November 29, 2007



|Gilead Sciences, Inc. (GILD) Research Report | Neil Guarniere |

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Table of Contents

Page

1. Company Description……………………………………………….3

2. Business Overview………………………………………………...4-6

Impact of Major Developments

Pipeline Developments

Financial Trends

Year 2008 & 2009 Investment Outlook

3. SWOT Analysis……………………………………………………...7

4. Historical Ratio Analysis……………………………………………8

5. Technical Analysis……………………………………………….9-14

Table 1: Gilead Sciences (GILD) Weekly IBD Chart

Table 2: Amgen (AMGN) Weekly IBD Chart

Table 3: Celgene (CELG) Weekly IBD Chart

Table 4: Genentech (DNA) Weekly IBD Chart

Table 5: Genzyme (GENZ) Weekly IBD Chart

6. Intrinsic Valuation………………………………………………....15

P/E Valuation Model

Earnings-Growth Discount Model

7. Wall Street Sentiment……………………………………………...16

Risks to Rating and Price Target

Corporate Management

Sources of Information

8. Historical Ratios and Financial Statements (2002-2006)……17-20

5-Year Historical Key Ratios

5-Year Historical Income Statement

5-Year Historical Balance Sheet

5-Year Historical Statement of Cash Flows

November 17, 2007

Gilead Sciences, Inc. (Buy)

Sector: Healthcare

Industry: Biotechnology

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Price: $44.64 (+37.5% - YTD)

52 Week Range: $47.65 – 30.96

Price Target: $58.19 (30% Undervalued)

Financial Data (Click Here for Key Statistics)

Fiscal Year: Dec

Current EPS Est.: $1.66

P/E: 27.05x

Revenue: $4.21Bln

Next Year EPS Est.: $1.85

P/E: 26.89x

Revenue: $5.01Bln

LT Growth Rate: 16.0%

Peg Ratio: 1.69x

Dividend Rate: N/A

Price / Book: 13.93x

Price / Sales: 9.86x

Beta: 1.38

Market Cap: $41.55Bln

Source: Yahoo Finance and Thomson Financial

Company Description

(Click Here for Expanded Description)

Gilead Sciences, Inc., a biopharmaceutical company, engages in the discovery, development, and commercialization of therapeutics for the treatment of life-threatening infectious diseases. Its products include: Truvada, Viread, Atripla, and Emtriva for the treatment of human immunodeficiency virus infection in adults. Gilead Sciences markets its products in the United States, Australia, Austria, Belgium, Canada, France, Germany, Greece, Ireland, Italy, the Netherlands, New Zealand, Portugal, Spain, Switzerland, Turkey, and the United Kingdom. The company was founded in 1987 and is headquartered in Foster City, California.

Business Overview:

(Click Here for: 2006 Annual Report)

Gilead's 2006 sales leader was Truvada, with sales of $1.19 billion, more than double 2005's $568 million. Truvada,

approved in 2004, is a once-daily combination tablet formulated with previous-generation drugs Viread and Emtriva. Emtriva was the lead product of Triangle Pharmaceuticals, acquired in 2003. Viread was approved in 2001 to treat HIV patients who had become resistant to other reverse transcriptase inhibitors, as well as naive patients in a front-line treatment setting. Viread sales were $689 million in 2006, compared to $779 million in 2005.

In late 2004, Gilead and Bristol-Myers Squibb (BMY) formed a joint venture to develop a combination tablet with Truvada and Bristol-Myer's Sustiva. The formulation, marketed as Atripla, was approved and launched in July 2006. Gilead books Atripla sales and then pays Bristol-Myers its 37% share for the Sustiva portion of the drug, which Gilead accounts for in cost of goods on its income statement. Atripla generated 2006 sales of $206 million.

Atripla received a positive opinion from Europe's Committee for Medicinal Products in October 2007 and

Gilead expects European Union approval by the end of 2007.

In September 2002, Hepsera was approved for treatment of Hepatitis B. In March 2003, it was approved in the European Union (EU). Gilead recorded $231 million in Hepsera sales in 2006, up from $187 million in 2005.

The company out-licensed rights to Hepsera for Asia and Latin America to GlaxoSmithKline (GSK) in exchange for milestones and royalties.

AmBisome is a liposomal formulation of amphotericin B, an antifungal agent that attacks a broad variety of life-threatening fungal infections.

AmBisome is co-marketed in the U.S. with Fujisawa Healthcare, and is also approved by the FDA to treat cryptococcal meningitis in AIDS patients. AmBisome Sales were $223 million in 2005, roughly flat with sales of $221 million in 2005.

Tamiflu, an orally administered treatment for influenza A and B, was developed with Roche and was approved by the FDA for adults in October 1999 and for children aged 1-12 in December 2005. Roche markets the drug, paying a 21-22% royalty to Gilead. In April 2007, Roche said it would be decreasing near-term Tamiflu production because capacity has surpassed demand.

Impact of Major Developments

In October 2006, Gilead purchased Myogen for about $2.5 billion.

Lead product candidate Letairis, a once-daily treatment for pulmonary arterial hypertension (PAH) was approved in June 2007. Given the drug class's potential for liver toxicity, Gilead has launched the drug with a

Risk Minimization Action Plan and Education program, which the company stated it has streamlined upon initial post-launch feedback.

In February 2007, Gilead and Achillion Pharmaceuticals discontinued their NS4A antagonist program for Hepatitis

C patients after data showed positive anti-viral activity but an unsuitable safety profile. The two companies will explore other compounds, with Gilead taking the lead on clinical development.

Pipeline Developments

In the second quarter of 2007, Gilead announced positive results from two Phase III trials of aztreonam lysine, an inhaled medicine for treating cystic fibrosis. Both trials met the primary endpoint of change from baseline in respiratory symptoms by a patient-reported tool. Gilead plans to file with the FDA by the end of 2007.

Gilead is developing Darusentan, an oral treatment of resistant hypertension, currently in Phase III trials.

Darusentan was also acquired in the 2006 purchase of Myogen. Gilead expects completed Phase III enrollment in early 2009 and data later that year.

In June 2007, Gilead announced results of two Phase III trials evaluating Viread, previously approved for HIV, in treating Hepatitis B. In both trials, Viread met its primary endpoint of non-inferiority to Gilead's Hepsera in patients with chronic Hepatitis B. Gilead filed with the FDA for this indication in October 2007 and expects a standard 10-month review.

Financial Trends

HIV product sales rose to $2.1 billion in 2006, up 52% from 2005. In 2006, total sales surpassed $3 billion for the first time. NG Investment Securities sees 2007 product sales of $3.7 billion, and $4.7 billion in 2008, a 27% increase. Gilead ended the third quarter of 2007 with $2.2 billion in cash and securities, up nearly 60% from the end of 2006. In June 2007, Gilead completed a $1 billion stock repurchase program, or nearly 17 million (split-adjusted) shares.

Year 2008 & 2009 Investment Outlook:

With the stock 6.3% off its 52-Week Gilead Sciences is still a Buy. In Year 2007, Gilead has gained roughly 33% of its market cap. Gilead is weekly Investor’s Business daily Chart is decent. The timeliness rating is a “A.” The company’s Earnings Per Share rank is an 84, Composite Rank is excellent at 98 and Relative Strength Price Ranking is an excellent 96. (Refer to Page 6: Gilead Weekly IBD Chart.) GILD’s S&P Investability Quotient was in the 96th percentile of all stocks, in which an S&P report was written.

Gilead’s earnings should be sluggish for the next 3 quarters and should pick up in Dec-08, in which, Thompson’s expects $0.44 per share (2.3% increase Y-O-Y) for Mar-08 0.45 per share (7.1% increase Y-O-Y) for Jun-08, $0.46 per share (9.5% increase Y-O-Y) for Sep-08 and $0.49 per share (22.5% increase Y-O-Y) for Dec-08.

|Gilead’s Thomson Earnings Estimates |

|PERIOD |DATE |#ESTS |MEAN |% Change |

| | | | |Y-O-Y |

|ANN |Dec-08 |24 |1.85 |11% |

|LTG | |6 |16.10 |% |

|QTR |Jun-08 |10 |0.45 |7% |

|QTR |

|PERIOD |DATE |#ESTS |MEAN |% Change |

| | | | |Y-O-Y |

|ANN |Dec-08 |30 |5,011.28 |19% |

|QTR |Mar-08 |

| | |

|Excellent 3-year historical charts and technical indicators. |Overall historical balance sheet and fundamentals are suspect. |

|Solid current annual and quarterly EPS and Revenues. |High current P/E ratio at 27.05x, indicating the stock could be |

|Management rated better than 96% of pharmaceutical companies by |somewhat risky. |

|Standard & Poor’s. |Suspect historical profitability and liquidity. |

|S&P Investability Quotient extremely high at 98%. |Like most biotech’s, Gilead pays no dividend. |

|Wall Street sentiment very high with no major firms rating GILD a| |

|sell. | |

|Strong valuation prospects with Wall Street’s average Price | |

|Target at $50. | |

|Major player in HIV market with a solid pipeline to boot. | |

|Opportunities |Threats |

| | |

|New pipeline could yield high revenues, especially GILD’s |New entrants in HIV space could drastically lessen Gilead’s |

|Thalomid, Truvada and Hespera. |market dominance. |

|Strong Earnings Per Share and Revenues projected by Wall Street |Medicare Part D could allow a higher infusion of cheaper generics|

|for Years 2008 & 2009. |to replace Gilead’s expensive HIV drugs. |

|Acquisitions of smaller biotech firms to expand product line |FDA is becoming increasingly stricter with new drugs coming on to|

|could be imminent in Gilead’s near future. |the market. |

|Buyback authorizations could increase the demand for the stock, |High debt could steepen the negative effects of a poor stock |

|as well. |market or inflationary pressures from the economy. |

|While an epidemic for the rest of the world, the HIV population |Gilead's dependence on the growth of its anti-HIV drug portfolio.|

|is increasing at an alarming rate. | |

Historical Ratio Analysis (2002-2006): Gilead Sciences(GILD)–Refer to Page(s) 15-18.

Profitability

Return on Equity: The 5-year average of ROE has been 3.2% for years 2002-2006. However, it has been brought down drastically by Year 2006 at a -49.1%, partly due in fact that Gilead from the Myogen acquisition and its transition costs.

Return on Assets: As with the 5-year average of ROA, it has been brought down precipitously by Year 2006 with an ROA of -31.5%. Year 2006 has incurred extenuating debt from Myogen acquisition.

Sales per Employee: However, Gilead’s Sales per Employee have been increasing for the past five years at an alarming average annual rate of approximately 24.57%; while topping out at $1.2 million per employee in Year 2006.

Asset Utilization

Asset Turnover: Gilead’s 5-year average has remained steady at about 0.58x, while being slightly skewed upward by Year 2006 at 0.8x. Generally this is a low ratio, but because the Biotech is normally a high-margin industry , this ratio isn’t so horrible.

Inventory Turnover: Gilead’s 5-year has remained steady at about 1.18x, while being slightly skewed downward by Year 2006 at 1.0x. Generally this is a low ratio, but because the Biotech is normally a high-margin industry , this ratio isn’t so horrible.

Leverage

LT Debt Pct Common Equity: Has been very cyclical for Gilead for the past 5 years with an average annual rate of 44.64%. A LT Debt Ratio is normally very high for a company. However, this mostly due to heavy acquisition and pipeline costs, which is typical for the Biotech industry.

Working Cap Pct Total Capital: Has been solid for Years 2002-2005 with an average annual rate of 84.6%. Due to acquisition and pipeline costs Gilead’s Working Cap PCT has fallen to 51.1% in Year 2006.

Liquidity

Quick Ratio: Has dropped precipitously for the past 5-years by an average on annual rate of roughly 40% down to 2.0x. in Year 2006 from 10.7x in Year 2002. This can be mostly explained by increased overhead and inventory expenses incurred from Myogen acquisition and marketing expenses for its Hespera, Atripla, Tamiflu and AmBisome drugs.

Current Ratio: Has dropped precipitously for the past 5-years by an average on annual rate of 28.7% down to 3.2x. in Year 2006 from 11.3x in Year 2002. This can be mostly explained by increased overhead and inventory expenses incurred from Myogen acquisition and marketing expenses for its Hespera, Atripla, Tamiflu and AmBisome drugs.

Sub-Industry: Biotechnology Peer Group: Biotech Therapeutics - Larger Capitalization

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| | | |

| | | | |

|P(11/16/07) |$44.68 | |

|EPS 2008 | $ 1.85 |Thomson Estimate (2008) |

|RFR (3-Month LIBOR) = |4.98% | (Bloomberg) |

|EPS (5-Yr. Growth) = |16.00% |Thomson Estimate (5-yr.) |

|βeta = |1.38 |Thomson Estimate (Beta) |

|k (calculated) = |20.2% |= 0.0498+(1.38*(0.16-0.0498)) |

|V 2008 = | $51.25 |14.80% |UV ($51.25/$44.68) |

* As of November, 16, 2007, I would rate Gilead Sciences (GILD) a BUY based on its intrinsic value of $51.25, which yields approximately an additional 14.80% upside.

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| | | | | |

| | | | | |

|Earnings-Growth Discount Method | | | | |

| | | | | | | |

| |11.4% |20.0% |20.0% |20.0% |20.0% |20.0% |

|2007 |2008 |2009 |2010 |2011 |2012 |2013 |

| $ 1.66 | $ 1.85 | $ 2.22 | $ 2.66 | $ 3.20 | $ 3.84 | $4.60 |

| | | | | | | |

|Discount %: |12.50% | | | | |

|Secular Growth Rate Biotech%**: |20.00% | | | | |

|Terminal Multiple GILD***: |1.30 | | | | |

|Terminal P/E S&P 500***: |17.5 | | | | |

|Terminal P/E GILD***: |22.8 |=.175 * 1.3 | | | |

|Valuation 2013: | $ 104.73 |=22.8 x $4.60 | | |

|Present Value 2008: | $ 58.19 |30.35% |UV | | |

* As of November, 16, 2007, I would rate Gilead Sciences (GILD) a BUY based on its intrinsic value of $58.19, which yields approximately an additional 30.35% upside.

**Secular growth rate is the implied growth rate of the companies industry. NG Investment services predicts the Biotech industry on average for the next 5-years will grow at 20.0%.

***Terminal Multiple is the additional expansion of the stocks P/E versus the S&P 500, which is approximately 17.5x. In effect, Gilead Science’s Terminal P/E would be calculated as: Terminal Multiple (GILD) * Terminal P/E (S&P 500) and would yield a Terminal P/E (GILD) of approximately 22.8x.

|Brokerage Rating Agency |Recommendation/ Sentiment |2008 Price |

| | |Target |

|NG Securities |Buy (Undervalued (30.35%)) |$58.19 |

|Bank of America |Buy (Top-Pick) |$47.00 |

|Bear Stearns |Peer Perform |--- |

|CIBC Markets |Sector Outperform |$49.00 |

|Citigroup |Buy |$51.00 |

|Credit Suisse |Neutral |$45.00 |

|Deutsche Bank |Hold |$43.00 |

|Friedman Billings |Market Perform |$43.00 |

|JP Morgan |Overweight |--- |

|Merrill Lynch |Buy |$46.00 |

|Morgan Stanley |Overweight |$56.00 |

|Rodman Renshaw |Market Perform |$56.00 |

|Standard & Poor’s |Buy |$49.00 |

|Thomson |Buy |$50.00 |

|Value Line |Buy |--- |

|Wachovia |Market Perform |$44.00 |

Risks:

Risks to my recommendation and target price include any slowdown in GILD's HIV product sales, failure of pipeline candidates to gain FDA approval, and increased competition in the heart failure market. Gilead's dependence on the growth of its anti-HIV drug portfolio. Also, the company operates in a highly competitive market, and a failure to successfully commercialize its pipeline candidates could diminish growth expectations in the future.

Corporate Management:

Gilead Sciences Inc.'s Corporate Governance Quotient (CGQ®) as of 6-Nov-07 is better than 58.6% of S&P 500 companies and 96.5% of Pharmaceuticals, Biotechnology & Life Sciences companies.

Sources:

Yahoo Finance, Multex Investor, Reuters, Standard & Poors, Thompson’s, Investor’s Business Daily, Gilead Sciences, Morgan Stanley, Merrill Lynch, Bear Stearns, Deutsche Bank, Bank of America, CIBC Markets, Citigroup, Credit Suisse, JP Morgan, Rodman Renshaw, Friedman Billings, Wachovia and Valueline.

(Click Here for Additional Research Reports).

|Top of Form |

|5 Yr History Annual Ratios |

| |

|[pic] |

|  |

|2002 |

|2003 |

|2004 |

|2005 |

|2006 |

| |

|[pic] |

|[pic]Profitability |

| |

| |

| |

| |

| |

| |

|[pic] |

|[pic]Return On Total Equity |

|14.1 |

|-9.1 |

|31.3 |

|33.2 |

|-49.1 |

| |

|[pic] |

|[pic]Reinvestment Rate |

|14.1 |

|-9.1 |

|31.3 |

|33.2 |

|-49.1 |

| |

|[pic] |

|[pic]Return On Assets |

|7.8 |

|-4.1 |

|25.1 |

|28.0 |

|-31.5 |

| |

|[pic] |

|[pic]Return On Invested Capital |

|8.7 |

|-4.6 |

|28.2 |

|31.3 |

|-35.6 |

| |

|[pic] |

|[pic]Cash Earnings Return On Equity |

|21.4 |

|42.8 |

|44.1 |

|39.8 |

|62.1 |

| |

|[pic] |

|[pic]Cash Flow To Sales |

|23.5 |

|38.8 |

|47.9 |

|48.1 |

|49.7 |

| |

|[pic] |

|[pic]Cost of Goods Sold To Sales |

|11.8 |

|10.6 |

|10.7 |

|11.1 |

|12.8 |

| |

|[pic] |

|[pic]S, G & A/Sales |

|38.8 |

|28.8 |

|22.5 |

|18.3 |

|19.0 |

| |

|[pic] |

|[pic]Gross Profit Margin |

|85.1 |

|87.0 |

|87.4 |

|87.2 |

|85.7 |

| |

|[pic] |

|[pic]R&D Sales |

|28.9 |

|20.5 |

|16.9 |

|13.7 |

|12.7 |

| |

|[pic] |

|[pic]Operating Profit Margin |

|17.4 |

|37.7 |

|48.0 |

|55.2 |

|54.0 |

| |

|[pic] |

|[pic]Operating Income/Total Capital |

|8.7 |

|26.0 |

|39.5 |

|43.5 |

|50.0 |

| |

|[pic] |

|[pic]Pretax Margin |

|15.7 |

|-19.3 |

|49.6 |

|57.1 |

|-21.3 |

| |

|[pic] |

|[pic]Tax Rate |

|1.8 |

|- |

|31.5 |

|30.0 |

|- |

| |

|[pic] |

|[pic]Interest Rate |

|2.3 |

|6.3 |

|1,769.9 |

|0.1 |

|1.4 |

| |

|[pic] |

|[pic]Net Margin |

|15.4 |

|-8.3 |

|33.9 |

|40.1 |

|-39.3 |

| |

|[pic] |

|[pic]Sales per Employee |

|0.4 |

|0.6 |

|0.8 |

|1.1 |

|1.2 |

| |

|[pic] |

|[pic]Asset Utilization |

| |

| |

| |

| |

| |

| |

|[pic] |

|[pic]Assets per Employee |

|1.0 |

|1.1 |

|1.3 |

|1.9 |

|1.5 |

| |

|[pic] |

|[pic]Assets Turnover |

|0.4 |

|0.6 |

|0.6 |

|0.5 |

|0.8 |

| |

|[pic] |

|[pic]Inventory Turnover |

|1.2 |

|1.2 |

|1.2 |

|1.3 |

|1.0 |

| |

|[pic] |

|[pic]Net Sales Pct Working Capital |

|0.4 |

|0.8 |

|0.8 |

|0.8 |

|1.8 |

| |

|[pic] |

|[pic]Capital Expend Pct Fixed Assets |

|13.4 |

|108.8 |

|17.8 |

|14.5 |

|28.2 |

| |

|[pic] |

|[pic]Capital Expend Pct Total Assets |

|2.2 |

|12.5 |

|3.4 |

|2.3 |

|2.8 |

| |

|[pic] |

|[pic]Capital Expend Pct Sales |

|3.8 |

|18.6 |

|3.9 |

|2.4 |

|3.5 |

| |

|[pic] |

|[pic]Leverage |

| |

| |

| |

| |

| |

| |

|[pic] |

|[pic]Total Debt Pct Common Equity |

|104.2 |

|34.4 |

|0.0 |

|9.9 |

|77.7 |

| |

|[pic] |

|[pic]LT Debt Pct Common Equity |

|104.2 |

|34.4 |

|0.0 |

|7.9 |

|76.7 |

| |

|[pic] |

|[pic]Tot Debt Pct Tot Captl and ST Debt |

|51.0 |

|25.6 |

|0.0 |

|9.0 |

|43.0 |

| |

|[pic] |

|[pic]LT Debt Pct Total Capital |

|51.0 |

|25.6 |

|0.0 |

|7.3 |

|42.7 |

| |

|[pic] |

|[pic]Equity Pct Total Capital |

|49.0 |

|74.4 |

|100.0 |

|92.4 |

|55.7 |

| |

|[pic] |

|[pic]Total Debt Pct Total Assets |

|46.2 |

|23.0 |

|0.0 |

|8.1 |

|37.3 |

| |

|[pic] |

|[pic]Common Equity Pct Total Assets |

|44.4 |

|66.8 |

|88.6 |

|81.9 |

|48.0 |

| |

|[pic] |

|[pic]Total Capital Pct Total Assets |

|90.6 |

|89.8 |

|88.7 |

|88.6 |

|86.2 |

| |

|[pic] |

|[pic]Fixed Charge Coverage Ratio |

|6.3 |

|-6.7 |

|90.4 |

|2,620.5 |

|-30.7 |

| |

|[pic] |

|[pic]Fixed Assets Pct Common Equity |

|11.9 |

|19.8 |

|11.9 |

|8.0 |

|19.9 |

| |

|[pic] |

|[pic]Working Cap Pct Total Capital |

|92.5 |

|80.1 |

|85.3 |

|80.5 |

|51.1 |

| |

|[pic] |

|[pic]Liquidity |

| |

| |

| |

| |

| |

| |

|[pic] |

|[pic]Quick Ratio |

|10.7 |

|5.1 |

|6.4 |

|6.0 |

|2.0 |

| |

|[pic] |

|[pic]Current Ratio |

|11.3 |

|6.8 |

|7.3 |

|6.8 |

|3.2 |

| |

|[pic] |

|[pic]Receivables Pct Current Assets |

|14.8 |

|18.6 |

|20.1 |

|12.8 |

|25.1 |

| |

|[pic] |

|[pic]Inventories Pct Curr Assets |

|4.4 |

|7.7 |

|7.4 |

|7.0 |

|23.2 |

| |

|[pic] |

|[pic]Accounts Receivable Days |

|97.5 |

|86.3 |

|83.6 |

|69.0 |

|60.6 |

| |

|Bottom of Form |

| |

|[pic] |

| |

|Top of Form |

|[pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic] |

|Bottom of Form |

|[pic][pic][pic] |

|Top of Form |

|5 Yr History Income Statement |

| |

|[pic] |

|  |

|2002 |

|2003 |

|2004 |

|2005 |

|2006 |

| |

|[pic] |

|[pic]Net Sales or Revenues |

|466.8 |

|867.9 |

|1,324.6 |

|2,028.4 |

|3,026.1 |

| |

|[pic] |

|[pic]Cost of Goods Sold |

|55.3 |

|91.8 |

|142.2 |

|224.5 |

|386.0 |

| |

|[pic] |

|[pic]Depreciation, Depletion & Amortization |

|14.4 |

|20.9 |

|24.4 |

|35.8 |

|47.3 |

| |

|[pic] |

|[pic]Gross Income |

|397.1 |

|755.2 |

|1,158.0 |

|1,768.1 |

|2,592.8 |

| |

|[pic] |

|[pic]Selling, General & Admin Expenses |

|316.1 |

|428.2 |

|522.0 |

|648.6 |

|957.5 |

| |

|[pic] |

|[pic]Other Operating Expenses |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Operating Expenses - Total |

|385.8 |

|540.9 |

|688.6 |

|908.9 |

|1,390.8 |

| |

|[pic] |

|[pic]Operating Income |

|81.0 |

|326.9 |

|636.0 |

|1,119.5 |

|1,635.3 |

| |

|[pic] |

|[pic]Extraordinary Credit - Pretax |

|- |

|13.2 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Extraordinary Charge - Pretax |

|0.0 |

|498.8 |

|7.4 |

|8.4 |

|2,394.1 |

| |

|[pic] |

|[pic]Non-Operating Interest Income |

|22.3 |

|13.0 |

|18.9 |

|47.1 |

|134.6 |

| |

|[pic] |

|[pic]Reserves - Inc(Dec) |

|0.0 |

|0.0 |

|- |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Pretax Equity In Earnings |

|- |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Other Income/Expense - Net |

|-16.0 |

|0.0 |

|16.3 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Earnings Before Interest And Taxes (EBIT) |

|87.3 |

|-145.6 |

|663.8 |

|1,158.2 |

|-624.1 |

| |

|[pic] |

|[pic]Interest Expense On Debt |

|13.9 |

|21.9 |

|7.3 |

|0.4 |

|20.4 |

| |

|[pic] |

|[pic]Interest Capitalized |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Pretax Income |

|73.4 |

|-167.5 |

|656.4 |

|1,157.8 |

|-644.5 |

| |

|[pic]- |

|[pic]Income Taxes |

|1.3 |

|-95.5 |

|207.1 |

|347.9 |

|551.8 |

| |

|[pic] |

|[pic]Current Domestic Income Taxes |

|-1.3 |

|6.2 |

|37.7 |

|405.3 |

|530.3 |

| |

|[pic] |

|[pic]Current Foreign Income Taxes |

|2.6 |

|9.8 |

|7.4 |

|18.8 |

|23.4 |

| |

|[pic] |

|[pic]Deferred Domestic Income Taxes |

|0.0 |

|-110.2 |

|161.9 |

|-72.3 |

|-1.9 |

| |

|[pic] |

|[pic]Deferred Foreign Income Taxes |

|0.0 |

|-1.4 |

|0.1 |

|-4.0 |

|-0.1 |

| |

|[pic] |

|[pic]Income Tax Credits |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Minority Interest |

|0.0 |

|0.0 |

|0.0 |

|-4.0 |

|-6.3 |

| |

|[pic] |

|[pic]Equity In Earnings |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]After Tax Other Income/Expense |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Discontinued Operations |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Net Income Before Extra Items/Preferred Div |

|72.1 |

|-72.0 |

|449.4 |

|813.9 |

|-1,190.0 |

| |

|[pic] |

|[pic]Extra Items & Gain(Loss) Sale of Assets |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Net Income Before Preferred Dividends |

|72.1 |

|-72.0 |

|449.4 |

|813.9 |

|-1,190.0 |

| |

|[pic] |

|[pic]Preferred Dividend Requirements |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Net Income Available to Common |

|72.1 |

|-72.0 |

|458.5 |

|813.9 |

|-1,190.0 |

| |

|Bottom of Form |

| |

| |

| |

|Top of Form |

|[pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic] |

|Bottom of Form |

|Top of Form |

|5 Yr History Balance Sheet |

| |

|[pic] |

|  |

|2002 |

|2003 |

|2004 |

|2005 |

|2006 |

| |

|[pic] |

|[pic]Assets |

| |

| |

| |

| |

| |

| |

|[pic]+ |

|[pic]Cash And ST Investments |

|942.4 |

|707.0 |

|1,254.0 |

|2,323.9 |

|936.9 |

| |

|[pic] |

|[pic]Cash |

|616.9 |

|194.7 |

|280.9 |

|707.9 |

|816.0 |

| |

|[pic] |

|[pic]ST Investments |

|325.4 |

|512.3 |

|973.1 |

|1,616.0 |

|120.8 |

| |

|[pic] |

|[pic]Receivables (Net) |

|175.0 |

|235.2 |

|371.2 |

|396.1 |

|609.3 |

| |

|[pic]+ |

|[pic]Total Inventories |

|51.6 |

|98.1 |

|136.0 |

|216.9 |

|564.1 |

| |

|[pic] |

|[pic]Raw Materials |

|24.8 |

|54.2 |

|93.9 |

|148.0 |

|361.6 |

| |

|[pic] |

|[pic]Work In Process |

|16.5 |

|11.8 |

|11.1 |

|25.1 |

|46.2 |

| |

|[pic] |

|[pic]Finished Goods |

|10.2 |

|32.1 |

|30.9 |

|43.9 |

|156.4 |

| |

|[pic] |

|[pic]Progress Payments & Other |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Prepaid Expenses |

|- |

|- |

|- |

|- |

|50.1 |

| |

|[pic] |

|[pic]Other Current Assets |

|14.7 |

|225.6 |

|88.4 |

|155.3 |

|268.8 |

| |

|[pic] |

|[pic]Current Assets - Total |

|1,183.8 |

|1,265.9 |

|1,849.7 |

|3,092.2 |

|2,429.2 |

| |

|[pic] |

|[pic]Long Term Receivables |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Investment In Unconsol Subsidiaries |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|452.7 |

| |

|[pic] |

|[pic]Other Investments |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic]+ |

|[pic]Property Plant & Equipment - Net |

|67.7 |

|198.2 |

|223.1 |

|242.6 |

|361.3 |

| |

|[pic]+ |

|[pic]Property Plant & Equipment - Gross |

|148.5 |

|288.1 |

|329.9 |

|373.2 |

|522.0 |

| |

|[pic] |

|[pic]Land |

|- |

|45.1 |

|45.1 |

|45.1 |

|54.6 |

| |

|[pic] |

|[pic]Buildings |

|61.0 |

|146.4 |

|177.7 |

|201.1 |

|256.4 |

| |

|[pic] |

|[pic]Machinery & Equipment |

|37.1 |

|35.8 |

|40.2 |

|48.5 |

|87.9 |

| |

|[pic] |

|[pic]Rental/Lease Property |

|- |

|- |

|- |

|- |

|- |

| |

|[pic] |

|[pic]Transportation Equipment |

|- |

|- |

|- |

|- |

|- |

| |

|[pic] |

|[pic]Property, Plant & Equipment - Other |

|35.5 |

|44.5 |

|- |

|- |

|- |

| |

|[pic] |

|[pic]PP&E Under Capitalized Leases |

|14.9 |

|16.3 |

|15.5 |

|15.5 |

|15.9 |

| |

|[pic]+ |

|[pic]Accumulated Depreciation |

|80.8 |

|89.9 |

|106.8 |

|130.7 |

|160.7 |

| |

|[pic] |

|[pic]Accum Depreciation-Land |

|- |

|- |

|- |

|- |

|- |

| |

|[pic] |

|[pic]Accum Depreciation-Buildings |

|- |

|- |

|- |

|- |

|- |

| |

|[pic] |

|[pic]Accum Depreciation-Machinery & Equip. |

|- |

|- |

|- |

|- |

|- |

| |

|[pic] |

|[pic]Accum Depreciation-Rental/Lease Property |

|- |

|- |

|- |

|- |

|- |

| |

|[pic] |

|[pic]Accum Depreciation-Transport Equip. |

|- |

|- |

|- |

|- |

|- |

| |

|[pic] |

|[pic]Accumulated Depreciation-Other PP&E |

|- |

|- |

|- |

|- |

|- |

| |

|[pic] |

|[pic]Accumulated Depreciation- PP&E Under Cap Leases |

|- |

|- |

|- |

|- |

|- |

| |

|[pic]+ |

|[pic]Other Assets |

|36.7 |

|38.1 |

|37.7 |

|363.0 |

|540.2 |

| |

|[pic] |

|[pic]Deferred Charges |

|24.5 |

|11.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Tangible Other Assets |

|12.2 |

|27.1 |

|37.7 |

|363.0 |

|540.2 |

| |

|[pic] |

|[pic]Intangible Other Assets |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Total Assets |

|1,288.2 |

|1,502.2 |

|2,110.5 |

|3,697.8 |

|3,783.4 |

| |

|[pic] |

|[pic]Liabilities |

| |

| |

| |

| |

| |

| |

|[pic] |

|[pic]Accounts Payable |

|24.4 |

|35.6 |

|47.6 |

|61.1 |

|367.0 |

| |

|[pic] |

|[pic]Short Term Debt |

|0.2 |

|0.1 |

|0.2 |

|60.2 |

|18.7 |

| |

|[pic] |

|[pic]Accrued Payroll |

|21.5 |

|35.8 |

|45.5 |

|59.9 |

|75.7 |

| |

|[pic] |

|[pic]Income Taxes Payable |

|3.0 |

|13.3 |

|8.7 |

|95.7 |

|26.7 |

| |

|[pic] |

|[pic]Dividends Payable |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Other Current Liabilities |

|55.8 |

|101.0 |

|151.6 |

|178.4 |

|276.2 |

| |

|[pic] |

|[pic]Current Liabilities - Total |

|104.9 |

|185.9 |

|253.5 |

|455.3 |

|764.3 |

| |

|[pic]+ |

|[pic]Long Term Debt |

|595.3 |

|345.3 |

|0.2 |

|240.7 |

|1,391.8 |

| |

|[pic] |

|[pic]Long Term Debt Excluding Capitalized Leases |

|595.0 |

|345.0 |

|0.0 |

|240.0 |

|1,391.8 |

| |

|[pic] |

|[pic]Capitalized Lease Obligations |

|0.3 |

|0.3 |

|0.2 |

|0.7 |

|0.0 |

| |

|[pic] |

|[pic]Provision For Risks And Charges |

|- |

|- |

|- |

|- |

|- |

| |

|[pic] |

|[pic]Deferred Income |

|16.7 |

|20.5 |

|31.4 |

|32.7 |

|61.0 |

| |

|[pic]+ |

|[pic]Deferred Taxes |

|0.0 |

|-52.5 |

|-45.4 |

|-66.9 |

|-302.5 |

| |

|[pic] |

|[pic]Deferred Taxes - Credit |

|- |

|- |

|- |

|- |

|- |

| |

|[pic] |

|[pic]Deferred Taxes - Debit |

|- |

|- |

|- |

|- |

|302.5 |

| |

|[pic] |

|[pic]Deferred Tax Liability In Untaxed Reserves |

|- |

|- |

|- |

|- |

|- |

| |

|[pic] |

|[pic]Other Liabilities |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Total Liabilities |

|716.8 |

|499.3 |

|239.6 |

|661.8 |

|1,914.6 |

| |

|[pic] |

|[pic]Shareholders' Equity |

| |

| |

| |

| |

| |

| |

|[pic] |

|[pic]Non-Equity Reserves |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|- |

| |

|[pic] |

|[pic]Minority Interest |

|0.0 |

|0.0 |

|0.0 |

|8.2 |

|53.1 |

| |

|[pic] |

|[pic]Preferred Stock |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic]+ |

|[pic]Common Equity |

|571.3 |

|1,003.0 |

|1,870.9 |

|3,027.8 |

|1,815.7 |

| |

|[pic] |

|[pic]Common Stock |

|0.2 |

|0.2 |

|0.4 |

|0.5 |

|0.5 |

| |

|[pic] |

|[pic]Capital Surplus |

|950.3 |

|1,453.2 |

|1,893.9 |

|2,206.2 |

|2,704.4 |

| |

|[pic] |

|[pic]Revaluation Reserves |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Other Appropriated Reserves |

|- |

|-1.3 |

|-0.5 |

|-0.1 |

|- |

| |

|[pic] |

|[pic]Unappropriated (Free) Reserves |

|- |

|- |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Retained Earnings |

|-381.6 |

|-453.6 |

|-4.3 |

|809.6 |

|-891.4 |

| |

|[pic] |

|[pic]Equity In Untaxed Reserves |

|- |

|- |

|- |

|- |

|- |

| |

|[pic] |

|[pic]ESOP Guarantees |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Unrealized Foreign Exchange Gain(Loss) |

|-1.4 |

|5.6 |

|-16.8 |

|14.4 |

|-3.1 |

| |

|[pic] |

|[pic]Unrealized Gain(Loss) On Marketable Securities |

|3.9 |

|-1.1 |

|-1.9 |

|-2.8 |

|5.3 |

| |

|[pic] |

|[pic]Treasury Stock |

|0.0 |

|0.0 |

|- |

|- |

|- |

| |

|[pic] |

|[pic]Total Liabilities & Shareholders' Equity |

|1,288.2 |

|1,502.2 |

|2,110.5 |

|3,697.8 |

|3,783.4 |

| |

|Bottom of Form |

| |

| |

| |

|Top of Form |

|[pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic][pic] |

|Bottom of Form |

| |

| |

| |

| |

| |

| |

| |

| |

|5 Yr History Statement Of Cash Flows |

| |

|[pic] |

|  |

|2002 |

|2003 |

|2004 |

|2005 |

|2006 |

| |

|[pic] |

|[pic]Net Income / Starting Line |

|72.1 |

|-72.0 |

|449.4 |

|813.9 |

|-1,190.0 |

| |

|[pic]- |

|[pic]Depreciation, Depletion & Amortization |

|14.4 |

|20.9 |

|24.4 |

|35.8 |

|47.3 |

| |

|[pic] |

|[pic]Depreciation & Depletion |

|13.2 |

|16.5 |

|20.3 |

|25.3 |

|27.6 |

| |

|[pic] |

|[pic]Amortization of Intangible Assets |

|1.2 |

|4.3 |

|4.1 |

|10.5 |

|19.7 |

| |

|[pic]- |

|[pic]Deferred Income Taxes & Investment Tax Credit |

|0.0 |

|0.0 |

|151.6 |

|-53.2 |

|-9.2 |

| |

|[pic] |

|[pic]Deferred Income Taxes |

|0.0 |

|0.0 |

|151.6 |

|-53.2 |

|-9.2 |

| |

|[pic] |

|[pic]Investment Tax Credit |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Other Cash Flow |

|23.1 |

|387.8 |

|8.9 |

|179.4 |

|2,656.1 |

| |

|[pic] |

|[pic]Funds From Operations |

|109.7 |

|336.7 |

|634.3 |

|975.9 |

|1,504.2 |

| |

|[pic] |

|[pic]Extraordinary Items |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic]- |

|[pic]Funds From/For Other Operating Activities |

|-35.3 |

|-102.1 |

|-122.9 |

|-260.8 |

|-286.2 |

| |

|[pic] |

|[pic]Dec(Inc) In Receivables |

|-43.9 |

|-97.1 |

|-118.8 |

|13.8 |

|-184.4 |

| |

|[pic] |

|[pic]Dec/(Inc) In Inventories |

|-12.3 |

|-46.5 |

|-37.9 |

|-81.9 |

|-358.2 |

| |

|[pic] |

|[pic]Inc(Dec) In Accounts Payable |

|5.2 |

|6.1 |

|11.9 |

|13.5 |

|264.0 |

| |

|[pic] |

|[pic]Inc(Dec) In IncomeTaxes Payable |

|- |

|- |

|- |

|87.0 |

|-69.1 |

| |

|[pic] |

|[pic]Inc(Dec) In Other Accruals |

|11.5 |

|44.5 |

|15.4 |

|62.5 |

|38.7 |

| |

|[pic] |

|[pic]Dec(Inc) In Other Assets/Liabilities |

|4.2 |

|-9.2 |

|6.5 |

|-355.7 |

|22.8 |

| |

|[pic] |

|[pic]Long Term Borrowings |

|336.6 |

|0.0 |

|0.0 |

|300.0 |

|1,276.2 |

| |

|[pic]- |

|[pic]Net Proceeds From Sale/Issue of Com & Pref |

|51.4 |

|83.8 |

|78.8 |

|142.1 |

|403.4 |

| |

|[pic] |

|[pic]Proceeds From Stock Options |

|44.7 |

|75.6 |

|67.6 |

|0.0 |

|235.5 |

| |

|[pic] |

|[pic]Other Proceeds From Sale/Issuance of Stock |

|6.7 |

|8.2 |

|11.2 |

|142.1 |

|167.9 |

| |

|[pic] |

|[pic]Disposal of Fixed Assets |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Decrease In Investments |

|603.7 |

|744.5 |

|1,024.6 |

|1,582.0 |

|3,711.5 |

| |

|[pic] |

|[pic]Inc(Dec) In Short Term Borrowings |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Other Sources - Financing |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|95.3 |

| |

|[pic] |

|[pic]Other Sources - Investing |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Other Sources |

|- |

|- |

|- |

|- |

|- |

| |

|[pic]- |

|[pic]Cash Dividends Paid - Total |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Common Dividends (Cash) |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Preferred Dividends (Cash) |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

|0.0 |

| |

|[pic] |

|[pic]Increase In Investments |

|490.3 |

|934.8 |

|1,464.0 |

|2,226.0 |

|2,609.5 |

| |

|[pic] |

|[pic]Reduction In Long Term Debt |

|1.4 |

|1.7 |

|0.1 |

|0.2 |

|580.7 |

| |

|[pic] |

|[pic]Capital Expenditures Additions to Fixed Assets |

| |

| |

| |

| |

| |

| |

| |

| |

| |

[pic]

-----------------------

|Gilead Sciences, Inc. |November 17, 2007 |

NG

Investment Securities

-----------------------

Neil Guarniere Investment Securities, LLC

RESEARCH REPORT

................
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