Interim Results - part 2 0f 2

AstraZeneca PLC 24 July 2003 Consolidated Profit & Loss Account 2003 2002 For the six months ended 30 June $m $m Sales 9,171 8,658 Cost of sales (2,237) (2,154) Distribution costs (75) (65) Research and development (1,597) (1,420) Selling, general and administrative expenses (3,163) (2,869) Other operating income 62 211 Operating profit 2,161 2,361 Net interest and dividend income 53 22 Profit on ordinary activities before taxation 2,214 2,383 Taxation (609) (644) Profit on ordinary activities after taxation 1,605 1,739 Attributable to minorities (7) (6) Net profit for the period 1,598 1,733 Dividends to shareholders (436) (398) Retained profit for the period 1,162 1,335 Earnings per Ordinary Share $0.93 $1.00 Diluted earnings per Ordinary Share $0.93 $1.00 Weighted average number of Ordinary Shares in issue (millions) 1,714 1,741 Diluted average number of Ordinary Shares in issue (millions) 1,716 1,743 Consolidated Profit & Loss Account 2003 2002 For the quarter ended 30 June $m $m Sales 4,436 4,312 Cost of sales (1,102) (1,060) Distribution costs (40) (35) Research and development (815) (723) Selling, general and administrative expenses (1,637) (1,485) Other operating income 47 55 Operating profit 889 1,064 Net interest and dividend income 32 1 Profit on ordinary activities before taxation 921 1,065 Taxation (253) (288) Profit on ordinary activities after taxation 668 777 Attributable to minorities (2) (2) Net profit for the period 666 775 Dividends to shareholders (436) (398) Retained profit for the period 230 377 Earnings per Ordinary Share $0.39 $0.45 Diluted earnings per Ordinary Share $0.39 $0.45 Weighted average number of Ordinary Shares in issue (millions) 1,712 1,736 Diluted average number of Ordinary Shares in issue (millions) 1,714 1,738 Consolidated Balance Sheet 30 June 30 June 2003 2002 $m $m Fixed assets Tangible fixed assets 7,005 6,079 Goodwill and intangible assets 2,863 2,748 Fixed asset investments 47 22 9,915 8,849 Current assets Stocks 2,765 2,460 Debtors 5,479 4,648 Cash and short-term investments 3,987 4,247 12,231 11,355 Total assets 22,146 20,204 Creditors due within one year Short-term borrowings and current instalments of loans (55) (476) Other creditors (7,047) (6,646) (7,102) (7,122) Net current assets 5,129 4,233 Total assets less current liabilities 15,044 13,082 Creditors due after more than one year Loans (323) (337) Other creditors (42) (153) Provisions for liabilities and charges (1,922) (1,547) (2,287) (2,037) Net assets 12,757 11,045 Capital and reserves Shareholders' funds - equity interests 12,696 10,994 Minority equity interests 61 51 Shareholders' funds and minority interests 12,757 11,045 Statement of Total Recognised Gains and Losses 2003 2002 For the six months ended 30 June $m $m Net profit for the period 1,598 1,733 Exchange adjustments on net assets 647 797 Translation differences on foreign currency borrowings - (5) Tax on translation differences on foreign currency borrowings - - Other movements - 3 Total recognised gains and losses relating to the period 2,245 2,528 Consolidated Cash Flow Statement 2003 2002 For the six months ended 30 June $m $m Cash flow from operating activities Operating profit 2,161 2,361 Depreciation 417 328 Amortisation 141 131 (Increase)/decrease in working capital (346) 251 Other non-cash movements 100 78 Net cash inflow from operating activities before exceptional items 2,473 3,149 Outflow related to exceptional items (381) (55) Net cash inflow from operating activities 2,092 3,094 Returns on investments and servicing of finance 33 3 Tax paid (762) (415) Capital expenditure and financial investment Net cash expenditure on fixed assets (673) (632) Cash expenditure on fixed asset investments - (1) (673) (633) Acquisitions and disposals 80 - Equity dividends paid to Shareholders (770) (820) Net cash inflow before management of liquid resources and financing - 1,229 Management of liquid resources Movement in short-term investments and fixed deposits (net) 487 (428) Financing (604) (815) Decrease in cash in the period (117) (14) Net cash funds Net cash inflow before management of liquid resources and - 1,229 financing AstraZeneca PLC Ordinary Shares Issued for cash 26 26 Repurchased for cash (311) (748) (Outflow)/inflow of net cash funds in the period (285) 507 Independent Review Report by KPMG Audit Plc to AstraZeneca PLC Introduction We have been engaged by the Company to review the financial information for the six month period ended 30 June 2003 set out on pages 10 and 12 to 16 and we have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Listing Rules of the Financial Services Authority. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the interim report in accordance with the Listing Rules which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where they are to be changed in the next annual accounts in which case any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/ 4: Review of Interim Financial Information issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review is substantially less in scope than an audit performed in accordance with Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 June 2003. KPMG Audit Plc Chartered Accountants 8 Salisbury Square London 24 July 2003 Notes to the Interim Financial Statements 1 BASIS OF PREPARATION AND ACCOUNTING POLICIES The unaudited financial statements for the six months ended 30 June 2003 have been prepared in accordance with UK generally accepted accounting principles. The accounting policies applied are those set out in AstraZeneca PLC's 2002 Annual Report and Form 20-F. The financial statements are unaudited but have been reveiwed by the auditors and their report is set out above. These interim financial statements do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. Statutory accounts for the year ended 31 December 2002 have been filed with the Registrar of Companies. The auditor's report on those accounts was unqualified and did not contain any statement under Section 237 of the Companies Act 1985. As part of AstraZeneca's objective to align with best accounting practice, cash discounts arising from prompt payments of invoices were reclassified from cost of sales to sales for the year ended 31 December 2002. Comparatives were reclassified and additional detail at product and territorial level are available on the AstraZeneca website. Both sales and cost of sales were reduced by $145m in the first half 2002. Neither profits nor net assets were affected. 2 JOINT VENTURES AND ASSOCIATES The group's share of joint ventures' sales for the half year to 30 June 2003 amounted to $174m and $173m for the comparative period. Share of joint ventures' operating profits for the half year to 30 June 2003, and for the comparative period, were $nil. 3 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS For the six months ended 30 June 2003 2002 $m $m Shareholders' funds at beginning of period 11,172 9,586 Net profit for the period 1,598 1,733 Dividends to Shareholders (436) (398) 1,162 1,335 Issue of AstraZeneca PLC Ordinary Shares 26 26 Repurchase of AstraZeneca PLC Ordinary Shares (311) (748) Foreign currency adjustment 647 792 Other movements - 3 Net addition to Shareholders' funds 1,524 1,408 Shareholders' funds at end of period 12,696 10,994 4 NET CASH FUNDS The table below provides an analysis of net cash funds and a reconciliation of net cash flow to the movement in net cash funds. At 31 Dec Cash Other Exchange At 30 June 2002 flow Non-cash Movements 2003 $m $m $m $m $m Loans due after 1 year (328) - 5 - (323) Current instalments of loans (314) 319 (5) - - Total loans (642) 319 - - (323) Short-term investments 3,962 (487) - 28 3,503 Cash 726 (264) - 22 484 Overdrafts (202) 147 - - (55) 4,486 (604) - 50 3,932 Net cash funds 3,844 (285) - 50 3,609 Issue of AstraZeneca PLC Ordinary Shares (26) Repurchase of AstraZeneca PLC Ordinary Shares 311 Net cash inflow before management of liquid resources and financing - 5 LEGAL PROCEEDINGS The Company announced on 20 June 2003 a settlement of the US Department of Justice investigation into the US sales and marketing practices for Zoladex (goserelin acetate implant). Under the terms of the settlement, AstraZeneca Pharmaceuticals LP admitted to violating the Prescription Drug Marketing Act by providing free samples of Zoladex to physicians during the period 1993 through 1996, with the understanding that these physicians would bill Medicare for reimbursement. AstraZeneca also settled, without admitting liability, civil claims involving allegations that the Company provided inducements to physicians to purchase Zoladex and for improperly setting and reporting its price. The total payment associated with the settlement is $355 million, with a portion of the settlement placed in escrow to fund anticipated settlements with the individual states. The settlement also provides for a five-year Corporate Integrity Agreement with the Office of Inspector General (OIG) for the Department of Health and Human Services, under which AstraZeneca Pharmaceuticals LP is required, among other obligations, to keep in place its current Compliance Program and provide periodic reports to the OIG on the status of compliance activities. 6 HALF YEAR TERRITORIAL SALES ANALYSIS % Growth 1st Half 1st Half 2003 2002 Constant $m $m Actual Currency US 4,432 4,597 (4) (4) Canada 330 273 21 16 North America 4,762 4,870 (2) (2) France 688 533 29 9 UK 274 325 (16) (24) Germany 390 329 19 1 Italy 450 379 19 1 Sweden 152 138 10 (7) Europe others 1,247 1,084 15 (1) Total Europe 3,201 2,788 15 (1) Japan 536 412 30 20 Rest of World 672 588 14 19 Total 9,171 8,658 6 - 7 SECOND QUARTER TERRITORIAL SALES ANALYSIS % Growth 2nd Quarter 2nd Quarter 2003 2002 Constant $m $m Actual Currency US 1,962 2,214 (11) (11) Canada 174 144 21 13 North America 2,136 2,358 (9) (10) France 359 270 33 10 UK 130 147 (12) (21) Germany 207 165 25 4 Italy 242 207 17 (3) Sweden 73 74 (1) (16) Europe others 635 538 18 - Total Europe 1,646 1,401 17 (2) Japan 293 240 22 11 Rest of World 361 313 15 19 Total 4,436 4,312 3 (4) 8 HALF YEAR PRODUCT SALES ANALYSIS World US 1st Half 1st Half Constant 1st Half 2003 2002 Actual Currency 2003 Actual $m $m Growth Growth $m Growth % % % Gastrointestinal: Losec 1,434 2,308 (38) (42) 607 (56) Nexium 1,466 811 81 76 1,106 74 Others 35 30 17 7 11 22 Total Gastrointestinal 2,935 3,149 (7) (11) 1,724 (15) Cardiovascular: Zestril 226 546 (59) (63) 43 (87) Seloken 748 437 71 67 576 93 Atacand 358 278 29 20 137 20 Plendil 239 203 18 12 89 24 Tenormin 165 190 (13) (18) 13 (65) Crestor 12 - n/m n/m - n/m Others 188 181 4 (8) 9 (18) Total Cardiovascular 1,936 1,835 6 - 867 (1) Respiratory: Pulmicort 490 426 15 9 261 37 Rhinocort 186 144 29 26 136 39 Symbicort 249 122 104 79 - - Accolate 56 65 (14) (16) 38 (16) Oxis 60 61 (2) (13) - - Others 74 72 3 (8) - - Total Respiratory 1,115 890 25 16 435 31 Oncology: Zoladex 406 382 6 (1) 84 (17) Casodex 417 271 54 43 132 110 Nolvadex 100 257 (61) (63) 36 (81) Arimidex 236 144 64 54 101 66 Iressa 66 - n/m n/m 18 n/m Faslodex 37 8 n/m n/m 37 n/m Others 9 11 (18) (27) - - Total Oncology 1,271 1,073 18 10 408 (3) CNS: Seroquel 714 592 21 18 545 10 Zomig 162 166 (2) (8) 78 (19) Others 15 15 - (13) 2 (33) Total CNS 891 773 15 11 625 5 Pain, Infection and Other Pharma: Diprivan 234 222 5 - 123 13 Merrem 154 141 9 8 25 (22) Local anaesthetics 223 156 43 34 51 55 Other Pharma Products 135 180 (25) (31) 31 (44) Total Pain, Infection and Other Pharma 746 699 7 2 230 - Salick Health Care 134 113 19 19 134 19 Astra Tech 94 71 32 11 7 40 Marlow Foods 49 55 (11) (18) 2 100 Total 9,171 8,658 6 - 4,432 (4) n/m not meaningful 9 SECOND QUARTER PRODUCT SALES ANALYSIS World US 2nd 2nd Constant 2nd Quarter Quarter Actual Currency Quarter Actual 2003 2002 Growth Growth 2003 Growth $m $m % % $m % Gastrointestinal: Losec 742 1,116 (34) (39) 320 (52) Nexium 631 464 36 31 437 25 Others 17 17 - (12) 3 (40) Total Gastrointestinal 1,390 1,597 (13) (18) 760 (25) Cardiovascular: Zestril 118 269 (56) (61) 23 (86) Seloken 380 206 84 79 291 112 Atacand 152 129 18 6 35 (19) Plendil 129 97 33 26 50 72 Tenormin 81 96 (16) (23) - - Crestor 9 - n/m n/m - n/m Others 98 92 7 (6) 5 - Total Cardiovascular 967 889 9 1 404 3 Respiratory: Pulmicort 239 199 20 13 128 51 Rhinocort 96 81 19 17 68 24 Symbicort 127 68 87 61 - - Accolate 25 33 (24) (27) 15 (35) Oxis 29 30 (3) (16) - - Others 36 37 (3) (17) - - Total Respiratory 552 448 23 13 211 29 Oncology: Zoladex 213 195 9 - 42 (24) Casodex 228 148 54 41 72 118 Nolvadex 39 117 (67) (70) 5 (94) Arimidex 143 79 81 70 68 94 Iressa 47 - n/m n/m 18 n/m Faslodex 15 8 88 88 15 88 Others 5 6 (17) (34) - - Total Oncology 690 553 25 15 220 4 CNS: Seroquel 270 263 3 (1) 185 (11) Zomig 54 74 (27) (35) 9 (76) Others 7 8 (13) (38) - - Total CNS 331 345 (4) (9) 194 (21) Pain, Infection and Other Pharma: Diprivan 98 111 (12) (17) 42 (25) Merrem 80 74 8 5 12 (29) Local anaesthetics 122 60 103 90 31 182 Other Pharma Products 69 112 (38) (41) 14 (62) Total Pain, Infection and Other Pharma 369 357 3 (2) 99 (18) Salick Health Care 69 59 17 17 69 17 Astra Tech 50 37 35 13 4 33 Marlow Foods 18 27 (33) (37) 1 - Total 4,436 4,312 3 (4) 1,962 (11) n/m not meaningful Information for US Investors RECONCILIATION TO UNITED STATES ACCOUNTING PRINCIPLES The profit and loss account and balance sheet set out on pages 10 to 12 are prepared in accordance with generally accepted accounting principles in the United Kingdom (UK GAAP) which differ in certain material respects from those generally accepted in the United States (US GAAP). The differences as they apply to AstraZeneca PLC are explained in the 2002 Annual Report and Form 20-F. The approximate effects on income and shareholders' equity of the GAAP differences are shown below. 1st 1st Half Half 2003 2002 Income attributable to Shareholders $m $m Net income for the period under UK GAAP from continuing operations 1,598 1,733 Adjustments to conform to US GAAP Purchase accounting adjustments (including goodwill and intangibles): - deemed acquisition of Astra (amortisation and other acquisition adjustments) (461) (419) - others 28 26 Capitalisation less amortisation of interest 3 - Capitalisation less amortisation of software costs (45) (42) Deferred taxation - on fair values of Astra 129 115 - others (49) (83) Pension expense (16) (27) Post-retirement benefits/plan amendment 2 2 Share based compensation (4) 32 Fair value of derivative financial instruments (11) 37 Deferred income recognition 12 (47) Unrealised gains on foreign exchange and others (1) 4 Net income in accordance with US GAAP 1,185 1,331 Net income per Ordinary Share under US GAAP - basic and diluted $0.69 $0.77 RECONCILIATION TO UNITED STATES ACCOUNTING PRINCIPLES (CONTINUED) 30 June 30 June Shareholders' equity 2003 2002 $m $m Shareholders' equity under UK GAAP 12,696 10,994 Adjustments to conform to US GAAP Purchase accounting adjustments (including goodwill and intangibles): - deemed acquisition of Astra - goodwill 13,406 12,355 - tangible and intangible fixed assets 7,658 7,737 - others 114 57 Capitalisation, less disposals and amortisation of interest 241 192 Deferred taxation - on fair value of Astra (2,300) (2,310) - others (218) (156) Dividend 436 398 Pension expense (287) (189) Post-retirement benefits/plan amendment (22) (26) Software costs capitalised 19 68 Fair value of derivative financial instruments 101 87 Deferred income recognition (2) (122) Others 96 93 Shareholders' equity in accordance with US GAAP 31,938 29,178 Shareholder Information ANNOUNCEMENTS AND MEETINGS Annual Business Review 2 October 2003 Announcement of third quarter and nine months results 23 October 2003 DIVIDENDS The record date for the first interim dividend payable on 6 October 2003 (in the UK, Sweden and the US) is 22 August 2003. Ordinary Shares will trade ex-dividend on the London and Stockholm Stock Exchanges from 20 August 2003. ADRs will trade ex-dividend on the New York Stock Exchange from the same date. Future dividends will normally be paid as follows: First interim Announced in July and paid in October Second interim Announced in January and paid in April. TRADEMARKS The following brand names used in this interim report are trade marks of the AstraZeneca group of companies: Accolate Arimidex Astra Tech Atacand Casodex Crestor Diprivan Exanta Faslodex Iressa Losec Merrem Nexium Nolvadex Oxis Plendil Prilosec Pulmicort Pulmicort Respules Pulmicort Turbuhaler Rhinocort Rhinocort Aqua Seloken Seroquel Symbicort Tenormin Toprol-XL Zestril Zoladex Zomig ADDRESSES FOR CORRESPONDENCE Registrar and Depositary Registered Office Swedish Securities Register Centre Transfer Office for ADRs The AstraZeneca Registrar JPMorgan Chase Bank 15 Stanhope Gate VPC AB Lloyds TSB Registrars PO Box 43013 London PO Box 7822 The Causeway Providence, W1K 1LN S-103 97 Stockholm Worthing RI 02940-3013 UK Sweden West Sussex US BN99 6DA Tel: +44 (0)121 433 8000 Tel: (781) 575 4328 Tel: +44 (0)20 7304 5000 Tel: +46 (0)8 402 9000 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS In order to utilise the 'Safe Harbor' provisions of the United States Private Securities Litigation Reform Act of 1995, AstraZeneca is providing the following cautionary statement. This Interim Report contains forward-looking statements with respect to the financial condition, results of operations and businesses of AstraZeneca. By their nature, forward-looking statements and forecasts involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from that expressed or implied by these forward-looking statements. These factors include, among other things, the loss or expiration of patents, marketing exclusivity or trade marks; exchange rate fluctuations; the risk that R&D will not yield new products that achieve commercial success; the impact of competition; price controls and price reductions; taxation risks; the risk of substantial product liability claims; the impact of any failure by third parties to supply materials or services; the risk of delay to new product launches; the difficulties of obtaining and maintaining governmental approvals for products; and the risk of environmental liabilities. This information is provided by RNS The company news service from the London Stock Exchange IV

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