Slide 1: Second Quarter 2008 Earnings Teleconference
Second Quarter 2008 Earnings Teleconference July 23, 2008
Slide 2: Introduction
Second Quarter 2008 Earnings Teleconference Introduction Chuck Triano Senior Vice President, Investor Relations
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 a
Slide 4: Opening Remarks
Second Quarter 2008 Earnings Teleconference Opening Remarks Jeff Kindler Chairman & Chief Executive Officer
Slide 5: Financial Review
Second Quarter 2008 Earnings Teleconference Financial Review Frank D’Amelio Senior Vice President & Chief Financial Officer
Slide 6: Income Statement Highlights
Second-Quarter 2008 Income Statement Highlights ($ Millions, Except Per-Share Amounts) Second Quarter Year To Date 2008 2007 Change 2008 2007 Change Reported Revenues $12,129 $11,084 9% $23,977 $23,558 2% Reported Net Income 2,776 1,267 119% 5,560 4,659 19% Reported Diluted EPS 0.41 0.18 128% 0.82 0
Slide 7: Certain Significant Items
Second-Quarter 2008 Certain Significant Items ($ Millions, on a Pre-Tax Basis) Second Quarter Year to Date 2008 2007 2008 2007 Restructuring Charges $562 $1,035 $739 $1,830 Implementation Costs 405 317 762 491 Cost-Reduction Initiatives 967 1,352 1,501 2,321 Other 77 25 84 35 Total Certain Significa
Slide 8: Quarterly Adjusted Income Components
Second-Quarter 2008 Quarterly Adjusted Income(1) Components ($ Millions, Except Per-Share Amounts) Second Quarter 2008 2007 Change Revenues(1) $12,075 $11,033 9% Cost of Sales(1) 2,036 1,873 9% SI&A Expenses(1) 3,696 3,737 (1%) R&D Expenses(1) 1,869 2,026 (8%) Provision for Income Taxes(1) 925 841 1
Slide 9: Year-to-Date Adjusted Income Components
Second-Quarter 2008 Year-to-Date Adjusted Income(1) Components ($ Millions, Except Per-Share Amounts) Year to Date 2008 2007 Change Revenues(1) $23,871 $23,464 2% Cost of Sales(1) 3,836 3,617 6% SI&A Expenses(1) 7,105 7,050 1% R&D Expenses(1) 3,507 3,654 (4%) Provision for Income Taxes(1) 2,075 2,17
Slide 10: Factors Impacting Adjusted Income Components
Second-Quarter 2008 Factors Impacting Adjusted Income(1) Components Compared with the Year-Ago Quarter ($ Millions, Except Per-Share Amounts) Second Quarter Adjusted Operational Result Fx Impact Revenues(1) $12,075 $247 2% $796 7% Cost of Sales(1) 2,036 (55) (3%) 219 12% SI&A Expenses(1) 3,696 (235)
Slide 11: Cumulative Progress on Cost-Reduction Target
Second-Quarter 2008 Cumulative Progress on Cost-Reduction Target On-track to reduce absolute Cost Reduction Period adjusted total costs(1) by at (2006 currency rates) least $1.5 to $2.0 billion on a FY2007 $600 million constant currency basis(2) for 2008 vs. 2006 Q108 170 million Cumulative oper
Slide 12: Quarterly Select Product Highlights
Second-Quarter 2008 Quarterly Select Product Highlights ($ Millions) Worldwide U.S. International 2008 Change 2008 Change 2008 Change In-Line Products(1) Lipitor $2,976 9% $1,397 1% $1,579 18% Lyrica 614 52% 335 55% 279 48% Celebrex 589 23% 416 22% 173 27% Viagra 463 21% 199 41% 264 9% Xalatan/Xalac
Slide 13: 2008 Financial Guidance
Second-Quarter 2008 2008 Financial Guidance Guidance(4) Revenues $47.0 to $49.0 Billion Decrease of at least $1.5–$2 Billion versus Adjusted Total Costs(1) 2006 on a constant currency basis (3) Adjusted Cost of Sales(2) as a 15.0% to 15.5% Percentage of Revenue (previously 14.5% to 15.5%) Adjusted S
Slide 14: Key Takeaways
Second-Quarter 2008 Key Takeaways Reaffirmed 2008 revenue and adjusted diluted EPS(1) guidance Steady growth from several key products – including Lyrica, Geodon, Viagra, Celebrex and Sutent As anticipated, year-over-year quarterly results were negatively impacted by loss of U.S. exclusivity o
Slide 15: Q&A Session
Second Quarter 2008 Earnings Teleconference Q&A Session