Genentech 8-K Genentech Announces Second Quarter 2007 Results

 EXHIBIT 99.2

GENENTECH, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

(Unaudited)

	Three Months						Six Months
	Ended June 30,						Ended June 30,
	2007			2006			2007			2006
Revenues:
Product sales	$	2,443		$	1,810		$	4,773		$	3,454
Royalties		484			316			903			602
Contract revenue		77			73			171			129
Total operating revenues		3,004			2,199			5,847			4,185
Costs and expenses:
Cost of sales (includes employee stock-based compensation expense: three months–2007–$16; 2006–$0; six months–2007–$33; 2006–$0)		429			284			821			546
Research and development (includes employee stock-based compensation expense: three months–2007–$39; 2006–$34; six months–2007–$77; 2006–$67)		603			390			1,213			764
Marketing, general and administrative (includes employee stock-based compensation expense: three months–2007–$47; 2006–$41; six months–2007–$93; 2006–$82)		532			471			1,023			912
Collaboration profit sharing		277			259			529			485
Recurring charges related to redemption		26			26			52			52
Special items: litigation-related		13			14			26			27
Total costs and expenses		1,880			1,444			3,664			2,786
Operating income		1,124			755			2,183			1,399
Other income (expense):
Interest and other income, net(1)		75			121			149			174
Interest expense		(17	)		(18	)		(35	)		(37	)
Total other income, net		58			103			114			137
Income before taxes		1,182			858			2,297			1,536
Income tax provision		435			327			844			584
Net income	$	747		$	531		$	1,453		$	952
Earnings per share:
Basic	$	0.71		$	0.50		$	1.38		$	0.90
Diluted	$	0.70		$	0.49		$	1.36		$	0.89
Weighted average shares used to compute earnings per share:
Basic		1,053			1,053			1,053			1,054
Diluted		1,070			1,073			1,071			1,074

________________________

(1) "Interest and other income, net" includes interest income, net realized gains from the sale of certain biotechnology equity securities and write-downs for other-than-temporary impairments in the fair value of certain biotechnology equity securities.  For further detail, refer to our web site at www.gene.com.

GENENTECH, INC.

SELECTED CONSOLIDATED FINANCIAL DATA

(In millions)

(Unaudited)

	June 30, 2007		December 31, 2006
Selected consolidated balance sheet data:
Cash, cash equivalents and short-term investments	$	3,195	$	2,493
Accounts receivable – product sales, net		1,067		965
Accounts receivable – royalties, net		514		453
Accounts receivable – other, net		178		248
Inventories		1,365		1,178
Long-term marketable debt and equity securities		1,883		1,832
Property, plant and equipment, net		4,563		4,173
Goodwill		1,315		1,315
Other intangible assets		427		476
Other long-term assets		1,472		1,342
Total assets		16,359		14,842
Total current liabilities(1)		1,989		2,010
Long-term debt(2)		2,307		2,204
Total liabilities		5,508		5,364
Total stockholders’ equity		10,851		9,478

	Six Months Ended June 30,
	2007		2006
Selected consolidated cash flow data:
Capital expenditures(2)	$	475	$	538
Total depreciation and amortization expense		215		199

________________________

(1)

Certain reclassifications have been made at December 31, 2006 to conform to the June 30, 2007 presentation.

(2)

Capital expenditures exclude approximately $101 million at June 30, 2007 and $61 million at June 30, 2006 in capitalized costs related to our accounting for construction projects for which we are considered to be the owner during the construction period.  We have recognized related amounts as a construction financing obligation in long-term debt.  The balances in long-term debt related to the construction financing obligation are $322 million at June 30, 2007 and $216 million at December 31, 2006.