Tag Archives: Company View

Wynn Resorts, Ltd – Company View

An excerpt from the ‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’ section is given below. The statement has been taken from the company’s 10-K filing for fiscal year 2007.


We are a developer, owner and operator of destination casino resorts. We currently own and operate Wynn Las Vegas, a destination casino resort in Las Vegas, Nevada, which opened on April 28, 2005, and Wynn Macau, a destination casino resort in the Macau Special Administrative Region of the Peoples Republic of China (Macau), which opened on September 6, 2006. In addition, on April 28, 2006, we commenced construction of Encore Suites at Wynn Las Vegas or Encore, a hotel casino resort which, when completed, will be fully integrated with Wynn Las Vegas. We have also commenced construction of Wynn Diamond Suites an additional hotel tower for Wynn Macau. Until the opening of Wynn Las Vegas in 2005, we were solely a development stage company.

Wynn Las Vegas

Wynn Las Vegas is located at the intersection of the Las Vegas Strip and Sands Avenue, occupies approximately 217 acres of land fronting the Las Vegas Strip and utilizes approximately 18 additional acres across Sands Avenue, a portion of which is utilized for employee parking.

We believe Wynn Las Vegas is the preeminent destination casino resort on the Strip in Las Vegas. Wynn Las Vegas currently features:

-An approximately 111,000 square foot casino offering 24-hour gaming and a full range of games, including private baccarat salons, a poker room, and a race and sports book;

-Luxury hotel accommodations in 2,716 spacious hotel rooms, suites and villas;

-22 food and beverage outlets featuring signature chefs, including the AAA Five Diamond, Mobil Five Star and Michelin award-winning restaurant, Alex;

-A Ferrari and Maserati automobile dealership;

-Approximately 74,000 square feet of high-end, brand-name retail shopping, including stores and boutiques featuring Alexander McQueen, Brioni, Cartier, Chanel, Dior, Graff, Louis Vuitton, Manolo Blahnik, Oscar de la Renta, Vertu and others;

-Recreation and leisure facilities, including an 18-hole golf course, five swimming pools, private cabanas and a full service spa and salon; and,

-Two showrooms, two nightclubs and lounges.

The Tower Suites at Wynn Las Vegas is the only casino resort in the world that has been awarded both the Mobil five star and AAA five diamond distinctions. In addition, Wynn Las Vegas was recognized in November 2007 by Michelin, the esteemed European restaurant rating system. Two Michelin stars were awarded to Alex and one Michelin star was awarded to each of Wing Lei and Daniel Boulud Brasserie. Additionally, Wynn Las Vegas received five red pavilions, the highest honor for Michelin rated accommodations.

In response to our evaluation of the completed Wynn Las Vegas project and the reactions of our guests, we began to make enhancements and refinements to Wynn Las Vegas in the third quarter of 2005 which continued throughout 2007.

Encore at Wynn Las Vegas

We are constructing Encore on approximately 20 acres on the Las Vegas Strip, immediately adjacent to Wynn Las Vegas. Encore plans include a 2,034 all-suite hotel tower fully integrated with Wynn Las Vegas, an approximately 72,000 square foot casino, additional convention and meeting space, as well as restaurants, a nightclub, swimming pools, a spa and salon and retail outlets. Encore is expected to open in December 2008.

Wynn Macau

We opened Wynn Macau on September 6, 2006.Wynn Macau currently features:

-An approximately 205,000 square foot casino offering 24-hour gaming and a full range of games, including private gaming salons, approximately 380 table games and approximately 1,270 slot machines;

-Luxury hotel accommodations in 600 rooms and suites;

-Casual and fine dining in five restaurants;

-Approximately 46,000 square feet of high-end, brand-name retail shopping, including stores and boutiques featuring Bvlgari, Chanel, Dior, Dunhill, Fendi, Ferrari, Giorgio Armani, Hermes, Hugo Boss, Louis Vuitton, Piaget, Prada, Rolex, Tiffany, Van Cleef & Arpels, Versace, Vertu, Zegna and others;

-Recreation and leisure facilities, including a health club, pool and spa; and,

-Lounges and meeting facilities.

During the year ended December 31, 2007, we completed an expansion of our Wynn Macau property. This expansion included approximately 75,000 square feet of additional gaming space, additional food and beverage amenities and three new retail stores. Subsequent to December 31, 2007, six additional retail stores opened. In addition to the gaming and retail facilities that opened in the expansion noted above, Wynn Macau opened its rotunda area which features a gold “prosperity tree” in conjunction with a Chinese zodiac-inspired ceiling level show incorporating a descending chandelier.

We have commenced construction on a further expansion of Wynn Macau, which was first announced in November 2006. This further expansion will add a fully-integrated resort hotel named “Wynn Diamond Suites,” with approximately 400 luxury suites and six villas, as well as additional VIP gaming areas, food and beverage and retail amenities.We expect Wynn Diamond Suites to open in the first half of 2010.

In response to our evaluation of the completed Wynn Macau and the reactions of our guests, we began to make enhancements and refinements to the property after its opening in 2006 and continued such enhancements during 2007.

We operate Wynn Macau under a 20-year casino concession agreement granted by the Macau government in June 2002.

Cotai Development

We have submitted an application to the Macau government for a concession of land in Cotai. We have reconfigured our site plan for 52 acres and are awaiting final approval.We are actively engaged in the design of our Cotai project.

Wyndham Worldwide – Company View

A statement by Stephen P Holmes, Chairman and Chief Executive Officer of Wyndham Worldwide is given below. The statement has been taken from the company’s 2006 annual report.

In 2006, we formed Wyndham Worldwide, uniting three highly successful companies, each a leader in its segment: lodging, vacation exchange and rentals, and vacation ownership. Together these three companies form a global hospitality company with a unique combination of scale, product range and geographic diversity.

Wyndham Hotel Group

Through a system of nearly 6,500 franchised and managed properties with over 543,000 rooms, Wyndham Hotel Group offers more hotels than any other company in the lodging industry. Our 10 brands generate a steady stream of franchise fees that contribute to strong revenue and earnings growth. In 2006, we opened 568 properties – our highest number since 1999 – adding a hotel every 15 hours. Our development pipeline as of December 31 includes 845 hotels and 92,000 additional rooms, with 15% planned for international markets. In 2006, revenue per available room (RevPAR) grew 13% and lodging revenues increased 24%. The group contributed 26% of total reportable segments EBITDA.

Wyndham Hotel Group franchises 10 brands, five of which operate internationally – Wyndham, Ramada, Days Inn, Super 8 and Howard Johnson. These brands are expanding globally through direct franchising, master franchises, management joint ventures and strategic joint venture alliances. With more than half the world’s lodging properties currently operated as independents, there are thousands of hotels that can benefit from the appeal of internationally recognized hotel brands to claim their fair share of the growing travel market. Doubledigit increases are projected for economy and mid-priced hotels in Europe and Asia. In the emerging markets of India and China, affordable and reliable economy and mid-priced hotels will be needed to service the massive, emerging middle class. Wyndham Hotel Group is already one of the largest U.S.-based hotel companies in China with 84 hotels in operation and is well positioned to benefit from this rapid growth.

RCI Global Vacation Network RCI Global Vacation Network is a global leader in non-hotel leisure accommodations with proprietary access to more than 60,000 vacation properties in approximately 100 countries. Through over 60 worldwide offices, we serve more than four million vacationing families each year and provide products and services to business customers that support the growth of the leisure real estate industry.These products and services include vacation exchange; vacation rentals; and advisory, research and asset management services. RCI Global Vacation Network’s brands include RCI; The Registry Collection; NorthCoursesm Leisure Real Estate Solutions; and more than 30 leading vacation rental brands.

RCI is the world’s largest vacation exchange company.Through its vast timeshare exchange network of more than 4,000 affiliated worldwide resorts, RCI served more than 3.4 million members in 2006.

The Registry Collection is one of the world’s largest luxury leisure asset exchange programs, offering members access to a global network of the very finest vacation properties and concierge services. NorthCoursesm Leisure Real Estate Solutions is an international leader in providing the full spectrum of leisure real estate advisory, research and asset management services. We are also the market leader in European vacation rental homes and global vacation condos, offering vacationers more than 56,000 rental accommodations including bungalows, campsites, castles, condos, cottages, and villas.

In 2006, RCI Global Vacation Network contributed 33% of total reportable segments EBITDA.

Wyndham Vacation Ownership Wyndham Vacation Ownership is the world’s largest timeshare business with approximately 150 vacation ownership resorts, more than 20,000 individual units and over 800,000 owners. Wyndham Vacation Ownership develops and markets points-based vacation ownership interests in timeshare resorts in top leisure destinations throughout North America, Mexico, the Caribbean and the South Pacific.We also provide consumer financing in conjunction with vacation ownership sales, and collect property management fees at our resorts.

In 2006, Wyndham Vacation Ownership’s gross vacation ownership interest sales increased by more than 25%. Unlike traditional fixed-week vacation ownership, our innovative pointsbased ownership programs give consumers substantially greater flexibility through a yearly allotment of points that can be spent in increments for custom-sized accommodations at different times of the year and for varying lengths of stay. Our products are designed to adapt to the ever changing travel needs and preferences of today’s vacationing consumers, allowing them flexibility in selecting locations and seasons for their vacations, all without forgoing the comforts of home in spacious, fully furnished condo-styled accommodations. Wyndham Vacation Ownership contributed 41% of total reportable segments EBITDA.

Wyndham Worldwide is Unique in the Travel Industry

With more than half of our revenue generated from franchise fees, property management fees, membership fees and exchange fees, combined with our international diversity, Wyndham Worldwide is an extraordinarily diversified hospitality company. As a result we are buffered from economic downturns in the cyclical hotel business, as well as the natural and manmade disasters that have affected other companies in recent years.

Leveraging the Wyndham Brand Our hotel management company, created in 2005 with the acquisition of the Wyndham Hotels and Resorts brand, creates a new source of fee income in the upscale segment of the lodging business and a springboard to future growth.We are re-branding our vacation ownership resorts under the Wyndham brand to leverage resort assets and marketing under one brand name.

One-Stop Shopping for Global Travel Global tourism revenues are expected to nearly double between 2007 and 2016 to more than $12 trillion. In the United States, tourism is the thirdlargest industry after automobiles and food stores. According to the Travel Industry Association (TIA), leisure travel accounts for 87% of all overnight trips in the United States compared with 13% for business travel.

Globally, 50% of all trips are for leisure, compared with 16% for business, with the balance devoted to religious, health care and other reasons. Leisure travel is the only travel segment that continues to increase every year regardless of the state of the world economy. Even after 9/11, when business travel dipped 15% in the United States between 2001 and 2003, leisure travel increased more than 7% during the same period.

Providing Value for Today’s Traveler Today’s consumers are demanding value for their travel dollar. Low-cost air carriers in the U.S., whose market share jumped from 12% to 28% in the last five years, reflect the popularity of economical services by choice, not necessity. With our economy, mid-price and upscale accommodations, which are expected to achieve continuing RevPAR growth in 2007, and a growing demand for luxury products like our Vacation Ownership “Presidential Suites” and RCI’s The RegistryCollection, Wyndham Worldwide is ideally positioned to capitalize on this ever-growing consumer expectation of value at each price point.

Wyndham Worldwide is benefiting from the age and wealth shifts in the global population. Members of the Baby Boomer generation are living longer and taking more trips. In addition to variety and value, these travelers are seeking out familiar brands as they book accommodations for their global adventures. U.S. travel abroad has grown by double digits in recent years. Sightseeing is giving way to “sight-doing,” as Americans are staying in one place to get to know it well. This is yet another trend that supports the growth of our timeshare and vacation home rentals product lines.

While Baby Boomer demand is growing, Gen Xers’ per capita business and leisure travel spending exceeds even that of Baby Boomers (see graph). Also, technology and greater flexibility in the workplace are leading to a blurring of business and leisure travel. Driven by time poverty, hyper-tasking, and access to last-minute travel bargains through the Internet, more and more travelers are extending their business trips into leisure weekends, leading to increased travel spending.

As consumers live longer, healthier lives, and seek more balance between work and family, they are taking more and more leisure trips that include up to three generations, fueling the popularity of our vacation ownership, vacation exchange and rental businesses. These consumers want the best value for their vacation dollar in addition to a “guarantee” that they will “share time” away from their otherwise time-deprived, demanding lives.

Wyndham Worldwide’s Competitive Edge Wyndham Worldwide possesses a strong portfolio of global, well-recognized brands with significant scale within the hospitality industry. We enjoy a multiplicity of inventory, customers, and geographic markets that helps mitigate the effects of economic downturns. We generate stable revenues and earnings from a variety of sources with a history of strong and stable cash flows. We have a talented management team that produces innovative products and inspires the creativity and loyalty of a remarkably diverse family of employees.

I want to personally thank each and every one of our over 30,000 employees, our customers and our shareholders for their commitment to the success of Wyndham Worldwide. It is our collective strength that has created a competitive edge for Wyndham Worldwide. Each of our business units has forged an industry-leading position, and together, they generated an 11% increase in revenues in 2006. These results would be commendable in any year, but extraordinary in light of our corporate and operating initiatives in 2006: our transformation into an independent, publicly traded company; the integration of two newly acquired hotel companies and the re-branding of our vacation ownership business to the Wyndham name.

Bound in hospitality and bound to grow, our three business units have united to form Wyndham Worldwide, the global leader in accommodations.

Wyeth – Company View

A statement by Robert Essner, Chairman and Chief Executive Officer of Wyeth is given below. The statement has been taken from the company’s annual report 2006.

I am pleased to report that 2006 was an excellent year for Wyeth. Building on our strong performance in 2005, we once again delivered on our commitment to expand our growth, strengthen our position for the future and lead the way to a healthier world.

Driven by the steady growth of our key products, Wyeth reported record revenue. We filed four New Drug Applications (NDA) for new products, demonstrating solid productivity from our research and development (R&D) efforts. Overall, our new product pipeline significantly expanded and advanced. By maximizing productivity, controlling costs and delivering high value, we helped position Wyeth to address the economic realities of a changing health care environment. And, as we have done every year, during 2006 we continued to listen to our stakeholders, to learn from them and to apply those lessons to our business.

Highlighted below are some of Wyeth’s significant achievements during 2006 and in early 2007. These demonstrate the success of our efforts and our potential to build upon them:

– Wyeth’s 2006 net revenue increased 9 percent to nearly $20.4 billion, a record high for the Company. Pro forma earnings grew 14 percent, the second consecutive year of double-digit growth. An in-depth review of our 2006 performance is provided in Wyeth’s 2006 Financial Report, the companion piece to this Annual Review.

– We achieved annual sales of more than $1 billion for each of six core product franchises: Effexor, Prevnar, Protonix, Enbrel,Wyeth Nutrition and the Premarin family – demonstrating the breadth and diversity of our portfolio.

– Revenue from all of our biotechnology products in 2006 reached $5.7 billion, representing about a third of Wyeth Pharmaceuticals’ total revenue and making Wyeth the fourth largest biotechnology company in the world.

– In January 2007, we received an approvable letter from the U.S. Food and Drug Administration (FDA) for Pristiq, a serotonin-norepinephrine reuptake inhibitor for the treatment of major depressive disorder, which will be launched with a specific focus on women.

– Wyeth Consumer Healthcare provided an important revenue contribution and positioned itself for future growth through the introduction of innovative new products such as Advil PM.

– Sales for Fort Dodge Animal Health rose 6 percent, driven by increased revenue from its companion animal and livestock products. The division’s robust new product pipeline is expected to continue as a source of strong growth.

– We increased our dividend to stockholders for the second consecutive year, demonstrating the confidence we have in our Company’s future and in the strength of its financial resources.

In the section that follows this report, you will read about how we’re striving to improve world health and sustain our growth through a near-term pipeline of innovative products. And in a special feature story on an area of enormous unmet need – Alzheimer’s disease – you will read about how Wyeth researchers are seeking critical breakthroughs for patients, their caregivers and society.

Wyeth Pharmaceuticals

Our pharmaceutical business delivered outstanding results by extending the reach of our products and enhancing their potential for further growth. At the same time, Wyeth Pharmaceuticals took significant steps to increase the efficiency and responsiveness of its sales organization and to expand a variety of educational efforts for patients.

Effexor and Effexor XR continued as the world’s number one antidepressant franchise. Sales reached $3.7 billion in 2006, an increase of 8 percent. An additional indication for use of Effexor XR in panic disorder contributed to growth while the results of the PREVENT study provided further evidence of the sustained efficacy of Effexor XR in treating major depressive disorder.

Prevnar (Prevenar outside the United States) was the number one selling vaccine in the world, with 42 million doses manufactured and net sales of nearly $2 billion, an increase of 30 percent over 2005. Strong global usage of Prevenar accelerated in 2006 as nine more countries, including Germany, Mexico and the United Kingdom, added Prevenar to their National Immunization Programs (NIP). In total, 16 countries have incorporated Prevenar into their NIPs, and growing evidence of the vaccine’s high value creates opportunities for further expansion.

Protonix, for erosive acid reflux disease, grew 7 percent to approximately $1.8 billion. During the year, RENEW, an innovative patient educational program for Protonix, was launched, providing sample starter medications and educational materials to facilitate discussions between patients and their physicians and to help ensure patient compliance over the longer term.

Worldwide net sales for Enbrel, the number one biotechnology product in its category in North America, grew 20 percent to more than $4.4 billion. This includes sales in the United States and Canada that are recorded by our marketing partner Amgen Inc.

While all regions contributed to growth, strongest results came from Europe, where sales increased 33 percent, making Enbrel the number one ranked biotechnology product there.

Wyeth Nutrition is a world leader in the development, manufacture and distribution of scientifically based nutritional products for infants and toddlers.Wyeth Nutrition continued to grow at double-digit rates in 2006. Global sales grew to $1.2 billion, an increase of 15 percent over 2005.The two regions enjoying the fastest growth were Asia/Pacific, which comprised nearly 60 percent of global nutritional sales and grew 23 percent, and Latin America, which made up 16 percent of global sales and grew 15 percent.

Having recently celebrated its 90th anniversary, Wyeth Nutrition has evolved into a significant international player with 60 affiliates selling our products around the world. The Company markets its premium product line under the Gold banner and, in late 2006, was first to market with an innovative new product called Gold with lutein, which seeks to protect the eyes of infants. To meet increasing demand for providing infants and toddlers with high-value products like the Gold line, Wyeth Nutrition increased its manufacturing capacity in Mexico and began construction of an expanded facility in the Philippines.

Wyeth remained a global leader in hormone therapies and was the U.S. market leader as sales of the Premarin family of products increased 16 percent globally and 21 percent in the United States. New data published in 2006 helped to further clarify the benefits and risks of hormone therapy for women, and Wyeth currently is working with physicians and their patients to appropriately address patient needs based on the emerging data.

Zosyn (Tazocin outside the United States) continued to be the largest selling I.V. antibiotic worldwide with global net sales of $972 million, a 9 percent increase over 2005. The success of Zosyn is attributable to its clinical efficacy and its ability to help hospitals control the emergence of resistant bacteria.

Tygacil, our new antibiotic product, also delivered net sales growth during the year. Since its launch in 2005, it has gained 55 worldwide regulatory approvals and now is available in 33 markets.Tygacil is particularly important in hospitals for patients infected with common as well as more dangerous resistant infectious pathogens in complicated skin/skinstructure and intra-abdominal infections.

All these products require the right selling model for a changing health care environment. We’re pleased to report that the new primary care selling model we implemented in the United States last year is working well. In 2006, we jumped from No. 8 to No. 1 in the Health Strategies Group’s annual primary care physician audit, which demonstrates physicians’ initial satisfaction with our new structure.

Wyeth Consumer Healthcare

Excluding the impact of revenue from Solgar Vitamin and Herb, which was divested in 2005, sales for Wyeth Consumer Healthcare increased 1 percent to more than $2.5 billion in 2006, spurred largely by a strong focus on supporting our core global brands.Three growth drivers – Advil, Centrum and Caltrate – benefited significantly from this strategy.

The Advil franchise grew 7 percent around the world, largely fueled by new marketing efforts. In Canada, Advil increased its market share and became the leader in the analgesic category for the first time. The Centrum family of vitamin products achieved 4 percent sales growth, driven by innovations in Europe and growth in the age 50+ population. Centrum Advantage was launched in the Canadian market in 2006.

Caltrate grew 3 percent largely due to international expansion. Overall, international sales increased 2 percent while U.S. sales declined 3 percent. The decline in the United States primarily resulted from the ongoing impact of legislative restrictions on sales of pseudoephedrine-containing cough/cold formulations. In response to these restrictions, Wyeth Consumer Healthcare transitioned most of its products to an alternative active ingredient.This reformulation is expected to impact sales favorably in 2007. Outside the United States, a number of major international markets enjoyed double-digit growth, including Canada, China, Colombia, Mexico, Portugal, Taiwan, Thailand and Venezuela. Wyeth Consumer Healthcare was particularly successful in achieving operating efficiencies to fund new investments and increase net income. Innovation also was a key contributor to growth, highlighted by the successful launch of Advil PM.

Opportunities for future growth now are being developed, including an innovative Caltrate food-grade line in China, the start of a consumer health care business in Russia, and an intense research and development effort to deliver new forms of Advil.

Fort Dodge Animal Health

Sales of our Fort Dodge Animal Health products moved closer to $1 billion, reaching $936 million and increasing 6 percent over the prior year. In 2006, Fort Dodge received pan-European regulatory approval to market ProMeris/ProMeris Duo, products offering flea and tick protection for dogs and flea protection for cats. Approval in the United States is expected in the first half of 2007. Another key achievement was the U.S. launch of Suvaxyn PCV2 One-Dose, a vaccine for the prevention of porcine circovirus, a disease that leads to a wasting syndrome in pigs. In the face of global concerns over avian influenza, Fort Dodge received approval for Poulvac Flufend, a new inactivated reverse genetics vaccine for poultry that addresses the potential pandemic strain of the avian influenza virus.

Research and Development

Our greatest challenge at Wyeth is to create breakthrough medicines that serve the needs of patients in an increasingly competitive environment. From a research and development standpoint, that challenge requires thinking and acting differently in discovering and advancing to market potentially important compounds. That is why we have instituted a new Learn and Confirm paradigm for drug development – a two-phase approach to streamlining the traditional multiple phases of development. This effort places greater emphasis on high-performing teams, rapid decision making and improved clinical trial designs.

Other accomplishments include the creation of a global network of 10 early clinical development centers to optimize our global patient mix, the streamlining of clinical data collection processes using electronic data capture, and the simplification of clinical trial material shipments and processes through a strategic alliance with a leading, worldwide logistics provider.

We continued to realize solid results from our R&D organization, drawing upon our expertise in three distinct discovery platforms: small molecules, biologics and vaccines. In 2006, Wyeth filed NDAs for Viviant, for prevention of postmenopausal osteoporosis; Pristiq, for non-hormonal treatment of moderate to severe vasomotor symptoms associated with menopause; Torisel, for patients with advanced renal cell carcinoma, which received priority review status; and bifeprunox – filed with our partner Solvay Pharmaceuticals – for the treatment of schizophrenia. In addition, we submitted regulatory applications for a reformulation of BeneFIX, one of our hemophilia agents, as well as for a new adult granule-dose formulation of Protonix, and we received regulatory approval for new dosing recommendations for Rapamune in high-risk renal transplant patients.

Wyeth also is seeking to expand its presence in the contraceptive market with Lybrel, currently awaiting final FDA approval. Lybrel is a novel, continuous-use oral contraceptive that is designed to provide significant benefits in terms of menstrual-cycle regulation.

During the year, we successfully advanced 15 new molecular entities and two new vaccine constructs from discovery into development. In total, over the past six years, 75 new drug candidates were placed into development, the majority having potential to be first- or best-in-class therapies. That has made Wyeth a leading company within our industry peer group in discovering novel molecules and advancing them rapidly into clinical development. We also believe that our pipeline is among the most robust in the industry. Others share our positive views. For example, early in 2007, R&D Directions magazine recognized Wyeth as the company with the best central nervous system product pipeline in the industry.

In 2007, we expect to submit several important filings, including Viviant, for the treatment of osteoporosis; Aprela, for the treatment of menopausal symptoms and prevention of postmenopausal osteoporosis; methylnaltrexone subcutaneous, for opioidinduced constipation in advanced medical illness; methylnaltrexone I.V., for post-operative ileus; and Tygacil, for use in community-acquired pneumonia and hospital-acquired pneumonia.

A Special Report on Alzheimer’s Disease Research

I believe that Alzheimer’s disease is the biggest health care issue of my generation. More than 4.5 million Americans suffer today, and, as the baby boomer generation ages, it is expected that this number will grow substantially. Add to that millions more affected by the disease – the families and caregivers of Alzheimer’s patients – and the billions of dollars in health care costs borne by society, and the nature of the challenge and the critical importance of doing everything we can to overcome it become clear. Clinical research in this field is complex and expensive with outcomes uncertain, but the impact of success would be enormous.

We’re proud that Wyeth is at the cutting edge in seeking new drugs not only to treat Alzheimer’s disease symptoms better than currently available therapies but potentially to stop or even reverse the course of this crippling and ultimately fatal disease. Our goal is to turn the corner on this terrible illness and provide new hope.

Success will come not just in the laboratory but also on the regulatory front and through the development of strong partnerships with patient groups, government, regulatory agencies, and scientists in industry and academia. We must encourage additional research, accelerated and informed new drug reviews, and more aid to caregivers who bear the brunt of this health scourge. You will read about some of the patients and their caregivers in this report. These family members are courageous beyond measure in doing everything in their power to try to care for their loved ones at home.

The People of Wyeth

Our Company has exhibited a track record of consistency, performance and responsibility. The people of Wyeth know that to continue on this path, we must maintain a relentless focus on improving our Company and running it even more efficiently. Our people understand that we have an imperative to change Wyeth fundamentally in order to succeed in the years ahead. At its core, this effort is based on two simple ideas. First, every year we will aim to grow our revenue through the quality of our products and their value to the people we serve. And second, every year we will aim to grow our profit at a faster rate than our revenue by running our Company more efficiently and productively. These goals drive our results and determine how they are evaluated and how we plan to improve upon them in the future.

Changes in Management

I am pleased that we have continued to strengthen the leadership of our organization in a variety of ways. In October 2006, we welcomed Raymond J. McGuire to our Company’s Board of Directors. Mr. McGuire is a Managing Director and Co-Head, Global Investment Banking, for Citigroup Global Markets Inc. I know he will provide important perspectives on our business operations and strategy. In January 2007, Bernard Poussot was elected Chief Operating Officer of Wyeth and joined the Company’s Board of Directors. Earlier in 2006, he was promoted to President and Vice Chairman of Wyeth. In his more than 20 years with our Company, Mr. Poussot’s leadership has helped us transform our organization and set it on a course for continual growth. Also in 2006, Kenneth J. Martin was promoted to Chief Financial Officer and Vice Chairman of Wyeth. In addition to heading our finance organization, Mr. Martin took on responsibility for our infrastructure initiative, which is critical to our operating efficiency and, therefore, to our future success. Further supporting our management team, Joseph M. Mahady was named President – Global Business for Wyeth Pharmaceuticals and continues as a Senior Vice President of Wyeth. In his new role, Mr. Mahady assumes operational responsibility for Wyeth’s global pharmaceutical business. With this expanded responsibility, I am certain he will bring significant insights to our worldwide business and commercial portfolio. In addition, Geno J. Germano was named President and General Manager, Wyeth Pharmaceuticals – United States and Wyeth Pharmaceutical Business Unit. Robert E. Landry, Jr., was elected Treasurer of Wyeth.

Corporate Social Responsibility

Wyeth recognizes its significant responsibilities as a global corporate citizen. One of the most important actions we can take in this regard is to expand access to our medicines. Our patient assistance programs in 2006 provided free Wyeth medicines, valued at $160 million, to 250,000 Americans who were without adequate prescription drug coverage or insurance. Outside the United States, we worked to support maternal health care, ensure access to reproductive and child health resources, and develop a new treatment option for river blindness. We are working with the Global Alliance for Vaccines and Immunization to find an affordable and sustainable way to bring vaccines to children in the developing world. We also are working hard to help protect and enrich the environment in the communities where we live and work by steadily reducing environmental emissions and ensuring the safety of employees at all of our facilities.

Looking to the Future

As we look to the future, we know that we will be operating in a tough environment around the world. To compete, we will continue to attract, retain and engage a diverse workforce that broadens our perspectives, enhances our customer connections and increases our creativity.The more productive and innovative we are in our operations, the better we will be in addressing concerns about pricing and access to our medicines. We have made important progress in a relatively short time as part of a longer-term effort to find new and more efficient ways to meet the challenges of the 21st century. The momentum we now have can be accelerated. We will continue to foster a high-performance culture where every person has a role, every person takes responsibility and every person acts to make a difference. We will continue to execute against aggressive plans and develop systems to help ensure both success and compliance with the highest legal and ethical standards around the world. And we will foster innovation through our creativity, challenging what we do every day and seeking improvements and opportunities for the years ahead. Our goal, over the next decade, is to make Wyeth a stronger company with an even higher value portfolio of products to fuel growth.

I want to take this opportunity to thank the people of Wyeth for making a difference for our Company and those we serve.Thanks to their efforts, our growth has accelerated, our pipeline never has been stronger and we are on the path to deliver important new medicines to a world in great need.

Company View of World Fuel Services Corporation

A statement by Paul H. Stebbins, chief executive officer and chairman of the board of World Fuel Services Corporation and Michael J. Kasbar, President and Chief Operating Officer are given below. The statement has been taken from the company’s 2006 annual report.
We experience a year of continued change and transformation in 2006. And while change is a constant we have come to expect, the current rate of change in the market today is unprecedented. This poses unique challenges and opportunities in a market where global service standards have grown more generic, commoditized and impersonal.The demand for authentic and highly personalized service, with rapid response delivery is acute and our ability to provide that service at scale has become an important competitive differentiator for out offering. Agility innovation and speed are critical components of creating and sustaining durable value for our global customers and suppliers. It has become axiomatic that we live in an age in which a vast amount of information and decision response cycles are measured in seconds, not hours.The ability to [process information in real time, distill it down to its essential components and use it to execute in the market has become a defining characteristic of every successful global company. It is a core competence without which no performance driven company can long endure. At World Fuel, authentic personal service, innovative thinking and rapid response have become the hallmarks of our success and each was a driver of our growth across the spectrum of key performance metrics in 2006.

-Revenue grew $2.1 billion or 24%
-Grass profit grew $35.4 million or 20%
-Operating income grew $20.0 million or 35%
-Net income grew $24.3 million or 61% – Return on equity was 17% and,
-Out share price increased from $33.72 to $44.46, an increase of 32%
We are proud of out performance, particularly given the volatile operating environment we observed throughout the year. More than anything else, 2006 will be remembered for volatility in the oil markets. In the midst of this volatility, we were able to add significant value to our customers and suppliers by helping them manage their exposure in a turbulent market.This was not easy when one considers that crude oil prices began the year near $60 per barrel, ralled more than 30% ti $77 per barrel at mid-year, only to decline late in the year to almost $50 per barrel. OPEC cuts and end-user demand ultimately created a floor. But there was no single airline, shipping company or fuel consumer which did not experience the impact of volatility and some frustration at knowing that oil prices were being driven as much by the financial markets as they were by true supply and demand dynamics. Our ability to help out customers and suppliers navigate these challenging markets was a clear demonstration that World Fuel performs best under pressure.


Out aviation segment had another great year in 2006 with income from operations growing $168 million or 42% over the prior year. While volume only grew by 21.9 million gallons or 1% year over year, it is important to remember that we terminated our fuel management contract with America West mid-year and successfully replaced approximately 225 million gallons of fuel management volume in the second half of the year. At an industry level, we were pleased to see the aviation industry improve its overall performance in spite of the rising cost of fuel which increased by $21billion to $112 billion as compared to the previous year’s total of $91 billion. Cost-cutting initiatives and strong passenger load factors helped the industry turn profit of $500 million following $3.2 billion of losses in 2005. This marks the first profitable year for the airlines since 2000 and analysts are estimating airline profitability to be even stronger in 2007. World Fuel experienced growth in every segment of the market in 2006 and we are well positioned for 2007.


By executing on our strategy of deep portfolio analysis and highly targeted marketing, our marine segment has a very strong year in 2006. volume grew 3.1 million metric tons or 21% while operating income grew %8.9 million or 25% over the prior year. At an industry level, the shipping industry enjoyed significant growth in 2006 in spite of early weakness in the tanker, bulk, and container markets caused by increased capacity. Toward the latter part of 2006 we saw strengthening in the market which we believe will carry over into 2007. The volatility in oil prices played to our strengths as a value-added partner to both the shipping and oil supply communities. Customers challenged by a fast moving spot market looked to World Furl to help time their purchases in the market and manage volatility. Suppliers facing the challenge of managing their inventories in a volatile market relied on us to provide financial strength and retable demand. We are pleased with our 2006 marine results and the foundation it provides for 2007.

Our emerging land segment began to show real promise in 2006 as volume grew by 19.5 million gallons or 11% and operating income grew by $0.2 million or 21%. While still small relative to our core aviation and marine business, we were very happy with the progress our team made throughout the year. Higher prices did little to quell demand and despite an increase of 16% over last year’s average gasoline price, 2006 consumption was on par with 2005 consumption. Diesel demand increased by almost 2% despite a 14% increase in price. Out primary objectives in 2006 were to broaden out base of supply expand our sales team and introduce derivatives to out customers. We were successful in all three areas and look forward to exploring further opportunities in 2007.
World Fuel continues to grew and prosper in 2006. Dynamic markets, volatile prices and an ever changing economic landscape all provided opportunities for us to add value to our customers and suppliers. We successfully penetrated new markets, expanded out products offering and achieved significant growth in a fast changing market. As we look forward in 2007, we remain focused on authentic service, speed of response and further development of each of our markets. We remain

committed to the further expansion of our business model, and we appreciate the continued support of our shareholder.


A statement by Gale E. Klappa, Chairman, President and Chief Executive Officer of Wisconsin Energy Corporation is given below. The statement has been taken from the company’s 2005 annual report.
In many ways, 2005 can best be described as a year of promise and performance for Wisconsin Energy.
Promisebecause a number of positive developments occurred that will allow us to move forward building the infrastructure Wisconsin needs to meet the state’s growing demand for energy.
Performancebecause we were able to deliver higher customer satisfaction, solid financial results, and real shareholder value.

Promise and Performance: Financial Highlights

Earnings from continuing operations totaled $304 million or $2.56 a share for 2005.
On a comparable basis in 2004, earnings were $220 million or $1.84 per share. Warm summer weather, lower debt levels, and six months of earnings from the new power plant we brought into service in July were key factors in our improved results.
I’m also pleased to report that Wisconsin Energy stock continued to gain in value last year, trading at an all-time high of $40.83 a share on October 4. The stock closed the year above $39 a share up more than 15 percent from year-end 2004. And over the past six years, Wisconsin Energy stock has outperformed the S&P 500 and our peer group of 30 utilities across the United States.
Our ratio of debt to total capital in the business remained essentially unchanged as we closed 2005. We accomplished this in the face of soaring prices for natural gas, two refueling outages and vessel head replacements on the reactors at our Point Beach Nuclear Plant, and the investment of nearly $750 million to improve our energy production and delivery system in Wisconsin and Michigan’s Upper Peninsula.
In January 2006, our board of directors voted to raise the dividend on our common stock by 4.5 percent. This is the third time in three years that we’ve been able to increase our dividend payments to you a reflection of the strong performance of our business and our confidence in our long-term business plan.
And as we turned the page on the new year, we were pleased to receive word that Forbes magazine named Wisconsin Energy one of the 10 best managed utilities in America.

Promise and Performance: Operational Highlights

As I mentioned earlier, we made significant progress on our Power the Future plan in 2005. In late June, the Supreme Court of Wisconsin reinstated an order from the Wisconsin Public Service Commission authorizing construction of two new coal-fired units at our site in Oak Creek, south of Milwaukee. With regulatory approvals secured, work began in earnest on this $2.2 billion project.
At our Port Washington site north of Milwaukee, the first of two new gas-fired units went into service on July 16 on time and on budget. This new power station, which was named best gas-fired project of the year by Power Engineering magazine, is a cornerstone of our promise to deliver reasonably priced energy and improved environmental performance for decades to come.
We’ll continue to move forward on the second unit at Port Washington this year. We expect to complete the project in time for the peak summer season in 2008.
Our nuclear units at Point Beach also achieved several milestones last year. In late December, the U.S. Nuclear Regulatory Commission extended the operating licenses for both units for an additional 20 years to 2030 and 2033, respectively. And Point Beach unit one set a plant record with 472 days of continuous operation before being taken out of service for normal refueling.

A Promising Economy

As we look back on the year, I believe it’s also important to note that nearly every sector of the Wisconsin economy posted gains during 2005. The state added some 37,700 jobs last year. In fact, according to the Bureau of Labor Statistics, Wisconsin added more jobs than nearly every neighboring state. Manufacturing and construction led the way, with the construction sector setting record employment levels during every month of 2005.
Our customer base and the demand for electricity and natural gas reflect this economic strength. We now serve 1.1 million electric customers in Wisconsin and upper Michigan and more than 1 million natural gas customers in Wisconsin. Our customers used 32.5 million megawatt hours of electricity last year underscoring the ongoing need for energy to power the region’s economy.
Promise and Performance: Customer Satisfaction and Reliability

Despite unprecedented volatility in the fuel markets that resulted in higher prices for electricity and natural gas, our customer satisfaction scores rose again in 2005. In the J.D. Power study of satisfaction among business customers, we ranked second in the Midwest and fifth out of 53 major electric utilities nationwide.
And in our own surveys, more customers were very satisfied with the company and with our services than in 2004.
We also maintained our status as one of the most reliable utilities in the country. In mid- September, one of the largest storms in the company’s history left nearly 128,000 of our customers without power. The response from our crews and those who traveled here to help was swift and effective. We restored power to 70 percent of those customers in 24 hours. And virtually all were back in service in a record time of less than 60 hours.
As part of our effort to become the industry leader in customer satisfaction, we also increased the number of follow-up calls we make to customers after a transaction or an outage. In addition, we expanded our Business Contact Center in 2005 to better serve the special needs of small businesses throughout our region.

A Promise for the Future

We know from the lessons of history and the success of great businesses that financial discipline, a solid growth plan, and a relentless focus on customer satisfaction lead to greater shareholder value. Our focus will be to make this enterprise even more valuable to our customers and stockholders in the year ahead. Thank you for your confidence and support