27th Apr 2006 12:00
GlaxoSmithKline PLC27 April 2006 Issued: 27th April 2006, London Results announcement for the first quarter 2006 GSK makes strong start to 2006 with excellent first quarter performance EPS of 26.5 pence, up 17% CER (26% reported) GlaxoSmithKline plc (GSK) today announces its results for the first quarter ended 31st March 2006. The full resultsare presented under 'Income Statement' on page 7, and are summarised below. FINANCIAL RESULTS* Q1 2006 Q1 2005 Growth £m £m CER% £% Turnover 5,813 5,036 10 15 Operating profit 2,174 1,747 15 24 Profit before tax 2,170 1,711 17 27 Earnings per share 26.5p 21.1p 17 26 Q1 2006 SUMMARY* • Total pharmaceutical sales grew 10% to £5 billion, driven by 15% growth in the USA. • Key growth drivers performed strongly with sales totalling £2.2 billion (+22%): - Seretide/Advair (+12% to £816 million) - Avandia products (+24% to £384 million) - Vaccines (+44% to £366 million) - Lamictal (+14% to £237 million) - Coreg (+53% to £225 million) - Valtrex (+16% to £204 million) • Excellent first quarter financial performance with EPS growth of 17% (26% reported). • Significant progress on important near-term pipeline opportunities: - Cervarix (vaccine for the prevention of cervical cancer) was filed in the EU and in 13 International markets in March. Latest data (4.5 years) shows 100% sustained efficacy against pre-cancerous lesions caused by HPV 16 and 18. - Excellent phase III efficacy data for Tykerb (a new oral medicine for breast cancer) were received in April and will support an earlier filing date of H2 2006 in Europe and the USA. - Positive phase III data for Trexima (a new treatment for migraine to be launched later this year) were presented in April demonstrating superiority over current 'gold standard' Imitrex. • 4 products started phase III/registration trials so far this year: - Eltrombopag for low blood platelets, pazopanib for cancer, casopitant for nausea and vomiting and H5N1 vaccine for flu pandemic. • GSK continues to expect 2006 earnings per share growth to be around 10% in CER terms. Commenting on the performance for the quarter, JP Garnier, Chief Executive Officer, said: "This has been a quarter of strong financial performance, driven by top-line pharma sales growth of 10%. It has alsobeen a quarter of good pipeline news. In particular, the efficacy seen in Tykerb's first phase III trial is verycompelling and it gives us confidence that we will be able to launch a significant new treatment for breast cancer nextyear. We also received strong data on Cervarix this quarter, demonstrating its potential to offer long lasting andbroad protection against cervical cancer." * The Group's practice is to discuss its results in terms of constant exchange rate (CER) growth. All commentaries compare 2006 results with 2005 in CER terms unless otherwise stated. See 'Accounting Presentation and Policies' on page 17 for fuller explanations of these matters. PRODUCT UPDATE • Total pharmaceutical turnover grew 10% to £5 billion in the quarter, driven by strong turnover in the USA (+15% to £2.6 billion). European sales (+1% to £1.4 billion) were impacted by lower seasonal use of anti-biotics compared with last year. Sales in International markets rose strongly (+12% to £1.0 billion). Key products continue to drive growth: • Total sales of Seretide/Advair, for asthma and COPD, rose 12% to £816 million. US sales of Advair increased 11% to £460 million, with European sales also up 11% to £276 million and sales in International markets up 20% to £80 million. On 28th March, the company announced positive headline data from TORCH, a landmark three-year study in 6,000 COPD patients with Advair. These data showed a 17% relative reduction in mortality (p=0.052), and a 25% reduction in exacerbations (p100 19 27 2 - ANTI-VIRALS 699 10 338 3 209 14 152 22HIV 399 4 182 (5) 163 14 54 12Combivir 143 (3) 62 (16) 59 5 22 25Trizivir 72 (7) 37 (13) 32 3 3 (25)Epivir 60 (12) 20 (24) 26 (10) 14 9Ziagen 32 (9) 13 (8) 11 (21) 8 17Agenerase, Lexiva 33 41 19 29 12 71 2 -Epzicom/Kivexa 51 >100 29 80 19 >100 3 - Herpes 236 13 145 17 36 3 55 11Valtrex 204 16 143 17 26 8 35 22Zovirax 32 (6) 2 - 10 (9) 20 (5) Zeffix 38 24 3 - 5 25 30 27 METABOLIC 434 26 295 26 58 45 81 17Avandia 344 30 265 34 32 23 47 17Avandamet 28 (39) 4 (88) 19 >100 5 -Avandaryl 12 - 12 - - - - -Bonviva/Boniva 15 - 14 - 1 - - - VACCINES 366 44 83 41 165 46 118 41Hepatitis 116 18 37 27 55 17 24 10Infanrix/Pediarix 124 54 41 32 68 73 15 40Boostrix 10 >100 5 - 3 >100 2 >100 CARDIOVASCULAR AND UROGENITAL 426 29 294 53 96 (6) 36 10Coreg 225 53 224 54 - - 1 (50)Levitra 11 - 10 - - - 1 -Avodart 47 73 28 >100 16 42 3 -Arixtra 11 >100 7 >100 4 100 - -Fraxiparine 51 (4) - - 44 - 7 (29) ANTI-BACTERIALS 378 (12) 62 (25) 180 (18) 136 7Augmentin 170 (14) 31 (38) 83 (15) 56 13Zinnat/Ceftin 50 (23) 4 33 26 (38) 20 6 ONCOLOGY AND EMESIS 288 14 225 20 41 (5) 22 -Zofran 230 13 181 19 30 (6) 19 (6)Hycamtin 29 8 20 6 7 14 2 - OTHER 249 (6) 25 35 58 (30) 166 2Zantac 65 7 21 54 14 (6) 30 (7) -------------- -------------- -------------- ------------- 5,045 10 2,615 15 1,395 1 1,035 12 -------------- -------------- -------------- ------------- Pharmaceutical turnover includes co-promotion income. CONSUMER HEALTHCARE TURNOVER Three months ended 31st March 2006 Q1 2006 Growth £m CER% --------- ---------Over-the-counter medicines 374 3Analgesics 95 7Dermatological 40 (3)Gastrointestinal 65 2Respiratory tract 41 8Smoking control 93 5Natural wellness support 34 - Oral care 242 7Nutritional healthcare 152 10 --------- ---------Total 768 6 --------- --------- FINANCIAL REVIEW - INCOME STATEMENT Operating profit Q1 2006 Q1 2005 ---------------------- -------------------- % of % of Growth £m turnover £m turnover CER% £% ------ ------ ------ ------ ------ -----Turnover 5,813 100.0 5,036 100.0 10 15 Cost of sales (1,134) (19.5) (1,127) (22.4) (2) 1Selling, general and administration (1,823) (31.4) (1,645) (32.7) 5 11Research and development (753) (12.9) (663) (13.1) 10 14Other operating income 71 1.2 146 2.9 ------ ------ ------ ------ ------ ----Operating profit 2,174 37.4 1,747 34.7 15 24 ------ ------ ------ ------ ------ ---- Overall, the operating margin increased 2.7 percentage points as sterling operating profit increased 24% on a sterlingturnover growth of 15%. At constant exchange rates, operating profit increased 15% and the margin increased 1.8percentage points, reflecting lower cost of sales and selling, general and administration (SG&A) margins partly offsetby a reduction in other operating income. Cost of sales decreased as a percentage of turnover by 2.9 percentage points. At constant exchange rates, the decreasewas 2.3 percentage points principally reflecting favourable product and regional mix effects and the write-back of a £65million restructuring provision previously made for the closure of the Montrose manufacturing site. Also contributingto the cost of sales margin improvement was the inclusion in Q1 2005 of higher costs related to the rectification ofmanufacturing issues at the Cidra site in Puerto Rico. SG&A as a percentage of turnover decreased 1.3 percentage points. At constant exchange rates, the decrease was 1.4percentage points. SG&A expenditure at constant exchange rates increased 5%. R&D expenditure as a percentage of turnover was 12.9% and grew in line with turnover growth. Pharmaceuticals R&Dexpenditure represented 14.5% of pharmaceutical turnover. Other operating income includes royalty income, equity investment disposals and impairments, product disposals and fairvalue adjustments to the Quest collar and Theravance options. Other operating income was £71 million in Q1 2006compared with £146 million in Q1 2005. The reduction is due to much lower product and asset disposal gains comparedwith the same period in 2005, partially offset by a favourable fair value movement of £30 million in the Quest collarand Theravance options in 2006 compared with an adverse fair value movement in Q1 2005 of £13 million. Taxation The charge for taxation on profit, amounting to £640 million, represents an effective tax rate of 29.5%, which is theexpected rate for the year. Transfer pricing issues are as previously described in the 'Taxation' note to the Financial Statements included in theAnnual Report 2005. The Group has open issues with the revenue authorities in the USA, UK, Japan and Canada; by far thelargest of which relates to the legal dispute with the US Internal Revenue Service (IRS) in respect of Glaxo heritageproducts. With respect to the claims of the IRS for the years 1989-2000, the total claims for these periods amount to$4.6 billion of additional taxes together with related interest to 31st March 2006 of $3.9 billion, net of federal taxrelief, giving a total of $8.5 billion. As similar issues remain open for 2001 to date, GSK expects to receive furthersubstantial claims by the IRS for these years. During the quarter the US tax court, in a status conference, delayed the start of the trial from October 2006 to January2007. The Group expects a decision in the second half of 2008. At 31st March 2006, the Group had a tax creditor balance of £2.6 billion which includes provisions for the estimatedamounts at which transfer pricing and other tax disputes might ultimately be settled. GSK uses the best advice in determining its transfer pricing methodology and in seeking to manage transfer pricingissues to a satisfactory conclusion and, on the basis of external professional advice, continues to believe that it hasmade adequate provision for the liabilities likely to arise from open assessments. However, there continues to be awide difference of views between the Group, the IRS, HMRC and other relevant taxation authorities where open issuesexist. The ultimate liability for such matters may vary from the amounts provided and is dependent upon the outcome oflitigation proceedings and negotiations with the relevant tax authorities. Weighted average number of shares Q1 2006 Q1 2005 2005 millions millions millions ---- ---- ----Weighted average number of shares - basic 5,658 5,692 5,674Dilutive effect of share options and share 61 37 46awards ---- ---- ----Weighted average number of shares - diluted 5,719 5,729 5,720 ---- ---- ---- The number of shares in issue, excluding those held by the ESOP Trusts and those held as Treasury shares at 31st March2006, was 5,655 million (31st March 2005: 5,682 million). Dividends Paid/ Pence per payable share £m ---- ---- ----2006First interim 6th July 2006 11 622 2005First interim 7th July 2005 10 570Second interim 6th October 2005 10 567Third interim 5th January 2006 10 568Fourth interim 6th April 2006 14 792 ---- ---- 44 2,497 ---- ---- STATEMENT OF RECOGNISED INCOME AND EXPENSE Q1 2006 Q1 2005 2005 £m £m £m ---- ---- ----Exchange movements on overseas net assets 43 (61) 203Tax on exchange movements 20 (4) 99Fair value movements on available-for-sale investments 47 (30) (1)Deferred tax on fair value movements (9) 6 (10)Exchange movements on goodwill in reserves 1 7 9Actuarial gains/(losses) on defined benefit plans 688 (97) (794)Deferred tax on actuarial movements in defined benefit plans (227) 33 257Fair value movements on cash flow hedges (3) - (4)Deferred tax on fair value movements on cash flow hedges 1 - 1 ---- ---- ----Net gains/(losses) recognised directly in equity 561 (146) (240) Profit for the period 1,530 1,223 4,816 ---- ---- ----Total recognised income and expense for the period 2,091 1,077 4,576 ---- ---- ---- Total recognised income and expense for the period attributable to:Shareholders 2,064 1,056 4,423Minority interests 27 21 153 ---- ---- ---- 2,091 1,077 4,576 ---- ---- ---- BALANCE SHEET 31st March 2006 31st March 2005 31st December 2005 £m £m £mASSETS ---- ---- ----Non-current assetsProperty, plant and equipment 6,767 6,130 6,652Goodwill 692 303 696Other intangible assets 3,354 2,508 3,383Investments in associates and joint ventures 284 218 276Other investments 414 324 362Deferred tax assets 2,046 1,999 2,214Other non-current assets 477 245 438 ---- ---- ----Total non-current assets 14,034 11,727 14,021 ---- ---- ----Current assetsInventories 2,347 2,130 2,177Current tax recoverable 480 418 416Trade and other receivables 5,336 4,990 5,348Liquid investments 1,039 1,490 1,025Cash and cash equivalents 4,740 2,774 4,209Assets held for sale 2 3 2 ---- ---- ----Total current assets 13,944 11,805 13,177 ---- ---- ----TOTAL ASSETS 27,978 23,532 27,198 ---- ---- ----LIABILITIESCurrent liabilitiesShort-term borrowings (863) (1,686) (1,200)Trade and other payables (4,931) (4,155) (5,147)Current tax payable (2,635) (2,282) (2,269)Short-term provisions (917) (1,017) (895) ---- ---- ----Total current liabilities (9,346) (9,140) (9,511) ---- ---- ----Non-current liabilitiesLong-term borrowings (5,288) (4,083) (5,271)Deferred tax provision (674) (473) (569)Pensions and other post-employment benefits (2,404) (2,652) (3,069)Other provisions (692) (509) (741)Other non-current liabilities (519) (420) (467) ---- ---- ----Total non-current liabilities (9,577) (8,137) (10,117) ---- ---- ----TOTAL LIABILITIES (18,923) (17,277) (19,628) ---- ---- ----NET ASSETS 9,055 6,255 7,570 ---- ---- ---- EQUITYShare capital 1,494 1,485 1,491Share premium account 670 326 549Other reserves (205) (490) (308)Retained earnings 6,859 4,758 5,579 ---- ---- ----Shareholders' equity 8,818 6,079 7,311 Minority interests 237 176 259 ---- ---- ----TOTAL EQUITY 9,055 6,255 7,570 ---- ---- ---- RECONCILIATION OF MOVEMENTS IN EQUITY Q1 2006 Q1 2005 2005 £m £m £m ---- ---- ----Total equity at beginning of period 7,570 5,925 5,925Total recognised income and expense for the period 2,091 1,077 4,576Dividends to shareholders (568) (571) (2,390)Shares issued 124 23 252Shares purchased and held as Treasury shares (219) (206) (1,000)Consideration received for shares transferred by ESOP Trusts 58 11 68Share-based incentive plans net of tax 48 60 265Changes in minority interest shareholdings - - (40)Distributions to minority shareholders (49) (64) (86) ---- ---- ----Total equity at end of period 9,055 6,255 7,570 ---- ---- ---- FINANCIAL REVIEW - BALANCE SHEET Net assets The book value of net assets increased by £1,485 million from £7,570 million at 31st December 2005 to £9,055 million at31st March 2006. This was principally attributable to a reduction in net debt and a decrease in pension and otherpost-employment liabilities arising from strengthening long-term interest rates, including an increase in the rate usedto discount UK pension liabilities from 4.75% to 5.0%, and improving asset values. The carrying value of investments in associates and joint ventures at 31st March 2006 was £284 million, with a marketvalue of £1,111 million. Equity At 31st March 2006, total equity had increased from £7,570 million at 31st December 2005 to £9,055 million. Theincrease arises principally from retained earnings and actuarial gains on defined benefit pension plans in the periodpartially offset by further purchases of Treasury shares. At 31st March 2006, the ESOP Trusts held 161.8 million GSK ordinary shares against the future exercise of share optionsand share awards. The carrying value, which is the lower of cost or expected proceeds, of £2,245 million has beendeducted from other reserves. The market value of these shares was £2,435 million. At 31st March 2006, GSK also held157.2 million shares as Treasury shares, at a cost of £2,018 million, which has been deducted from retained earnings. CASH FLOW STATEMENT Three months ended 31st March 2006 Q1 2006 Q1 2005 2005 £m £m £m ---- ---- ----Operating profit 2,174 1,747 6,874Depreciation and other non-cash items 232 147 1,103Increase in working capital (43) (88) (323)(Decrease)/increase in other net liabilities (301) (259) 11 ---- ---- ---- 2,062 1,547 7,665 Taxation paid (280) (260) (1,707) ---- ---- ----Net cash inflow from operating activities 1,782 1,287 5,958 ---- ---- ----Cash flow from investing activitiesPurchase of property, plant and equipment (231) (126) (903)Proceeds from sale of property, plant and equipment 10 17 54Purchase of intangible assets (36) (55) (278)Proceeds from sale of intangible assets 12 165 221Purchase of equity investments (7) (5) (23)Proceeds from sale of equity investments 5 3 35Share transactions with minority shareholders - - (36)Purchase of businesses, net of cash acquired - - (1,026)Disposals of businesses and interests in associates 3 - (2)Investment in associates and joint ventures 3 (1) (2)Interest received 70 61 290Dividends from associates and joint ventures 2 1 10 ---- ---- ----Net cash (outflow)/inflow from investing activities (169) 60 (1,660) ---- ---- ----Cash flow from financing activitiesDecrease in liquid investments - 22 550Proceeds from own shares for employee share options 58 11 68Issue of share capital 124 23 252Purchase of Treasury shares (200) (176) (999)Increase in long-term loans - - 982Repayment of long-term loans - (4) (70)Net repayment of short-term loans (333) (308) (857)Net repayment of obligations under finance leases (7) (15) (36)Interest paid (88) (96) (381)Dividends paid to shareholders (568) (571) (2,390)Dividends paid to minority interests (49) (58) (86)Other financing cash flows (24) (34) 53 ---- ---- ----Net cash outflow from financing activities (1,087) (1,206) (2,914) ---- ---- ---- Increase in cash and bank overdrafts in the period 526 141 1,384 Exchange adjustments (4) 13 233Cash and bank overdrafts at beginning of period 3,972 2,355 2,355 ---- ---- ----Cash and bank overdrafts at end of period 4,494 2,509 3,972 ---- ---- ---- Cash and bank overdrafts at end of period comprise: Cash and cash equivalents 4,740 2,774 4,209 Overdrafts (246) (265) (237) ---- ---- ---- 4,494 2,509 3,972 ---- ---- ---- RECONCILIATION OF CASH FLOW TO MOVEMENTS IN NET DEBT Q1 2006 Q1 2005 2005 £m £m £m ---- ---- ----Net debt at beginning of the period (1,237) (1,984) (1,984) Increase in cash and bank overdrafts 526 141 1,384Cash inflow from liquid investments - (22) (550)Net increase in long-term loans - 4 (912)Net repayment of short-term loans 333 308 857Net repayment of obligations under finance leases 7 15 36Net non-cash funds of businesses acquired - - (68)Exchange adjustments - 8 39Other non-cash movements (1) 25 (39) ---- ---- ----Reduction in net debt 865 479 747 ---- ---- ----Net debt at end of the period (372) (1,505) (1,237) ---- ---- ---- FINANCIAL REVIEW - CASH FLOW Operating cash flow was £2,062 million in Q1 2006. This represents an increase of £515 million over Q1 2005,principally due to higher operating profits. The operating cash flow is in excess of the funds needed for the routinecash flows of tax, capital expenditure on property, plant and equipment and dividend payments, together amounting to£1,079 million. Receipts of £182 million arose from the exercise of share options: £58 million from shares held by theESOP Trusts and £124 million from the issue of new shares. In addition, £200 million was spent in the quarter onpurchasing the company's shares to be held as Treasury shares. EXCHANGE RATES The results and net assets of the Group, as reported in sterling, are affected by movements in exchange rates betweensterling and overseas currencies. GSK uses the average of exchange rates prevailing during the period to translate theresults and cash flows of overseas Group subsidiary and associated undertakings into sterling and period-end rates totranslate the net assets of those undertakings. The currencies which most influence these translations, and therelevant exchange rates, are: Q1 2006 Q1 2005 2005Average rates: ---- ---- ---- £/US$ 1.75 1.91 1.82 £/Euro 1.46 1.44 1.46 £/Yen 205.00 199.00 200.00Period-end rates: £/US$ 1.73 1.89 1.72 £/Euro 1.43 1.45 1.46 £/Yen 205.00 202.00 203.00 During Q1 2006, average sterling exchange rates were weaker against the US dollar and stronger against the Euro and theYen compared with the same period in 2005. Comparing Q1 2006 period-end rates with Q1 2005 period-end rates, sterlingwas weaker against the US dollar and Euro and stronger against the Yen. LEGAL MATTERS The Group is involved in various legal and administrative proceedings, principally product liability, intellectualproperty, tax, anti-trust, and governmental investigations and related private litigation concerning sales, marketingand pricing. The Group makes provision for those proceedings on a regular basis and may make additional significantprovisions for such legal proceedings, as required in the event of further developments in those matters, consistentwith generally accepted accounting principles. Litigation, particularly in the USA, is inherently unpredictable andexcessive awards that may not be justified by the evidence can occur. The Group could in the future incur judgements orenter into settlements of claims that could result in payments that exceed its current provisions by an amount thatwould have a material adverse effect on the Group's financial condition, results of operations and cash flows. Intellectual property claims include challenges to the validity of the patents on various of the Group's products orprocesses and assertions of non-infringement of those patents. A loss in any of these cases could result in loss ofpatent protection for the product at issue. The consequence of any such loss could be a significant decrease in salesof that product and could materially affect future results of operations for the Group. At 31st March 2006 the Group's aggregate provision for legal and other disputes (not including tax matters describedunder 'Taxation' on page 10) was over £1.2 billion. The ultimate liability for legal claims may vary from the amountsprovided and is dependent upon the outcome of litigation proceedings, investigations and possible settlementnegotiations. Developments since the date of the Annual Report include: Intellectual property With respect to Biovail's patent infringement action against Anchen Pharmaceuticals in respect of Wellbutrin XL, thehearing on Anchen's motion for summary judgement has been scheduled for 22nd May 2006. With respect to Biovail'sinfringement action against Abrika Pharmaceuticals in respect of Wellbutrin XL, oral arguments in the patent claimsconstruction hearing and Abrika's motion for summary judgement are scheduled for 27th April 2006. Sales and marketing and regulation With respect to the temporary restraining order suspending the FDA approval of an ANDA filed by Roxane Laboratories fora generic form of Flonase nasal spray, on 6th March 2006 the US District Court denied the Group's follow-on motion for apreliminary injunction that would have continued the interim relief granted in the temporary restraining orderindefinitely, until the case would have been fully litigated. On expiration of the temporary restraining order Roxanebegan marketing its product while Par Pharmaceuticals also began marketing a generic version of Flonase by prioragreement with the Group. In light of those generic entries, on 7th March the Group chose voluntarily to dismiss thepending lawsuit. Anti-trust With respect to the Wellbutrin SR anti-trust litigation, on 9th March 2006 the judge denied the Group's motion todismiss the complaints. The Group has filed a motion for certification of an interlocutory review with the US districtcourt judge and will seek immediate appellate review. With respect to Canadian importation, on 10th March 2006, the Minnesota state court judge denied the Group's motion todismiss the lawsuit alleging violation of state anti-trust and commercial laws that had been filed by the MinnesotaState Attorney General, although a similar motion to dismiss was granted in the federal court claim for violation offederal anti-trust laws. The Group has filed a motion for certification for interlocutory review with the state trialcourt and will seek immediate appellate review. Cidra, Puerto Rico manufacturing site In April 2005, the Group was required to post a bond for $650 million pursuant to the Consent Decree entered into withthe FDA in connection with possible deficiencies at the manufacturing site in Cidra, Puerto Rico. The bond was toensure that product previously seized by the FDA was appropriately destroyed or reconditioned. All the conditions ofthe bond have been met, following which the bond has been cancelled with the FDA's agreement. Developments with respect to tax matters are described in 'Taxation' on page 10. ACCOUNTING PRESENTATION AND POLICIES This unaudited Results Announcement for the three months ended 31st March 2006 is prepared in accordance with IAS 34 'Interim Financial Reporting' and the accounting policies set out in the Annual Report 2005, except that IFRICInterpretation 4 'Determining whether an arrangement contains a lease' and an amendment to IAS 39 'Financial guaranteecontracts' have been implemented in 2006. There is no material effect of either change on the current or prior periods. Adjustments have been made to the balance sheet at 31st March 2005 from that published in the Q1 2005 ResultsAnnouncement in order to reflect the presentation subsequently adopted in the Annual Report 2005. The adjustments havebeen made to deferred tax and minority interests and to reflect the revised timing of the recognition of dividends, andthey increased net assets and total equity at 31st March 2005 by £469 million compared with the previously reportedbalances. The adjustments had no impact on the profits reported inQ1 2005. The income statement, statement of recognised income and expense and cash flow statement for the year ended, and thebalance sheet at, 31st December 2005 have been derived from the full Group accounts published in the Annual Report 2005,which have been delivered to the Registrar of Companies and on which the report of the independent auditors wasunqualified and did not contain a statement under either section 237(2) or section 237(3) of the Companies Act 1985. Data for market share and market growth rates are GSK estimates based on the most recent data from independent externalsources and, where appropriate, are valued in sterling at relevant exchange rates. Figures quoted for product marketshare reflect sales by GSK and licensees. In order to illustrate underlying performance, it is the Group's practice to discuss its results in terms of constantexchange rate (CER) growth. This represents growth calculated as if the exchange rates used to determine the results ofoverseas companies in sterling had remained unchanged from those used in the previous year. All commentaries arepresented in terms of CER unless otherwise stated. INVESTOR INFORMATION Preliminary Announcement of Annual Results 2006 This Announcement was approved by the Board of Directors on Thursday 27th April 2006. Financial calendar The company will announce second quarter 2006 results on 26th July 2006. The second interim dividend for 2006 will havean ex-dividend date of 2nd August 2006 and a record date of 4th August 2006 and will be paid on5th October 2006. Internet This Announcement and other information about GSK is available on the company's website at: http://www.gsk.com. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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