<DOCUMENT>
<TYPE>F-1
<SEQUENCE>1
<FILENAME>y54530f-1.txt
<DESCRIPTION>ALCON, INC.
<TEXT>
<PAGE>

   AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 22, 2002
                                            REGISTRATION NO. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                      ------------------------------------
                                    FORM F-1
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                      ------------------------------------
                                  ALCON, INC.
             (Exact name of registrant as specified in its charter)

<Table>
<S>                                   <C>                                   <C>
           SWITZERLAND                               6719                               98-0205094
 (State or other jurisdiction of         (Primary Standard Industrial        (I.R.S. Employer Identification
  incorporation or organization)         Classification Code Number)                     Number)
</Table>

                                    BOSCH 69
                                  P.O. BOX 62
                          6331 HUNENBERG, SWITZERLAND
                               011-41-41-785-8888
  (Address, including zip code, and telephone number, including area code, of
                   registrant's principal executive offices)

                               TIMOTHY R.G. SEAR
                            ALCON LABORATORIES, INC.
                               6201 SOUTH FREEWAY
                          FORT WORTH, TEXAS 76134-2099
                                 (817) 293-0450
 (Name, address, including zip code, and telephone number, including area code,
                              of agent of service)
                      ------------------------------------
                                   COPIES TO:

<Table>
<S>                                                     <C>
               JOHN T. GAFFNEY, ESQ.                                    LINDA C. QUINN, ESQ.
              CRAVATH, SWAINE & MOORE                                   SHEARMAN & STERLING
                  WORLDWIDE PLAZA                                       599 LEXINGTON AVENUE
                 825 EIGHTH AVENUE                                 NEW YORK, NEW YORK 10022-6069
           NEW YORK, NEW YORK 10019-7475                                   (212) 848-4000
                   (212) 474-1000
</Table>

                      ------------------------------------
    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:     As soon
as practicable after the effective date of this registration statement.
    If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
    If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
    If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
    If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [ ]
    If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
                      ------------------------------------

                        CALCULATION OF REGISTRATION FEE

<Table>
<S>                                           <C>                  <C>                  <C>                  <C>
---------------------------------------------------------------------------------------------------------------------------------
                                                PROPOSED MAXIMUM     PROPOSED MAXIMUM     PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES TO BE           AMOUNT TO BE        OFFERING PRICE     AGGREGATE OFFERING       AMOUNT OF
REGISTERED                                       REGISTERED(1)          PER SHARE             PRICE(2)         REGISTRATION FEE
---------------------------------------------------------------------------------------------------------------------------------
  Common Shares, par value CHF 0.20 per
  share.....................................   76,725,000 shares          $35.00           $2,685,375,000          $247,055
---------------------------------------------------------------------------------------------------------------------------------
</Table>

(1) Includes 6,975,000 common shares issuable upon the exercise of the
    underwriters' over-allotment option.
(2) Estimated solely for purposes of calculating the registration fee pursuant
    to Rule 457(o) under the Securities Act of 1933.

    The registrant hereby amends this registration statement on such date as may
be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities, and we are not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.

                 SUBJECT TO COMPLETION, DATED FEBRUARY 22, 2002

                               69,750,000 Shares

                                  [ALCON LOGO]

                                  ALCON, INC.

                                 Common Shares
                               ------------------

     This is our initial public offering, and no public market currently exists
for our shares.

     We are currently a wholly owned subsidiary of Nestle S.A. and are
incorporated in Switzerland. We currently expect the initial public offering
price of our common shares to be between $31.00 and $35.00 per common share.

     We have applied to list our common shares on the New York Stock Exchange
under the symbol "ACL."

     The underwriters have an option to purchase a maximum of 6,975,000
additional common shares to cover over-allotments.

     INVESTING IN OUR COMMON SHARES INVOLVES RISKS.  SEE "RISK FACTORS" ON PAGE
9.

<Table>
<Caption>
                                                                          UNDERWRITING
                                                           PRICE TO       DISCOUNTS AND     PROCEEDS TO
                                                            PUBLIC         COMMISSIONS         ALCON
                                                         -------------    -------------    -------------
<S>                                                      <C>              <C>              <C>
Per common share.....................................
Total................................................
</Table>

     Delivery of the common shares will be made on or about           , 2002.

     Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
                               Global Coordinator
                           CREDIT SUISSE FIRST BOSTON
                      ------------------------------------

                      Joint Lead Managers and Bookrunners
CREDIT SUISSE FIRST BOSTON                                   MERRILL LYNCH & CO.
                      ------------------------------------
GOLDMAN, SACHS & CO.                JPMORGAN                SALOMON SMITH BARNEY
                      ------------------------------------

BANC OF AMERICA SECURITIES LLC
                 LEHMAN BROTHERS
                                   MORGAN STANLEY
                                                 SG COWEN
                                                            UBS WARBURG

               The date of this prospectus is            , 2002.
<PAGE>

[Description of front inside cover artworks and graphics: in the center of the
page is an enlarged picture of an AcrySof intraocular lens with a picture of a
globe superimposed on it.; around this picture are pictures of (clockwise from
top left):]


LADARVision 4000 excimer laser for ophthalmic refractive surgery; Accurus
surgical system for vitreoretinal surgery; Series 20000 LEGACY
phacoemulsification system; TobraDex ophthalmic suspension, a combination
anti-infective/anti-inflammatory suspension; TobraDex ophthalmic ointment, a
combination anti-infective/anti-inflammatory ointment; Ciloxan ophthalmic
ointment, an anti-infective ointment; Ciloxan ophthalmic solution, an
anti-infective solution; Greishaber microsurgical instruments; LADARTome
microkeratome, a surgical instrument used as part of the LASIK refractive
surgical procedure and Viscoat viscoelastic material, used in cataract and
vitreoretinal surgery.
<PAGE>

                               ------------------

                               TABLE OF CONTENTS

<Table>
<Caption>
                                        PAGE
                                        ----
<S>                                     <C>
PROSPECTUS SUMMARY....................    1
RISK FACTORS..........................    9
CAUTIONARY NOTE REGARDING
  FORWARD-LOOKING STATEMENTS..........   17
ABOUT THIS PROSPECTUS.................   18
USE OF PROCEEDS.......................   19
DIVIDEND POLICY.......................   19
EXCHANGE RATES........................   20
CAPITALIZATION........................   21
DILUTION..............................   22
SELECTED CONSOLIDATED FINANCIAL
  INFORMATION.........................   23
MANAGEMENT'S DISCUSSION AND ANALYSIS
  OF FINANCIAL CONDITION AND RESULTS
  OF OPERATIONS.......................   26
OUR INDUSTRY..........................   40
BUSINESS..............................   46
</Table>

<Table>
<Caption>
                                        PAGE
                                        ----
<S>                                     <C>
MANAGEMENT............................   68
SOLE SHAREHOLDER......................   81
ARRANGEMENTS BETWEEN NESTLE AND OUR
  COMPANY.............................   81
DESCRIPTION OF SHARES.................   85
SHARES ELIGIBLE FOR FUTURE SALE.......   93
TAXATION..............................   94
UNDERWRITING..........................  100
NOTICE TO CANADIAN RESIDENTS..........  103
ENFORCEMENT OF CIVIL LIABILITIES......  104
LEGAL MATTERS.........................  104
EXPERTS...............................  104
OTHER OFFERING EXPENSES AND FEES......  105
WHERE YOU CAN FIND MORE INFORMATION...  105
INDEX TO FINANCIAL STATEMENTS.........  F-1
</Table>

                               ------------------

     YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT.
THIS PROSPECTUS MAY ONLY BE USED WHERE IT IS LEGAL TO SELL THESE SECURITIES. THE
INFORMATION IN THIS PROSPECTUS MAY ONLY BE ACCURATE ON THE DATE OF THIS
DOCUMENT.

                     DEALER PROSPECTUS DELIVERY OBLIGATION

     Until           , 2002 (25 days after the commencement of this offering),
all dealers that effect transactions in these securities, whether or not
participating in this offering, may be required to deliver a prospectus. This is
in addition to a dealer's obligation to deliver a prospectus when acting as an
underwriter and with respect to unsold allotments or subscriptions.
<PAGE>

                      [This Page Intentionally Left Blank]
<PAGE>

                               PROSPECTUS SUMMARY

     You should read the following summary together with the more detailed
information regarding us and our common shares being sold in this offering and
our historical and pro forma consolidated financial statements included
elsewhere in this prospectus.

                                     ALCON

OVERVIEW

     We are the largest eye care company in the world based on sales in 2001. We
develop, manufacture and market pharmaceuticals, surgical equipment and devices,
and contact lens care and other vision care products that treat conditions of
the eye. Our broad range of products represents the strongest portfolio in the
ophthalmic industry, with leading market share positions across most major
product categories. We have the largest research and development commitment of
any eye care company worldwide and have a strong track record of converting
discoveries into commercially viable products. With over 50 years of experience
in the ophthalmic industry, we believe our brand name is synonymous with
quality, service and innovation among eye care professionals worldwide. Our
products are sold in over 180 countries, and we are present in every significant
market in the world where ophthalmology is practiced.

     We estimate that the worldwide market for ophthalmic products (excluding
eyeglasses and contact lenses) is over $11 billion with growth driven by a
variety of factors, including an aging population, advances in medical
technology, improved therapies and economic growth in emerging markets. Many
ophthalmic conditions, such as glaucoma, cataracts, retinal disorders and dry
eye, are strongly correlated with age.

     The three principal categories of ophthalmic products we focus on are
pharmaceutical, surgical and contact lens care and other vision care products.
In 2001:

     -  The global ophthalmic pharmaceutical market was estimated to be
        approximately $5.2 billion, of which we hold a market share of
        approximately 17%. The largest segment of this market is related to the
        treatment of glaucoma, a $2.3 billion global market of which we hold a
        market share of approximately 11%. Other ophthalmic pharmaceutical
        products treat conditions such as ocular allergy, ocular infection and
        ocular inflammation.

     -  The global ophthalmic surgical market was estimated to be approximately
        $3.2 billion and includes products and equipment used during cataract
        surgery, vitreoretinal surgery, which is surgery on the back of the eye,
        and laser vision correction surgery, which is also known as refractive
        surgery. Our share of this market is approximately 43%.

     -  The global contact lens care and other vision care products market was
        estimated to be approximately $2.5 billion and includes disinfecting and
        cleaning solutions for contact lenses and dry eye products. Our share of
        this market is approximately 18%.

     In 2001, we had sales of over $2.7 billion, EBITDA of $784 million and net
earnings of $316 million and the leading U.S. market share position, based on
sales, in each of the following product categories:

     -  #1 in products for cataract surgery;(1)

     -  #1 in products for vitreoretinal surgery;(2)

     -  #1 in ocular allergy products;(3)

     -  #1 in combination ocular anti-infective/anti-inflammatory products;(3)

     -  #1 in ocular anti-infective products;(3)

     -  #1 in ocular anti-inflammatory products;(3)

     -  #1 in soft contact lens disinfecting solutions;(4) and

     -  #1 in generic ophthalmic pharmaceuticals, through our Falcon
        Pharmaceuticals business.(3)

     See Notes on Sources of Market Share Information on page 4 of this
prospectus.

                                        1
<PAGE>

     Outside of the United States, where we derive approximately half of our
sales, we are the largest ophthalmic surgical company based on sales and have
the #1 market share position in several other product categories in many
countries, based on wholesale sales at manufacturer's prices (as reported by IMS
Health Inc. as of June 2001) and other industry data. In Japan, our second
largest market, we have the #1 market share position in soft contact lens
disinfecting solutions, based on the Intage, Inc. report of data for Japan as of
November 2001, the #1 market share position in intraocular lenses, based on
internal estimates prepared using third-party data, and the #1 market share
position in surgical equipment and devices, based on internal estimates.

OUR COMPETITIVE STRENGTHS

     We believe that our comprehensive product portfolio, large research and
development commitment, longstanding relationships with eye care professionals,
global infrastructure, manufacturing expertise and experienced management team
differentiate us from other companies in the ophthalmic industry.

     -  DEPTH, BREADTH AND QUALITY OF OUR PRODUCTS.  In 2001, we had more than
        twice the global ophthalmic sales of our nearest competitor, excluding
        sales of eyeglasses and contact lenses. Our broad range of high-quality,
        technologically-advanced products represents the strongest portfolio in
        the ophthalmic industry. Our leadership positions across most major
        product categories enhance our ability to extend our product offerings,
        through the launch of innovative products, and to expand our geographic
        reach into ophthalmic markets worldwide.

     -  OUR SIGNIFICANT RESEARCH AND DEVELOPMENT COMMITMENT AND COMMERCIAL
        SUCCESS.  We have the largest research and development commitment of any
        eye care company worldwide and intend to invest more than $1.4 billion
        on research and development projects over the next four years. We also
        have a strong track record of converting discoveries into commercially
        viable products and have successfully introduced 16 significant
        internally developed products since 1994. Approximately 45% of our sales
        in 2001 came from products introduced since 1994.

     -  OUR LONGSTANDING COMMITMENT TO EYE CARE.  For over 50 years, we have
        specialized in developing, manufacturing and marketing innovative and
        high-quality eye care products and have established close relationships
        with eye care professionals around the world. We have built and
        maintained these relationships through sales and marketing efforts,
        training programs at our worldwide facilities, funding ophthalmic
        research and humanitarian efforts and product development
        collaborations. Our ongoing business dealings, in many cases with
        second-generation eye care professionals, illustrate the strength and
        quality of our relationships.

     -  OUR GLOBAL SCALE.  We are present in every significant market in the
        world with local operations in over 75 countries, and our products are
        currently sold in more than 180 countries. We use our local operations
        to sell directly to and provide technical service and support for our
        customers on a global scale, differentiating us from our competitors. We
        built our global network over many years by establishing local surgical
        training programs and facilities and through substantial investments in
        emerging markets when the practice of ophthalmology was in its
        developmental stage.

     -  OUR MANUFACTURING EXPERTISE.  We have state-of-the-art pharmaceutical
        and medical device manufacturing facilities that employ our proprietary
        technologies. The broad experience, long tenure and low turnover rate
        among our work force have ensured our ability to maintain and enhance
        our manufacturing know-how and expertise while reducing our
        manufacturing costs.

     -  OUR EXPERIENCED MANAGEMENT TEAM AND WORKFORCE.  Each member of our
        senior management team has over 18 years of experience with us. We
        benefit from an experienced workforce of more than 11,000 employees,
        many of whom have been with us, or a company we have acquired, for over
        two decades. The long and diverse experience of our senior management
        and employees is a competitive advantage because of their knowledge of
        the industry, familiarity with our customers and understanding of the
        development, manufacture and sale of our products.

                                        2
<PAGE>

OUR STRATEGIES

     We intend to create superior value for our shareholders by continuing to
execute our proven growth and operating strategies.

     -  BUILD ON OUR LEADERSHIP POSITIONS IN ATTRACTIVE MARKETS.  We intend to
        continue to use the proven quality of our products and their leadership
        positions across a broad range of product categories to increase our
        sales in established markets and grow our market share, particularly in
        attractive segments of the ophthalmic market, such as the treatment of
        glaucoma and cataracts.

     -  CONTINUE SIGNIFICANT INVESTMENTS IN RESEARCH AND DEVELOPMENT.  We plan
        to continue our commitment to ophthalmic research and development, with
        a significant focus on areas that present new and attractive growth
        opportunities, including the condition known as age-related macular
        degeneration, a multi-billion market opportunity, and other retinal
        disorders. We will also continue to focus our efforts on introducing the
        next generation of our products, with a particular emphasis on the
        replacement of products reaching the end of their product life cycle.

     -  GROW SALES IN EMERGING MARKETS.  We intend to increase sales in emerging
        markets by capitalizing on the infrastructure we have built over many
        years, which includes training programs and facilities, sales and
        marketing organizations, and technical service and support teams. Our
        surgical training facilities in 40 countries introduce ophthalmologists
        to our surgical equipment and cataract products through hands-on
        training in surgical techniques, while exposing them to leading
        ophthalmologists. Our local infrastructure and market presence enhance
        our relationships within the ophthalmic community, which, in our
        experience, has led to increased sales of existing products and faster
        approval times of our new products.

     -  CAPITALIZE ON SALES FORCES ACROSS PRODUCT CATEGORIES.  We dedicate our
        expert and focused sales forces to the specialized needs of our
        customers and organize our sales efforts in the United States and in the
        rest of the world around our pharmaceutical, surgical and contact lens
        care and other vision care product categories. We educate our
        specialized sales forces to recognize cross-selling opportunities for
        key products from other product categories and involve the appropriate
        sales representatives to market these products.

     -  LAUNCH PRODUCTS GLOBALLY.  We intend to use our extensive regulatory
        capabilities, with personnel in 40 countries, to accelerate the approval
        and launch of new products in key countries around the world. We
        coordinate the introduction of new products under the Alcon(R) brand
        and, where possible, globally brand our products to promote better
        recognition and broader customer acceptance. This strategy enables us to
        benefit more quickly from sales outside of the United States and realize
        a faster return on our research and development investments.

     -  INCREASE PRIMARY CARE SALES.  We will continue to target primary care
        physicians, pediatricians, allergists, and ear, nose and throat
        specialists as part of our sales efforts in the United States. We
        established the first direct sales force in the ophthalmic industry
        specific to these physicians and believe this sales effort gives us a
        significant competitive advantage because these groups of physicians are
        playing an increasing role in the delivery of specialty health care
        services, including eye care.

     -  CONTINUE TO IMPROVE MANUFACTURING OPERATIONS.  We will continue to
        produce the highest quality ophthalmic products at the lowest possible
        cost. All of our manufacturing facilities employ continuous improvement
        programs to reduce costs and improve quality and our efforts have
        contributed to a significant reduction in the cost of manufactured goods
        sold as a percentage of sales over the last five years.

                                        3
<PAGE>

RISKS INHERENT IN INVESTING IN OUR COMMON SHARES

     Despite our competitive strengths and strategies, an investment in our
common shares involves risks, including risks relating to the research,
development, launch and acceptance of new products, reliance on intellectual
property and the substantial government regulation to which we are subject.
Because we manufacture a significant number of our products, we are also subject
to manufacturing and supply risks as well as the risk that we will be subject to
product and other liability claims. In addition, we face risks associated with
general economic conditions and price competition as well as with reimbursement
from third-party payors for our products. For a more complete description and
discussion of these and other risks to which we are subject, see "Risk Factors"
beginning on page 9.

NOTES ON SOURCES OF MARKET SHARE DATA

(1) Based on the Market Scope survey of Cataract Surgeons published in August
    2001 and other industry data.

(2) Based on internal estimates and the 2001 Vitreous Society Preferences and
    Trends Survey published in August 2001.

(3) Based on total prescriptions filled as provided by the Scott Levin Source
    Prescription Audit for the year ended December 31, 2001.

(4) Based on sales volume as provided by the AC Nielsen SCANTRACK for the
    year-to-date period ended December 22, 2001 and other industry data.

                          OUR RELATIONSHIP WITH NESTLE

     We are currently a wholly owned subsidiary of Nestle S.A. Upon the
completion of this offering, Nestle will own 76.75% of our outstanding common
shares, or 75.01% if the underwriters exercise their over-allotment option in
full. Nestle will have the ability to direct the election of members of our
board of directors and to determine the outcome of all other matters submitted
to a vote of our shareholders.

     Nestle has advised us that it currently intends to continue to hold all of
our common shares it owns for at least two years following the completion of
this offering. However, Nestle is not subject to any contractual obligation to
maintain its share ownership, except that Nestle has agreed not to sell or
otherwise dispose of any of our common shares for a period of 180 days after the
date of this prospectus without the prior written consent of the representatives
of the underwriters.

     We have entered into a separation agreement with Nestle that will govern
the separation of our businesses from Nestle and various interim and ongoing
relationships. It contains, among other things, provisions regarding the
corporate governance of Alcon after the completion of this offering, including
provisions governing Nestle's nomination of appointees to our board of
directors, procedures relating to the nomination of directors unaffiliated with
Nestle or Alcon and independent director committee approval of certain
transactions. The separation agreement also contains provisions concerning,
among other things:

     - the refinancing of the intercompany debt we currently owe to Nestle;

     - the allocation of liabilities between us and Nestle, particularly
       regarding product liability and environmental, health and safety matters
       and employment matters including the allocation of pension fund
       obligations between us and Nestle;

     - the allocation of costs with respect to shared sites and services,
       including information technology services and internal audit services;
       and

     - the grant of registration rights under the Securities Act of 1933 to
       Nestle.

                                        4
<PAGE>

                                  THE OFFERING

Common shares offered....................     69,750,000 shares

Common shares to be outstanding
immediately after this offering..........     300,000,000 shares

Common shares to be owned by Nestle
immediately after this offering..........     230,250,000 shares

Use of proceeds..........................     We expect to use all of the net
                                              proceeds we receive from this
                                              offering (other than proceeds from
                                              shares sold pursuant to the
                                              underwriters' over-allotment
                                              option) to redeem our nonvoting
                                              preferred shares, all of which are
                                              owned by Nestle. We expect to use
                                              any net proceeds that we receive
                                              from the exercise of the
                                              underwriters' over-allotment
                                              option to repay short-term
                                              indebtedness.

Dividend policy..........................     We intend to pay annual dividends
                                              beginning with a dividend from
                                              earnings up to and including the
                                              calendar year 2002, which we
                                              expect would be paid by the end of
                                              April 2003. Subject to our ability
                                              to do so under Swiss law and
                                              depending on our financial
                                              results, we expect this dividend
                                              to be approximately CHF 0.45 per
                                              common share (or approximately
                                              $0.26 per common share).

Proposed New York Stock Exchange symbol       "ACL"

Expected offering timetable (subject to
change):

  Commencement of marketing of the
offering.................................     March 4, 2002
  Announcement of offer price............     March 20, 2002
  Allocation of common shares............     March 20, 2002
  Settlement and delivery of common
shares...................................     March 26, 2002

Unless otherwise indicated, all information contained in this prospectus:

     -  assumes no exercise of the underwriters' option to purchase up to
        6,975,000 additional common shares to cover over-allotments, if any;

     -  reflects an estimated initial public offering price of $33.00 per common
        share, the mid-point of the range set forth on the cover page of this
        prospectus; and

     -  does not take into account 30 million common shares of conditional
        capital which may be issued under our employee benefit plans.

                               ------------------

     We were incorporated in Switzerland in 1971 as Societe Fromagere Nestle
S.A., and, after a change of our name to Alcon Universal S.A. in 1978, were
registered in the Commercial Register of the Canton of Zug on March 13, 1992.
Effective on December 21, 2001, we changed our name to Alcon, Inc. Our principal
executive offices are located at Bosch 69, P.O. Box 62, 6331 Hunenberg,
Switzerland, and our telephone number is 011-41-41-785-8888. Our principal
United States offices are located at 6201 South Freeway, Fort Worth, Texas
76134-2099, and the telephone number at those offices is (817) 293-0450.

                                        5
<PAGE>

          SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA

     The following tables present our summary historical and pro forma
consolidated financial and other data in accordance with International
Accounting Standards, which we refer to as IAS, and generally accepted
accounting principles in the United States, which we refer to as U.S. GAAP. The
U.S. GAAP information should be read along with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and our consolidated
financial statements, including the accompanying notes thereto, and our
unaudited pro forma condensed financial information, including the accompanying
notes thereto, each included elsewhere in this prospectus.

     Prior to this offering, we prepared our consolidated financial statements
in accordance with IAS. We have therefore presented our five-year historical
financial data on an IAS basis for comparison purposes. We have also included
our historical information based on U.S. GAAP for 1999, 2000 and 2001. U.S. GAAP
financial data for periods prior to 1999 is not available. The significant
differences between IAS and U.S. GAAP in relation to our consolidated financial
data relate to the following:

     - Prior to 1995, intangible assets were written off to retained earnings
       when purchased under IAS. Beginning in 1995, intangible assets were
       capitalized and amortized over their estimated useful lives under IAS.
       Under U.S. GAAP, intangible assets are capitalized and amortized over
       their estimated useful lives.

     - On July 7, 2000, we acquired Summit Autonomous, Inc. All intangible
       assets of Summit were recorded as goodwill and amortized over 20 years
       under IAS with no deferred taxes established. Under U.S. GAAP, the
       intangible assets of Summit included various identifiable intangible
       assets with shorter lives for which deferred taxes were established which
       increased the amount of goodwill related to Summit.

     - Under IAS, realized exchange gains and losses are recognized in income
       upon the partial liquidation of a foreign subsidiary. Under U.S. GAAP,
       realized exchange gains and losses are recorded as accumulated other
       comprehensive income until complete or substantially complete liquidation
       of the subsidiary.

     - Under IAS, purchased in-process research and development is included in
       goodwill. Under U.S. GAAP, such costs are expensed.

     The U.S. GAAP financial information as of December 31, 2000 and 2001, and
for each of the three years in the period ended December 31, 2001, has been
derived from our audited consolidated financial statements included elsewhere in
this prospectus. The IAS financial information as of December 31, 1997, 1998,
1999, 2000 and 2001, and for each of the years then ended, has been derived from
our financial information as included in the audited consolidated financial
statements of the Nestle group as of and for those same periods.

     We have accounted for the acquisition of Summit as a purchase and have
included its results of operations since July 7, 2000 in our financial
statements. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- New Accounting Standards."

                                        6
<PAGE>

INTERNATIONAL ACCOUNTING STANDARDS

<Table>
<Caption>
                                                           YEAR ENDED DECEMBER 31,
                                                ----------------------------------------------
                                                 1997      1998      1999      2000      2001
                                                ------    ------    ------    ------    ------
                                                       (IN MILLIONS, EXCEPT SHARE DATA)
<S>                                             <C>       <C>       <C>       <C>       <C>
STATEMENT OF EARNINGS DATA:
  Sales.......................................  $2,010    $2,174    $2,401    $2,554    $2,748
  Cost of goods sold..........................     672       679       728       741       792
                                                ------    ------    ------    ------    ------
     Gross profit.............................   1,338     1,495     1,673     1,813     1,956
  Selling, general and administrative.........     643       731       810       866       947
  Research and development....................     173       193       213       247       289
  Amortization of intangibles.................      18        20        34        62        80
                                                ------    ------    ------    ------    ------
     Operating income.........................     504       551       616       638       640
  Interest income.............................      17        14        14        44        47
  Interest expense............................     (50)      (63)      (55)      (89)     (110)
  Other, net..................................      (6)        9        (5)      (17)       (4)
                                                ------    ------    ------    ------    ------
     Earnings before income taxes.............     465       511       570       576       573
  Income taxes................................     124       176       235       226       216
                                                ------    ------    ------    ------    ------
     Net earnings.............................  $  341    $  335    $  335    $  350    $  357
                                                ======    ======    ======    ======    ======
  Basic and diluted weighted-average common
     shares outstanding.......................     270       270       284       300       300
  Basic and diluted earnings per common
     share(1).................................  $ 1.26    $ 1.24    $ 1.18    $ 1.17    $ 1.19
OTHER DATA:
  EBITDA(2)...................................  $  599    $  631    $  732    $  773    $  794
BALANCE SHEET DATA:
  Current assets..............................  $  802    $1,045    $1,370    $1,887    $2,118
  Working capital (deficit)...................    (198)     (234)      (90)       63       530
  Total assets................................   1,509     2,182     2,481     3,845     4,007
  Long term debt, net of current maturities...     263       364        85       700       697
  Total shareholder's equity..................      17       280       722     1,074     1,440
</Table>

---------------
(1) We believe that net earnings are a more appropriate measure of our
    profitability prior to this offering than earnings per share since we were a
    wholly owned subsidiary of Nestle. We also have not included dividends paid
    and dividends per share information as they are not relevant to the investor
    since prior to this offering we were a wholly owned subsidiary of Nestle.

(2) We define EBITDA as operating income before depreciation and amortization of
    intangibles. We believe that EBITDA is a measure commonly used by analysts
    and investors. Accordingly, we have disclosed this information to permit a
    more complete analysis of our operating performance. EBITDA should not be
    considered in isolation or as a substitute for net earnings or other results
    of operations data or cash flow data prepared in accordance with IAS as a
    measure of our profitability or liquidity. EBITDA, as we calculate it, may
    not be comparable to similarly titled measures reported by other companies.

                                        7
<PAGE>

U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

<Table>
<Caption>
                                                                    YEAR ENDED DECEMBER 31, 2001
                                                              -----------------------------------------
                                                                                                 PRO
                                                                                                FORMA
                                                               1999       2000       2001      2001(3)
                                                              -------    -------    -------   ---------
                                                                  (IN MILLIONS, EXCEPT SHARE DATA)
<S>                                                           <C>        <C>        <C>       <C>
STATEMENT OF EARNINGS DATA:
    Sales...................................................  $ 2,401    $ 2,554    $ 2,748    $2,748
    Cost of goods sold......................................      719        750        798       798
                                                              -------    -------    -------    ------
      Gross profit..........................................    1,682      1,804      1,949     1,949
    Selling, general and administrative.....................      805        856        954       954
    Research and development................................      213        246        290       290
    In-process research and development.....................       --         19         --        --
    Amortization of intangibles.............................       46         87        117       117
                                                              -------    -------    -------    ------
      Operating income......................................      617        597        589       589
    Interest income.........................................       14         44         47         9
    Interest expense........................................      (54)       (86)      (108)     (125)
    Other, net..............................................       11         --        (14)      (14)
                                                              -------    -------    -------    ------
      Earnings before income taxes..........................      587        555        514       459
    Income taxes............................................      240        223        198       194
                                                              -------    -------    -------    ------
      Net earnings..........................................  $   347    $   332    $   316    $  266
                                                              =======    =======    =======    ======
    Basic and diluted weighted-average common shares
      outstanding...........................................      284        300        300       300
    Basic and diluted earnings per common share(1)..........  $  1.22    $  1.11    $  1.05    $ 0.89
OTHER DATA:
    EBITDA(2)...............................................  $   734    $   758    $   784    $  784
</Table>

<Table>
<Caption>
                                                                           AT DECEMBER 31,
                                                             --------------------------------------------
                                                                                                  PRO
                                                                                                 FORMA
                                                                                    PRO           AS
                                                                                   FORMA       ADJUSTED
                                                              2000      2001      2001(4)       2001(5)
                                                             ------    ------    ---------    -----------
                                                                            (IN MILLIONS)
<S>                                                          <C>       <C>       <C>          <C>
BALANCE SHEET DATA:
    Current assets.........................................  $2,045    $2,270     $ 1,270       $1,270
    Working capital (deficit)..............................     250       659        (573)        (573)
    Total assets...........................................   3,882     4,071       3,071        3,071
    Long term debt, net of current maturities..............     700       697         697          697
    Redeemable preferred stock.............................      --        --       2,189           --
    Total shareholder's equity.............................   1,101     1,390      (2,031)         158
</Table>

---------------
(1) We believe that net earnings are a more appropriate measure of our
    profitability prior to this offering than earnings per share since we were a
    wholly owned subsidiary of Nestle. We also have not included dividends paid
    and dividends per share information as they are not relevant to the investor
    since prior to this offering we were a wholly owned subsidiary of Nestle.
    Immediately prior to the completion of this offering, we expect to make a
    payment to Nestle which is considered a dividend and repayment of capital
    under U.S. generally accepted accounting principles of CHF 2.1 billion (or
    approximately $1.23 billion) which is expected to be financed by existing
    cash and cash equivalents and, if necessary, with additional borrowings.
    This entire payment is considered a dividend under Swiss law.

(2) We define EBITDA as operating income before depreciation and amortization of
    intangibles. We believe that EBITDA is a measure commonly used by analysts
    and investors. Accordingly, we have disclosed this information to permit a
    more complete analysis of our operating performance. EBITDA should not be
    considered in isolation or as a substitute for net earnings or other results
    of operations data or cash flow data prepared in accordance with U.S. GAAP
    as a measure of our profitability or liquidity. EBITDA, as we calculate it,
    may not be comparable to similarly titled measures reported by other
    companies.

(3) Our pro forma statement of earnings data for the year ended December 31,
    2001 reflects the reduction of earnings as if the CHF 2.1 billion (or
    approximately $1.23 billion) dividend payment to Nestle had been made on
    January 1, 2001.

(4) The pro forma balance sheet data is presented as if the CHF 2.1 billion (or
    approximately $1.23 billion) dividend payment to Nestle and the conversion
    of common shares into preferred shares with an assumed redemption value of
    $2.19 billion had occurred as of December 31, 2001. The pro forma balance
    sheet data does not reflect the proceeds of this offering or the redemption
    of the preferred shares.

(5) Our pro forma as adjusted balance sheet data at December 31, 2001 gives
    effect to the dividend payment of CHF 2.1 billion (or approximately $1.23
    billion) to Nestle, the issuance of nonvoting preferred shares to Nestle,
    receipt of the net proceeds of this offering and the redemption of the
    nonvoting preferred shares issued to Nestle.

                                        8
<PAGE>

                                  RISK FACTORS

     You should carefully consider the risks described below and the other
information contained in this prospectus before making a decision to invest in
our common shares. If any of the following risks actually occurs, our business,
financial condition and results of operations could suffer, in which case the
trading price of our common shares could decline.

RISKS RELATED TO OUR BUSINESS AND INDUSTRY

  IF WE FAIL TO KEEP PACE WITH ADVANCES IN OUR INDUSTRY OR FAIL TO PERSUADE
  PHYSICIANS TO ADOPT NEW PRODUCTS WE INTRODUCE, CUSTOMERS MAY NOT BUY OUR
  PRODUCTS AND OUR REVENUE AND PROFITS MAY DECLINE.

     The ophthalmic industry is characterized by rapid product development, with
a significant competitive advantage gained by companies that introduce products
that are first to market, constant innovation in products and techniques,
frequent new product introductions and price competition. Our future growth
depends, in part, on our ability to develop products which are more effective in
treating diseases and disorders of the eye or that incorporate the latest
technologies. In addition, we must be able to manufacture and effectively market
those products and persuade a sufficient number of eye care professionals to use
the new products we introduce. For example, glaucoma requires ongoing treatment
over a long period of time; thus, many doctors are reluctant to switch a patient
to a new treatment if the patient's current treatment for glaucoma remains
effective. Sales of our existing products may decline rapidly if a new product
is introduced by one of our competitors or if we announce a new product that, in
either case, represents a substantial improvement over our existing products.
Similarly, if we fail to make sufficient investments in research and development
programs or if we focus on technologies that do not lead to more effective
products, our current and planned products could be surpassed by more effective
or advanced products.

  WE MAY NOT SUCCESSFULLY DEVELOP AND LAUNCH REPLACEMENTS FOR OUR PRODUCTS WHICH
  LOSE PATENT PROTECTION.

     Most of our products are covered by patents that give us a degree of market
exclusivity during the term of the patent. Patents covering three of our
products, which constituted approximately 8% of our sales in 2001, will expire
within the next three years. Upon patent expiration, our competitors may
introduce products using the same technology. As a result of this possible
increase in competition, we may need to charge a lower price in order to
maintain sales of our products which could result in these products becoming
less profitable. If we fail to develop and successfully launch new products
prior to the expiration of patents for our existing products, our sales and
profits with respect to those products could decline significantly. We may not
be able to develop and successfully launch more advanced replacement products
before these and other patents expire.

  RESOURCES DEVOTED TO RESEARCH AND DEVELOPMENT MAY NOT YIELD NEW PRODUCTS THAT
  ACHIEVE COMMERCIAL SUCCESS.

     We devote substantial resources to research and development. The research
and development process is expensive, prolonged and entails considerable
uncertainty. Development of a new product, from discovery through testing and
registration to initial product launch, typically takes between eight and
fifteen years for a pharmaceutical product and three and seven years for a
medical device. Each of these periods varies considerably from product to
product and country to country. Because of the complexities and uncertainties
associated with ophthalmic research and development, products we are currently
developing may not complete the development process or obtain the regulatory
approvals required for us to market such products successfully. For example, we
are investing substantial sums in the research and development of new treatments
for age-related macular degeneration, a condition in which the retina
degenerates, thereby reducing sight. These may take longer and cost more to
develop and may be less successful than we currently anticipate. None of the
products currently in our development pipeline may be commercially successful.

                                        9
<PAGE>

  ECONOMIC CONDITIONS AND PRICE COMPETITION MAY CAUSE SALES OF OUR PRODUCTS USED
  IN ELECTIVE SURGICAL PROCEDURES TO DECLINE AND REDUCE OUR PROFITABILITY.

     Sales of products used in elective surgical procedures have been and may
continue to be adversely impacted by economic conditions. Generally, the costs
of elective surgical procedures are borne by individuals without reimbursement
from their medical insurance providers or government programs. Accordingly,
individuals may be less willing to incur the costs of these procedures in weak
or uncertain economic conditions and there may be a decline in the number of
these procedures. Sales of our laser refractive surgical equipment worldwide and
our revenues from technology fees in the United States have come under pressure
and may remain under pressure if current economic conditions persist or if the
pricing environment for technology fees does not improve. A softening in demand
for laser refractive surgery could also impact us by reducing our profits as
customers to whom we have leased, or have extended financing for the purchase
of, laser refractive surgical equipment are unable to make required payments to
us.

  THE FDA MAY AUTHORIZE SALES OF SOME PRESCRIPTION PHARMACEUTICALS ON A
  NON-PRESCRIPTION BASIS, WHICH WOULD REDUCE THE PROFITABILITY OF OUR
  PRESCRIPTION PRODUCTS.

     A managed care organization is currently petitioning the United States Food
and Drug Administration, known as the FDA, to permit sales of some
pharmaceuticals currently sold on a prescription basis, including anti-allergy
medications, without a prescription. Approval by the FDA of the sale of these
products without a prescription would reduce demand for our competing
prescription products and, accordingly, reduce our profits. In the future,
additional managed care organizations or other third-party payors may petition
the FDA to permit sales of some of our pharmaceutical products on a
non-prescription basis, which could reduce our profits.

  FAILURE OF USERS OF OUR PRODUCTS TO OBTAIN ADEQUATE REIMBURSEMENT FROM
  THIRD-PARTY PAYORS COULD LIMIT MARKET ACCEPTANCE OF OUR PRODUCTS, WHICH COULD
  IMPACT OUR SALES AND PROFITS.

     The initiatives of managed care organizations and governments to contain
health care costs in the United States and elsewhere are placing an increased
emphasis on the delivery of more cost-effective medical therapies. This emphasis
could adversely affect sales and prices of our products. Physicians, hospitals
and other health care providers may be reluctant to purchase our products if
they do not receive substantial reimbursement for the cost of our pharmaceutical
and surgical products and for procedures performed using our surgical medical
device products from third-party payors such as Medicare, Medicaid and health
insurance programs, both governmental and private. For example:

     -  major third-party payors for hospital services, including government
        insurance plans, Medicare, Medicaid and private health care insurers,
        have substantially revised their payment methodologies during the last
        few years, resulting in stricter standards for reimbursement of hospital
        and outpatient charges for some medical procedures, including cataract
        procedures and intraocular lenses;

     -  because of increased transparency of prices following the adoption of
        the euro, member governments in some countries in the European Union are
        requesting price reductions to match prices charged in other countries
        in the European Union;

     -  managed care organizations restrict the pharmaceutical products that
        doctors in those organizations can prescribe through the use of
        formularies, the lists of drugs which physicians are permitted to
        prescribe to patients in a managed care organization, and a failure of
        our pharmaceutical products to be included on formularies could have an
        adverse effect on our revenues and profits;

                                        10
<PAGE>

     -  numerous legislative proposals have been considered that, if enacted,
        would result in major reforms in the United States health care system,
        including the addition of a prescription drug benefit program under
        Medicare, that could have an adverse effect on our business;

     -  our competitors may reduce the prices of their products which could
        result in our competitors being reimbursed for a larger number of
        procedures by third-party payors;

     -  there are proposed and existing laws and regulations governing product
        prices and the profitability of companies in the health care industry;
        and

     -  there have been recent initiatives by third-party payors to challenge
        the prices charged for medical products which could affect our
        profitability.

     Reductions in the prices for our products in response to these trends could
reduce our profits. Moreover, our products may not be covered in the future by
third-party payors. The failure of our products to be so covered could cause our
profits to decline.

  THE GLOBAL NATURE OF OUR BUSINESS MAY RESULT IN FLUCTUATIONS AND DECLINES IN
  OUR SALES AND PROFITS.

     Our products are sold in more than 180 countries. We have more than 75
local operations worldwide and approximately half of our revenues in 2001 came
from customers outside of the United States. The results of operations and the
financial position of our local operations are generally reported in the
relevant local currencies and then translated into United States dollars at the
applicable exchange rates for inclusion in our consolidated financial
statements, exposing us to translation risk. In 2001, our most significant
currency exposures were to the U.S. dollar, euro, Japanese yen and Swiss franc.
The exchange rates between these and other local currencies and the United
States dollar may fluctuate substantially. In addition, we are exposed to
transaction risk because some of our expenses are incurred in a different
currency from the currency in which our revenues are received. Fluctuations in
the value of the United States dollar against other currencies have had in the
past, and may have in the future, a material adverse effect on our operating
margins and profitability.

     Economic, social and political conditions, laws, practices and local
customs vary widely among the countries in which we sell our products. Our
operations outside of the United States are subject to a number of risks and
potential costs, including lower product margins, less stringent protection of
intellectual property and economic, political and social uncertainty in
countries in which we operate, especially in emerging markets. Our continued
success as a global company depends, in part, on our ability to develop and
implement policies and strategies that are effective in anticipating and
managing these and other risks in the countries where we do business. These and
other risks may have a material adverse effect on our operations in any
particular country and on our business as a whole. For example, many emerging
markets have currencies that fluctuate substantially, in response to which we
may reduce our prices, making our products less profitable. Inflation in
emerging markets also makes our products less profitable and increases the
credit risks to which we are exposed. We have experienced currency fluctuations,
inflation and volatile economic conditions, which have impacted our
profitability in the past in several markets, including Argentina, Brazil,
Poland and Turkey, and we may experience such impacts in the future. We expect
the currency devaluation and weak economic conditions in Argentina to have a
negative impact on our revenues and profits in Argentina in 2002.

     During 2000 and 2001, the economy of Japan, our second largest market,
experienced slight deflation and very low growth. Because a majority of our
sales in Japan are to parties who are reimbursed by the government, a prolonged
downturn in the Japanese economy could lead to downward pricing pressures on
government reimbursement rates for our products.

                                        11
<PAGE>

  WE SINGLE SOURCE MANY OF THE ACTIVE INGREDIENTS AND COMPONENTS USED IN OUR
  PRODUCTS AND INTERRUPTIONS IN THE SUPPLY OF THESE RAW MATERIALS COULD DISRUPT
  OUR MANUFACTURING OF SPECIFIC PRODUCTS AND CAUSE OUR REVENUE AND PROFITABILITY
  TO DECLINE.

     We single source active ingredients contained in a majority of our
pharmaceutical products, including TRAVATAN (R), TobraDex (R), OPTI-FREE (R)
EXPRESS (R) No Rub(TM) disinfecting solution, Betoptic S (R) and Azopt (R). In
these cases, obtaining the required regulatory approvals, including from the
FDA, to use alternative suppliers may be a lengthy process. In many cases, we
use single-source suppliers for other components and raw materials used in our
products. The loss of any of these or other significant suppliers or the
inability of a supplier to meet performance and quality specifications,
requested quantities or delivery schedules could cause our revenue and
profitability to decline and have a negative impact on our customer relations.
In addition, a significant price increase from any of our single-source
suppliers could cause our profitability to decline if we cannot increase our
prices to our customers. In order to ensure sufficient supply, we may determine
that we need to provide financing to some of our single-source suppliers, which
could increase our financial exposure to those suppliers.

  IN MANY CASES, WE MANUFACTURE A PRODUCT AT A SINGLE-SOURCE FACILITY, AND AN
  INABILITY TO PRODUCE A SUFFICIENT QUANTITY OF, OR ANY DISRUPTION IN THE
  MANUFACTURING OF, A PRODUCT AT THE RELEVANT FACILITY COULD IMPAIR OUR ABILITY
  TO FILL CUSTOMER ORDERS AND COULD REDUCE OUR REVENUES.

     In many cases, we manufacture a product (including some of our key
products) at a single-source manufacturing facility. FDA product approval is
generally limited to a specific approved manufacturing facility. If we fail to
produce enough of a product at a facility, or if our manufacturing process at
that facility is disrupted, we may be unable to deliver that product to our
customers on a timely basis. A failure to deliver products on a timely basis
could lead to customer dissatisfaction and damage our reputation. Significant
delays in the delivery of our products or a delay in the delivery of a key
product could also negatively impact our sales and profitability.

  WE DEPEND ON PROPRIETARY TECHNOLOGIES, MAY NOT BE ABLE TO PROTECT OUR
  INTELLECTUAL PROPERTY RIGHTS ADEQUATELY AND ARE CURRENTLY SUBJECT TO A CLAIM
  OF INFRINGEMENT OF INTELLECTUAL PROPERTY.

     We currently hold more than 2,250 patents and have more than 1,350 pending
patent applications. We rely on a combination of contractual provisions,
confidentiality procedures and patent, trademark, copyright and trade secrecy
laws to protect the proprietary aspects of our technology. These legal measures
afford limited protection and may not prevent our competitors from gaining
access to our intellectual property and proprietary information. Any of our
patents may be challenged, invalidated, circumvented or rendered unenforceable.
Furthermore, we cannot assure you that any pending patent application held by us
will result in an issued patent, or that if patents are issued to us, such
patents will provide meaningful protection against competitors or competitive
technologies. Litigation may be necessary to enforce our intellectual property
rights, to protect our trade secrets and to determine the validity and scope of
our proprietary rights. Any litigation could result in substantial expense, may
reduce our profits and may not adequately protect our intellectual property
rights. In addition, we may be exposed to future litigation by third parties
based on claims that our products infringe their intellectual property rights.
This risk is exacerbated by the fact that the validity and breadth of claims
covered by patents in our industry may involve complex legal issues which are
not fully resolved.

     We are currently involved in two patent infringement actions with Pharmacia
Corporation, its affiliates, and, in one case, the Trustees of Columbia
University in the City of New York, and a trademark infringement and dilution
action with Pharmacia Corporation and its affiliated companies, with respect to
TRAVATAN(R). If we do not either prevail in the patent actions or settle them on
reasonable terms, we may be required to pay damages and, in addition, obtain a
license and pay royalties on unfavorable terms or possibly be compelled to
refrain from marketing TRAVATAN(R). In such case, our operations may be
disrupted, and our revenues, cash flow and profitability could be materially
affected. Even a settlement of

                                        12
<PAGE>

these lawsuits on reasonable terms may result in adverse consequences. Possible
consequences of an adverse outcome in the trademark litigation include damages,
fees and an injunction against selling TRAVATAN(R) under that name. In such
case, our operations may be disrupted, and our revenues, cash flow and
profitability could be materially affected. Moreover, in addition to potential
exposure to future litigation by third parties, Alcon is involved in similar
patent litigation related to TRAVATAN(R) with Pharmacia in other jurisdictions
and may be exposed to patent litigation by Pharmacia and/or its related entities
based on other patents, issued or not yet issued.

     Any litigation or claims against us, whether or not successful, could
result in substantial costs and harm our reputation. In addition, intellectual
property litigation or claims could force us to do one or more of the following:
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.

  WE ARE SUBJECT TO EXTENSIVE GOVERNMENT REGULATION THAT INCREASES OUR COSTS AND
  COULD PREVENT US FROM SELLING OUR PRODUCTS.

     The research, development, testing, manufacturing and marketing of our
products are subject to extensive governmental regulation. Government regulation
includes inspection of and controls over testing, manufacturing, safety and
environmental controls, efficacy, labeling, advertising, promotion, record
keeping, the sale and distribution of pharmaceutical products and samples and
electronic records and electronic signatures. We are also subject to government
regulation with respect to the prices we charge and the rebates we offer to
customers. Government regulation substantially increases the cost of developing,
manufacturing and selling our products.

     In the United States, we must obtain approval from the FDA for each
pharmaceutical that we market and FDA approval or clearance for each medical
device that we market. The FDA approval process is typically lengthy and
expensive, and approval is never certain. Products distributed outside of the
United States are also subject to government regulation, which may be equally or
more demanding. Our new products could take a significantly longer time than we
expect to gain regulatory approval and may never gain approval. If a regulatory
authority delays approval of a potentially significant product, our market value
and operating results may decline. Even if the FDA or another regulatory agency
approves a product, the approval may limit the indicated uses for a product, may
otherwise limit our ability to promote, sell and distribute a product or may
require post-marketing studies. If we are unable to obtain regulatory approval
of our products, we will not be able to market these products, which would
result in a decrease in our sales. Currently, we are actively pursuing approval
for a number of our products from regulatory authorities in a number of
countries, including, among others, the United States, countries in the European
Union and Japan. Continued growth in our sales and profits will depend, in part,
on the timely and successful introduction and marketing of some or all of these
products.

     The clinical trials required to obtain regulatory approvals are complex and
expensive and their outcomes are uncertain. We incur substantial expense for,
and devote significant time to, clinical trials, yet cannot be certain that the
trials will ever result in the commercial sale of a product. Positive results
from preclinical studies and early clinical trials do not ensure positive
results in later clinical trials that form the basis of an application for
regulatory approval. We may suffer significant setbacks in clinical trials, even
after earlier clinical trials show promising results. Any of our products may
produce undesirable side effects that could cause us or regulatory authorities
to interrupt, delay or halt clinical trials of a pharmaceutical or medical
device candidate. We, the FDA or another regulatory authority may suspend or
terminate clinical trials at any time if we or they believe the trial
participants face unacceptable health risks.

                                        13
<PAGE>

     Noncompliance with applicable United States regulatory requirements can
result in fines, injunctions, penalties, mandatory recalls or seizures,
suspensions of production, denial or withdrawal of pre-marketing approvals,
recommendations by the FDA against governmental contracts and criminal
prosecution. The FDA also has authority to request repair, replacement or refund
of the cost of any device we manufacture or distribute. Regulatory authorities
outside of the United States may impose similar sanctions for noncompliance with
applicable regulatory requirements.

  WE MAY IMPLEMENT A PRODUCT RECALL OR VOLUNTARY MARKET WITHDRAWAL 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.

     The manufacturing and marketing of pharmaceuticals, medical devices and
surgical equipment and instruments involve an inherent risk that our products
may prove to be defective and cause a health risk. In that event, we may
voluntarily implement a recall or market withdrawal or may be required to do so
by a regulatory authority. We have recalled products in the past and, based on
this experience, believe that the occurrence of a recall could result in
significant costs to us, potential disruptions in the supply of our products to
our customers and adverse publicity, all of which could harm our ability to
market our products. A recall of one of our products or a product manufactured
by another manufacturer could impair sales of other similar products we market
as a result of confusion concerning the scope of the recall.

     Although we are not currently subject to any material product liability
proceedings, we may incur material liabilities relating to product liability
claims in the future, including product liability claims arising out of
procedures performed using our surgical equipment. For example, long-term
studies could reveal complications relating to laser refractive surgery which
may lead to product liability claims against us and adverse publicity that could
harm demand. We currently rely on a combination of self-insurance and third-
party insurance to cover potential product liability exposure. The combination
of our insurance coverage, cash flows and reserves may not be adequate to
satisfy product liabilities we may incur in the future. Even meritless claims
could subject us to adverse publicity, hinder us from securing insurance
coverage in the future and require us to incur significant legal fees.
Successful product liability claims could have a material adverse effect on our
financial condition.

  OUR ACTIVITIES INVOLVE HAZARDOUS MATERIALS AND EMISSIONS AND MAY SUBJECT US TO
  ENVIRONMENTAL LIABILITY.

     Our manufacturing, research and development practices involve the
controlled use of hazardous materials. We are subject to federal, state and
local laws and regulations in the various jurisdictions in which we have
operations governing the use, manufacturing, storage, handling and disposal of
these materials and certain waste products. Although we believe that our safety
and environmental procedures for handling and disposing of these materials
comply with legally prescribed standards, we cannot completely eliminate the
risk of accidental contamination or injury from these materials. Remedial
environmental actions could require us to incur substantial unexpected costs
which would materially and adversely affect our results of operations. If we
were involved in a major environmental accident or found to be in substantial
non-compliance with applicable environmental laws, we could be held liable for
damages or penalized with fines.

RISKS RELATED TO OUR RELATIONSHIP WITH NESTLE

  WE WILL BE CONTROLLED BY NESTLE AS LONG AS IT OWNS A MAJORITY OF OUR COMMON
  SHARES, AND OUR OTHER SHAREHOLDERS WILL BE UNABLE TO AFFECT THE OUTCOME OF A
  SHAREHOLDER VOTE DURING THAT TIME.

     After the completion of this offering, Nestle will own 76.75% of our
outstanding common shares, or 75.01% if the underwriters exercise their
over-allotment option in full. Because Nestle's interests may differ from those
of our other shareholders, actions Nestle takes with respect to us may be
unfavorable to our other shareholders. Purchasers of common shares in this
offering will not be able to affect the outcome of

                                        14
<PAGE>

any shareholder vote so long as Nestle owns at least a majority of our
outstanding common shares. So long as it owns at least two-thirds of our common
shares, Nestle will be able to control, among other things: increases in our
share capital; the approval of a dissolution other than by liquidation,
including by way of merger; the creation of restrictions on the transferability
of our common shares; and the restriction or elimination of preemptive rights in
connection with a share capital increase. So long as it owns at least a majority
of our common shares, Nestle will be able to control, among other things: the
election and removal of all of our directors; amendments to our articles of
association; payment of dividends; changes to our capital structure unless the
change is subject to the requirement that it be approved by holders of two-
thirds of our common shares represented at a shareholders' meeting; and
appointment and removal of our statutory and group auditors.

  BECAUSE NESTLE CONTROLS US, CONFLICTS OF INTEREST BETWEEN NESTLE AND US COULD
  BE RESOLVED IN A MANNER UNFAVORABLE TO US.

     Our agreements with Nestle, including the separation agreement, the terms
of our nonvoting preferred shares and the terms on which those shares will be
redeemed, were finalized while we were a wholly owned subsidiary of Nestle and,
as a result, the terms of each may not be as favorable to us as if they had been
negotiated between unaffiliated parties. Various conflicts of interest between
Alcon and Nestle could arise. For example, ownership interests of directors or
officers of Alcon in Nestle shares or service as a director or officer of both
Alcon and Nestle could create, or appear to create, potential conflicts of
interest when a director or officer is faced with decisions that could have
different implications for the two companies, such as disagreement over the
desirability of a potential acquisition opportunity, employee retention or
recruiting or our dividend policy.

RISKS RELATED TO THE SECURITIES MARKETS AND OWNERSHIP OF OUR COMMON SHARES

  THE PRICE OF OUR COMMON SHARES MAY FLUCTUATE AFTER THIS OFFERING AND DECLINE
  BELOW THE INITIAL PUBLIC OFFERING PRICE.

     Prior to this offering, there has not been a market for our common shares
and after this offering, an active trading market in our common shares might not
develop or continue. If you purchase common shares in this offering, you will
pay a price that was not established in a competitive market. Rather, you will
pay a price that was negotiated with the representatives of the underwriters
based upon an assessment of the valuation of our common shares and a
book-building process. The public market may not agree with or accept this
valuation, in which case you may not be able to sell your common shares at or
above the initial offering price. The market price of our common shares may
fluctuate significantly in response to factors, some of which are beyond our
control, such as announcements of innovations and discoveries or new products by
us or our competitors, developments concerning intellectual property rights and
regulatory approvals, and changes in estimates of our financial performance or
changes in recommendations by securities analysts.

     The stock market in general has recently experienced extreme price and
volume fluctuations. The market prices of securities of pharmaceutical and
medical device companies have experienced fluctuations that often have been
unrelated or disproportionate to the operating results of these companies. These
market fluctuations could result in extreme volatility in the price of our
common shares, which could cause a decline in the value of your common shares.
You should also be aware that price volatility may be worse if the trading
volume of our common shares is low.

  FUTURE SALES OR DISTRIBUTIONS OF OUR COMMON SHARES BY NESTLE COULD DEPRESS THE
  MARKET PRICE FOR OUR COMMON SHARES.

     After the completion of this offering, Nestle may sell all or part of our
common shares that it owns or distribute those common shares to its
shareholders. There can be no assurance that any of our shareholders

                                        15
<PAGE>

will be included in any transaction in which Nestle sells a controlling interest
in us or realize a premium with respect to their common shares. In addition,
sales or distributions by Nestle of substantial amounts of our common shares in
the public market or to its shareholders could adversely affect prevailing
market prices for our common shares. Nestle has advised us that it has no
current intention to dispose of any of our common shares that it owns. Nestle is
not subject to any contractual obligation to maintain its ownership position in
our shares, except that it has agreed not to sell or otherwise dispose of any of
our common shares for a period of 180 days after the date of the completion of
this offering without the prior written consent of the representatives of the
underwriters. Consequently, Nestle may not maintain its ownership of our common
shares after the 180-day period following this offering.

  PURCHASERS OF OUR COMMON SHARES IN THIS OFFERING WILL EXPERIENCE IMMEDIATE AND
  SUBSTANTIAL DILUTION.

     Purchasers of common shares in this offering will experience immediate and
substantial dilution in the net tangible book value per common share from the
initial public offering price as all of the proceeds of this offering (other
than the proceeds from sales of shares pursuant to the underwriters'
over-allotment option) will be used to redeem nonvoting preferred shares owned
by Nestle and all proceeds from sales of shares pursuant to the underwriters'
over-allotment is expected to be used to repay short-term indebtedness. Assuming
an estimated initial public offering price of $33.00, the mid-point of the range
set forth on the cover page of this prospectus, after giving effect to the
redemption of the nonvoting preferred shares owned by Nestle and the expenses
associated with this offering, the dilution per common share to new investors is
estimated to be $35.84. This figure does not give effect to the 6,975,000 common
shares that will be issued if the underwriters exercise their over-allotment
option in full. After giving effect to the transactions undertaken in
preparation for this offering, this offering and the redemption of the nonvoting
preferred shares owned by Nestle, new investors in this offering will have
contributed an amount equal to $2.1 billion in excess of our total shareholders'
equity but will own only 23.25% of our outstanding common shares.

RISKS RELATED TO OUR JURISDICTION OF INCORPORATION

  WE ARE INCORPORATED IN SWITZERLAND AND SWISS LAW GOVERNS OUR INTERNAL
  CORPORATE AFFAIRS.

     We are a corporation incorporated under the laws of Switzerland. The rights
of holders of our common shares will be governed by Swiss corporate law and by
our articles of association. In particular, Swiss corporate law limits the
ability of a shareholder to challenge resolutions or actions of our board of
directors in court. Shareholders generally are not permitted to file a suit to
reverse a decision or action by directors but are permitted to seek damages for
breaches of fiduciary duty. Shareholder claims against a director for breach of
fiduciary duty would, as a matter of Swiss law, have to be brought at our place
of incorporation in the Canton of Zug, Switzerland, or at the domicile of the
involved director. In addition, under Swiss law, any claims by shareholders
against us would have to be brought exclusively at our place of incorporation.

     Under Swiss corporate law, we are required to declare dividends in Swiss
francs. As a result, any currency fluctuations between the U.S. dollar and the
Swiss franc may affect the value of the dividends we pay.

                                        16
<PAGE>

              CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     This prospectus contains forward-looking statements. These forward-looking
statements are contained principally in the sections entitled "Prospectus
Summary," "Risk Factors," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Our Industry" and "Business." These
statements involve known and unknown risks, uncertainties and other factors
which may cause our actual results, performance or achievements to be materially
different from any future results, performances or achievements expressed or
implied by our forward-looking statements. Forward-looking statements include,
but are not limited to, statements about: the progress of our research and
development programs; the receipt of regulatory approvals; competition in our
industry; the impact of pending or future litigation; the impact of any future
product recalls; changes in, or the failure or inability to comply with,
governmental regulation; the opportunities for growth, whether through internal
development or acquisitions; exchange rate fluctuations; general economic
conditions; and trends affecting the ophthalmic industry, our financial
condition or results of operations.

     Words such as "may," "will," "should," "could," "would," "expect," "plan,"
"anticipate," "believe," "intend," "estimate," "project," "predict," "potential"
and similar expressions are intended to identify forward-looking statements.
These statements reflect our current views with respect to future events and are
based on assumptions and subject to risks and uncertainties. Given these
uncertainties, you should not place undue reliance on these forward-looking
statements. We discuss many of these risks in this prospectus in greater detail
under the headings "Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations." These forward-looking statements
represent our estimates and assumptions only as of the date of this prospectus
and are not intended to give any assurance as to future results. Factors that
might cause future results to differ include, but are not limited to, the
following:

     -  the production and launch of commercially viable products may take
        longer and cost more than expected;

     -  changes in reimbursement procedures by third-party payors;

     -  competition may lead to worse than expected financial condition and
        results of operations;

     -  currency exchange rate fluctuations may negatively affect our financial
        condition and results of operations;

     -  pending or future litigation may negatively impact our financial
        condition and results of operations;

     -  product recalls or withdrawals may negatively impact our financial
        condition or results of operations;

     -  government regulation or legislation may negatively impact our financial
        condition or results of operations;

     -  supply and manufacturing disruptions could negatively impact our
        financial condition or results of operations; and

     -  qualified personnel may not be available, which could negatively impact
        our ability to grow our business.

     You should read this prospectus completely and with the understanding that
our actual future results may be materially different from what we expect. We
qualify all of our forward-looking statements by these cautionary statements.
Except to the extent required under the federal securities laws and the rules
and regulations promulgated by the Securities and Exchange Commission, we
undertake no obligation to publicly update or revise any of these
forward-looking statements, whether to reflect new information or future events
or circumstances or otherwise.

                                        17
<PAGE>

                             ABOUT THIS PROSPECTUS

     Trademarks used by Alcon appear in italic type in this prospectus and are
the property of or are licensed by one of our subsidiaries. Timoptic XE(R) is a
trademark of Merck & Co., Inc. Xalatan(R) is a trademark of Pharmacia AB.
Cortisporin(R) is a trademark of Burroughs-Wellcome.

     In this prospectus, references to Alomide(R) are to Alomide(R) ophthalmic
solution, references to Azopt(R) are to Azopt(R) ophthalmic suspension,
references to Betoptic S(R) are to Betoptic S(R) ophthalmic suspension,
references to BSS Plus(R) are to BSS Plus(R) irrigating solution, references to
Ciloxan(R) are to Ciloxan(R) ophthalmic solution and ointment, references to
Emadine(R) are to Emadine(R) ophthalmic solution, references to Maxitrol(R) are
to Maxitrol(R) ophthalmic suspension and ointment, references to Patanol(R) are
to Patanol(R) ophthalmic solution, references to TobraDex(R) are to TobraDex(R)
ophthalmic suspension and ointment, references to Tobrex(R) are to Tobrex(R)
ophthalmic solution and ointment and references to TRAVATAN(R) are to
TRAVATAN(R) ophthalmic solution.

     When we refer to the ophthalmic industry in this prospectus, we do not
include eyeglasses or contact lenses. In this prospectus, we rely on and refer
to statistics regarding the ophthalmic industry. Where specified, these
statistics reflect our own internal estimates. Otherwise, we obtained these
statistics from various third-party sources that we believe are reliable, but we
have not independently verified these third-party statistics. Unless otherwise
specified, all market share information is based on units sold.

     Our statements in this prospectus regarding our market share position in
the United States in various markets are based on the following sources:

     - Cataract surgery: Market Scope survey of Cataract Surgeons published in
       August 2001 and other industry data;

     - Vitreoretinal surgery: internal estimates and the 2001 Vitreous Society
       Preferences and Trends Survey published in August 2001;

     - Ophthalmic pharmaceuticals (including generics): total prescriptions
       filled as provided by the Scott Levin Source Prescription Audit for the
       year ended December 31, 2001; and

     - Soft contact lens disinfectants: sales volume as provided by the AC
       Nielsen SCANTRACK for the year-to-date period ended December 22, 2001 and
       other industry data.

     Our statements in this prospectus regarding our market share positions
outside of the United States in various markets are based on the following
sources:

     - Ophthalmic surgical products by sales worldwide: internal estimates
       prepared using third-party data;

     - Intraocular lenses in Japan: internal estimates prepared using
       third-party data;

     - Surgical equipment and devices in Japan: internal estimates; and

     - Soft contact lens disinfecting solutions in Japan: Intage Inc. report of
       data for Japan as of November 2001.

     In this prospectus, references to "$", "U.S.$", "U.S. dollars" and "United
States dollars" are to the lawful currency of the United States of America,
references to "CHF" and "Swiss francs" are to the lawful currency of the Swiss
Confederation, references to "euro" are to the lawful currency of the member
states of the European Monetary Union that have adopted or that adopt the single
currency in accordance with the Treaty establishing the European Community, as
amended by the Treaty on European Union, and references to "Japanese yen" are to
the lawful currency of Japan. Unless otherwise stated, figures provided are
under generally accepted accounting principles in the United States.

                                        18
<PAGE>

                                USE OF PROCEEDS

     We expect to use all of the net proceeds we receive from this offering,
other than any net proceeds from shares sold pursuant to the underwriters'
over-allotment option, to redeem our nonvoting preferred shares, all of which
are currently owned by Nestle, by May 31, 2002. The price at which the
redemption of our nonvoting preferred shares will be made will equal the net
proceeds, other than any net proceeds from common shares sold pursuant to the
underwriters' over-allotment option, we receive from this offering. As a result,
Nestle will receive all of the net proceeds of this offering, other than any net
proceeds from common shares sold pursuant to the underwriters' over-allotment
option. We expect to use any net proceeds from the exercise of the underwriters'
over-allotment option to repay short-term indebtedness. Such short-term
indebtedness matures in the second quarter of 2002 and bears interest at rates
ranging from 2.0% to 3.0%. We expect the net proceeds from the sale of
69,750,000 common shares in this offering to be approximately $2.19 billion, or
approximately $2.41 billion if the underwriters exercise their over-allotment
option in full. These estimates reflect an estimated initial public offering
price of $33.00 per common share, the mid-point of the price range set forth on
the cover page of this prospectus, and the deduction of the underwriting
discount and commissions and estimated offering expenses payable by us.

                                DIVIDEND POLICY

     We currently intend to pay annual dividends on our common shares beginning
with a dividend from earnings up to and including the calendar year 2002, which
we expect would be paid by the end of April 2003. The payment of dividends is
subject to a proposal by our board of directors, the approval of our
shareholders and the availability of retained earnings or dividendable reserves
under Swiss law. Future dividend payments will depend on various factors,
including our net earnings, financial condition, cash requirements, future
prospects and other factors deemed relevant by our board of directors. Subject
to these limitations, we expect to declare a dividend for 2002 of CHF 0.45 per
common share (or approximately $0.26 per common share). The separation agreement
provides that Nestle will vote in favor of the payment of dividends proposed by
our board of directors for so long as it holds a majority of our outstanding
common shares. We are required by Swiss corporate law to declare and pay
dividends in Swiss francs. Holders of record of our common shares will receive
dividend payments in U.S. dollars, unless they provide notice to our transfer
agent, The Bank of New York, that they wish to receive dividend payments in
Swiss francs. Holders of our common shares through The Depository Trust Company
will receive dividend payments in U.S. dollars, unless they provide notice to
The Depository Trust Company that they wish to receive payments in Swiss francs.
The Bank of New York will be responsible for paying the U.S. dollars or Swiss
francs to registered holders of common shares, as the case may be, and we will
be responsible for withholding required amounts for taxes.

                                        19
<PAGE>

                                 EXCHANGE RATES

     Fluctuations in the exchange rate between the Swiss franc and the U.S.
dollar will affect the conversion into U.S. dollars of any cash dividends paid
in Swiss francs on our common shares. In addition, these and other fluctuations
in the exchange rates of the currencies of our various local operations affect
our results of operations and financial condition as presented in our financial
statements.

     The following table sets forth, for the periods indicated, information
concerning the exchange rate between Swiss francs and U.S. dollars based on the
noon buying rate in the City of New York for cable transfers of Swiss francs as
certified for customs purposes by the Federal Reserve Bank of New York:

<Table>
<Caption>
FISCAL YEAR                                     PERIOD END(1)    AVERAGE(1)(2)     HIGH      LOW
-----------                                     -------------    -------------    ------    ------
<S>                                             <C>              <C>              <C>       <C>
1998..........................................  1.3735           1.4507           1.5210    1.3548
1999..........................................  1.5930           1.5139           1.5930    1.4168
2000..........................................  1.6202           1.6930           1.7978    1.6202
2001..........................................  1.6598           1.6942           1.8185    1.5858
2002 (through February 20, 2002)..............  1.6999           1.7190           1.7190    1.6424
</Table>

---------------

(1) The noon buying rate at each period end and the average rate for each period
    differed from the exchange rates used in the preparation of our financial
    statements.

(2) Represents the average of the noon buying rate on the last day of each month
    during the period.

     The following table sets forth the high and low noon buying rate for the
Swiss franc for each of the prior six months and the current month:

<Table>
<Caption>
MONTH                                            PERIOD END         AVERAGE        HIGH      LOW
-----                                           -------------    -------------    ------    ------
<S>                                             <C>              <C>              <C>       <C>
August........................................  1.6698           1.6808           1.7165    1.6552
September.....................................  1.6188           1.6338           1.7075    1.5858
October.......................................  1.6347           1.6295           1.6642    1.6193
November......................................  1.6405           1.6508           1.6668    1.6295
December......................................  1.6598           1.6566           1.6920    1.6307
January.......................................  1.7190           1.6708           1.7190    1.6424
February (through February 20, 2002)..........  1.6999           1.6962           1.7179    1.6835
</Table>

     Although we have translated selected Swiss franc amounts in this prospectus
into U.S. dollars for convenience, this does not mean that the Swiss franc
amounts referred to could have been, or could be, converted into U.S. dollars at
these rates or any other rate. All translations from Swiss francs to U.S.
dollars in this prospectus are based on the average rate of U.S.$1.00 = CHF
1.7040 on February 19, 2002, unless otherwise expressly indicated. The Federal
Reserve Bank of New York certifies this rate for customs purposes on each date
the rate is given. The noon buying rate on February 20, 2002 was CHF 1.6999 per
U.S.$1.00.

                                        20
<PAGE>

                                 CAPITALIZATION
     The following table sets forth our capitalization as of December 31, 2001.
     We have presented capitalization:
     -  on an actual basis;
     -  on a pro forma basis to reflect:
       -- a CHF 2.1 billion (or approximately $1.23 billion) dividend payment by
          us to Nestle prior to the date of this offering; and
       -- the conversion by Nestle of 69,750,000 of the common shares it owns
          (or 23.25% of the common shares it owns) into 69,750,000 nonvoting
          preferred shares, par value CHF 0.20 per share, prior to the
          completion of this offering; and
     -  on a pro forma as adjusted basis to reflect:
       -- our receipt of the net proceeds from the issuance and sale of
          69,750,000 common shares in this offering at an estimated initial
          public offering price of $33.00 per share, the mid-point of the range
          set forth on the cover page of this prospectus; and
       -- our use of the net proceeds from this offering to redeem the
          69,750,000 nonvoting preferred shares owned by Nestle, which
          redemption is expected to occur approximately two months after this
          offering.
     You should read the information set forth below together with "Prospectus
Summary -- Summary Historical and Pro Forma Consolidated Financial Data,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," our consolidated financial statements, our pro forma condensed
consolidated financial statements and the accompanying introductions and notes
to those statements included elsewhere in this prospectus.

<Table>
<Caption>
                                                                                       PRO FORMA
                                                                                          AS
                                                               ACTUAL    PRO FORMA    ADJUSTED(3)
                                                              --------   ---------    -----------
                                                                         (IN MILLIONS)
<S>                                                           <C>        <C>          <C>
Short term borrowings.......................................  $  805.5   $1,037.5       $1,037.5
Current maturities of long term debt........................      29.4       29.4           29.4
Long term debt, net of current maturities(1)................     697.4      697.4          697.4
                                                              --------   ---------      --------
Total debt(2)...............................................   1,532.3    1,764.3        1,764.3
                                                              --------   ---------      --------
Preferred shares (none authorized, issued and outstanding at
  December 31, 2001 actual and pro forma as adjusted;
  69,750,000 shares authorized, issued and outstanding pro
  forma, par value CHF 0.20 per share)......................        --    2,188.6             --
                                                              --------   ---------      --------
Shareholders' equity:
  Common shares (300,000,000 shares authorized, issued and
    outstanding at December 31, 2001 actual and pro forma as
    adjusted; 230,250,000 shares outstanding pro forma, par
    value CHF 0.20 per share)...............................      42.9       32.9           42.9
  Additional paid-in capital................................     592.0   (1,953.1)         225.5
  Accumulated other comprehensive loss......................    (110.8)    (110.8)        (110.8)
  Retained earnings.........................................     865.5         --             --
                                                              --------   ---------      --------
  Total shareholders' equity................................   1,389.6   (2,031.0)         157.6
                                                              --------   ---------      --------
Total capitalization........................................  $2,921.9   $1,921.9       $1,921.9
                                                              ========   =========      ========
</Table>

---------------

(1) None of our long term debt is secured.
(2) At December 31, 2001, our Japanese subsidiary had outstanding debt in the
    principal amount of $39.6 million guaranteed by Nestle. At such date, we had
    no other guaranteed debt outstanding.
(3) If the underwriters exercise the over-allotment in full, as adjusted,
    short-term borrowings would decrease by $219.1 million and common shares and
    additional paid-in capital would increase by $0.8 million and $218.3
    million, respectively.

     The number of our common shares to be outstanding after this offering
excludes:
     -  Up to 3,500,000 common shares issuable out of conditional capital for
        restricted share grants upon the conversion of phantom stock units at
        the time of this offering at a price equal to the initial public
        offering price.
     -  Up to 8,500,000 common shares issuable out of conditional capital upon
        the exercise of employee stock options to be granted at the time of this
        offering at an option price equal to the initial public offering price.
     -  Approximately 18,000,000 common shares of conditional capital which may
        be issued under our benefits plans.
See "Management -- 2002 Alcon Incentive Plan."
                                        21
<PAGE>

                                    DILUTION

     Our net tangible deficit at December 31, 2001, assuming the issuance of the
nonvoting preferred shares at the redemption value to Nestle and the payment of
a CHF 2.1 billion (or approximately $1.23 billion) dividend to Nestle would have
been $3,039.2 million, or $13.20 per common share. Our net tangible deficit per
common share represents:

     - our total liabilities;

     - increased by the redemption value of our nonvoting preferred shares;

     - reduced by the excess of total assets, after the dividend payment, over
       intangible assets; and

     - divided by the number of common shares outstanding, after the conversion
       of common shares to nonvoting preferred shares which will be redeemed.

     Dilution represents the difference between the amount per common share paid
by purchasers of our common shares in this offering increased by the net
tangible deficit per common share immediately following this offering.

     After giving effect to the sale by us of 69,750,000 common shares in this
offering at an estimated initial public offering price of $33.00 per share, the
mid-point of the range set forth on the cover page of this prospectus, after
deducting the underwriting discount and commissions and estimated expenses, our
total liabilities would have exceeded our total tangible assets at December 31,
2001, by approximately $850.6 million, or $2.84 net tangible deficit per common
share. This represents an immediate decrease in net tangible deficit of $10.36
per common share to Nestle, our sole shareholder. This also represents an
immediate dilution of $35.84 per common share to new investors purchasing common
shares in this offering. The following table illustrates this per share
dilution:

<Table>
<S>                                                           <C>      <C>
Assumed initial public offering price.......................           $33.00
Net tangible deficit per common share as of December 31,
  2001, giving effect to the CHF 2.1 billion (or
  approximately $1.23 billion) dividend payment to Nestle
  and the issuance of the nonvoting preferred shares which
  will be redeemed..........................................  $13.20
Decrease in net tangible deficit per common share
  attributable to this offering.............................   10.36
                                                              ------
Adjusted net tangible deficit per common share after this
  offering..................................................             2.84
                                                                       ------
Dilution per common share to new investors..................           $35.84
                                                                       ======
</Table>

     These calculations do not give effect to 6,975,000 common shares that we
will issue if the underwriters exercise their over-allotment option in full.

     The following table sets forth, as of December 31, 2001, the differences
between the number of common shares purchased from us, the total price paid and
average price per share paid by Nestle, our sole shareholder, and by investors
in this offering at an estimated initial public offering price of $33.00 per
common share, the mid-point of the range set forth on the cover page of this
prospectus, before deducting the estimated underwriting discount and commissions
and offering expenses payable by us.

<Table>
<Caption>
                                        SHARES PURCHASED     TOTAL CONSIDERATION       AVERAGE
                                        -----------------    --------------------     PRICE PER
                                        NUMBER    PERCENT     AMOUNT      PERCENT    COMMON SHARE
                                        ------    -------    ---------    -------    ------------
                                          (IN MILLIONS, EXCEPT PER SHARE DATA AND PERCENTAGES)
<S>                                     <C>       <C>        <C>          <C>        <C>
Sole shareholder......................  230.25     76.75%    $(2,031.0)       N/A      $ (8.82)
Investors in this offering............   69.75     23.25       2,301.8        N/A        33.00
                                        ------    ------     ---------    -------
  Total...............................  300.00    100.00%    $   270.8        N/A
                                        ======    ======     =========    =======
</Table>

     If the underwriters' over-allotment option is exercised in full:

     - the number of common shares held by Nestle, our sole shareholder, will
       decrease to approximately 75.01% of the total number of common shares
       outstanding after this offering; and

     - the number of common shares held by investors in this offering will
       increase to 76,725,000 shares, or approximately 24.99% of the total
       number of common shares outstanding after this offering.

                                        22
<PAGE>

                  SELECTED CONSOLIDATED FINANCIAL INFORMATION

     The following tables present our selected historical and pro forma
consolidated financial and other data in accordance with IAS and U.S. GAAP. The
U.S. GAAP information should be read along with "Management's Discussion and
Analysis of Financial Condition and Results of Operations", our consolidated
financial statements, including the accompanying notes thereto, and our
unaudited pro forma condensed financial information, including the accompanying
notes thereto, each as included elsewhere in this prospectus.

     Prior to this offering, we prepared our consolidated financial statements
in accordance with IAS. We have therefore presented our five-year historical
financial data on an IAS basis for comparison purposes. We have also included
our historical information based on U.S. GAAP for 1999, 2000 and 2001. U.S. GAAP
financial data for periods prior to 1999 is not available. The significant
differences between IAS and U.S. GAAP in relation to our consolidated financial
data relate to the following:

     -  Prior to 1995, intangible assets were written off to retained earnings
        when purchased under IAS. Beginning in 1995, intangible assets were
        capitalized and amortized over their estimated useful lives under IAS.
        Under U.S. GAAP, intangible assets are capitalized and amortized over
        their estimated useful lives.

     -  On July 7, 2000, we acquired Summit. All intangible assets of Summit
        were recorded as goodwill and amortized over 20 years under IAS with no
        deferred taxes established. Under U.S. GAAP, the intangible assets of
        Summit included various identifiable intangible assets with shorter
        lives for which deferred taxes were established which increased the
        amount of goodwill related to Summit.

     -  Under IAS, realized exchange gains and losses are recognized in income
        upon the partial liquidation of a foreign subsidiary. Under U.S. GAAP,
        realized exchange gains and losses are recorded as accumulated other
        comprehensive income until complete or substantially complete
        liquidation of the subsidiary.

     -  Under IAS, purchased in-process research and development is included in
        goodwill. Under U.S. GAAP, such costs are expensed.

     The U.S. GAAP financial information as of December 31, 2000 and 2001, and
for each of the three years in the period ended December 31, 2001, has been
derived from our audited consolidated financial statements included elsewhere in
this prospectus. The IAS financial information as of December 31, 1997, 1998,
1999, 2000 and 2001, and for each of the years then ended, has been derived from
our financial information as included in the audited consolidated financial
statements of Nestle as of and for those same periods.

     We have accounted for the acquisition of Summit as a purchase and have
included Summit's results of operations since July 7, 2000 in our financial
statements. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- New Accounting Standards."

                                        23
<PAGE>

INTERNATIONAL ACCOUNTING STANDARDS

<Table>
<Caption>
                                                           YEAR ENDED DECEMBER 31,
                                                ----------------------------------------------
                                                 1997      1998      1999      2000      2001
                                                ------    ------    ------    ------    ------
                                                       (IN MILLIONS, EXCEPT SHARE DATA)
<S>                                             <C>       <C>       <C>       <C>       <C>
STATEMENT OF EARNINGS DATA:
  Sales.......................................  $2,010    $2,174    $2,401    $2,554    $2,748
  Cost of goods sold..........................     672       679       728       741       792
                                                ------    ------    ------    ------    ------
     Gross profit.............................   1,338     1,495     1,673     1,813     1,956
  Selling, general and administrative.........     643       731       810       866       947
  Research and development....................     173       193       213       247       289
  Amortization of intangibles.................      18        20        34        62        80
                                                ------    ------    ------    ------    ------
     Operating income.........................     504       551       616       638       640
  Interest income.............................      17        14        14        44        47
  Interest expense............................     (50)      (63)      (55)      (89)     (110)
  Other, net..................................      (6)        9        (5)      (17)       (4)
                                                ------    ------    ------    ------    ------
     Earnings before income taxes.............     465       511       570       576       573
  Income taxes................................     124       176       235       226       216
                                                ------    ------    ------    ------    ------
     Net earnings.............................  $  341    $  335    $  335    $  350    $  357
                                                ======    ======    ======    ======    ======
  Basic and diluted weighted-average common
     shares outstanding.......................     270       270       284       300       300
  Basic and diluted earnings per common
     share(1).................................  $ 1.26    $ 1.24    $ 1.18    $ 1.17    $ 1.19
OTHER DATA:
  EBITDA(2)...................................  $  599    $  631    $  732    $  773    $  794
BALANCE SHEET DATA:
  Current assets..............................  $  802    $1,045    $1,370    $1,887    $2,118
  Working capital (deficit)...................    (198)     (234)      (90)       63       530
  Total assets................................   1,509     2,182     2,481     3,845     4,007
  Long term debt, net of current maturities...     263       364        85       700       697
  Total shareholder's equity..................      17       280       722     1,074     1,440
</Table>

---------------
(1) We believe that net earnings are a more appropriate measure of our
    profitability prior to this offering than earnings per share since we were a
    wholly owned subsidiary of Nestle. We also have not included dividends paid
    and dividends per share information as they are not relevant to the investor
    since prior to this offering we were a wholly owned subsidiary of Nestle.

(2) We define EBITDA as operating income before depreciation and amortization of
    intangibles. We believe that EBITDA is a measure commonly used by analysts
    and investors. Accordingly, we have disclosed this information to permit a
    more complete analysis of our operating performance. EBITDA should not be
    considered in isolation or as a substitute for net earnings or other results
    of operations data or cash flow data prepared in accordance with IAS as a
    measure of our profitability or liquidity. EBITDA, as we calculate it, may
    not be comparable to similarly titled measures reported by other companies.

                                        24
<PAGE>

U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

<Table>
<Caption>
                                                                    YEAR ENDED DECEMBER 31,
                                                              ------------------------------------
                                                                                         PRO FORMA
                                                               1999     2000     2001     2001(3)
                                                              ------   ------   ------   ---------
                                                                (IN MILLIONS, EXCEPT SHARE DATA)
<S>                                                           <C>      <C>      <C>      <C>
STATEMENT OF EARNINGS DATA:
  Sales.....................................................  $2,401   $2,554   $2,748    $2,748
  Cost of goods sold........................................     719      750      798       798
                                                              ------   ------   ------    ------
    Gross profit............................................   1,682    1,804    1,949     1,949
  Selling, general and administrative.......................     805      856      954       954
  Research and development..................................     213      246      290       290
  In-process research and development.......................      --       19       --        --
  Amortization of intangibles...............................      46       87      117       117
                                                              ------   ------   ------    ------
    Operating income........................................     617      597      589       589
  Interest income...........................................      14       44       47         9
  Interest expense..........................................     (54)     (86)    (108)     (125)
  Other, net................................................      11       --      (14)      (14)
                                                              ------   ------   ------    ------
    Earnings before income taxes............................     587      555      514       459
  Income taxes..............................................     240      223      198       194
                                                              ------   ------   ------    ------
    Net earnings............................................  $  347   $  332   $  316    $  266
                                                              ======   ======   ======    ======
  Basic and diluted weighted - average common shares
    outstanding.............................................     284      300      300       300
  Basic and diluted earnings per common share(1)............  $ 1.22   $ 1.11   $ 1.05    $ 0.89
CASH FLOW DATA:
  Cash provided by (used in):
  Operating activities......................................  $  452   $  393   $  529
  Investing activities......................................    (111)    (872)    (134)
  Financing activities......................................      21      883     (156)
OTHER DATA:
    EBITDA(2)...............................................  $  734   $  758   $  784    $  784
</Table>

<Table>
<Caption>
                                                                            AT DECEMBER 31,
                                                              --------------------------------------------
                                                                                                PRO FORMA
                                                                                PRO FORMA(4)   AS ADJUSTED
                                                               2000     2001        2001         2001(5)
                                                              ------   ------   ------------   -----------
                                                                             (IN MILLIONS)
<S>                                                           <C>      <C>      <C>            <C>
BALANCE SHEET DATA:
    Current assets..........................................  $2,045   $2,270     $ 1,270        $1,270
    Working capital (deficit)...............................     250      659        (573)         (573)
    Total assets............................................   3,882    4,071       3,071         3,071
    Long term debt, net of current maturities...............     700      697         697           697
    Redeemable preferred stock..............................      --       --       2,189            --
    Total shareholder's equity..............................   1,101    1,390      (2,031)          158
</Table>

---------------
(1) We believe that net earnings are a more appropriate measure of our
    profitability prior to this offering than earnings per share since we were a
    wholly owned subsidiary of Nestle. We also have not included dividends paid
    and dividends per share information as they are not relevant to the investor
    since prior to this offering we were a wholly owned subsidiary of Nestle.
    Immediately prior to the completion of this offering, we expect to make a
    payment to Nestle which is considered a dividend and repayment of capital
    under U.S. generally accepted accounting principles of CHF 2.1 billion (or
    approximately $1.23 billion) which is expected to be financed by existing
    cash and cash equivalents and, if necessary, with additional borrowings.
    This entire payment is considered a dividend under Swiss law.

(2) We define EBITDA as operating income before depreciation and amortization of
    intangibles. We believe that EBITDA is a measure commonly used by analysts
    and investors. Accordingly, we have disclosed this information to permit a
    more complete analysis of our operating performance. EBITDA should not be
    considered in isolation or as a substitute for net earnings or other results
    of operations data or cash flow data prepared in accordance with US GAAP as
    a measure of our profitability or liquidity. EBITDA, as we calculate it, may
    not be comparable to similarly titled measures reported by other companies.

(3) Our pro forma statement of earnings data for the year ended December 31,
    2001 reflects the reduction of earnings as if the CHF 2.1 billion (or
    approximately $1.23 billion) dividend payment to Nestle had been made on
    January 1, 2001.

(4) The pro forma balance sheet data is presented as if the CHF 2.1 billion (or
    approximately $1.23 billion) dividend payment to Nestle and the conversion
    of common shares into nonvoting preferred shares with an assumed redemption
    value of $2.19 billion had occurred as of December 31, 2001. The pro forma
    balance sheet data does not reflect the proceeds of this offering or the
    redemption of the nonvoting preferred shares.

(5) Our pro forma as adjusted balance sheet data at December 31, 2001 gives
    effect to the dividend payment of CHF 2.1 billion (or approximately $1.23
    billion) to Nestle, the issuance of nonvoting preferred shares to Nestle,
    receipt of the net proceeds of this offering and the redemption of the
    nonvoting preferred shares issued to Nestle.

                                        25
<PAGE>

        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                             RESULTS OF OPERATIONS

     You should read the following discussion and analysis in conjunction with
our financial statements and notes thereto included elsewhere in this
prospectus. This Management's Discussion and Analysis of Financial Condition and
Results of Operations contains forward-looking statements. Please see
"Cautionary Note Regarding Forward-Looking Statements" for a discussion of the
risks, uncertainties and assumptions relating to these statements.

OVERVIEW OF OUR BUSINESS

  General

     We develop, manufacture and market pharmaceuticals, surgical equipment and
devices and contact lens care and other vision care products that treat eye
diseases and disorders and promote the general health and function of the human
eye. Founded in 1945, we have local operations in over 75 countries and our
products are sold in more than 180 countries around the world. In 1977, we were
acquired by Nestle. Since then, we have operated largely as an independent
company, separate from most of Nestle's other businesses and have grown our
annual sales from $82 million to over $2.7 billion primarily as a result of
internal development and selected acquisitions.

     We conduct our global business through two business segments: Alcon United
States and Alcon International. Alcon United States includes sales to
unaffiliated customers located in the United States of America, excluding Puerto
Rico. Alcon United States operating profit is derived from operating profits
within the United States as well as operating profits earned outside of the
United States related to the United States business. Alcon International
includes sales to all other unaffiliated customers. Each business segment
markets and sells products principally in three product categories of the
ophthalmic market: (i) pharmaceutical (e.g., prescription ophthalmic drugs);
(ii) surgical equipment and devices (e.g., cataract, vitreoretinal and
refractive); and (iii) contact lens care (e.g., disinfecting and cleaning
solutions) and other vision care products (e.g., artificial tears). Business
segment operations generally do not include research and development,
manufacturing and other corporate functions. We market our products to eye care
professionals as well as to the direct purchasers of our products, such as
hospitals, managed care organizations, governments and individuals.

  Market Environment

     Demand for health care products and services is increasing in established
markets as a result of the aging of the population and the emergence of new drug
therapies and treatments for previously untreatable conditions. Likewise, demand
for health care products and services in emerging markets is increasing
primarily due to the adoption of medically advanced technologies and
improvements in living standards. As a result of these factors, health care
costs are rising at a faster rate than economic growth in many countries. This
faster rate of growth has led governments and other purchasers of health care
products and services, either directly or through patient reimbursement, to
exert pressure on the prices of health care products and services. These
cost-containment efforts vary by jurisdiction.

     In the United States, government policies and the influence of managed care
organizations continue to impact the pricing of health care products and
services. In an effort to control Medicare costs, the United States government
implemented reimbursement ceilings on cataract surgery in 2000 resulting in
increased price sensitivity by hospitals and surgery centers that perform
cataract procedures. Also under consideration is the addition of a prescription
drug benefit program under Medicare, which, if approved, would present
opportunities and challenges for pharmaceutical companies. Some states are also
moving to implement more aggressive price control programs and more liberal
generic substitution rules that could result in price reductions. In addition,
managed care organizations use formularies and their buying power to demand more
effective treatments at lower prices. Both governments and managed care
organizations have supported increased use of generic pharmaceuticals at the
expense of branded pharmaceuticals. We are well-positioned to address this
market opportunity with Falcon Pharmaceuticals Ltd., our generic
                                        26
<PAGE>

pharmaceutical business, which currently has the #1 market share position in
generic ophthalmic pharmaceuticals in the United States, based on revenues in
2001. We also use third-party data to demonstrate both the therapeutic and cost
effectiveness of our pharmaceutical products. Moreover, to achieve and maintain
attractive positions on formularies, we need to continuously introduce medically
advanced products that differentiate us from our competitors and are
competitively priced.

     Outside of the United States, third-party payor reimbursement of patients
and health care providers and prices for health care products and services vary
significantly and, in the case of pharmaceuticals, are generally lower than
those in the United States. In Western Europe, where government reimbursement of
health care costs is widespread, governments are requiring price reductions. The
economic integration by European Union members and the introduction of the euro
are also impacting pricing in these markets, as more affluent member countries
are requesting prices for health care products and services comparable to those
in less affluent member countries. In Latin America, where there is less
government reimbursement of health care costs, many of our products are paid for
by private health care systems covering a small portion of the population. As a
result, economic conditions in this region have a significant impact on prices
and demand for health care products and services. For example, we have recently
experienced a decline in sales in Argentina, one of our largest markets in the
region, as a result of economic conditions in that country. In most of the
countries in Asia, average income levels are low, government reimbursement for
the cost of health care products and services is limited and prices and demand
are sensitive to general economic conditions. However, many Asian countries have
rebounded from the economic crisis of 1997 and 1998 and demand for our products
in this region has been rising. By contrast, Japan, which has extensive private
and government reimbursement for health care costs, has not seen significant
efforts to control prices despite experiencing a combination of flat economic
growth and an aging population. However, regulatory approval times are long and
costs are very high in Japan, which delays the marketing of our pharmaceutical
products there.

  Currency Fluctuations

     Our products are sold in over 180 countries, and we sell products in a
number of currencies in our Alcon International business segment. Our
consolidated financial statements, which are presented in U.S. dollars, are
impacted by currency exchange rate fluctuations through both translation risk
and transaction risk. Translation risk is the risk that our financial statements
for a particular period are affected by changes in the prevailing exchange rates
of the various currencies of our subsidiaries relative to the U.S. dollar.
Transaction risk is the risk that the currency structure of our costs and
liabilities deviates to some extent from the currency structure of our sales
proceeds and assets.

     Our translation risk exposures are principally to the euro and Japanese
yen. With respect to transaction risk, because a significant percentage of our
operating expenses are incurred in the currency in which sales proceeds are
received, we do not have a significant net exposure. In addition, substantially
all of our assets which are denominated in currencies other than the U.S. dollar
are supported by loans or other liabilities of similar amount denominated in the
same currency. From time to time, we purchase or sell currencies forward to
hedge currency risk in obligations or receivables; these transactions are
designed to address transaction risk, not translation risk. Our Japanese and
South African subsidiaries purchase goods from some of our subsidiaries in U.S.
dollars and hedge a portion of these intercompany liabilities using forward
contracts. We have not experienced significant gains or losses as a result of
these hedging activities.

     Generally, a weakening of the U.S. dollar against other currencies has a
positive effect on our sales and profits while a strengthening of the U.S.
dollar against other currencies has a negative effect on our sales and profits.
We experienced negative currency impacts as a result of the strengthening of the
U.S. dollar during 1999, 2000 and 2001. During 1999 and 2000, the negative
currency impact was primarily due to the increase in the value of the U.S.
dollar versus the major European currencies. During 2001, the primary cause of
the negative currency impact was the strengthening of the U.S. dollar against
the major European currencies and the Japanese yen, with lesser negative impacts
relating to the Canadian, Australian and Brazilian currencies. We expect the
currency devaluation and weak economic
                                        27
<PAGE>

conditions in Argentina to have a negative impact on our revenues and profits in
Argentina in 2002. We refer to the effects of currency fluctuations and exchange
rate movements throughout this "Management's Discussion and Analysis of
Financial Condition and Results of Operations," which we have computed by
applying translation rates from the prior comparative period to the more recent
period amounts and comparing those results to the more recent period actual
results.

  Operating Revenues and Expenses

     We generate revenues largely from sales of ophthalmic pharmaceutical
products, ophthalmic surgical equipment and devices and contact lens care and
other vision care products. Our operating revenues and operating income are
affected by various factors including unit volume, price, currency fluctuations,
acquisitions, licensing and the mix between lower-margin and higher-margin
products.

     Sales of ophthalmic pharmaceutical products are primarily driven by the
development of safe and effective products that can be differentiated from
competing products in the treatment of ophthalmic diseases and disorders and
increased market acceptance of these new products. Inclusion of pharmaceutical
products on managed care formularies covering the largest possible number of
patients is another key competitive factor. We face significant competition in
ophthalmic pharmaceuticals, including competition from other companies with an
ophthalmic focus and from larger pharmaceutical companies. In general, sales of
our pharmaceutical products are not affected by general economic conditions,
although we face pressure to reduce prices from governments and United States
managed care organizations. We experience seasonality in our ocular allergy
medicines, with a large increase in sales in the spring and a lesser increase
during the fall. Costs of goods sold for our pharmaceutical products include
materials, labor, overhead and royalties.

     Our surgical product category includes three product lines: cataract,
vitreoretinal and refractive. Sales of our products for cataract and
vitreoretinal surgery are driven by technological innovation, demographic trends
and relationships with surgeons. We believe that our innovative and leading
technology, the strong relationships we establish by supporting physician
training and our ability to package a broad range of proprietary products into
customized surgical procedure packs, tailored to each surgeon's preference, are
the keys to our success in these product categories. Declining government
reimbursements for cataract procedures continually puts pressure on our prices.
However, the number of cataract and vitreoretinal surgical procedures is not
generally affected by general economic conditions. Sales of our refractive
surgical equipment and the related technology fees are driven by consumer demand
for laser refractive surgery. We sell lasers and other surgical equipment used
to perform laser refractive surgeries and, in the United States, charge a
technology fee for each surgery performed (one eye equals one surgery). Outside
of the United States, we generally do not charge a technology fee, although we
anticipate charging a technology fee upon the introduction of our LADARWave(TM)
Custom Cornea(R) Wavefront System when it is used to guide our laser to perform
a customized procedure. Because governments and private insurance companies
generally do not cover the costs of laser refractive surgery, sales of laser
refractive surgical products and related technology fees are sensitive to
changes in general economic conditions and consumer confidence. There is no
significant seasonality in our surgical business. Costs of goods sold for our
surgical products include raw materials, labor, overhead, royalties to licensors
and warranty costs. Operating income from cataract and vitreoretinal products is
driven by the number of procedures in which our products are used. Operating
income from laser refractive surgical equipment depends primarily on the number
of procedures for which we are able to collect technology fees.

     Sales of our contact lens care products are driven by ophthalmologist,
optometrist and optician recommendations of lens care systems, our provision of
starter kits to eye care professionals, and consumer preferences for more
convenient contact lens care solutions. Contact lens care products compete
largely on product attributes, brand familiarity, professional recommendations
and price. The use of less-advanced cleaning methods, especially outside of the
United States, also affects demand for our contact lens care products. There is
no seasonality in sales of contact lens care products, and we have experienced
little impact from general economic conditions to date, although in low-growth
economic environments consumers may switch to lower-priced brands. Costs of
goods sold for contact lens care products include
                                        28
<PAGE>

materials, labor, overhead and royalties. Operating income from contact lens
care products is driven by market penetration and unit volumes.

     Our selling, general and administrative costs include the costs of selling,
promoting and distributing our products and managing the organizational
infrastructure of our business. The largest portion of these costs is salary for
sales and marketing staff. During the first half of 2002, we expect to incur
additional marketing expenses related to the launch of TRAVATAN(R) in Europe and
higher TRAVATAN(R) marketing expenses in the United States than were incurred in
the first half of 2001.

     Research and development costs include basic research, pre-clinical
development of products, clinical trials, regulatory expenses and certain
technology licensing costs. The largest portion of our research and development
expenses relates to the research, development and regulatory approval of
pharmaceutical products. During 2000 and 2001, a greater proportion of our
research and development expenses were incurred during the second half of the
year than during the first half.

     Our amortization costs relate to our acquisitions and the licensing of
intangible assets. Effective July 7, 2000, we acquired Summit for a total
purchase price of $948.0 million, which resulted in intangible assets of $954.5
million that we will amortize over their estimated useful lives.

     We expect to incur a one-time $22.4 million charge to operating income
during the first quarter of 2002 related to the conversion of the 1994 Phantom
Stock Plan in connection with this offering. See "Management -- 2002 Alcon
Incentive Plan -- Phantom Stock Conversion".

     We expect to make a CHF 2.1 billion (or approximately $1.23 billion)
dividend payment to Nestle prior to the completion of this offering. This
payment will be funded by the liquidation of cash equivalents as well as
additional short-term borrowings. The decrease in cash, liquidation of cash
equivalents and increase in short-term borrowings will reduce our interest
income and increase our interest expense following this payment. Using the
average interest rates for 2001, the dividend payment to Nestle would decrease
annual interest income by approximately $37.6 million and increase annual
interest expense by approximately $17.0 million from comparable amounts in 2001.

RESULTS OF OPERATIONS

     The following table sets forth, for the periods indicated, selected items
from our consolidated financial statements prepared under U.S. GAAP.

<Table>
<Caption>
                                                                                                    AS A % OF SALES
                                                                                                -----------------------
                                                              1999        2000        2001      1999     2000     2001
                                                            --------    --------    --------    -----    -----    -----
                                                                         (IN MILLIONS, EXCEPT PERCENTAGES)
<S>                                                         <C>         <C>         <C>         <C>      <C>      <C>
United States.............................................  $1,263.2    $1,333.4    $1,464.6     52.6%    52.2%    53.3%
International.............................................   1,137.8     1,220.2     1,283.1     47.4     47.8     46.7
                                                            --------    --------    --------    -----    -----    -----
  Total sales.............................................   2,401.0     2,553.6     2,747.7    100.0    100.0    100.0
Costs of goods sold.......................................     719.1       749.7       798.3     30.0     29.4     29.1
                                                            --------    --------    --------    -----    -----    -----
  Gross profit............................................   1,681.9     1,803.9     1,949.4     70.0     70.6     70.9
Selling, general and administrative.......................     805.2       855.8       953.7     33.5     33.5     34.7
Research and development..................................     213.1       246.3       289.8      8.9      9.6     10.5
In process research and development.......................        --        18.5          --       --      0.7       --
Amortization of intangibles...............................      46.4        86.5       117.0      1.9      3.4      4.3
                                                            --------    --------    --------    -----    -----    -----
  Operating income........................................     617.2       596.8       588.9     25.7     23.4     21.4
Gain (loss) from foreign currency, net....................      10.7         0.1        (4.8)     0.4      0.0     (0.2)
Interest income...........................................      13.7        44.1        46.6      0.6      1.7      1.7
Interest expense..........................................     (54.4)      (86.3)     (107.7)    (2.3)    (3.4)    (3.9)
Other, net................................................        --          --        (9.1)      --       --     (0.3)
                                                            --------    --------    --------    -----    -----    -----
  Earnings before income taxes............................     587.2       554.7       513.9     24.5     21.7     18.7
Income taxes..............................................     240.3       223.0       198.3     10.0      8.7      7.2
                                                            --------    --------    --------    -----    -----    -----
  Net earnings............................................  $  346.9    $  331.7    $  315.6     14.4%    13.0%    11.5%
                                                            ========    ========    ========    =====    =====    =====
</Table>

                                        29
<PAGE>

     The following table sets forth, for the periods indicated, our sales and
operating profit by business segment under IAS.

<Table>
<Caption>
                                                                                       AS A % OF SALES
                                                                                   -----------------------
                                                 1999        2000        2001      1999     2000     2001
                                               --------    --------    --------    -----    -----    -----
                                                            (IN MILLIONS, EXCEPT PERCENTAGES)
<S>                                            <C>         <C>         <C>         <C>      <C>      <C>
ALCON UNITED STATES:
Pharmaceutical...............................  $  455.5    $  513.9    $  582.9     36.1%    38.5%    39.8%
Surgical.....................................     562.9       589.2       639.7     44.6     44.2     43.7
Contact lens care and other vision care......     244.8       230.3       242.0     19.3     17.3     16.5
                                               --------    --------    --------    -----    -----    -----
  Total sales................................   1,263.2     1,333.4     1,464.6    100.0%   100.0%   100.0%
                                               ========    ========    ========    =====    =====    =====
  Operating income(1)........................  $  557.2    $  519.6    $  571.1     44.1%    39.0%    39.0%
                                               ========    ========    ========    =====    =====    =====
ALCON INTERNATIONAL:
Pharmaceutical...............................  $  324.1    $  322.3    $  344.9     28.5%    26.4%    26.9%
Surgical.....................................     597.2       674.7       718.0     52.5     55.3     55.9
Contact lens care and other vision care......     216.5       223.2       220.2     19.0     18.3     17.2
                                               --------    --------    --------    -----    -----    -----
  Total sales................................   1,137.8     1,220.2     1,283.1    100.0%   100.0%   100.0%
                                               ========    ========    ========    =====    =====    =====
  Operating income(1)........................  $  328.0    $  380.1    $  402.6     28.8%    31.2%    31.4%
                                               ========    ========    ========    =====    =====    =====
</Table>

---------------

(1) Segment performance is measured based on sales and operating income reported
    in accordance with IAS. The principal differences between the IAS accounting
    policies used to generate segment results and our overall accounting
    policies under U.S. GAAP include differences in intangible asset cost and
    lives and in-process research and development (expensed for U.S. GAAP but
    not for IAS). Certain manufacturing costs and manufacturing variances are
    not assigned to business segments because most manufacturing operations
    produce products for more than one business segment. Research and
    development costs, excluding regulatory costs which are included in the
    business segments, are treated as general corporate costs and are not
    assigned to business segments.

     The following table sets forth, for the periods indicated, Alcon
International's sales and our consolidated sales by product category, and
includes the change in sales and change in sales in constant currency calculated
by applying rates from the earlier period. All of Alcon United States' sales are
in U.S. dollars, and therefore it does not experience any currency translation
gains or losses.

<Table>
<Caption>
                                                                 CHANGE                                        CHANGE
                                                                   IN                                            IN
                                                                CONSTANT                                      CONSTANT
                                1999        2000      CHANGE    CURRENCY      2000        2001      CHANGE    CURRENCY
                              --------    --------    ------    --------    --------    --------    ------    --------
<S>                           <C>         <C>         <C>       <C>         <C>         <C>         <C>       <C>
ALCON INTERNATIONAL:
Pharmaceutical..............  $  324.1    $  322.3     (0.6)%      5.6%     $  322.3    $  344.9      7.0%     13.5%
Surgical....................     597.2       674.7     13.0       17.9         674.7       718.0      6.4       14.2
Contact lens care and other
  vision care...............     216.5       223.2      3.1        7.2         223.2       220.2     (1.3)       6.3
                              --------    --------                          --------    --------
  Total sales...............  $1,137.8    $1,220.2      7.2       12.4      $1,220.2    $1,283.1      5.2       12.5
                              ========    ========                          ========    ========
TOTAL:
Pharmaceutical..............  $  779.6    $  836.2      7.3        9.9      $  836.2    $  927.8     11.0       13.5
Surgical....................   1,160.1     1,263.9      8.9       11.3       1,263.9     1,357.7      7.4       11.6
Contact lens care and other
  vision care...............     461.3       453.5     (1.7)       0.1         453.5       462.2      1.9        5.7
                              --------    --------                          --------    --------
  Total sales...............  $2,401.0    $2,553.6     6.4%        8.8%     $2,553.6    $2,747.7      7.6%     11.1%
                              ========    ========                          ========    ========
</Table>

  YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 2001

     Sales

     Sales increased 7.6% from $2,553.6 million in the year ended December 31,
2000 to $2,747.7 million in 2001, mainly due to a weighted growth of 9.2% in
unit volume (excluding the Summit acquisition) and offset in part by a 3.5%
negative currency impact due to the strength of the U.S. dollar compared to most
major currencies. At a constant exchange rate and excluding the impact of the
Summit acquisition, sales

                                        30
<PAGE>

increased by 9.5% during this period. Our pharmaceutical sales during this
period experienced growth of 11.0%, driven by increased sales of our key
pharmaceutical products and the launch of TRAVATAN(R). Sales of surgical
products and contact lens care and other vision care products grew 7.4% and
1.9%, respectively, during the period. Our surgical sales for the year ended
December 31, 2001 included twelve months of sales of refractive products and
related fees while our surgical sales for 2000 only included sales of refractive
products from July 7, 2000 to December 31, 2000, as a result of the Summit
acquisition.

     Sales by Alcon United States increased 9.8% from $1,333.4 million in the
year ended December 31, 2000 to $1,464.6 million in 2001, principally from
increases in unit volume (excluding the Summit acquisition) and a 2.4% increase
in sales as a result of the Summit acquisition. Pharmaceutical sales by Alcon
United States increased 13.4% from $513.9 million in the year ended December 31,
2000 to $582.9 million in 2001, with strong performance across major products,
including TobraDex (R), Patanol (R), Ciloxan (R) and Cipro(R) HC Otic , and the
launch of TRAVATAN(R). Surgical product sales by Alcon United States rose 8.6%
from $589.2 million in the year ended December 31, 2000 to $639.7 million in
2001, mainly due to the Summit acquisition, but partially offset by weaker
refractive sales during the second half of 2001, and growth of 3.4% in sales of
cataract and vitreoretinal products, mostly arising from increases in market
share. Contact lens care and other vision care product sales by Alcon United
States increased 5.1% from $230.3 million in the year ended December 31, 2000 to
$242.0 million in 2001. Most of this growth in contact lens care product sales
resulted from market share gains by OPTI-FREE(R) EXPRESS(R) NoRub(TM), partially
offset by declines in sales of our daily and enzymatic contact lens care
products.

     Sales by Alcon International increased 5.2% from $1,220.2 million in the
year ended December 31, 2000 to $1,283.1 million in 2001, mainly due to a strong
increase in unit volumes (excluding the Summit acquisition) that was largely
offset by a 7.4% decline due to negative currency fluctuations from the
strengthening of the U.S. dollar against most major currencies. At a constant
exchange rate and excluding the Summit acquisition, sales outside of the United
States increased 11.8%, driven largely by growth across all major European
countries, Canada, Taiwan and Brazil in addition to developing countries in
Eastern Europe and Asia. Pharmaceutical sales by Alcon International increased
7.0% (or 13.5% excluding the impact of currency fluctuations) from $322.3
million in the year ended December 31, 2000 to $344.9 million in 2001, mainly
due to the registration and launch of Azopt (R) in additional countries and to a
lesser extent due to growth in sales of TobraDex (R). Surgical product sales by
Alcon International increased 6.4% (or 14.2% excluding the impact of currency
fluctuations) from $674.7 million in the year ended December 31, 2000 to $718.0
million in 2001 as a result of increases in sales of cataract products,
particularly AcrySof (R) single-piece intraocular lenses, Custom Paks (R) and
viscoelastics, which are viscous liquids used to maintain the shape of the eye
during cataract surgery, and vitreoretinal products, together with additional
sales associated with our acquisition of Summit, which accounted for almost half
of the growth. Contact lens care and other vision care products sales by Alcon
International declined 1.3% (but would have risen 6.3% on a constant currency
basis) from $223.2 million in the year ended December 31, 2000 to $220.2 million
in 2001 reflecting negative currency fluctuations, which were largely offset by
increased sales of OPTI-FREE (R) multi-purpose disinfecting solution in Japan.
In most markets outside of Japan, the contact lens care market declined as
consumers continued to convert to frequent replacement lenses and one-step
multi-purpose disinfecting solutions which sharply reduced sales of enzymatic
and other daily cleaners.

     Gross Profit

     Gross profit increased 8.1% from $1,803.9 million in the year ended
December 31, 2000 to $1,949.4 million in 2001, resulting in an increase in gross
profit as a percentage of sales from 70.6% in the year ended December 31, 2000
to 70.9% in 2001. This increase in gross margin was due mainly to strong sales
of our pharmaceutical products and intraocular lenses and lower average
manufacturing costs per unit, which offset the negative currency impact of the
strengthening of the U.S. dollar during the last three quarters of 2001.

                                        31
<PAGE>

     Operating Expenses

     Selling, general and administrative expenses increased 11.4% from $855.8
million in the year ended December 31, 2000 to $953.7 million in 2001. This
increase was due mainly to an increase in the size of our sales force,
principally in the second half of 2001, in connection with the launch of
TRAVATAN (R) and other expenses related to this launch and more frequent use of
direct-to-consumer advertising campaigns. Research and development expenses
increased 17.7% from $246.3 million in the year ended December 31, 2000 to
$289.8 million in 2001, excluding our write-off of in-process research and
development of $18.5 million in 2000 as a result of the Summit acquisition. This
increase represents continued investment across all major therapeutic areas.
Amortization of intangible assets increased 35.3% from $86.5 million in the year
ended December 31, 2000 to $117.0 million in 2001. Amortization of intangible
assets arising as a result of the acquisition of Summit (totaling approximately
$36.0 million in 2000 and $72.0 million in 2001) is primarily responsible for
this increase.

     Operating Income

     Operating income decreased 1.3% from $596.8 million in the year ended
December 31, 2000 to $588.9 million in 2001 and decreased as a percentage of
sales from 23.4% to 21.4% mainly due to increased selling expenses, research and
development expenses and amortization.

     Alcon United States business segment operating income increased 9.9% from
$519.6 million in the year ended December 31, 2000 to $571.1 million in 2001.
This increase was due mainly to improved gross margins and control of general
and administrative expenses, which were partially offset by additional
amortization expenses associated with the Summit acquisition, an increase in the
size of our sales force and higher marketing expenditures.

     Alcon International business segment operating income increased 5.9% from
$380.1 million in the year ended December 31, 2000 to $402.6 million in 2001,
reflecting higher gross margins and improved cost controls.

     Operating income for the Alcon United States and Alcon International
business segments does not include: (1) certain manufacturing costs (e.g.,
manufacturing operation period costs and manufacturing variances); (2) all
research and development costs other than regulatory costs; and (3) certain
other general corporate expenses. Operating income for these two business
segments is determined in accordance with IAS.

     Interest and Other Expenses

     Interest income increased 5.7% from $44.1 million in the year ended
December 31, 2000 to $46.6 million in 2001, due to higher levels of short-term
investments. Interest expense increased 24.8% from $86.3 million in the year
ended December 31, 2000 to $107.7 million in 2001, mainly due to increased
interest expense (totaling approximately $33.0 million in 2000 and $60.0 million
in 2001) arising from higher borrowings used to finance the Summit acquisition.
Foreign currency gain decreased from a $0.1 million gain in the year ended
December 31, 2000 to a $4.8 million loss in 2001. Other, net for the year ended
December 31, 2001 includes a $9.1 million impairment loss on a marketable equity
investment acquired as a result of the acquisition of Summit.

     Income Tax Expense

     Income taxes declined 11.1% from $223.0 million in the year ended December
31, 2000 to $198.3 million in 2001 as a result of the taxation of a larger
portion of our earnings in jurisdictions with lower tax rates, thereby reducing
our effective tax rate from 40.2% during 2000 to 38.6% during 2001.

                                        32
<PAGE>

     Net Earnings

     Net earnings decreased 4.9% from $331.7 million in the year ended December
31, 2000 to $315.6 million in 2001. Excluding the impact of interest and
amortization expense related to the acquisition of Summit, net of taxes, net
earnings increased by 7.7% from 2000 to 2001.

  YEAR ENDED DECEMBER 31, 1999 COMPARED TO THE YEAR ENDED DECEMBER 31, 2000

     Sales

     Sales increased 6.4% from $2,401.0 million in the year ended December 31,
1999 to $2,553.6 million in 2000, largely as a result of growth in unit volume
(excluding the Summit acquisition) of 7.1%, which was partially offset by a
negative 2.4% impact from currency fluctuations. During this period, growth
across much of our pharmaceutical and surgical product categories drove the
increase while sales of contact lens care and other vision care products
declined by 1.7%.

     Alcon United States' sales increased 5.6% from $1,263.2 million in the year
ended December 31, 1999 to $1,333.4 million in 2000, mainly due to an increase
in unit volume (excluding the Summit acquisition) and a 2.4% increase as a
result of the Summit acquisition. Pharmaceutical sales by Alcon United States
increased 12.8% from $455.5 million in the year ended December 31, 1999 to
$513.9 million in 2000, with strong sales performance across key pharmaceutical
products, including TobraDex (R), Patanol (R), Ciloxan (R), Azopt (R), Timolol
GFS and Cipro (R) HC Otic . Surgical product sales by Alcon United States
increased 4.7% from $562.9 million in the year ended December 31, 1999 to $589.2
million in 2000, reflecting the Summit acquisition during the second half of
2000. Contact lens care and other vision care product sales by Alcon United
States declined 5.9% from $244.8 million during the year ended December 31, 1999
to $230.3 million in 2000, due to a decrease in contact lens care product sales
resulting from the continued conversion by consumers to frequent replacement
lenses and one-step, multi-purpose disinfecting solutions.

     Sales by Alcon International increased 7.2% from $1,137.8 million in the
year ended December 31, 1999 to $1,220.2 million in 2000, mainly due to a strong
increase in unit volume (excluding the Summit acquisition) partially offset by a
negative 5.2% impact from currency fluctuations resulting from a strengthening
of the U.S. dollar against most major currencies. At constant exchange rates and
excluding the Summit acquisition, sales by Alcon International increased 12.2%,
driven mainly by increases in most major European markets, Australia, Japan,
Brazil and Mexico. Pharmaceutical sales by Alcon International were flat in the
year ended December 31, 2000 as compared to sales in 1999, mainly due to
unfavorable currency fluctuations. Excluding the impact of currency
fluctuations, pharmaceutical sales by Alcon International increased 5.6% mainly
due to the registration and launch of Azopt (R) in additional countries and
growth from several other pharmaceutical products. Surgical product sales by
Alcon International increased 13.0% (or 17.9% excluding the impact of currency
fluctuations) from $597.2 million in the year ended December 31, 1999 to $674.7
million in 2000, mainly due to growth across all major cataract and
vitreoretinal products, particularly AcrySof (R), viscoelastics, Custom
Paks (R), surgical equipment and related accessories and disposables. Sales of
our contact lens care and other vision care products by Alcon International
increased 3.1% (or 7.2% excluding the impact of currency fluctuations) from
$216.5 million in the year ended December 31, 1999 to $223.2 million in 2000,
primarily due to increased sales of our OPTI-FREE(R) disinfecting solution in
Japan and sales of other vision care products which offset a decline in contact
lens care cleaning product sales.

     Gross Profit

     Gross profit increased 7.3% from $1,681.9 million in the year ended
December 31, 1999 to $1,803.9 million in 2000, resulting in a slight increase in
gross profit as a percentage of sales from 70.0% in the year ended December 31,
1999 to 70.6% in 2000. This slight increase in gross margin was due mainly to
sales of our pharmaceutical products and intraocular lenses and lower average
manufacturing costs per unit.

                                        33
<PAGE>

     Operating Expenses

     Selling, general and administrative expenses increased 6.3% from $805.2
million in the year ended December 31, 1999 to $855.8 million in 2000 but
remained constant as a percentage of sales. This increase in expenses resulted
largely from an increase in the size of our primary care sales force and the
integration costs related to the Summit acquisition. Research and development
expenses increased 15.6% from $213.1 million in the year ended December 31, 1999
to $246.3 million in 2000, excluding our write-off of in-process research and
development of $18.5 million in 2000 in connection with the Summit acquisition.
This increase in research and development expenses represents continued
investment across pharmaceutical and surgical products and higher regulatory
expenses incurred in several countries in connection with the registration of
products. Amortization of intangible assets increased 86.4% from $46.4 million
in the year ended December 31, 1999 to $86.5 million in 2000 primarily due to
the acquisition of Summit, resulting in approximately $36.0 million of
additional amortization.

     Operating Income

     Operating income declined 3.3% from $617.2 million in the year ended
December 31, 1999 to $596.8 million in 2000 and fell as a percentage of sales
from 25.7% to 23.4%. This decline in operating income was due mainly to
increased selling, general and administrative expenses, increased amortization
of goodwill and other intangible assets and our write-off of in-process research
and development, all related to the Summit acquisition, and increased research
and development spending.

     Operating income for the Alcon United States business segment declined 6.7%
from $557.2 million in the year ended December 31, 1999 to $519.6 million in
2000, mainly due to an increase in amortization expense and integration costs
related to the Summit acquisition.

     Operating income for the Alcon International business segment increased
15.9% from $328.0 million in the year ended December 31, 1999 to $380.1 million
in 2000, mainly due to improved gross margins and control of general and
administrative expenses.

     Operating income for the Alcon United States and Alcon International
business segments does not include: (1) certain manufacturing costs (e.g.,
manufacturing operation period costs and manufacturing variances); (2) all
research and development costs other than regulatory costs; and (3) certain
other general corporate expenses. Operating income for these two business
segments is determined in accordance with IAS.

     Interest and Other Expenses

     Interest income increased 221.9% from $13.7 million in the year ended
December 31, 1999 to $44.1 million in 2000, reflecting higher levels of
short-term investments in 2000. Interest expense increased 58.6% from $54.4
million in the year ended December 31, 1999 to $86.3 million in 2000, reflecting
increased interest expense (totaling approximately $33.0 million) resulting from
higher levels of borrowing used to finance the Summit acquisition. Foreign
currency gain decreased from $10.7 million in the year ended December 31, 1999
to $0.1 million in 2000.

     Income Tax Expense

     Income tax expense declined 7.2% from $240.3 million in the year ended
December 31, 1999 to $223.0 million in 2000, mainly due to lower earnings before
income taxes. As a result of the increase in non-deductible expenses associated
with the Summit acquisition, including goodwill amortization expense, and
in-process research and development, our effective tax rate decreased from 40.9%
in 1999 to 40.2% in 2000.

                                        34
<PAGE>

     Net Earnings

     Net earnings declined 4.4% from $346.9 million in the year ended December
31, 1999 to $331.7 million in 2000. Excluding the impact of interest and
amortization expenses related to the Summit acquisition, net of taxes, net
earnings increased by 9.7%.

SALES BY QUARTER

     The following table sets forth our sales by quarter since 1999.

<Table>
<Caption>
                                                                    UNAUDITED
                                                             ------------------------
                                                              1999     2000     2001
                                                             ------   ------   ------
                                                                  (IN MILLIONS)
<S>                                                          <C>      <C>      <C>
First......................................................  $  583   $  610   $  655
Second.....................................................     622      699      746
Third......................................................     595      608      676
Fourth.....................................................     601      637      671
                                                             ------   ------   ------
Total......................................................  $2,401   $2,554   $2,748
                                                             ======   ======   ======
</Table>

     Our quarterly sales trends reflect the seasonality in several products,
including ocular allergy products and Cipro (R) HC Otic , in the form of
increased sales during the spring months. Sales of selected products increased
in the second quarter of 2000 due to promotional activities, which resulted in
increased wholesaler inventory levels and decreased wholesaler purchases of
these products in the third quarter of 2000. In the fourth quarter of 2000, we
experienced an increase in wholesaler inventory levels, which we believe were
due to expected price increases in 2001.

LIQUIDITY AND CAPITAL RESOURCES

     In the year ended December 31, 2001, we generated operating cash flow of
$528.5 million. Net cash used in investing activities in the year ended December
31, 2001 was $134.1 million, including $127.4 million of capital expenditures
primarily related to improvements in our manufacturing facilities. During this
period, we also acquired intangible assets at a cost of $10.9 million. Our
annual capital expenditures over the last three years were $99.4 million in 1999
and $117.1 million in 2000, and $127.4 million in 2001, principally to expand
and upgrade our manufacturing facilities. We have capital expenditure
commitments of $16.0 million at December 31, 2001, principally to expand and
upgrade our manufacturing facilities. We expect to fund these capital
expenditures through operating cash flow and, if necessary, short-term
borrowings. Financing activities in the year ended December 31, 2001 used cash
of $155.5 million, as cash generated by our operations was used to pay down
outstanding short-term debt.

     We expect to meet our current liquidity needs, including the CHF 2.1
billion (or approximately $1.23 billion) dividend payment to Nestle, principally
through cash and cash equivalents, the liquidation of short-term investments
and, to the extent necessary, short-term borrowings. We expect to meet future
liquidity requirements through our operating cash flows and through sales of
commercial paper under the facility described below under the heading "-- Credit
Facilities", the combination of which we believe would be sufficient even if our
sales were adversely impacted.

  CREDIT FACILITIES

     We have approximately $2.9 billion in total lines of credit available
worldwide. We had a $600 million unsecured revolving credit facility with Nestle
with an outstanding balance of $315 million as of December 31, 2001. Alcon
Holdings, Inc., one of our U.S. subsidiaries, has a $1 billion unsecured,
revolving credit facility with Nestle Capital Corporation under which there was
an outstanding balance of $167 million as of December 31, 2001. Nestle Capital
Corporation loans funds to Alcon Holdings under this facility at interest rates
approximately equal to the rate at which Nestle Capital Corporation is able to
sell commercial paper. Alcon Holdings also has a $600 million term loan from
Nestle, which matures in

                                        35
<PAGE>

2009 with an annual interest rate of 7.89%. The remainder of our subsidiaries
had lines of credit totaling $599 million under which there was an aggregate
outstanding balance of $323 million as of December 31, 2001. Approximately $83
million of these outstanding balances were under lines with Nestle subsidiaries
in their respective countries. Additional lines are arranged or provided by a
number of international financial institutions, the most significant of which
had the following aggregate limits: Citibank ($130 million); Fuji Bank ($53
million); ABN AMRO ($38 million); and Societe Generale ($39 million). These
facilities are primarily short-term and generally have interest rates reflecting
local market rates.

     Prior to the completion of this offering, we expect to cancel most of our
credit facilities with Nestle and repay most of our outstanding loans to it. We
expect to retain our existing bank credit lines and to establish a $2 billion
commercial paper facility to refinance loans from Nestle and to provide
liquidity in the future in addition to operating cash flows. Nestle has agreed
to guarantee the commercial paper that we issue under this program and to assist
us in the management of our commercial paper facility for an annual fee based on
our average outstanding commercial paper balances, which we believe is
comparable to the fee that would be available in an arm's length transaction.

  CASH AND INVESTMENT AVAILABILITY

     At December 31, 2001, we had approximately $1.20 billion in cash and cash
equivalents and investments. Short-term deposits with Nestle accounted for
approximately $1.1 billion of this total, with the remainder invested around the
world. Substantially all of these investments are available for our general use
and are not restricted. However, we expect to use substantially all of these
funds to make the CHF 2.1 billion (or approximately $1.23 billion) dividend
payment to Nestle.

MARKET RISK

  INTEREST RATE RISKS

     Because we have and will continue to finance our operations, in part,
through loans, we are exposed to interest rate risks. In 2000, Alcon Holdings
entered into a $600 million long-term, fixed-rate loan with Nestle to fund the
acquisition of Summit. This loan represents approximately 40% of our
consolidated debt at December 31, 2001. The remainder of our loans are primarily
short-term, floating-rate loans that will become more expensive when interest
rates rise and less expensive when they fall. Historically, we have mitigated
this risk by making floating-rate deposits with Nestle that totaled $1.1 billion
at December 31, 2001. Prior to the completion of this offering, we will use
substantially all of these investments to make the CHF 2.1 billion (or
approximately $1.23 billion) dividend payment to Nestle.

  CREDIT RISKS

     In the normal course of our business, we incur credit risk because we
extend trade credit to our customers. We believe that these credit risks are
well-diversified, and our internal staff actively manages these risks. Our
principal concentrations of trade credit are generally with large and
financially sound corporations, such as large retailers and grocery chains, drug
wholesalers and governmental agencies. As part of our sales of surgical
equipment, we frequently finance the purchase of our equipment and enter into
leases and other financial transactions with our customers. In general, these
loans and other transactions range in duration from one to five years and in
principal amount from $50,000 to $700,000. We conduct credit analysis on the
customers we finance and secure the loans and leases with the purchased surgical
equipment. Over the last 15 years, we have offered financing programs for
cataract equipment with no significant losses. Our customer financing program
for laser refractive surgical equipment has a shorter history, is of a larger
size and has less credit strength and asset value for security. In countries
that have a history of high inflation, such as Turkey, Brazil and Argentina, the
credit risks to which we are exposed can be larger and less predictable.

     We conduct some of our business through export operations and are exposed
to country credit risk. This risk is mitigated by the use, where applicable, of
letters of credit confirmed by large commercial banks in Switzerland and the
United States.

                                        36
<PAGE>

QUANTITATIVE DISCLOSURE CONCERNING MARKET RISK

  CURRENCY RISKS

     We are exposed to market risk from changes in currency exchange rates that
could impact our results of operations and financial position. We manage our
exposure to these currency risks through our regular operating and financing
activities and, when appropriate, through the use of derivative financial
instruments. We use derivative financial instruments as risk management tools
and not for speculative purposes.

     We use forward contracts to manage the volatility of non-functional
currency cash flows resulting from changes in exchange rates. Currency exchange
contracts are used to hedge intercompany purchases and sales. The use of these
derivative financial instruments allows us to reduce our overall exposure to
exchange rate fluctuations, since the gains and losses on these contracts
substantially offset losses and gains on the assets, liabilities and
transactions being hedged.

     The fair value of currency exchange contracts is subject to changes in
currency exchange rates. For the purpose of assessing specific risks, we use a
sensitivity analysis to determine the effects that market risk exposures may
have on the fair value of our financial instruments and results of operations.
The financial instruments included in our sensitivity analysis are currency
forward contracts. Such contracts generally have a duration of three to six
months and are used to hedge transactions that are firmly committed on the date
the forward contract is entered into or are anticipated to occur within six
months of that date. The sensitivity analysis excludes the values of foreign
currency denominated receivables and payables because of their short maturities.
To perform the sensitivity analysis, we assess the risk of loss in fair values
from the effect of a hypothetical 10% change in currency exchange spot rates and
assuming no change in interest rates. For contracts outstanding as of December
31, 2001, a 10% appreciation in currency exchange rates against the U.S. dollar
from the prevailing market rates would have increased our pre-tax earnings by
approximately $13.2 million. Conversely, a 10% depreciation in these exchange
rates from the prevailing market rates would have decreased our pre-tax earnings
by approximately $13.2 million. Consistent with the nature of the economic hedge
of such currency exchange contracts, such gains or losses would be offset by
corresponding decreases or increases, respectively, of the underlying instrument
or transaction being hedged.

     The model used to perform the sensitivity analysis assumes a parallel shift
in all currency exchange spot rates. Exchange rates, however, rarely move in the
same direction. The assumption that all exchange rates change in a parallel
manner does not necessarily represent the actual changes in fair value we would
incur under normal market conditions because all variables other than the
specific market risk are held constant.

     While we hedge some non-U.S. dollar currency transactions, the decline in
value of non-U.S. dollar currencies may, if not reversed, adversely affect our
ability to contract for product sales in U.S. dollars because our products may
become more expensive to purchase in U.S. dollars for local customers doing
business in the countries of the affected currencies.

  INTEREST RATE RISKS

     We are exposed to market risk from changes in interest rates that could
impact our results of operations and financial position. As of December 31,
2001, approximately 40% of our debt was long-term fixed-rate loans. We also had
short-term floating-rate investments and deposits equal to approximately 136% of
our short-term floating-rate debt at December 31, 2001. The excess amount of our
short-term investments and deposits over our short-term debt is exposed to
fluctuations in short-term interest rates. A 1% increase in short-term interest
rates would have increased our 2001 pre-tax earnings by $5.8 million and a 1%
decrease in short-term interest rates would have decreased our 2001 pre-tax
earnings by $5.8 million.

                                        37
<PAGE>

IN-PROCESS RESEARCH AND DEVELOPMENT

     In connection with our acquisition of Summit, we immediately expensed $18.5
million of the Summit purchase price in the third quarter of 2000, representing
amounts for in-process research and development, which we refer to as IPR&D,
estimated at fair value. The expensed IPR&D represented the value of the Custom
Cornea project that had not yet reached technological or commercial feasibility
and for which the assets to be used in such project had no alternative future
use. We expect that products developed from the acquired IPR&D will begin to
generate sales and positive cash flows beginning in 2002. However, development
of this technology remains at risk due to the remaining effort to achieve
technological viability, rapidly changing customer markets, uncertain standards
for new products and competitive threats.

     We engaged an outside appraiser who estimated the fair value of the
purchased IPR&D using a discounted cash flow model similar to the income
approach. The value assigned to acquired IPR&D was determined by identifying
products under research in areas for which technological feasibility had not
been established. The IPR&D technology was then segmented into two
classifications: (i) completed and (ii) to-be-completed, giving explicit
consideration to the value created by research and development efforts of Summit
prior to the acquisition and to be created by us after the acquisition. The
analysis focused on the income-producing capability of the in-process
technologies and taking into consideration (i) the analysis of the stage of
completion of the project and (ii) the exclusion of value related to research
and development to-be completed as part of the on-going IPR&D project. Revenue
estimates were based on (i) individual product revenues, (ii) anticipated growth
rates, (iii) anticipated product development and introduction schedules, (iv)
product sales cycles and (v) the estimated life of a product's underlying
technology.

     From the revenue estimates, operating expense estimates, including income
taxes, and a charge for contributory assets were deducted to arrive at operating
income. Revenue growth rates were estimated by our management and gave
consideration to relevant market sizes and growth factors, expected industry
trends and the anticipated nature and timing of new product introductions by us
and our competitors. Operating expense estimates reflect our historical expense
ratios. The resulting operating income stream was discounted to reflect its
present value at the date of the acquisition. The rate used to discount the net
cash flows from the purchased IPR&D was 25% which considered rates of return
from investments in various areas of Alcon, and the inherent uncertainties in
future revenue estimates from technology investments including the uncertainty
surrounding the successful development of the acquired IPR&D.

     We expect to fund all research and development efforts, including acquired
IPR&D from cash flows from operations. As of December 2001, the Custom Cornea
project was moving forward, with an expected launch date of 2002. Custom Cornea
technology is designed to take advanced eye measurements from an aberrometer to
determine the more subtle errors of the human visual optical system and combine
this with the use of the LADARVision(R) laser and software, to define a
customized pattern of ablations, which are removals of tissue, for the patient
that will correct for these subtle errors. In the United States, this technology
requires FDA approval. At the acquisition date, costs to complete these research
and development efforts were expected to be $1.3 million. The estimated stage of
completion at acquisition was 85%.

NEW ACCOUNTING STANDARDS

     In July 2001, the Financial Accounting Standards Board, or FASB, issued
Statement No. 141, Business Combinations, and Statement No. 142, Goodwill and
Other Intangible Assets. Statement 141 requires that the purchase method of
accounting be used for all business combinations. Statement 141 also specifies
the criteria that intangible assets acquired in a purchase method business
combination must meet to be recognized and reported apart from goodwill.
Statement 142 requires that goodwill and intangible assets with indefinite
useful lives no longer be amortized, but instead tested for impairment at least
annually. Statement 142 also requires that intangible assets with estimable
useful lives be amortized over their respective estimated useful lives to their
estimated residual values, and reviewed for impairment. Amortization expense
related to goodwill and other intangible assets that will not be amortized under
these

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new accounting standards was $8.6 million, $22.0 million and $36.0 million for
the years ended December 31, 1999, 2000 and 2001, respectively. Because of the
extensive effort needed to comply with adopting Statements 141 and 142, it is
not practicable to reasonably estimate the impact of adopting these Statements
on our financial statements at the date of this report, including whether it
will be required to recognize any transitional impairment losses as the
cumulative effect of a change in accounting principle.

     In August 2001, the FASB issued Statement No. 144, Accounting for the
Impairment or Disposal of Long Lived Assets. This statement supersedes Statement
No. 121, Accounting for the Impairment of Long Lived Assets and for Long Assets
to be Disposed Of and the accounting and reporting provisions of Accounting
Principles Board Opinion No. 30, Reporting the Results of Operations Reporting
the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual
and Infrequently Occurring Events and Transactions. Statement 144 retains the
fundamental provisions of Statement 121 but eliminates the requirement to
allocate goodwill to long lived assets to be tested for impairment. This
statement also requires discontinued operations to be carried at the lower of
cost or fair value less costs to sell and broadens the presentation of
discontinued operations to include a component of an entity rather than a
segment of a business. Statement 144 is effective for fiscal years beginning
after December 15, 2001, and interim periods within those fiscal years, with
early application encouraged. We do not expect the adoption of this statement to
have a material impact on our results of operations or financial position.

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                                  OUR INDUSTRY

OVERVIEW

     The global eye care industry, or the ophthalmic industry, encompasses
products that treat medical conditions of the eye and that correct vision
disorders. We define the ophthalmic industry as products related to eye care,
other than eyeglasses and contact lenses. The three main categories of
ophthalmic products are pharmaceutical, surgical and contact lens care and other
vision care products.

     The worldwide market for ophthalmic products is growing, driven by a
variety of factors, including favorable demographic trends, advances in medical
technology, improved therapies and economic growth in emerging markets. Aging
increases the incidence of ophthalmic conditions, such as glaucoma, cataracts,
retinal disorders and dry eye. The patient population is growing as the
worldwide population ages, a trend that is expected to accelerate in the middle
of this decade as the baby-boom generation begins to reach the age of 60. The
ophthalmic market is also expanding as improved therapies increase patient
demand and new surgical procedures and pharmaceuticals are introduced to treat
conditions not effectively treated with current technologies. Demand for
ophthalmic products is expected to grow in emerging markets as advances in
medical technology become available and the ability of individuals to obtain
health care services improves.

THE GLOBAL OPHTHALMIC PHARMACEUTICAL MARKET

     We estimate that aggregate sales in the global ophthalmic pharmaceutical
market were approximately $5.2 billion in 2001, and are expected to grow.
Ophthalmic pharmaceutical products target numerous diseases and conditions of
the eye, such as glaucoma, allergies, infections and inflammation, and age-
related macular degeneration. The largest segment of the ophthalmic
pharmaceutical market relates to the treatment of glaucoma, and represents a
$2.3 billion global market. Pharmaceutical products treating disorders other
than glaucoma represent a $2.9 billion global market. These diseases and
conditions include ocular anti-infective products, a $690 million global market,
combination ocular anti-infective/anti-inflammatory products, a $360 million
global market and ocular allergy products, approximately a $780 million global
market.

     Favorable demographic trends in both the United States and elsewhere will
drive demand for new and existing ophthalmic pharmaceuticals. Furthermore,
growth will be driven by improving standards of living in emerging markets,
increases in the number of surgical procedures performed to correct ophthalmic
conditions and introductions of products treating conditions not effectively
treated currently, including age-related macular degeneration, potentially a
multi-billion dollar market.

THE GLOBAL OPHTHALMIC SURGICAL MARKET

     We estimate that aggregate sales in the global ophthalmic surgical market
were approximately $3.2 billion in 2001, which largely comprises products and
equipment used during cataract, vitreoretinal and refractive surgeries. The
largest segment of the ophthalmic surgical market, which we estimate represents
a $2.3 billion global market, is the treatment of cataracts, which is the
clouding of the natural lens located at the front portion of the eye. We
estimate that the market for products for cataract surgery is approximately $800
million in the United States and $1.5 billion outside of the United States. In
the United States, we estimate that there are approximately 2.5 million cataract
surgeries performed each year. The market for products used in cataract surgery
in the United States has shown little growth over the last three years, although
favorable demographic trends are expected to produce increased growth in the
number of procedures in the second half of this decade. Based on our surveys, we
estimate that the number of cataract procedures performed in 2001 outside of the
United States is approximately six million, and we expect the number of cataract
procedures outside of the United States to increase.

     We estimate that the market for vitreoretinal surgical products is
approximately $300 million worldwide, including approximately $130 million in
the United States and approximately $170 million outside of the United States.
Vitreoretinal surgery is performed in hospitals and addresses conditions
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affecting the back of the eye, including the retina. We estimate that more than
190,000 vitreoretinal procedures are performed annually in the United States and
that the market for vitreoretinal surgical products in the United States has
grown by 8% annually over the last five years. We expect more rapid growth in
the number of vitreoretinal procedures outside of the United States primarily
because of increased adoption of these surgical techniques.

     We estimate that the market for laser refractive surgical products and
technology fees was approximately $600 million in 2001, including approximately
$400 million in the United States and $200 million outside of the United States.
Refractive laser surgery involves the correction of vision through the use of a
laser to remove tissue from the cornea. We estimate that more than 1.3 million
laser refractive surgeries were performed in the United States in 2001, and we
expect the number of procedures performed annually to approach two million over
the next three to five years. We estimate that more than one million procedures
were performed outside of the United States in 2001.

THE GLOBAL MARKETS FOR CONTACT LENS CARE AND OTHER VISION CARE PRODUCTS

     We estimate that aggregate global sales of contact lens care products were
approximately $1.5 billion in 2001, almost half of which were in the United
States. Lens care products include disinfecting solutions and enzymatic and
other cleaners, which are used to destroy harmful microorganisms and remove
protein deposits in and on the surface of contact lenses. In general, the market
for these products continues to be affected by consumers transitioning to
simplified one-bottle care regimens, continued adoption of frequent replacement
lenses, both of which require fewer cleaning and disinfecting products, and the
increasing acceptance of refractive surgery, which reduces the need for
corrective lenses. In many markets worldwide, the conversion from heat-based or
hydrogen peroxide-based disinfecting systems to multi-purpose disinfecting
solutions presents an opportunity for growth in market share.

     Eye drops sold over-the-counter include vaso-constrictor (eye whitening)
products, decongestant products, antihistamine allergy products and artificial
tear products. In each of these product categories, there are two options
available, a lower-priced, consumer-promoted selection of products and a premium
priced, professionally recommended selection of products. We estimate that the
market for premium-priced artificial tears products is approximately $500
million globally. Dry eye refers to a series of conditions characterized by
ocular discomfort caused by a deficiency in tear production or the excessive
evaporation of tears. Artificial tears are sold primarily over-the-counter,
although in some countries outside of the United States they are sold as
prescription pharmaceuticals. As the population ages, the dry eye market is
expected to continue to grow accordingly.

STRUCTURE AND FUNCTION OF THE EYE

     The human eye is one of the most complex structures in the body. Light rays
enter the eye through the cornea, which provides most of the focusing power of
the eye, and pass through the pupil, which is surrounded by the iris which
controls the amount of light entering the eye. Light then travels through the
lens where it is focused onto the retina. The retina, located at the back of the
eye changes light into electric impulses that are carried by the optic nerve to
the brain where these impulses are processed. To see clearly, light must be
focused precisely on the retina.

     The eye contains a number of fluids which maintain its shape and provide
necessary nutrients to various parts of the eye. The posterior chamber of the
eye is filled with a gelatinous substance, known as vitreous humor, which helps
maintain the spherical shape of the eye and through which light passes before it
reaches the retina. Tears coat the surface of the eye providing protection
against external irritants.

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     The following diagram is a partial illustration of the eye and its
structures:

[Diagram of the eye identifying the following structures:
cornea, pupil, lens, iris, vitreous humor, retina and optic nerve.]

SELECTED CONDITIONS OF THE EYE

     Many diseases and disorders can afflict the eye. A number of factors,
including genetics, age, infection, environmental factors and ailments affecting
the body generally, may cause or contribute to these conditions.

  PHARMACEUTICALS

     This section describes the major conditions of the eye that are treated
with our pharmaceutical products.

     Glaucoma

     Glaucoma is a disease in which elevated levels of fluid pressure within the
eye, known as intraocular pressure, damage the optic nerve. Early detection and
treatment are important to slowing the irreversible loss of vision caused by
glaucoma. As a result of glaucoma, blind spots develop in the visual field,
usually beginning at the edges and progressing inward. Therefore, an individual
with advanced glaucoma will have only a small cylinder of useful vision. At
present, no cure exists for glaucoma, and life-long monitoring and treatment are
required to control its effects. Glaucoma therapy seeks to reduce the elevated
intraocular pressure associated with the disease through medications and
surgery. Glaucoma is a major cause of irreversible blindness globally.

     According to the American Academy of Opthalmology, glaucoma is one of the
leading causes of blindness in the United States, with an estimated 120,000
Americans legally blind from glaucoma, and many more suffering some degree of
visual impairment as a result. Approximately 2.5 million Americans currently
have glaucoma, but because glaucoma is usually a slowly progressive disease,
studies have shown that a large number of people who have glaucoma are not
undergoing treatment. Glaucoma is two to three times more prevalent in the
African-American population than in the Caucasian population, and African-
Americans experience the onset of glaucoma at an average age of 55 years,
approximately 10 years earlier than the average age for Caucasians.
African-Americans represent 25% of all patients receiving treatment for glaucoma
in the United States.

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     Ocular Infection

     The eye frequently comes into contact with microorganisms capable of
causing ocular infections. One of the eye's defense mechanisms is tears, which
have anti-microbial properties and also help to remove microorganisms with the
aid of reflex blinking. Despite their natural defenses, the eye and eyelid may
become infected by, among other things, bacteria. Common infections of the eye
include conjunctivitis, or pink eye, and infections of the eyelid hair follicles
and eyelid margins, known as blepharitis. Serious infections of the cornea can
occur as well. Eye infections can occur among individuals of any age, although
infections associated with upper respiratory conditions in children are most
common. Antibiotics and other anti-infective medications are typically used to
treat ocular infections.

     Ocular Inflammation

     Inflammation of the eye is a protective response to injury of ocular tissue
and may occur in any part of the eye. Sources of ocular injury include trauma,
infection, local or systemic autoimmune responses, allergy, irritation and
surgery on the eye. Topical steroids or non-steroid based anti-inflammatory
agents are most often used to treat inflammation. Ocular anti-inflammatory and
combination ocular anti-inflammatory/anti-infective products may be used before
or after ocular surgery.

     Ocular Allergy

     Ocular allergy is the response of the eye to airborne allergens such as
mold, dust and pollen. The frequency and severity of allergic reactions may vary
seasonally, although chronic ocular allergies exist. Generally, symptoms of
ocular allergies, which are caused by the action of histamines, consist of
itching, burning and redness of the inside of the eyelid followed by a watery
discharge from the eye. The allergic reaction may be limited to the eye or may
be accompanied by a larger allergic reaction involving nasal and respiratory
reactions. In most cases, it is not practical to avoid allergens. Therefore,
antihistamines, which are substances that block the action of histamines, and
mast-cell stabilizers, which are substances that limit the histamine production,
are used to control the symptoms of ocular allergy.

  SURGICAL

     This section describes the major conditions of the eye that are treated by
surgeries for which we offer surgical products and equipment. This section also
describes age-related macular degeneration.

     Cataracts

     A cataract is the clouding of the normally transparent natural lens in the
eye. This clouding is usually caused by the aging process, although it can also
be caused by heredity, diabetes, environmental factors and, in some cases,
medications. Cataracts typically result in blurred vision and increased
sensitivity to light. Cataract formations occur at different rates and may
affect one or both eyes. According to the Centers for Disease Control, more than
half the population over the age of 75 either has cataracts or has had surgery
to correct them. With an estimated 1.5 to 2 million surgeries per year cataract
surgery is one of the most frequently performed surgical procedures in the
United States. According to the National Eye Institute, cataracts account for
42% of all blindness worldwide even though effective surgical treatment exists.

     Currently, surgical removal of the clouded lens followed by insertion of a
transparent artificial replacement lens, called an intraocular lens, is the
preferred treatment for cataracts. The clouded lens is usually removed through a
process known as phacoemulsification. During phacoemulsification, an ophthalmic
surgeon makes a small surgical incision in the eye (approximately 3 millimeters
wide) and inserts an ultrasonic probe. Through a combination of ultrasonic waves
and mechanical action, the probe breaks up, or emulsifies, the clouded lens
while a hollow needle removes, or aspirates, the emulsified pieces of the lens
from the eye. Once the cataract is removed, the surgeon inserts an intraocular
lens through the same surgical incision. Currently, we believe that a high
percentage of cataract surgeries performed in North America, Western Europe and
Japan involve the insertion of an intraocular lens. By
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contrast, a lower percentage of cataract surgeries outside these regions involve
an intraocular lens, although the use of intraocular lens implants has increased
significantly over the last five years. If an intraocular lens is not inserted,
thick eyeglasses would need to be worn to focus light on the retina because of
the lack of an internal lens.

     Refractive Errors

     Refractive errors, such as myopia, commonly known as nearsightedness,
hyperopia, commonly known as farsightedness and astigmatism, a condition in
which images are not focused at any one point, result from an inability of the
cornea and the lens to focus images on the retina properly. If the curvature of
the cornea is incorrect, light passing through it onto the retina is not
properly focused and a blurred image results. For many years, eyeglasses and
contact lenses were the only solutions for individuals afflicted with common
visual impairments; however, they are not always convenient or attractive
solutions. Laser refractive surgery offers an alternative to eyeglasses and
contact lenses.

     Excimer lasers, which are low-temperature lasers that remove tissue without
burning, are currently used to correct refractive errors by removing small
amounts of tissue to reshape the cornea. These lasers remove tissue precisely
without the use of heat and without affecting the surrounding tissue. Currently,
two procedures use an excimer laser to correct vision disorders: laser in-situ
keratomileusis, commonly known as LASIK, and photorefractive keratectomy,
commonly known as PRK. LASIK and PRK are performed as outpatient procedures. In
the LASIK procedure, the surgeon uses an automated microsurgical instrument,
called a microkeratome, to create a thin corneal flap that remains hinged to the
eye. The corneal flap is then folded back and excimer laser pulses are applied
to the exposed layer of the cornea to change the shape of the cornea. The
corneal flap is then returned to its normal position. In the PRK procedure, the
laser removes tissue directly from the surface of the cornea and does not
involve a thin corneal flap.

     LASIK has become the most commonly practiced form of laser refractive
surgery globally. Among the reasons for this widespread acceptance of LASIK are
the shorter period of time required following surgery before useful vision is
restored and the lower degree of pain than alternative procedures.

     Retinal Disorders

     Vitreoretinal procedures involve surgery on the back portion of the eye,
namely the retina and surrounding structures. Vitrectomy is the removal of the
gel-like substance, known as vitreous, that fills the back portion of the eye.
Removal of vitreous allows a vitreoretinal surgeon to operate directly on the
retina or on membranes or tissues that have covered the retina. These procedures
typically treat conditions such as diabetic retinopathy, retinal detachment,
complications of surgery on the front of the eye, trauma, tumors and pediatric
disorders. Vitreoretinal surgery can also involve electronic surgical equipment,
lasers and hand-held microsurgical instruments as well as gases and liquids that
are injected into the eye.

     Age-related macular degeneration, commonly known as AMD, is a degeneration
of the retina which results in some degree of visual loss. According to the
Centers for Disease Control, AMD is one of the leading causes of blindness in
the world, and is the leading cause of irreversible blindness in the elderly in
the United States. The Centers for Disease Control estimates that approximately
3.5 million people in the United States have some degree of AMD. The age of the
onset of visual loss is generally 70, with a few cases in individuals under the
age of 50. The two main types of AMD are dry, or non-exudative, and wet, or
exudative. Although the wet form of AMD constitutes only 10 to 15% of all AMD
cases, it is responsible for approximately 90% of blindness attributable to this
condition. The causes of AMD are currently unknown, and no cure has been
discovered, although certain laser treatments and other procedures exist. A
recent clinical study sponsored by the National Eye Institute found that high
levels of antioxidants and certain vitamins and minerals reduce the risk of AMD.

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  CONTACT LENS CARE AND OTHER VISION CARE PRODUCTS

     Contact Lens Care

     Proper care of contact lenses and compliance with disinfection regimens are
perhaps the most important factors in reducing the risk of infection and
irritation associated with contact lens use, maintaining visual acuity and
increasing wearing comfort. Contact lenses are subject to contamination from
cosmetics, grease, bacteria, soaps, hand lotions and atmospheric pollutants, and
from proteins contained in natural tears. The buildup of these materials on a
contact lens can result in various conditions of the eye. To prevent ocular
infections, it is also important for contact lenses to be free from microbial
contamination when placed in the eye. When used properly, contact lens care
products remove these contaminants from the surface of the contact lens. In
addition, lens rewetting drops may be used to rehydrate the lens during wear and
to clear away surface material.

     Dry Eye

     Dry eye can be characterized by symptoms of ocular discomfort related to
insufficient tear quantity or quality caused by low tear production or the
excessive evaporation of tears. Dry eye affects the health of the ocular surface
and in turn can lead to risk of infection as well as visual impairment. Dry eye
is believed to be one of the most common ocular problems affecting adults, with
the frequency of this condition increasing with age. Clinical observations
reveal that dry eye is more than three times more prevalent in women than men
and increases with age. The causes of dry eye are not currently known and,
accordingly, no cure exists. Symptoms frequently experienced by individuals with
dry eye patients, including burning, itching, dryness, increased sensitivity to
light, stinging and redness. Treatments for dry eye include artificial tears and
nighttime treatments involving ointments. Artificial tears are currently
marketed in the United States as an over-the-counter product, whereas outside
the United States, both over-the-counter and prescription products are marketed.

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                                    BUSINESS

COMPANY OVERVIEW

     We are the largest eye care company in the world based on sales in 2001. We
develop, manufacture and market pharmaceuticals, surgical equipment and devices
and contact lens care and other vision care products to treat diseases and
disorders of the eye. Our broad range of products represents the strongest
portfolio in the ophthalmic industry. We have the largest research and
development commitment of any eye care company worldwide and believe we have the
largest commitment to ophthalmic research and development of any company
worldwide. We expect to spend over $1.4 billion over the next four years on
research and development efforts. We have a strong track record of converting
discoveries into commercially viable products and have successfully introduced
14 internally developed products in recent years. Approximately 45% of our sales
in 2001 came from products introduced since 1994. Currently, our products are
sold in over 180 countries, and we are present in every significant market in
the world where ophthalmology is practiced. In 2001, we had sales of over $2.7
billion, earnings before interest, income taxes, depreciation and amortization
of $784 million and net earnings of $316 million.

     In the United States, we have the #1 market share position, based on sales,
in each of the following product categories:

     -  #1 in products for cataract surgery;(1)

     -  #1 in products for vitreoretinal surgery;(2)

     -  #1 in ocular allergy products;(3)

     -  #1 in combination ocular anti-infective/anti-inflammatory products;(3)

     -  #1 in ocular anti-infective products;(3)

     -  #1 in ocular anti-inflammatory products;(3)

     -  #1 in soft contact lens disinfecting solutions;(4) and

     -  #1 in generic ophthalmic pharmaceuticals.(3)

     Outside of the United States, where we derive approximately half of our
sales, we are the largest ophthalmic surgical company based on sales and have
the #1 market share position in several other product categories in many
countries, based on wholesale sales at manufacturer's prices (as reported by IMS
Health Inc. as of June 2001) and other industry data. In Japan, our second
largest market, we have the #1 market share position in soft contact lens
disinfecting solutions, based on the Intage, Inc. report of data for Japan as of
November 2001, the #1 market share position in intraocular lenses, based on
internal estimates prepared using third-party data, and the #1 market share
position in surgical equipment and devices, based on internal estimates.

NOTES ON SOURCES OF MARKET SHARE DATA:

(1) Based on the Market Scope survey of Cataract Surgeons published in August
    2001 and other industry data.

(2) Based on internal estimates and the 2001 Vitreous Society Preferences and
    Trends Survey published in August 2001.

(3) Based on total prescriptions filled as provided by the Scott Levin Source
    Prescription Audit for the year ended December 31, 2001.

(4) Based on sales volume as provided by the AC Nielsen SCANTRACK for the
    year-to-date period ended December 22, 2001 and other industry data.

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OUR COMPETITIVE STRENGTHS

  DEPTH, BREADTH AND QUALITY OF OUR PRODUCTS

     In 2001, we had more than twice the global ophthalmic sales, excluding
sales of eyeglasses and contact lenses, of our nearest competitor. Our broad
range of products represents the strongest portfolio in the ophthalmic industry,
with high-quality and technologically-advanced products across all major product
categories. Our leadership position across most of our product categories
enhances our ability to extend our product offering, through the launch of new
and innovative products, and to expand our geographic reach into ophthalmic
markets worldwide. With over 50 years of experience in the ophthalmic industry,
we believe that the Alcon(R) brand is synonymous with quality, service and
innovation among eye care professionals worldwide. The depth, breadth and
market-leading positions of our products combined with our sales infrastructure
enhance our ability to sell our products effectively across product categories.

  OUR SIGNIFICANT RESEARCH AND DEVELOPMENT COMMITMENT AND COMMERCIAL SUCCESS

     Our commitment to ophthalmic research and development is the most
substantial in our industry. In 2001, we spent approximately $290 million on our
research and development efforts and expect to spend over $1.4 billion over the
next four years. Currently, we have over 1,100 individuals dedicated to our
research and development efforts, including over 270 individuals who are either
medical doctors, Ph.D.s or doctors of optometry. Our research and development
team has built substantial research relationships with over 35 leading academic
institutions worldwide, and our scientists work closely with researchers at each
of these institutions. These research and development efforts have yielded a
strong intellectual property portfolio, including over 2,250 patents and
approximately 1,350 pending patent applications as of January 1, 2002.

     We also have a strong track record of converting discoveries into
commercially viable products and bringing those products to market. We have
successfully introduced 14 significant internally developed products since 1994.
Approximately 45% of our sales in 2001 came from products introduced since 1994.
Moreover, since 1991 we have filed twice as many ophthalmic applications for new
drug approvals in the United States as any of our competitors. In addition, the
integration of our regulatory affairs staff and research and development
department together with our level of regulatory expertise has enabled us to
reduce the time required to bring new products to market around the world. We
believe that our research and development capabilities together with our
experience in converting discoveries into marketable products and improving our
existing products have resulted in, and will continue to provide us with, a very
strong development pipeline.

  OUR LONGSTANDING COMMITMENT TO EYE CARE

     For over 50 years, we have specialized in developing, manufacturing and
marketing innovative and high-quality branded products for eye care
professionals. Through our longstanding commitment to eye care, we have
established close relationships with ophthalmologists, optometrists, opticians
and other eye care professionals around the world. We have built and maintained
these relationships through sales and marketing efforts, programs at our
training facilities in 40 countries, funding ophthalmic research, product
development collaborations and humanitarian efforts. For example, during the
course of a year, we host over 1,500 eye care professionals at our Fort Worth
campus for multi-day training sessions covering ophthalmic procedures using our
products. The strength and quality of our relationships are illustrated by our
ongoing business dealings, in many cases with second-generation eye care
professionals. We believe that our broad and established relationships give us a
competitive advantage in maintaining and growing our business.

  OUR GLOBAL SCALE

     We are present in every significant market in the world where ophthalmology
is practiced and currently our products are sold in over 180 countries. We have
our own local operations in over 75 countries and sales representatives
dedicated to the sale of our products in other countries. Our network of local
operations
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differentiates us from our competitors through the level of direct selling
activities and technical service support we provide for our customers. We built
this network over time through our local surgical training programs and
facilities and through substantial investments in emerging markets when the
practice of ophthalmology was in its developmental stage. For example, in 1993,
we established a surgical training facility in Brazil, and today we have the #1
market share position in surgical products and several pharmaceutical product
categories in that country. We believe that our global infrastructure enables us
to provide a level of customer service and technical support on a global basis
unmatched in the ophthalmic industry.

  OUR MANUFACTURING EXPERTISE

     We have state-of-the-art pharmaceutical and medical device manufacturing
facilities that employ our proprietary technologies. In these facilities, we
manufacture the vast majority of our products, with only limited reliance on
third-party manufacturers. The broad experience, long tenure and low turnover
rate among our workforce allow us to maintain and enhance our manufacturing
know-how and expertise. Our manufacturing operations work closely with our
research and development and regulatory staff throughout the process of product
development to promote a rapid and successful launch once a product is approved.
Our knowledge base in manufacturing, state-of-the-art facilities and capacity
planning enable us to handle increased levels of product demand and product
complexity, while controlling manufacturing costs.

  OUR EXPERIENCED MANAGEMENT TEAM AND WORKFORCE

     The long and diverse experience of our management team in the ophthalmic
industry allows them to understand our business and add value to our operations.
All of the members of our senior executive team have been with us, or a company
we have acquired, for at least 18 years. As a result, the long industry
experience of our senior executives and managers and their strong relationships
with eye care professionals, academic researchers and regulators are important
to our business and differentiate us from other companies in the ophthalmic
industry.

     We also benefit from an experienced multinational and multidisciplinary
workforce of more than 11,000 employees, many of whom have been with us for over
two decades, and we have been included in Fortune's list of the "100 Best
Companies to Work For" in the United States in each of the last four years. The
long tenure of our staff represents a competitive advantage because of their
knowledge of our industry, familiarity with our customers and understanding of
the development, manufacture and sale of our products. Since individuals at many
levels of our organization interact with important customers, researchers and
regulators, the experience of our personnel forms an integral part of the
relationship-building is important to the effective conduct of our business.

OUR STRATEGY

     We intend to continue executing our proven growth and operating strategies
to fulfill our mission to be the global leader in the ophthalmic industry and to
achieve our financial targets. These strategies build on our core strengths of
global brands, broad product portfolio, the largest research and development
commitment and strong marketing presence. We achieve significant benefits of
scale by applying our strategies across our entire global organization.

  BUILD ON OUR LEADERSHIP POSITIONS IN ATTRACTIVE MARKETS

     We use the proven quality of our products and their leadership positions
across a broad range of product categories to increase sales in established
markets and grow our market share, particularly in attractive segments of the
ophthalmic market, such as the treatment of glaucoma and cataracts. This
strategy is implemented by using market-leading products such as our LEGACY (R)
phacoemulsification machines and AcrySof (R) intraocular lenses to increase
sales of related products, including viscoelastics and related pharmaceutical
products. We also intend to continue to rely on our leading products and
existing infrastructure in markets as a base to launch other products and drive
sales of our existing products. For example, as a result of our #1 market share
position in surgical products in Japan, we have built an infrastructure that has
enabled us to introduce our products to customers in other markets, such as soft

                                        48
<PAGE>

contact lens disinfectants, where we now have the #1 market share position, and
we are in the process of registering selected key pharmaceutical products in
Japan.

  CONTINUE TO MAKE SIGNIFICANT INVESTMENTS IN RESEARCH AND DEVELOPMENT

     Research and development is fundamental to our long-term growth and
profitability. We intend to continue our commitment to ophthalmic research and
development, spending in excess of $1.4 billion over the next four years. A
significant portion of this investment will target areas we believe present new
and attractive growth opportunities, including age-related macular degeneration
and other retinal disorders. We will continue to focus our efforts on
introducing the next generation of our products, with a particular emphasis on
the replacement of products reaching the end of their product life cycle. For
example, we are currently in Phase III clinical trials with a new and improved
anti-infective to replace Ciloxan (R) as our leading branded anti-infective. We
will also continue to license compounds from other pharmaceutical companies that
have potential ophthalmic uses as part of our research and development efforts.

  GROW OUR SALES IN EMERGING MARKETS

     Our strategy is to accelerate the adoption of medically advanced
technologies in emerging markets through our global scale and ophthalmic
expertise. The adoption of these technologies not only benefits local
populations but should also increase the size of the global market for our
products. We seek to increase our sales in emerging markets by capitalizing on
our longstanding tradition of setting up in-country infrastructure, including
training programs and facilities, local sales and marketing organizations and
technical service and support teams. We currently have permanent surgical
training facilities in 40 countries around the world on six continents. These
facilities introduce ophthalmologists to our surgical equipment and cataract
products through hands-on training in surgical techniques while exposing them to
leading ophthalmologists. In our experience, this infrastructure has led to
increased sales of our complete product offering and helped establish
relationships that have resulted in faster approval times for our products.
Furthermore, our local sales forces build on the relationships begun in our
training programs.

  CAPITALIZE ON SALES FORCES ACROSS PRODUCT CATEGORIES

     Our strategy is to dedicate expert and focused sales forces to the
specialized needs of our customers. Our selling efforts are organized around
pharmaceutical, surgical and contact lens care and other vision care products,
and we customize these efforts to the medical practice needs of each customer.
We encourage our sales representatives to go beyond traditional selling efforts
and to provide our customers with access to clinical education programs,
clinical studies, technical service assistance and practice management feedback.
We educate our specialized sales forces to recognize cross-selling opportunities
for key products from other product categories and involve the appropriate sales
representatives to market these products.

  LAUNCH PRODUCTS GLOBALLY

     We intend to use our extensive regulatory capabilities, with personnel in
40 countries, to accelerate the approval and launch of new products in key
countries around the world. We coordinate the introduction of new products under
the Alcon (R) brand and, where possible, globally brand our products to promote
better recognition and broad customer acceptance. Our strategy enables us to
benefit more quickly from sales outside of the United States and realize a
faster return on our research and development investments. Our promotion of
AcrySof (R) intraocular lenses, TobraDex (R) and TRAVATAN (R) illustrates this
strategy.

  INCREASE PRIMARY CARE SALES

     The focus of our sales force in the United States extends beyond
ophthalmologists and other eye care professionals to include primary care
physicians, pediatric physicians, allergists and ear, nose and throat
specialists. We established the first direct sales force in the ophthalmic
industry specific to these physicians and believe this sales effort gives us a
significant competitive advantage because they are playing an increasing role in
the delivery of specialty health care services, including eye care. Our primary
care sales

                                        49
<PAGE>

force generates sales of our products by educating primary care and pediatric
physicians and allergists about the effectiveness of our products in treating
conditions they currently diagnose and treat. We believe that our primary care
sales force has been instrumental in our successful launch of Patanol(R), which
currently has a market share of approximately 57% in the United States.

  CONTINUOUSLY IMPROVE MANUFACTURING OPERATIONS

     We continuously seek to produce the highest quality ophthalmic products at
the lowest possible cost while maintaining our high standards of regulatory
compliance. All of our manufacturing facilities employ continuous improvement
programs to reduce costs and improve quality, through cycle-time reductions,
efficiency improvements, automation, where appropriate, plant consolidations and
supply negotiation programs. Our efforts have contributed to a reduction in the
cost of manufactured goods sold (on an IAS basis) as a percentage of sales from
33.4% in 1997 down to 28.8% in 2001.

OUR PRODUCTS

     We manage our business through two business segments: Alcon United States
and Alcon International. Our portfolio spans three key ophthalmic categories:
pharmaceutical, surgical and contact lens care and other vision care products.

  OUR PHARMACEUTICAL PRODUCTS

     We are the global leader in ophthalmic pharmaceuticals, based on sales in
2001. We develop, manufacture and market a broad offering of prescription
ophthalmic pharmaceutical products. We have the #1 market share position in the
United States in ocular anti-infectives, combination ocular anti-
infective/anti-inflammatory products and ocular allergy products and leading
market share positions in many countries outside of the United States in
ophthalmic pharmaceuticals. Recently, we introduced a glaucoma product based on
the most effective class of anti-glaucoma compounds available today. Falcon, our
generic ophthalmic business, has the #1 market share position in generic
ophthalmic pharmaceuticals in the United States.

     The following table lists our principal pharmaceutical products:

<Table>
<Caption>
                OCULAR         OCULAR      OCULAR
GLAUCOMA    ANTI-INFECTIVES  COMBINATION  ALLERGY     GENERICS    OTIC COMBINATION
--------    ---------------  -----------  -------     --------    ----------------
<S>         <C>              <C>          <C>        <C>          <C>
TRAVATAN(R)  Ciloxan(R)      TobraDex(R)  Patanol(R) Timolol GFS  Cipro(R) HC Otic
Betoptic     Tobrex(R)       Maxitrol(R)  Emadine(R) Pred
  S(R)                                               Acetate
Azopt(R)                                  Alomide(R)
</Table>

     Glaucoma Treatment

     We offer a complete line of products to treat glaucoma. In 2001, sales of
our glaucoma products were approximately $263 million, or 28% of our total
pharmaceutical sales.

     In April 2001, we launched TRAVATAN (R), our entry into the prostaglandin
analogue class of glaucoma treatments, in the United States. Prostaglandin
analogues are the newest and most effective class of compounds currently
available to reduce intraocular pressure, the primary characteristic of
glaucoma. As a result, prescriptions for prostaglandin analogue-based products
currently represent an estimated 34% of the market for glaucoma products in the
United States, which grew at an estimated 17% during 2001, while sales of all
other glaucoma products in the United States are estimated to have declined 5%
from 2000 to 2001. TRAVATAN (R) contains the most potent prostaglandin analogue
available today, and our clinical trials have demonstrated that TRAVATAN (R) has
shown even greater effectiveness in reducing and controlling intraocular
pressure in black patients, who represent approximately 25% of the patients
treated for glaucoma in the United States. This greater degree of effectiveness
is significant because African-Americans frequently develop glaucoma at a
younger age than Caucasians and with greater severity. We expect the market for
TRAVATAN (R) to increase as a result of consumer awareness of glaucoma and
                                        50
<PAGE>

increased public funding for glaucoma screening, especially among the
African-American population, which is believed to be significantly
underdiagnosed.

     We have launched TRAVATAN (R) in 23 countries in addition to the United
States, including Brazil, Mexico, Germany, the United Kingdom and Sweden, have
received European Union approval of TRAVATAN (R) and are continuing its launch
in the European Union countries. With its approval in Europe, TRAVATAN (R)
became only the second prostaglandin analogue approved in the European Union.

     In addition to TRAVATAN (R), we offer a complete line of glaucoma products,
including Timolol GFS, Betoptic S (R) and Azopt (R), all of which utilize other
classes of compounds. These products are important to our glaucoma franchise and
currently make up a majority of our glaucoma sales. We expect these glaucoma
products to continue to contribute to our sales as sales of TRAVATAN (R) grow.

     Ocular Anti-infectives, Anti-inflammatories and Combination Therapies

     We currently manufacture and market the broadest range of drugs to treat
bacterial, viral and fungal infections of the eye and to control ocular
inflammation. We hold the #1 market share position in the United States in
combination ocular anti-infective/anti-inflammatory products, the largest
segment of this market. We also have the #1 market share position in the United
States in ocular anti-infectives, the second largest segment of this market, and
the #1 market share position in steroid-based ocular anti-inflammatories in the
United States. In 2001, combined sales of our ocular anti-infectives, ocular
anti-inflammatories and combination therapies were approximately $381 million,
or 41% of our total pharmaceutical sales.

     Our combination ocular anti-infective/anti-inflammatory product,
TobraDex (R), is the #1 combination product in the United States, with a market
share over 60%. TobraDex (R) is convenient and cost-effective because it
combines a broad-spectrum antibiotic with a proven anti-inflammatory.
TobraDex (R) is currently the only branded combination product on the market
without a generic equivalent. We currently market TobraDex (R) in 85 countries.

     Our leading ocular anti-infective product is Ciloxan (R), which is the #1
branded anti-infective product in the United States, with a market share of over
15%. Ciloxan (R), a topical ophthalmic solution utilizing ciprofloxacin, is
effective against a broad spectrum of bacteria, including strains resistant to
more than one antibiotic. In addition, Ciloxan (R) is preferred because it is
offered in both ointment and solution form providing options for treating ocular
infection in a variety of patients. We currently market Ciloxan (R) in 90
countries.

     We also market a combination anti-infective/anti-inflammatory product for
ear infections, Cipro (R) HC Otic. In 1998, we licensed Cipro (R) HC Otic , the
first combination product for ear infections in 25 years, to treat otitis
externa, commonly known as swimmer's ear. Sales of Cipro (R) HC Otic were $56
million in 2001, and Cipro (R) HC Otic currently is marketed in 55 countries. We
estimate that the ear infection market in the United States is approximately
$230 million.

     Ocular Allergy

     We currently market and manufacture products for the treatment of ocular
allergies and have the #1 market share position in the United States, with a
market share of 57%. In 2001, sales of our ocular allergy pharmaceutical
products were approximately $164 million, or 18% of our total pharmaceutical
sales.

     Patanol(R), our market-leading ocular allergy product, was the first
twice-daily ocular allergy product with a dual-action active ingredient, which
acts as both an antihistamine and a mast-cell stabilizer. When we introduced
Patanol(R) in 1997, we estimated the total topical ocular allergy market to be
less than $100 million. Due in large part to the effectiveness of this drug, our
related marketing efforts to physicians and direct-to-consumer advertising, the
methods for treating ocular allergy have been expanded to include topical eye
drops. This evolution in treatment methods has resulted in sales of topical
ocular allergy products in the United States increasing to more than $200
million in 2001. We have received approval of

                                        51
<PAGE>

a European version of Patanol(R), under the name Opatanol(R), and we also are
seeking approval of Patanol(R) in Japan. We currently market Patanol(R) in 42
countries.

     Generic Pharmaceuticals

     We established Falcon Pharmaceuticals in 1994 to manufacture and market
generic ophthalmic pharmaceutical products in the United States. Since we formed
Falcon, it has grown to become the #1 ophthalmic generic pharmaceutical company
in the United States, based on revenues in 2001. Falcon's sales in 2001 were
approximately $64 million, or 7% of our total pharmaceutical sales.

     Falcon's main product is Timolol GFS, a patented gel forming solution used
to treat glaucoma. Timolol GFS is currently the sole generic pharmaceutical
approved by the FDA as a therapeutically equivalent substitute for Merck's
Timoptic XE(R) at the pharmacy. In 2001, Timolol GFS accounted for over 50% of
the prescriptions written for gel formulated timolol. We expect Timolol GFS's
status as the sole generic substitute for Timoptic XE(R) to last until 2006,
when Merck's patent protection expires. Falcon currently manufactures and
markets 50 generic pharmaceutical products. Falcon's other principal generic
products include Pred Acetate 1%, the #1 steroid-based ocular anti-inflammatory
product in the United States.

     Age-related Macular Degeneration

     The causes of AMD are currently unknown, and no cure has been discovered,
although certain laser treatments and other procedures exist. The expected
development of more effective AMD treatments during the next five years is
anticipated to expand the market for AMD treatments into a multi-billion global
market. Today, the AMD market is largely undeveloped because of limited
knowledge and available treatments.

     Product Development and Registrations

     We currently are developing a number of products in all areas of our
pharmaceutical products. In glaucoma, we are exploring a new combination therapy
for hard-to-control glaucoma, including a prostaglandin analogue-containing
combination therapy. In anti-infectives, we are conducting Phase III clinical
trials on moxifloxacin and a new anti-infective/anti-inflammatory combination
product (CiproDex(R)) for use in the eye and the ear. In anti-allergy, we are
developing an improved anti-allergy formulation (Patanol(R) Plus) and a nasal
antihistamine. We are also developing anecortave acetate as a treatment for AMD.
The following table includes additional detail about each of these products in
development.

<Table>
<Caption>
                                            EXPECTED
                                            APPROVAL
         NAME                CONDITION        DATE        AREAS         STATUS
         ----            -----------------  --------  -------------  ------------
<S>                      <C>                <C>       <C>            <C>
New combination therapy  Glaucoma            2006     U.S./EU/Japan  Pre-clinical

Moxifloxacin             Anti-infective      2003         U.S.       Phase III
                                             2005       EU/Japan     Phase II

CiproDex(R)(ocular)      Anti-infective/     2004         U.S.       Phase III
                         Anti-inflammatory   2005          EU        Phase III

CiproDex(R) Otic         Anti-infective/     2003         U.S.       Phase III
                         Anti-inflammatory   2004          EU        Phase III

Patanol(R) Plus          Allergy             2004         U.S.       Phase III
                                             2005          EU        Pre-clinical
                                             N/A(1)       Japan      Pre-clinical

Nasal antihistamine      Allergy             2005        U.S./EU     Phase II

Anecortave acetate       AMD                 2005     U.S./EU/Japan  Phase II
</Table>

---------------
(1) We currently are unable to determine an expected approval date.

                                        52
<PAGE>

     We are also seeking registration of certain of our existing products in
additional countries. The products for which we are expecting to receive
approval include the following:

<Table>
<Caption>
                        EXPECTED
                        APPROVAL
  PRODUCT    CONDITION   DATES    AREAS
  -------    ---------  --------  -----
<S>          <C>        <C>       <C>
Betoptic
  S(R)       Glaucoma       2002  Japan
Azopt(R)     Glaucoma       2003  Japan
TRAVATAN(R)  Glaucoma       2006  Japan
Patanol(R)   Allergy        2002  EU
                            2005  Japan
</Table>

  OUR SURGICAL PRODUCTS

     We are the global leader in ophthalmic surgical products and manufacture
and market the most comprehensive product offering available today. We have the
#1 market share position in the United States in cataract and vitreoretinal
surgical products and estimate that our market share position outside of the
United States is similar.

     The following table lists our principal surgical products:

<Table>
<Caption>
          CATARACT                     REFRACTIVE                  VITREORETINAL            GENERAL SURGICAL
          --------                     ----------                  -------------            ----------------
<S>                           <C>                           <C>                           <C>
Series 20000 (R) LEGACY (R)   LADARVision(R) 4000           Accurus(R) surgical system    BSS Plus(R) surgical
  surgical system             laser                         Accurus(R) cassettes and        irrigating
LEGACY(R) cassettes                                           probes                      solution
AcrySof (R) multi-piece       LADARTome                     Grieshaber microsurgical      Custom Pak(R)
  intraocular lens            microkeratome                 instruments                   surgical   procedure
AcrySof (R) single-piece                                    Perfluoron liquid             packs
  intraocular lens
Viscoat(R) viscoelastic
Provisc(R) viscoelastic
Duovisc(R) viscoelastic
A-OK(R) surgical knives
</Table>

     Cataract Surgery

     We are the global leader in products used to perform cataract surgery. We
support our market leadership position through a comprehensive offering of
single-use disposable products. Sales of our products for cataract surgery in
2001 were approximately $1.2 billion, or 85% of our total surgical sales. We
currently market our products for cataract surgery in substantially all of the
countries in which we sell products.

     Our Series 20000 (R) LEGACY (R) phacoemulsification system is the market
leader in the United States. Currently, over half the phaco systems installed in
the United States are LEGACY (R) models and, during 2001, over 60% of the
cataract procedures performed in the United States used a LEGACY (R) system. In
countries outside of the United States where phacoemulsification is practiced,
we estimate that our market shares are similar to those in the United States. As
a result of the increasing adoption of phacoemulsification in many emerging
markets, we believe that our leading position provides significant growth
potential for sales of our phacoemulsification systems. We offer, and expect to
continue to offer, local education programs to accelerate the adoption of the
phacoemulsification procedure in emerging markets.

     Our comprehensive line of single-use products for cataract procedures
includes the cassettes used in the LEGACY (R) system, a full line of
viscoelastics to protect delicate tissues of the eye during the procedure,
surgical knives and surgical irrigating solutions.

                                        53
<PAGE>

     Our AcrySof (R) foldable intraocular lenses currently are the most widely
implanted foldable intraocular lens in the world. AcrySof (R) intraocular lenses
are made of the first material specially engineered for use in an intraocular
lens, which material is more compatible with the human eye than silicone. In
2001, AcrySof (R) intraocular lenses were used in over 40% of the approximately
2.5 million cataract surgeries performed in the United States. In 2000, we
introduced a single-piece version of our AcrySof (R) intraocular lens which has
demonstrated additional clinical advantages over our multi-piece version. In
connection with our efforts to bring phacoemulsification to ophthalmologists in
emerging markets, we are also educating surgeons about the techniques and
advantages of foldable intraocular lens products.

     Refractive Surgery

     We are one of the leaders in the global market for laser refractive
surgical products, with a #2 market share position in the United States. We
entered the laser refractive market with our acquisition of Summit during the
third quarter of 2000. In 2001, sales of our laser refractive products and
related technology fees were approximately $88 million, or 6% of our total
surgical sales. We currently market our laser refractive surgical equipment in
44 countries.

     Our LADARVision(R) 4000 excimer laser employs the most advanced laser
technology currently used for refractive procedures. Its leading features,
active radar eye tracking and small-laser beam corneal shaping, were unavailable
in the United States prior to its introduction. The LADARVision(R) laser uses
the first FDA-approved active eye tracker to increase the accuracy of the laser
refractive procedure and to compensate for patient eye movements. These features
allow the LADARVision(R) laser to be used to correct a wider range of refractive
conditions. We also market the LADARTome microkeratome, which is used to create
the flap in the cornea prior to the LASIK procedure.

     Vitreoretinal Surgery

     We are the global leader in products for surgical procedures for the back
of the eye. Our vitreoretinal surgical product offering is the most
comprehensive in the industry, and we have a leading position in most
categories. In 2001, sales of our products for vitreoretinal surgery were
approximately $119 million, or 9% of our total surgical sales. We currently
market our vitreoretinal surgical products in substantially all the countries in
which we sell products.

     We have established our position in vitreoretinal surgical products based
on the market-leading Accurus(R) surgical system, which we believe was used in
over half of vitreoretinal surgeries performed in the United States in 2001. The
Accurus(R) integrates all automated, non-laser surgical functions used in
vitreoretinal surgery, and some Accurus(R) models can also perform phaco
procedures for cataract removal. We also manufacture and market single-use
cassettes and cutting probes for the Accurus(R). We support the leading position
of the Accurus(R) through our full line of vitreoretinal products, including
lasers, hand-held microsurgical instruments used to remove membranes and other
tissues and repair the retina and various gases and liquids used to stabilize
the retina during vitreoretinal procedures.

     Custom Pak(R)

     To provide convenience and superior value for ophthalmic surgeons, we have
developed the Custom Pak(R) surgical procedure pack. We market our Custom Pak(R)
for cataract, refractive and vitreoretinal surgical procedures. Unlike
conventional surgical procedure packs, the Custom Pak(R) allows ophthalmic
surgeons and their staff to customize and sequence the products included in the
surgical procedure pack. For a single price, our Custom Pak(R) includes our
single-use products required for the procedure, combined with non-Alcon
products. We believe that our Custom Pak(R) allows ophthalmic surgeons to
improve their efficiency in the operating room, and this gives us the
opportunity to provide access to our single-use products in a value-added
package. We estimate that a Custom Pak(R) was used in a majority of the cataract
surgeries performed in the United States in 2001. Our Custom Pak(R) has enjoyed
similar success in Europe, and we see growth potential in other markets,
including in Latin America and Japan.

                                        54
<PAGE>

  Product Development

     We currently have products in development in the areas of cataract and
refractive surgery. In cataract surgery, we are developing the Infinity
next-generation cataract removal system to replace the LEGACY(R) console and two
new models of our AcrySof(R) intraocular lens, one of which is a blue blocking
version that blocks visible blue light, to better protect the retina, and the
other of which is a multifocal version that may reduce patient dependence on
eyeglasses following cataract surgery. We are also developing a new generation
of AcrySof(R) intraocular lens. In the area of refractive surgery, we have been
working to refine and improve our wavefront measurement technology
(LADARWave(TM)). Wavefront measurement technology involves the pulsing of a
narrow beam of light into the eye which generates data that is used to create a
three-dimensional map of the cornea. We are also developing a system
(LADARWave(TM) Custom Cornea(R) Wavefront System) that combines the
LADARWave(TM) with our LADARVision(R) 4000 laser to permit customized treatment
of refractive errors. The following table includes additional detail about each
of these products in development.

<Table>
<Caption>
                                              EXPECTED
                                              APPROVAL
NAME                              CONDITION     DATE         AREAS            STATUS
----                              ----------  --------   -------------  ------------------
<S>                               <C>         <C>        <C>            <C>
AcrySof(R) Blue Blocker           Cataract      2002     U.S./EU        Registration
                                                2003     Japan          Registration
AcrySof(R) Multifocal             Cataract      2004     U.S./EU        Active clinical
                                                2005     Japan          Early clinical
AcrySof(R) II                     Cataract      2002     EU             Registration
                                                2003     U.S.           Registration
                                                 N/A(1)  Japan          Active development
Infinity next generation          Cataract      2003     U.S./EU/Japan  Active development
  cataract system
Improved viscoelastic             Cataract      2003     U.S./EU/Japan  Active development
LADARWave(TM) Custom              Refractive    2002     U.S./EU        Active development
  Cornea(R) Wavefront System
                                                2004     Japan          Early development
LADARWave(TM) Diagnostic          Refractive    2002     U.S./EU/Japan  Registration
LADARTome modifications           Refractive    2002     U.S./EU/Japan  Late development
</Table>

---------------
(1) We currently are unable to determine an expected approval date.

  OUR CONTACT LENS CARE AND OTHER VISION CARE PRODUCTS

     We manufacture and market contact lens care products, artificial tears and
ocular vitamins. We currently market our contact lens care and dry eye products
in most of the countries where we sell products.

     The following table lists our principal products in these areas:

<Table>
<Caption>
         CONTACT LENS CARE                        ARTIFICIAL TEARS               OCULAR VITAMINS
         -----------------                        ----------------               ---------------
<S>                                        <C>                                   <C>
OPTI-FREE(R) EXPRESS(R) No Rub(TM)         Tears Naturale(R) Forte               ICAPS(R) dietary
  multi-purpose disinfecting               lubricant eye                         supplements
solution                                   drops
OPTI-FREE(R) multi-purpose solution        Tears Naturale(R) Free
OPTI-FREE(R) SUPRACLENS(R) liquid          lubricant eye
  enzyme                                   drops
CLERZ(R) Plus lens rewetting drops         Bion(R) Tears lubricant eye
UNIQUE(TM)pH disinfecting solution         drops
</Table>

  Contact Lens Care Products

     We currently hold the #1 market share position in soft contact lens
disinfectants in the United States, based on revenues in the first nine months
of 2001. Our products include disinfecting solutions to destroy

                                        55
<PAGE>

harmful microorganisms in and on the surface of contact lenses, daily cleaners
to remove undesirable film and deposits from contact lenses, weekly enzymatic
cleaners to remove protein deposits from contact lenses and lens rewetting drops
to improve wearing comfort for contact lenses.

     OPTI-FREE(R) EXPRESS(R) No Rub(TM) multi-purpose disinfecting solution, our
leading contact lens care product with a market share of over 20% in the United
States, based on revenues in 2001, was the first multi-purpose disinfecting
solution to obtain FDA approval to make a "no rub" claim. OPTI-FREE(R)
EXPRESS (R) No Rub(TM) utilizes a multi-purpose disinfecting solution with
high-capacity disinfection and superior protein cleaning benefits, without
requiring rubbing of the contact lenses. We introduced OPTI-FREE(R) EXPRESS (R)
No Rub(TM) in 1999 and currently market it in most countries throughout the
world.

     Our line of contact lens care products also includes CLERZ(R) Plus lens
rewetting drops, which moisten contact lenses during wear and are clinically
proven to reduce protein build-up, OPTI-FREE(R) SUPRACLENS(R) preservative-free
active cleaning solution and UNIQUE(TM) pH multi-purpose disinfecting and
cleaning solution for hard contact lenses.

     Other Vision Care Products

     We manufacture and market artificial tears to treat dry eye and ocular
vitamins formulated to promote good eye health. We offer a complete line of
products for the dry eye sufferer. We distinguish our dry eye products from
other lower-cost, consumer brands by their similar composition to natural tears
and marketing our artificial tears to eye care professionals. Our Tears
Naturale(R) Forte employs a unique Trisorb(TM) polymer to retain moisture in the
eye, and we market a preservative-free formula of Tears Naturale(R). Our Bion(R)
Tears is a new-generation artificial tears product containing zinc and
bicarbonate and is specially formulated for severe dry eye sufferers.

     We market ICAPS(R), a vitamin specially formulated to promote good eye
health. The results of recent clinical trials sponsored by the National Eye
Institute found that high levels of anti-oxidants and zinc reduce the risk of
AMD. ICAPS(R) includes the anti-oxidants and zinc ingredients referenced in the
National Eye Institute study plus lutein and zeaxanthin for a complete ocular
vitamin formulation.

  Product Development

     We currently are developing a number of products in the areas of contact
lens care and dry eye. We are developing an improved preservative for our
contact lens care products and an enhanced cleaning system for our OPTI-FREE(R)
EXPRESS(R) contact lens disinfecting solution. In the area of dry eye, we are
developing a dry eye product that we expect to be available on a prescription
basis, a new polymer system and a new preservative for our dry eye products. The
following table includes additional detail about each of these products in
development.

<Table>
<Caption>
                                                EXPECTED
                                                APPROVAL
NAME                                CONDITION     DATE          AREAS                STATUS
----                                ---------   --------   ---------------   -----------------------
<S>                                 <C>         <C>        <C>               <C>
New preservative -- tears product    Dry eye        2002   U.S./EU           Late stage clinical
                                                  N/A(1)   Japan             Active clinical trials
New polymer -- tears product         Dry eye        2002   U.S./EU           Active clinical trials
                                                    2003   Japan             Active clinical trials
Prescription dry eye product         Dry eye        2005   U.S./EU/Japan     Phase I clinical trials
Intelliport Punctal Plug             Dry eye        2002   U.S./EU/Japan     Late stage clinical
OPTI-FREE(R) EXPRESS(R)              Contact        2002   U.S./EU           Late stage clinical
  enhanced cleaning system          lens care
New disinfectant                     Contact        2004   U.S./EU           Early development
                                    lens care       2005   Japan             Early development
</Table>

---------------
(1) We currently are unable to determine an expected approval date.

                                        56
<PAGE>

SALES AND MARKETING

     We conduct our sales activities through more than 50 local operating
entities and 28 scientific offices around the world. We have a sales force of
over 2,200 sales representatives consisting of approximately 700 sales
representatives in the United States, our largest market, and approximately
1,500 sales representatives outside of the United States. We use the broad reach
of our local operations to provide technical service to our customers through
180 technicians in the United States and 250 technicians outside of the United
States. All of our surgical technical service in the United States and a high
percentage of that service outside the United States is provided by our service
technicians. In countries where we do not have local operations or a scientific
office, we use distributors to sell and handle the physical distribution of our
products. Outside of the United States, our largest markets by sales are Japan,
France, Canada, Spain, Germany, Brazil, Italy, the United Kingdom and Mexico.

     We organize our selling efforts around pharmaceutical, surgical and contact
lens care and other vision care products and customize these efforts to the
medical practice needs of each customer. We encourage our sales representatives
to go beyond traditional selling efforts and to provide our customers with
access to clinical education programs, clinical studies, technical service
assistance and practice management feedback. We educate our specialized sales
forces to recognize cross-selling opportunities for key products from other
product categories.

     In each of our markets, we rely on our strong relationships with eye care
professionals to maintain and expand our market share. We have established
several long-standing programs that bring ophthalmic residents, optometrists and
other eye care professionals to our Fort Worth campus for multi-day training
sessions and educational seminars. We also sponsor ophthalmic conferences around
the world, and we conduct training seminars where leading ophthalmologists
discuss the therapeutic attributes of our products and demonstrate surgical
techniques using our products. We support these programs by having our sales
representatives work closely with our customers and their staffs to better
understand their practices and solicit feedback, which is important to our
development of new products. We currently have permanent surgical training
facilities in 40 countries around the world on six continents. These facilities
introduce ophthalmologists to our surgical equipment and cataract products
through hands-on training in surgical techniques while exposing them to leading
ophthalmologists. In our experience, this infrastructure has resulted in
increased sales of our complete product offering and helped establish
relationships that have assisted in faster approval times for our products.
Furthermore, our local sales forces build on the relationships begun in our
training programs.

     Most of our global marketing efforts are supported by advertising in trade
publications and by sales representatives attending regional and national
medical conferences. We reinforce our marketing efforts with targeted and timely
promotional materials that our sales force presents to the eye care professional
in the office, hospital or surgery center setting. We supplement these marketing
efforts through direct mailings to eye care professionals and e-detailing. To
coordinate our sales efforts, we have begun using customer relationship
management software. Moreover, in the United States and Japan, we use
direct-to-consumer advertising to promote selected products.

     While we market all of our products by calling on eye care professionals,
our direct customers and distribution methods differ across business lines.
Distributors, wholesalers, hospitals, government agencies, large retailers and
physicians are the direct customers for our pharmaceutical products. We sell our
surgical products directly to hospitals and ambulatory surgical centers. In the
United States, over 80% of our contact lens care products are sold to large
grocery, drug and general merchandise retailers. Outside of the United States,
we sell most of our contact lens care and other vision care products directly to
retailers and optical chains, while a smaller amount is sold to distributors for
resale directly to smaller retailers and eye care professionals. No single
customer accounted for 10% or more of our sales in 2001.

     As a result of changes in health-care economics, managed care organizations
have become the largest payors for health care services in the United States. In
an effort to control prescription drug costs, over 95% of managed care
organizations use a formulary. We have a dedicated managed care sales team that

                                        57
<PAGE>

actively seeks to get our products on these formularies and to improve the
position of our products once they are on formulary.

RESEARCH AND DEVELOPMENT

     We have the largest research and development commitment of any eye care
company worldwide. Our research and development organization consists of
approximately 1,100 employees, including more than 270 individuals who are
either M.D.s, doctors of optometry or Ph.D.s. Our researchers have extensive
experience in the field of ophthalmology and frequently have academic or
practitioner backgrounds to complement their commercial experience. We organize
our teams around our pharmaceutical, surgical and contact lens care and other
vision care products. Candidates for pharmaceutical and contact lens care
product development originate from our internal research, from our extensive
relationships with academic institutions and from our licensing of molecules
from other pharmaceutical companies. Our surgical design concepts are internally
developed by staff engineers and scientists who, in addition to their own
research, gather ideas from opthalmic surgeons and clinicians in the involved
fields. Strong collaborative efforts among our research and development,
regulatory affairs and manufacturing organizations beginning in the development
phase allow us to reduce the time to market for our new products. Our research
and development organization has been designed to drive global registration of
products through a focused central research facility in Fort Worth, Texas,
combined with regionally based clinical and regulatory personnel in 40 countries
outside of the United States.

     We have invested approximately $1.1 billion over the last five years
(including $213 million in 1999, $246 million in 2000 and $290 million in 2001)
to carry out our strategy of developing products primarily from our own research
and development activities, and we expect to invest over $1.4 billion more over
the next four years. The fact that 45% of our sales in 2001 were derived from
products introduced by our research and development department since 1994
highlights the success of our research and development division in developing
commercially viable products. As an indicator of our productivity, since the
beginning of 1996, we have obtained over 1,400 new patents and received more
than 2,000 product approvals in various jurisdictions.

     We enter into license agreements in the ordinary course of our business
with respect to compounds used in our pharmaceutical products. We have a number
of agreements with pharmaceutical companies which allow us to screen compounds
for potential uses in the eye. We also have a small number of contracts with
companies that give us the right to develop ophthalmic products from their
compounds.

     Our research and development department maintains an extensive network of
technical relationships with scientists working in university laboratories and
with leading ophthalmologists, inventors and investigators in the pharmaceutical
and surgical products field. The principal purpose of these collaborative
scientific interactions is to take advantage of leading-edge research from
academic investigators and recognized surgeons to complement our internal
technical capabilities. We currently have relationships with leading ophthalmic
researchers at more than 35 academic centers around the world. We also support
our direct academic relationships with grants from the Alcon Research Institute
which we fund. These grants recognize research undertaken in the general area of
ophthalmology. These grants are awarded by an independent board of
ophthalmologists and academic researchers.

MANUFACTURING AND SUPPLIES

  MANUFACTURING

     We generally organize our manufacturing facilities along product
categories, with most plants being primarily dedicated to the manufacture of
either surgical equipment and surgical medical devices or pharmaceutical and
contact lens care products. Our functional division of plants reflects the
unique differences in regulatory requirements governing the production of
surgical medical devices and pharmaceuticals, as well as the different technical
skills required of employees in these two manufacturing environments. All of our
manufacturing plants in the United States and Europe are ISO 9001 certified.

                                        58
<PAGE>

     We employ cost reduction programs, known as continuous improvement
programs, involving activities such as cycle-time reductions, efficiency
improvements, automation, to the extent appropriate, plant consolidations and
material negotiation programs as a means to reduce manufacturing and component
costs. To comply with good manufacturing practices and to improve the skills of
our employees, we train our direct labor manufacturing staff throughout the
year. Our professional employees are trained in various aspects of management,
regulatory and technical issues through a combination of in-house seminars,
local university classes and trade meetings.

     We employ approximately 1,800 people to manufacture our pharmaceutical and
contact lens care products at eight facilities in the United States, Belgium,
France, Spain, Brazil and Mexico. We employ approximately 2,500 people to
manufacture surgical equipment and other surgical medical devices at nine
facilities in the United States, Belgium, Switzerland, Ireland and China.
Currently, we manufacture substantially all of our pharmaceutical, contact lens
care and surgical products internally and rely on third-party manufacturers for
only a small number of products.

     Due to the complexity of certain manufacturing technologies and the costs
of constructing and maintaining duplicate facilities, a number of our key
products are manufactured at only one of our facilities. Some of these key
products include:

<Table>
<Caption>
                          PRODUCTS                                       FACILITY
                          --------                                       --------
<S>                                                            <C>
U.S. pharmaceutical products                                   Fort Worth, Texas
Intraocular lenses                                             Huntington, West Virginia
Provisc(R), Viscoat(R), Duovisc(R)                             Puurs, Belgium
OPTI-FREE(R) EXPRESS(R) No Rub(TM) (for U.S. distribution)     Fort Worth, Texas
Accurus(R)/LEGACY(R)                                           Irvine, California
LADARVision(R) 4000                                            Orlando, Florida
</Table>

     In addition, certain of our products are produced for us by third parties,
each at a single location. These products and suppliers pursuant to contracts in
the ordinary course include:

<Table>
<Caption>
                          PRODUCT                                        SUPPLIER
                          -------                                        --------
<S>                                                            <C>
Cipro(R) HC Otic                                               Bayer Aktiengesellschaft
LadarWave(TM)                                                  Zeiss Humphrey
</Table>

  SUPPLIES

     The active ingredients used in our pharmaceutical and contact lens care and
general eye care products are sourced from facilities approved by the FDA or
other applicable health regulatory authorities. Because of the proprietary
nature and complexity of the production of these active ingredients, a number of
them are only available from a single FDA-approved source. When supplies are
single-sourced, we try to maintain a sufficient inventory consistent with
prudent practice and production lead-times. The majority of active chemicals and
biological raw materials and selected inactive chemicals are covered through
long-term supply contracts. The sourcing of components used in our surgical
products differs widely due to the breadth and variety of products. Inventory
levels for components used in the production of our surgical products are
established based on delivery times and other supply chain factors to ensure
sufficient inventory at all times. The prices of our supplies are generally not
volatile.

                                        59
<PAGE>

     The following table identifies certain single-source suppliers of raw
materials acquired pursuant to contracts entered into in the ordinary course of
business and the Alcon product that contains this raw material:

<Table>
<Caption>
            SUPPLIER NAME                       RAW MATERIAL             ALCON PRODUCT
            -------------                       ------------             -------------
<S>                                    <C>                             <C>
Dow Chemical Co.                       travaprost                      TRAVATAN(R)
Bayer Aktiengesellschaft               ciprofloxacin                   Ciloxan(R)
Kyowa Hakko Kogyo Co. Ltd.             olapatadine                     Patanol(R)
Solutia, Inc.                          myristinaminde                  OPTI-FREE(R)
                                                                       EXPRESS(R)
Plantex USA, Inc.                      timolol                         Timolol GFS
Genzyme Corporation                    hyaluronate acid-sterile        Provisc(R)
Lifecore Biomedical, Inc.              hyaluronate non-sterile         Viscoat(R)
</Table>

COMPETITION

     The ophthalmic industry is highly competitive and subject to rapid
technological change and evolving industry requirements and standards. Companies
within our industry compete on technological leadership and innovation, quality
and efficacy of their products, relationships with eye care professionals and
health care providers, breadth and depth of product offering and pricing. The
presence of these factors varies across our product offerings. We provide a
broad line of proprietary eye care products and compete in all product
categories in the ophthalmic market. Even if our principal competitors do not
have a comparable range of products, they can, and often do, form strategic
alliances and enter into co-marketing agreements to achieve comparable coverage
of the ophthalmic market.

  PHARMACEUTICAL

     Competition in the ophthalmic pharmaceutical market is characterized by
category leadership of products with superior technology, including increases in
clinical effectiveness (e.g., new drug delivery systems, formulations and
combination products), the development of therapies for previously untreated
conditions (e.g., AMD) and competition based on price from lower-priced generic
pharmaceuticals.

     Our main competitors in the pharmaceutical market are Allergan, Bausch &
Lomb, Novartis, Pharmacia, Merck, Daiichi and Santen.

  SURGICAL

     Competition in the ophthalmic surgical market is characterized by category
leadership with products that provide superior technology and performance.
Innovation, performance and long-term relationships are also key factors in this
competitive environment. Surgeons rely on the quality, convenience, value and
efficiency of a product and the availability and quality of technical service.
While we compete throughout the field of ophthalmic surgery, our principal
competitors vary somewhat in each area. Among our principal competitors in the
ophthalmic surgical market, we compete with Bausch & Lomb across most of the
market. Allergan, Pharmacia and Baxter each compete in limited segments of the
surgical market. In addition to Bausch & Lomb, our principal competitors in
laser refractive surgical equipment are VISX and Nidek.

  CONTACT LENS CARE AND OTHER VISION CARE PRODUCTS

     Competition in the contact lens care market is characterized by increases
in market share in a maturing market. Recommendations from eye care
professionals and customer brand loyalty as well as our product quality and
price are key factors in maintaining market share in these products. Our
principal competitors in contact lens care products are Bausch & Lomb, Allergan
and Novartis. We compete with Allergan in dry eye and Bausch & Lomb in ocular
vitamins.

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<PAGE>

INTELLECTUAL PROPERTY

     We strive to protect our investment in the research, development,
manufacturing and marketing of our products through the use of patents,
trademarks and copyrights. We own or have rights to a number of patents,
trademarks, copyrights, trade secrets and other intellectual property directly
related and important to our businesses. As of January 1, 2002, we owned
approximately 870 United States patents and pending United States patent
applications and over 2,700 corresponding patents and patent applications
outside of the United States.

     We believe that our patents are important to our business but that no
single patent, or group of related patents, currently is of material importance
in relation to our business as a whole. Patents for individual products extend
for varying periods of time according to the date a patent application is filed
or a patent is granted and the term of patent protection available in the
jurisdiction granting the patent. The scope of protection provided by a patent
can vary significantly from country to country.

     Our strategy is to develop patent portfolios for our research and
development projects in order to obtain market exclusivity for our products in
our major markets. Although the expiration of a patent for a product normally
results in the loss of market exclusivity, we may continue to derive commercial
benefits from these products. We routinely monitor the activities of our
competitors and other third parties with respect to their use of intellectual
property. If we believe our patents have been infringed, we generally file
patent infringement suits with the appropriate courts. We aggressively defend
the patents we hold relating to our lines of business. We seek to vigorously
contest claims brought by other patent holders.

     In addition to these patents and pending patent applications in the United
States and selected non-U.S. markets, we use proprietary know-how and trade
secrets in our businesses. In some instances, we also obtain from third parties
licenses of the right to use intellectual property, principally patents, which
are important to our businesses.

     Worldwide, all of our major products are sold under trademarks that we
consider in the aggregate to be important to our businesses as a whole. We
consider trademark protection to be particularly important in the protection of
our investment in the sales and marketing of our pharmaceutical and contact lens
care and general eye care products. The scope and duration of trademark
protection varies widely throughout the world. In some countries, trademark
protection continues only as long as the mark is used. Other countries require
registration of trademarks and the payment of registration fees. Trademark
registrations are generally for fixed but renewable terms.

     We rely on copyright protection in various jurisdictions to protect the
exclusivity of the code for the software used in our surgical equipment, which
forms an important component of our surgical equipment. The scope of copyright
protection for computer software varies throughout the world, although it is
generally for a fixed term which begins on the date of copyright registration.

PHILANTHROPIC EFFORTS

     We have a longstanding commitment to bringing ophthalmic products to those
who would not otherwise have access to them. Our Medical Missions Program
supported more than 800 humanitarian efforts in 2001 involving over 2,500
volunteer eye care professionals in 83 countries. Using products that we
provided without charge, these eye care professionals performed 24,000 cataract
procedures in 2001. We also conduct a glaucoma assistance program in the United
States, which in 2001, provided Alcon glaucoma products to more than 18,000
patients.

GOVERNMENT REGULATION

  OVERVIEW

     We are subject to comprehensive government controls governing the research,
clinical and non-clinical development, manufacturing, labeling, advertising,
promotion, safety and other reporting, storage, distribution, import, export and
marketing of our products in essentially all countries of the world. National

                                        61
<PAGE>

health regulatory agencies require pre-approval of pharmaceutical and medical
devices prior to their entry into that country's marketplace. State and local
laws also apply to our activities. This section summarizes the applicable
regulation in the United States, European Union and Japan.

  PHARMACEUTICAL DEVELOPMENT AND REGISTRATION PROCESS IN THE UNITED STATES

     The pharmaceutical research, development and registration process in the
United States is typically intensive, lengthy and rigorous and can generally
take several years, depending on the product under consideration. During
pre-clinical testing, pharmaceutical studies on the chemical and physical
stability of candidate formulations, as well as biological testing of the
compound, are conducted to demonstrate the activity of the compound against the
targeted disease in animal models and to evaluate the effects of the new drug
candidate on other organ systems in order to establish its therapeutic
effectiveness relative to its safety.

     In order for human clinical studies of a new drug to commence in the United
States, an Investigational New Drug Application, or IND, is filed with the FDA;
similar notifications are required in other countries. In general, studies may
begin in the United States without specific approval by the FDA after a 30-day
review period has passed. Clinical testing generally follows a prescribed format
that involves initial exposure to normal, non-diseased subjects in Phase I
clinical trials, followed by exposure of patients with disease to the new drug
candidate in Phase II and Phase III clinical trials. United States law requires
that studies conducted to support approval of a new drug be "adequate and
well-controlled" as a way to control possible bias. This generally means that a
control, either placebo or a drug already approved in the market for the same
disease, is used as a reference.

     Following the completion of clinical trials, we thoroughly analyze the data
to determine if the clinical trials successfully demonstrate safety and
efficacy. If they do, a New Drug Application, or NDA, is filed with the FDA
along with proposed labeling for the product. The FDA is generally required to
review and make a recommendation for approval of a new drug within 12 months,
although final FDA action on the NDA can take substantially longer and may
involve review and recommendations by an independent FDA advisory committee. The
FDA may require revisions to the product labeling and may require that
additional studies be conducted as a condition of approval.

  MEDICAL DEVICE DEVELOPMENT AND REGISTRATION PROCESS IN THE UNITED STATES

     Medical devices, including IOLs and surgical equipment used in cataract
procedures and laser refractive surgery, are also subject to regulation in the
United States by the FDA. Approval to market new device products is, in general,
achieved by a process not unlike that for new pharmaceuticals, requiring
submission of extensive pre-clinical and clinical evaluations in a new product
application. The process of developing data sufficient to support a regulatory
filing on a new device is costly and generally requires at least several years
for completion.

     In the United States, medical devices are classified by the FDA as Class I,
Class II or Class III based upon the level of risk presented by the device.
Class I devices present the least risk and are generally exempt from the
requirement of pre-market review. Certain Class II devices are also exempt from
pre-market review. Most non-exempt Class II devices and certain Class III
devices are marketed after submission of a pre-market notification under a
process which is known as a 510(k). The pre-market notification must demonstrate
that the proposed device is "substantially equivalent" in intended use and in
safety and effectiveness to a legally marketed "predicate device." Other Class
III devices and devices not substantially equivalent to a predicate device are
subject to the most stringent regulatory review and cannot be marketed for
commercial sale in the United States until the FDA grants a pre-market approval,
a PMA, for the device.

     If the FDA's evaluation of a PMA application is favorable, the FDA
typically issues an "approvable letter" requiring the applicant's agreement to
comply with specific conditions or to supply specific additional data or
information in order to secure final approval of the PMA application. Once the
conditions contained in the approvable letter are satisfied, the FDA will issue
a PMA order for the
                                        62
<PAGE>

approved indications, which can be more limited than those originally sought by
the manufacturer. The PMA order can include post-approval conditions that the
FDA believes are necessary to ensure the safety and effectiveness of the device
including, among other things, restrictions on labeling, promotion, sale and
distribution. Products manufactured and distributed pursuant to a PMA are
subject to extensive, ongoing regulation by the FDA. The FDA review of a PMA
application generally takes one to two years from the date the application is
accepted for filing but may take significantly longer.

  PHARMACEUTICAL AND MEDICAL DEVICE REGISTRATION OUTSIDE THE UNITED STATES

     European Union

     In the European Union, our products are subject to extensive regulatory
requirements. As in the United States, the marketing of medicinal products has
for many years been subject to the granting of marketing authorizations by
regulatory agencies. Particular emphasis is also being placed on more
sophisticated and faster procedures for reporting of adverse events to the
competent authorities.

     In the European Union, approval of new chemical compounds can at present be
obtained only through one of two processes:

     -  Mutual recognition procedure.  An applicant submits an application in
        one European Union member state, known as the Reference Member State.
        Once the Reference Member State has granted the marketing authorization,
        the applicant may choose to submit applications in other concerned
        member states, requesting them to mutually recognize the marketing
        authorization already granted. Under this mutual recognition process,
        authorities in other concerned member states have 55 days to raise
        objections, which must then be resolved by discussions among the
        concerned member states, the Reference Member State and the applicant
        within 90 days of the commencement of the mutual recognition procedure.
        If any disagreement remains, all considerations by authorities in the
        concerned member states are suspended and the disagreement is resolved
        through an arbitration process. The mutual recognition process results
        in separate national marketing authorizations in the Reference Member
        State and each concerned member state.

     -  Centralized procedure.  This procedure is currently mandatory for
        products developed by means of a biotechnological process and optional
        for new active substances and other "innovative medicinal products with
        novel characteristics." Under this procedure, an application is
        submitted to the European Agency for the Evaluation of Medical Products.
        Two European Union member states are appointed to conduct an initial
        evaluation of each application. These countries each prepare an
        assessment report, which are then used as the basis of a scientific
        opinion of the Committee on Proprietary Medical Products. If this
        opinion is favorable, it is sent to the European Commission which drafts
        a decision. After consulting with the member states, the European
        Commission adopts a decision and grants a marketing authorization, which
        is valid throughout the European Union and confers the same rights and
        obligations in each of the member states as a marketing authorization
        granted by that member state.

     Several other European countries outside of the European Union, for example
in the eastern European region, accept European Union review and approval as a
basis for their own national approval.

     The European Union regulatory regime for most medical devices became
mandatory in June 1998. Under this regime, a medical device may be placed on the
market within the European Union if it conforms with certain "essential
requirements." The most fundamental essential requirement is that a medical
device must be designed and manufactured in such a way that it will not
compromise the clinical condition or safety of patients, or the safety and
health of users and others. In addition, the device must achieve the
performances intended by the manufacturer and be designed, manufactured and
packaged in a suitable manner. To assist manufacturers in satisfying the
essential requirements, the European Commission has requested the preparation of
standards applicable to medical devices. These include standards governing
common requirements, such as sterilization and safety of medical electrical
equipment, and product standards for certain types of medical devices. There are
also harmonized quality standards

                                        63
<PAGE>

relating to design and manufacture. While not mandatory, compliance with these
standards is viewed as the easiest way to satisfy the essential requirements as
a practical matter. Compliance with a standard developed to implement an
essential requirement also creates a rebuttable presumption that the device
satisfies that essential requirement.

     Manufacturers must demonstrate that their devices conform with the relevant
essential requirements through a conformity assessment procedure. The nature of
the assessment depends upon the classification of the device. The classification
rules are mainly based on three criteria: the length of time the device is in
contact with the body, the degree of invasiveness, and the extent to which the
device affects the anatomy. A manufacturer's quality systems for products in all
but the lowest risk classification are also subject to certification and audit
by a notified body.

     Japan

     In Japan, our largest market outside of the United States, the regulatory
process is equally complex. Pre-marketing approval and clinical studies are
required, as is governmental pricing approval for medical devices and
pharmaceuticals. The regulatory regime for pharmaceuticals in Japan has
historically been so lengthy and costly that it has been cost-prohibitive for
many pharmaceutical companies. Historically, Japan has required that all
clinical data submitted in support of a new drug application be performed on
Japanese patients. This has slowed the development of some new drugs in Japan.
Recently, however, as a part of the global drug harmonization process, Japan has
signaled a willingness to accept United States or European Union patient data
when submitted along with a "bridging" study, which demonstrates that Japanese
and non-Japanese subjects react comparably to the product. This approach enables
companies like Alcon to achieve faster approval and introduction of new drugs
into the Japanese market, and we are currently employing these approaches to
petition for approval of new ocular drugs in Japan.

  OTHER REGULATION

     ONGOING REPORTING.  Following approval, a pharmaceutical company generally
must engage in various monitoring activities and continue to submit periodic and
other reports to the applicable regulatory agencies, including any cases of
adverse reactions and appropriate quality control records.

     ADVERTISING AND PROMOTION.  Drug and medical device advertising and
promotion is subject to federal and state regulations. In the United States, the
FDA regulates all company and product promotion, including direct-to-consumer
advertising. Promotional materials must be submitted to the FDA and violative
materials may lead to FDA enforcement action.

     MANUFACTURING.  In the United States, the manufacturing of our products is
subject to comprehensive and continuing regulation by the FDA. FDA regulations
require us to manufacture our products in specific approved facilities and in
accordance with its Quality System Regulation and/or current Good Manufacturing
Practices, and to list our products and manufacturing establishments with the
FDA. These regulations also impose certain organizational, procedural and
documentation requirements upon us with respect to manufacturing and quality
assurance activities. Our manufacturing facilities are subject to comprehensive,
periodic inspections by the FDA.

     LASERS.  In the United States, our lasers are also subject to the Radiation
Control for Health and Safety Act administered by the Center for Devices and
Radiological Health of the FDA. This law requires laser manufacturers to file
new product and annual reports and to maintain quality control, product testing
and sales records. In addition, lasers sold to end users must comply with
labeling and certification requirements. Various warning labels must be affixed
to the laser depending on the class of the product under the performance
standard.

     OTHER.  Our manufacturing, sales, promotion, and other activities following
product approval are subject to regulation by numerous regulatory authorities,
including, in the United States, the FDA, the Centers for Medicare & Medicaid
Services, other divisions of the Department of Health and Human Services, and
state and local governments. Among other laws and requirements, our
post-approval

                                        64
<PAGE>

manufacturing and promotion activities must comply with the Federal Food, Drug,
and Cosmetic Act and the implementing regulations of the FDA, and we must submit
post-approval reports required by these laws. Our distribution of pharmaceutical
samples to physicians must comply with the Prescription Drug Marketing Act. Our
sales, marketing and scientific/educational programs must comply with the
Medicare-Medicaid Anti-Fraud and Abuse Act and similar state laws. Our pricing
and rebate programs must comply with the Medicaid rebate requirements of the
Omnibus Budget Reconciliation Act of 1990. All of our activities are potentially
subject to federal and state consumer protection and unfair competition laws.

PROPERTIES

     Our principal executive offices and registered office are located at Bosch
69, P.O. Box 62, 6331, Hunenberg, Canton of Zug, Switzerland. Our principal
United States offices are located at 6201 South Freeway, Fort Worth, Texas
76134.

     We believe that our current manufacturing and production facilities have
adequate capacity for our medium-term needs. To ensure that we have sufficient
manufacturing capacity to meet future production needs, we continuously review
the capacity and utilization of our manufacturing facilities. The FDA and other
regulatory agencies regulate the approval for use of manufacturing facilities
for pharmaceuticals and medical devices, and compliance with these regulations
requires a substantial amount of validation time prior to start-up and approval.
Accordingly, it is important to our business that we ensure we have sufficient
manufacturing capacity to meet our future production needs. We presently
anticipate expanding the capacity of six of our manufacturing facilities over
the next two years. During that same time period, we also anticipate expanding
our research and development facilities in Fort Worth.

     The following table sets forth, by location, size and principal use of our
main manufacturing and other facilities:

<Table>
<Caption>
                                                                                            OWNED/
LOCATION                            SIZE       PRINCIPAL USE(S)                             LEASED
--------                         ----------    ----------------                             ------
                                 (SQ. FEET)
<S>                              <C>           <C>                                          <C>
UNITED STATES:
Fort Worth, Texas                 992,000      Research and development, administrative     Owned
                                               buildings
Fort Worth, Texas                 340,000      Pharmaceutical, contact lens care and        Owned
                                               surgical solutions
Fort Worth, Texas                 335,000      Pharmaceutical and small volume consumer     Owned
                                               products
Houston, Texas                    215,000      Surgical (Custom Paks (R) and                Owned
                                               consumables)
Irvine, California                189,199      Surgical (electronic instruments and         Leased
                                               consumables), research and development
Huntington, West Virginia         109,000      Surgical (intraocular lenses)                Owned
Sinking Spring, Pennsylvania      162,000      Surgical (hand-held instruments and          Owned
                                               consumables)
Orlando, Florida                   73,600      Surgical (refractive equipment)              Leased

OUTSIDE OF THE UNITED STATES:
Barcelona, Spain                  493,266      Pharmaceutical, contact lens care,           Owned
                                               research and development
Puurs, Belgium                    344,100      Pharmaceutical, contact lens care,           Owned
                                               surgical (viscoelastics and Custom
                                               Paks (R))
Kaysersberg, France               108,070      Pharmaceutical, contact lens care            Owned
Madrid, Spain                      96,490      Contact lens care                            Owned
</Table>

                                        65
<PAGE>

<Table>
<Caption>
                                                                                            OWNED/
LOCATION                            SIZE       PRINCIPAL USE(S)                             LEASED
--------                         ----------    ----------------                             ------
                                 (SQ. FEET)
<S>                              <C>           <C>                                          <C>
Sao Paulo, Brazil                  88,738      Pharmaceutical, contact lens care            Owned
Cork, Ireland                      51,000      Surgical (refractive equipment)              Leased
Schaffhausen, Switzerland          25,000      Surgical (microsurgical instruments)         Leased
Mexico City, Mexico                11,246      Pharmaceutical, contact lens care            Owned
Beijing, China                      4,900      Surgical (intraocular lenses and sutures)    Leased
</Table>

     In addition to these principal facilities, we have office facilities
worldwide. These facilities are generally leased. In some countries, we lease or
sublease facilities from Nestle. These leases or subleases, as the case may be,
will continue following completion of the offering as provided in the separation
agreement.

     We believe that all of our facilities and our equipment in those facilities
are in good condition and are well maintained.

EMPLOYEES

     As of December 31, 2001, we employed approximately 11,000 full-time
employees, including approximately 1,100 research and development employees,
approximately 4,300 manufacturing employees and 3,100 sales and marketing
employees. Currently, approximately 500 of our workers in Belgium are
represented by a union. In other European countries, our workers are represented
by works councils. We believe that our employee relations are good.

ENVIRONMENTAL, HEALTH AND SAFETY

     We are subject to a wide range of laws and regulations relating to
protection of the environment and employee health and safety. All of our
manufacturing facilities undergo regular internal audits relating to
environmental, health and safety requirements. Our facilities in the United
States are required to comply with applicable Environmental Protection Agency
and Occupational Safety and Health Administration regulations. Our facilities
outside the United States are required to comply with locally mandated
regulations that vary by country. We are currently in the process of obtaining
certifications under the internationally recognized environmental standard ISO
14001 for all of our European facilities. Currently, our Puurs, Belgium Custom
Pak(R) facility holds this certification. Based upon our reviews and the outcome
of local, state and federal inspections, we believe that our manufacturing
facilities are in substantial compliance with all applicable environmental,
health and safety requirements.

     We are subject to environmental laws, including the Comprehensive
Environmental Response, Compensation and Liability Act, that require the cleanup
of soil and groundwater contamination at sites currently or formerly owned or
operated by us, or at sites where we may have sent waste for disposal. These
laws often require parties to fund remedial action at sites regardless of fault.
We have been named as a potentially responsible party with respect to the
remediation costs at two sites which are in the process of being remediated or
might be remediated in the future. As a result of our long history of
manufacturing operations, there may be other sites for which we may be
responsible for all or a portion of the clean-up costs. However, we believe that
we have adequate reserves for our currently known remediation matters and that
such matters will not have a material adverse effect on our results of
operation, liquidity or consolidated financial position. In an effort to ensure
ongoing compliance with applicable environmental laws and regulations, we have a
program to continually monitor waste, air emissions, ozone depletion components
and energy consumption.

     We are not aware of any pending litigation or significant financial
obligations arising from current or past environmental practices that are likely
to have a material adverse impact on our financial position. There can be no
assurance, however, that environmental problems relating to properties owned or
operated by us will not develop in the future, and we cannot predict whether any
such problems, if they were to

                                        66
<PAGE>

develop, could require significant expenditures on the part of us. In addition,
we are unable to predict what legislation or regulations may be adopted or
enacted in the future with respect to environmental protection and waste
disposal.

INSURANCE

     The pharmaceutical and medical device business involves an inherent risk of
product liability and any claims of this type could have an adverse impact on
us. We have taken, and will continue to take, what we believe are appropriate
precautions, primarily self-insurance combined with product liability insurance
coverage, to provide adequate coverage for possible product liability claims. We
evaluate our insurance requirements on an ongoing basis to ensure that we
maintain adequate levels of coverage. Though our insurance coverage and cash
flows have been adequate to provide for liability claims in the past, product
liability claims could exceed our insurance coverage limits and cash flows, and
insurance may not be available on commercially reasonable terms or at all.

LEGAL PROCEEDINGS

     From time to time we are involved in legal proceedings arising in the
ordinary course of business. We may be subject to litigation and infringement
claims, which could cause us to incur significant expenses or prevent us from
selling our products.

     We currently are involved in three intellectual property proceedings with
Pharmacia Corporation, the maker of Xalatan(R), a competing glaucoma product,
over our glaucoma product TRAVATAN(R).

     On February 2, 2001, Pharmacia Corporation and its affiliated entities
brought suit in federal court in Delaware, seeking injunctive relief,
compensatory damages, treble damages and attorneys' fees, alleging that
TRAVATAN(R) infringes one of its patents, U.S. Patent No. 5,422,368. We have
denied infringement and asserted that Pharmacia's patent is invalid and
unenforceable. Pharmacia and Columbia University also asserted in Delaware that
we infringed U.S. Patent No. 4,599,753, granted to Columbia University and
licensed to Pharmacia, but this claim was ultimately dismissed on procedural
grounds. On April 9, 2001, we commenced an action against various Pharmacia
companies and Columbia University in the U.S. District Court for the Southern
District of New York seeking a declaratory judgment that we are not infringing
the Columbia University patent, or in the alternative, that the patent is
invalid and unenforceable. The Pharmacia entities and Columbia University have
asserted counterclaims in that case, seeking, inter alia, injunctive relief,
compensatory damages, treble damages and attorneys' fees, alleging that we
infringe that patent. If we are unsuccessful in resolving these proceedings, our
operations may be disrupted and our revenues, cash flow and profitability could
be materially affected. We cannot predict the outcome of these litigations but
intend to pursue vigorously all available defenses and claims available to us.

     Pharmacia Corporation and its affiliated companies filed an action in
federal court in New Jersey on March 30, 2001, alleging that our use of the
TRAVATAN(R) trademark violates rights it asserts in the Xalatan(R) mark. The
action alleges infringement, dilution and false designation under United States
federal law and trademark dilution and unfair competition under state law.
Pharmacia has requested preliminary and permanent injunctions, compensatory
damages, treble damages, costs and other relief. Pharmacia filed a motion for a
preliminary injunction on April 16, 2001. A hearing on that motion took place
from December 17 through December 21, 2001, although that motion has not yet
been decided by the court. In the event that an injunction is issued in this
litigation or Pharmacia otherwise prevails on its claims in this litigation, our
operations may be disrupted or we may incur additional costs that decrease
materially our profits. We cannot predict the outcome of this litigation but
intend to pursue vigorously all available defenses.

     Other than described above, we believe that there is no litigation pending
that could have, individually or in the aggregate, a material adverse effect on
our financial position, results of operations or cash flows.

                                        67
<PAGE>

                                   MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

     Below is information with respect to our current directors and officers and
our prospective directors. Unless otherwise indicated, the business address of
all of our directors and officers is c/o Alcon, Inc., Bosch 69, P.O. Box 62,
6331 Hunenberg, Switzerland.

<Table>
<Caption>
NAME                              AGE                             TITLE
----                              ----                            -----
<S>                               <C>    <C>
Timothy R.G. Sear...............    64   Chairman, President and Director; Chairman, President
                                         and Chief Executive Officer, Alcon Laboratories, Inc.
Gaston-Noel Baechler(1).........    65   Director; Senior Vice President, Head of Group
                                         Accounting and Reporting, Nestle S.A.(3)
Werner Bauer(2).................    51   Director; Executive Vice President, Corporate
                                         Technical, Production and R&D Division of Nestle
                                         S.A.(4)
Peter Brabeck-Letmathe(2).......    57   Director; Vice Chairman and Chief Executive Officer,
                                         Nestle S.A.
Francisco Castaner..............    57   Director; Executive Vice President, Pharmaceutical and
                                         Cosmetic Products, Liaison with L'Oreal, Human
                                         Resources, Corporate Affairs, Nestle S.A.
Odette Dupont-Bonvin(1).........    41   Director; Assistant Vice President and Regional Legal
                                         Counsel, Nestec S.A.
Alain Pedersen(1)...............    46   Director; Assistant Vice President and Financial
                                         Controller, Pharmaceutical and Cosmetic Products,
                                         Nestec S.A.
Dr. Wolfgang H.
  Reichenberger(2)..............    48   Director; Executive Vice President, Chief Financial
                                         Officer, Nestle S.A.
Claude Rossier(1)...............    51   Director; Vice President, Pharma and Cosmetics
                                         Management, Nestle S.A.
Dr. James I. Cash, Jr.(2).......    54   Director
Phillip H. Geier, Jr.(2)........    67   Director
Lodewijk J.R. de Vink(2)........    57   Director
Stefan Basler...................    47   Attorney-in-Fact (Prokurist)
Guido Koller....................    57   Senior Vice President (Direktor)
Martin Schneider................    42   Attorney-in-Fact (Prokurist)
</Table>

---------------

(1) Expected to resign as Director prior to the completion of this offering.

(2) Expected to be elected as Director prior to the completion of this offering.

(3) Senior Vice President, Head of Group Accounting and Reporting until November
    30, 2001.

(4) Nestle appointment to become effective on May 1, 2002.

     Alcon, Inc. is a holding company which operates principally through its
operating subsidiaries. Our board of directors is responsible for the ultimate
direction of Alcon, Inc., as a holding company, and will determine our business
strategy and policies and those of our operating subsidiaries. The executive
officers of Alcon, Inc. are responsible for certain administrative matters, the
exercise of shareholder rights with respect to our subsidiaries, the funding of
research and development projects, the administration and purchase of
intellectual property rights and the collection of related license income.

     Our principal subsidiary in the United States is Alcon Laboratories, Inc.
Under the supervision of our board of directors, the executive officers of Alcon
Laboratories coordinate and manage the ongoing business and operations of our
operating subsidiaries, including research and development, manufacturing, sales
and distribution, marketing, financing and treasury.

     Below is information with respect to the current executive officers of
Alcon Laboratories, Inc. Unless otherwise indicated, the business address of all
of these officers is c/o Alcon Laboratories, Inc., 6201 South Freeway, Fort
Worth, Texas 76134-2099.

                                        68
<PAGE>

<Table>
<Caption>
NAME                              AGE                            TITLE
----                              ---                            -----
<S>                               <C>   <C>
Timothy R.G. Sear...............  64    Chairman, President and Chief Executive Officer
Dr. G. Andre Bens...............  50    Senior Vice President, Global Manufacturing and
                                        Technical Support
Dr. Gerald D. Cagle.............  57    Senior Vice President, Research & Development
Charles E. Miller, Sr...........  56    Senior Vice President, Finance and Chief Financial
                                        Officer
Fred J. Pettinato...............  53    Senior Vice President, Alcon International
Cary R. Rayment.................  54    Senior Vice President, Alcon United States
</Table>

  BACKGROUNDS OF CURRENT DIRECTORS AND EXECUTIVE OFFICERS OF ALCON, INC.

     Set forth below is information concerning our current directors and
executive officers and prospective directors identified above.

     Timothy R.G. Sear.  Mr. Sear has served as Chairman, President and Chief
Executive Officer of Alcon Laboratories, Inc. since 1997. From 1981 to 1996, Mr.
Sear was responsible for Alcon International, attaining a title of Executive
Vice President. Prior to his promotion in 1981, Mr. Sear had served as Vice
President of our operations in Canada, Latin America and the Far East, a
position he had held since 1975. Mr. Sear joined Alcon in 1971 as Area Director,
Australia/Far East, after 10 years in international assignments with Mead
Johnson, a division of Bristol-Myers Squibb.

     Gaston-Noel Baechler.  Mr. Baechler served as Senior Vice President, Head
of Group Accounting and Reporting of Nestle from 1997 through November 30, 2001.
Mr. Baechler began his career with Nestle in 1955 and was employed in various
capacities, both in Switzerland and overseas, prior to his promotion to his
current position.

     Werner Bauer.  Mr. Bauer will assume the position of Executive Vice
President, Corporate Technical, Production and R&D Division of Nestle effective
May 1, 2002. In April 2000, Mr. Bauer was named Managing Director and President
of Nestle South Africa Pty Ltd. after having served as Technical Director of
Nestle in South Africa since 1998. Mr. Bauer began his career with Nestle in
1990 as Senior Vice President of Nestec S.A., a position which he held until
1998, after a five year term as head of the Fraunhofer-Institute, a research
center for food technology and packaging in Munich, Germany.

     Peter Brabeck-Letmathe.  Mr. Brabeck-Letmathe has served as Vice Chairman
and Chief Executive Officer of Nestle since June 1997. In January 1992, Mr.
Brabeck-Letmathe was appointed Executive Vice President of Nestle, holding this
position until his promotion to Chief Executive Officer. Mr. Brabeck-Letmathe
began his career with Nestle in 1968 and was employed in various capacities in
Switzerland and South America between 1968 and 1992. Mr. Brabeck-Letmathe is
also the Vice Chairman of Credit Suisse Group and a director of Roche Holding
S.A. and L'Oreal.

     Francisco Castaner.  Mr. Castaner has served as Executive Vice President,
Pharmaceutical and Cosmetic Products, Liaison with L'Oreal, Human Resources and
Corporate Affairs of Nestle since June 1997. In 1987, Mr. Castaner was named
Managing Director and in 1991 Vice-President of the Board of Nestle Espana S.A.,
holding this position until his transfer to Switzerland and his promotion to
Executive Vice President of Nestle S.A. in June 1997. Prior to 1987, Mr.
Castaner was employed in various capacities both in Switzerland and in Spain.
Mr. Castaner began his career with Nestle in the Market Research Department of
Nestle Espana S.A. in 1964. Mr. Castaner is also a director of L'Oreal.

     Odette Dupont-Bonvin.  Ms. Dupont-Bonvin has served as Secretary to our
board of directors and has been a member of our board of directors since 1989.
Ms. Dupont-Bonvin is an Assistant Vice President of Nestec S.A. She is Legal
Counsel for the Americas in Nestle's Legal Department.

     Alain Pedersen.  Mr. Pedersen has served as Assistant Vice President and
Financial Controller of Pharmaceutical and Cosmetic Management, Nestec S.A.
since July 2001. Between 1981 and 2001 he held various positions with Nestle in
Finance and Control Management in Ireland, Switzerland and France.

                                        69
<PAGE>

     Dr. Wolfgang H. Reichenberger.  Dr. Reichenberger has served as Chief
Financial Officer of Nestle since April 2001. In 1996 Dr. Reichenberger was
named Managing Director, Nestle New Zealand Limited and in 1999 was appointed as
President and Representative Director, Nestle Japan Limited. Prior to his
promotion in 1996, Dr. Reichenberger had held the position of Senior Vice
President, Finance of Nestle since 1993. Dr. Reichenberger began his career with
Nestle in 1977 and was employed in various capacities in Switzerland and
overseas between 1977 and 1993. Dr. Reichenberger is also a director of Societe
Montreux Palace S.A.

     Claude Rossier.  Mr. Rossier has served as Vice President, Pharmaceuticals
and Cosmetic Management of Nestle since April 1997. Prior to assuming his
present responsibilities in 1997, Mr. Rossier had served since 1991 as the Chief
Financial Officer of Galderma, the joint venture between Nestle and L'Oreal. Mr.
Rossier began his career with Nestle in 1972 and was employed in various
capacities in Switzerland and overseas.

     Dr. James I. Cash, Jr.  Professor Cash is the Senior Associate Dean and the
James E. Robison Professor of Business Administration of the Graduate School of
Business Administration, Harvard University and Chairman of HBS Publishing.
Professor Cash joined the Graduate School of Business Administration, Harvard
University in 1976. Professor Cash is also a member of the board of directors of
Chubb Corp., General Electric Co., Knight Ridder Inc., Microsoft Corp. and
Scientific Atlanta Inc.

     Philip H. Geier, Jr.  Mr. Geier is the Chairman Emeritus and Advisor to the
Board of Directors of The Interpublic Group of Companies, Inc. Prior to becoming
Chairman Emeritus in 2000, he served as the Chairman and Chief Executive Officer
of The Interpublic Group since 1980. Mr. Geier is also a member of the board of
directors of AEA Investors Inc., Fiduciary Trust Co. International, Foot Locker
Inc. and Mettler Toledo International Inc.

     Lodewijk J.R. de Vink.  Mr. de Vink has served as Chairman of Global Health
Care Partners, Credit Suisse First Boston since December 2000. Previously, Mr.
de Vink had served as President of Warner Lambert Co. from 1991 until 1999 when
he became Chairman and Chief Executive Officer of that company. Mr. de Vink is
also a member of the Supervisory Board of Royal Ahold.

     Stefan Basler.  Mr. Basler has been an attorney-in-fact (Prokurist) since
1998. He has served as Finance Manager of Alcon Pharmaceuticals Ltd. since
October 1989 and has been an attorney-in-fact (Prokurist) of that company since
June 1991. Prior to this, Mr. Basler held various positions as Finance Manager
in international trading and holding companies domiciled in Switzerland.

     Guido Koller.  Mr. Koller has served as Senior Vice President (Direktor)
since 1999. He has also served as Vice President and Controller, Europe, Middle
East, Africa and Global Finance of Alcon Laboratories, Inc. since July 1, 2000.
On January 1, 1987, he was appointed Controller, Europe/Middle East/Africa and
served in this position until January 1, 1993, when he was promoted to the
position of General Manager, Swiss Coordination Center/Controller Europe/Middle
East/Africa. He held this position until he took on his present responsibilities
in Fort Worth. Mr. Koller began his career with Alcon on July 1, 1983, as
Finance and Administration Manager of Alcon Pharmaceuticals Ltd.

     Martin Schneider.  Mr. Schneider has been an attorney-in-fact (Prokurist)
since 1998 and has served as Financial Area Controller for various countries in
Europe, Middle East and Africa since 1997. Mr. Schneider joined Alcon in 1994 as
Controller, Export Markets and has held positions in finance & control in
Switzerland and in Fort Worth.

 BACKGROUNDS OF CURRENT EXECUTIVE OFFICERS OF ALCON LABORATORIES, INC.

     Set forth below is information concerning the executive officers of Alcon
Laboratories, Inc.

     Timothy R.G. Sear.  Mr. Sear has served as Chairman, President and Chief
Executive Officer of Alcon, Inc. since 1997. From 1981 to 1996, Mr. Sear was
responsible for Alcon International, attaining a title of Executive Vice
President. Prior to his promotion in 1981, Mr. Sear had served as Vice President
of our operations in Canada, Latin America and the Far East, a position he had
held since 1975. Mr. Sear

                                        70
<PAGE>

joined Alcon in 1971 as Area Director, Australia/Far East, after 10 years in
international assignments with Mead Johnson, a division of Bristol-Myers Squibb.

     Dr. G. Andre Bens.  Dr. Bens has served as Senior Vice President, Global
Manufacturing and Technical Support of Alcon Laboratories, Inc. since January
2001. From 1999 to 2001, he was Vice President of Global Manufacturing &
Technical Support and from 1993 to 1999, Dr. Bens served as Vice President,
Manufacturing & Engineering. Between 1985 and 1993, Dr. Bens held various
positions in Quality Assurance and Manufacturing. He served as Quality Assurance
Manager and Responsible Industrial Pharmacist at the Puurs manufacturing
operation in Belgium from 1982 to 1985.

     Dr. Gerald D. Cagle.  Dr. Cagle has served as Senior Vice President,
Research & Development of Alcon Laboratories, Inc. since 1997. Before assuming
his current position, Dr. Cagle had served as Vice President, Development. Since
joining Alcon in 1976, Dr. Cagle has been continuously employed by an Alcon
entity in various capacities, including Director, Ophthalmology and Vice
President, Regulatory Affairs and Senior Scientist in Ophthalmic Microbiology.
Dr. Cagle joined Alcon as Senior Scientist in Ophthalmic Microbiology.

     Charles E. Miller, Sr.  Mr. Miller has served as Senior Vice President,
Finance and Chief Financial Officer of Alcon Laboratories, Inc. since 1997. Mr.
Miller moved to Alcon International as Vice President/Controller, holding this
position until his 1997 promotion. Mr. Miller was named Corporate Treasurer in
1981 and appointed Treasurer for U.S. Operations in 1983. Mr. Miller has been
employed continuously by an Alcon entity in various capacities since 1980 when
he joined Alcon Laboratories, Inc. as Director, Corporate Tax.

     Fred J. Pettinato.  Mr. Pettinato has served as Senior Vice President,
Alcon International, since January 2001. Prior to his promotion, Mr. Pettinato
served as Vice President and General Manager, U.S. Pharmaceuticals from 1998 to
2001, President of Alcon Japan from 1996 to 1998, Vice President, International
Marketing from 1992 to 1996 and Managing Director of Alcon United Kingdom from
1989 to 1992. He joined Alcon Laboratories in 1989 after the acquisition of
certain business units of the CooperVision Company, where he was Area Vice
President - Europe. Prior to that, Mr. Pettinato held various marketing
positions with Corning, Inc. and Dow Corning Medical.

     Cary R. Rayment.  Mr. Rayment has served as Senior Vice President, Alcon
United States since January 2001. Prior to his promotion, Mr. Rayment served as
Vice President and General Manager, Surgical Division from 1998 to 2001, Vice
President, International Marketing from 1997 to 1998, including responsibility
for Alcon Japan in 1998, Vice President and General Manager, Managed Care from
1996 to 1997, President and General Manager, Surgical Products from 1991 to
1996. Mr. Rayment joined Alcon Laboratories, Inc. as Vice President, Marketing,
Surgical Products in 1989, when it acquired CooperVision, Inc., where he was
Vice President of Marketing.

BOARD COMPOSITION

     Under the terms of the separation agreement that we entered into with
Nestle in connection with this offering, Nestle has the right to nominate four
members of our board of directors for so long as it owns at least a majority of
our outstanding common shares. Nestle has also agreed in the separation
agreement to vote all of the common shares it owns in favor of three nominees
for election to our board of directors who are not otherwise affiliated with
either Nestle or Alcon for so long as it owns at least a majority of our
outstanding common shares.

     Our board of directors will consist of eight members, including three
independent directors, four directors affiliated with Nestle and the chief
executive officer of Alcon Laboratories.

     Prior to this offering, all current members of our board of directors
(other than Messrs. Castaner and Sear) will resign and Nestle will elect Messrs.
Brabeck-Letmathe, Reichenberger and Bauer to our board of directors, effective
upon the pricing of this offering. Prior to the completion of this offering,
under the terms of the separation agreement, Nestle will elect Messrs. Cash,
Geier and de Vink to our board of

                                        71
<PAGE>

directors. These members will not otherwise be affiliated with Nestle or Alcon.
All members of our board of directors will be elected to serve three-year terms,
(subject to a maximum of two re-elections, except for the chief executive
officer of Alcon Laboratories, Inc., who is exempt from this limitation), or
until their successors are elected and qualified. Our board of directors will be
divided into three classes serving staggered terms. As their terms of office
expire, the directors of one class will stand for election each year as follows:

     - Class I directors will have terms of office expiring at the annual
       general meeting of shareholders in 2003;

     - Class II directors will have terms of office expiring at the annual
       general meeting of shareholders in 2004; and

     - Class III directors will have terms of office expiring at the annual
       general meeting of shareholders in 2005.

     Class determinations for our board of directors will be finalized by June
2002.

     Both Nestle directors and independent directors will be distributed among
three classes. Our organizational regulations provide that directors will retire
from office no later than the annual general meeting after their 72nd birthday.

BOARD COMMITTEES

     Our board of directors expects to appoint an audit committee, compensation
committee and finance committee. Our organizational regulations provide that
under the circumstances described below under "Independent Director Committee"
our board of directors will appoint an independent director committee. Our board
of directors also expects to appoint a research and development and scientific
advisory board, which will not be a committee of our board of directors.

  Audit Committee

     The audit committee will consist of at least three directors who are not
otherwise affiliated with either Nestle or Alcon. We expect that the audit
committee will initially consist of three directors. The functions of this
committee will include:

     - review of the adequacy of our system of internal accounting procedures;

     - recommendations to our board of directors regarding the appointment of
       independent auditors;

     - discussion with our independent auditors regarding their audit
       procedures, including the proposed scope of the audit, the audit results
       and the related management letters;

     - review of the audit results and related management letters;

     - review of the services performed by our independent auditors in
       connection with determining their independence;

     - review of the reports of our internal and outside auditors and the
       discussion of the contents of those reports with the auditors and our
       executive management;

     - overseeing the selection and the terms of reference of our internal and
       outside auditors;

     - review and discussion of our quarterly financial statements with our
       management and our outside auditors; and

     - ensure our ongoing compliance with legal requirements, accounting
       standards and the provisions of the New York Stock Exchange.

                                        72
<PAGE>

  Compensation Committee

     The compensation committee will be comprised of two members of our board of
directors who are not otherwise affiliated with either Nestle or Alcon and of
one member of our board of directors nominated by Nestle. The functions of this
committee will include:

     - review of our general compensation strategy;

     - recommendations for approval by our board of directors of compensation
       and benefits programs for our executive officers;

     - review of the terms of employment between Alcon and any executive officer
       or key employee;

     - administration of our long-term incentive plan and recommendations to our
       board of directors for approval of individual grants under this plan; and

     - decisions with respect to the compensation of members of our board of
       directors.

  Finance Committee

     The finance committee will be comprised of our chief executive officer, one
member of our board of directors who is an executive officer or director of
Nestle and one member of our board of directors who is not otherwise affiliated
with either Nestle or Alcon. This committee will review and provide guidance to
our board of directors and management with respect to our major financial
policies. The functions of this committee will include:

     - recommendations for approval by our board of directors of an asset and
       liability management policy and strategic direction;

     - overall supervisory responsibility to ensure proper implementation of the
       financial strategy approved by our board of directors;

     - monitoring strategy execution, portfolio management, risk management and
       the carrying out of special actions necessary to support the strategy;

     - periodic review of the financial results as achieved;

     - recommendations to our board of directors regarding the appointment of
       the chief financial officer; and

     - recommendations regarding the approval by our board of directors of any
       share repurchase program.

  Independent Director Committee

     Our board of directors will form an independent director committee, which
will consist of at least three independent and disinterested directors who will
be responsible for protecting the interests of our minority shareholders, to
evaluate and make recommendations to our board of directors with respect to:

     - a proposed merger, takeover, business combination or related party
       transaction with our current majority shareholder or any group company of
       our current majority shareholder;

     - a proposed bid for the minority shareholdings of Alcon by any entity
       owning a majority of our outstanding voting rights;

     - a proposed repurchase by us of all our shares not owned by an entity
       owning a majority of the outstanding voting rights of Alcon; and

     - any change to the powers and duties of the independent director
       committee.

Our board of directors will only approve any of these transactions if a majority
of the members of an independent director committee so recommends.

  Research and Development and Scientific Advisory Board

     The research and development and scientific advisory board is not a
committee of our board of directors, and will be composed of one representative
of Alcon, one representative of Nestle and three or four scientists who are not
otherwise affiliated with Alcon and Nestle. The advisory board will review and
                                        73
<PAGE>

make recommendations regarding Alcon's research and development objectives. It
will also monitor new developments, trends and initiatives in the pharmaceutical
industry.

DIRECTOR COMPENSATION

     We intend to provide our board of directors with compensation and benefits
that will attract and retain qualified directors. We expect that all members of
our board of directors, except for our chief executive officer, will receive an
annual cash retainer of $50,000. We refer to a director who is neither a member
of Nestle's board of directors nor a full-time employee of Nestle or Alcon as a
non-employee director. We expect to award our non-employee directors
non-qualified stock options to purchase our common shares. Each year, the number
of non-qualified stock options will be determined by dividing $100,000 by the
expected Black-Scholes value of an option to purchase one common share on the
date of grant.

     We do not have any service contracts with any of our directors.

SHARE OWNERSHIP

     All of our common shares are beneficially owned by Nestle. Certain of our
directors have nominal ownership of common shares. None of our officers owns any
of our common shares. None of our directors or executive officers beneficially
owns 1% or more of Nestle's share capital.

COMPENSATION

     In the fiscal year ended December 31, 2001, our directors and executive
officers did not receive any compensation or benefits-in-kind from Alcon, Inc.

     The following compensation table sets forth information regarding
compensation and benefits in-kind paid during the fiscal year ended December 31,
2001 to the executive officers of Alcon Laboratories, Inc.

                           SUMMARY COMPENSATION TABLE

<Table>
<Caption>
                                                                        LONG-TERM
                               ANNUAL COMPENSATION                     COMPENSATION
                               -------------------    OTHER ANNUAL       PAYOUTS         ALL OTHER
NAME                            SALARY    BONUS(2)   COMPENSATION(3)     LTIP(4)      COMPENSATION(5)
----                           --------   --------   ---------------   ------------   ---------------
<S>                            <C>        <C>        <C>               <C>            <C>
Timothy R.G. Sear(1).......    $860,000   $750,000       $37,750         $418,149        $238,468
Charles E. Miller, Sr......     435,000    510,000        30,800          125,445         144,179
Dr. Gerald D. Cagle........     460,000    410,000        30,750          188,167         123,416
Dr. G. Andre Bens..........     315,000    250,000        27,583          167,260          62,399
Fred J. Pettinato..........     315,000    230,000        27,583           83,630          64,937
Cary R. Rayment............     315,000    215,000        27,833          146,352          68,345
</Table>

---------------

(1) Mr. Sear received a grant of 4,300 stock options to purchase Nestle shares.
    All of Mr. Sear's outstanding stock options to purchase shares of Nestle
    stock will be converted into nonqualified stock options to purchase Alcon
    common shares.

(2) Bonus includes the regular annual bonus paid in 2001 for performance in 2000
    (Mr. Sear: $750,000; Mr. Miller: $360,000; Dr. Cagle: $370,000; Dr. Bens:
    $220,000; Mr. Pettinato: $200,000; Mr. Rayment: $185,000) plus a special
    bonus paid in recognition of the efforts made in connection with this
    offering.

(3) Includes payments made in 2001 for car and other allowances.

(4) Provides payments made in 2001 under the 1994 Phantom Stock Plan, which was
    created to provide additional incentives to key employees upon whom Alcon
    must depend for its growth and success.

(5) Provides employer contributions to the Profit Sharing Trust Program, and
    payments made to the Executive Universal Life Insurance and the Umbrella
    Liability Insurance.

                                        74
<PAGE>

AWARDS UNDER LONG-TERM INCENTIVE PLANS IN LAST FISCAL YEAR

     The following table sets forth grants made under the 1994 Alcon Phantom
Stock Plan to the executive officers listed in the Summary Compensation Table
for the fiscal year ended December 31, 2001. These executives will not receive
any further awards under the 1994 Alcon Phantom Stock Plan after December 31,
2001. In addition, these executives will be able to convert any accrued balance
under the 1994 Alcon Phantom Stock Plan into restricted shares under the
conversion plan.

<Table>
<Caption>
                                                                                    ESTIMATED
                                                                        VESTING       FUTURE
NAME                                                          UNITS      PERIOD      PAYOUTS
----                                                          ------   ----------   ----------
<S>                                                           <C>      <C>          <C>
Timothy R.G. Sear...........................................  25,000   Five years   $1,282,750
Charles E. Miller, Sr.......................................  12,500   Five years      641,375
Dr. Gerald D. Cagle.........................................  12,500   Five years      641,375
Dr. G. Andre Bens...........................................   7,000   Five years      359,170
Fred J. Pettinato...........................................   8,000   Five years      410,480
Cary R. Rayment.............................................   8,000   Five years      410,480
</Table>

     The estimated future payouts in the above table are calculated for
illustrative purposes only.

PENSION PLANS

     Messrs. Sear, Miller, Rayment and Pettinato and Drs. Cagle and Bens
participate in the non-qualified Executive Salary Continuation Plan. This plan
is non-contributory and provides for a fixed retirement benefit based on the
participant's years of participation service in the plan, and three-year average
annual base compensation (the three-year average of the annual base salary in
effect in the year of separation from service and for the two years preceding
such year of separation). Allowances are payable upon retirement at the normal
retirement age of 62 or earlier if certain conditions are met earlier. Annual
compensation includes the amount shown as annual base salary in the Summary
Compensation Table. The three-year average annual base compensation for 2001 is
$776,667 for Mr. Sear, $398,333 for Mr. Miller, $416,667 for Dr. Cagle, $285,000
for Dr. Bens, $266,667 for Mr. Pettinato and $273,333 for Mr. Rayment. At
December 31, 2001, Messrs. Sear and Miller had participation service of over 20
years, Dr. Cagle had participation service of 19 years, Dr. Bens had
participation service of 15 years, Mr. Pettinato had participation service of 13
years, and Mr. Rayment had participation service of 13 years.

     The Executive Salary Continuation Plan's benefit formula is three percent
of a participant's three-year average annual base compensation times years of
participation, up to a maximum of 20 years. A participant must attain at least
10 years of participation service in order to have a vested benefit.

     As of January 1, 2002, the Alcon Retirement Plan (money purchase plan) will
be merged into the Alcon Profit Sharing Trust; the resulting plan will be known
as the Alcon 401(k) Retirement Plan. Subject to applicable legal limits, the
Company will match employee contributions of up to 5% of compensation on a 2.4
to 1 basis; for every $1 contributed by the employee, up to 5% of compensation,
Alcon will contribute $2.40.

2002 ALCON INCENTIVE PLAN

     Our board of directors has adopted the 2002 Alcon Incentive Plan prior to
this offering.

     The 2002 Alcon Incentive Plan is intended to help us retain and motivate
our key employees. Through this plan, we will be able to grant our employees
stock options, stock appreciation rights, restricted shares and other awards
based on our common shares, in addition to performance-based annual and
long-term incentive awards. Through share ownership, we will be able to align
employee and shareholder interests, by directly linking incentive awards to our
profitability and increases in shareholder value.

                                        75
<PAGE>

  ELIGIBILITY AND AWARD LIMITS

     Our employees and those of our subsidiaries and affiliates will be eligible
to receive awards under the 2002 Alcon Incentive Plan. Employees of Nestle and
its subsidiaries other than Alcon will not be eligible to receive awards under
this plan.

     Under the 2002 Alcon Incentive Plan, limits will be placed on the maximum
award amounts that may be granted to any employee in any plan year.

  ADMINISTRATION

     The 2002 Alcon Incentive Plan will be administered by the compensation
committee, which will have the authority to recommend employee eligibility and
to set the terms and conditions of the grant awards. Our board of directors is
responsible for approving the recommendations of the compensation committee.

     For our employees who are not considered executive officers, the
compensation committee may delegate its authority under the Alcon Incentive Plan
to our executive officers, subject to guidelines.

  SHARES RESERVED FOR AWARDS

     Under the 2002 Alcon Incentive Plan, a total of 30 million common shares
may be issued out of conditional capital.

     Our board of directors will have the authority to make appropriate
adjustments to the limits described above (other than adjustments to the number
of underlying shares) as well as to the terms of outstanding awards, in the
event of any transaction that affects our common shares such as share splits,
share dividends or other similar events.

     Awards of stock options that have expired unexercised, stock appreciation
rights or restricted shares that were forfeited under the terms of this plan or
stock appreciation rights that were exercised for cash will not be included in
applying the maximum limit for our common shares available for grant under this
plan.

  ANNUAL AND LONG-TERM INCENTIVE AWARDS

     Annual and long-term incentive awards may be granted under the 2002 Alcon
Incentive Plan. The awards will only be earned if corporate, business segment or
performance goals over the performance cycle satisfy the conditions established
by the compensation committee and approved by our board of directors. The
performance objectives, which may vary from employee to employee, will be based
on one or more financial measures and additional non-financial measures.

     Awards, as determined by our board of directors, may be paid in the form of
cash, common shares or any combination of these items.

     Under the 2002 Alcon Incentive Plan, selected executive officers will be
awarded performance-based incentive awards, subject to a maximum limit. Awards
made under this plan are intended to qualify as "qualified performance-based
compensation," which is excluded from the $1.0 million limit on deductible
compensation set forth under Section 162(m) of the U.S. Internal Revenue Code of
1986.

  STOCK OPTIONS

     Under the 2002 Alcon Incentive Plan, we may grant to eligible employees
stock options that are either incentive stock options or nonqualified stock
options. Nonqualified stock options will not qualify as incentive stock options
for federal income tax purposes under Section 422 of the U.S. Internal Revenue
Code of 1986.

     The compensation committee will recommend to our board of directors for
approval of the number and type of stock options to grant, as well as the
exercise price, applicable vesting schedule, option term and any applicable
performance criteria. Unless otherwise decided by our board of directors, stock
options will vest in full on the third anniversary of the date of grant, or on
an option holder's death, permanent disability or retirement (as defined in the
2002 Incentive Plan). Upon the termination of an option
                                        76
<PAGE>

holder's employment with us, all vested options will be exercisable for thirty
days; provided, however, that where the termination of employment is due to (i)
retirement or (ii) death or disability, they may be exercisable for their
remaining term, or for 60 months, respectively. All unvested options will be
forfeited. The grant price for any stock option will be not less than the fair
market value of our common shares on the grant date, unless specifically
approved by our board of directors. Unless our board of directors provides for a
different period, stock options will have an exercise term of ten years.

  STOCK APPRECIATION RIGHTS

     We may grant stock appreciation rights, which will entitle the holder of
the stock option to receive an amount equal to the difference between the fair
market value and the grant price. Unless determined otherwise by our board of
directors, stock appreciation rights will vest in full on the third anniversary
of the date of grant or on a holder's death, permanent disability or retirement.
Upon the termination of a holder's employment with us, all vested stock
appreciation rights will be exercisable for thirty days; provided, however, that
where the termination is due to (i) retirement or (ii) death or disability, they
may be exercisable for the remaining term, or for 60 months, respectively. The
difference between the fair market value and the grant price of stock
appreciation rights may be paid in any combination of cash or common shares, as
determined by our board of directors. Stock appreciation right granted in tandem
with stock options can be exercised only if the related stock option is
exercisable at that time. Unless our board of directors provides for a different
period, stock appreciation rights will have an exercise term of ten years.

  RESTRICTED SHARES

     We are permitted to grant restricted shares. A restricted share is a common
share granted to a participant subject to restrictions determined by the board
of directors. A restricted share will vest and become transferable upon
satisfaction of the conditions set forth in the restricted share award
agreement. Restricted share awards will be forfeited if a recipient's employment
terminates prior to vesting of the award. Unless otherwise specified in the
restricted share award agreement, restricted stock awards will vest upon a
holder's death, permanent disability or retirement and holders of restricted
shares will have the same rights on his or her restricted shares as holders of
common shares.

  PHANTOM SHARES

     We are permitted to grant phantom shares under the 2002 Alcon Incentive
Plan. The value of any phantom shares granted under the plan will be determined
in relation to the fair market value of a common share. Under this plan, the
board of directors will have the right to determine the initial value of the
phantom share, the applicable valuation dates for the phantom share grants and
the maximum amount of appreciation value payable on the phantom shares.

  OTHER SHARE-BASED AWARDS

     The 2002 Alcon Incentive Plan will also allow us to provide awards that are
denominated in or valued by reference to our common shares. These types of
awards include performance shares and restricted share units. Upon satisfaction
of certain performance goals, the recipient will be entitled to receive a
specified number of common shares or the cash equivalent. The value of an award
will be based on the difference between the fair market value of the covered
shares and the exercise price. The grant price for the award will not be less
than the fair market value of our common shares on the grant date.

  CHANGE-OF-CONTROL PROVISIONS

     In the event of a change-of-control (as defined under the 2002 Alcon
Incentive Plan), the following events will occur if the agreement covering the
award so provides:

     - all stock options and stock appreciation rights will become fully vested
       and exercisable;

     - all restrictions on outstanding restricted shares and other share-based
       awards will lapse; and

     - all outstanding incentive awards will vest and be paid out on a prorated
       basis.

                                        77
<PAGE>

  CORPORATE TRANSACTIONS

     In the event of certain corporate transactions described in the 2002 Alcon
Incentive Plan, our board of directors may:

     - require the exercise of all outstanding awards during a specified time
       period, after which the awards shall be terminated,

     - cancel all outstanding awards in exchange for a cash payment equal to the
       value of the awards; or

     - immediately vest all outstanding stock options and stock appreciation
       rights, remove all restrictions on restricted share awards,
       performance-based awards and other share-based awards, and vest and pay
       pro rata (based on when the corporate transaction occurs in the
       applicable performance cycle) all outstanding incentive awards.

  AMENDMENT

     Our board of directors will have the authority to amend the 2002 Alcon
Incentive Plan at any time, provided that no amendment that increases the number
of our common shares subject to the 2002 Alcon Incentive Plan may be made
without shareholder approval.

  TRANSFERABILITY AND OTHER TERMS

     Options or awards granted to an employee under the 2002 Alcon Incentive
Plan may not be transferred except by will or the laws of descent and
distribution. In addition, the employee may only exercise options or awards
during his or her lifetime.

     In the case of nonqualified stock options, however, the compensation
committee has the authority to permit all or any part of a nonqualified stock
option to be transferred to members of the employee's immediate family and
certain family trusts or partnerships, subject to prior written consent of the
compensation committee.

  PHANTOM STOCK CONVERSION

     Prior to this offering, our board of directors will approve a conversion
plan for our 1994 Phantom Stock Plan. This new conversion plan will convert the
projected unit value of our Phantom Stock Plan, specified in the table below, to
restricted shares through the voluntary decision of each participant.
Participants who elect not to convert into restricted shares will remain in the
1994 Phantom Stock Plan with respect to the units previously awarded. The number
of restricted Alcon common shares to be converted will be determined by dividing
the conversion value by the offering price of our common shares. Participants
who so opt to convert their phantom shares will receive an additional 20% of the
conversion value in non-qualified stock options. The number of non-qualified
stock options will be determined by taking 20% of the conversion value and
dividing it by the approved Black-Scholes value of an option to purchase one
Alcon common share on the date this offering is consummated, discounting for
risk of forfeiture. Restricted shares and stock options issued in this
conversion will be disregarded in applying the limits on the maximum award
amounts that may be granted to any employee in any year.

     This plan will include the following individuals and groups of our Alcon
executive officers, employees and our subsidiaries, with the values specified in
the table below. This conversion plan intends to align the interests of our
middle and senior level management with the interests of our shareholders. For
participants who are tax residents of a country where restricted stock is not
possible, participants may receive other share-based awards such as restricted
stock units. Retirees who may still be holding accrued balances under the 1994
Phantom Stock Plan will not be eligible for the conversion.

     The restricted shares will vest as follows: the number of restricted shares
obtained from the conversion value of the 1998 Phantom Stock grant will vest on
January 1, 2003, the number of restricted shares obtained from the conversion
value of the 1999 Phantom Stock grant will vest on January 1, 2004, the number
of restricted shares obtained from the conversion value of the 2000 Phantom
Stock grant will vest

                                        78
<PAGE>

on January 1, 2005 and the number of restricted shares obtained from the
conversion value of the 2001 Phantom Stock grant will vest on January 1, 2006.
The restricted shares will vest in full upon a change of control of Alcon.

     The following table sets forth the maximum dollar values to be converted
into restricted stock:

<Table>
<Caption>
RESTRICTED STOCK RECIPIENT                                       VALUE
--------------------------                                    ------------
<S>                                                           <C>
Timothy R.G. Sear...........................................  $  4,922,350
Dr. Gerald D. Cagle.........................................     2,146,275
Charles E. Miller, Sr. .....................................     1,947,035
Dr. G. Andre Bens...........................................     1,036,375
Cary R. Rayment.............................................     1,013,345
Fred J. Pettinato...........................................       988,815
  Executive officers of Alcon and Alcon Laboratories, Inc.
     as a group (6 executives)..............................    12,054,195
  All eligible employees of Alcon and its subsidiaries as a
     group (approximately 1,230 employees)..................  $109,837,118
</Table>

     The exercise price for the options will equal the offering price per common
share. The options will vest in phases: 33% of the options will become
exercisable on the first anniversary date of the grant, 33% of the options will
become exercisable on the second anniversary date of the grant, and the
remaining 34% of the options will become exercisable on the third anniversary
date of the grant. The options will expire 10 years from the date of the grant,
unless terminated earlier as a result of employment termination. The options
will vest in full upon a change of control of Alcon.

     The following table sets forth the maximum dollar values to be converted
into stock options:

<Table>
<Caption>
STOCK OPTION RECIPIENT                                           VALUE
----------------------                                        -----------
<S>                                                           <C>
Timothy R.G. Sear...........................................  $   984,470
Dr. Gerald D. Cagle.........................................      429,255
Charles E. Miller, Sr. .....................................      389,407
Dr. G. Andre Bens...........................................      207,275
Cary R. Rayment.............................................      202,669
Fred J. Pettinato...........................................      197,763
  Executive officers of Alcon and Alcon Laboratories, Inc.
     as a group (6 executives)..............................    2,410,839
  All eligible employees of Alcon and its subsidiaries as a
     group (approximately 1,230 employees)..................  $21,967,424
</Table>

     Additionally, it is expected that a non-compete clause will be included in
the restricted share awards and stock option agreements related to the Phantom
Stock Plan conversion. The non-compete requirement will apply to all
participants of the Phantom Stock Plan and will be effective immediately upon
conversion of the phantom stock. The conditions of the non-compete requirement
will be similar to those outlined in the 1994 Phantom Stock Plan, which are
briefly summarized below.

     Upon termination of employment, through voluntary or involuntary separation
from Alcon by retirement or otherwise in circumstances that result in a
participant holding restricted shares, the participant must not compete in the
same or a substantially similar business as those in which we and our affiliated
companies that are engaged in the pharmaceutical business are engaged in or are
contemplating entering at the time of termination of employment. This obligation
will lapse as to given restricted shares on the date on which those shares would
have otherwise vested in accordance with the vesting schedule set forth above.
If any of the conditions of this non-compete requirement are violated, the
participant will be required to return to us the number of restricted shares
that were originally scheduled to vest after the date the participant first
violated the non-competition agreement (or cash equal to their then-current
value). If a participant is involuntarily terminated by us prior to December 31,
2002, the participant will forfeit all restricted shares and options granted in
connection with the Phantom Stock conversion and will

                                        79
<PAGE>

be eligible to receive a cash payment equal to the amount the participant would
have received under the Phantom Stock plan as if the participant had not elected
to convert.

  ALCON DIRECTOR PLAN

     The stock option grants to non-employee directors will promote greater
alignment of interests between our non-employee directors, our shareholders and
Alcon. It will assist us in attracting and retaining highly qualified
non-employee directors, by giving them an opportunity to share in our future
success.

     Eligibility

     Only non-employee directors will be eligible to receive awards under the
2002 Alcon Incentive Plan.

     Administration

     The compensation committee will administer this plan.

     Shares Reserved For Awards

     Approximately 60,000 of the 30 million common shares under the 2002 Alcon
Incentive Plan will be available for issuance out of conditional capital in
connection with awards to non-employee directors.

     Our board of directors has the authority to make appropriate adjustments to
the limits described above as well as to the terms of outstanding awards, in the
event of any transaction that affects our common shares such as share splits,
share dividends or other similar events.

     Annual Awards

     Every year, each non-employee director will receive non-qualified stock
options to purchase common shares. The number of non-qualified stock options
will be calculated by dividing $100,000 by the expected Black-Scholes value of
an Alcon stock option.

     Amendment

     Our board of directors has the authority to amend the Alcon Incentive Plan
at any time, provided that no amendment is made without shareholder approval, if
shareholder approval is required by applicable listing requirements.

     Transferability And Other Terms

     Options or awards granted to a non-employee director under the 2002 Alcon
Incentive Plan may not be transferred except by will or the laws of descent and
distribution. In addition, the non-employee director may only exercise options
or awards during his or her lifetime.

     In the case of nonqualified stock options, however, the compensation
committee has the authority to permit all or any part of a nonqualified stock
option to be transferred to members of the non-employee director's immediate
family and certain family trusts or partnerships, subject to prior written
consent of the compensation committee.

                                        80
<PAGE>

                                SOLE SHAREHOLDER

     Before this offering, all of our outstanding shares were owned by Nestle.
After completion of this offering, Nestle will own approximately 76.75% of our
common shares, or 75.01% if the underwriters exercise their over-allotment
option in full, and 100% of our nonvoting preferred shares. The common shares
owned by Nestle carry the same voting rights as the common shares being sold in
this offering. Nestle has advised us that it intends following completion of
this offering to continue to hold all of our common shares that it owns. Our
nonvoting preferred shares are expected to be redeemed prior to May 31, 2002.
Nestle is not subject to any contractual obligation to retain its controlling
interest in us, except that Nestle has agreed, subject to exceptions described
under "Underwriting", not to sell or otherwise dispose of any of our common
shares for a period of 180 days after the date of this prospectus without the
prior written consent of the representatives of the underwriters.

     Pursuant to the terms of a ruling negotiated with the Swiss Federal Tax
Administration, all intra-group restructurings of Alcon effected in 1999 were
exempted from the Swiss issuance stamp tax of 1%. See "Description of Shares".
If, as a result of subsequent sales of common shares or as a result of future
capital increases of Alcon, the shareholding of Nestle in Alcon were to fall
below two-thirds of our outstanding voting rights prior to January 15, 2004,
this stamp duty would become due retroactively. This stamp duty would be payable
by us but Nestle would, pursuant to the terms of the separation agreement,
reimburse us for any amount paid. We therefore expect Nestle to continue to hold
shares representing at least two-thirds of our outstanding voting rights at
least until early 2004.

                  ARRANGEMENTS BETWEEN NESTLE AND OUR COMPANY

SEPARATION AGREEMENT

     We have entered into a separation agreement with Nestle prior to this
offering. This separation agreement governs certain pre-offering transactions,
as well as the relationship between Alcon and Nestle following this offering.
The separation agreement has been filed as an exhibit to the registration
statement of which this prospectus forms a part. The separation agreement will
be governed by and construed in accordance with the laws of Switzerland.

     The separation agreement with Nestle governs the corporate actions
necessary to be taken in order to effect this offering as described in this
prospectus and will govern the business and legal relationship between us and
Nestle after this offering. Below is a summary of the material provisions which
are included in the separation agreement.

  PREPARATION OF THIS OFFERING

     Alcon Germany was sold to Nestle's German subsidiary effective January 1,
2001 for approximately $30 million, and, under the separation agreement, was
sold back to us by Nestle's German subsidiary effective January 1, 2002, for
approximately $42 million. Alcon Germany's results of operations have continued
to be consolidated by us and are reflected in the audited and unaudited
financial information in this prospectus. The separation agreement also
contemplates, prior to this offering, certain immaterial restructurings in
Belgium and Thailand.

  OUR CORPORATE GOVERNANCE FOLLOWING THIS OFFERING

     Under the separation agreement, Nestle will have the right to nominate four
members to our board of directors for so long as Nestle holds at least 50% of
our outstanding common shares. In addition, Nestle has agreed, for so long as
Nestle holds at least a majority of our outstanding common shares, to vote all
of its common shares in favor of three nominees for election to our board of
directors who are independent and neither affiliated with us nor with Nestle and
that our chief executive officer will be a member of our board of directors. If
a Nestle-nominated director resigns from office, Nestle will have the right to
nominate a replacement director; any vacancies in the position of independent
director will be filled by another independent person who will be nominated by
the full board of directors.

                                        81
<PAGE>

  DIVIDEND POLICY

     If our board of directors proposes to pay a dividend to shareholders,
Nestle has agreed to vote all of its shares in favor of such proposal so long as
Nestle holds at least a majority of our outstanding common shares.

  INTERCOMPANY DEBT AND FUTURE FINANCINGS

     The separation agreement contains provisions governing the refinancing of
intercompany debt prior to this offering. In the future, we may continue to
enter into financing transactions involving Nestle, or we may decide to perform
financing functions independently. Following the completion of this offering, we
will agree with Nestle, on a case by case basis, whether the guarantees,
commitments or undertakings currently given by Nestle in our favor will be
renewed. If any guarantee, commitment or undertaking is renewed, the terms on
which we will reimburse Nestle will be agreed upon with Nestle at the time of
such renewal.

  CASH MANAGEMENT AND TREASURY FUNCTIONS

     The separation agreement provides that Nestle will continue to perform
following the completion of this offering the cash management and treasury
functions that it currently performs for us.

  ACCOUNTING AND REPORTING

     Our consolidated financial statements will be prepared in accordance with
U.S. GAAP after the completion of this offering. Nestle's consolidated accounts,
consistent with past practice, will continue to be prepared in accordance with
IAS. The separation agreement provides that we will establish adequate
procedures allowing for the timely conversion of our financial statements to IAS
for inclusion in Nestle's financial statements. We will, in the future, report
our financial information on a quarterly basis. We expect to establish reporting
dates which are consistent, to the extent practicable, with comparable companies
in our industry in the United States. We will provide financial information in
compliance with the applicable New York Stock Exchange rules.

  ALLOCATION OF LIABILITIES

     The separation agreement provides for the allocation of liabilities between
us and Nestle, particularly with respect to product liability and environmental,
health and safety matters. Generally, we will assume responsibility for all
claims arising in connection with our business, including, without limitation,
product liability claims and claims relating to environmental, health and safety
matters, and we will indemnify Nestle for all costs and expenses incurred in
connection with any such claims.

     We will also assume liability for all employment matters of the employees
currently engaged in our business. In this connection, we will enter into
special arrangements with local Nestle companies on the allocation of pension
fund obligations between us and Nestle. In certain countries, we will continue
to benefit from Nestle's existing pension funds, and will not establish
independent pension funds for our employees.

  CONTRACTS

     The separation agreement contains provisions governing the continuation and
termination of contracts between Alcon and Nestle.

  SHARED SITES

     Three sites relating to the administration of our business will continue to
be shared with Nestle following the completion of this offering. These offices
are located in Norway, South Africa and Brazil.

  SHARED SERVICES

     Following the completion of this offering, Nestle will continue to provide
us with certain services, including information technology and an internal audit
function for a period of time. To the extent that we were covered under Nestle's
insurance arrangements prior to this offering, we will continue to be covered
under those arrangements following the completion of this offering. Nestle will
charge us our portion of the cost of these arrangements based on arm's length
prices. These services may include future financings for

                                        82
<PAGE>

us upon our request. All services will be provided on terms no less favorable to
us than would be available from a third party.

  REGISTRATION RIGHTS

     The separation agreement contains provisions granting registration rights
under the Securities Act of 1933 to Nestle with respect to sales of our common
shares by Nestle.

  COVENANTS NOT TO COMPETE AND NOT TO SOLICIT

     Nestle has undertaken, for so long it continues to hold at least a majority
of our common shares, not to compete with our business except in certain limited
areas that are set out in the separation agreement. The separation agreement
also governs the allocation of business opportunities which could be taken by
both Nestle and us. If Nestle acquires the assets or securities of, or merges
with, a business association that competes with our business, that acquisition
or merger will be permitted if at the time of the transaction the competing
business represents less than 50% of the gross revenues of the acquired business
association, provided that Nestle fully informs us of the particulars of the
competing business to be acquired, and gives us the right of first refusal to
acquire the products comprising the competing business on the basis of fair
value.

     The separation agreement provides that Nestle will not for a two-year
period following the completion of this offering, without our written consent,
actively solicit for employment or hire any of our employees, subject to limited
exceptions.

  TAX INDEMNITY

     Nestle has agreed to indemnify us for certain taxes for which we may become
liable if Nestle's ownership interest in us falls below two-thirds of our
outstanding voting rights. See "Sole Shareholder".

PRE-OFFERING TRANSACTIONS

     In anticipation of this offering, we have effected, or will effect, the
capital transactions summarized below.

     We have subdivided our share capital of CHF 60,000,000, which was
previously divided into 60,000 fully paid common shares of CHF 1,000 par value
each, into an ordinary share capital of CHF 60,000,000, divided into 300,000,000
fully paid common shares, par value CHF 0.20 per share. We expect to convert
69,750,000 of these common shares into 69,750,000 fully paid nonvoting preferred
shares, par value CHF 0.20 per share. The preferred shares will be afforded
special entitlements to dividends and liquidation proceeds, the amount and
determination of which will be voted upon by our shareholder, but will not be
entitled to voting rights. Nestle has agreed in the separation agreement that
there will be no dividend payment on the preferred shares in 2002. This capital
restructuring is expected to be recorded in the commercial register of the
Canton of Zug (Switzerland) by February 28, 2002.

     We expect to make a dividend payment to Nestle prior to the completion of
this offering of CHF 2.1 billion (or approximately $1.23 billion). A resolution
approving this dividend will be adopted in accordance with Swiss law and will be
confirmed as being lawful by our statutory auditors.

     Prior to the completion of this offering, we expect an extraordinary
general meeting to be held at which the following resolutions will be adopted by
Nestle, our sole shareholder:

     Share Capital Increase.  Our ordinary share capital will be increased from
CHF 46,050,000 to a maximum of CHF 60,000,000 through the issuance of 69,750,000
common shares, par value CHF 0.20 per share. Nestle's preemptive rights with
respect to these newly issued shares will be waived. Immediately prior to this
offering, the number of shares to be offered (excluding shares subject to the
over-allotment option) will be subscribed for by Credit Suisse First Boston,
Zurich, acting on behalf of the underwriters, at par value, subject to the
conditions to be specified in the underwriting arrangements, for the purpose of
sale in this offering. The underwriters will undertake to place the shares in
this offering, and to pay to us the net proceeds of this offering, upon the
completion of this offering. This capital increase will become

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effective upon its registration in the Commercial Register of the Canton of Zug,
expected to take place before the date of this offering.

     Redemption of Preferred Shares.  Nestle will vote to redeem all of our
outstanding nonvoting preferred shares, all of which are owned by Nestle, for
aggregate consideration equal to the net proceeds of this offering (other than
proceeds from an exercise of the over-allotment option). The redemption price
per preferred share will be in Swiss francs, based on the exchange rate in
effect at the time the redemption is approved. This redemption will be through a
share capital reduction and is conditioned on completion of this offering. As a
result of the redemption of our nonvoting preferred shares, we will pay all of
the net proceeds of this offering (other than the proceeds from shares sold
pursuant to the underwriters' over-allotment option) to Nestle. The proceeds
from the sale of common shares issued pursuant to the exercise of the
over-allotment option will not be used to redeem shares of nonvoting preferred
stock. See "Use of Proceeds".

     If the underwriters exercise the over-allotment option, our board of
directors will issue the number of shares to which the over-allotment option
relates immediately after the date of this offering. These shares will also be
subscribed for by Credit Suisse First Boston, Zurich, acting on behalf of the
underwriters, at par value, and will be sold to the underwriters at the offering
price, net of underwriting discount and commissions. This capital increase will
be recorded in the commercial register of the Canton of Zug immediately after
the exercise of the over-allotment option.

     Due to the requirements of Swiss law, we can only redeem our nonvoting
preferred shares two months after the date on which this offering is completed.
We intend to publish the shareholders' resolution relating to the capital
redemption in the Swiss Official Commercial Gazette (Schweizerisches
Handelsamtsblatt) in accordance with applicable Swiss law. In conformity with
Swiss law, our creditors have the right to file claims and to demand payment for
claims due, or security for claims not yet due, within two months after the
third publication of the capital redemption in the Swiss Official Gazette of
Commerce. We may redeem our preferred shares only after the two-month
notification period has expired and all claims filed by creditors have been
satisfied or secured in full. We currently plan to redeem our preferred shares
prior to May 31, 2002.

TAX CONSEQUENCE OF PRE-OFFERING TRANSACTIONS

  ISSUANCE STAMP TAX

     The issuance and sales of shares in this offering triggers a Swiss issuance
stamp tax of 1% on the net consideration (the offering price minus commissions
and expenses) received by us. This tax will be borne by us.

  REDEMPTION OF PREFERRED SHARES

     We expect to redeem the 69,750,000 preferred shares, all of which will be
held by Nestle, following the completion of this offering. This redemption will
cause certain tax consequences to Nestle that have no impact on our financial
situation.

CERTAIN OTHER TRANSACTIONS

     In 1999, we effected two restructurings involving Nestle (without giving
effect to the 5,000-to-1 share split which occurred during December 2001):

     - On January 11, 1999, we increased our share capital from CHF 4,000,000 to
       CHF 54,000,000 by issuing 50,000 fully paid common shares, par value of
       CHF 1,000 per share to Nestle. In consideration for this issuance of
       shares, Nestle made a contribution in kind (Sacheinlage) to us of equity
       interests in 29 subsidiaries as well as certain industrial and
       intellectual property received at a value of CHF 298,022,970.

     - On July 21, 1999, we increased our share capital from CHF 54,000,000 to
       CHF 60,000,000 by issuing 6,000 fully paid common shares, par value CHF
       1,000 per share to Nestle. In consideration for this issuance of shares,
       Nestle made a contribution in kind to us of three loans owed by Alcon
       Laboratories, Inc., Alcon UK and Alcon France to Nestle, totaling CHF
       360,225,400.

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                             DESCRIPTION OF SHARES

GENERAL

     As of the date of the completion of this offering, we expect to have an
issued and outstanding share capital of CHF 73,950,000 (including CHF 13,950,000
in respect of nonvoting preferred shares), an authorized but unissued capital of
CHF 1,395,000 and a conditional but unissued capital of CHF 6,000,000.

     Prior to the issuance of the shares to be sold in this offering, there will
be 230,250,000 common shares and 69,750,000 nonvoting preferred shares
outstanding, all of which will be owned by Nestle. After the completion of this
offering, we will have an issued and outstanding share capital of CHF
73,950,000, consisting of 300,000,000 common shares, par value CHF 0.20 per
share, and 69,750,000 nonvoting preferred shares, par value CHF 0.20 per share,
which will be redeemed.

     Set out below is information concerning our shares and a brief summary of
some of the significant provisions of our articles of association (Statuten),
written resolutions of our board of directors, known as organizational
regulations (Organisationsreglement), which are included as exhibits to the
registration statement of which this prospectus forms a part, and the Swiss
Federal Code of Obligations (Schweizerisches Obligationenrecht). This
description does not purport to be complete and is qualified by reference to our
articles of association, our organizational regulations and the Swiss Federal
Code of Obligations.

COMMON SHARES

     All common shares to be sold in this offering are registered common shares
which are fully paid, validly issued and non-assessable. There is no limitation
under our articles of association on the right of non-Swiss residents or
nationals to own or vote our common shares.

  SHARE REGISTER

     Prior to this offering, our share register was maintained by one of our
officers at our place of incorporation. From the date of the offering, our share
register will be kept by The Bank of New York in New York, New York, which will
act as transfer agent and registrar. The share register will reflect only record
owners of our shares; beneficial owners of common shares holding their shares
through The Depository Trust Company, which we refer to as DTC, will not be
recorded in our share register. Shares held through DTC will be registered in
our share register in the name of DTC's nominee. We are entitled to accept only
those persons as shareholders, usufructuaries or nominees who have been recorded
in our share register, and to perform dividend payment and other obligations
only to our shareholders of record, including DTC. A shareholder of record must
notify The Bank of New York of any change in address. Until notice of a change
in address has been given, all of our written communication to our shareholders
of record shall be deemed to have validly been made if sent to the address
recorded in the share register. We expect that all of our shares being sold in
this offering will initially be held through DTC. See "--Shareholders'
Meetings--Record Date."

  SHARE CERTIFICATES

     We will issue certificates evidencing our common shares to our shareholders
of record.

  TRANSFERS OF COMMON SHARES

     Beneficial owners of our common shares may transfer their shares through
the book-entry system of DTC. Common shares held of record represented by share
certificates may be transferred only by delivery of the share certificates
representing those common shares duly endorsed or accompanied by an executed
stock power. A transferee who wishes to become a shareholder of record must
deliver the duly executed certificate in a form proper for transfer to our
transfer agent and registrar, The Bank of New York, in order to be registered in
our share register (Aktienregister).

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  VOTING RIGHTS

     Each common share carries one vote at a shareholders' meeting. Voting
rights may be exercised by our registered shareholders or by a duly appointed
proxy of a shareholder, which proxy need not be a shareholder. This provision
will allow for the exercise of voting rights by beneficial owners of our common
shares. Our articles of association do not limit the number of shares that may
be represented by a single shareholder. See "--Transfers of Common Shares" and
"Certain Provisions of Our Articles, Organizational Regulations and Swiss
Law--Shareholders' Meetings."

     Treasury shares, i.e., shares held by us or our majority-owned
subsidiaries, will not be entitled to vote at our shareholders' meetings.

  PREEMPTIVE RIGHTS

     Shareholders have preemptive rights to subscribe for newly issued common
shares and other equity instruments, stock options and convertible bonds in
proportion to the nominal amount of our common shares they own. The vote of a
supermajority of two-thirds of the common shares represented at a shareholders'
meeting may, however, limit or suspend preemptive rights in certain limited
circumstances. All preemptive rights relating to the newly issued common shares
to be sold in this offering will be waived by Nestle.

  INFORMATIONAL RIGHTS

     At a shareholders' meeting, each shareholder is entitled to request certain
information from our board of directors concerning our affairs and to request
information from our auditors concerning their audit and its results. Such
information must be provided to the extent that it is necessary to exercise
shareholder rights (for example, voting rights) and does not jeopardize business
secrets or other legitimate interests of Alcon. Additionally, our books and
correspondence may be inspected by our shareholders if such an inspection is
expressly authorized by our shareholders or our board of directors. If
information is withheld or a request to inspect refused, a court in our place of
incorporation (Zug, Switzerland) may be petitioned to order access to
information or to permit the inspection. The right to inspect our share register
is limited to the right to inspect that shareholder's own entry on our share
register.

PREFERRED SHARES

     Our nonvoting preferred shares, all of which will be owned by Nestle, will
have no voting rights but will have preferences as to dividends and liquidation
proceeds, the amount and determination of which will be left to the discretion
of our shareholder. We expect these preferences to be determined in connection
with the redemption of preferred shares to be approved at a shareholder's
meeting prior to the completion of this offering. See "Arrangements between
Nestle and Our Company -- Pre-Offering Transactions -- Redemption of Preferred
Shares".

FUTURE SHARE ISSUANCES

     Under Swiss law, all decisions with respect to capital increases, whether
of common or nonvoting preferred shares and whether for cash, non-cash or no
consideration, are subject to the approval or authorization by shareholders.

     Creation of Conditional Share Capital for the 2002 Alcon Incentive
Plan.  Our share capital may be increased by a maximum aggregate amount of CHF 6
million through the issuance of a maximum of 30 million fully paid common
shares, subject to adjustments to reflect share splits, upon the exercise of
options to purchase common shares. New common shares will be issued upon the
exercise of options which our management, employees and directors may be granted
pursuant to the 2002 Alcon Incentive Plan. The grant of these options and the
issuance of the underlying common shares upon option exercises will not entitle
our shareholders to preemptive rights. The exercise price of the stock options
shall be no

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less than the market price of common shares upon the date of grant of the
options. See "Management--2002 Alcon Incentive Plan."

CERTAIN PROVISIONS OF OUR ARTICLES, ORGANIZATIONAL REGULATIONS AND SWISS LAW

  BUSINESS PURPOSE AND DURATION

     Article 2 of our articles of association provides that our business purpose
is to purchase, administer and transfer patents, trademarks and technical and
industrial know-how; to provide technical and administrative consultancy
services; and to hold participations in other industrial or commercial
companies. In addition, we may conduct all transactions to which our business
purpose may relate.

     Our articles of association do not limit our duration.

  NOTICES

     Swiss corporate law requires us to publish notices, including notice of
shareholders' meetings, to our shareholders in the Swiss Official Gazette of
Commerce (Schweizerisches Handelsamtsblatt). Our board of directors may, but is
not generally required by Swiss law to, designate additional means of providing
notice to shareholders. We may also communicate with our shareholders through
the addresses registered in our share register.

  SHAREHOLDERS' MEETINGS

     Annual General Meetings

     Under Swiss corporate law, we must hold an annual general meeting of
shareholders within six months after the end of our financial year, which is the
calendar year. Our board of directors has the authority to convene annual
general meetings. Holders of common shares with a nominal value equal to at
least CHF 1 million have the right to request that a specific proposal be
discussed and voted upon at a shareholders' meeting. Under Swiss corporate law,
notice of a shareholders' meeting must be given at least 20 days prior to the
date of that meeting.

     Extraordinary General Meetings

     Our board of directors is required to convene an extraordinary general
meeting of shareholders, for among other reasons, if a shareholders' meeting
adopts a resolution to that effect or if holders of common shares representing
an aggregate of at least 10% of our nominal share capital request in writing
that it do so. An extraordinary general meeting is convened by publication of a
notice as set forth above under "-- Notices".

     Powers and Duties

     Pursuant to Swiss corporate law, our shareholders have the exclusive right
to decide on the following matters:

     -  adoption and amendment of our articles of association;

     -  election of members of our board of directors, statutory auditors, the
        auditors for our consolidated financial statements and the special
        auditors;

     -  approval of our annual report (statutory financial statements) and our
        consolidated financial statements;

     -  payments of dividends and any other distributions to shareholders;

     -  discharge of the members of our board of directors from liability for
        previous business conduct to the extent such conduct is known to the
        shareholders; and

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     -  any other resolutions which are submitted to a shareholders' meeting
        pursuant to law, our articles of association or by voluntary submission
        by our board of directors.

     Proxies

     Shareholders can choose to be represented at a shareholders' meeting by a
proxy who is not required to be a shareholder. Shares held in collective custody
through DTC will be able to participate in shareholders' meetings regardless of
record ownership. See "-- Record Date".

     Quorum

     No quorum for shareholders' meetings is specified in our articles of
association.

     Action by Shareholders

     At a shareholders' meeting, all voting takes place by a show of hands,
unless voting by ballot is resolved by a majority vote of shareholders present
or ordered by the chairman of the meeting or unless voting is done by electronic
form as ordered by the chairman of the meeting. Resolutions of shareholders
generally require the approval of a majority of the common shares represented at
a shareholders' meeting, with abstentions having the effect of votes against the
resolution. Shareholders' resolutions requiring the affirmative vote of a
majority of the common shares represented at a shareholders' meeting include:

     -  amendments to our articles of association, unless the amendment is
        subject to the requirement that it be approved by holders of two-thirds
        of our common shares represented at a shareholders' meeting;

     -  elections of directors and auditors;

     -  approval of our annual report, statutory financial statements and
        consolidated financial statements;

     -  payment of dividends;

     -  decisions to discharge the directors and management from liability for
        matters disclosed to the shareholders' meeting; and

     -  ordering of an independent investigation into specific matters proposed
        to the shareholders' meeting (Sonderprufung).

     Pursuant to Swiss corporate law, the affirmative vote of two-thirds of the
common shares represented at a shareholders' meeting is required to approve:

     -  changes in our purpose;

     -  the creation of shares having different par values, each of which is
        entitled to one vote (i.e., dual-class common shares);

     -  the creation of restrictions on the transferability of common shares;

     -  the creation of authorized share capital or conditional share capital;

     -  an increase in our share capital by way of capitalization of reserves
        (Kapitalerhohung aus Reserven), against contribution in kind
        (Sacheinlage), for the acquisition of assets (Sachubernahme) as well as
        involving the grant of preferences;

     -  a restriction or elimination of preemptive rights of shareholders in
        connection with a share capital increase;

     -  a relocation of our place of incorporation; and

     -  the dissolution of Alcon other than by liquidation, including through a
        merger in which we are not the surviving corporation.

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     In addition, our articles of association require the approval of a
supermajority of at least two-thirds of the common shares represented at a
shareholders' meeting to:

     -  create or abolish any restrictions on the exercise of voting rights;

     -  abolish any applicable restrictions on the transferability of shares;

     -  convert registered shares into bearer shares and vice versa; and

     -  modify any provisions in our articles of association requiring actions
        to be approved by a supermajority of the common shares represented at a
        shareholders' meeting.

     Under Swiss corporate law, shareholders are not permitted to act by written
consent in lieu of a shareholders' meeting.

     Record Date

     We intend to announce the dates of forthcoming shareholders' meetings not
less than 30 days prior to the date of the shareholders' meeting in question and
to set a date for eligibility to vote at the shareholders' meeting, which we
refer to as the date of the closing of the books, not less than 20 days prior to
the date of the shareholders' meeting in question.

     We intend to mail shareholders' meeting materials to record owners and to
beneficial owners of shares holding their shares through DTC through customary
banking and brokerage channels three business days after the date of the closing
of the books.

     Shareholders of record and beneficial owners of shares holding their shares
through DTC will have the opportunity to appoint proxies, in the case of
shareholders of record, or give voting instructions, in the case of beneficial
owners of shares holding their shares through DTC, or to request attendance at
shareholders' meetings. Any request must be mailed to the address indicated in
the shareholders' meeting material through the same banking and brokerage
channels as we originally used to send the shareholders' materials.

     Net Profits and Dividends

     Swiss corporate law requires us to retain at least 5% of our annual net
profits as general reserves for so long as these reserves amount to less than
20% of our nominal share capital. All other net profits may be paid as dividends
if approved by our shareholders.

     Under Swiss corporate law, we may only pay dividends if we have sufficient
distributable profits from prior business years, or if the reserves on our
holding company-only balance sheet prepared in accordance with Swiss statutory
accounting rules are sufficient to allow the distribution of a dividend. In
either event, dividends may be distributed only following approval by our
shareholders based on our statutory holding company-only accounts. Our board of
directors may propose that a dividend be distributed, but our shareholders
retain the final authority to determine whether a dividend is paid. Our
statutory auditors must also confirm that the dividend proposal of the board of
directors conforms to statutory law and our articles of association. Subject to
the foregoing, we intend to pay dividends on our common shares. See "Dividend
Policy".

     We are required under Swiss corporate law to declare dividends on our
shares in Swiss francs. Holders of our common shares will receive payments in
U.S. dollars, unless they provide notice to our transfer agent, The Bank of New
York, that they wish to receive dividend payments in Swiss francs. The Bank of
New York will be responsible for paying the U.S. dollars or Swiss francs to
registered holders of common shares, less amounts subject to withholding for
taxes.

     Dividends usually become due and payable promptly after our shareholders
approve their payment. Dividends which remain unclaimed for five years after the
due date become barred by the statute of limitations under Swiss law and are
allocated to our general reserves.

     Dividends on our common shares are subject to Swiss withholding taxes as
described under the heading "Taxation."

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BORROWING POWERS

     Neither Swiss law nor our articles of association restrict in any way our
power to borrow and raise funds. The decision to borrow funds is made by or
under the direction of our board of directors, and no approval by our
shareholders is required.

CONFLICTS OF INTEREST

     Swiss law does not have a general provision regarding conflicts of
interest. However, the Swiss Code of Obligations requires directors and officers
to safeguard the interests of the company and, in this connection, imposes
duties of care and loyalty. This rule is generally understood as disqualifying
directors and officers from participating in decisions directly affecting them.
A breach of these provisions results in the breaching director or officer
incurring personal liability to us. Our organizational regulations provide
special provisions addressing conflicts of interest of directors. In addition,
under Swiss law, payments made to a shareholder or a director or any persons
associated therewith, other than on arm's length terms, must be repaid to us if
the recipient of the payment was acting in bad faith.

REPURCHASES OF SHARES

     Swiss law limits the amount of our shares which we may hold or repurchase.
We, together with our subsidiaries, may only repurchase shares if (i) we have
sufficient freely distributable reserves to pay the purchase price and (ii) the
aggregate par value of the repurchased shares does not exceed 10% of the nominal
share capital of our company. Furthermore, we must create a reserve on our
statutory balance sheet in the amount of the purchase price of the repurchased
shares. On shares we or our subsidiaries repurchase any rights to vote are
suspended, but these shares are entitled to the economic benefits applicable to
our shares generally.

DISSOLUTION; MERGER

     We may be dissolved at any time with the approval of (i) a simple majority
of our common shares represented at a shareholders' meeting in the event we are
being dissolved through a liquidation and (ii) two-thirds of the common shares
represented at a shareholders' meeting in all other cases of dissolution,
including a merger where we are not the surviving entity. Dissolution by court
order is possible if we become bankrupt, or for cause at the request of
shareholders holding at least 10% of our share capital. Under Swiss law, any
surplus arising out of a liquidation, after the settlement of all claims of all
creditors, is distributed to shareholders in proportion to the paid-up par value
of shares held, subject to a Swiss withholding tax of 35% on the amount
exceeding the paid-up par value. See "Taxation--Swiss Taxation--Swiss
Withholding Tax on Dividends and Similar Distributions".

BOARD OF DIRECTORS

  NUMBER, REMOVAL, VACANCIES AND TERM

     Our articles of association provide that we will have at least seven
directors at all times. All of our directors are elected by the vote of the
holders of a majority of the common shares represented at a shareholders'
meeting, and directors may be removed at any time with or without cause by the
holders of a majority of the common shares represented at a shareholders'
meeting. All vacancies on our board of directors must be filled by a vote of our
shareholders. Each member of our board of directors must have nominal ownership
of at least one common share, other than members of our board of directors who
are representatives of a legal entity that owns common shares.

     Our articles of association provide that the term of office for each
director is three years, with the interval between two annual general meetings
being deemed a year for this purpose. The initial term of office for each
director will be fixed in such a way as to assure that about one-third of all
the members must be newly elected or re-elected every year. Swiss law permits
staggered terms for directors. Directors, other than our chief

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executive officer, are eligible to be re-elected a maximum of two times. Our
organizational regulations provide that directors will retire from office no
later than the annual general meeting after their 72nd birthday.

  POWERS AND DUTIES

     Pursuant to Swiss statutory law, our articles of association and
organizational regulations, our board of directors is the corporate body
responsible for our business strategy, financial planning and control, and
supervision of executive management. Our organizational regulations contemplate
that our board of directors is responsible for our business operations. Among
other things, our board of directors as a whole has ultimate responsibility for:
(i) the ultimate direction of Alcon and the issuance of the necessary
guidelines, (ii) the determination of our organizational structure, including
the enactment and amendment of the organizational regulations; (iii) the
determination of our accounting principles, financial controls and financial
planning; (iv) the appointment and removal of the secretary of the board of
directors, members of board committees and our executive management as well as
the termination of their signatory power; (v) the ultimate supervision of our
executive management; (vi) the preparation of our business report and financial
statements, the preparation of shareholders' meetings and the implementation of
resolutions adopted by our shareholders; (vii) the examination of the
professional qualifications of our auditors; (viii) the notification of the
court if our liabilities exceed our assets (art. 725 CO); (ix) the approval of
certain significant transactions, details of which are set out in our
organizational regulations; (x) the exercise of shareholder rights in our
subsidiaries, as well as the ultimate control of the business activities of our
subsidiaries; (xi) the establishment of our dividend policy; (xii) the review
and approval of the recommendations of the board committees; and (xiii) the
response to any approach regarding a takeover offer.

     Except as otherwise provided in our organizational regulations with respect
to the independent director committee, our organizational regulations may be
amended with the approval of a majority of our board of directors.

CERTAIN ANTI-TAKEOVER PROVISIONS

  BUSINESS COMBINATIONS

     The separation agreement and our organizational regulations contemplate
that certain mergers, takeovers or other business combinations involving us must
be approved by a special committee of independent directors charged with
protecting the interests of minority shareholders, as well as by the full board
of directors.

     Our organizational regulations further obligate our board of directors to
form a special committee of independent and disinterested directors charged with
protecting the interests of minority shareholders to evaluate and decide upon
(i) a proposed merger, takeover, other business combination or related party
transaction of Alcon with its majority shareholder or any group company of the
majority shareholder, (ii) a proposed bid for the minority shareholdings of
Alcon by any entity owning a majority of our outstanding voting rights or (iii)
a proposed repurchase by us of all of our shares not owned by an entity owning a
majority of the outstanding voting rights of Alcon.

     Since our common shares are not listed on any Swiss stock exchange, the
restrictions on implementing a poison pill set forth in the Swiss Act on Stock
Exchanges and Securities Trading are not applicable to us. Anti-takeover
measures implemented by our board of directors would be restricted by the
principle of equal treatment of shareholders and the general rule that new
shares may only be issued based on a shareholders' resolution; this rule
generally bars a board of directors from issuing shares or options to all
shareholders other than a hostile bidder. Shareholders may, however, implement
certain anti-takeover measures through a shareholders' resolution.

  MANDATORY BID RULES

     Since our common shares are not listed on any Swiss exchange, the mandatory
bid rules specified in the Swiss Stock Exchange Act will not apply to us.

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NOTIFICATION AND DISCLOSURE OF SUBSTANTIAL SHARE INTERESTS

     The disclosure obligations generally applicable to shareholders of Swiss
corporations under the Swiss Act on Stock Exchanges and Securities Trading do
not apply to us, since our common shares are not listed on a Swiss exchange.
Since our common shares are proposed to be listed on the New York Stock
Exchange, the provisions of the United States Securities Exchange Act of 1934,
as amended, requiring disclosure of certain beneficial interests will apply to
our common shares.

TRANSFER AND PAYING AGENTS

     Our transfer agent and paying agent for dividends and all other similar
payments on our common shares is The Bank of New York.

NEW YORK STOCK EXCHANGE LISTING

     We have applied to have our common shares listed on the New York Stock
Exchange under the symbol "ACL."

AUDITORS, GROUP AUDITORS AND SPECIAL AUDITORS

     In anticipation of this offering, our current shareholder will elect KPMG
Klynveld Peat Marwick Goerdeler SA, London and Zurich, as auditors and group
auditors for the year ending December 31, 2002. KPMG Klynveld Peat Marwick
Goerdler SA meets the requirements of the Swiss Federal Code of Obligations for
auditing Swiss public companies. Prior to the completion of this offering, our
shareholder also will elect Zensor Auditing Ltd., Zug, as special auditors for
special audits in connection with capital increases. The auditors, group
auditors and the special auditors have been elected for a term ending at our
next annual general shareholders' meeting.

                                        92
<PAGE>

                        SHARES ELIGIBLE FOR FUTURE SALE

     All of the common shares sold in this offering will be freely tradeable
without restriction under the United States Securities Act of 1933, as amended,
except for any shares which may be acquired by an affiliate of Alcon, as that
term is defined in Rule 144 under the Securities Act. Persons who may be deemed
to be our affiliates generally include individuals or entities that control, are
controlled by, or are under common control with, us and may include our
directors and officers as well as our significant shareholders.

     Our common shares held by Nestle are deemed "restricted securities" as
defined in Rule 144, and may not be sold other than through registration under
the Securities Act or under an exemption from registration, such as the one
provided by Rule 144. Nestle, Alcon and our directors and officers have agreed
not to offer or sell any common shares, subject to exceptions, for a period of
180 days after the date of this prospectus without the prior written consent of
the representatives on behalf of the underwriters. See "Underwriting."

     The separation agreement contains provisions granting registration rights
under the Securities Act to Nestle with respect to sales of our common shares by
Nestle.

                                        93
<PAGE>

                                    TAXATION

     The following is a summary of the material U.S. Federal income tax and
Swiss tax considerations relevant to the ownership, acquisition and disposition
of our common shares.

     For purposes of this discussion, a "U.S. Holder" is any one of the
following:

     -  an individual who is a citizen or resident of the United States;

     -  a corporation, or other entity taxable as a corporation, created or
        organized in or under the laws of the United States or of any political
        subdivision of the United States;

     -  an estate the income of which is subject to U.S. Federal income taxation
        regardless of its source;

     -  a trust if a court within the United States is able to exercise primary
        supervision over the administration of the trust and one or more U.S.
        persons have the authority to control all substantial decisions of the
        trust; or

     -  a person otherwise subject to U.S. Federal income tax on its worldwide
        income.

     If a partnership holds common shares the tax treatment of a partner will
generally depend upon the partner's circumstances and upon the activities of the
partnership. Partners of partnerships holding these common shares should consult
their tax advisors as to the tax consequences of owning or disposing of common
shares.

     A "Non-U.S. Holder" is a holder that is not a U.S. Holder. This discussion
does not address the U.S. Federal, local, state, foreign or other tax
consequences to Non-U.S. Holders as a result of the ownership or disposal of
common shares. NON-U.S. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT
TO THE U.S. FEDERAL, LOCAL, STATE, FOREIGN AND OTHER TAX CONSEQUENCES TO THEM AS
A RESULT OF THE OWNERSHIP OR DISPOSAL OF COMMON SHARES.

     This summary is not a complete description of all of the tax consequences
of the ownership or disposition of common shares. It is based on the current tax
laws of Switzerland and the United States, including the United States Internal
Revenue Code of 1986, as amended, its legislative history, temporary, existing
and proposed Treasury Regulations, U.S. Internal Revenue Service rulings and
judicial opinions, all as in effect on the date of this prospectus and all
subject to change, possibly with retroactive effect. Your individual
circumstances may affect the tax consequences arising from your ownership and
disposal of common shares, and your particular facts or circumstances are not
considered in the discussion below.

     The summary is not intended to apply to holders of common shares in
particular circumstances, such as:

     -  dealers in securities;

     -  traders in securities who elect to apply a mark-to-market method of tax
        accounting;

     -  financial institutions;

     -  regulated investment companies;

     -  tax-exempt organizations;

     -  insurance companies;

     -  persons holding common shares as part of a hedging, straddle, conversion
        or other integrated transaction;

     -  U.S. Holders who hold their common shares other than as capital assets;

     -  persons whose functional currency is not the U.S. dollar;

     -  certain U.S. expatriates;

                                        94
<PAGE>

     -  persons subject to the U.S. alternative minimum tax; and

     -  holders of common shares that will own directly or indirectly, or will
        be deemed to own, ten percent or more of either the total voting power
        or the total value of our stock.

     Furthermore, this summary does not describe all the tax considerations
relevant to persons who acquired common shares pursuant to compensatory
arrangements.

SWISS TAX CONSIDERATIONS

  Swiss Withholding Tax on Dividends and Similar Distributions

     Dividends paid and other similar cash or in-kind taxable distributions made
by us to a holder of common shares (including dividends on liquidation proceeds
and stock dividends) are subject to Swiss Federal withholding tax at a rate of
35%. The withholding tax will be withheld by us on the gross distributions and
will be paid to the Swiss Federal Tax Administration.

     Swiss Holders

     A Swiss Holder who is an individual or a legal entity resident in
Switzerland for tax purposes is generally entitled to a total refund or tax
credit of the withholding tax incurred if that holder is the beneficial owner of
such distributions at the time the distribution is due and duly reports the
receipt thereof in the relevant tax return.

     U.S. Holders

     A U.S. Holder who is an individual or a legal entity not resident in
Switzerland for tax purposes may be entitled to a partial refund of the
withholding tax incurred on a taxable distribution from us if the conditions of
the bilateral tax treaty between the U.S. and Switzerland are met. A U.S. Holder
who is a resident of the United States for purposes of the bilateral tax treaty
between the U.S. and Switzerland is eligible for a reduced rate of withholding
tax on dividends equal to 15% of the dividend, provided that such holder (i)
qualifies for benefits under this treaty and (ii) holds, directly or indirectly,
less than 10% of our voting stock and (iii) does not conduct business through a
permanent establishment or fixed base in Switzerland to which common shares are
attributable. Such an eligible U.S. Holder may apply for a refund of the amount
of the withholding tax in excess of the 15% treaty rate. The claim for refund
must be filed on Swiss Tax Form 82 (82C for corporations; 82I for individuals;
82E for other entities), which may be obtained from any Swiss consulate general
in the United States or from the Swiss Federal Tax Administration at the address
below, together with an instruction form. Four copies of the form must be duly
completed, signed before a notary public of the United States, and sent to the
Swiss Federal Tax Administration, Eigerstrasse 65, CH 3003, Berne, Switzerland.
The form must be accompanied by suitable evidence of deduction of Swiss tax
withheld at source, such as certificates of deduction, signed bank vouchers or
credit slips. The form may be filed on or after July 1 or January 1 following
the date the dividend was payable, but no later than 31 December of the third
year following the calendar year in which the dividend became payable.

     Other holders

     Any other holder who is an individual or a legal entity not resident in
Switzerland for tax purposes may be entitled to a total or partial refund of the
withholding tax incurred on a taxable distribution from us if the country in
which such holder resides for tax purposes has entered into a bilateral treaty
for the avoidance of double taxation with Switzerland and the further conditions
of such treaty are met. Other holders of common shares not resident in
Switzerland should be aware that the procedures for claiming treaty benefits
(and the time required for obtaining a refund) may differ from country to
country. Other holders of common shares not resident in Switzerland should
consult their own legal, financial or tax advisors regarding the receipt,
ownership, purchase, sale or other disposition of shares and the procedures for
claiming a refund of the withholding tax.

                                        95
<PAGE>

     As of January 1, 2002, Switzerland had entered into bilateral treaties for
the avoidance of double taxation with respect to income taxes with the following
countries.

<Table>
<S>                <C>          <C>                         <C>
Albania            Hungary      New Zealand                 Sweden
Argentina (prov.)  Iceland      Norway                      Thailand
Australia          India        Pakistan                    Trinidad and Tobago
Austria            Indonesia    People's Republic of China  Tunisia
Belarus            Italy        Philippines                 United Kingdom
Belgium            Ivory Coast  Poland                      Venezuela
Bulgaria           Jamaica      Portugal                    Vietnam
Canada             Japan        Republic of Ireland
Croatia            Kazakhstan   Romania
Czech Republic     Kuwait       Russia
Denmark            Luxembourg   Singapore
Ecuador            Macedonia    Slovakia
Egypt              Malaysia     Slovenia
Finland            Mexico       South Africa
France             Moldova      South Korea
Germany            Morocco      Spain
Greece             Netherlands  Sri Lanka
</Table>

     In addition, negotiations have been completed for new double taxation
treaties with Armenia, Estonia, Georgia, Israel, Kyrgyzstan, Latvia, Lithuania,
Mongolia, Ukraine, Uzbekistan and Zimbabwe. Negotiations for double taxation
treaties with Brazil, Chile, Iran, Turkmenistan, Turkey and Yugoslavia are in
process.

  Income and Profit Tax on Dividends and Similar Distributions

     Swiss Holders

     A Swiss Holder of common shares who is an individual resident in
Switzerland for tax purposes or a non-Swiss resident holding common shares as
part of a Swiss business operation or a Swiss permanent establishment is
required to report the receipt of taxable distributions received on the shares
in his relevant Swiss tax returns. A Swiss Holder that is a legal entity
resident for tax purposes in Switzerland or a non-Swiss resident holding common
shares as part of a Swiss establishment is required to include taxable
distributions received on the common shares in its income subject to Swiss
corporate income taxes. A Swiss corporation or co-operative or a non-Swiss
corporation or co-operative holding common shares as part of a Swiss permanent
establishment may, under certain circumstances, benefit from a tax relief with
respect to dividends (Beteiligungsabzug).

     U.S. Holders and other holders

     U.S. and Non-U.S. Holders of common shares who are neither residents of
Switzerland for tax purposes nor hold common shares as part of a Swiss business
operation or a Swiss permanent establishment are not subject to Swiss income
taxes in respect of dividends and similar distributions received from us.

  Capital Gains Realized on Common Shares

     Swiss Holders

     A Swiss Holder who is an individual resident in Switzerland for tax
purposes holding common shares as part of his private property generally is
exempt from Swiss federal, cantonal and communal taxes with respect to capital
gains realized upon the sale or other disposal of the shares, unless such
individual is qualified as a security trading professional for income tax
purposes. Gains realized upon a repurchase of the common shares by us for the
purpose of a capital reduction are characterized as taxable distributions. The
same is true for gains realized upon a repurchase of the common shares if we
were not to dispose of the repurchased shares within six years after the
repurchase or such shares were repurchased in view of a capital reduction.
Taxable income would be the difference between the repurchase price and the
nominal

                                        96
<PAGE>

value of the common shares. A Swiss Holder that holds the shares as business
assets or a non-Swiss resident holding shares as part of a Swiss business
operation or Swiss permanent establishment is required to include capital gains
realized upon the disposal of common shares in its income subject to Swiss
income tax. A Swiss Holder that is a legal entity resident in Switzerland for
tax purposes or a non-Swiss resident legal entity holding common shares as part
of a Swiss permanent establishment is required to include capital gains realized
upon the disposal of common shares in its income subject to Swiss corporate
income tax.

     U.S. Holders and other holders

     U.S. and Non-U.S. Holders of common shares that are not resident in
Switzerland for tax purposes and do not hold common shares as part of a Swiss
business operation or a Swiss permanent establishment are not subject to Swiss
income taxes on gains realized upon the disposal of common shares.

  Net Worth and Capital Taxes

     Swiss Holders

     A Swiss Holder of common shares who is an individual resident in
Switzerland for tax purposes or is a non-Swiss resident holding common shares as
part of a Swiss business operation or Swiss permanent establishment is required
to include his shares in his wealth that is subject to cantonal and communal net
worth tax. A Swiss Holder that is a legal entity resident in Switzerland for tax
purposes or a non-Swiss resident legal entity holding common shares as part of a
Swiss permanent establishment is required to include its common shares in its
assets. The legal entity equity is then subject to cantonal and communal capital
tax.

     U.S. Holders and other holders

     U.S. and Non-U.S. Holders of common shares that are not resident in
Switzerland for tax purposes and do not hold common shares as part of a Swiss
business operation or a Swiss permanent establishment are not subject to Swiss
cantonal and communal net worth and capital taxes.

  Stamp Taxes upon Transfer of Securities

     The transfer of common shares by any holder may be subject to a Swiss
securities transfer tax of 0.15% calculated on the transaction value if it
occurs through or with a Swiss bank or other securities dealer as defined in the
Swiss Federal Stamp Tax Act. The stamp duty is paid by the securities dealer and
may be charged to the parties in a taxable transaction who are not securities
dealers or exempt entities. Transactions in common shares effected by or through
non-Swiss financial institutions are generally not subject to Swiss securities
transfer tax, but may be subject to other local stamp taxes, stock exchange
levies or other duties.

U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR U.S. HOLDERS

  Taxation of Dividends

     The gross amount of a distribution made by us, including any amounts of
Swiss tax withheld, will be taxable to a U.S. Holder as dividend income to the
extent paid out of our current or accumulated earnings and profits, as
determined for U.S. Federal income tax purposes. Dividends received on common
shares will not be eligible for the dividends received deduction generally
allowed to corporations. Distributions in excess of our current and accumulated
earnings and profits will constitute a nontaxable return of capital to a U.S.
Holder to the extent of the U.S. Holder's tax basis in its common shares. To the
extent that such distributions are in excess of the U.S. Holder's basis in its
common shares, the distribution will constitute gain from the deemed sale or
exchange of his or her shares. See "-- Tax on Sale or Exchange of Common Shares"
below.

                                        97
<PAGE>

     The amount of a distribution will be the U.S. dollar value of the Swiss
franc payment, determined at the spot Swiss franc/U.S. dollar rate on the date
the dividend is includible in a U.S. Holder's income, regardless of whether the
payment in fact is converted into U.S. dollars. Generally, any gain or loss
resulting from currency fluctuations during the period from the date a U.S.
Holder includes the dividend in income to the date such U.S. Holder (or a third
party acting for such U.S. Holder) converts the payment into U.S. dollars will
be treated as ordinary income or loss. Any such income or loss generally will be
income or loss from sources within the United States for U.S. foreign tax credit
limitation purposes.

     A U.S. Holder will be entitled to claim a foreign tax credit with respect
to distributions received from us only for foreign taxes (such as Swiss
withholding taxes) imposed on dividends paid to such U.S. Holder and not for
taxes imposed on us or on any entity in which we have made an investment.
Distributions with respect to the common shares that are taxable as dividends
generally will be treated as foreign source passive income (or for U.S. Holders
that are "financial services entities" as defined in the Treasury Regulations,
foreign source "financial services income") for U.S. foreign tax credit
purposes.

  Tax on Sale or Exchange of Common Shares

     For U.S. Federal income tax purposes, a U.S. Holder generally will
recognize gain or loss on a sale, exchange or other disposition of common
shares, unless a specific nonrecognition provision applies. That gain or loss
will be measured by the difference between the U.S. dollar value of the amount
of cash, and the fair market value of any other property, received and the U.S.
Holder's tax basis in the common shares. A U.S. Holder's tax basis in the common
shares will generally equal the amount paid by the U.S. Holder for the common
shares. Gain or loss arising from a sale or exchange of common shares will be
capital gain or loss and will be long-term if the holding period of the U.S.
Holder for the shares exceeds one year. In general, gain from a sale or exchange
of shares by a U.S. Holder will be treated as United States source income for
U.S. foreign tax credit limitation purposes.

  Controlled Foreign Corporation; Foreign Personal Holding Company

     We do not expect to be deemed a "controlled foreign corporation" or a
"foreign personal holding company" because we expect more than 50% of the voting
power and value of our shares to be held by non-U.S. persons. If more than 50%
of the voting power or value of our shares were owned (directly or indirectly or
by attribution) by U.S. Holders who hold 10% or more of the voting power of our
outstanding shares, then we would become a controlled foreign corporation and
the U.S. Holders who hold 10% or more of our voting power would be required to
include in their taxable income as a constructive dividend an amount equal to
their share of certain of our undistributed income. If more than 50% of the
voting power or value of our shares were owned (directly or indirectly or by
attribution) by five or fewer individuals who are citizens or residents of the
U.S. and if at least 60% of our income were to consist of certain interest,
dividend or other enumerated types of income, we would become a foreign personal
holding corporation and all U.S. Holders (regardless of their ownership
percentage) would be required to include in their taxable income as a
constructive dividend an amount equal to their share of certain of our
undistributed income.

  Passive Foreign Investment Company

     We do not expect to be a passive foreign investment company because less
than 75% of our gross income will consist of certain "passive" income and less
than 50% of the average value of our assets will consist of assets that produce,
or are held for the production of, such passive income. For this purpose,
"passive" income generally includes dividends, interest, royalties, rents,
annuities and the excess of gains over losses from the disposition of assets
that produce passive income. If we were to become a passive foreign investment
company, which determination will be made on an annual basis, the passive
foreign investment company rules could produce significant adverse consequences
for a U.S. Holder (regardless of the ownership percentage of our shares held by
such holder).

                                        98
<PAGE>

  Backup Withholding and Information Reporting

     Under certain circumstances, a U.S. Holder who is an individual may be
subject to information reporting requirements and backup withholding at a rate
of up to 30.5% on dividends received on common shares. This withholding
generally applies only if that individual holder:

     -  fails to furnish his or her taxpayer identification number to the U.S.
        financial institution that is in charge of the administration of that
        holder's common shares or any other person responsible for the payment
        of dividends on the common shares;

     -  furnishes an incorrect taxpayer identification number;

     -  is notified by the U.S. Internal Revenue Service that he or she has
        failed to properly report payments of interest or dividends and the U.S.
        Internal Revenue Service has notified us that that individual holder is
        subject to backup withholding; or

     -  fails, under specified circumstances, to comply with applicable
        certification requirements.

     Any amount withheld from a payment to a U.S. Holder under the backup
withholding rules will be allowable as a credit against such U.S. Holder's U.S.
Federal income tax liability, provided that the required information is
furnished to the U.S. Internal Revenue Service.

     U.S. Holders should consult their own tax advisor as to the application of
the U.S. Federal information reporting and backup withholding requirements to
them and their qualification, if any, for an exemption under these rules.

     This discussion, which does not address any aspects of U.S. taxation other
than Federal income taxation or any state or local law relevant to U.S. Holders
of common shares, is of a general nature only and is not intended to be, and
should not be construed to be, legal or tax advice to any prospective investor
and no representation with respect to the tax consequences to any particular
investor is made. DUE TO THE INDIVIDUAL NATURE OF TAX CONSEQUENCES, U.S. HOLDERS
ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE PARTICULAR TAX
CONSEQUENCES TO THEM OF OWNING AND DISPOSING OF COMMON SHARES, INCLUDING THE
EFFECTS OF U.S. FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES.

                                        99
<PAGE>

                                  UNDERWRITING

     Under the terms and subject to the conditions contained in an underwriting
agreement dated           , we have agreed to sell to the underwriters named
below, for whom Credit Suisse First Boston Corporation and Merrill Lynch,
Pierce, Fenner & Smith Incorporated are acting as representatives, the following
respective numbers of common shares:

<Table>
<Caption>
                                                                     NUMBER
                            UNDERWRITER                             OF SHARES
                            -----------                             ---------
    <S>                                                             <C>
    Credit Suisse First Boston Corporation......................
    Merrill Lynch, Pierce, Fenner & Smith
                 Incorporated...................................
    Goldman, Sachs & Co. .......................................
    J.P. Morgan Securities Inc. ................................
    Salomon Smith Barney Inc. ..................................
    Banc of America Securities LLC..............................
    Lehman Brothers Inc. .......................................
    Morgan Stanley & Co. Incorporated...........................
    SG Cowen Securities Corporation.............................
    UBS Warburg LLC.............................................
                                                                    --------
      Total.....................................................
                                                                    ========
</Table>

     The underwriting agreement provides that the underwriters are obligated to
purchase all the common shares in the offering if any are purchased, other than
those shares covered by the over-allotment option described below. The
underwriting agreement also provides that if an underwriter defaults the
purchase commitments of non-defaulting underwriters may be increased or the
offering may be terminated.

     We have granted to the underwriters a 30-day option to purchase on a pro
rata basis up to 6,975,000 additional common shares at the initial public
offering price less the underwriting discounts and commissions. The option may
be exercised only to cover any over-allotments of common shares.

     The underwriters propose to offer the common shares initially at the public
offering price on the cover page of this prospectus and to selling group members
at that price less a selling concession of $          per common share. The
underwriters and selling group members may allow a discount of $          per
common share on sales to other broker/dealers. After the initial public
offering, the representatives may change the public offering price and
concession and discount to broker/dealers.

     The following table summarizes the compensation and estimated expenses we
will pay:

<Table>
<Caption>
                                                   PER SHARE                         TOTAL
                                          ---------------------------    ------------------------------
                                          WITHOUT OVER-    WITH OVER-    WITHOUT OVER-     WITH OVER-
                                            ALLOTMENT      ALLOTMENT       ALLOTMENT        ALLOTMENT
                                          -------------    ----------    -------------    -------------
<S>                                       <C>              <C>           <C>              <C>
Underwriting Discounts and
  Commissions...........................
Expenses................................
</Table>

     Nestle has agreed to pay additional expenses related to this offering,
estimated to be $6.6 million.

     The underwriters have informed us that they do not expect discretionary
sales to exceed 5% of the common shares being offered.

     We have agreed that we will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file with the Securities and
Exchange Commission a registration statement under the Securities Act relating
to, any of our common shares or securities convertible into or exchangeable or
exercisable for any of our common shares, or publicly disclose the intention to
make any offer, sale, pledge, disposition or filing, without the prior written
consent of the representatives of the underwriters for a period of 180 days
after the date of this prospectus.

                                       100
<PAGE>

     Nestle and our officers and directors have agreed that they will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly or indirectly,
any of our common shares or securities convertible into or exchangeable or
exercisable for any of our common shares, enter into a transaction that would
have the same effect, or enter into any swap, hedge or other arrangement that
transfers, in whole or in part, any of the economic consequences of ownership of
our common shares, whether any of these transactions are to be settled by
delivery of our common shares or other securities, in cash or otherwise, or
publicly disclose the intention to make any offer, sale, pledge or disposition,
or to enter into any transaction, swap, hedge or other arrangement, without, in
each case, the prior written consent of the representatives for a period of 180
days after the date of this prospectus.

     The underwriters have reserved for sale at the initial public offering
price up to 3,487,500 common shares for employees, directors, retired employees
and parents and children of our current employees who have expressed an interest
in purchasing common shares in the offering. The number of common shares
available for sale to the general public in the offering will be reduced to the
extent these persons purchase the reserved common shares. Any reserved common
shares not so purchased will be offered by the underwriters to the general
public on the same terms as the other common shares.

     We have agreed to indemnify the underwriters against liabilities under the
Securities Act, or contribute to payments that the underwriters may be required
to make in that respect.

     We will apply to list the common shares on the New York Stock Exchange
under the symbol "ACL."

     In connection with the listing of the common shares on the New York Stock
Exchange, the underwriters will undertake to sell round lots of 100 shares or
more to a minimum of 2,000 beneficial owners.

     Prior to this offering, there has been no public market for our common
shares. The initial public offering price will be determined, following a
book-building procedure, by negotiations between us and the representatives.
Among the factors considered in determining the initial public offering price
will be our future prospects and those of our industry in general, our sales,
earnings and other financial and operating information in recent periods, and
the price-earnings ratios, price-sales ratios, market prices of securities and
financial and operating information of companies engaged in activities similar
to ours.

     The estimated initial public offering price range set forth on the cover
page of this prospectus is subject to change as a result of market conditions
and other factors.

     The representatives on behalf of the underwriters may engage in stabilizing
transactions, over-allotment transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the United States Securities
Exchange Act of 1934.

     -  Stabilizing transactions permit bids to purchase the underlying security
        so long as the stabilizing bids do not exceed a specified maximum.

     -  Over-allotment involves sales by the underwriters of shares in excess of
        the number of shares the underwriters are obligated to purchase, which
        creates a syndicate short position. The short position may be either a
        covered short position or a naked short position. In a covered short
        position, the number of shares over-allotted by the underwriters is not
        greater than the number of shares that they may purchase in the
        over-allotment option. In a naked short position, the number of shares
        involved is greater than the number of shares in the over-allotment
        option. The underwriters may close out any short position by either
        exercising their over-allotment option and/or purchasing shares in the
        open market.

     -  Syndicate covering transactions involve purchases of common shares in
        the open market after the distribution has been completed in order to
        cover syndicate short positions. In determining the source of shares to
        close out the short position, the underwriters will consider, among
        other things, the price of shares available for purchase in the open
        market as compared to the price at which they may purchase shares
        through the over-allotment option. If the underwriters sell more shares
                                       101
<PAGE>

        than could be covered by the over-allotment option, a naked short
        position, the position can only be closed out by buying shares in the
        open market. A naked short position is more likely to be created if the
        underwriters are concerned that there could be downward pressure on the
        price of the shares in the open market after pricing that could
        adversely affect investors who purchase in the offering.

     -  Penalty bids permit the representatives to reclaim a selling concession
        from a syndicate member when the common shares originally sold by the
        syndicate member are purchased in a stabilizing or syndicate covering
        transaction to cover syndicate short positions.

These stabilizing transactions, syndicate covering transactions and penalty bids
may have the effect of raising or maintaining the market price of our common
shares or preventing or retarding a decline in the market price of the common
shares. As a result the price of our common shares may be higher than the price
that might otherwise exist in the open market. These transactions may be
effected on the New York Stock Exchange and, if commenced, may be discontinued
at any time.

     A prospectus in electronic format may be made available on the web sites
maintained by one or more of the underwriters participating in this offering.
The representatives may agree to allocate a number of shares to underwriters and
selling group members, if any, for sale to their online brokerage account
holders. Internet distributions will be allocated by the underwriters and
selling group members that will make internet distributions on the same basis as
other allocations. Merrill Lynch, Pierce, Fenner & Smith Incorporated may effect
an on-line distribution as a selling group member.

     The representatives and some of the underwriters have performed investment
banking and advisory services for Nestle from time to time for which they have
received customary fees and expenses. The underwriters may, from time to time,
engage in transactions with and perform services for us and Nestle in the
ordinary course of their business. Banks affiliated with underwriters
participating in this offering are lenders under Nestle's credit facilities.
Lodewijk J.R. de Vink, a nominee to be one of our directors, is chairman of
Global Health Care Partners, an affiliate of Credit Suisse First Boston
Corporation.

     In addition, Rainer E. Gut, the chairman of the board of directors of
Nestle S.A., is the honorary chairman of the board of directors of Credit Suisse
Group, an affiliate of Credit Suisse First Boston Corporation; Peter
Brabeck-Letmathe, the chief executive officer and vice chairman of the board of
directors of Nestle S.A. and a nominee to be one of our directors, is vice
chairman of the board of directors of Credit Suisse Group; Vreni Spoerry, a
member of the board of directors of Nestle S.A., is a member of the board of
directors of Credit Suisse Group; and Andre Kudelski, a member of the board of
directors of Nestle S.A., is a member of the Credit Suisse Group Swiss advisory
board.

     The addresses of the representatives are: Credit Suisse First Boston
Corporation, Eleven Madison Avenue, New York, New York 10010; and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, 4 World Financial Center, North Tower, New
York, NY 10080.

                                       102
<PAGE>

                          NOTICE TO CANADIAN RESIDENTS

RESALE RESTRICTIONS

     The distribution of the common shares in Canada is being made only on a
private placement basis exempt from the requirement that we prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of common shares are made. Any resale of the common shares in Canada must
be made under applicable securities laws which will vary depending on the
relevant jurisdiction, and which may require resales to be made under available
statutory exemptions or under a discretionary exemption granted by the
applicable Canadian securities regulatory authority. Purchasers are advised to
seek legal advice prior to any resale of the common shares.

REPRESENTATIONS OF PURCHASERS

     By purchasing common shares in Canada and accepting a purchase confirmation
a purchaser is representing to us and the dealer from whom the purchase
confirmation is received that

     -  the purchaser is entitled under applicable provincial securities laws,
        including by reason of the purchaser being an accredited investor as
        defined in Ontario Securities Commission Rule 45-501, to purchase the
        common shares without the benefit of a prospectus qualified under those
        securities laws,

     -  where required by law, that the purchaser is purchasing as principal and
        not as agent, and

     -  the purchaser has reviewed the text above under Resale Restrictions.

RIGHTS OF ACTION (ONTARIO PURCHASERS ONLY)

     Under Ontario securities legislation, a purchaser who purchases a security
described in this prospectus on a private placement basis during the period of
distribution will have a statutory right of action for damages, or while still
the owner of the shares, for rescission against us in the event that this
prospectus contains a misrepresentation. A purchaser will be deemed to have
relied on the misrepresentation. The right of action for damages is exercisable
not later than the earlier of 180 days from the date the purchaser first had
knowledge of the facts giving rise to the cause of action and three years from
the date on which payment is made for the shares. The right of action for
rescission is exercisable not later than 180 days from the date on which payment
is made for the shares. If a purchaser elects to exercise the right of action
for rescission, the purchaser will have no right of action for damages against
us. In no case will the amount recoverable in any action exceed the price at
which the shares were offered to the purchaser and if the purchaser is shown to
have purchased the securities with knowledge of the misrepresentation, we will
have no liability. In the case of an action for damages, we will not be liable
for all or any portion of the damages that are proven to not represent the
depreciation in value of the shares as a result of the misrepresentation relied
upon. These rights are in addition to, and without derogation from, any other
rights or remedies available at law to an Ontario purchaser. The foregoing is a
summary of the rights available to an Ontario purchaser. Ontario purchasers
should refer to the complete text of the relevant statutory provisions.

ENFORCEMENT OF LEGAL RIGHTS

     All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Canadian purchasers to effect service of process within Canada upon the
issuer or such persons. All or a substantial portion of the assets of the issuer
and such persons may be located outside of Canada and, as a result, it may not
be possible to satisfy a judgment against the issuer or such persons in Canada
or to enforce a judgment obtained in Canadian courts against such issuer or
persons outside of Canada.

TAXATION AND ELIGIBILITY FOR INVESTMENT

     Canadian purchasers of common shares should consult their own legal and tax
advisors with respect to the tax consequences of an investment in the common
shares in their particular circumstances and about the eligibility of the common
shares for investment by the purchaser under relevant Canadian legislation.

                                       103
<PAGE>

                        ENFORCEMENT OF CIVIL LIABILITIES

     We are incorporated under the laws of Switzerland. A portion of our
directors and executive officers reside outside of the United States. A portion
of our assets are located outside the United States. In addition, a portion of
the assets of our directors and officers and of the non-resident experts are
located outside the United States. As a result, it may be difficult to effect
service of process within the United States upon these persons or to enforce
judgments obtained in United States courts against these persons, including
judgments predicated upon the civil liability provisions of the federal
securities laws of the United States.

     As a result, U.S. investors may find it difficult in a lawsuit based on the
civil liability provisions of the U.S. federal securities laws to:

     -  effect service within the U.S. upon us and our directors and officers
        located outside the U.S.;

     -  enforce outside the U.S. judgments obtained in U.S. courts against those
        persons;

     -  enforce within the U.S. judgments obtained in U.S. courts based upon the
        civil liability provisions of the U.S. federal securities laws against
        us, our non-U.S. resident officers, directors and experts named in this
        prospectus;

     -  enforce in U.S. courts judgments obtained against those persons in
        courts in jurisdictions outside the U.S.; and

     -  enforce against those persons in Switzerland, whether in original
        actions or in actions for the enforcement of judgments of U.S. courts,
        civil liabilities based solely upon the U.S. federal securities laws.

     Switzerland and the United States do not have a treaty providing for
reciprocal recognition of and enforcement of judgments in civil and commercial
matters. The recognition and enforcement of a judgment of the courts of the
United States in Switzerland is governed by the principles laid out in the Swiss
Federal Act on Private International Law. This statute provides in principle
that a judgment rendered by a non-Swiss court may be enforced in Switzerland
only if (1) the foreign court had jurisdiction (pursuant to the Swiss Federal
Act on Private International Law), (2) the judgment of such foreign court has
become final and non-appealable, (3) the judgment does not contravene Swiss
public policy and (4) the court procedures and the service of documents leading
to the judgment were in compliance with the principles of due process of law.

                                 LEGAL MATTERS

     The validity of the common shares offered hereby will be passed upon for us
by Homburger Rechtsanwalte, Weinbergstrasse 56, CH-8006, Zurich, Switzerland.
Certain legal matters will be passed upon for us by Cravath, Swaine & Moore,
Worldwide Plaza, 825 Eighth Avenue, New York, New York 10019. Certain legal
matters will be passed upon for the underwriters by Shearman & Sterling, 599
Lexington Avenue, New York, New York 10022.

                                    EXPERTS

     The consolidated financial statements of Alcon, Inc. and subsidiaries as of
December 31, 2000 and 2001 and for each of the three years in the period ended
December 31, 2001, included in this prospectus have been audited by KPMG LLP,
301 Commerce Street, Fort Worth, Texas 76102, independent auditors, as stated in
their report appearing herein, and have been so included in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing.

                                       104
<PAGE>

                        OTHER OFFERING EXPENSES AND FEES

     The expenses of this offering, not including underwriting discounts, are
estimated at approximately $25,000,000 and are payable by us, as set forth in
the following table:

<Table>
<S>                                                           <C>
SEC registration fee........................................  $   247,055
National Association of Securities Dealers filing fee.......       30,500
New York Stock Exchange listing fee.........................      375,000
U.S. state securities law qualifications fees and
  expenses..................................................            0
Printing and engraving expenses.............................    2,000,000
Swiss Federal Issuance stamp tax............................   21,905,743
Miscellaneous...............................................      441,702
                                                              -----------
  Total.....................................................  $25,000,000
                                                              ===========
</Table>

     In addition, legal and accounting fees in connection with this offering
totaling $6.6 million will be paid by Nestle.

                      WHERE YOU CAN FIND MORE INFORMATION

     We have filed with the Securities and Exchange Commission a registration
statement on Form F-1 under the Securities Act with respect to the common shares
offered hereby. This prospectus does not contain all of the information set
forth in the registration statement and the exhibits thereto, to which reference
is hereby made. With respect to each contract, agreement or other document filed
as an exhibit to the registration statement, reference is made to such exhibit
for a more complete description of the matter involved. The registration
statement and the exhibits thereto filed by us with the Securities and Exchange
Commission may be inspected at the public reference facilities of the Securities
and Exchange Commission listed below.

     As a result of this offering, we will be subject to the informational
requirements of the Securities Exchange Act and in accordance therewith will
file reports and other information with the Securities and Exchange Commission.
As a foreign private issuer, we are not subject to the proxy rules under Section
14 of the Exchange Act and our officers, directors and principal shareholders
are not subject to the insider short-swing profit disclosure and recovery
provisions under Section 16 of the Exchange Act. Such reports and other
information can be inspected and copied at the public reference facilities
maintained by the Securities and Exchange Commission at its principal offices at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such
information may be obtained from the Public Reference Section of the Securities
and Exchange Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. The Commission also maintains a World Wide Web site
(http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Securities and Exchange Commission.

     We intend to furnish holders of our common shares with reports annually
containing consolidated financial statements audited by independent accountants,
beginning with the fiscal year ending December 31, 2002. We intend to file
quarterly financial statements under cover of Form 6-K. We also intend to
furnish other reports as we may determine or as required by law.

                                       105
<PAGE>

                         INDEX TO FINANCIAL STATEMENTS

<Table>
<Caption>
                                                                 PAGE
                                                              REFERENCE:
                                                              ----------
<S>                                                           <C>
ALCON, INC. AND SUBSIDIARIES:
  Report of KPMG LLP, Independent Auditors..................      F-2
  Consolidated Balance Sheets -- December 31, 2000 and
     2001...................................................      F-3
  Consolidated Statements of Earnings -- Years ended
     December 31, 1999, 2000 and 2001.......................      F-4
  Consolidated Statements of Shareholder's Equity and
     Comprehensive Income -- Years ended December 31, 1999,
     2000 and 2001..........................................      F-5
  Consolidated Statements of Cash Flows -- Years ended
     December 31, 1999, 2000 and 2001.......................      F-6
  Notes to Consolidated Financial Statements................      F-7
OTHER FINANCIAL INFORMATION
Unaudited Pro Forma Condensed Consolidated Statements of
  Earnings:
  Introduction to Unaudited Pro Forma Condensed Consolidated
     Statements of Earnings.................................     F-25
  Year ended December 31, 2001..............................     F-26
  Notes to Unaudited Pro Forma Condensed Consolidated
     Statements of Earnings.................................     F-27
</Table>

                                       F-1
<PAGE>

                    REPORT OF KPMG LLP, INDEPENDENT AUDITORS

To the Board of Directors and Shareholder of
Alcon, Inc.

     We have audited the accompanying consolidated balance sheets of Alcon, Inc.
and subsidiaries as of December 31, 2000 and 2001, and the related consolidated
statements of earnings, shareholder's equity and comprehensive income, and cash
flows for each of the three years in the period ended December 31, 2001. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Alcon, Inc.
and subsidiaries as of December 31, 2000 and 2001, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2001, in conformity with accounting principles generally accepted
in the United States of America.

/s/ KPMG LLP

Fort Worth, Texas
February 1, 2002

                                       F-2
<PAGE>

                          ALCON, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
                                                                        DECEMBER 31,
                                                              ---------------------------------
                                                                                        2001
                                                                                      PRO FORMA
                                                                2000        2001      (NOTE 1)
                                                              --------    --------    ---------
                                                              (IN MILLIONS, EXCEPT SHARE DATA)
<S>                                                           <C>         <C>         <C>
ASSETS
Current assets:
  Cash and cash equivalents.................................  $  912.0    $1,140.5    $   140.5
  Investments...............................................      54.3        61.9         61.9
  Trade receivables, net....................................     489.7       492.0        492.0
  Inventories...............................................     344.2       379.5        379.5
  Deferred income tax assets................................     143.9       147.4        147.4
  Other current assets......................................     100.7        48.5         48.5
                                                              --------    --------    ---------
          Total current assets..............................   2,044.8     2,269.8      1,269.8
Property, plant and equipment, net..........................     613.4       643.8        643.8
Intangible assets, net......................................   1,138.8     1,008.2      1,008.2
Long term deferred income tax assets........................      40.5        98.1         98.1
Other assets................................................      44.0        50.9         50.9
                                                              --------    --------    ---------
          Total assets......................................  $3,881.5    $4,070.8      3,070.8
                                                              ========    ========    =========
LIABILITIES AND SHAREHOLDER'S EQUITY (DEFICIT)
Current liabilities:
  Accounts payable..........................................  $  114.3    $  108.6    $   108.6
  Short term borrowings.....................................   1,038.1       805.5      1,037.5
  Current maturities of long term debt......................      45.8        29.4         29.4
  Other current liabilities.................................     596.3       667.8        667.8
                                                              --------    --------    ---------
          Total current liabilities.........................   1,794.5     1,611.3      1,843.3
                                                              --------    --------    ---------
Long term debt, net of current maturities...................     699.8       697.4        697.4
Long term deferred income tax liabilities...................      45.5       103.3        103.3
Other long term liabilities.................................     240.3       269.2        269.2
Redeemable preferred shares.................................        --          --      2,188.6
Contingencies (Note 14)
Shareholder's equity (deficit):
  Common shares, par value CHF 0.20 per share, 300,000,000
     shares authorized, issued and outstanding at December
     31, 2000 and 2001; as adjusted for recapitalization,
     230,250,000 issued and outstanding.....................      42.9        42.9         32.9
  Additional (deficit) paid-in capital......................     592.0       592.0     (1,953.1)
  Accumulated other comprehensive loss......................     (91.4)     (110.8)      (110.8)
  Retained earnings.........................................     557.9       865.5           --
                                                              --------    --------    ---------
          Total shareholder's equity (deficit)..............   1,101.4     1,389.6     (2,031.0)
                                                              --------    --------    ---------
          Total liabilities and shareholder's equity........  $3,881.5    $4,070.8    $ 3,070.8
                                                              ========    ========    =========
</Table>

          See accompanying notes to consolidated financial statements.
                                       F-3
<PAGE>

                          ALCON, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF EARNINGS

<Table>
<Caption>
                                                             YEARS ENDED DECEMBER 31,
                                                   --------------------------------------------
                                                       1999            2000            2001
                                                   ------------    ------------    ------------
                                                         (IN MILLIONS, EXCEPT SHARE DATA)
<S>                                                <C>             <C>             <C>
Sales............................................  $    2,401.0    $    2,553.6    $    2,747.7
Cost of goods sold...............................         719.1           749.7           798.3
Selling, general and administrative..............         805.2           855.8           953.7
Research and development.........................         213.1           246.3           289.8
In process research and development..............            --            18.5              --
Amortization of intangibles......................          46.4            86.5           117.0
                                                   ------------    ------------    ------------
     Operating income............................         617.2           596.8           588.9
Other income (expense):
  Gain (loss) from foreign currency, net.........          10.7             0.1            (4.8)
  Interest income................................          13.7            44.1            46.6
  Interest expense...............................         (54.4)          (86.3)         (107.7)
  Other..........................................            --              --            (9.1)
                                                   ------------    ------------    ------------
     Earnings before income taxes................         587.2           554.7           513.9
Income taxes.....................................         240.3           223.0           198.3
                                                   ------------    ------------    ------------
     Net earnings................................  $      346.9    $      331.7    $      315.6
                                                   ============    ============    ============
Basic and diluted earnings per common share......  $       1.22    $       1.11    $       1.05
                                                   ============    ============    ============
Basic and diluted weighted average common
  shares.........................................   283,973,000     300,000,000     300,000,000
                                                   ============    ============    ============
</Table>

          See accompanying notes to consolidated financial statements.
                                       F-4
<PAGE>

                          ALCON, INC. AND SUBSIDIARIES

              CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY AND
                              COMPREHENSIVE INCOME
                  YEARS ENDED DECEMBER 31, 1999, 2000 AND 2001

<Table>
<Caption>
                                   COMMON STOCK                     ACCUMULATED
                               --------------------   ADDITIONAL       OTHER       RETAINED
                                 NUMBER                PAID-IN     COMPREHENSIVE   EARNINGS
                                OF SHARES    AMOUNT    CAPITAL     INCOME (LOSS)   (DEFICIT)    TOTAL
                               -----------   ------   ----------   -------------   ---------   --------
                                                   (IN MILLIONS, EXCEPT SHARE DATA)
<S>                            <C>           <C>      <C>          <C>             <C>         <C>
Balance, January 1, 1999.....  270,000,000   $39.1      $361.0        $ (32.0)      $  (3.9)   $  364.2
Comprehensive income:
  Net earnings...............           --      --          --             --         346.9       346.9
  Unrealized gains on
     investments.............           --      --          --            0.1            --         0.1
  Foreign currency
     translation
     adjustments.............           --      --          --          (39.3)           --       (39.3)
                                                                                               --------
     Total comprehensive
       income................                                                                     307.7
                                                                                               --------
Capital contribution.........   30,000,000     3.8       231.0             --            --       234.8
Dividends....................           --      --          --             --        (112.6)     (112.6)
                               -----------   -----      ------        -------       -------    --------
Balance, December 31, 1999...  300,000,000    42.9       592.0          (71.2)        230.4       794.1
Comprehensive income:
  Net earnings...............           --      --          --             --         331.7       331.7
  Unrealized losses on
     investments.............           --      --          --           (7.0)           --        (7.0)
  Foreign currency
     translation
     adjustments.............           --      --          --          (13.2)           --       (13.2)
                                                                                               --------
     Total comprehensive
       income................                                                                     311.5
                                                                                               --------
Dividends....................           --      --          --             --          (4.2)       (4.2)
                               -----------   -----      ------        -------       -------    --------
Balance, December 31, 2000...  300,000,000    42.9       592.0          (91.4)        557.9     1,101.4
Comprehensive income:
  Net earnings...............           --      --          --             --         315.6       315.6
  Unrealized gain on
     investments.............           --      --          --            0.4            --         0.4
  Impairment loss on
     investment..............           --      --          --            7.3            --         7.3
  Foreign currency
     translation
     adjustments.............           --      --          --          (27.1)           --       (27.1)
                                                                                               --------
     Total comprehensive
       income................                                                                     296.2
                                                                                               --------
Dividends....................           --      --          --             --          (8.0)       (8.0)
                               -----------   -----      ------        -------       -------    --------
Balance, December 31, 2001...  300,000,000   $42.9      $592.0        $(110.8)      $ 865.5    $1,389.6
                               ===========   =====      ======        =======       =======    ========
</Table>

          See accompanying notes to consolidated financial statements.
                                       F-5
<PAGE>

                          ALCON, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>
                                                                YEARS ENDED DECEMBER 31,
                                                              ----------------------------
                                                               1999      2000       2001
                                                              -------   -------   --------
                                                                     (IN MILLIONS)
<S>                                                           <C>       <C>       <C>
Cash provided by (used in) operating activities:
  Net earnings..............................................  $ 346.9   $ 331.7   $  315.6
  Adjustments to reconcile net earnings to cash provided
     from operating activities:
     Depreciation...........................................     70.7      74.2       78.3
     Amortization of intangibles............................     46.4      86.5      117.0
     Deferred income taxes..................................    (17.2)      4.4       (2.4)
     In process research and development....................       --      18.5          0
     (Gain) loss on sale of assets..........................      1.7      (1.5)       1.4
     Changes in operating assets and liabilities:
       Trade receivables....................................    (90.2)    (54.6)     (27.6)
       Inventories..........................................     17.1     (31.2)     (57.4)
       Other assets.........................................     81.9     (54.7)      15.8
       Accounts payable and other current liabilities.......     42.6     (16.2)      58.0
       Other long term liabilities..........................    (48.1)     35.7       29.8
                                                              -------   -------   --------
          Net cash from operating activities................    451.8     392.8      528.5
                                                              -------   -------   --------
Cash provided by (used in) investing activities:
  Proceeds from sale of assets..............................      3.7     107.9        4.2
  Purchases of property, plant and equipment................    (99.4)   (117.1)    (127.4)
  Purchase of intangible assets.............................    (15.2)       --      (10.9)
  Acquisitions, net of cash acquired........................       --    (863.0)        --
                                                              -------   -------   --------
          Net cash from investing activities................   (110.9)   (872.2)    (134.1)
                                                              -------   -------   --------
Cash provided by (used in) financing activities:
  Proceeds from issuance of long term debt..................      1.3     612.8       42.2
  Net proceeds (repayment) from short term debt.............    198.8     307.3     (194.8)
  Dividends to shareholder..................................   (112.6)     (4.2)      (8.0)
  Repayment of long term debt...............................    (66.1)    (32.9)     (37.7)
  Other.....................................................       --        --       42.8
                                                              -------   -------   --------
          Net cash from financing activities................     21.4     883.0     (155.5)
                                                              -------   -------   --------
Effect of exchange rates on cash and cash equivalents.......     (1.6)     (2.1)     (10.4)
                                                              -------   -------   --------
Net increase in cash and cash equivalents...................    360.7     401.5      228.5
Cash and cash equivalents, beginning of year................    149.8     510.5      912.0
                                                              -------   -------   --------
Cash and cash equivalents, end of year......................  $ 510.5   $ 912.0   $1,140.5
                                                              =======   =======   ========
Supplemental disclosure of cash flow information:
  Cash paid during the year for the following:
     Interest expense, net of amount capitalized............  $  55.1   $  85.6   $  111.6
                                                              =======   =======   ========
     Income taxes...........................................  $ 178.9   $ 192.7   $  146.1
                                                              =======   =======   ========
</Table>

          See accompanying notes to consolidated financial statements.
                                       F-6
<PAGE>

                          ALCON, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        (IN MILLIONS, EXCEPT SHARE DATA)

(1) SUBSEQUENT EVENTS

     Alcon, Inc., a Swiss corporation ("Alcon"), is a wholly-owned subsidiary of
Nestle S.A. ("Nestle"). On September 20, 2001, the Board of Directors of Nestle
approved the exploration of an initial public offering (the "IPO") of a minority
stake in Alcon.

     In December 2001, Alcon declared a 5,000 for 1 share split on its common
shares, in preparation for the IPO, resulting in 300,000,000 common shares
outstanding. The impact of this share split has been retroactively applied to
all periods presented.

     Immediately prior to the IPO, Alcon expects to make a dividend payment to
Nestle of CHF 2,100 (or approximately $1,232 based on an exchange rate of
U.S.$1.00 = CHF 1.704) which is expected to be financed by existing cash and
cash equivalents and, if necessary, with additional borrowings. To the extent
that the amount of this payment exceeds the Company's retained earnings, the
excess is considered a return of capital under U.S. generally accepted
accounting principles. The entire payment is considered a dividend under Swiss
law.

     In addition, prior to or immediately after the IPO, the Company expects to
replace the majority of its borrowings from Nestle with third-party borrowings
most of which will be guaranteed by Nestle.

     Contingent upon the IPO, the Company will change certain provisions of its
deferred compensation plan. These changes will result in a $22.4 charge to
operating income ($14.1 net of tax) upon the completion of the IPO.

     Prior to the completion of the IPO, Nestle expects to convert 69,750,000 of
the Alcon common shares it owns into 69,750,000 Alcon preferred shares. The
preferred shares are not convertible into common shares and no preferred
dividends will be paid. The proceeds, net of related costs including taxes, from
the IPO are to be used to redeem the preferred shares. The redemption will
become payable approximately two months subsequent to the completion of the IPO.
If the underwriters over-allotment option is exercised, the proceeds from this
exercise will be used to repay short-term indebtedness and for general corporate
purposes.

     The pro forma balance sheet reflects the CHF 2,100 (or approximately
$1,232) dividend payment to Nestle and the conversion of common shares into
preferred shares with an assumed redemption value of $2,188.6 as though they had
occurred as of December 31, 2001. The pro forma balance sheet does not reflect
the IPO proceeds or the redemption of the preferred shares.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

  (a) Description of Business

     The principal business of Alcon and all of its subsidiaries (collectively,
the "Company") is the development, manufacture and marketing of pharmaceuticals,
surgical equipment and devices, contact lens care and other vision care products
that treat eye diseases and disorders and promote the general health and
function of the human eye. Due to the nature of the Company's worldwide
operations, it is not subject to significant concentration risks.

                                       F-7
<PAGE>
                          ALCON, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                        (IN MILLIONS, EXCEPT SHARE DATA)

  (b) Principles of Consolidation

     The consolidated financial statements include the accounts of the Company.
All significant balances and transactions among the consolidated entities have
been eliminated in consolidation. All consolidated entities are included on the
basis of a calendar year.

  (c) Management Estimates

     Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with accounting principles generally accepted in the United States of
America ("U.S. GAAP"). Actual results could differ from those estimates.

  (d) Foreign Currency

     The reporting currency of the Company is the United States dollar. The
financial position and results of operations of the Company's foreign
subsidiaries are generally determined using the local currency as the functional
currency. Assets and liabilities of these subsidiaries have been translated at
the rate of exchange at the end of each period. Revenues and expenses have been
translated at the weighted average rate of exchange in effect during the period.
Gains and losses resulting from translation adjustments are included in
accumulated other comprehensive loss in shareholder's equity. The impact of
subsidiaries located in countries whose economies are considered highly
inflationary is insignificant. Gains and losses resulting from foreign currency
transactions are included in nonoperating earnings.

  (e) Cash and Cash Equivalents

     Cash equivalents include demand deposits and all highly liquid investments
with original maturities of three months or less.

  (f) Inventories

     Inventories are stated at the lower of cost or market. Cost is determined
primarily using the first-in, first-out method.

  (g) Investments

     Investments consist of equity and fixed income securities classified as
available-for-sale. Available-for-sale securities are recorded at fair value.
Unrealized holding gains and losses, net of the related tax effect, on
available-for-sale securities are excluded from earnings and are reported as a
separate component of accumulated other comprehensive income until realized.
Realized gains and losses from the sale of available-for-sale securities are
determined on a specific identification basis.

     A decline in the market value of any available-for-sale investments that is
deemed to be other than temporary results in a reduction in carrying amount to
fair value. The impairment is charged to earnings and a new cost basis for the
security is established. Dividend and interest income are recognized when
earned.

  (h) Financial Instruments

     The Company uses various derivative financial instruments on a limited
basis as part of a strategy to manage the Company's exposure to certain market
risks associated with interest rate and foreign currency exchange rate
fluctuations. The Company evaluates the use of interest rate swaps and
periodically uses
                                       F-8
<PAGE>
                          ALCON, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                        (IN MILLIONS, EXCEPT SHARE DATA)

such agreements to manage its interest risk on selected debt instruments. The
Company does not enter into financial instruments for trading or speculative
purposes.

     The Company periodically uses foreign currency forward contracts to reduce
the effect of fluctuating foreign currencies on foreign currency denominated
intercompany transactions. The forward contracts establish the exchange rates at
which the Company purchases or sells the contracted amount of local currencies
for specified foreign currencies at a future date. The Company uses forward
contracts, which are short-term in nature, and receives or pays the difference
between the contracted forward rate and the exchange rate at the settlement
date.

     All derivatives are recognized on the balance sheet at their fair value.
The Company currently has no material derivative instruments that qualify as a
hedge as defined by Financial Accounting Standards Board Statement Number 133,
Accounting for Derivative Instruments and Statement Number 138, Accounting for
Derivative Instruments and Certain Hedging Activities. Accordingly, all changes
in fair value of derivative instruments are recognized in the statements of
earnings.

  (i) Property, Plant and Equipment

     Property, plant and equipment are stated at historical cost. Additions,
major renewals and improvements are capitalized while repairs and maintenance
costs are expensed. Upon disposition, the book value of assets and related
accumulated depreciation is relieved and the resulting gains or losses are
reflected in earnings.

     Depreciation on plant and equipment is calculated on the straight-line
method over the estimated useful lives of the assets which are as follows:

<Table>
<S>                                                           <C>
Land improvements...........................................     25 years
Buildings and improvements..................................  25-50 years
Machinery, other equipment and software.....................   3-12 years
</Table>

  (j) Intangible Assets

     Goodwill, which represents the excess of purchase price over fair value of
net assets acquired, is amortized on a straight-line basis over the expected
periods to be benefited, which are 10 to 20 years. The Company assesses the
recoverability of goodwill by determining whether the amortization of the
goodwill balance over its remaining life can be recovered through undiscounted
future operating cash flows of the acquired operation. The amount of goodwill
impairment, if any, is measured based on projected discounted future operating
cash flows using a discount rate reflecting the Company's average cost of funds.
The assessment of the recoverability of goodwill will be impacted if estimated
future operating cash flows are not achieved.

     Other intangible assets consist of workforce, customer base, trademarks and
patents, and licensed technology. The cost of other intangible assets is
amortized straight line over the estimated useful lives of the respective
assets, which are 5 to 20 years.

  (k) Impairment

     Long-lived assets and certain identifiable intangible assets are reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to future net cash flows expected to be generated by the asset. If such assets
are considered to be

                                       F-9
<PAGE>
                          ALCON, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                        (IN MILLIONS, EXCEPT SHARE DATA)

impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeds the fair value of the assets. Assets to be
disposed of are reported at the lower of the carrying amount or fair value less
costs to sell.

  (l) Pension and Other Postretirement Plans

     The Company sponsors several defined contribution plans, defined benefit
retirement plans and a postretirement health care plan.

     The Company provides for the benefits payable to employees on retirement by
charging current service costs to income systematically over the expected
service lives of employees who participate in defined benefit plans. An
actuarially computed amount is determined at the beginning of each year by using
valuation methods that attribute the cost of the retirement benefits to periods
of employee service. Such valuation methods incorporate assumptions concerning
employees' projected compensation and health care cost trends. Past service
costs are generally charged to income systematically over the remaining expected
service lives of participating employees.

     The cost recognized for defined contribution plans is based upon the
contribution required for the period.

  (m) Revenue Recognition

     The Company recognizes revenue on product sales when the customer takes
title and assumes risk of loss except for refractive laser system sales. If the
customer takes title and assumes risk of loss upon shipment, revenue is
recognized on the shipment date. If the customer takes title and assumes risk of
loss upon delivery, revenue is recognized on the delivery date. Revenue is
recognized as the net amount to be received after deducting estimated amounts
for rebates and product returns. The Company recognizes revenue on refractive
laser system equipment sales when the customer takes title and assumes risk of
loss and when installation and training have been completed. Per procedure
license fees related to refractive laser systems are recognized when the
procedure is performed. Estimated costs for warranty are recorded in cost of
goods sold when the related equipment revenue is recognized.

     In December 1999, the United States Securities and Exchange Commission
issued Staff Accounting Bulletin (SAB) No. 101 -- "Revenue Recognition in
Financial Statements," as amended, effective October 1, 2000. SAB No. 101
summarizes certain of the staff's views in applying accounting principles
generally accepted in the United States of America to revenue recognition in
financial statements. The Company recognizes revenue in accordance with SAB No.
101.

  (n) Research and Development

     Internal research and development are expensed as incurred. Third-party
research and development costs are expensed as the contracted work is performed
or as milestone results have been achieved.

  (o) Selling, General and Administrative

     Advertising costs are expensed as incurred. Advertising costs amounted to
$83.7, $83.4 and $96.0 in 1999, 2000 and 2001, respectively.

     Shipping and handling costs amounted to $28.1, $31.2 and $33.5 in 1999,
2000 and 2001, respectively.

                                       F-10
<PAGE>
                          ALCON, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                        (IN MILLIONS, EXCEPT SHARE DATA)

  (p) Income Taxes

     The Company recognizes deferred income tax assets and liabilities for
temporary differences between the financial reporting basis and the tax basis of
the Company's assets and liabilities and expected benefits of utilizing net
operating loss and credit carryforwards. The impact on deferred income taxes of
changes in tax rates and laws, if any, are applied to the years during which
temporary differences are expected to be settled and reflected in the financial
statements in the period of enactment. Withholding taxes have been provided on
unremitted earnings of subsidiaries which are not reinvested indefinitely in
such operations. Dividends to Alcon do not result in Swiss income taxes.

  (q) Basic and Diluted Earnings Per Common Share

     Basic and diluted earnings per common share are based on the weighted
average number of common shares outstanding for the relevant period. There were
no dilutive securities outstanding at December 31, 1999, 2000 and 2001.

  (r) Comprehensive Income

     Comprehensive income consists of net earnings, foreign currency translation
adjustments and unrealized gains (losses) on investments and is presented in the
consolidated statements of shareholder's equity and comprehensive income.

  (s) Stock Based Compensation

     The Company applies the intrinsic value based method to account for grants
to Company employees by Nestle's stock option plan. Under this method,
compensation expense is measured as soon as the number of shares and the
exercise price is known. Compensation cost is measured by the amount by which
the current market price of the underlying stock exceeded the exercise price.
The Company discloses the pro forma impact of the fair value based method of
accounting for stock based employee compensation plans.

(3) SUMMIT ACQUISITION

     On July 7, 2000, the Company purchased substantially all of the outstanding
stock and options of Summit Autonomous, Inc. ("Summit") for a total purchase
price of $948.0 including acquisition costs. Summit manufactures, sells and
services excimer laser systems and related products which correct vision
disorders. The acquisition was financed with both short-term and long-term
borrowings and was accounted for using the purchase method. Under the purchase
method, the Company allocated the purchase price to the identified assets
(including tangible and intangible assets), in process research and development
("IPR&D") and liabilities based on their respective fair values. The excess of
the purchase price over the value of the identified assets, IPR&D and
liabilities was recorded as goodwill and is being amortized on a straight-line
basis over twenty years. The useful lives of the identified intangible assets
and goodwill were determined based upon an evaluation of pertinent factors,
including consideration of legal, regulatory and contractual provisions which
could limit the maximum useful life, management judgement and reports of
independent appraisers.

     Acquired IPR&D of $18.5 related to the LADARWave(TM) Custom Cornea
Wavefront System project was expensed immediately, resulting in a noncash charge
to 2000 earnings, since the project had not reached technological feasibility
and the assets to be used in such project had no alternative future use. The
value of the IPR&D was determined by an independent appraiser.

                                       F-11
<PAGE>
                          ALCON, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                        (IN MILLIONS, EXCEPT SHARE DATA)

     Summit's operations since the acquisition date have been included in the
Company's accompanying consolidated financial statements. The total purchase
price was allocated as follows:

<Table>
<S>                                                           <C>
Current assets..............................................  $  197.4
Property, plant and equipment...............................      17.3
Other assets................................................       1.0
Goodwill....................................................     539.1
IPR&D.......................................................      18.5
Licensed technology.........................................     321.0
Other intangible assets.....................................      94.4
                                                              --------
  Total assets..............................................   1,188.7
Current liabilities.........................................     (86.4)
Long term debt..............................................      (2.0)
Long term deferred tax liabilities..........................    (151.3)
Other long term liabilities.................................      (1.0)
                                                              --------
  Acquisition cost..........................................  $  948.0
                                                              ========
</Table>

     The following unaudited pro forma summary presents information as if Summit
had been acquired on January 1, 1999. The pro forma amounts include adjustments
to recognize additional interest expense, amortization and related income taxes
arising from the acquisition. IPR&D has been excluded from this pro forma
information. The pro forma information does not necessarily reflect the actual
results that would have occurred nor is it necessarily indicative of future
results of the operations of the combined companies. Pro forma net earnings
below include Summit's discontinued operations.

<Table>
<Caption>
                                                          YEAR ENDED DECEMBER 31,
                                                          ------------------------
                                                             1999          2000
                                                          ----------    ----------
<S>                                                       <C>           <C>
Sales...................................................   $2,465.2      $2,585.8
Net earnings............................................      259.6         244.9
Earnings per share......................................   $   0.46      $   0.41
</Table>

     Summit, VISX, and certain of their affiliates (including Pillar Point
Partners, a partnership between affiliates of Summit and VISX) were involved in
a number of antitrust lawsuits which, among other things, alleged price-fixing
in connection with per-procedure patent royalties charged by Summit and VISX.
These suits were settled in July 2001 for $25.0. This settlement was accrued on
the July 7, 2000 balance sheet of Summit and is included in the pro forma net
earnings above.

     Summit and certain of its present and former officers were defendants in
two class action shareholder suits claiming, among other things, violations of
the Securities Act of 1933 and the Securities Exchange Act of 1934. These suits
were settled for $10.0 during the fourth quarter of 2000. This settlement was
accrued on the July 7, 2000 balance sheet of Summit and is included in the pro
forma net earnings above.

                                       F-12
<PAGE>
                          ALCON, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                        (IN MILLIONS, EXCEPT SHARE DATA)

(4) SUPPLEMENTAL BALANCE SHEET INFORMATION

<Table>
<Caption>
                                                              DECEMBER 31,
                                                           ------------------
                                                            2000       2001
                                                           ------    --------
<S>                                                        <C>       <C>
CASH AND CASH EQUIVALENTS
Cash.....................................................  $ 41.2    $   45.8
Cash equivalents -- Nestle...............................   844.5     1,094.0
Cash equivalents -- Other................................    26.3         0.7
                                                           ------    --------
                                                           $912.0    $1,140.5
                                                           ======    ========
</Table>

     Cash equivalents consist of interest bearing deposits and repurchase
agreements with an initial term of less than three months. Certain cash
equivalents are on deposit with Nestle subsidiaries, bear interest of LIBOR plus
a margin and have original maturities of less than three months.

<Table>
<Caption>
                                                               DECEMBER 31,
                                                             ----------------
                                                              2000      2001
                                                             ------    ------
<S>                                                          <C>       <C>
TRADE RECEIVABLES, NET
Trade receivables..........................................  $510.0    $516.0
Allowance for doubtful accounts............................    20.3      24.0
                                                             ------    ------
                                                             $489.7    $492.0
                                                             ======    ======
</Table>

     Bad debt expense for the years ended December 31, 1999, 2000 and 2001 was
$0.8, $3.1 and $11.9, respectively. The allowance for doubtful accounts at the
beginning of 1999 and 2000 was $23.1 and, $17.0, respectively. Charge offs
(recoveries), net, for the years ended December 31, 1999, 2000 and 2001 were
$6.9, $(0.2) and $8.2, respectively.

<Table>
<Caption>
                                                               DECEMBER 31,
                                                             ----------------
                                                              2000      2001
                                                             ------    ------
<S>                                                          <C>       <C>
INVENTORIES
Finished products..........................................  $220.9    $219.8
Work in process............................................    32.2      36.2
Raw materials..............................................    91.1     123.5
                                                             ------    ------
                                                             $344.2    $379.5
                                                             ======    ======
</Table>

<Table>
<Caption>
                                                               DECEMBER 31,
                                                              ---------------
                                                               2000     2001
                                                              ------    -----
<S>                                                           <C>       <C>
OTHER CURRENT ASSETS
Prepaid expenses............................................  $ 31.9    $18.4
Receivables from affiliates.................................     1.4      1.3
Other.......................................................    67.4     28.8
                                                              ------    -----
                                                              $100.7    $48.5
                                                              ======    =====
</Table>

                                       F-13
<PAGE>
                          ALCON, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                        (IN MILLIONS, EXCEPT SHARE DATA)

<Table>
<Caption>
                                                              DECEMBER 31,
                                                          --------------------
                                                            2000        2001
                                                          --------    --------
<S>                                                       <C>         <C>
PROPERTY, PLANT AND EQUIPMENT, NET
Land and improvements...................................  $   19.0    $   21.5
Buildings and improvements..............................     396.2       439.5
Machinery, other equipment and software.................     596.9       665.2
Construction in progress................................      74.5        38.4
                                                          --------    --------
                                                           1,086.6     1,164.6
Accumulated depreciation................................     473.2       520.8
                                                          --------    --------
                                                          $  613.4    $  643.8
                                                          ========    ========
</Table>

     Construction in progress at December 31, 2001 consists primarily of various
plant expansion projects. Commitments related to these projects at December 31,
2001 totaled $16.0.

<Table>
<Caption>
                                                              DECEMBER 31,
                                                          --------------------
                                                            2000        2001
                                                          --------    --------
<S>                                                       <C>         <C>
INTANGIBLE ASSETS, NET
Goodwill................................................  $  660.9    $  657.6
Licensed technology.....................................     526.1       502.0
Other intangible assets.................................     176.9       187.7
                                                          --------    --------
                                                           1,363.9     1,347.3
Accumulated amortization................................     225.1       339.1
                                                          --------    --------
                                                          $1,138.8    $1,008.2
                                                          ========    ========
</Table>

<Table>
<Caption>
                                                               DECEMBER 31,
                                                             ----------------
                                                              2000      2001
                                                             ------    ------
<S>                                                          <C>       <C>
OTHER CURRENT LIABILITIES
Deferred income tax liabilities............................  $ 11.9    $ 15.5
Payables to affiliates.....................................     1.9      47.1
Accrued payroll............................................   140.0     159.0
Accrued taxes..............................................   203.4     214.0
Other......................................................   239.1     232.2
                                                             ------    ------
                                                             $596.3    $667.8
                                                             ======    ======
</Table>

<Table>
<Caption>
                                                               DECEMBER 31,
                                                             ----------------
                                                              2000      2001
                                                             ------    ------
<S>                                                          <C>       <C>
OTHER LONG TERM LIABILITIES
Pension plans..............................................  $135.8    $146.8
Postretirement healthcare plan.............................    23.3      32.1
Deferred compensation......................................    54.1      65.7
Other......................................................    27.1      24.6
                                                             ------    ------
                                                             $240.3    $269.2
                                                             ======    ======
</Table>

                                       F-14
<PAGE>
                          ALCON, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                        (IN MILLIONS, EXCEPT SHARE DATA)

(5) SHORT TERM BORROWINGS

<Table>
<Caption>
                                                              DECEMBER 31,
                                                           ------------------
                                                             2000       2001
                                                           --------    ------
<S>                                                        <C>         <C>
Lines of credit..........................................  $  219.4    $192.1
Affiliates...............................................     790.6     565.4
Bank overdrafts..........................................      28.1      48.0
                                                           --------    ------
                                                           $1,038.1    $805.5
                                                           ========    ======
</Table>

     The Company has several unsecured line of credit agreements totaling $324.6
at December 31, 2001, with third parties that are denominated in various
currencies. The commitment fees related to unused borrowings under these
facilities were nominal during 1999, 2000 and 2001. The weighted average
interest rate at December 31, 2000 and 2001 was 10.0% and 6.3%, respectively.
Amounts outstanding under these agreements at December 31, 2001 are due at
various dates during 2002.

     The Company has various unsecured promissory notes and line of credit
agreements denominated in various currencies with several subsidiaries of
Nestle. These short term borrowings at December 31, 2001 are either due on
demand or at various dates during 2002. The weighted average interest rate at
December 31, 2000 and 2001 was 6.8% and 2.9%, respectively. The unused portion
under the line of credit agreements is $1,126.9 at December 31, 2001.

     The Company has several unsecured bank overdraft lines of credit
denominated in various currencies totalling $182.0 at December 31, 2001. The
weighted average interest rate on bank overdrafts at December 31, 2000 and 2001
were 7.3% and 7.4%, respectively.

(6) LONG TERM DEBT

<Table>
<Caption>
                                                               DECEMBER 31,
                                                             ----------------
                                                              2000      2001
                                                             ------    ------
<S>                                                          <C>       <C>
Long term debt -- affiliates...............................  $604.5    $600.0
License obligations........................................   124.1      70.6
Bonds......................................................      --      39.6
Other......................................................    17.0      16.6
                                                             ------    ------
     Total long term debt..................................   745.6     726.8
Less: current maturities...................................    45.8      29.4
                                                             ------    ------
  Long term debt less current maturities...................  $699.8    $697.4
                                                             ======    ======
</Table>

     To finance the July 2000 acquisition of Summit, the Company entered into an
unsecured promissory note, due March 2009, with a subsidiary of Nestle for
$600.0 at an interest rate of 7.89%.

     License obligations represent the present value of noninterest bearing
future fixed payments through 2007 which have been capitalized as intangibles.
These obligations have been discounted at the Company's borrowing rate (6.25% to
8.50%) at the time each license was obtained.

     During January 2001, the Company's Japanese subsidiary issued bonds with
interest at LIBOR (0.1% at December 31, 2001) due 2011. Such bonds are
guaranteed by Nestle for a fee of approximately $0.10 per year.

     Long term maturities for each of the next five years are $29.4 in 2002,
$23.4 in 2003, $9.0 in 2004, $4.9 in 2005, and $4.7 in 2006.

                                       F-15
<PAGE>
                          ALCON, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                        (IN MILLIONS, EXCEPT SHARE DATA)

     Interest costs of $1.4, $2.3 and $2.2 in 1999, 2000 and 2001, respectively,
were capitalized as part of property, plant and equipment.

(7) INCOME TAXES

     The components of earnings before income taxes were:

<Table>
<Caption>
                                                      1999     2000     2001
                                                     ------   ------   ------
<S>                                                  <C>      <C>      <C>
Switzerland........................................  $128.3   $172.4   $267.7
Outside of Switzerland.............................   458.9    382.3    246.2
                                                     ------   ------   ------
  Earnings before income taxes.....................  $587.2   $554.7   $513.9
                                                     ======   ======   ======
</Table>

     Income tax expense (benefit) consists of the following:

<Table>
<Caption>
                                                      1999     2000     2001
                                                     ------   ------   ------
<S>                                                  <C>      <C>      <C>
Current:
  Switzerland......................................  $ 29.4   $ 25.4   $ 33.4
  Outside of Switzerland...........................   228.8    193.4    167.3
                                                     ------   ------   ------
     Total current.................................   258.2    218.8    200.7
                                                     ------   ------   ------
Deferred:
  Switzerland......................................     0.4      2.5      3.2
  Outside of Switzerland...........................   (18.3)     1.7     (5.6)
                                                     ------   ------   ------
     Total deferred................................   (17.9)     4.2     (2.4)
                                                     ------   ------   ------
Total..............................................  $240.3   $223.0   $198.3
                                                     ======   ======   ======
</Table>

     A comparison of income tax expense at the statutory tax rate of 7.8% in
Switzerland to the consolidated effective tax rate is as follows:

<Table>
<Caption>
                                                           1999   2000   2001
                                                           ----   ----   ----
<S>                                                        <C>    <C>    <C>
Statutory income tax rate................................   7.8%   7.8%   7.8%
Effect of higher tax rates in other jurisdictions........  25.6   14.1   13.0
Goodwill amortization and other nondeductible items......   8.7   14.0   17.2
Other....................................................  (1.2)   4.3    0.6
                                                           ----   ----   ----
Effective tax rate.......................................  40.9%  40.2%  38.6%
                                                           ====   ====   ====
</Table>

     At December 31, 2001, Alcon's subsidiaries had net operating loss
carryforwards as follows:

<Table>
<Caption>
YEAR OF EXPIRATION                                            AMOUNT
------------------                                            ------
<S>                                                           <C>
2002........................................................    0.1
2003........................................................    1.3
2004........................................................    1.4
2005........................................................    4.0
2006........................................................    1.9
2007-2009...................................................    1.6
Indefinite..................................................   11.1
                                                              -----
                                                              $21.4
                                                              =====
</Table>

                                       F-16
<PAGE>
                          ALCON, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                        (IN MILLIONS, EXCEPT SHARE DATA)

     Deferred income taxes are recognized for tax consequences of "temporary
differences" by applying enacted statutory tax rates, applicable to future
years, to differences between the financial reporting and the tax basis of
existing assets and liabilities.

     Temporary differences and carryforwards at December 31, 2000 and 2001 are
as follows:

<Table>
<Caption>
                                                              2000      2001
                                                             ------    ------
<S>                                                          <C>       <C>
Deferred income tax assets:
  Trade receivables........................................  $ 20.0    $ 16.7
  Inventories..............................................    50.8      42.1
  Other current assets.....................................    30.8      23.5
  Other assets.............................................     6.8        --
  Accounts payable and other current liabilities...........    36.7      49.8
  Other liabilities........................................   117.3     112.2
  Net operating loss carryforwards.........................     6.7       6.3
                                                             ------    ------
     Gross deferred income tax assets......................   269.1     250.6
  Valuation allowance......................................    (6.7)     (4.6)
                                                             ------    ------
     Total deferred income tax assets......................   262.4     246.0
                                                             ------    ------
Deferred income tax liabilities:
  Property, plant and equipment............................    23.4      30.8
  Intangible assets........................................   104.3      82.9
  Other....................................................     7.7       5.6
                                                             ------    ------
     Total deferred income tax liabilities.................   135.4     119.3
                                                             ------    ------
     Net deferred income tax assets........................  $127.0    $126.7
                                                             ======    ======
</Table>

     Based on the Company's historical pre-tax earnings, management believes it
is more likely than not that the Company will realize the benefit of the
existing net deferred income tax assets at December 31, 2001. Management
believes the existing net deductible temporary differences will reverse during
periods in which the Company generates net taxable earnings; however, there can
be no assurance that the Company will generate any earnings or any specific
level of continuing earnings in future years. Certain tax planning or other
strategies could be implemented, if necessary, to supplement earnings from
operations to fully realize tax benefits.

     Withholding taxes of approximately $32.0 have not been provided on
approximately $627.0 of unremitted earnings of certain subsidiaries since such
earnings are, or will be, reinvested in operations indefinitely. Dividends to
Alcon do not result in Swiss income taxes.

(8) BUSINESS SEGMENTS

     The Company conducts its global business through two business segments:
Alcon United States and Alcon International. Alcon United States includes sales
to unaffiliated customers located in the United States of America, excluding
Puerto Rico. Alcon United States operating profit is derived from operating
profits within the United States as well as operating profits earned outside of
the United States related to the United States business. Alcon International
includes sales to all other unaffiliated customers. Each business segment
markets and sells products principally in three product categories of the
ophthalmic market: (1) pharmaceutical (e.g., prescription ophthalmic drugs), (2)
surgical equipment and devices,

                                       F-17
<PAGE>
                          ALCON, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                        (IN MILLIONS, EXCEPT SHARE DATA)

(e.g., cataract, retinal, and refractive) and (3) contact lens care (e.g.,
disinfecting and cleaning solutions) and other vision care products (e.g.,
artificial tears). Business segment operations generally do not include research
and development, manufacturing and other corporate functions. Each business
segment is managed by a single business segment manager who reports to the Chief
Executive Officer who is the chief operating decision maker of the Company.

     Segment performance is measured based on sales and operating income
reported in accordance with International Accounting Standards ("IAS"). The
principal differences between the IAS accounting policies used to generate
segment results and the Company's overall accounting policies under U.S. GAAP
include differences in intangible asset cost and lives and in process research
and development (expensed for U.S. GAAP, but not for IAS). Certain manufacturing
costs and manufacturing variances are not assigned to business segments because
most manufacturing operations produce products for more than one business
segment. Research and development costs, excluding regulatory costs which are
included in the business segments, are treated as general corporate costs and
are not assigned to business segments.

     Identifiable assets are not assigned by business segment and are not
considered in evaluating the performance of the business segments.

<Table>
<Caption>
                                                                                                   DEPRECIATION AND
                                            SALES                     OPERATING INCOME               AMORTIZATION
                                ------------------------------   ---------------------------   ------------------------
                                  1999       2000       2001      1999      2000      2001      1999     2000     2001
                                --------   --------   --------   -------   -------   -------   ------   ------   ------
<S>                             <C>        <C>        <C>        <C>       <C>       <C>       <C>      <C>      <C>
IAS:
  United States...............  $1,263.2   $1,333.4   $1,464.6   $ 557.2   $ 519.6   $ 571.1   $ 30.7   $ 53.2   $ 66.5
  International...............   1,137.8    1,220.2    1,283.1     328.0     380.1     402.6     42.5     48.6     55.4
                                --------   --------   --------   -------   -------   -------   ------   ------   ------
    Segments total............   2,401.0    2,553.6    2,747.7     885.2     899.7     973.7     73.2    101.8    121.9
  Manufacturing operations....        --         --         --     (44.2)    (10.8)    (27.3)    25.9     26.4     25.0
  Research and development....        --         --         --    (197.9)   (220.8)   (269.8)     5.7      6.7      7.4
  General corporate...........        --         --         --     (26.9)    (29.4)    (36.8)      --       --       --
U.S. GAAP adjustments:
  Amortization................        --         --         --     (11.9)    (24.2)    (36.8)    11.9     24.2     36.8
  IPR&D.......................        --         --         --        --     (18.5)       --       --       --       --
  Other.......................        --         --         --      12.9       0.8     (14.1)     0.4      1.6      4.2
                                --------   --------   --------   -------   -------   -------   ------   ------   ------
U.S. GAAP total...............  $2,401.0   $2,553.6   $2,747.7   $ 617.2   $ 596.8   $ 588.9   $117.1   $160.7   $195.3
                                ========   ========   ========   =======   =======   =======   ======   ======   ======
</Table>

(9) GEOGRAPHIC, CUSTOMER AND PRODUCT INFORMATION

     Sales for the Company's country of domicile and all individual countries
accounting for more than 10% of total sales are noted below along with long
lived assets in those countries. Sales by ophthalmic market segment are also
included. Sales below are based on the location of the customer. No single
customer accounts for more than 10% of total sales.

                                       F-18
<PAGE>
                          ALCON, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                        (IN MILLIONS, EXCEPT SHARE DATA)

<Table>
<Caption>
                                                            SALES                PROPERTY, PLANT
                                                ------------------------------    AND EQUIPMENT
                                                      FOR THE YEAR ENDED         ---------------
                                                         DECEMBER 31,            AT DECEMBER 31,
                                                ------------------------------   ---------------
                                                  1999       2000       2001      2000     2001
                                                --------   --------   --------   ------   ------
<S>                                             <C>        <C>        <C>        <C>      <C>
United States.................................  $1,263.2   $1,333.4   $1,464.6   $430.6   $463.1
Japan.........................................     266.2      309.4      284.8      6.0      5.2
Switzerland...................................      13.2       14.7       16.2      4.9      4.1
Rest of World.................................     858.4      896.1      982.1    171.9    171.4
                                                --------   --------   --------   ------   ------
     Total....................................  $2,401.0   $2,553.6   $2,747.7   $613.4   $643.8
                                                ========   ========   ========   ======   ======
Pharmaceutical................................  $  779.6   $  836.2   $  927.8
Surgical......................................   1,160.1    1,263.9    1,357.7
Contact lens care and other vision care.......     461.3      453.5      462.2
                                                --------   --------   --------
     Total....................................  $2,401.0   $2,553.6   $2,747.7
                                                ========   ========   ========
</Table>

(10) DEFERRED COMPENSATION

     The Company has an unfunded deferred compensation plan referred to as the
1994 Phantom Stock Plan for which key management members and certain other
employees are eligible to be considered for participation. A committee appointed
by the Board of Directors administers the plan. Plan payments were $13.5 and
$16.1 for 2000 and 2001, respectively. The plan's liability was $63.1 and $74.5
at December 31, 2000 and 2001, respectively, which is included in other current
liabilities and other long term liabilities in the accompanying consolidated
balance sheets.

(11) FINANCIAL INSTRUMENTS

     At December 31, 2000 and 2001, the Company's financial instruments included
cash, cash equivalents, investments, trade receivables, accounts payable, short
term borrowings and long term debt. The estimated fair value of all of these
financial instruments is as noted below. Due to the short term maturities of
cash, cash equivalents, trade receivables, accounts payable and short term
borrowings, the carrying amount approximates fair value. The fair value of long
term debt is based on interest rates then currently available to the Company for
issuance of debt with similar terms and remaining maturities. The fair value of
investments was based on quoted market prices at year end.

<Table>
<Caption>
                                                                     DECEMBER 31,
                                                       -----------------------------------------
                                                              2000                  2001
                                                       -------------------   -------------------
                                                       CARRYING     FAIR     CARRYING     FAIR
                                                       AMOUNTS     VALUE     AMOUNTS     VALUE
                                                       --------   --------   --------   --------
<S>                                                    <C>        <C>        <C>        <C>
Cash and cash equivalents............................  $  912.0   $  912.0   $1,140.5   $1,140.5
Investments:
  Marketable equity..................................       5.6        5.6        4.8        4.8
  Fixed income.......................................      48.7       48.7       57.1       57.1
Trade receivables, net...............................     489.7      489.7      492.0      492.0
Accounts payable.....................................      98.2       98.2      108.6      108.6
Short term borrowings................................   1,054.2    1,054.2      805.5      805.5
Long term debt.......................................     745.6      763.3      726.8      832.0
</Table>

                                       F-19
<PAGE>
                          ALCON, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                        (IN MILLIONS, EXCEPT SHARE DATA)

     Investment amounts include net unrealized holding losses (gains) of $6.9
and $(0.7) at December 31, 2000 and 2001, respectively. During 2001, an
impairment loss on a marketable equity investment of $9.1 was recorded in other
nonoperating expenses ($5.7 net of tax).

(12) RELATED PARTY TRANSACTIONS

     The Company's material transactions with related parties have been with
Nestle and its subsidiaries. All material related party transactions that are
not disclosed elsewhere in these notes are included below.

     During 1999, 2000 and 2001 the Company had investments and borrowings with
Nestle and its subsidiaries which resulted in the following impact to earnings
before income taxes:

<Table>
<Caption>
                                                        1999    2000    2001
                                                        -----   -----   -----
<S>                                                     <C>     <C>     <C>
Interest expense......................................  $21.9   $49.9   $80.8
                                                        =====   =====   =====
Interest income.......................................  $ 3.6   $28.2   $37.6
                                                        =====   =====   =====
</Table>

     During June 1999, Nestle contributed to the Company the debt that a
subsidiary of the Company owed Nestle. The book value of this debt, which was
$234.8, was recorded as a capital contribution in 1999.

     The Company had a minority interest in a finance company that was owned
jointly with a Nestle subsidiary. The investment was recorded using the equity
method of accounting. During 2000, this investment was sold to a Nestle
subsidiary at book value for $76.4.

     The Company leases certain facilities from Nestle subsidiaries which
resulted in rent expense of $0.6 in 1999, 2000 and 2001.

     At December 31, 1999, 2000 and 2001, certain employees of the Company
participated in a Nestle stock option plan. The Company uses the intrinsic-value
method to account for the employee's participation in this plan. The impact of
these options under the intrinsic-value method or the fair-value method is
negligible.

     Under the Nestle stock option plan, the employee is granted options to
purchase Nestle common stock with an exercise price equal to the market value on
the date of grant. The options have lives of five and seven years and vest after
two and three years, respectively. The plan provides the employees with the
option of taking cash for the intrinsic value or paying the exercise price and
taking the stock of Nestle. Since the participants have the option to take net
settlement in cash, the plan has been treated as a variable plan under the
intrinsic-value method.

                                       F-20
<PAGE>
                          ALCON, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                        (IN MILLIONS, EXCEPT SHARE DATA)

     A summary of the options is as follows:

<Table>
<Caption>
                                        1999                          2000                          2001
                             ---------------------------   ---------------------------   ---------------------------
                                        WEIGHTED AVERAGE              WEIGHTED AVERAGE              WEIGHTED AVERAGE
                              SHARES     EXERCISE PRICE     SHARES     EXERCISE PRICE     SHARES     EXERCISE PRICE
                             (ACTUAL)     (ACTUAL CHF)     (ACTUAL)     (ACTUAL CHF)     (ACTUAL)     (ACTUAL CHF)
                             --------   ----------------   --------   ----------------   --------   ----------------
<S>                          <C>        <C>                <C>        <C>                <C>        <C>
Outstanding at beginning of
  year.....................   19,980         155.9          24,660         175.8          12,810         258.8
Granted....................    4,680         260.9           4,290         281.9           4,300         343.2
Exercised..................       --            --          16,140         138.3              --            --
                             -------         -----         -------         -----         -------         -----
Outstanding at end of
  year.....................   24,660         175.8          12,810         258.8          17,110         280.0
                             =======         =====         =======         =====         =======         =====
Options exercisable at end
  of year..................   16,140         138.3           3,840         230.3           8,520         247.1
                             =======         =====         =======         =====         =======         =====
Weighted average fair value
  of options granted during
  the year (Actual
  U.S.$)...................  $ 45.55                       $ 49.51                       $ 55.83
                             =======                       =======                       =======
</Table>

     The fair value of options granted was calculated using the Black Scholes
option pricing model with the following assumptions, with respect to Nestle:
dividend yield of 1.6% in 1999 and 2000 and 1.2% in 2001; volatility of 22% in
1999 and 2000 and 24% in 2001; risk free interest rate of 4.6%, 6.5% and 4.9% in
1999, 2000 and 2001, respectively; and an expected term of five years.

(13) PENSION AND POSTRETIREMENT BENEFITS

     The Company's pension and postretirement benefit plans, which in aggregate
cover substantially all employees in the United States and employees in certain
other countries, consist of defined benefit pension plans, defined contribution
plans and a postretirement health care plan. The Company's cost of defined
contribution plans was $34.4, $40.3 and $45.4 in 1999, 2000 and 2001,
respectively. The information provided below pertains to the Company's defined
benefit pension plans and postretirement health care plan. The following table
reconciles the changes in benefit obligations, fair value of plan assets, and
funded status for the two-year period ending December 31, 2001:

<Table>
<Caption>
                                                                               POSTRETIREMENT
                                                         PENSION BENEFITS         BENEFITS
                                                        ------------------    ----------------
                                                         2000       2001       2000      2001
                                                        -------    -------    ------    ------
<S>                                                     <C>        <C>        <C>       <C>
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year...............  $ 125.3    $ 154.4    $109.8    $120.3
Service cost..........................................     10.6       12.0       6.7       7.6
Interest cost.........................................      7.9        9.7       8.1       9.3
Amendments............................................      0.9         --        --        --
Benefit paid..........................................     (4.5)      (5.7)     (2.2)     (3.4)
Actuarial (gain)/loss.................................     14.2       13.8      (2.1)     (9.9)
                                                        -------    -------    ------    ------
Benefit obligation at end of year.....................    154.4      184.2     120.3     123.9
                                                        =======    =======    ======    ======
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year........      7.6        8.1     100.3      97.8
Actual return on plan assets..........................     (1.2)      (1.2)     (0.3)     (7.2)
Employer contribution.................................      6.2       11.6        --        --
Benefits paid.........................................     (4.5)      (5.7)     (2.2)     (3.4)
                                                        -------    -------    ------    ------
Fair value of plan assets at end of year..............      8.1       12.8      97.8      87.2
                                                        =======    =======    ======    ======
</Table>

                                       F-21
<PAGE>
                          ALCON, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                        (IN MILLIONS, EXCEPT SHARE DATA)

<Table>
<Caption>
                                                                               POSTRETIREMENT
                                                         PENSION BENEFITS         BENEFITS
                                                        ------------------    ----------------
                                                         2000       2001       2000      2001
                                                        -------    -------    ------    ------
<S>                                                     <C>        <C>        <C>       <C>
RECONCILIATION OF FUNDED STATUS TO BALANCE SHEET
  LIABILITY
Funded status.........................................   (146.3)    (171.4)    (22.5)    (36.7)
Unrecognized prior service cost.......................      0.8         --       4.9       4.3
Unrecognized actuarial (gain)/loss....................      9.7       24.6      (5.7)      0.3
                                                        -------    -------    ------    ------
Net amount recognized in other long term
  liabilities.........................................  $(135.8)   $(146.8)   $(23.3)   $(32.1)
                                                        =======    =======    ======    ======
WEIGHTED-AVERAGE ASSUMPTIONS AS OF DECEMBER 31,
Discount rate.........................................  3.0-7.5%   3.0-7.3%      7.8%      7.5%
Expected return on plan assets........................      3.0%       3.0%      9.0%      9.0%
Rate of compensation increase.........................      5.0%      6.25%      N/A       N/A
</Table>

<Table>
<Caption>
                                              1999     2000     2001     1999     2000     2001
                                              -----    -----    -----    -----    -----    ----
<S>                                           <C>      <C>      <C>      <C>      <C>      <C>
COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost................................  $10.2    $10.6    $12.0    $ 5.8    $ 6.7    $7.6
Interest cost...............................    7.1      7.9      9.7      7.3      8.1     9.3
Expected return on assets...................   (0.2)    (0.2)    (0.2)    (0.8)    (6.5)   (8.6)
Prior service cost amortization.............    0.6      0.7       --      0.4      2.7     0.5
Recognized actuarial loss...................    0.6      4.0      0.2       --       --      --
                                              -----    -----    -----    -----    -----    ----
Net periodic benefit cost...................  $18.3    $23.0    $21.7    $12.7    $11.0    $8.8
                                              =====    =====    =====    =====    =====    ====
</Table>

     The health care cost trend rate used to measure the expected cost of
benefits covered by the postretirement plan is 9.0% in 2001, declining to 4.5%
in 2006 and after. The effect of a one percentage point change in assumed
medical cost trend rates is as follows:

<Table>
<Caption>
                                                         1%                1%
                                                      INCREASE          DECREASE
                                                   --------------    --------------
<S>                                                <C>               <C>
Effect on total of service and interest cost
  components.....................................      $ 3.4             $ (2.7)
Effect on the postretirement benefit
  obligation.....................................       21.2              (17.1)
</Table>

     In certain countries, the Company's employees participate in defined
benefit plans of Nestle. No separate valuation for the Company's employees has
historically been prepared for the plans as they are not material to the Company
or to Nestle. Accordingly these plans are treated as multi-employer plans.
Annual contributions to these plans are determined by Nestle and charged to the
Company. Company contributions to these plans during 1999, 2000 and 2001 were
$1.6, $1.6 and $2.6, respectively.

(14) COMMITMENTS AND CONTINGENCIES

     The Company and its subsidiaries are parties to a variety of legal
proceedings arising out of the ordinary course of business, including product
liability and patent infringement. The Company believes that it has valid
defenses and is vigorously defending the litigation pending against it.

     The Company is a defendant in three separate cases which were initiated
during the first half of 2001 whereby the plaintiff alleges that one of the
Company's products infringes on their patents and trademark. The Company has
denied infringement and asserted that the plaintiff's patent is invalid and
unenforceable.

                                       F-22
<PAGE>
                          ALCON, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                        (IN MILLIONS, EXCEPT SHARE DATA)

     The Company's tax returns are subject to examination by various taxing
authorities. Management records current tax liabilities based on their best
estimate of what they will ultimately settle with the taxing authorities upon
examination.

     While the results of the aforementioned contingencies cannot be predicted
with certainty, management believes that the final outcome of these
contingencies are adequately covered by insurance and/or the ultimate liability,
if any, will not have a material adverse effect on the Company's consolidated
financial position. Although management believes that the tax treatments
reflected in the accompanying financial statements comply with the various tax
laws and regulations, some of the tax treatments may change if challenged by the
taxing authorities. Litigation contingencies are subject to change based on
settlements and court decisions.

     The Company leases certain facilities and equipment under operating leases.
Lease expense incurred was $21.5, $21.9 and $23.8 during 1999, 2000 and 2001,
respectively. Future minimum aggregate lease payments under non-cancelable
operating leases with a term of more than one year are as follows:

<Table>
<Caption>
YEAR                                                          AMOUNT
----                                                          ------
<S>                                                           <C>
2002........................................................    22.0
2003........................................................    15.3
2004........................................................    12.7
2005........................................................    10.9
2006........................................................     7.5
Thereafter..................................................    34.5
                                                              ------
          Total minimum lease payments......................  $102.9
                                                              ======
</Table>

(15) EXIT ACTIVITIES

     In 1998, the Company announced the closure of its manufacturing facility in
Puerto Rico. As a result of this decision, the Company accrued in 1998 certain
severance costs for approximately 300 affected employees based on the statutory
requirements for severance. The facility was sold in December 2000. Virtually
all of the severance costs were paid in 2000.

     In 1999, the Company announced the closure of a manufacturing facility in
St. Louis, which resulted in the accrual of severance costs for approximately 60
employees in 1999. These costs were paid in 2000. The severance expense is
included in cost of goods sold in the consolidated statement of earnings.

     Prior to the purchase of Summit in July 2000, the Company began assessing
and formulating a plan to exit the leased facility which represented Summit's
corporate headquarters. These actions resulted in the accrual of severance for
approximately 180 employees and other costs, as well as lease payments on the
vacated facility as of the acquisition date which was recorded as part of the
purchase price of Summit. During the first half of 2001, the closure of this
facility was completed and severance payments were made. The remaining lease
costs will be paid out over the remaining lease term through 2005.

                                       F-23
<PAGE>
                          ALCON, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                        (IN MILLIONS, EXCEPT SHARE DATA)

<Table>
<Caption>
                                                   EMPLOYEE
                                                  TERMINATION
                                                   BENEFITS      OTHER EXIT COSTS    TOTAL
                                                  -----------    ----------------    ------
<S>                                               <C>            <C>                 <C>
Balance, December 31, 1998......................     $ 6.1            $  --          $  6.1
Accrued.........................................       1.3               --             1.3
Spending........................................        --               --              --
                                                     -----            -----          ------
Balance, December 31, 1999......................       7.4               --             7.4
Accrued.........................................        --               --              --
Summit acquisition..............................      10.5              2.8            13.3
Spending........................................     (11.2)              --           (11.2)
                                                     -----            -----          ------
Balance, December 31, 2000......................       6.7              2.8             9.5
Accrued.........................................        --               --              --
Spending........................................      (6.7)            (0.2)           (6.9)
                                                     -----            -----          ------
Balance, December 31, 2001......................     $  --            $ 2.6          $  2.6
                                                     =====            =====          ======
</Table>

     The exit cost accrual is included in other current liabilities in the
accompanying consolidated balance sheets.

(16) UNAUDITED QUARTERLY INFORMATION

<Table>
<Caption>
                                                           THREE MONTHS ENDED
                                           ---------------------------------------------------
                                           MARCH 31,   JUNE 30,   SEPTEMBER 30,   DECEMBER 31,
                                           ---------   --------   -------------   ------------
                                                              (IN MILLIONS)
<S>                                        <C>         <C>        <C>             <C>
Sales....................................    $ 655      $ 746         $ 676          $ 671
Cost of goods sold.......................      185        219           195            199
Selling, general and administrative......      223        250           242            239
Research and development.................       65         72            72             81
Amortization of intangibles..............       30         29            29             29
                                             -----      -----         -----          -----
  Operating income.......................      152        176           138            123
Gain (loss) from foreign currency, net...       (1)         9            (9)            (4)
Interest income..........................       16         13            13              5
Interest expense.........................      (29)       (30)          (26)           (23)
Other, net...............................       --         --            --             (9)
                                             -----      -----         -----          -----
  Earnings before income taxes...........      138        168           116             92
Income taxes.............................       53         65            45             35
                                             -----      -----         -----          -----
  Net earnings...........................    $  85      $ 103         $  71          $  57
                                             =====      =====         =====          =====
</Table>

     Our quarterly sales trends reflect the seasonality in several products,
including ocular allergy and otic products, in the form of increased sales
during the spring months.

                                       F-24
<PAGE>

                         UNAUDITED PRO FORMA CONDENSED
                       CONSOLIDATED FINANCIAL INFORMATION
                        (IN MILLIONS, EXCEPT SHARE DATA)

INTRODUCTION

     Our pro forma condensed consolidated statement of earnings present our as
adjusted results of operations for the year ended December 31, 2001, as if the
CHF 2,100 (or approximately $1,232) dividend payment to Nestle had been
completed on January 1, 2001.

     Our pro forma results are not necessarily indicative of what actually would
have occurred if the CHF 2,100 (or approximately $1,232) dividend payment had
been made on January 1, 2001, nor are they necessarily indicative of our future
operating results.

     Our pro forma condensed consolidated statement of earnings should be read
in conjunction with the Alcon consolidated financial statements and the
accompanying notes included elsewhere in this prospectus.

                                       F-25
<PAGE>

                          ALCON, INC. AND SUBSIDIARIES

        UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS

                          YEAR ENDED DECEMBER 31, 2001

                        (IN MILLIONS, EXCEPT SHARE DATA)

<Table>
<Caption>
                                                       YEAR ENDED
                                                      DECEMBER 31,
                                                          2001        ADJUSTMENTS      PRO FORMA
                                                      ------------    -----------     -----------
<S>                                                   <C>             <C>             <C>
Sales...............................................  $   2,747.7       $             $   2,747.7
Cost of goods sold..................................        798.3                           798.3
Selling, general and administrative expenses........        953.7                           953.7
Research and development............................        289.8                           289.8
Amortization of intangibles.........................        117.0                           117.0
                                                      -----------       ------        -----------
  Operating income..................................        588.9                           588.9
Other income (expense):
  Gain (loss) from foreign currency, net............         (4.8)                           (4.8)
  Interest income...................................         46.6        (37.6)(a)            9.0
  Interest expense..................................       (107.7)       (17.0)(a)         (124.7)
  Other.............................................         (9.1)                           (9.1)
                                                      -----------       ------        -----------
     Earnings before income taxes...................        513.9        (54.6)             459.3
Income taxes........................................        198.3         (4.6)(b)          193.7
                                                      -----------       ------        -----------
     Net earnings...................................  $     315.6       $(50.0)       $     265.6
                                                      ===========       ======        ===========
Basic and diluted earnings per common share.........  $      1.05                     $      0.89
                                                      ===========                     ===========
Basic and diluted weighted average common shares....  300,000,000                     300,000,000
                                                      ===========                     ===========
</Table>

                                       F-26
<PAGE>

                          NOTES TO UNAUDITED PRO FORMA
                  CONDENSED CONSOLIDATED STATEMENT OF EARNINGS

                                 (IN MILLIONS)

     The following is a summary of the estimated pro forma adjustments, based
upon available information and upon certain assumptions that our management
believes are reasonable, that are reflected in our pro forma condensed
consolidated statement of earnings:

          (a) Represents the reduction of earnings (assumed annual interest rate
     of 4.4% in 2001) to reflect the CHF 2,100 (or approximately $1,232),
     dividend payment to Nestle as if it had occurred as of the beginning of the
     period presented.

          (b) Represents the tax effect of all adjustments.

     Immediately prior to the completion of this offering, we expect to make a
dividend payment to Nestle of approximately CHF 2,100 (or approximately $1,232),
which is expected to be financed by existing cash and cash equivalents and, if
necessary, with additional borrowings. To the extent that the amount of this
payment exceeds the Company's retained earnings, the excess is considered a
return of capital under U.S. generally accepted accounting principles. The
entire payment is considered a dividend under Swiss law.

                                       F-27
<PAGE>

[Description of back inside cover artworks and graphics: in the center of the
page is a picture of a man in a lab peering through a microscope performing
research; around this picture are pictures of (clockwise from top left):


TRAVATAN ophthalmic solution, used in the treatment of glaucoma; an elderly man
looking at his grandson holding a baseball; a woman running in a park with trees
and flowers in bloom; Patanol ophthalmic solution, ocular anti-allergy solution;
a couple stretching on the beach preparing to run; a young woman; OptiFree
Express "No-Rub" contact lens disinfecting solution; ICaps ocular vitamins;
Tears Naturale Forte, lubricant eye drops; an elderly couple gardening; and a
woman examining electronic components of surgical equipment.]
<PAGE>

                                   ALCON LOGO
<PAGE>

                                    PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.

     Article X, Section 3 of the Registrant's Organizational Regulations
provides that the Registrant may obtain directors' and officers' liability
insurance for members of the Board of Directors of the Registrant and key
executive officers of the Registrant and its subsidiaries. Pursuant to this
authority, the Registrant expects to obtain directors' and officers' liability
insurance for the members of the Board of Directors of the Registrant and
certain officers of Alcon Laboratories, Inc., a wholly owned subsidiary of the
Registrant ("Alcon Labs").

     The Registrant also expects to enter into Indemnification Agreements, in
form of Exhibit 10.6 to this Registration Statement, with each of the members of
its Board of Directors and certain officers of Alcon Labs pursuant to which the
Registrant will advance funds to members of the Registrant's Board of Directors
and these officers to defray expenses, or reimburse the expenses, incurred by
such persons arising out of proceedings related to their actions in such
capacities. The availability of the advance and/or reimbursement of expenses is
subject to a determination by the disinterested members of the Board of
Directors of the Registrant that the person seeking an advance or reimbursement
of expenses acted in good faith and in the best interests of the Registrant.

ITEM 7.  RECENT SALES OF UNREGISTERED SECURITIES.

     None.

ITEM 8.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

     (a) Exhibits:

     The following exhibits are filed pursuant to Item 601 of Regulation S-K.

<Table>
<Caption>
EXHIBIT
  NO.                             DESCRIPTION
-------                           -----------
<C>       <S>
  1       Form of Underwriting Agreement*
  3.1     Form of Registrant's Articles of Association
  3.2     Form of Registrant's Organizational Regulations
  4.1     Specimen Common Share Certificate*
  4.2     The Registrant agrees to furnish copies of any instruments
          defining the rights of holders of long-term debt of the
          Registrant and its consolidated subsidiaries that does not
          exceed 10 percent of the total assets of the Registrant and
          its consolidated subsidiaries to the Commission upon
          request.
  5.1     Form of Opinion of Homburger Rechtsanwalte with respect to
          legality*
 10.1     Form of Separation Agreement between Nestle S.A. and the
          Registrant
 10.2     Form of 2002 Alcon Incentive Plan
 10.3     Executive Salary Continuation Plan for Alcon Universal Ltd.
          and Affiliated Companies effective January 1, 2001
 10.4     Executive Salary Continuation Plan for Alcon Universal Ltd.
          and Affiliated Companies effective December 31, 1998
 10.5     Phantom Stock Plan of Alcon Laboratories, Inc., Its Selected
          Affiliates, Subsidiaries and Related Corporations, effective
          January 1, 1994.
 10.6     Form of Indemnification Agreement to be entered into by the
          Registrant and the Directors and Senior Management of the
          Registrant.*
</Table>

                                       II-1
<PAGE>

<Table>
<Caption>
EXHIBIT
  NO.                             DESCRIPTION
-------                           -----------
<C>       <S>
 21.1     Significant Subsidiaries of the Registrant
 23.1     Consent of KPMG LLP, Independent Auditors
 23.2     Consent of Homburger Rechtsanwalte (set forth in Exhibit
          5.1)*
 24       Powers of attorney (included on the signature page of the
          Registration Statement)
</Table>

---------------
 * To be filed by Amendment.

ITEM 9.  UNDERTAKINGS.

     (a) The undersigned Registrant hereby undertakes to the underwriters at the
closing specified in the underwriting agreement, certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

     (b) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

     (c) The undersigned Registrant hereby undertakes that:

          (1) For purpose of determining any liability under the Securities Act,
     the information omitted from the form of prospectus filed as part of this
     registration statement in reliance upon Rule 430A and contained in a form
     of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
     497(h) under the Securities Act shall be deemed to be part of this
     registration statement as of the time it was declared effective.

          (2) For the purpose of determining any liability under the Securities
     Act, each post-effective amendment that contains a form of prospectus shall
     be deemed to be a new registration statement relating to the securities
     offered therein, and the offering of such securities at that time shall be
     deemed to be the initial bona fide offering thereof.

                                       II-2
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form F-1 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Hunenberg, State of Zug, on February 22, 2002.

                                          ALCON, INC.

                                          By /s/ TIMOTHY R.G. SEAR
                                            ------------------------------------
                                          Name: Timothy R.G. Sear
                                          Title: Chairman and President

                                          By /s/ GUIDO KOLLER
                                            ------------------------------------
                                          Name: Guido Koller
                                          Title: Senior Vice President

                               POWER OF ATTORNEY

     KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints each of the members of the board
of directors of Alcon, Inc., Guido Koller, Stefan Bassler and Martin Schneider,
his or her true and lawful attorneys-in-fact and agents with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, any and all capacities, to sign any and all amendments (including
post-effective amendments) of and supplements to this registration statement, or
any related registration statement filed pursuant to Rule 462(b) under the
Securities Act of 1933, and to file the same with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto each such attorney-in-fact and agent full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, to all intents and each purposes and as fully as he
or she might or could do in person, hereby ratifying and confirming all that
such attorney-in-fact and agent, or his or her substitute, may lawfully do or
cause to be done by virtue hereof.

     Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.

<Table>
<Caption>
SIGNATURE                                                    TITLE                         DATE
---------                                                    -----                         ----
<S>                                         <C>                                      <C>
/s/ TIMOTHY R.G. SEAR                       Principal Executive Officer              February 22, 2002
------------------------------------------
Timothy R.G. Sear

/s/ GUIDO KOLLER                            Principal Financial Officer, Principal   February 22, 2002
------------------------------------------  Accounting Officer
Name: Guido Koller

/s/ TIMOTHY R.G. SEAR                       Director                                 February 22, 2002
------------------------------------------
Name: Timothy R.G. Sear
</Table>

                                       II-3
<PAGE>

<Table>
<Caption>
SIGNATURE                                                    TITLE                         DATE
---------                                                    -----                         ----

<S>                                         <C>                                      <C>


         /s/ GASTON-NOEL BAECHLER           Director                                 February 22, 2002
------------------------------------------
        Name: Gaston-Noel Baechler


/s/ FRANCISCO CASTANER                      Director                                 February 22, 2002
------------------------------------------
Name: Francisco Castaner


/s/ CLAUDE ROSSIER                          Director                                 February 22, 2002
------------------------------------------
Name: Claude Rossier


/s/ TIMOTHY R.G. SEAR                       Authorized Representative in the United  February 22, 2002
------------------------------------------  States
Name: Timothy R.G. Sear
</Table>

                                       II-4
<PAGE>

                                 EXHIBIT INDEX

<Table>
<Caption>
EXHIBIT
  NO.                             DESCRIPTION
-------                           -----------
<C>       <S>
  1       Form of Underwriting Agreement*
  3.1     Form of Registrant's Articles of Association
  3.2     Form of Registrant's Organizational Regulations
  4.1     Specimen Common Share Certificate*
  4.2     The Registrant agrees to furnish copies of any instruments
          defining the rights of holders of long-term debt of the
          Registrant and its consolidated subsidiaries that does not
          exceed 10 percent of the total assets of the Registrant and
          its consolidated subsidiaries to the Commission upon
          request.
  5.1     Form of Opinion of Homburger Rechtsanwalte with respect to
          legality*
 10.1     Form of Separation Agreement between Nestle S.A. and the
          Registrant
 10.2     Form of 2002 Alcon Incentive Plan
 10.3     Executive Salary Continuation Plan for Alcon Universal Ltd.
          and Affiliated Companies effective January 1, 2001
 10.4     Executive Salary Continuation Plan for Alcon Universal Ltd.
          and Affiliated Companies effective December 31, 1998
 10.5     Phantom Stock Plan of Alcon Laboratories, Inc., Its Selected
          Affiliates, Subsidiaries and Related Corporations, effective
          January 1, 1994.
 10.6     Form of Indemnification Agreement to be entered into by the
          Registrant and the Directors and Senior Management of the
          Registrant.*
 21.1     Significant Subsidiaries of the Registrant
 23.1     Consent of KPMG LLP, Independent Auditors
 23.2     Consent of Homburger Rechtsanwalte (set forth in Exhibit
          5.1)*
 24       Powers of attorney (included on the signature page of the
          Registration Statement)
</Table>

---------------
 * To be filed by Amendment.

                                       II-5

</TEXT>
</DOCUMENT>
