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These terms and conditions govern your use of the website alphaminr.com and its related services.
These Terms and Conditions (“Terms”) are a binding contract between you and Alphaminr, (“Alphaminr”, “we”, “us” and “service”). You must agree to and accept the Terms. These Terms include the provisions in this document as well as those in the Privacy Policy. These terms may be modified at any time.
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DELAWARE
(State of Incorporation)
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13-5315170
(I.R.S. Employer Identification No.)
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YES
X
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NO ___
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YES
X
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NO ___
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YES ____
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NO
X
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Page
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Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2012 and October 2, 2011
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Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 and October 2, 2011
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Three Months Ended
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Nine Months Ended
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||||||||||||
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(MILLIONS, EXCEPT PER COMMON SHARE DATA)
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September 30,
2012 |
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October 2,
2011 |
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September 30,
2012 |
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October 2,
2011 |
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||||
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Revenues
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$
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13,976
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$
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16,609
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$
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43,918
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$
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49,118
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Costs and expenses:
|
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||||
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Cost of sales
(a)
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2,665
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3,409
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8,162
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10,449
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||||
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Selling, informational and administrative expenses
(a)
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3,847
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4,457
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11,801
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13,635
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||||
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Research and development expenses
(a)
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1,981
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2,176
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5,734
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6,487
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||||
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Amortization of intangible assets
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1,228
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1,389
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3,939
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4,138
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||||
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Restructuring charges and certain acquisition-related costs
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302
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1,090
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1,089
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2,458
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||||
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Other deductions––net
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962
|
|
|
547
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3,283
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1,802
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||||
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Income from continuing operations before provision for taxes on income
|
2,991
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3,541
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9,910
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10,149
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||||
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Provision/(benefit) for taxes on income
|
(119
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)
|
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1,216
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1,882
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3,167
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||||
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Income from continuing operations
|
3,110
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2,325
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8,028
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6,982
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||||
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Discontinued operations:
|
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||||||||
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Income from discontinued operations––net of tax
|
104
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96
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249
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303
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||||
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Gain on sale of discontinued operations––net of tax
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—
|
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1,328
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—
|
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1,316
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||||
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Discontinued operations––net of tax
|
104
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1,424
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249
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1,619
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||||
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Net income before allocation to noncontrolling interests
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3,214
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3,749
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8,277
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8,601
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||||
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Less: Net income attributable to noncontrolling interests
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6
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11
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22
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31
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||||
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Net income attributable to Pfizer Inc.
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$
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3,208
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$
|
3,738
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$
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8,255
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$
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8,570
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Earnings per common share––basic:
(b)
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Income from continuing operations attributable to Pfizer Inc. common shareholders
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$
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0.42
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$
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0.30
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$
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1.07
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$
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0.88
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Discontinued operations––net of tax
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0.01
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0.18
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0.03
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0.21
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Net income attributable to Pfizer Inc. common shareholders
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$
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0.43
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$
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0.48
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$
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1.10
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$
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1.09
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Earnings per common share––diluted:
(b)
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Income from continuing operations attributable to Pfizer Inc. common shareholders
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$
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0.41
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$
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0.30
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$
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1.06
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$
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0.88
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Discontinued operations––net of tax
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0.01
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0.18
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0.03
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0.20
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Net income attributable to Pfizer Inc. common shareholders
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$
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0.43
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$
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0.48
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$
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1.09
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$
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1.08
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Weighted-average shares––Basic
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7,436
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7,770
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7,483
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7,877
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Weighted-average shares––Diluted
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7,508
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7,810
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7,550
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7,925
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Cash dividends paid per common share
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$
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0.22
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$
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0.20
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$
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0.66
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$
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0.60
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(a)
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Exclusive of amortization of intangible assets, except as disclosed in
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(b)
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EPS amounts may not add due to rounding.
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Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
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(MILLIONS OF DOLLARS)
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September 30,
2012 |
|
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October 2,
2011 |
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September 30,
2012 |
|
|
October 2,
2011 |
|
||||
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Net income before allocation to noncontrolling interests
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$
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3,214
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$
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3,749
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$
|
8,277
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|
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$
|
8,601
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Other Comprehensive Income/(Loss)
|
|
|
|
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|
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|
|
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|
||||
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Foreign currency translation adjustments
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$
|
153
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|
$
|
—
|
|
|
$
|
(1,565
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)
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$
|
2,546
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|
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Reclassification adjustments
(a)
|
|
—
|
|
|
(130
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)
|
|
—
|
|
|
(137
|
)
|
||||
|
|
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153
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|
|
(130
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)
|
|
(1,565
|
)
|
|
2,409
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|
||||
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Unrealized holding gains/(losses) on derivative financial instruments
|
|
446
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|
|
(1,051
|
)
|
|
217
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|
|
(516
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)
|
||||
|
Reclassification adjustments for realized (gains)/losses
(a)
|
|
(221
|
)
|
|
653
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|
|
(95
|
)
|
|
(81
|
)
|
||||
|
|
|
225
|
|
|
(398
|
)
|
|
122
|
|
|
(597
|
)
|
||||
|
Unrealized holding gains/(losses) on available-for-sale securities
|
|
35
|
|
|
(74
|
)
|
|
127
|
|
|
(94
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)
|
||||
|
Reclassification adjustments for realized (gains)/losses
(a)
|
|
(9
|
)
|
|
23
|
|
|
24
|
|
|
32
|
|
||||
|
|
|
26
|
|
|
(51
|
)
|
|
151
|
|
|
(62
|
)
|
||||
|
Benefit plans: Actuarial gains/(losses)
|
|
(88
|
)
|
|
1
|
|
|
(592
|
)
|
|
4
|
|
||||
|
Reclassification adjustments related to amortization
(b)
|
|
121
|
|
|
68
|
|
|
351
|
|
|
208
|
|
||||
|
Reclassification adjustments related to curtailments and settlements, net
(b)
|
|
48
|
|
|
85
|
|
|
160
|
|
|
258
|
|
||||
|
Other
|
|
(36
|
)
|
|
(20
|
)
|
|
18
|
|
|
(164
|
)
|
||||
|
|
|
45
|
|
|
134
|
|
|
(63
|
)
|
|
306
|
|
||||
|
Benefit plans: Prior service credits/(costs) and other
|
|
(3
|
)
|
|
—
|
|
|
23
|
|
|
1
|
|
||||
|
Reclassification adjustments related to amortization
(b)
|
|
(19
|
)
|
|
(17
|
)
|
|
(53
|
)
|
|
(52
|
)
|
||||
|
Reclassification adjustments related to curtailments and settlements, net
(b)
|
|
(4
|
)
|
|
(16
|
)
|
|
(86
|
)
|
|
(49
|
)
|
||||
|
Other
|
|
4
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||
|
|
|
(22
|
)
|
|
(33
|
)
|
|
(116
|
)
|
|
(104
|
)
|
||||
|
Other comprehensive income/(loss), before tax
|
|
427
|
|
|
(478
|
)
|
|
(1,471
|
)
|
|
1,952
|
|
||||
|
Tax provision/(benefit) on other comprehensive income/(loss)
(c)
|
|
73
|
|
|
(216
|
)
|
|
72
|
|
|
(276
|
)
|
||||
|
Other comprehensive income/(loss) before allocation to noncontrolling interests
|
|
$
|
354
|
|
|
$
|
(262
|
)
|
|
$
|
(1,543
|
)
|
|
$
|
2,228
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Comprehensive Income
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Comprehensive income before allocation to noncontrolling interests
|
|
$
|
3,568
|
|
|
$
|
3,487
|
|
|
$
|
6,734
|
|
|
$
|
10,829
|
|
|
Less: Comprehensive income attributable to noncontrolling interests
|
|
5
|
|
|
7
|
|
|
3
|
|
|
35
|
|
||||
|
Comprehensive income attributable to Pfizer Inc.
|
|
$
|
3,563
|
|
|
$
|
3,480
|
|
|
$
|
6,731
|
|
|
$
|
10,794
|
|
|
(a)
|
Reclassified into
Other deductions—net
in the condensed consolidated statements of income.
|
|
(b)
|
Generally reclassified into
Cost of sales, Selling, informational and administrative expenses,
and/or
Research and development expenses
, as appropriate in the condensed consolidated statements of income.
|
|
(c)
|
See
|
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
December 31,
2011 |
|
||
|
|
|
(Unaudited)
|
|
|
||||
|
Assets
|
|
|
|
|
||||
|
Cash and cash equivalents
|
|
$
|
4,506
|
|
|
$
|
3,182
|
|
|
Short-term investments
|
|
18,462
|
|
|
23,270
|
|
||
|
Accounts receivable, less allowance for doubtful accounts
|
|
12,523
|
|
|
13,058
|
|
||
|
Inventories
|
|
7,516
|
|
|
6,610
|
|
||
|
Taxes and other current assets
|
|
8,849
|
|
|
9,380
|
|
||
|
Assets of discontinued operations and other assets held for sale
|
|
5,271
|
|
|
5,317
|
|
||
|
Total current assets
|
|
57,127
|
|
|
60,817
|
|
||
|
Long-term investments
|
|
13,429
|
|
|
9,814
|
|
||
|
Property, plant and equipment, less accumulated depreciation
|
|
14,606
|
|
|
15,921
|
|
||
|
Goodwill
|
|
44,370
|
|
|
44,569
|
|
||
|
Identifiable intangible assets, less accumulated amortization
|
|
47,209
|
|
|
51,184
|
|
||
|
Taxes and other noncurrent assets
|
|
5,862
|
|
|
5,697
|
|
||
|
Total assets
|
|
$
|
182,603
|
|
|
$
|
188,002
|
|
|
|
|
|
|
|
||||
|
Liabilities and Equity
|
|
|
|
|
|
|
||
|
Short-term borrowings, including current portion of long-term debt
|
|
$
|
7,774
|
|
|
$
|
4,016
|
|
|
Accounts payable
|
|
2,967
|
|
|
3,678
|
|
||
|
Dividends payable
|
|
1
|
|
|
1,796
|
|
||
|
Income taxes payable
|
|
1,788
|
|
|
1,009
|
|
||
|
Accrued compensation and related items
|
|
1,736
|
|
|
2,120
|
|
||
|
Other current liabilities
|
|
13,455
|
|
|
15,066
|
|
||
|
Liabilities of discontinued operations
|
|
1,410
|
|
|
1,224
|
|
||
|
Total current liabilities
|
|
29,131
|
|
|
28,909
|
|
||
|
|
|
|
|
|
||||
|
Long-term debt
|
|
31,083
|
|
|
34,926
|
|
||
|
Pension benefit obligations
|
|
6,560
|
|
|
6,341
|
|
||
|
Postretirement benefit obligations
|
|
3,309
|
|
|
3,344
|
|
||
|
Noncurrent deferred tax liabilities
|
|
19,133
|
|
|
18,861
|
|
||
|
Other taxes payable
|
|
6,011
|
|
|
6,886
|
|
||
|
Other noncurrent liabilities
|
|
5,261
|
|
|
6,114
|
|
||
|
Total liabilities
|
|
100,488
|
|
|
105,381
|
|
||
|
|
|
|
|
|
||||
|
Commitments and Contingencies
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||||
|
Preferred stock
|
|
41
|
|
|
45
|
|
||
|
Common stock
|
|
447
|
|
|
445
|
|
||
|
Additional paid-in capital
|
|
72,317
|
|
|
71,423
|
|
||
|
Employee benefit trusts
|
|
(2
|
)
|
|
(3
|
)
|
||
|
Treasury stock
|
|
(36,703
|
)
|
|
(31,801
|
)
|
||
|
Retained earnings
|
|
51,256
|
|
|
46,210
|
|
||
|
Accumulated other comprehensive loss
|
|
(5,653
|
)
|
|
(4,129
|
)
|
||
|
Total Pfizer Inc. shareholders’ equity
|
|
81,703
|
|
|
82,190
|
|
||
|
Equity attributable to noncontrolling interests
|
|
412
|
|
|
431
|
|
||
|
Total equity
|
|
82,115
|
|
|
82,621
|
|
||
|
Total liabilities and equity
|
|
$
|
182,603
|
|
|
$
|
188,002
|
|
|
|
|
Nine Months Ended
|
||||||
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
||
|
Operating Activities
|
|
|
|
|
||||
|
Net income before allocation to noncontrolling interests
|
|
$
|
8,277
|
|
|
$
|
8,601
|
|
|
Adjustments to reconcile net income before allocation to noncontrolling interests to net
cash provided by operating activities:
|
|
|
|
|
|
|
||
|
Depreciation and amortization
|
|
5,716
|
|
|
6,568
|
|
||
|
Share-based compensation expense
|
|
362
|
|
|
347
|
|
||
|
Asset write-offs and impairment charges
|
|
865
|
|
|
773
|
|
||
|
Gain on sale of discontinued operations
|
|
—
|
|
|
(1,683
|
)
|
||
|
Deferred taxes from continuing operations
|
|
97
|
|
|
693
|
|
||
|
Other deferred taxes
|
|
23
|
|
|
145
|
|
||
|
Benefit plan contributions (in excess of)/less than expense
|
|
86
|
|
|
(270
|
)
|
||
|
Other non-cash adjustments, net
|
|
(118
|
)
|
|
(93
|
)
|
||
|
Other changes in assets and liabilities, net of acquisitions and divestitures
|
|
(3,510
|
)
|
|
(102
|
)
|
||
|
Net cash provided by operating activities
|
|
11,798
|
|
|
14,979
|
|
||
|
|
|
|
|
|
||||
|
Investing Activities
|
|
|
|
|
|
|
||
|
Purchases of property, plant and equipment
|
|
(833
|
)
|
|
(1,062
|
)
|
||
|
Purchases of short-term investments
|
|
(14,587
|
)
|
|
(13,457
|
)
|
||
|
Proceeds from redemptions and sales of short-term investments
|
|
19,377
|
|
|
7,221
|
|
||
|
Net proceeds from redemptions and sales of short-term investments with
original maturities of 90 days or less
|
|
1,483
|
|
|
10,648
|
|
||
|
Purchases of long-term investments
|
|
(8,694
|
)
|
|
(3,646
|
)
|
||
|
Proceeds from redemptions and sales of long-term investments
|
|
3,357
|
|
|
2,001
|
|
||
|
Acquisitions, net of cash acquired
|
|
(782
|
)
|
|
(3,188
|
)
|
||
|
Proceeds from sale of business
|
|
—
|
|
|
2,376
|
|
||
|
Other investing activities
|
|
(4
|
)
|
|
408
|
|
||
|
Net cash provided by/(used in) investing activities
|
|
(683
|
)
|
|
1,301
|
|
||
|
|
|
|
|
|
||||
|
Financing Activities
|
|
|
|
|
|
|
||
|
Proceeds from short-term borrowings
|
|
5,700
|
|
|
9,613
|
|
||
|
Principal payments on short-term borrowings
|
|
(3
|
)
|
|
(3,826
|
)
|
||
|
Net payments on short-term borrowings with original maturities of 90 days or less
|
|
(6,055
|
)
|
|
(6,243
|
)
|
||
|
Principal payments on long-term debt
|
|
(14
|
)
|
|
(3,486
|
)
|
||
|
Purchases of common stock
|
|
(4,834
|
)
|
|
(5,789
|
)
|
||
|
Cash dividends paid
|
|
(4,915
|
)
|
|
(4,710
|
)
|
||
|
Other financing activities
|
|
355
|
|
|
84
|
|
||
|
Net cash used in financing activities
|
|
(9,766
|
)
|
|
(14,357
|
)
|
||
|
Effect of exchange-rate changes on cash and cash equivalents
|
|
(25
|
)
|
|
48
|
|
||
|
Net increase in cash and cash equivalents
|
|
1,324
|
|
|
1,971
|
|
||
|
Cash and cash equivalents, beginning
|
|
3,182
|
|
|
1,735
|
|
||
|
|
|
|
|
|
||||
|
Cash and cash equivalents, end
|
|
$
|
4,506
|
|
|
$
|
3,706
|
|
|
|
|
|
|
|
||||
|
Supplemental Cash Flow Information
|
|
|
|
|
|
|
||
|
Cash paid during the period for:
|
|
|
|
|
|
|
||
|
Income taxes
|
|
$
|
1,895
|
|
|
$
|
1,539
|
|
|
Interest
|
|
1,675
|
|
|
1,872
|
|
||
|
•
|
Presentation of comprehensive income in financial statements. As a result of adopting this new standard, we have presented separate Condensed Consolidated Statements of Comprehensive Income.
|
|
•
|
An amendment to the guidelines on the measurement and disclosure of fair value that is consistent between U.S. GAAP and International Financial Reporting Standards. The adoption of this new standard did not have a significant impact on our financial statements.
|
|
•
|
Quoted prices for identical assets or liabilities in active markets (Level 1 inputs).
|
|
•
|
Quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active or are directly or indirectly observable (Level 2 inputs).
|
|
•
|
Unobservable inputs that reflect estimates and assumptions (Level 3 inputs).
|
|
(MILLIONS OF DOLLARS)
|
|
Amounts
Recognized as of
Acquisition Date
(Final)
|
|
|
|
Working capital, excluding inventories
|
|
$
|
155
|
|
|
Inventories
|
|
340
|
|
|
|
Property, plant and equipment
|
|
412
|
|
|
|
Identifiable intangible assets, excluding in-process research and development
|
|
1,806
|
|
|
|
In-process research and development
|
|
303
|
|
|
|
Net tax accounts
|
|
(328
|
)
|
|
|
All other long-term assets and liabilities, net
|
|
102
|
|
|
|
Total identifiable net assets
|
|
2,790
|
|
|
|
Goodwill
(a)
|
|
765
|
|
|
|
Net assets acquired/total consideration transferred
|
|
$
|
3,555
|
|
|
(a)
|
Goodwill recorded as of the acquisition date totaled
$720 million
for our
three
biopharmaceutical operating segments and
$45 million
for our Animal Health operating segment. (Since the acquisition of King, we have revised our operating segments. See
|
|
•
|
the expected synergies and other benefits that we believed would result from combining the operations of King with the operations of Pfizer;
|
|
•
|
any intangible assets that did not qualify for separate recognition, as well as future, yet unidentified projects and products; and
|
|
•
|
the value of the going-concern element of King’s existing businesses (the higher rate of return on the assembled collection of net assets versus if Pfizer had acquired all of the net assets separately).
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
||||
|
Revenues
(a)
|
|
$
|
564
|
|
|
$
|
699
|
|
|
$
|
1,665
|
|
|
$
|
2,068
|
|
|
Pre-tax income from discontinued operations
|
|
$
|
129
|
|
|
$
|
121
|
|
|
$
|
365
|
|
|
$
|
397
|
|
|
Provision for taxes on income
(b)
|
|
25
|
|
|
25
|
|
|
116
|
|
|
94
|
|
||||
|
Income from discontinued operations––net of tax
|
|
104
|
|
|
96
|
|
|
249
|
|
|
303
|
|
||||
|
Pre-tax gain on sale of discontinued operations
|
|
—
|
|
|
1,695
|
|
|
—
|
|
|
1,683
|
|
||||
|
Provision for taxes on income
(c)
|
|
—
|
|
|
367
|
|
|
—
|
|
|
367
|
|
||||
|
Gain on sale of discontinued operations––net of tax
|
|
—
|
|
|
1,328
|
|
|
—
|
|
|
1,316
|
|
||||
|
Discontinued operations––net of tax
(a)
|
|
$
|
104
|
|
|
$
|
1,424
|
|
|
$
|
249
|
|
|
$
|
1,619
|
|
|
(a)
|
I
ncludes the Nutrition business for all periods presented and the Capsugel business for 2011 only.
|
|
(b)
|
Includes deferred tax expense of
$9 million
and a deferred tax benefit of
$10 million
for the three months ended
September 30, 2012
and
October 2, 2011
, respectively, and a deferred tax expense of
$23 million
and a deferred tax benefit of
$17 million
for the nine months ended
September 30, 2012
and
October 2, 2011
, respectively. These deferred tax provisions include deferred income taxes related to investments in certain foreign subsidiaries resulting from our intention not to hold these subsidiaries permanently.
|
|
(c)
|
Includes deferred tax expense of
$162 million
for the three and nine months ended
October 2, 2011
. These deferred tax provisions include deferred taxes on certain current-year funds earned outside the U.S. that will not be permanently reinvested overseas.
|
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
December 31,
2011 |
|
||
|
Accounts receivable, less allowance for doubtful accounts
|
|
$
|
523
|
|
|
$
|
550
|
|
|
Other current assets
|
|
433
|
|
|
419
|
|
||
|
Property, plant and equipment, less accumulated depreciation
|
|
1,046
|
|
|
1,118
|
|
||
|
Goodwill
|
|
492
|
|
|
498
|
|
||
|
Identifiable intangible assets, less accumulated amortization
|
|
2,652
|
|
|
2,648
|
|
||
|
Other noncurrent assets
|
|
125
|
|
|
84
|
|
||
|
Assets of discontinued operations and other assets held for sale
|
|
$
|
5,271
|
|
|
$
|
5,317
|
|
|
|
|
|
|
|
||||
|
Current liabilities
|
|
$
|
554
|
|
|
$
|
385
|
|
|
Other liabilities
|
|
856
|
|
|
839
|
|
||
|
Liabilities of discontinued operations
|
|
$
|
1,410
|
|
|
$
|
1,224
|
|
|
•
|
In connection with our cost-reduction and productivity initiatives, significant programs of which began in 2005, we typically incur costs and charges associated with site closings and other facility rationalization actions, workforce reductions and the expansion of shared services, including the development of global systems; and
|
|
•
|
In connection with acquisition activity, we typically incur costs associated with executing the transactions, integrating the acquired operations (which may include expenditures for consulting and the integration of systems and processes), and restructuring the combined company (which may include charges related to employees, assets and activities that will not continue in the combined company).
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
||||
|
Transaction costs
(a)
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
1
|
|
|
$
|
28
|
|
|
Integration costs
(b)
|
|
87
|
|
|
184
|
|
|
295
|
|
|
562
|
|
||||
|
Restructuring charges
(c)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Employee termination costs
|
|
113
|
|
|
762
|
|
|
424
|
|
|
1,615
|
|
||||
|
Asset impairments
|
|
35
|
|
|
99
|
|
|
282
|
|
|
157
|
|
||||
|
Exit costs
|
|
67
|
|
|
40
|
|
|
87
|
|
|
96
|
|
||||
|
Restructuring charges and certain acquisition-related costs
|
|
302
|
|
|
1,090
|
|
|
1,089
|
|
|
2,458
|
|
||||
|
Additional depreciation––asset restructuring
recorded in our
condensed consolidated statements of income as follows
(d)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cost of sales
|
|
78
|
|
|
68
|
|
|
214
|
|
|
410
|
|
||||
|
Selling, informational and administrative expenses
|
|
3
|
|
|
39
|
|
|
8
|
|
|
68
|
|
||||
|
Research and development expenses
|
|
—
|
|
|
146
|
|
|
259
|
|
|
379
|
|
||||
|
Total additional depreciation––asset restructuring
|
|
81
|
|
|
253
|
|
|
481
|
|
|
857
|
|
||||
|
Implementation costs recorded in our condensed consolidated
statements of income as follows
(e)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cost of sales
|
|
19
|
|
|
—
|
|
|
23
|
|
|
—
|
|
||||
|
Selling, informational and administrative expenses
|
|
45
|
|
|
12
|
|
|
77
|
|
|
12
|
|
||||
|
Research and development expenses
|
|
47
|
|
|
10
|
|
|
132
|
|
|
28
|
|
||||
|
Total implementation costs
|
|
111
|
|
|
22
|
|
|
232
|
|
|
40
|
|
||||
|
Total costs associated with acquisitions and cost-reduction/
productivity initiatives
|
|
$
|
494
|
|
|
$
|
1,365
|
|
|
$
|
1,802
|
|
|
$
|
3,355
|
|
|
(a)
|
Transaction costs represent external costs directly related to acquired businesses and primarily include expenditures for banking, legal, accounting and other similar services.
|
|
(b)
|
Integration costs represent external, incremental costs directly related to integrating acquired businesses, and primarily include expenditures for consulting and the integration of systems and processes.
|
|
(c)
|
From the beginning of our cost-reduction and transformation initiatives in
2005
through
September 30, 2012
,
Employee termination costs
represent the expected reduction of the workforce by approximately
59,700
employees, mainly in manufacturing and sales and research, of which approximately
49,300
employees have been terminated as of
September 30, 2012
. For the
nine
months ended
September 30, 2012
, the amount of employee termination costs represents additional accruals with respect to reserves for approximately
2,300
employees.
|
|
•
|
For the
three
months ended September 30, 2012, Primary Care operating segment (
$83 million
), Specialty Care and Oncology operating segment (
$60 million
), Established Products and Emerging Markets operating segment (
$16 million
), other operating segments (
$8 million
), research and development operations (
$39 million
income), manufacturing operations (
$27 million
) and Corporate (
$60 million
).
|
|
•
|
For the
nine
months ended September 30, 2012, Primary Care operating segment (
$51 million
), Specialty Care and Oncology operating segment (
$79 million
), Established Products and Emerging Markets operating segment (
$20 million
), other operating segments (
$26 million
), research and development operations (
$14 million
income), manufacturing operations (
$193 million
) and Corporate (
$438 million
).
|
|
•
|
For the
three
months ended October 2, 2011, Primary Care operating segment (
$473 million
), Specialty Care and Oncology operating segment (
$186 million
), Established Products and Emerging Markets operating segment (
$64 million
), other operating segments (
$30 million
), research and development operations (
$46 million
income), manufacturing operations (
$41 million
) and Corporate (
$153 million
).
|
|
•
|
For the
nine
months ended October 2, 2011, Primary Care operating segment (
$606 million
), Specialty Care and Oncology operating segment (
$228 million
), Established Products and Emerging Markets operating segment (
$80 million
), other operating segments (
$44 million
), research and development operations (
$426 million
), manufacturing operations (
$196 million
) and Corporate (
$288 million
).
|
|
(d)
|
Additional depreciation––asset restructuring represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.
|
|
(e)
|
Implementation costs represent external, incremental costs directly related to implementing our non-acquisition-related cost-reduction and productivity initiatives.
|
|
(MILLIONS OF DOLLARS)
|
|
Employee
Termination
Costs
|
|
|
Asset
Impairment
Charges
|
|
|
Exit Costs
|
|
|
Accrual
|
|
||||
|
Balance, December 31, 2011
|
|
$
|
2,425
|
|
|
$
|
—
|
|
|
$
|
92
|
|
|
$
|
2,517
|
|
|
Provision
(a)
|
|
424
|
|
|
282
|
|
|
87
|
|
|
793
|
|
||||
|
Utilization and other
(b)
|
|
(1,270
|
)
|
|
(282
|
)
|
|
(69
|
)
|
|
(1,621
|
)
|
||||
|
Balance, September, 2012
(c)
|
|
$
|
1,579
|
|
|
$
|
—
|
|
|
$
|
110
|
|
|
$
|
1,689
|
|
|
(a)
|
For the
nine
months ended
September 30, 2012
,
Provision
includes additional accruals with respect to reserves for approximately
2,300
employees.
|
|
(b)
|
Includes adjustments for foreign currency translation.
|
|
(c)
|
Included in
Other current liabilities
(
$949 million
) and
Other noncurrent liabilities
(
$740 million
).
|
|
|
|
Fair Value
(a)
|
|
Nine Months Ended September 30, 2012
|
||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
Amount
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Impairment
|
|||||||||
|
Long-lived assets held-for-sale
(b)
|
|
$
|
96
|
|
|
$
|
—
|
|
|
$
|
96
|
|
|
$
|
—
|
|
|
$
|
220
|
|
|
(a)
|
The fair value amount is presented as of the date of impairment, as these assets are not measured at fair value on a recurring basis. See also
Note 1C.
Basis of Presentation and Significant Accounting Policies: Fair Value
.
|
|
(b)
|
Reflects property, plant and equipment and other long-lived assets written down to their fair value of
$96 million
, less costs to sell of
$2 million
(a net of
$94 million
), in the first
nine
months of 2012. The impairment charges of
$220 million
are included in
Restructuring charges and certain acquisition-related costs
. Fair value is determined primarily using a market approach, with various inputs, such as recent sales transactions.
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
||||
|
Interest income
(a)
|
|
$
|
(108
|
)
|
|
$
|
(109
|
)
|
|
$
|
(275
|
)
|
|
$
|
(331
|
)
|
|
Interest expense
(a)
|
|
382
|
|
|
423
|
|
|
1,151
|
|
|
1,285
|
|
||||
|
Net interest expense
|
|
274
|
|
|
314
|
|
|
876
|
|
|
954
|
|
||||
|
Royalty-related income
|
|
(132
|
)
|
|
(136
|
)
|
|
(353
|
)
|
|
(447
|
)
|
||||
|
Net gain on asset disposals
|
|
(19
|
)
|
|
(21
|
)
|
|
(45
|
)
|
|
(47
|
)
|
||||
|
Certain legal matters, net
(b)
|
|
726
|
|
|
132
|
|
|
2,014
|
|
|
619
|
|
||||
|
Certain asset impairment charges
(c)
|
|
49
|
|
|
145
|
|
|
561
|
|
|
625
|
|
||||
|
Costs associated with the potential separation of the Animal Health business
(d)
|
|
32
|
|
|
—
|
|
|
93
|
|
|
—
|
|
||||
|
Other, net
|
|
32
|
|
|
113
|
|
|
137
|
|
|
98
|
|
||||
|
Other deductions
––
net
|
|
$
|
962
|
|
|
$
|
547
|
|
|
$
|
3,283
|
|
|
$
|
1,802
|
|
|
(a)
|
Interest income decreased slightly in the third quarter of
2012
due to lower investment balances mostly offset by higher interest rates earned on investments. Interest income decreased in the first nine months of
2012
due to lower interest rates earned on investments. Interest expense decreased in both periods in
2012
due to lower debt balances and the effective conversion of some fixed-rate liabilities to floating-rate liabilities.
|
|
(b)
|
In the
third
quarter of
2012
, primarily includes a
$491 million
charge, not deductible for income tax purposes, resulting from an agreement-in-principle with the U.S. Department of Justice (DOJ) to resolve an investigation into Wyeth's historical promotional practices in connection with Rapamune. In the first
nine
months of
2012
, primarily includes the aforementioned
$491 million
charge related to Rapamune, a
$450 million
settlement of a lawsuit by Brigham Young University related to Celebrex, and charges related to hormone-replacement therapy litigation. In
2011
, primarily includes charges related to hormone-replacement therapy litigation. (See
|
|
(c)
|
In the first
nine
months of
2012
, includes intangible asset impairment charges of
$494 million
reflecting (i)
$314 million
of in-process research and development (IPR&D), substantially all related to compounds that targeted autoimmune and inflammatory diseases (full write-off), (ii)
$45 million
related to our Consumer Healthcare indefinite-lived brand, Robitussin, and (iii)
$135 million
related to three developed technology rights. The intangible asset impairment charges for
2012
reflect, among other things, the impact of new scientific findings, updated commercial forecasts, an increased competitive environment and declining gross margins. The impairment charges for the
nine
months of
2012
are associated with the following: Worldwide Research and Development (
$297 million
); Consumer Healthcare (
$45 million
); Established Products (
$45 million
); Primary Care (
$52 million
); Animal Health (
$36 million
) and Specialty Care (
$19 million
). In addition, the first
nine
months of
2012
include charges of approximately
$67 million
for certain investments. These investment impairment charges reflect the difficult global economic environment.
|
|
(d)
|
Costs incurred in connection with the potential initial public offering of up to a
20%
ownership stake in our Animal Health business, Zoetis. Includes expenditures for banking, legal, accounting and similar services related to the potential transaction.
|
|
|
|
Fair Value
(a)
|
|
Nine Months Ended September 30, 2012
|
|
|||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
Amount
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Impairment
|
|||||||||
|
Intangible assets––IPR&D
(b)
|
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
44
|
|
|
$
|
314
|
|
|
Intangible assets––Other
(b)
|
|
573
|
|
|
—
|
|
|
—
|
|
|
573
|
|
|
180
|
|
|||||
|
Total
|
|
$
|
617
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
617
|
|
|
$
|
494
|
|
|
(a)
|
Fair value as of the date of impairment, as these assets are not measured at fair value on a recurring basis. See also
Note 1C.
Basis of Presentation and Significant Accounting Policies: Fair Value
.
|
|
(b)
|
Reflects intangible assets written down to their fair value of
$617 million
in the first
nine
months of
2012
. The impairment charges of
$494 million
are included in
Other deductions––net.
When we are required to determine the fair value of intangible assets other than goodwill, we use an income approach, specifically the multi-period excess earnings method, also known as the discounted cash flow method. We start with a forecast of all the expected net cash flows associated with the asset, which includes the application of a terminal value for indefinite-lived assets, and then we apply an asset-specific discount rate to arrive at a net present value amount. Some of the more significant estimates and assumptions inherent in this approach include: the amount and timing of the projected net cash flows, which includes the expected impact of competitive, legal and/or regulatory forces on the projections and the impact of technological risk associated with IPR&D assets, as well as the selection of a long-term growth rate; the discount rate, which seeks to reflect the various risks inherent in the projected cash flows; and the tax rate, which seeks to incorporate the geographic diversity of the projected cash flows.
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
||||
|
Tax Expense/(Benefit) on Other Comprehensive Income/(Loss)
|
|
|
|
|
|
|
|
|
||||||||
|
Foreign currency translation adjustments
(a)
|
|
$
|
(23
|
)
|
|
$
|
(60
|
)
|
|
$
|
14
|
|
|
$
|
(70
|
)
|
|
Unrealized holding gains/(losses) on derivative financial instruments
|
|
137
|
|
|
(419
|
)
|
|
80
|
|
|
(212
|
)
|
||||
|
Reclassification adjustments for realized (gains)/losses
|
|
(52
|
)
|
|
250
|
|
|
(34
|
)
|
|
(31
|
)
|
||||
|
|
|
85
|
|
|
(169
|
)
|
|
46
|
|
|
(243
|
)
|
||||
|
Unrealized gains/(losses) on available-for-sale securities
|
|
4
|
|
|
(18
|
)
|
|
17
|
|
|
(18
|
)
|
||||
|
Reclassification adjustments for realized losses
|
|
3
|
|
|
3
|
|
|
8
|
|
|
4
|
|
||||
|
|
|
7
|
|
|
(15
|
)
|
|
25
|
|
|
(14
|
)
|
||||
|
Benefit plans: Actuarial gains/(losses)
|
|
(39
|
)
|
|
1
|
|
|
(157
|
)
|
|
1
|
|
||||
|
Reclassification adjustments related to amortization
|
|
44
|
|
|
24
|
|
|
129
|
|
|
74
|
|
||||
|
Reclassification adjustments related to curtailments and settlements, net
|
|
20
|
|
|
28
|
|
|
59
|
|
|
89
|
|
||||
|
Other
|
|
(12
|
)
|
|
(12
|
)
|
|
5
|
|
|
(71
|
)
|
||||
|
|
|
13
|
|
|
41
|
|
|
36
|
|
|
93
|
|
||||
|
Benefit plan: Prior service (costs)/credits and other
|
|
(2
|
)
|
|
—
|
|
|
6
|
|
|
—
|
|
||||
|
Reclassification adjustments related to amortization
|
|
(7
|
)
|
|
(7
|
)
|
|
(21
|
)
|
|
(21
|
)
|
||||
|
Reclassification adjustments related to curtailments and settlements, net
|
|
(2
|
)
|
|
(7
|
)
|
|
(34
|
)
|
|
(20
|
)
|
||||
|
Other
|
|
2
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
||||
|
|
|
(9
|
)
|
|
(13
|
)
|
|
(49
|
)
|
|
(42
|
)
|
||||
|
Tax provision/(benefit) on other comprehensive income/(loss)
|
|
$
|
73
|
|
|
$
|
(216
|
)
|
|
$
|
72
|
|
|
$
|
(276
|
)
|
|
(a)
|
Taxes are not provided for foreign currency translation relating to permanent investments in international subsidiaries.
|
|
•
|
During the third quarter of 2012, we reached a settlement with the IRS with respect to the audits of the Pfizer Inc. tax returns for the years 2006 through 2008. The IRS concluded the examination of the aforementioned tax years and issued a final Revenue Agent's Report (RAR). We agreed with all the adjustments and computations contained in the RAR. As a result of settling these audit years, in the third quarter of 2012 we recorded a tax benefit of approximately
$1.1 billion
representing tax and interest.
|
|
•
|
With respect to Pfizer Inc., tax years 2009-2010 are currently under audit. Tax years 2011-2012 are not under audit. All other tax years are closed.
|
|
•
|
With respect to Wyeth, tax years 2006 through the Wyeth acquisition date (October 15, 2009) are currently under audit. All other tax years are closed.
|
|
•
|
With respect to King, the audit for tax year 2008 has been effectively settled, and for Alpharma Inc. (a subsidiary of King), tax years 2005-2007 are currently under audit. For King, tax years 2009 through the date of acquisition (January 31, 2011) are open but not under audit. All other tax years are closed. The open tax years and audits for King and its subsidiaries are not considered material to Pfizer.
|
|
|
|
Net Unrealized Gain/(Losses)
|
|
Benefit Plans
|
|
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
Currency Translation Adjustment And Other
|
|
|
Derivative Financial Instruments
|
|
|
Available-For-Sale Securities
|
|
|
Actuarial Gains/(Losses)
|
|
|
Prior Service (Costs)/ Credits And Other
|
|
|
Accumulated Other Comprehensive Loss
|
|
||||||
|
Balance, December 31, 2011
|
|
$
|
944
|
|
|
$
|
(361
|
)
|
|
$
|
46
|
|
|
$
|
(5,120
|
)
|
|
$
|
362
|
|
|
$
|
(4,129
|
)
|
|
Other comprehensive income/(loss)
(a)
|
|
(1,560
|
)
|
|
76
|
|
|
126
|
|
|
(99
|
)
|
|
(67
|
)
|
|
(1,524
|
)
|
||||||
|
Balance, September 30, 2012
|
|
$
|
(616
|
)
|
|
$
|
(285
|
)
|
|
$
|
172
|
|
|
$
|
(5,219
|
)
|
|
$
|
295
|
|
|
$
|
(5,653
|
)
|
|
(a)
|
Amounts do not include foreign currency translation adjustments attributable to noncontrolling interests of
$19 million
loss for the first
nine
months of
2012
.
|
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
December 31,
2011 |
|
||
|
Selected financial assets measured at fair value on a recurring basis
(a)
|
|
|
|
|
||||
|
Trading securities
(b)
|
|
$
|
141
|
|
|
$
|
154
|
|
|
Available-for-sale debt securities
(c)
|
|
28,187
|
|
|
29,179
|
|
||
|
Available-for-sale money market funds
(d)
|
|
1,429
|
|
|
1,727
|
|
||
|
Available-for-sale equity securities, excluding money market funds
(c)
|
|
299
|
|
|
317
|
|
||
|
Derivative financial instruments in receivable positions
(e)
:
|
|
|
|
|
|
|
||
|
Interest rate swaps
|
|
1,029
|
|
|
1,033
|
|
||
|
Foreign currency forward-exchange contracts
|
|
178
|
|
|
349
|
|
||
|
Foreign currency swaps
|
|
76
|
|
|
17
|
|
||
|
|
|
31,339
|
|
|
32,776
|
|
||
|
Other selected financial assets
(f)
|
|
|
|
|
|
|
||
|
Held-to-maturity debt securities, carried at amortized cost
(c)
|
|
3,029
|
|
|
1,587
|
|
||
|
Private equity securities, carried at equity method or at cost
(g)
|
|
1,118
|
|
|
1,020
|
|
||
|
|
|
4,147
|
|
|
2,607
|
|
||
|
Total selected financial assets
|
|
$
|
35,486
|
|
|
$
|
35,383
|
|
|
Financial liabilities measured at fair value on a recurring basis
(a)
|
|
|
|
|
|
|
||
|
Derivative financial instruments in a liability position
(h)
:
|
|
|
|
|
|
|
||
|
Foreign currency swaps
|
|
$
|
1,172
|
|
|
$
|
1,396
|
|
|
Foreign currency forward-exchange contracts
|
|
165
|
|
|
355
|
|
||
|
Interest rate swaps
|
|
29
|
|
|
14
|
|
||
|
|
|
1,366
|
|
|
1,765
|
|
||
|
Other financial liabilities
(i)
|
|
|
|
|
|
|
||
|
Short-term borrowings, carried at historical proceeds, as adjusted
(f)
|
|
7,774
|
|
|
4,016
|
|
||
|
Long-term debt, carried at historical proceeds, as adjusted
(j), (k)
|
|
31,083
|
|
|
34,926
|
|
||
|
|
|
38,857
|
|
|
38,942
|
|
||
|
Total selected financial liabilities
|
|
$
|
40,223
|
|
|
$
|
40,707
|
|
|
(a)
|
We use a market approach in valuing financial instruments on a recurring basis. See also
Note 1C.
Basis of Presentation and Significant Accounting Policies: Fair Value
. All of our financial assets and liabilities measured at fair value on a recurring basis use Level 2 inputs in the calculation of fair value, except less than
1%
that use Level 1 or Level 3 inputs.
|
|
(b)
|
Trading securities are held in trust for legacy business acquisition severance benefits.
|
|
(c)
|
Gross unrealized gains and losses are not significant.
|
|
(d)
|
Includes approximately
$625 million
as of
December 31, 2011
of money market funds that were released from restriction in the
second
quarter of
2012
and classified as part of
Short-term investments
. Such money market funds were held in escrow to secure certain of Wyeth’s payment obligations under its 1999 Nationwide Class Action Settlement Agreement, which relates to litigation against Wyeth concerning its former weight-loss products, Redux and Pondimin. The amount also includes
$397 million
as of
September 30, 2012
and
$357 million
as of
December 31, 2011
of money market funds held in trust in connection with the asbestos litigation involving Quigley Company, Inc., a wholly owned subsidiary.
|
|
(e)
|
Designated as hedging instruments, except for certain foreign currency contracts used as offsets; namely, foreign currency forward-exchange contracts with fair values of
$25 million
as of
September 30, 2012
; and foreign currency forward-exchange contracts with fair values of
$169 million
and interest rate swaps with fair values of
$8 million
as of
December 31, 2011
.
|
|
(f)
|
The differences between the estimated fair values and carrying values of these financial assets and liabilities not measured at fair value on a recurring basis were not significant as of
September 30, 2012
or
December 31, 2011
. Held-to-maturity debt securities and our short-term and long-term debt fair value are based on Level 2 valuations using a market approach. Fair value measurements f
or priv
ate equity securities carried at cost are based on Level 3 valuations using a market approach.
|
|
(g)
|
Our private equity securities represent investments in the life sciences sector.
|
|
(h)
|
Designated as hedging instruments, except for certain foreign currency contracts used as offsets; namely, foreign currency swaps with fair values of
$179 million
and foreign currency forward-exchange contracts with fair values of
$129 million
as
of
September 30, 2012
;
and foreign currency forward-exchange contracts with fair values of
$141 million
and foreign currency swaps with fair values of
$123 million
as of
December 31, 2011
.
|
|
(i)
|
Some carrying amounts may include adjustments for discount or premium amortization or for the effect of interest rate swaps designated as hedges.
|
|
(j)
|
Includes foreign currency debt with fair values of
$898 million
as of
September 30, 2012
and
$919 million
as of
December 31, 2011
, which are used as hedging instruments.
|
|
(k)
|
The fair value of our long-term debt (not including the current portion of long term debt) is
$36.5 billion
as of
September 30, 2012
and
$40.1 billion
as of
December 31, 2011
.
|
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
December 31,
2011 |
|
||
|
Assets
|
|
|
|
|
||||
|
Cash and cash equivalents
|
|
$
|
2,312
|
|
|
$
|
900
|
|
|
Short-term investments
|
|
18,462
|
|
|
23,270
|
|
||
|
Long-term investments
|
|
13,429
|
|
|
9,814
|
|
||
|
Taxes and other current assets
(a)
|
|
210
|
|
|
357
|
|
||
|
Taxes and other noncurrent assets
(b)
|
|
1,073
|
|
|
1,042
|
|
||
|
|
|
$
|
35,486
|
|
|
$
|
35,383
|
|
|
Liabilities
|
|
|
|
|
|
|
||
|
Short-term borrowings, including current portion of long-term debt
|
|
$
|
7,774
|
|
|
$
|
4,016
|
|
|
Other current liabilities
(c)
|
|
395
|
|
|
459
|
|
||
|
Long-term debt
|
|
31,083
|
|
|
34,926
|
|
||
|
Other noncurrent liabilities
(d)
|
|
971
|
|
|
1,306
|
|
||
|
|
|
$
|
40,223
|
|
|
$
|
40,707
|
|
|
(a)
|
As of
September 30, 2012
, derivative instruments at fair value include foreign currency forward-exchange contracts (
$178 million
), foreign currency swaps (
$20 million
) and interest rate swaps (
$12 million
) and, as of
December 31, 2011
, include foreign currency forward-exchange contracts (
$349 million
) and interest rate swaps (
$8 million
).
|
|
(b)
|
As of
September 30, 2012
, derivative instruments at fair value include interest rate swaps (
$1.0 billion
) and foreign currency swaps (
$56 million
) and, as of
December 31, 2011
, include interest rate swaps (
$1 billion
) and foreign currency swaps (
$17 million
).
|
|
(c)
|
At
September 30, 2012
, derivative instruments at fair value include foreign currency swaps (
$230 million
) and foreign currency forward-exchange contracts (
$165 million
) and, as of
December 31, 2011
, include foreign currency forward-exchange contracts (
$355 million
) and foreign currency swaps (
$104 million
).
|
|
(d)
|
At
September 30, 2012
, derivative instruments at fair value include foreign currency swaps (
$942 million
) and interest rate swaps (
$29 million
) and, as of
December 31, 2011
, include foreign currency swaps (
$1.3 billion
) and interest rate swaps (
$14 million
).
|
|
|
|
Years
|
|
|
||||||||||||
|
|
|
|
|
|
Over 1
|
|
|
Over 5
|
|
|
September 30,
2012 |
|
||||
|
(MILLIONS OF DOLLARS)
|
|
Within 1
|
|
|
to 5
|
|
|
to 10
|
|
|
Total
|
|
||||
|
Available-for-sale debt securities
|
|
|
|
|
|
|
|
|
||||||||
|
Western European, Asian and other government debt
(a)
|
|
$
|
11,079
|
|
|
$
|
1,810
|
|
|
$
|
6
|
|
|
$
|
12,895
|
|
|
Corporate debt
(b)
|
|
1,368
|
|
|
4,302
|
|
|
1,799
|
|
|
7,469
|
|
||||
|
Western European, Scandinavian and other government agency debt
(a)
|
|
1,927
|
|
|
415
|
|
|
—
|
|
|
2,342
|
|
||||
|
Federal Home Loan Mortgage Corporation and Federal National Mortgage Association asset-backed securities
|
|
—
|
|
|
2,308
|
|
|
25
|
|
|
2,333
|
|
||||
|
U.S. government debt
|
|
1,912
|
|
|
171
|
|
|
—
|
|
|
2,083
|
|
||||
|
Supranational debt
(a)
|
|
310
|
|
|
345
|
|
|
—
|
|
|
655
|
|
||||
|
Reverse repurchase agreements
(c)
|
|
410
|
|
|
—
|
|
|
—
|
|
|
410
|
|
||||
|
Held-to-maturity debt securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Certificates of deposit and other
|
|
2,734
|
|
|
287
|
|
|
8
|
|
|
3,029
|
|
||||
|
Total debt securities
|
|
$
|
19,740
|
|
|
$
|
9,638
|
|
|
$
|
1,838
|
|
|
$
|
31,216
|
|
|
(a)
|
All issued by above-investment-grade governments, government agencies or supranational entities, as applicable.
|
|
(b)
|
Largely issued by above-investment-grade institutions in the financial services sector.
|
|
(c)
|
Involving U.S. government securities.
|
|
|
|
Amount of
Gains/(Losses)
Recognized in OID
(a), (b), (c)
|
|
Amount of
Gains/(Losses)
Recognized in OCI
(Effective Portion)
(a), (d)
|
|
Amount of
Gains/(Losses)
Reclassified from
OCI into OID
(Effective Portion)
(a), (d)
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
Sep 30,
2012 |
|
|
Oct 2,
2011 |
|
|
Sep 30,
2012 |
|
|
Oct 2,
2011 |
|
|
Sep 30,
2012 |
|
|
Oct 2,
2011 |
|
||||||
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Derivative Financial Instruments in Cash Flow Hedge Relationships
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Foreign currency swaps
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
455
|
|
|
$
|
(1,047
|
)
|
|
$
|
221
|
|
|
$
|
(654
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Derivative Financial Instruments in Net Investment Hedge Relationships
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Foreign currency swaps
|
|
—
|
|
|
(1
|
)
|
|
(40
|
)
|
|
(118
|
)
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Derivative Financial Instruments Not Designated as Hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Foreign currency forward-exchange contracts
|
|
(201
|
)
|
|
(75
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Foreign currency swaps
|
|
10
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Non-Derivative Financial Instruments in Net Investment Hedge Relationships
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Foreign currency short-term borrowings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Foreign currency long-term debt
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
(42
|
)
|
|
—
|
|
|
—
|
|
||||||
|
All other net
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
|
|
|
$
|
(191
|
)
|
|
$
|
(48
|
)
|
|
$
|
395
|
|
|
$
|
(1,206
|
)
|
|
$
|
221
|
|
|
$
|
(653
|
)
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Derivative Financial Instruments in Cash Flow Hedge Relationships
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Foreign currency swaps
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
238
|
|
|
$
|
(516
|
)
|
|
$
|
89
|
|
|
$
|
76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Derivative Financial Instruments in Net Investment Hedge Relationships
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Foreign currency swaps
|
|
(3
|
)
|
|
14
|
|
|
33
|
|
|
(1,076
|
)
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Derivative Financial Instruments Not Designated as Hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Foreign currency forward-exchange contracts
|
|
(137
|
)
|
|
(392
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Foreign currency swaps
|
|
(7
|
)
|
|
72
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Non-Derivative Financial Instruments in Net Investment Hedge Relationships
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Foreign currency short-term borrowings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
940
|
|
|
—
|
|
|
—
|
|
||||||
|
Foreign currency long-term debt
|
|
—
|
|
|
—
|
|
|
3
|
|
|
(47
|
)
|
|
—
|
|
|
—
|
|
||||||
|
All other net
|
|
1
|
|
|
(1
|
)
|
|
5
|
|
|
4
|
|
|
6
|
|
|
5
|
|
||||||
|
|
|
$
|
(146
|
)
|
|
$
|
(307
|
)
|
|
$
|
279
|
|
|
$
|
(695
|
)
|
|
$
|
95
|
|
|
$
|
81
|
|
|
(a)
|
OID = Other (income)/deductions—net,
included in
Other deductions—net
in the condensed consolidated statements of income
.
OCI = Other comprehensive income/(loss), included in the
condensed consolidated statements of comprehensive income
.
|
|
(b)
|
Also includes gains and losses attributable to the hedged risk in fair value hedge relationships.
|
|
(c)
|
There was no significant ineffectiveness for any period presented.
|
|
(d)
|
Amounts presented represent the effective portion of the gain or loss. For derivative financial instruments in cash flow hedge relationships, the effective portion is included in
Other comprehensive income/(loss)––Unrealized holding gains/(losses) on derivative financial instruments
. For derivative financial instruments in net investment hedge relationships and for foreign currency debt designated as hedging instruments, the effective portion is included in
Other comprehensive income/(loss)––foreign currency translation adjustments.
|
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
December 31,
2011 |
|
||
|
Finished goods
|
|
$
|
2,634
|
|
|
$
|
2,311
|
|
|
Work-in-process
|
|
3,994
|
|
|
3,514
|
|
||
|
Raw materials and supplies
|
|
888
|
|
|
785
|
|
||
|
Total inventories
(a)
|
|
$
|
7,516
|
|
|
$
|
6,610
|
|
|
Noncurrent portion not included above
(b)
|
|
$
|
702
|
|
|
$
|
800
|
|
|
(a)
|
The increase reflects, in part, a build-up in anticipation of plant rationalizations.
|
|
(b)
|
Included in
Taxes and other noncurrent assets
. There are no recoverability issues associated with these amounts.
|
|
(MILLIONS OF DOLLARS)
|
|
Primary
Care
|
|
|
Specialty
Care and
Oncology
|
|
|
Established
Products and
Emerging
Markets
|
|
|
Other Operating Segments
(a)
|
|
|
Total
|
|
|||||
|
Balance, December 31, 2011
|
|
$
|
6,229
|
|
|
$
|
17,097
|
|
|
$
|
18,746
|
|
|
$
|
2,497
|
|
|
$
|
44,569
|
|
|
Additions
(b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
397
|
|
|
397
|
|
|||||
|
Other
(c)
|
|
(90
|
)
|
|
(247
|
)
|
|
(266
|
)
|
|
7
|
|
|
(596
|
)
|
|||||
|
Balance, September 30, 2012
|
|
$
|
6,139
|
|
|
$
|
16,850
|
|
|
$
|
18,480
|
|
|
$
|
2,901
|
|
|
$
|
44,370
|
|
|
(a)
|
Reflects amounts associated with Animal Health and Consumer Healthcare.
|
|
(b)
|
Related to our acquisitions of Alacer and Ferrosan (see
|
|
(c)
|
Primarily reflects the impact of foreign exchange.
|
|
|
|
September 30, 2012
|
|
December 31, 2011
|
||||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
Gross
Carrying
Amount
|
|
|
Accumulated
Amortization
|
|
|
Identifiable
Intangible
Assets, less
Accumulated
Amortization
|
|
|
Gross
Carrying
Amount
|
|
|
Accumulated
Amortization
|
|
|
Identifiable
Intangible
Assets, less
Accumulated
Amortization
|
|
||||||
|
Finite-lived intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Developed technology rights
|
|
$
|
72,439
|
|
|
$
|
(35,695
|
)
|
|
$
|
36,744
|
|
|
$
|
72,678
|
|
|
$
|
(31,922
|
)
|
|
$
|
40,756
|
|
|
Brands
|
|
1,889
|
|
|
(747
|
)
|
|
1,142
|
|
|
1,678
|
|
|
(687
|
)
|
|
991
|
|
||||||
|
License agreements
|
|
483
|
|
|
(337
|
)
|
|
146
|
|
|
425
|
|
|
(215
|
)
|
|
210
|
|
||||||
|
Other
|
|
649
|
|
|
(444
|
)
|
|
205
|
|
|
623
|
|
|
(362
|
)
|
|
261
|
|
||||||
|
|
|
75,460
|
|
|
(37,223
|
)
|
|
38,237
|
|
|
75,404
|
|
|
(33,186
|
)
|
|
42,218
|
|
||||||
|
Indefinite-lived intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Brands
|
|
8,085
|
|
|
—
|
|
|
8,085
|
|
|
7,694
|
|
|
—
|
|
|
7,694
|
|
||||||
|
In-process research and development
|
|
814
|
|
|
—
|
|
|
814
|
|
|
1,200
|
|
|
—
|
|
|
1,200
|
|
||||||
|
Trademarks
|
|
73
|
|
|
—
|
|
|
73
|
|
|
72
|
|
|
—
|
|
|
72
|
|
||||||
|
|
|
8,972
|
|
|
—
|
|
|
8,972
|
|
|
8,966
|
|
|
—
|
|
|
8,966
|
|
||||||
|
Total identifiable intangible assets
(a)
|
|
$
|
84,432
|
|
|
$
|
(37,223
|
)
|
|
$
|
47,209
|
|
|
$
|
84,370
|
|
|
$
|
(33,186
|
)
|
|
$
|
51,184
|
|
|
(a)
|
The decrease is primarily related to amortization, as well as impairment charges (see
Note 4. Other Deductions
—
Net
), partially offset by the assets acquired as part of the acquisitions of Ferrosan and Alacer (see
Note 2A. Acquisitions and Divestitures: Acquisitions
).
|
|
•
|
Developed Technology Rights: Specialty Care (
65%
); Established Products (
18%
); Primary Care (
14%
); Animal Health (
2%
); and Oncology (
1%
);
|
|
•
|
Brands, finite-lived: Consumer Healthcare (
65%
); Established Products (
23%
); and Animal Health (
12%
);
|
|
•
|
Brands, indefinite-lived: Consumer Healthcare (
67%
); and Established Products (
33%
); and
|
|
•
|
IPR&D: Worldwide Research and Development (
47%
); Specialty Care (
21%
); Primary Care (
19%
); Established Products (
11%
); and Animal Health (
2%
).
|
|
|
|
Pension Plans
|
|
|
||||||||||||||||||||||||||||
|
|
|
U.S.
Qualified
(a)
|
|
U.S.
Supplemental
(Non-Qualified)
(b)
|
|
International
(c)
|
|
Postretirement
Plans
|
||||||||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
Sep 30,
2012 |
|
|
Oct 2,
2011 |
|
|
Sep 30,
2012 |
|
|
Oct 2,
2011 |
|
|
Sep 30,
2012 |
|
|
Oct 2,
2011 |
|
|
Sep 30,
2012 |
|
|
Oct 2,
2011 |
|
||||||||
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Service cost
|
|
$
|
86
|
|
|
$
|
87
|
|
|
$
|
8
|
|
|
$
|
9
|
|
|
$
|
52
|
|
|
$
|
61
|
|
|
$
|
16
|
|
|
$
|
17
|
|
|
Interest cost
|
|
170
|
|
|
181
|
|
|
15
|
|
|
17
|
|
|
99
|
|
|
113
|
|
|
46
|
|
|
49
|
|
||||||||
|
Expected return on plan assets
|
|
(247
|
)
|
|
(216
|
)
|
|
—
|
|
|
—
|
|
|
(104
|
)
|
|
(111
|
)
|
|
(12
|
)
|
|
(9
|
)
|
||||||||
|
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Actuarial losses
|
|
75
|
|
|
33
|
|
|
10
|
|
|
9
|
|
|
28
|
|
|
21
|
|
|
8
|
|
|
4
|
|
||||||||
|
Prior service credits
|
|
(2
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(13
|
)
|
|
(13
|
)
|
||||||||
|
Curtailments and settlements––net
|
|
31
|
|
|
20
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
(3
|
)
|
|
(14
|
)
|
||||||||
|
Special termination benefits
|
|
1
|
|
|
7
|
|
|
8
|
|
|
5
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||||||
|
|
|
$
|
114
|
|
|
$
|
110
|
|
|
$
|
42
|
|
|
$
|
42
|
|
|
$
|
73
|
|
|
$
|
86
|
|
|
$
|
43
|
|
|
$
|
35
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Service cost
|
|
$
|
272
|
|
|
$
|
266
|
|
|
$
|
27
|
|
|
$
|
28
|
|
|
$
|
156
|
|
|
$
|
185
|
|
|
$
|
51
|
|
|
$
|
52
|
|
|
Interest cost
|
|
528
|
|
|
550
|
|
|
47
|
|
|
54
|
|
|
302
|
|
|
333
|
|
|
137
|
|
|
146
|
|
||||||||
|
Expected return on plan assets
|
|
(738
|
)
|
|
(657
|
)
|
|
—
|
|
|
—
|
|
|
(317
|
)
|
|
(326
|
)
|
|
(35
|
)
|
|
(26
|
)
|
||||||||
|
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Actuarial losses
|
|
232
|
|
|
103
|
|
|
31
|
|
|
27
|
|
|
63
|
|
|
64
|
|
|
25
|
|
|
12
|
|
||||||||
|
Prior service credits
|
|
(8
|
)
|
|
(6
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|
(37
|
)
|
|
(40
|
)
|
||||||||
|
Curtailments and settlements––net
|
|
57
|
|
|
71
|
|
|
13
|
|
|
21
|
|
|
(7
|
)
|
|
7
|
|
|
(26
|
)
|
|
(40
|
)
|
||||||||
|
Special termination benefits
|
|
8
|
|
|
17
|
|
|
23
|
|
|
18
|
|
|
3
|
|
|
4
|
|
|
5
|
|
|
2
|
|
||||||||
|
|
|
$
|
351
|
|
|
$
|
344
|
|
|
$
|
138
|
|
|
$
|
146
|
|
|
$
|
195
|
|
|
$
|
263
|
|
|
$
|
120
|
|
|
$
|
106
|
|
|
(a)
|
The net periodic benefit cost for the
nine
months ended
September 30, 2012
, compared to the
nine
months ended
October 2, 2011
, for our U.S. qualified plans was largely unchanged, as (i) an increase in the amounts amortized for actuarial losses (resulting from a decrease in the discount rate and lower than expected actual returns in 2011) was largely offset by a higher expected return on plan assets (resulting from contributions made to the plan in 2011) as well as the fact that (ii) within curtailments and settlements, net, the curtailment gain resulting from the decision to freeze the defined benefit plans in the U.S. and Puerto Rico was more than offset by higher settlement activity.
|
|
(b)
|
The decrease in net periodic benefit cost for the nine months ended
September 30, 2012
, compared to the nine months ended
October 2, 2011
, for our U.S. supplemental (non-qualified) pension plans reflects the curtailment gain resulting from the decision to freeze the defined benefit plans in the U.S. and Puerto Rico.
|
|
(c)
|
The decrease in net periodic benefit costs for the
nine
months ended
September 30, 2012
, compared to the
nine
months ended
October 2, 2011
, for our international pension plans was primarily driven by changes in assumptions in our U.K. plans in 2011 and higher curtailment gains associated with ongoing restructuring initiatives.
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||
|
(IN MILLIONS)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|||||
|
EPS Numerator––Basic
|
|
|
|
|
|
|
|
|
|||||||||
|
Income from continuing operations
|
|
$
|
3,110
|
|
|
$
|
2,325
|
|
|
$
|
8,028
|
|
|
$
|
6,982
|
|
|
|
Less: Net income attributable to noncontrolling interests
|
|
6
|
|
|
11
|
|
|
22
|
|
|
31
|
|
|||||
|
Income from continuing operations attributable to Pfizer Inc.
|
|
3,104
|
|
|
2,314
|
|
|
8,006
|
|
|
6,951
|
|
|||||
|
Less: Preferred stock dividends––net of tax
|
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
|
Income from continuing operations attributable to Pfizer Inc.
common shareholders
|
|
3,103
|
|
|
2,314
|
|
|
8,005
|
|
|
6,950
|
|
|||||
|
Discontinued operations––net of tax
|
|
104
|
|
|
1,424
|
|
|
249
|
|
|
1,619
|
|
|||||
|
Net income attributable to Pfizer Inc. common shareholders
|
|
$
|
3,207
|
|
|
$
|
3,738
|
|
|
$
|
8,254
|
|
|
$
|
8,569
|
|
|
|
EPS Numerator––Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders and assumed conversions
|
|
$
|
3,104
|
|
|
$
|
2,314
|
|
|
$
|
8,006
|
|
|
$
|
6,951
|
|
|
|
Discontinued operations––net of tax
|
|
104
|
|
|
1,424
|
|
|
249
|
|
|
1,619
|
|
|||||
|
Net income attributable to Pfizer Inc. common shareholders and assumed conversions
|
|
$
|
3,208
|
|
|
$
|
3,738
|
|
|
$
|
8,255
|
|
|
$
|
8,570
|
|
|
|
EPS Denominator
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Weighted-average number of common shares outstanding––Basic
|
|
7,436
|
|
|
7,770
|
|
|
7,483
|
|
|
7,877
|
|
|||||
|
Common-share equivalents: stock options, stock issuable under employee compensation plans and convertible preferred stock
|
|
72
|
|
|
40
|
|
|
67
|
|
|
48
|
|
|||||
|
Weighted-average number of common shares outstanding––Diluted
|
|
7,508
|
|
|
7,810
|
|
|
7,550
|
|
|
7,925
|
|
|||||
|
Stock options that had exercise prices greater than the average market price of our common stock issuable under employee compensation plans
(a)
|
—
|
|
180
|
|
|
342
|
|
|
180
|
|
|
279
|
|
||||
|
(a)
|
These common stock equivalents were outstanding for the
three and nine
months ended
September 30, 2012
and
October 2, 2011
, but were not included in the computation of diluted EPS for those periods because their inclusion would have had an anti-dilutive effect.
|
|
•
|
Patent litigation, which typically involves challenges to the coverage and/or validity of our patents on various products, processes or dosage forms. We are the plaintiff in the vast majority of these actions. An adverse outcome in actions in which we are the plaintiff could result in a loss of patent protection for the drug at issue, a significant loss of revenues from that drug and impairments of any associated assets.
|
|
•
|
Product liability and other product-related litigation, which can include personal injury, consumer, off-label promotion, securities-law, antitrust and breach of contract claims, among others, often involves highly complex issues relating to medical causation, label warnings and reliance on those warnings, scientific evidence and findings, actual, provable injury and other matters.
|
|
•
|
Commercial and other litigation, which can include merger-related and product-pricing claims and environmental claims and proceedings, can involve complexities that will vary from matter to matter.
|
|
•
|
Government investigations, which often are related to the extensive regulation of pharmaceutical companies by national, state and local government agencies in the U.S. and in other countries.
|
|
•
|
Quigley
|
|
•
|
the payment to the Ad Hoc Committee, for the benefit of the Ad Hoc Committee claimants, of a first installment of
$500 million
upon receipt by Pfizer of releases of asbestos-related claims against Pfizer Inc. from Ad Hoc Committee claimants holding $500 million in the aggregate of claims (Pfizer began paying this first installment in June 2011);
|
|
•
|
the payment to the Ad Hoc Committee, for the benefit of the Ad Hoc Committee claimants, of a second installment of
$300 million
upon Pfizer’s receipt of releases of asbestos-related claims against Pfizer Inc. from Ad Hoc Committee claimants holding an additional $300 million in the aggregate of claims following the earlier of the effective date of a revised plan of reorganization and April 6, 2013;
|
|
•
|
the payment of the Ad Hoc Committee’s legal fees and expenses incurred in this matter up to a maximum of
$19 million
(Pfizer began paying these legal fees and expenses in May 2011); and
|
|
•
|
the procurement by Pfizer of insurance for the benefit of certain Ad Hoc Committee claimants to the extent such claimants with non-malignant diseases have a future disease progression to a malignant disease (Pfizer procured this insurance in August 2011).
|
|
•
|
Other Matters
|
|
•
|
Securities and ERISA Actions
|
|
•
|
Securities Action in New Jersey
|
|
•
|
Securities Action
|
|
•
|
Actions by Health Care Service Corporation
|
|
•
|
Personal Injury and Economic Loss Actions
|
|
•
|
Government Inquiries; Action by the State of Nevada
|
|
•
|
Personal Injury Actions
|
|
•
|
Antitrust Actions
|
|
•
|
Off-Label Promotion Actions in the U.S.
|
|
•
|
Personal Injury Actions in the U.S. and Certain Other Countries
|
|
•
|
Antitrust Action in the U.S.
|
|
•
|
Whistleblower Action
|
|
•
|
Antitrust Actions
|
|
•
|
Actions in the U.S.
|
|
•
|
Actions in Canada
|
|
•
|
In February 2009, special masters of the U.S. Court of Federal Claims rejected the three cases brought on the theory that a combination of MMR and thimerosal-containing vaccines caused petitioners’ conditions. After these rulings were affirmed by the U.S. Court of Federal Claims, two of them were appealed by petitioners to the U.S. Court of Appeals for the Federal Circuit. In 2010, the Federal Circuit affirmed the decisions of the special masters in both of these cases.
|
|
•
|
In March 2010, special masters of the U.S. Court of Federal Claims rejected the three additional test cases brought on the theory that thimerosal-containing vaccines alone caused petitioners’ conditions. Petitioners did not seek review by the U.S. Court of Federal Claims of the decisions of the special masters in these latter three test cases, and judgments were entered dismissing the cases in April 2010.
|
|
•
|
Petitioners in each of the six test cases have filed an election to bring a civil action.
|
|
•
|
Primary Care operating segment––includes revenues and earnings, as defined by management, from human pharmaceutical products primarily prescribed by primary-care physicians, and may include products in the following therapeutic and disease areas: Alzheimer’s disease, cardiovascular (excluding pulmonary arterial hypertension), erectile dysfunction, genitourinary, major depressive disorder, pain, respiratory and smoking cessation. Examples of products in this unit include Celebrex, Chantix/Champix, Lipitor (in certain EU countries and in Australia and New Zealand), Lyrica, Premarin, Pristiq and Viagra. All revenues and earnings for such products are allocated to the Primary Care unit, except those generated in Emerging Markets and those that are managed by the Established Products unit.
|
|
•
|
Specialty Care and Oncology operating segment––comprises the Specialty Care business unit and the Oncology business unit.
|
|
◦
|
Specialty Care––includes revenues and earnings, as defined by management, from human pharmaceutical products primarily prescribed by physicians who are specialists, and may include products in the following therapeutic and disease areas: anti-infectives, endocrine disorders, hemophilia, inflammation, ophthalmology, pulmonary arterial hypertension, specialty neuroscience and vaccines. Examples of products in this unit include BeneFIX, Enbrel, Genotropin, Geodon, the Prevnar/Prevenar franchise, ReFacto AF, Revatio, Tygacil, Vfend (outside the U.S. and South Korea), Vyndaqel (outside the U.S.), Xalatan (outside the U.S., Canada and South Korea), Xyntha and Zyvox. All revenues and earnings for such products are allocated to
|
|
◦
|
Oncology–– includes revenues and earnings, as defined by management, from human prescription pharmaceutical products addressing oncology and oncology-related illnesses. The products in this unit include Inlyta, Sutent, Torisel, Xalkori and, as of September 4, 2012, Bosulif in the U.S. All revenues and earnings for such products are allocated to the Oncology unit, except those generated in Emerging Markets and those that are managed by the Established Products unit.
|
|
•
|
Established Products and Emerging Markets operating segment––comprises the Established Products business unit and the Emerging Markets business unit.
|
|
◦
|
Established Products––generally includes revenues and earnings, as defined by management, from human prescription pharmaceutical products that have lost patent protection or marketing exclusivity in certain countries and/or regions. Typically, products are transferred to this unit in the beginning of the fiscal year following loss of patent protection or marketing exclusivity. In certain situations, products may be transferred to this unit at a different point than the beginning of the fiscal year following loss of patent protection or marketing exclusivity in order to maximize their value. This unit also excludes revenues and earnings generated in Emerging Markets. Examples of products in this unit include Arthrotec, Effexor, Lipitor (in the U.S., Canada, South Korea and Japan), Medrol, Norvasc, Protonix, Relpax, Vfend (in the U.S. and South Korea), Xalatan (in the U.S., Canada and South Korea) and Zosyn/Tazocin.
|
|
◦
|
Emerging Markets––includes revenues and earnings, as defined by management, from all human prescription pharmaceutical products sold in Emerging Markets, including Asia (excluding Japan and South Korea), Latin America, Middle East, Africa, Central and Eastern Europe and Turkey.
|
|
•
|
Animal Health operating segment––includes worldwide revenues and earnings, as defined by management, from products and services to prevent and treat disease in livestock and companion animals, including anti-infectives, vaccines, parasiticides, medicinal feed additives, other pharmaceutical products and other non-pharmaceutical products.
|
|
•
|
Consumer Healthcare operating segment––generally includes worldwide revenues and earnings, as defined by management, from non-prescription products in the following therapeutic categories: dietary supplements, pain management, respiratory and personal care. Products marketed by Consumer Healthcare include Advil, Caltrate, Centrum, ChapStick, Emergen-C, Preparation H and Robitussin.
|
|
•
|
Worldwide Research and Development (WRD), which is generally responsible for human health research projects until proof-of-concept is achieved and then for transitioning those projects to the appropriate business unit for possible clinical and commercial development. R&D spending may include upfront and milestone payments for intellectual property rights. This organization also has responsibility for certain science-based and other platform-services organizations, which provide technical expertise and other services to the various R&D projects. WRD is also responsible for all human-health-related regulatory submissions and interactions with regulatory agencies, including all safety-event activities.
|
|
•
|
Pfizer Medical is responsible for external affairs relating to all therapeutic areas, providing Pfizer-related medical information to healthcare providers, patients and other parties, and quality assurance and regulatory compliance activities, which include conducting clinical trial audits and readiness reviews.
|
|
•
|
Corporate, which is responsible for platform functions such as finance, global real estate operations, human resources, legal, compliance, science and technology, worldwide procurement, worldwide public affairs and policy and
|
|
•
|
Certain transactions and events such as (i) purchase accounting adjustments, where we incur expenses associated with the amortization of fair value adjustments to inventory, intangible assets and property, plant and equipment; (ii) acquisition-related activities, where we incur costs for restructuring, integration, implementation and executing the transaction; and (iii) certain significant items, which include non-acquisition-related restructuring costs, as well as costs incurred for legal settlements, asset impairments and sales of assets or businesses.
|
|
|
|
Revenues
|
|
R&D Expenses
|
|
Earnings
(a)
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
||||||
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Reportable Segments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Primary Care
(b)
|
|
$
|
3,610
|
|
|
$
|
5,948
|
|
|
$
|
247
|
|
|
$
|
286
|
|
|
$
|
2,112
|
|
|
$
|
4,156
|
|
|
Specialty Care and Oncology
|
|
3,735
|
|
|
4,131
|
|
|
345
|
|
|
400
|
|
|
2,630
|
|
|
2,678
|
|
||||||
|
Established Products and Emerging Markets
(c)
|
|
4,772
|
|
|
4,668
|
|
|
84
|
|
|
71
|
|
|
2,673
|
|
|
2,432
|
|
||||||
|
Total reportable segments
|
|
12,117
|
|
|
14,747
|
|
|
676
|
|
|
757
|
|
|
7,415
|
|
|
9,266
|
|
||||||
|
Other operating segments
(d)
|
|
1,797
|
|
|
1,808
|
|
|
357
|
|
|
98
|
|
|
328
|
|
|
595
|
|
||||||
|
Other business activities
(e)
|
|
62
|
|
|
54
|
|
|
656
|
|
|
834
|
|
|
(673
|
)
|
|
(856
|
)
|
||||||
|
Reconciling Items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Corporate
(f)
|
|
—
|
|
|
—
|
|
|
230
|
|
|
308
|
|
|
(1,382
|
)
|
|
(1,847
|
)
|
||||||
|
Purchase accounting adjustments
(g)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(3
|
)
|
|
(1,141
|
)
|
|
(1,698
|
)
|
||||||
|
Acquisition-related costs
(h)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
(229
|
)
|
|
(293
|
)
|
||||||
|
Certain significant items
(i)
|
|
—
|
|
|
—
|
|
|
47
|
|
|
149
|
|
|
(1,158
|
)
|
|
(1,309
|
)
|
||||||
|
Other unallocated
(j)
|
|
—
|
|
|
—
|
|
|
16
|
|
|
27
|
|
|
(169
|
)
|
|
(317
|
)
|
||||||
|
|
|
$
|
13,976
|
|
|
$
|
16,609
|
|
|
$
|
1,981
|
|
|
$
|
2,176
|
|
|
$
|
2,991
|
|
|
$
|
3,541
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Reportable Segments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Primary Care
(b)
|
|
$
|
11,725
|
|
|
$
|
17,259
|
|
|
$
|
739
|
|
|
$
|
912
|
|
|
$
|
7,399
|
|
|
$
|
11,513
|
|
|
Specialty Care and Oncology
|
|
11,423
|
|
|
12,407
|
|
|
1,044
|
|
|
1,122
|
|
|
7,883
|
|
|
8,137
|
|
||||||
|
Established Products and Emerging Markets
(c)
|
|
15,173
|
|
|
13,945
|
|
|
223
|
|
|
206
|
|
|
8,926
|
|
|
7,397
|
|
||||||
|
Total reportable segments
|
|
38,321
|
|
|
43,611
|
|
|
2,006
|
|
|
2,240
|
|
|
24,208
|
|
|
27,047
|
|
||||||
|
Other operating segments
(d)
|
|
5,404
|
|
|
5,296
|
|
|
551
|
|
|
304
|
|
|
1,423
|
|
|
1,593
|
|
||||||
|
Other business activities
(e)
|
|
193
|
|
|
211
|
|
|
2,001
|
|
|
2,538
|
|
|
(2,028
|
)
|
|
(2,558
|
)
|
||||||
|
Reconciling Items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Corporate
(f)
|
|
—
|
|
|
—
|
|
|
746
|
|
|
945
|
|
|
(4,805
|
)
|
|
(5,526
|
)
|
||||||
|
Purchase accounting adjustments
(g)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3,752
|
)
|
|
(5,197
|
)
|
||||||
|
Acquisition-related costs
(h)
|
|
—
|
|
|
—
|
|
|
5
|
|
|
9
|
|
|
(650
|
)
|
|
(1,455
|
)
|
||||||
|
Certain significant items
(i)
|
|
—
|
|
|
—
|
|
|
386
|
|
|
397
|
|
|
(3,921
|
)
|
|
(3,175
|
)
|
||||||
|
Other unallocated
(j)
|
|
—
|
|
|
—
|
|
|
42
|
|
|
54
|
|
|
(565
|
)
|
|
(580
|
)
|
||||||
|
|
|
$
|
43,918
|
|
|
$
|
49,118
|
|
|
$
|
5,734
|
|
|
$
|
6,487
|
|
|
$
|
9,910
|
|
|
$
|
10,149
|
|
|
(a)
|
Income from continuing operations before provision for taxes on income.
|
|
(b)
|
Revenues and Earnings from the Primary Care segment decreased in the
three and nine
months ended
September 30, 2012
as compared to the prior year, and earnings as a percentage of revenues also declined, mainly due to the loss of exclusivity for Lipitor in the U.S. and Japan and the subsequent shift in the reporting of Lipitor U.S. and Japan results to the Established Products business unit and the loss of exclusivity for Lipitor in the majority of developed European markets in March and May 2012.
|
|
(c)
|
Revenues and Earnings from the Established Products and Emerging Markets segment increased in the
three and nine
months ended
September 30, 2012
as compared to the prior year, primarily due to additional products losing exclusivity and moving to the Established Products unit and increased operational sales in emerging markets partially offset by unfavorable foreign exchange. Earnings also increased due to the change in the mix of products.
|
|
(d)
|
Includes the Animal Health operating segment and the Consumer Healthcare operating segment. Higher R&D expenses and lower Earnings reflects the Consumer Healthcare acquisition of the over-the-counter (OTC) rights for Nexium (see
Note 2A. Acquisitions and Divestitures: Acquisitions
).
|
|
(e)
|
Other business activities includes the revenues and operating results of Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical sales operation, and the research and development costs managed by our Worldwide Research and Development organization and our Pfizer Medical organization.
|
|
(f)
|
Corporate for R&D expenses includes, among other things, administration expenses and compensation expenses associated with our research and development activities and for Earnings includes, among other things, administration expenses, interest income/(expense), certain compensation and other costs not charged to our operating segments.
|
|
(g)
|
Purchase accounting adjustments include certain charges related to the fair value adjustments to inventory, intangible assets and property, plant and equipment.
|
|
(h)
|
Acquisition-related costs can include costs associated with acquiring, integrating and restructuring newly acquired businesses, such as transaction costs, integration costs, restructuring charges and additional depreciation associated with asset restructuring (see
Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives
for additional information).
|
|
(i)
|
Certain significant items are substantive, unusual items that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis. Such items primarily include restructuring charges and implementation costs associated with our cost-reduction and productivity initiatives that are not associated with an acquisition, the impact of certain tax and/or legal settlements and certain asset impairments.
|
|
(j)
|
Includes overhead expenses associated with our manufacturing and commercial operations not directly attributable to an operating segment.
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change
|
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change
|
|
||||
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
United States
|
|
$
|
5,627
|
|
|
$
|
6,879
|
|
|
(18
|
)
|
|
$
|
17,303
|
|
|
$
|
20,603
|
|
|
(16
|
)
|
|
Developed Europe
(a)
|
|
2,976
|
|
|
4,027
|
|
|
(26
|
)
|
|
10,025
|
|
|
12,078
|
|
|
(17
|
)
|
||||
|
Developed Rest of World
(b)
|
|
2,529
|
|
|
2,807
|
|
|
(10
|
)
|
|
7,830
|
|
|
7,974
|
|
|
(2
|
)
|
||||
|
Emerging Markets
(c)
|
|
2,844
|
|
|
2,896
|
|
|
(2
|
)
|
|
8,760
|
|
|
8,463
|
|
|
4
|
|
||||
|
Total Revenues
|
|
$
|
13,976
|
|
|
$
|
16,609
|
|
|
(16
|
)
|
|
$
|
43,918
|
|
|
$
|
49,118
|
|
|
(11
|
)
|
|
(a)
|
Developed Europe region includes the following markets: Western Europe, Finland and the Scandinavian countries. Revenues denominated in euros were
$2.2 billion
and
$3.0 billion
in the
third
quarter of
2012
and
2011
, respectively, and
$7.5 billion
and
$9.1 billion
in the first nine months of
2012
and
2011
, respectively.
|
|
(b)
|
Developed Rest of World region includes the following markets: Australia, Canada, Japan, New Zealand and South Korea.
|
|
(c)
|
Emerging Markets region includes, but is not limited to, the following markets: Asia (excluding Japan and South Korea), Latin America, Middle East, Africa, Central and Eastern Europe and Turkey.
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
September 30, 2012
|
|
|
October 2, 2011
|
|
|
September 30, 2012
|
|
|
October 2, 2011
|
|
||||
|
Revenues from biopharmaceutical products:
|
|
|
|
|
|
|
|
|
||||||||
|
Lipitor
(a)
|
|
$
|
749
|
|
|
$
|
2,602
|
|
|
$
|
3,364
|
|
|
$
|
7,578
|
|
|
Lyrica
|
|
1,036
|
|
|
961
|
|
|
3,026
|
|
|
2,695
|
|
||||
|
Enbrel (Outside the U.S. and Canada)
|
|
893
|
|
|
957
|
|
|
2,780
|
|
|
2,741
|
|
||||
|
Prevnar 13/Prevenar 13
|
|
868
|
|
|
1,006
|
|
|
2,725
|
|
|
2,823
|
|
||||
|
Celebrex
|
|
676
|
|
|
643
|
|
|
1,969
|
|
|
1,856
|
|
||||
|
Viagra
|
|
517
|
|
|
493
|
|
|
1,498
|
|
|
1,458
|
|
||||
|
Norvasc
|
|
319
|
|
|
350
|
|
|
1,001
|
|
|
1,081
|
|
||||
|
Zyvox
|
|
328
|
|
|
321
|
|
|
996
|
|
|
965
|
|
||||
|
Sutent
|
|
294
|
|
|
298
|
|
|
913
|
|
|
870
|
|
||||
|
Premarin family
|
|
262
|
|
|
267
|
|
|
797
|
|
|
757
|
|
||||
|
Genotropin
|
|
212
|
|
|
215
|
|
|
619
|
|
|
654
|
|
||||
|
Xalatan/Xalacom
|
|
181
|
|
|
277
|
|
|
617
|
|
|
960
|
|
||||
|
BeneFIX
|
|
201
|
|
|
178
|
|
|
577
|
|
|
518
|
|
||||
|
Detrol/Detrol LA
|
|
176
|
|
|
213
|
|
|
576
|
|
|
668
|
|
||||
|
Vfend
|
|
187
|
|
|
171
|
|
|
543
|
|
|
558
|
|
||||
|
Chantix/Champix
|
|
146
|
|
|
156
|
|
|
496
|
|
|
545
|
|
||||
|
Pristiq
|
|
152
|
|
|
146
|
|
|
461
|
|
|
422
|
|
||||
|
Refacto AF/Xyntha
|
|
150
|
|
|
140
|
|
|
420
|
|
|
380
|
|
||||
|
Revatio
|
|
135
|
|
|
140
|
|
|
414
|
|
|
393
|
|
||||
|
Zoloft
|
|
129
|
|
|
139
|
|
|
398
|
|
|
420
|
|
||||
|
Medrol
|
|
113
|
|
|
127
|
|
|
388
|
|
|
383
|
|
||||
|
Zosyn/Tazocin
|
|
109
|
|
|
149
|
|
|
378
|
|
|
490
|
|
||||
|
Effexor
|
|
107
|
|
|
165
|
|
|
342
|
|
|
537
|
|
||||
|
Geodon/Zeldox
|
|
57
|
|
|
263
|
|
|
322
|
|
|
753
|
|
||||
|
Zithromax/Zmax
|
|
89
|
|
|
93
|
|
|
318
|
|
|
335
|
|
||||
|
Prevnar/Prevenar (7-valent)
|
|
81
|
|
|
98
|
|
|
303
|
|
|
406
|
|
||||
|
Fragmin
|
|
91
|
|
|
95
|
|
|
283
|
|
|
283
|
|
||||
|
Relpax
|
|
92
|
|
|
86
|
|
|
266
|
|
|
250
|
|
||||
|
Rapamune
|
|
92
|
|
|
96
|
|
|
259
|
|
|
285
|
|
||||
|
Cardura
|
|
79
|
|
|
92
|
|
|
254
|
|
|
289
|
|
||||
|
Aricept
(b)
|
|
71
|
|
|
117
|
|
|
249
|
|
|
335
|
|
||||
|
Tygacil
|
|
82
|
|
|
76
|
|
|
249
|
|
|
224
|
|
||||
|
EpiPen
(c)
|
|
67
|
|
|
59
|
|
|
217
|
|
|
160
|
|
||||
|
Xanax XR
|
|
66
|
|
|
77
|
|
|
203
|
|
|
232
|
|
||||
|
BMP2
|
|
58
|
|
|
83
|
|
|
192
|
|
|
277
|
|
||||
|
Caduet
|
|
68
|
|
|
150
|
|
|
191
|
|
|
435
|
|
||||
|
Sulperazon
|
|
62
|
|
|
51
|
|
|
191
|
|
|
155
|
|
||||
|
Diflucan
|
|
61
|
|
|
72
|
|
|
185
|
|
|
201
|
|
||||
|
Dalacin/Cleocin
|
|
74
|
|
|
51
|
|
|
176
|
|
|
139
|
|
||||
|
Neurontin
|
|
52
|
|
|
67
|
|
|
172
|
|
|
222
|
|
||||
|
Unasyn
|
|
54
|
|
|
58
|
|
|
165
|
|
|
172
|
|
||||
|
Aromasin
|
|
51
|
|
|
85
|
|
|
162
|
|
|
294
|
|
||||
|
Arthrotec
|
|
50
|
|
|
61
|
|
|
159
|
|
|
182
|
|
||||
|
Inspra
|
|
51
|
|
|
51
|
|
|
156
|
|
|
142
|
|
||||
|
Toviaz
|
|
52
|
|
|
49
|
|
|
150
|
|
|
137
|
|
||||
|
Metaxalone/Skelaxin
(c)
|
|
55
|
|
|
57
|
|
|
149
|
|
|
145
|
|
||||
|
Methotrexate
|
|
50
|
|
|
51
|
|
|
148
|
|
|
133
|
|
||||
|
Protonix
|
|
50
|
|
|
65
|
|
|
140
|
|
|
168
|
|
||||
|
Alliance revenues
(d)
|
|
879
|
|
|
919
|
|
|
2,577
|
|
|
2,678
|
|
||||
|
All other biopharmaceutical products
(e)
|
|
1,643
|
|
|
1,611
|
|
|
5,187
|
|
|
4,827
|
|
||||
|
|
|
12,117
|
|
|
14,747
|
|
|
38,321
|
|
|
43,611
|
|
||||
|
Revenues from other products:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Animal Health
|
|
1,017
|
|
|
1,041
|
|
|
3,128
|
|
|
3,078
|
|
||||
|
Consumer Healthcare
|
|
780
|
|
|
767
|
|
|
2,276
|
|
|
2,218
|
|
||||
|
Other
(f)
|
|
62
|
|
|
54
|
|
|
193
|
|
|
211
|
|
||||
|
|
|
$
|
13,976
|
|
|
$
|
16,609
|
|
|
$
|
43,918
|
|
|
$
|
49,118
|
|
|
(a)
|
Lipitor lost exclusivity in the U.S. in
November 2011
and various other markets in
2011
and
2012
. This loss of exclusivity reduced branded worldwide revenues by
$1.9 billion
in the
third
quarter of
2012
, in comparison with the
third
quarter of
2011
, and by
$4.2 billion
in the first
nine
months of
2012
, in comparison with the first
nine
months of 2011.
|
|
(b)
|
Represents direct sales under license agreement with Eisai Co., Ltd.
|
|
(c)
|
Legacy King product. King’s operations are included in our financial statements commencing from the acquisition date of January 31, 2011.
|
|
(d)
|
Includes Enbrel (in the U.S. and Canada), Aricept, Exforge, Rebif and Spiriva.
|
|
(e)
|
Includes sales of generic atorvastatin.
|
|
(f)
|
Includes revenues generated primarily from Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical sales organization.
|
|
•
|
Overview of Our Performance, Operating Environment, Strategy and Outlook
. This section, beginning on page 53 provides information about the following: our business; our performance during the third quarter and first nine months of 2012 and 2011; our operating environment; our strategy; our business development initiatives; and our financial guidance for 2012.
|
|
•
|
Analysis of the Condensed Consolidated Statements of Income
. This section begins on page 61, and consists of the following sub-sections:
|
|
◦
|
Revenues
. This sub-section, beginning on page 61, provides an analysis of our products and revenues for the third quarter and first nine months of 2012 and 2011, as well as an overview of research and development expenses and important biopharmaceutical product developments.
|
|
◦
|
Costs and Expenses
. This sub-section, beginning on page 77, provides a discussion about our costs and expenses.
|
|
◦
|
Provision for Taxes on Income
. This sub-section, on page 82, provides a discussion of items impacting our tax provisions.
|
|
◦
|
Discontinued Operations
. This sub-section, beginning on page 83, provides an analysis of the financial statement impact of our discontinued operations.
|
|
◦
|
Adjusted Income
. This sub-section, beginning on page 83, provides a discussion of an alternative view of performance used by management.
|
|
•
|
Analysis of the Condensed Consolidated Statements of Comprehensive Income
. This section, on page 88, provides a discussion of changes in certain components of other comprehensive income.
|
|
•
|
Analysis of the Condensed Consolidated Balance Sheets
. This section, on page 88, provides a discussion of changes in certain balance sheet accounts.
|
|
•
|
Analysis of the Condensed Consolidated Statements of Cash Flows
. This section, beginning on page 89, provides an analysis of our cash flows for the first nine months of 2012 and 2011.
|
|
•
|
Analysis of Financial Condition
,
Liquidity and Capital Resources
. This section, beginning on page 90, provides an analysis of selected measures of our liquidity and of our capital resources as of September 30, 2012 and December 31, 2011 and a discussion of our outstanding debt and commitments that existed as of September 30, 2012 and December 31, 2011. Included in the discussion of outstanding debt is a discussion of the amount of financial capacity available to help fund Pfizer's future activities.
|
|
•
|
New Accounting Standards
. This section, beginning on page 93, discusses recently adopted and recently issued accounting standards.
|
|
•
|
Forward-Looking Information and Factors That May Affect Future Results
. This section, beginning on page 94 provides a description of the risks and uncertainties that could cause actual results to differ materially from those discussed in forward-looking statements set forth in this MD&A relating to our financial and operating performance, business plans and prospects, in-line products and product candidates, strategic review, capital allocation, business-development plans, and share-repurchase and dividend-rate plans. Such forward-looking statements are based on management’s current expectations about future events, which are inherently susceptible to uncertainty and changes in circumstances.
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS, EXCEPT PER COMMON SHARE DATA)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change
|
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change
|
|
||||
|
Revenues
|
|
$
|
13,976
|
|
|
$
|
16,609
|
|
|
(16
|
)
|
|
$
|
43,918
|
|
|
$
|
49,118
|
|
|
(11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Cost of sales
|
|
2,665
|
|
|
3,409
|
|
|
(22
|
)
|
|
8,162
|
|
|
10,449
|
|
|
(22
|
)
|
||||
|
% of revenues
|
|
19.1
|
%
|
|
20.5
|
%
|
|
|
|
|
18.6
|
%
|
|
21.3
|
%
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Selling, informational and administrative expenses
|
|
3,847
|
|
|
4,457
|
|
|
(14
|
)
|
|
11,801
|
|
|
13,635
|
|
|
(13
|
)
|
||||
|
% of revenues
|
|
27.5
|
%
|
|
26.8
|
%
|
|
|
|
|
26.9
|
%
|
|
27.8
|
%
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Research and development expenses
|
|
1,981
|
|
|
2,176
|
|
|
(9
|
)
|
|
5,734
|
|
|
6,487
|
|
|
(12
|
)
|
||||
|
% of revenues
|
|
14.2
|
%
|
|
13.1
|
%
|
|
|
|
|
13.1
|
%
|
|
13.2
|
%
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Amortization of intangible assets
|
|
1,228
|
|
|
1,389
|
|
|
(12
|
)
|
|
3,939
|
|
|
4,138
|
|
|
(5
|
)
|
||||
|
% of revenues
|
|
8.8
|
%
|
|
8.4
|
%
|
|
|
|
|
9.0
|
%
|
|
8.4
|
%
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Restructuring charges and certain acquisition-related costs
|
|
302
|
|
|
1,090
|
|
|
(72
|
)
|
|
1,089
|
|
|
2,458
|
|
|
(56
|
)
|
||||
|
% of revenues
|
|
2.2
|
%
|
|
6.6
|
%
|
|
|
|
|
2.5
|
%
|
|
5.0
|
%
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Other deductions––net
|
|
962
|
|
|
547
|
|
|
76
|
|
|
3,283
|
|
|
1,802
|
|
|
82
|
|
||||
|
Income from continuing operations before provision for taxes on income
|
|
2,991
|
|
|
3,541
|
|
|
(16
|
)
|
|
9,910
|
|
|
10,149
|
|
|
(2
|
)
|
||||
|
% of revenues
|
|
21.4
|
%
|
|
21.3
|
%
|
|
|
|
|
22.6
|
%
|
|
20.7
|
%
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Provision/(benefit) for taxes on income
|
|
(119
|
)
|
|
1,216
|
|
|
(110
|
)
|
|
1,882
|
|
|
3,167
|
|
|
(41
|
)
|
||||
|
Effective tax rate
|
|
(4.0
|
)%
|
|
34.3
|
%
|
|
|
|
|
19.0
|
%
|
|
31.2
|
%
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Income from continuing operations
|
|
3,110
|
|
|
2,325
|
|
|
34
|
|
|
8,028
|
|
|
6,982
|
|
|
15
|
|
||||
|
% of revenues
|
|
22.3
|
%
|
|
14.0
|
%
|
|
|
|
|
18.3
|
%
|
|
14.2
|
%
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Discontinued operations––net of tax
|
|
104
|
|
|
1,424
|
|
|
(93
|
)
|
|
249
|
|
|
1,619
|
|
|
(85
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Net income before allocation to noncontrolling interests
|
|
3,214
|
|
|
3,749
|
|
|
(14
|
)
|
|
8,277
|
|
|
8,601
|
|
|
(4
|
)
|
||||
|
% of revenues
|
|
23.0
|
%
|
|
22.6
|
%
|
|
|
|
|
18.8
|
%
|
|
17.5
|
%
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Less: Net income attributable to noncontrolling interests
|
|
6
|
|
|
11
|
|
|
(45
|
)
|
|
22
|
|
|
31
|
|
|
(29
|
)
|
||||
|
Net income attributable to Pfizer Inc.
|
|
$
|
3,208
|
|
|
$
|
3,738
|
|
|
(14
|
)
|
|
$
|
8,255
|
|
|
$
|
8,570
|
|
|
(4
|
)
|
|
% of revenues
|
|
23.0
|
%
|
|
22.5
|
%
|
|
|
|
|
18.8
|
%
|
|
17.4
|
%
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Earnings per common share––basic:
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders
|
|
$
|
0.42
|
|
|
$
|
0.30
|
|
|
40
|
|
|
$
|
1.07
|
|
|
$
|
0.88
|
|
|
22
|
|
|
Discontinued operations––net of tax
|
|
0.01
|
|
|
0.18
|
|
|
(94
|
)
|
|
0.03
|
|
|
0.21
|
|
|
(86
|
)
|
||||
|
Net income attributable to Pfizer Inc. common shareholders
|
|
$
|
0.43
|
|
|
$
|
0.48
|
|
|
(10
|
)
|
|
$
|
1.10
|
|
|
$
|
1.09
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings per common share––diluted:
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders
|
|
$
|
0.41
|
|
|
$
|
0.30
|
|
|
37
|
|
|
1.06
|
|
|
0.88
|
|
|
20
|
|
||
|
Discontinued operations––net of tax
|
|
0.01
|
|
|
0.18
|
|
|
(94
|
)
|
|
0.03
|
|
|
0.20
|
|
|
(85
|
)
|
||||
|
Net income attributable to Pfizer Inc. common shareholders
|
|
$
|
0.43
|
|
|
$
|
0.48
|
|
|
(10
|
)
|
|
$
|
1.09
|
|
|
$
|
1.08
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Cash dividends paid per common share
|
|
$
|
0.22
|
|
|
$
|
0.20
|
|
|
10
|
|
|
$
|
0.66
|
|
|
$
|
0.60
|
|
|
10
|
|
|
(a)
|
EPS amounts may not add due to rounding.
|
|
(MILLIONS OF DOLLARS)
|
September 30, 2012
vs.
October 2, 2011
Worldwide
Change
|
|
% Change
Worldwide
|
|
% Change
U.S.
|
|
% Change
International
|
|
|
|
Three Months Ended
|
|
|
|
|
|||||
|
Lipitor
(a)
|
$
|
(1,853
|
)
|
(71
|
)
|
(87
|
)
|
(51
|
)
|
|
Geodon/Zeldox
(a)
|
(206
|
)
|
(78
|
)
|
(88
|
)
|
(33
|
)
|
|
|
Prevnar 13/Prevenar 13
|
(138
|
)
|
(14
|
)
|
(3
|
)
|
(22
|
)
|
|
|
Xalatan/Xalacom
(a)
|
(96
|
)
|
(35
|
)
|
—
|
|
(36
|
)
|
|
|
Caduet
(a)
|
(82
|
)
|
(55
|
)
|
(84
|
)
|
(21
|
)
|
|
|
Effexor
|
(58
|
)
|
(35
|
)
|
(29
|
)
|
(38
|
)
|
|
|
Zosyn/Tazocin
|
(40
|
)
|
(27
|
)
|
(48
|
)
|
(5
|
)
|
|
|
Aromasin
(a)
|
(34
|
)
|
(40
|
)
|
(63
|
)
|
(38
|
)
|
|
|
Prevnar/Prevenar (7-valent)
|
(17
|
)
|
(17
|
)
|
—
|
|
(17
|
)
|
|
|
Celebrex
|
33
|
|
5
|
|
8
|
|
—
|
|
|
|
Lyrica
|
75
|
|
8
|
|
13
|
|
4
|
|
|
|
Alliance Revenue
(a)
|
(40
|
)
|
(4
|
)
|
20
|
|
(45
|
)
|
|
|
All other biopharmaceutical products
(b)
|
32
|
|
2
|
|
18
|
|
(5
|
)
|
|
|
Animal Health products
|
(24
|
)
|
(2
|
)
|
4
|
|
(7
|
)
|
|
|
Consumer Healthcare products
|
13
|
|
2
|
|
(5
|
)
|
9
|
|
|
|
|
|
|
|
|
|||||
|
Nine Months Ended
|
|
|
|
|
|
|
|
|
|
|
Lipitor
(a)
|
$
|
(4,214
|
)
|
(56
|
)
|
(79
|
)
|
(26
|
)
|
|
Geodon/Zeldox
(a)
|
(431
|
)
|
(57
|
)
|
(65
|
)
|
(17
|
)
|
|
|
Xalatan/Xalacom
(a)
|
(343
|
)
|
(36
|
)
|
(81
|
)
|
(27
|
)
|
|
|
Caduet
(a)
|
(244
|
)
|
(56
|
)
|
(89
|
)
|
(18
|
)
|
|
|
Effexor
|
(195
|
)
|
(36
|
)
|
(51
|
)
|
(27
|
)
|
|
|
Aromasin
(a)
|
(132
|
)
|
(45
|
)
|
(81
|
)
|
(37
|
)
|
|
|
Zosyn/Tazocin
|
(112
|
)
|
(23
|
)
|
(34
|
)
|
(9
|
)
|
|
|
Prevnar/Prevenar (7-valent)
|
(103
|
)
|
(25
|
)
|
—
|
|
(25
|
)
|
|
|
Prevnar 13/Prevenar 13
|
(98
|
)
|
(3
|
)
|
(7
|
)
|
1
|
|
|
|
Celebrex
|
113
|
|
6
|
|
7
|
|
4
|
|
|
|
Lyrica
|
331
|
|
12
|
|
10
|
|
14
|
|
|
|
Alliance revenue
(a)
|
(101
|
)
|
(4
|
)
|
17
|
|
(36
|
)
|
|
|
All other biopharmaceutical products
(b)
|
360
|
|
7
|
|
25
|
|
(1
|
)
|
|
|
Animal Health products
|
50
|
|
2
|
|
7
|
|
(2
|
)
|
|
|
Consumer Healthcare products
|
58
|
|
3
|
|
(3
|
)
|
8
|
|
|
|
(a)
|
Lipitor and Caduet lost exclusivity in the U.S. in November 2011 and various other major markets in 2011 and 2012. Xalatan lost exclusivity in the U.S. in March 2011 and in the majority of European markets in January 2012. Aromasin lost exclusivity in the U.S. in April 2011, in the majority of European markets in July 2011 and in Japan in November 2011. Geodon lost exclusivity in the U. S. in March 2012. We lost exclusivity for Aricept 5mg and 10mg tablets, which are included in Alliance revenues, in the U.S. in November 2010 and in the majority of European markets in February and April 2012.
|
|
(b)
|
Includes the “All other” category included in the Revenues—Major Biopharmaceutical Products table presented in this MD&A, which includes sales of generic atorvastatin.
|
|
•
|
the favorable impacts of a settlement with the U.S. Internal Revenue Service and the resolution of certain foreign tax audits, in the third quarter of 2012, all of which related to multiple tax years;
|
|
•
|
purchase accounting charges that were approximately $439 million lower in the third quarter and $1.1 billion lower in first nine months of 2012 than in the same periods in 2011;
|
|
•
|
acquisition-related costs that were approximately $50 million lower in the third quarter and $647 million lower in first nine months of 2012 than in the same periods in 2011;
|
|
•
|
asset impairment charges that were approximately $96 million lower in the third quarter of 2012 and $64 million lower in the first nine months of 2012 than in the same periods in 2011 (see further discussion in the “Costs and Expenses––Other Deductions––Net” section of this MD&A and Notes to Condensed Consolidated Financial Statements––
Note 4. Other Deductions––net
); and
|
|
•
|
charges related to our non-acquisition related cost-reduction and productivity initiatives that were approximately $807 million lower in the third quarter of 2012 and $747 million lower in the first nine months of 2012 than in the same periods in 2011;
|
|
•
|
the loss of exclusivity of Lipitor, as well as certain other products, resulting in lower revenues and associated expenses (see also the “Industry-Specific Challenges” section of this MD&A); and
|
|
•
|
charges for certain legal matters that were approximately $594 million higher in the third quarter and $1.4 billion higher in the first nine months of 2012 than in the same periods in 2011 (see further discussion in the “Costs and Expenses––Other Deductions––Net” section of this MD&A and Notes to Condensed Consolidated Financial Statements––
|
|
•
|
approximately $179 million in the third quarter of 2012 and $215 million in the third quarter of 2011, and approximately $413 million in the first nine months of 2012 and $539 million in the first nine months of 2011 recorded as a reduction to
Revenues
, related to the extended and expanded rebate provisions and the Medicare “coverage gap” discount provision; and
|
|
•
|
approximately $75 million in the third quarter of 2012 and $45 million in the third quarter of 2011, and approximately $256 million in the first nine months of 2012 and $183 million in the first nine months of 2011 related to the annual fee payable to the federal government (which is not deductible for U.S. income tax purposes) based on our prior-calendar-year share relative to other companies of branded prescription drug sales to specified government programs.
|
|
•
|
Lipitor in the U.S.––Lipitor lost exclusivity in the U.S. in November 2011. The entry of multi-source generic competition in the U.S. began in May 2012, with attendant increased competitive pressures. Beginning in 2012, sales of Lipitor in the U.S. are reported in our Established Products business unit.
|
|
•
|
Other recent loss of exclusivity impacts––In the U.S., we lost exclusivity for Vfend tablets in February 2011, for Xalatan in March 2011 and for Geodon in March 2012. The basic U.S. patent (including the six-month pediatric exclusivity period) for Protonix expired in January 2011. The basic patent for Vfend tablets in Brazil expired in January 2011. We lost exclusivity for Aromasin in the U.S. in April 2011, in the majority of European markets in July 2011 and in Japan in November 2011. We lost exclusivity for Xalatan and Xalacom in the majority of European markets in January 2012. We lost exclusivity for Aricept in the majority of European markets in February 2012 and April 2012. Caduet lost exclusivity in the U.S. in November 2011 and in the majority of European markets in March and May 2012. We lost exclusivity in the U.S. in September 2012 for Revatio tablet and for Detrol IR.
|
|
•
|
Aricept––Our rights to Aricept in Japan will return to Eisai Co., Ltd. in December 2012.
|
|
•
|
Spiriva––Our collaboration with Boehringer Ingelheim (BI) for Spiriva will expire on a country-by-country basis between 2012 and 2016, including the expiration in certain European Union (EU) markets in 2012.
|
|
•
|
On October 22, 2012, Pfizer announced its intention to acquire NextWave Pharmaceuticals, Inc. (NextWave), a privately held, specialty pharmaceutical company focused on the development and commercialization of products for the treatment of attention deficit/hyperactivity disorder (ADHD) and related central nervous system (CNS) disorders. Pfizer will make a payment of $255 million to NextWave's shareholders at the closing of the transaction and additional payments of up to $425 million based on certain sales milestones. Pfizer had previously entered into an option and merger agreement with NextWave during the second quarter of 2012 and made an option payment of $20 million. The transaction is expected to close during the fourth quarter of 2012, subject to regulatory approval in the United States, and other customary closing conditions. NextWave is the developer of Quillivant XR™ (methylphenidate hydrochloride) for extended-release oral suspension, CII, the first once-daily liquid medication approved for the treatment of ADHD, and holds the exclusive North American commercialization rights to Quillivant XR. Quillivant XR received approval from the U.S. Food and Drug Administration (FDA) on September 27, 2012.
|
|
•
|
On September 6, 2012, Pfizer and Zhejiang Hisun Pharmaceuticals, a leading Chinese pharmaceutical company, created a new company, Hisun-Pfizer Pharmaceuticals Co., Ltd. (HPP), to develop, manufacture and commercialize off-patent pharmaceutical products in China and global markets. In accordance with our international reporting periods, this transaction will be accounted for in the fourth quarter of 2012. HPP was established with registered capital of $250 million. Zhejiang Hisun Pharmaceuticals holds a 51% equity interest and Pfizer holds a 49% equity interest in HPP. The parties will contribute select existing products to HPP, which will have a broad portfolio covering cardiovascular disease, infectious disease, oncology, mental health, and other therapeutic areas. The parties will also contribute manufacturing sites, cash and other relevant assets. Our investment in HPP will be accounted for under the equity method.
|
|
•
|
On August 13, 2012, we filed a registration statement with the SEC for a potential IPO of up to a 20% ownership stake in our Animal Health business, Zoetis. If the IPO is successfully completed, which we are targeting for the first half of 2013, we will have a variety of options to achieve a potential full separation of Zoetis. As we continue to work toward a potential IPO and a potential full separation of Zoetis, we remain open to all alternatives to maximize the after-tax return for our shareholders. The Animal Health business continues to be presented as a continuing operation in the condensed consolidated financial statements.
|
|
•
|
On August 13, 2012, we announced that we entered into an agreement with AstraZeneca for the over-the-counter (OTC) rights for Nexium, a leading prescription drug currently approved to treat the symptoms of gastroesophageal reflux disease. Under the terms of the agreement, we acquired the exclusive global rights to market Nexium for the approved OTC indications. We made an upfront payment of $250 million to AstraZeneca, and AstraZeneca is eligible to receive milestone payments of up to $550 million based on product launches and level of sales as well as royalty payments based on sales. A marketing authorization application for OTC Nexium in a 20 mg tablet form was filed with the European Medicines Agency in June 2012. A new drug application filing for OTC Nexium in the U.S. in a 20 mg delayed-release capsule is targeted for the first half of 2013.
|
|
•
|
On April 23, 2012, we announced that we entered into an agreement to sell our Nutrition business to Nestlé for $11.85 billion in cash. The transaction is expected to close in the next few months, assuming receipt of the required regulatory clearances and satisfaction of other closing conditions. See Notes to Condensed Consolidated Financial Statements—
Note 2B. Acquisitions and Divestitures: Divestitures
.
|
|
•
|
On March 12, 2012, Biocon and Pfizer announced the conclusion of their alliance to commercialize Biocon’s biosimilar versions of insulin and insulin analog products. The companies agreed that, due to the individual priorities for their respective biosimilars businesses, it was in their best interest to move forward independently.
|
|
•
|
On February 26, 2012, we completed our acquisition of Alacer Corp. (Alacer), a privately owned company that manufactures, markets and distributes Emergen-C, a line of effervescent, powdered drink mix vitamin supplements that is the largest-selling branded vitamin C line in the U.S. For additional information, see Notes to Condensed Consolidated Financial Statements—
Note 2A. Acquisitions and Divestitures: Acquisitions
.
|
|
•
|
On December 1, 2011, we completed our acquisition of the consumer healthcare business of Ferrosan Holding A/S (Ferrosan), a Danish company engaged in the sale of science-based consumer healthcare products, primarily in the Nordic region and the emerging markets of Russia and Central and Eastern Europe. For additional information, see Notes to Condensed Consolidated Financial Statements—
Note 2A. Acquisitions and Divestitures: Acquisitions
.
|
|
•
|
On August 1, 2011, we sold our Capsugel business for approximately $2.4 billion in cash. For additional information, see Notes to Condensed Consolidated Financial Statements—
Note 2B. Acquisitions and Divestitures: Divestitures
.
|
|
•
|
On January 31, 2011, we completed a tender offer for the outstanding shares of common stock of King and acquired approximately 92.5% of the outstanding shares for approximately $3.3 billion in cash. On February 28, 2011, we acquired the remaining outstanding shares of King for approximately $300 million in cash. For additional information, see Notes to Condensed Consolidated Financial Statements—
|
|
|
|
Full-Year 2012 Guidance
|
||
|
(BILLIONS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
|
|
Net Income
(a)
|
|
Diluted EPS
(a)
|
|
Adjusted income/diluted EPS
(b)
guidance
|
|
~$16.1 - $16.4
|
|
~$2.14 - $2.17
|
|
Purchase accounting impacts of transactions completed as of 9/30/12
|
|
(3.6)
|
|
(0.48)
|
|
Acquisition-related costs
|
|
(0.5 - 0.7)
|
|
(0.07 - 0.09)
|
|
Non-acquisition-related restructuring costs
(c)
|
|
(1.4 - 1.6)
|
|
(0.18 - 0.21)
|
|
Other certain significant items incurred as of 9/30/12
|
|
(0.9)
|
|
(0.12)
|
|
Income from discontinued operations
(d)
|
|
0.4
|
|
0.06
|
|
Reported net income attributable to Pfizer Inc./diluted EPS guidance
|
|
~$9.7 - $10.4
|
|
~$1.30 - $1.38
|
|
(a)
|
Includes the revenues and expenses related to the Nutrition business, which is reflected as a discontinued operation, but does not include the gain on the pending sale of the Nutrition business. Does not assume the completion of any business-development transactions not completed as of
September 30, 2012
, including any one-time upfront payments associated with such transactions. Also excludes the potential effects of the resolution of litigation-related matters not substantially resolved as of
September 30, 2012
, except for charges for such matters that have been recorded during the first nine months of 2012.
|
|
(b)
|
For an understanding of Adjusted income and Adjusted diluted EPS, see the “Adjusted Income” section of this MD&A.
|
|
(c)
|
Includes amounts related to our initiatives to reduce R&D spending, including our realigned R&D footprint, and amounts related to other cost-reduction and productivity initiatives. In the reconciliation between Net income attributable to Pfizer Inc., as reported under principles generally accepted in the United States of America (U.S. GAAP), and Adjusted income, and in the reconciliation between diluted EPS, as reported under U.S. GAAP, and Adjusted diluted EPS, these amounts are categorized as Certain Significant Items (see the “Adjusted Income––Reconciliation” section of this MD&A).
|
|
(d)
|
Income attributable to Pfizer’s Nutrition business.
|
|
|
|
Worldwide
|
|
U.S.
|
|
International
|
|
World-
wide
|
|
U.S.
|
|
Inter-
national
|
|||||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
Sep 30,
2012 |
|
|
Oct 2,
2011 |
|
|
Sep 30,
2012 |
|
|
Oct 2,
2011 |
|
|
Sep 30,
2012 |
|
|
Oct 2,
2011 |
|
|
% Change in Revenues
|
|||||||||||||
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Biopharmaceutical revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Primary Care Operating Segment
|
|
$
|
3,610
|
|
|
$
|
5,948
|
|
|
$
|
2,021
|
|
|
$
|
3,451
|
|
|
$
|
1,589
|
|
|
$
|
2,497
|
|
|
(39
|
)
|
|
(41
|
)
|
|
(36
|
)
|
|
Specialty Care
|
|
3,406
|
|
|
3,799
|
|
|
1,528
|
|
|
1,636
|
|
|
1,878
|
|
|
2,163
|
|
|
(10
|
)
|
|
(7
|
)
|
|
(13
|
)
|
||||||
|
Oncology
|
|
329
|
|
|
332
|
|
|
151
|
|
|
97
|
|
|
178
|
|
|
235
|
|
|
(1
|
)
|
|
56
|
|
|
(24
|
)
|
||||||
|
SC&O Operating Segment
|
|
3,735
|
|
|
4,131
|
|
|
1,679
|
|
|
1,733
|
|
|
2,056
|
|
|
2,398
|
|
|
(10
|
)
|
|
(3
|
)
|
|
(14
|
)
|
||||||
|
Emerging Markets
|
|
2,389
|
|
|
2,438
|
|
|
—
|
|
|
—
|
|
|
2,389
|
|
|
2,438
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||||
|
Established Products
|
|
2,383
|
|
|
2,230
|
|
|
1,069
|
|
|
835
|
|
|
1,314
|
|
|
1,395
|
|
|
7
|
|
|
28
|
|
|
(6
|
)
|
||||||
|
EP&EM Operating Segment
|
|
4,772
|
|
|
4,668
|
|
|
1,069
|
|
|
835
|
|
|
3,703
|
|
|
3,833
|
|
|
2
|
|
|
28
|
|
|
(3
|
)
|
||||||
|
|
|
12,117
|
|
|
14,747
|
|
|
4,769
|
|
|
6,019
|
|
|
7,348
|
|
|
8,728
|
|
|
(18
|
)
|
|
(21
|
)
|
|
(16
|
)
|
||||||
|
Other product revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Animal Health
|
|
1,017
|
|
|
1,041
|
|
|
451
|
|
|
433
|
|
|
566
|
|
|
608
|
|
|
(2
|
)
|
|
4
|
|
|
(7
|
)
|
||||||
|
Consumer Healthcare
|
|
780
|
|
|
767
|
|
|
388
|
|
|
408
|
|
|
392
|
|
|
359
|
|
|
2
|
|
|
(5
|
)
|
|
9
|
|
||||||
|
Other Operating Segments
|
|
1,797
|
|
|
1,808
|
|
|
839
|
|
|
841
|
|
|
958
|
|
|
967
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||||
|
Other
(a)
|
|
62
|
|
|
54
|
|
|
19
|
|
|
19
|
|
|
43
|
|
|
35
|
|
|
15
|
|
|
—
|
|
|
23
|
|
||||||
|
Total revenues
|
|
$
|
13,976
|
|
|
$
|
16,609
|
|
|
$
|
5,627
|
|
|
$
|
6,879
|
|
|
$
|
8,349
|
|
|
$
|
9,730
|
|
|
(16
|
)
|
|
(18
|
)
|
|
(14
|
)
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Biopharmaceutical revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Primary Care Operating Segment
|
|
$
|
11,725
|
|
|
$
|
17,259
|
|
|
$
|
6,065
|
|
|
$
|
10,007
|
|
|
$
|
5,660
|
|
|
$
|
7,252
|
|
|
(32
|
)
|
|
(39
|
)
|
|
(22
|
)
|
|
Specialty Care
|
|
10,483
|
|
|
11,425
|
|
|
4,639
|
|
|
5,226
|
|
|
5,844
|
|
|
6,199
|
|
|
(8
|
)
|
|
(11
|
)
|
|
(6
|
)
|
||||||
|
Oncology
|
|
940
|
|
|
982
|
|
|
415
|
|
|
274
|
|
|
525
|
|
|
708
|
|
|
(4
|
)
|
|
51
|
|
|
(26
|
)
|
||||||
|
SC&O Operating Segment
|
|
11,423
|
|
|
12,407
|
|
|
5,054
|
|
|
5,500
|
|
|
6,369
|
|
|
6,907
|
|
|
(8
|
)
|
|
(8
|
)
|
|
(8
|
)
|
||||||
|
Emerging Markets
|
|
7,308
|
|
|
7,031
|
|
|
—
|
|
|
—
|
|
|
7,308
|
|
|
7,031
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||||
|
Established Products
|
|
7,865
|
|
|
6,914
|
|
|
3,780
|
|
|
2,739
|
|
|
4,085
|
|
|
4,175
|
|
|
14
|
|
|
38
|
|
|
(2
|
)
|
||||||
|
EP&EM Operating Segment
|
|
15,173
|
|
|
13,945
|
|
|
3,780
|
|
|
2,739
|
|
|
11,393
|
|
|
11,206
|
|
|
9
|
|
|
38
|
|
|
2
|
|
||||||
|
|
|
38,321
|
|
|
43,611
|
|
|
14,899
|
|
|
18,246
|
|
|
23,422
|
|
|
25,365
|
|
|
(12
|
)
|
|
(18
|
)
|
|
(8
|
)
|
||||||
|
Other product revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Animal Health
|
|
3,128
|
|
|
3,078
|
|
|
1,289
|
|
|
1,205
|
|
|
1,839
|
|
|
1,873
|
|
|
2
|
|
|
7
|
|
|
(2
|
)
|
||||||
|
Consumer Healthcare
|
|
2,276
|
|
|
2,218
|
|
|
1,054
|
|
|
1,087
|
|
|
1,222
|
|
|
1,131
|
|
|
3
|
|
|
(3
|
)
|
|
8
|
|
||||||
|
Other Operating Segments
|
|
5,404
|
|
|
5,296
|
|
|
2,343
|
|
|
2,292
|
|
|
3,061
|
|
|
3,004
|
|
|
2
|
|
|
2
|
|
|
2
|
|
||||||
|
Other
(a)
|
|
193
|
|
|
211
|
|
|
61
|
|
|
65
|
|
|
132
|
|
|
146
|
|
|
(9
|
)
|
|
(6
|
)
|
|
(10
|
)
|
||||||
|
Total revenues
|
|
$
|
43,918
|
|
|
$
|
49,118
|
|
|
$
|
17,303
|
|
|
$
|
20,603
|
|
|
$
|
26,615
|
|
|
$
|
28,515
|
|
|
(11
|
)
|
|
(16
|
)
|
|
(7
|
)
|
|
(a)
|
Includes revenues generated primarily from Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical sales organization.
|
|
•
|
the decrease in operational revenues of approximately $2.0 billion in the third quarter and $4.3 billion in the first nine months of 2012 due to the loss of exclusivity of various products in certain markets, including a decrease of $1.9 billion in the third quarter and $4.2 billion in the first nine months of 2012 in operational revenues from branded Lipitor; and
|
|
•
|
the unfavorable impact of foreign exchange, which resulted in revenue decreases of approximately $605 million in the third quarter and approximately $1.0 billion in the first nine months of 2012;
|
|
•
|
a lower reduction in revenues related to the U.S. Healthcare Legislation of $36 million in the third quarter and $126 million in the first nine months of 2012 compared to the same periods in 2011, primarily due to the loss of exclusivity of Lipitor; and
|
|
•
|
an increase in operational revenues for certain biopharmaceutical products, particularly Enbrel, Celebrex and Lyrica and in revenues from emerging markets.
|
|
•
|
in the U.S., revenues from biopharmaceutical products decreased 21% in the third quarter of 2012 and 18% in the first nine months of 2012, compared to the same periods in 2011, primarily reflecting lower revenues from Lipitor, Geodon, Caduet, Effexor, Zosyn, Aromasin and (in the first nine months of 2012 only) Xalatan/Xalacom, all due to loss of exclusivity, and from BMP2 and Detrol/Detrol LA. The impact of these adverse factors was partially offset by the strong performance of certain other biopharmaceutical products and the lower reduction in revenues related to U.S. Healthcare Legislation.
|
|
•
|
in our international markets, revenues from biopharmaceutical products decreased 16% in the third quarter of 2012 and 8% in the first nine months of 2012, compared to the same periods in 2011, primarily due to the losses of exclusivity of Lipitor in the majority of developed European markets during the second quarter of 2012 and the unfavorable impact of foreign exchange of 7% in the third quarter of 2012 and 4% in the first nine months of 2012. Operationally, revenues decreased 9% in the third quarter of 2012 and 4% in the first nine months of 2012, compared to the same periods in 2011. In addition to Lipitor, the decrease in operational revenues was driven by Xalatan/Xalacom, Norvasc, Effexor and Aromasin, all due to loss of exclusivity in certain markets, and lower Alliance revenues, primarily due to the loss of exclusivity of Aricept in many major European markets, as well as lower revenues for Spiriva in certain European countries reflecting the final-year terms of our Spiriva collaboration agreements relating to those countries. The impact of these adverse factors was partially offset by the strong operational growth of Lyrica and Enbrel.
|
|
•
|
Primary Care unit revenues decreased 39% in the third quarter and 32% in the first nine months of 2012, compared to the same periods in 2011, reflecting lower operational revenues of 37% and 31%, respectively, primarily due to the losses of exclusivity of Lipitor in the U.S. in November 2011, the majority of developed European markets during the second quarter of 2012 and Japan in June 2011, as well as the resulting shift in the reporting of U.S. and Japan Lipitor revenues to the Established Products unit beginning January 1, 2012. These factors impacted Primary Care operational revenues by approximately $2.0 billion, or 34%, in the third quarter of 2012 and by approximately $5.3 billion, or 31%, in the first nine months of 2012.
|
|
•
|
Specialty Care unit revenues decreased 10% in the third quarter and 8% in the first nine months of 2012, compared to the same periods in 2011, due to lower operational revenues of 5% and 6%, respectively, as well as the adverse impact of foreign exchange. Operational revenues were negatively impacted in both periods by the decline in the Prevnar/Prevenar franchise, primarily in the U.S. and developed Europe, as the pediatric catch-up dose opportunity in the third quarter of 2011 was no longer available in the third quarter of 2012 since all patients have already been vaccinated. Additionally, utilization of Prevnar/Prevenar in adults remains minimal at this time.
|
|
•
|
Oncology unit revenues decreased 1% in the third quarter and 4% in the first nine months of 2012, compared to the same periods in 2011, primarily due to the unfavorable impact of foreign exchange of 5% and 3%, respectively. Operational revenues were unfavorably impacted in both periods by the loss of exclusivity of Aromasin in the majority of European markets in the second half of 2011 and the resulting shift in the reporting of such revenues to the Established Products unit beginning January 1, 2012. This loss of exclusivity reduced Oncology unit revenues by $56 million, or 17%, in comparison with the third quarter of 2011, and reduced Oncology unit revenues by $184 million, or 19%, in comparison with the first nine months of 2011.
|
|
•
|
Established Products unit revenues increased 7% in the third quarter of 2012 compared to the same period in 2011 due to higher operational revenues of 11% and a 4% unfavorable impact of foreign exchange. Established Products unit revenues increased 14% in the first nine months of 2012 compared to the same period in 2011 due to higher operational revenues of 16% and a 2% unfavorable impact of foreign exchange. The increases in Established Products unit operational revenues in the third quarter and first nine months of 2012 were mainly due to the shift in the reporting of branded Lipitor revenues in the U.S. and Japan from the Primary Care unit totaling $320 million and $1.2 billion, respectively, to the Established Products unit beginning January 1, 2012, as well as recent launches of generic versions of certain Pfizer branded primary care and specialty care products, and by contributions from the sales of the authorized generic version of Lipitor in the U.S. by Watson Pharmaceuticals, Inc.
|
|
•
|
Emerging Markets unit revenues decreased 2%, in the third quarter of 2012 compared to the same period in 2011, due to an 8% unfavorable impact of foreign exchange, partially offset by higher operational revenues of 6%. Emerging Markets unit revenues increased 4%, in the first nine months of 2012 compared to the same period in 2011, due to higher operational revenues of 10%, partially offset by a 6% unfavorable impact of foreign exchange. The increases in Emerging Markets unit operational revenues in the third quarter and first nine months of 2012 were primarily due to volume growth in China, Mexico and Russia, as a result of more targeted promotional efforts for key innovative and established products, including Lipitor, Norvasc and Lyrica.
|
|
•
|
Animal Health unit revenues decreased 2% in the third quarter of 2012, compared to the same period in 2011, reflecting higher operational revenues of 4%, more than offset by the unfavorable impact of foreign exchange of 6%. Operational revenues from Animal Health products were favorably impacted in the third quarter of 2012 compared to the same period in 2011 primarily by increased demand across the companion animal and global livestock portfolios in key geographies.
|
|
•
|
Consumer Healthcare unit revenues increased 2% in the third quarter of 2012, compared to the same period in 2011, reflecting higher operational revenues of 6%, and the unfavorable impact of foreign exchange of 4%. Consumer Healthcare unit revenues increased 3% in the first nine months of 2012, compared to the same period in 2011, reflecting higher operational revenues of 5% and the unfavorable impact of foreign exchange of 2%. The operational revenue increases were primarily due to the addition of products from the acquisitions of Ferrosan Consumer Health in December 2011 and Alacer Corp. in February 2012.
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
||||
|
Medicaid and related state program rebates
(a)
|
|
$
|
132
|
|
|
$
|
249
|
|
|
$
|
558
|
|
|
$
|
925
|
|
|
Medicare rebates
(a)
|
|
159
|
|
|
372
|
|
|
572
|
|
|
1,099
|
|
||||
|
Performance-based contract rebates
(a), (b)
|
|
507
|
|
|
1,570
|
|
|
1,624
|
|
|
2,687
|
|
||||
|
Chargebacks
(c)
|
|
969
|
|
|
813
|
|
|
2,732
|
|
|
2,416
|
|
||||
|
Total
|
|
$
|
1,767
|
|
|
$
|
3,004
|
|
|
$
|
5,486
|
|
|
$
|
7,127
|
|
|
(a)
|
Rebates are product-specific and, therefore, for any given year are impacted by the mix of products sold.
|
|
(b)
|
Performance-based contract rebates include contract rebates with managed care customers within the U.S., including health maintenance organizations and pharmacy benefit managers, who receive rebates based on the achievement of contracted performance terms and
|
|
(c)
|
Chargebacks primarily represent reimbursements to wholesalers for honoring contracted prices to third parties.
|
|
•
|
the impact of decreased Medicare, Medicaid and performance-based contract rebates contracted for Lipitor and certain other products that have lost exclusivity;
|
|
•
|
changes in product mix; and
|
|
•
|
the impact on chargebacks of decreased sales for certain products that have lost exclusivity and decreased sales for certain generic products sold by our Greenstone unit that are subject to chargebacks;
|
|
•
|
an increase in chargebacks for our branded products as a result of increasing competitive pressures.
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||
|
(MILLIONS OF DOLLARS)
|
|
Sep 30,
2012 |
|
|
|
|
|
Sep 30,
2012 |
|
|
|
|
||||
|
Product
|
|
Primary Indications
|
|
|
% Change
(a)
|
|
|
|
% Change
(a)
|
|
||||||
|
Lipitor
|
|
Reduction of LDL cholesterol
|
|
$
|
749
|
|
|
(71
|
)
|
|
$
|
3,364
|
|
|
(56
|
)
|
|
Lyrica
|
|
Epilepsy, post-herpetic neuralgia and diabetic peripheral neuropathy, fibromyalgia, neuropathic pain due to spinal cord injury
|
|
1,036
|
|
|
8
|
|
|
3,026
|
|
|
12
|
|
||
|
Enbrel (Outside the U.S. and Canada)
|
|
Rheumatoid, juvenile rheumatoid and psoriatic arthritis, plaque psoriasis and ankylosing spondylitis
|
|
893
|
|
|
(7
|
)
|
|
2,780
|
|
|
1
|
|
||
|
Prevnar13/Prevenar 13
|
|
Vaccine for prevention of pneumococcal disease
|
|
868
|
|
|
(14
|
)
|
|
2,725
|
|
|
(3
|
)
|
||
|
Celebrex
|
|
Arthritis pain and inflammation, acute pain
|
|
676
|
|
|
5
|
|
|
1,969
|
|
|
6
|
|
||
|
Viagra
|
|
Erectile dysfunction
|
|
517
|
|
|
5
|
|
|
1,498
|
|
|
3
|
|
||
|
Norvasc
|
|
Hypertension
|
|
319
|
|
|
(9
|
)
|
|
1,001
|
|
|
(7
|
)
|
||
|
Zyvox
|
|
Bacterial infections
|
|
328
|
|
|
2
|
|
|
996
|
|
|
3
|
|
||
|
Sutent
|
|
Advanced and/or metastatic renal cell carcinoma (mRCC) and refractory gastrointestinal stromal tumors (GIST) and advanced pancreatic neuroendocrine tumor
|
|
294
|
|
|
(1
|
)
|
|
913
|
|
|
5
|
|
||
|
Premarin family
|
|
Menopause
|
|
262
|
|
|
(2
|
)
|
|
797
|
|
|
5
|
|
||
|
Genotropin
|
|
Replacement of human growth hormone
|
|
212
|
|
|
(1
|
)
|
|
619
|
|
|
(5
|
)
|
||
|
Xalatan/Xalacom
|
|
Glaucoma and ocular hypertension
|
|
181
|
|
|
(35
|
)
|
|
617
|
|
|
(36
|
)
|
||
|
BeneFIX
|
|
Hemophilia
|
|
201
|
|
|
13
|
|
|
577
|
|
|
11
|
|
||
|
Detrol/Detrol LA
|
|
Overactive bladder
|
|
176
|
|
|
(17
|
)
|
|
576
|
|
|
(14
|
)
|
||
|
Vfend
|
|
Fungal infections
|
|
187
|
|
|
9
|
|
|
543
|
|
|
(3
|
)
|
||
|
Chantix/Champix
|
|
An aid to smoking cessation treatment
|
|
146
|
|
|
(6
|
)
|
|
496
|
|
|
(9
|
)
|
||
|
Pristiq
|
|
Depression
|
|
152
|
|
|
4
|
|
|
461
|
|
|
9
|
|
||
|
ReFacto AF/Xyntha
|
|
Hemophilia
|
|
150
|
|
|
7
|
|
|
420
|
|
|
11
|
|
||
|
Revatio
|
|
Pulmonary arterial hypertension (PAH)
|
|
135
|
|
|
(4
|
)
|
|
414
|
|
|
5
|
|
||
|
Zoloft
|
|
Depression and certain anxiety disorders
|
|
129
|
|
|
(7
|
)
|
|
398
|
|
|
(5
|
)
|
||
|
Medrol
|
|
Inflammation
|
|
113
|
|
|
(11
|
)
|
|
388
|
|
|
1
|
|
||
|
Zosyn/Tazocin
|
|
Antibiotic
|
|
109
|
|
|
(27
|
)
|
|
378
|
|
|
(23
|
)
|
||
|
Effexor
|
|
Depression and certain anxiety disorders
|
|
107
|
|
|
(35
|
)
|
|
342
|
|
|
(36
|
)
|
||
|
Geodon/Zeldox
|
|
Schizophrenia; acute manic or mixed episodes associated with bipolar disorder; maintenance treatment of bipolar mania
|
|
57
|
|
|
(78
|
)
|
|
322
|
|
|
(57
|
)
|
||
|
Zithromax/Zmax
|
|
Bacterial infections
|
|
89
|
|
|
(4
|
)
|
|
318
|
|
|
(5
|
)
|
||
|
Prevnar/Prevenar (7-valent)
|
|
Vaccine for prevention of pneumococcal disease
|
|
81
|
|
|
(17
|
)
|
|
303
|
|
|
(25
|
)
|
||
|
Fragmin
|
|
Anticoagulant
|
|
91
|
|
|
(4
|
)
|
|
283
|
|
|
—
|
|
||
|
Relpax
|
|
Treats the symptoms of migraine headaches
|
|
92
|
|
|
7
|
|
|
266
|
|
|
6
|
|
||
|
Rapamune
|
|
Immunosuppressant
|
|
92
|
|
|
(4
|
)
|
|
259
|
|
|
(9
|
)
|
||
|
Cardura
|
|
Hypertension/Benign prostatic hyperplasia
|
|
79
|
|
|
(14
|
)
|
|
254
|
|
|
(12
|
)
|
||
|
Aricept
(b)
|
|
Alzheimer’s disease
|
|
71
|
|
|
(39
|
)
|
|
249
|
|
|
(26
|
)
|
||
|
Tygacil
|
|
Antibiotic
|
|
82
|
|
|
8
|
|
|
249
|
|
|
11
|
|
||
|
EpiPen
(c)
|
|
Epinephrine injection used in treatment of life-threatening allergic reactions
|
|
67
|
|
|
14
|
|
|
217
|
|
|
36
|
|
||
|
Xanax XR
|
|
Anxiety disorders
|
|
66
|
|
|
(14
|
)
|
|
203
|
|
|
(13
|
)
|
||
|
BMP2
|
|
Development of bone and cartilage
|
|
58
|
|
|
(30
|
)
|
|
192
|
|
|
(31
|
)
|
||
|
Caduet
|
|
Reduction of LDL cholesterol and hypertension
|
|
68
|
|
|
(55
|
)
|
|
191
|
|
|
(56
|
)
|
||
|
Sulperazon
|
|
Antibiotic
|
|
62
|
|
|
22
|
|
|
191
|
|
|
23
|
|
||
|
Diflucan
|
|
Fungal Infections
|
|
61
|
|
|
(15
|
)
|
|
185
|
|
|
(8
|
)
|
||
|
Dalacin/Cleocin
|
|
Antibiotic
|
|
74
|
|
|
45
|
|
|
176
|
|
|
27
|
|
||
|
Neurontin
|
|
Seizures
|
|
52
|
|
|
(22
|
)
|
|
172
|
|
|
(23
|
)
|
||
|
Unasyn
|
|
Injectable antibacterial
|
|
54
|
|
|
(7
|
)
|
|
165
|
|
|
(4
|
)
|
||
|
Aromasin
|
|
Breast cancer
|
|
51
|
|
|
(40
|
)
|
|
162
|
|
|
(45
|
)
|
||
|
Arthrotec
|
|
Osteoarthritis and rheumatoid arthritis
|
|
50
|
|
|
(18
|
)
|
|
159
|
|
|
(13
|
)
|
||
|
Inspra
|
|
Hypertension
|
|
51
|
|
|
—
|
|
|
156
|
|
|
10
|
|
||
|
Toviaz
|
|
Overactive bladder
|
|
52
|
|
|
6
|
|
|
150
|
|
|
9
|
|
||
|
Metaxalone/Skelaxin
(c)
|
|
Muscle relaxer
|
|
55
|
|
|
(4
|
)
|
|
149
|
|
|
3
|
|
||
|
Methotrexate
|
|
Rheumatoid arthritis
|
|
50
|
|
|
(2
|
)
|
|
148
|
|
|
11
|
|
||
|
Protonix
|
|
Gastroesophageal reflux disease
|
|
50
|
|
|
(23
|
)
|
|
140
|
|
|
(17
|
)
|
||
|
Alliance revenues
(d)
|
|
Various
|
|
879
|
|
|
(4
|
)
|
|
2,577
|
|
|
(4
|
)
|
||
|
All other
(e)
|
|
Various
|
|
1,643
|
|
|
2
|
|
|
5,187
|
|
|
7
|
|
||
|
(a)
|
As compared to the
three and nine
months ended
October 2, 2011
, respectively.
|
|
(b)
|
Represents direct sales under license agreement with Eisai Co., Ltd.
|
|
(c)
|
Legacy King product. King’s operations are included in our financial statements commencing from the acquisition date of January 31, 2011.
|
|
(d)
|
Enbrel (in the U.S. and Canada), Aricept, Exforge, Rebif and Spiriva.
|
|
(e)
|
Includes sales of generic atorvastatin.
|
|
•
|
Lipitor
, for the treatment of elevated LDL-cholesterol levels in the blood, recorded worldwide revenues of $749 million, or a decrease of 71%, in the third quarter of 2012, and $3.4 billion, or a decrease of 56%, in the first nine months of 2012, compared to the same periods in 2011, due to:
|
|
◦
|
the impact of loss of exclusivity in Japan in June 2011 (with generic entry occurring in November 2011), the U.S. (with generic entry occurring in November 2011 and multi-source generic entry occurring in May 2012), Australia in April 2012 and twelve European markets in March and May 2012, including Austria, Belgium, Denmark, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Sweden, Switzerland, and the UK;
|
|
◦
|
the continuing impact of an intensely competitive lipid-lowering market with competition from generics and branded products worldwide; and
|
|
◦
|
increased payer pressure worldwide, including the need for flexible rebate policies.
|
|
◦
|
in the U.S., branded Lipitor revenues were $192 million, a decrease of 87% in the third quarter of 2012, and $871 million, a decrease of 79% in the first nine months of 2012, compared to the same periods in 2011; and
|
|
◦
|
in our international markets, branded Lipitor revenues were $557 million, a decrease of 51%, in the third quarter of 2012, and $2.5 billion, a decrease of 26%, in the first nine months of 2012, compared to the same periods in 2011. Foreign exchange had an unfavorable impact on international revenues of $31 million in the third quarter and $59 million in the first nine months of 2012, compared to the same periods in 2011.
|
|
•
|
Lyrica
is indicated for the management of post-herpetic neuralgia, neuropathic pain associated with diabetic peripheral neuropathy, the management of fibromyalgia, neuropathic pain due to spinal cord injury, and as adjunctive therapy for adult patients with partial onset seizures in the U.S. For certain countries outside the U.S., Lyrica is indicated for neuropathic pain (peripheral and central), the management of fibromyalgia, adjunctive treatment of epilepsy and general anxiety disorder. Lyrica recorded increases in worldwide revenues of 8% in the third quarter of 2012 and 12% in the first nine months of 2012, compared to the same periods in 2011. There was strong operational performance in international markets in the third quarter of 2012, including Japan, where Lyrica was launched in 2010 as the first product approved for the peripheral neuropathic pain (NeP) indication. Internationally, Lyrica revenues increased 4% in the third quarter of 2012 and 14% in the first nine months of 2012, compared to the same periods in 2011, with the growth due to a focus on enhancing the neuropathic pain diagnosis and treatment rates, the successful re-launch of the general anxiety disorder indication in the EU and physician education regarding neuropathic pain in Japan. Foreign exchange had an unfavorable impact on international revenues of 10% in the third quarter and 6% in the first nine months of 2012, compared to the same periods in 2011. In the U.S., revenues increased 13% in the third quarter of 2012 and 10% in the first nine months of 2012, compared to the same periods in 2011. Notwithstanding these increases, U.S. revenues continue to be affected by increased competition from generic versions of competitive medicines, as well as managed care pricing and formulary pressures.
|
|
•
|
Enbrel
, for the treatment of moderate-to-severe rheumatoid arthritis, polyarticular juvenile rheumatoid arthritis, psoriatic arthritis, plaque psoriasis and ankylosing spondylitis, recorded a decrease in worldwide revenues, excluding the U.S. and Canada, of 7% in the third quarter of 2012 and recorded an increase in worldwide revenues of 1% in the first nine months of 2012, compared to the same periods in 2011, with the third quarter decline attributable to the unfavorable impact of foreign exchange, partially offset by overall growth in the anti-TNF biologic market. Enbrel revenues from the U.S. and Canada are included in Alliance revenues.
|
|
•
|
Prevnar 13/Prevenar 13
is our 13-valent pneumococcal conjugate vaccine for the prevention of various syndromes of pneumococcal disease in infants and young children and in adults 50 years of age and older. Prevnar 13/Prevenar 13 for use in infants and young children has been launched in the U.S. for the prevention of invasive pneumococcal disease caused by the 13 serotypes in Prevnar 13 and otitis media caused by the seven serotypes in Prevnar, and in the EU and many other international markets for the prevention of invasive pneumococcal disease, otitis media and pneumococcal pneumonia caused by the vaccine serotypes. In 2011, we received approval of Prevnar 13/Prevenar 13 for use in adults 50 years of age and older in the U.S. for the prevention of pneumococcal pneumonia and invasive pneumococcal disease caused by the 13 serotypes in Prevnar 13, and in the EU for the prevention of invasive pneumococcal disease caused by the vaccine serotypes. To date, Prevenar 13 for use in adults 50 years of age and older has been approved in over 55 countries. Worldwide revenues for Prevnar 13/Prevenar 13 decreased 14% in the third quarter of 2012 and 3% in the first nine months of 2012, compared to the same periods in 2011. In the U.S., revenues for Prevnar 13 decreased 3% in the third quarter of 2012 and 7% in the first nine months of 2012, compared to the same periods in 2011. Developed Europe Prevenar 13 revenues also were lower in the third quarter and the first nine months of 2012, compared to the same period of 2011. Revenues in the U.S. and developed Europe declined as the pediatric catch-up dose opportunity in third-quarter 2011 was no longer available in third-quarter 2012 since all eligible patients have been vaccinated. In addition, utilization in adults is minimal at this time. Prevenar 13 revenues in emerging markets were lower in the third quarter of 2012, compared to the same period last year, due to the timing of government purchases in Turkey.
|
|
•
|
Celebrex
, indicated for the treatment of the signs and symptoms of osteoarthritis and rheumatoid arthritis worldwide and for the management of acute pain in adults in the U.S., Japan and certain markets in the EU, recorded increases in worldwide revenues of 5% in the third quarter of 2012 and 6% in the first nine months of 2012, compared to the same periods in 2011. In the third quarter of 2012, strong operational performance in international markets was driven primarily by Japan volume growth for the lower back pain indication. In the U.S., prescription volume continues to be challenged by increased competition from generic versions of competitive medicines and managed care formulary pressures. Celebrex is supported by continued educational and promotional efforts highlighting its efficacy and safety profile for appropriate patients.
|
|
•
|
Viagra
, indicated for the treatment for erectile dysfunction. Viagra worldwide revenues increased 5% in the third quarter of 2012 and 3% in the first nine months of 2012, compared to the same period in 2011, due to the increase in U.S. revenues partially offset by branded and generic competitive pressure in developed Europe, other developed markets and emerging markets. The increase in the U.S. more than offset the decrease in international markets due to operational factors and the adverse impact of foreign exchange.
|
|
•
|
Norvasc
, for treating hypertension, lost exclusivity in the U.S. and other major markets in 2007 and in Canada in 2009. Norvasc worldwide revenues decreased 9% in the third quarter of 2012 and 7% in the first nine months of 2012, compared to the same periods in 2011.
|
|
•
|
Zyvox
is the world's best-selling branded agent among those used to treat serious Gram-positive pathogens, including methicillin-resistant staphylococcus-aureus. Zyvox worldwide revenues increased 2% in the third quarter of 2012 and 3% in the first nine months of 2012, compared to the same periods in 2011, primarily due to growth in emerging markets.
|
|
•
|
Sutent
is for the treatment of advanced renal cell carcinoma, including metastatic renal cell carcinoma (mRCC) and gastrointestinal stromal tumors after disease progression on, or intolerance to, imatinib mesylate and advanced
|
|
•
|
Our
Premarin
family of products remains the leading therapy to help women address moderate-to-severe menopausal symptoms. It recorded a decrease in worldwide revenues of 2% in the third quarter of 2012 and an increase of 5% in the first nine months of 2012, compared to the same periods in 2011. In the U.S., in the third quarter of 2012, the continued decline in market share was largely offset by favorable wholesaler inventory levels, price increases in January and July 2012 and favorable rebates. Internationally, the third-quarter decline was attributable to foreign exchange, as well as conversion of new packaging requirements in select markets and the continued decline in government sales.
|
|
•
|
Genotropin
, one of the world’s leading human growth hormones, is used in children for the treatment of short stature with growth hormone deficiency, Prader-Willi Syndrome, Turner Syndrome, Small for Gestational Age Syndrome, Idiopathic Short Stature (in the U.S. only) and Chronic Renal Insufficiency (outside the U.S. only), as well as in adults with growth hormone deficiency. Genotropin is supported by a broad platform of innovative injection-delivery devices and patient-support programs. Genotropin worldwide revenues decreased 1% in the third quarter of 2012 and 5% in the first nine months of 2012, compared to the same periods in 2011.
|
|
•
|
Xalabrands
consists of
Xalatan
, a prostaglandin, which is a branded agent used to reduce elevated eye pressure in patients with open-angle glaucoma or ocular hypertension, and
Xalacom
, a fixed combination prostaglandin (Xalatan) and beta blocker (timolol) available outside the U.S. Xalatan/Xalacom worldwide revenues decreased 35% in the third quarter of 2012 and 36% in the first nine months of 2012, compared to the same periods in 2011. Lower revenues were due primarily to the loss of exclusivity in the U.S. in March 2011 and in the majority of European markets in January 2012.
|
|
•
|
BeneFIX and ReFacto AF/Xyntha
are hemophilia products using state-of-the-art manufacturing that assist patients with a lifelong bleeding disorder. BeneFIX is the only available recombinant factor IX product for the treatment of hemophilia B, while ReFacto AF/Xyntha are recombinant factor VIII products for the treatment of hemophilia A. Both products are indicated for the control and prevention of bleeding in patients with these disorders and in some countries also are indicated for prophylaxis in certain situations, such as surgery. BeneFIX recorded increases in worldwide revenues of 13% in the third quarter of 2012 and 11% in the first nine months of 2012, compared to the same periods in 2011, primarily as a result of increases in the U.S. due to the launch of the new larger 3000IU dosage pack and price increases. ReFacto AF/Xyntha recorded increases in worldwide revenues of 7% in the third quarter of 2012 and 11% in the first nine months of 2012, compared to the same periods in 2011, driven by the successful transition of patients to Xyntha in Australia after winning the tender there earlier in 2012, the launch of a new dual chamber syringe, as well as a price increase in the U.S.
|
|
•
|
Detrol/Detrol LA
, a muscarinic receptor antagonist, is one of the most prescribed branded medicines worldwide for overactive bladder. Detrol LA is an extended-release formulation taken once a day. Detrol/Detrol LA worldwide revenues decreased 17% in the third quarter of 2012 and 14% in the first nine months of 2012, compared to the same periods in 2011, primarily due to increased competition from other branded medicines and a shift in promotional focus to our Toviaz product in most major markets. Detrol immediate release (Detrol IR) lost exclusivity in the U.S. in September 2012. We expect generic competition for Detrol LA in the U.S. to commence no earlier than January 1, 2014, except in certain limited circumstances, and no later than March 1, 2014.
|
|
•
|
Vfend
is a broad-spectrum agent for treating yeast and molds. Vfend worldwide revenues increased 9% in the third quarter of 2012 and decreased 3% in the first nine months of 2012, compared to the same periods in 2011. International revenues decreased 3% in both the third quarter of 2012 and the first nine months of 2012, compared to the same period in 2011, due to foreign exchange and supply constraints. Revenues in the U.S. in the third quarter of 2012 increased compared to the same period in 2011, primarily due to rebates accounted for in 2011, partially offset by the loss of exclusivity of Vfend tablets and the launch of generic voriconazole (generic Vfend) in February 2011.
|
|
•
|
Chantix/Champix
is an aid to smoking-cessation treatment in adults 18 years of age and older. Chantix/Champix worldwide revenues decreased 6% in the third quarter of 2012 and 9% in the first nine months of 2012, compared to the same periods in 2011, primarily due to the impact of changes to the product’s label, negative media exposure across several key markets and macro-economic decline, which decreased patient willingness to pay out of pocket. We
|
|
•
|
Pristiq
is approved for the treatment of major depressive disorder in the U.S. and in various other countries. Pristiq has also been approved for treatment of moderate-to-severe vasomotor symptoms (VMS) associated with menopause in Thailand, Mexico, the Philippines and Ecuador. Pristiq recorded increases in worldwide revenues of 4% in the third quarter of 2012 and 9% in the first nine months of 2012, compared to the same periods in 2011, primarily due to price increases as well as market growth partially offset by lower prescription share in the U.S., and internationally by further penetration in existing markets.
|
|
•
|
Revatio
is for the treatment of pulmonary arterial hypertension (PAH). Worldwide revenues decreased 4% in the third quarter of 2012 and increased 5% in the first nine months of 2012, compared to the same periods in 2011. The third quarter decline was primarily attributable to the unfavorable impact of foreign exchange, partially offset by an increased PAH awareness driving earlier diagnosis in the U.S. and EU. In the U.S., Revatio tablet lost exclusivity in September 2012, and Revatio intravenous injection will lose exclusivity in May 2013.
|
|
•
|
Zosyn/Tazocin
, our broad-spectrum intravenous antibiotic, faces generic global competition. U.S. exclusivity was lost in September 2009. Zosyn/Tazocin recorded decreases in worldwide revenues of 27% in the third quarter of 2012 and 23% in the first nine months of 2012, compared to the same periods in 2011.
|
|
•
|
Effexor
, an antidepressant for treating adult patients with major depressive disorder, generalized anxiety disorder, social anxiety disorder and panic disorder, faces generic competition in most markets. It recorded decreases in worldwide revenues of 35% in the third quarter of 2012 and 36% in the first nine months of 2012, compared to the same periods in 2011.
|
|
•
|
Geodon/Zeldox
, an atypical antipsychotic, is indicated for the treatment of schizophrenia, as monotherapy for the acute treatment of bipolar manic or mixed episodes, and as an adjunct to lithium or valproate for the maintenance treatment of bipolar disorder. Geodon worldwide revenues decreased 78% in the third quarter of 2012 and 57% in the first nine months of 2012, compared to the same periods in 2011, primarily due to loss of exclusivity in the U.S. in March 2012.
|
|
•
|
Prevnar/Prevenar (7-valent)
, our 7-valent pneumococcal conjugate vaccine for preventing invasive, and, in certain international markets, non-invasive pneumococcal disease in infants and young children, recorded decreases in worldwide revenues of 17% in the third quarter of 2012 and 25% in the first nine months of 2012, compared to the same periods in 2011. Many markets have transitioned from the use of Prevnar/Prevenar (7-valent) to Prevnar 13/Prevenar 13, resulting in lower revenues for Prevnar/Prevenar (7-valent). We expect this trend to continue.
|
|
•
|
Caduet
is a single-pill therapy combining Lipitor and Norvasc for the prevention of cardiovascular events. Caduet worldwide revenues decreased 55% in the third quarter of 2012 and 56% in the first nine months of 2012, compared to the same periods in 2011, primarily due to the loss of U.S. exclusivity in November 2011.
|
|
•
|
Xalkori
, for the treatment of patients with locally advanced or metastatic non-small cell lung cancer (NSCLC) that is anaplastic lymphoma kinase (ALK)-positive as detected by an FDA-approved test, was approved by the FDA in August 2011. In developed markets, Xalkori has also been approved in Japan, South Korea, Canada and Switzerland, and it received conditional marketing authorization in the EU in October 2012. In addition, it has been filed or approved in more than 25 emerging markets. Xalkori recorded worldwide revenues of $38 million in the third quarter of 2012, and $78 million in the first nine months of 2012.
|
|
•
|
Inlyta,
for the treatment of patients with advanced renal cell carcinoma after failure of a prior systemic treatment, has been approved in the U.S., Switzerland, Japan, Canada, Australia, South Korea and the EU (exact indications vary by region). Inlyta recorded worldwide revenues of $28 million in the third quarter of 2012, and $53 million in the first nine months of 2012.
|
|
•
|
Worldwide
alliance revenues
decreased 4% in both the third quarter of 2012 and the first nine months of 2012, compared to the same periods in 2011, mainly due to the loss of exclusivity for Aricept 5mg and 10mg tablets in the U.S. in November 2010 and the entry of multi-source generic competition in the U.S. in May 2011, as well as the loss of exclusivity in many major European markets in February 2012, and lower revenues for Spiriva in certain European countries due to the expiration of our collaboration with BI in those countries, partially offset by the strong performance of Enbrel and Rebif in the U.S. We expect that the Aricept 23mg tablet will have exclusivity in the U.S. until July 2013. See the “Industry-Specific Challenges” section of this MD&A for a discussion regarding the
|
|
|
|
Research and Development Expenses
|
||||||||||||||||||||
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change
|
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change
|
|
||||
|
Primary Care Operating Segment
(a)
|
|
$
|
247
|
|
|
$
|
286
|
|
|
(14
|
)
|
|
$
|
739
|
|
|
$
|
912
|
|
|
(19
|
)
|
|
Specialty Care and Oncology Operating Segment
(a)
|
|
345
|
|
|
400
|
|
|
(14
|
)
|
|
1,044
|
|
|
1,122
|
|
|
(7
|
)
|
||||
|
Established Products and Emerging Markets Operating Segment
(a)
|
|
84
|
|
|
71
|
|
|
18
|
|
|
223
|
|
|
206
|
|
|
8
|
|
||||
|
Other operating segments
(a), (b)
|
|
357
|
|
|
98
|
|
|
264
|
|
|
551
|
|
|
304
|
|
|
81
|
|
||||
|
Worldwide Research and Development/Pfizer Medical
(c)
|
|
655
|
|
|
833
|
|
|
(21
|
)
|
|
1,999
|
|
|
2,536
|
|
|
(21
|
)
|
||||
|
Corporate and other
(d)
|
|
293
|
|
|
488
|
|
|
(40
|
)
|
|
1,178
|
|
|
1,407
|
|
|
(16
|
)
|
||||
|
|
|
$
|
1,981
|
|
|
$
|
2,176
|
|
|
(9
|
)
|
|
$
|
5,734
|
|
|
$
|
6,487
|
|
|
(12
|
)
|
|
(a)
|
Our operating segments, in addition to their sales and marketing responsibilities, are responsible for certain development activities. Generally, these responsibilities relate to additional indications for in-line products and IPR&D projects that have achieved proof-of-concept. R&D spending may include upfront and milestone payments for intellectual property rights.
|
|
(b)
|
Includes the Animal Health operating segment and the Consumer Healthcare operating segment. The increase in 2012 relates to a $250 million payment to AstraZeneca to obtain the exclusive global over-the-counter rights to Nexium.
|
|
(c)
|
Worldwide Research and Development is generally responsible for human health research projects until proof-of-concept is achieved, and then for transitioning those projects to the appropriate business unit for possible clinical and commercial development. R&D spending may include upfront and milestone payments for intellectual property rights. This organization also has responsibility for certain science-based and other platform-services organizations, which provide technical expertise and other services to the various R&D projects. Worldwide Research and Development is also responsible for all human-health-related regulatory submissions and interactions with regulatory agencies, including all safety-event activities. Pfizer Medical is responsible for external affairs relating to all therapeutic areas, providing Pfizer-related medical information to healthcare providers, patients and other parties, and quality assurance and regulatory compliance activities, which include conducting clinical trial audits and readiness reviews. The decreases in both the third quarter and first nine months of 2012 compared to the same periods in 2011 result from cost savings associated with the R&D productivity initiative announced on February 1, 2011 (see the “Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives” section of this MD&A).
|
|
(d)
|
Corporate and other includes unallocated costs, primarily facility costs, information technology, share-based compensation, and restructuring-related costs. The decreases in the third quarter and the first nine months of 2012 results primarily from lower additional
|
|
RECENT FDA APPROVALS
|
||
|
PRODUCT
|
INDICATION
|
DATE APPROVED
|
|
XELJANZ (Tofacitinib)
|
Treatment of moderate-to-severe active rheumatoid arthritis
|
November 2012
|
|
BOSULIF (Bosutinib)
|
Treatment of previously treated chronic myelogenous leukemia
|
September 2012
|
|
Lyrica
|
Treatment of central neuropathic pain due to spinal cord injury
|
June 2012
|
|
ELELYSO (taliglucerase alfa)
(a)
|
Treatment of adults with a confirmed diagnosis of type 1 Gaucher disease
|
May 2012
|
|
INLYTA (Axitinib)
|
Treatment of advanced renal cell carcinoma after failure of one prior systemic therapy
|
January 2012
|
|
Prevnar 13 Adult
|
Prevention of pneumococcal pneumonia and invasive disease in adults 50 years of age and older
|
December 2011
|
|
(a)
|
In November 2009, we entered into a license and supply agreement with Protalix BioTherapeutics, which provides us exclusive worldwide rights, except in Israel, to develop and commercialize ELELYSO (taliglucerase alpha) for the treatment of Gaucher disease.
|
|
PENDING U.S. NEW DRUG APPLICATIONS (NDA) AND SUPPLEMENTAL FILINGS
|
||
|
PRODUCT
|
INDICATION
|
DATE FILED*
|
|
Tafamidis meglumine
(a)
|
Treatment of transthyretin familial amyloid polyneuropathy (TTR-FAP)
|
February 2012
|
|
Apixaban
(b)
|
Prevention of stroke and systemic embolism in patients with nonvalvular atrial fibrillation
|
November 2011
|
|
Genotropin
(c)
|
Replacement of human growth hormone deficiency (Mark VII multidose disposable device)
|
December 2009
|
|
Celebrex
(d)
|
Chronic pain
|
October 2009
|
|
Geodon
(e)
|
Treatment of bipolar disorder––pediatric filing
|
December 2008
|
|
Remoxy
(g)f
|
Management of moderate-to-severe pain when a continuous, around-the-clock opioid analgesic is needed for an extended period of time
|
August 2008
|
|
Spiriva
(g)
|
Respimat device for chronic obstructive pulmonary disease
|
January 2008
|
|
Viviant
(h)
|
Osteoporosis treatment and prevention
|
August 2006
|
|
(a)
|
In May 2012, the FDA’s Peripheral and Central Nervous System Drugs Advisory Committee voted that the tafamidis meglumine data provide substantial evidence of efficacy for a surrogate endpoint that is reasonably likely to predict a clinical benefit. In June 2012, the FDA issued a “complete response” letter with respect to the tafamidis NDA. The FDA is requesting the completion of a second efficacy study to establish substantial evidence of effectiveness and also is asking for additional information on the data within the current tafamidis NDA. We have requested a meeting with the FDA in order to discuss the next steps regarding the tafamidis NDA.
|
|
(b)
|
Apixaban is being developed in collaboration with our alliance partner, BMS. On June 22, 2012, the FDA issued a “complete response” letter for apixaban for the prevention of stroke and systemic embolism in patients with nonvalvular atrial fibrillation. The “complete response” letter requests additional information on data management and verification from the ARISTOTLE trial. The FDA has not requested that the companies complete any new studies. On September 26, 2012, the companies announced the FDA acknowledged receipt of the NDA resubmission for apixaban and deemed the resubmission a complete response to its “complete response” letter. The FDA assigned a new Prescription Drug User Fee Act (PDUFA) goal date of March 17, 2013.
|
|
(c)
|
In April 2010, we received a “complete response” letter from the FDA for the Genotropin Mark VII multidose disposable device submission. In August 2010, we submitted our response to address the requests and recommendations included in the FDA letter. In April 2011, we received a second “complete response” letter from the FDA, requesting additional information. We are working to address the FDA’s requests for additional information.
|
|
(d)
|
In June 2010, we received a “complete response” letter from the FDA for the Celebrex chronic pain supplemental NDA. The supplemental NDA remains pending while we await the completion of ongoing studies to determine next steps.
|
|
(e)
|
In October 2009, we received a “complete response” letter from the FDA with respect to the supplemental NDA for Geodon for the treatment of acute bipolar mania in children and adolescents aged 10 to 17 years. In October 2010, we submitted our response. In April 2010, we received a “warning letter” from the FDA with respect to the clinical trial in support of this supplemental NDA. We developed corrective actions and procedures to address the issues raised in the “warning letter." In April 2011, we received a second “complete response" letter from the FDA in which the FDA indicated that, in its view, the reliability of the data supporting the filing had not yet been demonstrated, and that the fulfillment of the Pediatric Research Equity Act (PREA) commitment for the study had been rescinded. While we are working with the FDA to develop a plan for moving forward to fulfill the PREA commitment, such an action would not extend Geodon exclusivity for an additional six months because we lost exclusivity for Geodon in the U.S. in March 2012.
|
|
(f)
|
In 2005, King entered into an agreement with Pain Therapeutics, Inc. (PT) to develop and commercialize Remoxy. In August 2008, the FDA accepted the NDA for Remoxy that had been submitted by King and PT. In December 2008, the FDA issued a “complete response” letter. In March 2009, King exercised its right under the agreement with PT to assume sole control and responsibility for the development of Remoxy. In December 2010, King resubmitted the NDA for Remoxy with the FDA. In June 2011, we and PT announced that a “complete response” letter was received from the FDA with regard to the resubmission of the NDA. We have been working to address the issues raised in the letter, which primarily relate to manufacturing. We have analyzed the results from two, recently completed bioavailability studies, as well as data from other experiments that were conducted to optimize the formulation composition and analytical methods for Remoxy. While we have gained important insights from this work, we have initiated a confirmatory bioavailability study to assess the pharmacokinetic profile of modified Remoxy formulation compositions, which we expect to read out early in 2013. The results of this study will provide us with much greater clarity as to whether or not we will be able to adequately address the questions raised in the “complete response” letter received from the FDA. We are targeting a late-March meeting with the FDA to discuss our plan to address the June 2011 “complete response" letter.
|
|
(g)
|
Boehringer Ingelheim (BI), our alliance partner, holds the NDAs for Spiriva Handihaler and Spiriva Respimat. In September 2008, BI received a “complete response” letter from the FDA for the Spiriva Respimat submission. The FDA is seeking additional data, and we are coordinating with BI, which is working with the FDA to provide the additional information. A full response will be submitted to the FDA upon the completion of planned and ongoing studies.
|
|
(h)
|
Two “approvable” letters were received by Wyeth in April and December 2007 from the FDA for Viviant (bazedoxifene), for the prevention of post-menopausal osteoporosis, that set forth the additional requirements for approval. In May 2008, Wyeth received an “approvable” letter from the FDA for the treatment of post-menopausal osteoporosis. The FDA is seeking additional data, and we have been systematically working through these requirements and seeking to address the FDA’s concerns. A full response will be provided to the FDA. In February 2008, the FDA advised Wyeth that it expects to convene an advisory committee to review the pending NDAs for both the treatment and prevention indications after we submit our response to the “approvable” letters. In April 2009, Wyeth received approval in the EU for CONBRIZA (the EU trade name for Viviant) for the treatment of post-menopausal osteoporosis in women at increased risk of fracture. Viviant was also approved in Japan in July 2010 for the treatment of post-menopausal osteoporosis and in South Korea in November 2011 for the treatment and prevention of post-menopausal osteoporosis.
|
|
REGULATORY APPROVALS AND FILINGS IN THE EU AND JAPAN
|
|||
|
PRODUCT
|
DESCRIPTION OF EVENT
|
DATE APPROVED
|
DATE FILED*
|
|
Xalkori (Crizotinib)
|
Conditional marketing authorization in the EU for treatment of previously treated ALK-positive advanced non-small cell lung cancer
|
October 2012
|
—
|
|
INLYTA (Axitinib)
|
Approval in the EU for treatment of advanced renal cell carcinoma after failure of prior systemic treatment
|
September 2012
|
—
|
|
Sutent
|
Approval in Japan for treatment of pancreatic neuroendocrine tumor
|
August 2012
|
—
|
|
Bazedoxifene-conjugated estrogens
|
Application filed in the EU for treatment of symptoms associated with menopause and osteoporosis
|
—
|
July 2012
|
|
Prevenar 13 Infant
|
Application filed in Japan for prevention of invasive pneumococcal disease in infants and young children
|
—
|
July 2012
|
|
Lyrica (Pregabalin)
|
Approval in Japan for treatment of fibromyalgia
|
June 2012
|
—
|
|
INLYTA (Axitinib)
|
Approval in Japan for treatment of renal cell carcinoma not indicated for curative resection, metastatic renal cell carcinoma
|
June 2012
|
—
|
|
Xalkori (Crizotinib)
|
Approval in Japan for treatment of ALK-positive advanced non-small cell lung cancer
|
March 2012
|
—
|
|
Lyrica (Pregabalin)
|
Application filed in Japan for treatment of neuropathic pain: peripheral neuropathic pain, central neuropathic pain
|
—
|
March 2012
|
|
Toviaz
|
Application filed in Japan for treatment of overactive bladder
|
—
|
March 2012
|
|
Tofacitinib
|
Application filed in Japan for treatment of rheumatoid arthritis
|
—
|
December 2011
|
|
Celecox (Celebrex)
|
Approval in Japan for treatment of acute pain: post-operative, post-trauma, post-tooth extraction
|
December 2011
|
—
|
|
Apixaban
|
Application filed in Japan for prevention of stroke and systemic embolism in patients with nonvalvular atrial fibrillation
|
—
|
December 2011
|
|
Vyndaqel (Tafamidis meglumine)
|
Approval in the EU for treatment of TTR-FAP in adult patients with stage 1 symptomatic polyneuropathy
|
November 2011
|
—
|
|
Tofacitinib
|
Application filed in the EU for treatment of moderate-to-severe active rheumatoid arthritis
|
—
|
November 2011
|
|
ELIQUIS (Apixaban)
(a)
|
Application filed in the EU for prevention of stroke and systemic embolism in patients with nonvalvular atrial fibrillation
|
—
|
October 2011
|
|
Bosutinib
(b)
|
Application filed in the EU for treatment of previously treated chronic myelogenous leukemia
|
—
|
August 2011
|
|
*
|
For applications in the EU, the dates set forth in this column are the dates on which the European Medicines Agency (EMA) validated our submissions.
|
|
(a)
|
In September 2012, the EMA’s Committee for Medicinal Products for Human Use (CHMP) issued an opinion recommending that ELIQUIS (apixaban) be granted approval for the prevention of stroke and systemic embolism in patients with nonvalvular atrial fibrillation and one or more risk factors for stroke.
|
|
(b)
|
The initial application was for the treatment of newly diagnosed chronic myelogenous leukemia.
|
|
LATE-STAGE CLINICAL PROGRAMS FOR ADDITIONAL USES AND DOSAGE FORMS
FOR IN-LINE AND IN-REGISTRATION PRODUCTS
|
|
|
PRODUCT
|
INDICATION
|
|
Bazedoxifene-conjugated estrogens
|
A tissue-selective estrogen complex for the treatment of symptoms associated with menopause and osteoporosis (U.S.)
|
|
ELIQUIS (Apixaban)
|
For the prevention and treatment of venous thromboembolism, which is being developed in collaboration with BMS
|
|
INLYTA (Axitinib)
(a)
|
Oral and selective inhibitor of vascular endothelial growth factor (VEGF) receptor 1, 2 & 3 for the treatment of adjuvant renal cell carcinoma (Asia only)
|
|
Lyrica (Pregabalin)
|
Peripheral neuropathic pain; CR (once-a-day) dosing
|
|
Sutent
|
Adjuvant renal cell carcinoma
|
|
Tofacitinib
|
A JAK kinase inhibitor for the treatment of psoriasis and ulcerative colitis
|
|
Xalkori (Crizotinib)
|
An oral ALK and c-Met inhibitor for the treatment of ALK-positive 1st and 2nd line (supports full approval in the U.S.) non-small cell lung cancer
|
|
Zithromax/chloroquine
|
Malaria
|
|
(a)
|
In October 2012, we announced that Phase 3 study AGILE 1051 of INLYTA
®
(axitinib) did not meet its primary endpoint of demonstrating statistically significantly longer progression-free survival, versus sorafenib, in treatment-naïve patients with advanced renal cell carcinoma (RCC). We are analyzing the study findings to determine whether further evaluation of INLYTA in specific subpopulations of treatment-naïve patients with advanced RCC would be warranted.
|
|
NEW DRUG CANDIDATES IN LATE-STAGE DEVELOPMENT
|
|
|
CANDIDATE
|
INDICATION
|
|
ALO-02
|
A Mu-type opioid receptor agonist for the management of moderate-to-severe pain when a continuous, around-the-clock opioid analgesic is needed for an extended period of time
|
|
Dacomitinib
|
A pan-HER tyrosine kinase inhibitor for the treatment of previously treated advanced non-small cell lung cancer
|
|
Inotuzumab ozogamicin
|
An antibody drug conjugate, consisting of an anti-CD22 monotherapy antibody linked to a cytotoxic agent, calicheamycin, for the treatment of aggressive Non-Hodgkin’s Lymphoma and acute lymphoblastic leukemia
|
|
MnB rLP2086
(PF-05212366)
|
A prophylactic vaccine for prevention of
Neisseria meningitidis
serogroup B invasive disease in adolescents and young adults (ages 11 - 25)
|
|
Tanezumab
(a)
|
An anti-nerve growth factor monoclonal antibody for the treatment of pain
|
|
(a)
|
Following requests by the FDA in 2010, we suspended and subsequently terminated worldwide the osteoarthritis, chronic low back pain and painful diabetic peripheral neuropathy studies of tanezumab. The FDA’s requests followed a small number of reports of osteoarthritis patients treated with tanezumab who experienced the worsening of osteoarthritis leading to total joint replacement and also reflected the FDA’s concerns regarding the potential for such events in other patient populations. In December 2010, the FDA placed a clinical hold on all other anti-nerve growth factor therapies under clinical investigation in the U.S. Studies of tanezumab in cancer pain were allowed to continue. Extensive analyses were undertaken of all total joint replacements reported in studies of tanezumab. The results of these analyses and the conclusions drawn were provided to the FDA. On March 12, 2012, the FDA’s Arthritis Advisory Committee met to discuss the future development of nerve growth factor inhibitors, including tanezumab. The Committee voted that there is a role for the ongoing development of nerve growth factor inhibitors in conditions such as osteoarthritis and for the management of pain associated with conditions other than osteoarthritis for which there are no agents with demonstrated analgesic effect. We submitted a Clinical Hold Complete Response to the FDA on July 31, 2012. On August 28, 2012, the FDA removed the clinical hold
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change
|
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change
|
|
||||
|
Cost of sales
|
|
$
|
2,665
|
|
|
$
|
3,409
|
|
|
(22
|
)
|
|
$
|
8,162
|
|
|
$
|
10,449
|
|
|
(22
|
)
|
|
•
|
a decline in revenues related to products that lost exclusivity in various markets;
|
|
•
|
lower purchase accounting charges, primarily reflecting the fair value adjustments to acquired inventory from Wyeth and King that was subsequently sold;
|
|
•
|
lower costs related to our cost-reduction and productivity initiatives in the first nine months of 2012, as well as the higher benefits generated from the ongoing productivity initiatives to streamline the manufacturing network both in the first nine months and third quarter of 2012; and
|
|
•
|
the favorable impact of foreign exchange of 8% for the third quarter of 2012 and 7% for the first nine months of 2012;
|
|
•
|
an unfavorable shift in geographic and business mix due to products that lost exclusivity in various markets.
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change
|
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change
|
|
||||
|
Selling, informational and administrative expenses
|
|
$
|
3,847
|
|
|
$
|
4,457
|
|
|
(14
|
)
|
|
$
|
11,801
|
|
|
$
|
13,635
|
|
|
(13
|
)
|
|
•
|
savings generated from a reduction in the field force and a decrease in promotional spending, both partly in response to product losses of exclusivity;
|
|
•
|
more streamlined corporate support functions;
|
|
•
|
a decline in revenues related to products that lost exclusivity in various markets; and
|
|
•
|
the favorable impact of foreign exchange of 4% for the third quarter of 2012 and 2% for the first nine months of 2012;
|
|
•
|
costs associated with the potential separation of Animal Health employees, net assets and activities from Pfizer.
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change |
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change |
|
||||
|
Research and development expenses
|
|
$
|
1,981
|
|
|
$
|
2,176
|
|
|
(9
|
)
|
|
$
|
5,734
|
|
|
$
|
6,487
|
|
|
(12
|
)
|
|
•
|
savings generated by the discontinuation of certain therapeutic areas and R&D programs in connection with our previously announced cost-reduction and productivity initiatives; and
|
|
•
|
lower charges related to those initiatives;
|
|
•
|
a $250 million payment to AstraZeneca to obtain the exclusive global over-the-counter rights to Nexium.
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change |
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change |
|
||||
|
Costs associated with acquisitions and cost-reduction/productivity initiatives
|
|
$
|
494
|
|
|
$
|
1,365
|
|
|
(64
|
)
|
|
$
|
1,802
|
|
|
$
|
3,355
|
|
|
(46
|
)
|
|
•
|
In connection with our cost-reduction and productivity initiatives, significant programs of which began in 2005, we typically incur costs and charges associated with site closings and other facility rationalization actions, workforce reductions and the expansion of shared services, including the development of global systems; and
|
|
•
|
In connection with acquisition activity, we typically incur costs associated with executing the transactions, integrating the acquired operations (which may include expenditures for consulting and the integration of systems and processes), and restructuring the combined company (which may include charges related to employees, assets and activities that will not continue in the combined company).
|
|
•
|
The closing of duplicative facilities and other site rationalization actions Company-wide, including research and development facilities, manufacturing plants, sales offices and other corporate facilities. Among the more significant actions are the following:
|
|
◦
|
Manufacturing: After the acquisition of Wyeth, our manufacturing sites totaled 75. Other acquisitions have added 21 manufacturing sites and we have subsequently exited 10 sites, resulting in 86 sites supporting continuing operations as of September 30, 2012. Our plant network strategy will result in the exit of a further 9 sites over the next several years. These site counts exclude our 5 Nutrition business-related manufacturing sites as the Nutrition business is treated as a discontinued operation. See Notes to Condensed Consolidated Financial Statements—
|
|
◦
|
Research and Development: After the acquisition of Wyeth, we operated in 20 R&D sites and announced that we would close a number of sites. We have completed a number of site closures, including our Sandwich, U.K. research and development facility, except for a small presence. In addition, in 2011, we rationalized several other sites to reduce and optimize the overall R&D footprint. We disposed of our toxicology site in Catania, Italy; exited our R&D sites in Aberdeen and Gosport, U.K.; and disposed of a vacant site in St. Louis, MO. We are presently marketing for sale, lease or sale/lease-back, either a portion of or all of certain of our R&D campuses. Locations with R&D operations are in the U.S., Europe, Canada and China, with five major research sites in addition to a number of specialized units. We also re-prioritized our commitments to disease areas and have discontinued certain therapeutic areas and R&D programs.
|
|
•
|
Workforce reductions across all areas of our business and other organizational changes, primarily in the U.S. field force, manufacturing, R&D and corporate functions. We identified areas for a reduction in workforce across all of our businesses. In January 2009, when Pfizer and Wyeth entered into the merger agreement, the workforce of the two companies totaled approximately 130,000. We have exceeded our original target to reduce the combined Pfizer/Wyeth workforce 15%, or 19,500, within three years. By the end of 2011, we achieved a reduction of 26,300, and by the end of the third quarter of 2012, we achieved a reduction of 31,200. In 2012, though September 30, the workforce declined by 4,900, from 103,700 to 98,800, primarily in the U.S. field force, manufacturing, R&D and corporate operations. The aforementioned workforce reductions include the impact of acquisitions and divestitures subsequent to the Wyeth acquisition.
|
|
•
|
The increased use of shared services.
|
|
•
|
Procurement savings.
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
||||
|
Transaction costs
(a)
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
1
|
|
|
$
|
28
|
|
|
Integration costs
(b)
|
|
87
|
|
|
184
|
|
|
295
|
|
|
562
|
|
||||
|
Restructuring charges
(c)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Employee termination costs
|
|
113
|
|
|
762
|
|
|
424
|
|
|
1,615
|
|
||||
|
Asset impairments
|
|
35
|
|
|
99
|
|
|
282
|
|
|
157
|
|
||||
|
Exit costs
|
|
67
|
|
|
40
|
|
|
87
|
|
|
96
|
|
||||
|
Restructuring charges and certain acquisition-related costs
|
|
302
|
|
|
1,090
|
|
|
1,089
|
|
|
2,458
|
|
||||
|
Additional depreciation––asset restructuring
recorded in our
condensed consolidated statements of income as follows
(d)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cost of sales
|
|
78
|
|
|
68
|
|
|
214
|
|
|
410
|
|
||||
|
Selling, informational and administrative expenses
|
|
3
|
|
|
39
|
|
|
8
|
|
|
68
|
|
||||
|
Research and development expenses
|
|
—
|
|
|
146
|
|
|
259
|
|
|
379
|
|
||||
|
Total additional depreciation––asset restructuring
|
|
81
|
|
|
253
|
|
|
481
|
|
|
857
|
|
||||
|
Implementation costs recorded in our condensed consolidated statements of income as follows
(e)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cost of sales
|
|
19
|
|
|
—
|
|
|
23
|
|
|
—
|
|
||||
|
Selling, informational and administrative expenses
|
|
45
|
|
|
12
|
|
|
77
|
|
|
12
|
|
||||
|
Research and development expenses
|
|
47
|
|
|
10
|
|
|
132
|
|
|
28
|
|
||||
|
Total implementation costs
|
|
111
|
|
|
22
|
|
|
232
|
|
|
40
|
|
||||
|
Total costs associated with acquisitions and cost-
reduction/productivity initiatives
|
|
$
|
494
|
|
|
$
|
1,365
|
|
|
$
|
1,802
|
|
|
$
|
3,355
|
|
|
(a)
|
Transaction costs represent external costs directly related to acquired businesses and primarily include expenditures for banking, legal, accounting and other similar services.
|
|
(b)
|
Integration costs represent external, incremental costs directly related to integrating acquired businesses, and primarily include expenditures for consulting and the integration of systems and processes.
|
|
(c)
|
From the beginning of our cost-reduction and transformation initiatives in
2005
through
September 30, 2012
,
Employee termination costs
represent the expected reduction of the workforce by approximately
59,700
employees, mainly in manufacturing and sales and research, of which approximately
49,300
employees have been terminated as of
September 30, 2012
. For the
nine
months ended
September 30, 2012
, the amount of employee termination costs represents additional accruals with respect to reserves for approximately
2,300
employees.
|
|
•
|
For the
three
months ended September 30, 2012, Primary Care operating segment (
$83 million
), Specialty Care and Oncology operating segment (
$60 million
), Established Products and Emerging Markets operating segment (
$16 million
), other operating segments (
$8 million
), research and development operations (
$39 million
income), manufacturing operations (
$27 million
) and Corporate (
$60 million
).
|
|
•
|
For the
nine
months ended September 30, 2012, Primary Care operating segment (
$51 million
), Specialty Care and Oncology operating segment (
$79 million
), Established Products and Emerging Markets operating segment (
$20 million
), other operating segments (
$26 million
), research and development operations (
$14 million
income), manufacturing operations (
$193 million
) and Corporate (
$438 million
).
|
|
•
|
For the
three
months ended October 2, 2011, Primary Care operating segment (
$473 million
), Specialty Care and Oncology operating segment (
$186 million
), Established Products and Emerging Markets operating segment (
$64 million
), other operating segments (
$30 million
), research and development operations (
$46 million
income), manufacturing operations (
$41 million
) and Corporate (
$153 million
).
|
|
•
|
For the
nine
months ended October 2, 2011, Primary Care operating segment (
$606 million
), Specialty Care and Oncology operating segment (
$228 million
), Established Products and Emerging Markets operating segment (
$80 million
), other operating
|
|
(d)
|
Additional depreciation––asset restructuring represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.
|
|
(e)
|
Implementation costs represent external, incremental costs directly related to implementing our non-acquisition-related cost-reduction and productivity initiatives.
|
|
(MILLIONS OF DOLLARS)
|
|
Employee
Termination
Costs
|
|
|
Asset
Impairment
Charges
|
|
|
Exit Costs
|
|
|
Accrual
|
|
||||
|
Balance, December 31, 2011
|
|
$
|
2,425
|
|
|
$
|
—
|
|
|
$
|
92
|
|
|
$
|
2,517
|
|
|
Provision
(a)
|
|
424
|
|
|
282
|
|
|
87
|
|
|
793
|
|
||||
|
Utilization and other
(b)
|
|
(1,270
|
)
|
|
(282
|
)
|
|
(69
|
)
|
|
(1,621
|
)
|
||||
|
Balance, September 30, 2012
(c)
|
|
$
|
1,579
|
|
|
$
|
—
|
|
|
$
|
110
|
|
|
$
|
1,689
|
|
|
(a)
|
For the
nine
months ended
September 30, 2012
,
Provision
includes additional accruals with respect to reserves for approximately
2,300
employees.
|
|
(b)
|
Includes adjustments for foreign currency translation.
|
|
(c)
|
Included in
Other current liabilities
($
949 million
) and
Other noncurrent liabilities
($
740 million
).
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change |
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change |
||||
|
Other deductions—net
|
|
$
|
962
|
|
|
$
|
547
|
|
|
76
|
|
$
|
3,283
|
|
|
$
|
1,802
|
|
|
82
|
|
•
|
charges for litigation-related matters that were approximately $594 million higher in the third quarter of 2012 than in the same period in 2011, primarily due to a $491 million charge resulting from an agreement-in-principle with the U.S. Department of Justice (DOJ) to resolve an investigation into Wyeth's historical promotional practices in connection with Rapamune;
|
|
•
|
certain asset impairment charges that were approximately $96 million lower in the third quarter of 2012 than in the same period in 2011, (see below); and
|
|
•
|
net interest expense that was approximately $40 million lower in the third quarter of 2012 than in the same period in 2011.
|
|
•
|
charges for litigation-related matters that were $1.4 billion higher in the first nine months of 2012 than in the same period in 2011, primarily due to a $491 million charge resulting from an agreement-in-principle with the DOJ to resolve an investigation into Wyeth's historical promotional practices in connection with Rapamune, a $450 million settlement of a lawsuit by Brigham Young University related to Celebrex and higher charges related to hormone-replacement therapy litigation;
|
|
•
|
lower royalty-related income of $94 million; and
|
|
•
|
increase in costs of approximately $90 million in connection with the potential initial public offering of up to a 20% ownership stake in our Animal Health business, Zoetis Inc. (Zoetis);
|
|
•
|
lower net interest expense of $78 million; and
|
|
•
|
certain asset impairment charges that were approximately $64 million lower in the first nine months of 2012 than in the same period in 2011, (see below).
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change |
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change |
|
||||
|
Provision/(benefit) for taxes on income
|
|
$
|
(119
|
)
|
|
$
|
1,216
|
|
|
(110
|
)
|
|
$
|
1,882
|
|
|
$
|
3,167
|
|
|
(41
|
)
|
|
Effective tax rate on continuing operations
|
|
(4.0
|
)%
|
|
34.3
|
%
|
|
|
|
|
19.0
|
%
|
|
31.2
|
%
|
|
|
|
||||
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
||||
|
Revenues
(a)
|
|
$
|
564
|
|
|
$
|
699
|
|
|
$
|
1,665
|
|
|
$
|
2,068
|
|
|
Pre-tax income from discontinued operations
|
|
$
|
129
|
|
|
$
|
121
|
|
|
$
|
365
|
|
|
$
|
397
|
|
|
Provision for taxes on income
(b)
|
|
25
|
|
|
25
|
|
|
116
|
|
|
94
|
|
||||
|
Income from discontinued operations––net of tax
|
|
104
|
|
|
96
|
|
|
249
|
|
|
303
|
|
||||
|
Pre-tax gain on sale of discontinued operations
|
|
—
|
|
|
1,695
|
|
|
—
|
|
|
1,683
|
|
||||
|
Provision for taxes on income
(c)
|
|
—
|
|
|
367
|
|
|
—
|
|
|
367
|
|
||||
|
Gain on sale of discontinued operations––net of tax
|
|
—
|
|
|
1,328
|
|
|
—
|
|
|
1,316
|
|
||||
|
Discontinued operations––net of tax
(a)
|
|
$
|
104
|
|
|
$
|
1,424
|
|
|
$
|
249
|
|
|
$
|
1,619
|
|
|
(a)
|
Includes the Nutrition business for all periods presented and the Capsugel business for 2011 only.
|
|
(b)
|
Includes deferred tax expense of
$9 million
and a deferred tax benefit of
$10 million
for the three months ended
September 30, 2012
and
October 2, 2011
, respectively, and a deferred tax expense of
$23 million
and a deferred tax benefit of
$17 million
for the nine months ended
September 30, 2012
and
October 2, 2011
, respectively. These deferred tax provisions include deferred taxes related to investments in certain foreign subsidiaries resulting from our intention not to hold these subsidiaries permanently.
|
|
(c)
|
Includes deferred tax expense of
$162 million
for the three and nine months ended
October 2, 2011
. These deferred tax provisions include deferred taxes on certain current-year funds earned outside the U.S. that will not be permanently reinvested overseas.
|
|
•
|
senior management receives a monthly analysis of our operating results that is prepared on an Adjusted income basis;
|
|
•
|
our annual budgets are prepared on an Adjusted income basis; and
|
|
•
|
senior management’s annual compensation is derived, in part, using this Adjusted income measure. Adjusted income is one of the performance metrics utilized in the determination of bonuses under the Pfizer Inc. Executive Annual Incentive Plan that is designed to limit the bonuses payable to the Executive Leadership Team (ELT) for purposes of Internal Revenue Code Section 162(m). Subject to the Section 162(m) limitation, the bonuses are funded from a pool based on the achievement of three financial metrics, including Adjusted diluted earnings per share, which is derived from Adjusted income. Since 2011, this metric accounts for 40% of the bonus pool made available to ELT members and other members of senior management and will constitute a factor in determining each of these individual’s bonus.
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change |
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change |
|
||||
|
GAAP Reported net income attributable to Pfizer Inc.
|
|
$
|
3,208
|
|
|
$
|
3,738
|
|
|
(14
|
)
|
|
$
|
8,255
|
|
|
$
|
8,570
|
|
|
(4
|
)
|
|
Purchase accounting adjustments––net of tax
|
|
813
|
|
|
1,252
|
|
|
(35
|
)
|
|
2,725
|
|
|
3,852
|
|
|
(29
|
)
|
||||
|
Acquisition-related costs––net of tax
|
|
190
|
|
|
240
|
|
|
(21
|
)
|
|
489
|
|
|
1,136
|
|
|
(57
|
)
|
||||
|
Discontinued operations––net of tax
|
|
(104
|
)
|
|
(1,424
|
)
|
|
(93
|
)
|
|
(249
|
)
|
|
(1,619
|
)
|
|
(85
|
)
|
||||
|
Certain significant items––net of tax
|
|
(158
|
)
|
|
890
|
|
|
(118
|
)
|
|
1,744
|
|
|
2,116
|
|
|
(18
|
)
|
||||
|
Non-GAAP Adjusted income
(a)
|
|
$
|
3,949
|
|
|
$
|
4,696
|
|
|
(16
|
)
|
|
$
|
12,964
|
|
|
$
|
14,055
|
|
|
(8
|
)
|
|
(a)
|
The effective tax rate on Non-GAAP Adjusted income was 28.3% in the
third
quarter of 2012, compared with 31.2% in the
third
quarter of 2011. For the first nine months of 2012, the effective tax rate on Non-GAAP Adjusted income was 28.8%, compared with 29.5% in the same period last year. The tax rates in both periods in 2012 compared to the same periods in 2011 were favorably impacted by the resolution of various foreign audits pertaining to multiple tax years, as well as the change in the jurisdictional mix of earnings as a result of operating fluctuations in the normal course of business, partially offset by the unfavorable impact of the expiration of the U.S. research and development tax credit.
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
|
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change |
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change |
|
||||
|
Earnings per common share––diluted
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
GAAP Reported income from continuing operations attributable to Pfizer Inc. common shareholders
|
|
$
|
0.41
|
|
|
$
|
0.30
|
|
|
37
|
|
|
$
|
1.06
|
|
|
$
|
0.88
|
|
|
20
|
|
|
Income from discontinued operations––net of tax
|
|
0.01
|
|
|
0.18
|
|
|
(94
|
)
|
|
0.03
|
|
|
0.20
|
|
|
(85
|
)
|
||||
|
GAAP Reported net income attributable to Pfizer Inc. common shareholders
|
|
0.43
|
|
|
0.48
|
|
|
(10
|
)
|
|
1.09
|
|
|
1.08
|
|
|
1
|
|
||||
|
Purchase accounting adjustments––net of tax
|
|
0.11
|
|
|
0.16
|
|
|
(31
|
)
|
|
0.36
|
|
|
0.49
|
|
|
(27
|
)
|
||||
|
Acquisition-related costs––net of tax
|
|
0.03
|
|
|
0.03
|
|
|
—
|
|
|
0.06
|
|
|
0.14
|
|
|
(57
|
)
|
||||
|
Discontinued operations––net of tax
|
|
(0.01
|
)
|
|
(0.18
|
)
|
|
(94
|
)
|
|
(0.03
|
)
|
|
(0.20
|
)
|
|
(85
|
)
|
||||
|
Certain significant items––net of tax
|
|
(0.02
|
)
|
|
0.11
|
|
|
(118
|
)
|
|
0.23
|
|
|
0.27
|
|
|
(15
|
)
|
||||
|
Non-GAAP Adjusted income attributable to Pfizer Inc. common shareholders
|
|
$
|
0.53
|
|
|
$
|
0.60
|
|
|
(12
|
)
|
|
$
|
1.72
|
|
|
$
|
1.77
|
|
|
(3
|
)
|
|
(a)
|
EPS amounts may not add due to rounding.
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
||||
|
Purchase accounting adjustments
|
|
|
|
|
|
|
|
|
||||||||
|
Amortization, depreciation and other
(a)
|
|
$
|
1,142
|
|
|
$
|
1,411
|
|
|
$
|
3,741
|
|
|
$
|
4,116
|
|
|
Cost of sales, primarily related to fair value adjustments of acquired inventory
|
|
(2
|
)
|
|
286
|
|
|
9
|
|
|
1,081
|
|
||||
|
Total purchase accounting adjustments––pre-tax
|
|
1,140
|
|
|
1,697
|
|
|
3,750
|
|
|
5,197
|
|
||||
|
Income taxes
(d)
|
|
(327
|
)
|
|
(445
|
)
|
|
(1,025
|
)
|
|
(1,345
|
)
|
||||
|
Total purchase accounting adjustments––net of tax
|
|
813
|
|
|
1,252
|
|
|
2,725
|
|
|
3,852
|
|
||||
|
Acquisition-related costs
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Transaction costs
(b)
|
|
—
|
|
|
5
|
|
|
1
|
|
|
28
|
|
||||
|
Integration costs
(b)
|
|
87
|
|
|
184
|
|
|
295
|
|
|
562
|
|
||||
|
Restructuring charges
(b)
|
|
62
|
|
|
13
|
|
|
127
|
|
|
406
|
|
||||
|
Additional depreciation––asset restructuring
(c)
|
|
81
|
|
|
92
|
|
|
227
|
|
|
460
|
|
||||
|
Total acquisition-related costs––pre-tax
|
|
230
|
|
|
294
|
|
|
650
|
|
|
1,456
|
|
||||
|
Income taxes
(d)
|
|
(40
|
)
|
|
(54
|
)
|
|
(161
|
)
|
|
(320
|
)
|
||||
|
Total acquisition-related costs––net of tax
|
|
190
|
|
|
240
|
|
|
489
|
|
|
1,136
|
|
||||
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Total discontinued operations––net of tax
|
|
(104
|
)
|
|
(1,424
|
)
|
|
(249
|
)
|
|
(1,619
|
)
|
||||
|
Certain significant items
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Restructuring charges
(e)
|
|
153
|
|
|
888
|
|
|
666
|
|
|
1,462
|
|
||||
|
Implementation costs and additional depreciation––asset restructuring
(f)
|
|
111
|
|
|
183
|
|
|
486
|
|
|
437
|
|
||||
|
Certain legal matters
(g)
|
|
725
|
|
|
132
|
|
|
1,983
|
|
|
657
|
|
||||
|
Certain asset impairment charges
(h)
|
|
54
|
|
|
106
|
|
|
543
|
|
|
595
|
|
||||
|
Costs associated with the potential separation of the Animal Health business
(i)
|
|
100
|
|
|
8
|
|
|
191
|
|
|
8
|
|
||||
|
Other
|
|
15
|
|
|
(8
|
)
|
|
52
|
|
|
16
|
|
||||
|
Total certain significant items––pre-tax
|
|
1,158
|
|
|
1,309
|
|
|
3,921
|
|
|
3,175
|
|
||||
|
Income taxes
(d)
|
|
(1,316
|
)
|
|
(419
|
)
|
|
(2,177
|
)
|
|
(1,059
|
)
|
||||
|
Total certain significant items––net of tax
|
|
(158
|
)
|
|
890
|
|
|
1,744
|
|
|
2,116
|
|
||||
|
Total purchase accounting adjustments, acquisition-related costs, discontinued operations and certain significant items––net of tax
|
|
$
|
741
|
|
|
$
|
958
|
|
|
$
|
4,709
|
|
|
$
|
5,485
|
|
|
(a)
|
Included primarily in
Amortization of intangible assets.
|
|
(b)
|
Included in
Restructuring charges and certain acquisition-related costs
(see Notes to Condensed Consolidated Financial Statements—
Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives
).
|
|
(c)
|
Represents the impact of changes in estimated useful lives of assets involved in restructuring actions related to acquisitions. For the third quarter of 2012, included in
Cost of sales
($78 million), and
Selling, informational and administrative expenses
($3 million). For the third quarter of 2011, included in
Cost of sales
($68 million),
Selling, informational and administrative expenses
($18 million) and
Research and development expenses
($6 million).
|
|
(d)
|
Income taxes includes the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pre-tax amounts and applying that jurisdiction’s applicable tax rate. In addition, income taxes for Certain significant items in the third quarter and nine months of 2012 includes a $1.1 billion tax benefit, representing tax and interest, as a result of a settlement with the U.S. Internal Revenue Service related to audits for tax years 2006 through 2008. See Notes to Condensed Consolidated Financial Statements—
Note 5A. Tax Matters: Taxes on Income from Continuing Operations
.
|
|
(e)
|
Represents restructuring charges incurred for our cost-reduction and productivity initiatives. Included in
Restructuring charges and certain acquisition-related costs
(see Notes to Condensed Consolidated Financial Statements—
Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives
).
|
|
(f)
|
Amounts primarily relate to our cost-reduction and productivity initiatives (see Notes to Condensed Consolidated Financial Statements—
|
|
(g)
|
Included in
Other deductions
—
net
(see Notes to Condensed Consolidated Financial Statements—
Note 4. Other Deductions
—
Net
)
.
In the third quarter of 2012, primarily includes a $491 million charge, not deductible for income tax purposes, resulting from an agreement-in-principle with the DOJ to resolve an investigation into Wyeth’s historical promotional practices in connection with Rapamune. In the first nine months of 2012, primarily includes the aforementioned $491 million charge related to Rapamune, a $450 million settlement of a lawsuit by Brigham Young University related to Celebrex, and charges related to hormone-replacement therapy litigation. In 2011, primarily includes charges related to hormone-replacement therapy litigation.
|
|
(h)
|
Primarily included in
Other deductions
—
net
(see Notes to Condensed Consolidated Financial Statements—
|
|
(i)
|
Costs incurred in connection with the potential initial public offering of up to a 20% ownership stake in our Animal Health business, Zoetis Inc. (Zoetis). Includes expenditures for banking, legal, accounting and similar services related to the potential transaction.
|
|
|
|
Nine Months Ended
|
|
|
|||||||
|
(MILLIONS OF DOLLARS)
|
|
September 30,
2012 |
|
|
October 2,
2011 |
|
|
%
Change |
|
||
|
Cash provided by/(used in):
|
|
|
|
|
|
|
|||||
|
Operating activities
|
|
$
|
11,798
|
|
|
$
|
14,979
|
|
|
(21
|
)
|
|
Investing activities
|
|
(683
|
)
|
|
1,301
|
|
|
(152
|
)
|
||
|
Financing activities
|
|
(9,766
|
)
|
|
(14,357
|
)
|
|
(32
|
)
|
||
|
Effect of exchange-rate changes on cash and cash equivalents
|
|
(25
|
)
|
|
48
|
|
|
(152
|
)
|
||
|
Net increase in cash and cash equivalents
|
|
$
|
1,324
|
|
|
$
|
1,971
|
|
|
(33
|
)
|
|
•
|
the loss of exclusivity of Lipitor, as well as certain other products, resulting in lower revenues and associated expenses (see also the “Industry-Specific Challenges” section of this MD&A), partially offset by spending reductions resulting from our company-wide cost-reduction initiatives;
|
|
•
|
payments made in connection with certain legal matters;
|
|
•
|
an increase in inventory, partly due to the build-up of inventory in anticipation of plant rationalizations;
|
|
•
|
an increase in payments for taxes; and
|
|
•
|
the timing of receipts and payments in the ordinary course of business.
|
|
•
|
net proceeds from redemption and sales of investments of $936 million in the first nine months of 2012, which were primarily used to finance our acquisitions, compared to net proceeds from redemptions and sales of investments of $2.8 billion in the first nine months of 2011, which were primarily used to finance our acquisition of King; and
|
|
•
|
net proceeds from the sale of our Capsugel business of $2.4 billion in the first nine months of 2011;
|
|
•
|
cash paid of $782 million, net of cash acquired, for our acquisitions of Alacer Corp. and Ferrosan in the first nine months of 2012 (see Notes to Condensed Consolidated Financial Statements
––
|
|
•
|
lower purchases of property, plant and equipment.
|
|
•
|
net repayments of borrowings of $372 million in the first nine months of 2012, compared to net repayments of borrowings of $3.9 billion in the first nine months of 2011; and
|
|
•
|
lower purchases of common stock;
|
|
•
|
higher cash dividends paid.
|
|
•
|
the working capital requirements of our operations, including our research and development activities;
|
|
•
|
investments in our business;
|
|
•
|
dividend payments and potential increases in the dividend rate;
|
|
•
|
share repurchases;
|
|
•
|
the cash requirements associated with our cost-reduction/productivity initiatives;
|
|
•
|
paying down outstanding debt;
|
|
•
|
contributions to our pension and postretirement plans; and
|
|
•
|
business-development activities.
|
|
(MILLIONS OF DOLLARS, EXCEPT RATIOS AND PER COMMON SHARE DATA)
|
|
September 30,
2012 |
|
|
December 31,
2011 |
|
||
|
Selected financial assets:
|
|
|
|
|
||||
|
Cash and cash equivalents
(a)
|
|
$
|
4,506
|
|
|
$
|
3,182
|
|
|
Short-term investments
(a)
|
|
18,462
|
|
|
23,270
|
|
||
|
Long-term investments
|
|
13,429
|
|
|
9,814
|
|
||
|
|
|
36,397
|
|
|
36,266
|
|
||
|
Debt:
|
|
|
|
|
|
|
||
|
Short-term borrowings, including current portion of long-term debt
|
|
7,774
|
|
|
4,016
|
|
||
|
Long-term debt
|
|
31,083
|
|
|
34,926
|
|
||
|
|
|
38,857
|
|
|
38,942
|
|
||
|
Net financial liabilities
(b)
|
|
$
|
(2,460
|
)
|
|
$
|
(2,676
|
)
|
|
|
|
|
|
|
||||
|
Working capital
(c)
|
|
$
|
27,996
|
|
|
$
|
31,908
|
|
|
Ratio of current assets to current liabilities
|
|
1.96:1
|
|
|
2.10:1
|
|
||
|
Shareholders’ equity per common share
(d)
|
|
$
|
11.04
|
|
|
$
|
10.85
|
|
|
(a)
|
See Notes to Condensed Consolidated Financial Statements––
|
|
(b)
|
Net financial liabilities decreased during the first nine months of 2012 as operating cash flow generation was partially offset by share repurchases, dividends, capital expenditures, and business development activities. For additional information, see the “Analysis of the Condensed Consolidated Statements of Cash Flows
”
section of this MD&A.
|
|
(c)
|
Working capital includes net assets held for sale of $3.9 billion as of
September 30, 2012
and $4.1 billion as of
December 31, 2011
.
|
|
(d)
|
Represents total Pfizer Inc. shareholders’ equity divided by the actual number of common shares outstanding (which excludes treasury shares and shares held by our employee benefit trust).
|
|
NAME OF RATING AGENCY
|
Commercial Paper
|
Long-term Debt
|
Date of Last Action
|
|
|
Rating
|
Outlook
|
|||
|
Moody’s
|
P-1
|
A1
|
Stable
|
October 2009
|
|
S&P
|
A1+
|
AA
|
Stable
|
October 2009
|
|
•
|
the outcome of research and development activities including, without limitation, the ability to meet anticipated clinical trial commencement and completion dates, regulatory submission and approval dates, and launch dates for product candidates;
|
|
•
|
decisions by regulatory authorities regarding whether and when to approve our drug applications, as well as their decisions regarding labeling, ingredients and other matters that could affect the availability or commercial potential of our products;
|
|
•
|
the speed with which regulatory authorizations, pricing approvals and product launches may be achieved;
|
|
•
|
the outcome of post-approval clinical trials, which could result in the loss of marketing approval for a product or changes in the labeling for, and/or increased or new concerns about the safety or efficacy of, a product that could affect its availability or commercial potential;
|
|
•
|
the success of external business-development activities;
|
|
•
|
competitive developments, including the impact on our competitive position of new product entrants, in-line branded products, generic products, private label products and product candidates that treat diseases and conditions similar to those treated by our in-line drugs and drug candidates;
|
|
•
|
the implementation by the FDA of an abbreviated legal pathway to approve biosimilar products, which could subject our biologic products to competition from biosimilar products in the U.S., with attendant competitive pressures, after the expiration of any applicable exclusivity period and patent rights;
|
|
•
|
the ability to meet generic and branded competition after the loss of patent protection for our products or competitor products;
|
|
•
|
the ability to successfully market both new and existing products domestically and internationally;
|
|
•
|
difficulties or delays in manufacturing;
|
|
•
|
trade buying patterns;
|
|
•
|
the impact of existing and future legislation and regulatory provisions on product exclusivity;
|
|
•
|
trends toward managed care and healthcare cost containment;
|
|
•
|
the impact of the U.S. Budget Control Act of 2011 (the Budget Control Act) and the deficit-reduction actions to be taken pursuant to the Budget Control Act in order to achieve the deficit-reduction targets provided for therein, and the impact of any broader deficit-reduction efforts;
|
|
•
|
the impact of U.S. healthcare legislation enacted in 2010—the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act––and of any modification or repeal of any of the provisions thereof;
|
|
•
|
U.S. legislation or regulatory action affecting, among other things, pharmaceutical product pricing, reimbursement or access, including under Medicaid, Medicare and other publicly funded or subsidized health programs; the importation of prescription drugs from outside the U.S. at prices that are regulated by governments of various foreign countries; direct-to-consumer advertising and interactions with healthcare professionals; and the use of comparative effectiveness methodologies that could be implemented in a manner that focuses primarily on the cost differences and minimizes the therapeutic differences among pharmaceutical products and restricts access to innovative medicines;
|
|
•
|
legislation or regulatory action in markets outside the U.S. affecting pharmaceutical product pricing, reimbursement or access, including, in particular, continued government-mandated price reductions for certain biopharmaceutical products in certain European and emerging market countries;
|
|
•
|
the exposure of our operations outside the U.S. to possible capital and exchange controls, expropriation and other restrictive government actions, changes in intellectual property legal protections and remedies, as well as political unrest and unstable governments and legal systems;
|
|
•
|
contingencies related to actual or alleged environmental contamination;
|
|
•
|
claims and concerns that may arise regarding the safety or efficacy of in-line products and product candidates;
|
|
•
|
any significant breakdown, infiltration or interruption of our information technology systems and infrastructure;
|
|
•
|
legal defense costs, insurance expenses, settlement costs, the risk of an adverse decision or settlement and the adequacy of reserves related to product liability, patent protection, government investigations, consumer, commercial, securities, antitrust, environmental and tax issues, ongoing efforts to explore various means for resolving asbestos litigation, and other legal proceedings;
|
|
•
|
our ability to protect our patents and other intellectual property both domestically and internationally;
|
|
•
|
interest rate and foreign currency exchange rate fluctuations;
|
|
•
|
governmental laws and regulations affecting domestic and foreign operations, including, without limitation, tax obligations and changes affecting the tax treatment by the U.S. of income earned outside of the U.S. that may result from pending and possible future proposals;
|
|
•
|
any significant issues involving our largest wholesaler customers, which account for a substantial portion of our revenues;
|
|
•
|
the possible impact of the increased presence of counterfeit medicines in the pharmaceutical supply chain on our revenues and on patient confidence in the integrity of our medicines;
|
|
•
|
any significant issues that may arise related to the outsourcing of certain operational and staff functions to third parties, including with regard to quality, timeliness and compliance with applicable legal requirements and industry standards;
|
|
•
|
changes in U.S. generally accepted accounting principles;
|
|
•
|
uncertainties related to general economic, political, business, industry, regulatory and market conditions including, without limitation, uncertainties related to the impact on us, our customers, suppliers and lenders and counterparties to our foreign-exchange and interest-rate agreements of challenging global economic conditions and recent and possible future changes in global financial markets; and the related risk that our allowance for doubtful accounts may not be adequate;
|
|
•
|
any changes in business, political and economic conditions due to actual or threatened terrorist activity in the U.S. and other parts of the world, and related U.S. military action overseas;
|
|
•
|
growth in costs and expenses;
|
|
•
|
changes in our product, segment and geographic mix;
|
|
•
|
our ability and the ability of Nestlé to satisfy the conditions to closing the sale of our Nutrition business to Nestlé at all or within the anticipated time period; and whether and when the Company's new $10 billion share repurchase program will go into effect, which is contingent upon the closing of the sale of our Nutrition business to Nestlé;
|
|
•
|
the possibility that the initial public offering (IPO) of up to a 20% ownership stake in our Animal Health business, for which a registration statement was filed with the Securities and Exchange Commission on August 13, 2012, will not be consummated at all or within the anticipated time period, including as the result of regulatory, market or other factors; and, if the IPO is consummated, the impact of the strategic alternative that we decide to pursue with regard to our remaining ownership stake in the Animal Health business;
|
|
•
|
our ability and the ability of NextWave Pharmaceuticals, Inc. (NextWave) to satisfy the conditions to closing our acquisition of NextWave at all or within the anticipated time period; and
|
|
•
|
the impact of acquisitions, divestitures, restructurings, product recalls and withdrawals and other unusual items, including (i) our ability to realize the projected benefits of our acquisition of King Pharmaceuticals, Inc., and (ii) our ability to realize the projected benefits of our cost-reduction and productivity initiatives, including those related to our research and development organization.
|
|
•
|
On April 23, 2012, we entered into an agreement to sell our Nutrition business to Nestlé. The transaction is subject to our ability and Nestlé’s ability to obtain the regulatory clearances required in certain jurisdictions and to satisfy the other conditions to closing the sale. (For further information, see the “Our Operating Environment––Our Business Development Initiatives” section of the MD&A.)
|
|
•
|
On August 13, 2012, we filed a registration statement with the U.S. Securities and Exchange Commission for a potential initial public offering (IPO) of up to a 20% ownership stake in our Animal Health business. The transaction is subject to the possibility that the IPO will not be consummated at all or within the anticipated time period, including as the result of regulatory, market or other factors. (For further information, see the “Our Operating Environment––Our Business Development Initiatives” section of the MD&A.)
|
|
•
|
As discussed above in Part I, Item 4, “Controls and Procedures”, we continue to pursue a multi-year initiative to outsource some transaction-processing activities within certain accounting processes and are migrating to a consistent enterprise resource planning system across the organization. These are enhancements of ongoing activities to support the growth of our financial shared service capabilities and standardize our financial systems. If any difficulties in the migration to or in the operation of the new system were to occur, they could adversely affect our operations, including,
|
|
Period
|
Total Number of
Shares Purchased
(b)
|
|
Average Price
Paid per Share
(b)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plan
(a)
|
|
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plan
(a), (c)
|
|
||
|
July 2, 2012, through July 29,
2012
|
69,525
|
|
$
|
22.50
|
|
—
|
|
$
|
7,035,125,784
|
|
|
July 30, 2012, through August 26, 2012
|
29,489,991
|
|
$
|
23.95
|
|
29,430,755
|
|
$
|
6,330,215,429
|
|
|
August 27, 2012, through September 30, 2012
|
46,925,003
|
|
$
|
24.13
|
|
46,840,276
|
|
$
|
5,199,791,721
|
|
|
Total
|
76,484,519
|
|
$
|
24.06
|
|
76,271,031
|
|
|
|
|
|
(a)
|
On December 12, 2011, we announced that the Board of Directors had authorized a $10 billion share repurchase plan (the December 2011 Stock Purchase Plan). On November 1, 2012, we announced that the Board of Directors had authorized, effective upon the consummation of the sale of the Nutrition business to Nestlé, a new $10 billion share repurchase plan to be utilized over time (the 2012 Stock Purchase Plan). At such time as the 2012 Stock Purchase Plan becomes effective, it will be in addition to the authorization then-remaining, if any, under the December 2011 Stock Purchase Plan.
|
|
(b)
|
In addition to amounts purchased under the December 2011 Stock Purchase Plan, these columns reflect the following transactions during the
third
fiscal quarter of
2012
: (i) the surrender to Pfizer of 171,595 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock and restricted stock units issued to employees; (ii) the open market purchase by the trustee of 33,169 shares of common stock in connection with the reinvestment of dividends paid on common stock held in trust for employees who were granted performance share awards and who deferred receipt of such awards; and (iii) the surrender to Pfizer of 8,724 shares of common stock to satisfy tax withholding obligations in connection with the vesting of performance share awards issued to employees.
|
|
(c)
|
The amounts in this column do not reflect the 2012 Stock Purchase Plan.
|
|
|
1) Exhibit 12
|
-
|
Computation of Ratio of Earnings to Fixed Charges
|
|
|
2) Exhibit 15
|
-
|
Accountants’ Acknowledgement
|
|
|
3) Exhibit 31.1
|
-
|
Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
4) Exhibit 31.2
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-
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Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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5) Exhibit 32.1
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-
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Certification by the Chief Executive Officer Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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6) Exhibit 32.2
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-
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Certification by the Chief Financial Officer Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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7) Exhibit 101:
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EX-101.INS
EX-101.SCH
EX-101.CAL
EX-101.LAB
EX-101.PRE
EX-101.DEF
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XBRL Instance Document
XBRL Taxonomy Extension Schema
XBRL Taxonomy Extension Calculation Linkbase
XBRL Taxonomy Extension Label Linkbase
XBRL Taxonomy Extension Presentation Linkbase
XBRL Taxonomy Extension Definition Document
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Pfizer Inc.
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(Registrant)
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Dated:
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November 8, 2012
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/s/ Loretta V. Cangialosi
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Loretta V. Cangialosi, Senior Vice President and
Controller
(Principal Accounting Officer and
Duly Authorized Officer)
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No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|