Financial Highlights (Unaudited)
(in millions, except per share)

Total Operating Revenues	Net Income	Diluted Earnings Per Share
Contract Revenue Royalties Product Sales	Non-GAAP(1) GAAP	Non-GAAP(1) GAAP

(1) Genentech's non-GAAP earnings per share and non-GAAP net income exclude recurring charges related to the 1999 redemption of our stock by Roche, litigation-related special items, the cumulative effect of the change in an accounting principle in 2003, and all related tax effects. See pages 16—17 for the reconciliation to our GAAP numbers. All share and per share amounts reflect the May 2004 two-for-one split of Genentech common stock.

(Unaudited)
(in millions, except per share and employee data)

% Change from Preceding Year Years ended December 31, 2004 2003 2002  2004/2003  2003/2002             Total operating revenues $4,621.2 $3,300.2 $2,583.7 40% 28%             Product sales 3,748.9 2,621.4 2,163.6 43    21                Cost of sales 672.5 480.1 441.6 40    9                Research and development (R&D) expenses 947.5 722.0 623.5 31    16                 R&D expenses as a %    of operating revenues 21% 22% 24% —    —              Marketing, general and administrative expenses 1,088.2 794.8 546.2 37    46                Collaboration profit sharing 593.6 457.5 350.7 30    30                Recurring charges related to redemption(1) 145.5 154.3 155.7 (6)   (1)               Special items: litigation-related(2) 37.1 (113.1) 543.9 *    *                Cumulative effect of accounting change, net of tax(3) — 47.6 — *    —                Net income(4) 784.8 562.5 63.8 40    782                Diluted earnings per share 0.73 0.53 0.06 38    783                Non-GAAP net income(5) $   894.4 $   634.9 $   483.6 41% 31%             Non-GAAP diluted EPS(5) 0.83 0.60 0.46 38    30                Non-GAAP net income as a % of operating revenues(5) 19% 19% 19% —    —                Shares used to compute diluted earnings per share 1,079.2 1,057.6 1,048.8 2    1                Actual shares at year-end 1,047.1 1,049.5 1,025.6 —    2                Stock price at year-end $   54.44 $   46.78 $   16.58 16    182                No cash dividends were paid               Cash, cash equivalents, short-term investments, and long-term marketable debt and equity securities $2,780.4 $2,934.7 $1,601.9 (5)   83                Property, plant and equipment, net 2,091.4 1,617.9 1,068.7 29    51                Total assets 9,403.4 8,759.5 6,775.5 7    29                Total stockholders' equity 6,782.2 6,520.3 5,338.9 4    22                Capital expenditures 649.9 322.0 322.8 102    —                Number of employees at year-end 7,646 6,226 5,252 23    19

(1) Amounts represent the amortization of other intangible assets in 2004, 2003 and 2002, related to the June 30, 1999 redemption of our special common stock (or Redemption) and the effects of push-down accounting.

(2) Amount in 2004 includes accrued interest and bond costs related to the City of Hope (or COH) trial judgment, net of a released accrual on a separate litigation matter. Amount in 2003 is comprised of Amgen and Bayer litigation settlements, net of COH litigation-related charges. Amount in 2002 includes litigation-related special charges for the COH trial judgment in the second quarter of 2002, including accrued interest and costs related to obtaining a surety bond, and certain other litigation-related matters. For further information on these items, see the "Results of Operations" section of Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of Part II of our 2004 Form 10-K on file with the Securities and Exchange Commission (or SEC).

(3) We adopted Financial Accounting Standards Board Interpretation No. 46, "Consolidation of Variable Interest Entities," on July 1, 2003, which resulted in a $47.6 million charge, net of tax, (or $0.04 per share) as a cumulative effect of a change in accounting principle in 2003.

(4) We adopted Statement of Financial Accounting Standards (or FAS) 141 on Business Combinations and FAS 142 on Goodwill and Other Intangible Assets on January 1, 2002. As a result of our adoption, reported net income in 2002 increased by $157.6 million (or $0.15 per share), due to the cessation of goodwill amortization and the amortization of our trained and assembled workforce intangible asset related to the Redemption and push-down accounting.

(5)Non-GAAP amounts exclude the recurring charges related to the Redemption, litigation-related special items, the cumulative effect of an accounting change, and all related tax effects. GAAP net income as a percentage of operating revenues was 17 percent in 2004 and 2003, and two percent in 2002. See pages 16—17 for the reconciliation to our GAAP numbers. For further information on these items, see the "Results of Operations" section of Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of Part II of our 2004 Form 10-K on file with the SEC.

* Calculation not meaningful.