Slide 1: Fourth Quarter 2011 Earnings Teleconference
Fourth Quarter 2011 Earnings Teleconference January 31, 2012
Slide 2: Introduction
Introduction Chuck Triano Senior Vice President, Investor Relations Fourth Quarter 2011 Earnings
Slide 3: Forward-Looking Statements and Non-GAAP Financial Information
Forward-Looking Statements and Non-GAAP Financial Information ● Our discussions during this conference call will include forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements. The factors that could cause actual results to differ ar
Slide 4: Opening Remarks
Opening Remarks Ian Read Chairman and Chief Executive Officer Fourth Quarter 2011 Earnings
Slide 5: CEO Perspectives
CEO Perspectives ● Finished 2011 with a solid Q4; overall financial performance for the year was strong ● Met or exceeded every aspect of our 2011 financial guidance ● Returned over $15 billion to shareholders through dividends and share repurchases during 2011 ● Continuing to build on momentum gene
Slide 6: Opening Remarks
Opening Remarks Ian Read Chairman and Chief Executive Officer Fourth Quarter 2011 Earnings
Slide 7: Financial Review
Financial Review Frank D’Amelio Executive Vice President & Chief Financial Officer Fourth Quarter 2011 Earnings
Slide 8: Income Statement Highlights
Income Statement Highlights ($ Millions, Except Per-Share Amounts and Percentages) Fourth Quarter Full Year 2011 2010 Change 2011 2010 Change Reported Revenues $16,746 $17,354 (4%) $67,425 $67,057 1% Adjusted Income(1) 3,863 3,744 3% 18,217 17,885 2% Adjusted Diluted EPS(1) 0.50 0.47 6% 2.31 2.22 4%
Slide 9: Quarterly Adjusted Income Components
Quarterly Adjusted Income(1) Components ($ Millions, Except Per-Share Amounts and Percentages) Fourth Quarter 2011 2010 Change Revenues $16,746 $17,354 (4%) Cost of Sales(1) 3,362 3,655 (8%) SI&A Expenses(1) 5,347 5,710 (6%) R&D Expenses(1) 2,327 2,794 (17%) Adjusted Total Costs(2) 11,036 12,159 (9%
Slide 10: Impact of Foreign Exchange on Adjusted Income Components
Impact of Foreign Exchange on Adjusted Income(1) Components Compared with the Year-Ago Quarter ($ Millions, Except Percentages) Fourth Quarter 2011 FX Impact Revenues $16,746 $157 1% Cost of Sales(1) 3,362 519 14% SI&A Expenses(1) 5,347 33 1% R&D Expenses(1) 2,327 5 -- Adjusted Total Costs(2) $11,03
Slide 11: Business Revenues
Business Revenues ($ Millions, Except Percentages) Fourth Quarter FX Operational 2011 2010 Change Impact Growth Primary Care $5,411 $5,886 (8%) 1% (9%) Specialty Care 3,820 4,014 (5%) 2% (7%) Emerging Markets 2,264 2,368 (4%) (2%) (2%) Established Products 2,300 2,414 (5%) 2% (7%) Oncology 341 369 (
Slide 12: Emerging Markets Revenue Performance
Emerging Markets Revenue Performance ($ Millions, Except Percentages) ~ $100 ~ $3,200 ~ $3,300 Q4 2011 Biopharma $3,000 Animal Health, Consumer Volume Growth of 3% ~ $850 Healthcare, Nutrition and ~ $1,050 More than Offset by Other Price Reductions of 5%; FY 2011 Biopharma Volume Growth of 10% $2,
Slide 13: 2011 Financial Guidance vs. Actual Results
2011 Financial Guidance(1)(2)(3) vs. Actual Results(3) Guidance Actual Reported Revenues (4) + $66.2 to $67.2 Billion $67.4 Billion Adjusted Cost of Sales as a Percentage of Revenues 19.8% to 20.3% 19.3% + Adjusted SI&A Expenses (4) $19.4 to $19.9 Billion $19.4 Billion Adjusted R&D Expenses (4)
Slide 14: 2012 Financial Guidance
2012 Financial Guidance(1)(2) Reported Revenues $60.5 to $62.5 Billion Previously $62.2 to $64.7 Billion Adjusted Cost of Sales(3) as a Percentage of Revenues 20.5% to 21.5% Adjusted SI&A Expenses(3) $17.0 to $18.0 Billion Previously $17.5 to $18.5 Billion Adjusted R&D Expenses(3) $6.5 to $7.0 Billi
Slide 15: Key Takeaways
Key Takeaways • Met or exceeded all components of 2011 financial guidance • Updated certain components of 2012 financial guidance primarily to reflect unfavorable changes in foreign exchange rates from mid-October 2011 to mid- January 2012 Updated the guidance range for 2012 Adjusted Diluted EPS(1
Slide 16: Q&A Session
Fourth Quarter 2011 Earnings Teleconference Q&A Session January 31, 2012