Advanced Medical Optics (EYE)

Note 12: Earnings Per Share

Basic earnings per share is calculated by dividing net earnings by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by adjusting net earnings and the weighted average outstanding shares, assuming the conversion of all potentially dilutive convertible securities, stock options and stock purchase plan awards.

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Table of Contents

The table below presents the computation of basic and diluted earnings (loss) per share for the years ended December 31, 2008, 2007 and 2006:

For 2008, options to purchase 6.1 million shares of common stock were excluded as the effect would be anti-dilutive. For 2007, the aggregate dilutive effect of approximately 2.0 million shares for stock options, ESPP and unvested restricted stock were excluded as the effect would be anti-dilutive due to the net loss. For 2006, options to purchase 0.3 million shares of common stock were excluded as the effect would be anti-dilutive. In addition, there were no potentially dilutive common shares associated with the 3.25% Notes, 2 ¹/2% Notes and the 1.375% Notes as the Company’s year end stock price was less than the conversion prices of the notes.

Note 12:
Earnings Per Share

Basic earnings per share is calculated by dividing net earnings by the weighted average number of common shares
outstanding during the period. Diluted earnings per share is calculated by adjusting net earnings and the weighted average outstanding shares, assuming the conversion of all potentially dilutive convertible securities, stock options and stock
purchase plan awards.

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Table of Contents

The table below presents the computation of basic and diluted earnings (loss) per share for the years
ended December 31, 2008, 2007 and 2006:

For 2008, options to purchase
6.1 million shares of common stock were excluded as the effect would be anti-dilutive. For 2007, the aggregate dilutive effect of approximately 2.0 million shares for stock options, ESPP and unvested restricted stock were excluded as the
effect would be anti-dilutive due to the net loss. For 2006, options to purchase 0.3 million shares of common stock were excluded as the effect would be anti-dilutive. In addition, there were no potentially dilutive common shares associated
with the 3.25% Notes, 2 ¹/2% Notes and the 1.375% Notes as the Company’s year end stock price was less than the conversion
prices of the notes.

Note 12:
Earnings Per Share

Basic earnings per share is calculated by dividing net earnings by the weighted average number of common shares
outstanding during the period. Diluted earnings per share is calculated by adjusting net earnings and the weighted average outstanding shares, assuming the conversion of all potentially dilutive convertible securities, stock options and stock
purchase plan awards.

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Table of Contents

The table below presents the computation of basic and diluted earnings (loss) per share for the years
ended December 31, 2008, 2007 and 2006:

For 2008, options to purchase
6.1 million shares of common stock were excluded as the effect would be anti-dilutive. For 2007, the aggregate dilutive effect of approximately 2.0 million shares for stock options, ESPP and unvested restricted stock were excluded as the
effect would be anti-dilutive due to the net loss. For 2006, options to purchase 0.3 million shares of common stock were excluded as the effect would be anti-dilutive. In addition, there were no potentially dilutive common shares associated
with the 3.25% Notes, 2 ¹/2% Notes and the 1.375% Notes as the Company’s year end stock price was less than the conversion
prices of the notes.

Note 6: Earnings Per Share

Basic earnings per share is calculated by dividing net earnings by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by adjusting net earnings and the weighted average outstanding shares, assuming the conversion of all potentially dilutive convertible securities, stock options and stock purchase plan awards.

For the three and six months ended June 27, 2008, the Company included the dilutive effect of stock options, Employee Stock Purchase Plans (“ESPP”) and unvested restricted stock of approximately 1.9 million shares and 1.8 million shares, respectively. For the three and six months ended June 27, 2008, there were 5.3 million and 5.4 million antidilutive stock options excluded from the computation of dilutive shares outstanding, respectively. The three and six months ended June 29, 2007 exclude the aggregate dilutive effect of approximately 1.6 million and 1.4 million shares, respectively, for stock options, ESPP and unvested restricted stock as the effect would be antidilutive due to the net loss in each of these periods. There were no potentially diluted common shares associated with the 2  ¹/2% Notes, 1.375% Notes and the 3.25% Notes as the Company’s quarter-end stock price was less than the conversion prices of the notes.

Note 6: Earnings Per Share

Basic earnings per share is calculated by dividing net earnings by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by adjusting net earnings and the weighted average outstanding shares, assuming the conversion of all potentially dilutive convertible securities, stock options and stock purchase plan awards.

For the three months ended March 28, 2008, the Company included the dilutive effect of stock options and stock purchase plan awards of approximately 1.7 million shares. For the three months ended March 28, 2008, there were 5.2 million antidilutive stock options excluded from the computation of dilutive shares outstanding. For the three months ended March 30, 2007, the Company included the dilutive effect of stock options and stock purchase plan awards of approximately 1.6 million shares. For the three months ended March 30, 2007, there were 2.1 million antidilutive stock options excluded from the computation of dilutive shares outstanding. There were no potentially diluted common shares associated with the 2 ¹/2% Notes, 1.375% Notes and the 3.25% Notes as the Company’s quarter-end stock price was less than the conversion prices of the notes.

Note 12: Earnings Per Share

Basic earnings per share is calculated by dividing net earnings by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by adjusting net earnings and the weighted average outstanding shares, assuming the conversion of all potentially dilutive convertible securities, stock options and stock purchase plan awards.

The table below presents the computation of basic and diluted earnings (loss) per share for the years ended December 31, 2007, 2006 and 2005:

For 2007, the aggregate dilutive effect of approximately 2.0 million shares for stock options, ESPP and unvested restricted stock were excluded as the effect would be antidilutive due to the net loss. For 2006, options to purchase 0.3 million shares of common stock were excluded as the effect would be anti-dilutive. For 2005, the dilutive effect of stock options and stock purchase plan awards of approximately 2.7 million shares and the dilutive effect of the 3 ¹/2% Notes of approximately 0.3 million shares have been excluded from the computation of diluted loss per share as the effect would be anti-dilutive due to the net loss.

The Company will settle in cash the principal amount of the 3.25% Notes, 2 ¹/2% Notes and the 1.375% Notes. In addition, there were no potentially diluted common shares associated with the 3.25% Notes, 2 ¹/2% Notes and the 1.375% Notes as the Company’s year end stock price was less than the conversion prices of the notes.

Note 12:
Earnings Per Share

Basic earnings per share is calculated by dividing net earnings by the weighted average number of common shares
outstanding during the period. Diluted earnings per share is calculated by adjusting net earnings and the weighted average outstanding shares, assuming the conversion of all potentially dilutive convertible securities, stock options and stock
purchase plan awards.

The table below presents the computation of basic and diluted earnings (loss) per share for the years ended
December 31, 2007, 2006 and 2005:

For 2007, the aggregate dilutive effect of
approximately 2.0 million shares for stock options, ESPP and unvested restricted stock were excluded as the effect would be antidilutive due to the net loss. For 2006, options to purchase 0.3 million shares of common stock were excluded as the
effect would be anti-dilutive. For 2005, the dilutive effect of stock options and stock purchase plan awards of approximately 2.7 million shares and the dilutive effect of the 3 ¹/SIZE="1">2% Notes of approximately 0.3 million shares have been excluded from the computation of diluted loss per share as the effect would be anti-dilutive due to the net loss.

Note 7: Earnings Per Share

Basic earnings per share is calculated by dividing net earnings by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by adjusting net earnings and the weighted average outstanding shares, assuming the conversion of all potentially dilutive convertible securities, stock options and stock purchase plan awards.

During the three months ended March 30, 2007, the Company included the dilutive effect of stock options and stock purchase plan awards of approximately 1,645,000 shares. During the three months ended March 30, 2007, there were 2,057,378 antidilutive stock options excluded from the computation of dilutive shares outstanding. During the three months ended March 31, 2006, there were no antidilutive stock options. There were no potentially diluted common shares associated with the 2  ¹/2% Notes, 1.375% Notes and the 3.25% Notes as the Company’s quarter-end stock price was less than the conversion prices of the notes.

Note 12: Earnings Per Share

Basic earnings per share is calculated by dividing net earnings by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by adjusting net earnings and the weighted average outstanding shares, assuming the conversion of all potentially dilutive convertible securities, stock options and stock purchase plan awards.

The table below presents the computation of basic and diluted earnings (loss) per share for the years ended December 31, 2006, 2005 and 2004:

For 2006, options to purchase 284,000 shares of common stock were excluded as the effect would be anti-dilutive. For 2005, the dilutive effect of stock options and stock purchase plan awards of approximately 2,674,000 shares and the dilutive effect of the 3  ¹/2% Notes of approximately 290,000 shares have been excluded from the computation of diluted loss per share as the effect would be anti-dilutive. For 2004, the dilutive effect of stock options and stock purchase plan awards of approximately 2,125,000 shares and the dilutive effect of the 3  ¹/2% Notes of approximately 3,559,000 shares have been excluded from the computation of diluted loss per share as the effect would be anti-dilutive.

The Company will settle in cash the principal amount of the 3.25% Notes, 2  ¹/2% Notes and the 1.375% Notes. In addition, there were no potentially diluted common shares associated with the 3.25% Notes, 2  ¹/2% Notes and the 1.375% Notes as the Company’s year end stock price was less than the conversion prices of the notes.

Note 7: Earnings Per Share

Basic earnings per share is calculated by dividing net earnings by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by adjusting net earnings and the weighted average outstanding shares, assuming the conversion of all potentially dilutive convertible securities, stock options and stock purchase plan awards.

Statement of Financial Accounting Standards No. 128, “Earnings per Share,” requires that stock options, nonvested shares and similar equity instruments granted by the Company be treated as potential common shares outstanding in computing diluted earnings per share. Diluted shares outstanding include the dilutive effect of in-the-money options which is calculated based on the average market price of the Company’s common stock for each fiscal period using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of tax benefits that would be recorded in additional paid-in capital when the award becomes deductible are assumed to be used to repurchase shares.

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During the three and nine month periods ended September 29, 2006, there were 13,900 and 5,000 antidilutive stock options excluded from the computation of diluted shares outstanding. The three and nine month periods ended September 30, 2005 exclude the aggregate dilutive effect of approximately 3.3 million shares and 3.0 million shares, respectively, for stock options, stock purchase plan awards and the 3.5% convertible senior subordinated notes as the effect would be antidilutive.

The Company will settle in cash the principal amount of the 2 ½% Notes, 1.375% Notes, and the 3.25% Notes. The potential dilutive common shares associated with the 1.375% Notes during the three and nine months period ended September 29, 2006 were insignificant. There were no potentially dilutive common shares associated with the 2 ½% Notes and the 3.25% Notes as the Company’s average stock prices during the three and nine months ended September 29, 2006 were less than the conversion prices of the respective notes.

Note 7: Earnings Per Share

Basic earnings per share is calculated by dividing net earnings by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by adjusting net earnings and the weighted average outstanding shares, assuming the conversion of all potentially dilutive convertible securities, stock options and stock purchase plan awards.

Statement of Financial Accounting Standards No. 128, “Earnings per Share,” requires that stock options, nonvested shares and similar equity instruments granted by the Company be treated as potential common shares outstanding in computing diluted earnings per share. Diluted shares outstanding include the dilutive effect of in-the-money options which is calculated based on the average market price of the Company’s common stock for each fiscal period using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of tax benefits that would be recorded in additional paid-in capital when the award becomes deductible are assumed to be used to repurchase shares.

The three and six month periods ended June 30, 2006 exclude the aggregate dilutive effect of approximately 2.4 million shares for stock options, ESPP and unvested restricted stock as the effect would be antidilutive due to the net loss in each of these periods.  The three and six month periods ended June 24, 2005 exclude the aggregate dilutive effect of approximately 2.7 million shares for stock options, ESPP unvested restricted stock and 3.5% convertible senior subordinated notes as the effect would be antidilutive due to the net loss in each of these periods.

The Company will settle in cash the principal amount of the 2 ½% Notes, 1.375% Notes, and the 3.25% Notes. In addition, there were no potentially dilutive common shares associated with the 2 ½% Notes, the 1.375% Notes, and the 3.25% Notes as the Company’s average stock prices during the three and six months ended June 30, 2006 were less than the conversion prices of the respective notes.

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Note 12: Earnings Per Share

Basic earnings per share is calculated by dividing net earnings by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by adjusting net earnings and the weighted average outstanding shares, assuming the conversion of all potentially dilutive convertible securities, stock options and stock purchase plan awards. Due to the net loss, basic and diluted earnings per share are the same for the years ended December 31, 2005 and 2004.

The table below presents the computation of basic and diluted earnings (loss) per share for the years ended December 31, 2005, 2004 and 2003:

For 2005, the dilutive effect of stock options and stock purchase plan awards of approximately 2,674,000 shares and the dilutive effect of the 3  ¹/2% convertible senior subordinated notes of approximately 290,000 shares have been excluded from the computation of diluted loss per share as the effect would be anti-dilutive. For 2004, the dilutive effect of stock options and stock purchase plan awards of approximately 2,125,000 shares and the dilutive effect of the 3  ¹/2% convertible senior subordinated notes of approximately 3,559,000 shares have been excluded from the computation of diluted loss per share as the effect would be anti-dilutive. For 2003, the dilutive effect of the 3  ¹/2% convertible senior subordinated notes of approximately 1,704,000 shares has been excluded from the computation of diluted earnings per share as the effect would be anti-dilutive.

The Company will settle in cash the principal amount of the 2  ¹/2% convertible senior subordinated notes and the 1.375% convertible senior subordinated notes. In addition, there were no potentially diluted common shares associated with the 2  ¹/2% convertible senior subordinated notes and the 1.375% convertible senior subordinated notes as the Company’s year end stock price was less than the conversion prices of the notes.