Slide 1: Third Quarter 2007 Earnings Teleconference
Third Quarter 2007 Earnings Teleconference October 18, 2007 Valid as of October 18, 2007
Slide 2: Introduction
Third Quarter 2007 Earnings Teleconference Introduction Amal Naj Senior Vice President, WW Investor Development & Strategy Valid as of October 18, 2007
Slide 3: Forward-Looking Statement and Non-GAAP Financial Information
Forward-Looking Statement 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
Slide 4: Opening Remarks
Third Quarter 2007 Earnings Teleconference Opening Remarks Jeffrey Kindler Chairman & Chief Executive Officer Valid as of October 18, 2007
Slide 5: Financial Review
Third Quarter 2007 Earnings Teleconference Financial Review Frank D’Amelio Senior Vice President & Chief Financial Officer Valid as of October 18, 2007
Slide 6: Income Statement Highlights
Third-Quarter 2007 Income Statement Highlights ' ($ millions, except per-share amounts) Third Quarter Year to Date 2007 2006 Change 2007 2006 Change Reported Revenues $ 11,990 $ 12,280 (2%) $ 35,548 $ 35,768 (1%) Reported Net Income 761 3,362 (77%) 5,420 9,888 (45%) Reported Diluted EPS 0.11 0.46 (7
Slide 7: Certain Significant Items
Third-Quarter 2007 Certain Significant Items ' ($ in millions on a pre-tax basis) Third Quarter Year to Date 2007 2006 2007 2006 Cost-Reduction Initiatives $ 810 $ 427 $ 3,131 $ 1,348 - Restructuring Charges 437 245 2,267 801 - Implementation Costs 373 182 864 547 Sanofi-aventis R&D Milestone - - -
Slide 8: Charges related to Exubera
Third-Quarter 2007 Charges related to Exubera ' ($ in millions) Intangible Assets $1,105 Inventory 661 Fixed Assets 454 Other Exit Costs 584 $ 2,804 Represents the Charges Related to our Decision to Exit Exubera - - Approximately $2.2 Billion Represents Non-Cash Charges while $600 Million Represents
Slide 9: Adjusted Income Components
Third-Quarter 2007 Adjusted Income(1) Components ' ($ millions, except per-share amounts) Third Quarter 2007 2006 Change Revenues(1) $ 11,950 $ 12,280 (3%) Cost of Sales(1) 1,810 1,887 (4%) SI&A Expenses(1) 3,638 3,691 (1%) R&D Expenses(1) 1,730 1,825 (5%) Provision for Income Taxes(1) 1,099 1,182 (
Slide 10: Adjusted Income Components (Year to Date)
Third-Quarter 2007 Adjusted Income(1) Components ' ($ millions, except per-share amounts) Year to Date 2007 2006 Change Revenues(1) $ 35,414 $ 35,768 (1%) Cost of Sales(1) 5,427 5,119 6% SI&A Expenses(1) 10,688 10,876 (2%) R&D Expenses(1) 5,384 5,152 5% Provision for Income Taxes(1) 3,271 3,381 (3%)
Slide 11: Quarterly Select Product Highlights
Third-Quarter 2007 Quarterly Select Product Highlights ' ($ in millions) WORLDWIDE U.S. INTERNATIONAL 2007 Change 2007 Change 2007 Change In-Line Products(1) Lipitor $ 3,170 (5%) $ 1,810 (13%) $ 1,360 9% Viagra 450 6% 208 4% 242 9% Celebrex 577 8% 433 3% 144 23% Zyrtec/Zyrtec D 428 8% 428 8% - - Xal
Slide 12: 2007 Financial Guidance
Third-Quarter 2007 2007 Financial Guidance ' Previous Guidance Revised Guidance Revenues $47.0 to $48.0 Billion $47.5 to $48.0 Billion Adjusted Cost of Sales (1) (2) Approx. 15.0% Approx. 15.5% Decrease of greater than $500 Decrease of approx. $600 Million versus 2006 on a constant Million versus 20
Slide 13: 2008 Financial Guidance
Third-Quarter 2007 2008 Financial Guidance ' Previous Guidance Revised Guidance Revenues $46.5 to $48.5 Billion $46.5 to $48.5 Billion Reduction of at least Reduction of at least $1.5 to $2.0 Billion from $1.5 to $2.0 Billion from Adjusted Total Costs(4) 2006 2006 on a constant currency basis(2) Rep
Slide 14: Key Takeaways
Third-Quarter 2007 Key Takeaways ' On-Track to Achieve 2007 Revenue & Adjusted Diluted EPS(1) Guidance Raised Lower End of Range on Revenues and Adjusted Diluted EPS(1) Reaffirm 2008 Guidance Total Cost Reduction Compared to 2006 At Constant Exchange Rates(2) $2.8 Billion Pre-tax Charges R
Slide 15: Q&A Session
Third Quarter 2007 Earnings Teleconference Q&A Session Valid as of October 18, 2007