UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 11-K

ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

(Mark One):

þ		ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED EFFECTIVE OCTOBER 7, 1996]

For the fiscal year ended December 31, 2005

OR

o		TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ____________

Commission File Number 1-10269

ALLERGAN, INC.
SAVINGS AND INVESTMENT PLAN

(Full title of the plan)

ALLERGAN, INC.
2525 Dupont Drive
Irvine, California 92612

(Name of issuer of the securities held
pursuant to the plan and the address of its
principal executive office)

 

 

 

 

4.

ERISA Financial Statements and Schedule and Exhibits:

	(a)		Financial Statements and Schedule:
			Report of Independent Registered Public Accounting Firm of Lesley, Thomas, Schwarz & Postma, Inc., dated June 16, 2006, on the Statements of Net Assets Available for Benefits as of December 31, 2005 and 2004 and the related Statements of Changes in Net Assets Available for Benefits for the Years Then Ended — Allergan, Inc. Savings and Investment Plan.
			Statements of Net Assets Available for Benefits as of December 31, 2005 and 2004 — Allergan, Inc. Savings and Investment Plan.
			Statements of Changes in Net Assets Available for Benefits for the Years Ended December 31, 2005 and 2004 — Allergan, Inc. Savings and Investment Plan.
			Notes to Financial Statements — Allergan, Inc. Savings and Investment Plan.
			Schedule H, Line 4i — Schedule of Assets (Held at End of Year) — December 31, 2005 — Allergan, Inc. Savings and Investment Plan.
	(b)		Exhibits
			Exhibit 23 — Consent of Lesley, Thomas, Schwarz & Postma, Inc.

SIGNATURES

     The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the Plan) have duly caused this annual report to be signed by the undersigned thereunto duly authorized.

ALLERGAN, INC.
SAVINGS AND INVESTMENT PLAN

INDEX TO FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULE

		Page
Report of Independent Registered Public Accounting Firm			1
Statements of Net Assets Available for Benefits as of December 31, 2005 and 2004			2
Statements of Changes in Net Assets Available for Benefits for the Years Ended December 31, 2005 and 2004			3
Notes to Financial Statements			4
SUPPLEMENTAL SCHEDULE
Schedule 1 - Schedule H, Line 4i — Schedule of Assets (Held At End of Year)			13

All other schedules are omitted because they are not required or applicable pursuant to ERISA and Department of Labor regulations.

Report of Independent Registered Public Accounting Firm

To the Executive Committee of Allergan, Inc.

     We have audited the accompanying statements of net assets available for benefits of the Allergan, Inc. Savings and Investment Plan as of December 31, 2005 and 2004, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

     We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Allergan, Inc. Savings and Investment Plan as of December 31, 2005 and 2004, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.

     Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of Schedule H, line 4i — Schedule of Assets (Held at End of Year) as of December 31, 2005 is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/s/ Lesley, Thomas, Schwarz & Postma, Inc.

Lesley, Thomas, Schwarz & Postma, Inc.
Newport Beach, California

June 16, 2006

ALLERGAN, INC. SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2005 AND 2004

		2005				2004
ASSETS
Investments at fair value (Note 3)		$	369,618,134			$	309,559,326
Receivables
Participant contributions			—				2,345
Employer contributions			5,244,491				4,070,789
Total Receivables			5,244,491				4,073,134
NET ASSETS AVAILABLE FOR BENEFITS		$	374,862,625			$	313,632,460

See the accompanying notes to these financial statements

ALLERGAN, INC. SAVINGS AND INVESTMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

		2005				2004
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income
Net appreciation in fair value of investments (Note 3)		$	40,992,412			$	26,935,031
Interest			234,121				235,411
Dividends			4,735,541				3,371,366
			45,962,074				30,541,808
Contributions
Employer — match			7,936,800				7,159,573
Employer — retirement			4,911,889				3,738,248
Participant — before tax			17,738,360				15,725,428
Participant — after tax			778,017				773,910
Rollovers			3,530,833				3,230,454
			34,895,899				30,627,613
Total additions to net assets			80,857,973				61,169,421
DEDUCTION FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants			19,611,065				13,768,612
Administrative expenses			16,743				20,563
Total deductions from net assets			19,627,808				13,789,175
NET INCREASE			61,230,165				47,380,246
NET ASSETS AVAILABLE FOR BENEFITS, beginning of year			313,632,460				266,252,214
NET ASSETS AVAILABLE FOR BENEFITS, end of year		$	374,862,625			$	313,632,460

See the accompanying notes to the financial statements

ALLERGAN, INC. SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

NOTE 1 – DESCRIPTION OF THE PLAN

     The following description of the Allergan, Inc. Savings and Investment Plan (Restated 2005) (the “Plan”) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan’s provisions.

     General – The Plan, established on July 26, 1989, is a defined contribution plan sponsored by Allergan, Inc. (the “Company”). The Plan provides for immediate eligibility into the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA) and is qualified under the Internal Revenue Code (the “Code”). The administrator for the Plan is the Allergan, Inc. Corporate Benefits Committee. The trustee for the Plan is JPMorgan Chase Bank.

     Employee Contributions – The Company’s eligible United States employees may contribute a portion of their defined compensation, either before tax, after tax, or a combination thereof, subject to the limitations as defined by the Code.

     The Company’s eligible Puerto Rico employees may contribute a portion of their defined compensation, either before tax, after tax, or a combination thereof, subject to the limitations as defined by the Puerto Rico Internal Revenue Code.

     Effective December 31, 2004, participant contributions may be invested in the Allergan, Inc. Common Stock Fund, American Century Stable Asset Fund, Western Asset Core Plus Bond Portfolio Fund, Dodge & Cox Balanced Fund, Hotchkis and Wiley Large Cap Value Fund, American Century Income and Growth Fund, Barclays Global Inv S&P 500 Equity Index Fund, American Century Ultra Fund, American Century Small Cap Value Fund, Artisan Small Cap Fund, American Funds New Perspective Fund, American Funds EuroPacific Growth Fund, or any combination of the twelve (12) funds at the participant’s discretion. Additionally, certain assets are invested in the Advanced Medical Optics, Inc. Common Stock Fund, although new allocations are not permitted and have not been made to that fund since June 29, 2002. Employer matching contributions are made in Allergan, Inc. common stock which is invested in the Allergan, Inc. Common Stock Fund. Participants who are over 55 can, however, elect to direct their employer matching contributions into any of the twelve investment funds. All participants can elect at any time to diversify their employer matching contributions in the Allergan stock fund into any of the other eleven investment funds, subject to the Company’s insider trading policy.

     Prior to December 31, 2004, the Plan offered ten (10) investment funds. Participant contributions could be invested in the Allergan, Inc. Common Stock Fund, American Century Stable Asset Fund, Dodge & Cox Balanced Fund, American Century Income and Growth Fund, Barclays S&P 500 Fund, American Century Ultra Fund, American Funds New Perspective A Fund, American Century Small Cap Value Fund, American Century International Growth Fund, and Franklin Small-Mid Cap Growth A Fund, or any combination of the ten funds at the participant’s discretion.

NOTE 1 – DESCRIPTION OF THE PLAN (CONTINUED)

     Certain limitations imposed by the Code may have the effect of reducing the level of contributions initially selected by participants who fall within the classification of “highly compensated employees” as defined in the Code.

     Employer Matching Contributions – The Company contributed an amount equal to 100% of each employee’s contribution up to 4% of defined compensation for the years ended December 31, 2005 and 2004.

     Employer Retirement Contributions – Effective January 1, 2003, the Company makes an annual contribution equal to 5% of each participant’s defined compensation if they are enrolled in the Retirement Contribution Feature of the Plan, have completed at least six months of service, and are employed on the last business day of the year.

     Investment Options – Participants have the right to elect investment options upon enrollment or re-enrollment into the Plan. Additionally, participants may elect to change their investment options and transfer their account balances among the different investment funds at any time, subject to the Company’s insider trading policy.

     Participant Accounts – Each participant’s account is credited for the participant’s contributions, employer match and employer retirement contributions and allocations of fund earnings and charged with an allocation of administrative expenses and fund losses. The earnings and losses of each of the funds are allocated daily to the individual accounts of participants based on their relative interest in the fair value of the assets held in each fund, except for dividends and unrealized appreciation (depreciation) on the common stock of Allergan, Inc., which is allocated based upon the number of shares held in the individual accounts of participants.

     Participant Loans Receivable – Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or fifty percent (50%) of their vested account balance excluding retirement contributions. Loan terms range from one (1) to five (5) years or, for the purchase of a primary residence, up to fifteen (15) years. The loans are secured by the balance in the participant’s account and bear interest at prime plus one percent (1%) as determined on the date of the loan application. The interest rate is fixed for the term of the loan. Principal and interest is paid through payroll deductions each pay period.

     Vesting and Forfeitures – Participant contributions are fully vested at all times. Participants forfeit their share of employer matching contributions if they terminate their employment before completing three years of service with the Company. Employer retirement contributions vest on a graduated basis. After completing one year of service, the participant is twenty percent (20%) vested, and vesting increases twenty percent (20%) each year thereafter until fully vested at the end of the fifth (5^th) year of service. Forfeitures are used by the Company to offset future employer contribution requirements and to reinstate rehired employee accounts. During the Plan years ended December 31, 2005 and 2004, $563,340 and $536,134, respectively, of forfeitures were used to offset contributions. At December 31, 2005 and 2004, unutilized forfeitures totaled $189,081 and $110,927, respectively.

NOTE 1 – DESCRIPTION OF THE PLAN (CONTINUED)

     Payment of Benefits – Participants may withdraw their employee “after-tax” and rollover contributions at any time. Vested employer matching contributions can also be withdrawn at any time providing they were credited at least two years prior to withdrawal or in the case of a financial hardship. Withdrawals of employee “after-tax” contributions and employer matching contributions during employment may cause the participant to become ineligible to receive certain employer matching contributions and be suspended from contributing to the Plan for a period of six months following the withdrawal.

     Prior to age 59-1/2, employee “before-tax” contributions may be withdrawn in the event of financial hardship, after the withdrawal of the value of employee “after-tax” contributions and employer matching contributions. Hardship withdrawals cause the employee to become ineligible to contribute to the Plan for a period of six (6) months following the withdrawal for US employees and twelve (12) months for Puerto Rico employees. Hardship withdrawals of employer retirement contributions are not permitted.

     Participants become entitled to payment of the total value of their accounts at the time of termination (if fully vested), attainment of age 59-1/2 (if fully vested), permanent and total disability, or death. Under certain circumstances set forth in the Plan, the participant may elect to receive the distribution in a lump sum (in cash or in cash and common stock of Allergan, Inc. or Advanced Medical Optics, Inc.) or may elect partial distributions. If the participant’s account value is $5,000 or more, withdrawals may be postponed until as late as attaining age 70-1/2. After death, payment is in the form of a lump sum to the designated beneficiary.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

     Basis of Accounting – The accompanying financial statements have been prepared on the accrual basis of accounting. The net assets of the Plan are allocated entirely to individual participants’ accounts.

     Accounting Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the plan administrator to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Investment Valuation and Income Recognition – Investments are stated at fair value. The fair value of Allergan, Inc. and Advanced Medical Optics, Inc. common stock is based upon quotations obtained from the New York Stock Exchange. The fair values of the Western Asset Core Plus Bond Portfolio Fund, Dodge & Cox Balanced Fund, Hotchkis and Wiley Large Cap Value Fund, American Century Income and Growth Fund, Barclays Global Inv S&P 500 Equity Index Fund, American Century Ultra Fund, American Century Small Cap Value Fund, Artisan Small Cap Fund, American Funds New Perspective Fund, American Century International Growth Fund, American Funds EuroPacific Growth Fund, and Franklin Small-Mid Cap Growth A Fund are based upon quotations of each fund’s net asset value obtained from the National Association of Security Dealers Automated Quotations (NASDAQ). The fair value of the American Century Stable Asset Fund is based upon the net asset value reported by the fund. Participant loans are valued at cost which the Plan Sponsor has estimated approximate fair value.

     Purchases and sales of investments are reflected on the trade-date basis. Dividend income is recorded on the ex-dividend date.

     The Plan presents, in the statements of changes in net assets available for benefits, the net appreciation (depreciation) in the fair value of its investments, which consists of the realized gains or losses and the unrealized appreciation (depreciation) on those investments.

     Interest Bearing Cash and Cash Equivalents – Interest bearing cash and cash equivalents represent amounts invested in JPMorgan Chase Bank, which consists of highly liquid short-term investments.

     Contribution Funding – The participant deferrals and employer matching contributions are funded on a consistent basis following the issuance of each Company payroll. Employer retirement contributions are funded on an annual basis.

     Non-Discrimination for Employee and Employer Contributions – The Plan, as required by the Code, performs annual tests between highly compensated participants versus non-highly compensated participants to ensure that highly compensated participants are not disproportionately favored under the Plan. If the Plan fails the tests, it must refund some of the excess deferral contributions. Excess deferral contributions which are refunded within two and one-half (2 ¹/2) months of the Plan year end are accrued as a liability to the Plan. Excess deferral contributions which are not refunded within two and one-half (2 ¹/2) months of the Plan year end are recorded as a distribution in the Plan year in which the refund is paid.

     Non-Distributed Benefits – The Plan does not accrue non-distributed benefits related to participants who have withdrawn from the Plan, but recognizes such benefits as a deduction from net assets in the period in which such benefits are paid.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Continuation of the Plan – The Company anticipates and believes the Plan will continue without interruption, but reserves the right to discontinue the Plan. If the Plan is terminated by the Company, the accounts of all affected participants shall become 100% vested and non-forfeitable without regard to the years of service of such participants.

     Administrative Expenses – Expenses incurred in the administration and operation of the Plan are paid by the Plan. Certain administrative expenses of the Plan are paid by the Company.

NOTE 3 – INVESTMENTS

The following table presents the fair value of investments. Investments that represent five percent (5%) or more of the Plan’s net assets at December 31, 2005 and 2004 are separately identified.

		December 31, 2005
		Number of shares,
		units or principal
		amounts				Fair Value
PARTICIPANT DIRECTED INVESTMENTS
At fair value as determined by quoted market prices
Common Stock:
Allergan, Inc. *			1,097,243			$	118,458,326
Advanced Medical Optics, Inc.			180,078				7,527,268
Total common stock							125,985,594
Mutual Funds:
Dodge & Cox Balanced Fund *			647,012				52,638,354
American Century Income and Growth Fund *			1,236,636				37,520,058
Barclays Global Inv S&P500 Equity Index Fund			214,612				8,093,008
American Century Ultra Fund *			680,603				20,697,756
American Funds New Perspective Fund *			856,726				24,520,057
American Funds EuroPacific Growth Fund			309,843				12,731,469
Artisan Small Cap Fund			562,774				9,769,759
American Century Small Cap Value Fund			1,827,513				17,635,496
Hotchkis and Wiley Large Cap Value Fund			416,933				9,760,404
Western Asset Core Plus Bond Portfolio Fund			202,505				2,099,980
Total mutual funds							195,466,341
At fair value as reported by the fund:
Common/Collective Trusts:
American Century Stable Asset Fund *			43,871,812				43,871,812
Investments at estimated fair value:
Participant loans							4,289,979
Interest bearing cash and cash equivalents							4,408
Total investments						$	369,618,134

* Investments that represent five percent (5%) or more of the Plan’s net assets.

NOTE 3 – INVESTMENTS (CONTINUED)

		December 31, 2004
		Number of shares,
		units or principal
		amounts				Fair Value
PARTICIPANT DIRECTED INVESTMENTS
At fair value as determined by quoted market prices
Common Stock:
Allergan, Inc. *			1,252,161			$	101,512,684
Advanced Medical Optics, Inc.			214,166				8,810,799
Total common stock							110,323,483
Mutual Funds:
Dodge & Cox Balanced Fund *			505,874				40,141,343
American Century Income and Growth Fund *			1,254,085				38,475,338
Barclays Global Inv S&P500 Equity Index Fund			172,185				6,195,219
American Century Ultra Fund *			753,882				22,473,224
American Funds New Perspective Fund *			851,117				23,584,442
American Funds EuroPacific Growth Fund			142,034				5,059,239
Artisan Small Cap Fund			506,836				8,494,577
American Century Small Cap Value Fund			1,218,122				12,400,487
Total mutual funds							156,823,869
At fair value as reported by the fund:
Common/Collective Trusts:
American Century Stable Asset Fund *			38,228,840				38,228,840
Investments at estimated fair value:
Participant loans							4,179,879
Interest bearing cash and cash equivalents							3,255
Total investments						$	309,559,326

* Investments that represent five percent (5%) or more of the Plan’s net assets.

NOTE 3 – INVESTMENTS (CONTINUED)

     The Plan’s investments (including gains and losses on investments bought and sold, as well as held) appreciated in value during the years ended December 31, 2005 and 2004. A summary of the change in fair value of investments is as follows:

		2005				2004
Common stock		$	31,490,077			$	10,989,947
Mutual funds			9,502,335				15,945,084
		$	40,992,412			$	26,935,031

NOTE 4 – INCOME TAX STATUS

     The Plan obtained its latest determination letter on July 22, 2002, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan has been amended since receiving the determination letter. However, the plan administrator and the Plan’s tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of Internal Revenue Code and constitutes a qualified trust under Section 401(a) of the Internal Revenue Code and is therefore exempt from federal income taxes under provisions of Section 501(a).

NOTE 5 – RELATED PARTY AND PARTY-IN-INTEREST TRANSACTIONS

     The Plan allows participants to purchase employer securities. As of December 31, 2005 and 2004, the Plan held 1,097,243 and 1,252,161 shares, respectively, of Allergan, Inc. common stock.

     Certain Plan investments are invested in mutual funds that are managed by an affiliate of JPMorgan Chase Bank, the custodian, and therefore, these transactions qualify as party-in-interest transactions for which there is a statutory exemption.

NOTE 6 – RISKS AND UNCERTAINTIES

     The Plan provides for various investment options in mutual funds, common and collective trusts, common stock and cash and cash equivalents. Investment securities are exposed to various risks such as interest rate, market, and credit. Due to the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in the various risk factors, in the near term, could materially affect participants’ account balances and the amounts reported in the financial statements.

NOTE 7 – CONCENTRATIONS

     Investments in the common stock of Allergan, Inc. comprised approximately 32% and 33% of the Plan’s total investments as of December 31, 2005 and 2004, respectively.

NOTE 8 – SUBSEQUENT EVENT

     In accordance with the first amendment to the Plan dated March 6, 2006, retroactive to December 20, 2005, the definition of eligible employees and credit received for prior service periods was changed to include the employees of Inamed Corporation.

 

 

SUPPLEMENTAL SCHEDULE

ALLERGAN, INC. SAVINGS AND INVESTMENT PLAN
SCHEDULE OF ASSETS HELD AT END OF YEAR
SCHEDULE H, LINE 4i
EMPLOYER ID NUMBER 95-1622442, PLAN NUMBER 002
DECEMBER 31, 2005

(c)

(b)

Description of Investment

Identity of Issue

Including Maturity Date,

(e)

Borrower

Rate of Interest, Collateral,

(d)

Current

(a)

Lessor or Similar Party

Par or Maturity Value

Cost

Value

*

Allergan, Inc.

Common Stock, 1,097,243 shares

**

$

118,458,326

Advanced Medical Optics, Inc.

Common Stock, 180,078 shares

**

7,527,268

*

American Century Stable Asset Fund

Common/Collective Trust, 43,871,812 shares

**

43,871,812

Dodge & Cox Balanced Fund

Mutual Fund, 647,012 shares

**

52,638,354

*

American Century Income and Growth Fund

Mutual Fund, 1,236,636 shares

**

37,520,058

Barclays Global Inv S&P 500 Equity Index Fund

Mutual Fund, 214,612 shares

**

8,093,008

*

American Century Ultra Fund

Mutual Fund, 680,603 shares

**

20,697,756

American Funds New Perspective Fund

Mutual Fund, 856,726 shares

**

24,520,057

American Funds EuroPacific Growth Fund

Mutual Fund, 309,843 shares

**

12,731,469

Artisan Small Cap Fund

Mutual Fund, 562,774 shares

**

9,769,759

*

American Century Small Cap Value Fund

Mutual Fund, 1,827,513 shares

**

17,635,496

Hotchkis and Wiley Large Cap Value Fund

Mutual Fund, 416,933 shares

**

9,760,404

Western Asset Core Plus Bond Portfolio Fund

Mutual Fund, 202,505 shares

**

2,099,980

*

Participant loans

Interest rates ranging from 5% to 10.5%

$

0

4,289,979

*

JPMorgan Chase Bank

Money Market, 4,408 units

**

4,408

$

0

$

369,618,134

* Party-in interest

** Historical cost information is not required for participant directed investment funds

See Report of Independent Registered Public Accounting Firm and the accompanying notes to the financial statements.

Exhibits		Description
Exhibit 23		Consent of Lesley, Thomas, Schwarz & Postma, Inc.