Independent Auditors’ Report
The Board of Directors
Elan Corporation, plc
We have audited the accompanying statement of net assets to be sold as of
December 31, 2002 and the related statement of revenues and
direct expenses for the
year then ended of the Skelaxin
®
and Sonata
®
Product Lines of Elan
Corporation, plc presented on pages F-8 to F-15. These financial statements are the
responsibility of Elan Corporation, plc’s management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit 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
audit provides a reasonable basis for our opinion.
The accompanying statements were
prepared for the purposes of complying with the rules and regulations
of the Securities and Exchange Commission and for inclusion in the
Form 8-K/A of King Pharmaceuticals, Inc., as described in
note 2. The accompanying statements present the net assets to be
sold and the revenues and direct expenses of the Skelaxin
®
and
Sonata
®
Product Lines and are not intended to be a complete
presentation of the Skelaxin
®
and Sonata
®
Product Lines’ financial
position or results of operation.
In our opinion, the statements
referred to above present fairly, in
all material respects, the net assets to be sold of the Skelaxin
®
and Sonata
®
Product
Lines as of December 31, 2002 and the Skelaxin
®
and
Sonata
®
Product Lines’ revenues and direct expenses for
the year then ended, in
conformity with accounting principles generally accepted in the United States
of America.
KPMG
Chartered Accountants
Dublin, Ireland
August 22, 2003
F-7
THE SKELAXIN
®
AND SONATA
®
PRODUCT LINES
(Products of Elan Corporation, plc)
Statement of Net Assets to be Sold
(In US$, Thousands)
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
2002
|
|
|
|
|
|
Fixed
assets, net of accumulated depreciation of $1,297 (note 4)
|
|
|
5,852
|
|
|
Inventories (note 5)
|
|
|
39,961
|
|
|
Intangible assets, net of accumulated amortization of $27,600 (note 6)
|
|
|
196,100
|
|
|
Goodwill (note 6)
|
|
|
34,410
|
|
|
Capital lease obligations (note 7)
|
|
|
(5,556
|
)
|
|
Accounts payable (note 8)
|
|
|
(61,700
|
)
|
|
|
|
|
|
|
|
Net
assets to be sold
|
|
|
209,067
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
F-8
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