Genzyme (GZTR) 8-K Results of Operations and Financial Condition

Exhibit 99.2

GENZYME CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP EARNINGS

For the Three Months Ended March 31, 2009

(Amounts in thousands, except percentage and per share data)

														Items Formerly Excluded From Non-GAAP [(Income)/Expense]
	GAAP					FAS 123R			NON-GAAP					Inventory			Technology
	As Reported					Expense			As Adjusted (1)					Write-offs			Purchase			Amortization
Income Statement Classification:
Total revenues			$	1,148,871							$	1,148,871
Cost of products and services sold			$	(295,812	)	$	7,234				$	(288,578	)	$	9,154
Gross margin	74	%	$	853,059		$	7,234		75	%	$	860,293		$	9,154
Selling, general and administrative			$	(317,961	)	$	23,836				$	(294,125	)
Research and development			$	(206,925	)	$	13,536				$	(193,389	)				$	18,180
Amortization of intangibles			$	(57,598	)						$	(57,598	)							$	57,598
Gains (losses) on investments in equity securities			$	(576	)						$	(576	)
Other			$	(979	)						$	(979	)
Investment income			$	5,350							$	5,350
Summary:
Income (loss) before income taxes			$	274,370		$	44,606				$	318,976		$	9,154		$	18,180		$	57,598
(Provision for) benefit from income taxes	29	%	$	(78,884	)	$	(12,589	)	29	%	$	(91,473	)	$	(1,923	)	$	(6,544	)	$	(15,891	)
Net income (loss)			$	195,486		$	32,017				$	227,503		$	7,231		$	11,636		$	41,707
Net income (loss) per share:
Basic			$	0.72		$	0.12				$	0.84		$	0.03		$	0.04		$	0.15
Diluted			$	0.70		$	0.12				$	0.82		$	0.03		$	0.04		$	0.15
Weighted average shares outstanding:
Basic			270,854								270,854
Diluted			277,628								277,628

Notes:

(1) Represents the adjusted Non-GAAP results of operations and financial position for Genzyme Corporation for the three months ended March 31, 2009.  All other amounts presented herein represent previously reported amounts.  We believe that certain Non-GAAP financial measures, when considered together with the GAAP figures, can enhance the overall understanding of the company’s past financial performance and its prospects for the future.  The Non-GAAP financial measures are included with the intent of providing investors with a more complete understanding of the trends underlying our operating results and financial position and are among the primary indicators management uses for planning and forecasting purposes and measuring the company’s performance.  Such Non-GAAP financial measures should not be considered in isolation or used as a substitute for GAAP.

GENZYME CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP EARNINGS

For the Year Ended December 31, 2008

(Amounts in thousands, except percentage and per share data)

														Items Formerly Excluded from Non-GAAP [(Income)/Expense]
														Dilution
														Due to		Validation/
	GAAP					FAS 123R			NON-GAAP					Common Stock		Inventory			(Gain) Loss on			License
	As Reported					Expense			As Adjusted (1)					Equivalents		Write-offs			Investments			Fees			Amortization
Income Statement Classification:
Total revenues			$	4,605,039							$	4,605,039
Cost of products and services sold			$	(1,148,562	)	$	27,555				$	(1,121,007	)			$	12,614
Gross margin	75	%	$	3,456,477		$	27,555		76	%	$	3,484,032				$	12,614
Selling, general and administrative			$	(1,338,190	)	$	102,745				$	(1,235,445	)
Research and development			$	(1,308,330	)	$	56,673				$	(1,251,657	)			$	11,039					$	490,900
Amortization of intangibles			$	(226,442	)						$	(226,442	)												$	226,442
Charge for impaired assets			$	(2,036	)						$	(2,036	)
Equity in income (loss) of equity method investments			$	201							$	201
Minority interest			$	2,217							$	2,217
Gains (losses) on investments in equity securities			$	(3,340	)						$	(3,340	)						$	5,253
Other			$	(1,861	)						$	(1,861	)
Investment income			$	51,260							$	51,260
Interest Expense			$	(4,418	)						$	(4,418	)
Summary:
Income (loss) before income taxes			$	625,538		$	186,973				$	812,511		$	—	$	23,653		$	5,253		$	490,900		$	226,442
(Provision for) benefit from income taxes	33	%	$	(204,457	)	$	(56,740	)	32	%	$	(261,197	)	$	—	$	(5,724	)	$	(390	)	$	(108,328	)	$	(75,399	)
Net income (loss)			$	421,081		$	130,233				$	551,314		$	—	$	17,929		$	4,863		$	382,572		$	151,043
Net income (loss) per share:
Basic			$	1.57		$	0.50				$	2.07		$	—	$	0.07		$	0.02		$	1.42		$	0.56
Diluted (2)			$	1.50		$	0.45				$	1.95		$	0.11	$	0.06		$	0.01		$	1.34		$	0.53
Weighted average shares outstanding:
Basic			268,490								268,490
Diluted (2)			285,595								285,595

Notes:

(1) Represents the adjusted Non-GAAP results of operations and financial position for Genzyme Corporation for the year ended December 31, 2008.  All other amounts presented herein represent previously reported amounts.  We believe that certain Non-GAAP financial measures, when considered together with the GAAP figures, can enhance the overall understanding of the company’s past financial performance and its prospects for the future.  The Non-GAAP financial measures are included with the intent of providing investors with a more complete understanding of the trends underlying our operating results and financial position and are among the primary indicators management uses for planning and forecasting purposes and measuring the company’s performance.  Such Non-GAAP financial measures should not be considered in isolation or used as a substitute for GAAP.

(2) Diluted earnings per share and diluted weighted average shares outstanding reflect the adoption of EITF 04-8. In accordance with the provisions of EITF 04-8, interest and debt fees related to our 1.25% convertible senior notes of $6,915K, net of tax, have been added back to net income and approximately 8,851K shares have been added to diluted weighted average shares outstanding for purposes of computing GAAP and Non-GAAP diluted earnings per share.

GENZYME CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP EARNINGS

For the Year Ended December 31, 2007

(Amounts in thousands, except percentage and per share data)

																	Items Formerly Excluded From Non-GAAP [(Income)/Expense]
																	Dilution		(Gain) on
																	Due to		Investments
	GAAP					FAS 123R			Acquisition			NON-GAAP					Common Stock		in Equity			Litigation		Milestone			Manufacturing						Effect of
	As Reported					Expense			Related			As Adjusted (1)					Equivalents		Securities			Settlement		Payment			Related			Amortization			FIN 46
Income Statement Classification:
Total revenues			$	3,813,519										$	3,813,519
Cost of products and services sold			$	(927,330	)	$	25,677							$	(901,653	)											$	20,916
Gross margin	76	%	$	2,886,189		$	25,677					76	%	$	2,911,866												$	20,916
Selling, general and administrative			$	(1,186,438	)	$	106,172							$	(1,080,266	)						$	64,000										$	200
Research and development			$	(731,950	)	$	58,101							$	(673,849	)								$	25,000								$	7,461
Amortization of intangibles			$	(201,105	)									$	(201,105	)														$	201,105
Purchase of in-process research and development			$	(106,350	)				$	106,350				$	—
Equity in income (loss) of equity method investments			$	7,398					$	19,150				$	26,548															$	830		$	(3,830	)
Minority interest			$	3,932										$	3,932																		$	(3,831	)
Gains (losses) on investments in equity securities			$	13,067										$	13,067				$	(10,848	)
Other			$	(7,118	)									$	(7,118	)											$	5,735
Investment income			$	70,196										$	70,196
Interest Expense			$	(12,147	)									$	(12,147	)
Summary:
Income (loss) before income taxes			$	735,674		$	189,950		$	125,500				$	1,051,124		$	—	$	(10,848	)	$	64,000	$	25,000		$	26,651		$	201,935		$	—
(Provision for) benefit from income taxes	35	%	$	(255,481	)	$	(58,148	)	(15,781		)	31	%	$	(329,410	)	$	—	$	2,698		$	—	$	(9,069	)	$	(9,702	)	$	(72,449	)	$	—
Net income (loss)			$	480,193		$	131,802		$	109,719				$	721,714		$	—	$	(8,150	)	$	64,000	$	15,931		$	16,949		$	129,486		$	—
Net income (loss) per share:
Basic			$	1.82		$	0.50		$	0.41				$	2.73		$	—	$	(0.03	)	$	0.24	$	0.06		$	0.06		$	0.49		$	—
Diluted (2)			$	1.74		$	0.47		$	0.39				$	2.60		$	0.09	$	(0.03	)	$	0.23	$	0.06		$	0.06		$	0.46		$	—
Weighted average shares outstanding:
Basic			263,895											263,895
Diluted (2)			280,767											280,767

Notes:

(1) Represents the adjusted Non-GAAP results of operations and financial position for Genzyme Corporation for the year ended December 31, 2007.  All other amounts presented herein represent previously reported amounts. We believe that certain Non-GAAP financial measures, when considered together with the GAAP figures, can enhance the overall understanding of the company’s past financial performance and its prospects for the future.  The Non-GAAP financial measures are included with the intent of providing investors with a more complete understanding of the trends underlying our operating results and financial position and are among the primary indicators management uses for planning and forecasting purposes and measuring the company’s performance.  Such Non-GAAP financial measures should not be considered in isolation or used as a substitute for GAAP.

(2) Diluted earnings per share and diluted weighted average shares outstanding reflect the adoption of EITF 04-8. In accordance with the provisions of EITF 04-8, interest and debt fees related to our 1.25% convertible senior notes of $7,543K, net of tax, have been added back to net income and approximately 9,686K shares have been added to diluted weighted average shares outstanding for purposes of computing GAAP and Non-GAAP diluted earnings per share.

GENZYME CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP EARNINGS

For the Year Ended December 31, 2006

(Amounts in thousands, except percentage and per share data)

												Dilution
												Due to							Items Formerly Excluded From Non-GAAP [(Income)/Expense]
												Transition										(Gain)/Loss
												from										on Investments
	GAAP					FAS 123R						(Net Loss) to		NON-GAAP					OFT			in Equity			Settlement of			Impairment of						Effect of
	As Reported					Expense			IPR&D			Net Income		As Adjusted (1)					Settlement			Securities			Tax Audits			Goodwill			Amortization			FIN 46
Income Statement Classification:
Total revenues			$	3,187,013												$	3,187,013
Cost of products and services sold			$	(735,671	)	$	21,430									$	(714,241	)
Gross margin	77	%	$	2,451,342		$	21,430							78	%	$	2,472,772
Selling, general and administrative			$	(1,010,400	)	$	121,822									$	(888,578	)	$	7,936														$	1,376
Research and development			$	(649,951	)	$	65,248									$	(584,703	)																$	19,328
Amortization of intangibles			$	(209,355	)											$	(209,355	)													$	209,355
Purchase of in-process research and development			$	(552,900	)				$	552,900						$	—
Charge for impaired goodwill			$	(219,245	)											$	(219,245	)										$	219,245
Equity in income (loss) of equity method investments			$	15,705												$	15,705																	$	(10,348	)
Minority interest			$	10,418												$	10,418																	$	(10,352	)
Gains (losses) on investments in equity securities			$	73,230												$	73,230					$	(66,466	)
Other			$	(2,045	)											$	(2,045	)
Investment income			$	56,001												$	56,001																	$	(4	)
Interest Expense			$	(15,478	)											$	(15,478	)
Summary:
Income (loss) before income taxes			$	(52,678	)	$	208,500		$	552,900		$	—			$	708,722		$	7,936		$	(66,466	)	$	—		$	219,245		$	209,355		$	—
(Provision for) benefit from income taxes	68	%	$	35,881		$	(66,331	)	$	(148,565	)	$	—	25	%	$	(179,015	)	$	(2,920	)	$	24,459		$	(31,748	)	$	(69,823	)	$	(77,043	)	$	—
Net income (loss)			$	(16,797	)	$	142,169		$	404,335		$	—			$	529,707		$	5,016		$	(42,007	)	$	(31,748	)	$	149,422		$	132,312		$	—
Net income (loss) per share:
Basic			$	(0.06	)	$	0.54		$	1.54		$	—			$	2.02		$	0.02		$	(0.16	)	$	(0.12	)	$	0.57		$	0.51		$	—
Diluted (2)			$	(0.06	)	$	0.52		$	1.54		$	—			$	2.00		$	0.02		$	(0.15	)	$	(0.11	)	$	0.54		$	0.48		$	—
Weighted average shares outstanding:
Basic			261,124													261,124
Diluted (2)			261,124									6,892				268,016

Notes:

(1) Represents the adjusted Non-GAAP results of operations and financial position for Genzyme Corporation for the year ended December 31, 2006.  All other amounts presented herein represent previously reported amounts.  We believe that certain Non-GAAP financial measures, when considered together with the GAAP figures, can enhance the overall understanding of the company’s past financial performance and its prospects for the future.  The Non-GAAP financial measures are included with the intent of providing investors with a more complete understanding of the trends underlying our operating results and financial position and are among the primary indicators management uses for planning and forecasting purposes and measuring the company’s performance.  Such Non-GAAP financial measures should not be considered in isolation or used as a substitute for GAAP.

(2) Common stock equivalents are included in the calculation of diluted earnings per share to the extent they are dilutive.  Due to the significant IPR&D charge for AnorMED of $552,900K, Genzyme had a GAAP net loss for the year ended December 31, 2006 and, therefore, the effect of options, stock purchase rights and warrants to purchase shares of Genzyme Stock, which we refer to collectively as common stock equivalents, and the potentially dilutive effect of our 1.25% convertible notes are excluded from the calculation of GAAP diluted net loss per share because the effect would be anti-dilutive.  Conversely, on a Non-GAAP basis, Genzyme produced a net profit and, therefore, the common stock equivalents are included in the calculation of Non-GAAP diluted net income per share because the effect is dilutive.  Non-GAAP diluted earnings per share excludes the potentially dilutive effect of our 1.25% convertible notes.