----

**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-K**

**ANNUAL      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934**

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

**BAUSCH      & LOMB INCORPORATED**

| **NEW                YORK**                                                                 | **16-0345235**                                                    |
|---------------------------------------------------------------------------------------------|-------------------------------------------------------------------|
| (State                or other jurisdiction ofincorporation                or organization) | (I.R.S.                EmployerIdentification                No.) |
|                                                                                        |                                                              |
| **ONE                BAUSCH & LOMB PLACE, ROCHESTER, NY**                               | **14604-2701**                                                    |
| (Address                of principal executive offices)                                     | (Zip                Code)                                         |

| Title                of each class                             | Name                of each exchange on which registered |
|----------------------------------------------------------------|----------------------------------------------------------|
| Common                Stock, $0.40 par value    | New                York Stock Exchange    |
|                                                           |                                                     |
|                                                           |                                                     |

----

**Part      III**

----

**Table      of Contents**

| **Part                I**        |                                                                                                                                                          | **Page**                                             |
|----------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------|
|                             |                                                                                                                                                          |                                                 |
| Item                1.           | Business                                                                                                                                                      | 4                                                    |
|                             |                                                                                                                                                          |                                                 |
| Item                1A.          | Risk                Factors                                                                                                                                   | 9                                                    |
|                             |                                                                                                                                                          |                                                 |
| Item                1B.          | Unresolved                Staff Comments                                                                                                                      | 22                                                   |
|                             |                                                                                                                                                          |                                                 |
| Item                2.           | Properties                                                                                                                                                    | 22                                                   |
|                             |                                                                                                                                                          |                                                 |
| Item                3.           | Legal                Proceedings                                                                                                                              | 22                                                   |
|                             |                                                                                                                                                          |                                                 |
| Item                4.           | Submission                of Matters to a Vote of Security Holders                                                                                            | 26                                                   |
|                             |                                                                                                                                                          |                                                 |
| **Part                II**       |                                                                                                                                                          |                                                 |
|                             |                                                                                                                                                          |                                                 |
| Item                5.           | Market                for Bausch & Lomb Incorporated's Common Stock, Related Shareholder                Matters and Issuer Purchases of Equity Securities | 28                                                   |
|                             |                                                                                                                                                          |                                                 |
| Item                6.           | Selected                Financial Data                                                                                                                        | 29                                                   |
|                             |                                                                                                                                                          |                                                 |
| Item                7.           | Management's                Discussion and Analysis of Financial Condition and Results of                Operations                                           | 29                                                   |
|                             |                                                                                                                                                          |                                                 |
| Item                7A.          | Quantitative                and Qualitative Disclosures about Market Risk                                                                                     | 60                                                   |
|                             |                                                                                                                                                          |                                                 |
| Item                8.           | Financial                Statements and Supplementary Data                                                                                                    | 60                                                   |
|                             |                                                                                                                                                          |                                                 |
| Item                9.           | Changes                in and Disagreements with Accountants on Accounting and Financial                Disclosure                                            | 117                                                  |
|                             |                                                                                                                                                          |                                                 |
| Item                9A.          | Controls                and Procedures                                                                                                                        | 117                                                  |
|                             |                                                                                                                                                          |                                                 |
| Item                9B.          | Other                Information                                                                                                                              | 122                                                  |
|                             |                                                                                                                                                          |                                                 |
| **Part                III**      |                                                                                                                                                          |                                                 |
|                             |                                                                                                                                                          |                                                 |
| Item                10.          | Directors                and Executive Officers of Bausch & Lomb Incorporated                                                                             | 123                                                  |
|                             |                                                                                                                                                          |                                                 |
| Item                11.          | Executive                Compensation                                                                                                                         | 130                                                  |
|                             |                                                                                                                                                          |                                                 |
| Item                12.          | Security                Ownership of Certain Beneficial Owners and Management and Related                Stockholder Matters                                  | 138                                                  |
|                             |                                                                                                                                                          |                                                 |
| Item                13.          | Certain                Relationships and Related Transactions                                                                                                 | 140                                                  |
|                             |                                                                                                                                                          |                                                 |
| Item                14.          | Principal                Accounting Fees and Services                                                                                                         | 142                                                  |
|                             |                                                                                                                                                          |                                                 |
| **Part                IV**       |                                                                                                                                                          |                                                 |
|                             |                                                                                                                                                          |                                                 |
| Item                15.          | Exhibits                and Financial Statement Schedules                                                                                                     | 143                                                  |
|                             |                                                                                                                                                          |                                                 |
| **Signatures**                   |                                                                                                                                                          | 144                                                  |
| **Exhibit                Index** |                                                                                                                                                          | 149                                                  |
| **Exhibits**                     |                                                                                                                                                          | (Attached                to the Report on Form 10-K) |

----

**Part      I**

**Item      1.**
**Business**

**(a)      Restatement of Previously Issued Financial Statements**

*Item      8. Financial Statements and Supplementary Data*
*      Note      2 — Restatement*
*Item      8. Financial Statements and Supplementary Data*
*Note      22 — Quarterly Results, Stock Prices and Selected Financial Data (Unaudited)*
*Item      8. Financial Statements and Supplementary Data*
*Note      22 — Quarterly Results, Stock Prices and Selected Financial Data      (Unaudited)*

*Item      8. Financial Statements and Supplementary Data *
*Note      2 — Restatement*
*Note      22 — Quarterly Results, Stock Prices and Selected Financial Data (Unaudited)*

**(b)      General Development of Business**

**(c)      Financial Information about Operating Segments**

*Item      7. Management's Discussion and Analysis of Financial Condition and Results      of      Operations *
*Net      Sales and Income by Business Segment and Geographic Region*
*Item      8. Financial Statements and Supplementary Data*
*Note      5 — Business Segment and Geographic Information*

----

**(d)      Narrative Description of Business**

**Operating      Segments**
* *

**Products**

***Contact      Lenses***
*Bausch      & Lomb*
*Boston*
*Medalist,*
*PureVision*
*SofLens*

*SofLens*
*SofLens*
*Medalist      II*
*Medalist*
*Medalist*

*PureVision*
*PureVision*
*PureVision*
*PureVision*

***Lens      Care***
*ReNu*
*MoistureLoc*
*MoistureLoc*
*ReNu*
*Boston*

----

*      ReNu*
*MultiPlus      *
*MoistureLoc*
*Item      7. Management's Discussion and Analysis of Financial Condition and Results      of      Operations*
*Item      8. Financial Statements and Supplementary Data *
*Note      23 — Subsequent Event*

***Pharmaceuticals***
*Bausch      & Lomb*
*Alrex,*
*Indocollyre,      Liposic*
*Lotemax*
*Moisten*
*Mioclear*
*Ocuvite*
*PreserVision*
*Retisert*
*Zylet*

*PreserVision*

*Bausch      & Lomb*
*Advanced      Eye Relief*

*Zylet*
*      Retisert,*

***Cataract      and Vitreoretinal Surgery***
*Millennium*
*Stellaris*
*Bausch      & Lomb*
*Akreos,      AMVISC*
*Millennium*
*SofPort*
*Storz*

----

*Akreos*
*Easy-Load*
*SofPort*
*SofPort*
*Akreos*
*Akreos*
*Stellaris*
*Stellaris*

***Refractive      Surgery***
*Hansatome*
*Technolas*
*Zyoptix*

*Hansatome*
*Zyoptix      XP*
*Zyoptix      XP*
*Zyoptix*
*Zyoptix*

**Suppliers      and Customers**

**Patents      and Licenses**
*PureVision*

**Trademarks**
*Akreos,      Alrex, AMVISC, Bausch & Lomb, Bausch & Lomb*
*Advanced      Eye Relief, Boston, Easy-Load, Hansatome, Indocollyre, Liposic, Lotemax,      Medalist, Millennium, Mioclear, Moisten, MoistureLoc, Ocuvite, PreserVision,      PureVision, ReNu, ReNu MultiPlus, Retisert, SofLens, SofLens59, SofPort, Storz,      Technolas, Zylet *
* Zyoptix*

----

**Seasonality      and Working Capital**

**Competition      and Markets**

**Research      and Development**

**Government      Regulation**

**Environment**

**Employee      Relations**

**(d)      Financial Information about Foreign and Domestic      Operations**

*Geographic      Region*
*Item      8. Financial Statements and Supplementary Data*
*Note      5 — Business Segment and Geographic Information*

**(e)      Available Information**

----

**Item      1A.**
**Risk      Factors**

**(a)      Risks Related to Our Business and Industry**

**The      markets for our eye care products are intensely competitive and new medical      and      technological developments may reduce the need for our      products.**

**Resources      devoted to research and development may not yield new products that achieve      commercial success**

----

**Market      acceptance of our products requires, in many cases, that users of our products      obtain adequate reimbursement from third-party payers.**

**Federal,      state and non-U.S. laws pertaining to healthcare fraud and abuse could      materially adversely affect our business and results of      operations.**

**Healthcare      initiatives and other cost-containment pressures could cause us to sell our      products at lower prices, resulting in less revenue to us.**

**Economic      conditions and price competition may cause sales of our products used in      elective surgical procedures to decline and reduce our      profitability.**

----

**If      we fail to maintain our relationships with healthcare providers, including      ophthalmologists, optometrists, opticians, hospitals, ambulatory surgical      centers, corporate optometry chains and group purchasing organizations,      customers may not buy our products and our revenue and profitability may      decline.**

**The      majority of our business is conducted outside the United States, subjecting      us      to additional business risks, including increased costs, market and currency      fluctuations, business interruption and changing demands, all of which may      result in fluctuations and declines in our sales and      profits.**

| ·   | unexpected                changes in foreign regulatory                requirements; |
|--------------------|--------------------------------------------------------------------------------------|

| ·   | differing                local product preferences and product                requirements; |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | political                and economic instability; |
|--------------------|----------------------------------------------------|

| ·   | changes                in foreign medical reimbursement and coverage policies and                programs; |
|--------------------|------------------------------------------------------------------------------------------------------------|

| ·   | diminished                protection of intellectual property in some countries outside the                United                States; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | trade                protection measures and import or export licensing                requirements; |
|--------------------|------------------------------------------------------------------------------------------------------|

| ·   | potential                tax costs associated with repatriating cash from our non-U.S.                subsidiaries; |
|--------------------|---------------------------------------------------------------------------------------------------------------------|

| ·   | difficulty                in staffing and managing foreign                operations; |
|--------------------|---------------------------------------------------------------------------------------|

| ·   | differing                labor regulations; and |
|--------------------|-------------------------------------------------|

| ·   | potentially                negative consequences from changes in tax                laws. |
|--------------------|-------------------------------------------------------------------------------------------|

**If      we were to experience an interruption of our manufacturing operations, our      business, financial condition and operating results would be materially      harmed.**

----

**We      rely on independent suppliers for raw materials and we could experience      inventory shortages if we were required to use an alternative supplier on short      notice. **

**If      we fail to attract, hire and retain qualified personnel, we may not be able      to      design, develop, market or sell our products or successfully manage our      business.**

**(b)      Risks Related to Our Financial Condition**

**Our      indebtedness could adversely affect our financial health.**

| ·   | increase                our vulnerability to general adverse economic and industry                conditions; |
|--------------------|---------------------------------------------------------------------------------------------------------------|

| ·   | require                us to dedicate a substantial portion of our cash flow from operations                to                payments on our indebtedness, thereby reducing the availability of                our                cash flow to fund working capital, capital expenditures, acquisitions,                research and development efforts and other general corporate                purposes; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | limit                our flexibility in planning for, or reacting to, changes in our business                and the industry in which we                operate; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | place                us at a competitive disadvantage if any of our competitors have less                debt; |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| ·   | limit                our ability to borrow additional funds;                and |
|--------------------|---------------------------------------------------------------------------------|

| ·   | make                it more difficult for us to satisfy our obligations with respect                to our                debt, including our obligation to repay amounts borrowed under our                credit                facilities or repurchase outstanding public debentures under certain                circumstances. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Item      7. Management's Discussion and Analysis of Financial Condition and Results      of      Operations*
*Item      8. Financial Statements and Supplementary Data *
*Note      11 — Debt*

----

**We      are vulnerable to interest rate risk with respect to our debt.**

**The      market price of our Common stock has been volatile and may continue to be      volatile, and the value of any investment may decline.**

| ·   | our                business performance and financial                results; |
|--------------------|-------------------------------------------------------------------------------|

| ·   | changes                in our markets; |
|--------------------|----------------------------------------|

| ·   | pending                and threatened litigation against                us; |
|--------------------|-----------------------------------------------------------------------------|

| ·   | the                recall of *MoistureLoc*                from the market; |
|--------------------|----------------------------------------------------------------------------|

| ·   | our                restatement of financial statements for prior                periods; |
|--------------------|------------------------------------------------------------------------------------------|

| ·   | the                Audit Committee's and/or other Company investigations; and |
|--------------------|-------------------------------------------------------------------------------|

| ·   | our                assessment of our internal control over financial                reporting. |
|--------------------|------------------------------------------------------------------------------------------------|

**We      incur substantial costs with respect to pension benefits and providing      healthcare for our employees.**

**Changes      in accounting may affect our reported earnings and operating income.**

**Catastrophic      events may disrupt our business.**

----

**Acquisitions      and joint ventures may have an adverse effect on our      business.**

| ·   | difficulties                in the integration of the operations, technologies, products and                personnel                of the acquired company and establishment of appropriate accounting                controls and reporting procedures and other regulatory compliance                procedures; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | risks                of entering markets in which we have no or limited prior                experience; |
|--------------------|----------------------------------------------------------------------------------------------------------|

| ·   | potential                loss of employees; |
|--------------------|---------------------------------------------|

| ·   | an                inability to identify and consummate future acquisitions on favorable                terms or at all; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|

| ·   | diversion                of management’s attention away from other business                concerns; |
|--------------------|------------------------------------------------------------------------------------------------------------|

| ·   | expenses                of any unknown or potential liabilities of the acquired                company; |
|--------------------|---------------------------------------------------------------------------------------------------------|

| ·   | expenses,                including restructuring expenses, to shut-down our own locations                and/or                terminate our employees; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | dilution                of earnings per share; and |
|--------------------|----------------------------------------------------|

| ·   | risks                inherent in accounting allocations and consequences                thereof. |
|--------------------|--------------------------------------------------------------------------------------------------|

**We      are in the process of upgrading certain of our management information systems      and we cannot ensure that there will not be associated excessive costs or      disruption of our business.**

**The      spending to address the **
***MoistureLoc***
**recall,      our investigations and consent solicitations and bank waiver matters could      negatively affect our financial performance.**
*MoistureLoc*
*MoistureLoc*
*(d)      Risks Related to Regulatory Matters*
*MoistureLoc*

*MoistureLoc*
*PureVision*

----

**We      have made certain assumptions and could experience other risks concerning our      financial performance.**
*ReNu      MultiPlus*
*ReNu      MPS*
*MoistureLoc*

**(c)      Risks Related to Litigation, Actions, Claims, Investigations, Internal Control      Deficiencies, the Restatement of Our Financial Statements, the Delay in Filing      Our Periodic Reports and Intellectual Property**

**Unfavorable      results in pending and future claims and litigation matters as well as the      outcome of pending or future investigations could have an adverse impact on      us.**
*Item      3. Legal Proceedings*

*Item      8. Financial Statements and Supplementary Data *
*Note      2 — Restatement *

*Item      3. Legal Proceedings*

----

**We      may not have sufficient insurance to cover our liability in our pending      litigation claims and future claims either due to coverage limits or as a result      of insurance carriers seeking to deny coverage of such claims, which in either      case could have a material adverse effect on our business and financial      condition.**

**Our      potential indemnification obligations and limitations of our director and      officer liability insurance could have a material adverse effect on our      business, results of operations and financial condition.**

**Our      potential liability relating to a Notice of Final Partnership Administrative      Adjustment from the Internal Revenue Service **
**could      have a material adverse effect on our financial results**
**.**

----

**Management      has identified a number of material weaknesses in our internal control over      financial reporting.**
*Item      9A.*
*Controls      and Procedures *
*Item      9A. Controls and Procedures*

**We      may face risks related to the recent restatement of our financial      statements.**
*Item      8. Financial Statements and Supplementary Data*
*Note      2 — Restatement*
*Item      8. Financial Statements and Supplementary Data*
*Note      22 — Quarterly Results, Stock Prices and Selected Financial Data (Unaudited)*
*Item      8. Financial Statements and Supplementary Data*
*Note      22 — Quarterly Results, Stock Prices and Selected Financial Data      (Unaudited)*

*Item      3. Legal Proceedings*
*Item      7. Management's Discussion and Analysis of Financial Condition and Results      of      Operations*
*Item      8. Financial Statements and Supplementary Data *
*Note      21 — Other Matters*

**We      expect to continue to incur significant expenses related to our internal control      over financial reporting and the preparation of our financial      statements.**
* *

----

**We      have postponed the filing of this Annual Report and of our Quarterly Reports      on      Form 10-Q for the quarters ended September 24, 2005, April 1, 2006, July 1,      2006      and September 30, 2006. As a result, we do not have current financial      information available and will be limited in our ability to register our      securities for offer and sale until we are deemed a current filer with the      SEC.**

**As      a result of the delays in filing our periodic reports, we required certain      waivers in connection with the delivery of financial statements and related      matters under financing arrangements for our public and bank debt. We may      require additional waivers in the future, and failure to obtain the necessary      waivers could have a material adverse effect on our business, liquidity and      financial condition.**

**The      delay in filing this Annual Report on Form 10-K with the SEC and any failure      to      satisfy other NYSE listing requirements could cause the NYSE to commence      suspension or delisting procedures with respect to our common      stock.**

| ·   | the                liquidity of our common stock; |
|--------------------|---------------------------------------------------|

| ·   | the                market price of our common stock; |
|--------------------|------------------------------------------------------|

| ·   | the                number of institutional and other investors that will consider investing                in our common stock; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                availability of information concerning the trading prices and volume                of                our common stock; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                number of broker-dealers willing to execute trades in shares of our                common                stock; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our                ability to obtain equity financing for the continuation of our                operations. |
|--------------------|--------------------------------------------------------------------------------------------------------------|

----

**We      depend on proprietary technologies, and may not be able to protect our      intellectual property rights adequately.**

| ·   | cease                selling or using any of our products that incorporate the challenged                intellectual property, which would adversely affect our                revenue; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | obtain                a license from the holder of the intellectual property right alleged                to                have been infringed, which license may not be available on reasonable                terms, if at all; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | redesign                or, in the case of trademark claims, rename our products to avoid                infringing the intellectual property rights of third parties, which                may                not be possible and could be costly and time-consuming if it is possible                to do so. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Our      products could be subject to claims of infringement. **

| ·   | be                expensive and time consuming to                defend; |
|--------------------|--------------------------------------------------------------------------|

| ·   | cause                us to cease making, licensing or using products that incorporate                the                challenged intellectual property; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | require                us to redesign or reengineer our products, if                feasible; |
|--------------------|-----------------------------------------------------------------------------------------------|

| ·   | divert                management’s attention and resources;                or |
|--------------------|-------------------------------------------------------------------------------------|

| ·   | require                us to enter into royalty or licensing agreements in order to obtain                the                right to use a necessary product, component or                process. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**(d)      Risks Related to Regulatory Matters**

**We      are subject to extensive government regulation that increases our costs and      could prevent us from selling our products**

| ·   | inability                to attract clinical investigators for                trials; |
|--------------------|---------------------------------------------------------------------------------------|

| ·   | inability                to recruit patients at the expected                rate; |
|--------------------|-----------------------------------------------------------------------------------|

| ·   | failure                of the trials to demonstrate a product's safety or                efficacy; |
|--------------------|----------------------------------------------------------------------------------------------------|

| ·   | unavailability                of FDA or other regulatory agencies' accelerated approval                processes; |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

| ·   | inability                to follow patients adequately after                treatment; |
|--------------------|----------------------------------------------------------------------------------------|

| ·   | changes                in the design or formulation of a                product; |
|--------------------|----------------------------------------------------------------------------------|

| ·   | inability                to manufacture sufficient quantities of materials to use for clinical                trials; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------|

| ·   | unforeseen                governmental or regulatory delays; |
|--------------------|--------------------------------------------------------------|

| ·   | failure                of manufacturing facilities to meet regulatory requirements;                or |
|--------------------|-------------------------------------------------------------------------------------------------------|

| ·   | failure                of clinical trial management, oversight or implementation to meet                regulatory requirements. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|

----

**We      have undertaken, and may in the future implement, a product recall or voluntary      market withdrawal, or could be required by a governmental authority to do so,      and could be exposed to significant product liability claims; we may have to      pay      significant amounts to those harmed and may suffer from adverse publicity as      a      result.**
*MoistureLoc*

**Our      worldwide voluntary withdrawal of our **
***ReNu***
**      with **
***MoistureLoc***
**      product has had an adverse effect on our business, which could continue longer      than previously estimated, even permanently**
*MoistureLoc*
** **
*MoistureLoc*
*MoistureLoc*
*MoistureLoc,*
*MoistureLoc*
*Item      1A. Risk Factors*
*Item      7. Management’s Discussion and Analysis of Financial Condition and Results of      Operations*
*Item      8. Financial Statements and Supplementary Data *
*Note      21 — Other Matters*

**Our      activities involve hazardous materials and emissions and may subject us to      environmental liability**

----

**We      may incur increased costs or suffer competitive disadvantage as a result of      recently enacted and proposed changes in laws and      regulations.**

**Item      1B.**
**Unresolved      Staff Comments**

**Item      2.**
**Properties**

**Item      3. **
**Legal      Proceedings**

**Legal      Matters **
*MoistureLoc*

----

***Shareholder      Securities Class Actions***
*In      re      Bausch & Lomb Incorporated Securities Litigation*
*MoistureLoc*

***ERISA-Based      Class Actions***
* *
*In      re      Bausch & Lomb Incorporated ERISA Litigation,*
*MoistureLoc*

***Shareholder      Derivative Actions***
*MoistureLoc*

*In      re      Bausch & Lomb Incorporated Derivative Litigation,*

----

*MoistureLoc*
*Little      v. Zarrella*
*Pinchuck      v. Zarrella*
*MoistureLoc*

*Pinchuck*
*Little*

***Product      Liability Lawsuits***
* *
*ReNu*
*ReNu*
*MoistureLoc*

***Material      Intellectual Property Litigation***
*Rembrandt      Vision Technology, L.P. v. Bausch & Lomb Incorporated and CIBA Vision      Corporation*
*PureVision*

----

***Material      Tax Litigation***
*Item      8. Financial Statements and Supplementary Data *
*Note      10 — Provision for Income Taxes*

**General      Litigation Statement**

*Item      8. Financial Statements and Supplementary Data *
*Note      2 — Restatement *

----

**Item      4.**
**Submission      of Matters to a Vote of Security Holders**

**Executive      Officers of the Registrant**

| **Name                and Age**                       | **Position**                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|-------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Ronald                L. Zarrella (57)                | Chairman                and Chief Executive Officer since 2001; Executive Vice President                and                President, General Motors North America, General Motors Corporation                (1998-2001).                                                                                                                                                                                                                                                |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Gerhard                Bauer (50)                     | Senior                Vice President, Global Operations and Engineering since May 2006;                Vice                President, Global Operations and Engineering for Europe (2001-May                2006).                                                                                                                                                                                                                                                        |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Alan                H. Farnsworth (54)                | Senior                Vice President and President, Europe, Middle East and Africa Region                since                2001; Corporate Vice President, Pharmaceuticals/Europe                (2000-2001).                                                                                                                                                                                                                                                          |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Dwain                L. Hahs (54)                     | Senior                Vice President and President Asia Region since May 2006; Senior Vice                President, Global Operations and Engineering                (2000-2006).                                                                                                                                                                                                                                                                                        |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Paul                G. Howes (52)                1    | Senior                Vice President and President, Americas Region (2003-2007); Vice President,                Mid-Atlantic Business Group, Merck & Co., Inc. (2000-2003); Vice                President Sales and Marketing, Specialty Products, Merck & Co., Inc.                (1998-2001).                                                                                                                                                                  |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| John                M. Loughlin (56)                2 | Senior                Vice President since May 2006; Senior Vice President and President                Asia                Region (2000-2006).                                                                                                                                                                                                                                                                                                                           |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Stephen                C. McCluski (54)               | Senior                Vice President and Chief Financial Officer since 1995.                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| David                R. Nachbar (44)                  | Senior                Vice President, Human Resources since 2002; Senior Vice President,                Human                Resources, The St. Paul Companies, Inc. (1998-2002).                                                                                                                                                                                                                                                                                         |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Robert                B. Stiles (57)                  | Senior                Vice President and General Counsel since 1997.                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Praveen                Tyle (46)                      | Senior                Vice President, Research & Development and Chief Scientific Officer                since 2004; Group Vice President, Pharmaceutical Sciences and                Manufacturing, Biovail Corporation (2003-2004); Vice President, Global                Head, Global Pharmaceutical Sciences, Pharmacia Corporation (2001-2003);                Vice President, Pharmaceutical Sciences - U.S., Pharmacia Corporation                (1999-2001). |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Evon                L. Jones (42)                     | Corporate                Vice President and Chief Information Officer since January 2005;                Senior                Vice President and Chief Information Officer, The Dial Corporation                (2001-2004); Senior Vice President and Chief Information Officer,                America                West Holdings Corporation (1998-2001).                                                                                                           |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Barbara                M. Kelley (60)                 | Corporate                Vice President, Communications and Investor Relations since                2001.                                                                                                                                                                                                                                                                                                                                                                 |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Jurij                Z. Kushner (56)                  | Corporate                Vice President, Controller since 1995.                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Brian                Levy (55)                        | Corporate                Vice President and Chief Medical Officer since 2004; Vice President,                Clinical & Medical Affairs (2000-2004).                                                                                                                                                                                                                                                                                                                  |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Angela                J. Panzarella (48)              | Corporate                Vice President, Global Vision Care since 2001.                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

----

| Gary                M. Phillips (40) | Corporate                Vice President and Vice President Commercial Operations, U.S. Surgical                and                Pharmaceuticals since January 2007; Corporate Vice President, Global                Pharmaceuticals (2002-2006); Executive Director, Strategic Planning,                Novartis Pharmaceuticals                (2000-2002). |
|--------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Efrain                Rivera (50) | Corporate                Vice President and Treasurer since 2004; Corporate Vice President                and                Assistant Treasurer (2003-2004); Leave of Absence (2003); Corporate                Vice                President and President, Latin America and Canada (2002-2003); President,                Bausch & Lomb Latin America and General Manager, Bausch & Lomb                Mexico (2001-2002); Vice President and Controller, Vision Care                (1998-2001). |
|-----------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Henry                C. Tung (47) | Corporate                Vice President, Global Surgical since February 2005; Vice President,                New                Business Development, Boston Scientific Corporation (2000-February                2005).                                                                                                                                                                                                                                                                                      |

----

**Part      II**

**Item      5.**
**Market      for Bausch & Lomb Incorporated's Common Stock, Related Shareholder Matters      and Issuer Purchases of Equity Securities**

*Dividends*
*Item      7. Management's Discussion and Analysis of Financial Condition and Results      of      Operations *

*Quarterly      Stock Prices *
*Item      8. Financial Statements and Supplementary Data*
*Note      22 — Quarterly Results, Stock Prices and Selected Financial Data      (Unaudited)*

**Equity      Compensation Plan Information**

|   Plan                Category                              | Number                of Securities to be Issued Upon Exercise of Outstanding Options,                Warrants                and Rights | Weighted                Average Exercise Price of Outstanding Options, Warrants and                Rights |  Number                of Securities Remaining Available for Future Issuance |
|-----------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------|
| **Options**                                                           |                                                                                                                                     |                                                                                                      |                                                                              |
| Equity                compensation plans approved by shareholders     | 5,375,970                1                                                                                                               | $50.77                                                                                                    | 6,313,107                1                                                        |
|                                                                  |                                                                                                                                     |                                                                                                      |                                                                              |
| Equity                compensation plans not approved by shareholders | 448,267                2                                                                                                                 | $40.28                                                                                                    | -                2                                                                |
|                                                                  |                                                                                                                                     |                                                                                                      |                                                                              |
| Total                Options                                          | 5,824,237                                                                                                                      | $49.96                                                                                                    | 6,313,107                                                               |
|                                                                  |                                                                                                                                     |                                                                                                      |                                                                              |
| **Restricted                Stock Awards**                            |                                                                                                                                     |                                                                                                      |                                                                              |
| Equity                compensation plans approved by shareholders     | 566,268                3                                                                                                                 |                                                                                                      | -                                                                       |
|                                                                  |                                                                                                                                     |                                                                                                      |                                                                              |
| Equity                compensation plans not approved by shareholders | -                2                                                                                                                       |                                                                                                      | -                                                                       |
|                                                                  |                                                                                                                                     |                                                                                                      |                                                                              |
| Total                Restricted Stock Awards                          | 566,268                                                                                                                        |                                                                                                      | -                                                                       |

| 1 | Represents                awards issued under the 1990 Stock Incentive Plan and the 2003 Long-Term                Incentive Plan. Shares remaining available for issuance consist of                6,243,287 from the 2003 Plan of which no more than 1,619,205 shares                may be                issued as grants other than options and SARs and 69,820 shares under                the                Annual Retainer Stock Plan for Non-Employee Directors. There are                no shares                available under the 1990 Stock Incentive                Plan. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | The                2001 Stock Incentive Plan was approved by the Board of Directors                on                January 22, 2001. The Plan provides for an annual pool of shares                for grant                of options and restricted shares equal to two percent of outstanding                shares. Eligible participants include all employees but not officers                or                directors. Options granted under the Plan have an option price equal                to                100 percent of the fair market value of the stock on the date of                grant and                a term of ten years. The options typically vest ratably over three                years                and restricted shares typically vest 50 percent after two years and                50                percent after three years with vesting contingent upon a continued                employment relationship with the Company. Effective January 1, 2003,                the                Board amended this Plan to allow for no further awards under this                Plan. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Included                in this number are performance share awards that were granted under                the                1990 Stock Incentive Plan which upon achievement of performance goals                may                be distributed immediately or deferred under the Restricted Stock                Deferred                Compensation Plan as elected by the participant. At December 31,                2005,                278,057 shares had been deferred and will be paid out in shares based                on                the election made by the                participant. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Issuer      purchases of equity securities**

|    Period                             |  Total                Number of Shares Purchased 1 |   Average                Price Paid Per Share | Total                Number of Shares Purchased as Part of Publicly Announced Programs                2,                3 | Maximum                Number of Shares that May Yet Be Purchased Under the Programs 2,3 |
|------------------------------------------------------|---------------------------------------------------------|---------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------|
| September                25, 2005 - October 22, 2005 | 1,040                                                   | $78.38                                                  | -                                                                                                                         | 2,219,838                                                                                |
| October                23, 2005 - November 19, 2005  | 4,674                                                   | $79.86                                                  | 2,830                                                                                                                     | 2,217,008                                                                                |
| November                20, 2005 - December 31, 2005 | 10,067                                                  | $79.10                                                  | 4,707                                                                                                                     | 2,212,301                                                                                |
| Total                                                | 15,781                                                  | $79.28                                                  | 7,537                                                                                                                     | 2,212,301                                                                                |

| 1 | Shares                purchased during the fourth quarter ended December 31, 2005 include                purchases pursuant to a publicly announced repurchase program (see                footnote 2 below), stock compensation plans and deferred compensation                plans. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | On                January 27, 2004, the Board of Directors authorized a program to                repurchase up to two million shares of the Company's outstanding                Common                stock. There is no expiration date for this program. During the fourth                quarter ended December 31, 2005, 7,537 shares were repurchased at                an                average price of $80.70. Shares repurchased after November 2005 were                through private transactions with the rabbi trust for the Company's                Deferred Compensation Plan. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | On                July 26, 2005, the Board of Directors approved the purchase of up                to an                additional two million shares of the Company's outstanding Common                stock.                There is no expiration date for this program, and since its approval                no                shares have been repurchased. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Item      6. **
**Selected      Financial Data**

*Selected      Financial Data *
*Item      8. Financial Statements and Supplementary Data*
*Note      22 — Quarterly Results, Stock Prices and Selected Financial Data      (Unaudited)*

**Item      7. **
**Management's      Discussion and Analysis of Financial Condition and Results of      Operations**

*Recent      Developments*
*Item      8. Financial Statements and Supplementary Data*
*Note      2 — Restatement*
*.*

*Recent      Developments*
*Item      8. Financial Statements and Supplementary Data*
*Note      23 — Subsequent Event,*
*ReNu*
*MoistureLoc*
*MoistureLoc*

----

**Business      Overview**

*Bausch      & Lomb*

*Item      8. Financial Statements and Supplementary Data*
*Note      1 — Significant Accounting Policies*

| ·   | focusing                on research and development programs to yield a robust                pipeline; |
|--------------------|---------------------------------------------------------------------------------------------------------|

| ·   | expanding                the geographic reach of key products, especially in under-penetrated                markets; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------|

| ·   | enhancing                our organizational capabilities by further implementing disciplined                business processes in all areas, particularly sales;                and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | protecting                the equity represented by the *Bausch                & Lomb*                brand. In the shorter term, this will include activities to rebuild                that                equity in certain markets where brand image has suffered following                the                outbreak of fungal infections among contact lens wearers and the                *MoistureLoc*                recall. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | a                continued focus on faster growing business segments and the launch                of                higher-margin new products in each of our product                categories; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | favorable                demographic trends, such as the aging of the population and an increase                in                the incidence of myopia and presbyopia;                and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | opportunities                to further implement Lean manufacturing techniques and other cost                improvements to enhance margins, particularly for contact lenses                and                intraocular lenses. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Recent      Developments**

**Restatement      of Financial Information **
*Item      9A.*
*Controls      and Procedures *

*Item      8. Financial Statements and Supplementary Data*
*Note      2 — Restatement and Note 22 — *
*Quarterly      Results, Stock Prices and Selected Financial Data (Unaudited)*

----

**Market      Withdrawal of **
***MoistureLoc***
** **
*MoistureLoc*

*      MoistureLoc *
*Item      3. Legal Proceedings,*
*Item      8. Financial Statements and Supplementary Data *
*Note      21*
*      Other Matters *
*Legal      Matters*

*MoistureLoc*
*MoistureLoc*
*MoistureLoc*
*Item      8. Financial Statements and Supplementary Data *
*Note      23 — Subsequent Event*

**Legal      Matters**
*MoistureLoc*

***Shareholder      Securities Class Actions***
*In      re      Bausch & Lomb Incorporated Securities Litigation*
*MoistureLoc*

----

***ERISA-Based      Class Actions***
*In      re      Bausch & Lomb Incorporated ERISA Litigation,*
*MoistureLoc*

***Shareholder      Derivative Actions***
*MoistureLoc*

*In      re      Bausch & Lomb Incorporated Derivative Litigation*

*MoistureLoc*
*Little      v. Zarrella*
*Pinchuck      v. Zarrella*
*MoistureLoc*

----

*Pinchuck*
*Little*

***Product      Liability Lawsuits***
*ReNu*
*ReNu*
*MoistureLoc*

***Material      Intellectual Property Litigation***
*Rembrandt      Vision Technology, L.P. v. Bausch & Lomb Incorporated and CIBA Vision      Corporation*
*PureVision*

***Material      Tax Litigation***
*Item      8. Financial Statements and Supplementary Data*
*Note      10 — Provision for Income Taxes*

----

*Item      3. Legal Proceedings*
* *
*Item      8. Financial Statements and Supplementary Data *
*Note      21 — Other Matters*
*.*

**Financial      Overview**

|                                                                                                                                                  |   | **2005**   |     | 2004                  (Restated) |   | 2003                  (Restated) |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|----------|----------------------------------|--------|----------------------------------|--------|
|                                                                                                                                                  |   | **Amount** |     | **Per                  Share**   |   | Amount                           |   | Per                  Share |   | Amount |   | Per                  Share |   |
| Net                  income                                                                                                                           |   | **$**      | **19.2** |                             | **$**  | **0.35**                         |   | **$** | **153.9** |   | $ | 2.83 |   | $ | 106.0 |   | $ | 1.98 |   |
| Cumulative                  effect of change in accounting principle, net of taxes, due to                  adoption of                  SFAS No. 143 |   |       | **-**    |                             |   | **-**                            |   |   | **-** |   |   | - |   |   | 0.9 |   |   | 0.02 |   |
| Income                  before cumulative effect of  change                  in accounting principle                                             |   | **$**      | **19.2** |                             | **$**  | **0.35**                         |   | **$** | **153.9** |   | $ | 2.83 |   | $ | 106.9 |   | $ | 2.00 |   |
| Average                  Shares Outstanding - Diluted (000s)                                                                                          |   |       |     |                             |   | **55,684**                       |   |   |   |   |   | 54,504 |   |   |   |   |   | 53,519 |   |

| ·   | A                valuation allowance against deferred income tax assets which reduced                reported net income by $149, or $2.67 per share, recorded in the                third                quarter. The need for the allowance resulted from anticipated losses                in                early future periods attributed to the U.S. entities to which the                deferred                tax assets relate and uncertainties surrounding when we will return                to                U.S. profitability. The expected losses result from, among other                things,                the costs associated with the *MoistureLoc*                recall and its expected impact on 2006 financial                results; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Incremental                income tax expense of $9, or $0.17 per share, recorded in the third                quarter associated with our repatriating foreign earnings under the                American Jobs Creation Act of 2004 (AJCA);                and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Amortization                of inventory step-up totaling $2 before taxes ($1 or $0.03 per share                after                taxes) related to purchase accounting adjustments associated with                the 2005                acquisition of Freda. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Income      Taxes *
*Item      8. Financial Statements and Supplementary Data *
*Note      10 — Provision for Income Taxes*

----

| ·   | Reversals                of severance-related restructuring charges of $6 before taxes ($4                or $0.07                per share after taxes), when certain anticipated termination actions                and                plant closures did not occur due to increased demand for certain                product                lines; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | R&D                expense of $6 before taxes ($4 or $0.06 per share after taxes) recorded                in                the fourth quarter associated with acquiring an early-stage pharmaceutical                technology we had previously been developing with a third-party                partner. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Net      Sales and Income by Business Segment and Geographic Region**

**Geographic      Net Sales**

|                           |   |    Net                Sales |        | PercentIncreaseActualDollars |   | PercentIncreaseConstantCurrency |   | Percent                of Total Company Net Sales |   |
|--------------------------------|--------|--------------------------------------------|-------------|------------------------------|--------|---------------------------------|--------|---------------------------------------------------|--------|
| **2005**                       |   |                                       |        |                         |   |                            |   |                                              |   |
| Non-U.S.                       |   | **$**                                      | **1,462.8** |                         |   | **7**                           | **%**  |                                              | **6**  | **%** |   | **62** | **%** |
| U.S.                1          |   |                                       | **891.0**   |                         |   | **3**                           | **%**  |                                              | **3**  | **%** |   | **38** | **%** |
| Total                Company 2 |   | **$**                                      | **2,353.8** |                         |   | **5**                           | **%**  |                                              | **5**  | **%** |   |  |   |
|                           |   |                                       |        |                         |   |                            |   |                                              |   |   |   |   |   |
| 2004                (Restated) |   |                                       |        |                         |   |                            |   |                                              |   |   |   |   |   |
| Non-U.S.                       |   | $                                          | 1,370.0     |                         |   | 14                              | %      |                                              | 6      | % |   | 61 | % |
| U.S.                1          |   |                                       | 863.5       |                         |   | 6                               | %      |                                              | 6      | % |   | 39 | % |
| Total                Company   |   | $                                          | 2,233.5     |                         |   | 11                              | %      |                                              | 6      | % |   |  |   |
|                           |   |                                       |        |                         |   |                            |   |                                              |   |   |   |   |   |
| 2003                (Restated) |   |                                       |        |                         |   |                            |   |                                              |   |   |   |   |   |
| Non-U.S.                       |   | $                                          | 1,204.0     |                         |   | 15                              | %      |                                              | 3      | % |   | 60 | % |
| U.S.                1          |   |                                       | 814.5       |                         |   | 7                               | %      |                                              | 7      | % |   | 40 | % |
| Total                Company   |   | $                                          | 2,018.5     |                         |   | 12                              | %      |                                              | 5      | % |   |  |   |

| 2 | 2005                amounts reflect the impact of the voluntary recall of *MoistureLoc*                discussed in *Recent                Developments*                above and in *Item                8. Financial Statements and Supplementary Data*                under *Note                23 —Subsequent Event*                of                this Annual Report on Form 10-K. Charges associated with the recall                reduced U.S. net sales by $12.0 and non-U.S. net sales by $5.1,                respectively. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Business      Segment**
**      Net Sales **

----

*Financial      Overview*

|                                               |   | **2005**1                            |        | 2004                                          |   | 2003                 |   |
|----------------------------------------------------|--------|--------------------------------------|-------------|-----------------------------------------------|--------|----------------------|--------|
|                                               |   |  **As                Reported** |        | **Percent                of Total Net Sales** |   |   Restated |   | Percent                of Total Net Sales |   |   Restated |   | Percent                of Total Net Sales |   |
| **Net                Sales**                       |   |                                 |        |                                          |   |                 |   |   |   |   |   |   |   |
| Americas                                           |   | **$**                                | **1,005.3** |                                          |   | **43**               | **%**  | $ | 960.2 |   |   | 43 | % | $ | 903.3 |   |   | 45 | % |
| Europe                                             |   |                                 | **859.9**   |                                          |   | **36**               | **%**  |   | 818.9 |   |   | 37 | % |   | 724.4 |   |   | 36 | % |
| Asia                                               |   |                                 | **488.6**   |                                          |   | **21**               | **%**  |   | 454.4 |   |   | 20 | % |   | 390.8 |   |   | 19 | % |
|                                               |   | **$**                                | **2,353.8** |                                          |   |                 |   | $ | 2,233.5 |   |   |   |   | $ | 2,018.5 |   |   |   |   |
|                                               |   |                                 |        |                                          |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Operating                Income (Costs)**        |   |                                 |        |                                          |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Americas                                           |   | **$**                                | **333.0**   |                                          |   |                 |   | $ | 326.1 |   |   |   |   | $ | 282.6 |   |   |   |   |
| Europe                                             |   |                                 | **250.8**   |                                          |   |                 |   |   | 251.2 |   |   |   |   |   | 201.5 |   |   |   |   |
| Asia                                               |   |                                 | **123.6**   |                                          |   |                 |   |   | 128.5 |   |   |   |   |   | 106.1 |   |   |   |   |
| Research                & Development          |   |                                 | **(200.5**  | **)**                                         |   |                 |   |   | (180.6 | ) |   |   |   |   | (166.1 | ) |   |   |   |
| Global                Operations & Engineering |   |                                 | **(131.7**  | **)**                                         |   |                 |   |   | (157.2 | ) |   |   |   |   | (123.1 | ) |   |   |   |
| **Segment                Income**                  |   |                                 | **375.2**   |                                          |   |                 |   |   | 368.0 |   |   |   |   |   | 301.0 |   |   |   |   |
| Corporate                Administration 2          |   |                                 | **(89.8**   | **)**                                         |   |                 |   |   | (88.9 | ) |   |   |   |   | (73.5 | ) |   |   |   |
| Restructuring                reversals 3           |   |                                 | **-**       |                                          |   |                 |   |   | - |   |   |   |   |   | 6.3 |   |   |   |   |
| Other                significant charges 4         |   |                                 | **(1.9**    | **)**                                         |   |                 |   |   | - |   |   |   |   |   | (5.6 | ) |   |   |   |
| **Operating                Income**                |   | **$**                                | **283.5**   |                                          |   |                 |   | $ | 279.1 |   |   |   |   | $ | 228.2 |   |   |   |   |

| 1 | 2005                amounts reflect the impact of the voluntary recall of *MoistureLoc*                discussed in *Recent                Developments*                above and in *Item                8. Financial Statements and Supplementary Data*                under *Note                23 — Subsequent Event*                of                this Annual Report on Form 10-K. Charges associated with the recall                reduced Americas region net sales and operating income by $12.4 and                $25.0,                respectively; Asia region net sales and operating income by $4.7                and                $11.0, respectively; increased Global Operations & Engineering                operating costs by $1.2; and increased corporate administration expense                by                $1.7. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Operating      Costs and Expenses*

*Restructuring      Charges and Asset Write-offs*

| 4 | Other                significant charges in 2005 represent purchase accounting adjustments                related to the acquisition of Freda. Other significant charges in                2003                pertain to R&D expense associated with the acquisition of an                early-stage pharmaceutical                technology. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                         |   |                        |        |                                       |   | **2005                vs. 2004**                                   |   |                                          |   | 2004                vs. 2003 |   |
|------------------------------|--------|-----------------------------|-------------|--------------------------------------------|--------|--------------------------------------------------------------------|--------|-----------------------------------------------|--------|------------------------------|--------|
|                         |   |    **2005**1 |        |   2004                (Restated) |   | **Percent                Change****Actual                Dollars** |   | **Percent****Change****Constant****Currency** |   |   2003(Restated)   |   | Percent                ChangeActual                Dollars |   | Percent                ChangeConstantCurrency |   |
|                         |   |                        |        |                                       |   |                                                               |   |                                          |   |                         |   |   |   |   |   |
| Americas                     |   | **$**                       | **1,005.3** |                                       | $      | 960.2                                                              |   |                                          | **5**  | **%**                        |   | **4** | **%** | $ | 903.3 |   |   | 6 | % |   | 6 | % |
| Europe                       |   |                        | **859.9**   |                                       |   | 818.9                                                              |   |                                          | **5**  | **%**                        |   | **5** | **%** |   | 724.4 |   |   | 13 | % |   | 3 | % |
| Asia                         |   |                        | **488.6**   |                                       |   | 454.4                                                              |   |                                          | **8**  | **%**                        |   | **7** | **%** |   | 390.8 |   |   | 16 | % |   | 12 | % |
| Total                Company |   | **$**                       | **2,353.8** |                                       | $      | 2,233.5                                                            |   |                                          | **5**  | **%**                        |   | **5** | **%** | $ | 2,018.5 |   |   | 11 | % |   | 6 | % |

| 1 | 2005                amounts reflect the impact of the voluntary recall of *MoistureLoc*                discussed in *Recent                Developments*                above and in *Item                8. Financial Statements and Supplementary Data*                under *Note                23 — Subsequent Event*                of                this Annual Report on Form 10-K. Provisions for sales returns and                consumer                rebates associated with the recall reduced Americas region net sales                by                $12.4 and Asia region net sales by                $4.7. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**2005      Versus 2004**
*MoistureLoc*
*Item      8. Financial Statements and Supplementary Data*
*Note      23 —Subsequent Event*

| ·   | Americas                segment net sales increased 5 percent from 2004, or 4 percent in                constant                currency. Those figures include $12 in sales return and consumer                rebate                provisions associated with the *MoistureLoc*recall.                Excluding those items, Americas segment net sales grew 6 percent,                or 5                percent in constant currency. Gains were led by above-market performance                for contact lenses and higher sales of cataract surgery                products. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Europe                segment net sales increased 5 percent on both a reported and                constant-currency basis. Gains were led by higher sales of pharmaceutical                and vision care products, which more than offset declines for the                refractive surgery category and the impact of divesting our German                Woehlk                contact lens business in the 2005 third quarter. The *MoistureLoc*                product recalled in Europe was both manufactured and sold in 2006;                therefore, sales return and customer rebates of $18 associated with                the                *MoistureLoc*                recall in the Europe segment were not provided for in 2005, but have                been                expensed in 2006. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Asia segment reported net sales gains of 8 percent compared to 2004,                or 7                percent in constant currency. Those figures include $5 in sales return                and                consumer rebate provisions associated with the *MoistureLoc*                recall as well as $18 in incremental sales associated with the acquisition                of Freda. Excluding those items, Asia segment net sales grew 5 percent,                or                4 percent in constant currency, with gains led by higher sales of                contact                lenses and cataract surgery                products. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**2004      Versus 2003**

| ·   | Americas                segment net sales grew 6 percent from 2003, with gains in all product                categories. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------|

| ·   | Europe                segment net sales increased 13 percent, mainly reflecting favorable                currency benefits. Constant-currency sales growth was 3 percent.                Gains                were driven by the contact lens, surgical and pharmaceutical categories.                Constant-currency European lens care sales were flat with the prior                year,                which was encouraging given overall market                dynamics. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Asia                segment net sales grew 16 percent, or 12 percent on a constant-currency                basis. Growth was experienced in all product categories, but especially                our lines of vision care products. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Americas**

|                                      |   |  **2005                vs. 2004 Restated****Percent                Increase (Decrease)** |   |  2004                Restated vs. 2003 RestatedPercent                Increase |   |
|-------------------------------------------|--------|-----------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------|--------|
|                                      |   | **Actual                Dollars**                                                        |   | **Constant                Currency**                                                |   | Actual                Dollars  |   | Constant                Currency |   |
| Contact                Lens               |   |                                                                                          | **15** | **%**                                                                               |   | **14** | **%** |   | 8 | % |   | 7 | % |
| Lens                Care 1                |   |                                                                                          | **-**  | **%**                                                                               |   | **(1** | **)%** |   | 1 | % |   | 1 | % |
| Pharmaceuticals                           |   |                                                                                          | **3**  | **%**                                                                               |   | **3** | **%** |   | 11 | % |   | 11 | % |
| Cataract                and Vitreoretinal |   |                                                                                          | **7**  | **%**                                                                               |   | **6** | **%** |   | 2 | % |   | 1 | % |
| Refractive                                |   |                                                                                          | **(4** | **)%**                                                                              |   | **(6** | **)%** |   | 20 | % |   | 20 | % |
| Total                Americas             |   |                                                                                          | **5**  | **%**                                                                               |   | **4** | **%** |   | 6 | % |   | 6 | % |

| 1 | 2005                amounts reflect the impact of the voluntary recall of *MoistureLoc*                discussed in *Recent                Developments*                above and in *Item                8. Financial Statements and Supplementary Data*                under *Note                23 — Subsequent Event*                of                this Annual Report on Form 10-K.                Provisions for sales returns and consumer rebates associated with                the                recall reduced Americas region net sales by                $12.4. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**2005      Versus 2004**

| ·   | Contact                lens category growth** **reflected                the reintroduction of the *PureVision*                brand of silicone hydrogel contact lenses in the United States as                well as                continued growth for *SofLens*                Toric and *SofLens*                Multi-Focal contact lenses. Moderating that performance was a continued                decline in sales of our older, conventional hydrogel two-week contact                lenses, reflecting the overall market shift to silicone hydrogel                materials. Sales of *SofLens*Toric                contact lenses for people with astigmatism increased more than 10                percent                from 2004. As expected, dollar growth for this product has begun                to                moderate, reflecting the competitive impact of new silicone hydrogel                toric                offerings. We launched *PureVision*                Toric contact lenses in the United States on a limited basis in October                2005 and reached full commercial distribution in the second quarter                of                2006. Sales of *SofLens*                Multi-Focal contact lenses for people with presbyopia grew more than                30                percent in the Americas region in 2005, reflecting our continued                leading                market position. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Sales                in the lens care category were essentially flat mainly due to sales                returns and consumer rebate provisions associated with our voluntary                recall of *MoistureLoc*                which was reflected as a subsequent event (see *Item                8. Financial Statements and Supplementary Data*                under *Note                23 — Subsequent Event*                of                this Annual Report on Form 10-K for further discussion). Excluding                the                impact of the recall, Americas region constant-currency lens care                sales                increased 3 percent, reflecting U.S. market share gains for our lines                of                multipurpose solutions and higher sales of *Boston*                lens care solutions for RGP contact lenses. As described above, lens                care                category sales have declined in 2006 in all regions, due to additional                charges associated with the *MoistureLoc*                recall combined with market share losses resulting from customer                and trade                concerns during our investigation into increased fungal infections                among                contact lens wearers. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Pharmaceuticals                sales increases were mainly attributable to incremental sales of                *Zylet*                combination eye drops, as well as higher sales of *Lotemax*                steroid eye drops. Those gains were largely offset by expected declines                in                sales of two non-ophthalmic drugs in our multisource pharmaceuticals                portfolio. Prescriptions for our lines of steroid eye drops containing                loteprednol etabonate continued to trend positively throughout 2005,                with                *Lotemax*                and *Alrex*                prescriptions reaching all-time highs. Our vitamins business grew                1                percent in constant currency. As expected, we faced difficult comparisons                to the prior year, when we launched *PreserVision*                soft gels and customers were carrying inventories of both tablets                and gel                formulations. The underlying dynamics of the vitamins market remain                strong, with consumption growing more than 15 percent in dollars,                and our                *PreserVision*                brand continuing to gain market                share. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Sales                gains for cataract and vitreoretinal products were led by our lines                of                silicone IOLs, which increased more than 15 percent. That performance                was                mainly due to our *SofPort*                lines of silicone IOLs, which grew at an even faster rate and benefited                from market share gains and strong market acceptance for the *SofPort                AO*                IOL featuring an aspheric optics design. Phacoemulsification product                sales                increased more than 5 percent, reflecting an increase in revenues                for                *Millennium*                microsurgical systems and disposable products used in cataract surgery                procedures. The increase in *Millennium*                net sales reflects primarily a change in the type of system placements                in                2005 as compared to the prior year. We placed more units under direct                sales agreements in 2005 compared to 2004, when we placed more units                under                operating lease arrangements requiring revenue to be recognized over                a                longer period of time. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Sales                declines in the refractive category were mainly due to lower sales                of                lasers and microkeratome blades. These declines were partially offset                by                higher sales of per-procedure cards, especially those used for                *Zyoptix*                personalized vision correction                procedures. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**2004      Versus 2003**

| ·   | Contact                lens sales growth was led by the *SofLens*                Multi-Focal and *SofLens*                Toric brands. *SofLens*                Multi-Focal contact lens sales nearly doubled, and *SofLens*Toric                contact lens revenues grew slightly less than 20 percent and achieved                an                all-time high share of patient fits in 2004. Performance for these                two                lines was somewhat tempered by weakness in U.S. two-week disposable                SVS                products, reflecting market shifts toward competitive silicone hydrogel                offerings and our lack of such a product prior to the U.S. reintroduction                of the *PureVision*                brand of contact lenses in 2005. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Lens                care sales growth was mainly due to our lines of solutions for soft                contact lenses, and reflected incremental sales from the initial                shipments                of *MoistureLoc*                solution in the third quarter. We maintained our leading position                in the                U.S. market for both multipurpose solutions and rigid gas permeable                solutions in 2004. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Sales                gains in the pharmaceuticals category in the Americas region were                led by                our lines of ocular vitamins, proprietary pharmaceuticals and multisource                products. Ocular vitamin sales grew more than 20 percent, with the                *PreserVision*                brand up more than 40 percent. Late in the third quarter, we introduced                an                easy-to-swallow soft gel version of the original AREDS formula, as                well as                a line extension containing lutein in place of beta carotene. In                the                proprietary pharmaceuticals portfolio, sales of *Alrex*                and *Lotemax*                steroid drops each grew more than 20 percent in 2004, reflecting                more                prescriptions written for both                products. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Cataract                and vitreoretinal category sales growth was due to our lines of IOLs,                which registered overall gains of approximately 10 percent. Sales                growth                in our lines of silicone IOLs, most notably the *SofPort*                brand, were even stronger, at more than 20 percent. IOL performance                was                partially offset by lower revenues for phacoemulsification products,                reflecting a higher mix of equipment placed under operating lease                arrangements than in 2003. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Despite                a decline in refractive category net sales in the fourth quarter                compared                to the same period in 2003, full-year 2004 growth reflected incremental                sales of U.S. equipment and higher margin per-procedure cards associated                with the *Zyoptix*                system for personalized vision correction. We launched that product                late                in 2003. Other factors contributing to 2004 performance included                higher                sales of standard LASIK procedure cards and microkeratome                blades. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Europe**

|                                      |   |  **2005                vs. 2004 Restated****Percent                Increase (Decrease)**  |    |  2004                Restated vs. 2003 RestatedPercent                Increase |   |
|-------------------------------------------|--------|-----------------------------------------------------------------------------------------------------|---------|-------------------------------------------------------------------------------------|--------|
|                                      |   | **Actual                Dollars**                                                              |    | **Constant                Currency**                                                |   | Actual                Dollars  |   | Constant                Currency |   |
| Contact                Lens               |   |                                                                                                | **5**   | **%**                                                                               |   | **5** | **%** |   | 14 | % |   | 4 | % |
| Lens                Care                  |   |                                                                                                | **6**   | **%**                                                                               |   | **8** | **%** |   | 9 | % |   | - | % |
| Pharmaceuticals                           |   |                                                                                                | **11**  | **%**                                                                               |   | **11** | **%** |   | 12 | % |   | 2 | % |
| Cataract                and Vitreoretinal |   |                                                                                                | **2**   | **%**                                                                               |   | **2** | **%** |   | 16 | % |   | 6 | % |
| Refractive                                |   |                                                                                                | **(13** | **)%**                                                                              |   | **(13** | **)%** |   | 16 | % |   | 7 | % |
| Total                Europe               |   |                                                                                                | **5**   | **%**                                                                               |   | **5** | **%** |   | 13 | % |   | 3 | % |

**2005      Versus 2004**

| ·   | Contact                lens sales comparisons were impacted by the divestiture of our German                Woehlk business in the third quarter of 2005. Excluding that impact,                contact lens net sales would have grown approximately 8 percent on                a                reported basis and 9 percent in constant currency. Gains were mainly                due                to our lines of specialty products and*PureVision*                silicone hydrogel spherical contact lenses. Monthly replacement toric                contact lens revenues increased more than 20 percent, with gains                coming                from a combination of expanded distribution for the *PureVision*                Toric line and high-single-digit growth for*SofLens*                Toric contact lenses. Our multifocal product also posted strong growth,                and we continued to gain market                share. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Increased                lens care sales reflected market share gains, especially for our                lines of                multipurpose solutions, which grew approximately 10 percent on the                continued market acceptance of *MoistureLoc*                prior to the recall. As described above, lens care category sales                have                declined in 2006 in all regions, due to additional charges associated                with                the *MoistureLoc*                recall combined with market share losses resulting from customer                and trade                concerns during our investigation into increased fungal infections                among                contact lens wearers. We recorded additional charges associated with                the                *MoistureLoc*                recall for product manufactured and sold in Europe in                2006. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | European                pharmaceuticals sales growth was mainly attributable to our lines                of dry                eye products, ocular nutritionals and anti-infective drugs, coupled                with                expansion into new geographic                markets. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Higher                cataract and vitreoretinal sales reflected overall strong performance                in                most markets with the exception of the United Kingdom, where the                number of                procedures declined in 2005 following government initiatives in the                prior                year to decrease the number of patients waiting to have the procedure.                On                a total region basis, growth was largely due to our *Akreos*                line of acrylic IOLs, as well as higher sales of                viscoelastics. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Declines                in sales of refractive surgery products in Europe were consistent                with                overall market trends. Lower sales of equipment and microkeratome                blades                more than offset increased sales of *Zyoptix*                treatment cards. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**2004      Versus 2003**

| ·   | Contact                lens sales growth was primarily due to the continued strength and                market                leading positions for *SofLens*                Toric and *SofLens*                Multi-Focal lenses, growth for the *PureVision*                brand, as well as favorable currency benefits. The *PureVision*                lens franchise grew more than 20 percent in 2004, benefiting from                the                introduction of *PureVision*                Toric lenses and strong growth in the *PureVision*                SVS line. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Constant-currency                European lens care sales declined through the first three quarters                of                2004, but rebounded in the fourth quarter following the launch of                *MoistureLoc*,                yielding full-year flat constant-currency                performance. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Pharmaceuticals                gains in Europe were led by higher sales of ocular vitamins,                anti-infective and anti-inflammatory products, as well as favorable                exchange rate movements, somewhat offset by general sales declines                for                most other product lines in Germany, where government pharmaceuticals                pricing and reimbursement legislation negatively impacted                revenues. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Higher                sales of cataract and vitreoretinal products mainly reflected gains                for                phacoemulsification products and IOLs. Revenues from our *Akreos*                line of acrylic IOLs rose more than 30 percent on a constant-currency                basis, as European surgeons continued to use more advanced designs                and                foldable materials. Sales of phacoemulsification products increased                approximately 10 percent for the year, excluding favorable currency                benefits. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Growth                within the refractive product category reflected higher revenues                from                *Zyoptix*                system upgrades, per-procedure cards, diagnostic equipment and                microkeratome blades, as well as favorable currency                movements. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Asia**

|                                      |   | **2005                vs. 2004 Restated****Percent                Increase (Decrease)** |   | 2004                Restated vs. 2003 RestatedPercent                Increase |   |
|-------------------------------------------|--------|-----------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|--------|
|                                      |   | **Actual                Dollars**                                                  |   | **Constant                Currency**                                          |   | Actual                Dollars  |   | Constant                Currency |   |
| Contact                Lens               |   |                                                                                    | **8**  | **%**                                                                         |   | **7** | **%** |   | 17 | % |   | 11 | % |
| Lens                Care 1                |   |                                                                                    | **(5** | **)%**                                                                        |   | **(7** | **)%** |   | 13 | % |   | 9 | % |
| Pharmaceuticals                2          |   |                                                                                    | **NM** |                                                                          |   | **NM** |   |   | 72 | % |   | 60 | % |
| Cataract                and Vitreoretinal |   |                                                                                    | **16** | **%**                                                                         |   | **13** | **%** |   | 19 | % |   | 14 | % |
| Refractive                                |   |                                                                                    | **(7** | **)%**                                                                        |   | **(9** | **)%** |   | 13 | % |   | 10 | % |
| Total                Asia                 |   |                                                                                    | **8**  | **%**                                                                         |   | **7** | **%** |   | 16 | % |   | 12 | % |

| 1 | 2005                amounts reflect the impact of the voluntary recall of *MoistureLoc*                discussed in *Recent                Developments*                above and in *Item                8. Financial Statements and Supplementary Data*                under *Note                23 — Subsequent Event*                of                this Annual Report on Form 10-K. Provisions for sales returns and                consumer                rebates associated with the recall reduced Asia region net sales                by                $4.7. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | NM                denotes "not meaningful." 2005 pharmaceuticals category sales include                $17.8 incremental revenues from the acquisition of Freda, resulting                in a                calculated growth rate of more than 100                percent. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**2005      Versus 2004**

| ·   | Contact                lens sales growth in Asia reflected gains for our lines of specialty                and                silicone hydrogel lenses, including incremental sales from the launch                in                Japan of our latest conventional hydrogel two-week disposable lenses.                Throughout much of the year, our Chinese contact lens sales growth                was                lower than historical trends and internal expectations, reflecting,                in                part, trade disruption following changes we made in some of our                distributor programs early in 2005. That business rebounded in the                fourth                quarter, posting constant-currency growth of approximately 15 percent                compared to the same period in 2004. In 2006, the *MoistureLoc*                recall created negative collateral impacts on our non-lens care product                lines, especially contact lenses and pharmaceuticals products in                China. As                a result, Asia region contact lens sales have moderated from levels                experienced in 2005. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Lens                care sales declines reflect the sales returns and customer rebate                provisions associated with the voluntary recall of *MoistureLoc*                (see *Item                8. Financial Statements and Supplementary Data*                under *Note                23 — Subsequent Event*                of                this Annual Report on Form 10-K for further discussion). Excluding                the                impact of the recall, Asian constant-currency lens care sales were                down 3                percent. Declines in China, due to the same distributor issues discussed                above, more than offset 1 percent constant-currency gains in Japan,                reflecting the market introduction of *ReNu                MultiPlus*                solution. As described above, lens care category sales have declined                in                2006 in all regions, due to additional charges associated with the                *MoistureLoc*                recall combined with market share losses resulting from customer                and trade                concerns during our investigation into increased fungal infections                among                contact lens wearers. In the Asia region, our Chinese business has                been                most impacted by these events. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Historically                we have not had a significant pharmaceuticals business in Asia. In                the                fourth quarter of 2005 we acquired a controlling interest in Freda.                The                acquisition should help accelerate our expansion into the rapidly                growing                Chinese ophthalmic pharmaceuticals market and provide a national                pharmaceuticals sales and distribution network. Further information                with                respect to the Freda acquisition can be found in *Item                8. Financial Statements and Supplementary Data*                under *Note                3 — Acquisitions*                of                this Annual Report on Form 10-K. Excluding the Freda acquisition,                our                Asian pharmaceuticals revenues grew about 20 percent on a                constant-currency basis, led by gains for ocular                nutritionals. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Growth                in the cataract and vitreoretinal category was mainly driven by gains                for                our lines of IOL and phacoemulsification products. IOL revenues were                up                strongly, largely due to the continued rollout of the *Akreos*line                of acrylic IOLs throughout the                year. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Lower                sales in the refractive category in Asia reflected declines in laser                and                diagnostic equipment sales. Part of this decline was expected, as                prior-year results included revenues associated with initial customer                adoption of our *Zyoptix*                laser platform. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**2004      Versus 2003**

| ·   | Strong                contact lens sales gains were registered in most markets, especially                Japan, where constant-currency sales were up nearly 10 percent, reflecting                the launch of *Medalist*                One Day contact lenses in the first half of 2004 and continued strong                sales growth for disposable toric contact lenses. In markets outside                of                Japan, constant-currency sales grew approximately 15 percent during                2004. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Lens                care sales growth was led by our lines of multipurpose solutions,                which                were up more than 10 percent for the year on a constant-currency                basis. We                launched *MoistureLoc*                solution in several markets in the fourth quarter, with encouraging                response from the trade. Our other *ReNu*                brand solutions continued to perform well in 2004, particularly in                China                and Japan. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Net                sales of pharmaceuticals in Asia were immaterial to our overall results                of                operations in 2004 and 2003. Sales gains reflected our efforts to                expand                and introduce our pharmaceutical products in the region, particularly                vitamins. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Increased                sales of cataract and vitreoretinal products reflected growth in                markets                outside of Japan, where sales of the *SofPort*                and *Akreos*                lines of IOLs grew strongly, as well as higher sales of                phacoemulsification products. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Refractive                surgery product sales gains in 2004 were driven by *Zyoptix*                system upgrades, per-procedure cards and microkeratome blades, somewhat                offset by fewer new laser placements, reflecting the launch of the                *Technolas                z100*                laser in 2003. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Net      Sales by Product Category**

|                                      |   |     Net                Sales |        | PercentIncrease(Decrease)ActualDollars |   | PercentIncrease(Decrease)ConstantCurrency |   |
|-------------------------------------------|--------|--------------------------------------------------|-------------|----------------------------------------|--------|-------------------------------------------|--------|
| **2005**                                  |   |                                             |        |                                   |   |                                      |   |
| Contact                Lens               |   | **$**                                            | **728.5**   |                                   |   | **9**                                     | **%**  |   | **9** | **%** |
| Lens                Care 1                |   |                                             | **522.2**   |                                   |   | **-**                                     | **%**  |   | **(1** | **)%** |
| Pharmaceuticals                           |   |                                             | **584.8**   |                                   |   | **11**                                    | **%**  |   | **11** | **%** |
| Cataract                and Vitreoretinal |   |                                             | **377.8**   |                                   |   | **6**                                     | **%**  |   | **5** | **%** |
| Refractive                                |   |                                             | **140.5**   |                                   |   | **(8**                                    | **)%** |   | **(9** | **)%** |
|                                      |   | **$**                                            | **2,353.8** |                                   |   | **5**                                     | **%**  |   | **5** | **%** |
|                                      |   |                                             |        |                                   |   |                                      |   |   |   |   |
| 2004                (Restated)            |   |                                             |        |                                   |   |                                      |   |   |   |   |
| Contact                Lens               |   | $                                                | 671.0       |                                   |   | 13                                        | %      |   | 7 | % |
| Lens                Care                  |   |                                             | 523.3       |                                   |   | 5                                         | %      |   | 2 | % |
| Pharmaceuticals                           |   |                                             | 528.2       |                                   |   | 12                                        | %      |   | 7 | % |
| Cataract                and Vitreoretinal |   |                                             | 358.2       |                                   |   | 10                                        | %      |   | 5 | % |
| Refractive                                |   |                                             | 152.8       |                                   |   | 17                                        | %      |   | 13 | % |
|                                      |   | $                                                | 2,233.5     |                                   |   | 11                                        | %      |   | 6 | % |
|                                      |   |                                             |        |                                   |   |                                      |   |   |   |   |
| 2003                (Restated)            |   |                                             |        |                                   |   |                                      |   |   |   |   |
| Contact                Lens               |   | $                                                | 593.2       |                                   |   | 14                                        | %      |   | 7 | % |
| Lens                Care                  |   |                                             | 496.5       |                                   |   | 8                                         | %      |   | 2 | % |
| Pharmaceuticals                           |   |                                             | 471.2       |                                   |   | 19                                        | %      |   | 10 | % |
| Cataract                and Vitreoretinal |   |                                             | 327.1       |                                   |   | 8                                         | %      |   | 2 | % |
| Refractive                                |   |                                             | 130.5       |                                   |   | (1                                        | )%     |   | (7 | )% |
|                                      |   | $                                                | 2,018.5     |                                   |   | 12                                        | %      |   | 5 | % |

| 1 | 2005                lens care amounts reflect the impact of the voluntary recall of                *MoistureLoc*                discussed in *Recent                Developments*                above and in *Item                8. Financial Statements and Supplementary Data*                under *Note                23 — Subsequent Event*                of                this Annual Report on Form 10-K. Provisions for sales returns and                consumer                rebates associated with the recall reduced full-year lens care net                sales                by $17.1. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**2005      Versus 2004**
*MoistureLoc*
*Item      8. Financial Statements and Supplementary Data*
*Note      23 — Subsequent Event*

| ·   | Contact                lens sales growth was led by our specialty and silicone hydrogel                spherical                offerings, which offset continued declines for older technology products.                That growth rate reflects the impact of divesting our German                Woehlk contact lens business during the third quarter of 2005. Excluding                that impact, contact lens net sales would have grown approximately                10                percent. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Sales                in the lens care category, which were flat with the prior year, mainly                reflected the impact of the *MoistureLoc*                recall. Excluding that impact, lens care sales grew 3 percent on                a                reported basis and 2 percent in constant currency, with gains for                multipurpose solutions in Europe and the Americas region partially                offset                by declines in Asia. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Full-year                pharmaceutical net sales growth includes the impact of the Freda                acquisition. Excluding revenues from Freda, growth was approximately                7                percent on both a reported and constant-currency basis. That reflects                incremental sales of *Zylet*                combination ophthalmic drops in the United States, combined with                higher                global sales of ocular vitamins and *Lotemax*                steroid drops containing loteprednol etabonate. Those gains were                somewhat                offset by sales declines for two non-ophthalmic drugs in our U.S.                multisource (generic) pharmaceuticals                portfolio. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Cataract                and vitreoretinal product category growth was led by gains in IOLs                of more                than 10 percent on the strength of our *SofPort*                and *Akreos*                lines of foldable IOLs. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Net                sales declines in the refractive category reflected lower equipment                and                microkeratome blade sales in all regions, partially offset by higher                service revenues and sales of per-procedure                cards. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | As                discussed above, the decision to withdraw *MoistureLoc*                will negatively impact 2006 sales performance. In addition to provisions                for sales returns and coupon redemptions that we will record (primarily                in                Europe), performance will be hampered by the impact from lost *MoistureLoc*                revenues; lower revenues for other lens care products, reflecting                market                share losses caused by trade and consumer uncertainty; and the negative                collateral impact on our non-lens care product categories, primarily                in                Asia. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**2004      Versus 2003**

| ·   | Contact                lens sales growth was attributable to strong gains for the *SofLens*                Toric, *SofLens*                One Day, *SofLens*                Multi-Focal and *SofLens59*                brands, as well as the *PureVision*                line of contact lenses. Combined, these products represented more                than 50                percent of contact lens revenues, benefiting from continued market                expansion and share gains. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Lens                care sales growth was mainly due to higher sales of all-in-one solutions,                particularly in the Americas and Asia                regions. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Pharmaceuticals                sales growth mainly reflected the continued market success and geographic                expansion of the *PreserVision*                and *Ocuvite*                lines of ocular vitamins. Strong gains were also noted in the Americas                region for *Lotemax*                and *Alrex*                prescription steroid eye drops. In Europe, growth was tempered by                the                continued impact of pharmaceuticals pricing legislation in                Germany. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Higher                sales of cataract and vitreoretinal surgery products were attributable                to                our lines of IOLs, phacoemulsification products and viscoelastics                as well                as service revenues. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Refractive                surgery revenues increased due to higher sales of per-procedure cards,                lasers and microkeratome blades. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

**Segment      Income**

**2005      Versus 2004**
*MoistureLoc*

**2004      Versus 2003**

----

**Operating      Costs and Expenses**

|                                                        |   |  **2005**                             |     | 2004(Restated) |   | 2003(Restated) |   |
|-------------------------------------------------------------|--------|--------------------------------------------|----------|----------------|--------|----------------|--------|
|                                                        |   | **Percentage                of Net Sales** |     |
| Cost                of products sold                        |   |                                       | **41.8** | **%**          |   | 41.6           | %      |   | 42.4 | % |
| Selling,                administrative and general expenses |   |                                       | **38.6** | **%**          |   | 38.6           | %      |   | 39.1 | % |
| Research                and development expenses            |   |                                       | **7.5**  | **%**          |   | 7.3            | %      |   | 7.4 | % |

*MoistureLoc*

*MoistureLoc*
*Item      8. Financial Statements and Supplementary Data*
*Note      2 — Restatement*
*,*

**Non-Operating      Income and Expense**

**Other      Income and Expense**

*Item      8. Financial Statements and Supplementary Data*
*Note      4 — Earnings Per Share*
*Access      to Financial Markets*
*Item      8. Financial Statements and Supplementary Data*
*Note      12 — Accounting for Derivatives and Hedging Activities*

----

*Sources      of Liquidity*

**Income      Taxes**

*Item      8. Financial Statements and Supplementary Data*
*Note      10 — Provision for Income Taxes*
*.      *

*MoistureLoc*

----

**Minority      Interest**

**Restructuring      Charges and Asset Write-offs**

**Profitability      Improvement Program and Transfer of **
***PureVision***
**      Contact Lens Manufacturing **
*PureVision*

*PureVision*

**Liquidity      and Financial Resources**

**Cash      Flows from Operating Activities**

**Cash      Flows from Investing Activities**
*      PureVision*

----

**Cash      Flows from Financing Activities**

*Item      8. Financial Statements and Supplementary Data*
*Note      18 — Forward Equity Contracts*
*;*

**Sources      of Liquidity**

*Legal      Matters*
*Recent      Developments*

***Credit      Facilities***
*Item      8. Financial Statements and Supplementary Data*
*Note      2 — Restatement*

----

***Bank      Term Loans***
*Item      8. Financial Statements and Supplementary Data*
*Note      10 — Provision for Income Taxes*
*Item      8. Financial Statements and Supplementary Data*
*Note      2 — Restatement*

***Capital      Markets Offerings***

----

***Access      to Financial Markets***

*MoistureLoc*

*MoistureLoc*

*MoistureLoc*

***Working      Capital***

***Dividends***

***Return      on Equity and Capital***
*MoistureLoc*

----

**Contractual      Cash Obligations**

|                                               |   |   Total |   | Less                than 1 Year |   |   1-3                years |   |   3-5                years |   | More                than 5 years |   |
|----------------------------------------------------|--------|-------------------|--------|---------------------------------|--------|--------------------------------------|--------|--------------------------------------|--------|----------------------------------|--------|
| **Contractual                Obligations****1**    |   |              |   |                            |   |                                 |   |                                 |   |                             |   |
| Short-                and long-term debt           |   | $                 | 992    |                            | $      | 161                                  |   | $                                    | 184    |                             | $      | 423 |   | $ | 224 |   |
| Purchase                obligations 2              |   |              | 82     |                            |   | 49                                   |   |                                 | 18     |                             |   | 5 |   |   | 10 |   |
| Minimum                operating lease commitments |   |              | 76     |                            |   | 23                                   |   |                                 | 28     |                             |   | 15 |   |   | 10 |   |
| Total                                              |   | $                 | 1,150  |                            | $      | 233                                  |   | $                                    | 230    |                             | $      | 443 |   | $ | 244 |   |

| 1 | We                had no capital lease obligations at December 31, 2005. Other long-term                liabilities reflected on our *Balance                Sheets*                consisted primarily of obligations associated with employee benefit                plans.                (See *Critical                Accounting Policies*                for a discussion of our estimated future statutory minimum funding                requirements.) |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Purchase                obligations include minimum obligation to purchase goods and services,                or                to make royalty payments, under agreements that are enforceable and                legally binding on us. The amounts above include payments due under                a                utility contract that can be terminated in the tenth year with the                payment                of $1. If we choose to terminate the utility contract, the total                payments                due would decrease by $9. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Off-Balance      Sheet Arrangements**

*Item      8. Financial Statements and Supplementary Data*
*Note      9 — Related Party Transaction*
*Retisert*

*Item      8. Financial Statements and Supplementary Data*
*Note      1 —Significant Accounting Policies*

*MoistureLoc*
*Item      8. Financial Statements and Supplementary Data*
*Note      17 — Commitments and Contingencies*

----

**Market      Risk**

*Item      8. Financial Statements and Supplementary Data*
*Note      13 — Financial Instruments*

**Critical      Accounting Policies**

----

**Revenue      Recognition**

*Item      8. Financial Statements and *
*Supplementary      Data*
*Note      2 — *
*Restatement*
*Item      8. Financial Statements and Supplementary Data*
*Note      1 — Significant Accounting Policies*

**Provisions      for Uncollectible Trade Receivables**

----

**Inventory      Allowances**
*Statements      of Income*

**Fair      Value of Assets**
*Goodwill      and Intangible Assets*
*Accounting      for the Impairment or Disposal of Long-Lived Assets*
*Item      8. Financial Statements and Supplementary Data*
*Note      1 — Significant Accounting Policies*

*MoistureLoc*
*Item      8. Financial Statements and Supplementary Data*
*Note      23 — Subsequent Event*
*,*
*MoistureLoc*

----

**Restructuring      Actions**
*Liability      Recognition for Certain Employee Termination Benefits and Other Costs to Exit      an      Activity (including Certain Costs Incurred in a Restructuring)*
*Accounting      for Costs Associated with Exit or Disposal Activities*

**Deferred      Tax Assets and Reserves**

----

**Employee      Benefits**
*Item      8. Financial Statements and Supplementary Data*
*Note      14 — Employee Benefits*

----

**Derivative      Financial Instruments and Hedging Activity**
*Accounting      for Derivative Instruments and Hedging Activities*

**Other      Matters**

**Environment**

**New      Accounting Guidance**
*Share-Based      Payment (SFAS No. 123R) *
*Accounting      for Stock-Based Compensation*
*Accounting      for Stock Issued to Employees*

----

*Accounting      Changes and Error Corrections, a replacement of APB Opinion No. 20 and FASB      Statement No. 3*

*Accounting      for Electronic Equipment Waste Obligations*

*Accounting      for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109      (FIN 48)*

*Fair      Value Measurements. *
* *
*.      *
*Accounting      for Derivative Instruments and Hedging Activities*

*Employers’      Accounting for Defined Benefit Pension and Other Postretirement Plans, an      amendment of FASB Statements No. 87, 88, 106 and 132(R). *

*Considering      the Effects of Prior Year Misstatements when Quantifying Misstatements in      Current Year Financial Statements*

----

**Information      Concerning Forward-Looking Statements**
*Item      I-A. Risk Factors*

----

**Item      7A.**
**Quantitative      and Qualitative Disclosures about Market Risk**

*Market      Risk*
*Item      7. Management's Discussion and Analysis of Financial Condition and Results      of      Operations*

**Item      8.**
**Financial      Statements and Supplementary Data**

**Statements      of Income**

| For                the Years EndedDecember                31, 2005, December 25, 2004 and December 27, 2003Dollar                Amounts in Millions - Except Per Share Data |   | **2005** |        | 2004(Restated) |   | 2003(Restated) |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|-------------|----------------|--------|----------------|--------|
| **Net                Sales**                                                                                                                                                 |   | **$**    | **2,353.8** |           | $      | 2,233.5        |   | $ | 2,018.5 |   |
|                                                                                                                                                                         |   |     |        |           |   |           |   |   |   |   |
| *Costs                and Expenses*                                                                                                                                          |   |     |        |           |   |           |   |   |   |   |
| Cost                of products sold                                                                                                                                         |   |     | **983.1**   |           |   | 929.2          |   |   | 856.8 |   |
| Selling,                administrative and general                                                                                                                           |   |     | **909.7**   |           |   | 862.7          |   |   | 789.9 |   |
| Research                and development                                                                                                                                      |   |     | **177.5**   |           |   | 162.5          |   |   | 149.9 |   |
| Reversal                of restructuring charges                                                                                                                             |   |     | **-**       |           |   | -              |   |   | (6.3 | ) |
|                                                                                                                                                                         |   |     | **2,070.3** |           |   | 1,954.4        |   |   | 1,790.3 |   |
| **Operating                Income**                                                                                                                                          |   |     | **283.5**   |           |   | 279.1          |   |   | 228.2 |   |
|                                                                                                                                                                         |   |     |        |           |   |           |   |   |   |   |
| *Other                (Income) Expense*                                                                                                                                      |   |     |        |           |   |           |   |   |   |   |
| Interest                and investment income                                                                                                                                |   |     | **(20.1**   | **)**          |   | (13.8          | )      |   | (15.7 | ) |
| Interest                expense                                                                                                                                              |   |     | **52.8**    |           |   | 49.6           |   |   | 55.2 |   |
| Foreign                currency, net                                                                                                                                         |   |     | **4.4**     |           |   | 0.6            |   |   | 13.4 |   |
|                                                                                                                                                                         |   |     | **37.1**    |           |   | 36.4           |   |   | 52.9 |   |
| *Income                before Income Taxes and Minority Interest*                                                                                                            |   |     | **246.4**   |           |   | 242.7          |   |   | 175.3 |   |
| Provision                for income taxes                                                                                                                                    |   |     | **221.4**   |           |   | 83.8           |   |   | 65.3 |   |
| Minority                interest in subsidiaries                                                                                                                             |   |     | **5.8**     |           |   | 5.0            |   |   | 3.1 |   |
| *Income                before Cumulative Effect of Change in Accounting                Principle*                                                                            |   |     | **19.2**    |           |   | 153.9          |   |   | 106.9 |   |
|                                                                                                                                                                         |   |     |        |           |   |           |   |   |   |   |
| *Cumulative                Effect of Change in Accounting Principle, Net of                Taxes*                                                                            |   |     | **-**       |           |   | -              |   |   | (0.9 | ) |
| **Net                Income**                                                                                                                                                |   | **$**    | **19.2**    |           | $      | 153.9          |   | $ | 106.0 |   |
|                                                                                                                                                                         |   |     |        |           |   |           |   |   |   |   |
| **Basic                Earnings (Loss) Per Share:**                                                                                                                          |   |     |        |           |   |           |   |   |   |   |
| Before                Cumulative Effect of Change in Accounting Principle                                                                                                    |   | **$**    | **0.36**    |           | $      | 2.94           |   | $ | 2.04 |   |
| Cumulative                Effect of Change in Accounting Principle                                                                                                           |   |     | **-**       |           |   | -              |   |   | (0.02 | ) |
|                                                                                                                                                                         |   | **$**    | **0.36**    |           | $      | 2.94           |   | $ | 2.02 |   |
| Average                Shares Outstanding - Basic (000s)                                                                                                                     |   |     | **53,146**  |           |   | 52,433         |   |   | 52,426 |   |
|                                                                                                                                                                         |   |     |        |           |   |           |   |   |   |   |
| **Diluted                Earnings (Loss) Per Share:**                                                                                                                        |   |     |        |           |   |           |   |   |   |   |
| Before                Cumulative Effect of Change in Accounting Principle                                                                                                    |   | **$**    | **0.35**    |           | $      | 2.83           |   | $ | 2.00 |   |
| Cumulative                Effect of Change in Accounting Principle                                                                                                           |   |     | **-**       |           |   | -              |   |   | (0.02 | ) |
|                                                                                                                                                                         |   | **$**    | **0.35**    |           | $      | 2.83           |   | $ | 1.98 |   |
| Average                Shares Outstanding - Diluted (000s)                                                                                                                   |   |     | **55,684**  |           |   | 54,504         |   |   | 53,519 |   |

----

**Balance      Sheets**

| December                31, 2005 and December 25, 2004Dollar                Amounts in Millions - Except Per Share Data                                             |   | **2005** |        | 2004(Restated) |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|-------------|----------------|--------|
| **Assets**                                                                                                                                                          |   |     |        |           |   |
| Cash                and cash equivalents                                                                                                                            |   | **$**    | **720.6**   |           | $      | 501.8 |   |
| Trade                receivables, less allowances of $16.2 and $22.1,                respectively                                                                   |   |     | **491.7**   |           |   | 511.4 |   |
| Inventories,                net                                                                                                                                     |   |     | **219.8**   |           |   | 212.1 |   |
| Other                current assets                                                                                                                                 |   |     | **124.6**   |           |   | 108.6 |   |
| Deferred                income taxes                                                                                                                                |   |     | **71.2**    |           |   | 112.1 |   |
| Total                Current Assets                                                                                                                                 |   |     | **1,627.9** |           |   | 1,446.0 |   |
|                                                                                                                                                                |   |     |        |           |   |   |   |
| Property,                Plant and Equipment, net                                                                                                                   |   |     | **604.4**   |           |   | 580.8 |   |
| Goodwill                                                                                                                                                            |   |     | **799.0**   |           |   | 682.2 |   |
| Other                Intangibles, net                                                                                                                               |   |     | **273.8**   |           |   | 204.3 |   |
| Other                Long-Term Assets                                                                                                                               |   |     | **100.3**   |           |   | 106.9 |   |
| Deferred                Income Taxes                                                                                                                                |   |     | **11.0**    |           |   | 25.6 |   |
| **Total                Assets**                                                                                                                                     |   | **$**    | **3,416.4** |           | $      | 3,045.8 |   |
|                                                                                                                                                                |   |     |        |           |   |   |   |
| **Liabilities                and Shareholders' Equity**                                                                                                             |   |     |        |           |   |   |   |
| Notes                payable                                                                                                                                        |   | **$**    | **0.2**     |           | $      | 2.6 |   |
| Current                portion of long-term debt                                                                                                                    |   |     | **161.2**   |           |   | 100.8 |   |
| Accounts                payable                                                                                                                                     |   |     | **88.1**    |           |   | 94.8 |   |
| Accrued                compensation                                                                                                                                 |   |     | **126.0**   |           |   | 153.3 |   |
| Accrued                liabilities                                                                                                                                  |   |     | **495.5**   |           |   | 453.2 |   |
| Federal,                state and foreign income taxes payable                                                                                                      |   |     | **137.7**   |           |   | 109.6 |   |
| Deferred                income taxes                                                                                                                                |   |     | **1.5**     |           |   | 3.7 |   |
| Total                Current Liabilities                                                                                                                            |   |     | **1,010.2** |           |   | 918.0 |   |
|                                                                                                                                                                |   |     |        |           |   |   |   |
| Long-Term                Debt, less current portion                                                                                                                 |   |     | **831.2**   |           |   | 543.3 |   |
| Other                Long-Term Liabilities                                                                                                                          |   |     | **145.9**   |           |   | 131.9 |   |
| Deferred                Income Taxes                                                                                                                                |   |     | **120.7**   |           |   | 75.2 |   |
| **Total                Liabilities**                                                                                                                                |   |     | **2,108.0** |           |   | 1,668.4 |   |
|                                                                                                                                                                |   |     |        |           |   |   |   |
| Minority                Interest                                                                                                                                    |   |     | **24.5**    |           |   | 14.6 |   |
|                                                                                                                                                                |   |     |        |           |   |   |   |
| Commitments                and Contingencies (Note 17)                                                                                                              |   |     |        |           |   |   |   |
|                                                                                                                                                                |   |     |        |           |   |   |   |
| Common                Stock, par value $0.40 per share, 200 million shares authorized 60,427,172                shares issued (60,340,522 shares in 2004)           |   |     | **24.1**    |           |   | 24.1 |   |
| Class                B Stock, par value $0.08 per share, 15 million shares authorized,                253,699                shares issued (443,584 shares in 2004) |   |     | **-**       |           |   | - |   |
| Capital                in Excess of Par Value                                                                                                                       |   |     | **102.4**   |           |   | 105.6 |   |
| Common                and Class B Stock in Treasury, at cost, 6,741,731 shares (7,888,001                shares                in 2004)                             |   |     | **(356.3**  | **)**          |   | (409.2 | ) |
| Retained                Earnings                                                                                                                                    |   |     | **1,471.6** |           |   | 1,480.4 |   |
| Accumulated                Other Comprehensive Income                                                                                                               |   |     | **50.9**    |           |   | 167.8 |   |
| Other                Shareholders' Equity                                                                                                                           |   |     | **(8.8**    | **)**          |   | (5.9 | ) |
| **Total                Shareholders' Equity**                                                                                                                       |   |     | **1,283.9** |           |   | 1,362.8 |   |
| **Total                Liabilities and Shareholders' Equity**                                                                                                       |   | **$**    | **3,416.4** |           | $      | 3,045.8 |   |

----

**Statements      of Cash Flows**

| For                the Years EndedDecember                31, 2005, December 25, 2004 and December 27, 2003Dollar                Amounts in Millions |   | **2005** |       | 2004(Restated) |   | 2003(Restated) |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|------------|----------------|--------|----------------|--------|
| **Cash                Flows from Operating Activities**                                                                                              |   |     |       |           |   |           |   |
| Net                Income                                                                                                                            |   | **$**    | **19.2**   |           | $      | 153.9          |   | $ | 106.0 |   |
| *Adjustments                to Reconcile Net Income to Net Cash Provided by Operating                Activities*                                     |   |     |       |           |   |           |   |   |   |   |
| Depreciation                                                                                                                                         |   |     | **98.5**   |           |   | 99.4           |   |   | 98.8 |   |
| Amortization                                                                                                                                         |   |     | **27.3**   |           |   | 24.9           |   |   | 25.6 |   |
| Reversal                of restructuring charges                                                                                                     |   |     | **-**      |           |   | -              |   |   | (6.3 | ) |
| Deferred                income taxes                                                                                                                 |   |     | **93.2**   |           |   | (21.4          | )      |   | (21.5 | ) |
| Stock-based                compensation expense                                                                                                      |   |     | **5.3**    |           |   | 10.2           |   |   | 10.7 |   |
| Tax                benefits associated with exercise of stock options                                                                                |   |     | **16.9**   |           |   | 16.1           |   |   | - |   |
| Gain                from sale of investments available-for-sale                                                                                      |   |     | **-**      |           |   | (0.3           | )      |   | - |   |
| Loss                on divestiture of German Woehlk contact lens business                                                                            |   |     | **2.3**    |           |   | -              |   |   | - |   |
| Loss                on retirement of fixed assets                                                                                                    |   |     | **2.4**    |           |   | 11.0           |   |   | 3.2 |   |
| *Changes                in Assets and Liabilities*                                                                                                   |   |     |       |           |   |           |   |   |   |   |
| Trade                receivables                                                                                                                     |   |     | **5.4**    |           |   | (18.9          | )      |   | (13.7 | ) |
| Inventories                                                                                                                                          |   |     | **(16.3**  | **)**          |   | 11.9           |   |   | 16.0 |   |
| Other                current assets                                                                                                                  |   |     | **(17.2**  | **)**          |   | 11.9           |   |   | 7.9 |   |
| Other                long-term assets, including equipment on operating lease                                                                        |   |     | **(2.7**   | **)**          |   | (21.6          | )      |   | (11.1 | ) |
| Accounts                payable and accrued liabilities                                                                                              |   |     | **(31.9**  | **)**          |   | 59.3           |   |   | (3.8 | ) |
| Income                taxes payable                                                                                                                  |   |     | **27.7**   |           |   | (24.4          | )      |   | 27.7 |   |
| Other                long-term liabilities                                                                                                           |   |     | **9.3**    |           |   | (27.5          | )      |   | 12.9 |   |
| **Net                Cash Provided by Operating Activities****1**                                                                                    |   |     | **239.4**  |           |   | 284.5          |   |   | 252.4 |   |
|                                                                                                                                                 |   |     |       |           |   |           |   |   |   |   |
| **Cash                Flows from Investing Activities**                                                                                              |   |     |       |           |   |           |   |   |   |   |
| Capital                expenditures                                                                                                                  |   |     | **(116.0** | **)**          |   | (118.9         | )      |   | (91.5 | ) |
| Net                cash paid for acquisition of businesses and other                intangibles                                                      |   |     | **(236.7** | **)**          |   | (2.1           | )      |   | (6.4 | ) |
| Purchase                of available-for-sale securities                                                                                             |   |     | **-**      |           |   | (43.4          | )      |   | (19.7 | ) |
| Cash                received from sale of investments available-for-sale                                                                             |   |     | **-**      |           |   | 44.0           |   |   | 19.7 |   |
| Other                                                                                                                                                |   |     | **(0.4**   | **)**          |   | (1.3           | )      |   | 3.8 |   |
| **Net                Cash Used in Investing Activities**                                                                                             |   |     | **(353.1** | **)**          |   | (121.7         | )      |   | (94.1 | ) |
|                                                                                                                                                 |   |     |       |           |   |           |   |   |   |   |
| **Cash                Flows from Financing Activities**                                                                                              |   |     |       |           |   |           |   |   |   |   |
| Repurchases                of Common and Class B shares                                                                                              |   |     | **(45.1**  | **)**          |   | (79.0          | )      |   | (72.0 | ) |
| Exercise                of stock options                                                                                                             |   |     | **69.6**   |           |   | 77.8           |   |   | 12.1 |   |
| Net                repayments of notes payable                                                                                                       |   |     | **(2.1**   | **)**          |   | 0.3            |   |   | (1.1 | ) |
| Repayment                of long-term debt                                                                                                           |   |     | **(325.7** | **)**          |   | (196.6         | )      |   | (200.7 | ) |
| Proceeds                from issuance of debt                                                                                                        |   |     | **676.7**  |           |   | 0.1            |   |   | 210.1 |   |
| Cash                paid to minority interests                                                                                                       |   |     | **(3.8**   | **)**          |   | (4.2           | )      |   | (4.5 | ) |
| Payment                of dividends                                                                                                                  |   |     | **(28.1**  | **)**          |   | (27.6          | )      |   | (27.7 | ) |
| **Net                Cash Provided by (Used in) Financing Activities**                                                                               |   |     | **341.5**  |           |   | (229.2         | )      |   | (83.8 | ) |
|                                                                                                                                                 |   |     |       |           |   |           |   |   |   |   |
| Effect                of exchange rate changes on cash and cash equivalents                                                                          |   |     | **(9.0**   | **)**          |   | 5.6            |   |   | 23.0 |   |
| **Net                Change in Cash and Cash Equivalents**                                                                                           |   |     | **218.8**  |           |   | (60.8          | )      |   | 97.5 |   |
|                                                                                                                                                 |   |     |       |           |   |           |   |   |   |   |
| **Cash                and Cash Equivalents, Beginning of Year**                                                                                      |   |     | **501.8**  |           |   | 562.6          |   |   | 465.1 |   |
| **Cash                and Cash Equivalents, End of Year**                                                                                            |   | **$**    | **720.6**  |           | $      | 501.8          |   | $ | 562.6 |   |
|                                                                                                                                                 |   |     |       |           |   |           |   |   |   |   |
| **Supplemental                Cash Flow Disclosures**                                                                                                |   |     |       |           |   |           |   |   |   |   |
| Cash                paid for interest                                                                                                                |   | **$**    | **44.9**   |           | $      | 48.3           |   | $ | 57.4 |   |
| Net                cash payments for income taxes                                                                                                    |   |     | **82.1**   |           |   | 115.2          |   |   | 58.2 |   |
|                                                                                                                                                 |   |     |       |           |   |           |   |   |   |   |
| **Supplemental                Schedule of Non-Cash Financing Activities**                                                                            |   |     |       |           |   |           |   |   |   |   |
| Dividends                declared but not paid                                                                                                       |   | **$**    | **7.1**    |           | $      | 6.9            |   | $ | 6.8 |   |

----

**             Statements of Changes in Shareholders' Equity**
**    **

| For                the Years EndedDecember                31, 2005, December 25, 2004 (Restated) and December 27, 2003                (Restated)Dollar                Amounts in Millions |   |   |        |                                                        |   |                                    |   |                          |      |                             |   |                                                         |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|-------------------------------------------------------------|--------|-----------------------------------------|--------|-------------------------------|-----------|----------------------------------|--------|--------------------------------------------------------------|--------|
|                                                                                                                                                                                      |   | Total  |        | Common                and Class B Stock 1,                2 |   | Capital                in Excess of Par |   | Treasury                Stock |      | Retained                Earnings |   | Accumulated                Other Compre-hensive (Loss)Income |   | Other                Shareholders' Equity |   |
| **Balance                at December 28, 2002 (As reported)**                                                                                                                             |   | $      | 1,017.8     |                                                        | $      | 24.1                                    |   | $                             | 102.2     |                             | $      | (359.8                                                       | )      | $ | 1,298.9 |   | $ | (38.5 | ) | $ | (9.1 | ) |
| Impact                of Restatement                                                                                                                                                      |   |   | (12.5       | )                                                           |   | -                                       |   |                          | 4.0       |                             |   | (8.3                                                         | )      |   | (23.3 | ) |   | 15.1 |   |   | - |   |
| **Balance                at December 28, 2002 (Restated)**                                                                                                                                |   | $      | 1,005.3     |                                                        | $      | 24.1                                    |   | $                             | 106.2     |                             | $      | (368.1                                                       | )      | $ | 1,275.6 |   | $ | (23.4 | ) | $ | (9.1 | ) |
| Components                of comprehensive income                                                                                                                                         |   |   |        |                                                        |   |                                    |   |                          |      |                             |   |                                                         |   |   |   |   |   |   |   |   |   |   |
| Net                income                                                                                                                                                                 |   |   | 106.0       |                                                        |   | -                                       |   |                          | -         |                             |   | -                                                            |   |   | 106.0 |   |   | - |   |   | - |   |
| Currency                translation adjustments                                                                                                                                           |   |   | 123.5       |                                                        |   | -                                       |   |                          | -         |                             |   | -                                                            |   |   | - |   |   | 123.5 |   |   | - |   |
| Net                loss on cash flow hedges                                                                                                                                               |   |   | (0.2        | )                                                           |   | -                                       |   |                          | -         |                             |   | -                                                            |   |   | - |   |   | (0.2 | ) |   | - |   |
| Reclassification                adjustment into net income for net loss on cash flow                hedges                                                                                |   |   | 3.2         |                                                        |   | -                                       |   |                          | -         |                             |   | -                                                            |   |   | - |   |   | 3.2 |   |   | - |   |
| Minimum                additional pension liability                                                                                                                                       |   |   | 4.4         |                                                        |   | -                                       |   |                          | -         |                             |   | -                                                            |   |   | - |   |   | 4.4 |   |   | - |   |
| Total                comprehensive income 3                                                                                                                                               |   |   | 236.9       |                                                        |   |                                    |   |                          |      |                             |   |                                                         |   |   |   |   |   |   |   |   |   |   |
| Net                change in shares under employee plans (106,426 shares) 4                                                                                                               |   |   | (0.6        | )                                                           |   | -                                       |   |                          | 3.2       |                             |   | -                                                            |   |   | - |   |   | - |   |   | (3.8 | ) |
| Treasury                shares issued under employee plans (460,056 shares)                                                                                                               |   |   | 15.6        |                                                        |   | -                                       |   |                          | -         |                             |   | 15.6                                                         |   |   | - |   |   | - |   |   | - |   |
| Treasury                shares repurchased (1,758,796 shares)                                                                                                                             |   |   | (72.0       | )                                                           |   | -                                       |   |                          | -         |                             |   | (72.0                                                        | )      |   | - |   |   | - |   |   | - |   |
| Activity                related to deferred stock awards held by the rabbi trust under a                deferred                compensation program 5                                    |   |   | (1.7        | )                                                           |   | -                                       |   |                          | -         |                             |   | (1.7                                                         | )      |   | - |   |   | - |   |   | - |   |
| Amortization                of unearned compensation                                                                                                                                      |   |   | 4.8         |                                                        |   | -                                       |   |                          | -         |                             |   | -                                                            |   |   | - |   |   | - |   |   | 4.8 |   |
| Dividends                6                                                                                                                                                                |   |   | (27.5       | )                                                           |   | -                                       |   |                          | -         |                             |   | -                                                            |   |   | (27.5 | ) |   | - |   |   | - |   |
| **Balance                at December 27, 2003 (Restated)**                                                                                                                                |   | $      | 1,160.8     |                                                        | $      | 24.1                                    |   | $                             | 109.4     |                             | $      | (426.2                                                       | )      | $ | 1,354.1 |   | $ | 107.5 |   | $ | (8.1 | ) |
| Components                of comprehensive income                                                                                                                                         |   |   |        |                                                        |   |                                    |   |                          |      |                             |   |                                                         |   |   |   |   |   |   |   |   |   |   |
| Net                income                                                                                                                                                                 |   |   | 153.9       |                                                        |   | -                                       |   |                          | -         |                             |   | -                                                            |   |   | 153.9 |   |   | - |   |   | - |   |
| Currency                translation adjustments                                                                                                                                           |   |   | 63.7        |                                                        |   | -                                       |   |                          | -         |                             |   | -                                                            |   |   | - |   |   | 63.7 |   |   | - |   |
| Reclassification                adjustment into net income for net loss on cash flow                hedges                                                                                |   |   | 1.9         |                                                        |   | -                                       |   |                          | -         |                             |   | -                                                            |   |   | - |   |   | 1.9 |   |   | - |   |
| Minimum                additional pension liability                                                                                                                                       |   |   | (5.3        | )                                                           |   | -                                       |   |                          | -         |                             |   | -                                                            |   |   | - |   |   | (5.3 | ) |   | - |   |
| Total                comprehensive income 3                                                                                                                                               |   |   | 214.2       |                                                        |   |                                    |   |                          |      |                             |   |                                                         |   |   |   |   |   |   |   |   |   |   |
| Net                change in shares under employee plans (45,300 shares) 4                                                                                                                |   |   | (6.3        | )                                                           |   | -                                       |   |                          | (4.1      | )                                |   | -                                                            |   |   | - |   |   | - |   |   | (2.2 | ) |
| Treasury                shares issued under employee plans (1,986,353 shares)                                                                                                             |   |   | 97.6        |                                                        |   | -                                       |   |                          | -         |                             |   | 97.6                                                         |   |   | - |   |   | - |   |   | - |   |
| Treasury                shares repurchased (1,293,625 shares)                                                                                                                             |   |   | (79.2       | )                                                           |   | -                                       |   |                          | -         |                             |   | (79.2                                                        | )      |   | - |   |   | - |   |   | - |   |
| Activity                related to deferred stock awards held by the rabbi trust under a                deferred                compensation program 5                                    |   |   | (1.1        | )                                                           |   | -                                       |   |                          | 0.3       |                             |   | (1.4                                                         | )      |   | - |   |   | - |   |   | - |   |
| Amortization                of unearned compensation                                                                                                                                      |   |   | 4.4         |                                                        |   | -                                       |   |                          | -         |                             |   | -                                                            |   |   | - |   |   | - |   |   | 4.4 |   |
| Dividends                6                                                                                                                                                                |   |   | (27.6       | )                                                           |   | -                                       |   |                          | -         |                             |   | -                                                            |   |   | (27.6 | ) |   | - |   |   | - |   |
| **Balance                at December 25, 2004 (Restated)**                                                                                                                                |   | **$**  | **1,362.8** |                                                        | **$**  | **24.1**                                |   | **$**                         | **105.6** |                             | **$**  | **(409.2**                                                   | **)**  | **$** | **1,480.4** |   | **$** | **167.8** |   | **$** | **(5.9** | **)** |
| Components                of comprehensive income                                                                                                                                         |   |   |        |                                                        |   |                                    |   |                          |      |                             |   |                                                         |   |   |   |   |   |   |   |   |   |   |
| Net                income                                                                                                                                                                 |   |   | **19.2**    |                                                        |   | **-**                                   |   |                          | **-**     |                             |   | **-**                                                        |   |   | **19.2** |   |   | **-** |   |   | **-** |   |
| Currency                translation adjustments                                                                                                                                           |   |   | **(100.2**  | **)**                                                       |   | **-**                                   |   |                          | **-**     |                             |   | **-**                                                        |   |   | **-** |   |   | **(100.2** | **)** |   | **-** |   |
| Reclassification                adjustment into net income for net loss on cash flow                hedges                                                                                |   |   | **3.3**     |                                                        |   | **-**                                   |   |                          | **-**     |                             |   | **-**                                                        |   |   | **-** |   |   | **3.3** |   |   | **-** |   |
| Minimum                additional pension liability                                                                                                                                       |   |   | **(20.0**   | **)**                                                       |   | **-**                                   |   |                          | **-**     |                             |   | **-**                                                        |   |   | **-** |   |   | **(20.0** | **)** |   | **-** |   |
| Total                comprehensive income 7                                                                                                                                               |   |   | **(97.7**   | **)**                                                       |   |                                    |   |                          |      |                             |   |                                                         |   |   |   |   |   |   |   |   |   |   |
| Net                change in shares under employee plans (89,750 shares)                                                                                                                  |   |   | **(10.1**   | **)**                                                       |   | **-**                                   |   |                          | **(3.8**  | **)**                            |   | **-**                                                        |   |   | **-** |   |   | **-** |   |   | **(6.3** | **)** |
| Treasury                shares issued under employee plans (1,790,096 shares)                                                                                                             |   |   | **100.9**   |                                                        |   | **-**                                   |   |                          | **-**     |                             |   | **100.9**                                                    |   |   | **-** |   |   | **-** |   |   | **-** |   |
| Treasury                shares repurchased (600,464 shares)                                                                                                                               |   |   | **(44.9**   | **)**                                                       |   | **-**                                   |   |                          | **-**     |                             |   | **(44.9**                                                    | **)**  |   | **-** |   |   | **-** |   |   | **-** |   |
| Activity                related to deferred stock awards held by the rabbi trust under a                deferred                compensation program                                      |   |   | **(2.5**    | **)**                                                       |   | **-**                                   |   |                          | **0.6**   |                             |   | **(3.1**                                                     | **)**  |   | **-** |   |   | **-** |   |   | **-** |   |
| Amortization                of unearned compensation                                                                                                                                      |   |   | **3.4**     |                                                        |   | **-**                                   |   |                          | **-**     |                             |   | **-**                                                        |   |   | **-** |   |   | **-** |   |   | **3.4** |   |
| Dividends                6                                                                                                                                                                |   |   | **(28.0**   | **)**                                                       |   | **-**                                   |   |                          | **-**     |                             |   | **-**                                                        |   |   | **(28.0** | **)** |   | **-** |   |   | **-** |   |
| **Balance                at December 31, 2005**                                                                                                                                           |   | **$**  | **1,283.9** |                                                        | **$**  | **24.1**                                |   | **$**                         | **102.4** |                             | **$**  | **(356.3**                                                   | **)**  | **$** | **1,471.6** |   | **$** | **50.9****8** |   | **$** | **(8.8** | **)** |

----

| 1 | There                are also 10 thousand shares of $100 par value 4 percent cumulative                preferred stock authorized, none of which has been                issued. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | See                *Note                2 — Restatement*                for a discussion of the impact of restatement regarding the components                of                total comprehensive income. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | Activity                reflects restatement adjustments associated with the Company's                comprehensive review of its accounting for income taxes. The after-tax                impact of these adjustments was $1.5 and $(3.9) for 2003 and 2004,                respectively. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Note      2 — Restatement*

| 7 | Total                  comprehensive income was reported net of any related tax effects.                  Amounts                  of income tax expense for minimum additional pension liability                  for the                  year ended December 31, 2005 was $2.3. There was no income tax                  benefit or                  expense related to currency translation adjustments and reclassification                  adjustments for net loss on cash flow hedges as a result of the                  Company                  recording a valuation allowance as further discussed in *Note                  10 — Provision for Income Taxes*. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8 | Accumulated                other comprehensive income was $50.9 at December 31, 2005 and included                the                following accumulated income (loss) amounts: currency translation                adjustment, $116.2; net loss on cash flow hedges, $(1.7); and minimum                additional pension liability, $(63.6). Accumulated other comprehensive                income was $167.8 at December 25, 2004 and included the following                accumulated income (loss) amounts: currency translation adjustment,                $216.4; net loss on cash flow hedges, $(5.0); and minimum additional                pension liability, $(43.6). |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Notes      to Financial Statements**

**1.**
**Significant      Accounting Policies**

**Company      Operations **

*Note      2 — Restatement*

**Basis      of Presentation **

**Principles      of Consolidation**

**Segment      Reporting**
*Disclosures      about Segments of an Enterprise and Related Information*

**Use      of Estimates**

**Cash      Equivalents**

**Inventories**

**Property,      Plant and Equipment**
*Accounting      for the Impairment or Disposal of Long-Lived Assets*

----

**Goodwill      and Other Intangibles**
*Business      Combinations*
*Goodwill      and Intangible Assets*

*MoistureLoc*
*Note      23 — Subsequent Event,*
*MoistureLoc*

**Revenue      Recognition and Related Provisions and Allowances**
*Revenue      Recognition, corrected copy*
*Accounting      for Revenue Arrangements with Multiple Deliverables*

| ·   | persuasive                evidence of an arrangement exists; |
|--------------------|--------------------------------------------------------------|

| ·   | delivery                has occurred or services have been                rendered; |
|--------------------|-------------------------------------------------------------------------------------|

| ·   | the                Company's price to its customers is fixed or determinable;                and |
|--------------------|--------------------------------------------------------------------------------------------------|

| ·   | collection                of the resulting receivable is reasonably                assured. |
|--------------------|---------------------------------------------------------------------------------------------|

----

*Balance      Sheets*
*Balance      Sheets*
*Cataract      and Vitreoretinal, and Refractive*

*Revenue      Recognition When Right of Return Exists*

*Accounting      for Consideration Given by a Vendor to a Customer or a Reseller of the Vendor's      Products*

*Accounting      for Shipping and Handling Fees and Costs*

***Lens      and Lens Care***

----

***Pharmaceuticals***

***Cataract      and Vitreoretinal, and Refractive***
*Accounting      for Leases*
*Accounting      for Contingencies*

**Advertising      Expense**
*MoistureLoc*
*Note      23 — Subsequent Event*

**Research      and Development Costs**
*Note      8 — Acquired Intangible Assets*

**Legal      Fees**

----

**Stock-Based      Compensation**
*Accounting      for Stock Issued to Employees*
*Accounting      for Stock-Based Compensation*
*Accounting      for Stock-Based Compensation-Transition and Disclosure*

|                                                                                                                                          |   |     |                       | 2004       |   | 2003                             |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|----------------------------|------------|--------|----------------------------------|--------|
|                                                                                                                                          |   | **2005** |                       | (Restated) |   | (Restated)                       |   |
| Net                income, as reported                                                                                                        |   | **$**    | **19.2  **       |       | $      | 153.9                  |   | $ | 106.0                   |   |
| Stock-based                compensation cost included in reported net income, net of tax2                                                     |   |     | **3.3****1 **         |       |   | 6.21                        |   |   | 6.51  |    |
| Stock-based                compensation cost determined under the fair value method for all                awards,                net of tax2 |   |     | **(16.6)****1**            |       |   | (18.0)1                          |   |   | (16.8)1 |   |
| Pro                forma net income                                                                                                           |   | **$**    | **5.9   **  |       | $      | 142.1             |   | $ | 95.7    |   |
|                                                                                                                                          |   |     |                       |       |   |                             |   |   |   |   |
| **Basic                earnings per share:**                                                                                                  |   |     |                       |       |   |                             |   |   |   |   |
| As                reported                                                                                                                    |   | **$**    | **0.36   ** |       | $      | 2.94              |   | $ | 2.02    |   |
| Pro                forma                                                                                                                      |   |     | **0.11   ** |       |   | 2.71                   |   |   | 1.83    |   |
|                                                                                                                                          |   |     |                       |       |   |                             |   |   |   |   |
| **Diluted                earnings per share:**                                                                                                |   |     |                       |       |   |                             |   |   |   |   |
| As                reported                                                                                                                    |   | **$**    | **0.35   ** |       | $      | 2.83              |   | $ | 1.98    |   |
| Pro                forma                                                                                                                      |   |     | **0.11   ** |       |   | 2.61                   |   |   | 1.79    |   |

| 1 | Amounts                reflect the deferred compensation plan restatement adjustments net                of tax                (see *Note                2 — Restatement*for                further discussion). |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Net                of tax amounts were calculated using the U.S. statutory rate (38.3%                in                2005 and 39.0% in 2004 and 2003). |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

*Share-Based      Payment*
*New      Accounting Guidance*
*Note      15 — Employee Stock Plans *

**Comprehensive      Income**
*Statements      of Changes in Shareholders' Equity*

----

**Investments      in Debt and Equity Securities**
*Statements      of Income*
*Balance      Sheets*

**Foreign      Currency**

**Derivative      Financial Instruments and Hedging Activity**
*Accounting      for Derivative Instruments and Hedging Activities*

----

**Deferred      Tax Assets and Reserves**

----

**Minority      Interest**
*Balance      Sheets*
*Statements      of Income*

**New      Accounting Guidance**
*Share-Based      Payment (SFAS 123R)*
*Accounting      for Stock-Based Compensation*
*Accounting      for Stock Issued to Employees*

*Accounting      Changes and Error Corrections*

*Accounting      for Electronic Equipment Waste Obligations*

*Accounting      for Uncertainty in Income Taxes - an Interpretation of FASB Statement No.      109*

----

*Fair      Value Measurements. *
* *
*.      *
*Accounting      for Derivative Instruments and Hedging Activities*

*Employers’      Accounting for Defined Benefit Pension and Other Postretirement Plans, an      amendment of FASB Statements No. 87, 88, 106 and 132(R). *

*Considering      the Effects of Prior Year Misstatements when Quantifying Misstatements in      Current Year Financial Statements*

**Reclassifications**

**2.**
**Restatement**

*Note      22 — Quarterly Results, Stock Prices and Selected Financial Data (Unaudited)*
*Note      22 — Quarterly Results, Stock Prices and Selected Financial Data      (Unaudited)*

----

**Brazil      Matters**

**Asia      and Other Revenue Recognition Matters**

----

**Tax      Matters **

----

**Deferred      Compensation Plan **
*Accounting      for Deferred Compensation Arrangements Where Amounts Earned Are Held in a Rabbi      Trust and Invested*

**Other      Items**

----

*Statements      of Income*

|                                                                                    |   | For                the Year Ended December 25, 2004 |    |
|-----------------------------------------------------------------------------------------|--------|-----------------------------------------------------|---------|
|                                                                                    |   |   As                Previously Reported   |    |    Brazil                Matters |   | Asia                and Other Revenue Recognition Matters |   |    Tax                Matters |   |   Deferred                Compensation Plan |   |    Other                Items |   |     Restated |   |
| **Net                Sales**                                                            |   | $                                                   | 2,232.3 |   | $ | - |   | $ | (2.6 | ) | $ | - |   | $ | - |   | $ | 3.8 |   | $ | 2,233.5 |   |
| *Costs                and Expenses*                                                     |   |                                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Cost                of products sold                                  |   |                                                | 934.9   |   |   | - |   |   | (1.0 | ) |   | - |   |   | - |   |   | (4.7 | ) |   | 929.2 |   |
|    Selling,                administrative and general               |   |                                                | 855.3   |   |   | 1.3 |   |   | - |   |   | - |   |   | 3.1 |   |   | 3.0 |   |   | 862.7 |   |
|    Research                and development                               |   |                                                | 162.5   |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 162.5 |   |
|                                                                                    |   |                                                | 1,952.7 |   |   | 1.3 |   |   | (1.0 | ) |   | - |   |   | 3.1 |   |   | (1.7 | ) |   | 1,954.4 |   |
| **Operating                Income**                                                     |   |                                                | 279.6   |   |   | (1.3 | ) |   | (1.6 | ) |   | - |   |   | (3.1 | ) |   | 5.5 |   |   | 279.1 |   |
| *Other                (Income) Expense*                                                 |   |                                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Interest                and investment income                    |   |                                                | (13.8   | ) |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (13.8 | ) |
|    Interest                expense                                       |   |                                                | 48.4    |   |   | 1.0 |   |   | - |   |   | - |   |   | - |   |   | 0.2 |   |   | 49.6 |   |
|    Foreign                currency, net                                  |   |                                                | (1.8    | ) |   | 0.3 |   |   | - |   |   | - |   |   | - |   |   | 2.1 |   |   | 0.6 |   |
|                                                                                    |   |                                                | 32.8    |   |   | 1.3 |   |   | - |   |   | - |   |   | - |   |   | 2.3 |   |   | 36.4 |   |
| *Income                before Income Taxes **and                Minority Interest* |   |                                                | 246.8   |   |   | (2.5 | ) |   | (1.6 | ) |   | - |   |   | (3.1 | ) |   | 3.1 |   |   | 242.7 |   |
|    Provision                for income taxes                             |   |                                                | 82.7    |   |   | (0.7 | ) |   | (0.8 | ) |   | 2.1 |   |   | (1.2 | ) |   | 1.7 |   |   | 83.8 |   |
|    Minority                interest in subsidiaries                 |   |                                                | 4.5     |   |   | - |   |   | 0.5 |   |   | - |   |   | - |   |   | - |   |   | 5.0 |   |
| **Net                Income**                                                           |   | $                                                   | 159.6   |   | $ | (1.8 | ) | $ | (1.3 | ) | $ | (2.1 | ) | $ | (1.9 | ) | $ | 1.4 |   | $ | 153.9 |   |
| **Basic                Earnings Per Share**                                             |   | $                                                   | 3.03    |   | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.04 | ) | $ | 0.03 |   | $ | 2.94 |   |
| **Diluted                Earnings Per Share**                                           |   | $                                                   | 2.93    |   | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.04 | ) | $ | 0.03 |   | $ | 2.83 |   |

----

|                                                                                                                                                        |   | For                the Year Ended December 27, 2003 |    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|---------|
|                                                                                                                                                        |   |   As                Previously Reported   |    |    Brazil                Matters |   | Asia                and Other Revenue Recognition Matters |   |    Tax                Matters |   |   Deferred                CompensationPlan |   |    Other                Items |   |     Restated |   |
| **Net                Sales**                                                                                                                                |   | $                                                   | 2,019.5 |   | $ | - |   | $ | (5.4 | ) | $ | - |   | $ | - |   | $ | 4.4 |   | $ | 2,018.5 |   |
| *Costs                and Expenses*                                                                                                                         |   |                                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Cost                of products sold                                                                                                      |   |                                                | 858.0   |   |   | - |   |   | (1.9 | ) |   | - |   |   | - |   |   | 0.7 |   |   | 856.8 |   |
|    Selling,                administrative and general                                                                                   |   |                                                | 782.3   |   |   | 7.4 |   |   | (0.3 | ) |   | - |   |   | 3.7 |   |   | (3.3 | ) |   | 789.9 |   |
|    Research                and development                                                                                                   |   |                                                | 149.9   |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 149.9 |   |
|    Restructuring                (reversal) charges                and asset write-offs                                                  |   |                                                | (6.3    | ) |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (6.3 | ) |
|                                                                                                                                                        |   |                                                | 1,783.9 |   |   | 7.4 |   |   | (2.2 | ) |   | - |   |   | 3.7 |   |   | (2.6 | ) |   | 1,790.3 |   |
| **Operating                Income**                                                                                                                         |   |                                                | 235.6   |   |   | (7.4 | ) |   | (3.3 | ) |   | - |   |   | (3.7 | ) |   | 7.1 |   |   | 228.2 |   |
| *Other                (Income) Expense*                                                                                                                     |   |                                                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Interest                and investment income                                                                                        |   |                                                | (15.7   | ) |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (15.7 | ) |
|    Interest                expense                                                                                                           |   |                                                | 54.2    |   |   | 1.0 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 55.2 |   |
|    Foreign                currency, net                                                                                                      |   |                                                | 0.1     |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 13.3 |   |   | 13.4 |   |
|                                                                                                                                                        |   |                                                | 38.6    |   |   | 1.0 |   |   | - |   |   | - |   |   | - |   |   | 13.3 |   |   | 52.9 |   |
| *Income                before Income Taxes **and                Minority Interest*                                                                     |   |                                                | 197.0   |   |   | (8.4 | ) |   | (3.3 | ) |   | - |   |   | (3.7 | ) |   | (6.2 | ) |   | 175.3 |   |
|    Provision                for income taxes                                                                                                 |   |                                                | 67.0    |   |   | (0.9 | ) |   | (0.8 | ) |   | (0.7 | ) |   | (1.5 | ) |   | 2.2 |   |   | 65.3 |   |
|    Minority                interest in subsidiaries                                                                                     |   |                                                | 3.6     |   |   | - |   |   | (0.5 | ) |   | - |   |   | - |   |   | - |   |   | 3.1 |   |
| *Income                before Cumulative **Effect                of Change in**    Accounting                Principle*            |   |                                                | 126.4   |   |   | (7.5 | ) |   | (2.1 | ) |   | 0.7 |   |   | (2.3 | ) |   | (8.4 | ) |   | 106.9 |   |
| *Cumulative                Effect of Change **in                Accounting Principle,**                  Net **of                Taxes* |   |                                                | (0.9    | ) |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (0.9 | ) |
| **Net                Income**                                                                                                                               |   | $                                                   | 125.5   |   | $ | (7.5 | ) | $ | (2.1 | ) | $ | 0.7 |   | $ | (2.3 | ) | $ | (8.4 | ) | $ | 106.0 |   |
| **Basic                Earnings Per Share**                                                                                                                 |   | $                                                   | 2.37    |   | $ | (0.14 | ) | $ | (0.04 | ) | $ | 0.01 |   | $ | (0.04 | ) | $ | (0.16 | ) | $ | 2.02 |   |
| **Diluted                Earnings Per Share**                                                                                                               |   | $                                                   | 2.34    |   | $ | (0.14 | ) | $ | (0.04 | ) | $ | 0.01 |   | $ | (0.04 | ) | $ | (0.16 | ) | $ | 1.98 |   |

*Statement      of Changes in Shareholders’ Equity*
*Note      22 — Quarterly Results, Stock Prices and Selected Financial Data      (Unaudited))*

----

*Balance      Sheets*

|                                                           |   | December                25, 2004      |    |
|----------------------------------------------------------------|--------|---------------------------------------|---------|
|                                                           |   | As                Previously Reported |    | Effect                of Restatement |   | Restated |   |
| **Assets**                                                     |   |                                  |    |   |   |   |   |
| Cash                and cash equivalents                       |   | $                                     | 501.8   |   | $ | - |   | $ | 501.8 |   |
| Trade                receivables, less allowances of $22.1     |   |                                  | 511.4   |   |   | - |   |   | 511.4 |   |
| Inventories,                net                                |   |                                  | 204.4   |   |   | 7.7 |   |   | 212.1 |   |
| Other                current assets                            |   |                                  | 95.7    |   |   | 12.9 |   |   | 108.6 |   |
| Deferred                income taxes                           |   |                                  | 67.2    |   |   | 44.9 |   |   | 112.1 |   |
| Total                Current Assets                            |   |                                  | 1,380.5 |   |   | 65.5 |   |   | 1,446.0 |   |
|                                                           |   |                                  |    |   |   |   |   |   |   |   |
| Property,                Plant and Equipment, net              |   |                                  | 580.9   |   |   | (0.1 | ) |   | 580.8 |   |
| Goodwill                                                       |   |                                  | 736.3   |   |   | (54.1 | ) |   | 682.2 |   |
| Other                Intangibles, net                          |   |                                  | 204.3   |   |   | - |   |   | 204.3 |   |
| Other                Long-Term Assets                          |   |                                  | 108.7   |   |   | (1.8 | ) |   | 106.9 |   |
| Deferred                Income Taxes                           |   |                                  | 11.4    |   |   | 14.2 |   |   | 25.6 |   |
| **Total                Assets**                                |   | $                                     | 3,022.1 |   | $ | 23.7 |   | $ | 3,045.8 |   |
|                                                           |   |                                  |    |   |   |   |   |   |   |   |
| **Liabilities                and Shareholders' Equity**        |   |                                  |    |   |   |   |   |   |   |   |
| Notes                payable                                   |   | $                                     | -       |   | $ | 2.6 |   | $ | 2.6 |   |
| Current                portion of long-term debt               |   |                                  | 100.8   |   |   | - |   |   | 100.8 |   |
| Accounts                payable                                |   |                                  | 93.6    |   |   | 1.2 |   |   | 94.8 |   |
| Accrued                compensation                            |   |                                  | 149.1   |   |   | 4.2 |   |   | 153.3 |   |
| Accrued                liabilities                             |   |                                  | 390.8   |   |   | 62.4 |   |   | 453.2 |   |
| Federal,                state and foreign income taxes payable |   |                                  | 97.8    |   |   | 11.8 |   |   | 109.6 |   |
| Deferred                income taxes                           |   |                                  | 0.4     |   |   | 3.3 |   |   | 3.7 |   |
| Total                Current Liabilities                       |   |                                  | 832.5   |   |   | 85.5 |   |   | 918.0 |   |
|                                                           |   |                                  |    |   |   |   |   |   |   |   |
| Long-Term                Debt, less current portion            |   |                                  | 543.3   |   |   | - |   |   | 543.3 |   |
| Other                Long-Term Liabilities                     |   |                                  | 130.3   |   |   | 1.6 |   |   | 131.9 |   |
| Deferred                Income Taxes                           |   |                                  | 73.6    |   |   | 1.6 |   |   | 75.2 |   |
| **Total                Liabilities**                           |   |                                  | 1,579.7 |   |   | 88.7 |   |   | 1,668.4 |   |
|                                                           |   |                                  |    |   |   |   |   |   |   |   |
| Minority                Interest                               |   |                                  | 15.5    |   |   | (0.9 | ) |   | 14.6 |   |
|                                                           |   |                                  |    |   |   |   |   |   |   |   |
| Commitments                and Contingencies (Note 17)         |   |                                  |    |   |   |   |   |   |   |   |
|                                                           |   |                                  |    |   |   |   |   |   |   |   |
| Common                Stock                                    |   |                                  | 24.1    |   |   | - |   |   | 24.1 |   |
| Class                B Stock                                   |   |                                  | -       |   |   | - |   |   | - |   |
| Capital                in Excess of Par Value                  |   |                                  | 103.8   |   |   | 1.8 |   |   | 105.6 |   |
| Common                and Class B Stock in Treasury, at cost   |   |                                  | (397.8  | ) |   | (11.4 | ) |   | (409.2 | ) |
| Retained                Earnings                               |   |                                  | 1,528.9 |   |   | (48.5 | ) |   | 1,480.4 |   |
| Accumulated                Other Comprehensive Income          |   |                                  | 173.8   |   |   | (6.0 | ) |   | 167.8 |   |
| Other                Shareholders' Equity                      |   |                                  | (5.9    | ) |   | - |   |   | (5.9 | ) |
| **Total                Shareholders' Equity**                  |   |                                  | 1,426.9 |   |   | (64.1 | ) |   | 1,362.8 |   |
| **Total                Liabilities and Shareholders' Equity**  |   | $                                     | 3,022.1 |   | $ | 23.7 |   | $ | 3,045.8 |   |

----

| ·   | The                Company's comprehensive review of its accounting for income taxes                had the                following impact: |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | other                current assets increased $12.9, primarily reflecting the reclassification                of tax on intercompany profit reserves from current deferred income                tax                assets to prepaid tax; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | current                deferred income tax assets increased $44.9 primarily reflecting the                reconciliation of tax effects on the differences between financial                reporting and tax bases in various current assets and liability accounts                including inventories $10.3, accrued employee benefits $10.6, and                other                current liabilities $13.0; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | goodwill                decreased $54.1 reflecting restatement adjustments made to goodwill                associated with a 1998 acquisition; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | non-current                deferred income tax assets increased $14.2 primarily reflecting                restatement adjustments of $55.5 to deferred tax assets associated                with                certain acquired entities, partially offset by an adjustment of $45.4                to                deferred tax liabilities on earnings of foreign subsidiaries which                are not                re-invested; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | federal,                state & foreign income taxes payable increased $11.8, reflecting the                adjusted tax liability associated with the restatement adjustments                in                aggregate. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Accrued                liabilities increased $62.4 primarily reflecting restatement adjustments                made to record deferred consignment revenue of $27.7 for Asia revenue                recognition matters, other accrued liabilities of $26.6 for Brazil                matters, and deferred compensation liability of $15.3 for the deferred                compensation plan matter. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Common                and Class B stock in treasury, at cost, increased $11.4 reflecting                restatement adjustments associated with the deferred compensation                plan                matter. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                $48.5 decrease in retained earnings reflects the cumulative impact                of                restatement adjustments. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

*Statements      of Cash Flows*

|                                                                        |   | 2004                                  |   | 2003     |   |
|-----------------------------------------------------------------------------|--------|---------------------------------------|--------|----------|--------|
|                                                                        |   | As                Previously Reported |   | Restated |   | As                Previously Reported |   | Restated |   |
| Net                Cash Provided by (Used In):                              |   |                                  |   |     |   |   |   |   |   |
| Operating                activities                                         |   | $                                     | 280.5  |     | $      | 284.5 |   | $ | 248.2 |   | $ | 252.4 |   |
| Investing                activities                                         |   |                                  | (121.6 | )        |   | (121.7 | ) |   | (94.1 | ) |   | (94.1 | ) |
| Financing                activities                                         |   |                                  | (225.3 | )        |   | (229.2 | ) |   | (79.6 | ) |   | (83.8 | ) |
| Effect                of Exchange Rate Changes on Cash and Cash Equivalents |   |                                  | 5.6    |     |   | 5.6 |   |   | 23.0 |   |   | 23.0 |   |
| Net                Change in Cash and Cash Equivalents                      |   |                                  | (60.8  | )        |   | (60.8 | ) |   | 97.5 |   |   | 97.5 |   |
| Cash                and Cash Equivalents, Beginning of Year                 |   |                                  | 562.6  |     |   | 562.6 |   |   | 465.1 |   |   | 465.1 |   |
| Cash                and Cash Equivalents, End of Year                       |   | $                                     | 501.8  |     | $      | 501.8 |   | $ | 562.6 |   | $ | 562.6 |   |

----

|                                                                                                                                 |   | 2004                                  |   | 2003           |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|----------------|--------|
|                                                                                                                                 |   | As                Previously Reported |   |  Restated |   | As                Previously Reported |   |  Restated |   |
| Net                Income                                                                                                            |   | $                                     | 159.6  |           | $      | 153.9 |   | $ | 125.5 |   | $ | 106.0 |   |
| Currency                Translation Adjustments                                                                                      |   |                                  | 70.7   |           |   | 63.7 |   |   | 135.1 |   |   | 123.5 |   |
| Net                Loss on Cash Flow Hedges                                                                                          |   |                                  | -      |           |   | - |   |   | (0.2 | ) |   | (0.2 | ) |
| Reclassification                Adjustment into Net Income for Net Loss  on                Cash                Flow Hedges |   |                                  | 1.9    |           |   | 1.9 |   |   | 1.7 |   |   | 3.2 |   |
| Minimum                Additional Pension Liability                                                                                  |   |                                  | (1.6   | )              |   | (5.3 | ) |   | 4.7 |   |   | 4.4 |   |
| Total                Comprehensive Income                                                                                            |   | $                                     | 230.6  |           | $      | 214.2 |   | $ | 266.8 |   | $ | 236.9 |   |

**2004**

| ·   | Restated                net income decreased from $159.6 to                $153.9. |
|--------------------|------------------------------------------------------------------------------------|

| ·   | Currency                translation adjustments decreased from $70.7 to $63.7 primarily as                a                result of adjustments made as part of the Company's comprehensive                review                of its accounting for income taxes, of which, $6.3 represents adjustments                to tax liabilities recorded under APB                23. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                change in minimum additional pension liability increased from $(1.6)                to                $(5.3) reflecting tax adjustments made as part of the Company’s                comprehensive review of its accounting for income taxes as well as                other                adjustments made for accounting entries not in accordance with                GAAP. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**2003**

| ·   | Restated                net income decreased from $125.5 to                $106.0. |
|--------------------|------------------------------------------------------------------------------------|

| ·   | Currency                translation adjustments decreased from $135.1 to $123.5 primarily                representing adjustments made as part of the Company's comprehensive                review of its accounting for income taxes, of which, $10.1 represents                adjustments to tax liabilities recorded under APB 23. The decrease                in                currency                translation adjustments                as                a result of these tax entries was partially offset by a $4.3 increase                to                currency translation adjustments reflecting a reclassification adjustment                related to the reversal of the liquidation of a non-U.S. subsidiary                as it                was determined that this transaction should have been viewed as a                change                in functional currency rather than as a                liquidation. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                change in minimum additional pension liability decreased from $4.7                to $4.4                reflecting tax adjustments made as part of the Company's comprehensive                review of its accounting for income                taxes. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**3.      **
**Acquisitions**

*Moisten*
*Mioclear*

*SFAS      No. 141, Business Combinations*
*SFAS      No. 142, Goodwill and Other Intangible Assets*

| Current                Assets (includes $6.4 of cash acquired) 1 |   | $      | 26.4   |   |
|------------------------------------------------------------------|--------|--------|--------|--------|
| Property,                Plant & Equipment                   |   |   | 23.8   |   |
| Other                Long-Term Assets                            |   |   | 0.9    |   |
| Intangible                Assets Subject to Amortization 2       |   |   |   |   |
| Distributor                Relationships                         |   |   | 57.9   |   |
| Tradenames                                                       |   |   | 23.7   |   |
| Technology                                                       |   |   | 7.1    |   |
| Non-Compete                Agreements                            |   |   | 1.8    |   |
| Goodwill                                                         |   |   | 160.5  |   |
| Total                Assets Acquired                             |   |   | 302.1  |   |
|                                                             |   |   |   |   |
| Current                Liabilities                               |   |   | 20.2   |   |
| Long-Term                Liabilities                             |   |   | 14.0   |   |
| Minority                Interest                                 |   |   | 7.8    |   |
| Total                Liabilities Assumed                         |   |   | 42.0   |   |
|                                                             |   |   |   |   |
| Net                Assets Acquired                               |   | $      | 260.1  |   |

| 1 | Includes                a purchase accounting adjustment of $1.9 associated with the step-up                of                inventory which was fully amortized in the fourth quarter of                2005. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Weighted                average remaining useful life of acquired intangible assets were                as                follows: distributor relationships - 16 years; tradenames - 24 years;                technology - 19 years; and non-compete agreements - 3                years. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**4.      **
**Earnings      Per Share**

*Note      11 — Debt*

*The      Effect of Contingently Convertible Debt on Diluted Earnings per      Share*

|                                                                                               |   |  **2005** |       | 2004(Restated) |   | 2003(Restated) |   |
|----------------------------------------------------------------------------------------------------|--------|----------------|------------|----------------|--------|----------------|--------|
| Income                Before Cumulative Effect of Change in Accounting Principle                   |   | **$**          | **19.2**   |           | $      | 153.9          |   | $ | 106.9 |   |
| Cumulative                Effect of Change in Accounting Principle, Net of Taxes                   |   |           | **-**      |           |   | -              |   |   | (0.9 | ) |
| Net                Income                                                                          |   | **$**          | **19.2**   |           | $      | 153.9          |   | $ | 106.0 |   |
|                                                                                               |   |           |       |           |   |           |   |   |   |   |
| Weighted                Average Basic Shares Outstanding (000s)                                    |   |           | **53,146** |           |   | 52,433         |   |   | 52,426 |   |
| Effect                of Dilutive Shares                                                           |   |           | **1,981**  |           |   | 2,004          |   |   | 1,065 |   |
| Effect                of Convertible Senior Notes Shares (Old Notes)                               |   |           | **67**     |           |   | 67             |   |   | 28 |   |
| Effect                of 2004 Senior Convertible Securities Shares (New                Securities) |   |           | **490**    |           |   | -              |   |   | - |   |
| Weighted                Average Diluted Shares Outstanding (000s)                                  |   |           | **55,684** |           |   | 54,504         |   |   | 53,519 |   |
|                                                                                               |   |           |       |           |   |           |   |   |   |   |
| Basic                Earnings Per Share                                                            |   | **$**          | **0.36**   |           | $      | 2.94           |   | $ | 2.02 |   |
|                                                                                               |   |           |       |           |   |           |   |   |   |   |
| Diluted                Earnings Per Share                                                          |   | **$**          | **0.35**   |           | $      | 2.83           |   | $ | 1.98 |   |

----

**5.       **
**Business      Segment and Geographic Information**

----

**Business      Segment**

|                                               |   | Net                Sales |        | Operating                Income |   | Depreciation                and Amortization |   | Capital                Expenditures |      | Assets1 |   |
|----------------------------------------------------|--------|--------------------------|-------------|---------------------------------|--------|----------------------------------------------|--------|-------------------------------------|-----------|---------|--------|
| **2005**                                           |   |                     |        |                            |   |                                         |   |                                |      |    |   |
| Americas                                           |   | **$**                    | **1,005.3** |                            | **$**  | **333.0**                                    |   | **$**                               | **8.3**   |    | **$**  | **3.5** |   | **$** | **327.9** |   |
| Europe                                             |   |                     | **859.9**   |                            |   | **250.8**                                    |   |                                | **10.4**  |    |   | **3.9** |   |   | **359.9** |   |
| Asia                                               |   |                     | **488.6**   |                            |   | **123.6**                                    |   |                                | **7.6**   |    |   | **4.8** |   |   | **297.8** |   |
| Research                & Development          |   |                     | **-**       |                            |   | **(200.5**                                   | **)**  |                                | **5.3**   |    |   | **24.9** |   |   | **54.7** |   |
| Global                Operations & Engineering |   |                     | **-**       |                            |   | **(131.7**                                   | **)**  |                                | **73.3**  |    |   | **70.8** |   |   | **1,344.8** |   |
|                                               |   |                     | **2,353.8** |                            |   | **375.2**                                    |   |                                | **104.9** |    |   | **107.9** |   |   | **2,385.1** |   |
| Corporate                administration            |   |                     | **-**       |                            |   | **(89.8**                                    | **)**  |                                | **20.9**  |    |   | **8.1** |   |   | **1,031.3 ** |   |
| Other                significant charges 2         |   |                     |  -     |                            |   | **(1.9**                                     | **)**  |                                | -         |    |   | - |   |   | - |   |
|                                               |   | **$**                    | **2,353.8** |                            | **$**  | **283.5**                                    |   | **$**                               | **125.8** |    | **$**  | **116.0** |   | **$** | **3,416.4** |   |
|                                               |   |                     |        |                            |   |                                         |   |                                |      |    |   |   |   |   |   |   |
| 2004                (Restated)                     |   |                     |        |                            |   |                                         |   |                                |      |    |   |   |   |   |   |   |
| Americas                                           |   | $                        | 960.2       |                            | $      | 326.1                                        |   | $                                   | 8.7       |    | $      | 3.5 |   | $ | 313.7 |   |
| Europe                                             |   |                     | 818.9       |                            |   | 251.2                                        |   |                                | 16.5      |    |   | 2.8 |   |   | 401.9 |   |
| Asia                                               |   |                     | 454.4       |                            |   | 128.5                                        |   |                                | 5.9       |    |   | 3.7 |   |   | 224.1 |   |
| Research                & Development          |   |                     | -           |                            |   | (180.6                                       | )      |                                | 5.4       |    |   | 12.5 |   |   | 50.8 |   |
| Global                Operations & Engineering |   |                     | -           |                            |   | (157.2                                       | )      |                                | 69.3      |    |   | 69.4 |   |   | 1,167.5 |   |
|                                               |   |                     | 2,233.5     |                            |   | 368.0                                        |   |                                | 105.8     |    |   | 91.9 |   |   | 2,158.0 |   |
| Corporate                administration            |   |                     | -           |                            |   | (88.9                                        | )      |                                | 18.5      |    |   | 27.0 |   |   | 887.8 |   |
|                                               |   | $                        | 2,233.5     |                            | $      | 279.1                                        |   | $                                   | 124.3     |    | $      | 118.9 |   | $ | 3,045.8 |   |
|                                               |   |                     |        |                            |   |                                         |   |                                |      |    |   |   |   |   |   |   |
| 2003                (Restated)                     |   |                     |        |                            |   |                                         |   |                                |      |    |   |   |   |   |   |   |
| Americas                                           |   | $                        | 903.3       |                            | $      | 282.6                                        |   | $                                   | 13.0      |    | $      | 5.0 |   |   |   |   |
| Europe                                             |   |                     | 724.4       |                            |   | 201.5                                        |   |                                | 16.2      |    |   | 4.2 |   |   |   |   |
| Asia                                               |   |                     | 390.8       |                            |   | 106.1                                        |   |                                | 6.9       |    |   | 3.3 |   |   |   |   |
| Research                & Development          |   |                     | -           |                            |   | (166.1                                       | )      |                                | 6.0       |    |   | 8.1 |   |   |   |   |
| Global                Operations & Engineering |   |                     | -           |                            |   | (123.1                                       | )      |                                | 73.6      |    |   | 42.7 |   |   |   |   |
|                                               |   |                     | 2,018.5     |                            |   | 301.0                                        |   |                                | 115.7     |    |   | 63.3 |   |   |   |   |
| Corporate                administration            |   |                     | -           |                            |   | (73.5                                        | )      |                                | 8.7       |    |   | 28.2 |   |   |   |   |
| Restructuring                reversal              |   |                     | -           |                            |   | 6.3                                          |   |                                | -         |    |   | - |   |   |   |   |
| Other                significant charges 2         |   |                     | -           |                            |   | (5.6                                         | )      |                                | -         |    |   | - |   |   |   |   |
|                                               |   | $                        | 2,018.5     |                            | $      | 228.2                                        |   | $                                   | 124.4     |    | $      | 91.5 |   |   |   |   |

| 1 | Assets                by business segment for 2005 and 2004 reflect restatement adjustments                made                to goodwill in association with the comprehensive tax                review. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Other                significant charges in 2005 represent purchase accounting adjustments                related to the acquisition of Freda (see *Note                3 — Acquisitions*).                Other significant charges in 2003 pertain to research and development                expense associated with the acquisition of an early-stage pharmaceutical                technology. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Note      1 — Significant Accounting Policies; Revenue Recognition*

|                                      |   | Net                Sales |        |
|-------------------------------------------|--------|--------------------------|-------------|
|                                      |   |  **2005**           |        | 2004(Restated) |   | 2003(Restated) |   |
| Contact                Lens               |   | **$**                    | **728.5**   |   | $ | 671.0 |   | $ | 593.2 |   |
| Lens                Care                  |   |                     | **522.2**   |   |   | 523.3 |   |   | 496.5 |   |
| Pharmaceuticals                           |   |                     | **584.8**   |   |   | 528.2 |   |   | 471.2 |   |
| Cataract                and Vitreoretinal |   |                     | **377.8**   |   |   | 358.2 |   |   | 327.1 |   |
| Refractive                                |   |                     | **140.5**   |   |   | 152.8 |   |   | 130.5 |   |
|                                      |   | **$**                    | **2,353.8** |   | $ | 2,233.5 |   | $ | 2,018.5 |   |

**Geographic      Region**

|                                           |   | Non-U.S. |        | U.S.   |   | Consolidated |   |
|------------------------------------------------|--------|----------|-------------|--------|--------|--------------|--------|
| **2005**                                       |   |     |        |   |   |         |   |
| Sales                to unaffiliated customers |   | **$**    | **1,462.8** |   | **$**  | **891.0**    |   | **$** | **2,353.8** |   |
| Long-lived                assets               |   |     | **275.5**   |   |   | **328.9**    |   |   | **604.4** |   |
|                                           |   |     |        |   |   |         |   |   |   |   |
| 2004                (Restated)                 |   |     |        |   |   |         |   |   |   |   |
| Sales                to unaffiliated customers |   | $        | 1,370.0     |   | $      | 863.5        |   | $ | 2,233.5 |   |
| Long-lived                assets               |   |     | 259.0       |   |   | 321.8        |   |   | 580.8 |   |
|                                           |   |     |        |   |   |         |   |   |   |   |
| 2003                (Restated)                 |   |     |        |   |   |         |   |   |   |   |
| Sales                to unaffiliated customers |   | $        | 1,204.0     |   | $      | 814.5        |   | $ | 2,018.5 |   |
| Long-lived                assets               |   |     | 234.7       |   |   | 310.0        |   |   | 544.7 |   |

----

**6.       **
**Net      Investment in Sales-Type and Operating Leases**

*Accounting      for Leases*

|                                                                                                            |   |  **December                31, 2005** |     | December                25, 2004(Restated) |   |
|-----------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|----------|--------------------------------------------|--------|
| **Net                Investment in Sales-Type Leases**                                                          |   |                                       |     |                                       |   |
| Total                minimum lease payments to be received 1                                                    |   | **$**                                      | **30.6** |                                       | $      | 36.0 |   |
| Less                amounts due from service agreements included in total minimum lease                payments |   |                                       | **(2.5** | **)**                                      |   | (2.8 | ) |
| Less                allowance for doubtful accounts 1                                                           |   |                                       | **(0.4** | **)**                                      |   | (0.6 | ) |
| Net                minimum lease payments receivables                                                           |   |                                       | **27.7** |                                       |   | 32.6 |   |
| Less                unearned income 2                                                                           |   |                                       | **(2.1** | **)**                                      |   | (2.5 | ) |
| Net                investment in sales-type leases                                                              |   | **$**                                      | **25.6** |                                       | $      | 30.1 |   |

| 1 | The                current portion of minimum lease payments receivable and the related                allowance for doubtful accounts are included in Trade receivables                on the                *Balance                Sheets*.                Minimum lease payments receivable and the related allowance for doubtful                accounts due after one year are included with Other Long-Term                Assets. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | The                current portion of unearned income is included in Accrued liabilities                on                the *Balance                Sheets*.                Unearned income due after one year is included with Other Long-Term                Liabilities. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                  |   | **December                31, 2005** |     | December                25, 2004 |   |
|-------------------------------------------------------|--------|--------------------------------------|----------|----------------------------------|--------|
| **Net                Investment in Operating Leases** |   |                                 |     |                             |   |
| Equipment                on operating lease           |   | **$**                                | **14.4** |                             | $      | 16.5 |   |
| Less                accumulated depreciation          |   |                                 | **(7.6** | **)**                            |   | (6.9 | ) |
| Equipment                on operating lease, net      |   | **$**                                | **6.8**  |                             | $      | 9.6 |   |

*Balance      Sheets*
*Note      1 — Significant Accounting Policies; Property, Plant and      Equipment*

**7.       **
**Goodwill**

*Note      3 — Acquisitions*

----

|                                                                                         |   | Americas |     | Europe |   | Asia     |   | Global                Operations & Engineering |     | Research                & Development |   | Total     |   |
|----------------------------------------------------------------------------------------------|--------|----------|----------|--------|--------|----------|--------|----------------------------------------------------|----------|-------------------------------------------|--------|-----------|--------|
| Balance                as of December 27, 2003 (Restated)                1,                2 |   | $        | 38.3     |   | $      | 60.4     |   | $                                                  | 12.5     |                                      | $      | 544.1     |   | $ | - |   | $ | 655.3 |   |
| Other                (primarily currency)                                                    |   |     | -        |   |   | 3.5      |   |                                               | 0.7      |                                      |   | 22.7      |   |   | - |   |   | 26.9 |   |
| Balance                as of December 25, 2004 (Restated)                                    |   | $        | 38.3     |   | $      | 63.9     |   | $                                                  | 13.2     |                                      | $      | 566.8     |   | $ | - |   | $ | 682.2 |   |
| Acquisition                of Freda                                                          |   |     | -        |   |   | -        |   |                                               | 5.6      |                                      |   | 154.9     |   |   | - |   |   | 160.5 |   |
| Other                (primarily currency)                                                    |   |     | -        |   |   | (5.8     | )      |                                               | (0.7     | )                                         |   | (37.2     | )      |   | - |   |   | (43.7 | ) |
| **Balance                as of December 31, 2005**                                           |   | **$**    | **38.3** |   | **$**  | **58.1** |   | **$**                                              | **18.1** |                                      | **$**  | **684.5** |   | **$** | **-** |   | **$** | **799.0** |   |

| 1 | Due                to the Company’s restatement of previously issued financial statements as                discussed in *Note                2 — Restatement*,                the amounts originally reported for goodwill prior to December 27,                2003                have changed in the disclosure above. Goodwill associated with a                1998                acquisition was reduced by $51.9 prior to December 31, 2003, representing                the net impact of a reduction of $58.0 to reflect findings from a                comprehensive review of the Company's accounting for income taxes                and an                increase of $6.1 to correctly reflect the purchase method of accounting.                The adjustments reduced goodwill in the Americas by $8.4 and in Global                Operations & Engineering by $43.5. Goodwill in Europe associated with                a 2002 acquisition was reduced $1.8 to correctly reflect periodic                re-measurement at historical rates. See discussion in *Note                2 — Restatement*. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | During                2003, the Company acquired additional interests in its commercial                and                manufacturing joint ventures located in Korea. The $3.5 excess of                the                purchase price of $6.2 over the value of identifiable assets and                liabilities was recorded as goodwill in the Company's Asia business                segment. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**8.       **
**Acquired      Intangible Assets**

*Retisert*
*Note      9 — Related Party Transaction*

*Zylet*
*Lotemax*

*Note      3 — Acquisitions*

----

|                                                         |   | **December                31, 2005**     |      | December                25, 2004            |   |
|--------------------------------------------------------------|--------|------------------------------------------|-----------|---------------------------------------------|--------|
|                                                         |   | **Gross                Carrying Amount** |      | **Accumulated                Amortization** |   | Gross                Carrying Amount |   | Accumulated                Amortization |   |
| Tradenames                                                   |   | **$**                                    | **117.7** |                                        | **$**  | **44.3** |   | $ | 97.1 |   | $ | 36.7 |   |
| Technology                and patents                        |   |                                     | **96.1**  |                                        |   | **74.5** |   |   | 86.4 |   |   | 68.9 |   |
| Developed                technology                          |   |                                     | **77.6**  |                                        |   | **20.7** |   |   | 83.6 |   |   | 18.1 |   |
| Distributor                relationships                     |   |                                     | **57.9**  |                                        |   | **0.9** |   |   | - |   |   | - |   |
| Intellectual                property                         |   |                                     | **38.2**  |                                        |   | **10.6** |   |   | 25.9 |   |   | 7.0 |   |
| License                agreements                            |   |                                     | **36.2**  |                                        |   | **18.4** |   |   | 39.8 |   |   | 18.5 |   |
| Physician                information & customer database |   |                                     | **21.8**  |                                        |   | **3.9** |   |   | 24.3 |   |   | 3.6 |   |
| Non-Compete                agreements                        |   |                                     | **1.8**   |                                        |   | **0.2** |   |   | - |   |   | - |   |
|                                                         |   | **$**                                    | **447.3** |                                        | **$**  | **173.5** |   | $ | 357.1 |   | $ | 152.8 |   |

| Fiscal                Year Ending |   | Amount |   |
|-----------------------------------|--------|--------|--------|
| December                30, 2006  |   | $      | 29.3   |   |
| December                29, 2007  |   |   | 28.4   |   |
| December                27, 2008  |   |   | 25.5   |   |
| December                26, 2009  |   |   | 22.0   |   |
| December                25, 2010  |   |   | 20.6   |   |

**9.  **
**Related      Party Transaction**

*Retisert*
*Retisert      *

----

*Retisert*

**10.       **
**Provision      for Income Taxes **

|                                                                       |   |  **2005** |      | 2004(Restated) |   | 2003(Restated) |   |
|----------------------------------------------------------------------------|--------|----------------|-----------|----------------|--------|----------------|--------|
| **(Loss)                income before income taxes and minority interest** |   |           |      |           |   |           |   |
| U.S.                                                                       |   | **$**          | **(12.3** | **)**          | $      | (24.8          | )      | $ | (33.6 | ) |
| Non-U.S.                                                                   |   |           | **258.7** |           |   | 267.5          |   |   | 208.9 |   |
|                                                                       |   | **$**          | **246.4** |           | $      | 242.7          |   | $ | 175.3 |   |
| **Provision                for income taxes**                              |   |           |      |           |   |           |   |   |   |   |
| Federal                                                                    |   |           |      |           |   |           |   |   |   |   |
| Current                                                                    |   | **$**          | **46.8**  |           | $      | 28.3           |   | $ | 16.7 |   |
| Deferred                                                                   |   |           | **94.2**  |           |   | (27.9          | )      |   | (16.6 | ) |
| State                                                                      |   |           |      |           |   |           |   |   |   |   |
| Current                                                                    |   |           | **4.7**   |           |   | 2.4            |   |   | 0.5 |   |
| Deferred                                                                   |   |           | **1.9**   |           |   | (2.2           | )      |   | (1.6 | ) |
| Foreign                                                                    |   |           |      |           |   |           |   |   |   |   |
| Current                                                                    |   |           | **70.8**  |           |   | 74.5           |   |   | 63.0 |   |
| Deferred                                                                   |   |           | **3.0**   |           |   | 8.7            |   |   | 3.3 |   |
|                                                                       |   | **$**          | **221.4** |           | $      | 83.8           |   | $ | 65.3 |   |

----

|                                                    |   |  **Deferred                Taxes****December                31, 2005** |       | Deferred                TaxesDecember                25, 2004(Restated) |   |
|---------------------------------------------------------|--------|-----------------------------------------------------------------------------|------------|-------------------------------------------------------------------------|--------|
|                                                    |   | **Assets**                                                                  |       | **Liabilities**                                                         |   | Assets |   | Liabilities |   |
| **Current:**                                            |   |                                                                        |       |                                                                    |   |   |   |   |   |
| Sales                and allowance accruals             |   | **$**                                                                       | **45.1**   |                                                                    | **$**  | **-** |   | $ | 40.1 |   | $ | - |   |
| Employee                benefits and compensation       |   |                                                                        | **41.9**   |                                                                    |   | **-** |   |   | 37.8 |   |   | - |   |
| Inventories                                             |   |                                                                        | **12.5**   |                                                                    |   | **-** |   |   | 10.9 |   |   | - |   |
| Unrealized                foreign exchange transactions |   |                                                                        | **-**      |                                                                    |   | **1.6** |   |   | 9.7 |   |   | 0.2 |   |
| Other                accruals                           |   |                                                                        | **24.0**   |                                                                    |   | **-** |   |   | 26.4 |   |   | - |   |
| Valuation                allowance                      |   |                                                                        | **(52.2**  | **)**                                                                   |   | **-** |   |   | (16.3 | ) |   | - |   |
|                                                    |   | **$**                                                                       | **71.3**   |                                                                    | **$**  | **1.6** |   | $ | 108.6 |   | $ | 0.2 |   |
| **Non-current:**                                        |   |                                                                        |       |                                                                    |   |   |   |   |   |   |   |   |   |
| Depreciation                and amortization            |   | **$**                                                                       | **152.5**  |                                                                    | **$**  | **82.7** |   | $ | 133.8 |   | $ | 74.1 |   |
| Tax                loss and credit carryforwards        |   |                                                                        | **76.3**   |                                                                    |   | **-** |   |   | 95.9 |   |   | - |   |
| Employee                benefits and compensation       |   |                                                                        | **51.1**   |                                                                    |   | **-** |   |   | 47.7 |   |   | - |   |
| Other                accruals                           |   |                                                                        | **3.8**    |                                                                    |   | **16.7** |   |   | 1.7 |   |   | 51.5 |   |
| Valuation                allowance                      |   |                                                                        | **(136.9** | **)**                                                                   |   | **-** |   |   | (44.4 | ) |   | - |   |
| Intercompany                investments                 |   |                                                                        | **-**      |                                                                    |   | **157.1** |   |   | - |   |   | 158.7 |   |
|                                                    |   |                                                                        | **146.8**  |                                                                    |   | **256.5** |   |   | 234.7 |   |   | 284.3 |   |
|                                                    |   | **$**                                                                       | **218.1**  |                                                                    | **$**  | **258.1** |   | $ | 343.3 |   | $ | 284.5 |   |

----

|                                                                |   |  **2005** |     | 2004(Restated) |   | 2003(Restated) |   |
|---------------------------------------------------------------------|--------|----------------|----------|----------------|--------|----------------|--------|
| Statutory                U.S. tax rate                              |   |           | **35.0** | **%**          |   | 35.0           | %      |   | 35.0 | % |
| Earnings                impact of changes in valuation allowances   |   |           | **49.3** |           |   | 8.8            |   |   | (0.9 | ) |
| Foreign,                including earnings taxed at different rates |   |           | **5.6**  |           |   | (6.1           | )      |   | 6.8 |   |
| State,                net of federal benefit                        |   |           | **2.7**  |           |   | 0.7            |   |   | (0.6 | ) |
| Tax                return and audit adjustments                     |   |           | **1.1**  |           |   | 1.8            |   |   | 2.3 |   |
| Orphan                drug credit                                   |   |           | **(0.4** | **)**          |   | (2.2           | )      |   | (2.9 | ) |
| Other                                                               |   |           | **(3.4** | **)**          |   | (3.6           | )      |   | (2.4 | ) |
| **Effective                tax rate**                               |   |           | **89.9** | **%**          |   | 34.4           | %      |   | 37.3 | % |

*Foreign,      including earnings taxed at different rates*
*Note      2 — Restatement*

----

**11.       **
**Debt**

*Note      2 — Restatement.*

*Note      3 — Acquisitions *

*Note      17 — Commitments and Contingencies*

----

|                                                 |   |           |    | **December                31, 2005**            |   | December                25, 2004      |   |
|------------------------------------------------------|--------|----------------|---------|-------------------------------------------------|--------|---------------------------------------|--------|
|  Type                                           |   |  Maturity |    | **Effective                Interest Rate****1** |   | **Amount                Outstanding** |   | Effective                Interest Rate1 |   | Amount                Outstanding |   |
| Notes                2                               |   |           | 2005    |                                            |   | -                                |   | **$** | **-** |   |   | 6.29%   |   | $ | 100.0 |   |
| Notes                3,                4             |   |           | 2007    |                                            |   | **8.63%  **                 |   |   | **150.0** |   |   | 8.63%   |   |   | 150.0 |   |
| Notes                3,                5             |   |           | 2008    |                                            |   | **7.87%***                            |   |   | **50.0** |   |   | 6.09%* |   |   | 50.0 |   |
| Debentures                3                          |   |           | 2028    |                                            |   | **7.19%  **                 |   |   | **183.9** |   |   | 7.19%   |   |   | 183.9 |   |
| Convertible                Notes 6                   |   |           | 2023    |                                            |   | **5.90%***                            |   |   | **4.1** |   |   | 2.41%* |   |   | 4.1 |   |
| Convertible                Securities 6              |   |           | 2023    |                                            |   | **6.14%***                            |   |   | **155.9** |   |   | 2.41%* |   |   | 155.9 |   |
| Bank                Term Loan                        |   |           | 2010    |                                            |   | **0.50%***                            |   |   | **48.1** |   |   | -     |   |   | - |   |
| Bank                Term Loan                        |   |           | 2010    |                                            |   | **5.10%***                            |   |   | **375.0** |   |   | -     |   |   | - |   |
| Other                7                               |   |           | Various |                                            |   | **Various**                           |   |   | **25.4** |   |   | Various  |   |   | 0.2 |   |
|                                                 |   |           |    |                                            |   |                                  |   |   | **992.4** |   |   |   |   |   | 644.1 |   |
| Less                current portion                7 |   |           |    |                                            |   |                                  |   |   | **(161.2** | **)** |   |   |   |   | (100.8 | ) |
|                                                 |   |           |    |                                            |   |                                  |   | **$** | **831.2** |   |   |   |   | $ | 543.3 |   |

| 2 | Notes                contained a put/call option exercisable at 100 percent of par in                2005. The                Company had also entered into a remarketing agreement which allowed                the                agent to call the debt from the holders on the option exercisable                date,                and then remarket them. If the rights were exercised, the coupon                rate paid                by the Company would reset to a rate higher than the then current                market                rate. Following the Company's debt rating downgrade by Moody's Investors                Service during March 2002, the agents exercised their right to put                the                remarketing agreement back to the Company. The debt was repaid during                August 2005. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | The                Company, at its option, may call these notes/debentures at any time                      pursuant to a make-whole redemption provision, which would                compensate                holders for any changes in interest rate levels of the notes/debentures                upon early extinguishment. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | In                May 2002, the Company entered into an interest rate lock agreement                to                hedge the benchmark interest rate associated with this debt issue.                Losses                associated with the hedge have been deferred to other comprehensive                income                and are being amortized to interest expense over the remaining life                of the                debt. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5 | In                August 2003, simultaneous with the issuance of this debt maturing                in 2008,                an interest rate swap agreement converted this note to a variable-rate                liability at a rate of six-month LIBOR plus 2.37 percent. Also in                May                2002, the Company entered into an interest rate lock agreement to                hedge                the benchmark interest rate associated with this debt issue. Losses                associated with the hedge have been deferred to other comprehensive                income                and are being amortized to interest expense over the debt                term. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6 | These                notes accrue interest at six-month LIBOR plus 0.5 percent, with the                rate                reset on a semi-annual basis in advance. The effective rate for 2005                includes the impact of the write-off of unamortized debt issuance                costs                for the convertible notes and securities due to the triggering of                the                conversion option, which resulted in an increase of $3.0 in interest                expense for 2005. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7 | The                amounts outstanding under other and current portion at December 31,                2005                include the $26.8 of outstanding borrowings under non-U.S. credit                facilities. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Note      10 — Provision for Income Taxes*
*Note      2 — Restatement*

*Note 10—*
*Provision      for Income Taxes*

----

**12.       **
**Accounting      for Derivatives and Hedging Activities**

*Accounting      for Derivative Instruments and Hedging Activities, *

**Fair      Value Hedges **
*Note      11 — Debt*

**Cash      Flow Hedges **
*Note      11 — Debt*

**Net      Investment Hedges **

----

**13.       **
**Financial      Instruments**

|                                                                |   | **December                31, 2005** |       | December                25, 2004 |   |
|---------------------------------------------------------------------|--------|--------------------------------------|------------|----------------------------------|--------|
|                                                                |   | **Carrying                Value**    |       | **Fair****Value**                |   | Carrying                Value |   | Fair                Value |   |
| **Non-derivatives**                                                 |   |                                 |       |                             |   |   |   |   |   |
| Other                investments                                    |   | **$**                                | **5.9**    |                             | **$**  | **5.9** |   | $ | 5.5 |   | $ | 5.5 |   |
| Long-term                debt, including current portion            |   |                                 | **(992.4** | **)**                            |   | **(1,065.7** | **)** |   | (644.1 | ) |   | (718.2 | ) |
|                                                                |   |                                 |       |                             |   |   |   |   |   |   |   |   |   |
| **Derivatives                held for purposes other than trading** |   |                                 |       |                             |   |   |   |   |   |   |   |   |   |
| Foreign                exchange instruments                         |   |                                 |       |                             |   |   |   |   |   |   |   |   |   |
| Other                current assets                                 |   | **$**                                | **2.4**    |                             | **$**  | **2.4** |   | $ | 8.1 |   | $ | 8.1 |   |
| Accrued                liabilities                                  |   |                                 | **(4.2**   | **)**                            |   | **(4.2** | **)** |   | (6.5 | ) |   | (6.5 | ) |
| Net                foreign exchange instruments                     |   | **$**                                | **(1.8**   | **)**                            | **$**  | **(1.8** | **)** | $ | 1.6 |   | $ | 1.6 |   |
|                                                                |   |                                 |       |                             |   |   |   |   |   |   |   |   |   |
| **Interest                rate instruments**                        |   |                                 |       |                             |   |   |   |   |   |   |   |   |   |
| Accrued                liabilities                                  |   | **$**                                | **(1.6**   | **)**                            | **$**  | **(1.6** | **)** | $ | (0.1 | ) | $ | (0.1 | ) |

*Balance      Sheets*

**14.       **
**Employee      Benefits**

----

**Pension      and Postretirement Benefit Plans **
*Net      Periodic Benefit Cost*

*Net      Periodic Benefit Cost*

*Accounting      and Disclosure Requirements Related to the Medicare Prescription Drug,      Improvement and Modernization Act*

*Item      7.*
*Management’s      Discussion and Analysis - Critical Accounting Policies; Employee Benefits*

----

**Net      Periodic Benefit Cost **

|                                                 |   | Pension                Benefit Plans |      | Postretirement                Benefit Plan |   |
|------------------------------------------------------|--------|--------------------------------------|-----------|--------------------------------------------|--------|
|                                                 |   |  **2005**                       |      | 2004                2(Restated)            |   | 2003                2(Restated) |   |  **2005** |   |  2004 |   |  2003 |   |
| Service                cost **1**                    |   | **$**                                | **8.2**   |                                       | $      | 15.8 |   | $ | 13.7 |   | **$** | **1.3** |   | $ | 1.6 |   | $ | 1.4 |   |
| Interest                cost                         |   |                                 | **19.9**  |                                       |   | 19.4 |   |   | 18.4 |   |   | **5.4** |   |   | 4.9 |   |   | 5.9 |   |
| Expected                return on plan assets        |   |                                 | **(22.0** | **)**                                      |   | (20.3 | ) |   | (16.6 | ) |   | **(3.4** | **)** |   | (3.1 | ) |   | (2.6 | ) |
| Amortization                of transition obligation |   |                                 | **0.1**   |                                       |   | 0.1 |   |   | 0.2 |   |   | **-** |   |   | - |   |   | - |   |
| Amortization                of prior-service cost    |   |                                 | **-**     |                                       |   | 0.5 |   |   | 2.2 |   |   | **(0.3** | **)** |   | (0.1 | ) |   | (0.1 | ) |
| Amortization                of net loss              |   |                                 | **8.6**   |                                       |   | 6.6 |   |   | 7.5 |   |   | **0.9** |   |   | - |   |   | 0.3 |   |
| Curtailment                loss (gain)               |   |                                 | **-**     |                                       |   | 1.1 |   |   | 0.4 |   |   | **-** |   |   | (0.7 | ) |   | - |   |
| Settlement                (gain) loss                |   |                                 | **(6.6**  | **)**                                      |   | - |   |   | 0.3 |   |   | **-** |   |   | - |   |   | - |   |
|                                                 |   |                                 |      |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                periodic benefit cost             |   | **$**                                | **8.2**   |                                       | $      | 23.2 |   | $ | 26.1 |   | **$** | **3.9** |   | $ | 2.6 |   | $ | 4.9 |   |

| 1 | The                decline in service cost in 2005 for the pension benefit plans was                primarily due to the freezing of the Company's U.S. defined benefit                pension plan effective December 31,                2004. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Due                to the Company's restatement of previously issued financial statements                as                discussed in *Note                2 — Restatement*                certain amounts originally reported in net periodic benefit cost                for 2004                and 2003 have changed in the disclosure                above. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Weighted      Average Assumptions Used to Determine Net Periodic Benefit      Cost**

|                                          |   | Pension                Benefit Plans |     | Postretirement                Benefit Plan |   |
|-----------------------------------------------|--------|--------------------------------------|----------|--------------------------------------------|--------|
|                                          |   | **2005**                             |     | 2004                                       |   | 2003 |   | **2005** |   | 2004 |   | 2003 |   |
| **U.S.                Plans**                 |   |                                 |     |                                       |   |   |   |   |   |   |   |   |   |
| Discount                rate                  |   |                                 | **5.75** | **%**                                      |   | 6.00 | % |   | 6.75 | % |   | **5.75** | **%** |   | 6.00 | % |   | 6.75 | % |
| Expected                return on plan assets |   |                                 | **8.75** | **%**                                      |   | 9.00 | % |   | 9.00 | % |   | **7.75** | **%** |   | 8.00 | % |   | 8.00 | % |
| Rate                of compensation increase  |   |                                 | **-**    |                                       |   | 4.00 | % |   | 4.25 | % |   | **-** |   |   | - |   |   | - |   |
|                                          |   |                                 |     |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Non-U.S.                Plans****1**        |   |                                 |     |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discount                rate                  |   |                                 | **4.43** | **%**                                      |   | 4.90 | % |   | 5.23 | % |   |   |   |   |   |   |   |   |   |
| Expected                return on plan assets |   |                                 | **5.96** | **%**                                      |   | 6.12 | % |   | 6.07 | % |   |   |   |   |   |   |   |   |   |
| Rate                of compensation increase  |   |                                 | **3.76** | **%**                                      |   | 3.09 | % |   | 3.05 | % |   |   |   |   |   |   |   |   |   |

----

*Balance      Sheets*

|                                            |   | Pension                Benefit Plans |      | Postretirement                Benefit Plan |   |
|-------------------------------------------------|--------|--------------------------------------|-----------|--------------------------------------------|--------|
|                                            |   |  **2005**                       |      | 2004                1(Restated)            |   |  **2005** |   |  2004 |   |
| **Change                in Benefit Obligation** |   |                                 |      |                                       |   |   |   |   |   |
| Obligation                at beginning of year  |   | **$**                                | **387.8** |                                       | $      | 355.3 |   | **$** | **78.7** |   | $ | 96.5 |   |
| Service                cost                     |   |                                 | **8.2**   |                                       |   | 15.8 |   |   | **1.3** |   |   | 1.6 |   |
| Interest                cost                    |   |                                 | **19.9**  |                                       |   | 19.4 |   |   | **5.4** |   |   | 4.9 |   |
| Participant                contributions        |   |                                 | **1.8**   |                                       |   | 1.6 |   |   | **1.2** |   |   | 1.5 |   |
| Benefit                payments                 |   |                                 | **(19.4** | **)**                                      |   | (20.4 | ) |   | **(9.1** | **)** |   | (10.0 | ) |
| Currency                translation adjustments |   |                                 | **(13.9** | **)**                                      |   | 9.1 |   |   | **-** |   |   | - |   |
| Curtailment                gain                 |   |                                 | **(0.2**  | **)**                                      |   | (22.4 | ) |   | **-** |   |   | (2.7 | ) |
| Settlement                gain                  |   |                                 | **(8.5**  | **)**                                      |   | - |   |   | **-** |   |   | - |   |
| Actuarial                loss (gain)**2**       |   |                                 | **38.2**  |                                       |   | 29.4 |   |   | **19.8** |   |   | (13.1 | ) |
| Obligation                at end of year        |   | **$**                                | **413.9** |                                       | $      | 387.8 |   | **$** | **97.3** |   | $ | 78.7 |   |

| **Change                in Plan Assets**                      |   |   |      |   |   |   |   |   |     |
|---------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|--------|--------|----------|
| Fair                value of plan assets at beginning of year |   | **$**  | **281.7** |   | $      | 239.0  |   | **$**  | **43.6** |   | $ | 37.0 |   |
| Actual                gain on plan assets                     |   |   | **24.9**  |   |   | 31.1   |   |   | **1.2**  |   |   | 6.8 |   |
| Employer                contributions                         |   |   | **19.2**  |   |   | 25.6   |   |   | **7.4**  |   |   | 8.3 |   |
| Participant                contributions                      |   |   | **1.8**   |   |   | 1.6    |   |   | **1.2**  |   |   | 1.5 |   |
| Benefit                payments                               |   |   | **(19.4** | **)**  |   | (20.4  | )      |   | **(9.1** | **)** |   | (10.0 | ) |
| Settlement                payments                            |   |   | **(0.5**  | **)**  |   | -      |   |   | **-**    |   |   | - |   |
| Currency                translation adjustments               |   |   | **(8.4**  | **)**  |   | 4.8    |   |   | **-**    |   |   | - |   |
| Fair                value of plan assets at end of year       |   | **$**  | **299.3** |   | $      | 281.7  |   | **$**  | **44.3** |   | $ | 43.6 |   |

| **Funded                Status at end of year**          |   |                **$** | **(114.6** | **)**  |                **$** | (106.1 | )      |                **$** | **(53.0** | **)**  |                **$** | (35.1 | )      |
|----------------------------------------------------------|--------|---------------------------|------------|--------|---------------------------|--------|--------|---------------------------|-----------|--------|---------------------------|-------|--------|
| Unrecognized                transition obligation        |   |                      | **0.2**    |   |                      | 0.4    |   |                      | **-**     |   |                      | -     |   |
| Unrecognized                prior-service cost (benefit) |   |                      | **-**      |   |                      | 0.1    |   |                      | **(1.2**  | **)**  |                      | (1.5  | )      |
| Unrecognized                actuarial loss               |   |                      | **111.6**  |   |                      | 89.1   |   |                      | **22.1**  |   |                      | 1.0   |   |
| Net                amount recognized at end of year      |   | **$**                     | **(2.8**   | **)**  | $                         | (16.5  | )      | **$**                     | **(32.1** | **)**  | $                         | (35.6 | )      |

| Amounts                recognized in the *Balance                Sheets*                consist of: |   |   |      |   |   |   |   |   |      |
|-----------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|--------|--------|-----------|
| Prepaid                benefit cost                                                                 |   | **$**  | **1.8**   |   | $      | -      |   | **$**  | **-**     |   | $ | - |   |
| Accrued                benefit liability                                                            |   |   | **(91.1** | **)**  |   | (86.9  | )      |   | **(32.1** | **)** |   | (35.6 | ) |
| Intangible                asset                                                                     |   |   | **-**     |   |   | 0.6    |   |   | **-**     |   |   | - |   |
| Accumulated                other comprehensive loss**3**                                            |   |   | **86.5**  |   |   | 69.8   |   |   | **-**     |   |   | - |   |
| Net                amount recognized at end of year                                                 |   | **$**  | **(2.8**  | **)**  | $      | (16.5  | )      | **$**  | **(32.1** | **)** | $ | (35.6 | ) |

*Note      2 — Restatement*

| 2 | Unrecognized                actuarial losses increased in 2005 primarily due to reductions in                the                discount rate used to determine benefit obligations and an increase                in the                assumed life expectancy of plan participants. Unrecognized actuarial                losses are deferred and amortized to expense over future periods.                Unrecognized gains and losses that exceed ten percent of the greater                of                the plans' projected benefit obligations or the market-related value                of                assets are amortized to earnings over the shorter of the estimated                future                service period of the plan participants or the period until any                anticipated final plan settlements. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Weighted      Average Assumptions Used to Determine Benefit Obligations**

|                                                          |   | Pension                Benefit Plans |     | Postretirement                Benefit Plan |   |
|---------------------------------------------------------------|--------|--------------------------------------|----------|--------------------------------------------|--------|
|                                                          |   | **2005**                             |     | 2004                                       |   | **2005** |   | 2004 |   |
| **U.S.                Plans**                                 |   |                                 |     |                                       |   |   |   |   |   |
| Discount                rate                                  |   |                                 | **5.50** | **%**                                      |   | 5.75 | % |   | **5.50** | **%** |   | 5.75 | % |
| Rate                of compensation increase                1 |   |                                 | **-**    |                                       |   | **-** |   |   | **-** |   |   | - |   |
|                                                          |   |                                 |     |                                       |   |   |   |   |   |   |   |   |   |
| **Non-U.S.                Plans****2**                        |   |                                 |     |                                       |   |   |   |   |   |   |   |   |   |
| Discount                rate                                  |   |                                 | **3.89** | **%**                                      |   | 4.43 | % |   |   |   |   |   |   |
| Rate                of compensation increase                  |   |                                 | **3.71** | **%**                                      |   | 3.76 | % |   |   |   |   |   |   |

| 1 | The                rate of compensation increase assumption is not applicable to the                U.S.                Plans since plan participants are accruing no additional benefits                except                for an interest allocation on the December 31, 2004 account                balance. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Plan      Assets **

|                                          |   | Pension                Benefit Plans |    | Postretirement                Benefit Plan |   |
|-----------------------------------------------|--------|--------------------------------------|---------|--------------------------------------------|--------|
|                                          |   | **2005**                             |    | 2004                                       |   | **2005** |   | 2004 |   |
| **U.S.                Plans**                 |   |                                 |    |                                       |   |   |   |   |   |
| Equity                securities              |   |                                 | **72**  | **%**                                      |   | 74 | % |   | **97** | **%** |   | 97 | % |
| Fixed                income (debt) securities |   |                                 | **28**  | **%**                                      |   | 26 | % |   | **3** | **%** |   | 3 | % |
| Total                                         |   |                                 | **100** | **%**                                      |   | 100 | % |   | **100** | **%** |   | 100 | % |
|                                          |   |                                 |    |                                       |   |   |   |   |   |   |   |   |   |
| **Non-U.S.                Plans****1**        |   |                                 |    |                                       |   |   |   |   |   |   |   |   |   |
| Equity                securities              |   |                                 | **69**  | **%**                                      |   | 65 | % |   |   |   |   |   |   |
| Fixed                income (debt) securities |   |                                 | **20**  | **%**                                      |   | 19 | % |   |   |   |   |   |   |
| Other                                         |   |                                 | **11**  | **%**                                      |   | 16 | % |   |   |   |   |   |   |
| Total                                         |   |                                 | **100** | **%**                                      |   | 100 | % |   |   |   |   |   |   |

**Plan      Funded Status**

|                                          |   | Pension                Benefit Plans |      |
|-----------------------------------------------|--------|--------------------------------------|-----------|
|                                          |   |  **2005**                       |      | 2004(Restated) |   |
| Projected                benefit obligation   |   | **$**                                | **400.8** |   | $ | 387.8 |   |
| Accumulated                benefit obligation |   |                                 | **377.9** |   |   | 368.5 |   |
| Fair                value of plan assets      |   |                                 | **286.9** |   |   | 281.7 |   |

----

*Note      10 — Provision for Income Taxes*

|                                        |   | Pension                Benefit Plans |      |
|---------------------------------------------|--------|--------------------------------------|-----------|
|                                        |   |  **2005**                       |      | 2004(Restated) |   |
| Projected                benefit obligation |   | **$**                                | **413.9** |   | $ | 387.8 |   |
| Fair                value of plan assets    |   |                                 | **299.3** |   |   | 281.7 |   |

**Contributions**

**Estimated      Future Benefit Payments**

|                                    |   |                                 |   | Postretirement                Benefit Plan |   |
|-----------------------------------------|--------|--------------------------------------|--------|--------------------------------------------|--------|
|  Fiscal                Year Ending |   | Pension                Benefit Plans |   | Benefit                Payments            |   | Subsidy                Receipts |   |
| December                30, 2006        |   | $                                    | 23.5   |                                       | $      | 7.6 |   | $ | 0.6 |   |
| December                29, 2007        |   |                                 | 23.8   |                                       |   | 7.8 |   |   | 0.6 |   |
| December                27, 2008        |   |                                 | 23.5   |                                       |   | 8.1 |   |   | 0.6 |   |
| December                26, 2009        |   |                                 | 25.2   |                                       |   | 8.2 |   |   | 0.6 |   |
| December                25, 2010        |   |                                 | 22.2   |                                       |   | 8.4 |   |   | 0.6 |   |
| Fiscal                years 2011 - 2015 |   |                                 | 114.6  |                                       |   | 41.7 |   |   | 2.8 |   |

**Health      Care Cost Trend Rate**

|                                                                                                                                       |   | 1%                Increase |   | 1%                Decrease |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|--------|----------------------------|--------|
| Effect                on total service and interest cost components of net periodic                postretirement health care benefit cost |   | $                          | 0.7    |                       | $      | (0.6 | ) |
|                                                                                                                                       |   |                       |   |                       |   |   |   |
| Effect                on the health care component of the accumulated postretirement benefit                obligation                     |   |                       | 8.6    |                       |   | (7.3 | ) |

----

**Defined      Contribution Plans **

**15.       **
**Employee      Stock Plans**

**2003      Long-Term Incentive Plan **

**Stock      Options**
*Note      1 — Significant Accounting Policies*

*Accounting      for Stock-Based Compensation*

|                                                  |   | **2005** |      | 2004   |   | 2003  |   |
|-------------------------------------------------------|--------|----------|-----------|--------|--------|-------|--------|
| Risk-free                interest rate                |   |     | **4.33**  | **%**  |   | 3.06  | %      |   | 3.37 | % |
| Dividend                yield                         |   |     | **1.13**  | **%**  |   | 1.18  | %      |   | 1.18 | % |
| Volatility                factor                      |   |     | **34.61** | **%**  |   | 35.97 | %      |   | 36.02 | % |
| Weighted                average expected life (years) |   |     | **5**     |   |   | 6     |   |   | 6 |   |
| Weighted                average fair value            |   | **$**    | **24.47** |   | $      | 19.19 |   | $ | 10.98 |   |

----

|                                            |   | **2005**                                    |       | 2004                                                           |   |                                   |   | 2003                                                       |   |
|-------------------------------------------------|--------|---------------------------------------------|------------|----------------------------------------------------------------|--------|----------------------------------------|--------|------------------------------------------------------------|--------|
|                                            |   | **Numbers                of Shares (000s)** |       | **Weighted                Average Exercise Price (Per Share)** |   | Number                of Shares (000s) |   | Weighted                Average Exercise Price (Per Share) |   | Number                of Shares (000s) |   | Weighted                Average Exercise Price (Per Share) |   |
| Outstanding                at beginning of year |   |                                        | **6,521**  |                                                           | **$**  | **45.31**                              |   |                                                       | 7,530  |   | $ | 43.66 |   |   | 7,060 |   | $ | 46.60 |   |
| Granted                                         |   |                                        | **979**    |                                                           |   | **72.56**                              |   |                                                       | 1,125  |   |   | 54.86 |   |   | 1,444 |   |   | 30.65 |   |
| Exercised                                       |   |                                        | **(1,569** | **)**                                                          |   | **44.40**                              |   |                                                       | (1,853 | ) |   | 42.27 |   |   | (312 | ) |   | 38.97 |   |
| Forfeited                and canceled           |   |                                        | **(107**   | **)**                                                          |   | **54.83**                              |   |                                                       | (281   | ) |   | 60.62 |   |   | (662 | ) |   | 48.68 |   |
| Outstanding                at year end          |   |                                        | **5,824**  |                                                           |   | **49.96**                              |   |                                                       | 6,521  |   |   | 45.31 |   |   | 7,530 |   |   | 43.66 |   |
| Options                exercisable at year end  |   |                                        | **3,781**  |                                                           | **$**  | **45.67**                              |   |                                                       | 3,996  |   | $ | 46.94 |   |   | 4,680 |   | $ | 48.80 |   |

|                                                |   | Options                Outstanding       |   | Options                Exercisable                                 |   |
|-----------------------------------------------------|--------|------------------------------------------|--------|--------------------------------------------------------------------|--------|
| Range                of Exercise Prices (Per Share) |   | Number                Outstanding (000s) |   | Weighted                Average Remaining Contractual Life (Years) |   | Weighted                Average Exercise Price (Per Share) |   | Number                Exercisable (000s) |   | Weighted                Average Exercise Price (Per Share) |   |
| $26.00                to 40.49                      |   |                                     | 2,356  |                                                               |   | 6.3 |   | $ | 34.15 |   |   | 1,928 |   | $ | 34.97 |   |
|   40.50                to 45.49           |   |                                     | 556    |                                                               |   | 4.2 |   |   | 44.22 |   |   | 553 |   |   | 44.23 |   |
|   45.50                to 55.49           |   |                                     | 1,043  |                                                               |   | 7.0 |   |   | 53.64 |   |   | 442 |   |   | 52.84 |   |
|   55.50                to 65.49           |   |                                     | 523    |                                                               |   | 5.2 |   |   | 61.50 |   |   | 461 |   |   | 61.78 |   |
|   65.50                to 75.49           |   |                                     | 1,292  |                                                               |   | 7.3 |   |   | 72.24 |   |   | 397 |   |   | 72.96 |   |
|   75.50                to 83.55           |   |                                     | 54     |                                                               |   | 9.6 |   |   | 83.55 |   |   | - |   |   | - |   |
|                                                |   |                                     | 5,824  |                                                               |   | 6.4 |   | $ | 49.96 |   |   | 3,781 |   | $ | 45.67 |   |

**Restricted      Stock **

**Performance      Awards**

**Employee      Stock Purchase Plan**

----

**16.       **
**Operating      Leases**

**17.       **
**Commitments      and Contingencies**

**Subsidiary      Debt Guarantees **
*Note      11 — Debt*

**Letters      of Credit**

**Guarantees      **

**Tax      Indemnifications**

**Environmental      Indemnifications**

----

**Other      Commitments and Contingencies **
*Note      21 — Other Matters*
*Note      2 — Restatement*

*Note      21 — Other Matters *

**Product      Warranties**

| Balance                at December 27, 2003 (Restated)                |   | $      | 8.0  |   |
|-----------------------------------------------------------------------|--------|--------|------|--------|
| Accruals                for warranties issued                         |   |   | 6.7  |   |
| Changes                in accruals related to pre-existing warranties |   |   | (1.0 | )      |
| Settlements                made                                       |   |   | (5.9 | )      |
| Balance                at December 25, 2004 (Restated)                |   | $      | 7.8  |   |
| Accruals                for warranties issued                         |   |   | 6.9  |   |
| Changes                in accruals related to pre-existing warranties |   |   | (2.1 | )      |
| Settlements                made                                       |   |   | (6.7 | )      |
| Balance                at December 31, 2005 1                         |   | $      | 5.9  |   |

| 1 | Warranty                reserve changes during 2005 and the 2005 year end balance do not                include                amounts in connection with the *MoistureLoc*                recall. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Deferred      Service Revenue**

| Balance                at December 27, 2003 (Restated)                       |   | $      | 6.5   |   |
|------------------------------------------------------------------------------|--------|--------|-------|--------|
| Accruals                for service contracts                                |   |   | 14.0  |   |
| Changes                in accruals related to pre-existing service contracts |   |   | (0.3  | )      |
| Revenue                recognized                                            |   |   | (12.5 | )      |
| Balance                at December 25, 2004 (Restated)                       |   | $      | 7.7   |   |
| Accruals                for service contracts                                |   |   | 11.8  |   |
| Revenue                recognized                                            |   |   | (12.6 | )      |
| Balance                at December 31, 2005                                  |   | $      | 6.9   |   |

**18.       **
**Forward      Equity Contracts**

**19.       **
**Supplemental      Balance Sheet Information**

|                                                                           |   |  **December                31, 2005** |     | December                25, 2004(Restated) |   | December                27, 2003(Restated) |   |
|--------------------------------------------------------------------------------|--------|--------------------------------------------|----------|--------------------------------------------|--------|--------------------------------------------|--------|
| **Allowances                for Losses on Trade Receivables**                  |   |                                       |     |                                       |   |                                       |   |
| Balance                at beginning of year                                    |   | **$**                                      | **22.1** |                                       | $      | 20.6                                       |   | $ | 25.1 |   |
| Change                in provision                                             |   |                                       | **(0.6** | **)**                                      |   | 4.2                                        |   |   | 2.9 |   |
| Gross                write-offs of trade receivables accounts                  |   |                                       | **(5.4** | **)**                                      |   | (4.0                                       | )      |   | (9.3 | ) |
| Recoveries                on trade receivables accounts previously written off |   |                                       | **1.2**  |                                       |   | 0.6                                        |   |   | 0.1 |   |
| Currency                effect                                                 |   |                                       | **(1.1** | **)**                                      |   | 0.7                                        |   |   | 1.8 |   |
| Balance                at end of year                                          |   | **$**                                      | **16.2** |                                       | $      | 22.1                                       |   | $ | 20.6 |   |

|                                      |   |  **December                31, 2005** |      | December                25, 2004(Restated) |   |
|-------------------------------------------|--------|--------------------------------------------|-----------|--------------------------------------------|--------|
| **Inventories,                net**       |   |                                       |      |                                       |   |
| Raw                materials and supplies |   | **$**                                      | **51.4**  |                                       | $      | 50.0 |   |
| Work                in process            |   |                                       | **19.5**  |                                       |   | 17.8 |   |
| Finished                products          |   |                                       | **148.9** |                                       |   | 144.3 |   |
|                                      |   | **$**                                      | **219.8** |                                       | $      | 212.1 |   |

----

|                                                  |   |  **December                31, 2005** |        | December                25, 2004(Restated) |   |
|-------------------------------------------------------|--------|--------------------------------------------|-------------|--------------------------------------------|--------|
| **Property,                Plant and Equipment, net** |   |                                       |        |                                       |   |
| Land                                                  |   | **$**                                      | **20.0**    |                                       | $      | 19.1 |   |
| Buildings                                             |   |                                       | **344.8**   |                                       |   | 341.5 |   |
| Machinery                and equipment                |   |                                       | **998.2**   |                                       |   | 972.7 |   |
| Leasehold                improvements 1               |   |                                       | **25.5**    |                                       |   | 28.7 |   |
| Equipment                on operating lease 2         |   |                                       | **14.4**    |                                       |   | 16.5 |   |
|                                                  |   |                                       | **1,402.9** |                                       |   | 1,378.5 |   |
| Less                accumulated depreciation          |   |                                       | **(798.5**  | **)**                                      |   | (797.7 | ) |
|                                                  |   | **$**                                      | **604.4**   |                                       | $      | 580.8 |   |

| 1 | Upon                initial application of SFAS No. 143, *Accounting                for Asset Retirement Obligations,*                the Company recorded an initial liability and an increase to leasehold                improvements of $1.8. Cumulative accretion and accumulated depreciation                were measured from the commencement date of the leases to the date                of                adoption. A cumulative charge of initially applying this statement                of                $0.9, net of tax, was reported in the first quarter of 2003 as a                change in                accounting principle in the Statements of                Income. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | See                *Note                6 — Net Investment in Sales-Type and Operating Leases*                for additional information regarding equipment on operating                lease. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**20.       **
**Restructuring      Charges and Asset Write-offs**

**Profitability      Improvement Program and Transfer of **
***PureVision***
**      Contact Lens Manufacturing **
*PureVision*

*PureVision*

**21.       **
**Other      Matters**

**Legal      Matters**
*MoistureLoc*

----

***Shareholder      Securities Class Actions***
*In      re      Bausch & Lomb Incorporated Securities Litigation,*
*MoistureLoc*

***ERISA-Based      Class Actions***
*In      re      Bausch & Lomb Incorporated ERISA Litigation*
*MoistureLoc*

***Shareholder      Derivative Actions***
*MoistureLoc*

*In      re      Bausch & Lomb Incorporated Derivative Litigation*

----

*MoistureLoc*
*Little      v. Zarrella*
*Pinchuck      v. Zarrella*
*MoistureLoc*

*Pinchuck*
*Little*

***Product      Liability Lawsuits***
*ReNu*
*ReNu*
*MoistureLoc*

***Material      Intellectual Property Litigation***
*Rembrandt      Vision Technology, L.P. v. Bausch & Lomb Incorporated and CIBA Vision      Corporation*
*PureVision*

----

***Material      Tax Litigation***
*Note      10 — Provision for Income Taxes*

**General      Litigation Statement **

*Note      2 — Restatement*

*Item      3. Legal Proceedings*

----

**22.       **
**Quarterly      Results, Stock Prices and Selected Financial Data      (Unaudited)**

**Quarterly      Results **
*Note      2 — Restatement*
*Statements      of Income*

|                                              |   | First                Quarter |   | Second                Quarter |   | Third                Quarter |   | Fourth                Quarter |   |
|---------------------------------------------------|--------|------------------------------|--------|-------------------------------|--------|------------------------------|--------|-------------------------------|--------|
|                                              |   | As                Reported   |   | AsRestated                    |   | As                Reported   |   | As                Restated    |   |   |   |   |   |
| **2005**                                          |   |                         |   |                          |   |                         |   |                          |   |   |   |   |   |
| Net                Sales                          |   | $                            | 554.3  |                          | $      | 554.7                        |   | $                             | 608.3  |   | $ | 605.4 |   | $ | 567.3 |   | $ | 626.4 |   |
| Gross                Profit                       |   |                         | 322.3  |                          |   | 321.9                        |   |                          | 362.2  |   |   | 360.4 |   |   | 318.6 |   |   | 369.7 |   |
| Operating                Income                   |   |                         | 60.5   |                          |   | 55.2                         |   |                          | 80.2   |   |   | 75.7 |   |   | 56.4 |   |   | 96.1 |   |
| Net                Income (Loss)                  |   |                         | 34.5   |                          |   | 33.3                         |   |                          | 45.0   |   |   | 37.3 |   |   | (105.2 | ) |   | 53.8 |   |
| Earnings                (Loss) Per Share, Basic   |   | $                            | 0.65   |                          | $      | 0.63                         |   | $                             | 0.85   |   | $ | 0.70 |   | $ | (1.97 | ) | $ | 1.00 |   |
| Earnings                (Loss) Per Share, Diluted |   | $                            | 0.63   |                          | $      | 0.60                         |   | $                             | 0.81   |   | $ | 0.67 |   | $ | (1.97 | ) | $ | 0.96 |   |

|                                              |   | First                Quarter |   | Second                Quarter |   | Third                Quarter |   | Fourth                Quarter |   |
|---------------------------------------------------|--------|------------------------------|--------|-------------------------------|--------|------------------------------|--------|-------------------------------|--------|
|                                              |   | As                Reported   |   | AsRestated                    |   | As                Reported   |   | AsRestated                    |   | As                Reported |   | AsRestated |   | As                Reported |   | As                Restated |   |
| 2004                                              |   |                         |   |                          |   |                         |   |                          |   |   |   |   |   |   |   |   |   |
| Net                Sales                          |   | $                            | 510.3  |                          | $      | 514.0                        |   | $                             | 566.5  |   | $ | 564.6 |   | $ | 548.9 |   | $ | 548.6 |   | $ | 606.6 |   | $ | 606.3 |   |
| Gross                Profit                       |   |                         | 289.9  |                          |   | 291.6                        |   |                          | 338.9  |   |   | 338.2 |   |   | 317.5 |   |   | 319.5 |   |   | 351.1 |   |   | 355.1 |   |
| Operating                Income                   |   |                         | 43.5   |                          |   | 39.7                         |   |                          | 75.2   |   |   | 71.2 |   |   | 76.8 |   |   | 77.9 |   |   | 84.1 |   |   | 90.3 |   |
| Net                Income                         |   |                         | 23.5   |                          |   | 22.8                         |   |                          | 41.4   |   |   | 32.4 |   |   | 43.3 |   |   | 46.7 |   |   | 51.4 |   |   | 51.9 |   |
| Earnings                Per Share, Basic     |   | $                            | 0.45   |                          | $      | 0.44                         |   | $                             | 0.78   |   | $ | 0.62 |   | $ | 0.81 |   | $ | 0.89 |   | $ | 0.97 |   | $ | 0.99 |   |
| Earnings                Per Share, Diluted 1 |   | $                            | 0.43   |                          | $      | 0.42                         |   | $                             | 0.76   |   | $ | 0.59 |   | $ | 0.79 |   | $ | 0.86 |   | $ | 0.94 |   | $ | 0.95 |   |

| 1 | Includes                the diluted effect from the Company's application of EITF Issue 04-8,                *The                Effect of Contingently Convertible Debt on Diluted Earnings Per Share*(see                *Note                4 — Earnings Per Share*).                Diluted shares were retroactively restated for periods ended prior                to                December 25, 2004 with no change to previously reported EPS. Diluted                shares outstanding for the first, second and third quarters of 2004                were                restated to 54,566; 54,569 and 54,628 from 54,499; 54,431 and 54,460,                respectively. Diluted shares outstanding for the 2003 third quarter                and                year to date periods were restated to 53,423 and 53,519 from 53,379                and                53,491, respectively. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Quarterly      Stock Prices **

|   |   | **2005**                           |      | 2004                           |   |
|--------|--------|------------------------------------|-----------|--------------------------------|--------|
|   |   | **Price                Per Share** |      | Price                Per Share |   |
|   |   | **High**                           |      | **Low**                        |   | High |   | Low |   |
| First  |   | **$**                              | **75.85** |                           | **$**  | **61.82** |   | $ | 61.64 |   | $ | 50.70 |   |
| Second |   |                               | **79.75** |                           |   | **70.80** |   |   | 66.67 |   |   | 57.63 |   |
| Third  |   |                               | **87.89** |                           |   | **74.50** |   |   | 69.00 |   |   | 57.42 |   |
| Fourth |   |                               | **84.30** |                           |   | **66.17** |   |   | 67.95 |   |   | 57.17 |   |

----

*Note      2 — Restatement*

|                                                      |   | Quarters                Ended |   |
|-----------------------------------------------------------|--------|-------------------------------|--------|
|                                                      |   | Jun                25,2005    |   | Mar                26,2005 |   | Dec                25,2004 |   | Sep                25,2004 |   | Jun                26,2004 |   | Mar                27,2004 |   |
| Net                Income, as Previously Reported         |   | $                             | 45.0   |   | $ | 34.5 |   | $ | 51.4 |   | $ | 43.3 |   | $ | 41.4 |   | $ | 23.5 |   |
| Brazil                Matters                             |   |                          | (0.9   | ) |   | (0.7 | ) |   | (0.6 | ) |   | (0.6 | ) |   | (0.3 | ) |   | (0.3 | ) |
| Asia                and Other Revenue Recognition Matters |   |                          | (1.5   | ) |   | (0.6 | ) |   | (0.3 | ) |   | (0.7 | ) |   | (1.8 | ) |   | 1.5 |   |
| Tax                Matters                                |   |                          | (4.2   | ) |   | 2.6 |   |   | (0.8 | ) |   | 3.1 |   |   | (6.4 | ) |   | 2.0 |   |
| Deferred                Compensation Plan                 |   |                          | (1.7   | ) |   | (2.0 | ) |   | 0.2 |   |   | (0.2 | ) |   | (0.6 | ) |   | (1.3 | ) |
| Other                Items                                |   |                          | 0.6    |   |   | (0.5 | ) |   | 2.0 |   |   | 1.8 |   |   | 0.1 |   |   | (2.5 | ) |
| Net                Income as Restated                     |   | $                             | 37.3   |   | $ | 33.3 |   | $ | 51.9 |   | $ | 46.7 |   | $ | 32.4 |   | $ | 22.8 |   |

|                                                              |   | Quarters                Ended |   |
|-------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                              |   | Jun                25,2005    |   | Mar                26,2005 |   | Dec                25,2004 |   | Sep                25,2004 |   | Jun                26,2004 |   | Mar                27,2004 |   |
| Diluted                Earnings Per Share, as Previously Reported |   | $                             | 0.81   |   | $ | 0.63 |   | $ | 0.94 |   | $ | 0.79 |   | $ | 0.76 |   | $ | 0.43 |   |
| Brazil                Matters                                     |   |                          | (0.02  | ) |   | (0.01 | ) |   | (0.01 | ) |   | (0.01 | ) |   | (0.01 | ) |   | (0.01 | ) |
| Asia                and Other Revenue Recognition Matters         |   |                          | (0.03  | ) |   | (0.01 | ) |   | - |   |   | (0.01 | ) |   | (0.03 | ) |   | 0.03 |   |
| Tax                Matters                                        |   |                          | (0.07  | ) |   | 0.05 |   |   | (0.02 | ) |   | 0.06 |   |   | (0.12 | ) |   | 0.04 |   |
| Deferred                Compensation Plan                         |   |                          | (0.03  | ) |   | (0.04 | ) |   | - |   |   | - |   |   | (0.01 | ) |   | (0.02 | ) |
| Other                Items                                        |   |                          | 0.01   |   |   | (0.01 | ) |   | 0.04 |   |   | 0.03 |   |   | - |   |   | (0.05 | ) |
| Diluted                Earnings Per Share, as Restated            |   | $                             | 0.67   |   | $ | 0.60 |   | $ | 0.95 |   | $ | 0.86 |   | $ | 0.59 |   | $ | 0.42 |   |

----

**Selected        Financial Data**

|                                                                |   |           |        |                              |   |                              |   | 2002                           |    | 2001                                |   |
|---------------------------------------------------------------------|--------|----------------|-------------|-----------------------------------|--------|-----------------------------------|--------|--------------------------------|---------|-------------------------------------|--------|
|                                                                |   |  **2005** |        | 2004(Restated)                  2 |   | 2003(Restated)                  2 |   | (As                  Reported) |    |  (Restated)                  2 |   | (As                  Reported) |   |  (Restated)                  2 |   |
| **Results                  for the Year**                           |   |           |        |                              |   |                              |   |                           |    |                                |   |   |   |   |   |
| Net                  Sales 1                                        |   | **$**          | **2,353.8** |                              | $      | 2,233.5                           |   | $                              | 2,018.5 |                                | $      | 1,816.7 |   | $ | 1,810.5 |   | $ | 1,665.5 |   | $ | 1,660.4 |   |
| Income                  from Continuing Operations             |   |           | **19.2**    |                              |   | 153.9                             |   |                           | 106.9   |                                |   | 72.5 |   |   | 20.8 |   |   | 42.0 |   |   | 45.9 |   |
| Net                  Income                                         |   |           | **19.2**    |                              |   | 153.9                             |   |                           | 106.0   |                                |   | 72.5 |   |   | 20.8 |   |   | 21.2 |   |   | 15.7 |   |
| Continuing                  Operations - Basic earnings per share   |   |           | **0.36**    |                              |   | 2.94                              |   |                           | 2.04    |                                |   | 1.35 |   |   | 0.39 |   |   | 0.78 |   |   | 0.86 |   |
| Net                  Income - Basic earnings per share         |   |           | **0.36**    |                              |   | 2.94                              |   |                           | 2.02    |                                |   | 1.35 |   |   | 0.39 |   |   | 0.39 |   |   | 0.29 |   |
| Continuing                  Operations - Diluted earnings per share |   |           | **0.35**    |                              |   | 2.83                              |   |                           | 2.00    |                                |   | 1.34 |   |   | 0.39 |   |   | 0.78 |   |   | 0.85 |   |
| Net                  Income - Diluted earnings per share            |   |           | **0.35**    |                              |   | 2.83                              |   |                           | 1.98    |                                |   | 1.34 |   |   | 0.39 |   |   | 0.39 |   |   | 0.29 |   |
| Dividends                  per share                                |   |           | **0.52**    |                              |   | 0.52                              |   |                           | 0.52    |                                |   | 0.65 |   |   | 0.65 |   |   | 1.04 |   |   | 1.04 |   |

| 1 | Expenses                totaling $46.4 originally reported as selling, administrative and                general                expenses in 2001 have been reclassified to a reduction of net sales                to                reflect the adoption of EITF 01-9. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | See                *Note                2 — Restatement*                for further information regarding the restatement of the Company's                consolidated financial statements and                information. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                 |   |           |        |                            |   | 2003                         |   | 2002                              |    | 2001                         |   |
|--------------------------------------|--------|----------------|-------------|---------------------------------|--------|------------------------------|--------|-----------------------------------|---------|------------------------------|--------|
|                                 |   |  **2005** |        | 2004(Restated)                1 |   | (As                Reported) |   |  (Restated)                1 |    | (As                Reported) |   |  (Restated)                1 |   | (As                Reported) |   |  (Restated)                1 |   |
| **Year                End Position** |   |           |        |                            |   |                         |   |                              |    |                         |   |   |   |   |   |   |   |
| Working                capital       |   | **$**          | **617.7**   |                            | $      | 528.0                        |   | $                                 | 545.0   |                         | $      | 528.9 |   | $ | 455.7 |   | $ | 457.5 |   | $ | 693.7 |   | $ | 673.1 |   |
| Total                assets          |   |           | **3,416.4** |                            |   | 3,045.8                      |   |                              | 3,006.4 |                         |   | 3,038.14 |   |   | 2,773.4 |   |   | 2,767.1 |   |   | 2,993.5 |   |   | 2,872.05 |   |
| Short-term                debt       |   |           | **161.4**   |                            |   | 103.4                        |   |                              | 195.0   |                         |   | 197.2 |   |   | 187.9 |   |   | 189.4 |   |   | 123.3 |   |   | 123.3 |   |
| Long-term                debt        |   |           | **831.2**   |                            |   | 543.3                        |   |                              | 652.0   |                         |   | 652.0 |   |   | 656.2 |   |   | 656.2 |   |   | 703.2 |   |   | 703.2 |   |
| Retained                earnings     |   |           | **1,471.6** |                            |   | 1,480.4                      |   |                              | 1,396.9 |                         |   | 1,354.12 |   |   | 1,298.9 |   |   | 1,275.62 |   |   | 1,261.4 |   |   | 1,289.82 |   |
| Shareholders'                equity  |   |           | **1,283.9** |                            |   | 1,362.8                      |   |                              | 1,203.4 |                         |   | 1,160.82 |   |   | 1,017.8 |   |   | 1,005.32 |   |   | 975.0 |   |   | 1,017.33 |   |

| **Other                Ratios and Statistics**                                                             |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Return                on average shareholders' equity                                                      |   |   | **1.4**   | **%**  |   | 12.6   | %      |   | 11.9   | %      |   | 10.5   | %      |   | 7.4    | %      |   | 2.1 | % |   | 2.1 | % |   | 1.5 | % |
| Return                on invested capital                                                                  |   |   | **3.5**   | **%**  |   | 9.9    | %      |   | 8.5    | %      |   | 8.6    | %      |   | 6.0    | %      |   | 4.1 | % |   | 3.1 | % |   | 2.8 | % |
| Effective                income tax rate for continuing operations before minority                interest |   |   | **89.9**  | **%**  |   | 34.4   | %      |   | 34.0   | %      |   | 37.3   | %      |   | 34.5   | %      |   | 69.8 | % |   | 33.8 | % |   | 41.5 | % |
| Current                ratio                                                                               |   |   | **1.6**   |   |   | 1.6    |   |   | 1.6    |   |   | 1.6    |   |   | 1.5    |   |   | 1.5 |   |   | 2.0 |   |   | 1.9 |   |
| Capital                expenditures                                                                        |   | **$**  | **116.0** |   | $      | 118.9  |   | $      | 91.5   |   | $      | 91.5   |   | $      | 91.9   |   | $      | 91.9 |   | $ | 96.4 |   | $ | 96.4 |   |

| 1 | See                *Note                2 — Restatement*                for further information regarding the restatement of the Company's                consolidated financial statements and                information. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | See                the *Statements                of Changes in Shareholders' Equity*                for information regarding the impact of restatement adjustments on                the                Company's retained earnings and components of total shareholders'                equity. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | The                $42.3 increase in shareholders' equity primarily reflects the cumulative                impact of restatement adjustments on net earnings (see the following                table) and the cumulative impact of restatement adjustments associated                with the Company's comprehensive review of its accounting for income                taxes                partially offset by the impact of restatement adjustments associated                with                the deferred compensation matter. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | The                $31.7 increase in total assets primarily reflects the impact of                restatement adjustments associated with the Company's comprehensive                review                of its accounting for income taxes which increased deferred income                tax                assets by $76.6, partially offset by a $53.8 decrease in goodwill                reflecting adjustments also associated with this comprehensive review,                specifically related to a 1998                acquisition. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5 | The                $121.5 decrease in total assets reflects the impact of restatement                adjustments associated with the Company's comprehensive review of                its                accounting for income taxes. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Note      2 — Restatement*

|                                                                  |   | Years                  Ended  |    |
|-----------------------------------------------------------------------|--------|-------------------------------|---------|
|                                                                  |   | Dec                  25, 2004 |    | Dec                  27, 2003 |   | Dec                  28, 2002 |   | Dec                  29, 2001 |   |
| Retained                  Earnings, as Previously Reported            |   | $                             | 1,528.9 |   | $ | 1,396.9 |   | $ | 1,298.9 |   | $ | 1,261.4 |   |
| Cumulative                  Retained Earnings Restatement Adjustments |   |                          | (42.8   | ) |   | (23.3 | ) |   | 28.4 |   |   | 33.9 |  1 |
|                                                                  |   |                          |    |   |   |   |   |   |   |   |   |   |   |
| Net                  Income, as Previously Reported                   |   | $                             | 159.6   |   | $ | 125.5 |   | $ | 72.5 |   | $ | 21.2 |   |
| Brazil                  Matters                                       |   |                          | (1.8    | ) |   | (7.5 | ) |   | (8.3 | ) |   | (6.0 | ) |
| Asia                  and Other Revenue Recognition Matters           |   |                          | (1.3    | ) |   | (2.1 | ) |   | (0.8 | ) |   | (0.4 | ) |
| Tax                  Matters                                          |   |                          | (2.1    | ) |   | 0.7 |   |   | (40.0 | ) |   | 1.6 |   |
| Deferred                  Compensation Plan                           |   |                          | (1.9    | ) |   | (2.3 | ) |   | 0.2 |   |   | 0.3 |   |
| Other                  Items                                          |   |                          | 1.4     |   |   | (8.4 | ) |   | (2.8 | ) |   | (1.0 | ) |
| Net                  Income, as Restated                              |   | $                             | 153.9   |   | $ | 106.0 |   | $ | 20.8 |   | $ | 15.7 |   |
| Total                  Net Income Restatement Adjustments             |   |                          | (5.7    | ) |   | (19.5 | ) |   | (51.7 | ) |   | (5.5 | ) |
| Retained                  Earnings, as Restated                       |   | $                             | 1,480.4 |   | $ | 1,354.1 |   | $ | 1,275.6 |   | $ | 1,289.8 |   |

|                                                              |   | Years                Ended  |   |
|-------------------------------------------------------------------|--------|-----------------------------|--------|
|                                                              |   | Dec                25, 2004 |   | Dec                27, 2003 |   | Dec                28, 2002 |   | Dec                29, 2001 |   |
| Diluted                Earnings Per Share, as Previously Reported |   | $                           | 2.93   |   | $ | 2.34 |   | $ | 1.34 |   | $ | 0.39 |   |
| Brazil                Matters                                     |   |                        | (0.03  | ) |   | (0.14 | ) |   | (0.15 | ) |   | (0.11 | ) |
| Asia                and Other Revenue Recognition Matters         |   |                        | (0.02  | ) |   | (0.04 | ) |   | (0.01 | ) |   | (0.01 | ) |
| Tax                Matters                                        |   |                        | (0.04  | ) |   | 0.01 |   |   | (0.74 | ) |   | 0.03 |   |
| Deferred                Compensation Plan                         |   |                        | (0.04  | ) |   | (0.04 | ) |   | - |   |   | 0.01 |   |
| Other                Items                                        |   |                        | 0.03   |   |   | (0.16 | ) |   | (0.05 | ) |   | (0.02 | ) |
| Diluted                Earnings Per Share, as Restated            |   | $                           | 2.83   |   | $ | 1.98 |   | $ | 0.39 |   | $ | 0.29 |   |

**23.       **
**Subsequent      Event**

**Market      Withdrawal of **
***MoistureLoc***
**      Lens Care Solution**
*MoistureLoc*
** **

----

*      MoistureLoc *
*Note      21 *
*Other      Matters*

*MoistureLoc*
*MoistureLoc*

*MoistureLoc*
*Note      1 — Significant Accounting Policies*
*Note      3 — Acquisition*

**Item      9.  **
**Changes      in and Disagreements with Accountants on Accounting and Financial      Disclosure**

**Item      9A.  **
**Controls      and Procedures**

**Evaluation      of Disclosure Controls and Procedures **

----

*Note      2 — Restatement*

**Management’s      Report on Internal Control Over Financial Reporting **

*Internal      Control - Integrated Framework *

----

***Control      Environment***

***Controls      Over the Financial Reporting and Close Process***

***Controls      Over Revenue Recognition and Sales Practices***

----

***Controls      Over Tax Accounting***
* *

***Controls      Over Deferred Compensation Plan***

*Internal      Control-Integrated Framework*

*Report      of Independent Registered Public Accounting Firm *

**Remediation      of Material Weaknesses in Internal Control Over Financial      Reporting**

----

| ·   | Several                individuals in management positions at its Brazilian and Korean operations                have either left the Company or have been terminated. In addition,                the                Senior Vice President - Asia has been                replaced. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Company has strengthened its management and financial ranks including                the                appointment of a Vice President, Compliance reporting directly to                the                Chief Executive Officer and the Audit Committee of the Board; and                a Vice                President, Financial Compliance reporting to the Corporate                Controller. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Company further enhanced its whistleblower program related to the                communication, investigation and resolution of whistleblower                activities. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Company plans to further expand and strengthen its internal audit                organization by hiring additional experienced audit                staff. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Company has continued and expanded executive management's ongoing                communications regarding the importance of adherence to internal                controls                and company policies. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Company has strengthened its tax department by hiring additional                senior                tax staff with expertise in accounting for income                taxes. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Company realigned the global finance organization in its operating                segments to have a direct reporting relationship to the Corporate                Controller, rather than to management within the operating                segments. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Company has modified the performance management objectives and individual                bonus metrics for the global finance organization to be more heavily                weighted to internal controls and financial reporting and close                metrics. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Company has begun an initiative to provide additional training to                finance,                accounting and tax professionals regarding new and evolving areas in U.S.                GAAP accounting. In addition, the Company is undertaking a review                to                ensure that the finance, accounting and tax functions are staffed                in                accordance with the required competencies, and has begun the process                of                making personnel changes where                necessary. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Company is developing a formal training program for certain non-finance                employees on revenue recognition and integrity of financial reporting                and                controls. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Company has reinforced the certification process to emphasize senior                managers' accountability for maintaining an ethical                environment. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Company, with the assistance of outside consultants other than its                independent registered public accountants, undertook a project to                perform                a comprehensive review of its accounting for income taxes including                deferred tax assets and liabilities, taxes payable and tax reserves.                Further, the Company will initiate processes to improve proper tracking                of                deferred tax assets and                liabilities. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Company has augmented the quarterly financial reporting and close                process,                including by implementing an expanded Quarterly Close Checklist which                is                completed by each Operating Segment Controller and reviewed by the                Corporate Controller to focus on the specific areas identified in                the                material weaknesses. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Company has enhanced key control activities related to revenue recognition                on laser installations and, sales to distributor/wholesalers,                documentation and approval of terms of sales, including standard                and                extended credit terms and, analysis of sales returns and                exchanges. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Company is in the process of enhancing policies and procedures designed                to                detect and prevent fraud including strengthening key region and                entity-wide monitoring activities. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Company implemented a process requiring all subsidiaries outside                of the                United States to use one global professional tax advisor to review                local                income tax returns prior to filing and to provide services relating                to tax                assessments and positions. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Company has clarified responsibilities of the Regional Tax Directors                to                include review of VAT, customs and other indirect                taxes. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Company will require formal review and approval of all new or amended                employee benefit plans by Corporate Technical                Accounting. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Changes      in Internal Control Over Financial Reporting **

**Item      9B.  **
**Other      Information**

----

**Part      III**

**Item      10.  **
**Directors      and Executive Officers of Bausch & Lomb Incorporated**

|  ALAN                M. BENNETT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |  Director                since 2004Age:                55 |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------|
|  Mr.                Bennett has served since 2001 as senior vice president and chief                financial                officer of Aetna Inc., a leading provider of health, dental, group                life,                disability and long-term care benefits. He joined Aetna in 1995 as                chief                financial officer for Aetna Business Resources. He was named vice                president and director of internal audit of Aetna Inc. in 1997 and                in 1998                was named vice president and controller. From 1981 to 1995, Mr. Bennett                held several executive positions with Pirelli Armstrong Tire Corporation.                From 1972 to 1981, he was an audit manager at Ernst & Young. Mr.                Bennett is a Director of Halliburton and a member of the American                Institute of Certified Public Accountants.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|  DOMENICO                DE SOLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |  Director                since 1996Age:                62 |
|  Mr.                De Sole has served since April 2005 as chairman of Tom Ford International,                a fashion company which produces fragrances, sunglasses and a signature                ready-to-wear men's line. He served from 1995 to 2004 as president                and                chief executive officer of Gucci Group N.V., a multibrand luxury                goods                company. He joined that company in 1984 as president and chief executive                officer of Gucci America, Inc. and in 1994 was named chief operating                officer of Gucci Group N.V. Mr. De Sole is a director of Delta Airlines,                Inc., GAP Inc. and Telecom Italia and Ermenegildo Zegna. He is a                member of                the Harvard Law School Advisory Board.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|  PAUL                A. FRIEDMAN, M.D.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |  Director                since 2004Age:                63 |
|  Dr.                Friedman has served since 2001 as president and chief executive officer                of                Incyte Corporation, a biotechnology company. From 1998 until 2001,                he                served as president of DuPont Pharmaceuticals Research Laboratories.                From                1994 until 1998, he served as president, Research and Development,                of                DuPont Merck Pharmaceutical Company. From 1991 to 1994, he was senior                vice                president of Research at Merck Sharp & Dohme Research Laboratories and                from 1985 to 1991 he held several executive positions there. From                1974 to                1985, Dr. Friedman was associate professor of Medicine and Pharmacology                at                Harvard Medical School. Dr. Friedman is a diplomat of the American                Board                of Internal Medicine and a member of the American Society of Pharmacology                and Experimental Therapeutics, the American Society of Clinical                Investigation, and the American Society of Biological                Chemistry.                                                                                                                                                                                                                                                                                                                                          |
|  JONATHAN                S. LINEN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |  Director                since 1996Age:                63 |
|  Mr.                Linen has served since January 2006 as advisor to the chairman of                American                Express Company, a diversified worldwide travel and financial services                company. From 1993 to 2006, he served as vice chairman. He joined                that                company in 1969 and held various executive positions before being                appointed president and chief executive officer of Shearson Lehman                Brothers in 1989. In 1992, he was named president and chief operating                officer of American Express Travel Related Services Company, Inc.                Mr.                Linen is chairman of the board of the International Golf Association,                a                trustee of the U.S. Council for International Business and a member                of The                Council on Foreign Relations. Mr. Linen presides on the policy committee                of The Travel Business Roundtable and is vice chairman of the executive                committee of the World Travel & Tourism Council. He serves as a member                of the boards of Yum! Brands, Inc., Intercontinental Hotels, World                Monuments Fund, the U.S. Travel & Tourism Promotion Advisory Board,                and is an executive committee member of NYC & Company. Mr. Linen is a                past chairman and now honorary member of the board of trustees of                the                National Urban League. |

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|  RUTH                R. McMULLIN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |  Director                since 1987Age:                64 |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------|
|  Mrs.                McMullin is the chairperson of trustees of the Eagle-Picher Trust.                She was                a member of the faculty of the Yale School of Management as a Management                Fellow from 1994 to 1995. From 1992 to 1994, she was president and                chief                executive officer of the Harvard Business School Publishing Corporation.                From 1990 to 1992, Mrs. McMullin was a consultant to private industry                and                from 1991 to 1992, she was also acting chief executive officer of                UNR                Industries, Inc. and a member of that company's chairman's committee.                From                1989 to 1990, she was president and chief executive officer of John                Wiley                & Sons, Inc., a publishing company. Mrs. McMullin joined that company                as executive vice president and chief operating officer in 1987.                She is a                director of The Mighty Eighth Foundation, Inc., and The Mighty Eighth                Air                Force Heritage Center, Inc.                                                                                                                             |
|  LINDA                JOHNSON RICE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |  Director                since 1990Age:                48 |
|  Mrs.                Rice has served since 2002 as president and chief executive officer                of                Johnson Publishing Company, Inc., a multi-media company. She joined                that                company in 1980, became vice president in 1985 and president and                chief                operating officer in 1987. In addition to management of the company,                she                oversees the editorial content of *Ebony*                and *Jet*                magazines. She is also president of Fashion Fair Cosmetics, a division                of                Johnson Publishing. Mrs. Rice is a director of Kimberly-Clark Corporation,                Omnicom Group, Inc., and Money Gram International, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|  WILLIAM                H. WALTRIP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |  Director                since 1985Age:                69 |
|  Mr.                Waltrip served from 1993 to 2003 as chairman of the board of Technology                Solutions Company, a systems integration company, and from 1993 until                1995                he was chief executive officer of that company. Mr. Waltrip has served                twice as Bausch & Lomb's interim chief executive officer, once in 1996                and once in 2001. He also served as the Company's chairman from 1996                to                1998 and again in 2001. From 1991 to 1993, he was chairman and chief                executive officer of Biggers Brothers, Inc., a food service distribution                company and was a consultant to private industry from 1988 to 1991.                From                1985 to 1988, he served as president and chief operating officer                of IU                International Corporation, a transportation, environmental and                distribution company. Earlier, he had been president, chief executive                officer and a director of Purolator Courier Corporation. He is a                director                of Theravance, Inc., Charles River Laboratories International, Inc.                and                Thomas & Betts Corporation. |
|  BARRY                W. WILSON                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |  Director                since 2003Age:                62 |
|  Mr.                Wilson has served since 1997 as senior vice president and a member                of the                Executive Committee of Medtronic, Inc., a medical technology company.                In                2006, he was appointed senior vice president, International Affairs                and                President Greater China, having had responsibility as president of                Medtronic International since 2001. Mr. Wilson joined Medtronic as                president of Europe, Middle East and Africa in 1995. From 1980 to                1993, he                held various executive positions with Bristol-Myers Squibb, including                president of Europe. Prior to that, he held executive positions with                Pfizer, Inc. in nine different countries. Mr. Wilson was chairman                of                Eucomed, the European medical device industry association from 2000                to                2004 and now serves as its honorary chairman.                                                                                                                                                                                                                                                               |
|  KENNETH                L. WOLFE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |  Director                since 1989Age:                67 |
|  Mr.                Wolfe served as chairman and chief executive officer of Hershey Foods                Corporation, a food products manufacturing firm, from 1994 until                his                retirement in 2001. He joined that firm in 1967 and held various                executive                positions before being appointed vice president and chief financial                officer in 1981. In 1984, Mr. Wolfe was named senior vice president.                From                1985 until 1993, he was president and chief operating officer. Mr.                Wolfe                is a director of Adelphia Communications Corporation and Revlon,                Inc. and                is a trustee of Fidelity Funds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

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|  RONALD                L. ZARRELLA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |  Director                since 2001Age:                57 |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------|
|  Mr.                Zarrella has served since 2001 as chairman and chief executive officer                of                Bausch & Lomb Incorporated. He was previously with General Motors                Corporation, where he was executive vice president and president                of                General Motors North America from 1998 to 2001. From 1994 to 1998,                Mr.                Zarrella was vice president and group executive in charge of General                Motors' North American Vehicle Sales, Service and Marketing Group.                From                1985 to 1994, Mr. Zarrella held several executive positions at Bausch                & Lomb, including serving as its president, chief operating officer                and a member of its Board of Directors. Mr. Zarrella is a director                of                Avaya, Inc. He is a trustee of Rochester Institute of Technology,                the                International Agency for the Prevention of Blindness, and the Committee                for Economic Development. Mr. Zarrella is a member of the board of                the                University of Rochester Medical Center, FIRST (For Inspiration and                Recognition of Science and Technology), and the National Italian                American                Foundation. |

Under      the      Company's Deferred Stock Equivalent Program, non-employee directors of the      Company receive an annual grant of 500 deferred stock equivalent units. These      instruments are a contract right to receive, in cash, at the time of the      director's retirement from the Board, an amount equal to the product of the      market value of one share of the Company's Common stock at the time of the      director's retirement from the Board multiplied by the number of deferred stock      equivalent units. This element of compensation brings total director      compensation into line with that of comparable companies, in part enhancing      the      Company's ability to attract and retain high-quality director candidates, and      in      part aligning directors' economic interests with those of shareholders. The      program also provides for a one-time matching contribution of deferred stock      equivalent units valued at $25,000 for new non-employee directors upon the      acquisition of an equal number of shares of Company stock by the      director.

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**Executive      Sessions**

**Communications      by Shareholders and Interested Parties **

**Corporate      Governance Principles, Board Matters and Code of Ethics **

**Board      Independence **

**Committees      of the Board **
*Item      3. Legal Proceedings*
*Item      8. Financial Statements and Supplementary Data*
*Note      21 — Legal Matters*

site      at      http://www.bausch.com/en_us/corporate/ir/general/board_members.aspx. Printed      copies of the committee charters can be obtained by contacting the secretary      of      the Company.

| **Executive                Committee**Number                of Members:Members: |   |  Four                directorsRonald                L. Zarrella (Chair), Jonathan S. Linen, William H. Waltrip and Kenneth                L.                Wolfe                                |
|---------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Number                of Meetings in 2005:                                      |   | None                                                                                                                                                                                                  |
| Functions:                                                                      | -      | Holds                meetings, as necessary, between regular Board of Directors meetings                to                take action necessary for the Company to operate                efficiently |
|                                                                            | -      | Possesses                all of the authority of the full Board of Directors, except as limited                by                law and the By-laws of the                Company                    |

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| **Audit                Committee**Number                of Members:Members:        |   |  Four                independent directorsKenneth                L. Wolfe (Chair), Alan M. Bennett, Domenico De Sole and Barry W.                Wilson                                                                                                                                                                      |
|------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Number                of Meetings in 2005:                                         |   | Seventeen                                                                                                                                                                                                                                                                                                                         |
| Functions:                                                                         | -      | Reviews                and evaluates the qualifications and performance of the independent                accountants                                                                                                                                                                                                             |
|                                                                               | -      | Appoints                and/or replaces the independent accountants                                                                                                                                                                                                                                                               |
|                                                                               | -      | Responsible                for compensating and overseeing the work of the independent                accountants                                                                                                                                                                                                                 |
|                                                                               | -      | Preapproves                all audit services and permitted nonaudit services to be performed                for the                Company by its independent accountants                                                                                                                                                        |
|                                                                               | -      | Reviews                and discusses with management and the independent accountants the                quarterly interim and annual audited financial statements and related                Management's Discussion & Analysis                                                                                               |
|                                                                               | -      | Provides                for direct communication among the Board of Directors, the independent                accountants and the internal auditors, including review of the disclosures                and letter provided by the independent accountants pursuant to                Independence Standards Board Standard No. 1 |
|                                                                               | -      | Discusses                with management and the independent accountants significant financial                reporting and internal control issues                                                                                                                                                                               |
|                                                                               | -      | Discusses                with the independent accountants the matters required to be discussed                by                Statement on Auditing Standards No. 61                                                                                                                                                            |
|                                                                               | -      | Meets                with the independent accountants prior to the audit to discuss the                planning and staffing of the audit                                                                                                                                                                                         |
|                                                                               | -      | Oversees                the Company's internal audit function                                                                                                                                                                                                                                                                     |
|                                                                               | -      | Reviews                the receipt, retention and disposition of complaints received by                the                Company regarding accounting, internal accounting controls or auditing                matters                                                                                                           |
|                                                                               | -      | Discusses                with the Company's general counsel legal matters that may have a                material                impact on the financial statements or the Company's compliance                policies                                                                                                           |
|                                                                               | -      | Retains                independent legal, accounting or other advisors, as                necessary                                                                                                                                                                                                                               |
|                                                                               | -      | Presents                the annual Report of the Audit Committee for the Company’s Proxy                Statement                                                                                                                                                                                                           |
|                                                                               | -      | Reviews                its own performance annually                                                                                                                                                                                                                                                                               |
| **Compensation                Committee**Number                of Members:Members: |   |  Four                independent directorsJonathan                S. Linen (Chair), Ruth R. McMullin, William H. Waltrip and Barry                W.                Wilson                                                                                                                                                   |
| Number                of Meetings in 2005:                                         |   | Four                                                                                                                                                                                                                                                                                                                              |
| Functions:                                                                         | -      | Recommends                to the Board of Directors remuneration of the chief executive officer                and                determines remuneration of other officers of the Company elected                by the                Board of Directors                                                                        |
|                                                                               | -      | Conducts                evaluation of the chief executive officer for submission to the Board                of                Directors                                                                                                                                                                                          |
|                                                                               | -      | Grants                options under and otherwise administers the Company's stock incentive                plans and approves and administers any other compensation plan in                which                officers of the Company participate                                                                              |
|                                                                               | -      | Reviews                succession planning for the CEO and senior executives, and reports                on such                matters to the Board of Directors                                                                                                                                                                 |
|                                                                               | -      | Retains                compensation consultants and obtains advice from internal or external                advisors, as necessary                                                                                                                                                                                                |
|                                                                               | -      | Presents                the annual Compensation Committee Report on Executive Compensation                for the                Company's Proxy Statement                                                                                                                                                                        |
|                                                                               | -      | Reviews                its own performance annually                                                                                                                                                                                                                                                                               |

----

| **Nominating                and Governance Committee**Number                of Members:Members: |   |   Four                independent directorsWilliam                H. Waltrip (Chair), Paul A. Friedman, Jonathan S. Linen and Linda                Johnson                Rice      |
|-------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Number                of Meetings in 2005:                                                      |   | Five                                                                                                                                                                                          |
| Functions:                                                                                      | -      | Seeks                and evaluates individuals qualified to become board members for                recommendation to the Board of Directors                                                  |
|                                                                                            | -      | Reviews                the qualifications of any director candidate proposed by a shareholder                in                accordance with the Company's By-laws                          |
|                                                                                            | -      | Reviews                and makes recommendations to the Board of Directors with respect                to the                compensation and benefits of directors                           |
|                                                                                            | -      | Reviews                the adequacy of the Company's Corporate Governance Guidelines and                recommends any proposed changes to the Board of Directors for                approval |
|                                                                                            | -      | Retains                any search firm to be used to identify director candidates and obtains                advice from internal or external advisors, as necessary                          |
|                                                                                            | -      | Reviews                its own performance annually                                                                                                                                           |

*Item        10. Directors and Executive Officers of Bausch & Lomb        Incorporated.*

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*Item        10. Directors and Executive Officers of Bausch & Lomb        Incorporated*

Any      shareholder who intends to present a proposal at the Company’s 2007 Annual      Meeting of Shareholders must send the proposal to: Secretary, Bausch & Lomb      Incorporated, One Bausch & Lomb Place, Rochester, New York      14604-2701.

*Item      4. Submissions of Matters to a Vote of Security Holders*

**Section      16(a) Beneficial Ownership Reporting Compliance **

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**Item      11.  **
**Executive      Compensation**

**Report      of the Compensation Committee **

**Compensation      Philosophy and Policy **

*Item      11. Executive Compensation *

**Base      Pay **
*Item      11. Executive Compensation *

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**Annual      Incentive Awards **

**Long-Term      Incentive Awards **

*Item      11. Executive Compensation*

----

*Item      11. Executive Compensation*

**Supplemental      Executive Retirement Plan **
*Item      11. Executive Compensation*
*Defined      Benefit Retirement Plans*
*Item      11. Executive Compensation*

**Long-Term      Equity Equivalent Accumulation Plan **

**Response      to Internal Revenue Code Limits on Deductibility of Certain Compensation**

----

**Conclusion      **

|   | Compensation                Committee                                                                                                       |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------|
|   |  Jonathan                S. Linen, ChairRuth                R. McMullinWilliam                H. WaltripBarry                W. Wilson |

**Employment      Agreements, Change of Control Agreements and Severance Arrangements**
*Item      13. Certain Relationships and Related Transactions*

*Item      10. Directors and Executive Officers of Bausch & Lomb      Incorporated*

----

**Compensation      Tables **

**SUMMARY      COMPENSATION TABLE**

|                                                                                                                                   |   |                   |             | Annual                Compensation |   | Long-Term                Compensation |   |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|------------------|------------------------------------|--------|---------------------------------------|--------|
|                                                                                                                                   |   |                   |             |                               |   | Awards                                |   | Payouts |   |
|   Name                and Principal Position                                                                                 |   |    Year |             |    Salary           |   |    Bonus               |   |  Other                Annual Compensation  **1** |   |  Restricted                Stock Award(s) 2 |   | Securities                Underlying Options/ SARs |   |   LTIP                Payouts 3 |   |  All                Other Compensation  **4** |   |
| **R.                L. Zarrella**Chairman                and CEO                                                                  |   |                   | **2005**20042003 |                               | **$**  | **1,100,000**1,142,3081,100,000       |   | **$** | **-**1,650,0001,628,000 |   | **$** | **94,977**82,07878,857 |   | **$** | **-**-- |   |   | **125,000**117,650180,000 |   | **$** | **1,666,000**2,383,0491,745,178 |   | **$** | **275,000**124,66486,600 |   |
| **P.                Tyle**Sr.                V.P. Research & Development and Chief Scientific                Officer               |   |                   | **2005**20042003 |                               | **$**  | **410,001**181,347-                   |   | **$** | **295,000**235,706- |   | **$** | **38,673**28,254- |   | **$** | **1,457,800**488,800- |   |   | **25,000**35,000- |   | **$** | **666,400**-- |   | **$** | **62,994**203,238- |   |
| **D.                L. Hahs**Sr.                V.P. Global Operations & Engineering                                               |   |                   | **2005**20042003 |                               | **$**  | **405,600**421,200403,685             |   | **$** | **280,000**565,145315,000 |   | **$** | **50,362**31,79532,221 |   | **$** | **842,400**-- |   |   | **20,000**25,00030,000 |   | **$** | **416,500**268,130130,907 |   | **$**$$ | **71,251**19,46518,432 |   |
| **P.                G. Howes**Sr.                V.P. & President - Americas Region                                                |   |                   | **2005**20042003 |                               | **$**  | **400,000**415,385184,615             |   | **$** | **150,000**500,020150,000 |   | **$** | **34,058**37,7484,423 |   | **$** | **-**-937,750 |   |   | **22,000**25,000100,000 |   | **$** | **533,120**107,252- |   | **$** | **289,433**26,161130,813 |   |
| **A.                H. Farnsworth****5**Sr.                V.P. & President - Europe, Middle East and Africa                Region |   |                   | **2005**20042003 |                               | **$**  | **310,000**321,923308,539             |   | **$** | **200,000**367,717200,000 |   | **$** | **361,730**128,029128,321 |   | **$** | **-**-- |   |   | **19,000**22,00025,000 |   | **$** | **466,480**312,819152,707 |   | **$** | **92,537**23,48719,364 |   |

| 1 | This                column includes the aggregate incremental cost to the Company of                providing                various perquisites. For Mr. Zarrella, the amount that represents                more                than 25% of the aggregate value of his reportable perquisites in                2005 is                $48,663 for use of the Company’s aircraft. The value of personal aircraft                use is based on incremental direct operating costs. A weighted average                usage per mile cost of fuel, maintenance, landing fees, crew                travel-related expenses, and other miscellaneous variable costs have                been                included. Since the Company’s aircraft are used mainly for business                travel, fixed costs such as pilots’ and other employees’ salaries and                aircraft lease costs are not included. For Mr. Hahs, the amount that                represents more than 25% of the aggregate value of his reportable                perquisites in 2005 is $30,957 for auto                expenses. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | The                value of grants is equal to the number of shares of restricted stock                multiplied by the closing market price on the date of the grant.                Holders                of restricted stock, including restricted stock granted under the                Company's Cumulative Long-Term Incentive Program, are entitled to                dividend                and voting rights on the shares. At December 31, 2005, the aggregate                number of shares, including restricted stock awarded under the Cumulative                Long-Term Incentive Program, and corresponding value as of such date                of                restricted stock owned by named individuals were as follows: Mr.                Zarrella,                65,561 shares valued at $4,451,592; Dr. Tyle, 28,000 shares valued                at                $1,901,200; Mr. Hahs, 10,000 shares valued at $679,000 and Mr.                Howes, 25,000 shares valued at                $1,697,500. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | The                amounts shown represent payments of the Company’s cash-denominated                Long-Term Incentive Award Program. Payment may be in cash or shares                provided stock holding guidelines are met. Payments                must be made in shares if the participant’s stock holding requirements are                not met. This payment will be in 2007, upon review by and approval                of the                Compensation Committee and in accordance with audited 2005 financial                results. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | The                amounts reported in this column, for all officers other than Mr.                Howes,                Dr. Tyle and Mr. Farnsworth consist solely of the Company’s matching                contributions under its 401(k) Plan and 401(k) Excess Plan. Relocation                expenses for Dr. Tyle in 2004 totaled $203,238. In 2005, for Mr.                Howes and                Mr. Farnsworth, relocation expenses totaling $204,500 and $33,137,                respectively, are included. A 2005 tax gross-up of $7,431 is reflected                for                Mr. Howes. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5 | Mr.                Farnsworth’s Other Annual Compensation includes expatriate allowances of                $337,044, $105,659 and $100,486 for 2005, 2004 and 2003, respectively.                Mr.                Farnsworth is on expatriate assignment in the UK and receives the                following allowances in accordance with the Company’s Global Service                Policy: goods and services differential, housing/utilities (less                employee                contribution), annual home leave, and tax differential. The tax                differential portion of the allowances in the amounts of $207,317,                $57,064                and $55,624 for 2005, 2004 and 2003, respectively, represents actual                income tax payments made by the Company on behalf of Mr. Farnsworth,                less                amounts withheld for the years stated. These amounts adjust Mr.                Farnsworth’s taxes to amounts he would have paid in the U.S. under the                Company’s Tax Equalization Program. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Options/SAR      Grants in Last Fiscal Year**

|                            |   | Individual                Grants                                                    |    |
|---------------------------------|--------|-------------------------------------------------------------------------------------|---------|
|     Name    |   | Number                of Securities Underlying Options/SARsGranted                1 |    | %                of Total Options/SARs Granted to Employees in Fiscal Year 2 |   |   Exercise                or Base Price ($/Sh) 3 |   |     Expiration                Date |   |   Grant                Date Present Value 4 |   |
| R.                L. Zarrella   |   |                                                                                | 125,000 |   |   | 12.76 | % | $ | 71.8450 |   |   | Jan.                31, 2015 |   | $ | 3,068,750 |   |
| P.                Tyle          |   |                                                                                | 25,000  |   |   | 2.55 | % |   | 71.8450 |   |   | Jan.                31, 2015 |   |   | 613,750 |   |
| D.                L. Hahs       |   |                                                                                | 20,000  |   |   | 2.04 | % |   | 71.8450 |   |   | Jan.                31, 2015 |   |   | 491,000 |   |
| P.                G. Howes      |   |                                                                                | 22,000  |   |   | 2.25 | % |   | 71.8450 |   |   | Jan.                31, 2015 |   |   | 540,100 |   |
| A.                H. Farnsworth |   |                                                                                | 19,000  |   |   | 1.94 | % |   | 71.8450 |   |   | Jan.                31, 2015 |   |   | 466,450 |   |

| 1 | All                of the above stock options were granted to the named executives on                January                31, 2005 and vest annually in one-third                increments. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | The                estimated grant date present value reflected in the above table is                determined using the Black-Scholes model based on all awards issued                on                that date. The ultimate realizable value of the options will depend                on the                future market price of the Company's stock, which cannot be forecast                with                reasonable accuracy. The actual value, if any, an optionee will realize                upon exercise will depend on the excess of the market value of the                Company's common stock over the exercise price on the date the option                is                exercised. The material assumptions and adjustments incorporated                in the                estimated valuation of the options include: (a) an option term of                10                years; (b) an expected life of five years; (c) an interest rate of                4.34%                that represents a U.S. Treasury strip rate for the nearest quarter                end                with a maturity date corresponding to the expected life; (d) volatility                of                35.146% calculated using daily stock prices for the five year period                prior                to the grant date; and (e) dividends at the rate of $.52 per share                representing the annualized dividends paid with respect to a share                of                common stock at the date of grant, and a corresponding dividend yield                of                1.138% calculated using average of the high and the low stock price                over                the expected term. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Aggregated      Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR      Values**

|                            | ** ** | ** **                                           | ** ** | ** **                                  | ** ** | Number                of Securities Underlying Unexercised Options/SARs at                FY-End | ** ** | Value                of Unexercised, In-the-Money Options/SARs at FY-End | ** ** |
|---------------------------------|------------|------------------------------------------------------|------------|---------------------------------------------|------------|--------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------|------------|
|   Name                |       | Number                of Shares Acquired on Exercise |       |   Value                Realized 1 |       |   Exercisable                                                                          |       |   Unexercisable                                                |       |   Exercisable                2 |   |   Unexercisable                2 |   |
| R.                L. Zarrella   |       |                                                 | 60,000     |                                        | $          | 2,823,928                                                                                        |       |                                                                     | 919,217    |   |   | 263,433 |   | $ | 29,146,234 |   | $ | 3,324,055 |   |
| P.                Tyle          |       |                                                 | -          |                                        |       | -                                                                                                |       |                                                                     | 11,667     |   |   | 48,333 |   |   | 74,494 |   |   | 148,981 |   |
| D.                L. Hahs       |       |                                                 | -          |                                        |       | -                                                                                                |       |                                                                     | 107,334    |   |   | 46,666 |   |   | 2,425,709 |   |   | 602,274 |   |
| P.                G. Howes      |       |                                                 | -          |                                        |       | -                                                                                                |       |                                                                     | 75,001     |   |   | 71,999 |   |   | 2,145,936 |   |   | 1,240,814 |   |
| A.                H. Farnsworth |       |                                                 | 4,200      |                                        |       | 139,335                                                                                          |       |                                                                     | 117,355    |   |   | 41,999 |   |   | 2,547,970 |   |   | 512,327 |   |

| 2 | Fair                market value of Company's common stock at year-end 2005 ($67.69),                minus                the exercise price. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------|

**Long-Term      Incentive Compensation **
As      described in more detail in the Report of the Compensation Committee, the      Long-Term Incentive Award Program is a cash-denominated program that uses      two-year end-to-end cycles. Awards under this program vest based on attainment      of pre-established objectives for average return on net assets and average      sales      growth over the two-year performance cycle.

----

**Long-Term      Incentive Program--Awards in Last Fiscal Year **
**1**

| ** **                      | ** ** | ** **        | ** ** | ** **                                  | ** ** | Estimated                Future Payments - Non-Stock | ** ** |
|---------------------------------|------------|-------------------|------------|---------------------------------------------|------------|------------------------------------------------------|------------|
|   Name                |       |   Value |       | Performance                Period (Years) 1 |       |   Threshold                                |       |   Target |   |   Maximum                (200%) |   |
| R.                L. Zarrella   |       | $                 | 2,000,000  |                                        |       | 2                                                    |       | $ | - |   | $ | 2,000,000 |   | $ | 4,000,000 |   |
| P.                Tyle          |       |              | 800,000    |                                        |       | 2                                                    |       |   | - |   |   | 800,000 |   |   | 1,600,000 |   |
| D.                L. Hahs       |       |              | 500,000    |                                        |       | 2                                                    |       |   | - |   |   | 500,000 |   |   | 1,000,000 |   |
| P.                G. Howes      |       |              | 640,000    |                                        |       | 2                                                    |       |   | - |   |   | 640,000 |   |   | 1,280,000 |   |
| A.                H. Farnsworth |       |              | 560,000    |                                        |       | 2                                                    |       |   | - |   |   | 560,000 |   |   | 1,120,000 |   |

| 1 | The                program began in 2004 with the cycle covering 2004-2005. Payment                will be                made in 2007 upon review and approval of the Compensation Committee                and in                accordance with audited 2005 financial results. As a result of the                two-year nature of this program, no awards were granted in 2005 except                as                a part of a hiring package for new                officers. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Total      Return to Shareholders**

|    Date       |   |    Bausch                & Lomb Incorporated |   |  S&P                Healthcare Index |   |    S&P                500 |   | S&P                Healthcare Equipment Index |   |
|------------------------------|--------|-----------------------------------------------------------------|--------|-----------------------------------------------|--------|----------------------------------------------|--------|---------------------------------------------------|--------|
|                         |   |                                                            |   |                                          |   |                                         |   |                                              |   |
| December                2000 |   | $                                                               | 100.00 |                                          | $      | 100.00                                       |   | $                                                 | 100.00 |   | $ | 100.00 |   |
| December                2001 |   |                                                            | 95.86  |                                          |   | 88.08                                        |   |                                              | 88.17  |   |   | 94.91 |   |
| December                2002 |   |                                                            | 93.22  |                                          |   | 71.54                                        |   |                                              | 68.73  |   |   | 82.90 |   |
| December                2003 |   |                                                            | 136.13 |                                          |   | 82.28                                        |   |                                              | 88.41  |   |   | 109.45 |   |
| December                2004 |   |                                                            | 170.45 |                                          |   | 83.66                                        |   |                                              | 98.00  |   |   | 123.24 |   |
| December                2005 |   |                                                            | 180.78 |                                          |   | 89.05                                        |   |                                              | 102.80 |   |   | 123.31 |   |

----

**Defined      Benefit Retirement Plans **

|  Executive                     |   | Estimated                Annual Benefit Payable at Age 63 |    |
|-------------------------------------|--------|-----------------------------------------------------------|---------|
|  R.                L. Zarrella |   | $                                                         | 10,411* |   |
| P.                Tyle              |   |                                                      | -       |   |
| D.                L. Hahs           |   |                                                      | 112,128 |   |
| P.                G. Howes          |   |                                                      | -       |   |
| A.                H. Farnsworth     |   |                                                      | 36,223  |   |

*Item      11. Executive Compensation*

----

|  Executive                 |   | Estimated                Annual Benefit Payable at Age 63 - SERP III |   |
|---------------------------------|--------|----------------------------------------------------------------------|--------|
|  P.                Tyle    |   | $                                                                    | 5,981  |   |
| D.                L. Hahs       |   |                                                                 | 29,748 |   |
| P.                G. Howes      |   |                                                                 | -      |   |
| A.                H. Farnsworth |   |                                                                 | 16,553 |   |

**Item      12. ** **Security      Ownership of Certain Beneficial Owners and Management and Related Stockholder      Matters**

**Beneficial      Owners of More than 5% of the Company's Common Stock**

|     Name                and Address of Beneficial Owners                                                  | ** ** | Number                of Shares and Nature of Beneficial Ownership |                       |  Percent                of Outstanding Common Stock |   |
|-------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------|----------------------------|----------------------------------------------------------|--------|
| **Franklin                Mutual Advisors, LLC**51                John F. Kennedy ParkwayShort                Hills, NJ 07078 |       |                                                               | 4,439,987                1 |                                                     |   | 8.27 | % |
| **Lord,                Abbett & Co., LLC**90                Hudson StreetJersey                City, NJ 07302             |       |                                                               | 3,212,290                2 |                                                     |   | 5.99 | % |

| 1 | Shares                are as of September 30, 2006 and include 4,439,987 shares with respect                to                which there is sole power to vote; 4,439,987 shares with respect                to which                there is sole power of disposition; and 1,495 shares with respect                to which                there is shared power of                disposition. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Shares                are as of September 30, 2006 and include 3,083,590 shares with respect                to                which there is sole power to vote; 3,083,590 shares with respect                to which                there is sole power of disposition; and 128,700 shares with respect                to                which Lord Abbett & Co., LLC provides non-discretionary investment                advice with respect to voting authority and                disposition. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Security      Ownership of Directors and Executive Officers**Presented      below is information concerning the amount of Company stock beneficially owned      by each director and director nominee, each non-director officer named in the      Summary Compensation Table appearing in *Item      11. Executive Compensation*      of this      Annual Report on Form 10-K and all directors and executive officers of the      Company as a group. All numbers stated are as of December 1, 2006, and include      beneficial ownership of shares of both Common and Class B stock, which are      identical with respect to dividend and liquidation rights and vote together      as a      single class for all purposes.

----

|    Name                of Beneficial Owner                   |   | Amount                and Nature of Beneficial Ownership |                                        |
|-----------------------------------------------------------------------------|--------|----------------------------------------------------------|---------------------------------------------|
| Alan                M. Bennett                                              |   |                                                     | 5,382                1                      |   |
| Domenico                De Sole                                             |   |                                                     | 22,917                2                     |   |
| Alan                H. Farnsworth                                           |   |                                                     | 163,203                3                    |   |
| Paul                A. Friedman                                             |   |                                                     | 3,466                4                      |   |
| Dwain                L. Hahs                                                |   |                                                     | 178,642                5                    |   |
| Paul                G. Howes                                                |   |                                                     | 151,242                6                    |   |
| Jonathan                S. Linen                                            |   |                                                     | 40,447                2                     |   |
| Ruth                R. McMullin                                             |   |                                                     | 33,926                2                     |   |
| Linda                Johnson Rice                                           |   |                                                     | 25,864                7                     |   |
| Praveen                Tyle                                                 |   |                                                     | 60,206                8                     |   |
| William                H. Waltrip                                           |   |                                                     | 46,257                9                     |   |
| Barry                W. Wilson                                              |   |                                                     | 13,970                10                    |   |
| Kenneth                L. Wolfe                                             |   |                                                     | 27,867                11                    |   |
| Ronald                L. Zarrella                                           |   |                                                     | 1,087,964                12                 |   |
| All                directors and executive officers as a group (27 persons) |   |                                                     | 2,932,425                    |   |

| 1 | Includes                4,882 shares which may be acquired within 60 days through the exercise                of                stock options. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Includes                22,917 shares which may be acquired within 60 days through the exercise                of                stock options. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | Includes                133,403 shares and 2,925 shares, respectively, which may be acquired                within 60 days through the exercise of stock options and acquired                under                the 401(k) Plan. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | Includes                1,956 shares which may be acquired within 60 days through the exercise                of                stock options |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------|

| 5 | Includes                132,334 shares and 1,596 shares, respectively, which may be acquired                within 60 days through the exercise of stock options and acquired                under                the 401(k) Plan and 10,000 shares of restricted stock subject to                satisfaction of certain vesting                conditions. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6 | Includes                124,001 shares and 541 shares, respectively, which may be acquired                within                60 days through the exercise of stock options and acquired under                the                401(k) Plan and 16,667 shares of restricted stock subject to satisfaction                of certain vesting conditions. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7 | Includes                19,151 shares which may be acquired within 60 days through the exercise                of                stock options. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------|

| 8 | Includes                31,667 shares and 258 shares, respectively, which may be acquired                within                60 days through the exercise of stock options and acquired under                the                401(k) Plan and 28,000 shares of restricted stock subject to satisfaction                of certain vesting conditions. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9 | Includes                40,890 shares which may be acquired within 60 days through the exercise                of                stock options. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------|

| 10 | Includes                8,970 shares which may be acquired within 60 days through the exercise                of                stock options. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------|

| 11 | Includes                20,750 shares which may be acquired within 60 days through the exercise                of                stock options. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------|

| 12 | Includes                1,060,100 shares and 1,335 shares, respectively, which may be acquired                within 60 days through the exercise of stock options and acquired                under                the 401(k) Plan. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Item      13.  **
**Certain      Relationships and Related Transactions**

*Report      of the Compensation Committee*
*Item      11. Executive Compensation*

----

*Summary      Compensation Table*
*Item      11. Executive Compensation *

----

**Item      14.  **
**Principal      Accounting Fees and Services**

provided      for up to one year and any pre-approval is detailed as to the particular service      or category of services and is generally subject to a specific budget. The      independent accountants and management are required to periodically report      to      the Audit Committee regarding the extent of services provided by the independent      accountants in accordance with this pre-approval and the fees for the services      performed to date. The Audit Committee may also pre-approve particular services      on a case-by-case basis.

**Audit      Fees **

**Audit-Related      Fees **

**Tax      Fees **

**All      Other Fees **

----

**Part      III**

**Item      15.  **
**Exhibits,      Financial Statement Schedules**

| **(a)**                                                                                                                                                                                                                                                                                                                                                       | **Index                to Financial Statements and Financial Statement Schedules Covered                by                Reports of Independent Auditors.** | **Page**                                                                                                                           |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                          | **1.**                                                                                                                                                       | **Financial                statements filed herewith:**                                                                            |   |
|                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                         |  Report                of Independent Registered Public Accounting Firm                                                       |  145 |
|                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                         |  Balance                Sheets at December 31, 2005 and December 25, 2004                                                     |  61 |
|                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                         |  For                the years ended December 31, 2005, December 25, 2004 and December                27,                2003: |   |
|                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                         |       Statements                of Income                                                            |  60 |
|                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                         |       Statements                of Cash Flows                                                        |  62 |
|                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                         |       Statements                of Changes in Shareholders' Equity                                   |  63 |
|                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                         |       Notes                to Financial Statements                                                   |  65 |
|  All                schedules have been omitted because the required information is not                present or not present in amounts sufficient to require submission                of the                schedule, or because the information required is included in the                financial                statements or the notes thereto. |

|  **(b)** |  **Item                601 Exhibits**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|          |  Those                exhibits required to be filed by Item 601 of Regulation S-K are listed                in                the Exhibit Index immediately preceding the exhibits filed herewith                and                such listing is incorporated herein by reference. Each of Exhibits                (10)-a                through (10)-w, (10)-hh through (10)-kk, (10)-nn and (10)-pp is a                management contract or compensatory plan or arrangement required                to be                filed as an exhibit to this Form pursuant to Item 15(c) of this Annual                Report on Form 10-K. |   |

----

**Signatures**

**Principal      Executive Officer**

**Principal      Financial Officer**

**Controller**

**Directors**

----

**Report      of Independent Registered Public Accounting Firm**

** **

**Consolidated      Financial Statements**

*Note      2 — Restatement *

*Note      14 — Employee Benefits *
*Accounting      and Disclosure Requirements Related to the Medicare Prescription Drug,      Improvement and Modernization Act of 2003*

*Note      19 — Supplemental Balance Sheet Information *
*Accounting      for Asset Retirement Obligations*

----

**Internal      Control Over Financial Reporting **
*Item      9A Controls and Procedures*
** **
*Internal      Control - Integrated Framework*

----

----

*Internal      Control - Integrated Framework*
*Internal      Control - Integrated Framework*
*.*

----

**Exhibit      Index**

| **S-K                Item****601                No.** | **Document**                                                                                                                                                                                                                                                                                                                                                                                         |
|-------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (3)-a                                                 | Restated                Certificate of Incorporation of Bausch & Lomb Incorporated (filed                herewith).                                                                                                                                                                                                                                                                              |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (3)-b                                                 | Amended                and Restated By-Laws of Bausch & Lomb Incorporated, effective April                26, 2005 (filed as Exhibit (3)-e to the Company's Form 10-Q for the                quarter ended June 25, 2005, File No. 1-4105, and incorporated herein                by                reference).                                                                                  |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (4)-a                                                 | See                Exhibit (3)-a.                                                                                                                                                                                                                                                                                                                                                                    |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (4)-b                                                 | Form                of Indenture, dated as of September 1, 1991, between the Company                and                Citibank, N.A., as Trustee, with respect to the Company's Medium-Term                Notes (filed as Exhibit (4)-a to the Company's Registration Statement                on                Form S-3, File No. 33-42858 and incorporated herein by                reference). |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (4)-c                                                 | Supplemental                Indenture No. 1, dated May 13, 1998, between the Company and Citibank,                N.A. (filed as Exhibit 3.1 to the Company's Current Report on Form                8-K,                dated July 24, 1998, File No. 1-4105 and incorporated herein by                reference).                                                                                   |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (4)-d                                                 | Supplemental                Indenture No. 2, dated as of July 29, 1998, between the Company and                Citibank, N.A. (filed as Exhibit 3.2 to the Company's Current Report                on                Form 8-K, dated July 24, 1998, File No. 1-4105 and incorporated herein                by                reference).                                                             |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (4)-e                                                 | Supplemental                Indenture No. 3, dated November 21, 2002, between the Company and                Citibank, N.A. (filed as Exhibit 4.8 to the Company's Current Report                on                Form 8-K, dated November 18, 2002, File No. 1-4105 and incorporated                herein                by reference).                                                           |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (4)-f                                                 | Supplemental                Indenture No. 4, dated August 1, 2003, between the Company and Citibank,                N.A. (filed as Exhibit 4.1 to the Company's Current Report on Form                8-K,                dated August 6, 2003, File No. 1-4105 and incorporated herein by                reference).                                                                                |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (4)-g                                                 | Fifth                Supplemental Indenture, dated August 4, 2003, between the Company                and                Citibank, N.A. (filed as Exhibit 4.2 to the Company's Current Report                on                Form 8-K, filed August 6, 2003, File No. 1-4105, and incorporated                herein                by reference).                                                 |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (4)-h                                                 | Sixth                Supplemental Indenture, dated December 20, 2004, between the Company                and                Citibank, N.A. (filed as Exhibit (4)-j to the Company's Annual Report                on                Form 10-K for the fiscal year ended December 25, 2004, File No. 1-4105                and                incorporated herein by reference).                       |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (4)-i                                                 | Supplemental                Indenture No. 7, dated as of June 6, 2006 (filed as Exhibit (4) to                the                Company's Current Report on Form 8-K, filed June 12, 2006 and incorporated                herein by reference).                                                                                                                                                     |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (4)-j                                                 | Supplemental                Indenture No. 8, dated as of November 8, 2006 (filed                herewith).                                                                                                                                                                                                                                                                                           |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (4)-k                                                 | Amended                and Restated Supplemental Indenture No. 8, effective as of November                8,                2006 (filed herewith).                                                                                                                                                                                                                                                   |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (10)-a                                                | Change                of Control Employment Agreement with certain executive officers of                the                Company (filed as Exhibit (10)-a to the Company's Annual Report on                Form                10-K for the fiscal year ended December 29, 1990, File No. 1-4105                and                incorporated herein by reference).                              |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (10)-b                                                | Change                of Control Employment Agreement with certain executive officers of                the                Company (filed as Exhibit (10)-b to the Company's Annual Report on                Form                10-K for the fiscal year ended December 28, 1996, File No. 1-4105                and                incorporated herein by reference).                              |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                 |

----

| (10)-c | Amended                and Restated Supplemental Retirement Income Plan II (filed as Exhibit                (10)-f to the Company's Annual Report on Form 10-K for the fiscal                year                ended December 29, 1990, File No. 1-4105 and incorporated herein                by                reference).                                                                                                                         |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)-d | Amended                and Restated Supplemental Retirement Income Plan III, dated December                31,                2000 filed as Exhibit (10)-d to the Company's Annual Report on Form                10-K                for the fiscal year ended December 30, 2000, File No. 1-4105 and                incorporated herein by reference).                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)-e | Annual                Retainer Stock Plan for Non-Employee Directors (filed as Exhibit                (10)-dd                to the Company's Annual Report on Form 10-K for the fiscal year ended                December 28, 1996, File No. 1-4105 and incorporated herein by                reference).                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)-f | Management                Incentive Compensation Plan (filed as Exhibit (10)-b to the Company's                Form                10-Q for the quarter ended June 27, 1998, File No. 1-4105 and incorporated                herein by reference).                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)-g | Employment                Agreement dated November 9, 2001 between Bausch & Lomb Incorporated                and Ronald L. Zarrella, Chairman and Chief Executive Officer (filed                as                Exhibit (10)-z to the Company's Annual Report on Form 10-K for the                fiscal                year ended December 29, 2001, File No. 1-4105 and incorporated herein                by                reference).       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)-h | Amended                and Restated 1990 Stock Incentive Plan (filed as Exhibit (10)-s to                the                Company's Annual Report on Form 10-K for the year ended December                28, 2002,                File No. 1-4105 and incorporated herein by reference).                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)-i | Amendment                No. 6 to the Bausch & Lomb Incorporated 1990 Stock Incentive Plan                (filed as Exhibit (10)-t to the Company's Annual Report on Form 10-K                for                the year ended December 28, 2002, File No. 1-4105 and incorporated                herein                by reference).                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)-j | Corporate                Officer Separation Plan (filed as Exhibit (10)-v to the Company's                Annual                Report on Form 10-K for the year ended December 28, 2002, File No.                1-4105                and incorporated herein by reference).                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)-k | Amended                and Restated 2001 Stock Incentive Plan for Non-Officers, as approved                by                the Committee on Management on January 22, 2001 and amended on July                23,                2001 (filed as Exhibit (10)-w to the Company's Annual Report on Form                10-K                for the year ended December 28, 2002, File No. 1-4105 and incorporated                herein by reference). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)-l | Amendment                No. 2 to the Bausch & Lomb Incorporated 2001 Stock Incentive Plan for                Non-Officers, effective January 1, 2003 (filed as Exhibit (10)-x                to the                Company's Annual Report on Form 10-K for the year ended December                28, 2002,                File No. 1-4105 and incorporated herein by reference).                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)-m | 2003                Long-Term Incentive Plan as amended and restated on July 15, 2003                (filed                as Exhibit (10)-b to the Company's Form 10-Q for the quarter ended                June                28, 2003, File No. 1-4105 and incorporated herein by                reference).                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)-n | Amendment                No. 1 to the Amended and Restated Supplemental Retirement Income                Plan III                (filed as Exhibit (10)-b to the Company's Form 10-Q for the quarter                ended                September 27, 2003, File No. 1-4105 and incorporated herein by                reference).                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)-o | Stock                Unit Award Agreement pursuant to the 2003 Long-Term Incentive Plan                (filed                as Exhibit (10)-c to the Company's Form 10-Q for the quarter ended                September 27, 2003, File No. 1-4105 and incorporated herein by                reference).                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)-p | Restricted                Stock Award Agreement pursuant to the 2003 Long-Term Incentive Plan                (filed                as Exhibit (10)-d to the Company's Form 10-Q for the quarter ended                September 27, 2003, File No. 1-4105 and incorporated herein by                reference).                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)-q | Bausch                & Lomb Incorporated Annual Incentive Compensation Plan, as amended                and                restated on July 25, 2006 (filed herewith).                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

----

| (10)-r  | Director                Deferred Compensation Plan as amended and restated on December 1,                2003                (filed as Exhibit (10)-w to the Company's Annual Report on Form 10-K                for                the year ended December 27, 2003, File No. 1-4105 and incorporated                herein                by reference).                                                                                                                                                                                       |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (10)-s  | Restricted                Stock Deferred Compensation Plan, as amended and restated on December                1,                2003 (filed as Exhibit (10)-x to the Company's Annual Report on Form                10-K                for the year ended December 27, 2003, File No. 1-4105 and incorporated                herein by reference).                                                                                                                                                                                             |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (10)-t  | Executive                Deferred Compensation Plan, as amended and restated on December 1,                2003                (filed as Exhibit (10)-y to the Company's Annual Report on Form 10-K                for                the year ended December 27, 2003, File No. 1-4105 and incorporated                herein                by reference).                                                                                                                                                                                     |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (10)-u  | Stock                Option Agreement Pursuant to 2003 Long-Term Incentive Plan (filed                as                Exhibit (10)-z to the Company's Annual Report on Form 10-K for the                year                ended December 27, 2003, File No. 1-4105 and incorporated herein                by                reference).                                                                                                                                                                                                      |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (10)-v  | Long-Term                Equity Equivalent Accumulation Plan (filed herewith).                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (10)-w  | Amendment                No. 2 to the Amended and Restated Supplemental Retirement Income                Plan III                (filed herewith).                                                                                                                                                                                                                                                                                                                                                                                               |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (10)-x  | Credit                Agreement by and among Bausch & Lomb Incorporated, certain banks,                financial institutions and other institutional lenders and issuers                of                letter of credit, Citigroup Global Markets Inc., Keybank National                Association and Citibank, N.A., dated July 26, 2005 (filed as Exhibit                (10)-b to the Company's Form 10-Q for the quarter ended June 25,                2005,                File No. 1-4105 and incorporated herein by reference). |
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| (10)-y  | Credit                Agreement between, among others, Citibank International PLC, as facility                agent, Bausch & Lomb B.V. and Bausch & Lomb Incorporated, dated                November 29, 2005 (filed herewith).                                                                                                                                                                                                                                                                                                         |
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| (10)-z  | Letter                Waiver (U.S. Credit Agreement), dated November 23, 2005 (filed                herewith).                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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| (10)-aa | Letter                Waiver (U.S. Credit Agreement), dated February 24, 2006 (filed                herewith).                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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| (10)-bb | Letter                Waiver (B.V. Term Loan), dated February 24, 2006 (filed                herewith).                                                                                                                                                                                                                                                                                                                                                                                                                                          |
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| (10)-cc | Letter                Waiver (U.S. Credit Agreement), dated May 17, 2006 (filed                herewith).                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| (10)-dd | Letter                Waiver (B.V. Term Loan), dated May 17, 2006 (filed                herewith).                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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| (10)-ee | Letter                Waiver (U.S. Credit Agreement), dated August 28, 2006 (filed                herewith).                                                                                                                                                                                                                                                                                                                                                                                                                                     |
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| (10)-ff | Letter                Waiver (B.V. Term Loan), dated August 30, 2006 (filed                herewith).                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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| (10)-gg | Agreement                for the Sale and Purchase of the Entire Issued Capital of Sino Concept                Technology Limited, by and between Sino Biopharmaceutical Limited                and                Bausch & Lomb Incorporated, dated July 2, 2005 (filed                herewith).                                                                                                                                                                                                                                           |
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| (10)-hh | Summary                of employment arrangement for Praveen Tyle, Senior Vice President                and                Chief Scientific Officer (filed herewith).                                                                                                                                                                                                                                                                                                                                                                            |
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| (10)-ii | Summary                of terms for agreement to authorize Company contribution for certain                participants in the 401(k) Excess Program under the non-qualified                Executive Deferred Compensation Plan (filed herewith).                                                                                                                                                                                                                                                                                               |
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| (10)-jj | Executive                Deferred Compensation Plan for Post-2004 Deferrals, dated November                7, 2006                (filed herewith).                                                                                                                                                                                                                                                                                                                                                                                              |
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| (10)-kk | Amendment                to Executive Deferred Compensation Plan, dated November 7, 2006 (filed                herewith).                                                                                                                                                                                                                                                                                                                 |
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| (10)-ll | Letter                Waiver (U.S. Credit Agreement), dated December 13, 2006 (filed                herewith).                                                                                                                                                                                                                                                                                                                            |
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| (10)-mm | Letter                Waiver (B.V. Term Loan), dated December 13, 2006 (filed                herewith).                                                                                                                                                                                                                                                                                                                                   |
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| (10)-nn | Description                of certain employment terms for Paul G. Howes, Senior Vice President                and                President, Americas Region, dated November 12, 2003 (filed as Exhibit                (10)-w of the Company's Annual Report on Form 10-K for the fiscal                year                ended December 25, 2004, File No. 1-4105 and incorporated herein                by                reference). |
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| (10)-oo | License                Agreement between and among CIBA Vision AG and Bausch & Lomb                Incorporated, dated July 1, 2004 (filed herewith). (Portions of this                exhibit are omitted pursuant to a confidential treatment request                and filed                separately with the SEC.)                                                                                                             |
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| (10)-pp | Long                Term Performance Unit Agreement Pursuant to 2003 Long-Term Incentive                Plan                (filed herewith).                                                                                                                                                                                                                                                                                             |
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| (10)-qq | Letter                Waiver (U.S. Credit Agreement), dated January 26, 2007 (filed                herewith).                                                                                                                                                                                                                                                                                                                             |
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| (10)-rr | Letter                Waiver (B.V. Term Loan), dated January 29, 2007 (filed                herewith).                                                                                                                                                                                                                                                                                                                                    |
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| (12)    | Statement                Regarding Computation of Ratio of Earnings to Fixed Charges (filed                herewith).                                                                                                                                                                                                                                                                                                                     |
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| (21)    | Subsidiaries                (filed herewith).                                                                                                                                                                                                                                                                                                                                                                                             |
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| (24)    | Power                of Attorney with respect to the signatures of directors in this Annual                Report on Form 10-K (filed herewith).                                                                                                                                                                                                                                                                                          |
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| (31)-a  | Certification                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed                herewith).                                                                                                                                                                                                                                                                                                                   |
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| (31)-b  | Certification                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed                herewith).                                                                                                                                                                                                                                                                                                                   |
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| (32)-a  | Certification                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.                Section 1350 (furnished herewith).                                                                                                                                                                                                                                                                                       |
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| (32)-b  | Certification                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.                Section 1350 (furnished herewith).                                                                                                                                                                                                                                                                                       |