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Kevin MannixThank you, Jackie. Good morning. Good afternoon everyone. Thank you for joining us today to review Teva’s fourth quarter and full-year 2011 earnings results. I’m joined today by our CEO, Shlomo Yanai; our Chief Financial Officer, Eyal Desheh; Bill Marth, President and CEO of Teva Americas, Dr. Gerard Van Odijk, President and CEO of Teva Europe; and Kevin Buchi, Corporate VP, Global Branded Products. Shlomo will begin by providing an overview of the quarterly and annual results. Eyal will then provide additional details on our consolidated financial results. We’ll then open the call to a question and answer period. Before we start, I’d like to remind you that our discussions during this conference call will include forward-looking statements and actual results could differ materially from those projected in the forward-looking statements. The factors that could cause actual results to differ are discussed in Teva’s report on Form 20-F and Form 6-K. Also, the discussions during this conference call will include certain financial measures that were not prepared in accordance with generally accepted accounting principals. A reconciliation of those non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in Teva’s earnings release issued this morning, which can also be found on our website. With that, I’ll now turn the call over to Shlomo. Shlomo, if you would, please. Shlomo Yanai Thank you, Kevin, and welcome everyone and thank you for joining us today as we review Teva’s results for the fourth quarter and full year 2011. 2011 was a challenging year for Teva, but despite these challenges, we ended the year on a strong note, delivering our sixth consecutive year of double-digit growth. Sales for the year reached $18.3 billion, which reflects 40% growth year-over-year. Our net income reached $4.4 billion, up 7% over 2010. This led us to EPS for the year of $4.97, up 9% over 2010.
The fourth quarter was our strongest quarter ever. Net sales reached $5.7 billion, growing by 28% over the fourth quarter of 2010. Quarterly operating profit was $1.7 billion with net income of $1.4 billion. This brought up to EPS of $1.59. Cash flow from operations during the quarter was strong, reaching a record $1.4 billion.2011 was a year of major strategic achievements for Teva. Our strategy is focused on growth and creating a highly diversified business, and on reducing our dependence on any one particular market or product. During the year, we took major steps toward reaching our strategic goals, including the acquisition of Cephalon which has enabled us to continue the process of establishing a top-notch specialty pharma business; our acquisition of Taiyo which creates an important growth engine for us in Japan, one of the world’s most attractive generics markets; and our JV with Procter & Gamble which significantly strengthens Teva’s OTC business on a global scale, establishing a new growth platform for us. I believe that Teva’s financial performance in 2011 clearly demonstrates the strength of our balanced business model. During the year, we delivered on our legacy of continued profitable growth thanks to contributions from all of our geographies and lines of business. One clear sign of our growing diversity is that during 2011, more than half of our total sales came from European and other rest of the world sales, and our total (inaudible) rose to all-time high of 35% of total sales. We believe that in the years to come, we will achieve even greater diversity across geographies as well as across therapeutic areas in our branded business. I would like to begin my review off the top of the performance of our business during 2011 with a discussion of our U.S. generics business. The fourth quarter saw a return to the normal standard for this business with exclusive launch of all strengths of generic Zyprexa, our agreement with Ranbaxy regarding the launch of generic Lipitor, as well as the launch of generic (inaudible) in the last days of the quarter.
Looking ahead to 2012, we anticipate $650 million in new launches, with over $20 million of that resulting from the anticipated successful launch of generic Lexapro. Although many of these launch opportunities will face competition, we are confident that we will compete effectively and increase our market share.Teva remains the leader in the U.S. generics market by a very wide margin. We believe that our commitment to providing excellent service, our strong R&D, and our deep customer relationships will enable Teva to outpace the market growth in 2012. In Europe where Teva is also a generic leader, we grew by 44% in 2011, with Q4 being the fourth consecutive quarter of growth despite the serious economic turmoil and regulatory challenges in the euro zone. Teva’s vast portfolio of products, our broad reach across Europe, and the fact that we are truly diverse European player insulated us from many of the disturbances that impacted our competitors. We had a strong year in key European markets where Teva is the leading player, including the U.K. where sales grew by 30%, Italy where sales grew by 81%, and Spain with 82% growth. During 2011, we had 441 launches across Europe and our pipeline now includes generic versions of products which represented approximately $77 billion in branded sales in 2011. I would like to point out that over the last two years, Teva Europe has almost doubled sales and profitability due in large part to our quick and successful integration of Ratiopharm and the benefits we enjoy as the number one generics player. If Europe provides an example of Teva’s strengths when it comes to M&A, the performance of our rest of the world business demonstrates our ability to deliver organic growth. 2011 was an excellent year for this business, which grew 39% over 2010. In Russia, sales reached over half a billion dollars, representing organic growth of 21%. In Latin America, sales were over $800 million, up 11%; and in Japan, the world’s second-largest pharmaceutical market, we completed the acquisition of Taiyo during the third quarter as well as assuming full ownership of Teva Kowa, our Japanese JV. This was a very important milestone in realizing our strategic objective of becoming a leading player in Japan, a market we view as an important growth driver for Teva. By leveraging our combined resources, we are significantly increasing access to high quality, affordable generics for the people of Japan. Teva is now the number three generic player with a slim gap between our sales and the number one and number two players. This April, we will bring in together Teva Kowa and Taiyo under one organizational umbrella which will be called Teva Saikou (phon), which in English means Teva Healthcare. Read the rest of this transcript for free on seekingalpha.com