shareholders’ letter In ophthalmology, Allergan was again the fastest growing global company in the world, increasing in-market sales by 19 percent in the first nine months of 2003, according to IMS global data. In fact, Allergan has been the fastest growing global company since 2002 and is poised to capture the No. 2 global position in 2004. Strong market share gains were recorded in all of the key segments of the ophthalmology market where we compete. In particular, glaucoma, which accounts for 43 percent of the world ophthalmology market, saw significant share gains thanks to major sales increases for LUMIGAN as well as continuing growth of our ALPHAGAN franchise, given the strong market acceptance of our enhanced ALPHAGAN P formula in the United States. Market share gains were also made with anti-infectives, based on the successful introduction of ZYMAR, and in the non-steroidal anti-inflammatory market, aided by the launch of ACULAR LS, as well as in the artificial tears market, where Allergan is the market leader with our broad range of REFRESH tears products. In our third platform business, dermatology in North America, excellent progress was again made in 2003 with sales increasing by 21 percent. Sales of TAZORAC/AVAGE expanded by 29 percent to $80 million, securing Allergan’s leadership position in the specialty market for topical treatments for acne and psoriasis, and we continue to be one of the fastest growing competitors in this area. This strength may be used as leverage in the Company’s next major product introduction, tazarotene oral for psoriasis, which was filed with the FDA during the third quarter of 2003. We currently expect to launch this product at the end of 2004. Psoriasis is a market characterized by significant unmet medical needs, as evidenced by a flurry of activity to launch new biological agents by several biotechnology companies. Tazarotene oral will compete indirectly with these new agents and some older products on the basis of its convenient once-per-day oral dosing and relative efficacy combined with a good side effect  profile. In addition, it should appeal to managed care companies with its lower pricing compared to the new biologicals. OUTLOOK FOR THE FUTURE.  Today Allergan is already acknowledged as a leader in ophthalmology, neuromodulators with BOTOX and dermatology. Our strategy for the future is to continue to bolster our strengths in these existing areas and, by following the technology being developed in our laboratories, to add positions in neurology, gastroenterology and potentially another therapeutic area. This will establish Allergan as a multi-platform specialty company. We have one of the best drug pipelines in the industry relative to our size. With an exceptional portfolio of early and mid-stage pipeline compounds, coupled with no fewer than ten projects in Phase III, and the integration of the Oculex programs, there is a requirement for continuing high investment rates in R&D – some $330 million to $350 million in 2004. In addition, in 2004 we plan to file no fewer than five Investigational New Drug applications (INDs) with the FDA. The richness, breadth and depth of our pipeline – unusual in our industry at this time – mean that we have the good fortune of deciding among many exciting strategic options. Faced with these many options, we have developed processes for disciplined resource allocation and rigorous portfolio planning so that we may concentrate our resources on the highest return projects for long-term shareholder value creation. In this context, we selected retinal diseases as the next large potential market in ophthalmology and acquired the Oculex technology. We have decided to avoid the costs of building a sales infrastructure overseas by out-licensing tazarotene oral outside North America for psoriasis and out-licensing LUMIGAN in Japan, thus leveraging partners’ existing sales forces. Also in the discovery area we must focus our prolific efforts on the highest potential areas. As a consequence, we currently plan to spin out our early stage retinoid technology in 2004. For all of our accomplishments in 2003, I wish to recognize the hard work, creativity and dedication of talented Allergan employees around the world. As the Company has grown and evolved, many new demands have been placed on our management and all of our associates. Fortunately, these demands also yielded many opportunities for professional and personal development. In developing a new strategic plan for the next phase in growth of Allergan, I wish also to acknowledge the support and counsel of our strong Board of Directors, whose rich experience covers many aspects of the health care field and global business. I want to thank our shareholders for your continuing loyalty and support. Above all, I wish to make a tribute to the patients whom we serve, whose stories make our work so vital and to whom we dedicate our discovery efforts to meet unmet needs. David E. I. Pyott  Chairman of the Board, President and Chief Executive Officer