alliances. We conduct a significant amount of our sales and operations outside of the United States, which subjects us to additional business risks that may cause our profitability to decline. We are exposed to foreign currency risks from our international operations that could adversely affect our financial results. If we do not introduce new commercially successful products in a timely manner, our products may become obsolete over time, customers may not buy our products and our revenue and profitability may decline. We are implementing a product rationalization and repositioning plan, which will require significant financial and personnel resources and may not be successful. We rely on certain suppliers and manufacturers for raw materials and other products and are vulnerable to fluctuations in the availability and price of such products and services. We face intense competition, and our failure to compete effectively could have a material adverse effect on our profitability and results of operations. Trends in the contact lens care market may negatively impact our eye care business. If we are unable to protect our intellectual property rights, our business and prospects may be harmed. We may be subject to intellectual property litigation and infringement claims, which could cause us to incur significant expenses or prevent us from selling our products. Our manufacturing capacity may not be adequate to meet the demands of our business. We could experience losses due to product liability claims, product recalls or corrections. If we fail to maintain our relationships with health care providers, customers may not buy our products and our revenue and profitability may decline. We generally do not have long-term contracts with our customers. Our business is subject to extensive government regulation. The clinical trial process required to obtain regulatory approvals is costly and uncertain, and could result in delays in new product introductions or even an inability to release a product. Our business is subject to environmental regulations. If we fail to attract, hire and retain qualified personnel, we may not be able to design, develop, market or sell our products or successfully manage our business. We may be required to satisfy certain indemnification obligations to Allergan, and we may not be able to collect on indemnification rights from Allergan. We may be responsible for federal income tax liabilities that relate to the distribution of our common stock by Allergan. Recent changes in the accounting treatment of stock options are expected to have a negative impact on our financial statements and could cause our stock price to decline. If laser vision correction is not broadly accepted by both doctors and patients, our business, financial position and results of operations would be materially and adversely impacted. The possibility of long-term side effects and adverse publicity regarding laser correction surgery could seriously harm our business. General economic conditions could have a negative impact on our business, financial position, and results of operations. While we devote significant resources to research and development, our research and development may not lead to new products that achieve commercial success. Any failure by third party financing entities to satisfy their obligations to us would negatively impact our financial condition. If any of our employees, consultants or others breach their proprietary information agreements, our competitive position could be harmed. Risks Relating to Our Indebtedness and Our Common Stock We have a significant amount of debt. Our substantial indebtedness could adversely affect our business, financial condition and results of operations and our ability to meet our payment obligations under our debt. To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash flow depends on many factors beyond our control. A significant amount of our debt agreements contain covenant restrictions that may limit our ability to operate our business. Despite our and our subsidiaries current levels of indebtedness, we may incur substantially more debt, which could further exacerbate the risks associated with our substantial indebtedness. Our stock price may fluctuate as a result of a variety of factors, many of which are beyond our control. These factors include: Our stockholder rights plan, amended and restated certificate of incorporation and bylaws, as well as provisions of Delaware law, could make it difficult for a third party to acquire our company.

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1168335--3/14/2006--ADVANCED_MEDICAL_OPTICS_INC