Pakistan frets over burqa bombers

Burqa-clad women suicide bombers in Pakistan have posed a potent threat to the country as it grapples to deal with the Taliban.

This has been vindicated by two recent attacks on the security forces that appear to have rudely awakened the authorities to the new Taliban tactic.

Thursday's attack on a security checkpost in Peshawar by women suicide bombers was the second such attack in less than two months. The previous attack was in Bajaur on June 26.

The Bajaur attack too targeted a checkpost. The bombing by the husband-wife duo left 46 people dead and over 80 injured.

The involvement of women suicide bombers has posed a major security challenge in Pakistan with the Eid shopping in full swing. As shopping is primarily done by women, security agencies are yet to devise ways to identify burqa-clad bombers in the crowd, said a report in Daily Times on Friday.

A senior police official overseeing the security measures in Lahore for Ramazan, said the government should get a decree from ulema to ask women to remove their burqas as a security measure before

entering shopping malls meant for them, he said requesting anonymity.

He said it was required because there are few women police officers available, particularly during Eid when shopping malls are thronged by women, the Daily Times report said.

Traditionally, security forces in Pakistan are reluctant to search women due to cultural sensitivities, which may have helped the Taliban to use them in their operations.

The Peshawar attackers seem to have had no hurdle in getting close to the target, although a police cordon was put in place after another blast same day near the checkpost claimed the lives of five policemen.

In Bajaur, the attackers managed to get pass the security because of one them was a woman.

Another police official contended that Peshawar attack presented a new challenge for the security forces as male officers doesn't search women.

“The attack does pose serious problems for security personnel, who will have to find ingenious ways to avert such bombings. We need to improve intelligence and gadgetry,” he said on condition of anonymity.

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Karachi killings: Pak minister blames wives, girlfriends

ISLAMABAD: After initially pointing fingers at the Taliban, Pakistan Interior Minister Rehman Malik has come out with a bizarre theory on the raging violence in Karachi, blaming “wives and girlfriends” for 70 % of the killings in the city where ethnic and political rivalries have claimed scores of lives.

In comments that were ridiculed all over the media, Malik told reporters during an interaction in Quetta yesterday that more people had been killed by those who wanted to get rid of their wives, girlfriends and boyfriends than those responsible for “target killings” in Karachi.

He was responding to a question on the killing of more than 150 people in recent clashes in the port city.

“According to my personal experience in Karachi, if, let&

#039;s say, it is said that 100 people have died in target killings, when I did the investigation, I found that there were only 30 target killings,” Malik said.

“Seventy % were those people who wanted to be rid of their wives and girlfriends or girlfriends who wanted to be rid of their boyfriends. All the figures are with me, they killed them,” he added.

The Interior Minister's comments invited ridicule of TV talk show hosts and users of popular micro-blogging website Twitter, who posted the video footage in which Malik was seen making the remarks.

Dunya News channel, in a report posted on its website, said: “However, one fails to understand if the Interior Minister knows this much, what is stopping him from taking meaningful action”.

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Karachi killings: Pak minister blames wives, girlfriends

ISLAMABAD: After initially pointing fingers at the Taliban, Pakistan Interior Minister Rehman Malik has come out with a bizarre theory on the raging violence in Karachi, blaming “wives and girlfriends” for 70 % of the killings in the city where ethnic and political rivalries have claimed scores of lives.

In comments that were ridiculed all over the media, Malik told reporters during an interaction in Quetta yesterday that more people had been killed by those who wanted to get rid of their wives, girlfriends and boyfriends than those responsible for “target killings” in Karachi.

He was responding to a question on the killing of more than 150 people in recent clashes in the port city.

“According to my personal experience in Karachi, if, let&

#039;s say, it is said that 100 people have died in target killings, when I did the investigation, I found that there were only 30 target killings,” Malik said.

“Seventy % were those people who wanted to be rid of their wives and girlfriends or girlfriends who wanted to be rid of their boyfriends. All the figures are with me, they killed them,” he added.

The Interior Minister's comments invited ridicule of TV talk show hosts and users of popular micro-blogging website Twitter, who posted the video footage in which Malik was seen making the remarks.

Dunya News channel, in a report posted on its website, said: “However, one fails to understand if the Interior Minister knows this much, what is stopping him from taking meaningful action”.

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Philippines says not raising deficit fcast further

July 27 (Reuters) – The Philippine government is not prepared to further raise the target for the budget deficit in 2010 and nor does it plan to seek a supplementary budget, Budget Secretary Florencio Abad said on Tuesday. The government, which took office on June 30, earlier this month raised the forecast for the 2010 budget deficit to 325 bilion pesos ($7.1 billion), a record in nominal terms.

As a percentage of gross domestic product, the forecast was raised to 3.9 percent from 3.6 percent, to be equal to 2009′s level.

The government has said it plans to cut the deficit to 2 percent of GDP by the end of 2013. ($1=45.9 billion) (Reporting by Rosemarie Francisco; Editing by John Mair)

UPDATE 1-African Barrick cuts FY production guidance

LONDON, July 27 (Reuters) – African Barrick Gold (ABG) (ABGL.L), which floated in London this year, has cut its full-year production guidance due to delays in accessing higher grade from its new Buzwagi mine in Tanzania.

It expects to produce 750,000-800,000 ounces of gold for the year, at a cash cost of $500-550 an ounce, down from its 800,000 to 850,000 ounce target.

ABG’s chief executive told Reuters in June that production this year would likely end up at the low end of its 800,000 to 850,000 ounce target after a slow ramp up at its new Buzwagi open pit mine. [ID:nLDE65L22D]

On Tuesday, the FTSE 100 miner said first-half attributable production was 356,208 ounces, up 23 percent year-on-year, at cash costs of $529 per ounce.

The miner reiterated that it expects higher grade primary sulphide ore to be increasingly mined in the second half and for production to rise at Buzwagi.

First-half net income jumped 217 percent from the year-earlier period to $99 million and the company said it plans to pay an interim dividend of 1.6 cents per share.

Shares in the FTSE 100 group closed on Monday at 550 pence, just below the IPO price. Gold prices XAU= rose 13 percent in the first half of 2010 to touch a record $1,264.90 an ounce in June on concern over euro zone sovereign debt levels. [GOL/]

The market has viewed the company, which has four producing gold mines in Tanzania, with some caution compared to its rivals and is looking for African Barrick to establish a track record of organic growth or make an acquisition elsewhere in Africa.

ABG, spun off on March 19 from its Canadian parent Barrick Gold Corp (ABX.TO), the world’s largest gold miner, after raising 581 million pounds via an initial public offering at 575 pence a share.

Barrick Gold will announce its second-quarter results on Thursday. [ID:nN22125838]

(Reporting by Julie Crust; editing by Rhys Jones)

FOREX-Euro inches higher, hovers near 2-mth peak

TOKYO, July 27 (Reuters) – The euro ticked up towards a two-month peak above $1.3000 on Tuesday, although traders were cautious about bidding it up too much as they await clarity on Deutsche Bank’s exposure to euro zone sovereign debt.

Deutsche (DBKGn.DE) posted second-quarter pretax profit in line with expectations but it has not revealed its exposure to European sovereign debt following tests to see how well banks in the region would stand up to financial shocks. [ID:nLDE66Q07V] [ID:nLDE66P1X4]

Some traders said that if the bank gives details and there are no shocks, that could help build more confidence in euro zone banks and trigger buying in the euro.

In that case, the single currency’s next target would be last week’s two-month high of $1.3029 EUR= and then $1.3125, a 38.2 percent retracement of its December-June fall, technical analysts said.

“Despite all the negative talk about the stress test results, German interest rates are rising and the euro firmed, which seems to suggest lingering euro short-covering needs,” said Osamu Takashima, chief FX strategist at Citibank in Tokyo.

The euro rallied on Monday on relief the tests were over, although concerns they were not rigorous enough mean investors are still hesitant to make big bets on it, while some traders say euro zone debt redemptions this week could also constrain it.

Citi estimates there are some 45 billion euros worth of maturing bonds and coupon payments this week. [ID:nLDE66M1PR]

The euro rose 0.1 percent to $1.3009 EUR=. It climbed as high as $1.3019 earlier. Any fall was seen likely to be limited while it remained above support at $1.2870 — its 100-day moving average — and last week’s low around $1.2730.

The euro gained 0.2 percent to 113.11 yen EURJPY=. It has met stiff resistance at 113.30-50 in the past two weeks, partly on selling by Japanese exporters.

But Takashima said it was likely to rise above 113 yen.

“It’s true Japanese exporters were lowering their target price to around 113 yen from 118 yen. But looking at trade data, exports to Europe are stagnating, which points to limited selling by exporters,” he said.

The Aussie was steady on the day at $0.9021 AUD=D4, after rising 0.9 percent on Monday as investor risk appetite revived after the stress test results.

Chartwise it could be set to rise against the yen. On the daily Ichimoku chart for Aussie/yen, the tenkan sen has risen above the kijun sen line, in a bullish signal.

The top of the Ichimoku cloud now lies roughly around 80 yen, and a rise above that level would be another bullish sign.

“I think investors will tiptoe back into high-yielders as worries about Europe will gradually subside,” said a trader at a Japanese brokerage house.

The U.S. dollar gained 0.1 percent against the yen to 86.97 yen JPY=, though it was capped by offers around 87 yen from Japanese exporters. (Additional reporting by Reuters FX Analyst Krishna Kumar in Sydney; Editing by Joseph Radford)

UPS Digs Deep into Footprint, Sets High Goals for Fuel Efficiency

United Parcel Service decreased energy and water use as well as its greenhouse gas emissions last year in the U.S., prompting the company to set a new goal of 20 percent improvement in automotive fuel efficiency by 2020.

The environmental efforts are detailed in UPS’s latest sustainability report, which was published Monday.

The higher standard for fuel efficiency is set against a baseline year of 2000 and if achieved would double the company’s performance in the area thus far. From 2000 through 2009, automotive fuel efficiency increased 10 percent, UPS reported, noting that its drivers covered 77.3 million miles more in 2009 than they did in 2000 but consumed 3.2 million gallons less fuel.

The new target for automotive fuel efficiency dovetails an air fleet efficiency goal announced last year: After several years of steadily increasing efficiency in air operations, UPS said it would reduce the carbon emissions by its air fleet by 20 percent by 2020, compared to 2005.

The company’s move to raise the bar for efficiency in its ground and air operations were among the highlights of a sustainability report that noted improvement in the majority of the company’s environmental key performance indicators.

UPS started compiling sustainability reports in 2003 and this year’s report, which covers operations in 2009, is the first to publish information on the company’s global greenhouse gas emissions (including CO2, CH4, N2O and HFC) for Scope 1 and Scope 2 emissions. (see chart, right). Previously, the company reported only on CO2 emissions.

The information also reflects more extensive data collection by UPS, which process mapped all transport-related activities that generate carbon across the company globally in reporting CO2 Scope 3 emissions this year. As noted in the chart below left, direct emissions fell almost 9 percent from 2008 to 2009 while indirect emissions almost tripled.

“As you see, we continue to evolve and we’re working very hard at mapping out our impact,” said Steven Leffin, UPS’s corporate sustainability manager.

Leffin pointed to those efforts, UPS’s heightened transparency in reporting and its new goals for fuel and air fleet efficiency as some of the key accomplishments by the company in the past year.

Although revenue slipped from $51.5 billion in 2008 to $45.3 billion in 2009 as the recession continued, UPS remained the world’s largest package delivery company and handled 3.8 billion packages in 2009. The U.S. domestic package operation, the company’s largest business segment, accounted for 62 percent of the revenue and showed improvement in energy efficiency as well as emissions when compared to parcels handled. When measured against revenue, however, energy consumption and emissions rose in 2009.

Energy consumption was 3.5 percent lower per 1,000 packages and rose 3.6 percent per dollar of revenue. CO2e emissions declined 3.1 percent per 1,000 packages and increased 3.8 percent per dollar of revenue, the company reported.

Next Page: UPS’s environmental progress by the numbers.

!–pagebreak–
The sustainability report examined the company’s work to reduce energy consumption, emissions, water use and fuel consumption on the ground and in air.

UPS, which prides itself on deeply detailed measuring and monitoring to boost environmental performance, presented data in terms of absolute change and as an efficiency rate based on what it takes to deliver a package or produce revenue.

Specifically, UPS decreased:

Energy Use

Absolute direct and indirect energy consumption for U.S. package operations and for U.S. supply chain and freight fell. U.S. package operations consumed 96.80 million gigajoules in 2009, about 7 percent less than the 104.1 million gigajoules in 2008. U.S. supply chain and freight consumed 16.55 million gigajoules of energy in 2009, 19.4 percent less than the 20.53 million gigajoules in consumed in 2008 (see chart at right).

Energy efficiency, expressed as energy consumption per 1,000 parcels in U.S. package operations, came to 29.33 million gigajoules in 2009, compared with 30.40 million gigajoules per 1,000 packages in 2008. Meanwhile, energy consumption per $1,000 of revenue was 3.44 gigajoules for 2009 an increase from the 3.32 gigajoules for $1,000 of revenue in 2008.

Emissions for U.S. Package Operations

Absolute direct and indirect CO2e emissions for U.S. package operations also dropped. CO2e emissions came to 7.27 million metric tonnes in 2009, compared with 7.75 million metric tonnes in 2008 (see chart below right).

Carbon efficiency, expressed as CO2e emissions per 1,000 parcels in U.S. package operations, were 2.18 metric tonnes per 1,000 packages in 2009, compared with 2.25 metric tonnes per 1,000 packages for the previous year. Viewing emissions compared to revenue, CO2e emissions came to 25.55 metric tonnes per $100,000 of revenue in 2009, an uptick from the 24.61 metric tonnes CO2e for the same amount of revenue in 2008.

Water Use

Water consumption decreased in absolute terms and in water efficiency rates based on number of packages handled and revenue. The company’s absolute water consumption in 2009 came to 4.52 million cubic meters for U.S. package operations, supply chain and freight, compared with 5.04 million cubic meters in 2008. In 2009, 1.18 cubic meters of water were consumed per 1,000 packages in U.S. package operations, compared with 1.28 cubic meters of waters per 1,000 packages in 2008. In a look at water use compared to revenue, UPS consumed 0.138 cubic meters per $1,000 of revenue in 2009 compared with 0.139 cubic meters per $1,000 in 2008.

Fuel Consumption and Air Fleet Emissions

Gallons of fuel consumed on the ground to deliver a single package decreased. In 2009, it took an average 0.121 gallons of fuel to deliver single package in the U.S. using UPS’ ground network, which includes its fleet of more than 95,000 vehicles and rail services. That’s a nearly 5 percent improvement over the figure for 2008. The company’s green fleet steadily grew in 2009 to 1,883 alternative fuel vehicles.

Carbon emissions of global airline operations based on the amount on CO2 emitted when transporting a ton of capacity one nautical mile, termed an available ton mile or ATM, also dropped. The measure of carbon efficiency was 1.40 pounds of CO2 per available ton mile in 2009, compared to 1.42 pounds of CO2/ATM in 2008. The goal to increase carbon efficiency by 20 percent between 2005 and 2020, builds on previous gains in the area. If achieved, UPS will increase carbon efficiency by 42 percent compared to 1990.

Gallons of jet fuel consumed per 100 available ton miles. UPS used 6.63 gallons of jet fuel per 100ATM in 2009, a drop from the 6.73 gals/100ATM logged in 2008. The company originally set a target of 6.9 gals/100ATM for 2011 target, but surpassed the goal in 2008. It has a new target of 6.57 gals/100ATM for 2012.

Next Page: “Decarbonization synergy” — the UPS way.

!–pagebreak–
The firm’s goals for reducing carbon emissions in its airline operations, which would be the ninth largest in the U.S. if it were an airline company, are among the most aggressive in UPS’s ambitious environmental program.

UPS’s efforts include joining 10 other members of the Air Transportation Association of America to support development of aviation biofuel development by signing a memorandum of understanding with two potential aviation biofuel developers in 2009.

Airline operations account for 53 percent of the company’s global carbon footprint, so focusing on that area is an imperative, Leffin said. Overall, the company’s improvements in environmental performance demonstrate the value of UPS’s integrated transportation network of package cars, trucks, rail and shipping services and aircraft, he said.

The company not only optimizes the way each functions (down to specific drivers and their routes), the firm also employs sophisticated systems to optimize carbon and energy efficiency across a single delivery and delivery operations as a whole.

The process, which UPS calls “decarbonization synergy,” ensures that packages get to their destinations with least environmental impact without compromising delivery schedules and customer service, Leffin said.

The company also is providing services for customers to help lighten the environmental tread of their packages. The company introduce a carbon offset program last October and expanded it to 36 countries this summer. It also introduced its Eco Responsible Packaging Program this spring.

The sustainability report is available www.responsibility.ups.com/Sustainability. This year’s report was assured by Deloitte & Touche LLP and checked by the Global Reporting Initiative — two other firsts for the company.

All images and charts courtesy of UPS.

Australia’s Charter Hall to launch A$200 mln fund

July 27 (Reuters) – Australia’s Charter Hall (CHC.AX) is launching a A$200 million ($180.5 million) industrial property fund, an executive from the property firm said on Tuesday, in a sign of recovery in the unlisted retail market previously hit by redemptions.

Charter Hall, which earlier this year bought Macquarie Group’s (MQG.AX) real estate business, hope to raise as much as A$110 million in the next two years from retail investors with a target of buying a portfolio of assets of up to A$200 million with debt, Richard Stacker, chief executive officer for Charter Hall’s direct property business, told a briefing. The closed-end fund will aim to deliver an average annualised yield of 8.7 percent.

The unlisted retail market was one of the sectors hardest hit by the global financial crisis with many funds frozen, but some high net-worth clients remain keen to get steady income returns from property, he said.

Stacker said raising new funds “would definitely be a challenge” but some self-managed pension funds targeting high-net worth individuals were seeking such investments.

He also said demand for unlisted property products was firm, with the listed property trusts trading at a discount and seeing volatile sessions.

Charter Hall has more than A$10 billion assets under management through listed and unlisted vehicles.

Demand for industrial space was picking up in Australia and Grade A warehouse rents were expected to rise 3 to 4 percent each year for a few years from 2011, Kevin Stanley, executive director for CB Richard Ellis, told the same briefing.

(Reporting by Eriko Amaha; Editing by Ed Davies)

Ericsson: Ericsson second quarter results

“Group sales in the quarter declined -8% year-over-year with lower sales in Networks.
Sales in Global Services were flat due to decline in network rollout although
Professional Services increased 5%,” says Hans Vestberg, President and CEO of Ericsson
(NASDAQ:ERIC).

“Group sales increased sequentially by 6%. Sales for comparable units, adjusted for
currency exchange rate effects and hedging declined year-over-year -15%. Operators
showed a continued good demand for mobile broadband driven by smartphone and laptop
usage. Sales were however impacted by continued industry component shortages and supply
chain bottlenecks. We estimate that this had a negative impact on our sales in the
quarter by SEK 3-4 b.

Gross margin improved year-over-year and sequentially due to business mix and efficiency
gains. Cash flow declined year-over-year, mainly due to increased working capital. Sony
Ericsson continued to show improved results and ST-Ericsson’s transition program is on
track.

Net income improved year-over-year and sequentially, positively impacted by improved
earnings in Sony Ericsson.

The market conditions we saw in the second half of 2009 with mixed operator investment
behavior prevailed also in the first half of this year. In the quarter all regions,
except North America, showed lower year-over-year sales. Meanwhile, sequential sales
showed a more mixed picture with growth in regions such as Mediterranean, North America,
Northern Europe and Central Asia, as well as Sub-Saharan Africa.

Over the past years, we have gone through major changes with cost reductions and
strengthened portfolio and market presence while maintaining our technology leadership.
The cost reduction program, initiated in the first quarter 2009 has been completed,
reaching its target. Going forward, cost and capital efficiency will remain top of our
agenda,” concludes Hans Vestberg.

Second quarter First quarter Six months
SEK b. 2010 2009 Change 2010 Change 2010 2009 Change
Net sales 48.0 52.1 -8% 45.1 6% 93.1 101.7 -8%
Gross margin 39% 36% – 39% – 39% 36% –
EBITA margin excl JVs1) 14% 13%3) – 13% – 13% 13%3) –
Operating income excl JVs 5.3 6.13) -12% 4.5 17% 9.9 10.83) -9%
Operating margin excl JVs 11% 12%3) – 10% – 11% 11%3) –
Ericsson’s share in earnings in JVs -0.1 -2.0 – -0.3 – -0.4 -4.2 –
Income after financial items 5.1 4.8 4% 4.1 23% 9.2 8.2 12%
Net income 2.0 0.8 154% 1.3 59% 3.3 2.6 26%
EPS diluted, SEK 0.58 0.26 123% 0.39 49% 0.98 0.79 24%
Adjusted cash flow2) -2.0 9.9 – 3.0 – 1.0 8.3 –
Cash flow from operations -2.7 9.1 – 2.3 – -0.4 6.3 –
Restructuring charges excl JVs 2.0 3.6 – 2.2 – 4.2 4.3 –

All numbers, excl. EPS, Net income and Cash flow from operations, excl. restructuring
charges.

1) EBITA – Earnings before interest, tax, amortizations and write-downs of acquired
intangibles.

2) Cash flow from operations excl. restructuring cash outlays that have been provided
for. Cash outlays in the quarter were SEK 0.7 (0.8) b. For the first quarter, cash
outlays amounted to SEK 0.7 b.

3) Second quarter 2009 excl. capital gain of SEK 0.8 b from divested TEMS services
operation.

FINANCIAL HIGHLIGHTS

Income statement and cash flow

Sales in the quarter were down -8% year-over-year and increased 6% sequentially. Sales
for comparable units, adjusted for currency exchange rate effects and hedging, declined
-15% year-over-year. The net impact of currency exchange rate effects and hedging was
slightly negative. Sales were impacted by continued industry component shortages and
supply chain bottlenecks. We estimate that this had a negative impact on our sales in
the quarter by SEK 3-4 b.

During the quarter, operators in a number of developing markets were still cautious with
investments which impacted sales in Networks, Network Rollout and Multimedia. This was
partly offset by increased sales in Professional Services and especially in Managed
Services.

Gross margin, excluding restructuring, improved slightly sequentially and improved
year-over-year to 39% (36%) due to business mix and efficiency gains.

The cost reduction activities have reduced operating expenses as planned. However,
integration of the acquired CDMA and GSM businesses, higher investments in certain R&D
areas and growing number of 4G/LTE trials, have resulted in an increase in operating
expenses to SEK 13.9 (13.6) b., excluding restructuring charges. Other operating income
and expenses were SEK 0.5 (1.6) b. in the quarter. Last year includes a capital gain of
SEK 0.8 b. from the divested TEMS services operation.

Operating income, excluding joint ventures and restructuring charges, amounted to SEK
5.3 (6.1) b., including positive contribution from the acquired CDMA and GSM businesses.
The year-over-year decline is mainly due to lower sales. Operating margin declined to
11% (12%) for the same reason. Sequentially, the margin improved due to increased sales
and efficiency gains. The capital gain of SEK 0.8 b. from the divested TEMS services
operation is excluded from the 2009 numbers.

Ericsson’s share in earnings of joint ventures, before tax, amounted to SEK -0.1 (-2.0)
b. excluding restructuring charges, compared to SEK -0.3 b. in the first quarter.
Sequentially, Sony Ericsson improved sales and margins significantly due to efficiency
programs and new products. ST-Ericsson’s sales declined sequentially, however the loss
remained at the same level, positively impacted by efficiency programs. Restructuring
charges in joint ventures were SEK 0.2 b. in the quarter.

Financial net was SEK -0.1 (-0.1) b., mainly due to low interest rates and negative
currency revaluation effects on financial assets and liabilities.

Net income amounted to SEK 2.0 (0.8) b. and earnings per share were SEK 0.58 (0.26) in
the quarter.

Adjusted cash flow was SEK -2.0 (9.9) b. in the quarter, down sequentially from SEK 3.0
b. Cash flow from operations decreased mainly due to increased working capital as a
result of tight components supply conditions which led to deliveries late in the
quarter.

Balance sheet and other performance indicators

SEK b. Dec 31 Mar 31 June 30
2009 2010 2010
Net cash 36.1 38.5 25.8
Interest-bearing liabilities and post-employment benefits 40.7 39.3 41.8
Trade receivables 66.4 62.7 69.4
Days sales outstanding 106 117 133
Inventory 22.7 24.1 29.4
Of which regional inventory 12.9 14.0 18.3
Inventory days 68 75 81
Payable days 57 59 61
Customer financing, net 2.3 2.9 3.1
Return on capital employed 4% 5% 6%
Equity ratio 52% 53% 51%

Trade receivables increased sequentially by SEK 6.7 b. to SEK 69.4 (62.7) b. and days
sales outstanding (DSO) increased from 117 to 133 days impacted by higher proportion of
deliveries late in the quarter and currency exchange effects. The consolidation of the
LG-Nortel operation impacted trade receivables by SEK 1.0 b.

Inventory increased sequentially by SEK 5.3 b. to SEK 29.4 (24.1) b. and inventory
turnover days increased by six days from 75 to 81 days, impacted by continued component
shortages and supply chain bottlenecks. The consolidation of the LG-Nortel operation
impacted inventory by SEK 1.0 b.

Cash, cash equivalents and short-term investments amounted to SEK 67.6 (77.9) b. The net
cash position decreased sequentially by SEK 12.7 b. to SEK 25.8 (38.5) b., due to pay
out of dividend of SEK 6.4 b., the acquisition of Nortel’s part of LG-Nortel and
negative cash flow from operations as a result of increased working capital.

During the quarter, approximately SEK 1.5 b. of provisions were utilized, of which SEK
0.7 b. related to restructuring. Additions of SEK 2.4 b. were made, of which SEK 1.3 b.
related to restructuring. Reversals of SEK 0.3 b. were made.

Cost reduction program

The cost reduction program, initiated in first quarter 2009, has been completed by the
second quarter 2010. The total annual savings of the program are estimated to SEK 15-16
b. from the second half of 2010. Of total restructuring charges of SEK 15.5 b., about
SEK 6.0 b. is related to cost of sales and SEK 9.5 b. to operating expenses.

In the second quarter, restructuring charges, excluding joint ventures, amounted to SEK
2.0 b. At the end of the quarter, cash outlays of SEK 4.7 b. remain to be made.

Restructuring charges, SEK b. 2010 2010 2009
Q2 Q1 Full year
Cost of sales -1.0 -0.8 -4.2
Research and development expenses -0.6 -0.3 -6.1
Selling and administrative expenses -0.4 -1.1 -1.0
Total -2.0 -2.2 -11.3

SEGMENT RESULTS

Second quarter First quarter Six months
SEK b. 2010 2009 Change 2010 Change 2010 2009 Change
Networks sales 25.5 28.8 -12% 24.7 3% 50.2 57.6 -13%
EBITA margin1) 17% 14% – 16% – 16% 14% –
Operating margin 13% 12% – 12% – 13% 12% –
Global Services sales 20.1 20.0 0% 18.1 11% 38.2 37.5 2%
Of which Professional Services 14.8 14.1 5% 13.3 12% 28.1 26.9 5%
Of which Managed Services 5.6 4.6 23% 4.9 15% 10.5 8.8 20%
Of which Network Rollout 5.2 5.9 -12% 4.8 8% 10.1 10.6 -5%
EBITA margin1) 12% 12%2) – 12% – 12% 11%2) –
Of which Professional Services 15% 16%2) – 16% – 16% 16%2) –
Operating margin 12% 12%2) – 11% – 11% 11%2) –
Of which Professional Services 15% 16%2) – 15% – 15% 15%2) –
Multimedia sales 2.4 3.3 -27% 2.3 5% 4.7 6.6 -28%
EBITA margin1) -5% 15% – -5% – -5% 12% –
Operating margin -13% 9% – -13% – -13% 5% –
Total sales 48.0 52.1 -8% 45.1 6% 93.1 101.7 -8%

All numbers exclude restructuring charges.

1) EBITA – Earnings before interest, tax, amortizations and write-downs of acquired
intangibles.

2) Second quarter 2009 excl. capital gain of SEK 0.8 b from divested TEMS services
operation.

Networks

Networks’ sales in the quarter declined by -12% year-over-year. Voice related sales,
such as 2G access and circuit switched core continued to decline. Increased mobile
broadband sales (3G), including radio, backhaul and packet core, partly offset this
impact. CDMA continued to develop favorably. Similar to the first quarter segment sales
were negatively impacted by continued component shortages and supply chain bottlenecks.

The strong data traffic uptake is creating
transmission bottlenecks and demand for microwave based backhaul solutions was strong in
the quarter.

EBITA margin in the quarter increased year-over-year to 17% (14%) despite lower sales,
positively impacted by continued efficiency gains and business mix with a high
proportion of network expansions.

The multi standard radio base station RBS 6000 has been well received by customers and
is now shipping in volumes. In the quarter, the world’s first commercial 42 Mbit/s HSPA
network was launched with Ericsson equipment. There was continued good demand for IP
infrastructure based on the SmartEdge platform. The same platform is used in Ericsson’s
converged packet gateway which is part of the mobile packet core for 4G/LTE.

Global Services

Global Services sales were flat year-over-year, but increased 11% sequentially. Global
services sales account for some 42% of total Group sales. Professional Services sales
increased 5% year-over-year and in local currencies growth amounted to 9%
year-over-year. Managed Services sales in the quarter increased by 23% year-over-year.
Network Rollout sales decreased -12% year-over-year.

The year-over-year slow-down in growth in Global Services sales is primarily an effect
of lower network rollout activity driven by fewer turnkey projects, continued component
shortages and supply chain bottlenecks.

There is a continued good demand for services targeting the operational efficiency of
operators, such as managed services, systems integration and consulting. Operators also
show growing interest in network optimization services, driven by mobile broadband build
out, as well as revenue assurance services. Services related to 2G voice sales developed
unfavorably also this quarter.

EBITA margin for Global Services was flat year-over-year and sequentially at 12% (12%).
EBITA margin for Professional Services amounted to 15% (16%) in the quarter and
decreased slightly sequentially from 16%. Last year excludes a capital gain of SEK 0.8
b. from the divested TEMS operations.

During the quarter, nine managed services contracts were signed of which six were
extensions or expansions of existing customer agreements.

Further proof of operators’ interest in our services offering is our largest managed
services contract in China to date with China Mobile Hebei announced on July 19.

Ericsson provides support for networks that serve more than two billion subscribers
worldwide. The total number of subscribers in managed networks is more than 450 million,
of which 50% are in high-growth markets.

Multimedia

Multimedia sales in the quarter decreased by -27% year-over-year due to continued weak
demand for revenue management solutions in regions India, Middle East and Sub-Saharan
Africa. Sales grew 5% sequentially, driven by TV and Multimedia Brokering.

The TV business continued to show good development with strong demand for compression
technology. EBITA margin declined to -5% (15%) year-over-year as a result of the lower
sales.

Sony Ericsson

Second quarter First quarter Six months
EUR m. 2010 2009 Change 2010 Change 2010 2009 Change
Number of units shipped (m.) 11.0 13.8 -20% 10.5 5% 21.5 28.3 -24%
Average selling price (EUR) 160 122 31% 134 19% 147 121 21%
Net sales 1,757 1,684 4% 1,405 25% 3,162 3,419 -8%
Gross margin 28% 12% – 31% – 29% 10% –
Operating margin 2% -16% – 1% – 2% -19% –
Income before taxes 31 -283 – 18 – 50 -653 –
Income before taxes, excl restructuring charges 63 -283 – 21 – 84 -640 –
Net income 12 -213 – 21 – 33 -505 –

Units shipped in the quarter were 11 million, a decrease of -20% year-over-year and an
increase of 5% sequentially. Sales in the quarter were EUR 1,757 million, an increase of
4% year-over-year and 25% sequentially.

Average selling price in the quarter increased by 31% year-over-year due to improved
product and geographical mix, as well as currency effects.

Income before taxes for the quarter, excluding restructuring charges, was a profit of
EUR 63 (-283) million, illustrating the positive impact of the cost reduction program
and favorable product mix. As of June 30, 2010, Sony Ericsson had a net cash position of
EUR 609 million.

Ericsson’s share in Sony Ericsson’s income before tax was SEK 0.1 (-1.5) b. in the
quarter.

ST-Ericsson

USD m. Second quarter First quarter
2010 2009 Change 2010 Change
Net sales 544 666 -18% 606 -10%
Adjusted operating income 1) -118 -165 – -114 –
Operating income before taxes -148 -224 – -164 –
Net income -139 -213 – -154 –

1) Operating income adjusted for amortization of acquired intangibles and restructuring
charges.

Net sales decreased by -10% sequentially, reflecting the continued portfolio transition,
weaker than expected performance in Asia and some supply limitations, which were only
partially offset by a positive performance by certain EDGE products.

The adjusted operating loss increased sequentially by USD 4 m. The impact of the lower
level of revenues was mitigated by the positive effects of the cost savings generated in
the quarter.

Net cash was USD 43 m. at the end of the quarter. During the quarter the company sold
trade receivables without recourse, of which USD 67 m. were outstanding at the end of
the quarter. The cash outflow was due to the operating loss and payments related to the
restructuring.

The restructuring plans, respectively, of USD 230 m., announced on April 29, 2009, and
of USD 115 million, announced on December 3, 2009, are on track. The USD 230 m. plan was
completed with 87% of the savings realized at the end of the second quarter, and the
full effects are expected to come through in the third quarter. The USD 115 m.
restructuring plan is expected to start contributing savings from the third quarter of
2010.

ST-Ericsson is reported in US GAAP. Ericsson’s share in ST-Ericsson’s income before tax,
adjusted to IFRS, was SEK -0.4 (-0.6) b. in the quarter, including restructuring charges
of SEK -19 (-140) m.

REGIONAL OVERVIEW

Second quarter First quarter Six months
Sales, SEK b. 2010 2009 Change 2010 Change 2010 2009 Change
North America 13.1 5.7 128% 9.5 37% 22.5 10.5 115%
Latin America 4.2 4.8 -12% 4.0 6% 8.2 9.2 -11%
Northern Europe and Central Asia 2.7 2.9 -7% 2.3 16% 5.0 5.8 -14%
Western and Central Europe 4.4 5.4 -19% 5.2 -16% 9.6 10.8 -11%
Mediterranean 5.6 6.8 -17% 5.1 11% 10.7 12.9 -17%
Middle East 3.8 4.7 -20% 3.9 -4% 7.7 8.7 -11%
Sub-Saharan Africa 3.0 3.6 -19% 2.4 22% 5.4 8.3 -35%
India 1.4 3.7 -63% 2.3 -41% 3.7 7.7 -52%
China and North East Asia 4.6 7.2 -36% 5.0 -7% 9.6 13.0 -26%
South East Asia and Oceania 3.6 5.7 -36% 3.5 4% 7.2 10.9 -34%
Other 1.6 1.6 3% 1.9 -14% 3.5 3.9 -10%
Total 48.0 52.1 -8% 45.1 6% 93.1 101.7 -8%

North America sales increased 128% year-over-year and 37% sequentially. The strong
mobile data growth was further spurred by the launch of smartphones by all leading
carriers. This development drives capacity investments in mobile broadband networks.
Operators are also working on tiered price plans. In the quarter, Ericsson started
volume deliveries of 4G/LTE.

Latin Americasales decreased -12% year-over-year and grew 6% sequentially. Operator
consolidation is ongoing in the region. Lower cost smartphones has created continuous
growth in mobile broadband usage, pushing operators for investments in networks and
services. LTE trials are ongoing in the region and additional 3G licenses are still to
be auctioned in Costa Rica, Brazil and Mexico.

Northern Europe and Central Asia sales decreased by -7% year-over-year and increased 16%
sequentially. Sales of mobile network infrastructure increased sequentially, mainly
driven by major 2G expansions and 3G build-outs in the Eastern part of the region.

Western and Central Europe sales decreased -19% year-over-year and -16% sequentially due
to cautious operator investments in parts of the region. Development in the region
showed large variations, parts of Western Europe developed favorably while Central
Europe in general was slow. Mobile broadband usage is rapidly increasing in the region
and operators are marketing network quality and speed as a differentiator. 4G/LTE and
network modernization is high on operators’ agendas and new projects will be defined in
coming quarters.

Services represented two thirds of the sales in the quarter, and operators’ focus on
efficiency continued to drive a strong interest in exploring business models such as
network sharing and network transformations leading to opportunities both in services
and networks.

Mediterranean sales decreased -17% year-over-year and increased 11% sequentially.
Operator investments in Spain and Greece were low due to overall economic environment.
In order to meet demand for mobile broadband services operators continued to focus on
network modernization. Operators also have operational efficiency high on the agenda
which created good demand for managed services and consulting.

Middle East sales decreased -20% year-over-year and by -4% sequentially. Services sales
showed a continued growth in the quarter driven by demand for managed services. Services
represented 46% of the business in the region this quarter.

Sales development showed large variations across the region but in general operators
were cautious with investments. Egypt and Gulf Countries developed favorably, while
Turkey and Saudi Arabia were slower. Although 2G is still in operators’ focus, 3G
related sales are becoming significant.

Sub-Saharan Africa sales decreased by -19% year-over-year and increased 22%
sequentially. The region continued to be impacted by the global economic downturn with a
tight credit environment. Operator consolidation is also taking place in the region,
which temporarily reduced investments. Mobile subscriptions are developing positively
with net additions for both voice and broadband services. New mobile licenses are being
selected in certain countries.

India sales decreased -63% year-over-year and -41% sequentially due to cautious operator
investments in the lead up to the 3G auctions as well as the ongoing government
initiated security clearance process. The decline in business volumes mainly affected
mobile infrastructure sales while recurring services business maintained its good
development. The auctions for 3G and broadband wireless access operating at 2.3GHz took
place in the quarter and deployments are expected to start in the second half of the
year in a highly competitive market.

China and North East Asia sales decreased -36% year-over-year and by -7% sequentially.
The year-over-year decline is related to timing of roll-out for 3G/WCDMA in mainland
China. In 2009 a majority of network rollouts took place during the first half of the
year. While operators on mainland China are still focused on successful 3G launches,
operators across the region also now have 4G/LTE on the agenda. In Japan, demand for
mobile broadband has had a positive effect on sales.

On June 30, 2010, the acquisition of Nortel’s part of LG-Nortel was completed. This
positions Ericsson as a leading vendor in Korea. Another milestone was the showcase of
the first complete TD-LTE solution with end-to-end capabilities together with
ST-Ericsson in China.

South East Asia and Oceania sales decreased -36% year-over-year and increased 4%
sequentially. Sales of network equipment were weaker overall due to cautious investment
in a number of markets. Highlights include network expansions in Indonesia and
Bangladesh. Access to spectrum for 3G and also 4G/LTE remains a limitation in several
markets. Overall there is an increasing interest for managed services among operators in
several countries.

The region includes a mix of markets focused on long-term government sponsored fiber
deployments as well as operator investment in HSPA upgrades and 4G/LTE trials. Other
markets in the region are continuing to expand in 2G and 3G mobile networks.

Other includes sales of for example embedded modules, cables, power modules as well as
licensing and IPR.

MARKET DEVELOPMENT

Growth rates are based on Ericsson and market estimates

Operator investment behavior continues to vary across regions and countries. In markets
with strong data traffic uptake, network quality and efficiencies are high on operators’
agendas.

Ericsson’s addressable market was estimated to USD 350 b. in 2009 of which USD 200 b.
relates to the core business mobile networks, converged networks, services and
multimedia. USD 150 b. relates to platforms and handsets.

While the global mobile infrastructure market declined by more than 10% in 2009 with
continued decline in the first quarter 2010, measured in USD, we believe that the
fundamentals for longer-term positive development for the industry remain solid.
Ericsson is well positioned to drive and benefit from this development.

Mobile broadband is being built-out across the world. However, HSPA still only covers
25% of the world’s population.

Ericsson findings based on measurements in live networks show that global mobile data
traffic almost doubled between Q109 to Q110. Mobile data traffic is forecasted to double
annually over the next five years, primarily driven by 24/7 connectivity and usage of
smartphones and laptops.

Voice traffic is still the main revenue source for operators even though data represents
an increasing share as more and more consumers use data traffic generating devices, such
as smartphones and laptops. For many large operators, mobile data revenues constitute
25% of total service revenues or more. In Japan there are operators whose data revenues
account for more than 50% of total revenues. Tiered price plans for mobile broadband are
on operators agendas and in some markets such plans have already been introduced.

From having connected places and currently people, operators are now moving towards
connecting things. Ericsson believes that every device that can benefit from
connectivity will be connected in the future. Ericsson envisions that by 2020 50 b.
devices will be connected.

Data traffic uptake in mobile as well as fixed networks drives need for higher capacity
in areas such as backhaul, aggregation, transport, routing based on IP and Ethernet
technologies.

With operators’ focus on increased network quality and efficiency, the ability to deal
with high data volumes while maintaining telecom grade service levels is key. This also
drives demand for services targeting the operational efficiency of operators, such as
managed services and consulting.

There is continued good growth in the professional services market. The move toward
all-IP and increased network complexity will create further demand for systems
integration and consulting.

Mobile subscriptions are estimated to have increased by 190 million in the quarter,
returning to higher growth levels. China and India alone accounted for 50% of net
additions with 33 and 61 million respectively. Ericsson estimates that the global mobile
subscriptions hit the 5 b. mark on July 8, 2010. Global mobile penetration is now 72%.
GSM/GPRS/EDGE added 125 of the 190 million net subscription additions in the quarter and
will continue to be an important technology for billions of users many years to come.

The global number of new WCDMA subscriptions grew by 40 million in the quarter to a
total of 530 million, of which 245 million are estimated to be HSPA. Ericsson estimates
that the global mobile broadband subscriptions will amount to more than 3.4 b. by 2015.

Demand for fixed broadband maintained a 3.5% growth rate during Q110 to add 16 million
subscriptions for the quarter and reached 474 million. DSL remains the prevailing
technology with around 66% of total subscribers. Top 3 countries, China, US and Japan,
account for almost 50% of global fixed broadband subscriptions.

PARENT COMPANY INFORMATION

Net sales for the six-month period amounted to SEK 0.0 (0.3) b. and income after
financial items was SEK 4.8 (5.2) b.

Major changes in the Parent Company’s financial position for the six-month period
include; investments in LG-Ericsson of SEK 1.8 b.; decreased current and non-current
receivables from subsidiaries of SEK 5.1 b.; decreased cash, cash equivalents and
short-term investments of SEK 7.5 b. and decreased current and non-current liabilities
to subsidiaries of SEK 10.6 b.

During the second quarter the dividend payment of SEK 6.4 b., as decided by the Annual
General Meeting, has been made. As per June 30, 2010, cash, cash equivalents and
short-term investments amounted to SEK 54.9 (62.4) b.

In accordance with the conditions of the long-term variable remuneration program (LTV)
for Ericsson employees, 1,316,895 shares from treasury stock were sold or distributed to
employees during the second quarter. The holding of treasury stock at June 30, 2010 was
76,385,435 Class B shares.

OTHER INFORMATION

Acquisition of Nortel’s stake of LG-Nortel completed

On June 30, 2010, Ericsson announced it had completed the acquisition of Nortel’s
majority shareholding (50%+1 share) in LG-Nortel, the joint venture of LG Electronics
and Nortel Networks. The purchase price was USD 242 million on a cash and debt free
basis. The acquisition will be accretive to Ericsson’s earnings within a year.

LG-Nortel generated approximately USD 650 million of sales in 2009 and had 1,300
employees. LG-Nortel was consolidated by Ericsson as of June 30, 2010 and is included in
segment Networks. The new name of the operation is LG-Ericsson.

Nomination committee appointed

On June 16, 2010 Ericsson announced that the nomination committee for the Annual General
Meeting of Shareholders (AGM) 2011 had been appointed in accordance with the procedure
resolved by the AGM 2010. The committee consists of Jacob Wallenberg (chairman of the
nomination committee), Carl-Olof By, Caroline af Ugglas, Marianne Nilsson and Michael
Treschow.

Assessment of risk environment

Ericsson’s operational and financial risk factors and uncertainties are described under
“Risk factors Assessment of risk environment” in our Annual Report 2009.

Risk factors and uncertainties in focus during the forthcoming six-month period for the
Parent Company and the Ericsson Group include:

*

Potential negative effects on operators’ willingness to invest in network development
due to a continued uncertainty in the financial markets and a weak economic business
environment as well as uncertainty regarding the financial stability of suppliers, for
example due to lack for borrowing facilities, or reduced consumer telecom spending, or
increased pressure on us to provide financing;

*

Effects on gross margins and/or working capital of the product mix in the Networks
segment between sales of software, upgrades and extensions as well as break-in
contracts;

*

Effects on gross margins of the product mix in the global services segment including
proportion of new network build-outs and share of new managed services deals with
initial transition costs;

*

A continued volatile sales pattern in the Multimedia segment or variability in our
overall sales seasonality could make it more difficult to forecast future sales;

*

Effects of the ongoing industry consolidation among our customers as well as between our
largest competitors, e.g. with postponed investments and intensified price competition
as a consequence;

*

Changes in foreign exchange rates, in particular USD and EUR;

*

Political unrest or instability in certain markets;

*

Effects on production and sales from restrictions with respect to timely and adequate
supply of materials, components and production capacity and other vital services on
competitive terms;

*

Natural disasters, effecting production, supply and transportation.

Ericsson conducts business in certain countries which are subject to trade restrictions
or which are focused on by certain investors. We stringently follow all relevant
regulations and trade embargos applicable to us in our dealings with customers operating
in such countries. Moreover, Ericsson operates globally in accordance with Group level
policies and directives for business ethics and conduct. In no way should our business
activities in these countries be construed as supporting a particular political agenda
or regime. We have activities in such countries mainly due to that certain customers
with multi-country operations put demands on us to support them in all their markets.

Please refer further to Ericsson’s Annual Report 2009, where we describe our risks and
uncertainties along with our strategies and tactics to mitigate risk exposures or limit
unfavorable outcomes.

Stockholm, July 23, 2010

Hans Vestberg, President and CEO

Telefonaktiebolaget LM Ericsson (publ)

Date for next report: October 22, 2010

AUDITORS’ REVIEW REPORT

We have reviewed this report for the period January 1 to June 30, 2010, for
Telefonaktiebolaget LM Ericsson (publ). The board of directors and the CEO are
responsible for the preparation and presentation of this financial information in
accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a
conclusion on this financial information based on our review.

We conducted our review in accordance with the Standard on Review Engagements SÖG 2410,
Review of Interim Financial Information Performed by the Independent Auditor of the
Entity, issued by FAR SRS. A review consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an audit conducted in
accordance with Standards on Auditing in Sweden, RS, and other generally accepted
auditing practices. The procedures performed in a review do not enable us to obtain a
level of assurance that would make us aware of all significant matters that might be
identified in an audit. Therefore, the conclusion expressed based on a review does not
give the same level of assurance as a conclusion expressed based on an audit.

Based on our review, nothing has come to our attention that causes us to believe that
the interim report is not prepared, in all material respects, in accordance with IAS 34
and the Swedish Annual Accounts Act regarding the Group and with the Swedish Annual
Accounts Act regarding the Parent Company.

Stockholm, July 23, 2010

PricewaterhouseCoopers AB
Peter Clemedtson
Authorized Public Accountant

EDITOR’S NOTE

To read the complete report with tables, please go to:
www.ericsson.com/investors/financial_reports/2010/6month10-en.pdf

http://www.ericsson.com/investors/financial_reports/2010/6month10-en.pdf

Ericsson invites media, investors and analysts to a press conference at the Ericsson
headquarters, Torshamnsgatan 23, Stockholm, at 09.00 (CET),
July 23.

An analysts, investors and media conference call will begin at 14.00 (CET).

Live webcasts of the press conference and conference call as well as supporting slides
will be available at www.ericsson.com/press http://www.ericsson.com/press and
www.ericsson.com/investors http://www.ericsson.com/investors

Video material will be published during the day on www.ericsson.com/broadcast_room

http://www.ericsson.com/broadcast_room

FOR FURTHER INFORMATION, PLEASE CONTACT

Henry Sténson, Senior Vice President, Communications
Phone: +46 10 719 4044
E-mail: investor.relations@ericsson.com mailto:investor.relations@ericsson.com or
media.relations@ericsson.com mailto:media.relations@ericsson.com

Investors

Ã…se Lindskog, Vice President,
Head of Industry and Investor Relations
Phone: +46 10 719 9725, +46 730 244 872
E-mail: investor.relations@ericsson.com mailto:investor.relations@ericsson.com

Susanne Andersson,
Investor Relations
Phone: +46 10 719 4631
E-mail: investor.relations@ericsson.com mailto:investor.relations@ericsson.com

Andreas Hedemyr,
Investor Relations
Phone: +46 10 714 3748
E-mail: investor.relations@ericsson.com mailto:investor.relations@ericsson.com

Media

Ola Rembe, Vice President,
Head of Corporate Public and Media Relations
Phone: +46 10 719 9727, +46 730 244 873
E-mail: media.relations@ericsson.com mailto:media.relations@ericsson.com

Corporate Public & Media Relations
Phone: +46 10 719 69 92
E-mail: medial.relations@ericsson.com mailto:medial.relations@ericsson.com

Telefonaktiebolaget LM Ericsson (publ)
Org. number: 556016-0680
Torshamnsgatan 23
SE-164 83 Stockholm
Phone: +46 10 719 0000
www.ericsson.com http://www.ericsson.com/

DISCLOSURE PURSUANT TO THE SWEDISH SECURITIES MARKETS ACT

Ericsson discloses the information provided herein pursuant to the Securities Markets
Act. The information was submitted for publication at 07.30 CET, on July 23, 2010.

Safe Harbor Statement of Ericsson under the US Private Securities Litigation Reform Act
of 1995;

All statements made or incorporated by reference in this release, other than statements
or characterizations of historical facts, are forward-looking statements. These
forward-looking statements are based on our current expectations, estimates and
projections about our industry, management’s beliefs and certain assumptions made by us.
Forward-looking statements can often be identified by words such as “anticipates”,
“expects”, “intends”, “plans”, “predicts”, “believes”, “seeks”, “estimates”, “may”,
“will”, “should”, “would”, “potential”, “continue”, and variations or negatives of these
words, and include, among others, statements regarding: (i) strategies, outlook and
growth prospects; (ii) positioning to deliver future plans and to realize potential for
future growth; (iii) liquidity and capital resources and expenditure, and our credit
ratings; (iv) growth in demand for our products and services; (v) our joint venture
activities; (vi) economic outlook and industry trends; (vii) developments of our
markets; (viii) the impact of regulatory initiatives; (ix) research and development
expenditures; (x) the strength of our competitors; (xi) future cost savings; (xii) plans
to launch new products and services; (xiii) assessments of risks; (xiv) integration of
acquired businesses; (xv) compliance with rules and regulations and (xvi) infringements
of intellectual property rights of others.

In addition, any statements that refer to expectations, projections or other
characterizations of future events or circumstances, including any underlying
assumptions, are forward-looking statements. These forward-looking statements speak only
as of the date hereof and are based upon the information available to us at this time.
Such information is subject to change, and we will not necessarily inform you of such
changes. These statements are not guarantees of future performance and are subject to
risks, uncertainties and assumptions that are difficult to predict. Therefore, our
actual results could differ materially and adversely from those expressed in any
forward-looking statements as a result of various factors. Important factors that may
cause such a difference for Ericsson include, but are not limited to: (i) material
adverse changes in the markets in which we operate or in global economic conditions;
(ii) increased product and price competition; (iii) reductions in capital expenditure by
network operators; (iv) the cost of technological innovation and increased expenditure
to improve quality of service; (v) significant changes in market share for our principal
products and services; (vi) foreign exchange rate or interest rate fluctuations; and
(vii) the successful implementation of our business and operational initiatives.

WRAPUP 1-Faurecia, Plastic Omnium upbeat after strong H1

PARIS, July 22 (Reuters) – French car parts maker Faurecia (EPED.PA) raised its full-year targets on Thursday while smaller supplier Plastic Omnium (PLOF.PA) made upbeat comments about the coming months as rising car demand boosted first-half results.

Carmakers and suppliers hurt by a deep industry crisis and a dramatic sales slump have benefited in recent months from scrappage schemes and rising emerging market sales, combined with an underlying recovery in economic activity in Europe.

Faurecia, which makes seats, exhausts and emissions control systems for carmakers including BMW (BMWG.DE) and Opel [GM.UL], said it saw product sales up 13-16 percent for the full year, compared with a previous target of a 4 percent rise.

Faurecia said it was aiming for over 340 million euros in operating income in the year as a whole, compared with an earlier target of over 200 million. Net cash flow would be over 100 million euros, rather than simply “positive”, it added.

Chief Executive Yann Delabriere told BFM Radio he expected the group to post a net profit for the year.

“We can easily imagine that the net profit will remain comfortably positive for the year as a whole,” he said.

Analysts had predicted first-half sales from car suppliers and carmakers would be strong, but warned there were still doubts about the second half as scrapping schemes fade and austerity measures kick in. [ID:nLDE66F083]

Plastic Omnium had a first-half net profit of 72.3 million euros, up from 8 million in the first half of 2009 and more than double the 31 million euros it posted in the full year.

The first-half operating margin reached 7.3 percent, compared with 3 percent in the first half last year. The group is expecting business to remain “dynamic” in the second half, it said in a statement.

Faurecia, 57.4 percent-owned by French carmaker PSA Peugeot Citroen (PEUP.PA), posted a 33.2 percent like-for-like rise in product sales in the first half to 5.4 billion euros. Overall sales rose 26.9 percent like-for-like to 6.8 billion.

Operating income swung to a 216.5 million euro profit from a 187.3 million euro loss in the first half of 2009. Net income reached 101.9 million euros, against a 364.6 million net loss.

The group said second-half sales would likely fall 5-8 percent in Europe. Sales soared in the second half of last year with scrapping schemes in full swing, providing an unfavourable basis for comparison.

Sales in the second half are set to rise 11-14 percent in North America and surge 20-25 percent in Asia, Faurecia said.

Faurecia last month set out ambitious growth and profitability targets and said it wanted to speed up development in Asia. [ID:nLDE65D11I]

For a story on truckmaker Volvo see [ID:nLDE66L06A]

(Reporting by Helen Massy-Beresford; Additional Reporting by Gilles Guillaume; Editing by James Regan and Michael Shields)

WRAPUP 1-Faurecia, Plastic Omnium upbeat after strong H1

PARIS, July 22 (Reuters) – French car parts maker Faurecia (EPED.PA) raised its full-year targets on Thursday while smaller supplier Plastic Omnium (PLOF.PA) made upbeat comments about the coming months as rising car demand boosted first-half results.

Carmakers and suppliers hurt by a deep industry crisis and a dramatic sales slump have benefited in recent months from scrappage schemes and rising emerging market sales, combined with an underlying recovery in economic activity in Europe.

Faurecia, which makes seats, exhausts and emissions control systems for carmakers including BMW (BMWG.DE) and Opel [GM.UL], said it saw product sales up 13-16 percent for the full year, compared with a previous target of a 4 percent rise.

Faurecia said it was aiming for over 340 million euros in operating income in the year as a whole, compared with an earlier target of over 200 million. Net cash flow would be over 100 million euros, rather than simply “positive”, it added.

Chief Executive Yann Delabriere told BFM Radio he expected the group to post a net profit for the year.

“We can easily imagine that the net profit will remain comfortably positive for the year as a whole,” he said.

Analysts had predicted first-half sales from car suppliers and carmakers would be strong, but warned there were still doubts about the second half as scrapping schemes fade and austerity measures kick in. [ID:nLDE66F083]

Plastic Omnium had a first-half net profit of 72.3 million euros, up from 8 million in the first half of 2009 and more than double the 31 million euros it posted in the full year.

The first-half operating margin reached 7.3 percent, compared with 3 percent in the first half last year. The group is expecting business to remain “dynamic” in the second half, it said in a statement.

Faurecia, 57.4 percent-owned by French carmaker PSA Peugeot Citroen (PEUP.PA), posted a 33.2 percent like-for-like rise in product sales in the first half to 5.4 billion euros. Overall sales rose 26.9 percent like-for-like to 6.8 billion.

Operating income swung to a 216.5 million euro profit from a 187.3 million euro loss in the first half of 2009. Net income reached 101.9 million euros, against a 364.6 million net loss.

The group said second-half sales would likely fall 5-8 percent in Europe. Sales soared in the second half of last year with scrapping schemes in full swing, providing an unfavourable basis for comparison.

Sales in the second half are set to rise 11-14 percent in North America and surge 20-25 percent in Asia, Faurecia said.

Faurecia last month set out ambitious growth and profitability targets and said it wanted to speed up development in Asia. [ID:nLDE65D11I]

For a story on truckmaker Volvo see [ID:nLDE66L06A]

(Reporting by Helen Massy-Beresford; Additional Reporting by Gilles Guillaume; Editing by James Regan and Michael Shields)

Romania – Factors to Watch on July 22

July 22 (Reuters) – Here are news stories, press reports and events to watch which may affect Romanian financial markets on Thursday.

SUPREME COUNCIL OF MAGISTRATES

President Traian Basescu is expected to attend a meeting of the Supreme Council of Magistrates.

DEBT AUCTION

Romania’s finance ministry tenders 400 million lei in 10-year treasury bonds.

TAX CHECKS BOOST CASH-STRAPPED ROMANIA’S REVENUES

Romania increased tax inspections in June, bringing additional revenue of 908 million lei ($274.7 million) to the consolidated budget, up 41 percent on the year, it said on Wednesday. [ID:nLDE66K0W9]

ROMANIA EXHUMES REMAINS OF EX-DICTATOR CEAUSESCU

The graves of Romania’s former communist dictator Nicolae Ceausescu and his wife Elena were dug up on Wednesday, some 20 years after their deaths, to check if they were truly buried there, their son-in-law said. [ID:nLDE66K11T]

GOVT LETTER OF INTENT TO THE IMF

The IMF has released Romania’s upgraded letter of intent which it sent at the end of June after hiking value added tax to ensure it meets key requirements of its aid package.

The coalition cabinet has requested waivers for most of its end-June performance criteria, including a deadline to pass a pension reform bill and a target to lower government arrears. Read the letter at:

here

LAYOFFS

About 57 percent of the 2,919 jobs from the interior ministry will be cut, as part of wider government efforts to downsize a bloated public administration, Minister Vasile Blaga said on Wednesday.

Some other 3,100 jobs will be cut from the farm ministry. The restructuring will bring yearly budget savings of 127 million lei ($37.97 million), Farm Minister Mihail Dumitru said.

Agerpres

STEEL PRODUCTION

Romania’s steel production rose by 64.5 percent in the first half of the year, to 1.86 million tonnes, according to the World Steel Association.

Ziarul Financiar, Page 8

SPECIAL PENSIONS

The government approved rules for cutting high pensions of special sectors like parliamentarians, diplomats or policemen on Wednesday.

NOTE- For a diary of forthcoming Romanian events, double

click [RO/DIARY], and a calendar of east European economic indicators, see [CONV/DIARY].

For other related news, double click on: ————————————————————— Romania Market Debt [RO-DBT] Romanian forex [RO-FRX] Romania Market Report [ROL/] Romanian money [RO-M] Emerging Market Debt [EMRG/DBT] Emerging forex [EMRG/FRX] All Emerging Markets news [EMRG] CEE indicators [CONV/DIARY] All East Europe News [EEU] E.Europe equities [.CEE] TOP NEWS — Emerging markets [TOP/EMRG] TOP NEWS — Convergence watch [TOP/EAST] Romanian indicators [RO/ECI] Main page of Reuters poll —————————————————–

Elan Reports Second Quarter and First Half 2010 Financial Results

DUBLIN–(Business Wire)–
Elan Corporation, plc today reported its second quarter and first half 2010
financial results.

Elan CEO Kelly Martin commented, “Our second quarter results demonstrate
continued progress across our major areas of focus. Tysabri growth increased in
terms of net patient additions; our BioNeurology pipeline advanced, including
completion of the ELND005 Phase 2 trial and full enrollment of the STRATIFY 1
trial studying the JC virus assay; we also saw recently launched EDT licensed
products continue to grow in terms of revenue and market share for our
licensees.”

Commenting on the results, Elan executive vice president and chief financial
officer, Shane Cooke said that the Company was very pleased with the operating
performance in the first half of the year. Revenues grew by 10% which, coupled
with a decrease of 14% in operating expenses, resulted in a six-fold increase in
Adjusted EBITDA to $82.4 million. Revenue growth continued to be driven by a 22%
increase in revenues from Tysabri as well as the launch of Ampyra earlier in the
year. Adjusted EBITDA for the second quarter was impacted by reduced revenues
from a number of older legacy products, but this was more than offset by the
growth in Tysabri and a 14% reduction in operating expenses. Mr. Cooke confirmed
that for the full-year 2010, Elan remains on target to record revenue growth,
Adjusted EBITDA of more than $150 million and operating profits before other
charges or gains. He noted also that the Company generated almost $50 million in
cash from operations in the first half of the year, including $23.7 million
generated in the second quarter, and was on track to be cash flow positive
before other charges for the full-year. Mr. Cooke added that the $215.1 million
net loss for the first half of the year included a $206.3 million settlement
reserve charge in relation to the previously announced agreement in principle
with the U.S. Attorney`s Office in relation to Zonegran.

Unaudited Consolidated U.S. GAAP Income Statement Data

Three Months Ended June 30 Six Months Ended June 30
2009 2010 2009 2010
US$m US$m US$m US$m
Revenue (see page 9)
270.6 264.5 Product revenue 513.5 570.3
10.3 4.4 Contract revenue 12.5 9.1
280.9 268.9 Total revenue 526.0 579.4
139.4 141.6 Cost of goods sold 268.2 287.1
141.5 127.3 Gross margin 257.8 292.3

Operating Expenses (see page 14)
69.1 63.8 Selling, general and administrative 140.1 127.8
80.9 65.5 Research and development 161.4 130.3
– 206.3 Settlement reserve charge (see page 16) – 206.3
8.0 1.6 Other net charges (see page 16) 27.6 5.1
158.0 337.2 Total operating expenses 329.1 469.5
(16.5 ) (209.9 ) Operating loss (71.3 ) (177.2 )

Net Interest and Investment Gains and Losses
35.8 26.4 Net interest expense 69.6 54.6
– (8.4 ) Net investment gains – (13.9 )
35.8 18.0 Net interest and investment gains 69.6 40.7

(52.3 ) (227.9 ) Net loss before tax (140.9 ) (217.9 )
15.9 (14.8 ) Provision for/(benefit from) income taxes 29.9 (2.8 )
(68.2 ) (213.1 ) Net loss (170.8 ) (215.1 )

(0.14 ) (0.36 ) Basic and diluted net loss per ordinary share (0.36 ) (0.37 )
475.9 584.8 Basic and diluted weighted average number of ordinary shares outstanding (in millions) 475.7 584.6

Unaudited Non-GAAP Financial Information – EBITDA

Three Months Ended Non-GAAP Financial Information Six Months Ended
June 30 Reconciliation Schedule June 30
2009 2010 2009 2010
US$m US$m US$m US$m

(68.2 ) (213.1 ) Net loss (170.8 ) (215.1 )
35.8 26.4 Net interest expense 69.6 54.6
15.9 (14.8 ) Provision for/(benefit from) income taxes 29.9 (2.8 )
19.1 15.7 Depreciation and amortization 38.2 31.5
(0.3 ) (0.3 ) Amortized fees (0.4 ) (0.4 )
2.3 (186.1 ) EBITDA (33.5 ) (132.2 )

Three Months Ended Non-GAAP Financial Information Six Months Ended
June 30 Reconciliation Schedule June 30
2009 2010 2009 2010
US$m US$m US$m US$m
2.3 (186.1 ) EBITDA (33.5 ) (132.2 )
8.8 7.6 Share-based compensation 19.0 17.1
– 206.3 Settlement reserve charge – 206.3
8.0 1.6 Other net charges 27.6 5.1
– (8.4 ) Net investment gains – (13.9 )
19.1 21.0 Adjusted EBITDA 13.1 82.4

To supplement its consolidated financial statements presented on a U.S. GAAP
basis, Elan provides readers with EBITDA (Earnings Before Interest, Taxes,
Depreciation and Amortization) and Adjusted EBITDA, non-GAAP measures of
operating results. EBITDA is defined as net loss plus or minus depreciation and
amortization of costs and revenues, provisions for income tax, tax benefit and
net interest expense. Adjusted EBITDA is defined as EBITDA plus or minus
share-based compensation, settlement reserve charge, other net charges, and net
investment gains. EBITDA and Adjusted EBITDA are not presented as, and should
not be considered alternative measures of, operating results or cash flows from
operations, as determined in accordance with U.S. GAAP. Elan`s management uses
EBITDA and Adjusted EBITDA to evaluate the operating performance of Elan and its
business and these measures are among the factors considered as a basis for
Elan`s planning and forecasting for future periods. Elan believes EBITDA and
Adjusted EBITDA are measures of performance used by some investors, equity
analysts and others to make informed investment decisions. EBITDA and Adjusted
EBITDA are used as analytical indicators of income generated to service debt and
to fund capital expenditures. EBITDA and Adjusted EBITDA do not give effect to
cash used for interest payments related to debt service requirements and do not
reflect funds available for investment in the business of Elan or for other
discretionary purposes. EBITDA and Adjusted EBITDA, as defined by Elan and
presented in this press release, may not be comparable to similarly titled
measures reported by other companies. Reconciliations of EBITDA and Adjusted
EBITDA to net loss from continuing operations are set out in the tables above
titled, “Non-GAAP Financial Information Reconciliation Schedule.”

Unaudited Consolidated U.S. GAAP Balance Sheet Data

December 31 June 30

2009
2010

US$m
US$m
Assets
Current Assets
Cash and cash equivalents 836.5(1) 883.2 (1)(2)
Restricted cash and cash equivalents – current 16.8 13.6
Investment securities – current 7.1 2.6
Deferred tax assets – current 23.9 32.5
Other current assets 274.9 239.0
Total current assets 1,159.2 1,170.9

Non-Current Assets
Intangible assets, net 417.4 389.7
Property, plant and equipment, net 292.8 297.9
Equity method investment 235.0 235.0
Investment securities – non-current 8.7 9.1
Deferred tax assets – non-current 174.8 166.7
Restricted cash and cash equivalents – non-current 14.9 14.9
Other assets 42.9 50.6
Total Assets 2,345.7 2,334.8

Liabilities and Shareholders` Equity
Accounts payable, accrued and other liabilities 311.5 304.4
Settlement reserve – 206.3
Long-term debt 1,540.0 1,540.0
Shareholders` equity (see page 17) 494.2 284.1
Total Liabilities and Shareholders` Equity 2,345.7 2,334.8

(1) Under the terms of our debt covenants, we are required to either reinvest $235.0 million of the proceeds received from the September 17, 2009 transaction with Johnson & Johnson within twelve months of that date, or if not reinvested, make a pro-rata offer to repurchase a portion of our debt at par. As of June 30, 2010, $192.0 million of the $235.0 million proceeds has not been reinvested.

(2) As of July 16, 2010, $203.5 million of cash has been placed in an escrow account in relation to the Zonegran settlement.

Unaudited Consolidated U.S. GAAP Cash Flow Data
Three Months Ended Six Months Ended
June 30 June 30
2009 2010 2009 2010
US$m US$m US$m US$m

19.1 21.0 Adjusted EBITDA 13.1 82.4
(39.0 ) (17.6 ) Net interest and tax (75.6 ) (52.2 )
– (206.3 ) Settlement reserve charge – (206.3 )
(8.0 ) (3.3 ) Other net charges (9.7 ) (5.3 )
(45.1 ) 229.9 Working capital decrease/(increase) (27.1 ) 227.5
(73.0 ) 23.7 Cash flows from operating activities (99.3 ) 46.1

(7.9 ) (14.9 ) Net purchases of tangible and intangible assets (76.7 ) (23.8 )
2.7 9.3 Net proceeds from sale of investments 10.3 16.0
3.0 (5.8 ) Cash flows from financing activities 5.2 0.5
– 4.7 Net proceeds on disposal of Prialt business – 4.7
3.4 3.2 Restricted cash and cash equivalents movement 3.6 3.2
(71.8 ) 20.2 Net cash movement (156.9 ) 46.7
290.2 863.0 Beginning cash balance 375.3 836.5
218.4 883.2 Cash and cash equivalents at end of period 218.4 883.2

Overview

Operating Results

First Half of 2010

Total revenue for the first half of 2010 increased by 10% to $579.4 million from
$526.0 million for the same period in 2009. The increase in revenue was driven
by the growth of Tysabri®, which more than offsets the expected decline in
revenues from Azactam®. Elan ceased distributing Azactam as of March 31, 2010
and will not earn any future revenues from this product. Elan`s recorded sales
of Tysabri increased 22% to $406.2 million for the first half of 2010 from
$332.4 million for the first half of 2009. This increase in revenues is
consistent with the 22% growth in global in-market net sales of Tysabri to
$589.4 million in the first half of 2010 from $481.3 million in the first half
of 2009 and the 22% increase in patients on therapy worldwide to approximately
52,700 patients at the end of June 2010 from approximately 43,300 at the end of
June 2009.

For the first half of 2010, Adjusted EBITDA increased six-fold to $82.4 million
from $13.1 million for the same period in 2009. The increase principally
reflects the 10% increase in revenue, improved operating margins and a 14%
reduction in combined selling, general and administrative (SG&A) and research
and development (R&D) expenses.

In assessing the first half performance, it is important to note that these
results were achieved against a background where we have, as expected, seen
reduced revenues from a number of products including Azactam and Prialt® in the
BioNeurology business and Skelaxin® and Tricor® in the Elan Drug Technologies
(EDT) business, as well as an increased investment in development activities
related particularly to Tysabri, ELND005 and the EDT business. The loss of
contribution from this decrease in revenue and the increased investment in our
growth drivers was more than compensated for by the continued growth of Tysabri,
the launch of AmpyraTM, reduced SG&A costs and the transfer of the Alzheimer`s
Immunotherapy Program (AIP) to Janssen Alzheimer Immunotherapy (Janssen AI).
This transition was particularly pronounced in the second quarter of 2010 with
revenues from these products $34.1 million lower than the same period last year.
Despite the loss of approximately $25 million in Adjusted EBITDA associated with
these revenues, and with very little revenue included this quarter related to
Ampyra, we reported 4% lower total revenues and increased Adjusted EBITDA in the
second quarter of 2010 due to increased revenue from Tysabri and good cost
control.

Cash flows generated from operating activities were $46.1 million in the first
half of 2010, compared to cash used by operating activities of $99.3 million in
the first half of 2009. This improvement was due to the improved operating
performance and a reduction in working capital requirements.

The net loss of $215.1 million for the first half of 2010 includes a settlement
reserve charge of $206.3 million in respect of an agreement in principle reached
with the U.S. Attorney`s Office for the District of Massachusetts with respect
to the previously disclosed U.S. Department of Justice`s investigation of sales
and marketing practices for Zonegran® (zonisamide), which Elan divested in 2004.

For the first half of 2010, net loss before tax, excluding the settlement
reserve charge and other net charges was $6.5 million, compared to a net loss
before tax and excluding other net charges of $113.3 million for the same period
of 2009. This improvement was due to the improved operating performance, lower
net interest expense, and net investment gains in the first half of 2010.

Quarter 2, 2010

Total revenue for the second quarter of 2010 decreased by 4% to $268.9 million
from $280.9 million for the same period in 2009. Revenue from the BioNeurology
business grew by 5% while revenue from the EDT business decreased by 29%. The
increase in revenues from the BioNeurology business was driven by Tysabri, which
more than offset the expected reduced revenues from Azactam and Prialt. Elan`s
recorded sales of Tysabri increased 19% to $207.4 million for the second quarter
of 2010, from $173.7 million for the second quarter of 2009, consistent with the
17% growth in global in-market net sales of Tysabri to $297.5 million in the
second quarter of 2010 from $253.8 million in the second quarter of 2009. The
solid patient demand for Tysabri is also reflected in the growth of net patient
additions with 2,400 added during the second quarter of 2010, compared to 1,900
added during the first quarter of 2010.

As expected, revenue from the EDT business declined by 4% in the first half of
2010 due principally to lower revenues from Tricor and Skelaxin, which were
offset by revenues associated with the launch of Ampyra. The decrease in the
second quarter of 2010 as compared to the second quarter of 2009 was more
pronounced than the half-year decrease primarily due to the timing of Ampyra
revenues, which are recorded based on when the product is shipped to Acorda
Therapeutics, Inc. (Acorda). Consequently, of the $20.8 million in revenues from
Ampyra that were recorded in the first half of 2010, only $1.9 million were
recorded in the second quarter due to the timing of shipments.

For the second quarter of 2010, the gross margin decreased 10% to $127.3 million
from $141.5 million for the second quarter of 2009, reflecting the revenue
decrease and changes in product mix described above.

Operating loss before the settlement reserve charge and other net charges for
the second quarter of 2010 was $2.0 million, compared to an operating loss
before other net charges of $8.5 million for the same period of 2009. This
improved operating performance was driven by a 14% decrease in combined SG&A and
R&D expenses compared to the second quarter of 2009, offset by reduced revenues
as described above. SG&A expenses declined by 8% compared to the same period in
2009, while R&D costs decreased by 19%. The decrease in R&D costs is primarily
due to the cost savings as a result of the divestment of the AIP to a subsidiary
of Johnson & Johnson (Janssen AI) in September 2009. Under the terms of the
September 2009 transaction with Johnson & Johnson, Elan received a 49.9%
ownership interest in Janssen AI. R&D costs in the second quarter of 2009
included $29.1 million in relation to AIP.

The BioNeurology business recorded an operating loss, before the settlement
reserve charge and other net charges, of $5.0 million in the second quarter of
2010. This represents a $31.6 million improvement over the $36.6 million
operating loss before other net charges recorded by the BioNeurology business in
the second quarter of 2009, and reflects the continued growth in Tysabri
revenues offsetting the expected reduced revenues from Azactam and Prialt, in
addition to an 18% reduction in combined SG&A and R&D expenses. In the EDT
business, the operating income before other net charges decreased to $3.0
million in the second quarter of 2010 compared to $28.1 million in the same
period in 2009, due principally to the decrease in revenues from Tricor and
Skelaxin.

For the second quarter of 2010, net loss before tax, excluding the settlement
reserve charge and other net charges was $20.0 million, compared to a net loss
before tax and excluding other net charges of $44.3 million for the same period
of 2009. This improvement was primarily due to the decrease in combined SG&A and
R&D expenses, lower net interest expense, and net investment gains in the second
quarter of 2010, offset by reduced revenues as described above.

For the second quarter of 2010, Elan reported Adjusted EBITDA of $21.0 million,
compared to Adjusted EBITDA of $19.1 million in the same period of 2009. The
improvement principally reflects improved operating margins and an 18% reduction
in operating expenses in the BioNeurology business, offset by the decrease in
revenues from the EDT business.

A reconciliation of Adjusted EBITDA to net loss, is presented in the table
titled, “Unaudited Non-GAAP Financial Information – EBITDA,” included on page 3.
Included at Appendices I and II are further analyses of the results and Adjusted
EBITDA between the BioNeurology and EDT businesses.

Exploration of EDT separation

Elan continues to explore the possibility of a separation of its EDT business.
The Company’s review includes a detailed assessment of the possible separation,
including timing, market conditions and the impact on all of its key
constituencies. The Company expects to make a decision whether to proceed over
the next several months. No specific timetable has been set for completion of
the review and there can be no assurances that such a transaction will take
place.

Total Revenue

For the first half of 2010, total revenue increased by 10% to $579.4 million
from $526.0 million for the same period of 2009. Revenue from the BioNeurology
business increased by 15% while revenue from the EDT business decreased by 4%
for the half-year. For the second quarter of 2010, total revenue decreased by 4%
to $268.9 million from $280.9 million for the same period of 2009. Revenue from
the BioNeurology business increased by 5% while revenue from the EDT business
decreased by 29% for the quarter. Revenue is analyzed below between revenue from
the BioNeurology and EDT business units.

Three Months Ended Six Months Ended
June 30 June 30
2009 2010 2009 2010
US$m US$m US$m US$m
202.0 212.9 Revenue from the BioNeurology business 387.4 447.0
78.9 56.0 Revenue from the EDT business 138.6 132.4
280.9 268.9 Total revenue 526.0 579.4

Revenue from the BioNeurology business

For the second quarter of 2010, revenue from the BioNeurology business increased
by 5% to $212.9 million from $202.0 million for the second quarter of 2009. The
increase was primarily driven by the growth in Tysabri sales, more than
offsetting the expected lower revenues from other BioNeurology products.

Three Months Ended Six Months Ended
June 30 June 30
2009 2010 2009 2010
US$m US$m US$m US$m
Product revenue
124.4 144.9 Tysabri – U.S. 240.4 280.1
49.3 62.5 Tysabri – Rest of world (ROW) 92.0 126.1
173.7 207.4 Total Tysabri 332.4 406.2
20.5 1.9 Azactam 37.7 27.4
4.6 1.6 Prialt 8.7 6.2
2.6 1.6 Maxipime® 7.6 5.4
0.6 0.4 Royalties 1.0 0.8
202.0 212.9 Total product revenue from BioNeurology business 387.4 446.0
– – Contract revenue – 1.0
202.0 212.9 Total revenue from BioNeurology business 387.4 447.0

Tysabri

Global in-market net sales of Tysabri can be analyzed as follows:

Three Months Ended Six Months Ended
June 30 June 30
2009 2010 2009 2010
US$m US$m US$m US$m
124.4 144.9 United States 240.4 280.1
129.4 152.6 ROW 240.9 309.3
253.8 297.5 Total Tysabri in-market net sales 481.3 589.4

For the second quarter of 2010, Tysabri in-market net sales increased by 17% to
$297.5 million from $253.8 million for the same period of 2009. The increase
reflects solid patient demand across global markets. At the end of June 2010,
approximately 52,700 patients were on therapy worldwide, including approximately
26,200 commercial patients in the United States and approximately 26,000
commercial patients in the ROW, representing a 22% increase over the
approximately 43,300 patients who were on the therapy at the end of June 2009.
The second quarter of 2010 saw an increase in net patient additions to 2,400 for
this quarter, compared to 1,900 in the first quarter of 2010.

Tysabri was developed and is being marketed in collaboration with Biogen Idec,
Inc. (Biogen Idec). In general, subject to certain limitations imposed by the
parties, Elan shares with Biogen Idec most of the development and
commercialization costs for Tysabri. Biogen Idec is responsible for
manufacturing the product. In the United States, Elan purchases Tysabri from
Biogen Idec and is responsible for distribution. Consequently, Elan records as
revenue the net sales of Tysabri in the U.S. market. Elan purchases product from
Biogen Idec at a price that includes the cost of manufacturing, plus Biogen
Idec`s gross margin on Tysabri, and this cost, together with royalties payable
to other third parties, is included in cost of sales.

Outside of the United States, Biogen Idec is responsible for distribution and
Elan records as revenue its share of the profit or loss on these sales of
Tysabri, plus Elan`s directly-incurred expenses on these sales.

Tysabri – U.S.

In the U.S. market, Elan recorded net sales of $144.9 million for the second
quarter of 2010, an increase of 16% over net sales of $124.4 million in the same
period of 2009. Almost all of these sales are for the multiple sclerosis (MS)
indication.

At the end of June 2010, approximately 26,200 patients were on commercial
therapy, which represents an increase of 4% over the approximately 25,200 who
were on therapy at the end of March 2010 and 19% over the approximately 22,000
patients who were on therapy at the end of June last year.

Tysabri – ROW

In the ROW market, Biogen Idec is responsible for distribution and Elan records
as revenue its share of the profit or loss on ROW sales of Tysabri, plus Elan`s
directly-incurred expenses on these sales. As a result, in the ROW market, Elan
recorded net revenue of $62.5 million for the second quarter of 2010, compared
to $49.3 million for the second quarter of 2009, an increase of 27%. Elan`s net
Tysabri ROW revenue is calculated as follows:

Three Months Ended Six Months Ended
June 30 June 30
2009 2010 2009 2010
US$m US$m US$m US$m
129.4 152.6 ROW in-market sales by Biogen Idec 240.9 309.3
(69.7) (70.3) ROW operating expenses incurred by the collaboration (128.6) (144.4)
59.7 82.3 ROW operating profit incurred by the collaboration 112.3 164.9
29.8 41.2 Elan`s 50% share of Tysabri ROW collaboration operating profit 56.1 82.5
19.5 21.3 Elan`s directly incurred costs 35.9 43.6
49.3 62.5 Net Tysabri ROW revenue 92.0 126.1

Tysabri ROW in-market sales for the second quarter of 2010 were $152.6 million
as compared to $129.4 million for the second quarter of 2009, an increase of
18%. As Tysabri ROW in-market sales are principally earned in the European
Union, second quarter in-market sales were negatively impacted by the
depreciation of the euro against the dollar. On a constant currency basis,
Tysabri ROW in-market sales for the second quarter of 2010 increased by $29.6
million, or 24%, compared to the second quarter of 2009.

At the end of June 2010, approximately 26,000 patients, principally in the
European Union, were on commercial therapy, an increase of 6% over the
approximately 24,600 (revised) who were on therapy at the end of March 2010 and
26% over the approximately 20,700 patients who were on therapy at the end of
June last year.

Other BioNeurology products

As expected, Azactam revenue decreased 91% to $1.9 million for the second
quarter of 2010, compared to $20.5 million for the same period of 2009. Elan
ceased distributing Azactam as of March 31, 2010 and will not earn any future
revenues from this product. The $1.9 million of revenue in the second quarter of
2010 relates to the timing of delivery of shipments in late March 2010.

On March 4, 2010, Elan entered into a definitive agreement to divest its Prialt
assets and rights to Azur Pharma International Limited and this transaction
subsequently closed on May 5, 2010. As a result, Prialt revenue decreased 65% to
$1.6 million for the second quarter of 2010, compared to $4.6 million for the
same period of 2009.

Revenue from the EDT business

For the first half of 2010, revenue from the EDT business decreased by 4% to
$132.4 million from $138.6 million for the same period of 2009. For the second
quarter of 2010, revenue from the EDT business decreased by 29% to $56.0 million
from $78.9 million for the second quarter of 2009.

Three Months Ended Six Months Ended
June 30 June 30
2009 2010 2009 2010
US$m US$m US$m US$m
Product revenue
Manufacturing revenue and royalties
16.4 13.8 Tricor 30.0 25.0
– 1.9 Ampyra – 20.8
9.2 7.8 Focalin® XR / RitalinLA® 17.6 16.6
4.9 5.0 Verelan® 10.8 11.9
3.9 2.9 Naprelan® 5.9 7.8
10.3 0.4 Skelaxin 15.6 5.2
23.9 19.8 Other 46.2 37.0
68.6 51.6 Total manufacturing revenue and royalties 126.1 124.3

Contract revenue
10.3 4.4 Research revenue and milestones 12.5 8.1

78.9 56.0 Total revenue from the EDT business 138.6 132.4

Manufacturing revenue and royalties comprise revenue earned from products
manufactured for clients and royalties earned principally on sales by clients of
products that incorporate Elan`s technologies. Except as noted above, no other
product accounted for more than 10% of total manufacturing revenue and royalties
for the second quarter of 2010 or 2009.

In January 2010, the FDA approved Ampyra as a treatment to improve walking
ability in patients with MS; this was demonstrated by an improvement in walking
speed. The product was subsequently launched in the United States in March 2010.
Ampyra, which is globally licensed to Acorda, is marketed and distributed in the
United States by Acorda and will be marketed and distributed outside the United
States by Biogen Idec, Acorda`s sub-licensee, where it is called Fampridine
Prolonged Release (Fampridine-PR) tablets. EDT manufactures supplies of Ampyra
for the global market at its Athlone, Ireland facility, under a supply agreement
with Acorda.

Manufacturing and royalty revenue recorded for Ampyra in the six months ended
June 30, 2010 of $20.8 million principally reflects shipments to Acorda in the
first quarter of 2010 to satisfy Acorda`s initial stocking requirements for the
U.S. launch of the product as well as build-up of safety stock supply. As Elan
records revenue upon shipment of Ampyra to Acorda, this revenue was not
contingent upon ultimate sale of the shipped product by Acorda or its customers.
U.S. Ampyra revenues for the remainder of the year are expected to be based only
on ongoing restocking and supply needs.

Potential generic competitors have challenged the existing patent protection for
several of the products from which Elan earns manufacturing revenue and
royalties. Elan and its clients defend the parties` intellectual property rights
vigorously. However, if these challenges are successful, Elan`s manufacturing
revenue and royalties will be materially and adversely affected. As a result of
the approval and launch of generic forms of Skelaxin in April 2010, EDT`s
royalty revenues from this product have significantly declined.

Research revenue and milestones includes revenue earned from performing R&D
services on behalf of clients and technology licensing. Revenue in the second
quarter of 2009 included a license fee of $7.7 million from Acorda as a result
of Acorda entering into an agreement with Biogen Idec to develop and
commercialize Fampridine-PR in markets outside the United States.

Additional analyses of the results between the BioNeurology and EDT businesses
are set out in Appendices I and II. For the first half of 2010, Adjusted EBITDA
from the EDT business decreased to $46.5 million from $59.0 million for the same
period of 2009, reflecting the transition of this business away from some of the
older products to newer products, such as Ampyra and Invega Sustenna. For the
second quarter of 2010, Adjusted EBITDA from the EDT business decreased by $25.3
million to $13.0 million from $38.3 million for the same period of 2009. EDT
revenues, and their impact on Adjusted EBITDA, vary from quarter to quarter
based on a number of factors, including the timing of customer orders and
license fees earned, and contractual in-market sales hurdles for royalties.

Operating Expenses

Selling, general and administrative

SG&A expenses decreased by 8% to $63.8 million for the second quarter of 2010
from $69.1 million for the same period of 2009. The decrease principally
reflects reduced sales and marketing costs and amortization expense related to
Prialt, along with continued cost control. SG&A expense for the three and six
months ended June 30, 2010 and 2009 can be analyzed as follows:

Three Months Ended Six Months Ended
June 30 June 30
2009 2010 2009 2010
US$m US$m US$m US$m
52.3 47.7 BioNeurology 105.8 95.6
8.3 8.6 EDT 16.2 16.8
4.1 2.9 Depreciation and amortization 8.2 6.1
4.4 4.6 Share-based compensation 9.9 9.3
69.1 63.8 Total 140.1 127.8

The SG&A expenses related to the Tysabri ROW sales are reflected in the Tysabri
ROW revenue as previously described on page 11.

Research and development

Three Months Ended Six Months Ended
June 30 June 30
2009 2010 2009 2010
US$m US$m US$m US$m
40.2 51.5 BioNeurology 80.8 103.2
11.6 14.0 EDT 23.6 27.1
29.1 – AIP 57.0 –
80.9 65.5 Total 161.4 130.3

For the second quarter of 2010, R&D expenses decreased to $65.5 million from
$80.9 million for the same period of 2009. The decrease primarily relates to the
cost savings as a result of the divestment of AIP in the third quarter of 2009.
Excluding AIP, R&D expenses increased by $13.7 million, principally reflecting
increased investment in R&D initiatives related to Tysabri and EDT.

The Phase 2 study of ELND005 has completed and the data is being analyzed.

A Phase 1b study to evaluate the safety and efficacy of subcutaneous ELND002 in
patients with relapsing forms of MS has been initiated.

In the second quarter of 2010, Elan and Biogen Idec completed enrollment of
1,000 patients in STRATIFY 1. This trial is designed to prospectively confirm
the percentage of the MS population that is positive for anti-JC Virus
antibodies and the false negative rate for this test.

On July 15, 2010 the Tysabri label was updated to include prior
immunosuppressant use as a risk factor for development of PML.

During the second quarter of 2010, Tysabri exceeded 100,000 patient years of
exposure.

Elan and Biogen-Idec continue enrolling the RESTORE clinical trial to examine
treatment interruption of Tysabri. This is a randomized, rater blinded trial in
patients who interrupt treatment with Tysabri with or without being treated with
other immunomodulatory drugs. The main purpose of the study is to find out the
following when participants stop taking Tysabri for 24 weeks: how quickly the
effects that Tysabri has on its target receptor return to normal, when MS
symptoms return and if other drugs for MS may help control MS symptoms during
the Tysabri interruption period. This study will also explore how quickly the
beneficial effects of Tysabri return after resuming Tysabri dosing.

Settlement reserve

On July 15, 2010, Elan announced that it had reached an agreement in principle
with the U.S. Attorney`s Office for the District of Massachusetts with respect
to the previously disclosed U.S. Department of Justice`s investigation of sales
and marketing practices for Zonegran, which Elan divested in 2004.

If the agreement in principle is finalized, Elan expects to pay $203.5 million
as part of a comprehensive settlement for all U.S. federal and related state
Medicaid claims and has placed $203.5 million into an escrow account to cover
the proposed settlement amount. The Company has established a reserve of $206.3
million for this expected settlement and related costs.

As part of this agreement in principle, Elan Pharmaceuticals, Inc., a U.S.
subsidiary of Elan Corporation, plc, expects to plead guilty to a misdemeanor
violation of the U.S. Federal Food, Drug and Cosmetic Act and to enter into a
Corporate Integrity Agreement with the Office of Inspector General of the U.S.
Department of Health and Human Services.

While Elan expects to negotiate and enter into final settlement and Corporate
Integrity Agreements, there can be no assurance as to when or if any settlement
will be finalized or, if a settlement is finalized, what the final terms of the
settlement will be. Additionally, the proposed resolution of the Zonegran
investigation could give rise to other litigation by state government entities
or private parties.

Other net charges

Other net charges for the three and six months ended June 30, 2010 and 2009 were
as follows:

Three Months Ended Six Months Ended
June 30 June 30
2009 2010 2009 2010
US$m US$m US$m US$m
3.0 1.4 Severance and restructuring charges 25.2 3.5
– 0.2 Net loss on divestment of Prialt business – 1.6
– – Asset impairment charges 15.4 –
5.0 – In-process research and development 5.0 –
– – Legal settlement gain (18.0) –
8.0 1.6 Total 27.6 5.1

Other net charges for the three months ended June 30, 2010 included $1.4 million
of severance and restructuring charges principally associated with the
realignment of resources announced in 2009.

On March 4, 2010, Elan entered into a definitive agreement to divest its Prialt
assets and rights to Azur Pharma International Limited. This transaction
subsequently closed on May 5, 2010. Elan recorded a net loss of $1.6 million
arising from the Prialt divestment in the six months ended June 30, 2010.

For the three months ended June 30, 2009, other net charges of $8.0 million
consisted of an in-process research and development charge of $5.0 million in
respect of a license fee payable under a collaboration agreement with
PharmatrophiX and severance and restructuring charges of $3.0 million.

Net Interest and Investment Gains and Tax

The net interest expense for the second quarter of 2010 decreased to $26.4
million compared to $35.8 million in the second quarter of 2009, primarily due
to lower interest expense following the Johnson & Johnson and debt refinancing
transactions in the second half of 2009.

The net investment gains of $8.4 million in the second quarter of 2010 include a
gain of $7.9 million related to a recovery realized on a previously impaired
investment in auction rate securities, and a gain on disposal of investment
securities of $0.5 million.

The benefit from income taxes was $14.8 million in the second quarter of 2010,
compared to a provision of $15.9 million in the second quarter of 2009. The tax
benefit for the second quarter of 2010 reflects changes to U.S. net income, in
addition to one-off tax benefits, recorded during the quarter.

Movement in Shareholders` Equity

Three Months ended Six Months ended

June 30, 2010
June 30, 2010

US$m
US$m
500.1 Opening shareholders` equity 494.2
(213.1 ) Net loss for the period (215.1 )
7.5 Share based compensation 17.0
(6.7 ) Minimum pension liability (6.7 )
0.1 Issuance of share capital 0.9
(3.8 ) Other (6.2 )
284.1 Closing shareholders` equity 284.1

About Elan

Elan Corporation, plc (NYSE: ELN) is a neuroscience-based biotechnology company
committed to making a difference in the lives of patients and their families by
dedicating itself to bringing innovations in science to fill significant unmet
medical needs that continue to exist around the world. Elan shares trade on the
New York and Irish Stock Exchanges. For additional information about the
Company, please visit www.elan.com.

Forward-Looking Statements

This document contains forward-looking statements about Elan`s financial
condition, results of operations, business prospects and products in research
and development that involve substantial risks and uncertainties.You can
identify these statements by the fact that they use words such as “anticipate”,
“estimate”, “project”, “target”, “intend”, “plan”, “will”, “believe”, “expect”
and other words and terms of similar meaning in connection with any discussion
of future operating or financial performance or events.Among the factors that
could cause actual results to differ materially from those described or
projected herein are the following: the potential of Tysabri, which may be
severely constrained by increases in the incidence of serious adverse events
(including death) associated with Tysabri (in particular, by increases in the
incidence rate for cases of PML), or by competition from existing or new
therapies (in particular, oral therapiesfiled for U.S. and European approval),
and the potential for the successful development and commercialization of
additional products; Elan`s ability to maintain sufficient cash, liquid
resources, and investments and other assets capable of being monetized to meet
its liquidity requirements; the success of our research and development
activities, and research and development activities in which we retain an
interest, including, in particular, whether the Phase 3 clinical trials for
bapineuzumab are successful and the speed with which regulatory authorizations
and product launches may be achieved; our dependence on Johnson & Johnson and
Pfizer for the success of AIP; failure to comply with kickback and false claims
laws including in respect to past practices related to the marketing of Zonegran
which are being investigated by the U.S. Department of Justice and the U.S.
Department of Health and Human Services (we have reached an agreement in
principle to resolve this Zonegran matter which, if finalized, will require Elan
to pay a $203.5 million fine and to take other actions that could have a
material adverse effect on Elan); competitive developments affecting Elan`s
products; the ability to successfully market both new and existing products;
difficulties or delays in manufacturing and supply of Elan`s products; trade
buying patterns; the impact of generic and branded competition, whether
restrictive covenants in Elan`s debt obligations will adversely affect Elan; the
trend towards managed care and health care cost containment, including Medicare
and Medicaid; whether the proposed separation of EDT occurs and, if the
separation occurs, on what terms; legislation affecting pharmaceutical pricing
and reimbursement, both domestically and internationally; failure to comply with
Elan`s payment obligations under Medicaid and other governmental programs;
exposure to product liability and other types of lawsuits and legal defense
costs and the risks of adverse decisions or settlements related to product
liability, patent protection, securities class actions, governmental
investigations and other legal proceedings; Elan`s ability to protect its
patents and other intellectual property; claims and concerns that may arise
regarding the safety or efficacy of Elan`s products or product candidates;
interest rate and foreign currency exchange rate fluctuations; governmental laws
and regulations affecting domestic and foreign operations, including tax
obligations; general changes in United States and International generally
accepted accounting principles; growth in costs and expenses; changes in product
mix, in particular we ceased distributing Azactam as of March 31, 2010 and we
will cease distributing Maxipime as of September 30, 2010; and the impact of
acquisitions, divestitures, restructurings, product withdrawals and other
unusual items. A further list and description of these risks, uncertainties and
other matters can be found in Elan`s Annual Report on Form 20-F for the fiscal
year ended December 31, 2009, and in its Reports of Foreign Issuer on Form 6-K
filed with the U.S. Securities and Exchange Commission.Elan assumes no
obligation to update any forward-looking statements, whether as a result of new
information, future events or otherwise.

Appendix I

Three Months Ended Three Months Ended
June 30, 2009 June 30, 2010
Bio- EDT Total Bio- EDT Total

Neurology
Neurology
US$m US$m US$m US$m US$m US$m
Revenue
202.0 68.6 270.6 Product revenue 212.9 51.6 264.5
– 10.3 10.3 Contract revenue – 4.4 4.4
202.0 78.9 280.9 Total revenue 212.9 56.0 268.9
109.9 29.5 139.4 Cost of goods sold 112.6 29.0 141.6
92.1 49.4 141.5 Gross margin 100.3 27.0 127.3

Operating Expenses
59.4 9.7 69.1 Selling, general and administrative(1) 53.8 10.0 63.8
69.3 11.6 80.9 Research and development 51.5 14.0 65.5
– – – Settlement reserve charge 206.3 – 206.3
7.2 0.8 8.0 Other net charges 1.2 0.4 1.6
135.9 22.1 158.0 Total operating expenses 312.8 24.4 337.2
(43.8 ) 27.3 (16.5 ) Operating income/(loss) (212.5 ) 2.6 (209.9 )

10.5 8.6 19.1 Depreciation and amortization 7.7 8.0 15.7
– (0.3 ) (0.3 ) Amortized fees (0.1 ) (0.2 ) (0.3 )
6.9 1.9 8.8 Share-based compensation 5.4 2.2 7.6
– – – Settlement reserve charge 206.3 – 206.3
7.2 0.8 8.0 Other net charges 1.2 0.4 1.6
(19.2 ) 38.3 19.1 Adjusted EBITDA 8.0 13.0 21.0
(1) General and corporate costs have been allocated between the two segments.

Appendix II

Six Months Ended Six Months Ended
June 30, 2009 June 30, 2010
Bio- EDT Total Bio- EDT Total

Neurology
Neurology
US$m US$m US$m US$m US$m US$m
Revenue
387.4 126.1 513.5 Product revenue 446.0 124.3 570.3
– 12.5 12.5 Contract revenue 1.0 8.1 9.1
387.4 138.6 526.0 Total revenue 447.0 132.4 579.4
210.2 58.0 268.2 Cost of goods sold 227.3 59.8 287.1
177.2 80.6 257.8 Gross margin 219.7 72.6 292.3

Operating Expenses
121.3 18.8 140.1 Selling, general and administrative(1) 108.3 19.5 127.8
137.8 23.6 161.4 Research and development 103.2 27.1 130.3
– – – Settlement reserve charge 206.3 – 206.3
24.1 3.5 27.6 Other net charges 4.7 0.4 5.1
283.2 45.9 329.1 Total operating expenses 422.5 47.0 469.5
(106.0) 34.7 (71.3) Operating income/(loss) (202.8) 25.6 (177.2)

21.0 17.2 38.2 Depreciation and amortization 15.0 16.5 31.5
– (0.4) (0.4) Amortized fees (0.2) (0.2) (0.4)
15.0 4.0 19.0 Share-based compensation 12.9 4.2 17.1
– – – Settlement reserve charge 206.3 – 206.3
24.1 3.5 27.6 Other net charges 4.7 0.4 5.1
(45.9) 59.0 13.1 Adjusted EBITDA 35.9 46.5 82.4
(1) General and corporate costs have been allocated between the two segments.

Elan Corporation, plc
Investor Relations:
Chris Burns, 800-252-3526
David Marshall, 353-1-709-4444
or
Media Relations:
Mary Stutts, 650-794-4403
Paul McSharry, 353-1-663-3600

Copyright Business Wire 2010

10 Things to Know About Life Cycle Assessments

Life cycle assessment (LCA) has come a long way in the past few years, evolving from a niche activity carried out by academics and a few forward-thinking businesses to a mainstream practice talked about publicly by Fortune 500 companies.

But there is still some confusion about what LCA is, what it’s good (and not so good) for, and where it might be headed.

What follows here are 10 facts — and a few opinions — to help shed some light on this exciting young field.

1. LCA is a tool in a growing field called Industrial Ecology

Industrial Ecology seeks to redefine the global economy from the old paradigm of open loop systems (linear flows of materials where resources are extracted, goods are produced and used, and waste products are disposed) to closed loop models (the goal of which is to mimic nature, where the wastes from one product are the raw materials for another).

2. Think “cradle-to-grave,” or ideally, “cradle-to-cradle”

LCA is a “cradle-to-grave” (or, ideally, cradle to cradle) accounting of the key environmental impacts of products and services.
To perform an LCA, you essentially sum up all of the material and energy inputs to the production, use, and disposal of a product; then sum up all of the outputs (air and water emissions, materials, and waste) from each phase; and interpret the results in terms of impacts on human health, ecosystems quality, and resource depletion.

3. LCA is often performed to determine the impact of consumer products

Though there are many uses for LCA, consumer products have long been a prominent target for practitioners. There can be many reasons for this, but it seems likely that it is a response to the growing consumer demand for environmentally-responsible products. The increasing prevalence of product carbon footprints (see next bullet) is a good example of this phenomenon.

4. A product carbon footprint is a type of LCA

There are many ways that LCA can “quantify” the environmental impact of products. One such method is the product carbon footprint, which is really an LCA that focuses on climate change impacts. The increasing prevalence of carbon footprinting can only be good news, as so-called supply chain carbon (that is, carbon emissions that occur outside the direct control of the company selling the final product) make up a very large percentage of the emissions associated with the goods we buy and sell every day.

5. To do an LCA the right way, you need to know (and communicate) the “What” and the “Why”

Why are you performing an LCA? Is it intended for use only inside your organization to make improvements to a product? Or are you intending to “go public” with your findings and make an environmental claim? And what will you be evaluating? Is it a single, consumer facing item (like a can of soda), or is it an entire product line (such as carbonated beverages)? Also, what year will you be evaluating (most recent is always best)? These are the kind of questions you’ll need to answer when you state the “What and the Why” of your study (technically called the Goal and Scope), the first stage of any LCA.

!–pagebreak– 6. LCA is data driven

To perform an LCA, you need a lot of data. Some of the data is relatively easy to come by — the amount of energy used in a manufacturing plant that your company owns and operates, for example. Other types can be extremely difficult to obtain — a common example is a material used in your product (such as plastic packaging) that is bought from an overseas supplier. Fortunately, there are databases that contain representative information for common materials. Some of these databases are proprietary, others free, and all are of varying degrees of quality. But there are global efforts to improve the data available to LCA practitioners, so we can look forward to stronger and more robust results as time goes on.

7. The Life Cycle Inventory is the meat of LCA

The grunt work of LCA begins with data collection and modeling, or Life Cycle Inventory in LCA terms. This is often made easier by drawing a process map of your product’s life cycle — a box flow diagram of all the inputs and outputs across the entire supply chain. Once this is sketched out, the LCI essentially becomes a matter of acquiring and filling in data at each relevant step. So, the LCI is really a balance sheet of all the material and energy inputs and the emissions outputs over the product’s life cycle.

8. It’s not enough to know how much — we have to place the impacts in context

After the LCI is compiled, the inputs and outputs are interpreted to broadly explain their effect on key environmental categories — the usual suspects are human health, ecosystem quality, and resource depletion. This part of the LCA is known as life cycle impact assessment (LCIA), and is used by decision makers to make choices about how to lessen the environmental effects of the evaluated product. So, for example, while the LCI might tell us how many grams of different greenhouse gases are emitted across a product’s life cycle, the LCIA would go a step further and quantify the global warming potential of all those emissions.

9. Interpretation

Once the life cycle inventory and assessment are finished (these are usually accomplished with the help of software tools, which are proliferating at a rapid rate), it’s left to the human practitioner to frame the results. Questions such as which impact categories to emphasize the most (human health is a common choice) and which processes to focus on for improvement need to be decided. Answers to these questions are often highly subjective, and depend upon many things, such as the priorities of the organization performing the LCA, the target audience, and other issues decided in the Goal and Scope phase.

10. LCA is what we make of it

LCA is a powerful tool to help us understand the impacts of the products we make and use. But like any tool, it can be used in many different ways, some of them not so helpful. If, for example, we evaluate a “bad” product and use LCA to improve its impact incrementally, we still might not realize the true aim of our work — the production of goods and services that do not hinder the ability of current future generations to provide for themselves. In other words, only in the context of broader sustainability goals can LCA do what it was created to do — help to enable the creation of truly green economy.

Scott Kaufman is a senior manager at the Carbon Trust and Adjunct Professor at Columbia University, where he teaches a course in Industrial Ecology and Life Cycle Assesment (LCA).

Ireland may slow budget reform: gov’t party

(Reuters) – Ireland may not have the political will to bring its budget deficit in line with EU rules as planned by 2014 and could need six years more, the chairman of the smaller governing coalition party the Greens said.

Investors and European leaders have praised Ireland for austerity measures culminating in 4 billion euros ($5.2 billion) of spending cuts imposed in last December’s budget for 2010.

Green Party Chairman Dan Boyle told the Sunday Tribune it was “probably a heresy” for a government party to question whether the deficit could be cut to 3 percent of gross domestic product by 2014 from more than 14 percent in 2009.

“It is certainly doable if you want to be draconian every year,” Boyle was quoted by the newspaper as saying. “But is it politically feasible and is it socially possible?”

Boyle said he still expected the cabinet to deliver the 3 billion euros of savings planned for the 2011 budget in December and then the government could “take stock.”

“I do not see the public appetite continuing,” Boyle said. “It could be that we have neutral budgets for a period.”

Boyle said he was making his comments in acknowledgement of a report by the International Monetary Fund, which expressed doubts over Ireland’s ability to meet the 2014 target.

The Green Party last year debated quitting the alliance with Prime Minister Brian Cowen’s Fianna Fail party due to the strains of the fiscal tightening and bank rescue programme, but its members ultimately decided to stay on board.

BANK BAILOUT COSTS

In a talk show on public radio RTE on Sunday, Boyle said the next parliamentary election — due in 2012 if Cowen can keep the coalition in place until then — would provide an opportunity to debate possibly extending the 2014 fiscal target.

“We have to honor the commitment to the three billion (in savings) in 2011,” he said.

“I think we will have a debate maybe when the general election happens about whether 2014 is the year, whether it could be 2015, 2017, 2020, that we should measure the pain over a longer time period.”

Cowen and Finance Minister Brian Lenihan, main architect of the reforms and also from Fianna Fail, have been adamant Dublin must stick to austerity measures and meet the 2014 deadline.

Asked about Boyle’s remarks, a spokesman for Lenihan confirmed the official budget target remained 2014. He did not comment further.

If Ireland loosened its budget discipline, it could cause a flight of investors who already demand a hefty premium for holding Irish sovereign bonds. A row over fiscal policy could also destabilize the already fragile coalition.

(For an earlier analysis on Cowen’s survival prospects as PM please click)

So far, Green ministers have supported the reforms. Boyle is chairman of the party and a member of the upper house of parliament, but not a member of the cabinet.

The budget deficit has risen partly due to the cost of rescuing banks, chiefly nationalized Anglo Irish Bank. The bank costs last year gave Ireland the biggest deficit per GDP in the EU and could push the 2010 deficit as high as 20 percent.

Boyle said he also expected the state to raise its minority holding in another lender, Allied Irish Banks to a majority of up to 70 percent.

(Editing by Mark Heinrich)

BP says “hopeful” well can stay shut indefinitely

(Reuters) – BP Plc is “hopeful” that its blown-out well in the Gulf of Mexico can remain sealed until a pair of relief wells permanently stop the flow, a company executive said on Sunday.

BP is more than two days into a pressure test on its crippled Macondo well, which had been described as a temporary measure to stop oil from gushing into the Gulf while engineers study pressure within the well.

Now, BP officials say they want to keep the well sealed in until they finish a pair of relief wells that are eventually meant to permanently seal the well, or “kill” it, with heavy mud and cement. BP says the relief wells will likely be complete by mid-August.

“We’re hopeful that if the encouraging signs continue that we’ll be able to continue the integrity test all the way to the point that we get the well killed,” Doug Suttles, BP’s chief operating officer, told reporters on a conference call.

“Right now there is no target set to open the well back up to flow,” Suttles said. “Clearly we don’t want to re-initiate flow into the Gulf if we don’t have to.”

The U.S. government has yet to approve BP’s plan. On Saturday, the top U.S. oil spill official said the pressure test was temporary and meant to clarify options for sealing off the well in the event of a hurricane.

After completing the test, BP would open valves on the containment cap to allow oil to temporarily flow into the sea while it repositioned vessels on the surface which would siphon up the oil, retired Coast Guard Admiral Thad Allen said in a statement on Saturday.

(Editing by Doina Chiacu)

BP says ‘hopeful’ well can stay shut indefinitely

HOUSTON, July 18 (Reuters) – BP Plc (BP.L) (BP.N) is “hopeful” that its blown-out well in the Gulf of Mexico can remain sealed until a pair of relief wells permanently stop the flow, a company executive said on Sunday.

BP is more than two days into a pressure test on its crippled Macondo well, which had been described as a temporary measure to stop oil from gushing into the Gulf while engineers study pressure within the well.

Now, BP officials say they want to keep the well sealed in until they finish a pair of relief wells that are eventually meant to permanently seal the well, or “kill” it, with heavy mud and cement. BP says the relief wells will likely be complete by mid-August.

“We’re hopeful that if the encouraging signs continue that we’ll be able to continue the integrity test all the way to the point that we get the well killed,” Doug Suttles, BP’s chief operating officer, told reporters on a conference call.

“Right now there is no target set to open the well back up to flow,” Suttles said. “Clearly we don’t want to re-initiate flow into the Gulf if we don’t have to.”

The U.S. government has yet to approve BP’s plan. On Saturday, the top U.S. oil spill official said the pressure test was temporary and meant to clarify options for sealing off the well in the event of a hurricane.

After completing the test, BP would open valves on the containment cap to allow oil to temporarily flow into the sea while it repositioned vessels on the surface which would siphon up the oil, retired Coast Guard Admiral Thad Allen said in a statement on Saturday.

(Editing by Doina Chiacu)

UPDATE 1-BP says ‘hopeful’ well can stay shut indefinitely

HOUSTON, July 18 (Reuters) – BP Plc (BP.L) (BP.N) is “hopeful” that its blown-out well in the Gulf of Mexico can remain sealed until a pair of relief wells permanently stop the flow, a company executive said on Sunday.

BP is more than two days into a pressure test on its crippled Macondo well, which had been described as a temporary measure to stop oil from gushing into the Gulf while engineers study pressure within the well.

Now, BP officials say they want to keep the well sealed in until they finish a pair of relief wells that are eventually meant to permanently seal the well, or “kill” it, with heavy mud and cement. BP says the relief wells will likely be complete by mid-August.

“We’re hopeful that if the encouraging signs continue that we’ll be able to continue the integrity test all the way to the point that we get the well killed,” Doug Suttles, BP’s chief operating officer, told reporters on a conference call.

“Right now there is no target set to open the well back up to flow,” Suttles said. “Clearly we don’t want to re-initiate flow into the Gulf if we don’t have to.”

The U.S. government has yet to approve BP’s plan. On Saturday, the top U.S. oil spill official said the pressure test was temporary and meant to clarify options for sealing off the well in the event of a hurricane.

After completing the test, BP would open valves on the containment cap to allow oil to temporarily flow into the sea while it repositioned vessels on the surface which would siphon up the oil, retired Coast Guard Admiral Thad Allen said in a statement on Saturday.

(Editing by Doina Chiacu)

Convoy attack just another day in rural Afghanistan

Afghanistan (Reuters) – Rising smoke and two muted booms bring the first sign of trouble for Lieutenant Laura Jonikaitis’s supply convoy, stalled on a narrow main road in volatile Arghandab district.

“They just popped off right now. It’s a mortar. Someone’s firing a mortar,” driver Jorge Martinez yells into his vehicle headphones. The shells, fired from a mud-walled village in the distance, seem to land nowhere.

But moments later, a far louder boom reverberates as an insurgent rocket grenade, or RPG, explodes near a hulking, mine-proofed vehicle up front, while bullets clank beside Jonikaitis, on doors built strong enough to withstand a roadside bomb.

In the back of her MATV a kind of SUV on steroids — gunner Rodney Reyes swivels a remote-control 50-mm caliber machine gun on the roof and squints at a television screen showing green fields and squat houses in front of him.

“I’m looking. I don’t see anything. We need to go now ma’am. It’s kinda dumb if we’re just sitting here. It’s kind of a big target,” Reyes says.

Jonikaitis has already given orders to move, but the road is blocked as Afghan civilians abandon their trucks and cars on this artery to the main U.S. command post in the area, nervous of an escalating firefight.

“Be advised: These civilians are jumping out of the trucks like roaches,” says Martinez, leaning over to scan up along the road through glass windows several inches thick.

It is another setback for Jonikaitis, 24, whose column of 12 military trucks and three civilian haulers, known as “jingles” to the troops because of the decorative chains that give them their distinctive sound, is already six hours late on its supply run to Combat Outpost Jelawur.

COP Jelawur and several smaller nearby bases are taking the brunt of fighting as 150,000 U.S. and NATO troops prepare for an offensive against Taliban insurgents in their Kandahar province strongholds.

THREATS FROM ALL SIDES

Along the way, delays and threats have come from all sides: an ownerless pushbike with containers on the back holding possible bombs, flocks of sheep and village children giving the finger. A creaking lorry piled high with orange-colored sacks overtakes.

“What’s in those sacks?” asks Jonikaitis.

“Should I fire a round into it ma’am?” asks Reyes, 23, only half-joking.

COP Jelawur and several smaller nearby bases are right now taking the brunt of fighting as 150,000 U.S. and NATO troops prepare for an offensive against Taliban insurgents in their Kandahar province strongholds.

This convoy belongs to the 2nd Brigade of the U.S. 101st Airborne Division, which has just arrived in the area as shock troops to choke off two routes used by insurgents to move into Kandahar city from districts to the west.

The brigade is already experiencing heavy fighting against hardcore Taliban fighters that COP Jelawur’s battalion commander, Lieutenant-Colonel David Flynn, thinks have such skills that some have come from outside Afghanistan.

A sniper killed one of Flynn’s soldiers at a forward post near here with a long-range shot that struck him in the head. Three other soldiers have lost limbs to bombs in recent days, including one who lost both legs.

For Jonikaitis, help arrives in the form of Afghan army troops who flank the road, clear traffic and prepare to hunt the insurgents, one poised behind his own machine gun on an open-back utility wearing a red bandana on his head.

“That guy’s a bad ass,” says Reyes. “You don’t want to get in the way of the Afghan army. They say if those guys start shooting, they just unload everything.”

Another boom sounds through the armored doors. Jonikaitis and her trucks are already moving, picking up speed and hoping to arrive before dark, when the Taliban threat really starts.

(Editing by David Fox and Jonathan Thatcher)

E.On keeps options open on Italy nuclear tech-report

July 18 (Reuters) – Germany’s E.On (EONGn.DE) has still not decided what technology it would use for possible nuclear power plants in Italy, the head of its Italian unit, Klaus Schaefer, said in an interview with an Italian newspaper.

“We still haven’t taken a decision” on technology, Schaefer, who is chief executive of E.On Italia, told Il Sole 24 Ore in the interview, published on Sunday.

“We can count on lots of specific experience, with a variety of solutions in all the countries where we are operating,” he said.

Rival group Enel (ENEI.MI) of Italy and France’s EDF (EDF.PA) have already picked French EPR reactors and Schaefer did not exclude his company also using that.

“Nothing excluded, no limits,” he said.

Italy plans to revive nuclear energy, which was rejected by a public vote in 1987 after the Chernobyl disaster in Ukraine. But clashing political interests have delayed setting up a safety agency — an important step in the plans.

Schaefer said there were still key elements missing from the plans, including rules for competition for sites and guarantees on stability for regulation.

The nuclear safety agency, yet to be set up, is expected to define precise criteria for selecting sites and oversee construction and operation. [ID:nLDE66D0QP]

He added that E.On could start work on nuclear projects in Italy before Enel and EdF but added it was not important.

“We are in a marathon, not a 100 metre sprint,” he said.

He said the government’s target of laying the first stone within the current legislature which could run to 2013 was “a tougher objective than it was a year ago,” adding that lost time could be regained.

Schaefer said if all went well, the first nuclear power plant could be working five to seven years after the start of construction.

(Editing by Jeremy Laurence)