Slide 1: Second Quarter 2014 Earnings Teleconference
Second Quarter 2014 Earnings Teleconference July 29, 2014
Slide 2: Introduction
Introduction Chuck Triano Senior Vice President, Investor Relations Second Quarter 2014 Earnings
Slide 3: Forward-Looking Statements and Non-GAAP Financial Information
Forward-Looking Statements and Non-GAAP Financial Information l 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 Second Quarter 2014 Earnings
Slide 5: CEO Perspectives
CEO Perspectives l We achieved strong operational growth this quarter in a number of areas Ü Lyrica in developed markets, Prevnar in the U.S. and in emerging markets and Celebrex worldwide Ü Recently launched products, including Eliquis, Xeljanz, Xalkori and Inlyta Ü Our consumer business, driven by
Slide 6: Financial Review
Financial Review Frank D’Amelio Executive Vice President & Chief Financial Officer Second Quarter 2014 Earnings
Slide 7: Income Statement Highlights
Income Statement Highlights ($ Millions, Except Per Share Amounts and Percentages) Second Quarter 2014 2013 Change Reported Revenues(1) $12,773 $12,973 (2%) Adjusted Income(2) 3,769 4,003 (6%) Adjusted Diluted EPS(2) 0.58 0.56 4% Reported Net Income(1) 2,912 14,095 (79%) Reported Diluted EPS(1) 0.45
Slide 8: Impact of Foreign Exchange on Adjusted Income Components
Impact of Foreign Exchange on Adjusted Income(1) Components ($ Millions, Except Percentages) Favorable / (Unfavorable) Second Quarter 2014 2013 FX Impact Revenues(1) $12,702 $12,973 ($87) » (1%) Cost of Sales(1) 2,320 2,194 (1) « — SI&A Expenses(1) 3,486 3,550 25 » 1% R&D Expenses(1) 1,714 1,521 (6)
Slide 9: Global Innovative Pharmaceutical (GIP) Selected Financial Highlights
Global Innovative Pharmaceutical (GIP) Selected Financial Highlights ($ Millions, Except Percentages) Second Quarter l Q2 2014 revenues decreased 5% operationally to $3,547M vs. Q2 2013 % Change 2014 2013 Ü LOEs and the loss of Enbrel alliance revenues Total Oper. negatively impacted revenues by $45
Slide 10: Global Vaccines, Oncology and Consumer Healthcare (VOC) Selected Financial Highlights
Global Vaccines, Oncology and Consumer Healthcare (VOC) Selected Financial Highlights ($ Millions, Except Percentages) Second Quarter l Q2 2014 revenues increased 15% operationally to $2,579M vs. Q2 2013 % Change 2014 2013 Ü Driven by strong operational growth of Total Oper. Prevnar, Nexium 24HR, Xa
Slide 11: Global Established Pharmaceutical (GEP) Selected Financial Highlights
Global Established Pharmaceutical (GEP) Selected Financial Highlights ($ Millions, Except Percentages) Second Quarter l Q2 2014 revenues declined 5% operationally to $6,513M vs. Q2 2013 % Change 2014 2013 Ü LOEs, the loss of alliance revenues and Lipitor Total Oper. in developed markets negatively i
Slide 12: 2014 Adjusted Financial Guidance
(1)(2)(3) 2014 Adjusted Financial Guidance $48.7 to $50.7 billion Adjusted Revenues(4) (previously $49.2 to $51.2 billion) Adjusted Cost of Sales(4) as a % of Adjusted Revenues(4) 19.0% to 20.0% $13.3 to $14.3 billion Adjusted SI&A Expenses(4) (previously $13.5 to $14.5 billion) $6.7 to $7.2 billion
Slide 13: Key Takeaways
Key Takeaways • Achieved solid Q2 2014 financial performance Reaffirmed 2014 adjusted diluted EPS(1) guidance, absorbing a ~$0.05 anticipated negative impact from multi-source generic competition for Celebrex in the U.S. in December 2014 and a ~$0.01 negative impact from the planned upfront payment
Slide 14: Second Quarter 2014 Earnings Teleconference Q&A Session
Second Quarter 2014 Earnings Teleconference Q&A Session July 29, 2014