ADJUSTED NET INCOME
(excluding certain items) $458(3) $374 22%
ADJUSTED DILUTED EPS
(excluding certain items) $0.70(3) $0.57 23%
(1) Marketing and administrative expenses in 2007 included a pre-tax
charge of $56 million ($34 million, or $0.05 per diluted share, on an
after-tax basis) related to the company's Average Wholesale Pricing
(AWP) litigation.
(2) Research and development expenses in 2007 included in-process
research and development (IPR&D) charges of $25 million related to
the company's collaboration for the development of a next-generation
home hemodialysis machine, and $10 million related to the company's
in-licensing arrangement with Halozyme Therapeutics, Inc. The after-
tax impact of these items was $29 million, or $0.04 per diluted
share.
(3) See page 8 for description of adjustments and reconciliation to GAAP
(generally accepted accounting principles) measures.
Non-GAAP Financial Measures: The non-GAAP financial measures contained in
this press release (pre-tax income, net income and per-share earnings,
excluding certain items) adjust for factors that are unusual or
nonrecurring. Unusual or nonrecurring items can be highly variable,
difficult to predict, and of a size that may substantially impact the
company's reported operations for a period. Management believes that non-
GAAP financial measures can facilitate a fuller analysis of the company's
results of operations, particularly in evaluating performance period over
period. Management uses these non-GAAP financial measures internally in
financial planning, to monitor business unit performance, and in
evaluating management performance. Refer to the company's filing on Form
8-K of today's date for addi
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