Allergan settles with IRS, raises 2005 EPS

US drugmaker Allergan says that, following a settlement with the Internal Revenue Service, its fourth-quarter and full-year 2005 Generally-Accepted Accounting Principles diluted earnings per share reported in its yet-to-be-filed 10-K form will increase $0.13, from the $0.90 and $2.88 reported in its February 2, 2006, earnings release, to $1.03 and $3.01, respectively.

In the fourth quarter of last year, Allergan determined that it was required to record a valuation allowance against a deferred tax asset associated with the 2001 acquisition of Allergan Specialty Therapeutics. After the end of the period, but prior to the filing of its Form 10-K for the year, Allergan held a conference with the IRS and negotiated a settlement with respect to the issue underlying the requirement to record the deferred allowance. As a result of the talks, the drugmaker determined that it is no longer required to record such an allowance against the deferred tax asset, which has the effect of increasing its reported GAAP diluted EPS $0.09.