Genentech 8-K Results of Operations and Financial Condition

EXHIBIT 99.2

GENENTECH, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

(Unaudited)

	Three Months						Six Months
	Ended June 30,						Ended June30,
	2008			2007			2008			2007
Revenues:
Product sales	$	2,536		$	2,443		$	4,915		$	4,773
Royalties		629			484			1,244			903
Contract revenue		71			77			140			171
Total operating revenues		3,236			3,004			6,299			5,847
Costs and expenses:
Cost of sales (includes employee stock-based compensation expense: three months–2008–$18; 2007–$16; six months–2008–$41; 2007–$33)		441			429			831			821
Research and development (includes employee stock-based compensation expense: three months–2008–$38; 2007–$39; six months–2008–$80; 2007–$77)		649			603			1,266			1,213
Marketing, general and administrative (includes employee stock-based compensation expense: three months–2008–$41; 2007–$47; six months–2008–$87; 2007–$93)		559			532			1,076			1,023
Collaboration profit sharing		313			277			592			529
Recurring charges related to redemption and acquisition		43			26			86			52
Special items: litigation-related		2			13			(300	)		26
Total costs and expenses		2,007			1,880			3,551			3,664
Operating income		1,229			1,124			2,748			2,183
Other income (expense):
Interest and other income, net(1)		93			75			166			149
Interest expense		(15	)		(17	)		(32	)		(35	)
Total other income, net		78			58			134			114
Income before taxes		1,307			1,182			2,882			2,297
Income tax provision		525			435			1,118			844
Net income	$	782		$	747		$	1,764		$	1,453
Earnings per share:
Basic	$	0.74		$	0.71		$	1.68		$	1.38
Diluted	$	0.73		$	0.70		$	1.65		$	1.36
Weighted average shares used to compute earnings per share:
Basic		1,051			1,053			1,052			1,053
Diluted		1,064			1,070			1,066			1,071

_________________________

(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 debt and 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,		December 31,
	2008		2007
Selected consolidated balance sheet data:
Cash, cash equivalents and short-term investments	$	4,505	$	3,975
Accounts receivable – product sales, net		889		847
Accounts receivable – royalties, net		732		620
Accounts receivable – other, net		200		299
Inventories		1,406		1,493
Long-term marketable debt and equity securities		1,832		2,090
Property, plant and equipment, net		5,266		4,986
Goodwill		1,577		1,577
Other intangible assets		1,083		1,168
Other long-term assets		308		366
Total assets		19,119		18,940
Total current liabilities		2,705		3,918
Long-term debt(1)		2,475		2,402
Total liabilities		5,834		7,035
Total stockholders’ equity		13,285		11,905

	Six Months
	Ended June 30,
	2008		2007
Selected consolidated cash flow data:
Capital expenditures(1)	$	398	$	475
Total depreciation and amortization expense		285		215

_________________________

(1) Capital expenditures exclude approximately $75 million for the six months ended June 30, 2008 and $101 million for the six months ended June 30, 2007 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 $466 million at June 30, 2008 and $399 million at December 31, 2007.