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  • Barr Pharmaceuticals, Inc.

    Annual Report 2005

    Barr Today, Barr Tomorrow

    Questions For and Answers By Bruce L. Downey, CEO

  • Years Ended June 30,

    (Numbers in thousands, except per share data and employee data) 2005 2004

    Results of Operations

    Total Revenues $1,047,399 $1,309,088

    Earnings

    Earnings from Operations $ 316,027 $ 192,848

    Net Earnings 214,988 123,103

    Diluted Earnings per Share 2.03 1.15

    Financial Position

    Cash Flows from Operations $ 363,035 $ 258,099

    Working Capital 780,386 670,601

    Total Assets 1,482,846 1,333,269

    Shareholders Equity 1,233,970 1,042,046

    Statistics

    Research and Development Expenditures $ 128,384 $ 168,995

    Capital Expenditures $ 55,157 $ 46,907

    Number of Employees 1,847 1,480

    Weighted Average Number of Diluted Common

    Shares Outstanding 106,052 106,661

    Selected Financial Highlights

    Restated to include historicalfinancial data of Duramed

    Net Earnings$ in millions

    01 02 03 0504

    62.6

    210.

    3

    167.

    6

    123.

    1

    215.

    0

    Adjusted to reflect stock splits;restated to include historicalfinancial data of Duramed

    Earnings per Share$ per share

    01 02 03 0504

    0.63

    2.06

    1.62

    1.15

    2.03

    Restated to include historicalfinancial data of Duramed

    Shareholders Equity$ in millions

    01 02 03 0504

    416.

    8

    666.

    5

    868.

    0 1,0

    42.0 1

    ,234

    .0

    Restated to include historicalfinancial data of Duramed

    Total Revenues$ in millions

    01 02 03 0504

    593.

    2

    1,18

    9.0

    902.

    9

    1,30

    9.1

    1,04

    7.4

  • Barr Pharmaceuticals, Inc.Board of Directors

    Carole S. Ben-Maimon, M.D.President and Chief Operating OfficerDuramed Research Inc.

    Paul M. Bisaro, Esq.President and Chief Operating OfficerBarr Laboratories, Inc.

    Harold N. ChefitzChairman of Notch Hill AdvisorsPresident of Chefitz Healthcare Advisors

    Bruce L. Downey, Esq.Chairman and Chief Executive OfficerBarr Pharmaceuticals, Inc.

    Richard R. FrankovicPharmaceutical Industry Consultant

    James S. Gilmore, III, Esq.Partner, Kelley, Drye & Warren;Former Governor, Commonwealth of Virginia

    Jacob M. KayPresident & Chief Operating Officer ofApotex, Inc.

    Peter R. SeaverHealthcare Industry Consultant

    George P. Stephan, Esq.Business ConsultantFormer Director of Kollmorgen Corporation

    Management Team

    Bruce L. Downey, Esq.Chairman and Chief Executive OfficerBarr Pharmaceuticals, Inc.

    Paul M. Bisaro, Esq.Senior Vice President

    Carole S. Ben-Maimon, M.D.Senior Vice President

    Frederick J. Killion, Esq.Vice President, General Counsel and Secretary

    William T. McKeeVice President, Chief Financial Officer andTreasurer

    Barr Laboratories, Inc.A subsidiary of Barr Pharmaceuticals, Inc.

    Management Team

    Paul M. Bisaro, Esq.President and Chief Operating Officer

    Salah U. Ahmed, Ph.D.Senior Vice President, Research and Development

    Michael J. BogdaSenior Vice PresidentManufacturing and Engineering

    Timothy P. CatlettSenior Vice President, Sales and Marketing

    Catherine F. HigginsSenior Vice President, Human Resources

    Frederick J. Killion, Esq.Senior Vice President, General Counseland Secretary

    William T. McKeeSenior Vice PresidentChief Financial Officer and Treasurer

    Christine Mundkur, Esq.Senior Vice PresidentQuality and Regulatory Counsel

    Emad M. Alkhawam, Ph.D.Vice PresidentAnalytical Research and Development

    Jay Bapna, P.E.Vice President, New York Manufacturingand Engineering

    Carol A. CoxVice President, Investor Relations andCorporate Communications

    Charles E. DiLiberti, M.S.Vice President of Scientific Affairs

    Suzanne DonaghyVice President and Chief Information Officer

    David J. FurnissVice President, Internal Audit

    Phil GioiaVice President, Proprietary Sales

    Jake HansenVice President, Government Affairs

    J. Gregory JesterVice President and Corporate Controller

    Daryl LeSueurVice President, Operations, Ohio Facility

    Christopher Mengler, R.Ph.Vice President, Corporate Devlopment

    Michael MoorsheadVice President and General Manager,Virginia Facility

    Amy NiemannVice President, Proprietary Marketing

    Timothy B. SawyerVice President, Sales for Generic Products

    Robert WillifordVice President and General Manager,Ohio Facility

    Duramed Research Inc.A subsidiary of Barr Pharmaceuticals, Inc.

    Management Team

    Carole S. Ben-Maimon, M.D.President and Chief Operating Officer

    Lance J. Bronnenkant, Ph.D.Vice President of Research and Development,Operations

    Howard I. HaitVice President, Data Management andBiostatistics

    Wayne S. Mulcahy, Ph.D.Vice President, Clinical Operations

    Shareholder InformationInvestor Relations DepartmentContact: Carol A. CoxVice President, Investor Relations andCorporate CommunicationsEmail: ccox@barrlabs.comTelephone: 1-800-BARRLABWebsite: www.barrlabs.com

    Common StockCommon Stock is traded on the New YorkStock Exchange Symbol: BRL

    Registrar and Transfer AgentMellon Investor ServicesP.O. Box 3315South Hackensack, NJ 07606-1915

    Annual MeetingThe annual meeting of shareholders will beheld at 10 am on November 3, 2005 at theWoodcliff Lake Hilton, Tice Blvd., WoodcliffLake, NJ.

    TrademarksBARR, barr (stylized), the stylized b,Duramed, DURAmed (stylized), four dots(stylized), Shaping Womens Health (stylized)and the female symbol (stylized) are registeredtrademarks of Barr Pharmaceuticals, Inc. orrelated subsidiaries. APRI, AVIANE,AYGESTIN, BARR, CAMILA, CENESTIN,CRYSELLE, DIAMOX, DOXY-CAP, DOXY-TABS, DURADRIN, DURAMED, ENPRESSE,ERRIN, E.S.P., FEWER PERIODS. MOREPOSSIBILITIES., ITS NOT TOO LATE TOPREVENT PREGNANCY, JUNEL, KARIVA,LESSINA, NORDETTE, NORTREL, PLAN B,PORTIA, PREFEST, PREVEN, PREVENT,REVIA, REVIA NALTREXONE HCL,SEASONALE, SHAPING WOMENS HEALTH,SPRINTEC, TRI-SPRINTEC, VIASPAN,WHEEL OF MENSTRUATION, ZEBETAand ZIAC are registered trademarks, andA.L.E.R.T., ARANELLE, CARE, CLARAVIS,CYPAT, ENJUVIA, FASLIQ, JUNEL FE,KELNOR, MAKING MEDICINES WORKFOR EVERYONE, NEVIS, OUTLOOKS &OPINIONS, SEASONEST, SEASONETTE,TREXALL and VELIVET are trademarks, ofBarr Pharmaceuticals, Inc. or related subsidiaries.LOESTRIN is a registered trademark andLOESTRIN FE is a trademark of WarnerChilcott, licensed for use by DuramedPharmaceuticals, Inc.

    All other trademarks referenced herein are theproperty of their respective owners.

    10-K Report AvailableThe Companys 2005 Annual Report on Form10-K, filed with the Securities and ExchangeCommission is available via the Companysweb site or by writing to the Investor RelationsDepartment at the Companys headquarters.

    2005 Barr Pharmaceuticals, Inc. All rights reserved.

    Directory

    Design: Arnold Saks Associates, NYC Photography: Bill Gallery Product Photography: Jim Barber Printing: PonyXPress Printing Services

  • 1

    Questions and Answers...

    2005 Business Summary and Financial Performance

    Q Please provide your assessment of the Companys overall financial progress infiscal 2005.Fiscal 2005 represented another strong year for Barr. Our investment in building avibrant proprietary products pipeline, the expansion of our generic oral contraceptiveproduct line, the addition of several important new generic products, and key businessdevelopment initiatives were among the highlights of the fiscal year.

    On a GAAP basis, we reported fully diluted earnings per share of $2.03 for fiscal 2005,compared to $1.15 for fiscal 2004, on net earnings for fiscal 2005 of $215.0 million,compared to $123.1 million in fiscal 2004. Revenues for the year totaled $1.05 billion,compared to $1.31 billion in fiscal 2004. Excluding the approximate $0.37 per sharecharge related to a liability recorded in relation to a letter of intent signed in June 2005regarding a potential litigation settlement and product acquisition related to OrganonsMircette oral contraceptive, detailed elsewhere in this report, adjusted net earnings forthe fiscal year ended June 30, 2005 were $254.3 million, or $2.40 per fully diluted share.

    Strong proprietary product sales, up 91% year-over-year, were $279 million. Thisgrowth was driven by sales of our SEASONALE extended-cycle oral contraceptiveproduct. We also reported margins of 70%, up from 51% a year ago. We ended thefiscal year with more than $363 million in operating cash flow.

    While delivering sound results, we also continued to invest in new product develop-ment generic and proprietary and took the first steps into the new and untappedarena of biopharmaceutical products.

    Bruce L. DowneyChairman and ChiefExecutive Officer

    Barr Pharmaceuticals, Inc. (NYSE-BRL) is a holding companywhose principal subsidiaries, Barr Laboratories, Inc. and DuramedPharmaceuticals, Inc., develop, manufacture and market genericand proprietary pharmaceuticals. Generic products are sold underthe Barr label, while proprietary products are sold under theDuramed label. In a wide-ranging interview, Bruce L. Downey,Chairman and Chief Executive Officer, discussed the Companysprogress during fiscal 2005, and its opportunities and challengesfor fiscal 2006 and beyond.

  • Q What do you consider Barrs major accomplishments for the fiscal year?In addition to our solid financial performance, we had a number of important achieve-ments across the company. In our generic business, we added two new oral contracep-tives to our product franchise: AranelleTM, the generic version of Watson Laboratories,Inc.s Tri-Norinyl-28 oral contraceptive; and KelnorTM, the generic version of PfizersDemulen 1/35-28 oral con