Slide 1: Fourth Quarter 2013 Earnings Teleconference
Fourth Quarter 2013 Earnings Teleconference January 28, 2014
Slide 2: Introduction
Introduction Chuck Triano Senior Vice President, Investor Relations Fourth Quarter 2013 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 2013 Earnings
Slide 5: CEO Perspectives
CEO Perspectives Generated solid financial results in Q4 2013; overall financial performance for 2013 was strong Strengthened our innovative core by advancing key R&D programs, created significant value for our shareholders through disciplined capital allocation and our commercial businesses per
Slide 6: Financial Review
Financial Review Frank D’Amelio Executive Vice President & Chief Financial Officer Fourth Quarter 2013 Earnings
Slide 7: Income Statement Highlights
Income Statement Highlights ($ Millions, Except Per Share Amounts and Percentages) Fourth Quarter Full Year 2013 2012 Change 2013 2012 Change Reported Revenues(1) $13,558 $13,891 (2%) $51,584 $54,657 (6%) Adjusted Income(2) 3,686 3,391 9% 15,288 15,749 (3%) Adjusted Diluted EPS(2) 0.56 0.46 22% 2.22
Slide 8: BRIC-MT Biopharmaceutical Revenue Performance
BRIC-MT(1) Biopharmaceutical Revenue Performance ($ Millions, Except Percentages) $1,198 Operational Growth / (Decline) $1,160 Q4 2013 vs. FY 2013 vs. Q4 2012 FY 2012 India (10%) 2% Turkey (32%) (28%) Russia 8% 11% Mexico 15% 3% Brazil 5% (1%) China 19% 15% BRIC-MT(1) 6% 4% Volume Growth of 6% With
Slide 9: Impact of Foreign Exchange on Adjusted Income Components
Impact of Foreign Exchange on Adjusted Income(1) Components ($ Millions, Except Percentages) Favorable / (Unfavorable) Fourth Quarter 2013 2012 FX Impact Revenues(1) $13,493 $13,891 ($397) (3%) Cost of Sales(1) 2,672 2,686 166 6% SI&A Expenses(1) 4,093 4,276 75 2% R&D Expenses(1) 1,790 1,884 10 1% T
Slide 10: 2013 Financial Guidance vs. Actual Results
2013 Financial Guidance(1)(2) vs. Actual Results Guidance Actual Adjusted Revenues(3) $50.8 to $51.8 Billion $51.5 Billion Adjusted Cost of Sales(3) as a % of Adjusted Revenues(3) 18.0% to 18.5% 18.0% Adjusted SI&A Expenses(3) $14.2 to $14.7 Billion $14.2 Billion Adjusted R&D Expenses(3) $6.3 to $6.
Slide 11: 2014 Financial Guidance
2014 Financial Guidance(1)(2) Adjusted Revenues(3) $49.2 to $51.2 Billion Adjusted Cost of Sales(3) as a % of Adjusted Revenues(3) 19.0% to 20.0% Adjusted SI&A Expenses(3) $13.5 to $14.5 Billion Adjusted R&D Expenses(3) $6.4 to $6.9 Billion Adjusted Other (Income) / Deductions(3) ~$100 Million Effec
Slide 12: Key Takeaways
Key Takeaways • Achieved or exceeded all elements of our 2013 financial guidance despite a challenging operating environment Completed important strategic initiatives in 2013 Separation of our Animal Health business through the disposition of Zoetis Formation of the new commercial structure • Pr
Slide 13: Fourth Quarter 2013 Earnings Teleconference Q&A Session
Fourth Quarter 2013 Earnings Teleconference Q&A Session January 28, 2014