Slide 1: Third Quarter 2011 Earnings Teleconference
Third Quarter 2011 Earnings Teleconference November 1, 2011
Slide 2: Introduction
Introduction Chuck Triano Senior Vice President, Investor Relations Third 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 Third Quarter 2011 Earnings
Slide 5: CEO Perspectives
CEO Perspectives ● Delivered solid quarterly financial performance despite a challenging global operating environment and the ongoing impact from the loss of exclusivity of several key products in certain geographies ● Sustained focus on enhancing shareholder value Repurchased $2.1 billion of our
Slide 6: Opening Remarks
Opening Remarks Ian Read President and Chief Executive Officer Third Quarter 2011 Earnings
Slide 7: Financial Review
Financial Review Frank D’Amelio Executive Vice President & Chief Financial Officer Third Quarter 2011 Earnings
Slide 8: Income Statement Highlights
Income Statement Highlights ($ Millions, Except Per-Share Amounts and Percentages) Third Quarter 2011 2010 Change Reported Revenues $17,193 $15,995 7% Adjusted Income(1) 4,820 4,352 11% Adjusted Diluted EPS(1) 0.62 0.54 15% Reported Net Income(2) 3,738 866 * Reported Diluted EPS(2) 0.48 0.11 * Repor
Slide 9: Quarterly Adjusted Income Components
Quarterly Adjusted Income(1) Components ($ Millions, Except Per-Share Amounts and Percentages) Third Quarter 2011 2010 Change Revenues $17,193 $15,995 7% Cost of Sales(1) 3,325 2,852 17% SI&A Expenses(1) 4,560 4,581 -- R&D Expenses(1) 2,034 2,155 (6%) Adjusted Total Costs(2) 9,919 9,588 3% Provision
Slide 10: Impact of Foreign Exchange on Adjusted Income Components
Impact of Foreign Exchange on Adjusted Income(1) Components Compared with the Year-Ago Quarter ($ Millions, Except Percentages) Third Quarter 2011 FX Impact Revenues $17,193 $951 6% Cost of Sales(1) 3,325 (291) (10%) SI&A Expenses(1) 4,560 (212) (5%) R&D Expenses(1) 2,034 (38) (2%) Adjusted Total Co
Slide 11: Business Performance
Business Performance ($ Millions, Except Percentages) Third Quarter FX Operational 2011 2010 Change Impact Growth Primary Care $5,948 $5,653 5% 5% -- Specialty Care 3,799 3,717 2% 7% (5%) Emerging Markets 2,438 2,072 18% 6% 12% Established Products 2,230 2,168 3% 7% (4%) Oncology 332 335 (1%) 8% (9%
Slide 12: Continued Expansion in Emerging Markets
Continued Expansion in Emerging Markets ($ Millions, Except Percentages) ~ $600 ~ $3,400 ~ $2,800 ~ $950 Animal Health, Consumer BRIC-MT(1) Markets Healthcare, Nutrition and Contributed ~53% of ~ $750 Other Emerging Markets Growth Established ~ $1,000 Biopharma Revenues in ~ $900 Products BRIC-M
Slide 13: 2011 Financial Guidance
2011 Financial Guidance(1)(2) Reported Revenues $66.2 to $67.2 Billion Previously $65.2 to $67.2 Billion Adjusted Cost of Sales(3) as a Percentage of Revenues 19.8% to 20.3% Previously 19.5% to 20.5% Adjusted SI&A Expenses(3) $19.4 to $19.9 Billion Previously $19.2 to $20.2 Billion Adjusted R&D Expe
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 Other (Income) / Deductions(3) Approximately $1.0 Billion Adjusted Operating Margin(3) High 30%s to Low 40%s Effective Tax Rat
Slide 15: Key Takeaways
Key Takeaways • Delivered solid quarterly financial performance despite a challenging global operating environment and the ongoing impact from the loss of exclusivity of several key products in certain geographies • Updated components of 2011 financial guidance and reaffirmed 2012 financial targets
Slide 16: Third Quarter 2011 Earnings Teleconference Q&A Session
Third Quarter 2011 Earnings Teleconference Q&A Session November 1, 2011