Slide 1: Second Quarter 2011 Earnings Teleconference
Second Quarter 2011 Earnings Teleconference August 2, 2011
Slide 2: Introduction
Introduction Chuck Triano Senior Vice President, Investor Relations Second 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 Second Quarter 2011 Earnings
Slide 5: CEO Perspectives
CEO Perspectives ● Quarterly performance in-line with our expectations driven by, among other things, revenue growth from several key products and savings generated from cost-reduction and productivity initiatives Absorbed the impact of the loss of exclusivity for several key products ● Portfolio
Slide 6: Opening Remarks
Opening Remarks Ian Read President and Chief Executive Officer Second Quarter 2011 Earnings
Slide 7: Financial Review
Financial Review Frank D’Amelio Executive Vice President & Chief Financial Officer Second Quarter 2011 Earnings
Slide 8: Income Statement Highlights
Income Statement Highlights ($ Millions, Except Per-Share Amounts and Percentages) Second Quarter 2011 2010 Change Reported Revenues $16,984 $17,132 (1%) Adjusted Income(1) 4,726 4,927 (4%) Adjusted Diluted EPS(1) 0.60 0.61 (2%) Reported Net Income(2) 2,610 2,475 5% Reported Diluted EPS(2) 0.33 0.31
Slide 9: Quarterly Adjusted Income Components
Quarterly Adjusted Income(1) Components ($ Millions, Except Per-Share Amounts and Percentages) Second Quarter 2011 2010 Change Revenues $16,984 $17,132 (1%) Cost of Sales(1) 3,257 2,841 15% SI&A Expenses(1) 4,950 4,694 5% R&D Expenses(1) 2,059 2,176 (5%) Adjusted Total Costs(2) 10,266 9,711 6% Provi
Slide 10: Impact of Foreign Exchange on Adjusted Income Components
Impact of Foreign Exchange on Adjusted Income(1) Components Compared with the Year-Ago Quarter ($ Millions, Except Percentages) Second Quarter 2011 FX Impact Revenues $16,984 $740 4% Cost of Sales(1) 3,257 (460) (16%) SI&A Expenses(1) 4,950 (187) (4%) R&D Expenses(1) 2,059 (34) (2%) Adjusted Total C
Slide 11: Business Performance
Business Performance ($ Millions, Except Percentages) Second Quarter FX Operational 2011 2010 Change Impact Growth Primary Care $5,870 $5,923 (1%) 4% (5%) Specialty Care 3,699 3,769 (2%) 5% (7%) Emerging Markets 2,415 2,250 7% 4% 3% Established Products 2,317 2,730 (15%) 5% (20%) Oncology 339 349 (3
Slide 12: Continued Expansion in Emerging Markets
Continued Expansion in Emerging Markets ($ Millions, Except Percentages) ~$300 ~$3,350 ~$3,050 $3,000 Animal Health, Consumer ~$950 ~$800 Healthcare, Nutrition and BRIC-MT(1) Markets Other Contributed ~56% of Emerging Markets $2,000 Growth Established ~$950 ~$950 Products Biopharma Revenues in B
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 operational performance in-line with our expectations; absorbing impacts from the loss of exclusivity of several key products • Reaffirm all components of 2011 financial guidance and 2012 financial targets given continued confidence in the business • Portfol
Slide 16: Q&A Session
Second Quarter 2011 Earnings Teleconference Q&A Session August 2, 2011