8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 14, 2004

GENENTECH, INC.
(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation) 1-9813
(Commission
File Number) 94-2347624
(I.R.S. Employer
Identification No.)

1 DNA Way
South San Francisco, California 94080-4990
(Address of principal executive offices and Zip Code)

Registrant's telephone number, including area code: (650) 225-1000

ITEM 5. OTHER EVENTS

On January 14, 2004, Genentech, Inc., a Delaware corporation, issued a press release announcing earnings for the three and twelve months ended December 31, 2003. A copy of the earnings press release is filed as Exhibit 99.1 to this report.

The non-GAAP financial measures used within our earnings press release include net income and earnings per share for the three and twelve months ended December 31, 2003 and 2002, excluding recurring charges related to the redemption of our callable putable common stock on June 30, 1999 (the "Redemption") and the effects of push-down accounting, litigation-related special items, the cumulative effect of a change in accounting principle related to our adoption of Financial Accounting Standards Board Interpretation No. 46, "Consolidation of Variable Interest Entities" (or FIN 46), and their related tax effects.

Each non-GAAP financial measure presented in the earnings press release is included because our management uses this information to monitor and evaluate Genentech's operating results and trends on an on-going basis. Our management believes the non-GAAP information is also useful for investors because the amounts relating to the Redemption and push-down accounting, the litigation-related special items and the cumulative effect of a change in accounting principle related to our adoption of FIN 46 that are excluded were the result of transactions that are unusual due to their nature, size or infrequency. Consequently, excluding those items from our operating results provides users of the financial statements an important insight into our operating results and related trends that affect our business. In addition, our management uses non-GAAP financial information and measures internally for operating, budgeting and financial planning purposes.

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS

      (c)  Exhibits.

                99.1  Earnings Press Release of Genentech, Inc. dated January 14, 2004.

Page 2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		GENENTECH, INC.
Date:	January 14, 2004	/s/ARTHUR D. LEVINSON
		Arthur D. Levinson, Ph.D. President and Chief Executive Officer
Date:	January 14, 2004	/s/LOUIS J. LAVIGNE, JR.
		Louis J. Lavigne, Jr. Executive Vice President and Chief Financial Officer
Date:	January 14, 2004	/s/JOHN M. WHITING
		John M. Whiting Vice President, Controller and Chief Accounting Officer

Page 3

EXHIBIT INDEX

Exhibit No.	Description
99.1	Earnings Press Release of Genentech, Inc. dated January 14, 2004.

Page 4

EX-99.1

EXHIBIT 99.1

Genentech	NEWS RELEASE
	Media Contact:	Debra Charlesworth Mark Krajnak	(650) 225-2742 (650) 225-2792
	Investor Contact:	Kathee Littrell	(650) 225-1034
	http://www.gene.com

GENENTECH REPORTS $3.3 BILLION IN REVENUES WITH $1.9 BILLION
IN ONCOLOGY SALES

-- 30 Percent Increase in Non-GAAP Earnings Per Share --

SOUTH SAN FRANCISCO, Calif. -- January 14, 2004 -- Genentech, Inc. (NYSE: DNA) today announced a 30 percent increase in non-GAAP earnings per share to $1.20 per share and a 28 percent increase in revenues driven by a 21 percent increase in product sales for 2003. GAAP earnings per share in 2003 increased to $1.06 per share after the cumulative effect of an accounting change.

            "The success that we are seeing from 2003 is a result of many years of effort. We view success over the long term and continue to focus on great science and execution," said Arthur D. Levinson, Ph.D., Genentech's chairman and chief executive officer. "We successfully launched two new products, RAPTIVA and Xolair, and received Priority Review from the U.S. Food and Drug Administration for the Biologic License Application for Avastin. With the approval of RAPTIVA, we have exceeded our 5X5 goal of five product approvals by the end of 2005."

Note: Genentech's non-GAAP earnings per share and non-GAAP net income exclude recurring charges related to the 1999 Roche redemption of Genentech's stock, litigation-related special items and the cumulative effect of the change in an accounting principle related to a synthetic lease. The differences in non-GAAP and GAAP numbers are reconciled in the tables below.

For 2003, including the three months ended December 31, 2003:

• Non-GAAP earnings per share for 2003 increased 30 percent to $1.20 per share compared to 92 cents per share for 2002. GAAP earnings per share for 2003 increased to $1.06 per share compared to 12 cents per share for 2002. GAAP earnings per share includes the impact of the recent settlement of litigation with Amgen and with Bayer, and the cumulative effect of the change in an accounting principle related to a synthetic lease for 2003.

-- more --

-- 2 --

Non-GAAP earnings per share for the fourth quarter of 2003 increased 13 percent to 27 cents per share compared to 24 cents per share in the fourth quarter of 2002. GAAP earnings per share for the fourth quarter of 2003 increased 33 percent to 24 cents per share compared to 18 cents per share for the fourth quarter of 2002.

• Non-GAAP net income for 2003 increased 31 percent to $634.9 million compared to $483.6 million for 2002. GAAP net income for 2003 increased to $562.5 million compared to $63.8 million for 2002. GAAP net income includes the impact of the settlements with Amgen and with Bayer, and the cumulative effect of the accounting change related to a synthetic lease for 2003. Non-GAAP net income for the fourth quarter of 2003 increased 17 percent to $145.0 million from $124.2 million in the fourth quarter of 2002. GAAP net income for the fourth quarter of 2003 increased 37 percent to $126.7 million compared to $92.8 million for the fourth quarter of 2002.

• Operating revenues for 2003 increased 28 percent to $3,300.2 million compared to $2,583.7 million in 2002. This revenue growth was driven primarily by sales of Genentech's BioOncology products, Rituxan® (Rituximab) and Herceptin® (Trastuzumab). Total product sales increased 21 percent in 2003 to $2,621.4 million from $2,163.6 million in 2002.

Product Sales

• Sales of marketed products in 2003 increased 21 percent to $2,621.4 million from $2,163.6 million in 2002.

• BioOncology sales in 2003 were 73 percent of total product revenues compared to 72 percent of total product revenues in 2002.

• Rituxan sales in 2003 increased 28 percent to $1,489.1 million compared to $1,162.9 million in 2002.

• Net U.S. sales in 2003 were $1,360.2 million compared to $1,080.2 million in 2002.

• Ex-U.S. sales in 2003 were $128.9 million compared to $82.7 million in 2002.

• Herceptin sales in 2003 increased 10 percent to $424.8 million compared to $385.2 million in 2002.

• Growth hormone sales in 2003 increased 8 percent to $321.9 million compared to $297.2 million in 2002.

• Cardiovascular product sales in 2003 increased 3 percent to $185.2 million compared to $180.2 million in 2002.

• Pulmozyme® (dornase alfa) Inhalation Solution sales in 2003 increased 21 percent to $167.2 million compared to $138.1 million in 2002.

• Xolair® (Omalizumab), launched in July 2003, had sales of $25.3 million for the year.

-- more --

-- 3 --

• RAPTIVA™ (efalizumab), launched in November, had sales of $1.4 million for the quarter.

Royalties

            Royalties in 2003 increased to $500.9 million compared to $365.6 million in 2002. The increase is primarily due to higher sales by various licensees.

Contract Revenues

            Contract revenues in 2003 increased to $177.9 million compared to $54.5 million in 2002. The increase is primarily due to higher revenues from product opt-ins and reimbursement on development efforts from ongoing collaborations.

Total Costs and Expenses

            Costs and expenses increased as anticipated in 2003 as compared to 2002.

• Research and development (R&D) expenses increased in 2003 to $722.0 million compared to $623.5 million in 2002. R&D expenses as a percentage of operating revenues in 2003 were 22 percent compared to 24 percent in 2002.

• Cost of sales in 2003 increased to $480.1 million from $441.6 million in 2002, primarily due to the increase in product sales. Cost of sales as a percentage of product sales in 2003 was 18 percent as compared to 20 percent in 2002 due to lower manufacturing costs on products sold.

• Marketing, general and administrative (MG&A) expenses in 2003 increased to $794.8 million compared to $546.2 million in 2002 due to ongoing expenses for commercial products, primarily the launches of Xolair and RAPTIVA, the potential launch of Avastin™ (bevacizumab), increased promotional programs, higher corporate functional and other expenses, and higher royalty expenses. MG&A expenses as a percentage of operating revenues in 2003 increased to 24 percent as compared to 21 percent in 2002.

• Collaboration profit-sharing expenses in 2003 increased $457.5 million compared to $350.7 million in 2002. The increase was due primarily to an increased Rituxan profit-sharing expense due to higher Rituxan sales.

            "Our 2003 results are indicative of the overall strength of our strategy of managing our business to build both short- and long-term value," said Louis J. Lavigne, Jr., Genentech's executive vice president and chief financial officer. "We exceeded our EPS performance targets, while at the same time making significant investments in our new product launches and increasing our R&D investments for future growth potential."

-- more --

-- 4 --

            Genentech is a leading biotechnology company that discovers, develops, manufactures, and commercializes biotherapeutics for significant unmet medical needs. Seventeen of the currently approved biotechnology products originated from or are based on Genentech science. Genentech manufactures and commercializes 12 biotechnology products in the United States. The company has headquarters in South San Francisco, California, and is traded on the New York Stock Exchange under the symbol DNA. For additional information about the company, please visit http://www.gene.com.

Webcast:

Genentech will be offering a live webcast of a discussion by Genentech management of the earnings and other business results on Wednesday, January 14, 2004 at 2:15 p.m. PT. The live webcast may be accessed on Genentech's website at http://www.gene.com. This webcast will also be available after the call via the website until 5:00 p.m. PT on January 28, 2004. An audio replay of the webcast will be available beginning at 5:15 p.m. PT on January 14, 2004, through 5:15 p.m. PT on January 21, 2004. Access numbers for this replay are: 1-800-642-1687 (US/Canada) and 1-706-645-9291 (international); conference identification number is 4512259.

Genentech Business and Product Development
Events in the Fourth Quarter 2003

Marketed and Pipeline Product Events

Oncology

Avastin™ (bevacizumab):  On December 1, 2003, Genentech announced that the Biologics License Application (BLA) for Avastin was accepted by the U.S. Food and Drug Administration (FDA). As part of the Avastin BLA filing, Genentech requested and was granted Priority Review designation from the FDA. Based on the Priority Review designation, the FDA has six months from the submission date, or by the end of March 2004, to take action on the BLA filing. The final portion of the BLA was submitted on September 29, 2003, under the FDA's Fast Track designation, as a treatment for first-line metastatic colorectal cancer in combination with chemotherapy. In late November, Genentech and Roche announced that a Phase II study of Avastin plus 5FU/Leucovorin chemotherapy in 209 previously untreated metastatic colorectal cancer patients showed a 29 percent improvement in median survival, the primary endpoint, which did not achieve statistical significance. The study also showed a 67 percent prolongati on in median progression-free survival, which was highly statistically significant, in patients treated with Avastin plus 5FU/Leucovorin compared to 5FU/Leucovorin alone.

-- more --

-- 5 --

Rituxan® (Rituximab):  There were over 250 abstracts on Rituxan presented at the 45th Annual American Society of Hematology (ASH) meeting in early December, including positive results of the first Phase III trial with Rituxan in previously untreated (front-line) patients with indolent non-Hodgkin's lymphoma (NHL) and initial results of a Phase II study suggesting that Rituxan maintenance therapy prolongs remission in indolent NHL. At ASH, Genentech and Biogen Idec were informed that a large, Phase III study evaluating Rituxan in combination with chemotherapy as a front-line treatment for aggressive lymphoma had met its pre-specified primary efficacy endpoint early. Also presented were promising results of a Phase III study of Rituxan as a front-line and maintenance therapy in the treatment of newly diagnosed, diffuse, large, B-cell, or aggressive NHL. Earlier in the quarter, Genentech, Biogen Idec and Roche announced that they had been informed that an Eastern Cooperative Oncology Gro up (ECOG) Phase III study (E1496) evaluating Rituxan maintenance therapy had met its pre-specified primary efficacy endpoint early.

Herceptin® (Trastuzumab):  At the 26th Annual San Antonio Breast Cancer Symposium in early December, Genentech and Roche announced updated results from a clinical study evaluating Herceptin in combination with Taxotere® (docetaxel) as a first-line treatment for HER2 (human epidermal growth factor receptor-2) positive metastatic breast cancer patients. The multi-center, randomized Phase II trial results suggest that adding Herceptin to docetaxel resulted in an increase in median survival of 51 percent, or 9.4 months (27.7 months for patients treated with Herceptin and docetaxel compared to 18.3 months for patients treated with docetaxel alone).

Immunological Disease

RAPTIVA™ (efalizumab):  On October 27, 2003, Genentech and XOMA Ltd. announced that RAPTIVA was approved by the FDA for the treatment of chronic moderate-to-severe plaque psoriasis in adults age 18 or older who are candidates for systemic therapy or phototherapy. RAPTIVA was launched on November 17, and on November 19, Genentech and XOMA announced results of a study published in the November 20 issue of the New England Journal of Medicine in which patients with moderate-to-severe plaque psoriasis receiving 12 weeks of treatment with RAPTIVA experienced a significant reduction in the signs and symptoms associated with psoriasis. In addition, most patients who received extended treatment to 24 weeks continued to benefit.

-- more --

-- 6 --

Rituxan for Rheumatoid Arthritis (RA):  In October, Genentech, Biogen Idec and Roche announced positive follow-up results from a Phase II study showing that a single, short course of treatment (two infusions during the first 15 days of treatment) with Rituxan, alone or in combination with either methotrexate (MTX) or cyclophosphamide (CTX), improved symptoms in patients with moderate-to-severe RA for up to 48 weeks compared to MTX alone.

Growth Hormone

Nutropin® [somatropin (rDNA origin) for injection]:  On December 19, 2003, Genentech submitted a supplemental New Drug Application (sNDA) to the FDA for the additional indication of Nutropin for the long-term treatment of idiopathic short stature (ISS), also called non-growth hormone-deficient short stature, defined by a height score of less than -2.25 standard deviations below the mean for normal height and associated with growth rates unlikely to permit attainment of adult height in the normal range, in pediatric patients whose epiphyses are not closed and for whom diagnostic evaluation excludes other causes associated with short stature that should be observed or treated by other means. In the fourth quarter, the study of Nutropin Depot in patients with adult growth hormone deficiency met its primary endpoint. Data has been submitted to the Endocrine Society for presentation in 2004. Discussions are underway between Genentech and Alkermes on a potential filing of these data to the FDA.

Vascular Disease

TNKase™ (Tenecteplase):  In November, Boehringer Ingelheim and Genentech announced that they plan to test the single-bolus thrombolytic TNKase/Metalyse® in combination with percutaneous coronary intervention (PCI), also known as primary angioplasty, as a potential treatment regimen for acute myocardial infarction (AMI).

Corporate Events

Genentech announced it was named by FORTUNE Magazine as one of the "100 Best Companies To Work For" for the sixth consecutive year. Genentech moved up the list to number 15 from number 80 in 2002.

-- more --

-- 7 --

Genentech and Lonza Group Ltd. announced in December that the companies have entered into a long-term manufacturing agreement under which Lonza Biologics will manufacture commercial quantities of Rituxan for Genentech at Lonza's production facility in Portsmouth, New Hampshire.

Genentech was named by Science magazine as "the top employer and most admired company in the biotechnology and pharmaceutical industries" for the second year in a row. The honor was the result of a survey sponsored by Science magazine and conducted by Hughes Research Worldwide of Rockville, Maryland, involving readers of Science who work in the pharmaceutical, biotechnology, and biopharmaceutical industries in the United States and Western Europe.

Genentech announced that its Board of Directors authorized the repurchase of up to $1 billion of its common stock through December 31, 2004.

The statements made in this press release relating to Genentech's future growth potential are forward-looking and actual results could differ materially. Among other things, Genentech's future growth potential could be impacted by a number of factors, including FDA actions or delays or failure to receive FDA approval, competition, pricing, reimbursement, the ability to supply product, product withdrawals, new product approvals and launches, achieving sales revenue consistent with internal forecasts, unanticipated expenses such as litigation or legal settlement expenses or equity securities writedowns, costs of sales, R&D expenses, fluctuations in contract revenues and royalties, and fluctuations in tax and interest rates.

# # #

GENENTECH, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (unaudited)
		Three Months Ended December 31,
		2003							2002(6)
		GAAP(1)		Differences			Non-GAAP(2)		GAAP(1)		Differences			Non-GAAP(2)
Revenues:
Product sales		$	723,736				$	723,736	$	611,765				$	611,765
Royalties			148,307					148,307		113,090					113,090
Contract revenue			61,856					61,856		18,339					18,339
Total operating revenues			933,899					933,899		743,194					743,194
Costs and expenses:
Cost of sales			126,202					126,202		119,838					119,838
Research and development			215,627					215,627		185,210					185,210
Marketing, general and administrative			263,505					263,505		169,631					169,631
Collaboration profit sharing			133,927					133,927		104,510					104,510
Recurring charges related to redemption			38,586	$	(38,586)	(3)		-		38,928	$	(38,928)	(3)		-
Special items:  litigation-related			(8,119)		8,119	(4)		-		13,394		(13,394)	(4)		-
Total costs and expenses			769,728		(30,467)			739,261		631,511		(52,322)			579,189
Operating margin			164,171		30,467			194,638		111,683		52,322			164,005
Other income, net(5)			20,334		-			20,334		27,418		-			27,418
Income before taxes			184,505		30,467			214,972		139,101		52,322			191,423
Income tax provision			57,774		12,170			69,944		46,274		20,929			67,203
Net income		$	126,731	$	18,297		$	145,028	$	92,827	$	31,393		$	124,220
Earnings per share:
	Basic	$	0.24	$	0.04		$	0.28	$	0.18	$	0.06		$	0.24
	Diluted	$	0.24	$	0.03		$	0.27	$	0.18	$	0.06		$	0.24
Weighted average shares used to compute    earnings per share:
Basic			523,695					523,695		514,156					514,156
Diluted			535,764					535,764		518,976					518,976

___________________

(1)	Reflects operating results in accordance with U.S. generally accepted accounting principles (or GAAP).
(2)	Non-GAAP amounts exclude litigation-related special items and recurring charges related to the 1999 redemption of Genentech's Special Common Stock.
(3)	Represents the amortization of other intangible assets related to the 1999 redemption of Genentech's Special Common Stock.
(4)	Represents amounts received in Q4 2003 related to a litigation settlement, net of accrued interest and costs in Q4 2003 and 2002 related to a surety bond for the City of Hope trial judgment.
(5)	As part of our strategic alliance efforts, we invest in debt and equity securities of certain biotechnology companies with which we have or have had collaborative agreements. The "other income, net" includes realized gains from the sale of certain of these biotechnology equity securities and write-downs in 2002 for other-than-temporary declines in the fair value of certain of these biotechnology debt and equity securities. In addition, "other income, net" includes interest income and interest expense. For further detail, refer to our web site at www.gene.com.
(6)	Certain reclassifications of prior period amounts have been made to conform with the current year presentation.

GENENTECH, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (unaudited)
		Year Ended December 31,
		2003							2002(7)
		GAAP(1)		Differences			Non-GAAP(2)		GAAP(1)		Differences			Non-GAAP(2)
Revenues:
Product sales		$	2,621,490				$	2,621,490	$	2,163,665				$	2,163,665
Royalties			500,903					500,903		365,550					365,550
Contract revenue			177,934					177,934		54,443					54,443
Total operating revenues			3,300,327					3,300,327		2,583,658					2,583,658
Costs and expenses:
Cost of sales			480,123					480,123		441,630					441,630
Research and development			721,970					721,970		623,482					623,482
Marketing, general and administrative			794,845					794,845		546,276					546,276
Collaboration profit sharing			457,457					457,457		350,725					350,725
Recurring charges related to redemption			154,344	$	(154,344)	(3)		-		155,713	$	(155,713)	(3)		-
Special items:  litigation-related			(113,127)		113,127	(4)		-		543,905		(543,905)	(4)		-
Total costs and expenses			2,495,612		(41,217)			2,454,395		2,661,731		(699,618)			1,962,113
Operating margin			804,715		41,217			845,932		(78,073)		699,618			621,545
Other income, net(6)			92,791		-			92,791		107,822		-			107,822
Income before taxes and cumulative effect    of accounting change			897,506		41,217			938,723		29,749		699,618			729,367
Income tax provision (benefit)			287,324		16,366			303,690		(34,038)		279,835			245,797
Income before cumulative effect of    accounting change			610,182		24,851			635,033		63,787		419,783			483,570
Cumulative effect of accounting change,    net of tax			(47,655)		47,655	(5)		- -		- -		- -			- -
Net income		$	562,527	$	72,506		$	635,033	$	63,787	$	419,783		$	483,570
Earnings per share:
Basic:	Earnings before cumulative effect    of accounting change	$	1.18	$	0.05		$	1.23	$	0.12	$	0.81		$	0.93
	Cumulative effect of accounting    change, net of tax		(0.09)		0.09			- -		- -		- -			- -
	Net earnings per share	$	1.09	$	0.14		$	1.23	$	0.12	$	0.81		$	0.93
Diluted:	Earnings before cumulative effect    of accounting change	$	1.15	$	0.05		$	1.20	$	0.12	$	0.80		$	0.92
	Cumulative effect of accounting    change, net of tax		(0.09)		(0.09)			- -		- -		- -			- -
	Net earnings per share	$	1.06	$	0.14		$	1.20	$	0.12	$	0.80		$	0.92
Weighted average shares used to compute    earnings per share:
Basic			517,240					517,240		519,192					519,192
Diluted			528,810					528,810		524,408					524,408

___________________

(1)	Reflects operating results in accordance with U.S. generally accepted accounting principles (or GAAP).
(2)	Non-GAAP amounts exclude litigation-related special items, recurring charges related to the 1999 redemption of Genentech's Special Common Stock, and the cumulative effect of a change in accounting principle related to our adoption of Financial Accounting Standards Board Interpretation No. 46, "Consolidation of Variable Interest Entities," (or FIN 46), on July 1, 2003, net of tax effects.
(3)	Represents the amortization of other intangible assets related to the 1999 redemption of Genentech's Special Common Stock.
(4)	Represents amounts received in 2003 related to the Amgen and Bayer litigation settlements, net of accrued interest and costs in 2003 and 2002 related to a surety bond for the City of Hope trial judgment.
(5)	Amount represents the cumulative effect of the accounting change related to our adoption of FIN 46 on July 1, 2003.
(6)	As part of our strategic alliance efforts, we invest in debt and equity securities of certain biotechnology companies with which we have or have had collaborative agreements. The "other income, net" includes realized gains from the sale of certain of these biotechnology equity securities, as well as changes in the recoverability of our debt securities in 2002. In addition, "other income, net" includes write-downs for other-than-temporary declines in the fair value of certain of these biotechnology debt and equity securities, interest income and interest expense, net of amounts capitalized in 2002. For further detail, refer to our web site at www.gene.com.
(7)	Certain reclassifications of prior period amounts have been made to conform with the current year presentation.

GENENTECH, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited)
	December 31,
	2003			2002(7)
Selected balance sheet data:
Cash and short-term investments	$	1,511,772		$	1,034,572
Accounts receivable - product sales, net		315,097			242,907
Accounts receivable - royalties, net		184,163			116,423
Accounts receivable - other, net		74,831			59,151
Inventories		469,640			393,542
Long-term marketable securities and other		1,422,886			567,286
Property, plant and equipment, net		1,617,912	(5)		1,068,734
Goodwill		1,315,019			1,315,019
Other intangible assets		810,810			927,538
Other long-term assets		812,714	(4)		796,758	(4)
Total assets		8,736,171			6,758,119
Total current liabilities		873,031			646,660
Total liabilities		2,215,873	(6)		1,419,235
Total stockholders' equity		6,520,298			5,338,884
Year-to-date:
Capital expenditures	$	321,955		$	322,832
Total GAAP(1) depreciation and amortization expense		295,449			274,956
Less:  redemption related amortization expense(3)		(154,344)			(155,713)
Non-GAAP(2) depreciation and amortization expense	$	141,105		$	119,243

___________________

(1)	In accordance with U.S. generally accepted accounting principles (or GAAP).
(2)	Non-GAAP amounts exclude amortization of other intangible assets related to the 1999 redemption of Genentech's Special Common Stock.
(3)	Represents the amortization of other intangible assets related to the 1999 redemption of Genentech's Special Common Stock.
(4)	Includes $630 million of restricted cash pledged to secure a bond for the City of Hope trial judgment.
(5)	Includes $348 million of assets related to the consolidation of a variable interest entity pursuant to Financial Accounting Standards Board Interpretation No. 46 (or FIN 46) on July 1, 2003.
(6)	Includes $412 million of debt related to the consolidation of a variable interest entity pursuant to FIN 46.
(7)	Certain reclassifications of prior period amounts have been made to conform with the current year presentation.