Gilead
 
Full Year 2009 Guidance^

($ in millions, except percentages and per share amounts)

Net Product Revenues

 $ 5,900 - 6,000

Product Gross Margin*

 76% - 78%

Expenses
  • R&D*
  • SG&A*

$ 800 - 820
$ 720 - 740

Effective Tax Rate

 26% - 27%

Diluted EPS Impact of Stock-Based
    Compensation Expense, Net of Tax

 $ 0.14 - 0.16

^ All guidance reiterated on 4/21/09, previously provided on 1/27/09. The acquisition of CV Therapeutics was completed on 4/17/09 and is not reflected in the guidance.

* Product gross margin and expenses are non-GAAP and exclude the impact of stock-based compensation expense. Management believes this non- GAAP information is useful for investors, taken in conjunction with Gilead’s GAAP financial statements, because management currently uses such information internally for its operating, budgeting and financial planning purposes. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of Gilead’s operating results as reported under U.S. GAAP.

Forward-looking Statements

The projected financial results presented on this page represent management's estimates of Gilead’s future financial results. Gilead cautions readers that forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include: Gilead’s ability to sustain growth in revenues for its antiviral and cardiovascular franchises; unpredictable variability of Tamiflu royalties and the strong relationship between this royalty revenue and global pandemic planning and supply; Gilead’s ability to receive regulatory approvals in a timely manner or at all, for new and current products, including GS 9350, a single-tablet fixed-dose regimen containing elvitegravir, GS 9350 and Truvada, cicletanine hydrochloride or aztreonam for inhalation solution; Gilead’s ability to successfully commercialize any products that receive regulatory approvals; Gilead’s ability to successfully develop its respiratory and cardiovascular franchises; initiating and completing clinical trials may take longer or cost more than expected; fluctuations in the foreign exchange rate of the U.S. dollar that may reduce or eliminate the favorable foreign currency exchange impact on Gilead’s future revenues and pre-tax earnings; our ability to consummate additional purchases under our share repurchase program due to changes in our stock price, corporate or other market conditions; risks and uncertainties related to Gilead’s ability to successfully integrate the products and employees of Gilead and CV Therapeutics, including its ability to increase sales of CV Therapeutics’ approved products and its ability to advance pipeline programs; and other risks identified from time to time in Gilead’s reports filed with the U.S. Securities and Exchange Commission. Gilead directs readers to its Annual Report on Form 10-K for the year ended December 31, 2008 and its subsequent current reports on Form 8-K. Gilead claims the protection of the Safe Harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements. All forward-looking statements are based on information currently available to Gilead, and Gilead assumes no obligation to update any such forward-looking statements.

FSP APB 14-1^

  • Effective for Gilead January 1, 2009

  • Impacts accounting related to Gilead’s Convertible Senior Notes (Notes):
    • Conversion feature embedded in Notes is bifurcated from debt portion of Notes
    • Conversion feature is recorded in Equity
    • Bifurcation of conversion feature simultaneously creates a debt discount on the Notes
    • Debt discount is amortized to interest expense over the term of our 2011 and 2013 Notes based on Gilead’s nonconvertible borrowing rate

  • FSP APB 14-1 also requires retrospective application to reflect additional interest expense and a benefit for income taxes in prior periods

  • Estimated Historical Impact of retrospective accounting:
    • Approximately $ 0.01 per diluted share per quarter

  • Estimated 2009 Impact of new accounting:
    • Approximately $ 0.01 per diluted share per quarter

^FSP APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement), was issued by the Financial Accounting Standards Board in May 2008.

  • Effective January 1, 2009
  • Prior periods are required to be retrospectively adjusted
  • 2008 and 2007 GAAP Net Income attributable to Gilead and EPS have been retrospectively adjusted as follows ($ in millions, except per share amounts):
Q1 2008 Q2 2008 Q3 2008 Q4 2008 FYE 2008 FYE 2007
Net Income attributable to Gilead as Reported $496.1 $442.8 $504.0 $568.2 $2,011.2 $1,615.3
Additional Interest Expense, Net of Tax* ($7.8) ($8.0) ($8.2) ($8.2) ($32.3) ($30.4)
Net Income attributable to Gilead as Adjusted* $488.3 $434.8 $495.9 $560.0 $1,978.9 $1,584.9
NNet Income attributable to Gilead per Share as Reported (Diluted) $0.51 $0.46 $0.52 $0.60 $2.10 $1.68
Additional Interest Expense, Net of Tax* ($0.00) ($0.01) ($0.00) ($0.01) ($0.04) ($0.04)
Net Income attributable to Gilead per Share, as Adjusted (Diluted)* $0.51 $0.45 $0.52 $0.59 $2.06 $1.64

* Amounts may not sum due to rounding