`
`ALCON LENSX, INC.
`v.
` JOSEPH NEEV
`
` ___________________________________________________
`
`PATRICK MATHEWS - Vol. 1
`September 12, 2013
`
` ___________________________________________________
`
`
`
`
`
`
`PATRICK MATHEWS - 9/12/2013
`
`Page 1
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` CASE NO. 1200046131
`
` JAMS ARBITRATION
`
` ALCON LENSX, INC.
`
` Claimant
`
` VS.
`
` JOSEPH NEEV
`
` Respondent
`
` ORAL DEPOSITION OF
`
` PATRICK MATHEWS ALCON
`
` SEPTEMBER 12, 2013
`
` ORAL DEPOSITION OF PATRICK MATHEWS, produced as a witness
`
`at the instance of the Respondent, and duly sworn, was taken in
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`the above-styled and numbered cause on the 12th of September,
`
`2013, from 9:04 a.m. to 2:28 p.m., before Tierney Burgett, CSR
`
`in and for the State of Texas, reported by machine shorthand,
`
`at the Comfort Suites, 6450 South Freeway, Fort Worth, Texas,
`
`pursuant to JAMS.
`
`888-513-9800
`
`Merrill Corporation - Houston
`www.merrillcorp.com/law
`
`
`
`PATRICK MATHEWS - 9/12/2013
`
`Page 2
`
` A P P E A R A N C E S
`
`FOR THE CLAIMANT:
` MARY PRENDERGAST
` MORRISON & FOERSTER
` 12531 High Bluff Drive, Suite 100
` San Diego, California 92130-2040
` 858.720.5100 Fax: 858.720.5125
` e-mail: mprendergast@mofo.com
`
`FOR THE RESPONDENT:
` DAVID A. MAKMAN
` MAKMAN & MATZ LLP
` 655 Mariner's Island Boulevard, Suite 306
` San Mateo, California 94404
` 650.242.1560 Fax: 650.242.1547
` e-mail: david@makmanmatz.com
`
`ALSO PRESENT:
`
` Matthew Hayenga
`
`09:04:36
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`888-513-9800
`
`Merrill Corporation - Houston
`www.merrillcorp.com/law
`
`
`
`PATRICK MATHEWS - 9/12/2013
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`Page 28
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` MS. PRENDERGAST: It's easier for him.
`
` MR. MAKMAN: Yeah.
`
` A. It is not exactly, no.
`
` Q. Okay. Do you know why it's not?
`
` A. I do not. And I don't want to speculate. What I
`
`09:39:03
`
`can say is that revenue is exactly what we reported externally.
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`Sometimes you'll have returns, for example, from customers that
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`may offset and distort the units versus the selling price. But
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`without actually looking into that specific month, I'd rather
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`not speculate. But again, these are our actual reported sales
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`09:39:25
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`externally for a public company, and this is actually what is
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`recognized and reported outside and also to Wall Street as
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`well.
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` Q. And in what document are these numbers recorded?
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` A. So they will be part of our -- Novartis's financial
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`09:39:47
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`statements that they report. You would not have the detail of
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`LenSX, for example, on that document, but this is part of
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`our -- the roll-up of our financials.
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` Q. So the numbers that are in here are based on some
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`odd -- numbers that were taken from audited financials?
`
`09:40:08
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` A. From our systems which -- audit and financial
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`statements leverage the exact numbers for those systems, to
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`clarify.
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` Q. And then what is in the column that says "Total" --
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`"2011 Total"?
`
`09:40:40
`
`888-513-9800
`
`Merrill Corporation - Houston
`www.merrillcorp.com/law
`
`
`
`PATRICK MATHEWS - 9/12/2013
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`independent of revenue?
`
` A. I took the average sales price directly from our
`
`system from units sold, right. In the revenue calculation,
`
`there is some issues with whether there be a rental, sometimes
`
`deductions for returns, things of that nature.
`
`09:44:21
`
` Q. Okay. But usually those things -- in accounting,
`
`they show up somewhere on the balance sheet?
`
` A. In the revenue.
`
` Q. In the revenue?
`
` A. Right. It would be in the contra revenue, for
`
`09:44:31
`
`example, if it was a return.
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` Q. So in order to figure out what was going on, I would
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`have to look at a document that actually discloses the
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`revenue -- the basis for the revenue calculation?
`
` A. That's correct.
`
`09:44:57
`
` Q. And these revenue calculations are based on sales
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`from Alcon LenSX to other Alcon entities; is that correct?
`
` A. No. They're actually based on sales to -- we don't
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`recognize revenue unless it's actually sold to a customer.
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` Q. And when it's sold to a customer, who recognizes the
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`09:45:16
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`revenue? Is it Alcon Labs?
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` A. It's not Alcon LenSX, and I don't want to speculate.
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`We have so many legal entities. It depends on where the sale
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`is being made. But they all roll up to the same place, which
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`everything would be reflected here.
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`09:45:37
`
`888-513-9800
`
`Merrill Corporation - Houston
`www.merrillcorp.com/law
`
`
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