Slide 1: Fourth Quarter 2007 Earnings Teleconference
Fourth Quarter 2007 Earnings Teleconference January 23, 2008
Slide 2: Introduction
Fourth Quarter 2007 Earnings Teleconference Introduction Amal Naj Senior Vice President, WW Investor Development & Strategy
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
Slide 4: Opening Remarks
Fourth Quarter 2007 Earnings Teleconference Opening Remarks Jeff Kindler Chairman & Chief Executive Officer
Slide 5: Financial Review
Fourth Quarter 2007 Earnings Teleconference Financial Review Frank D’Amelio Senior Vice President & Chief Financial Officer
Slide 6: Income Statement Highlights
Fourth-Quarter 2007 Income Statement Highlights ' ($ Millions, Except per-Share Amounts) Fourth Quarter Full Year 2007 2006 Change 2007 2006 Change Reported Revenues $13,065 $12,603 4% $48,613 $48,371 1% Reported Net Income 2,878 9,449 (70%) 8,298 19,337 (57%) Reported Diluted EPS 0.42 1.32 (68%) 1.
Slide 7: Certain Significant Items
Fourth-Quarter 2007 Certain Significant Items ' ($ Millions, on a Pre-Tax Basis) Fourth Quarter Full Year 2007 2006 2007 2006 Restructuring Charges $213 $495 $2,523 $1,296 Implementation Costs 525 241 1,389 788 Cost-Reduction Initiatives $738 $736 $3,912 $2,084 Charges Related to Exubera (6) – 2,798
Slide 8: Quarterly Adjusted Income Components
Fourth-Quarter 2007 Quarterly Adjusted Income (1) Components ' ($ Millions, Except per-Share Amounts) Fourth Quarter 2007 2006 Change Revenues(1) $12,990 $12,603 3% Cost of Sales(1) 2,266 2,090 8% SI&A Expenses(1) 4,532 4,481 1% R&D Expenses(1) 2,160 2,361 (9%) Provision for Income Taxes(1) 798 848
Slide 9: Quarterly Select Product Highlights
Fourth-Quarter 2007 Quarterly Select Product Highlights ' ($ Millions) Worldwide U.S. International 2007 Change 2007 Change 2007 Change In-Line Products(1) Lipitor $3,428 3% $1,864 (4%) $1,564 13% Viagra 498 10% 220 (1%) 278 21% Celebrex 637 18% 469 14% 168 30% Zyrtec/Zyrtec D 267 (28%) 267 (28%) –
Slide 10: 2007 Financial Guidance vs. Actual
Fourth-Quarter 2007 2007 Financial Guidance vs. Actual ' Guidance Actual Adjusted Revenues(1) (1) $47.5 to $48.0 Billion $48.4 Billion 3 Adjusted Cost of Sales as a Approx. 15.5% Approx. 15.9% Percentage of Revenues Decrease of approx. $600 Decrease of $560 Million Million versus 2006 on a versus 20
Slide 11: 2008 Financial Guidance
Fourth-Quarter 2007 2008 Financial Guidance ' Previous Guidance Revised Guidance(3) Revenues $46.5 to $48.5 Billion $47.0 to $49.0 Billion Decrease of at least $1.5–$2 Decrease of at least $1.5–$2 (1) Adjusted Total Costs Billion versus 2006 on a Billion versus 2006 on a constant currency basis (2)
Slide 12: Key Takeaways
Fourth-Quarter 2007 Key Takeaways ' Exceeded 2007 Revenue and EPS Guidance provided last quarter New products(2) continue to perform well – particularly Chantix, Lyrica and Sutent – and partially offset decreasing revenues from products that have lost U.S. exclusivity – Revenues from these three
Slide 13: Q&A Session
Fourth Quarter 2007 Earnings Teleconference Q&A Session