|
Letter to Stockholders |
Business Events |
Financial Highlights
(in thousands, except per share amounts) (unaudited)
|
Three Months
Ended June 30,
|
|
|
|
2001
|
2000(2)
|
|
|
|
Actual
|
Pro Forma(1)
|
Actual
|
Pro Forma(1)
|
Revenues
|
Product sales
|
$410,258
|
$410,258
|
$309,414
|
$309,414
|
Royalties
|
52,446
|
52,446
|
49,643
|
49,643
|
Contract and other
|
20,935
|
20,935
|
34,507
|
34,507
|
Interest
|
32,235
|
32,235
|
22,262
|
22,262
|
Total revenues
|
515,874
|
515,974
|
415,826
|
415,826
|
|
|
|
Costs and expenses
|
Cost of sales
|
76,188
|
76,188
|
97,657
|
66,283
|
Research and development
|
123,448
|
123,448
|
115,563
|
115,563
|
Marketing, general and administrative
|
107,800
|
107,800
|
86,259
|
86,259
|
Collaboration profit sharing
|
57,908
|
57,908
|
30,897
|
30,897
|
Recurring charges related to redemption
|
81,490
|
-
|
98,072
|
-
|
Interest
|
1,345
|
1,345
|
1,240
|
1,240
|
Total costs and expenses
|
448,179
|
366,689
|
429,688
|
300,242
|
|
|
|
Income (loss) before taxes
|
67,695
|
149,185
|
(13,862)
|
115,584
|
Income tax provision (benefit)
|
29,047
|
47,739
|
(997)
|
36,025
|
|
|
|
Net income (loss)
|
$38,648
|
$101,446
|
$(12,865)
|
$79,559
|
|
|
|
Earnings (loss) per share
|
Basic
|
$0.07
|
$0.19
|
$(0.02)
|
$0.15
|
Diluted
|
$0.07
|
$0.19
|
$(0.02)
|
$0.15
|
|
|
|
Weighted average shares used to compute earnings (loss) per share:
|
|
|
|
|
Basic
|
526,998
|
526,998
|
521,233
|
521,233
|
Diluted
|
535,142
|
535,142
|
521,233
|
538,373
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|
(1) Pro Forma amounts exclude recurring charges related to the redemption, costs in 2000 related to the sale of inventory that was written up at the redemption and their related tax effects.
(2) The results for the quarter ended June 30, 2001 have been restated to reflect the adoption of the Securities and Exchange Commission's Staff Accounting Bulletin No. 101 on Revenue Recognition as of January 1, 2000.
|
Six Months
Ended June 30,
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|
|
|
2001
|
2000(2)
|
|
|
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Actual
|
Pro Forma(1)
|
Actual
|
Pro Forma(1)
|
Revenues
|
Product sales
|
$802,161
|
$802,161
|
$592,592
|
$592,592
|
Royalties
|
127,077
|
127,077
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96,987
|
96,987
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Contract and other
|
59,419
|
49,415
|
70,361
|
70,361
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Interest
|
67,299
|
67,299
|
43,736
|
43,736
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Total revenues
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1,055,956
|
1,045,952
|
803,676
|
803,676
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|
|
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Costs and expenses
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Cost of sales
|
159,984
|
159,984
|
203,792
|
129,140
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Research and development
|
259,788
|
259,788
|
226,969
|
226,969
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Marketing, general and administrative
|
235,719
|
235,719
|
169,872
|
169,872
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Collaboration profit sharing
|
104,281
|
104,281
|
49,231
|
49,231
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Recurring charges related to redemption
|
163,007
|
-
|
196,619
|
-
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Interest
|
2,836
|
2,836
|
2,526
|
2,526
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Total costs and expenses
|
925,615
|
762,608
|
849,009
|
577,738
|
|
|
|
Income (loss) before taxes and cumulative effect of accounting change
|
130,341
|
283,344
|
(45,333)
|
225,938
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Income tax provision (benefit)
|
59,305
|
90,670
|
(7,858)
|
70,429
|
Income (loss) before cumulative effect of accounting change
|
71,036
|
192,674
|
(37,475)
|
155,509
|
Cumulative effect of accounting change, net of tax (2) (3)
|
(5,638)
|
-
|
(57,800)
|
-
|
|
|
|
Net income (loss)
|
$65,398
|
$192,674
|
$(95,275)
|
$155,509
|
|
|
|
Earnings (loss) per share
|
Basic: Earnings (loss) before cumulative effect of accounting change
|
$0.13
|
$0.37
|
$(0.07)
|
$0.30
|
Cumulative effect of accounting change, net of income tax
|
(0.01)
|
-
|
(0.11)
|
-
|
Net earnings (loss) per share
|
$0.12
|
$0.37
|
$(0.18)
|
$0.30
|
|
|
|
Diluted: Earnings (loss) before cumulative effect of accounting change
|
$0.13
|
$0.36
|
$(0.07)
|
$0.29
|
Cumulative effect of accounting change, net of income tax
|
(0.01)
|
-
|
(0.11)
|
-
|
Net earnings (loss) per share
|
$0.12
|
$0.36
|
$(0.18)
|
$0.29
|
|
|
|
Weighted average shares used to compute earnings (loss) per share:
|
|
|
|
|
Basic
|
526,396
|
526,396
|
520,182
|
520,182
|
Diluted
|
535,181
|
535,181
|
520,182
|
539,348
|
|
(1) Pro Forma amounts exclude recurring charges related to the redemption, costs in 2000 related to the sale of inventory that was written up at the redemption and their related tax effects. In addition, pro forma excludes the cumulative effect of the changes in accounting principle net of tax, adopted in 2001 and 2000, and the changes in fair value of certain derivatives ($10.0 million) recorded in Q1 2001 under FAS 133.
(2) The results for the three- and six-months ended June 30, 2001 have been restated to reflect the adoption of the SEC's Staff Accounting Bulletin No. 101 on Revenue Recognition as of January 1, 2000, and the related cumulative effect of a change in accounting principle associated with contract revenues recognized in prior periods. The related deferred revenue is being recognized over the term of the agreements.
(3) Genentech adopted Statement of Financial Accounting Standard 133 (FAS 133) on Accounting for Derivative Instruments and Hedging Activities (FAS 133) on January 1, 2001, and recorded a cumulative effect of a change in accounting principle related to recording derivative instruments at fair value.
|
June 30,
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|
2001
|
|
2000
|
Revenues
|
Cash and short-term investments
|
$1,392,806
|
|
$766,451
|
Accounts receivable
|
272,680
|
|
262,140
|
Inventories
|
396,319
|
|
240,190
|
Long-term marketable securities
|
1,208,305
|
|
1,334,683
|
Property, plant and equipment, net
|
790,504
|
|
739,698
|
Goodwill
|
1,379,136
|
|
1,531,742
|
Other intangible assets
|
1,194,020
|
|
1,353,040
|
Other long-term assets
|
243,121
|
|
170,293
|
Total assets
|
6,893,108
|
|
6,541,493
|
Total current liabilities
|
561,448
|
|
288,910
|
Long-term debt
|
-
|
|
149,692
|
Total liabilities
|
1,073,103
|
|
1,087,746
|
Total stockholders' equity
|
5,820,005
|
|
5,453,747
|
Year-to-date
|
Capital expenditures
|
85,676
|
|
53,571
|
Pro forma depreciation and amortization expense
|
53,503
|
|
47,304
|
|
The Press Release of Genentech's Second Quarter 2001 Results is also available.
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