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Watson Pharmaceuticals' CEO Discusses Q1 2012 Results - Earnings Call Transcript

With us on today's call are Paul Bisaro, our President and CEO, who will provide an overview of our first quarter results; Todd Joyce, our Global Chief Financial Officer, will then provide additional details on the performance of our business segments, as well as our consolidated financial results for the quarter. Paul will conclude our presentation with an updated outlook for 2012. We'll then open the call up for questions and answers.

Also on the call and available during the Q&A are Siggi Olafsson, President of Global Generics; Fred Wilkinson, President of Global Brands and Biosimilars; Bob Stewart, President of Global Operations; Al Paonessa, Executive Vice President and Chief Operating Officer of our Anda Distribution Division; and David Buchen, our Global Chief Legal Officer.

Please note that today’s call is copyrighted material of Watson Pharmaceuticals, Inc. and cannot be rebroadcast without the company’s expressed written consent.

I’d also like to remind you that during the course of this call, management will make projections or other forward-looking remarks regarding future events or the future financial performance of the company. It's important to note that such statements about estimated or anticipated Watson results, prospects or other non-historical facts are forward-looking statements and reflect our current perspective of existing trends and information as of today’s date.

Watson disclaims any intent or obligation to update these forward-looking statements, except as expressly required by law. Actual results may differ materially from current expectations and projections, depending on a number of factors affecting the Watson business. Factors are detailed in our periodic public filings with the Securities and Exchange Commission, including but not limited to, Watson's Form 10-K for the period ended December 31, 2011.

With that, I'll turn the call over to Paul.

Paul M. Bisaro

Thanks, Patty, and good morning, everyone, and thank you for joining us this morning. Watson is off to a great start in the first quarter of 2012. Net revenues increased 74% to $1.5 billion. Non-GAAP earnings per diluted share were up 84% to $1.64 per share. Adjusted EBITDA increased 70% to $367 million in the quarter. If you exclude the $0.52 contribution from the sales of generic LIPITOR this quarter, non-GAAP earnings per share were up 26% from last year. We also had a very busy quarter in terms of strategic global expansion of our company. We are aggressively integrating the Ascent business acquired in late January, which made us the fifth largest generic company in Australia and the leader in Southeast Asia. The integration is progressing very well and many financial and IT-related items have already been completed. Last Wednesday, we announced the further expansion of our Global Generics business with the agreement to acquire Actavis. When completed, this acquisition will transform Watson. We will more than double our reach outside the U.S. and we will have access to new markets with exciting growth trajectories. In addition, the acquisition will expand our range of product offerings in all markets into semi solids, liquids and injectables. We are pleased to have been able to capitalize on this opportunity and look forward to working with Actavis leadership to complete this transaction and then move rapidly to execute the integration of the combined company.

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