(Unaudited)
(thousands, except per share amounts)
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(1) Reflects expense of $2.3 million, $15.8 million, $31.4 million and $43.3 million in the fourth, third, second and first quarters of 2000, respectively, related to the sale of inventory that was written up to fair value as a result of the Redemption on June 30, 1999, and related push-down accounting. For 1999, reflects expense of $46.6 million in the fourth quarter and $46.8 million in the third quarter related to the sales of inventory that was written up to fair value as a result of the Redemption on June 30, 1999, and related push-down accounting. (2) Primarily reflects the impact of the Redemption and push-down accounting, including: the sale of inventory that was written up to fair value, see note (1) above; the amortization of goodwill and other intangible assets of $78.6 million, $95.2 million, $95.2 million and $95.2 million in the fourth, third, second and first quarters of 2000, respectively, and $95.2 million in both the fourth and third quarters of 1999; and $57.8 million for the remeasurement of the value of continuing employee stock options in the third quarter of 1999. This also reflects the $180.0 million charge in the fourth quarter of 1999 related to the legal settlement with the Regents of the University of California (3.) Primarily reflects a $1,147.3 million special charge related to the Redemption and push-down accounting. Included in this charge is $752.5 million for in-process research and development, $284.5 million for the early cash settlement of certain employee stock options and $102.3 million for the remeasurement of the value of continuing employee stock options. (4) Primarily reflects the legal settlement of $50.0 million with the Office of the U.S. Attorney for the Northern District of California. (5) Restated to reflect the two-for-one stock splits in each of 2000 and 1999. (6) Includes initial license fee from Immunex Corporation for Enbrel® and from Schwarz Pharma AG for Nutropin AQ and Nutropin Depot sustained-release growth hormone. In addition we received a milestone payment from F. Hoffmann-La Roche for Herceptin. (7) We adopted the Securities and Exchange Commission's Staff Accounting Bulletin No. 101 on revenue recognition effective January 1, 2000, and recorded a $57.8 million charge, net of tax, as a cumulative effect of a change in accounting principle related to contract revenues recognized in prior periods. The related deferred revenue is being recognized over the term of the agreements. The increase (decrease) in revenues, net income (loss) and earnings (loss) per diluted shares reflect the impact of this adoption. (8) As a result of the Redemption, we revised our presentation of our quarterly data to reflect the New Basis and Old Basis of accounting and also corrected the accounting related to the write-up of the valuation allowance pertaining to unrealized gains on certain marketable securities, which resulted in a reduction in revenues of $20.3 million during the quarter ended June 30, 1999 and a reduction of goodwill of $20.3 million as of June 30, 1999. The aggregate effect of this revision was an increase in net loss by approximately $13.6 million ($0.03 per share), as compared to amounts previously reported for the quarter ended June 30, 1999. Amortization expense and net loss was reduced by $0.3 million in each of the quarters ended September 30, 1999 and December 31, 1999 (less than $0.01 per share in each quarter).