Dave Denton: Thank you, Albert, and good morning to everyone. Over the past 24 months, Pfizer has made important investments to position it squarely on track to achieve profitable and sustainable growth particulary in the back half of this decade. We have strategically invested to expand our commercial portfolio and our late-stage pipeline, strengthen our market launch capabilities, and enhanced innovation through internal R&D and business development actions. These deliberate efforts continue to solidify Pfizer’s ability to overcome upcoming LOEs and drive sustainable revenue growth all while enhancing long-term shareholder value. To further support our long-term growth objectives, we are executing a capital allocation strategy designed to effectively deploy our cash. Our strategy is focused on three main pillars: first is reinvesting in our business; second is growing our dividends over time; and finally, making value-enhancing share repurchases. In the first half of 2023 alone, we’ve invested $5.2 billion in internal R&D; returned $4.6 billion to shareholders via our quarterly dividend; and allocated approximately $43 billion towards the proposed acquisition of Seagen. During the second quarter, Pfizer successfully completed a $31 billion unsecured debt offering across 8 tranches. The net proceeds of this debt offering will be used to substantially fund the Seagen acquisition. The new debt carries a weighted average yield of 4.93% and a weighted average maturity of 16.3 years, consistent with our expectations. On a full year run rate basis, the annual financing cost associated with the acquisition is expected to be nearly $2 billion. With the completion now of this debt offering, the company is now positioned to close the Seagen acquisition immediately upon post regulatory approvals. While we plan to continue investing in our business, we expect to de-lever our capital structure following the closing of Seagen transaction. As we de-lever it is our expectation to return to a more balanced capital allocation strategy inclusive of share repurchases. Now, with that, let me briefly cover a few highlights of our quarterly financial performance. As Albert said, our Q2 results were solid and in line with our expectations from both a top and bottom-line perspective, albeit slightly better than EPS consensus. As expected in our guidance, our overall Q2 revenues declined 53% operationally. The contraction of revenues was driven by the anticipated decline in Paxlovid and Comirnaty sales. We expect these products to transition to a commercial market in the second half of this year. Our operational revenue growth excluding our COVID products was in line with expectations at 5% versus Q2 of LY, with strong contributions from the inclusion of Nurtec and Oxbryta, as well as the continued growth from the Vyndaqel family. During Q2, adjusted SI&A expenses were $3.4 billion and grew 20% operationally versus LY. We continue to invest in support of our upcoming launches and grow our recently acquired products. While it’s clear that these near-term investments are dampening our current profitability levels, we are laser-focused on maximizing the longer-term performance of these products. Now, moving to the bottom line, reported diluted EPS this quarter declined by 77% to $0.41, while adjusted diluted earnings per share of $0.67 declined 65% on an operational basis. Earnings compressed at a greater rate than revenues, primarily due to the steep and anticipated contraction in Paxlovid sales during the quarter. Once again, foreign exchange movements continued to unfavorably impact our results, reducing second quarter revenues by approximately $280 million, or 1%, and adjusted diluted earnings per share by $0.05, or 2%, compared to last year. Now that we are at the halfway point of our 2023 financial plan, I’d like to take a moment to reflect on how we are executing across our business while navigating within an incredibly unique and dynamic environment. As a management team, we remain committed to transparency and sharing our assessment of the evolving marketplace given the magnitude of launches; the ongoing shifting nature of the COVID landscape; and the continued integration of acquired assets. Let me begin by elaborating on our full-year 2023 financial guidance. We are narrowing our expectations for revenues to between $67 billion to $70 billion and maintaining guidance for adjusted diluted earnings per share of $3.25 to $3.45 for the full year. For our more durable and predictable non-COVID revenues, we are updating our guidance range to 6% to 8% operational revenue growth. From a launch timing standpoint, I’ll point out that the majority of our 2023 launches are anticipated to occur in the second half of 2023 and our commercialization schedule remains materially unchanged. As a company, we always strive to achieve the highest revenue level possible while maintaining a realistic view of key inputs that inform our outlook. Regarding RSV for older adults, the shared decision-making recommendation by ACIP is likely to slow its uptake in the U.S. In addition, the recent approval of Talzenna in the U.S. results in a more narrow patient population than originally planned. These factors coupled with the impact of the damaged Rocky Mount manufacturing facility presents near-term revenue challenges. However, we expect positive revenue momentum as we exit 2023 and head into 2024. Importantly, the long-term outlook for our non-COVID business remains intact relative to our 2030 ambitions. Turning now to our less predictable and more variable COVID portfolio. Year-to-date we have booked slightly over 40% of the $21.5 billion full-year revenue forecast for both Comirnaty and Paxlovid with the important fall vaccination and respiratory infection season ahead of us. We are acutely aware that COVID demand depends on many evolving market variables making the range of potential revenue outcomes increasingly large and difficult to predict with certainty. These variables include overall levels of vaccination and infection rates; the speed of draw-down of government inventory levels; and the mutating nature of the virus itself, just to name a few. In the interest of public health and with the important fall season ahead of us, we are maintaining our COVID revenue outlook for the year while continuing to invest, largely on a variable expense basis, to support our COVID products in 2023. These variable investments are important to support our efforts to reach as many patients as possible, helping to ensure the most at-risk individuals are both vaccinated and treated while maintaining our leading market share. We are proud of what we have achieved through the COVID portfolio, and this has allowed the Company to invest in support of its growth agenda for the back half of this decade. Our visibility into future COVID revenues and demands should improve through the remainder of 2023, as we gain clarity on a more typical annual revenue run-rate. We are well aware that our 2023 profit outlook is currently being dampened by incremental costs in support of our launches, as well as higher R&D investments aligned with the Company’s current revenue base. We remain committed to both defending and growing our overall level of profitability. As Albert mentioned earlier, we expect this fall’s performance of our COVID-19 products to help us more effectively forecast future sales performance. To that end, if our COVID-19 revenues are less than what we have assumed, we are prepared to launch an enterprise-wide cost improvement program aligned with the longer-term revenue projections for our business. This program would be designed to support our objective of growing our operating profit margin and we would expect it to begin to yield results in 2024. We look forward to sharing specific details of this program in our upcoming earnings calls. In closing, this is an extraordinary time for Pfizer. Our confidence and our commitment to our strategy and to achieving our 2030 goals is unwavering. We will continue to focus our efforts to drive growth while enhancing long-term shareholder value. And with that, let me now turn it over to Mikael.

adjusted diluted earnings per share declined 65% on an operational basis


David Denton : Thank you, Albert, and good morning, everyone. As we enter 2024, we are clearly focused on a small number of critical priorities. These priorities include building a world-class oncology organization, ensuring the next wave of pipeline innovations, maximizing our new product portfolio performance with a more efficient commercial structure, and finally right-sizing our cost base. With that said, I’ll start this morning with our full-year and our fourth quarter results, then I’ll touch on our capital allocation priorities. I'll finish this morning with a few comments on our 2024 guidance and the near-term expectations that set this year as a foundational year to drive our growth potential in the latter half of the decade. For the full-year 2023, we recorded revenues of $58.5 billion, achieving 7% operational growth, solidly in line with our expectations when excluding contributions from both Comirnaty and Paxlovid. The significant sales decline in our COVID products, including a $3.5 billion revenue reversal for Paxlovid, were the primary drivers of an overall 41% operational decrease year-over-year. And with the expectation that Seagen will be a substantial growth contributor in 2024 and beyond, our full-year and fourth quarter results include approximately $120 million in Seagen product revenue after the close of the acquisition on December 14. On the bottom line, we reported full-year 2023 diluted EPS of $0.37 a share, a 93% year-over-year decline, and adjusted diluted earnings per share of $1.84, down 72% versus year-over-year. This decline is primarily due to a significant decrease in sales for both Comirnaty and Paxlovid; the impact of the $3.5 billion revenue reversal for Paxlovid revenues in the fourth quarter related to an expected return of an estimated 6.5 million unused EUA-labeled treatment courses from the U.S. government; and finally a non-cash inventory write-off and other charges of $5.6 billion recorded in the third quarter for Paxlovid and to a lesser extent Comirnaty. Now turning to the quarter, I’d like to highlight that we delivered a solid 8% year-over-year operational revenue growth, again, excluding Comirnaty and Paxlovid. Contributing to this strong performance were our newly approved RSV vaccine as well as Vyndaqel and Eliquis; partially offset by lower revenues for Ibrance and the Prevnar Family. However, our Q4 results, both top and bottom-line, continued to be significantly, and negatively, impacted by our COVID products on a year-on-year basis. Revenues declined 42% operationally, the results were significant decrease in both Comirnaty and Paxlovid sales. Adjusted cost of sales as a percentage of revenues increased by 12 percentage points driven primarily by the $3.5 billion non-cash Paxlovid revenue reversal, and to a much lesser extent, unfavorable changes in sales mix. Overall, our adjusted operating expenses declined 10%, compared to Q4 of last year. Adjusted SI&A expenses increased 1% operationally in the quarter, primarily driven by the timing of marketing and promotional activities, including those related to recently launched and acquired products. And consistent with our strategy, we have been focused on re-prioritizing our R&D spending to enhance overall returns. Adjusted R&D expenses decreased 24% operationally, driven primarily by lower spending across both vaccine programs and certain acquired assets, as well as lower compensation-related expenses. Both our reported diluted loss per share of $0.60 and our adjusted diluted earnings per share of $0.10 for the quarter were negatively impacted by the $3.5 billion Paxlovid revenue reversal, which dampened EPS by approximately $0.54. Continued declines in both Comirnaty and Paxlovid sales also negatively affected our performance in the quarter. Foreign exchange movements had an immaterial impact compared to last year's fourth quarter. As we are increasingly focused on prioritizing our investments to drive forward-looking growth, our GAAP results include a $1.4 billion intangible asset impairment charge associated with etrasimod, based on changes in development plans for additional indications and overall revenue expectations. But I will point out that this product is still projected to contribute over a $1 billion in peak annual sales. Additionally, we recorded a nearly $1 billion intangible asset impairment for Prevnar 13 reflecting a transition to vaccines with higher sero-type coverage. As discussed in prior quarters, our capital allocation strategy is designed to enhance shareholder value and is based on three core pillars. First is growing our dividend. Second is reinvesting in the business. And finally is making share repurchases after de-levering our balance sheet. For 2023, we returned $9.2 billion to shareholders via our quarterly dividend, we have invested $10.7 billion in internal R&D and finally, we have invested approximately $44 billion in completed business development transactions, net of cash acquired, essentially all for the acquisition of Seagen. Our expectation is to maintain and grow our dividend while de-levering our capital structure, with a gross leverage target of 3.25x and a goal to preserve our credit rating and access to Tier 1 commercial paper. Upon achieving our de-levering goals, we anticipate returning to a more balanced capital allocation strategy, inclusive of share repurchases. Now given that we issued our full-year 2024 revenue and adjusted diluted EPS guidance on December 13, let me just hit a few of the highlights. We expect total company full-year '24 revenues to be in the range of $58.5 billion to $61.5 billion, which reflects our expectation of strong contributions across our product portfolio. Importantly, excluding Comirnaty and Paxlovid, we anticipate operational revenue growth of 8%-10%. We remain confident on delivering at least $4 billion of net savings from our cost-realignment program by the end of the year. We believe right sizing the cost base will put us on a strong footing towards margin expansion and increased operational efficiency moving forward. We expect adjusted diluted earnings per share to be in the range of $2.05 to $2.25 a share for the full-year 2024 and as a reminder, this range is inclusive of an anticipated $0.40 of earnings dilution from the Seagen acquisition, and again with the vast majority of this dilution resulting from the financing costs associated with the deal. Cycling into 2024, we have significantly invested in our business to fuel our longer-term growth, and the foundation is set to deliver on our commitments to enhance long-term shareholder value. We are acutely focused on driving near-term performance while solidifying our growth expectations for the back half of the decade. And with that, I'd like to turn it back over to Albert to begin our Q&A session.

adjusted diluted earnings per share fourth quarter


Dave Denton: Thank you, Albert, and good morning, everyone. As we close out the first half of the year, I’m very pleased by our second quarter results. We continue our relentless focus on execution, demonstrating our ability to both protect and grow our core brands while also continuing to advance our science-led transformation by investing in key TAs to build durable franchises. Our initiatives to right size OpEx and reduce cost of goods will result in a more efficient organization, setting the stage for strong capital returns and long-term improved shareholder value enabling our commitment to both maintain and to grow our dividend. This morning, I will briefly review our second quarter results including some one-time items, touch on our capital allocation priorities, and wrap up with an update on our 2024 financial guidance, our key priorities, and expectations for the remainder of this year. Turning first to Q2 performance versus the same period last year; let’s walk down the P&L. Total company revenues for the quarter were $13.3 billion, reflecting operational growth of 3%. Our revenue and cash flow continue to be impacted by the post-pandemic COVID environment on a global basis but to a much lesser extent than prior quarters. Looking at the business excluding our COVID products, we demonstrated strong commercial execution across the enterprise, resulting in 14% operational revenue growth in the quarter. Performance was positively impacted by our continued focus on key products and geographies; refined allocation of commercial field resources globally; and further optimization of our marketing resources into key priority areas. Contributing to this performance was our acquired products from Seagen as well as Nurtec, alongside in-line products Vyndaqel, Eliquis and Xtandi. As expected, dampening our growth in the quarter were Xeljanz and Ibrance. Adjusted Gross Margin for the second quarter was 79%, compared to 76% last year, and was primarily the result of favorable sales mix from our non-COVID products, as well as continued strong cost management across our manufacturing network. Improvements in our gross margin rate will continue to be a focus for the company over the next few years as we execute on our recently announced Manufacturing Optimization Program. This new program and together with our cost realignment program is focused on returning the company to pre-pandemic operating margins on a mix adjusted basis excluding Comirnaty. Phase 1 of the Manufacturing Optimization Program, which focuses on operational efficiencies, is well underway now. This first phase is expected to deliver approximately $1.5 billion in savings by the end of 2027, some of which is anticipated to be realized beginning in 2025. Total Adjusted operating expenses increased by 5% operationally to $6.3 billion and include spending from our legacy Seagen business. Looking at the components, adjusted SI&A expenses increased 8% driven primarily by marketing and promotional expenses for recently launched as well as acquired products. Adjusted R&D expenses increased 2% operationally driven primarily by increased spending related to the acquisition of Seagen, partially offset by lower spending primarily the result of our cost realignment program. Q2 reported diluted earnings per share was $0.01 and our adjusted diluted EPS was $0.60. Unique one-time items included in our GAAP results and excluded from our adjusted results, this quarter include a $1.3 billion charge related to our Manufacturing Optimization Program primarily for severance, and a $230 million charge for IPR&D asset impairment and other related costs associated with the discontinuation of our DMD program. Additionally, we expect to record a charge of approximately $400 million in the third quarter of 2024 after a decision was made in July to sell one of our facilities as a result of the discontinuation of the DMD effort. Now let me quickly touch upon our capital allocation strategy, which is designed to enhance long-term shareholder value. Our strategy consists of maintaining and growing our dividend over time, reinvesting in our business at an appropriate level of financial return; and finally making value enhancing share repurchases after de-levering our balance sheet. In the first half of 2024, we returned $4.8 billion to shareholders via our quarterly dividend; invested $5.2 billion in internal R&D; and as expected, the completed business development activity was minimal. Our commitment to de-levering our capital structure to a gross leverage target of 3.25 times remains a key priority. In support of that goal, year-to-date, we have paid down approximately $2.25 billion in maturing debt, including $1 billion in May of outstanding notes. And though we did not monetize any Haleon shares in Q2, we expect to resume monetization of our 23% Haleon stake in the future. I would also note that once our Haleon ownership is less than 20%, our accounting will transition from recording equity income and will no longer be included in our adjusted results. This change is factored into our long-term financial planning and as well as our guidance. As we’ve previously stated previously, we expect operating cash flow to be significantly below typical levels this year and particularly during the first half of 2024, due to the timing of certain payments and one-time expenses. We expect heavily weighting of revenues to the fourth quarter as our business has become more seasonal in nature with the potential that a high level of cash collections may carry over into Q1 of 2025. Despite this near-term pressure, clearly, our objective remains to return to a more balanced capital allocation strategy over time. Now, let me spend just a few minutes on our outlook for the remainder of the year. We entered 2024 focused on delivering on our financial commitments as well as commercial performance. With a successful first half now complete, we believe it is appropriate to update our full year earnings outlook to reflect our strong business performance. I’ll remind you that our revised guidance assumes the seasonal cadence of our product portfolio, and that we expect Paxlovid results to trend with infection rates. With that said, we are raising our full year revenue range by $1 billion and our adjusted diluted earnings per share by $0.30. We now expect revenues in the range of $59.5 billion to $62.5 billion and operational revenue growth excluding COVID products is projected to be 9% to 11%. COVID product revenues are now expected to be $8.5 billion for the year; $5 billion for Comirnaty and $3.5 billion for Paxlovid. Our guidance for adjusted SI&A and adjusted R&D remains unchanged while our effective tax rate on adjusted income is now expected to be approximately 13%; and, lastly, we expect adjusted diluted earnings per share of $2.45 to $2.65 primarily reflecting the increase to the top line and the revised tax rate among other items. As a reminder, our EPS guidance includes an anticipated $0.40 of earnings dilution from the Seagen acquisition, largely due to financing cost. In closing, we remain on track to deliver at least $4 billion of net savings from our cost-realignment program by the end of this year. This improvement in our cost base alongside our new initiatives focused on manufacturing is expected to put us on strong footing towards margin expansion and improved financial returns. Additionally, our continued focus on execution and our recent investments have positioned the company for continued success moving forward. This quarter’s results are a testament to the performance of our commercial business and our prudent approach to improving our cost base. Though we’ve had a strong first half, we do not take lightly the continued focus needed to deliver in the second half considering the seasonality of our respiratory products. We are clearly striving to bring about improved performance on both the top and bottom lines through focus, execution and delivering on our near-term commercial and financial goals. 2024 is clearly a foundation year for Pfizer. Our achievements to date sets the stage for generating compelling shareholder value. Through our science-led transformation, we will methodically build off this base and with breakthroughs and innovation driving growth in the back half of the decade. And with that, I’d now like to turn it back over to Albert to start our Q&A.

adjusted diluted earnings per share $2.45 to $2.65


Dave Denton: Thank you, Albert, and good morning, everyone. I will build on Albert's comments by reinforcing that we are very pleased with the financial results for the third quarter of 2024. These results demonstrate that our focus and our execution against our 5 strategic priorities are driving positive patient outcomes and continued financial and operational strength. In addition to our strong top line performance, our cost reduction programs are creating a more efficient organization, setting the stage for increased capital returns and supporting our commitment to both maintaining and growing our dividend, all while enhancing shareholder value. This morning, I will briefly review our Q3 P&L performance, I'll highlight our capital allocation priorities and touch upon our full year 2024 financial guidance. Additionally, as we approach the end of the year, I will also share several modeling considerations as we began to plan for 2025. Turning first to the third quarter performance versus the same period of last year. Let me walk on the P&L. Total company revenues were $17.7 billion, representing an impressive 32% operational growth. Our COVID-19 products were significant contributors with PAXLOVID generating $2.7 billion in revenue. This included $442 million related to delivering 1 million treatment courses to the U.S. Government Strategic National Stockpile. COMIRNATY, our COVID-19 vaccine contributed $1.4 billion in revenue. Our COVID-19 products were not the only drivers during the quarter. Our non-COVID products also exhibited robust performance with revenues of $13.6 billion, reflecting 14% operational year-over-year growth. This performance shows that our refined commercial approach is working. We continue to focus on key products and geographies, we've refined how we allocate our commercial field resources globally and we're further optimizing our marketing resources into key priority areas. We saw strong contribution from our recently acquired Seagen products, including Passive, which continues its momentum following the results of the EV302 study last year. Other key growth drivers included VYNDAQEL, ELIQUIS, XTANDI and NURTEC, partially offset by declines in Xeljanz and Ibrance. Adjusted gross margin for the third quarter is approximately 70%, primarily the result of a net unfavorable mix related to our COVID-19 products, primarily due to the COMIRNATY profit split with BioNTech and applicable royalty expenses, as well as a slight dampening due to the associated costs incurred with the withdrawal of Oxbryta. All of this was partially offset by our ongoing focus on cost management across our manufacturing network. We continue to expect gross margins to be in the mid-70s for the full year. And as previously communicated, long-term improvements in gross margins will remain a key focus for the company over the next several years. We expect to achieve savings from Phase I of our manufacturing optimization program beginning in 2025 and deliver approximately $1.5 billion in savings for the first phase by the end of 2027. In parallel, we continue to evaluate our strategy for both Phase II and Phase III, which will focus on network structure and product portfolio, respectively. And we expect to have more information to share on those components of the program once they become available. Total adjusted operating expenses decreased 2% operationally to $5.8 billion. And I will note that this amount includes spending acquired via our Seagen transaction. And looking at the components, adjusted SI&A expenses increased 1% operationally, driven primarily by marketing and promotional expenses for recently launched and acquired products partly offset by a reduction in the U.S. health care reform fees. Adjusted R&D expenses decreased 4% operationally, driven primarily by lower spending on certain vaccine programs as well as our cost realignment program, partially offset by an increased spending related to the Seagen acquisition. We continue to be disciplined with our operational expense management and remain on track to deliver at least $4 billion in net cost savings from our cost realignment program by year-end. Q3 reported diluted earnings per share was $0.78 in the quarter and our adjusted earnings per share was $1.06, benefiting from our top line performance and efficient operating structure as well as a favorable tax rate driven primarily by jurisdictional mix. As mentioned last quarter, unique onetime items included in our GAAP results and excluded from our adjusted results this quarter include a $420 million charge related to the expected sale of one of our facilities, resulting from the discontinuation of our DMD program earlier this year. Now let me quickly touch upon our capital allocation strategy, which is designed to enhance long-term shareholder value. Our strategy consists of both maintaining and growing our dividend over time, reinvesting in our business at an appropriate level of financial return and making value-enhancing share repurchases after delevering our balance sheet. In the first 9 months of '24, we returned $7.1 billion to shareholders via our quarterly dividend, invested $7.8 billion in internal R&D and as we expected, completed business development activity was minimal. Our commitment to delevering our capital structure to a gross leverage target of 3.25x remains a key priority. In support of that goal, year-to-date, we have delevered by approximately $4.4 billion, paying down approximately $2.3 billion in maturing debt and approximately $2.1 billion in commercial paper. And in October, we monetized another tranche of our Helion shares, which for reporting purposes is a Q4 event. We received approximately $3.5 billion in net cap proceeds, and our ownership in Helion was reduced from approximately 23% to approximately 15%. Year-to-date, we have received approximately $6.9 billion of net cash proceeds from the sale of our shares. We intend to monetize our remaining Helion investment in a prudent fashion considering our cash flow requirements and future market conditions. Overall, in Q3, we generated robust operating cash flows, which combined with the Helion net sale proceeds of approximately $3.5 billion, resulting in significant cash flow generation as we enter the fourth quarter. Our objective remains to delever and return to a more balanced allocation of capital between reinvestment and direct return to shareholders over time. Now let me spend just a few minutes on our outlook for the full year. Based on our focused execution and strong year-to-date results, we are raising our full year '24 revenue guidance by $1.5 billion and our adjusted diluted earnings per share by $0.30. We now expect revenues in the range of $61 billion to $64 billion and operational revenue growth, excluding COVID-19 products is unchanged at 9% to 11% and takes into consideration reduction of sales associated with Oxbryta. COVID-19 product revenues are now expected to be $10.5 billion, $5 billion for COMIRNATY and $5.5 billion for PAXLOVID. Our guidance for adjusted SI&A, adjusted R&D and our effective tax rate on adjusted income remains unchanged. And last, we expect adjusted diluted earnings per share of $2.75 to $2.95, primarily reflecting the top line increase and absorbing the Oxbryta impact. As a reminder, our EPS guidance includes an anticipated $0.40 of earnings dilution from the Seagen acquisition, largely due to financing costs. Now as we begin to look towards next year, I want to touch on a few modeling considerations. As we've previously discussed, there are several nonrecurring items included in our 2024 results. First, during 2024, PAXLOVID revenue included a U.S. government revenue credit true-up and the fulfillment of our obligation to the U.S. National Strategic Stockpile. Second, given our ownership of Helion is now below 20%, we will no longer record equity income from that investment in our adjusted earnings beginning in 2025. And finally, our 2024 tax rate on adjusted income was favorably impacted by timing with respect to the impact of Pillar 2 and to a lesser extent, audit settlements. All in, these items are expected to have a favorable impact on full year 2024 adjusted diluted earnings per share of approximately $0.30. In closing, I'm extremely pleased with our third quarter 2024 results and our overall performance this year. Our team remains dedicated to strong operational execution, and we believe our cost-saving programs will drive enhanced operating leverage over time that will enable us to consistently deliver on our financial commitments to our shareholders. We are committed to driving long-term value creation through scientific leadership, portfolio strength and productivity across all aspects of our business. And with that, I'll now turn it back over to Albert.


revenues $67 billion to $70 billion adjusted diluted earnings per share $3.25 to $3.45


Dave Denton: Thank you, Albert, and good morning, everyone. I'll build on Albert's comments by reinforcing that we are very pleased with the financial results for both the fourth quarter as well as the full-year of 2024. These results demonstrate that our focus and execution against our strategic priorities are driving both positive patient outcomes as well as financial and operational strength. In addition to our strong top line performance, our cost reduction programs are creating a more efficient organization, driving operating margin improvement. And as we move into 2025, these efforts will continue to lay the groundwork for potential increased capital returns and reinforce our commitment to maintaining and growing our dividend while enhancing long-term shareholder value. With that said, let me start with our full-year and fourth quarter results, then I'll touch on our capital allocation priorities. I'll finish up with a few comments on our 2025 guidance, which we are reaffirming today, and our near-term expectations that will continue to drive our growth potential in the latter half of the decade. For the full-year of 2024, we recorded revenues of $63.6 billion versus $59.6 billion last year. Importantly, our operational revenue growth when excluding contributions from our COVID products was 12%, exceeding our expectations of 9% to 11%. Full year 2024 adjusted gross margins expanded to 74% as we continued to drive cost improvements across our manufacturing network. On the bottom line, we reported full year 2024 diluted EPS of $1.41 versus $0.37 last year, and adjusted diluted earnings per share of $3.11 versus $1.84 last year, significantly ahead of expectations due to our overall strong P&L performance. Now turning to the fourth quarter performance versus the same period of LOI, let me walk down the P&L. Total company revenues were $17.8 billion versus $14.6 billion in the fourth quarter of last year. Once again, our non-COVID-19 products exhibited robust performance with revenues of $13.7 billion reflecting 11% operational year-over-year growth. This performance continues to show that our refined commercial approach is working. We continue to focus on key products and geographies. We've refined how we allocate our commercial field resources globally. And we're further optimizing our marketing resources into key priority areas. We saw strong contributions across our product portfolio, primarily driven by the Vyndaqel family, Padcev, Eliquis and Nurtec, partially offset by declines in ABRYSVO and XELJANZ. Adjusted gross margin in the fourth quarter was approximately 68%, primarily the result of a net unfavorable mix related to our COVID-19 products, primarily due to the Comirnaty profit split with BioNTech and applicable royalty expenses. This was partially offset by our ongoing focus on cost management across our manufacturing network, as I previously mentioned. And as we previously communicated, long-term improvements in gross margin will remain a key focus for the company over the next few years. We expect to begin to achieve initial savings from Phase 1 of our manufacturing optimization program in the latter part of 2025 and continue to expect approximately $1.5 billion in savings from this first phase by the end of 2027. We continue to evaluate other strategies to improve our network structure and as well as our product portfolio. And we plan to share more information on those components of the program once it becomes available. Total adjusted operating expenses are essentially flat operationally at $7.3 billion in the fourth quarter of 2024. And I will note that this amount includes spending acquired via our Seagen transaction. Looking at the components specifically, adjusted SI&A expenses decreased 4% operationally, driven primarily by a decrease in marketing and promotional spend for various products, including both commodity Comirnaty and Paxlovid, partially offset by an increase in spending for certain oncology and recently launched and acquired products. Adjusted R&D expenses increased 8% operationally, driven primarily by net increase in spending, mainly to develop certain product candidates acquired from Seagen, partially offset by lower spending on certain ongoing vaccine programs and certainly as a result of our cost realignment program. We continue to be disciplined with our operational expense management and delivered on our goal of at least $4 billion in net cost savings from our cost realignment program. Q4 reported diluted earnings per share was $0.07, and our adjusted diluted earnings per share was $0.63, benefiting from our top line performance as well as our efficient operating structure, partially offset by a higher effective tax rate driven primarily by jurisdictional mix. In support of our goal to enhance R&D productivity and to focus on high-impact medicines, our fourth quarter GAAP results reflect strategic decisions in our development plans and updated long-range revenue forecasts for several medicines. And as a result, we recorded approximately $2.9 billion in noncash intangible asset impairments related to several medicines in development as well as several in-line products. These decisions reinforce our focus on future growth as well as innovation. Now let me quickly touch upon our capital allocation strategy, which is designed to enhance long-term shareholder value. Our strategy consists of maintaining and growing our dividend over time, reinvesting in our business at an appropriate level of financial return, and finally making value-enhancing share repurchases after delevering our balance sheet. In 2024, we returned $9.5 billion to shareholders via our quarterly dividend, invested $10.8 billion in internal R&D, and as expected, completed business development activity was minimal. Our commitment to delevering our capital structure to a gross leverage target of 3.25x by the end of 2025 remains a key priority. In support of that goal, in 2024, we delevered by approximately $7.8 billion, paying down approximately $2.3 billion in maturing debt and approximately $5.5 billion in commercial paper. And in January of '25, we monetized another tranche of our Haleon shares, which for reporting purposes is a Q1 '25 event. We received approximately $3 billion in net cash proceeds, and now our ownership in Haleon was reduced from approximately 15% to approximately 7%. We intend to monetize our remaining Haleon investment in a prudent fashion during 2025. Overall, in Q4, we generated robust operating cash flows which combined with the most recent Haleon net sales proceeds of approximately $3 billion, resulted in significant free cash flow generation as we enter 2025. Our objective remains to delever and return to a more balanced allocation of capital between reinvestments and direct return to shareholders over time. Given we issued our full year 2025 financial guidance on December 17, let me just hit a few highlights. We expect total company full year '25 revenues to be in the range of $61 billion to $64 billion and full year '25 adjusted diluted earnings per share to be in the range of $2.80 to $3 a share, which reflects our expectation of strong contributions across our product portfolio as well as our focus on disciplined cost management. Importantly, we believe the steps taken to right size our cost base will put us on a strong footing towards increased operational efficiency and support our goal to return to pre-pandemic operating margins. In further support of this initiative, we now expect to deliver overall net savings of $4.5 billion from our ongoing cost realignment programs by the end of 2025, while continuing to advance programs that will improve cost of goods sold in the years to come. As a reminder, the impact of the IRA Medicare Part D redesign is expected to be a net headwind to the company's revenue of approximately $1 billion across our product portfolio, dampening growth by approximately 1.6% versus 2024. The impact of catastrophic coverage is expected to exceed the potential volume benefit from the reduction of the patient out-of-pocket cap, leading to a negative impact beginning in early in the year, while the positive impact of lower patient out-of-pocket costs is expected to build throughout this year. As the IRA is felt more acutely in higher-priced medicines, we expect Vyndaqel, Ibrance, Xtandi and Xeljanz to reach catastrophic coverage much earlier in the year. And due to these changes, we expect a higher gross to net impact on our revenues for all drugs in the beginning of 2025 that is expected to moderate throughout the remainder of the year when compared to 2024. And lastly, I will mention that we continue to monitor currency fluctuation as the year progresses. So in closing, let me just emphasize several key aspects of our business. We believe our financial targets for 2025 are both reasonable and achievable, reinforcing our commitment to operational excellence. We also believe our revenue volatility is largely in the past as COVID-related uncertainties have diminished. Additionally, our cost improvement programs have set the stage for ongoing margin expansion. We will continue our focus and execution to maximize the commercial value of our product portfolio. And our new R&D leadership is committed to driving value-creating innovation and strengthening our pipeline. And lastly, we have a clear path to reloading our balance sheet, enabling enhanced capital deployment in pursuit of additional opportunities to strengthen our business and create value for our shareholders. We are dedicated to maintaining and growing our dividend and meeting our delevering targets by the end of 2025, providing for a more balanced capital allocation. And with that, I'll turn it back to Albert to start the Q&A session.


Chris Shibutani: Two questions, if I may. Aamir, with your prior role, you had talked about a $25 billion in revenues by 2030 that the company was looking to deliver based upon M&A. We have the impairment with Arena. Is there an update for that? And now that you're in the role of U.S. Chief Commercial Officer, non-oncology, non-COVID, what would be on your wish list in your currency in terms of where you feel an opportunity to expand those revenues potentially through business development that could work to hit that $25 billion target by 2030? Then secondly, with the M&A activity across the industry, investors are always paying attention to what's going on with the FTC. Having passed through this gauntlet with Seagen last year, is there anything you can comment about to help us think about how regulators are thinking about the M&A environment in terms of particularly size of deal or any other dimension that you think is worth being aware of that might have been your observations from your experience in '23?


David Denton: Thank you, Albert, and good morning. As we continue to navigate a challenging post-COVID environment, I’'m pleased to share that this year is off to a solid start. We are protecting and growing our core brands while investing in building a more effective organization. Our relentless focus on execution is positioning Pfizer to improve shareholder returns. This morning, I'll briefly review the highlights of our first quarter results, then I'll touch on our capital allocation priorities. I’ll wrap up by outlining our 2024 financial guidance as well as our key priorities for the remainder of this year. Turning to the first quarter, let me walk down the P&L. Total company revenues for the quarter were $14.9 billion, reflecting an operational decline of $3.5 billion or 19% versus last year. As you know, our business continues to be negatively impacted by a declining COVID environment on a global basis. To that end, we expect our COVID products will continue to have an outsized effect on both our top line and our bottom line throughout this year. However, I do want to point out that we expect our COVID products will continue to be contributors to revenues and cash flows for the foreseeable future. Strong commercial execution across the enterprise drove 11% operational revenue growth in the quarter when you exclude COMIRNATY and PAXLOVID. Performance was positively impacted by our renewed focus on key products and markets, refined allocation of commercial field resources globally and further alignment of marketing resources into key priority areas. Contributing to this performance were our acquired products from Seagen, alongside in-line products such as VYNDAQEL, ELIQUIS and ABRYSVO. Dampening our growth in the quarter was the expected lower global demand for IBRANCE and SULPERAZON, driven largely by lower demand in China in the first quarter of 2024 versus last year. Adjusted Gross Margin for the first quarter improved by 530 basis points to 79.6% versus Q1 of last year. This improvement was driven by 3 factors. First were lower sales volume of COMIRNATY resulting in favorable sales mix. Second, in the quarter, we recorded a product return adjustment for PAXLOVID associated with our U.S. government contract, and I’ll touch upon that in just a moment. And finally, we executed strong cost management across our manufacturing network. Improvements in our gross margin rate will continue to be an important focus for the company going forward. Total Adjusted operating expenses increased modestly by 1% to $5.9 billion compared to Q1 of last year despite adding expenses associated with the acquired Seagen business. This disciplined cost control puts us squarely on track to delivering on our $4 billion net savings commitment by the end of the year. Adjusted SI&A expenses increased 3% operationally in the quarter, driven by an increase in marketing and promotional expenses for recently acquired or launched products, partially offset by a decrease in expenses for PAXLOVID and COMIRNATY. Consistent with our strategy, we are prioritizing our R&D spending to enhance overall returns while supporting growth from our pipeline. For the quarter, adjusted R&D Expenses were $2.5 billion, a decrease of 1% operationally versus LY. The slight decline was driven primarily by a lower spending resulting from our cost realignment program and lower spending on certain vaccines program, largely offset by increased investments mainly to develop certain assets acquired from Seagen. Q1 reported diluted earnings per share were $0.55. Our adjusted diluted earnings per share was $0.82, which exceeded our expectations due to favorable gross margin performance as well as strong cost management across the enterprise. As I stated earlier, during the quarter, we recorded a favorable product return adjustment associated with our U.S. government contract for PAXLOVID. Recall that during Q4 of last year, we estimated the U.S. government credit for PAXLOVID was $3.5 billion. Earlier this year, the U.S. government announced that the EUA labeled product was no longer authorized for CUs and the agreed-upon return period had now expired. Given those facts, we can now finalize the total value of the U.S. government credit. This resulted in a favorable adjustment to revenues of $771 million for PAXLOVID and contributed $0.11 to the company's earnings per share. Now let me quickly touch upon our capital allocation strategy, which is designed to enhance long-term shareholder value. Our strategy consists of maintaining and growing our dividend over time, reinvesting in our business at an appropriate level of financial return and making value-enhancing share repurchases after delevering our balance sheet. During the first quarter, we returned $2.4 billion to shareholders via our quarterly dividend, invested $2.5 billion in internal R&D and, as expected, business development activity was minimal in the quarter. We are committed to delivering our capital structure with a gross leverage target of 3.25x, which we expect to achieve over time. In support of that goal, during the quarter, we paid down approximately $1.25 billion of maturing debt. And in May, we will pay down another $1 billion of outstanding notes. And importantly, during the quarter, we began to monetize our Haleon stake through an initial sale of $3.5 billion, which reduced our equity position in the company from 32% to approximately 23%. Looking ahead to the next couple of quarters, I'd like to point out that we expect operating cash flow to be significantly below typical levels, largely due to the timing of certain payments. Despite this near-term pressure, clearly, our objective is to return to a more balanced capital allocation strategy over time. Now let me spend just a few minutes on our outlook for the remainder of this year. As we entered 2024, the company was highly focused on delivering on its financial commitments, and our performance in Q1 demonstrates that we are off to a solid start. With that objective in mind and the fact that it's still early in the year, we are modestly updating the earnings outlook for this year. We are raising our full year adjusted diluted earnings per share guidance range by $0.10 to a new range of $2.15 to $2.35. Looking ahead, this increase takes into consideration both our improving line of sight to our cost savings targets and continued strength in our underlying business. As a reminder, our EPS guidance also includes an anticipated $0.40 of earnings dilution from the Seagen acquisition, largely due to financing costs. While the PAXLOVID revenue return adjustment moves us to the upper end of the revenue guidance range, our top line revenue expectations remain unchanged for the year. We continue to expect revenues in the range of $58.5 billion to $61.5 billion. In addition, even though COMIRNATY revenues continue to perform consistent with our plan, it is important to remember that we expect approximately 90% of our sales to occur in the second half of the year, mostly in Q4, given the seasonal nature of these products. Lastly, we remain on track to deliver at least $4 billion of net savings from our cost realignment program by the end of the year. Improving our cost base will put us on strong footing towards margin expansion and improved financial returns as we move forward. As you know, over the past 2 years, the company has made significant investments to drive growth in the back half of the decade, and we remain encouraged by the long-term growth outlook for Pfizer. 2024 is clearly a year of focus, execution and delivering on our near-term financial commitments. The foundation that we establish this year sets the stage to deliver on our commitment to enhance shareholder value, both this year and through the end of the decade. And with that, I'd like to turn it back over to Albert as we begin our Q&A session.

Total Adjusted operating expenses first quarter


Pfizer Total Adjusted operating expenses Q2

Total Adjusted operating expenses second quarter


total adjusted operating expenses third quarter of 2024


Total adjusted operating expenses 2024 fourth quarter

total adjusted operating expenses fourth quarter

total adjusted operating expenses $7.3 billion


total company revenues third quarter of 2024

Total company revenues third quarter of 2024


Andre Schulten: Good morning, everyone. Joining me on the call today are Jon Moeller, Chairman of the Board, President and Chief Executive Officer; and John Chevalier, Senior Vice President, Investor Relations. We're going to keep our prepared remarks brief and then turn straight to your questions. Execution of our integrated strategies continued to yield good results in the July to September quarter and provides a solid start to the fiscal year. We're growing organic sales in all 10 categories, holding global aggregate market share, accelerating productivity savings, and improving supply sufficiency. Together, this progress enables us to maintain guidance ranges for organic sales growth, core EPS growth, free cash flow productivity and cash return to shareowners. Despite continued high commodity and transportation costs, inflation in the upstream supply chain and in our own operations, accelerating headwinds from foreign exchange, geopolitical issues, COVID disruptions impacting consumer confidence and historically high inflation impacting consumer budgets. Moving to the first quarter numbers. Organic sales grew 7%, pricing added 9 points to sales growth and mix was up 1 point. Volume declined 3 points, primarily due to lower shipments in Russia. Growth was broad-based across business units with each of our 10 product categories growing organic sales. Personal Health Care grew high teens. Feminine Care was up double digits. Fabric Care and Home Care were up high single digits. Baby Care, Grooming, Hair Care and Skin and Personal Care were each up mid-singles. Family Care and Oral Care grew low single digits. Focus markets grew 4% for the quarter, with the US up 5%. Greater China organic sales were down 4% versus the prior year, modest sequential improvement in the market still affected by COVID lockdowns and weak consumer confidence. Longer term, we expect China to return to strong underlying growth rates. Enterprise markets were up 16% with each of the three regions, up 13% or more. Global aggregate market share was in line with prior year, with 26 of our top 50 category country combinations holding or growing share. In the US, all outlet value share was in line with prior year with 6 of 10 categories holding or growing shares. On the bottom line, core earnings per share were $1.57, down 2% versus prior year. On a currency-neutral basis, core EPS increased 7%. Core margin decreased 160 basis points and currency-neutral core margin was down 130 basis points. Higher commodity materials and freight cost impacts combined with a 550 basis point hit to gross margins. Mix was 120-point headwinds, productivity savings and pricing provided 580 basis points of offset. SG&A costs as a percentage of sales were lower by 90 basis points as sales leverage and productivity improvements more than offset inflation and foreign exchange impacts. Core operating margin decreased 70 basis points, currency-neutral core operating margin increased 10 basis points, productivity improvements were a 230 basis help to the quarter. Adjusted free cash flow productivity was 86%, we returned nearly $6.3 billion of cash to shareowners, approximately $2.3 billion in dividends and $4 billion share repurchase. In summary, considering the backdrop of a very challenging cost and operating environment, results across top line, bottom line and cash to start the fiscal year. Our team continues to operate with excellence, executing the integrating strategies that have enabled strong results over the past four years, which are the foundation for balanced growth and value creation. A portfolio of daily use products, many providing cleaning, health and hygiene benefits in categories where performance plays a significant role in brand choice. The priority across the five vectors of product, package, brand communication, retail execution and value. Productivity improvement in all areas of our operations to fund investments is a priority offset cost and currency challenges, expand margins and deliver strong cash generation. An approach of constructive disruption, a willingness to change, adapt and create new trends and technologies that will shape our industry for the future especially important in this volatile environment. Finally, an organization that is increasingly more empowered, agile and accountable with little overlap or redundancy flowing to new demands, seamlessly supporting each other to deliver against our priorities around the world. Going forward, there are four areas we are driving to improve the execution of integrated strategies: Supply Chain 3.0, digital acumen, environmental sustainability and employee value equation. These are not new or separate strategies. They are necessary elements in continuing to build the priority, reduce cost to enable investment and value creation and to further strengthen our organization. Jon touched on each of these in our July earnings call and they will be a central part of our discussion at Investor Day in November. Our strategic choices on portfolios, priority, productivity, constructive disruption and organization are not independent strategies. They reinforce and build on each other, when executed well, they grow markets, which in-turn grow share, sales and profit. We continue to believe that the best path forward to deliver sustainable top and bottom-line growth is to double down on these integrated strategies, starting with a commitment to deliver irresistibly superior propositions to consumers and retail partners. Now moving on to guidance, we fully expect more volatility in costs, currencies and consumer dynamics as we move through the fiscal year. However, we think the strategies we've chosen, the investments we've made and the focus on executional excellence has positioned us well to manage through this volatility over time. Raw and packaging material costs inclusive of commodities and supplier inflation have remained high since we gave our initial outlook for the year in late July. Based on current spot prices at latest contracts, we now estimate a $2.4 billion after-tax headwind in fiscal 2023. Freight costs have also remained high. Though we have seen some easing in spot prices, we've made a modest downward adjustment in our outlook and now expect a $200 million after-tax headwind on freight and transportation costs in fiscal 2023. Foreign exchange has continued its strong move against us as the US dollar has strengthened significantly against essentially all major currencies around the world. Based on current exchange rates, we forecast a $1.3 billion after-tax impact, an incremental hit of $400 million versus our initial outlook for the year. Combined, headwinds from these items are now estimated at approximately $3.9 billion after tax or $1.57 a share, a 27 percentage point headwind to EPS growth for the year. We will offset a portion of these cost headwinds with price increases and productivity savings. We will continue to invest in irresistible superiority, which is even more important as we compete in some markets with local or non-US based competitors that don't see the same foreign exchange rate impact. As we've said before, we believe this is a rough patch to grow through not a reason to reduce investment in the business. As I noted at the outset, our good first quarter results enable us to confirm our guidance ranges for the fiscal year, across all key metrics. We continue to expect organic sales growth in the range of 3% to 5%. On the bottom line, we are maintaining our outlook of core earnings per share growth in a range of in line plus 4% versus prior year. However, the steep increase in foreign exchange impact pushes our current expectations towards the lower end of the range. We continue to forecast adjusted free cash flow productivity of 90%. We expect to pay around $9 billion in dividends and to repurchase $6 billion to $8 billion in common stock, combined a plan to return $15 billion to $17 billion of cash to shareowners this fiscal year. The outlook is based on current market growth rate estimates, commodity prices and foreign exchange rates. Significant additional currency weakness, commodity cost increases, geopolitical disruption, major production stoppages or store closures are not anticipated within this guidance range. To conclude, the macroeconomic and market level consumer challenges we're facing are not unique to P&G, and we won't immune to the impact. We've attempted to be realistic about these impacts in our guidance and transparent in our commentary. As we've said before, we believe this is a rough patch to grow through not a reason to reduce investment in the long-term health of the business. We're doubling down on the strategy that has been working well and delivering strong results. We'll continue to step forward towards the opportunities that we may fully invest in our business. We remain committed to driving productivity improvements to fund growth investments, mitigate input cost challenges and to maintain balanced top and bottom line growth. With that, we'll be happy to take your questions.

adjusted free cash flow productivity July to September quarter


maintaining our outlook adjusted free cash flow productivity fiscal year


Andre Schulten : Good morning. Joining me on the call today are Jon Moeller, Chairman of the Board, President and Chief Executive Officer; and John Chevalier, Senior Vice President, Investor Relations. We're going to keep our prepared remarks brief and then turn straight to your questions. Execution of our integrated strategies continued to yield good results in the October to December quarter, growing organic sales in nine of 10 categories, holding global aggregate market share, continued productivity savings, improving supply efficiency, sustained investment and superiority of our brands across all five vectors: product, package, communication, go-to-market and value, continue to pay benefits for our consumers and retail partners and in turn, for P&G shareholders. Progress against our plan fiscal year-to-date enables us to increase the guidance range for organic sales growth and maintain ranges for core EPS growth, free cash flow productivity and cash return to shareowners. Moving to the second quarter numbers. Organic sales grew 5%, pricing at a 10 points to sales growth and mix was up 1 point. Volume declined 6 points driven by a combination of market contraction, trade inventory reductions and portfolio reduction in Russia. Growth was broad-based across business units with each of our 10 product categories growing or holding organic sales. Personal Health Care grew high teens, Feminine Care, Fabric Care and Home Care were up high single digits. Hair Care was up mid-single digits. Baby Care, Family Care, Oral Care and Skin and Personal Care were each up low single digits. Grooming was in line with prior year. Focus markets grew 3% for the quarter, with the U.S. up 6%. Greater China organic sales were down 7% versus prior year, as the market continued to be impacted by COVID lockdowns and weaker consumer confidence. We continue to expect a slow recovery as consumer mobility increases over the coming quarters. Long term, we expect China to return to strong underlying growth rates. Enterprise markets were up 14% with each of the three regions up 10% or more. Global aggregate market share was in line with prior year with 27 of our top 50 category country combinations holding or growing share. In the U.S., all outlet value share was in line with prior year with seven of 10 categories holding or growing share. U.S. volume share is up 0.5 point versus the prior year quarter, delivering sequential improvement from quarter one. Recent innovations like Downy Rinse and Refresh in fabric enhancers and Dawn Powerwash in hand dishwashing are extending superiority advantages and driving value and volume share growth. Innovation also serves as a catalyst for pricing across our other brands and forms in their category segments. On the bottom line, core earnings per share were $1.59, down 4% versus prior year. On a currency-neutral basis, core EPS increased 5%. Core operating margin decreased 170 basis points, primarily due to gross margin pressure from commodities and foreign exchange. Currency-neutral core operating margin decreased 70 basis points. Productivity improvements were 110 basis points help to the quarter. Adjusted free cash flow productivity was 72%, primarily due to a temporary reduction in payables. We returned $4.2 billion of cash to shareowners, approximately $2.2 billion in dividends and $2 billion in share repurchase. In summary, considering the backdrop of a very challenging cost and operating environment, continued solid results across the top line, bottom line and cash for the first half of the fiscal year. Moving on to strategy. Our team continues to operate with excellence, executing the integrated strategies that have enabled strong results over the past four years, and that are the foundation for balanced growth and value creation. A portfolio of daily use products, many providing cleaning, health and hygiene benefits in categories where performance plays a significant role in brand choice. Ongoing commitment to and investment in irresistible superiority across the five vectors of product, package, brand communication, retail execution and value. As discussed during our Investor Day in November, we are renewing our superiority standards to reflect the dynamic nature of this strategy. Productivity improvement in all areas of our operations to fund investments in superiority offset cost and currency challenges, expand margins and deliver strong cash generation. An approach of constructive disruption, a willingness to change, adapt and create new trends and technologies that will shape our industry for the future, especially important in this volatile environment. Finally, an organization that is increasingly more empowered, agile and accountable with little overlap or redundancy, flowing to new demands, seamlessly reporting each other to deliver against our priorities around the world. Going forward, there are four areas we are driving to improve the execution of the integrated strategies, Supply Chain 3.0, digital acumen, environmental sustainability and employee value creation. These are not new or separate strategies. They are necessary elements in continuing to build superiority, reduce cost to enable investment and value creation and to further strengthen our organization. We expanded on each of these at our Investor Day in November. If you weren't able to attend or listen in remotely, I encourage you to review the materials on our IR events website. Our strategic choices on portfolio, superiority, productivity, constructive disruption and organization are interdependent strategies. They reinforce and build on each other. When executed well, they grow markets, which in turn grow share, sales and profit. We continue to believe that the best path forward to deliver sustainable top and bottom line growth is to double down on these integrated strategies starting with commitment to deliver irresistible superior propositions to consumers and retail partners. Now moving to guidance. We continue to expect more volatility in costs, currencies and consumer dynamics as we move through the second half of the fiscal year. However, we think the strategies we've chosen, the investments we've made and the focus on executional excellence have positioned us well to manage through this volatility over time. Raw and pack material costs inclusive of commodities and supplier inflation are still a significant headwind versus last fiscal year, though we have seen some modest sequential improvement. Based on current spot prices and latest contracts, we now estimate a $2.3 billion after-tax headwind in fiscal '23. Foreign exchange is also a significant year-on-year headwind. But like raw and pack materials, we've seen modest directional improvement. Based on current exchange rates, we now forecast a $1.2 billion after-tax impact for the fiscal year. Freight costs remain higher versus prior year, and we continue to expect the $200 million after-tax headwind in fiscal '23. Combined headwinds from these items are now estimated at approximately $3.7 billion after tax, $1.50 per share, a 26 percentage point headwind to EPS growth for the year. For perspective, recall that we began the year expecting approximately $1.33 of cost and FX headwinds. So despite some modest relief since last quarter, our current outlook is still $0.17 worse than our ingoing position. We are offsetting a portion of these cost headwinds with price increases and productivity savings. We are continuing to invest in irresistible superiority, and we are investing to improve our supply capacity, resilience and flexibility. As we've said before, we believe this is a bottom line rough patch to grow through with continued investment in the business and underlying strategies. As I noted at the outset, our solid first half results enable us to raise our organic sales outlook and confirm our guidance ranges on EPS and cash. We are increasing our guidance for organic sales growth from a range of 3% to 5% to a range of 4% to 5%. Within this company-wide range, we -- there are many puts and takes. As I mentioned, we expect to see some modest improvement in China, but European markets have softened as high inflation affects consumer spending. The U.S. remains relatively strong to date, and most enterprise markets remain resilient. On the bottom line, we're maintaining our outlook of core earnings per share growth in the range of in line to plus 4% versus prior year. The significant headwinds from input costs and foreign exchange keep our current expectations towards the lower end of this range. This guidance also reflects our intent to remain fully invested to drive our superiority strategy and increase investments as opportunities are available. We continue to forecast adjusted free cash flow productivity of 90%. We expect to pay around $9 billion of dividends and to repurchase $6 billion to $8 billion of common stock, combined a plan to return $15 billion to $17 billion of cash to shareowners this fiscal year. This outlook is based on current market growth rate estimates, commodity prices and foreign exchange rates. Significant additional currency weakness, commodity cost increases, geopolitical disruptions, major production stoppages or store closures are not anticipated within these guidance ranges. To conclude, we continue to face high year-over-year commodity and transportation cost inflation in the upstream supply chain and in our own operations, headwinds from foreign exchange, geopolitical issues, COVID disruptions impacting consumer confidence and historically high inflation impacting consumer budgets. These macroeconomic and market level consumer challenges we're facing are not unique to P&G, and we won't be immune to the impact. We attempt to be realistic about these impacts in our guidance and transparent in our commentary. As we've said before, we believe this is a rough patch to grow through, not a reason to reduce investment in the long-term health of the business. We're doubling down on the strategy that has been working well and is delivering strong results. We continue to step forward towards our opportunities, and we remain fully invested in our business. We are committed to driving productivity, improvements to fund growth investments, mitigate input cost challenges and to deliver balanced top and bottom line growth. With that, we're happy to take your questions.

adjusted free cash flow productivity 72% October to December quarter


expected adjusted free cash flow productivity 90% fiscal year


Andre Schulten: Good morning, everyone. Joining me on the call today are Jon Mueller, Chairman of the Board, President and Chief Executive Officer; and John Chevalier, Senior Vice President, Investor Relations. Execution of our integrated strategies drove strong results in the January to March quarter. Organic sales grew across all 10 categories in -- and in six out of seven regions. Global aggregate market share is holding steady, productivity savings are accelerating and enabling sustained investment in the superiority of our brands. In-market execution across all five vectors of superiority is strong and consistent: product, package, communication, go-to-market and value. Superior offerings continue to pay benefits for our consumers and retail partners and in turn for P&G shareholders. Progress against our plan enables us to increase guidance for organic sales growth and cash return to shareowners, and to maintain guidance for core EPS growth and free cash flow productivity. Moving to third quarter numbers. Organic sales grew more than 7%. Pricing added 10 points to sales growth and mix was a modest positive contributor for the quarter. Volume declined 3 points, including a 1 point headwind from portfolio reduction in Russia. Growth was broad based across business units with each of our 10 product categories growing organic sales. Feminine Care was up low teens, Personal Health Care, Home Care and Hair Care each grew double digits, Grooming, Oral Care and Fabric Care grew high single digits, Baby Care was up mid singles, and Family Care and Skin and Personal Care grew low singles. Growth was also broad based across geographies with six of seven regions growing organic sales. Focus markets grew 5% for the quarter. Organic sales in the U.S. were up 6%, including modest unit volume growth. Europe focus markets were up 8%. Greater China organic sales were up 2% versus prior year, as the market begins to recover from COVID lockdowns and as consumer confidence improves. We continue to expect further recovery as consumer mobility increases over the coming quarters. Longer-term, we expect China to return to mid singles underlying market growth rates for our portfolio of categories. Enterprise markets were up 15% with Latin America up nearly 30% and Europe enterprise markets up low teens. This is the fourth consecutive quarter in which all five sectors grew organic sales double digits in enterprise markets. Global aggregate value share was in line with prior year, with 30 of our top 50 category country combinations holding or growing share. Excluding Russia, global value share was up 20 basis points. In the U.S., all outlet value share was up 40 basis points versus prior year with eight of 10 categories holding or growing share in the quarter. U.S. volume share is up 90 basis points versus the prior year, driven by 2 points of absolute volume consumption growth in a market that is still down modestly versus prior year. Strong U.S. share growth in Personal Care has been led by innovation on the native brand and deodorants, as well as successful extension into body wash. Cascade Platinum Plus has driven strong share growth in auto dishwashing, and Dawn share continues to be up more than 1 point with ongoing leverage from the power wash and easy squeeze innovations. Vicks continues to be a growth leader in Personal Health Care, and we've delivered strong share growth in the Metamucil and Pepto-Bismol brands. In Europe, the new four-chamber Ariel Platinum PODS are driving strong consumer demand in Fabric Care. Fairy Power Spray is growing the dish category and building market share in Home Care. The new GilletteLabs exfoliating razor, male and female intimate grooming innovations and cardboard packaging upgrades are driving strong growth in grooming. Moving to the bottom-line. Core earnings per share were $1.37, up 3% versus prior year. On a currency neutral basis, core EPS increased 13%, good progress as we faced $0.31 per share of cost and foreign exchange headwinds in the quarter. Core operating margin increased 40 basis points, as 150 basis points of gross margin expansion were partially offset by SG&A investments and inflation impacts. Currency-neutral core operating margin increased 160 basis points. Productivity improvements were a 290 basis point help to the quarter. Adjusted free cash flow productivity was at 92%. We returned $3.6 billion of cash to shareowners, approximately $2.2 billion in dividends and $1.4 billion in share repurchase. Last week, we announced a 3% increase in our dividend, again reinforcing our commitment to return cash to shareowners. This is the 67th consecutive annual dividend increase and the 133rd consecutive year P&G has paid a dividend. In summary, against what is still a challenging cost and operating environment, continued good results across top-line, bottom-line and cash for the third quarter. Our team continues to operate with excellence, executing the integrated strategies that have enabled strong results over the past four years and that are the foundation for balanced growth and value creation. A portfolio of daily use products, many providing cleaning, health and hygiene benefits in categories where performance plays a significant role in brand choice. Ongoing commitment to and investment in irresistible superiority across the five vectors of product, package, brand communication, retail execution and value, we are again raising the bar on our superiority standards to reflect the dynamic nature of this strategy. Productivity improvements in all areas of operations to fund investments in superiority offset cost and currency challenges, extend margins and deliver strong cash generation, an approach of constructive disruption, a willingness to change, adapt and create new trends and technologies that will shape our industry for the future. Finally, an organization that is increasingly more empowered, agile and accountable with little overlap or redundancy flowing to new demands seamlessly supporting each other to deliver against our priorities around the world. There are four areas we are driving to improve the execution of the integrated strategies: Supply Chain 3.0, digital acumen, environmental sustainability and employee value equation. These are not new or separate strategies, they are necessary elements in continuing to build superiority, reduce costs to enable investment and value creation and to further strengthen our organization. Our strategic choices on portfolio, superiority, productivity, constructive disruption and organization are interdependent strategies. They reinforce and build on each other. When executed well, they grow markets, which in turn grow share, sales and profit. We continue to believe that the best path forward to deliver sustainable top- and bottom-line growth is to double down on these integrated strategies, starting with the commitment to deliver irresistibly superior propositions to consumers and retail partners. Now, moving to guidance. As we work towards the end of the fiscal year, we are cautiously optimistic. We remain confident in our strategies and the organization's ability to execute them with excellence. We continue to expect more volatility in the macro and consumer environment, and expect sustained pressure in costs and foreign exchange as we move forward. On the whole, our consumer markets remained relatively resilient, with U.S. and China volume trends improving, but with inflation pressures in Europe weighing more heavily on consumption. We continue to think the strategies we've chosen, the investments we've made and the focus on executional excellence have positioned us well to manage through this volatility over time. Raw and packaging material costs, inclusive of commodities and supply inflation, have largely stabilized over the last few months, but still remain a significant headwind versus last fiscal year. Based on current spot prices and latest contracts, we now estimate a $2.2 billion after-tax headwind in fiscal '23. Foreign exchange is also a significant year-on-year headwind and rates since last quarter have moved modestly against us. Based on current exchange rates, we now forecast a $1.3 billion after-tax impact to the fiscal year. Freight costs have moderated throughout the year, and we now expect them to be roughly in line with prior year. Combined headwinds from these items are now estimated at approximately $3.5 billion after-tax, or $1.40 per share, a 24 percentage point headwind to EPS growth for the year. In addition to these impacts, we are also facing higher inflation in wages and benefits and higher year-on-year net interest expense. We are offsetting a portion of these cost headwinds with price increases and productivity savings. We are continuing to invest in irresistible superiority and we are investing to improve our supply capacity, resilience and flexibility. As noted in the outset, our strong results over the first three quarters have enabled us to raise our organic sales outlook and confirm our guidance ranges on EPS and cash. We are increasing our guidance for organic sales growth from a range of 4% to 5% to approximately 6% for the fiscal year. This would put fiscal '23 in line with 6% top-line growth we've averaged over the last four years, which were 5%, 6%, 6% and 7% from fiscal '19 through '22, respectively. On the bottom-line, we're maintaining our outlook of core earnings per share growth in the range of in line to plus 4% versus prior year. Significant headwinds from input costs and foreign exchange keep our current expectations toward the lower end of this range. This guidance also reflects our intent to remain fully invested to drive our superiority strategy and increase investments as we value -- as value creating opportunities are available. We continue to forecast adjusted free cash flow productivity of 90%. We now expect to pay nearly $9 billion in dividends and to repurchase $7.4 billion to $8 billion in common stock, combined a plan to return $16 billion to $17 billion of cash to shareowners this fiscal year. This outlook is based on current market growth estimates, commodity prices and foreign exchange rates. Significant additional currency weakness commodity cost increases, geopolitical disruption, major production stoppages or store closures are not anticipated within this guidance range. To conclude, we continue to face highly volatile consumer and macro dynamics. We also continue to see high year-over-year input costs, inflation in the upstream supply chain and in our own operations. Headwinds from foreign exchange, geopolitical issues, and historically high inflation impacting consumer budgets. As we said before, we believe this is a rough patch to grow through, not a reason to reduce investment in the long-term health of our business. We're doubling down on the strategy that has been working well and is delivering strong results. We continue to step forward. We remain fully invested in our business. We remain committed to driving productivity improvements to fund growth investments, mitigate input cost challenges and to deliver balanced top- and bottom-line growth. With that, we'll be happy to take your questions.

adjusted free cash flow productivity January to March quarter


Andre Schulten: With me today are Jon Moeller, Chairman of the Board, President and Chief Executive Officer, and John Chevalier, Senior Vice President, Investor Relations. I’ll start with an overview of results for fiscal year ’23 and the fourth quarter. Jon will add perspective on our strategic focus areas and capabilities and will close with guidance for fiscal ’24 and then take your questions. Fiscal ’23 was another very strong year. Execution of our integrated strategy continues to yield broad-based strong sales growth across categories and regions, strong earnings in the face of significant cost headwinds, and continued strong return on cash to P&G shareholders. Organic sales for the fiscal year grew 7%, our second consecutive year of 7% organic sales growth and fifth consecutive year of 5% or better organic growth starting fiscal 2019 - 5%, 6%, 6%, 7% and 7%. Growth was broad-based across business units with all 10 of our product categories growing organic sales. Personal healthcare grew mid-teens, feminine care grew double digits, fabric care, home care and hair care up high single digits, skin and personal care, baby care, family care and grooming each grew mid singles. Oral care grew low single digits. Focus markets were up 5% for the year and we delivered strong results in our largest and most profitable market, the United States, with organic sales growing 6% on top of a strong 8% growth comp in the base period. Greater China organic sales were down low single digits versus the prior year, with trends improving in the back half as the market continues to slowly recover. Enterprise markets were up 15% led by Latin America with 24% organic sales growth. Ecommerce sales increased 7%, now representing 17% of total company. Our strategy focused on driving market growth is in turn driving share growth for P&G. All channel market value sales in the U.S. categories in which we compete grew approximately 7% in fiscal ’23. P&G consumption grew ahead of fair share of category growth, driving modest value share growth and volume share up 50 basis points for the year. We held global aggregate market share. Twenty-nine of our top 50 category-country combinations held or grew share for the year. Importantly, this share growth is broad-based. Seven of 10 product categories grew share globally over the past year. Core earnings per share were $5.90, up 2% for the year despite a 24 percentage point earnings growth headwind, or $1.38 from share from higher material costs and foreign exchange. On a currency neutral basis, core EPS was up 11%. Adjusted free cash flow productivity was 95%. We increased our dividend by 3% and returned over $16 billion of value to share owners, $9 billion in dividends and $7.4 billion in share repurchase. Moving to the April to June quarter, organic sales grew 8%. We have now delivered seven consecutive quarters with 5% or better organic sales growth. Pricing contributed seven points to organic sales growth, mix was up 2 points, volume declined one point, improving sequentially versus the March quarter, as expected. These strong company results are grounded in broad-based category and geographic strength. Each of our 10 product categories grew organic sales in the quarter. Skin and personal care, personal healthcare, home care, feminine care, and family care, five of our 10 categories, each grew double digits. Baby care, hair care and grooming grew high singles, fabric care grew mid singles, and oral care was up low single digits. Each of our seven regions grew organic sales with focus markets up 7% and enterprise markets up 13% for the quarter. Organic sales in the U.S. grew 6%. Importantly, this includes 3 points of volume growth, a return to positive volume in our largest market for the first time in five quarters. Greater China organic sales grew 4%. We continue to see sequential market recovery, but as expected at a slow pace. European focused market organic sales were up 12% despite volume pressure from wider pricing gaps. In enterprise markets, Latin America led the growth with organic sales up 22%. Global aggregate market share increased 10 basis points. Twenty nine of our top 50 category-country combinations held or grew share for the quarter. On the bottom line, core earnings per share were $1.37, up 13% versus the prior year. On a currency neutral basis, core EPS increased 22%. Core operating margin increased 190 basis points as benefits from strong sales growth and productivity improvements more than offset higher material cost, foreign exchange headwinds, wage and benefit inflation, and reinvestment in higher media reach and frequency. Currency neutral operating margin increased 310 basis points. Adjusted free cash flow productivity was 136%. We returned approximately $2.3 billion of cash to share owners in the quarter. In summary, we met or exceeded each of our going-in target ranges for the year: organic sales growth, core EPS growth, free cash flow productivity, and cash returned to share owners, strong performance again this year in a very difficult operating environment. Now I’ll pass it over to Jon.

adjusted free cash flow productivity fiscal year '23


adjusted free cash flow productivity April to June quarter


Andre Schulten: Thank you Jon. As we’ve said in each guidance outlook for the past three years and as Jon indicated, we will undoubtedly experience more volatility in the fiscal year ahead, and while supply chains and input costs have become more stable as we enter fiscal ’24, the challenges we face are multi-faceted: economic, geopolitical, and societal, putting pressure on consumer confidence and household budgets. We’ll navigate these challenges with our dynamic integrated strategy guided by consumers with every step. Based on current spot prices, we estimate commodities will be a tailwind of around $800 million after tax in fiscal ’24. Foreign exchange rates continue to be a headwind and, based on current rates, we now expect a $400 million after-tax impact. We still face above normal levels of wage and benefit cost inflation in our cost structure and higher costs for third party services. In addition, we expect below-the-line impact from higher net interest expense to be a roughly $200 million after tax earnings headwind. With this context, I’ll move to the key guidance metrics. We expect global market value growth in our categories to moderate back towards a range of around 4%, with the drivers of market growth normalizing as we move through the year, pricing becoming less of a driver and volume returning to modest growth. With the strength of our brands and commitment to keep investing in the business, we continue to expect to grow above underlying market levels, building aggregate market share globally. This leads to guidance for organic sales growth in the range of 4% to 5% for fiscal ’24. On the bottom line, we expect EPS growth in the range of 6% to 9% versus fiscal year ’23 EPS of $5.90. This guidance equates to a range of $6.25 to $6.43 per share, $6.34 or up 7.5% at the center of the range. With a three-point headwind from foreign exchange, this outlook translates to 9% to 12% EPS growth on a constant currency basis. We expect adjusted free cash flow productivity of 90% for the year. This includes an increase in capital spending as we add capacity in several categories. We expect to pay more than $9 billion in dividends and to repurchase $5 billion to $6 billion in common stock, combined a plan to return $14 billion to $15 billion of cash to share owners this fiscal year. Top line, bottom line and cash guidance for fiscal ’24 all consistent with our long term algorithm. This outlook is based on current market growth estimates, commodity prices and foreign exchange rates. Significant additional currency weakness, commodity cost increases, geopolitical disruptions, major supply chain disruptions, more store closures are not anticipated within the guidance ranges. These guidance ranges also do not assume a further reduction in commodity and material costs versus current levels. If this should occur, it would generate greater flexibility to invest more in value-accretive innovation and marketing opportunities. With that, I’ll hand it back to Jon for his closing thoughts.


Andre Schulten: Good morning, everyone. Joining me on the call today are Jon Moeller, Chairman of the Board, President and Chief Executive Officer, and Jon Chevalier, Senior Vice-President, Investor Relations. I'll start with an overview of results for the October to December quarter, Jon will add perspective on our recent results and strategic focus areas and capabilities. We'll close with guidance for fiscal '24, and then take your questions. October to December, was another strong quarter. Execution of our integrated strategy drove solid sales and market-share results and another quarter of strong margin progress, delivering strong earnings and cash results for the quarter. The strong results we've delivered in the first half of fiscal '24, enable us to raise our outlook for core earnings per share and keep us on track to deliver within our fiscal year guidance ranges for organic sales growth, cash productivity and cash return to shareowners. We continue to see the upper range on organic sales and core EPS as likely outcome for fiscal '23 - '24. So, moving to second quarter numbers, organic sales grew 4%, volume rounded down to a decline of one point as continued volume acceleration in North America and Europe focused markets was offset by softer shipments in Greater China, Eastern Europe and Middle East, Africa regions due to local issues in select markets. Pricing contributed four points to sales growth, consistent with the guidance we provided, mix was neutral to organic sales growth. Growth across categories continues to be broad based with eight of 10 product categories holding or growing organic sales this quarter. Home care, hair care and grooming grew sales high single digits. Fabric care, family care, feminine care and oral care were up mid-single digits. Baby care was in line with prior year. Personal health care was down low singles against a very tough comp and a late developing cold and flu season this year. Skin and personal care was down mid singles due to SK-II in China. Growth was also broad based across geographies with North America, Europe, Asia Pacific focus markets and Latin America and Europe enterprise markets each growing organic sales. Focus markets grew 3% for the quarter and enterprise markets grew 7%. Organic sales in North America grew 5% with four points of volume growth. Over the last five quarters, volume growth in North America has been minus three, flat, then 2% growth plus 3% and now plus 4%, strong acceleration well ahead of the underlying market trends. Europe focused markets were up 7% with three points of volume growth. As expected, both regions saw a step down in pricing contribution to sales growth as a large portion of price increases from last year have annualized. Importantly, volume accelerated in both regions to partially offset the pricing impact. Latin America delivered another very strong quarter with 17% organic sales growth, continued strong results in these regions. There are some targeted issues affecting other markets. Greater China organic sales were down minus 15% versus prior year. Underlying market growth was down mid to high single digits as consumer confidence weakened further. The SK-II brand in Greater China was down 34% due to soft market conditions and a temporary headwind for Japanese brands in the market. Our consumer research indicates SK-II brand sentiment is improving and we expect to see sequential improvement in the back half. Underlying market trends have softened in some Europe enterprise and Asia Pacific, Middle East, Africa countries such as Egypt, Saudi Arabia and Turkey, following multiple rounds of pricing to offset inflation and due to heightened tensions in the Middle East. Global aggregate value share was up 40 basis points versus prior year with 28 of our top 50 category country combinations holding or growing share. In the U.S., all outlet value share was up 20 basis points versus prior year. U.S. volume share was up 50 basis points reflecting strong volume growth. Value share in European focus markets was up 90 basis points over the past three months. In summary, North America, Europe focus Markets, Asia Pacific focus markets and Latin America, which combined represent three-quarters of company sales, delivered over 6% of organic sales growth in quarter two, with three points of volume growth and three points of price mix. These same markets grew 9% in quarter one with around two points of volume growth and seven points of price mix. Continued strong organic sales growth with accelerating volume growth to mitigate the anticipated annualization of pricing, consistent with our guidance. The balanced 25% of company sales including Greater China, Eastern Europe and Middle East Africa were impacted by local market issues we described. Quarter two organic sales for this group were down five points versus prior year. We expect most of these effects in these regions to be temporary or annualizing, SK-II consumption is sequentially improving. We continue to expect China market growth to improve, and over time return to mid singles, and we expect market pressures in the Middle east and Turkey to ease over time. Moving to the bottom line, core earnings per share were $1.84, up 16% versus prior year. On a currency neutral basis, core EPS increased 18%. Core operating margin increased 400 basis points as 520 basis points of gross margin expansion were partially offset by increased marketing investments, wage and benefit inflation and foreign exchange impacts in SG&A. Currency neutral core operating margin increased 470 basis points. Productivity improvements were a very strong 340 basis points helped to the quarter. Adjusted free cash flow productivity was 95%. We returned $3.3 billion of cash to share owners, approximately $2.3 billion in dividends and $1 billion in share repurchase. In summary, against what continues to be a challenging and volatile operating environment, strong overall progress in the first half of the year keeping us on track for our fiscal year guidance ranges. Now I'll pass it over to Jon for his perspective.

adjusted free cash flow productivity October to December

adjusted free cash flow productivity 95%