Financial Data and Key Metrics Changes - The net asset value (NAV) increased by $252 million from the first quarter, primarily driven by positive performance in CVI, offset by decreases in auto service [5] - The investment funds ended down approximately 0.5% for the quarter, primarily driven by gains in the consumer cyclical sector, offset by broad market and refining hedges [6] - The holding company ended the quarter with $1.1 billion in cash and cash equivalents, and an additional $700 million of cash at the funds [10] Business Line Data and Key Metrics Changes - The Energy segment's consolidated EBITDA was negative $24 million for Q2 2025, compared to $103 million in Q2 2024, negatively impacted by unfavorable RINs valuation and reduced throughput volumes [14] - The auto service division saw revenues decrease by $8 million compared to the prior year quarter, but same-store revenues were relatively flat, improving from a 5% decline in the previous quarter [15] - The pharma segment initiated a pivotal trial for a new drug aimed at treating pulmonary arterial hypertension, with expectations for updates in 12 to 18 months [9][10] Market Data and Key Metrics Changes - CVI's share price increased by 38%, contributing to a $561 million increase in NAV from the first quarter [5] - The digital business at Caesars grew revenue by 24% and EBITDA by 100% in the second quarter, indicating strong market performance [12] Company Strategy and Development Direction - The company is focusing on maintaining liquidity to capitalize on opportunities within and outside existing operating segments, with a total liquidity of $3.5 billion at the holding company and $1.1 billion at subsidiaries [20] - The company plans to redeploy capital from the sale of a country club to replicate successful strategies in newly acquired properties [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the resolution of outstanding litigation related to small refinery exemptions, which could remove a $548 million liability [6] - The company sees considerable value creation potential in its portfolio, particularly in electric utilities and gas utilities, driven by AI-related demand [11] Other Important Information - The Board maintained the quarterly distribution at $0.50 per depositary unit [10] - The company closed 22 underperforming auto service locations, bringing the total to 44 for 2025, while planning to add 16 new locations by year-end [16] Q&A Session Summary Question: Regarding the decrease in cash balance at the holding company level - The decrease was primarily due to interest payments and LP distributions, with some impact from the CVR repurchase of about $32 million [22]

Financial Data and Key Metrics Changes - The company reported total revenues of $15.8 billion, a decrease of 2% both nominally and excluding foreign exchange impact [17] - Earnings per share were $2.13, with gross margin at 82.2%, an increase of 1.3 percentage points driven by favorable product mix [24][23] - The company expects full year revenue for 2025 to be between $64.3 billion and $65.3 billion, representing growth of 1% to 2% [26] Business Line Data and Key Metrics Changes - Oncology sales, particularly from Keytruda, increased by 9% to $8 billion, driven by robust demand for metastatic indications [18] - Sales of Gardasil decreased by 55% to $1.1 billion, primarily due to a decline in China [19] - The Animal Health business saw an 11% increase in sales, reflecting higher demand across all species [22] Market Data and Key Metrics Changes - Global growth excluding Gardasil in China was 7%, primarily driven by strength in oncology and animal health [17] - In the U.S., Vaxnuvance sales increased by 20%, benefiting from CDC stockpile activity [20] - The company anticipates a more significant headwind to growth in Japan for Gardasil in the second half of the year [28] Company Strategy and Development Direction - The company is focusing on a multi-year optimization initiative to redirect $3 billion of cost savings from lower growth areas to higher potential areas [25] - The acquisition of Verona Pharma is expected to enhance the cardiopulmonary program and reflects the company's commitment to transformative science [12] - The company aims to leverage its scientific expertise to deliver the next wave of innovations that can save and improve lives [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to growth in 2025 and highlighted the strong clinical momentum and new product launches [9] - The company is entering a period of rapid transformation, with a diversified pipeline and over 20 new growth drivers [14] - Management acknowledged challenges in the Chinese market for Gardasil but remains focused on new product launches to drive growth [28] Other Important Information - The FDA approved Inflonsia for RSV prevention in infants, marking a significant milestone for the company [38] - The company is conducting over 80 phase three studies across various therapeutic areas, indicating strong clinical development activity [10] Q&A Session Summary Question: Context for outcomes in the Cadence trial - Management indicated that the most important signal for success is the PVR, with the six-minute walk also being important [52] Question: Market size for Winrevir and ex-U.S. strategy - Management noted that the patient population for Winrevir is underdiagnosed, and they expect growth in the ex-U.S. market as reimbursements come in [64] Question: $3 billion restructuring announcement - Management clarified that the $3 billion is a reallocation of resources from slower growth areas to fund faster-growing segments, with an expectation of overall growth in spending [70][72] Question: Gardasil demand dynamics and ACIP recommendations - Management expressed confidence in Gardasil's safety and efficacy but noted the high evidentiary standard set by the FDA for any changes in dosing recommendations [77] Question: Diligence in assets between Chinese and Western companies - Management emphasized a high standard for diligence regardless of the origin of the assets, highlighting the strategic advantage of the Verona acquisition [86] Question: Progress on Winrevir and patient adoption - Management reported steady growth in patient adds for Winrevir and increasing adoption among less severe patients [96]

Financial Data and Key Metrics Changes - The company reported total revenues of $15.8 billion, a decrease of 2% both nominally and excluding foreign exchange impact [16] - Earnings per share were $2.13, reflecting strong fundamentals despite revenue decline [23] Business Line Data and Key Metrics Changes - Oncology sales, particularly from Keytruda, increased by 9% to $8 billion, driven by robust demand in both US and international markets [17] - Sales of Gardasil decreased by 55% to $1.1 billion, primarily due to a decline in China [18] - Winrevir achieved global sales of $336 million, with cumulative sales exceeding $1 billion in just over a year since launch [20] - The Animal Health business saw an 11% increase in sales, reflecting higher demand across all species [21] Market Data and Key Metrics Changes - Global growth, excluding Gardasil sales in China, was 7%, driven by strength in oncology and animal health [16] - The company noted that Gardasil channel inventories in China remain elevated, with soft demand impacting sales [28] Company Strategy and Development Direction - The company announced a multi-year optimization initiative to redirect $3 billion in cost savings from lower growth areas to higher potential areas [25] - The acquisition of Verona Pharma is expected to enhance the cardiopulmonary program and reflects the company's commitment to transformative science [10][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to growth in 2025, supported by new product launches and a strong pipeline [7][26] - The company anticipates challenges in the second half of the year, particularly with Gardasil in Japan and China [28] Other Important Information - The company is conducting over 80 phase three studies across various therapeutic areas, indicating strong clinical momentum [8] - The FDA approved Inflonsia for RSV prevention in infants, marking a significant milestone for the company [9] Q&A Session Summary Question: Context for Cadence outcomes - Management indicated that the most important signal for success in the Cadence study is the PVR, with the six-minute walk also being significant [51][52] Question: Ex-US uptake of Winrevir - Management noted that growth in the ex-US market is expected to accelerate in the second half of the year, with recent approvals in Japan [61][62] Question: Impact of $3 billion restructuring - Management clarified that the $3 billion will be reinvested into high-potential areas, with a focus on funding the pipeline and commercial launches [67][69] Question: Gardasil demand dynamics - Management expressed confidence in Gardasil's safety and efficacy, but noted challenges in the CDC purchasing dynamics and soft demand in China [72][78] Question: Valuation for Chinese partner Lenovo - Management confirmed that the Lenovo program is progressing as planned, with no issues reported [88][89]