1st Feb 2007 11:00
AstraZeneca PLC01 February 2007 Consolidated Income Statement 2006 2005For the year ended 31 December $m $mSales 26,475 23,950 Cost of sales (5,559) (5,356) Distribution costs (226) (211) Research and development (3,902) (3,379) Selling, general and administrative costs (9,096) (8,695) Other operating income and expense 524 193 Operating profit 8,216 6,502 Finance income 888 665 Finance expense (561) (500) Profit before tax 8,543 6,667 Taxation (2,480) (1,943) Profit for the period 6,063 4,724 Attributable to: Equity holders of the Company 6,043 4,706 Minority interests 20 18 6,063 4,724 Basic earnings per $0.25 Ordinary Share $3.86 $2.91 Diluted earnings per $0.25 Ordinary Share $3.85 $2.91 Weighted average number of Ordinary Shares in issue (millions) 1,564 1,617 Diluted average number of Ordinary Shares in issue (millions) 1,570 1,618 Dividends declared in the period 2,649 2,068 Consolidated Income Statement 2006 2005For the quarter ended 31 December $m $mSales 7,154 6,286 Cost of sales (1,578) (1,388) Distribution costs (61) (56) Research and development (1,124) (873) Selling, general and administrative costs (2,511) (2,403) Other operating income and expense 123 70 Operating profit 2,003 1,636 Finance income 267 181 Finance expense (167) (128) Profit before tax 2,103 1,689 Taxation (658) (462) Profit for the period 1,445 1,227 Attributable to: Equity holders of the Company 1,432 1,224 Minority interests 13 3 1,445 1,227 Basic earnings per $0.25 Ordinary Share $0.93 $0.77 Diluted earnings per $0.25 Ordinary Share $0.93 $0.77 Weighted average number of Ordinary Shares in issue (millions) 1,540 1,590 Diluted average number of Ordinary Shares in issue (millions) 1,545 1,592 Consolidated Balance SheetAs at 31 December 2006 2005 $m $mASSETS Non-current assets Property, plant and equipment 7,453 6,985Intangible assets, including goodwill 4,204 2,712Other investments 119 256Deferred tax assets 1,220 1,117 12,996 11,070 Current assets Inventories 2,250 2,206Trade and other receivables 5,561 4,778Other investments 657 1,624Income tax receivable 1,365 183Cash and cash equivalents 7,103 4,979 16,936 13,770Total assets 29,932 24,840 LIABILITIES Current liabilities Interest bearing loans and borrowings (136) (90)Trade and other payables (6,334) (5,466)Income tax payable (2,977) (1,283) (9,447) (6,839)Non-current liabilities Interest bearing loans and borrowings (1,087) (1,111)Deferred tax liabilities (1,559) (1,112)Retirement benefit obligations (1,842) (1,706)Provisions (327) (309) Other payables (254) (72) (5,069) (4,310)Total liabilities (14,516) (11,149)Net assets 15,416 13,691 EQUITY Capital and reserves attributable to equity holders ofthe Company Share capital 383 395 Share premium account 1,671 692 Other reserves 1,902 1,831 Retained earnings 11,348 10,679 15,304 13,597 Minority equity interests 112 94 Total equity 15,416 13,691 Consolidated Cash Flow Statement For the year ended 31 December 2006 2005 $m $mCash flows from operating activities Profit before taxation 8,543 6,667Finance income and expense (327) (165)Depreciation, amortisation and impairment 1,345 1,327Decrease in working capital 108 332Other non-cash movements 263 220Cash generated from operations 9,932 8,381 Interest paid (70) (32) Tax paid (2,169) (1,606) Net cash inflow from operating activities 7,693 6,743 Cash flows from investing activities Acquisition of businesses* (1,148) -Movement in short term investments and fixed deposits* 1,120 (491)Purchase of property, plant and equipment (794) (810)Disposal of property, plant and equipment 35 87Purchase of intangible assets (545) (157)Disposal of intangible assets* 661 -Purchase of non-current asset investments (17) (12)Disposal of non-current asset investments 68 -Interest received 352 206Payments made by subsidiaries to minority interest (4) (5)Net cash outflow from investing activities (272) (1,182)Net cash inflow before financing activities* 7,421 5,561Cash flows from financing activities Proceeds from issue of share capital 985 143Repurchase of shares (4,147) (3,001)Dividends paid (2,220) (1,717)Movement in short term borrowings 16 3Net cash outflow from financing activities (5,366) (4,572)Net increase in cash and cash equivalents in the period 2,055 989 Cash and cash equivalents at the beginning of the period 4,895 3,927Exchange rate effects 39 (21)Cash and cash equivalents at the end of the period 6,989 4,895Cash and cash equivalents consists of:Cash and cash equivalents 7,103 4,979Overdrafts (114) (84) 6,989 4,895 Note: Free Cash Flow (*) of $6,788 million (2005: $6,052 million) is calculatedas; net cash inflow before financing activities, adjusted for: acquisition ofbusinesses, movements in short term investments and fixed deposits, and disposalof intangible assets. Consolidated Statement of Recognised Income and ExpenseFor the year ended 31 December 2006 2005 $m $m Profit for the period 6,063 4,724 Foreign exchange and other adjustments on consolidation 922 (1,052) Available for sale losses taken to equity (20) (10) Actuarial loss for the period (108) (35) Tax on items taken directly to reserves 137 (25) 931 (1,122) Total recognised income and expense for the period 6,994 3,602 Attributable to: Equity holders of the Company 6,970 3,595 Minority interests 24 7 6,994 3,602 Notes to the Preliminary Announcement 1 BASIS OF PREPARATION AND ACCOUNTING POLICIES The preliminary announcement for the full year ended 31 December 2006 has beenprepared in accordance with International Accounting Standards and InternationalFinancial Reporting Standards (collectively "IFRS") as adopted by the EuropeanUnion (EU) at 31 December 2006. Details of the accounting policies applied arethose set out in AstraZeneca PLC's Annual Report and Form 20-F Information 2005. The annual financial information presented in this preliminary announcementfor the year ended 31 December 2006 is based on, and is consistent with, that inthe Group's audited financial statements for the year ended 31 December 2006,and those financial statements will be delivered to the Registrar of Companiesfollowing the Company's Annual General Meeting. The auditors' report on thosefinancial statements is unqualified and does not contain any statement underSection 237 of the Companies Act 1985. The information contained in Note 3 updates the disclosures concerning legalproceedings and contingent liabilities in the Company's Annual Report and Form20-F Information 2005 and the Third Quarter and Nine Months Results 2006. Information in this preliminary announcement does not constitute statutoryaccounts of the Group within the meaning of Section 240 of the Companies Act1985. Statutory accounts for the year ended 31 December 2005 have been filedwith the Registrar of Companies. The auditors' report on those accounts wasunqualified and did not contain any statement under Section 237 of the CompaniesAct 1985. 2 NET CASH FUNDS The table below provides an analysis of net cash funds and a reconciliation ofnet cash flow to the movement in net cash funds. At 31 December At 1 Jan Cash Non-cash Exchange 2006 2006 flow Acquisitions movements movements $m $m $m $m $m $m Loans due after 1 year (1,111) - - 24 - (1,087) Other investments - current 1,624 (1,120) 157 (15) 11 657Cash and cash equivalents 4,979 2,084 - - 40 7,103Overdrafts (84) (29) - - (1) (114)Short term borrowings (6) (16) - - - (22) 6,513 919 157 (15) 50 7,624Net funds 5,402 919 157 9 50 6,537 Non-cash movements in the period consist of fair value adjustments under IAS 39. 3 LEGAL PROCEEDINGS and contingent liabilities AstraZeneca is involved in various legal proceedings considered typical to itsbusiness, including litigation relating to employment matters, productliability, commercial disputes, infringement of intellectual property rights andthe validity of certain patents. The matters discussed below constitute themore significant developments since publication of the disclosures concerninglegal proceedings in the Company's Annual Report and Form 20-F Information 2005and the Third Quarter and Nine Months Results 2006. Matters disclosed in respect of the fourth quarter of 2006 and January 2007. Legal proceedings DiprivanTM (propofol) As previously disclosed, in relation to a patent infringement action brought byAstraZeneca, the US District Court for the Southern District of New York issuedan injunction against Mayne Pharma (USA) Inc. (the holder of the new AbbreviatedNew Drug Application) preventing the manufacture, use, sale and offering forsale in the US of Mayne's propofol product. Mayne filed an appeal against thisand in November 2006 the US Court of Appeals for the Federal Circuit affirmedthe decision of the District Court. In June 2006, the DiprivanTM NDA was sold toAbraxis BioScience Inc. as part of an Asset Purchase Agreement. LosecTM/PrilosecTM (omeprazole) AstraZeneca continues to be involved in numerous proceedings in Canada involvingvarious generics and patents, including under the Patented Medicines (Notice ofCompliance) Regulations, relating to omeprazole capsules or omeprazole magnesiumtablets. As previously disclosed, Apotex Inc. launched a generic omeprazolecapsule product in Canada in January 2004. Following this launch, AstraZenecacommenced judicial review proceedings seeking to quash Apotex's notice ofcompliance (marketing approval) and AstraZeneca sued Apotex in July 2004alleging infringement of its formulation patents by Apotex's omeprazolecapsules. In May 2005, the Canadian Federal Court of Appeal quashed Apotex'snotice of compliance (marketing approval), overruling the first instancedecision in September 2004, which went against AstraZeneca. In June 2005, theCanadian Federal Court of Appeal granted Apotex's motion for a stay of theCourt's decision to quash the notice of compliance, pending an application byApotex for leave to appeal to the Supreme Court of Canada. The Supreme Court ofCanada granted Apotex leave to appeal and also continued the stay granted by theFederal Court of Appeal, thereby allowing Apotex to continue selling itsomeprazole capsules pending a decision by the Supreme Court on Apotex's appeal.The appeal was heard in May 2006 and allowed in November 2006, with the resultthat Apotex can continue to sell omeprazole capsules pending the outcome of thepatent infringement action. In January 2006, AstraZeneca Canada Inc. was served with a claim in the FederalCourt of Canada for payment of an undetermined sum based on damages allegedlysuffered by Apotex due to the delay from January 2002 to January 2004 in theissuance to Apotex of a notice of compliance (marketing approval) in Canada forits 20mg omeprazole capsule product. The claim was held in abeyance pendingApotex's appeal to the Supreme Court of Canada, and following the November 2006allowance of that appeal, Apotex has indicated it will be advancing the damagesclaim. AstraZeneca believes the claim is without merit and intends to defend itand to pursue its already pending patent infringement actions against Apotexvigorously. Sandoz Canada Inc. served AstraZeneca Canada with a notice of allegation inconnection with certain patents related to omeprazole capsules, on the basisthat Sandoz was seeking a notice of compliance (marketing approval) in Canadabased on a comparison with AstraZeneca's LosecTM capsules. In January 2007, AstraZeneca Canada Inc. discontinued long pending proceedingsagainst Reddy-Cheminor Inc. in respect of patents relating to omeprazolecapsules, following Reddy-Cheminor's withdrawal of its allegations. NexiumTM (esomeprazole magnesium) As disclosed in the Annual Report and 20-F Information 2005, AstraZenecaentities have been sued in various state and federal courts in the US inpurported representative and class actions involving the marketing of NexiumTM(esomeprazole magnesium). These actions generally allege that AstraZeneca'spromotion and advertising of NexiumTM to physicians and consumers is unfair,unlawful and deceptive conduct, particularly as the promotion relates tocomparisons of NexiumTM with PrilosecTM. They also allege that AstraZeneca'sconduct relating to the pricing of NexiumTM was unfair, unlawful and deceptive.The plaintiffs allege claims under various state consumer protection, unfairpractices and false advertising laws. The plaintiffs in these cases seekremedies that include restitution, disgorgement of profits, damages, punitivedamages, injunctive relief, attorneys' fees and costs of suit. In October 2006, the Circuit Court of the 11th Judicial Court in and forMiami-Dade County, Florida dismissed the plaintiff's complaint with prejudiceand without leave to amend. The plaintiff has appealed the dismissal, and theopening appeal brief is due in February 2007. In December 2006 and January 2007, several lawsuits against AstraZenecaentities, including putative class actions, were filed in US District Court forthe District of Columbia alleging claims of unlawful monopolisation relating toPrilosecTM and NexiumTM. Individual actions were filed on 7 December 2006 byWalgreen Co., Eckerd Corporation, Maxi Drug, Inc. d/b/a Brooks Pharmacy, TheKroger Co., New Albertson's Inc., Safeway, Inc., Hy-Vee, Inc., and AmericanSales Company, Inc. and on 8 December 2006 by Rite Aid Corporation, and Rite AidHeadquarters Corp. Putative class actions brought on behalf of directpurchasers were filed on 18 December 2006 by Meijer, Inc. and MeijerDistribution, Inc., on 19 December 2006 by Louisiana Wholesale Drug Co., Inc.,and on 8 January 2007 by Burlington Drug Co., Inc., Dik Drug Co., Inc., and KingDrug Co. of Florence, Inc. The plaintiffs seek treble damages, injunctiverelief, and attorney fees. AstraZeneca denies the allegations and intends todefend each of the actions vigorously. In December 2006, the European Patent Office (EPO) ruled that one of theEuropean substance patents for NexiumTM would be rejected, following an appealfrom the German generic manufacturer ratiopharm. The original patent expiry forthis patent was 2014. While disappointed with the EPO decision, AstraZeneca has confidence in theintellectual property portfolio protecting NexiumTM. This portfolio includesprocess, method of use and additional substance patents with expiration datesranging from 2009 through to 2019. The process patent is under opposition withthe EPO and an Opposition Division oral hearing is scheduled for October 2007(postponed from the original hearing date in March 2007). In addition to thesepatents, NexiumTM has data exclusivity valid to 2010 in major European markets. The revocation of the AstraZeneca European substance patent relating to NexiumTMshould not have any substantive impact on AstraZeneca's ability to uphold andenforce its NexiumTM patents in the United States. AstraZeneca has several USPatents covering NexiumTM, all of which can be differentiated from the Europeanpatent found to be invalid. SeroquelTM (quetiapine fumarate) In August 2003, Susan Zehel-Miller filed a putative class action againstAstraZeneca PLC and AstraZeneca Pharmaceuticals LP on behalf of "all persons inthe US who purchased and/or used SeroquelTM". Among other things, the classaction alleged that AstraZeneca failed to provide adequate warnings inconnection with an alleged association between SeroquelTM and the onset ofdiabetes. In 2004, the United States District Court for the Middle District ofFlorida denied class certification and the case was ultimately dismissed. Twoadditional putative class actions raising similar allegations have likewise beendismissed. There are no other US class actions relating to SeroquelTM; however,four putative class actions raising substantially similar allegations have beenfiled in Canada. Additionally, AstraZeneca Pharmaceuticals LP, either alone or in conjunctionwith one or more affiliates, has been sued in numerous individual personalinjury actions involving SeroquelTM. In the overwhelming majority of thesecases, the nature of the plaintiffs' alleged injuries is not clear. Althoughsome plaintiffs contend that they developed diabetes or other related injuriesas a result of taking SeroquelTM and/or other atypical antipsychoticmedications, in most instances, little or no factual information regarding thealleged injury has been provided. As of 24 January 2007, AstraZeneca wasdefending 604 served or answered lawsuits involving approximately 7,450plaintiff groups. These include a number of recently filed cases that includeclose to 1,000 plaintiff groups per case. The majority of the SeroquelTM casesare pending in federal court with clusters of state court activity in Delaware,New Jersey, New York and Missouri. AstraZeneca is also aware of over 600additional cases that have been filed but not yet served and has not determinedhow many additional cases, if any, may have been filed. Some of the cases alsoinclude claims against other pharmaceutical manufacturers such as Eli Lilly,Janssen Pharmaceutica and/or Bristol-Myers Squibb. AstraZeneca intends tovigorously defend all of the SeroquelTM cases. As previously disclosed, in September 2005, AstraZeneca received a notice fromTeva Pharmaceuticals USA that Teva had submitted an Abbreviated New DrugApplication (ANDA) for quetiapine fumarate 25mg tablets containing a paragraphIV certification alleging invalidity, unenforceability, or non-infringementrespecting AstraZeneca's US patent listed in the FDA's Orange Book withreference to SeroquelTM. In November 2005, AstraZeneca filed a lawsuit directedto Teva's 25mg ANDA tablets in the US District Court for the District of NewJersey for willful patent infringement. In February 2006, AstraZeneca receivedanother notice from Teva Pharmaceuticals USA that Teva had amended itspreviously submitted ANDA for quetiapine fumarate 25mg tablets and added 100,200 and 300mg tablets to its application to the US FDA. The amended ANDAsubmission contained a similar paragraph IV certification alleging invalidity,unenforceability, or non-infringement in respect of AstraZeneca's US patentlisted in the FDA's Orange Book with reference to SeroquelTM. In March 2006, inresponse to Teva's amended ANDA and Teva's intent to market additional strengthsof a generic version of SeroquelTM in the US prior to the expiration ofAstraZeneca's patent, AstraZeneca filed an additional lawsuit against Teva inthe US District Court for the District of New Jersey for patent infringement. The two lawsuits were consolidated in April 2006. However in March 2006, theUS District Court had granted Teva's motion to strike AstraZeneca's addedallegation of willfulness in its patent infringement claim in the firstcomplaint directed to Teva's 25mg tablets. Therefore, in the consolidatedaction, in response to AstraZeneca's now-combined allegations of patentinfringement directed to Teva's 25, 100, 200 and 300mg ANDA tablets, Tevaalleges non-infringement and patent invalidity. On 16 January, 2007, Teva fileda motion seeking leave to amend its pleadings in the consolidated action to addallegations, defenses, and counter-claims directed to alleged inequitableconduct in the procurement of AstraZeneca's patent. Discovery in theconsolidated case is proceeding. AstraZeneca continues to have full confidence in and will vigorously defend andenforce its intellectual property protecting SeroquelTM. Toprol-XLTM (metoprolol succinate extended release capsules) As previously disclosed, in the consolidated litigation brought against KV,Andrx and Eon, the AstraZeneca patents relating to Toprol-XLTM were found to beinvalid and unenforceable by the US District Court for the Eastern District ofMissouri in January 2006. AstraZeneca appealed the District Court decision tothe US Court of Appeals for the Federal Circuit. The appeal was fully briefedin 2006 and was argued in December 2006. We await the decision of the Court ofAppeals. In August 2006, Sandoz (formerly Eon) received final approval from the US Foodand Drug Administration (FDA) on the 25 mg dose of metoprolol succinate andtentative approval on the 50, 100 and 200mg doses. In November 2006, Sandozlaunched its 25mg metoprolol succinate product, which was followed by ParPharmaceutical's launch of a 25mg generic metoprolol succinate under adistribution agreement by AstraZeneca. There is no longer a stay in effect onthe approval of the ANDAs filed by KV and Andrx but neither has received FDAapproval. ZestrilTM (lisinopril) In 1996, two of AstraZeneca's predecessor companies, Zeneca Limited and ZenecaPharma Inc. (as licencees), Merck & Co., Inc. and Merck Frosst Canada Inc.commenced a patent infringement action in the Federal Court of Canada againstApotex Inc., alleging infringement of Merck's lisinopril patent. Apotex sold ageneric version of AstraZeneca's ZestrilTM and Merck's PrinivilTM tablets.Apotex admitted infringement but has raised positive defences to infringement,including that it acquired certain quantities of lisinopril prior to issuance ofthe patent and that certain quantities were licensed under a compulsory licence.Apotex also alleged invalidity of the patent. Following a trial in early 2006,in April 2006 the Federal Court of Canada ruled in favour of AstraZeneca andMerck on the key issues and Apotex stopped selling lisinopril in May 2006. InOctober 2006, the Federal Court of Appeal in Canada upheld the lower court'sdecision and dismissed Apotex's appeal. In December 2006, Apotex sought leave toappeal to the Supreme Court of Canada and the application remains pending. Average wholesale price class action litigation In the Average Wholesale Price class action litigation pending in Boston, atrial against certain of the defendants, including AstraZeneca, began on 6November 2006 and concluded on 26 January 2007. That trial involved two of thethree classes of plaintiffs certified by the Court, consisting mainly ofthird-party insurers for certain self-administered drugs, including Zoladex(goserelin acetate implant). The Court has yet to render its decision. Aseparate jury trial, against AstraZeneca only, is scheduled for 30 April 2007,to resolve the claims of the remaining class of plaintiffs, the individualMedicare beneficiaries. The multiple Attorney General lawsuits filed in statecourts are proceeding independently of the Boston proceeding. The first trialsthat potentially involve AstraZeneca are scheduled for November 2007 in theAlabama and Mississippi Attorney General cases. Anti-trust In July 2006, AstraZeneca Pharmaceuticals LP was named as a defendant, alongwith a number of other pharmaceutical manufacturers and wholesalers, in acomplaint filed by RxUSA Wholesale, Inc. in the U.S. District Court for theEastern District of New York. The complaint alleges that the defendantsviolated federal and state anti-trust laws by, among other things, allegedlyrefusing to deal with RxUSA and other "secondary wholesalers" in the wholesalepharmaceutical industry. The plaintiff alleges a conspiracy among themanufacturers and seeks an injunction and treble damages. AstraZeneca vigorouslydenies the allegations and in November 2006 filed a motion to dismiss thecomplaint. Drug importation anti-trust litigation As previously disclosed, in May 2004, plaintiffs in a purported class actionfiled complaints in the US District Court for Minnesota and for New Jersey,alleging that AstraZeneca Pharmaceuticals LP and eight other pharmaceuticalmanufacturer defendants conspired to prevent American consumers from purchasingprescription drugs from Canada, "depriving consumers of the ability to purchase"drugs at competitive prices. The New Jersey case was voluntarily dismissed inJuly 2004. In August 2005, the Minnesota District Court dismissed with prejudicethe plaintiffs' federal anti-trust claims and declined to exercise supplementaljurisdiction in relation to the state statutory and common law claims, whichclaims were dismissed without prejudice. The plaintiffs appealed the DistrictCourt's decision to the United States Court of Appeals for the Eighth Circuit.In November 2006, the United States Court of Appeals for the Eighth Circuitaffirmed the District Court's decision. As previously disclosed, in August 2004, Californian retail pharmacy plaintiffsfiled an action in the Superior Court of California making similar allegationsto the Minnesota action and also alleging a conspiracy by approximately fifteenpharmaceutical manufacturer defendants to set the price of drugs sold inCalifornia at or above the Canadian sales price for those same drugs. In July2005, the court overruled in part and sustained in part, without leave to amend,the defendants' motion to dismiss the plaintiffs' third amended complaint inthese proceedings. The Court overruled the defendants' motion in respect ofconspiracy claims but sustained the motion in respect of the California UnfairCompetition Law claims. In December 2006, the Court granted the defendants'motion for summary judgment and the case was subsequently dismissed. In January2007, plaintiffs filed a Notice of Appeal with the Court of Appeal of the Stateof California. NolvadexTM (tamoxifen) As previously disclosed, AstraZeneca is a co-defendant with Barr Laboratories,Inc. in numerous purported class actions filed in federal and state courtsthroughout the US. All of the state court actions were removed to federal courtand have been consolidated, along with all of the cases originally filed in thefederal courts, in a federal multi-district litigation proceeding pending in theUS District Court for the Eastern District of New York. Some of the cases werefiled by plaintiffs representing a putative class of consumers who purchasedtamoxifen. The other cases were filed on behalf of a putative class of 'thirdparty payers' (including health maintenance organisations, insurers and othermanaged care providers and health plans) that have reimbursed or otherwise paidfor prescriptions of tamoxifen. The plaintiffs allege that they paid 'supra-competitive and monopolistic prices' for tamoxifen as a result of thesettlement of patent litigation between Zeneca and Barr in 1993. The plaintiffsseek injunctive relief, treble damages under the anti-trust laws, disgorgementand restitution. In April 2002, AstraZeneca filed a motion to dismiss the casesfor failure to state a cause of action. In May 2003, the US District Court forthe Eastern District of New York granted AstraZeneca's motion to dismiss. Theplaintiffs appealed the decision. In November 2005, the US Court of Appeals forthe Second Circuit affirmed the District Court's decision. The plaintiffsthereafter moved for re-hearing by the original panel of judges in the case andre-hearing by a panel of all of the judges on the US Court of Appeals for theSecond Circuit. The plaintiffs' requests for re-hearing were denied in September2006. In December 2006, plaintiffs filed a Petition for a writ of certiorari tothe US Supreme Court seeking to have the Court hear an appeal of the SecondCircuit's decision. 4 FULL YEAR TERRITORIAL SALES ANALYSIS % Growth Full Year Full Year 2006 2005 Constant $m $m Actual Currency US 12,449 10,771 16 16 Canada 1,031 976 6 (1) North America 13,480 11,747 15 14 France 1,642 1,654 (1) - UK 850 757 12 12 Germany 1,165 1,223 (5) (4) Italy 1,265 1,152 10 11 Sweden 308 295 4 5 Europe others 3,673 3,382 9 10 Total Europe 8,903 8,463 5 6 Japan 1,503 1,527 (2) 5 China 328 272 21 19 Rest of World 2,261 1,941 16 16Total 26,475 23,950 11 11 5 FOURTH QUARTER TERRITORIAL SALES ANALYSIS % Growth 4th Quarter 4th Quarter 2006 2005 Constant $m $m Actual Currency US 3,390 2,907 17 17 Canada 263 257 2 (2) North America 3,653 3,164 15 15 France 423 389 9 2 UK 237 196 21 12 Germany 301 306 (2) (8) Italy 311 274 14 7 Sweden 80 63 27 16 Europe others 1,006 861 17 10 Total Europe 2,358 2,089 13 6 Japan 442 424 4 6 China 87 76 14 13 Rest of World 614 533 15 13Total 7,154 6,286 14 11 6 FULL YEAR PRODUCT SALES ANALYSIS World US Full Year Full Year Actual Constant Full Actual 2006 2005 Growth Currency Year Growth Growth 2006 $m $m % % $m % Gastrointestinal: Nexium 5,182 4,633 12 12 3,527 13Losec/Prilosec 1,371 1,652 (17) (16) 233 (12)Others 78 70 11 11 24 71Total Gastrointestinal 6,631 6,355 4 4 3,784 11Cardiovascular: Seloken/Toprol-XL 1,795 1,735 3 3 1,382 7Crestor 2,028 1,268 60 59 1,148 57Atacand 1,110 974 14 14 260 12Tenormin 320 352 (9) (7) 24 (4)Zestril 307 332 (8) (7) 28 N/mPlendil 275 360 (24) (24) 24 (71)Others 283 311 (9) (9) 3 N/mTotal Cardiovascular 6,118 5,332 15 15 2,869 21Respiratory:Pulmicort 1,292 1,162 11 11 835 22Symbicort 1,184 1,006 18 18 - -Rhinocort 360 387 (7) (7) 252 (9)Oxis 88 91 (3) (3) - -Accolate 81 72 13 13 59 28Others 146 155 (6) (6) - -Total Respiratory 3,151 2,873 10 10 1,146 14Oncology:Arimidex 1,508 1,181 28 29 614 29Casodex 1,206 1,123 7 9 295 23Zoladex 1,008 1,004 - 1 107 (9)Iressa 237 273 (13) (11) 16 (76)Others 303 264 15 16 121 27Total Oncology 4,262 3,845 11 12 1,153 16Neuroscience:Seroquel 3,416 2,761 24 24 2,486 24Local anaesthetics 529 511 4 5 76 9Zomig 398 352 13 13 168 39Diprivan 304 369 (18) (17) 85 (42)Others 57 66 (14) (12) 15 (17)Total Neuroscience 4,704 4,059 16 16 2,830 20Infection and Other:Merrem 604 505 20 19 113 33Other Products 271 334 (19) (18) 139 (27)Total Infection and Other 875 839 4 4 252 (8)Aptium Oncology 374 335 12 12 374 12Astra Tech 360 312 15 16 41 41Total 26,475 23,950 11 11 12,449 16 7 FOURTH QUARTER PRODUCT SALES ANALYSIS World US 4th 4th Constant 4th Quarter Quarter Actual Currency Quarter Actual 2006 2005 Growth Growth 2006 Growth $m $m % % $m %Gastrointestinal: Nexium 1,430 1,247 15 13 992 17Losec/Prilosec 347 411 (16) (18) 77 5Others 24 19 26 21 10 67Total Gastrointestinal 1,801 1,677 7 5 1,079 16Cardiovascular: Seloken/Toprol-XL 387 455 (15) (16) 276 (20)Crestor 625 353 77 73 356 75Atacand 301 247 22 17 68 28Tenormin 82 90 (9) (10) 5 (38)Zestril 78 84 (7) (11) 7 (30)Plendil 65 73 (11) (15) 4 (33)Others 71 76 (7) (13) 2 N/mTotal Cardiovascular 1,609 1,378 17 14 718 15Respiratory:Pulmicort 400 338 18 16 271 28Symbicort 323 264 22 15 - -Rhinocort 90 92 (2) (3) 63 -Oxis 23 22 5 - - -Accolate 22 17 29 29 17 55Others 41 40 3 (5) - -Total Respiratory 899 773 16 12 351 23Oncology:Arimidex 412 325 27 24 174 33Casodex 327 283 16 13 82 37Zoladex 272 252 8 5 27 17Iressa 63 72 (13) (14) 4 (76)Others 83 69 20 16 36 44Total Oncology 1,157 1,001 16 13 323 26Neuroscience:Seroquel 912 755 21 19 663 20Local anaesthetics 133 131 2 (1) 11 (50)Zomig 103 94 10 7 41 5Diprivan 79 88 (10) (11) 22 (37)Others 13 16 (19) (19) 2 (60)Total Neuroscience 1,240 1,084 14 12 739 13Infection and Other:Merrem 167 130 28 23 29 21Other Products 81 72 13 12 42 17Total Infection and Other 248 202 23 20 71 18Aptium Oncology 98 88 11 11 98 11Astra Tech 102 83 23 16 11 38Total 7,154 6,286 14 11 3,390 17 Convenience Translation of Key Financial Information 2006 2005 2006 2005 2006 2005For the quarter ended 31 December $m $m £m £m SEKm SEKm Total Sales 7,154 6,286 3,645 3,203 49,237 43,263 Operating profit 2,003 1,636 1,021 834 13,785 11,260Profit before tax 2,103 1,689 1,072 861 14,474 11,624Net profit for the period 1,445 1,227 736 625 9,945 8,445 Earnings per Ordinary Share $0.93 $0.77 £0.47 £0.39 SEK6.40 SEK5.30 2006 2005 2006 2005 2006 2005For the year ended 31 December $m $m £m £m SEKm SEKm Total Sales 26,475 23,950 13,490 12,204 182,212 164,833 Operating profit 8,216 6,502 4,186 3,313 56,546 44,749 Profit before tax 8,543 6,667 4,353 3,397 58,796 45,885 Net profit for the year 6,063 4,724 3,089 2,407 41,728 32,512 Earnings per Ordinary Share $3.86 $2.91 £1.97 £1.48 SEK26.57 SEK20.03 Dividend per Ordinary Share $1.72 $1.30 £0.896 £0.737 SEK12.20 SEK10.01 Net cash inflow from operating 7,693 6,743 3,920 3,436 52,946 46,408activities Increase in cash & cash 2,055 989 1,047 504 14,143 6,807equivalents Capital and Reserves 15,304 13,597 7,798 6,928 105,328 93,580Attributable to Equity Holders All Sterling (£) and Swedish krona (SEK) equivalents are shown for convenienceand have been calculated using the current period end rates of $1= £ 0.509541 and $1= SEK 6.882400 respectively. Dividend per Ordinary Shareis shown as the actual amount payable using the rates at the date of declarationof the dividend. Information for US Investors RECONCILIATION TO UNITED STATES ACCOUNTING PRINCIPLES The consolidated income statement and balance sheet set out on pages 12 and 14are prepared in accordance with IASs and IFRSs (collectively "IFRS") as adoptedby the European Union (EU), which differ in certain material respects from thoseaccounting principles generally accepted in the United States (US GAAP). Thedifferences as they apply to AstraZeneca PLC are explained in the Annual Reportand Form 20-F Information 2005 except that, during the year, AstraZeneca adoptedthe provisions of SFAS No. 158 "Employers' Accounting for Defined BenefitPension and Other Postretirement Plans - an amendment of FASB Statements No. 87,88, 106 and 132(R)". The effect of adoption, which is prospective from 15December 2006, is to recognise in full the actuarial gains and losses arisingfrom post-retirement benefit plans. The effects on income and shareholders'equity of the GAAP differences are shown below. Full Year Full YearIncome attributable to Shareholders 2006 2005 $m $mNet income for the period under IFRS 6,043 4,706 Adjustments to conform to US GAAP Purchase accounting adjustments:- amortisation and depreciation (1,017) (1,019)- in-process research and development (502) -Capitalisation less disposals and amortisation of interest (21) (13)Pension and other post-retirement benefits (128) (74)Financial instruments 7 (35)In-licensed development intangibles (193) (29)Deferred taxation 283 283 - on purchase accounting adjustments (101) 65 - othersOther 21 -Net income in accordance with US GAAP 4,392 3,884 Net income per Ordinary Share in accordance with US GAAP - basic $2.81 $2.40Net income per Ordinary Share in accordance with US GAAP - diluted $2.80 $2.40 RECONCILIATION TO UNITED STATES ACCOUNTING PRINCIPLES (CONTINUED) Shareholders' equity 31 December 31 December 2006 2005 $m $mShareholders' equity under IFRS 15,304 13,597 Adjustments to conform to US GAAPPurchase accounting adjustments:- goodwill 14,712 13,562- property, plant and equipment and intangible assets 4,655 5,229- in-process research and development (605) -Capitalisation, less disposals and amortisation of interest 220 241Pension and other post-retirement benefits (48) 1,483Financial instruments - 18In-licensed development intangibles (309) (112)Deferred taxation- on purchase accounting adjustments (1,322) (1,629)- others (153) (492)Other 13 (3)Shareholders' equity in accordance with US GAAP 32,467 31,894 Shareholder Information ANNOUNCEMENTS AND MEETINGS Announcement of first quarter 2007 results 26 April 2007 Annual General Meeting 26 April 2007 Announcement of second quarter and half year 2007 results 26 July 2007 Announcement of third quarter and nine months 2007 1 November 2007results DIVIDENDS The record date for the first interim dividend paid on 18 September 2006 (in theUK, Sweden and the US) was 11 August 2006. Ordinary shares traded ex-dividend onthe London and Stockholm Stock Exchanges from 9 August 2006. ADRs tradedex-dividend on the New York Stock Exchange from the same date. The record date for the second interim dividend for 2006 payable on 19 March2007 (in the UK, Sweden and the US) will be 9 February 2007. Ordinary shareswill trade ex-dividend on the London and Stockholm Stock Exchanges from 7February 2007. ADRs will trade ex-dividend on the New York Stock Exchange fromthe same date. Future dividends will normally be paid as follows: First interim Announced in July and paid in SeptemberSecond interim Announced in January/February and paid in March TRADEMARKS The following brand names used in these interim financial statements aretrademarks of the AstraZeneca Group of companies: Accolate Arimidex Astra Tech Atacand Casodex Crestor Diprivan FaslodexIressa Losec Losec MUPS Merrem Nexium Nolvadex Oxis Plendil PrilosecPulmicort Pulmicort Respules Rhinocort Rhinocort Aqua Seloken SeroquelSeroquel SR Symbicort Symbicort SMART Tenormin Toprol-XL Zestril ZoladexZomig ADDRESSES FOR CORRESPONDENCE Registrar and Depositary Registered Office Swedish SecuritiesTransfer Office for ADRs Registration Centre The AstraZeneca Registrar JPMorgan Chase Bank 15 Stanhope Gate VPC ABLloyds TSB Registrars JPMorgan Service Center London PO Box 7822The Causeway PO Box 3408 W1K 1LN SE-103 97 StockholmWorthing South Hackensack UK SwedenWest Sussex NJ 07606-3408BN99 6DA USUK Tel: +44 (0)20 7304 5000 Tel: +46 (0)8 402 9000Tel (freephone in UK): Tel (toll free in US):0800 389 1580 888 697 8018Tel (outside UK): Tel: +1 (201) 680 6630+44 (0)121 415 7033 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS In order to utilise the 'safe harbour' provisions of the US Private SecuritiesLitigation Reform Act 1995, we are providing the following cautionary statement:This preliminary announcement contains certain forward-looking statements aboutAstraZeneca. Although we believe our expectations are based on reasonableassumptions, any forward-looking statements may be influenced by factors thatcould cause actual outcomes and results to be materially different from thosepredicted. We identify the forward-looking statements by using the words 'anticipates', 'believes', 'expects', 'intends' and similar expressions in suchstatements. These forward-looking statements are subject to numerous risks anduncertainties. Important factors that could cause actual results to differmaterially from those contained in forward-looking statements, certain of whichare beyond control, include, among other things: the loss or expiration ofpatents, marketing exclusivity or trade marks; exchange rate fluctuations; therisk that R&D will not yield new products that achieve commercial success; theimpact of competition, price controls and price reductions; taxation risks; therisk of substantial product liability claims; the impact of any failure by thirdparties to supply materials or services; the risk of delay to new productlaunches; the difficulties of obtaining and maintaining governmental approvalsfor products; the risk of failure to observe ongoing regulatory oversight; therisk that new products do not perform as we expect; and the risk ofenvironmental liabilities. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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