Slide 1: First Quarter 2011 Earnings Teleconference
First Quarter 2011 Earnings Teleconference May 3, 2011
Slide 2: Introduction
Introduction Chuck Triano Senior Vice President, Investor Relations First 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 President and Chief Executive Officer First Quarter 2011 Earnings
Slide 5: CEO Perspectives
CEO Perspectives ● Solid first quarter performance driven by revenue growth from several key patent-protected products, strong results in Emerging Markets, the addition of legacy King products as well as savings generated from cost- reduction initiatives ● Keenly focused on improving the performance
Slide 6: Opening Remarks
Opening Remarks Ian Read President and Chief Executive Officer First Quarter 2011 Earnings
Slide 7: Financial Review
Financial Review Frank D’Amelio Executive Vice President & Chief Financial Officer First Quarter 2011 Earnings
Slide 8: Income Statement Highlights
Income Statement Highlights ($ Millions, Except Per-Share Amounts and Percentages) First Quarter 2011 2010 Change Reported Revenues $16,502 $16,576 -- Adjusted Income(1) 4,808 4,862 (1%) Adjusted Diluted EPS(1) 0.60 0.60 -- Reported Net Income(2) 2,222 2,026 10% Reported Diluted EPS(2) 0.28 0.25 12%
Slide 9: Quarterly Adjusted Income Components
Quarterly Adjusted Income(1) Components ($ Millions, Except Per-Share Amounts and Percentages) First Quarter 2011 2010 Change Reported Revenues $16,502 $16,576 -- Cost of Sales(1) 3,092 2,831 9% SI&A Expenses(1) 4,501 4,342 4% R&D Expenses(1) 2,017 2,191 (8%) Adjusted Total Costs(2) 9,610 9,364 3% P
Slide 10: Impact of Foreign Exchange on Adjusted Income Components
Impact of Foreign Exchange on Adjusted Income(1) Components Compared with the Year-Ago Quarter ($ Millions, Except Percentages) First Quarter 2011 FX Impact Reported Revenues $16,502 $97 1% Cost of Sales(1) 3,092 64 2% SI&A Expenses(1) 4,501 33 1% R&D Expenses(1) 2,017 4 -- Adjusted Total Costs(2) $
Slide 11: Business Performance
Business Performance ($ Millions, Except Percentages) First Quarter FX Operational 2011 2010 Change Impact Growth Primary Care $5,441 $5,866 (7%) -- (7%) Specialty Care 3,927 3,521 12% -- 12% Established Products 2,367 2,786 (15%) 1% (16%) Emerging Markets 2,178 1,972 10% 2% 8% Oncology 311 361 (14%
Slide 12: Broader Portfolio Driving Revenue Expansion in Emerging Markets
Broader Portfolio Driving Revenue Expansion in Emerging Markets ($ Millions, Except Percentages) ~$300 ~$3,050 ● BRIC-MT(1) Markets Contributed ~58% of Total ~$2,750 Emerging Markets Growth Animal Health, Consumer ~$850 ● Biopharma Revenues in ~$800 Healthcare, Nutrition and BRIC-MT(1) Increased ~10
Slide 13: 2011 Financial Guidance
2011 Financial Guidance(1)(2) Reported Revenues $65.2 to $67.2 Billion Adjusted Cost of Sales(3) as a Percentage of Revenues 19.5% to 20.5% Adjusted SI&A Expenses(3) $19.2 to $20.2 Billion Adjusted R&D Expenses(3) $8.0 to $8.5 Billion Adjusted Other (Income)/Deductions(3) Approximately $1.0 Billion
Slide 14: 2012 Financial Targets
2012 Financial Targets(1)(2) Reported Revenues $62.2 to $64.7 Billion Adjusted SI&A Expenses(3) $17.5 to $18.5 Billion Adjusted R&D Expenses(3) $6.5 to $7.0 Billion Adjusted Operating Margin(3) High 30%s to Low 40%s Adjusted Other (Income) / Deductions(3) Approximately $1.0 Billion Effective Tax Rat
Slide 15: Key Takeaways
Key Takeaways • Quarterly results reflect solid operational performance despite the loss of exclusivity of several products in the U.S. and other geographies • Reaffirm all components of 2011 financial guidance and 2012 financial targets given continued confidence in the business • Expect to complet
Slide 16: Q&A Session
First Quarter 2011 Earnings Teleconference Q&A Session May 3, 2011