Jeffrey B. Kindler
Okay. Next question, please.
Operator
And next David Risinger, Morgan Stanley.
David Risinger - Morgan Stanley
Thanks very much. I have a couple of questions. First of all, with respect to the longer-term other expense targets, specifically in 2012, they''re only slightly different from 2010. So I am hoping that Frank can discuss your use of free cash flow and what your assumptions are because it seems like you are being particularly conservative, given the fact that the company is going to be generating very high teens operating cash flow in coming years.
And then, second, with respect to the tax rate, could you just explain why in 2012 Pfizer is going to have a materially higher tax rate than all of its U.S. based peers? You are projecting 30%. Your U.S. peers are in the low to mid 20s. It seems like that is too conservative.
And then my final question just relates to Prevnar. Prevnar was weaker than expected in the quarter. Was that due to a work down of Prevnar inventory in the channel ahead of the first quarter Prevnar 13 launch? Thank you.
Jeffrey B. Kindler
Okay. I think Frank can hit all three of those.
Frank A. D’Amelio
So, Dave, on the other income, think about it this way, there is, really when all is said and done there is three items that go through there for 2012, it is an adjusted, it is really other deducts, because it is a charge, it is a debit. It is interest income, interest expense and royalty income. So it goes down, give or take, by a couple of hundred million from 2010, so it is declining. We have some royalty income that declines over the period as well and when you put all that together, you get the adjusted income number the adjusted deduction number that we put out there for 2012.
Our priorities for capital and use of cash haven''t changed. They are the priorities that we have talked about, that I''ve talked about before, whether it be the dividend, the amount of cash that we repatriate, debt repay downs, share buybacks, business development. Those haven''t changed. They are all priorities. They continue to be priorities.
On the tax rate, our tax rate this year on an adjusted income basis was 29.5%. We had guided to approximately 30%. And that is really being driven by the cash that we are repatriating from overseas as a result of the financing that we put in place for the Wyeth acquisition.
So, I view that as very similar to what we have been doing. The industry average is lower. And we were lower than the industry. Last year we were 22%. And really it is what we are doing as a result of the Wyeth acquisition that has caused the rate to increase. And on Prevnar, the short answer is, yes, to your question. It really was the result of – I will call it, lower Prevnar sales in anticipation of Prevnar 13 in the U.S.
Jeffrey B. Kindler
Okay. Next question, please.
Operator
Next is Jami Rubin, Goldman Sachs.
Jami Rubin - Goldman Sachs
Thank you. Just to follow-up on that question, Frank, if I take the high end of your 2012 guidance assumes $68.5 billion in revenues and assume low 40% operating margin, et cetera, et cetera, I am getting more like 240 in earnings. And that still assumes no change to the share base. And I know you just said your priorities haven''t changed, but just in terms of the guidance you''re putting out there, am I wrong to assume that you''re being quite conservative in terms of uses of cash? That is my first question.
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