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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-Q





(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|- | ----------------------------------------------------------------------------------------

For the quarterly period ended March 28, 2008

or



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|- | -----------------------------------------------------------------------------------------

For the transition period from ____________ to ____________.

COMMISSION FILE NUMBER 001-31257





ADVANCED MEDICAL OPTICS, INC.

(Exact name of registrant as specified in its charter)







|                                                              |  |                                    
|------------------------------------------------------------- |  | -----------------------------------
|DELAWARE                                                      |  | 33-0986820                         
|(State or other jurisdictionof incorporation or organization) |  | (I.R.S. EmployerIdentification No.)



|                                               |  |           
|---------------------------------------------- |  | ----------
|1700 E. St. Andrew Place Santa Ana, California |  | 92705     
|(Address of principal executive offices)       |  | (Zip Code)

Registrants telephone number, including area code 714/247-8200





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    Yes  x    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of large accelerated filer,
accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                                                                          |  |                             
|------------------------------------------------------------------------- |  | ----------------------------
|Large Accelerated Filer  x                                                |  | Accelerated Filer   ̈        
|Non-Accelerated Filer   ̈    (Do not check if a smaller reporting
company) |  | Smaller reporting company   ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).    Yes   ̈    No  x

As of May 5, 2008, there were 60,819,730 shares of common stock outstanding.









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ADVANCED MEDICAL OPTICS, INC.

FORM 10-Q FOR THE QUARTER ENDED MARCH 28, 2008

INDEX



|                               |  |                                                                                                        |  |   
|------------------------------ |  | ------------------------------------------------------------------------------------------------------ |  | --
|PART I - FINANCIAL INFORMATION |  | 3                                                                                                     
|                               |  |                                                                                                       
|Item 1.                        |  | Financial Statements                                                                                   |  | 3 
|                               |  |                                                                                                       
|(A).                           |  | Unaudited Consolidated Statements of Operations - Three Months Ended March 28, 2008 and March 30, 2007 |  | 3 
|                               |  |                                                                                                       
|(B).                           |  | Unaudited Consolidated Balance Sheets - March 28, 2008 and December 31, 2007                           |  | 4 
|                               |  |                                                                                                       
|(C).                           |  | Unaudited Consolidated Statements of Cash Flows - Three Months Ended March 28, 2008 and March 30, 2007 |  | 5 
|                               |  |                                                                                                       
|(D).                           |  | Notes to Unaudited Consolidated Financial Statements                                                   |  | 6 
|                               |  |                                                                                                       
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                  |  | 18
|                               |  |                                                                                                       
|                               |  | Certain Factors and Trends Affecting AMO and Its Businesses                                            |  | 23
|                               |  |                                                                                                       
|Item 3.                        |  | Quantitative and Qualitative Disclosures About Market Risk                                             |  | 24
|                               |  |                                                                                                       
|Item 4.                        |  | Controls and Procedures                                                                                |  | 27
|                               | 
|PART II - OTHER INFORMATION    |  | 27                                                                                                    
|                               |  |                                                                                                       
|Item 1.                        |  | Legal Proceedings                                                                                      |  | 27
|                               |  |                                                                                                       
|Item 1A.                       |  | Risk Factors                                                                                           |  | 27
|                               |  |                                                                                                       
|Item 2.                        |  | Unregistered Sales of Equity Securities and Use of Proceeds                                            |  | 28
|                               |  |                                                                                                       
|Item 6.                        |  | Exhibits                                                                                               |  | 29
|                               |  |                                                                                                       
|Note:                          |  | Items 3, 4 and 5 of Part II are omitted because they are not applicable.                               |  |   
|                               |  |                                                                                                       
|Signatures                     |  |                                                                                                        |  | 30
|                               |  |                                                                                                       
|Exhibit Index                  |  |                                                                                                        |  | 31
|                               |  |                                                                                                       
|EXHIBIT 10.1                   |  |                                                                                                        |  |   
|                               |  |                                                                                                       
|EXHIBIT 31.1                   |  |                                                                                                        |  |   
|                               |  |                                                                                                       
|EXHIBIT 31.2                   |  |                                                                                                        |  |   
|                               |  |                                                                                                       
|EXHIBIT 32.1                   |  |                                                                                                        |  |   



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PART I  FINANCIAL INFORMATION

Item 1. Financial Statements

Advanced Medical Optics, Inc.

Unaudited Consolidated Statements of Operations

(In thousands, except per share data)



|                                               |  |                    |         |   |               |   |        
|---------------------------------------------- |  | ------------------ | ------- | - | ------------- | - | -------
|                                               |  | Three Months Ended
|                                               |  | March 28,2008      |         |   | March 30,2007
|Net sales                                      |  | $                  | 303,736 |   |               | $ | 251,673
|Cost of sales                                  |  |                    | 115,603 |   |               |   | 94,167 
|                                               |  |                    |         |   |               |   |        
|Gross profit                                   |  |                    | 188,133 |   |               |   | 157,506
|Selling, general and administrative            |  |                    | 126,923 |   |               |   | 109,518
|Research and development                       |  |                    | 19,906  |   |               |   | 19,164 
|In-process research and development            |  |                    |        |   |               |   | 1,580  
|Restructuring charges (Note 2)                 |  |                    | 11,936  |   |               |   |       
|                                               |  |                    |         |   |               |   |        
|Operating income                               |  |                    | 29,368  |   |               |   | 27,244 
|                                               |  |                    |         |   |               |   |        
|Non-operating expense:                         |  |                    |         |   |               |   |        
|Interest expense                               |  |                    | 20,212  |   |               |   | 6,164  
|Unrealized loss on derivative instruments      |  |                    | 2,081   |   |               |   | 383    
|Gain on sale of investment                     |  |                    | (3,318  | ) |               |   |       
|Other, net                                     |  |                    | (785    | ) |               |   | 1,216  
|                                               |  |                    |         |   |               |   |        
|                                               |  |                    | 18,190  |   |               |   | 7,763  
|                                               |  |                    |         |   |               |   |        
|Earnings before income taxes                   |  |                    | 11,178  |   |               |   | 19,481 
|Provision for income taxes                     |  |                    | 4,248   |   |               |   | 7,372  
|                                               |  |                    |         |   |               |   |        
|Net earnings                                   |  | $                  | 6,930   |   |               | $ | 12,109 
|                                               |  |                    |         |   |               |   |        
|Net earnings per share:                        |  |                    |         |   |               |   |        
|Basic                                          |  | $                  | 0.11    |   |               | $ | 0.20   
|Diluted                                        |  | $                  | 0.11    |   |               | $ | 0.20   
|                                               |  |                    |         |   |               |   |        
|Weighted average number of shares outstanding: |  |                    |         |   |               |   |        
|Basic                                          |  |                    | 60,503  |   |               |   | 59,399 
|Diluted                                        |  |                    | 62,196  |   |               |   | 61,044 

See accompanying notes to unaudited consolidated financial statements.



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Advanced Medical Optics, Inc.

Unaudited Consolidated Balance Sheets

(In thousands, except share data)



|                                                                                                     |  |               |           |   |                  |   |           |  
|---------------------------------------------------------------------------------------------------- |  | ------------- | --------- | - | ---------------- | - | --------- | -
|                                                                                                     |  | March 28,2008 |           |   | December 31,2007 |  
|ASSETS                                                                                               |  |               |           |   |                  |   |           |  
|Current assets:                                                                                      |  |               |           |   |                  |   |           |  
|Cash and equivalents                                                                                 |  | $             | 31,952    |   |                  | $ | 34,525    |  
|Trade receivables, net                                                                               |  |               | 275,145   |   |                  |   | 250,018   |  
|Inventories                                                                                          |  |               | 174,236   |   |                  |   | 160,267   |  
|Deferred income taxes                                                                                |  |               | 42,722    |   |                  |   | 42,227    |  
|Income tax receivable                                                                                |  |               | 10,413    |   |                  |   | 10,569    |  
|Other current assets                                                                                 |  |               | 21,777    |   |                  |   | 25,505    |  
|                                                                                                     |  |               |           |   |                  |   |           |  
|Total current assets                                                                                 |  |               | 556,245   |   |                  |   | 523,111   |  
|Property, plant and equipment, net                                                                   |  |               | 189,031   |   |                  |   | 177,675   |  
|Deferred income taxes                                                                                |  |               | 14,764    |   |                  |   | 14,111    |  
|Other assets                                                                                         |  |               | 94,207    |   |                  |   | 94,949    |  
|Intangible assets, net                                                                               |  |               | 641,516   |   |                  |   | 649,369   |  
|Goodwill                                                                                             |  |               | 1,315,570 |   |                  |   | 1,289,121 |  
|                                                                                                     |  |               |           |   |                  |   |           |  
|Total assets                                                                                         |  | $             | 2,811,333 |   |                  | $ | 2,748,336 |  
|                                                                                                     |  |               |           |   |                  |   |           |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                 |  |               |           |   |                  |   |           |  
|Current liabilities:                                                                                 |  |               |           |   |                  |   |           |  
|Current portion of long-term debt and short-term borrowings                                          |  | $             | 76,200    |   |                  | $ | 64,500    |  
|Accounts payable                                                                                     |  |               | 90,010    |   |                  |   | 88,432    |  
|Accrued compensation                                                                                 |  |               | 45,871    |   |                  |   | 54,410    |  
|Other accrued expenses                                                                               |  |               | 124,787   |   |                  |   | 128,833   |  
|Deferred income taxes                                                                                |  |               | 6,500     |   |                  |   | 6,419     |  
|                                                                                                     |  |               |           |   |                  |   |           |  
|Total current liabilities                                                                            |  |               | 343,368   |   |                  |   | 342,594   |  
|Long-term debt                                                                                       |  |               | 1,543,230 |   |                  |   | 1,543,230 |  
|Deferred income taxes                                                                                |  |               | 201,102   |   |                  |   | 198,333   |  
|Other liabilities                                                                                    |  |               | 67,547    |   |                  |   | 65,443    |  
|Commitments and contingencies                                                                        |  |               |           |   |                  |   |           |  
|Stockholders equity:                                                                                |  |               |           |   |                  |   |           |  
|Preferred stock, $.01 par value; 5,000,000 shares authorized; none issued                            |  |               |          |   |                  |   |          |  
|Common stock, $.01 par value; 240,000,000 shares authorized; 60,782,205 and 60,647,394 shares issued |  |               | 608       |   |                  |   | 606       |  
|Additional paid-in capital                                                                           |  |               | 1,458,610 |   |                  |   | 1,451,961 |  
|Accumulated deficit                                                                                  |  |               | (916,539  | ) |                  |   | (923,469  | )
|Accumulated other comprehensive income                                                               |  |               | 113,547   |   |                  |   | 69,726    |  
|Treasury stock, at cost (5,168 shares and 3,186 shares)                                              |  |               | (140      | ) |                  |   | (88       | )
|                                                                                                     |  |               |           |   |                  |   |           |  
|Total stockholders equity                                                                           |  |               | 656,086   |   |                  |   | 598,736   |  
|                                                                                                     |  |               |           |   |                  |   |           |  
|Total liabilities and stockholders equity                                                           |  | $             | 2,811,333 |   |                  | $ | 2,748,336 |  
|                                                                                                     |  |               |           |   |                  |   |           |  

See accompanying notes to unaudited consolidated financial statements.



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Advanced Medical Optics, Inc.

Unaudited Consolidated Statements of Cash Flows

(In thousands)



|                                                                                    |  |                    |         |   |               |   |         |  
|----------------------------------------------------------------------------------- |  | ------------------ | ------- | - | ------------- | - | ------- | -
|                                                                                    |  | Three Months Ended |        
|                                                                                    |  | March 28,2008      |         |   | March 30,2007 |  
|Cash flows from operating activities:                                               |  |                    |         |   |               |   |         |  
|Net earnings                                                                        |  | $                  | 6,930   |   |               | $ | 12,109  |  
|Adjustments to reconcile net earnings to net cash provided by operating activities: |  |                    |         |   |               |   |         |  
|Amortization of debt issuance costs                                                 |  |                    | 1,400   |   |               |   | 975     |  
|Depreciation and amortization                                                       |  |                    | 28,022  |   |               |   | 17,116  |  
|In-process research and development                                                 |  |                    |        |   |               |   | 1,580   |  
|(Gain) loss on investment and assets, net                                           |  |                    | (3,103  | ) |               |   | 375     |  
|Deferred income taxes                                                               |  |                    | (1,747  | ) |               |   | (1,474  | )
|Unrealized loss on derivatives                                                      |  |                    | 2,081   |   |               |   | 383     |  
|Share-based compensation                                                            |  |                    | 5,222   |   |               |   | 4,746   |  
|Changes in assets and liabilities (net of effect of business acquired):             |  |                    |         |   |               |   |         |  
|Trade receivables, net                                                              |  |                    | (14,097 | ) |               |   | 19,741  |  
|Inventories                                                                         |  |                    | (9,214  | ) |               |   | 1,680   |  
|Other current assets                                                                |  |                    | 3,756   |   |               |   | 4,761   |  
|Accounts payable                                                                    |  |                    | (2,830  | ) |               |   | (7,703  | )
|Accrued expenses and other liabilities                                              |  |                    | (15,743 | ) |               |   | (27,284 | )
|Income taxes                                                                        |  |                    | 999     |   |               |   | 3,123   |  
|Other non-current assets and liabilities                                            |  |                    | 722     |   |               |   | (5,312  | )
|                                                                                    |  |                    |         |   |               |   |         |  
|Net cash provided by operating activities                                           |  |                    | 2,398   |   |               |   | 24,816  |  
|                                                                                    |  |                    |         |   |               |   |         |  
|Cash flows from investing activities:                                               |  |                    |         |   |               |   |         |  
|Acquisition of businesses, net of cash acquired                                     |  |                    |        |   |               |   | (13,540 | )
|Additions to property, plant and equipment                                          |  |                    | (8,963  | ) |               |   | (7,188  | )
|Proceeds from sale of property, plant and equipment                                 |  |                    | 164     |   |               |   | 21      |  
|Proceeds from sale of investment                                                    |  |                    | 3,318   |   |               |   |        |  
|Additions to capitalized internal-use software                                      |  |                    | (300    | ) |               |   | (915    | )
|Additions to demonstration and bundled equipment                                    |  |                    | (4,180  | ) |               |   | (1,942  | )
|                                                                                    |  |                    |         |   |               |   |         |  
|Net cash used in investing activities                                               |  |                    | (9,961  | ) |               |   | (23,564 | )
|                                                                                    |  |                    |         |   |               |   |         |  
|Cash flows from financing activities:                                               |  |                    |         |   |               |   |         |  
|Short-term borrowings, net                                                          |  |                    | 11,700  |   |               |   |        |  
|Financing-related cost                                                              |  |                    | (123    | ) |               |   |        |  
|Proceeds from issuance of common stock                                              |  |                    | 1,429   |   |               |   | 5,989   |  
|Purchase of treasury stock                                                          |  |                    | (52     | ) |               |   |        |  
|Excess tax benefits from share-based compensation                                   |  |                    |        |   |               |   | 1,082   |  
|                                                                                    |  |                    |         |   |               |   |         |  
|Net cash provided by financing activities                                           |  |                    | 12,954  |   |               |   | 7,071   |  
|                                                                                    |  |                    |         |   |               |   |         |  
|Effect of exchange rates on cash and equivalents                                    |  |                    | (7,964  | ) |               |   | 1,054   |  
|                                                                                    |  |                    |         |   |               |   |         |  
|Net (decrease) increase in cash and equivalents                                     |  |                    | (2,573  | ) |               |   | 9,377   |  
|Cash and equivalents at beginning of period                                         |  |                    | 34,525  |   |               |   | 34,522  |  
|                                                                                    |  |                    |         |   |               |   |         |  
|Cash and equivalents at end of period                                               |  | $                  | 31,952  |   |               | $ | 43,899  |  
|                                                                                    |  |                    |         |   |               |   |         |  

See accompanying notes to unaudited consolidated financial statements.



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Advanced Medical Optics, Inc.

Notes to Unaudited Consolidated Financial Statements

Note 1: Basis of Presentation

In the opinion of
management, the accompanying unaudited consolidated financial statements contain all adjustments necessary (consisting only of normal, recurring adjustments) for a fair statement of the financial information contained therein. These statements
do not include all disclosures required by accounting principles generally accepted in the United States of America for annual financial statements and should be read in conjunction with the audited consolidated financial statements of Advanced
Medical Optics, Inc. (the Company or AMO) for the year ended December 31, 2007. The Companys fiscal periods end on the last Friday of each calendar month and the fiscal year ends on December 31. The
results of operations for the three months ended March 28, 2008 (January 1, 2008 through March 28, 2008) are not necessarily indicative of the results to be expected for the year ending December 31, 2008.

All material intercompany transactions and balances have been eliminated.

Reclassification

Certain prior period amounts have been reclassified to conform to current period
presentation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, the reported amounts of revenues and expenses during the reporting period, and related disclosures. Actual results could differ
materially from those estimates.

Recently Adopted and Issued Accounting Standards

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157 Fair Value Measurements (SFAS No. 157).
SFAS No. 157 defines fair value, establishes a framework for measuring fair value within generally accepted accounting principles, and expands disclosure requirements regarding fair value measurements. Although SFAS No. 157 does not require any new
fair value measurements, its application may, in certain instances, change current practice. Where applicable, SFAS No. 157 simplifies and codifies fair value related guidance previously issued within GAAP. The Company has adopted FASB Staff
Position 157-2 Effective Date of FASB Statement No. 157 (FSP 157-2), issued February 2008, and as a result the Company has applied the provisions of SFAS No. 157 that are applicable as of January 1, 2008, which had no
material effect on its consolidated financial statements. FSP 157-2 delays the effective date of SFAS No. 157 for certain non-financial assets and non-financial liabilities until January 1, 2009. See Note 5 for the interim disclosures required by
SFAS No. 157.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial
LiabilitiesIncluding an amendment of FASB Statement No. 115 (SFAS No. 159). SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. The Company
adopted SFAS No. 159 on January 1, 2008, which did not have an impact on the consolidated financial statements.

In December
2007, the FASB issued SFAS No. 141(R), Business Combinations (SFAS No. 141R), and SFAS No. 160, Accounting and Reporting of Noncontrolling Interest in Consolidated Financial Statements, an amendment of
ARB No. 51 (SFAS No. 160). These new standards will significantly change the financial accounting and reporting of business combination transactions and noncontrolling (or minority) interests in consolidated financial
statements. The Company will be required to adopt SFAS No. 141R and SFAS No. 160 on or after December 15, 2008. The Company has not yet determined the effect, if any, that the adoption of SFAS No. 141R and SFAS No. 160 will
have on its consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities (SFAS No. 161). SFAS No. 161 is intended to improve financial reporting of derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand
their effects on an entitys financial position, financial performance, and cash flows. SFAS No. 161 is effective for the Company January 1, 2009. The Company is evaluating the impact of this new standard but currently does not anticipate
a material impact on its financial statements as a result of the implementation of SFAS No. 161.

Note 2: Restructuring Plan

After its acquisition of IntraLase in the second quarter of 2007, the Company continued femtosecond laser manufacturing operations in Irvine, California
(the Irvine Plant). As part of the overall integration of IntraLase, on December 13, 2007, AMO management committed to a plan to relocate the femtosecond laser manufacturing operations from the Irvine Plant to its excimer laser and
phacoemulsification manufacturing facility in Milpitas, California (the Milpitas Plant), in order to consolidate equipment manufacturing in one location and to maximize opportunities to leverage core strengths. Also included was the
movement of the assembly of IntraLase disposable patient interfaces from the Irvine Plant to AMOs facility in Puerto Rico in order to obtain additional synergies.

As a continuation of AMOs commitment to further enhance its global competitiveness, operating leverage and cash flow, the Board of Directors of AMO on February 12, 2008 approved an additional plan to reduce
the Companys fixed costs. The additional plan includes a net workforce reduction of approximately 150 positions, or about 4% of the Companys global workforce. In addition, AMO plans to consolidate certain operations, including the
relocation of all remaining activities at the Irvine Plant, to improve its overall facility utilization.



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These plans include workforce reductions and transfers, outplacement assistance, relocation of certain
employees, facilities-related costs, and accelerated amortization of certain long-lived assets and termination of redundant supplier contracts. These plans will also result in start-up costs such as expenses for moving, incremental travel,
recruiting and duplicate personnel associated with hiring staff during ramp-up, as well as incremental costs associated with capacity underutilization of the Milpitas Plant during the ramp-up period.

AMO expects to complete these activities in 2008 and estimates the total pre-tax charges resulting from these plans to be in the range of $36 million to
$43 million, substantially all of which are expected to be cash expenditures. The Company incurred severance and retention bonus charges of $0.4 million under the plan in 2007. An estimated breakdown of the total charges is as follows:



|                                                                                          |  |                         
|----------------------------------------------------------------------------------------- |  | ------------------------
|Severance, retention bonuses, employee relocation and other one-time termination benefits |  | $20 million -$24 million
|Facilities related and other costs                                                        |  | $10 million -$13 million
|Termination of redundant supplier contracts and relocation of equipment and inventory     |  | $2 million              
|Incremental costs for transition and start-up activities at the Milpitas Plant            |  | $4 million              

Activities in the restructuring charges accrual balances during the three months ended
March 28, 2008 were as follows (in thousands):



|                                                                                          |  |                            |     |               |   |              |  |   |                     |   |                         |   |   |  |   |    
|----------------------------------------------------------------------------------------- |  | -------------------------- | --- | ------------- | - | ------------ |  | - | ------------------- | - | ----------------------- | - | - |  | - | ---
|Restructuring Charges:                                                                    |  | Balance atDecember 31,2007 |     | CostsIncurred |   | CashPayments |  |   | Non-CashAdjustments |   | Balance atMarch 28,2008
|Severance, retention bonuses, employee relocation and other one-time termination benefits |  | $                          | 0.4 |               | $ | 11.3         |  | $ | (4.3                | ) |                         | $ |  |  | $ | 7.4
|Facilities related and other costs                                                        |  |                            |    |               |   | 0.6          |  |   |                    |   |                         |   |  |  |   | 0.6
|                                                                                          |  |                            |     |               |   |              |  |   |                     |   |                         |   |   |  |   |    
|                                                                                          |  | $                          | 0.4 |               | $ | 11.9         |  | $ | (4.3                | ) |                         | $ |  |  | $ | 8.0
|                                                                                          |  |                            |     |               |   |              |  |   |                     |   |                         |   |   |  |   |    

Note 3: Composition of Certain Financial Statement Captions

Inventories:



|                                                                                                    |  |               |         |                  |   |        
|--------------------------------------------------------------------------------------------------- |  | ------------- | ------- | ---------------- | - | -------
|(In thousands)                                                                                      |  | March 28,2008 |         | December 31,2007
|Finished goods, including consignment inventory of $8,075 and $7,712 in 2008 and 2007, respectively |  | $             | 113,662 |                  | $ | 93,503 
|Work in process                                                                                     |  |               | 17,072  |                  |   | 16,562 
|Raw materials                                                                                       |  |               | 43,502  |                  |   | 50,202 
|                                                                                                    |  |               |         |                  |   |        
|                                                                                                    |  | $             | 174,236 |                  | $ | 160,267
|                                                                                                    |  |               |         |                  |   |        

Intangible assets, net



|                                      |  |                    |  |                |         |                         |                   |          |             |  |                         |         |  |   |          |  
|------------------------------------- |  | ------------------ |  | -------------- | ------- | ----------------------- | ----------------- | -------- | ----------- |  | ----------------------- | ------- |  | - | -------- | -
|                                      |  |                    |  | March 28, 2008 |         |                         | December 31, 2007 |         
|(In thousands)                        |  | UsefulLife (Years) |  | GrossAmount    |         | AccumulatedAmortization |                   |          | GrossAmount |  | AccumulatedAmortization |        
|Amortizing Intangible Assets:         |  |                    |  |                |         |                         |                   |          |             |  |                         |         |  |   |          |  
|Patent                                |  | 17                 |  | $              | 431     |                         | $                 | (32      | )           |  | $                       | 431     |  | $ | (26      | )
|Licensing                             |  | 3 - 5              |  |                | 4,590   |                         |                   | (4,405   | )           |  |                         | 4,590   |  |   | (4,373   | )
|Technology rights                     |  | 5 - 19             |  |                | 561,131 |                         |                   | (136,040 | )           |  |                         | 549,737 |  |   | (117,699 | )
|Trademarks                            |  | 13.5               |  |                | 19,398  |                         |                   | (5,801   | )           |  |                         | 17,899  |  |   | (5,064   | )
|Customer relationships                |  | 5  10             |  |                | 32,680  |                         |                   | (14,736  | )           |  |                         | 32,680  |  |   | (13,106  | )
|                                      |  |                    |  |                |         |                         |                   |          |             |  |                         |         |  |   |          |  
|                                      |  |                    |  |                | 618,230 |                         |                   | (161,014 | )           |  |                         | 605,337 |  |   | (140,268 | )
|Nonamortizing Tradename (VISX)      |  | Indefinite         |  |                | 140,400 |                         |                   |         |             |  |                         | 140,400 |  |   |         |  
|Nonamortizing Tradename (IntraLase) |  | Indefinite         |  |                | 43,900  |                         |                   |         |             |  |                         | 43,900  |  |   |         |  
|                                      |  |                    |  |                |         |                         |                   |          |             |  |                         |         |  |   |          |  
|                                      |  |                    |  | $              | 802,530 |                         | $                 | (161,014 | )           |  | $                       | 789,637 |  | $ | (140,268 | )
|                                      |  |                    |  |                |         |                         |                   |          |             |  |                         |         |  |   |          |  



7



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The amortizable intangible assets balance increased due to the impact of foreign currency fluctuation.
Amortization expense was $17.1 million and $10.1 million for the three months ended March 28, 2008 and March 30, 2007, respectively, and is recorded in selling, general and administrative in the accompanying unaudited consolidated
statements of operations. Amortization expense is expected to be $69.1 million in 2008, $68.9 million in 2009, $66.3 million in 2010, $64.4 million in 2011 and $59.6 million in 2012. Actual amortization expense may vary due to the impact of foreign
currency fluctuations.

Goodwill



|               |  |                            |           |                            |   |                         |  |   |          
|-------------- |  | -------------------------- | --------- | -------------------------- | - | ----------------------- |  | - | ---------
|(In thousands) |  | Balance atDecember 31,2007 |           | ForeignCurrencyAdjustments |   | Balance atMarch 28,2008
|Goodwill:      |  |                            |           |                            |   |                         |  |   |          
|Eye Care       |  | $                          | 30,182    |                            | $ | 3,375                   |  | $ | 33,557   
|Cataract       |  |                            | 365,785   |                            |   | 23,074                  |  |   | 388,859  
|Refractive     |  |                            | 893,154   |                            |   |                        |  |   | 893,154  
|               |  |                            |           |                            |   |                         |  |   |          
|               |  | $                          | 1,289,121 |                            | $ | 26,449                  |  | $ | 1,315,570
|               |  |                            |           |                            |   |                         |  |   |          

The change in goodwill during the three months ended March 28, 2008 included an increase of
$26.4 million from foreign currency fluctuations in the Eye Care and Cataract segments. The Company performs its annual impairment test of goodwill during the second quarter of each year.

Note 4: Debt



|                                                                                                                                    |  |                         |  |               |           |                  |   |          
|----------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------- |  | ------------- | --------- | ---------------- | - | ---------
|(In thousands)                                                                                                                      |  | Average Rateof Interest |  | March 28,2008 |           | December 31,2007
|Convertible Senior Subordinated Notes due 2024 (21/2% Notes), with put dates of January 15, 2010, July 15, 2014 and July 15, 2019 |  | 2.500%                  |  | $             | 246,105   |                  | $ | 246,105  
|Convertible Senior Subordinated Notes due 2025 (1.375% Notes), with put dates of July 1, 2011, July 1, 2016 and
July 1, 2021      |  | 1.375%                  |  |               | 105,000   |                  |   | 105,000  
|Convertible Senior Subordinated Notes due 2026 (3.25% Notes), with put dates of August 1, 2014, August 1, 2017 and
August 1, 2021 |  | 3.250%                  |  |               | 500,000   |                  |   | 500,000  
|Senior Subordinated Notes due 2017 (71/2% Notes)                                                                                  |  | 7.500%                  |  |               | 250,000   |                  |   | 250,000  
|Term Loan due 2014 (Term Loan)                                                                                                    |  | 6.51%                   |  |               | 446,625   |                  |   | 446,625  
|Senior revolving credit facility                                                                                                    |  | 5.87%                   |  |               | 71,700    |                  |   | 60,000   
|                                                                                                                                    |  |                         |  |               |           |                  |   |          
|                                                                                                                                    |  |                         |  |               | 1,619,430 |                  |   | 1,607,730
|Less current portion                                                                                                                |  |                         |  |               | 76,200    |                  |   | 64,500   
|                                                                                                                                    |  |                         |  |               |           |                  |   |          
|Total long-term debt                                                                                                                |  |                         |  | $             | 1,543,230 |                  | $ | 1,543,230
|                                                                                                                                    |  |                         |  |               |           |                  |   |          

All of the convertible notes issued by the Company may be converted, at the option of the holders,
on or prior to the final maturity date under certain circumstances, none of which had occurred as of March 28, 2008. Upon conversion of the convertible notes, the Company will satisfy in cash the conversion obligation with respect to the
principal amount of the convertible notes, with any remaining amount of the conversion obligation to be satisfied in shares of common stock. As a result of this election, the Company also is required to satisfy in cash its obligations to repurchase
any convertible notes that holders may put to the Company on the respective dates noted in the table above.

The Company has a $300 million
revolving line of credit maturing April 2, 2013 and a $450 million term loan maturing on April 2, 2014 (collectively the Credit Facility). As of March 28, 2008, the revolving line of credit included outstanding cash
borrowings of $71.7 million and commitments to support letters of credit totaling $8.8 million issued on behalf of the Company for normal operating purposes which resulted in an available balance of $219.5 million.

Borrowings under the Credit Facility, if any, bear interest at current market rates plus a margin based upon the Companys ratio of debt to EBITDA,
as defined. The incremental interest margin on borrowings under the Credit Facility decreases as the Companys ratio of debt to EBITDA decreases to specified levels. During the first quarter of 2008, this interest margin was 1.75% over the
applicable LIBOR rate. Additionally, the Company can borrow at the prevailing prime rate of interest plus an interest margin of 0.75%. The average annual rate of interest during the first quarter of 2008, inclusive of incremental margin, was 5.87%
and 6.51% for the revolving credit facility and term loan, respectively. Under the Credit Facility, certain transactions may trigger mandatory prepayment of borrowings, if any. Such transactions may include equity or debt offerings, certain asset
sales and extraordinary receipts. The Company pays a quarterly fee (1.95% per annum at March 28, 2008) on the average balance of outstanding letters of



8



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##### Table of Contents

credit and a quarterly commitment fee (0.50% per annum at March 28, 2008) on the average unused portion of the revolving credit facility. In addition,
the Company makes mandatory quarterly amortization payments (1.0% per annum at March 28, 2008) on the outstanding balance of the term loan. The revolver component of the Credit Facility provides that the Company will maintain certain financial
and operating covenants which include, among other provisions, maintaining specific leverage and coverage ratios. Certain covenants under the revolving credit facility may limit the incurrence of additional indebtedness. The revolving credit
facility prohibits dividend payments by the Company. On October 5, 2007, as a result of the product recall in May 2007 discussed in Note 10, the Company amended the Credit Facility. The amendment changed the Maximum Consolidated Total
Leverage Ratio for certain quarterly periods. Additionally, for purposes of calculating this ratio as well as the Minimum Consolidated Interest Coverage Ratio, the Company was permitted to exclude certain recall-related costs and other related
impacts. The Company was in compliance with these covenants at March 28, 2008. The Credit Facility is collateralized by a first priority perfected lien on, and pledge of, all of the combined companys present and future property and assets
(subject to certain exclusions), 100% of the stock of the domestic subsidiaries, 66% of the stock of foreign subsidiaries and all present and future intercompany debts.

As of March 28, 2008, the aggregate maturities of total long-term debt of $1.5 billion are due after 2012.

Guarantor Subsidiaries

In connection with the issuance of the 71/2% Notes, certain of the Companys 100% owned subsidiaries (Guarantor Subsidiaries) jointly, fully, severally and
unconditionally guaranteed such 71/2% Notes. Each subsidiary is 100% owned by the parent company issuer. The following presents
the condensed consolidating financial information separately for:



| | i. | Advanced Medical Optics, Inc. (the Parent Company), the issuer of the guaranteed obligations;
| | -- | -----------------------------------------------------------------------------------------------



| | ii. | Guarantor Subsidiaries, on a combined basis, as specified in the Indenture;
| | --- | ---------------------------------------------------------------------------



| | iii. | Non-guarantor subsidiaries, on a combined basis, as specified in the Indenture;
| | ---- | -------------------------------------------------------------------------------



| | iv. | Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions and balances between or among the Parent Company, the Guarantor
Subsidiaries and the non-guarantor subsidiaries, (b) eliminate the investments in our subsidiaries and (c) record consolidating entries; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | v. | Advanced Medical Optics, Inc. and subsidiaries on a consolidated basis.
| | -- | -----------------------------------------------------------------------

Each entity in the consolidating financial information follows the same accounting policies as described in the consolidated financial statements, except for the use by the Parent Company and Guarantor Subsidiaries of the equity method of
accounting to reflect ownership interests in subsidiaries which are eliminated upon consolidation. Net earnings for the three months ended March 30, 2007 under the Parent and Consolidating Entries and Eliminations columns reflect the correction
of an immaterial error which did not have an impact on the consolidated net earnings as previously reported.



|                                                                      |  |        |           |                       |   |                           |  |                                      |           |  |              |            |   |  |   |          
|--------------------------------------------------------------------- |  | ------ | --------- | --------------------- | - | ------------------------- |  | ------------------------------------ | --------- |  | ------------ | ---------- | - |  | - | ---------
|Condensed Consolidating Balance Sheet  March 28, 2008 (in thousands) |  | Parent |           | GuarantorSubsidiaries |   | Non-GuarantorSubsidiaries |  | ConsolidatingEntries andEliminations |           |  | Consolidated
|Assets:                                                               |  |        |           |                       |   |                           |  |                                      |           |  |              |            |   |  |   |          
|Cash and equivalents                                                  |  | $      | 7         |                       | $ | 2,337                     |  | $                                    | 29,608    |  | $            |           |   |  | $ | 31,952   
|Trade receivables, net                                                |  |        | 437       |                       |   | 92,731                    |  |                                      | 181,977   |  |              |           |   |  |   | 275,145  
|Inventories                                                           |  |        | 5,498     |                       |   | 139,228                   |  |                                      | 122,801   |  |              | (93,291    | ) |  |   | 174,236  
|Other current assets                                                  |  |        | 38,622    |                       |   | 328,412                   |  |                                      | 35,232    |  |              | (327,354   | ) |  |   | 74,912   
|                                                                      |  |        |           |                       |   |                           |  |                                      |           |  |              |            |   |  |   |          
|Total current assets                                                  |  |        | 44,564    |                       |   | 562,708                   |  |                                      | 369,618   |  |              | (420,645   | ) |  |   | 556,245  
|Property, plant and equipment                                         |  |        | 13,867    |                       |   | 34,027                    |  |                                      | 141,137   |  |              |           |   |  |   | 189,031  
|Goodwill and intangibles, net                                         |  |        | 29,673    |                       |   | 1,417,932                 |  |                                      | 541,681   |  |              | (32,200    | ) |  |   | 1,957,086
|Other assets                                                          |  |        | 160,182   |                       |   | 31,226                    |  |                                      | 52,356    |  |              | (134,793   | ) |  |   | 108,971  
|Investment in subsidiaries                                            |  |        | 2,616,754 |                       |   | 3,597,136                 |  |                                      | 2,312,178 |  |              | (8,526,068 | ) |  |   |         
|                                                                      |  |        |           |                       |   |                           |  |                                      |           |  |              |            |   |  |   |          
|Total assets                                                          |  | $      | 2,865,040 |                       | $ | 5,643,029                 |  | $                                    | 3,416,970 |  | $            | (9,113,706 | ) |  | $ | 2,811,333
|                                                                      |  |        |           |                       |   |                           |  |                                      |           |  |              |            |   |  |   |          
|Liabilities and stockholders equity:                                 |  |        |           |                       |   |                           |  |                                      |           |  |              |            |   |  |   |          
|Short-term borrowings                                                 |  | $      | 76,200    |                       | $ |                          |  | $                                    |          |  | $            |           |   |  | $ | 76,200   
|Accounts payable and other current liabilities                        |  |        | 323,233   |                       |   | 76,072                    |  |                                      | 189,418   |  |              | (321,555   | ) |  |   | 267,168  
|                                                                      |  |        |           |                       |   |                           |  |                                      |           |  |              |            |   |  |   |          
|Total current liabilities                                             |  |        | 399,433   |                       |   | 76,072                    |  |                                      | 189,418   |  |              | (321,555   | ) |  |   | 343,368  
|Long-term debt, net of current portion                                |  |        | 1,543,230 |                       |   |                          |  |                                      |          |  |              |           |   |  |   | 1,543,230
|Other liabilities                                                     |  |        | 266,291   |                       |   | 50,489                    |  |                                      | 85,971    |  |              | (134,102   | ) |  |   | 268,649  
|                                                                      |  |        |           |                       |   |                           |  |                                      |           |  |              |            |   |  |   |          
|Total liabilities                                                     |  |        | 2,208,954 |                       |   | 126,561                   |  |                                      | 275,389   |  |              | (455,657   | ) |  |   | 2,155,247
|Total stockholders equity                                            |  |        | 656,086   |                       |   | 5,516,468                 |  |                                      | 3,141,581 |  |              | (8,658,049 | ) |  |   | 656,086  
|                                                                      |  |        |           |                       |   |                           |  |                                      |           |  |              |            |   |  |   |          
|Total liabilities and stockholders equity                            |  | $      | 2,865,040 |                       | $ | 5,643,029                 |  | $                                    | 3,416,970 |  | $            | (9,113,706 | ) |  | $ | 2,811,333
|                                                                      |  |        |           |                       |   |                           |  |                                      |           |  |              |            |   |  |   |          



9



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##### Table of Contents

|                                                                         |  |        |           |                       |   |                           |  |                                      |           |  |              |            |   |  |   |          
|------------------------------------------------------------------------ |  | ------ | --------- | --------------------- | - | ------------------------- |  | ------------------------------------ | --------- |  | ------------ | ---------- | - |  | - | ---------
|Condensed Consolidating Balance Sheet  December 31, 2007 (in thousands) |  | Parent |           | GuarantorSubsidiaries |   | Non-GuarantorSubsidiaries |  | ConsolidatingEntries andEliminations |           |  | Consolidated
|Assets:                                                                  |  |        |           |                       |   |                           |  |                                      |           |  |              |            |   |  |   |          
|Cash and equivalents                                                     |  | $      | 236       |                       | $ | 2,031                     |  | $                                    | 32,258    |  | $            |           |   |  | $ | 34,525   
|Trade receivables, net                                                   |  |        | 2,084     |                       |   | 89,008                    |  |                                      | 158,926   |  |              |           |   |  |   | 250,018  
|Inventories                                                              |  |        | 7,301     |                       |   | 141,651                   |  |                                      | 107,900   |  |              | (96,585    | ) |  |   | 160,267  
|Other current assets                                                     |  |        | 38,370    |                       |   | 312,884                   |  |                                      | 30,953    |  |              | (303,906   | ) |  |   | 78,301   
|                                                                         |  |        |           |                       |   |                           |  |                                      |           |  |              |            |   |  |   |          
|Total current assets                                                     |  |        | 47,991    |                       |   | 545,574                   |  |                                      | 330,037   |  |              | (400,491   | ) |  |   | 523,111  
|Property, plant and equipment, net                                       |  |        | 14,021    |                       |   | 31,998                    |  |                                      | 131,656   |  |              |           |   |  |   | 177,675  
|Goodwill and intangibles, net                                            |  |        | 29,673    |                       |   | 1,432,099                 |  |                                      | 520,786   |  |              | (44,068    | ) |  |   | 1,938,490
|Other assets                                                             |  |        | 158,899   |                       |   | 32,956                    |  |                                      | 49,097    |  |              | (131,892   | ) |  |   | 109,060  
|Investment in subsidiaries                                               |  |        | 2,520,217 |                       |   | 2,694,404                 |  |                                      | 2,270,788 |  |              | (7,485,409 | ) |  |   |         
|                                                                         |  |        |           |                       |   |                           |  |                                      |           |  |              |            |   |  |   |          
|Total assets                                                             |  | $      | 2,770,801 |                       | $ | 4,737,031                 |  | $                                    | 3,302,364 |  | $            | (8,061,860 | ) |  | $ | 2,748,336
|                                                                         |  |        |           |                       |   |                           |  |                                      |           |  |              |            |   |  |   |          
|Liabilities and stockholders equity:                                    |  |        |           |                       |   |                           |  |                                      |           |  |              |            |   |  |   |          
|Short-term borrowings                                                    |  | $      | 64,500    |                       | $ |                          |  | $                                    |          |  | $            |           |   |  | $ | 64,500   
|Accounts payable and other current liabilities                           |  |        | 298,626   |                       |   | 84,075                    |  |                                      | 256,442   |  |              | (361,049   | ) |  |   | 278,094  
|                                                                         |  |        |           |                       |   |                           |  |                                      |           |  |              |            |   |  |   |          
|Total current liabilities                                                |  |        | 363,126   |                       |   | 84,075                    |  |                                      | 256,442   |  |              | (361,049   | ) |  |   | 342,594  
|Long-term debt, net of current portion                                   |  |        | 1,543,230 |                       |   |                          |  |                                      |          |  |              |           |   |  |   | 1,543,230
|Other liabilities                                                        |  |        | 265,709   |                       |   | 50,664                    |  |                                      | 78,605    |  |              | (131,202   | ) |  |   | 263,776  
|                                                                         |  |        |           |                       |   |                           |  |                                      |           |  |              |            |   |  |   |          
|Total liabilities                                                        |  |        | 2,172,065 |                       |   | 134,739                   |  |                                      | 335,047   |  |              | (492,251   | ) |  |   | 2,149,600
|Total stockholders equity                                               |  |        | 598,736   |                       |   | 4,602,292                 |  |                                      | 2,967,317 |  |              | (7,569,609 | ) |  |   | 598,736  
|                                                                         |  |        |           |                       |   |                           |  |                                      |           |  |              |            |   |  |   |          
|Total liabilities and stockholders equity                               |  | $      | 2,770,801 |                       | $ | 4,737,031                 |  | $                                    | 3,302,364 |  | $            | (8,061,860 | ) |  | $ | 2,748,336
|                                                                         |  |        |           |                       |   |                           |  |                                      |           |  |              |            |   |  |   |          



|                                                                                                   |  |        |         |   |                       |   |         |                           |  |   |                                      |   |  |              |          |   |  |   |        
|-------------------------------------------------------------------------------------------------- |  | ------ | ------- | - | --------------------- | - | ------- | ------------------------- |  | - | ------------------------------------ | - |  | ------------ | -------- | - |  | - | -------
|Condensed Consolidating Statement of Operations  Three months ended March 28, 2008 (in
thousands) |  | Parent |         |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | ConsolidatingEntries andEliminations |   |  | Consolidated
|Net sales                                                                                          |  | $      | 45,820  |   |                       | $ | 196,243 |                           |  | $ | 264,153                              |   |  | $            | (202,480 | ) |  | $ | 303,736
|Operating costs and expenses:                                                                      |  |        |         |   |                       |   |         |                           |  |   |                                      |   |  |              |          |   |  |   |        
|Cost of sales                                                                                      |  |        | 28,816  |   |                       |   | 131,743 |                           |  |   | 163,216                              |   |  |              | (208,172 | ) |  |   | 115,603
|Selling, general and administrative                                                                |  |        | 18,031  |   |                       |   | 42,601  |                           |  |   | 67,393                               |   |  |              | (1,102   | ) |  |   | 126,923
|Research and development                                                                           |  |        | 6,061   |   |                       |   | 5,448   |                           |  |   | 8,397                                |   |  |              |         |   |  |   | 19,906 
|Restructuring charges                                                                              |  |        | 6,058   |   |                       |   | 2,753   |                           |  |   | 3,125                                |   |  |              |         |   |  |   | 11,936 
|                                                                                                   |  |        |         |   |                       |   |         |                           |  |   |                                      |   |  |              |          |   |  |   |        
|Operating (loss) income                                                                            |  |        | (13,146 | ) |                       |   | 13,698  |                           |  |   | 22,022                               |   |  |              | 6,794    |   |  |   | 29,368 
|Non-operating expense (income), net                                                                |  |        | 23,924  |   |                       |   | (1,339  | )                         |  |   | (33,778                              | ) |  |              | 29,383   |   |  |   | 18,190 
|Equity in earnings of subsidiaries                                                                 |  |        | (44,629 | ) |                       |   | (50,779 | )                         |  |   |                                     |   |  |              | 95,408   |   |  |   |       
|                                                                                                   |  |        |         |   |                       |   |         |                           |  |   |                                      |   |  |              |          |   |  |   |        
|Earnings before income taxes                                                                       |  |        | 7,559   |   |                       |   | 65,816  |                           |  |   | 55,800                               |   |  |              | (117,997 | ) |  |   | 11,178 
|Provision for income taxes                                                                         |  |        | 629     |   |                       |   | 504     |                           |  |   | 3,115                                |   |  |              |         |   |  |   | 4,248  
|                                                                                                   |  |        |         |   |                       |   |         |                           |  |   |                                      |   |  |              |          |   |  |   |        
|Net earnings                                                                                       |  | $      | 6,930   |   |                       | $ | 65,312  |                           |  | $ | 52,685                               |   |  | $            | (117,997 | ) |  | $ | 6,930  
|                                                                                                   |  |        |         |   |                       |   |         |                           |  |   |                                      |   |  |              |          |   |  |   |        



10



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##### Table of Contents

|                                                                                                   |  |        |         |   |                       |   |         |                           |  |                                      |         |  |              |          |   |  |   |        
|-------------------------------------------------------------------------------------------------- |  | ------ | ------- | - | --------------------- | - | ------- | ------------------------- |  | ------------------------------------ | ------- |  | ------------ | -------- | - |  | - | -------
|Condensed Consolidating Statement of Operations  Three months ended March 30, 2007 (in
thousands) |  | Parent |         |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  | ConsolidatingEntries andEliminations |         |  | Consolidated
|Net sales                                                                                          |  | $      | 54,868  |   |                       | $ | 155,920 |                           |  | $                                    | 201,543 |  | $            | (160,658 | ) |  | $ | 251,673
|Operating costs and expenses:                                                                      |  |        |         |   |                       |   |         |                           |  |                                      |         |  |              |          |   |  |   |        
|Cost of sales                                                                                      |  |        | 33,594  |   |                       |   | 89,683  |                           |  |                                      | 122,787 |  |              | (151,897 | ) |  |   | 94,167 
|Selling, general and administrative                                                                |  |        | 11,576  |   |                       |   | 37,980  |                           |  |                                      | 62,120  |  |              | (2,158   | ) |  |   | 109,518
|Research and development                                                                           |  |        | 3,303   |   |                       |   | 4,683   |                           |  |                                      | 11,178  |  |              |         |   |  |   | 19,164 
|In-process research & development                                                                  |  |        |        |   |                       |   | 1,580   |                           |  |                                      |        |  |              |         |   |  |   | 1,580  
|                                                                                                   |  |        |         |   |                       |   |         |                           |  |                                      |         |  |              |          |   |  |   |        
|Operating income                                                                                   |  |        | 6,395   |   |                       |   | 21,994  |                           |  |                                      | 5,458   |  |              | (6,603   | ) |  |   | 27,244 
|Non-operating expense (income), net                                                                |  |        | 6,533   |   |                       |   | (600    | )                         |  |                                      | 872     |  |              | 958      |   |  |   | 7,763  
|Equity in earnings of subsidiaries                                                                 |  |        | (12,207 | ) |                       |   | (5,206  | )                         |  |                                      |        |  |              | 17,413   |   |  |   |       
|                                                                                                   |  |        |         |   |                       |   |         |                           |  |                                      |         |  |              |          |   |  |   |        
|Earnings before income taxes                                                                       |  |        | 12,069  |   |                       |   | 27,800  |                           |  |                                      | 4,586   |  |              | (24,974  | ) |  |   | 19,481 
|(Benefit) provision for income taxes                                                               |  |        | (40     | ) |                       |   | 6,482   |                           |  |                                      | 930     |  |              |         |   |  |   | 7,372  
|                                                                                                   |  |        |         |   |                       |   |         |                           |  |                                      |         |  |              |          |   |  |   |        
|Net earnings                                                                                       |  | $      | 12,109  |   |                       | $ | 21,318  |                           |  | $                                    | 3,656   |  | $            | (24,974  | ) |  | $ | 12,109 
|                                                                                                   |  |        |         |   |                       |   |         |                           |  |                                      |         |  |              |          |   |  |   |        



|                                                                                                   |  |        |         |   |                       |   |        |                           |  |   |                                      |   |  |              |    |   |  |   |        |  
|-------------------------------------------------------------------------------------------------- |  | ------ | ------- | - | --------------------- | - | ------ | ------------------------- |  | - | ------------------------------------ | - |  | ------------ | -- | - |  | - | ------ | -
|Condensed Consolidating Statement of Cash Flows  Three months ended March 28, 2008 (in
thousands) |  | Parent |         |   | GuarantorSubsidiaries |   |        | Non-GuarantorSubsidiaries |  |   | ConsolidatingEntries andEliminations |   |  | Consolidated |   
|Net cash (used in) provided by operating activities                                                |  | $      | (15,776 | ) |                       | $ | 6,249  |                           |  | $ | 11,925                               |   |  | $            |   |   |  | $ | 2,398  |  
|                                                                                                   |  |        |         |   |                       |   |        |                           |  |   |                                      |   |  |              |    |   |  |   |        |  
|Cash flows from investing activities:                                                              |  |        |         |   |                       |   |        |                           |  |   |                                      |   |  |              |    |   |  |   |        |  
|Capital contribution                                                                               |  |        | (1      | ) |                       |   |       |                           |  |   |                                     |   |  |              | 1  |   |  |   |       |  
|Additions to property, plant and equipment                                                         |  |        | (443    | ) |                       |   | (4,772 | )                         |  |   | (3,748                               | ) |  |              |   |   |  |   | (8,963 | )
|Proceeds from sale of property, plant and equipment                                                |  |        |        |   |                       |   |       |                           |  |   | 164                                  |   |  |              |   |   |  |   | 164    |  
|Proceeds from the sale of investment                                                               |  |        | 3,318   |   |                       |   |       |                           |  |   |                                     |   |  |              |   |   |  |   | 3,318  |  
|Additions to capitalized internal-use software                                                     |  |        | (281    | ) |                       |   | (19    | )                         |  |   |                                     |   |  |              |   |   |  |   | (300   | )
|Additions to demonstration and bundled equipment                                                   |  |        |        |   |                       |   | (1,153 | )                         |  |   | (3,027                               | ) |  |              |   |   |  |   | (4,180 | )
|                                                                                                   |  |        |         |   |                       |   |        |                           |  |   |                                      |   |  |              |    |   |  |   |        |  
|Net cash provided by (used in) investing activities                                                |  |        | 2,593   |   |                       |   | (5,944 | )                         |  |   | (6,611                               | ) |  |              | 1  |   |  |   | (9,961 | )
|                                                                                                   |  |        |         |   |                       |   |        |                           |  |   |                                      |   |  |              |    |   |  |   |        |  
|Cash flows from financing activities:                                                              |  |        |         |   |                       |   |        |                           |  |   |                                      |   |  |              |    |   |  |   |        |  
|Capital contribution                                                                               |  |        |        |   |                       |   | 1      |                           |  |   |                                     |   |  |              | (1 | ) |  |   |       |  
|Short-term borrowings, net                                                                         |  |        | 11,700  |   |                       |   |       |                           |  |   |                                     |   |  |              |   |   |  |   | 11,700 |  
|Financing-related costs                                                                            |  |        | (123    | ) |                       |   |       |                           |  |   |                                     |   |  |              |   |   |  |   | (123   | )
|Proceeds from issuance of common stock                                                             |  |        | 1,429   |   |                       |   |       |                           |  |   |                                     |   |  |              |   |   |  |   | 1,429  |  
|Repurchase of treasury stock                                                                       |  |        | (52     | ) |                       |   |       |                           |  |   |                                     |   |  |              |   |   |  |   | (52    | )
|                                                                                                   |  |        |         |   |                       |   |        |                           |  |   |                                      |   |  |              |    |   |  |   |        |  
|Net cash provided by financing activities                                                          |  |        | 12,954  |   |                       |   | 1      |                           |  |   |                                     |   |  |              | (1 | ) |  |   | 12,954 |  
|                                                                                                   |  |        |         |   |                       |   |        |                           |  |   |                                      |   |  |              |    |   |  |   |        |  
|Effect of exchange rates on cash and equivalents                                                   |  |        |        |   |                       |   |       |                           |  |   | (7,964                               | ) |  |              |   |   |  |   | (7,964 | )
|                                                                                                   |  |        |         |   |                       |   |        |                           |  |   |                                      |   |  |              |    |   |  |   |        |  
|Net increase in cash and equivalents                                                               |  |        | (229    | ) |                       |   | 306    |                           |  |   | (2,650                               | ) |  |              |   |   |  |   | (2,573 | )
|Cash and equivalents at beginning of period                                                        |  |        | 236     |   |                       |   | 2,031  |                           |  |   | 32,258                               |   |  |              |   |   |  |   | 34,525 |  
|                                                                                                   |  |        |         |   |                       |   |        |                           |  |   |                                      |   |  |              |    |   |  |   |        |  
|Cash and equivalents at end of period                                                              |  | $      | 7       |   |                       | $ | 2,337  |                           |  | $ | 29,608                               |   |  | $            |   |   |  | $ | 31,952 |  
|                                                                                                   |  |        |         |   |                       |   |        |                           |  |   |                                      |   |  |              |    |   |  |   |        |  



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|                                                                                                   |  |        |        |   |                       |   |         |                           |  |   |                                      |   |              |   |   |  |   |         |  
|-------------------------------------------------------------------------------------------------- |  | ------ | ------ | - | --------------------- | - | ------- | ------------------------- |  | - | ------------------------------------ | - | ------------ | - | - |  | - | ------- | -
|Condensed Consolidating Statement of Cash Flows  Three months ended March 30, 2007 (in
thousands) |  | Parent |        |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | ConsolidatingEntries andEliminations |   | Consolidated |  
|Net cash (used in) provided by operating activities                                                |  | $      | (2,007 | ) |                       | $ | 15,918  |                           |  | $ | 10,905                               |   |              | $ |  |  | $ | 24,816  |  
|                                                                                                   |  |        |        |   |                       |   |         |                           |  |   |                                      |   |              |   |   |  |   |         |  
|Cash flows from investing activities:                                                              |  |        |        |   |                       |   |         |                           |  |   |                                      |   |              |   |   |  |   |         |  
|Acquisition of business, net of cash acquired                                                      |  |        |       |   |                       |   | (13,540 | )                         |  |   |                                     |   |              |   |  |  |   | (13,540 | )
|Additions to property, plant and equipment                                                         |  |        | (362   | ) |                       |   | (749    | )                         |  |   | (6,077                               | ) |              |   |  |  |   | (7,188  | )
|Proceeds from sale of property, plant and equipment                                                |  |        |       |   |                       |   |        |                           |  |   | 21                                   |   |              |   |  |  |   | 21      |  
|Additions to capitalized internal-use software                                                     |  |        | (900   | ) |                       |   | (15     | )                         |  |   |                                     |   |              |   |  |  |   | (915    | )
|Additions to demonstration and bundled equipment                                                   |  |        |       |   |                       |   | (181    | )                         |  |   | (1,761                               | ) |              |   |  |  |   | (1,942  | )
|                                                                                                   |  |        |        |   |                       |   |         |                           |  |   |                                      |   |              |   |   |  |   |         |  
|Net cash used in investing activities                                                              |  |        | (1,262 | ) |                       |   | (14,485 | )                         |  |   | (7,817                               | ) |              |   |  |  |   | (23,564 | )
|                                                                                                   |  |        |        |   |                       |   |         |                           |  |   |                                      |   |              |   |   |  |   |         |  
|Cash flows from financing activities:                                                              |  |        |        |   |                       |   |         |                           |  |   |                                      |   |              |   |   |  |   |         |  
|Proceeds from issuance of common stock                                                             |  |        | 5,989  |   |                       |   |        |                           |  |   |                                     |   |              |   |  |  |   | 5,989   |  
|Excess tax benefit from stock-based compensation                                                   |  |        | 1,082  |   |                       |   |        |                           |  |   |                                     |   |              |   |  |  |   | 1,082   |  
|                                                                                                   |  |        |        |   |                       |   |         |                           |  |   |                                      |   |              |   |   |  |   |         |  
|Net cash provided by financing activities                                                          |  |        | 7,071  |   |                       |   |        |                           |  |   |                                     |   |              |   |  |  |   | 7,071   |  
|                                                                                                   |  |        |        |   |                       |   |         |                           |  |   |                                      |   |              |   |   |  |   |         |  
|Effect of exchange rates on cash and equivalents                                                   |  |        |       |   |                       |   |        |                           |  |   | 1,054                                |   |              |   |  |  |   | 1,054   |  
|                                                                                                   |  |        |        |   |                       |   |         |                           |  |   |                                      |   |              |   |   |  |   |         |  
|Net increase in cash and equivalents                                                               |  |        | 3,802  |   |                       |   | 1,433   |                           |  |   | 4,142                                |   |              |   |  |  |   | 9,377   |  
|Cash and equivalents at beginning of period                                                        |  |        | 344    |   |                       |   | 1,187   |                           |  |   | 32,991                               |   |              |   |  |  |   | 34,522  |  
|                                                                                                   |  |        |        |   |                       |   |         |                           |  |   |                                      |   |              |   |   |  |   |         |  
|Cash and equivalents at end of period                                                              |  | $      | 4,146  |   |                       | $ | 2,620   |                           |  | $ | 37,133                               |   |              | $ |  |  | $ | 43,899  |  
|                                                                                                   |  |        |        |   |                       |   |         |                           |  |   |                                      |   |              |   |   |  |   |         |  

Note 5: Fair Value Measurement

The Company enters into foreign exchange option and forward contracts to reduce earnings and cash flow volatility associated with foreign exchange rate
changes to allow management to focus its attention on its core business operations. Accordingly, the Company enters into contracts that change in value as foreign exchange rates change to economically offset the effect of changes in foreign currency
on the Companys assets and liabilities, commitments and anticipated foreign currency denominated sales and operating expenses. The Company enters into foreign exchange option and forward contracts in amounts between minimum and maximum
anticipated foreign exchange exposures, generally for periods not to exceed one year. These derivative instruments are not designated as accounting hedges. The Company does not enter into speculative derivative transactions.

The Company uses foreign currency option contracts, which provide for the sale of foreign currencies to offset foreign currency exposures expected to
arise in the normal course of the Companys business. While these instruments are subject to fluctuations in value, such fluctuations are anticipated to offset changes in the value of the underlying exposures. The principal currencies subject
to this process are the Japanese yen and the euro. The foreign exchange forward contracts are entered into to protect the value of foreign currency denominated monetary assets and liabilities and the changes in the fair value of the foreign currency
forward contracts are economically designed to offset the changes in the revaluation of the foreign currency denominated monetary assets and liabilities. These forward contracts are denominated in currencies that represent material exposures. The
changes in the fair value of foreign currency option and forward contracts are recorded through earnings as Unrealized (gain) loss on derivative instruments, while any realized gains or losses on expired contracts are recorded through
earnings as Other, net in the accompanying consolidated statements of operations. Any premium cost of purchased foreign exchange option contracts are recorded in Other current assets and amortized over the life of the
options.

As described in Note 1, the Company adopted SFAS No. 157 effective January 1, 2008. SFAS No. 157 expands
disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis.



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SFAS No. 157 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in
measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable
inputs in which there are little or no market data, which require the reporting entity to develop its own assumptions.

Assets and
liabilities measured at fair value are based on one or more of three valuation techniques described in SFAS No. 157. Valuation techniques utilized for each individual asset and liability category are referenced in the tables below. Where more
than one technique is noted, individual assets or liabilities were valued using multiple techniques. The valuation techniques are as follows:



| | (a) | Market approach  Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Income approach  Techniques to convert future amounts to a single present amount based on market expectations (including present value techniques, option-pricing and excess
earnings models);
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Cost approach  Amount that would be required to replace the service capacity of an asset (replacement cost).
| | --- | -------------------------------------------------------------------------------------------------------------

Assets and liabilities measured at fair value as of March 28, 2008 on a recurring basis are as follows:



|                                            |  |                                           |   |                                           |   |      |                    |  |    |  
|------------------------------------------- |  | ----------------------------------------- | - | ----------------------------------------- | - | ---- | ------------------ |  | -- | -
|                                            |  | Assets                                    |   | Liabilities                               |   |      | ValuationTechnique | 
|(in millions)                               |  | Significantotherobservableinputs(Level 2) |   | Significantotherobservableinputs(Level 2) |   |     
|Foreign currency option contracts           |  | $                                         |  |                                           | $ | (7.5 | )                  |  | (a | )
|Foreign currency forward exchange contracts |  |                                           |  |                                           |   |     |                    |  | (a | )
|                                            |  |                                           |   |                                           |   |      |                    |  |    |  

There were no changes in the valuation techniques used to measure asset or liability fair values
on a recurring basis in the three months ended March 28, 2008.

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 21/2% 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 7: Common Stock

AMO has an Incentive
Compensation Plan (ICP) and a Stock Incentive Plan (SIP) that provide for the granting of stock options, restricted stock and restricted stock units to directors, employees and consultants. The Company has two Employee Stock
Purchase Plans (ESPP) for United States and international employees, respectively, which allow employees to purchase AMO common stock. A total of 5 million shares of common stock have been authorized for issuance under the ICP and approximately
2 million shares of common stock have been authorized for issuance under the SIP after April 2, 2007, the date the SIP was assumed following the IntraLase acquisition.



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Share-Based Compensation Expense

Total share-based compensation expense included in the unaudited consolidated statements of operations for the three months ended March 28, 2008 and
March 30, 2007 was as follows (in thousands):



|                                             |  |                                  |        |   |                                  |   |        |  
|-------------------------------------------- |  | -------------------------------- | ------ | - | -------------------------------- | - | ------ | -
|                                             |  | Three Months EndedMarch 28, 2008 |        |   | Three Months EndedMarch 30, 2007 |  
|Cost of sales                                |  | $                                | 458    |   |                                  | $ | 581    |  
|                                             |  |                                  |        |   |                                  |   |        |  
|Operating Expenses -                         |  |                                  |        |   |                                  |   |        |  
|Research and development                     |  |                                  | 728    |   |                                  |   | 590    |  
|Selling, general and administrative          |  |                                  | 3,920  |   |                                  |   | 3,575  |  
|Restructuring charges                        |  |                                  | 116    |   |                                  |   |       |  
|                                             |  |                                  |        |   |                                  |   |        |  
|                                             |  |                                  | 4,764  |   |                                  |   | 4,165  |  
|                                             |  |                                  |        |   |                                  |   |        |  
|Pre-tax expense                              |  |                                  | 5,222  |   |                                  |   | 4,746  |  
|Income tax benefit                           |  |                                  | (1,747 | ) |                                  |   | (1,474 | )
|                                             |  |                                  |        |   |                                  |   |        |  
|Share-based compensation expense, net of tax |  | $                                | 3,475  |   |                                  | $ | 3,272  |  
|                                             |  |                                  |        |   |                                  |   |        |  

Approximately $0.1 million of pre-tax share-based compensation expense was included in
restructuring charges in the unaudited consolidated statements of operations for the three months ended March 28, 2008 due to acceleration of vesting.

Stock Options

Stock options granted to employees are exercisable at a price equal to the fair market
value of the common stock on the date of the grant and generally vest at a rate of 25% per year beginning twelve months after the date of grant. Grants under these plans expire ten years from the date of grant.

The Company issues new shares to satisfy option exercises.

The following is a summary of stock option activity (in thousands, except per share amounts):



|                                              |  |                 |   |  |                               |      
|--------------------------------------------- |  | --------------- | - |  | ----------------------------- | -----
|                                              |  | Number ofShares |   |  | WeightedAverageExercise Price
|Outstanding at December 31, 2007              |  | 7,518           |   |  | $                             | 27.95
|Granted                                       |  | 21              |   |  |                               | 22.83
|Exercised                                     |  | (134            | ) |  |                               | 9.90 
|Forfeitures, cancellations and expirations    |  | (103            | ) |  |                               | 37.96
|                                              |  |                 |   |  |                               |      
|Outstanding at March 28, 2008                 |  | 7,302           |   |  | $                             | 28.14
|                                              |  |                 |   |  |                               |      
|Vested and expected to vest at March 28, 2008 |  | 7,058           |   |  | $                             | 27.71
|                                              |  |                 |   |  |                               |      
|Exercisable at March 28, 2008                 |  | 5,092           |   |  | $                             | 22.83

Note 8: Other Comprehensive Income

The following table summarizes the components of comprehensive income (in thousands):



|                                         |  |                    |        |                |   |                  |  |                  |        |  |           |        |                  |  |   |   |  |   |        |  
|---------------------------------------- |  | ------------------ | ------ | -------------- | - | ---------------- |  | ---------------- | ------ |  | --------- | ------ | ---------------- |  | - | - |  | - | ------ | -
|                                         |  | Three Months Ended |       
|                                         |  | March 28, 2008     |        | March 30, 2007 |  
|                                         |  | Before-taxamount   |        | Incometax      |   | Net-of-taxamount |  | Before-taxamount |        |  | IncomeTax |        | Net-of-taxamount | 
|Foreign currency translation adjustments |  | $                  | 43,821 |                | $ |                 |  | $                | 43,821 |  | $         | (2,267 | )                |  | $ |  |  | $ | (2,267 | )
|Net earnings                             |  |                    |        |                |   |                  |  |                  | 6,930  |  |           |        |                  |  |   |   |  |   | 12,109 |  
|                                         |  |                    |        |                |   |                  |  |                  |        |  |           |        |                  |  |   |   |  |   |        |  
|Total comprehensive income               |  |                    |        |                |   |                  |  | $                | 50,751 |  |           |        |                  |  |   |   |  | $ | 9,842  |  
|                                         |  |                    |        |                |   |                  |  |                  |        |  |           |        |                  |  |   |   |  |   |        |  



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Note 9: Business Segment Information

The operating segments are segments for which separate financial information is available and upon which operating results are evaluated on a timely basis to assess performance and to allocate resources.

The Companys reportable segments reflect the way it currently manages its business. These reportable segments are represented by three business
units: cataract, refractive and eye care. The cataract business sells monofocal intraocular lenses (monofocal IOLs), phacoemulsification systems, viscoelastics and related products used in ocular surgery. The refractive business sells
wavefront diagnostic devices, femtosecond lasers and associated patient interface devices, excimer laser systems and treatment cards, and refractive implants. The eye care business sells disinfecting solutions, enzymatic cleaners, lens rewetting
drops and artificial tears. Effective January 1, 2008, net sales of refractive implant products and the related impact on operating income are reported in the refractive business segment. Prior to 2008, refractive implant products were included
in the cataract business segment. Accordingly, net sales and the impact on operating income attributable to refractive implant products in the three months ended March 30, 2007 have been reclassified from the cataract to refractive business
segments to conform to the new presentation.

The Company evaluates segment performance based on operating income, excluding certain costs
such as business repositioning and restructuring costs, acquisition-related costs and stock-based compensation expense. Research and development costs, manufacturing operations and related variances, inventory provision/repricing costs and supply
chain costs are managed on a global basis and are considered corporate costs. The Company presents segment information which management believes is determined in accordance with measurement principles that are consistent with those used in the
corresponding amounts in the consolidated financial statements. Because operating segments are generally defined by the products each segment manufactures and sells, they do not generally make sales to each other. Depreciation and amortization
related to the manufacturing of goods, excluding amortization of intangible assets, is included in the operating income of the Companys reportable segments. The Company does not discretely allocate assets to its operating segments, nor does
the Companys chief operating decision maker evaluate operating segments using discrete asset information.

Business Segments



|                                    |  |                    |         |                         |   |               |  |   |               |   |  |   |         |  
|----------------------------------- |  | ------------------ | ------- | ----------------------- | - | ------------- |  | - | ------------- | - |  | - | ------- | -
|                                    |  | Net Sales          |         | Operating Income (Loss) |  
|                                    |  | Three Months Ended |         | Three Months Ended      |  
|(In thousands)                      |  | March 28,2008      |         | March 30,2007           |   | March 28,2008 |  |   | March 30,2007 |  
|Operating segments:                 |  |                    |         |                         |   |               |  |   |               |   |  |   |         |  
|Cataract                            |  | $                  | 124,299 |                         | $ | 114,892       |  | $ | 63,777        |   |  | $ | 58,867  |  
|Refractive                          |  |                    | 120,450 |                         |   | 77,472        |  |   | 74,616        |   |  |   | 48,699  |  
|Eye Care                            |  |                    | 58,987  |                         |   | 59,309        |  |   | 20,550        |   |  |   | 21,616  |  
|                                    |  |                    |         |                         |   |               |  |   |               |   |  |   |         |  
|Total segments                      |  |                    | 303,736 |                         |   | 251,673       |  |   | 158,943       |   |  |   | 129,182 |  
|Global operations                   |  |                    |        |                         |   |              |  |   | (43,385       | ) |  |   | (38,183 | )
|Research and development            |  |                    |        |                         |   |              |  |   | (19,906       | ) |  |   | (19,164 | )
|In-process research and development |  |                    |        |                         |   |              |  |   |              |   |  |   | (1,580  | )
|Restructuring charges               |  |                    |        |                         |   |              |  |   | (11,936       | ) |  |   |        |  
|General corporate                   |  |                    |        |                         |   |              |  |   | (54,348       | ) |  |   | (43,011 | )
|                                    |  |                    |         |                         |   |               |  |   |               |   |  |   |         |  
|Total                               |  | $                  | 303,736 |                         | $ | 251,673       |  | $ | 29,368        |   |  | $ | 27,244  |  
|                                    |  |                    |         |                         |   |               |  |   |               |   |  |   |         |  



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Geographic Area Information



|                                        |  |                    |         |               |   |        
|--------------------------------------- |  | ------------------ | ------- | ------------- | - | -------
|                                        |  | Net Sales         
|                                        |  | Three Months Ended
|(In thousands)                          |  | March 28,2008      |         | March 30,2007
|United States:                          |  |                    |         |               |   |        
|Cataract                                |  | $                  | 34,375  |               | $ | 33,456 
|Refractive                              |  |                    | 74,861  |               |   | 59,057 
|Eye Care                                |  |                    | 15,042  |               |   | 17,211 
|                                        |  |                    |         |               |   |        
|Total United States                     |  |                    | 124,278 |               |   | 109,724
|Americas, excluding United States:      |  |                    |         |               |   |        
|Cataract                                |  |                    | 9,630   |               |   | 8,459  
|Refractive                              |  |                    | 5,434   |               |   | 2,890  
|Eye Care                                |  |                    | 1,708   |               |   | 2,804  
|                                        |  |                    |         |               |   |        
|Total Americas, excluding United States |  |                    | 16,772  |               |   | 14,153 
|Europe/Africa/Middle East:              |  |                    |         |               |   |        
|Cataract                                |  |                    | 53,502  |               |   | 48,833 
|Refractive                              |  |                    | 20,112  |               |   | 8,939  
|Eye Care                                |  |                    | 19,060  |               |   | 20,024 
|                                        |  |                    |         |               |   |        
|Total Europe/Africa/Middle East         |  |                    | 92,674  |               |   | 77,796 
|Japan:                                  |  |                    |         |               |   |        
|Cataract                                |  |                    | 15,717  |               |   | 13,284 
|Refractive                              |  |                    | 11,252  |               |   | 1,551  
|Eye Care                                |  |                    | 15,765  |               |   | 13,689 
|                                        |  |                    |         |               |   |        
|Total Japan                             |  |                    | 42,734  |               |   | 28,524 
|Asia Pacific:                           |  |                    |         |               |   |        
|Cataract                                |  |                    | 11,075  |               |   | 10,860 
|Refractive                              |  |                    | 8,791   |               |   | 5,035  
|Eye Care                                |  |                    | 7,412   |               |   | 5,581  
|                                        |  |                    |         |               |   |        
|Total Asia Pacific                      |  |                    | 27,278  |               |   | 21,476 
|                                        |  |                    |         |               |   |        
|Total                                   |  | $                  | 303,736 |               | $ | 251,673
|                                        |  |                    |         |               |   |        

The United States information is presented separately as it is the Companys headquarters
country, and U.S. sales represented 40.9% and 43.6% of total net sales for the three months ended March 28, 2008 and March 30, 2007, respectively. Additionally, sales in Japan represented 14.1% and 11.3% of total net sales for the three
months ended March 28, 2008 and March 30, 2007, respectively. No other country, or single customer, generated over 10% of total net sales in the periods presented.

Note 10: Commitments and Contingencies

Product Recall

In May 2007, the Company initiated a global recall of the Complete MoisturePlus multipurpose formulation (the 2007 Recall) after being
informed by the U.S. Food and Drug Administration of an association with acanthamoeba keratitis. The 2007 Recall resulted in the following charges during the year ended December 31, 2007: a provision for sales returns of $41.5 million and
charges totaling $67.5 million, which comprised $37.5 million in costs of goods sold for impairment of inventory and distribution costs, $29.7 million in selling, general and administrative costs associated with public relations, communication,
investigation, processing and handling of distributor and end-customer reimbursements and $0.3 million in research and development costs. As of March 28, 2008, the Company had approximately $4.2 million in accrued liabilities and $2.8 million
in accrued sales returns associated with the 2007 Recall.

Management continues to review its estimates of the overall recall costs, which
could result in additional charges in the future.



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On August 24, 2007 and September 13, 2007, two purported class action complaints were filed by
Scott Kairalla and Barry Galison (the Galison case), respectively, in the U.S. District Court of the Central District of California on behalf of purchasers of our securities between January 4 and May 25, 2007. The Galison case
was dismissed without prejudice on November 20, 2007. An amended consolidated complaint was filed on January 18, 2008 (the Consolidated Complaint). The Consolidated Complaint alleges claims under the Securities Exchange Act of
1934 against the Company and certain of its officers and directors. The Consolidated Complaint alleges that the Company made material misrepresentations concerning the Companys Complete MoisturePlus product. The Company does not believe
that the Consolidated Complaint has merit and intends to defend itself vigorously. The Company may incur substantial expenses in defending against the allegations. In the event of a determination adverse to the Company or its officers and directors,
the Company may incur substantial monetary liability, which could have a material adverse effect on its financial position, results of operations or cash flows.

As of March 28, 2008, the Company has been served or is aware that it has been named as a defendant in approximately 97 product liability lawsuits pending in various state and federal courts within the U.S. as
well as certain jurisdictions outside the U.S. in relation to the 2007 Recall. These suits involve allegations of personal injury to 119 consumers. Of these 97 cases, 83 have been filed in various U.S. courts, 11 in Canada and three in jurisdictions
outside North America. None of the U.S. personal injury actions have been filed as purported class actions; however, eight of the Canadian personal injury matters seek class action status. In addition to personal injury suits, three U.S. and four
Canadian matters have been filed as purported class actions by uninjured consumers seeking reimbursement for discarded product pursuant to various consumer protection statutes.

These cases involve complex medical and scientific issues relating to both liability and damages and are currently at a very early stage. Moreover, most
of the plaintiffs seek unspecified damages. Because of this, and because these types of suits are inherently unpredictable, the Company is unable at this time to predict the outcome of these matters. The Company intends to vigorously defend itself
in these matters; however, the Company could in future periods enter into settlements or incur judgments that, individually or in the aggregate, could have a material adverse impact on its financial condition or results of operations in any such
period.

While the Company is involved from time to time in litigation arising in the ordinary course of business, including product
liability claims, the Company is not currently aware of any other actions against it or Allergan, Inc. (Allergan) relating to the optical medical device business that it believes would have a material adverse effect on its business,
financial condition, results of operations or cash flows. The Company may be subject to future litigation and infringement claims, which could cause it to incur significant expenses or prevent it from selling its products. The Company operates in an
industry susceptible to significant product liability claims. Product liability claims may be asserted against it in the future arising out of the 2007 Recall and/or events not known to it at the present time. Under the terms of the contribution and
distribution agreement affecting the Companys spin-off from Allergan. Allergan agreed to assume responsibility for, and to indemnify it against, all current and future litigation relating to its retained businesses and the Company agreed to
assume responsibility for, and to indemnify Allergan against, all current and future litigation related to the optical medical device business.

Note
11: Pension Benefit Plans

The Company sponsors defined benefit pension plans in Japan and in certain European countries. Components of
net periodic benefit cost under these plans were (in thousands):



|                                          |  |                    |     |   |               |   |     |  
|----------------------------------------- |  | ------------------ | --- | - | ------------- | - | --- | -
|                                          |  | Three Months Ended |    
|                                          |  | March 28,2008      |     |   | March 30,2007 |  
|Service cost                              |  | $                  | 546 |   |               | $ | 551 |  
|Interest cost                             |  |                    | 209 |   |               |   | 174 |  
|Expected return on plan assets            |  |                    | (84 | ) |               |   | (80 | )
|Amortization of prior service cost        |  |                    | 12  |   |               |   | 11  |  
|Amortization of net actuarial (gain) loss |  |                    | (6  | ) |               |   | 26  |  
|                                          |  |                    |     |   |               |   |     |  
|Net periodic benefit cost                 |  | $                  | 677 |   |               | $ | 682 |  
|                                          |  |                    |     |   |               |   |     |  



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ADVANCED MEDICAL OPTICS, INC.



|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations for the Quarter Ended March 28, 2008
|------- | --------------------------------------------------------------------------------------------------------------------------

The following discussion and analysis presents the factors that had a material effect on AMOs cash flows and results of operations during the
three months ended March 28, 2008, and the Companys financial position at that date. Except for the historical information contained herein, the following discussion contains forward-looking statements that involve risks and
uncertainties. Our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in the subsection entitled
Certain Factors and Trends Affecting AMO and Its Businesses. The following discussion should be read in conjunction with the 2007 Form 10-K and the unaudited consolidated financial statements and notes thereto included elsewhere in this
Form 10-Q.

OVERVIEW

We are a
global leader in the development, manufacture and marketing of medical devices for the eye. AMO is focused on providing the full range of advanced refractive technologies and support to help eye care professionals deliver optimal vision and
lifestyle experiences to patients of all ages. Our reportable segments are represented by our three business units: cataract, refractive and eye care. Our cataract business sells monofocal intraocular lenses (monofocal IOLs),
phacoemulsification systems, viscoelastics and related products used in ocular surgery. Our refractive business sells wavefront diagnostic devices, femtosecond lasers and associated patient interface devices, excimer laser systems and treatment
cards, and refractive implants. Our eye care business sells disinfecting solutions, enzymatic cleaners, lens rewetting drops and artificial tears.

We have operations in approximately 24 countries and sell our products in approximately 60 countries within the following four region structure:



| |  |  | Americas (North and South America);
| | - |  | -----------------------------------



| |  |  | Europe, Africa and Middle East;
| | - |  | -------------------------------



| |  |  | Japan; and
| | - |  | ----------



| |  |  | Asia Pacific (excluding Japan, but including Australia and New Zealand).
| | - |  | ------------------------------------------------------------------------

Restructuring Plan

After our acquisition of IntraLase Corp. in the second quarter of 2007, we
continued femtosecond laser manufacturing operations in Irvine, California (Irvine Plant). As part of the overall integration of IntraLase, on December 13, 2007, we committed to a plan to relocate the femtosecond laser manufacturing operations
from the Irvine Plant to our excimer laser and phacoemulsification manufacturing facility in Milpitas, California (Milpitas Plant), in order to consolidate equipment manufacturing in one location and to maximize opportunities to leverage core
strengths. We also intend to move the assembly of IntraLase disposable patient interfaces from the Irvine Plant to our facility in Puerto Rico in order to obtain additional synergies.

As a continuation of our commitment to further enhance our global competitiveness, operating leverage and cash flow, our Board of Directors on
February 12, 2008 approved an additional plan to reduce our fixed costs. The additional plan includes a net workforce reduction of approximately 150 positions, or about 4% of our global workforce. In addition, we plan to consolidate certain
operations, including the relocation of all non-manufacturing related activities at the Irvine Plant, to improve our overall facility utilization.

These plans include workforce reductions and transfers, outplacement assistance, relocation of certain employees, facilities-related costs, and accelerated amortization of certain long-lived assets and termination of redundant supplier
contracts. These plans will also result in start-up costs such as expenses for moving, incremental travel, recruiting and duplicate personnel associated with hiring staff during ramp-up, as well as incremental costs associated with capacity
underutilization of the Milpitas Plant during the ramp-up period.

We currently expect to complete these activities in 2008 and estimate
the total pre-tax charges resulting from these plans to be in the range of $36 million to $43 million, substantially all of which are expected to be cash expenditures. In the three months ended March 28, 2008, we incurred $11.9 million of
pre-tax charges which comprised severance, retention bonuses and other one-time termination benefits of $11.3 million and facilities related costs of $0.6 million. Cumulative charges from plan inception through March 28, 2008 were $12.3
million. Expected annualized cost savings from these restructuring actions are expected to range from $12 million to $16 million. Actual cost savings could be significantly different from the estimated range if any unforeseen events or changes
occur.



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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United
States of America requires management to make judgments, assumptions and estimates that affect the amounts reported. Actual results could differ from those estimates. Certain of these significant accounting policies are considered to be critical
accounting policies as more fully described in Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations, of the Companys Annual Report on Form 10-K for the year ended December 31, 2007.
Management believes that at March 28, 2008 there has been no material change to this information.

RESULTS OF OPERATIONS

The following table presents net sales and operating income by operating segment for the three months ended March 28, 2008 and March 30, 2007,
respectively:



|                         |  |                    |         |                    |   |               |  |               |         |  |   |        
|------------------------ |  | ------------------ | ------- | ------------------ | - | ------------- |  | ------------- | ------- |  | - | -------
|                         |  | Net Sales          |         | Operating Income  
|                         |  | Three Months Ended |         | Three Months Ended
|(In thousands)           |  | March 28,2008      |         | March 30,2007      |   | March 28,2008 |  | March 30,2007
|Cataract                 |  | $                  | 124,299 |                    | $ | 114,892       |  | $             | 63,777  |  | $ | 58,867 
|Refractive               |  |                    | 120,450 |                    |   | 77,472        |  |               | 74,616  |  |   | 48,699 
|Eye Care                 |  |                    | 58,987  |                    |   | 59,309        |  |               | 20,550  |  |   | 21,616 
|                         |  |                    |         |                    |   |               |  |               |         |  |   |        
|Total operating segments |  | $                  | 303,736 |                    | $ | 251,673       |  | $             | 158,943 |  | $ | 129,182
|                         |  |                    |         |                    |   |               |  |               |         |  |   |        

Net sales. Total net sales increased 20.7% in the three months ended March 28, 2008,
compared to the same period last year. The increase in net sales in the three months ended March 28, 2008 resulted from higher net sales in our Cataract and Refractive operating segments, which also reflected an overall favorable foreign
currency impact of 6.5%. Our sales and earnings may be impacted during times of a strengthening or weakening U.S. dollar. Total net sales in the U.S. and Japan represented 40.9% and 14.1%, respectively, of total net sales in the three months ended
March 28, 2008. No other country, or single customer, generated over 10% of total net sales in the periods presented.

Net sales from
our Cataract business increased by 8.2% in the three months ended March 28, 2008, compared with the same period last year. The increase in net sales was the result of favorable foreign currency impacts, largely due to fluctuations of the euro
and yen versus the U.S. dollar. Monofocal IOL sales increased by 3.7%, to $65.5 million, reflecting continued strong growth of the Tecnis IOL franchise, offset by declining sales of older generation IOLs. Net sales from viscoelastics and
phacoemulsification systems were up by 14.9% to $54.8 million in the three months ended March 28, 2008, compared with the same period last year due to our new WhiteStar Signaturephacoemulsification system and growth in surgical pack
sales. Our growth in phacoemulsification system placements also contributed to increased usage of our viscoelastic products. Net sales growth in the overall Cataract business in the United States of 2.7% in the three months ended March 28, 2008
was primarily due to phacoemulsification systems and viscoelastics. Sales in the Other Americas increased by 13.8% in the three months ended March 28, 2008 largely due to continued strong IOL sales driven by our proprietary Tecnis
aspheric monofocal IOL. Sales in Europe/Africa/Middle East increased by 9.6% in the three months ended March 28, 2008 primarily due to continued strong sales of our Tecnismonofocal IOLs. Sales in Japan increased by 18.3% in the three
months ended March 28, 2008, largely due to phacoemulsification systems and viscoelastics. Sales in Asia Pacific in the three months ended March 28, 2008 were about flat with the same period last year.

Net sales from our Refractive business increased by 55.5% to $120.5 million in the three months ended March 28, 2008, compared with the same period
last year. The increase primarily reflects the addition of $52.0 million in sales in the current quarter from last years acquisition of IntraLase, partially offset by a $1.9 million decline in sales of refractive implants and a decline in
excimer procedure revenues associated with economic weakness affecting United States excimer procedure volumes, which were down about 10%. We expect U.S. procedure volumes to continue to be impacted throughout 2008. An acceleration of this decline
in the U.S. or globally would have a material adverse impact on our revenue and financial condition. Net sales in the Refractive business overall increased by $15.8 million in the United States, $2.5 million in the Other Americas, $11.2 million in
Europe/Africa/Middle East, $9.7 million in Japan and $3.8 million in Asia Pacific, primarily as a result of the acquisition of IntraLase. Net sales in our Refractive business reflect a favorable foreign currency impact of 2.8% in the three months
ended March 28, 2008, largely from fluctuations of the euro versus the U.S. dollar.

Net sales from our Eye Care business in the three
months ended March 28, 2008 were about flat compared with the same period last year. The decrease in net sales of our multipurpose solutions, reflecting recall-related impacts, was offset by increased sales of hydrogen peroxide-based products,
principally in Europe and Japan, and increased sales of other eye care products due in part to the launch of our new artificial tears product. Net sales decreased by 12.6% in the United States and 39.1% in the Other Americas largely



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due to the decline in sales of multipurpose solutions related to the 2007 Recall. Net sales in Asia Pacific and Japan increased by 32.8% and 15.2%,
respectively, primarily due to sales of hydrogen peroxide-based products. Net sales in Europe/Africa/Middle East decreased by 4.8% due to recall-related impacts on multipurpose solutions, offset by increased demand for hydrogen peroxide-based
products. Net sales in our Eye Care business included a favorable foreign currency impact of 7.8% in the three months ended March 28, 2008, largely resulting from fluctuations of the euro and yen versus the U.S. dollar.

Gross margin and gross profit. Our gross margin percentage was 61.9% in the three months ended March 28, 2008, compared with 62.6% in the
same period last year. Gross profit for the three months ended March 28, 2008 reflects the combined effects of the IntraLase acquisition and other unfavorable sales mix shifts. Specifically, the revenue introduced by the addition of IntraLase
products into our profile resulted in an unfavorable revenue mix shift where the impact of lower margin equipment sales and service business buildout more than offset the positive margin impact of the newly added IntraLase procedures. Also, we
continue to feel the margin effects of the multipurpose solution recall. Gross profit for the three months ended March 30, 2007 included a $2.3 million negative impact from the product recall in November 2006 and a $4.7 million charge to
discontinue the Amadeus microkeratome distributor agreement.

Selling, general and administrative. Selling, general and
administrative expenses decreased as a percent of net sales by 1.7 percentage points to 41.8% in the three months ended March 28, 2008, compared with 43.5% in the three months ended March 30, 2007. Selling, general and administrative
expenses for the three months ended March 28, 2008 reflect the addition of operating expenses from the IntraLase acquisition. Amortization expense associated with acquisition-related intangible assets was $17.1 million and $9.9 million in the
three months ended March 28, 2008 and March 30, 2007, respectively. Selling, general and administrative expenses for the three months ended March 30, 2007 included $2.1 million in recall-related expenses.

Research and development. Research and development expenditures decreased as a percent of net sales by 1.0 percentage point to 6.6% in the three
months ended March 28, 2008, compared with 7.6% in the three months ended March 30, 2007. Total research and development expenses increased by 3.9% to $19.9 million in the three months ended March 28, 2008, which primarily reflects
incremental expenses from the IntraLase acquisition. We recognized an impairment charge of $1.0 million in the first quarter of 2007 in connection with a research and development licensing arrangement. Our research and development strategy is to
develop proprietary products for vision correction that are safe and effective and address unmet needs. We are currently focusing on new advancements that will build on our Tecnis, Healon and phacoemulsification technologies, corneal
and lens-based solutions to presbyopia, projects from the acquisitions of WaveFront Sciences, Inc. (WFSI) and IntraLase, and additional dry eye products.

In-process research and development.In the three months ended March 30, 2007, we recorded a $1.6 million in-process research and development (IPR&D) charge from the WFSI acquisition. This
charge represented the estimated fair value of projects that, as of the acquisition date, had not reached technological feasibility and had no alternative future use.

Restructuring charges. In the three months ended March 28, 2008, we incurred $11.9 million of pre-tax charges which comprised severance, retention bonuses and other one-time termination benefits of $11.3
million and facilities related costs of $0.6 million.

Operating Income.Operating income as a percentage of net sales, or operating
margin, was 9.7% in the three months ended March 28, 2008, compared to 10.8% in the same period last year. Operating income of $29.4 million in the three months ended March 28, 2008 includes charges of $11.9 million for restructuring
actions, $5.1 million in share-based compensation expense under SFAS 123R, and $28.0 million in depreciation and amortization, of which $17.1 million was for acquisition-related intangible asset amortization. Operating income of $27.2 million in the
three months ended March 30, 2007 includes charges of $4.2 million in share-based compensation expense under SFAS 123R, $4.7 million related to the discontinuation of a distributor contract, $1.0 million impairment related to a R&D
licensing agreement, a $4.4 million impact from the product recall in November 2006, $1.6 million for IPR&D related to the WFSI acquisition and $17.1 million in depreciation and amortization, of which $9.9 million was for acquisition-related
intangible asset amortization.

Operating income from our Cataract business increased by $4.9 million in the three months ended
March 28, 2008 due to the increase in net sales of IOL products discussed above. Operating income from our Refractive business increased by $25.9 million in the three months ended March 28, 2008 primarily due to the impact of the IntraLase
acquisition. Operating income from our Eye Care business decreased by $1.1 million in the three months ended March 28, 2008 as net sales were about flat compared with the same period last year and we saw an increase in marketing costs
associated with the launch of our new artificial tears product in the current period.

Non-operating expense (income). Interest
expense was $20.2 million in the three months ended March 28, 2008, compared with $6.2 million in the three months ended March 30, 2007. The increase was due to the issuance of more than $700 million in debt in April 2007 in connection
with the IntraLase acquisition. We recorded an unrealized loss on derivative instruments of $2.1 million and $0.4 million in the three months ended March 28, 2008 and March 30, 2007, respectively. We record as unrealized (gain) loss
on derivative instruments the mark-to-market adjustments on the outstanding foreign currency options and forward contracts which we enter into as part of our overall risk management strategy to reduce the volatility of expected earnings in
currencies other than the



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U.S. dollar. The losses in the first three months of 2008 and 2007 were largely attributable to euro and Japanese yen instruments. During the three months
ended March 28, 2008, we recognized a gain of $3.3 million in connection with the sale of our investment in SIS AG, Surgical Instruments Systems.

Income taxes. We recorded a provision for income taxes of $4.2 million in the three months ended March 28, 2008 resulting in an effective tax rate of approximately 38% for the current period. The
results for the quarter included $3.3 million of gain on the sale of our investment in SIS AG, Surgical Instruments Systems, for which a net tax provision of $0.3 million was recorded, and an increase in interest expense for uncertain tax positions
in the amount of $0.7 million. Also, the effective tax rate reflected a benefit from stock-based compensation expense currently being recognized under SFAS 123R at an estimated effective rate of approximately 34%. A provision with an estimated
effective rate of 38% was recorded on all other pre-tax income.

The effective tax rate for the three months ended March 30, 2007 was
37.8%. The results for the quarter included $1.6 million of IPR&D charges related to the purchase of WFSI and a $1.0 million write-off associated with a research and development agreement for which no tax benefits were recorded. In addition, the
effective tax rate reflected a benefit from stock-based compensation expense currently being recognized under SFAS 123R at an estimated effective rate of approximately 31.1%. A provision with an estimated effective rate of 33.0% was recorded on all
other pre-tax income.

Our future effective income tax rate may vary depending on our mix of domestic and international taxable income or
loss and the various tax and treasury methodologies that we implement, including our policy regarding repatriation of future accumulated foreign earnings.

The unrecognized tax benefits of $46.4 million at December 31, 2007 and the net amount of unrecognized tax benefits of $29.4 million that, if recognized, would favorably affect the effective tax rate, have not
changed materially during the quarter ended March 28, 2008. Accrued penalties and interest of $2.4 million (net of a tax benefit of $1.3 million) at December 31, 2007, which increased to $3.3 million (net of a tax benefit of $1.7 million)
at March 28, 2008.

LIQUIDITY AND CAPITAL RESOURCES

Management assesses our liquidity by our ability to generate cash to fund operations. Significant factors in the management of liquidity are: funds generated by operations; levels of accounts receivable, inventories,
accounts payable and capital expenditures; adequate lines of credit; and financial flexibility to attract long-term capital on satisfactory terms. As of March 28, 2008, we had cash and equivalents of $32.0 million.

Historically, we have generated cash from operations in excess of working capital requirements, and we expect to do so in the future. Net cash provided
by operating activities was $2.4 million in the three months ended March 28, 2008 compared to cash provided by operating activities of $24.8 million in the three months ended March 30, 2007. Cash provided by operating activities in the
current quarter was impacted by the cash outlay for restructuring actions, timing of accounts receivable collections, rate of inventory turnover, the buildup of bridging inventories to support our manufacturing move and the payment of current
liabilities.

Net cash used in investing activities was $10.0 million and $23.6 million in the three months ended March 28, 2008 and
March 30, 2007, respectively. Expenditures for property, plant and equipment totaled $9.0 million and $7.2 million in the three months ended March 28, 2008 and March 30, 2007, respectively. Expenditures in the three months ended
March 28, 2008 primarily comprised expenditures associated with the new Milpitas Plant and continuation of upgrades and expansion of our Eye Care manufacturing facility in China. Expenditures in the three months ended March 30, 2007
primarily comprised expenditures to upgrade and expand our Eye Care manufacturing facility in China and continuation of upgrades to our manufacturing facilities in Puerto Rico and Uppsala, Sweden. Expenditures for demonstration (demo) and bundled
equipment, primarily phacoemulsification and microkeratome surgical equipment, were $4.2 million and $1.9 million in the three months ended March 28, 2008 and March 30, 2007, respectively. We maintain demo and bundled equipment to
facilitate future sales of similar equipment and related products to our customers. Expenditures in the three months ended March 30, 2007 also included $13.5 million for the acquisition of WFSI. We capitalize internal-use software cost
after technical feasibility has been established. In 2008, we expect to invest approximately $45.0 million to $55.0 million in property, plant and equipment, demo and bundled equipment, and capitalized software as part of the overall expansion
of our business, including the incremental impact from the IntraLase acquisition capital spending.

Net cash provided by financing
activities was $13.0 million in the three months ended March 28, 2008. We received proceeds of $11.7 million from net short-term borrowings and $1.4 million from the sale of stock to employees. Net cash provided by financing activities was $7.1
million in the three months ended March 28, 2007. We received proceeds of $6.0 million from the sale of stock to employees and $1.1 million excess tax benefits from share-based compensation.



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As of March 28, 2008, the revolving line of credit included outstanding cash borrowings of
approximately $71.7 million and commitments to support letters of credit totaling $8.8 million issued on our behalf for normal operating purposes which resulted in an available balance of $219.5 million.

Borrowings under the Credit Facility, if any, bear interest at current market rates plus a margin based upon our ratio of debt to EBITDA, as defined. The
incremental interest margin on borrowings under the Credit Facility decreases as our ratio of debt to EBITDA decreases to specified levels. During the first quarter of 2008, this interest margin was 1.75% over the applicable LIBOR rate.
Additionally, we can borrow at the prevailing prime rate of interest plus an interest margin of 0.75%. The average annual rate of interest during the first quarter of 2008, inclusive of incremental margin, was 5.87% and 6.51% for the revolving
credit facility and term loan, respectively. Under the Credit Facility, certain transactions may trigger mandatory prepayment of borrowings, if any. Such transactions may include equity or debt offerings, certain asset sales and extraordinary
receipts. We pay a quarterly fee (1.95% per annum at March 28, 2008) on the average balance of outstanding letters of credit and a quarterly commitment fee (0.50% per annum at March 28, 2008) on the average unused portion of the revolving
credit facility. In addition, we make mandatory quarterly amortization payments (1.0% per annum at March 28, 2008) on the outstanding balance of the term loan. The revolver component of the Credit Facility provides that we maintain certain
financial and operating covenants which include, among other provisions, maintaining specific leverage and coverage ratios. Certain covenants under the revolving credit facility may limit the incurrence of additional indebtedness. Our revolving
credit facility prohibits dividend payments by us. On October 5, 2007, as a result of the 2007 Recall, we amended the Credit Facility. The amendment changed the Maximum Consolidated Total Leverage Ratio for certain quarterly periods.
Additionally, for purposes of calculating this ratio as well as the Minimum Consolidated Interest Coverage Ratio, we were permitted to exclude certain recall costs and related impacts. We were in compliance with these covenants at March 28,
2008. The Credit Facility is collateralized by a first priority perfected lien on, and pledge of, all of our combined present and future property and assets (subject to certain exclusions), 100% of the stock of the domestic subsidiaries, 66% of the
stock of foreign subsidiaries and all present and future intercompany debts.

Our cash position includes amounts denominated in foreign
currencies, and the repatriation of those cash balances from some of our non-U.S. subsidiaries may result in additional tax costs. However, these cash balances are generally available without legal restriction to fund ordinary business
operations.

We believe that the net cash provided by our operating activities, supplemented as necessary with borrowings available under
our revolving credit facility and existing cash and equivalents, will provide sufficient resources to fund the expected 2008 capital expenditures, and to meet our working capital requirements, debt service and other cash needs over the next year.

We are partially dependent upon the reimbursement policies of government and private health insurance companies. Government and
private sector initiatives to limit the growth of health care costs, including price regulation and competitive pricing, are continuing in many countries where we do business. As a result of these changes, the marketplace has placed increased
emphasis on the delivery of more cost-effective medical therapies. While we have been unaware of significant price resistance resulting from the trend toward cost containment, changes in reimbursement policies and other reimbursement
methodologies and payment levels could have an adverse effect on our pricing flexibility. Additionally, the current trend among U.S. hospitals and other customers of medical device manufacturers is to consolidate into larger purchasing groups to
enhance purchasing power. The enhanced purchasing power of these larger customers may also increase the pressure on product pricing, although we are unable to estimate the potential impact at this time.

Inflation.Although at reduced levels in recent years, inflation may cause upward pressure on the cost of goods and services used by
us. The competitive and regulatory environments in many markets substantially limit our ability to fully recover these higher costs through increased selling prices. We continually seek to mitigate the adverse effects of inflation through
cost containment and improved productivity and manufacturing processes.

Foreign currency fluctuations.Approximately 59% of
our revenues for the three months ended March 28, 2008 were derived from operations outside the United States and a significant portion of our cost structure is denominated in currencies other than the U.S. dollar, primarily the Japanese yen
and the euro. Therefore, we are subject to fluctuations in sales and earnings reported in U.S. dollars as a result of changing currency exchange rates.

The impact of foreign currency fluctuations on sales resulted in an increase of $16.3 million for the three months ended March 28, 2008. These fluctuations were due primarily to the fluctuations of the Japanese
yen and the euro versus the U.S. dollar. The impact of foreign currency fluctuations on sales resulted in an increase of $6.0 million for the three months ended March 30, 2007. These fluctuations were due primarily to fluctuations of the
Japanese yen and the euro versus the U.S. dollar.

Contractual obligations. We have contractual obligations for long-term debt,
interest on long-term debt, operating lease obligations, service contracts and other purchase obligations that were summarized in a table of Contractual Obligations in our



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Annual Report on Form 10-K for the year ended December 31, 2007. Since December 31, 2007, there have been no material changes to the table of
Contractual Obligations of the Company, outside of the ordinary course of business.

Off-balance sheet arrangements. We had no
off-balance sheet arrangements at March 28, 2008 as defined in Regulation S-K Item 303(a)(4).

Recent Accounting Standards

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157 Fair Value Measurements (SFAS No. 157).
SFAS No. 157 defines fair value, establishes a framework for measuring fair value within generally accepted accounting principles, and expands disclosure requirements regarding fair value measurements. Although SFAS No. 157 does not require any new
fair value measurements, its application may, in certain instances, change current practice. Where applicable, SFAS No. 157 simplifies and codifies fair value related guidance previously issued within GAAP. We have adopted FASB Staff Position 157-2
Effective Date of FASB Statement No. 157 (FSP 157-2), issued February 2008, and as a result we applied the provisions of SFAS No. 157 that are applicable as of January 1, 2008, which had no material effect on our consolidated
financial statements. FSP 157-2 delays the effective date of SFAS No. 157 for certain non-financial assets and non-financial liabilities until January 1, 2009.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an amendment of FASB Statement No. 115 (SFAS
No. 159). SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. We have adopted SFAS No. 159 on January 1, 2008, which did not have an impact on the
consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (SFAS
No. 141R), and SFAS No. 160, Accounting and Reporting of Noncontrolling Interest in Consolidated Financial Statements, an amendment of ARB No. 51 (SFAS No. 160). These new standards will
significantly change the financial accounting and reporting of business combination transactions and noncontrolling (or minority) interests in consolidated financial statements. We will be required to adopt SFAS No. 141R and SFAS No. 160
on or after December 15, 2008. We have not yet determined the effect, if any, that the adoption of SFAS No. 141R and SFAS No. 160 will have on its consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS No. 161).
SFAS No. 161 is intended to improve financial reporting of derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entitys financial position, financial
performance, and cash flows. SFAS No, 161 is effective for us beginning January 1, 2009. We are evaluating the impact of this new standard and currently do not anticipate a material impact on our financial statements as a result of the
implementation of SFAS No. 161.

Certain Factors and Trends Affecting AMO and Its Businesses

Our disclosure and analysis in this report contain
forward-looking information about our companys financial results and estimates, business prospects and future products that involve substantial risks and uncertainties. These statements constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. From time to time, we also may provide oral or written forward-looking statements in other materials we release to the public. Forward-looking statements give our current
expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historic or current facts. They use words such as anticipate, estimate, expect,
project, intend, plan, believe, will, and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. In particular, these
include statements relating to future actions, prospective products, product approvals or approved indications, reimbursement rates, future performance or results of current and anticipated products, sales efforts, expenses, interest rates, foreign
exchange rates, and the outcome of contingencies, such as legal proceedings, financial results, and the expected results and benefits of our strategic initiatives and restructuring activities. Among the factors that could cause actual results to
differ materially are the following:



| |  |  | risks associated with the timing, costs and expected benefits of our restructuring activities;
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | uncertainties associated with the research and development and regulatory processes;
| | - |  | ------------------------------------------------------------------------------------



| |  |  | our ability to make and successfully integrate acquisitions or enter into strategic alliances;
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | exposure to risks associated with doing business outside of the United States, where we conduct a significant amount of our sales and operations;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | foreign currency risks and fluctuation in interest rates;
| | - |  | ---------------------------------------------------------



| |  |  | our ability to introduce new commercially successful products in a timely and effective manner;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | our ability to maintain a sufficient and timely supply of products we manufacture;
| | - |  | ----------------------------------------------------------------------------------



| |  |  | our reliance on sole source suppliers for raw materials and other products, and single sites of manufacturing;
| | - |  | --------------------------------------------------------------------------------------------------------------



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| |  |  | intense competition from companies with substantially more resources and a greater marketing scale;
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | risks and expenses associated with our ability to protect our intellectual property rights;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | risks and expenses associated with intellectual property litigation and infringement claims;
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | unexpected losses due to product liability claims, product recalls or corrections, or other litigation;
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | risks associated with our ability to regain market share in the multipurpose solution segment following our 2006 and 2007 recalls;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------



| |  |  | our ability to maintain our relationships with health care providers;
| | - |  | ---------------------------------------------------------------------



| |  |  | concentration of revenue with corporate LASIK chains;
| | - |  | -----------------------------------------------------



| |  |  | risks, uncertainties and delays associated with extensive government regulation of our business, including risks associated with regulatory compliance, quality
systems standards, complaint-handling, reimbursement and regulation of relationships with health care providers;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our ability to attract, hire and retain qualified personnel;
| | - |  | ------------------------------------------------------------



| |  |  | risks associated with indemnification obligations and potential tax liabilities associated with our spin-off from Allergan;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | our significant debt, which contains covenants limiting our business activities;
| | - |  | --------------------------------------------------------------------------------



| |  |  | changes in market acceptance of laser vision correction;
| | - |  | --------------------------------------------------------



| |  |  | the possibility of long-term side effects and adverse publicity regarding laser correction surgery; and
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | the effect of weak or uncertain general economic conditions on the ability of individuals to afford refractive procedures.
| | - |  | --------------------------------------------------------------------------------------------------------------------------

We cannot guarantee that any forward-looking statement will be realized. Achievement of future results is subject to risks, uncertainties and inaccurate
assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from past results and those anticipated, estimated or projected. Investors should bear
this in mind as they consider forward-looking statements.

We undertake no obligation to publicly update forward-looking statements,
whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our Forms 10-Q, 8-K and 10-K reports to the Securities and Exchange Commission. Our Form
10-K filing for the 2007 fiscal year listed various important factors that could cause actual results to differ materially from expected and historic results. We note these factors for investors as permitted by the Private Securities Litigation
Reform Act of 1995. Readers can find them in Item 1A of the Form 10-K under the heading Risk Factors. We incorporate that section of that Form 10-K in this filing and encourage investors to refer to it. You should understand that it
is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

We routinely monitor the risks associated with fluctuations in currency exchange rates and interest rates. We address these risks through controlled risk management that may include the use of derivative financial instruments to
economically hedge or reduce these exposures. We do not expect to enter into financial instruments for trading or speculative purposes.

Given the inherent limitations of forecasting and the anticipatory nature of the exposures intended to be hedged, there can be no assurance that such programs will offset more than a portion of the adverse financial impact resulting from
unfavorable movements in either interest or foreign exchange rates. In addition, the timing of the accounting for recognition of gains and losses related to mark-to-market instruments for any given period may not coincide with the timing of
gains and losses related to the underlying economic exposures and, therefore, may adversely affect our operating results and financial position.

To ensure the adequacy and effectiveness of our interest rate and foreign exchange hedge positions, we continually monitor, from an accounting and economic perspective, our interest rate swap positions and foreign exchange forward and
option positions, when applicable, both on a stand-alone basis and in conjunction with our underlying interest rate and foreign currency exposures.

Interest rate risk. At March 28, 2008, our debt comprises domestic borrowings of $1.1 billion of fixed rate debt and $518.3 million of variable rate debt. If the interest rates on our variable rate debt were to increase or
decrease by 1% for the year, annual interest expense would increase or decrease by approximately $5.2 million based on the amount of outstanding variable rate debt at March 28, 2008.



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The tables below present information about our debt obligations as of March 28, 2008 and
December 31, 2007:

March 28, 2008



|                               |  |                                       |        |   |                 |   |       |      |  |   |       |   |  |      |       |   |            |   |       |       |  |   |           |   |  |   |           |   |  |   |          
|------------------------------ |  | ------------------------------------- | ------ | - | --------------- | - | ----- | ---- |  | - | ----- | - |  | ---- | ----- | - | ---------- | - | ----- | ----- |  | - | --------- | - |  | - | --------- | - |  | - | ---------
|                               |  | Maturing in                           |        |   | FairMarketValue
|                               |  | 2008                                  |        |   | 2009            |   |       | 2010 |  |   | 2011  |   |  | 2012 |       |   | Thereafter |   |       | Total |  |  
|                               |  | (in thousands, except interest rates)
|LIABILITIES                    |  |                                       |        |   |                 |   |       |      |  |   |       |   |  |      |       |   |            |   |       |       |  |   |           |   |  |   |           |   |  |   |          
|Debt Obligations:              |  |                                       |        |   |                 |   |       |      |  |   |       |   |  |      |       |   |            |   |       |       |  |   |           |   |  |   |           |   |  |   |          
|Fixed Rate                     |  | $                                     |       |   |                 | $ |      |      |  | $ |      |   |  | $    |      |   |            | $ |      |       |  | $ | 246,105   |   |  | $ | 246,105   |   |  | $ | 230,970  
|Weighted Average Interest Rate |  |                                       |       |   |                 |   |      |      |  |   |      |   |  |      |      |   |            |   |      |       |  |   | 2.50      | % |  |   | 2.50      | % |  |   |          
|Fixed Rate                     |  | $                                     |       |   |                 | $ |      |      |  | $ |      |   |  | $    |      |   |            | $ |      |       |  | $ | 105,000   |   |  | $ | 105,000   |   |  | $ | 84,242   
|Weighted Average Interest Rate |  |                                       |       |   |                 |   |      |      |  |   |      |   |  |      |      |   |            |   |      |       |  |   | 1.375     | % |  |   | 1.375     | % |  |   |          
|Fixed Rate                     |  | $                                     |       |   |                 | $ |      |      |  | $ |      |   |  | $    |      |   |            | $ |      |       |  | $ | 500,000   |   |  | $ | 500,000   |   |  | $ | 361,810  
|Weighted Average Interest Rate |  |                                       |       |   |                 |   |      |      |  |   |      |   |  |      |      |   |            |   |      |       |  |   | 3.25      | % |  |   | 3.25      | % |  |   |          
|Fixed Rate                     |  | $                                     |       |   |                 | $ |      |      |  | $ |      |   |  | $    |      |   |            | $ |      |       |  | $ | 250,000   |   |  | $ | 250,000   |   |  | $ | 216,250  
|Weighted Average Interest Rate |  |                                       |       |   |                 |   |      |      |  |   |      |   |  |      |      |   |            |   |      |       |  |   | 7.50      | % |  |   | 7.50      | % |  |   |          
|Variable Rate                  |  | $                                     | 71,700 |   |                 | $ |      |      |  | $ |      |   |  | $    |      |   |            | $ |      |       |  | $ |          |   |  | $ | 71,700    |   |  | $ | 71,700   
|Weighted Average Interest Rate |  |                                       | 5.00   | % |                 |   |      |      |  |   |      |   |  |      |      |   |            |   |      |       |  |   |          |   |  |   | 5.00      | % |  |   |          
|Variable Rate                  |  | $                                     | 4,500  |   |                 | $ | 4,500 |      |  | $ | 4,500 |   |  | $    | 4,500 |   |            | $ | 4,500 |       |  | $ | 424,125   |   |  | $ | 446,625   |   |  | $ | 446,625  
|Weighted Average Interest Rate |  |                                       | 5.00   | % |                 |   | 5.50  | %    |  |   | 5.50  | % |  |      | 5.50  | % |            |   | 5.75  | %     |  |   | 5.75      | % |  |   | 5.50      | % |  |   |          
|Total Debt Obligations         |  | $                                     | 76,200 |   |                 | $ | 4,500 |      |  | $ | 4,500 |   |  | $    | 4,500 |   |            | $ | 4,500 |       |  | $ | 1,525,230 |   |  | $ | 1,619,430 |   |  | $ | 1,411,597
|Weighted Average Interest Rate |  |                                       | 5.00   | % |                 |   | 5.50  | %    |  |   | 5.50  | % |  |      | 5.50  | % |            |   | 5.75  | %     |  |   | 4.39      | % |  |   | 4.37      | % |  |   |          

December 31, 2007



|                               |  |                                       |        |   |      |   |       |      |  |   |       |   |  |      |       |   |            |   |       |       |  |   |                  |   |  |   |           |   |  |   |          
|------------------------------ |  | ------------------------------------- | ------ | - | ---- | - | ----- | ---- |  | - | ----- | - |  | ---- | ----- | - | ---------- | - | ----- | ----- |  | - | ---------------- | - |  | - | --------- | - |  | - | ---------
|                               |  | Maturing in                           |        |   |     
|                               |  | 2008                                  |        |   | 2009 |   |       | 2010 |  |   | 2011  |   |  | 2012 |       |   | Thereafter |   |       | Total |  |   | Fair MarketValue
|                               |  | (in thousands, except interest rates)
|LIABILITIES                    |  |                                       |        |   |      |   |       |      |  |   |       |   |  |      |       |   |            |   |       |       |  |   |                  |   |  |   |           |   |  |   |          
|Debt Obligations:              |  |                                       |        |   |      |   |       |      |  |   |       |   |  |      |       |   |            |   |       |       |  |   |                  |   |  |   |           |   |  |   |          
|Fixed Rate                     |  | $                                     |       |   |      | $ |      |      |  | $ |      |   |  | $    |      |   |            | $ |      |       |  | $ | 246,105          |   |  | $ | 246,105   |   |  | $ | 226,038  
|Weighted Average Interest Rate |  |                                       |       |   |      |   |      |      |  |   |      |   |  |      |      |   |            |   |      |       |  |   | 2.50             | % |  |   | 2.50      | % |  |   |          
|Fixed Rate                     |  | $                                     |       |   |      | $ |      |      |  | $ |      |   |  | $    |      |   |            | $ |      |       |  | $ | 105,000          |   |  | $ | 105,000   |   |  | $ | 92,400   
|Weighted Average Interest Rate |  |                                       |       |   |      |   |      |      |  |   |      |   |  |      |      |   |            |   |      |       |  |   | 1.375            | % |  |   | 1.375     | % |  |   |          
|Fixed Rate                     |  | $                                     |       |   |      | $ |      |      |  | $ |      |   |  | $    |      |   |            | $ |      |       |  | $ | 500,000          |   |  | $ | 500,000   |   |  | $ | 400,425  
|Weighted Average Interest Rate |  |                                       |       |   |      |   |      |      |  |   |      |   |  |      |      |   |            |   |      |       |  |   | 3.25             | % |  |   | 3.25      | % |  |   |          
|Fixed Rate                     |  | $                                     |       |   |      | $ |      |      |  | $ |      |   |  | $    |      |   |            | $ |      |       |  | $ | 250,000          |   |  | $ | 250,000   |   |  | $ | 230,000  
|Weighted Average Interest Rate |  |                                       |       |   |      |   |      |      |  |   |      |   |  |      |      |   |            |   |      |       |  |   | 7.50             | % |  |   | 7.50      | % |  |   |          
|Variable Rate                  |  | $                                     | 60,000 |   |      | $ |      |      |  | $ |      |   |  | $    |      |   |            | $ |      |       |  | $ |                 |   |  | $ | 60,000    |   |  | $ | 60,000   
|Weighted Average Interest Rate |  |                                       | 5.00   | % |      |   |      |      |  |   |      |   |  |      |      |   |            |   |      |       |  |   |                 |   |  |   | 5.00      | % |  |   |          
|Variable Rate                  |  | $                                     | 4,500  |   |      | $ | 4,500 |      |  | $ | 4,500 |   |  | $    | 4,500 |   |            | $ | 4,500 |       |  | $ | 424,125          |   |  | $ | 446,625   |   |  | $ | 446,625  
|Weighted Average Interest Rate |  |                                       | 5.00   | % |      |   | 5.25  | %    |  |   | 5.50  | % |  |      | 5.50  | % |            |   | 5.75  | %     |  |   | 5.75             | % |  |   | 5.50      | % |  |   |          
|Total Debt Obligations         |  | $                                     | 64,500 |   |      | $ | 4,500 |      |  | $ | 4,500 |   |  | $    | 4,500 |   |            | $ | 4,500 |       |  | $ | 1,525,230        |   |  | $ | 1,607,730 |   |  | $ | 1,455,488
|Weighted Average Interest Rate |  |                                       | 5.00   | % |      |   | 5.25  | %    |  |   | 5.50  | % |  |      | 5.50  | % |            |   | 5.75  | %     |  |   | 4.39             | % |  |   | 4.36      | % |  |   |          

Foreign currency risk.Overall, we are a net recipient of currencies other than the
U.S. dollar and, as such, we benefit from a weaker dollar and are adversely affected by a stronger dollar relative to major currencies worldwide. Accordingly, changes in exchange rates, and in particular a strengthening of the U.S. dollar, may
negatively affect our consolidated net sales and gross profit as expressed in U.S. dollars.

We may enter into foreign exchange option and
forward contracts to reduce earnings and cash flow volatility associated with foreign exchange rate changes to allow management to focus its attention on its core business operations. Accordingly, we enter into contracts which change in value as
foreign exchange rates change to economically offset the effect of changes in value of foreign currency assets and liabilities, commitments and anticipated foreign currency denominated sales and operating expenses. We enter into foreign exchange
option and forward contracts in amounts between minimum and maximum anticipated foreign exchange exposures, generally for periods not to exceed one year. We do not enter into foreign exchange option and forward contracts for trading purpose.



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We use foreign currency option contracts, which provide for the sale of foreign currencies to offset
foreign currency exposures expected to arise in the normal course of our business. While these instruments are subject to fluctuations in value, such fluctuations are anticipated to offset changes in the value of the underlying exposures. The
principal currencies subject to this process are the Japanese yen and the euro. The foreign exchange forward contracts are entered into to protect the value of foreign currency denominated monetary assets and liabilities and the changes in the fair
value of the foreign currency forward contracts were economically designed to offset the changes in the revaluation of the foreign currency denominated monetary assets and liabilities. These forward contracts are denominated in currencies which
represent material exposures. The changes in the fair value of foreign currency option and forward contracts are recorded through earnings as Unrealized (gain) loss on derivative instruments, while any realized gains or losses on expired
contracts are recorded through earnings as Other, net in the accompanying unaudited consolidated statements of operations. Any premium cost of purchased foreign exchange option contracts are recorded in Other current assets
and amortized over the life of the options.

The following table provides information about our foreign currency derivative financial
instruments outstanding as of March 28, 2008 and December 31, 2007, respectively. The information is provided in U.S. dollar amounts, as presented in our consolidated financial statements.



|                                        |  |                |      |                   |                              |        |                |   |       |                              |  |       
|--------------------------------------- |  | -------------- | ---- | ----------------- | ---------------------------- | ------ | -------------- | - | ----- | ---------------------------- |  | ------
|                                        |  | March 28, 2008 |      | December 31, 2007
|                                        |  | NotionalAmount |      |                   | AverageContractor StrikeRate |        | NotionalAmount |   |       | AverageContractor StrikeRate
|                                        |  | (in $millions) |      | (in $millions)   
|Foreign currency forward contracts:     |  |                |      |                   |                              |        |                |   |       |                              |  |       
|Pay US$/Receive Foreign Currency:       |  |                |      |                   |                              |        |                |   |       |                              |  |       
|U.K. Pound                              |  | $              | 9.9  |                   |                              | 0.50   |                | $ | 17.9  |                              |  | 0.50  
|Danish Krone                            |  |                | 1.5  |                   |                              | 4.74   |                |   | 1.4   |                              |  | 5.11  
|Swiss Franc                             |  |                | 3.0  |                   |                              | 1.00   |                |   | 4.4   |                              |  | 1.13  
|Norwegian Krone                         |  |                | 0.8  |                   |                              | 5.12   |                |   | 0.8   |                              |  | 5.44  
|Receive US$/Pay Foreign Currency:       |  |                |      |                   |                              |        |                |   |       |                              |  |       
|Swedish Krona                           |  |                | 11.7 |                   |                              | 5.96   |                |   | 24.9  |                              |  | 6.42  
|Canadian Dollar                         |  |                | 2.0  |                   |                              | 1.02   |                |   | 9.1   |                              |  | 0.99  
|Australia Dollar                        |  |                |     |                   |                              |       |                |   | 3.5   |                              |  | 1.14  
|Japanese Yen                            |  |                | 7.1  |                   |                              | 98.97  |                |   | 16.8  |                              |  | 112.90
|                                        |  |                |      |                   |                              |        |                |   |       |                              |  |       
|Total Notional                          |  | $              | 36.0 |                   |                              |        |                | $ | 78.8  |                              |  |       
|                                        |  |                |      |                   |                              |        |                |   |       |                              |  |       
|Estimated Fair Value                    |  | $              |     |                   |                              |        |                | $ | (0.2  | )                            |  |       
|                                        |  |                |      |                   |                              |        |                |   |       |                              |  |       
|Foreign currency purchased put options: |  |                |      |                   |                              |        |                |   |       |                              |  |       
|Japanese Yen                            |  | $              | 16.9 |                   |                              | 118.00 |                | $ | 35.8  |                              |  | 119.02
|Euro                                    |  |                | 30.6 |                   |                              | 1.33   |                |   | 46.0  |                              |  | 1.32  
|Foreign currency sold call options:     |  |                |      |                   |                              |        |                |   |       |                              |  |       
|Japanese Yen                            |  |                | 17.8 |                   |                              | 111.85 |                |   | 29.3  |                              |  | 114.97
|Euro                                    |  |                | 30.6 |                   |                              | 1.33   |                |   | 46.0  |                              |  | 1.32  
|                                        |  |                |      |                   |                              |        |                |   |       |                              |  |       
|Total Notional                          |  | $              | 95.9 |                   |                              |        |                | $ | 157.1 |                              |  |       
|                                        |  |                |      |                   |                              |        |                |   |       |                              |  |       
|Estimated Fair Value                    |  | $              | (7.5 | )                 |                              |        |                | $ | (6.1  | )                            |  |       
|                                        |  |                |      |                   |                              |        |                |   |       |                              |  |       



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The notional principal amount provides one measure of the transaction volume outstanding as of the end of
the period, and does not represent the amount of our exposure to market loss. The estimate of fair value is based on applicable and commonly used prevailing financial market information as of March 28, 2008 and December 31, 2007,
respectively. The amounts ultimately realized upon settlement of these financial instruments, together with the gains and losses on the underlying exposures, will depend on actual market conditions during the remaining life of the instruments.



|Item 4. | Controls and Procedures
|------- | -----------------------

As of the end of the
period covered by this report, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure
controls and procedures. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange
Act of 1934) are effective. In addition, our management evaluated our internal control over financial reporting and there have been no changes during the most recent fiscal quarter ended March 28, 2008 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial reporting.

PART IIOTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

On August 24, 2007 and
September 13, 2007, two purported class action complaints were filed by Scott Kairalla and Barry Galison (the Galison case), respectively, in the U.S. District Court of the Central District of California on behalf of purchasers of
our securities between January 4 and May 25, 2007. The Galison case was dismissed without prejudice on November 20, 2007. An amended consolidated complaint was filed on January 18, 2008 (Consolidated Complaint). The
Consolidated Complaint alleges claims under the Securities Exchange Act of 1934 against us and certain of our officers and directors. The Consolidated Complaint alleges that we made material misrepresentations concerning our Complete
MoisturePlus product. We do not believe that the Consolidated Complaint has merit and intend to defend ourselves vigorously. We may incur substantial expenses in defending against the allegations. In the event of a determination adverse to us or
our officers and directors, we may incur substantial monetary liability, which could have a material adverse effect on our financial position, results of operations or cash flows.

As of March 28, 2008, we have been served or are aware that we have been named as a defendant in approximately 97 product liability lawsuits pending
in various state and federal courts within the U.S. as well as certain jurisdictions outside the U.S. in relation to the May 25, 2007 recall of Complete MoisturePlus Multi-Purpose Solution. These suits involve allegations of personal
injury to 119 consumers. Of these 97 cases, 83 have been filed in various U.S. courts, 11 in Canada and three in jurisdictions outside North America. None of the U.S. personal injury actions have been filed as purported class actions; however, eight
of the Canadian personal injury matters seek class action status. In addition to personal injury suits, three U.S. and four Canadian matters have been filed as purported class actions by uninjured consumers seeking reimbursement for discarded
product pursuant to various consumer protection statutes.

These cases involve complex medical and scientific issues relating to both
liability and damages and are currently at a very early stage. Moreover, most of the plaintiffs seek unspecified damages. Because of this, and because these types of suits are inherently unpredictable, we are unable at this time to predict the
outcome of these matters. We intend to vigorously defend ourselves in these matters; however, we could in future periods enter into settlements or incur judgments that, individually or in the aggregate, could have a material adverse impact on our
financial condition or results of operations in any such period.

While we are involved from time to time in litigation arising in the
ordinary course of business, including product liability claims, we are not currently aware of any other actions against us or Allergan, Inc. (Allergan) relating to the optical medical device business that we believe would have a
material adverse effect on our business, financial condition, results of operations or cash flows. We may be subject to future litigation and infringement claims, which could cause us to incur significant expenses or prevent us from selling our
products. We operate in an industry susceptible to significant product liability claims. Product liability claims may be asserted against us in the future arising out of the 2007 Recall and/or events not known to us at the present time. Under the
terms of the contribution and distribution agreement affecting our spin-off from Allergan, Allergan agreed to assume responsibility for, and to indemnify us against, all current and future litigation relating to its retained businesses and we agreed
to assume responsibility for, and to indemnify Allergan against, all current and future litigation related to the optical medical device business.



|Item 1A. | Risk Factors
|-------- | ------------

There have been no significant
changes to the risk factors disclosed in the Companys Annual Report on Form 10-K for the year ended December 31, 2007.



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|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

ISSUER PURCHASES OF EQUITY SECURITIES



|                                      |  |                                                 |  |                                          |       |                                                                                             |   |                                                                                                                        |  
|------------------------------------- |  | ----------------------------------------------- |  | ---------------------------------------- | ----- | ------------------------------------------------------------------------------------------- | - | ---------------------------------------------------------------------------------------------------------------------- | -
|Period                                |  | (a) Total Numberof Shares(or Units)Purchased(1) |  | (b) AveragePrice Paid perShare (or unit) |       | (c) Total Numberof Shares (or Units)Purchased as Part ofPublicly
AnnouncedPlans or Programs |   | (d) Maximum Number(or Approximate DollarValue) of Shares (or Units)that May Yet BePurchased Under the Plansor Programs
|January 1, 2008 to January 31, 2008   |  |                                                |  |                                          |      |                                                                                             |  |                                                                                                                        | 
|February 1, 2008 to February 29, 2008 |  | 947                                             |  | $                                        | 24.39 |                                                                                             |  |                                                                                                                        | 
|March 1, 2008 to March 28, 2008       |  | 1,035                                           |  | $                                        | 22.38 |                                                                                             |  |                                                                                                                        | 
|Total                                 |  | 1,982                                           |  | $                                        | 23.34 |                                                                                             |  |                                                                                                                        | 

(1) Represents shares purchased from employees to pay taxes related to an employee benefit plan.



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##### Table of Contents

|Item 6. | Exhibits
|------- | --------



|     |  |                                                                                                                                                                                                                  
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | 
|10.1 |  | Agreement dated May 01, 2008 between Advanced Medical Optics, Inc., AMO Germany GmbH, AMO Switzerland GmbH, and Holger Heidrich, Ph.D., assigning and amending Dr. Heidrichs
June 28, 2002 Employment Agreement.
|     | 
|31.1 |  | Certification of James V. Mazzo pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                       
|     | 
|31.2 |  | Certification of Michael J. Lambert pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                   
|     | 
|32.1 |  | Certification of James V. Mazzo and Michael J. Lambert pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.

Date: May 6, 2008



ADVANCED MEDICAL OPTICS, INC./s/ MICHAEL J. LAMBERTMichael J. LambertExecutive Vice President and Chief Financial Officer (Principal Financial Officer)




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EXHIBIT INDEX



|     |  |                                                                                                                                                                                                                  
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1 |  | Agreement dated May 01, 2008 between Advanced Medical Optics, Inc., AMO Germany GmbH, AMO Switzerland GmbH, and Holger Heidrich, Ph.D., assigning and amending Dr. Heidrichs
June 28, 2002 Employment Agreement.
|     | 
|31.1 |  | Certification of James V. Mazzo pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                       
|     | 
|31.2 |  | Certification of Michael J. Lambert pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                   
|     | 
|32.1 |  | Certification of James V. Mazzo and Michael J. Lambert pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                



31