Advanced Medical Optics (EYE)

Liquidity

The Company expects that its merger with Abbott will be completed during the first quarter of 2009. The terms of the Merger Agreement indicate that, if a majority of the outstanding shares of AMO’s common stock is tendered in the merger, Abbott will advance, provide access to or otherwise fund sufficient amounts to the Company to satisfy its outstanding debt obligations, including the credit facility (the “Credit Facility”), the convertible senior subordinated notes and the senior subordinated notes upon the close of the merger or shortly thereafter. Abbott has a substantial amount of available capital to support the operations of the acquired AMO business, including available cash and investment balances, operating cash flows and access to credit facilities, in addition to AMO’s operating cash flows.

Should the merger with Abbott not be consummated and given the worldwide economic crisis and its effects on the Company’s refractive business, the Company’s current financial projections indicate that it may not be in

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compliance with the financial covenants under the Credit Facility in 2009, possibly as early as the second quarter. The Company would revert to the immediate exploration of one or more of the alternatives that it was pursuing as part of its capital raising and debt reduction program that began in the second half of 2008. As a result of the Merger Agreement, the Company suspended work on these capital raising and debt reduction efforts.

There were various elements to the Company’s capital raising and debt reduction efforts, which were being explored either individually or in some combination at that time, including:

All the above risks and possible outcomes contemplate the merger not being consummated. As mentioned above, were this to occur the Company would immediately renew the capital raising and debt reduction alternatives it was previously pursuing. The Company believes that a number of these options, in combination with each other, when supplemented with its available cash, projected operating cash flows and availability under the Credit Facility, would provide sufficient resources to fund operations, capital expenditures, working capital, debt service and other cash needs over the next twelve months, as well as to repurchase any remaining outstanding 2  ¹/2% Convertible Senior Subordinated Notes due 2024, which would be subject to repurchase in January 2010 at the option of the holder. The Company also believes there is an alternate path, relying primarily on actions within its control such as additional restructuring and cost reductions, that could achieve a comparable outcome.