Warner Chilcott plc (

WCRX

)

Q4 2011 Earnings Call

February 24, 2012, 8:00 a.m. ET

Executives

Paul Herendeen - EVP & CFO

Roger Boissonneault - CEO, President & Director

Analysts

Gregg Gilbert – Bank of America/Merrill Lynch

Shibani Malhotra - RBC Capital

Randall Stanicky - Canaccord Genuity

Michael Tong (Brian) - Wells Fargo Securities

Marc Goodman – UBS

John Boris – Citigroup

Douglas Gale – Barclays Capital

Elliot Wilbur - Needham & Company

Andrew Finkelstein – Susquehanna Financial

Scott Henry – ROTH Capital Partners

Dewey Steadman - JPMorgan

Presentation

Operator

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Good day, ladies and gentlemen, and welcome to the Warner Chilcott fourth quarter and full-year 2011 financial results. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. (Operator instructions).

As a reminder, today’s conference call is being recorded.

I would now like to turn the conference over to your host, Mr. Paul Herendeen. Please go ahead.

Paul Herendeen

Thank you, Allie. Good morning. This morning we issued a press release that details our fourth quarter and full-year 2011 results. The press release is available on our website, if you haven’t already seen it. Roger and I will take a few minutes to give a best general business overview, and I’ll provide some comments about our financial results, then we’ll end with the Q&A.

Before we get started, let me point out that this call will include forward-looking statements. These statements are subject to a number of risks and uncertainties that could cause the company’s actual results to differ materially from such statements. These risks and uncertainties are discussed in our 2011 Form 10-K and other filings which are available on the SEC website.

Forward looking statements made during this call are made only as of the date of this call. The company undertakes no obligation to update such statements to reflect subsequent events or circumstances. In addition, we will make reference during the course of the call to non-GAAP financial measures as defined by the SEC. In accordance with SEC regulations, we have provided reconciliations of those measures in our press release issued this morning, to what we believe are the most directly comparable GAAP measures.

With that, let me turn things over to Roger Boissonneault, our President and CEO.

Roger Boissonneault

Thanks, Paul. 2011 was another busy year for us. To try to recap, we started the year with commercial launches of two products, the Atelvia and LO Loestrin. We are off to a good start with LO Loestrin and we’re ramping up on Atelvia. It’s been slower than we had hoped but our RX’s are picking up and Atelvia is currently the only branded bisphosphonate that is growing in the U.S.

In the fourth quarter, we had a favorable development with the respect to Asacol 400 when Roxane informed us that it will no longer pursue marketing approval for its generic version of Asacol 400, and the litigation was dismissed.

Our patent case against Par, which is seeking FDA approval of a generic version of Asacol 400 continues. In December, the FDA granted our citizen’s petition, confirmed the regulatory framework that requires ANDA filers to satisfy the FDA’s previously-announced bioequivalence guidance. We view this as a positive development and remain optimistic about the future prospects for our Asacol franchise.

During the course of the year we also announced a number of initiatives that we believe will position us to continue to deliver value to our shareholders. In April of 2011, we announced our Western European restructuring plan following the loss of exclusivity for Actonel in Western Europe. Over the course of 2011 we successfully transferred almost all of our Western European markets to a distributor model, which reduces our operating cost in these markets.

In the U.S. we reorganized our sales forces at the end of the year to improve targeting and focus in many of our therapeutic categories. We successfully completed a refinancing of our senior secure debt in March of 2011, reducing our interest expense by over 40 million in 2011, and extending our debt maturities.

We put our free cash flow to good use during the year by making optional prepayments of term debt totally $750 million. And in November 2011, we put in place a program to redeem up to $250 million of our ordinary shares. We’ll continue to look for value-enhancing strategic opportunities to utilize our strong cash flow, including business development, which remains a priority for us.

At this point, I’ll turn it over to Paul for some thoughts on our financial performance.

Paul Herendeen

Yes, thanks, Roger. Overall we had a solid fourth quarter and finished the year in line with our full-year revenue expectations, while adjusted cash debt income of $3.83 per share topped the high end of our guidance range. We continued to drive sales gains in many of our key promoted brands compared with the prior year quarter, and were able to gain additional leverage on operating cost.

Our cash interest cost decline due to a combination of financial deleveraging and a reduction of our interest rates, and all those factors enable us to deliver strong growth and cash net income in the quarter, up 17% compared with Q4 of 2010.

We continue to generate strong cash flow. For the year, we generated over $1.1 billion of free cash flow, which we used in part to prepayment our debt, and to redeem our shares starting in the fourth quarter of the year.

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