5X5 Report Card Our 5X5 goals were conceived in 1999 and continued through 2005. 1. 25 percent average annual non-GAAP¹ EPS growth The first goal was the most important of the 5X5 goals. We exceeded this goal, with an average annual non-GAAP¹ earnings per share (EPS) growth of 33 percent between 1999 and 2005 (using 1998 as the base year). 2. 5 new products/indications approved With seven new products approved and multiple new indications, we have exceeded our 5X5 goal of five new products or indications approved by 2005. 3. 5 significant products in late-stage clinical trials We ended the 5X5 period with six products for 21 potential indications in our late-stage development pipeline, exceeding our goal of five late-stage products in clinical development. 4. $500 million in new revenues from strategic alliances or acquisitions In 2005, we achieved more than $300 million in revenues associated with strategic alliances or acquisitions, missing our goal of $500 million. 2. 25 percent non-GAAP¹ net income as a percentage of operating revenues Our 2005 non-GAAP¹ net income as a percentage of operating revenues was 21 percent. We did not meet this final productivity goal, primarily due to the success of Rituxan® (Rituximab) and the effect of the associated profit-sharing arrangement.
¹ Non-GAAP amounts exclude the after-tax effects of recurring charges related to the June 30, 1999 redemption of our Special Common Stock by Roche and litigation-related special items, and the cumulative effect of accounting changes. The compound annual GAAP earnings per share growth rate was 31 percent from 1999 through 2005. (Given negative GAAP earnings in 1999 and 2000, a directly comparable calculation of the average annual growth rate for 1999 through 2005 is not available and compound annual growth rate instead of average annual growth rate is provided.) For 2005, our GAAP net income as a percentage of operating revenues was 19 percent. See pages 20-23 for the full reconciliation between our non-GAAP and GAAP numbers. |