Slide 1: Fourth Quarter 2012 Earnings Teleconference
Fourth Quarter 2012 Earnings Teleconference January 29, 2013
Slide 2: Introduction
Introduction Chuck Triano Senior Vice President, Investor Relations Fourth Quarter 2012 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 2012 Earnings
Slide 5: CEO Perspectives
CEO Perspectives ● 2012 was a year of very strong operational and financial performance Drove revenue growth in many of our key products in the patent-protected portfolio Strong Emerging Markets performance ● Allocated capital in ways that enhanced shareholder value Reduced operating costs, co
Slide 6: Financial Review
Financial Review Frank D’Amelio Executive Vice President & Chief Financial Officer Fourth Quarter 2012 Earnings
Slide 7: Income Statement Highlights
Income Statement Highlights ($ Millions, Except Per Share Amounts and Percentages) Fourth Quarter Full Year 2012 2011 Change 2012 2011 Change Reported Revenues $15,068 $16,141 (7%) $58,986 $65,259 (10%) Adjusted Income(1) 3,512 3,784 (7%) 16,476 17,839 (8%) Adjusted Diluted EPS(1) 0.47 0.49 (4%) 2.1
Slide 8: Impact of Foreign Exchange on Adjusted Income Components
Impact of Foreign Exchange on Adjusted Income(1) Components ($ Millions, Except Percentages) Favorable / (Unfavorable) Fourth Quarter 2012 2011 FX Impact Revenues $15,068 $16,141 ($271) (2%) Cost of Sales(1) 3,106 3,083 (240) (8%) SI&A Expenses(1) 4,658 5,173 67 1% R&D Expenses(1) 2,000 2,318 12 1%
Slide 9: Emerging Markets Biopharmaceutical Revenue Mix
Emerging Markets Biopharmaceutical Revenue Mix ($ Millions, Except Percentages) Emerging Markets Business Unit BRIC-MT(1) Biopharmaceutical $2,652, up 20% operationally vs. Q4 2011 $1,160, up 26% operationally vs. Q4 2011 Established Primary Care Primary Care Products +2% -- +21% 24% 25% Established
Slide 10: BRIC-MT Biopharmaceutical Revenue Performance
BRIC-MT(1) Biopharmaceutical Revenue Performance ($ Millions, Except Percentages) Operational Growth / (Decline) $1,200 $1,160 Q4 2012 vs. FY 2012 vs. Q4 2011 FY 2011 $1,000 $952 India 12% 11% Russia 16% 34% $800 Turkey 22% (7%) $600 Mexico 4% 4% $400 Brazil 36% 14% $200 China 34% 32% BRIC-MT(1) 26%
Slide 11: 2012 Financial Guidance vs. Actual Results
2012 Financial Guidance(1)(2)(3) vs. Actual Results(2) Guidance Actual Reported Revenues $58.0 to $59.0 Billion $59.0 Billion Adjusted Cost of Sales(4) as a % of Revenues 18.7% to 19.2% 18.6% Adjusted SI&A Expenses(4) $16.3 to $16.8 Billion $16.3 Billion Adjusted R&D Expenses(4) $7.0 to $7.25 Billio
Slide 12: 2013 Financial Guidance
2013 Financial Guidance(1)(2) Reported Revenues $56.2 to $58.2 Billion Adjusted Cost of Sales(3) as a % of Revenues 19.0% to 20.0% Adjusted SI&A Expenses(3) $15.6 to $16.6 Billion Adjusted R&D Expenses(3) $6.5 to $7.0 Billion Adjusted Other (Income) / Deductions(3) ~$900 Million Effective Tax Rate o
Slide 13: Key Takeaways
Key Takeaways • Achieved top-end of 2012 reported revenue guidance and exceeded 2012 adjusted diluted EPS(1) guidance • Provided initial 2013 financial guidance; reflects full-year contribution from Zoetis Includes $0.02 unfavorable impact to reported and adjusted diluted EPS(1) for ongoing costs
Slide 14: Q&A Session
Fourth Quarter 2012 Earnings Teleconference Q&A Session January 29, 2013