Cephalon's 2007 Results Exceed Full Year Sales and Earning...(425000 (4) - Impairment ...)

Impairment charge - 12,417 (9)

Acquired in-process research and

development - 5,000 (10)

Debt exchange expense - 48,122 (11)

Write-off of deferred debt issuance

costs - 13,105 (12)

Gain on extinguishment of debt (5,319)(5) -

Gain on sale of investment (5,791)(6) -

Income taxes (58,608)(7) (74,891)(7) (13)

500,515 171,300

ADJUSTED NET INCOME $308,811 $316,116

BASIC ADJUSTED INCOME PER COMMON SHARE $4.64 $5.22

DILUTED ADJUSTED INCOME PER COMMON

SHARE $3.92 $4.54

WEIGHTED AVERAGE NUMBER OF COMMON

SHARES OUTSTANDING 66,597 60,507

WEIGHTED AVERAGE NUMBER OF COMMON

SHARES OUTSTANDING-ASSUMING DILUTION 78,684 69,672 Notes to Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income

(1) In 2007, to exclude the on-going amortization of acquired intangible

assets. In 2006, to exclude the reserve for SPARLON capitalized

inventory costs ($8.6 million) and the on-going amortization of

acquired intangible assets ($81.7 million).

(2) In 2007, to exclude charges related to payments for several research

and development collaborations ($28.5 million) and the recognition of

a milestone related to the FDA's acceptance of our NDA filing for

TREANDA(R) (bendamustine HCl) ($15.0 million). In 2006, to exclude

charges related to payments for several research and development

collaborations.

(3) In 2007, to e
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