DELAWARE
(State of Incorporation)
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13-5315170
(I.R.S. Employer Identification No.)
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Large Accelerated filer x | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
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40
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41
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79
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79
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79
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80
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80
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80
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80
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81
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Three Months Ended
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Nine Months Ended
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|||||||||||||||
(MILLIONS, EXCEPT PER COMMON SHARE DATA)
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Oct. 2,
2011
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Oct. 3,
2010
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Oct. 2,
2011
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Oct. 3,
2010
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||||||||||||
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||||||||||||||||
Revenues
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$ | 17,193 | $ | 15,995 | $ | 50,679 | $ | 49,703 | ||||||||
Costs and expenses:
|
||||||||||||||||
Cost of sales(a)
|
3,679 | 3,790 | 11,177 | 11,676 | ||||||||||||
Selling, informational and administrative expenses(a)
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4,621 | 4,599 | 14,097 | 13,776 | ||||||||||||
Research and development expenses(a)
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2,188 | 2,188 | 6,516 | 6,590 | ||||||||||||
Amortization of intangible assets
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1,397 | 1,156 | 4,168 | 3,972 | ||||||||||||
Acquisition-related in-process research and development
charges
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–– | –– | –– | 74 | ||||||||||||
Restructuring charges and certain acquisition-related costs
|
1,101 | 499 | 2,474 | 2,090 | ||||||||||||
Other deductions––net
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538 | 2,349 | 1,778 | 3,036 | ||||||||||||
Income from continuing operations before provision for taxes on income
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3,669 | 1,414 | 10,469 | 8,489 | ||||||||||||
Provision for taxes on income
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1,235 | 558 | 3,223 | 3,165 | ||||||||||||
Income from continuing operations
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2,434 | 856 | 7,246 | 5,324 | ||||||||||||
Discontinued operations:
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||||||||||||||||
(Loss)/income from discontinued operations––net of tax
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(13 | ) | 26 | 39 | 76 | |||||||||||
Gain/(loss) on sale of discontinued operations––net of tax
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1,328 | (11 | ) | 1,316 | (9 | ) | ||||||||||
Discontinued operations––net of tax
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1,315 | 15 | 1,355 | 67 | ||||||||||||
Net income before allocation to noncontrolling interests
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3,749 | 871 | 8,601 | 5,391 | ||||||||||||
Less: net income attributable to noncontrolling interests
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11 | 5 | 31 | 24 | ||||||||||||
Net income attributable to Pfizer Inc.
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$ | 3,738 | $ | 866 | $ | 8,570 | $ | 5,367 | ||||||||
Earnings per share––basic:(b)
|
||||||||||||||||
Income from continuing operations attributable to Pfizer Inc.
common shareholders
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$ | 0.31 | $ | 0.11 | $ | 0.92 | $ | 0.66 | ||||||||
Discontinued operations––net of tax
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0.17 | –– | 0.17 | 0.01 | ||||||||||||
Net income attributable to Pfizer Inc. common shareholders
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$ | 0.48 | $ | 0.11 | $ | 1.09 | $ | 0.67 | ||||||||
Earnings per share––diluted:(b)
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||||||||||||||||
Income from continuing operations attributable to Pfizer Inc.
common shareholders
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$ | 0.31 | $ | 0.11 | $ | 0.91 | $ | 0.66 | ||||||||
Discontinued operations––net of tax
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0.17 | –– | 0.17 | 0.01 | ||||||||||||
Net income attributable to Pfizer Inc. common shareholders
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$ | 0.48 | $ | 0.11 | $ | 1.08 | $ | 0.66 | ||||||||
Weighted-average shares used to calculate earnings per common share:
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||||||||||||||||
Basic
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7,770 | 8,027 | 7,877 | 8,045 | ||||||||||||
Diluted
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7,810 | 8,057 | 7,925 | 8,079 | ||||||||||||
Cash dividends paid per common share
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$ | 0.20 | $ | 0.18 | $ | 0.60 | $ | 0.54 |
(a)
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Exclusive of amortization of intangible assets, except as disclosed in Note 11B. Goodwill and Other Intangible Assets: Other Intangible Assets.
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(b)
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EPS amounts may not add due to rounding.
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(millions of dollars)
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Oct. 2,
2011
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Dec. 31,
2010
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||||||
(Unaudited)
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||||||||
Assets
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||||||||
Cash and cash equivalents
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$ | 3,706 | $ | 1,735 | ||||
Short-term investments
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25,257 | 26,277 | ||||||
Accounts receivable, less allowance for doubtful accounts
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15,749 | 14,426 | ||||||
Short-term loans
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184 | 467 | ||||||
Inventories
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8,426 | 8,275 | ||||||
Taxes and other current assets
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9,288 | 8,394 | ||||||
Assets of discontinued operations and other assets held for sale
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122 | 1,439 | ||||||
Total current assets
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62,732 | 61,013 | ||||||
Long-term investments and loans
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9,468 | 9,747 | ||||||
Property, plant and equipment, less accumulated depreciation
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17,721 | 18,645 | ||||||
Goodwill
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45,409 | 43,928 | ||||||
Identifiable intangible assets, less accumulated amortization
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55,597 | 57,555 | ||||||
Taxes and other noncurrent assets
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5,205 | 4,126 | ||||||
Total assets
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$ | 196,132 | $ | 195,014 | ||||
Liabilities and Shareholders’ Equity
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||||||||
Short-term borrowings, including current portion of long-term debt
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$ | 5,637 | $ | 5,603 | ||||
Accounts payable
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3,765 | 3,994 | ||||||
Dividends payable
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–– | 1,601 | ||||||
Income taxes payable
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2,215 | 951 | ||||||
Accrued compensation and related items
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1,999 | 2,080 | ||||||
Other current liabilities
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14,240 | 14,256 | ||||||
Liabilities of discontinued operations
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–– | 151 | ||||||
Total current liabilities
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27,856 | 28,636 | ||||||
Long-term debt
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35,399 | 38,410 | ||||||
Pension benefit obligations
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5,734 | 6,194 | ||||||
Postretirement benefit obligations
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3,059 | 3,035 | ||||||
Noncurrent deferred tax liabilities
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20,415 | 18,628 | ||||||
Other taxes payable
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6,900 | 6,245 | ||||||
Other noncurrent liabilities
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6,239 | 5,601 | ||||||
Total liabilities
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105,602 | 106,749 | ||||||
Commitments and Contingencies
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||||||||
Preferred stock
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46 | 52 | ||||||
Common stock
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445 | 444 | ||||||
Additional paid-in capital
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71,235 | 70,760 | ||||||
Employee benefit trusts
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(3 | ) | (7 | ) | ||||
Treasury stock
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(28,586 | ) | (22,712 | ) | ||||
Retained earnings
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48,121 | 42,716 | ||||||
Accumulated other comprehensive loss
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(1,211 | ) | (3,440 | ) | ||||
Total Pfizer Inc. shareholders’ equity
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90,047 | 87,813 | ||||||
Equity attributable to noncontrolling interests
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483 | 452 | ||||||
Total shareholders’ equity
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90,530 | 88,265 | ||||||
Total liabilities and shareholders’ equity
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$ | 196,132 | $ | 195,014 |
Nine Months Ended
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||||||||
(millions of dollars)
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Oct. 2,
2011
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Oct. 3,
2010
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||||||
Operating Activities:
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||||||||
Net income before allocation to noncontrolling interests
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$ | 8,601 | $ | 5,391 | ||||
Adjustments to reconcile net income before allocation to noncontrolling interests to net
cash provided by operating activities:
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||||||||
Depreciation and amortization
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6,656 | 6,493 | ||||||
Share-based compensation expense
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347 | 351 | ||||||
Asset write-offs and impairment charges
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773 | 2,956 | ||||||
Acquisition-related in-process research and development charges
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–– | 74 | ||||||
(Gain)/loss on sale of discontinued operations
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(1,683 | ) | 9 | |||||
Deferred taxes from continuing operations
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693 | 1,277 | ||||||
Other deferred taxes
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175 | –– | ||||||
Other non-cash adjustments
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26 | (135 | ) | |||||
Benefit plan contributions in excess of expense
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(283 | ) | (706 | ) | ||||
Other changes in assets and liabilities, net of acquisitions and divestitures
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(326 | ) | (10,514 | ) | ||||
Net cash provided by operating activities
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14,979 | 5,196 | ||||||
Investing Activities:
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||||||||
Purchases of property, plant and equipment
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(1,062 | ) | (966 | ) | ||||
Purchases of short-term investments
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(13,456 | ) | (5,018 | ) | ||||
Proceeds from redemptions and sales of short-term investments––net
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17,458 | 9,493 | ||||||
Purchases of long-term investments
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(3,446 | ) | (2,674 | ) | ||||
Proceeds from redemptions and sales of long-term investments
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2,001 | 3,822 | ||||||
Acquisitions, net of cash acquired
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(3,188 | ) | –– | |||||
Proceeds from sale of business
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2,376 | –– | ||||||
Other investing activities
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618 | 496 | ||||||
Net cash provided by investing activities
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1,301 | 5,153 | ||||||
Financing Activities:
|
||||||||
Increase in short-term borrowings
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9,613 | 4,686 | ||||||
Principal payments on short-term borrowings––net
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(10,069 | ) | (9,265 | ) | ||||
Principal payments on long-term debt
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(3,486 | ) | (4 | ) | ||||
Purchases of common stock
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(5,789 | ) | (1,000 | ) | ||||
Cash dividends paid
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(4,710 | ) | (4,544 | ) | ||||
Other financing activities
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84 | 32 | ||||||
Net cash used in financing activities
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(14,357 | ) | (10,095 | ) | ||||
Effect of exchange-rate changes on cash and cash equivalents
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48 | (56 | ) | |||||
Net increase in cash and cash equivalents
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1,971 | 198 | ||||||
Cash and cash equivalents at beginning of period
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1,735 | 1,978 | ||||||
Cash and cash equivalents at end of period
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$ | 3,706 | $ | 2,176 | ||||
Supplemental Cash Flow Information:
Cash paid during the period for:
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||||||||
Income taxes
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$ | 1,539 | $ | 11,519 | ||||
Interest
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1,872 | 2,039 |
●
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New guidelines that address the recognition and presentation of the annual fee paid by pharmaceutical companies beginning on January 1, 2011 to the U.S. Treasury as a result of U.S. Healthcare Legislation. As a result of adopting this new standard, we are recording the annual fee ratably throughout the year in the Selling, informational and administrative expenses line item in our condensed consolidated statement of income.
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●
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An amendment to the guidelines that address the accounting for multiple-deliverable arrangements to enable companies to account for certain products or services separately rather than as a combined unit.
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(millions of dollars)
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Amounts
Recognized as of
Acquisition Date
(Provisional)
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|||
Working capital, excluding inventories
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$ | 174 | ||
Inventories
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340 | |||
Property, plant and equipment
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412 | |||
Identifiable intangible assets, excluding in-process research and development
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1,822 | |||
In-process research and development
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312 | |||
Net tax accounts
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(389 | ) | ||
All other long-term assets and liabilities, net
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101 | |||
Total identifiable net assets
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2,772 | |||
Goodwill
|
783 | |||
Net assets acquired/total consideration transferred
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$ | 3,555 |
●
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the expected synergies and other benefits that we believe will result from combining the operations of King with the operations of Pfizer;
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●
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any intangible assets that do not qualify for separate recognition, as well as future, yet unidentified projects and products; and
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●
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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).
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●
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Amounts for intangibles and inventory, pending finalization of valuation efforts;
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●
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Amounts for income tax assets, receivables and liabilities pending the filing of King’s pre-acquisition tax returns and the receipt of information from taxing authorities, which may change certain estimates and assumptions used; and
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●
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The allocation of goodwill among reporting units.
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Pro Forma Consolidated Results
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||||||||||||
Three Months
Ended
|
Nine Months Ended
|
|||||||||||
(millions of dollars, except per share data)
|
Oct. 3,
2010
|
Oct. 2,
2011
|
Oct. 3,
2010
|
|||||||||
Revenues
|
$ | 16,335 | $ | 50,788 | $ | 50,749 | ||||||
Net income attributable to Pfizer Inc. common shareholders
|
854 | 8,769 | 5,163 | |||||||||
Diluted earnings per share attributable to Pfizer Inc. common shareholders
|
0.11 | 1.11 | 0.64 |
●
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Elimination of King’s historical intangible asset amortization expense (approximately $18 million in the third quarter of 2010, $6 million in the first nine months of 2011 and $98 million in the first nine months of 2010).
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●
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Additional amortization expense (approximately $48 million in the third quarter of 2010, $15 million in the first nine months of 2011 and $136 million in the first nine months of 2010) related to the fair value of identifiable intangible assets acquired.
|
●
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Additional depreciation expense (approximately $9 million in the third quarter of 2010, $3 million in the first nine months of 2011 and $26 million in the first nine months of 2010) related to the fair value adjustment to property, plant and equipment acquired.
|
●
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Adjustment related to the fair value adjustments to acquisition-date inventory estimated to have been sold (addition of $33 million charge in the third quarter of 2010, elimination of $146 million charge in the first nine months of 2011 and addition of $146 million charge in the first nine months of 2010).
|
●
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Adjustment for acquisition-related costs directly attributable to the acquisition (addition of $11 million of charges in the third quarter of 2010, elimination of $205 million of charges in the first nine months of 2011 and addition of $205 million of charges in the first nine months of 2010, reflecting charges incurred by both King and Pfizer).
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Three Months Ended
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Nine Months Ended
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(millions of dollars)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
Oct. 2,
2011
|
Oct. 3,
2010
|
||||||||||||
Revenues
|
$ | 116 | $ | 176 | $ | 507 | $ | 545 | ||||||||
Pre-tax (loss)/income from discontinued operations
|
$ | (7 | ) | $ | 29 | $ | 78 | $ | 106 | |||||||
Provision for taxes on income(a)
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6 | 3 | 39 | 30 | ||||||||||||
(Loss)/income from discontinued operations––net of tax
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(13 | ) | 26 | 39 | 76 | |||||||||||
Pre-tax gain/(loss) on sale of discontinued operations
|
1,695 | (12 | ) | 1,683 | (9 | ) | ||||||||||
Provision/(benefit) for taxes on income(b)
|
367 | (1 | ) | 367 | –– | |||||||||||
Discontinued operations––net of tax
|
$ | 1,315 | $ | 15 | $ | 1,355 | $ | 67 |
(a)
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Includes a deferred tax expense of $13 million for the first nine months of 2011.
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(b)
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Includes a deferred tax expense of $162 million for the third quarter and first nine months of 2011.
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(millions of dollars)
|
Oct. 2,
2011
|
Dec. 31,
2010
|
||||||
Accounts receivable
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$ | –– | $ | 186 | ||||
Inventories
|
–– | 130 | ||||||
Taxes and other current assets
|
12 | 47 | ||||||
Property, plant and equipment
|
110 | 1,009 | ||||||
Goodwill
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–– | 19 | ||||||
Identifiable intangible assets
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–– | 3 | ||||||
Taxes and other noncurrent assets
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–– | 45 | ||||||
Assets of discontinued operations and other assets held for sale
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$ | 122 | $ | 1,439 | ||||
Current liabilities
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$ | –– | $ | 124 | ||||
Other liabilities
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–– | 27 | ||||||
Liabilities of discontinued operations
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$ | –– | $ | 151 |
●
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for our cost-reduction and productivity initiatives, 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
|
●
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for our acquisition activity, we typically incur costs that can include transaction costs, integration costs (such as expenditures for consulting and the integration of systems and processes) and restructuring charges, related to employees, assets and activities that will not continue in the combined company.
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Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
(millions of dollars)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
Oct. 2,
2011
|
Oct. 3,
2010
|
||||||||||||
Transaction costs(a)
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$ | 5 | $ | –– | $ | 28 | $ | 13 | ||||||||
Integration costs(b)
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187 | 231 | 567 | 650 | ||||||||||||
Restructuring charges(c):
|
||||||||||||||||
Employee termination costs
|
770 | 27 | 1,626 | 603 | ||||||||||||
Asset impairments
|
99 | 174 | 157 | 677 | ||||||||||||
Other
|
40 | 67 | 96 | 147 | ||||||||||||
Restructuring charges and certain acquisition-related costs
|
1,101 | 499 | 2,474 | 2,090 | ||||||||||||
Additional depreciation––asset restructuring(d):
|
||||||||||||||||
Cost of sales
|
68 | 241 | 411 | 367 | ||||||||||||
Selling, informational and administrative expenses
|
39 | 27 | 69 | 190 | ||||||||||||
Research and development expenses
|
146 | 25 | 378 | 45 | ||||||||||||
Total additional depreciation––asset restructuring
|
253 | 293 | 858 | 602 | ||||||||||||
Implementation costs(e):
|
||||||||||||||||
Selling, informational and administrative expenses | 11 | –– | 11 | –– | ||||||||||||
Research and development expenses
|
8 | –– | 28 | –– | ||||||||||||
Total implementation costs
|
19 | –– | 39 | –– | ||||||||||||
Total costs associated with cost-reduction and productivity initiatives and
acquisition activity
|
$ | 1,373 | $ | 792 | $ | 3,371 | $ | 2,692 |
(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 October 2, 2011, Employee termination costs represent the expected reduction of the workforce by approximately 57,800 employees, mainly in manufacturing and sales and research, of which approximately 41,000 employees have been terminated as of October 2, 2011. Employee termination costs are generally recorded when the actions are probable and estimable and include accrued severance benefits, pension and postretirement benefits, many of which may be paid out during periods after termination. Asset impairments primarily include charges to write down property, plant and equipment to fair value. Other primarily includes costs to exit certain assets and activities.
|
|
●
|
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 ($65 million), Animal Health and Consumer Healthcare operating segment ($30 million), Nutrition operating segment ($2 million), research and development operations ($47 million income), manufacturing operations ($47 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), Animal Health and Consumer Healthcare operating segment ($44 million), Nutrition operating segment ($4 million), research and development operations ($426 million), manufacturing operations ($203 million) and Corporate ($288 million).
|
|
●
|
For the three months ended October 3, 2010, Primary Care operating segment ($14 million), Specialty Care and Oncology operating segment ($53 million), Established Products and Emerging Markets operating segment ($14 million), Nutrition operating segment ($1 million), research and development operations ($17 million), manufacturing operations ($161 million) and Corporate ($8 million).
|
|
●
|
For the nine months ended October 3, 2010, Primary Care operating segment ($1 million), Specialty Care and Oncology operating segment ($99 million), Established Products and Emerging Markets operating segment ($23 million), Animal Health and Consumer Healthcare operating segment ($33 million), Nutrition operating segment ($12 million income), research and development operations ($239 million), manufacturing operations ($970 million) and Corporate ($74 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.
|
Costs Incurred
|
Activity
|
Accrual
|
||||||||||
(millions of dollars)
|
2005-2011 |
Through
Oct. 2,
2011(a)
|
As of
Oct. 2,
2011(b)
|
|||||||||
Employee termination costs
|
$ | 10,437 | $ | 7,720 | $ | 2,717 | ||||||
Asset impairments
|
2,465 | 2,465 | –– | |||||||||
Other
|
996 | 889 | 107 | |||||||||
Total restructuring charges
|
$ | 13,898 | $ | 11,074 | $ | 2,824 |
(a)
|
Includes adjustments for foreign currency translation.
|
(b)
|
Included in Other current liabilities ($1.7 billion) and Other noncurrent liabilities ($1.1 billion).
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
(millions of dollars)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
Oct. 2,
2011
|
Oct. 3,
2010
|
||||||||||||
Interest income(a)
|
$ | (110 | ) | $ | (100 | ) | $ | (332 | ) | $ | (297 | ) | ||||
Interest expense(a)
|
423 | 427 | 1,285 | 1,338 | ||||||||||||
Net interest expense
|
313 | 327 | 953 | 1,041 | ||||||||||||
Royalty-related income
|
(135 | ) | (158 | ) | (447 | ) | (395 | ) | ||||||||
Net losses/(gains) on asset disposals
|
18 | (13 | ) | (8 | ) | (243 | ) | |||||||||
Certain legal matters, net(b)
|
132 | 712 | 619 | 886 | ||||||||||||
Certain asset impairment charges(c)
|
105 | 1,478 | 585 | 1,710 | ||||||||||||
Other, net
|
105 | 3 | 76 | 37 | ||||||||||||
Other deductions––net
|
$ | 538 | $ | 2,349 | $ | 1,778 | $ | 3,036 |
(a)
|
Interest income increased in both periods of 2011 primarily due to higher cash balances. Interest expense decreased in both periods of 2011 due to lower long- and short-term debt balances and the conversion of some fixed-rate liabilities to floating-rate liabilities.
|
(b)
|
In the first nine months of 2011, primarily relates to charges for hormone-replacement therapy litigation (see Note 14. Legal Proceedings and Contingencies). In both periods of 2010, primarily includes a charge for asbestos litigation related to our wholly owned subsidiary, Quigley Company, Inc. (See Note 14. Legal Proceedings and Contingencies).
|
(c)
|
Substantially all of these asset impairment charges are related to intangible assets, including in-process research and development (IPR&D) assets, that were acquired as part of our acquisition of Wyeth. The impairment charges are determined by comparing the estimated fair value of the assets as of the date of the impairment to their carrying values as of the same date. In the first nine months of 2011, we recorded impairment charges of $585 million, which included approximately $440 million of IPR&D assets, primarily related to two compounds for the treatment of certain autoimmune and inflammatory diseases, and approximately $145 million of Developed Technology Rights. These impairment charges reflect, among other things, the impact of new scientific findings and updated commercial forecasts. In the first nine months of 2010, we recorded impairment charges of $1.7 billion, which include (i) approximately $900 million of IPR&D assets, primarily Prevnar/Prevenar 13 Adult, a compound for the prevention of pneumococcal disease in adults age 50 and older, and Neratinib, a compound for the treatment of breast cancer; (ii) approximately $600 million of indefinite-lived Brands, related to Third Age, infant formulas for the first 12-36 months of age, and Robitussin, a cough suppressant; and (iii) approximately $200 million of Developed Technology Rights, primarily Protonix, a product that treats erosive gastroesophageal reflux disease. These impairment charges, most of which occurred in the third quarter of 2010, reflect, among other things, the following: for IPR&D assets, the impact of changes to the development programs, the projected development and regulatory timeframes and the risk associated with these assets; for Brand assets, the current competitive environment and planned investment support; and, for Developed Technology Rights, an increased competitive environment.
|
●
|
the extension of the U.S. research and development credit, which was signed into law on December 17, 2010;
|
●
|
the decrease and jurisdictional mix of certain impairment charges related to assets acquired in connection with the Wyeth acquisition; and
|
●
|
the change in the jurisdictional mix of earnings.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
(millions of dollars)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
Oct. 2,
2011
|
Oct. 3,
2010
|
||||||||||||
Net income before allocation to noncontrolling interests
|
$ | 3,749 | $ | 871 | $ | 8,601 | $ | 5,391 | ||||||||
Other comprehensive income/(loss):
|
||||||||||||||||
Currency translation adjustment and other
|
(68 | ) | 786 | 2,479 | (4,105 | ) | ||||||||||
Net unrealized (losses)/gains on derivative financial instruments
|
(230 | ) | (59 | ) | (354 | ) | (300 | ) | ||||||||
Net unrealized (losses)/gains on available-for-sale securities
|
(36 | ) | 26 | (48 | ) | (86 | ) | |||||||||
Benefit plan adjustments
|
72 | (45 | ) | 151 | 239 | |||||||||||
Total other comprehensive (loss)/income
|
(262 | ) | 708 | 2,228 | (4,252 | ) | ||||||||||
Total comprehensive income before allocation to noncontrolling interests
|
3,487 | 1,579 | 10,829 | 1,139 | ||||||||||||
Less: comprehensive income attributable to noncontrolling interests
|
7 | 5 | 35 | 23 | ||||||||||||
Comprehensive income attributable to Pfizer Inc.
|
$ | 3,480 | $ | 1,574 | $ | 10,794 | $ | 1,116 |
(millions of dollars)
|
Oct. 2,
2011
|
Dec. 31,
2010
|
||||||
Selected financial assets measured at fair value on a recurring basis(a) :
|
||||||||
Trading securities
|
$ | 148 | $ | 173 | ||||
Available-for-sale debt securities(b)
|
31,368 | 32,699 | ||||||
Available-for-sale money market funds
|
1,320 | 1,217 | ||||||
Available-for-sale equity securities, excluding money market funds(b)
|
317 | 230 | ||||||
Derivative financial instruments in receivable positions(c):
|
||||||||
Interest rate swaps
|
963 | 603 | ||||||
Foreign currency swaps
|
133 | 128 | ||||||
Foreign currency forward-exchange contracts
|
123 | 494 | ||||||
Total
|
34,372 | 35,544 | ||||||
Other selected financial assets(d):
|
||||||||
Held-to-maturity debt securities, carried at amortized cost(b)
|
1,204 | 1,178 | ||||||
Private equity securities, carried at cost or equity method
|
1,016 | 1,134 | ||||||
Short-term loans, carried at cost
|
184 | 467 | ||||||
Long-term loans, carried at cost
|
383 | 299 | ||||||
Total
|
2,787 | 3,078 | ||||||
Total selected financial assets(e)
|
$ | 37,159 | $ | 38,622 | ||||
Selected financial liabilities measured at fair value on a recurring basis(a):
|
||||||||
Derivative financial instruments in a liability position(f):
|
||||||||
Foreign currency swaps
|
$ | 1,671 | $ | 623 | ||||
Foreign currency forward-exchange contracts
|
426 | 257 | ||||||
Interest rate swaps
|
15 | 4 | ||||||
Total
|
2,112 | 884 | ||||||
Other selected financial liabilities:
|
||||||||
Short-term borrowings, carried at historical proceeds, as adjusted(d)
|
5,637 | 5,603 | ||||||
Long-term debt, carried at historical proceeds, as adjusted(g), (h)
|
35,399 | 38,410 | ||||||
Total
|
41,036 | 44,013 | ||||||
Total selected financial liabilities
|
$ | 43,148 | $ | 44,897 |
(a)
|
Fair values are determined based on valuation techniques categorized as follows: Level 1 means the use of quoted prices for identical instruments in active markets; Level 2 means the use of quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active or are directly or indirectly observable; Level 3 means the use of unobservable inputs. 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 that included in available-for-sale equity securities, excluding money market funds, are $84 million as of October 2, 2011 and $105 million as of December 31, 2010 of investments that use Level 1 inputs in the calculation of fair value and $26 million that use Level 3 inputs as of October 2, 2011.
|
(b)
|
Gross unrealized gains and losses are not significant.
|
(c)
|
Designated as hedging instruments, except for certain foreign currency contracts used as offsets; namely, foreign currency forward-exchange contracts with fair values of $68 million and foreign currency swaps with fair values of $27 million at October 2, 2011; and foreign currency forward-exchange contracts with fair values of $326 million and foreign currency swaps with fair values of $17 million at December 31, 2010.
|
(d)
|
The differences between the estimated fair values and carrying values of our financial assets and liabilities not measured at fair value on a recurring basis were not significant at October 2, 2011 or December 31, 2010.
|
(e)
|
The decrease in selected financial assets is primarily due to redemptions of investments, the proceeds from which were used to fund our acquisition of King (see Note 3. Acquisition of King Pharmaceuticals, Inc.)
|
(f)
|
Designated as hedging instruments, except for certain foreign currency contracts used as offsets; namely, foreign currency forward-exchange contracts with fair values of $113 million and foreign currency swaps with fair values of $82 million at October 2, 2011; and foreign currency forward-exchange contracts with fair values of $186 million and foreign currency swaps with fair values of $93 million at December 31, 2010.
|
(g)
|
Includes foreign currency debt with fair values of $919 million at October 2, 2011 and $880 million at December 31, 2010, which are used to hedge the exposure of certain foreign currency denominated net investments.
|
(h)
|
The fair value of our long-term debt is $40.1 billion at October 2, 2011 and $42.3 billion at December 31, 2010.
|
(millions of dollars)
|
Oct. 2,
2011
|
Dec. 31,
2010
|
||||||
Assets
|
||||||||
Cash and cash equivalents
|
$ | 1,031 | $ | 906 | ||||
Short-term investments
|
25,257 | 26,277 | ||||||
Short-term loans
|
184 | 467 | ||||||
Long-term investments and loans
|
9,468 | 9,747 | ||||||
Taxes and other current assets(a)
|
232 | 515 | ||||||
Taxes and other noncurrent assets(b)
|
987 | 710 | ||||||
Total selected financial assets
|
$ | 37,159 | $ | 38,622 | ||||
Liabilities
|
||||||||
Short-term borrowings, including current portion of long-term debt
|
$ | 5,637 | $ | 5,603 | ||||
Other current liabilities(c)
|
701 | 339 | ||||||
Long-term debt
|
35,399 | 38,410 | ||||||
Other noncurrent liabilities(d)
|
1,411 | 545 | ||||||
Total selected financial liabilities
|
$ | 43,148 | $ | 44,897 |
(a)
|
At October 2, 2011, derivative instruments at fair value include foreign currency forward-exchange contracts ($123 million), foreign currency swaps ($88 million) and interest rate swaps ($21 million) and at December 31, 2010, include foreign currency forward-exchange contracts ($494 million) and foreign currency swaps ($21 million).
|
(b)
|
At October 2, 2011, derivative instruments at fair value include interest rate swaps ($942 million) and foreign currency swaps ($45 million) and at December 31, 2010, include interest rate swaps ($603 million) and foreign currency swaps ($107 million).
|
(c)
|
At October 2, 2011, derivative instruments at fair value include foreign currency forward-exchange contracts ($426 million) and foreign currency swaps ($275 million) and at December 31, 2010, include foreign currency forward-exchange contracts ($257 million), foreign currency swaps ($79 million) and interest rate swaps ($3 million).
|
(d)
|
At October 2, 2011, derivative instruments at fair value include foreign currency swaps ($1.4 billion) and interest rate swaps ($15 million) and at December 31, 2010, include foreign currency swaps ($544 million) and interest rate swaps ($1 million).
|
Years
|
||||||||||||||||
(millions of dollars)
|
Within 1
|
Over 1
to 5
|
Over 10
|
Total at
Oct. 2,
2011
|
||||||||||||
Available-for-sale debt securities:
|
||||||||||||||||
Western European, U.S., Scandinavian and other government debt
|
$ | 15,215 | $ | 1,361 | $ | –– | $ | 16,576 | ||||||||
Corporate debt
|
1,675 | 2,495 | –– | 4,170 | ||||||||||||
Western European, Scandinavian and other government agency debt
|
3,661 | 253 | –– | 3,914 | ||||||||||||
Federal Home Loan Mortgage Corporation and Federal National Mortgage
Association asset-backed securities
|
–– | 2,240 | –– | 2,240 | ||||||||||||
Supranational debt
|
2,338 | 514 | 2,852 | |||||||||||||
Reverse repurchase agreements
|
783 | –– | –– | 783 | ||||||||||||
U.S. government Federal Deposit Insurance Corporation
guaranteed debt
|
623 | 13 | 16 | 652 | ||||||||||||
Other asset-backed securities
|
2 | 74 | 10 | 86 | ||||||||||||
Certificates of deposit
|
95 | –– | –– | 95 | ||||||||||||
Held-to-maturity debt securities:
|
||||||||||||||||
Certificates of deposit and other
|
1,198 | 6 | –– | 1,204 | ||||||||||||
Total debt securities
|
$ | 25,590 | $ | 6,956 | $ | 26 | $ | 32,572 |
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)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
Oct. 2,
2011
|
Oct. 3,
2010
|
Oct. 2,
2011
|
Oct. 3,
2010
|
||||||||||||||||||
Three Months Ended:
|
||||||||||||||||||||||||
Derivative Financial Instruments in Fair Value
Hedge Relationships(b)
|
||||||||||||||||||||||||
Interest rate swaps
|
$ | –– | $ | –– | $ | –– | $ | –– | $ | –– | $ | –– | ||||||||||||
Foreign currency swaps
|
(1 | ) | (1 | ) | –– | –– | –– | –– | ||||||||||||||||
Derivative Financial Instruments in Cash Flow
Hedge Relationships
|
||||||||||||||||||||||||
Foreign currency swaps
|
$ | –– | $ | –– | $ | (1,047 | ) | $ | 656 | $ | (654 | ) | $ | 815 | ||||||||||
Foreign currency forward-exchange contracts
|
–– | –– | 1 | (1 | ) | 1 | –– | |||||||||||||||||
Derivative Financial Instruments in Net
Investment Hedge Relationships
|
||||||||||||||||||||||||
Foreign currency swaps
|
$ | (1 | ) | $ | 1 | $ | (118 | ) | $ | (39 | ) | $ | –– | $ | –– | |||||||||
Derivative Financial Instruments Not
Designated as Hedges
|
||||||||||||||||||||||||
Foreign currency swaps
|
$ | 29 | $ | 6 | $ | –– | $ | –– | $ | –– | $ | –– | ||||||||||||
Foreign currency forward-exchange contracts
|
(75 | ) | 419 | –– | –– | –– | –– | |||||||||||||||||
Non-Derivative Financial Instruments in Net
Investment Hedge Relationships
|
||||||||||||||||||||||||
Foreign currency short-term borrowings
|
$ | –– | $ | –– | $ | –– | $ | (96 | ) | $ | –– | $ | –– | |||||||||||
Foreign currency long-term debt
|
–– | –– | (42 | ) | (38 | ) | –– | –– | ||||||||||||||||
Total
|
$ | (48 | ) | $ | 425 | $ | (1,206 | ) | $ | 482 | $ | (653 | ) | $ | 815 | |||||||||
Nine Months Ended:
|
||||||||||||||||||||||||
Derivative Financial Instruments in Fair Value
Hedge Relationships(b)
|
||||||||||||||||||||||||
Interest rate swaps
|
$ | –– | $ | –– | $ | –– | $ | –– | $ | –– | $ | –– | ||||||||||||
Foreign currency swaps
|
(1 | ) | (1 | ) | –– | –– | –– | –– | ||||||||||||||||
Derivative Financial Instruments in Cash Flow
Hedge Relationships
|
||||||||||||||||||||||||
Foreign currency swaps
|
$ | –– | $ | –– | $ | (516 | ) | $ | (1,000 | ) | $ | 76 | $ | (440 | ) | |||||||||
Foreign currency forward-exchange contracts
|
–– | –– | 4 | (2 | ) | 5 | 2 | |||||||||||||||||
Derivative Financial Instruments in Net
Investment Hedge Relationships
|
||||||||||||||||||||||||
Foreign currency swaps
|
$ | 14 | $ | –– | $ | (1,076 | ) | $ | (78 | ) | $ | –– | $ | –– | ||||||||||
Derivative Financial Instruments Not
Designated as Hedges
|
||||||||||||||||||||||||
Foreign currency swaps
|
$ | 72 | $ | 6 | $ | –– | $ | –– | $ | –– | $ | –– | ||||||||||||
Foreign currency forward-exchange contracts
|
(392 | ) | (943 | ) | –– | –– | –– | –– | ||||||||||||||||
Non-Derivative Financial Instruments in Net
Investment Hedge Relationships
|
||||||||||||||||||||||||
Foreign currency short-term borrowings
|
$ | –– | $ | –– | $ | 940 | $ | (195 | ) | $ | –– | $ | –– | |||||||||||
Foreign currency long-term debt
|
–– | –– | (47 | ) | (72 | ) | –– | –– | ||||||||||||||||
Total
|
$ | (307 | ) | $ | (938 | ) | $ | (695 | ) | $ | (1,347 | ) | $ | 81 | $ | (438 | ) |
(a)
|
OID = Other (income)/deductions—net, included in the income statement account, Other deductions—net. OCI = Other comprehensive income/(loss), included in the balance sheet account Accumulated other comprehensive loss.
|
(b)
|
Also includes gains and losses attributable to the hedged risk in fair value hedge relationships.
|
(c)
|
There was no significant ineffectiveness in the third quarter and first nine months of 2011 or 2010.
|
(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)––Net unrealized (losses)/gains 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)––Currency translation adjustment and other.
|
(millions of dollars)
|
Oct. 2,
2011
|
Dec. 31,
2010
|
||||||
Finished goods
|
$ | 3,975 | $ | 3,665 | ||||
Work-in-process
|
3,577 | 3,727 | ||||||
Raw materials and supplies
|
874 | 883 | ||||||
Total inventories(a)
|
$ | 8,426 | $ | 8,275 |
(a)
|
Certain amounts of inventories are in excess of one year’s supply. There are no recoverability issues associated with these amounts.
|
(millions of dollars)
|
Primary Care | Specialty Care and Oncology | Established Products and Emerging Markets | Animal Health and Consumer Healthcare | Nutrition | To be
allocated(a)
|
Total | |||||||||||||||||||||
$ | $ | |||||||||||||||||||||||||||
Balance, December 31, 2010
|
$ | 2,449 | $ | 496 | $ | 40,983 | $ | 43,928 | ||||||||||||||||||||
Additions(b)
|
— | — | 825 | 825 | ||||||||||||||||||||||||
Other(c)
|
15 | 11 | 630 | 656 | ||||||||||||||||||||||||
Balance, October 2, 2011
|
$ | $ | 2,464 | $ | 507 | $ | 42,438 | $ | 45,409 |
(a)
|
The amount to be allocated includes the former Biopharmaceutical goodwill (see below), as well as newly acquired goodwill, substantially all from our acquisition of King, for which the allocation to reporting units is pending (see Note 3. Acquisition of King Pharmaceuticals, Inc. for additional information).
|
(b)
|
Substantially all of the amount relates to our acquisition of King and is subject to change until we complete the recording of the assets acquired and liabilities assumed from King (see Note 3. Acquisition of King Pharmaceuticals, Inc.). The allocation of King goodwill among our reporting units has not yet been completed, but will be completed within one year of the acquisition date.
|
(c)
|
Primarily reflects the impact of foreign exchange.
|
Oct. 2, 2011
|
December 31, 2010
|
|||||||||||||||||||||||
(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
|
$ | 71,288 | $ | (30,932 | ) | $ | 40,356 | $ | 68,432 | $ | (26,223 | ) | $ | 42,209 | ||||||||||
Brands
|
1,693 | (569 | ) | 1,124 | 1,626 | (607 | ) | 1,019 | ||||||||||||||||
License agreements
|
589 | (284 | ) | 305 | 637 | (248 | ) | 389 | ||||||||||||||||
Trademarks and other
|
558 | (441 | ) | 117 | 533 | (324 | ) | 209 | ||||||||||||||||
Total amortized finite-lived intangible assets
|
74,128 | (32,226 | ) | 41,902 | 71,228 | (27,402 | ) | 43,826 | ||||||||||||||||
Indefinite-lived intangible assets:
|
||||||||||||||||||||||||
Brands
|
10,291 | — | 10,291 | 10,219 | — | 10,219 | ||||||||||||||||||
In-process research and development
|
3,332 | — | 3,332 | 3,438 | — | 3,438 | ||||||||||||||||||
Trademarks
|
72 | — | 72 | 72 | — | 72 | ||||||||||||||||||
Total indefinite-lived intangible assets
|
13,695 | — | 13,695 | 13,729 | — | 13,729 | ||||||||||||||||||
Total identifiable intangible assets(a)
|
$ | 87,823 | $ | (32,226 | ) | $ | 55,597 | $ | 84,957 | $ | (27,402 | ) | $ | 57,555 |
(a)
|
The decrease is primarily related to amortization as well as impairment charges (see Note 6. Other (Income)/Deductions—Net), partially offset by the assets acquired as part of the acquisition of King (see Note 3. Acquisition of King Pharmaceuticals, Inc.) and the impact of foreign exchange.
|
●
|
Developed Technology Rights: Specialty Care (62%); Established Products (18%); Primary Care (16%); Animal Health (2%); Oncology (1%); and Nutrition (1%)
|
●
|
Finite-Lived Brands: Consumer Healthcare (57%); Established Products (29%); and Animal Health (14%)
|
●
|
Indefinite-Lived Brands: Consumer Healthcare (50%); Established Products (28%); and Nutrition (22%)
|
●
|
IPR&D: Specialty Care (75%); Worldwide Research and Development (13%); Primary Care (6%); Established Products (3%); Oncology (2%); and Animal Health (1%)
|
Pension Plans
|
||||||||||||||||||||||||||||||||
U.S. Qualified(a)
|
U.S. Supplemental
(Non-Qualified)(b)
|
International(c)
|
Postretirement
Plans(d)
|
|||||||||||||||||||||||||||||
(millions of dollars)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
Oct. 2,
2011
|
Oct. 3,
2010
|
Oct. 2,
2011
|
Oct. 3,
2010
|
Oct. 2,
2011
|
Oct. 3,
2010
|
||||||||||||||||||||||||
Three Months Ended:
|
||||||||||||||||||||||||||||||||
Service cost
|
$ | 87 | $ | 83 | $ | 9 | $ | 7 | $ | 63 | $ | 55 | $ | 17 | $ | 18 | ||||||||||||||||
Interest cost
|
181 | 183 | 17 | 19 | 115 | 103 | 49 | 52 | ||||||||||||||||||||||||
Expected return on plan assets
|
(216 | ) | (193 | ) | –– | –– | (115 | ) | (105 | ) | (9 | ) | (7 | ) | ||||||||||||||||||
Amortization of:
|
||||||||||||||||||||||||||||||||
Actuarial losses
|
33 | 38 | 9 | 7 | 23 | 17 | 4 | 7 | ||||||||||||||||||||||||
Prior service (credits)/costs
|
(2 | ) | –– | (1 | ) | (1 | ) | (2 | ) | (1 | ) | (13 | ) | (15 | ) | |||||||||||||||||
Curtailments and settlements––net
|
20 | (3 | ) | 3 | 8 | 3 | –– | (14 | ) | (4 | ) | |||||||||||||||||||||
Special termination benefits
|
7 | 7 | 5 | 3 | 1 | 1 | 1 | 1 | ||||||||||||||||||||||||
Net periodic benefit costs
|
$ | 110 | $ | 115 | $ | 42 | $ | 43 | $ | 88 | $ | 70 | $ | 35 | $ | 52 | ||||||||||||||||
Nine Months Ended:
|
||||||||||||||||||||||||||||||||
Service cost
|
$ | 266 | $ | 266 | $ | 28 | $ | 22 | $ | 190 | $ | 172 | $ | 52 | $ | 61 | ||||||||||||||||
Interest cost
|
550 | 562 | 54 | 59 | 340 | 319 | 146 | 160 | ||||||||||||||||||||||||
Expected return on plan assets
|
(657 | ) | (595 | ) | –– | –– | (336 | ) | (324 | ) | (26 | ) | (23 | ) | ||||||||||||||||||
Amortization of:
|
||||||||||||||||||||||||||||||||
Actuarial losses
|
103 | 114 | 27 | 22 | 66 | 50 | 12 | 7 | ||||||||||||||||||||||||
Prior service (credits)/costs
|
(6 | ) | 1 | (2 | ) | (2 | ) | (4 | ) | (3 | ) | (40 | ) | (24 | ) | |||||||||||||||||
Curtailments and settlements––net
|
71 | (72 | ) | 21 | (1 | ) | 7 | (5 | ) | (40 | ) | (6 | ) | |||||||||||||||||||
Special termination benefits
|
17 | 57 | 18 | 155 | 4 | 4 | 2 | 13 | ||||||||||||||||||||||||
Net periodic benefit costs
|
$ | 344 | $ | 333 | $ | 146 | $ | 255 | $ | 267 | $ | 213 | $ | 106 | $ | 188 |
(a)
|
The increase in net periodic benefit costs in the first nine months of 2011, compared to the first nine months of 2010, for our U.S. qualified plans was primarily driven by higher settlement charges and lower curtailment gains associated with restructuring initiatives partially offset by higher expected return on plan assets and special termination benefits recognized in the prior-year period for certain executives as part of restructuring initiatives.
|
(b)
|
The decrease in net periodic benefit costs in the first nine months of 2011, compared to the first nine months of 2010, for our U.S. supplemental (non-qualified) pension plans was primarily driven by special termination benefits recognized in the prior-year period for certain executives as part of restructuring initiatives.
|
(c)
|
The increase in net periodic benefit costs in the first nine months of 2011, compared to the first nine months of 2010, for our international pension plans was primarily driven by the decrease in the discount rate partially offset by higher expected return on plan assets.
|
(d)
|
The decrease in net periodic benefit costs in the first nine months of 2011, compared to the first nine months of 2010, for our postretirement plans was primarily driven by the harmonization of the postretirement plans and by higher curtailment gains and lower settlement charges associated with restructuring initiatives.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
(in millions)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
Oct. 2,
2011
|
Oct. 3,
2010
|
||||||||||||
EPS Numerator––Basic:
|
||||||||||||||||
Income from continuing operations
|
$ | 2,434 | $ | 856 | $ | 7,246 | $ | 5,324 | ||||||||
Less: net income attributable to noncontrolling interests
|
11 | 5 | 31 | 24 | ||||||||||||
Income from continuing operations attributable to Pfizer Inc.
|
2,423 | 851 | 7,215 | 5,300 | ||||||||||||
Less: preferred stock dividends––net of tax
|
–– | 1 | 1 | 2 | ||||||||||||
Income from continuing operations attributable to Pfizer Inc.
common shareholders
|
2,423 | 850 | 7,214 | 5,298 | ||||||||||||
Discontinued operations––net of tax
|
1,315 | 15 | 1,355 | 67 | ||||||||||||
Net income attributable to Pfizer Inc. common shareholders
|
$ | 3,738 | $ | 865 | $ | 8,569 | $ | 5,365 | ||||||||
EPS Numerator––Diluted:
|
||||||||||||||||
Income from continuing operations attributable to Pfizer Inc. common
shareholders and assumed conversions
|
$ | 2,423 | $ | 851 | $ | 7,215 | $ | 5,300 | ||||||||
Discontinued operations––net of tax
|
1,315 | 15 | 1,355 | 67 | ||||||||||||
Net income attributable to Pfizer Inc. common shareholders and assumed
conversions
|
$ | 3,738 | $ | 866 | $ | 8,570 | $ | 5,367 | ||||||||
EPS Denominator:
|
||||||||||||||||
Weighted-average number of common shares outstanding––Basic
|
7,770 | 8,027 | 7,877 | 8,045 | ||||||||||||
Common-share equivalents: stock options, stock issuable under employee
compensation plans and convertible preferred stock
|
40 | 30 | 48 | 34 | ||||||||||||
Weighted-average number of common shares outstanding––Diluted
|
7,810 | 8,057 | 7,925 | 8,079 | ||||||||||||
Stock options that had exercise prices greater than the average market price
of our common stock issuable under employee compensation plans(a)
|
342 | 419 | 279 | 419 |
(a)
|
These common stock equivalents were outstanding during the three and nine months ended October 2, 2011 and October 3, 2010, 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 or processes. 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 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.
|
●
|
Guarantees and indemnifications, which generally arise in connection with the sale of assets and businesses and typically pertain to environmental, tax, employee and/or product-related matters and patent-infringement claims.
|
●
|
Actions in Which We Are the Plaintiff and Certain Related Actions
|
●
|
Action in Which We Are the Defendant and a Related Action
|
●
|
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
|
●
|
Other
|
●
|
Securities Action
|
●
|
Actions by Health Care Service Corporation
|
●
|
Government Inquiries; Action by State of Nevada
|
●
|
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 (PC)––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, diabetes, cardiovascular (excluding pulmonary arterial hypertension), erectile dysfunction, major depressive disorder, genitourinary, pain, respiratory and smoking cessation. Examples of products in this unit include Celebrex, Chantix/Champix, Lipitor, 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 (SC&O)––comprises the Specialty Care business unit and the Oncology business unit.
|
|
●
|
Specialty Care––includes revenues and earnings, as defined by management, from most 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, multiple sclerosis, ophthalmology, pulmonary arterial hypertension, specialty neuroscience and vaccines. Examples of products in this unit include BeneFIX, Enbrel, Genotropin, Geodon, the Prevnar/Prevenar franchise, Rebif, ReFacto, Revatio, Xalatan, Xyntha and Zyvox. All revenues and earnings for such products are allocated to the Specialty Care unit, except those generated in emerging markets and those that are managed by the Established Products unit.
|
|
●
|
Oncology––includes revenues and earnings, as defined by management, from human pharmaceutical products addressing oncology and oncology-related illnesses. Examples of products in this unit include Aromasin, Sutent, Torisel and Xalkori. 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 (EP&EM)––comprises the Established Products business unit and the Emerging Markets business unit.
|
|
●
|
Established Products––generally includes revenues and earnings, as defined by management, from most human 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 losing 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 losing 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 XR, Medrol, Norvasc, Protonix, Relpax and Zosyn/Tazocin.
|
|
●
|
Emerging Markets––includes revenues and earnings, as defined by management, from all human pharmaceutical products sold in emerging markets, including, but not limited to, Asia (excluding Japan and South Korea), Latin America, Middle East, Africa, Central and Eastern Europe and Turkey.
|
●
|
Animal Health and Consumer Healthcare operating segment (AH&CH)—comprises the Animal Health business unit and the Consumer Healthcare business unit.
|
|
●
|
Animal Health––includes worldwide revenues and earnings, as defined by management, from products and services to prevent and treat disease in livestock and companion animals, including vaccines, paraciticides and anti-infectives.
|
|
●
|
Consumer Healthcare––generally includes worldwide revenues and earnings, as defined by management, from non-prescription medicines and vitamins, including products in the following therapeutic categories: GI-topicals, nutritionals, pain management and respiratory. Examples of products in Consumer Healthcare are Advil, Caltrate, Centrum, ChapStick and Robitussin.
|
●
|
Nutrition operating segment––generally includes revenues and earnings, as defined by management, from a full line of infant and toddler nutritional products sold outside the U.S. and Canada.
|
●
|
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 platform services, which provide technical expertise and other services to the various research and development projects.
|
●
|
Pfizer Medical, which is responsible for all human-health-related regulatory submissions and interactions with regulatory agencies. This organization is also responsible for the collection, evaluation and reporting of all safety event information related to our human health products and for conducting clinical trial audits and readiness reviews and for providing Pfizer-related medical information to healthcare providers.
|
●
|
Corporate, which is responsible for platform functions such as finance, global real estate operations, human resources, legal, worldwide procurement, worldwide public affairs and policy and worldwide technology. These costs include payroll charges and associated operating expenses, as well as interest income and expense.
|
●
|
Certain transactions and events such as (1) purchase accounting adjustments, where we incur expenses associated with the amortization of fair value adjustments to inventory, intangible assets and property, plant and equipment; (2) acquisition-related activities, where we incur costs for restructuring, integration and executing the transaction; and (3) 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)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
Oct. 2,
2011
|
Oct. 3,
2010
|
Oct. 2,
2011
|
Oct. 3,
2010
|
||||||||||||||||||
Three Months Ended:
|
||||||||||||||||||||||||
Primary Care
|
$ | 5,948 | $ | 5,653 | $ | 285 | $ | 353 | $ | 4,156 | $ | 3,817 | ||||||||||||
Specialty Care and Oncology
|
4,131 | 4,052 | 400 | 388 | 2,678 | 2,730 | ||||||||||||||||||
Established Products and Emerging Markets
|
4,668 | 4,240 | 71 | 100 | 2,432 | 2,158 | ||||||||||||||||||
Animal Health and Consumer Healthcare
|
1,815 | 1,533 | 97 | 93 | 595 | 423 | ||||||||||||||||||
Total reportable segments
|
16,562 | 15,478 | 853 | 934 | 9,861 | 9,128 | ||||||||||||||||||
Nutrition and other business activities(b)
|
631 | 517 | 844 | 861 | (697 | ) | (749 | ) | ||||||||||||||||
Reconciling Items:
|
||||||||||||||||||||||||
Corporate(c)
|
–– | –– | 337 | 360 | (1,866 | ) | (1,893 | ) | ||||||||||||||||
Purchase accounting adjustments(d)
|
–– | –– | –– | 8 | (1,711 | ) | (1,625 | ) | ||||||||||||||||
Acquisition-related costs(e)
|
–– | –– | 5 | 25 | (301 | ) | (792 | ) | ||||||||||||||||
Certain significant items(f)
|
–– | –– | 149 | –– | (1,310 | ) | (2,413 | ) | ||||||||||||||||
Other unallocated(g)
|
–– | –– | –– | –– | (307 | ) | (242 | ) | ||||||||||||||||
$ | 17,193 | $ | 15,995 | $ | 2,188 | $ | 2,188 | $ | 3,669 | $ | 1,414 | |||||||||||||
Nine Months Ended:
|
||||||||||||||||||||||||
Primary Care
|
$ | 17,259 | $ | 17,442 | $ | 912 | $ | 1,128 | $ | 11,513 | $ | 11,954 | ||||||||||||
Specialty Care and Oncology
|
12,407 | 12,054 | 1,122 | 1,129 | 8,137 | 8,120 | ||||||||||||||||||
Established Products and Emerging Markets
|
13,945 | 13,976 | 206 | 197 | 7,397 | 8,074 | ||||||||||||||||||
Animal Health and Consumer Healthcare
|
5,318 | 4,613 | 304 | 296 | 1,598 | 1,302 | ||||||||||||||||||
Total reportable segments
|
48,929 | 48,085 | 2,544 | 2,750 | 28,645 | 29,450 | ||||||||||||||||||
Nutrition and other business activities(b)
|
1,750 | 1,618 | 2,568 | 2,630 | (2,178 | ) | (2,270 | ) | ||||||||||||||||
Reconciling Items:
|
||||||||||||||||||||||||
Corporate(c)
|
–– | –– | 998 | 1,142 | (5,553 | ) | (5,911 | ) | ||||||||||||||||
Purchase accounting adjustments(d)
|
–– | –– | –– | 23 | (5,232 | ) | (6,564 | ) | ||||||||||||||||
Acquisition-related costs(e)
|
–– | –– | 9 | 45 | (1,471 | ) | (2,692 | ) | ||||||||||||||||
Certain significant items(f)
|
–– | –– | 397 | –– | (3,176 | ) | (2,691 | ) | ||||||||||||||||
Other unallocated(g)
|
–– | –– | –– | –– | (566 | ) | (833 | ) | ||||||||||||||||
$ | 50,679 | $ | 49,703 | $ | 6,516 | $ | 6,590 | $ | 10,469 | $ | 8,489 |
(a)
|
Income from continuing operations before provision for taxes on income.
|
(b)
|
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.
|
(c)
|
Corporate for R&D expenses includes, among other things, administration expenses and share-based compensation expenses associated with our research and development activities and for Earnings includes, among other things, administration expenses, interest income/(expense), certain performance-based and all share-based compensation expenses.
|
(d)
|
Purchase accounting adjustments include charges related to the fair value adjustments to inventory, intangible assets and property, plant and equipment.
|
(e)
|
Acquisition-related costs can include costs associated with acquiring businesses and integrating and restructuring acquired businesses, such as transaction costs, integration costs, restructuring charges and additional depreciation associated with asset restructuring (see Note 5. Costs Associated with Cost-Reduction and Productivity Initiatives and Acquisition Activity for additional information).
|
(f)
|
Certain significant items are substantive, unusual items that, either as a result of their nature or size, we would not expect 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.
|
|
For the third quarter of 2011, certain significant items for R&D expenses includes implementation costs and additional depreciation - asset restructuring associated with our cost-reduction and productivity initiatives that are not associated with an acquistion, and for Earnings includes (i) restructuring charges and implementation costs of $1.1 billion associated with our cost-reduction and productivity initiatives that are not associated with an acquisition, (ii) charges for certain legal matters of $132 million and (iii) certain asset impairment charges of $105 million (see Note 5. Costs Associated with Cost-Reduction and Productivity Initiatives and Acquisition Activity and Note 6. Other (Income)/Deductions––Net for additional information).
|
|
For the third quarter of 2010, certain significant items for Earnings includes (i) asset impairment charges of $1.5 billion (ii) charges for certain legal matters of $701 million and (iii) Wyeth-related inventory write-off of $212 million (which included a purchase accounting fair value adjustment of $104 million), primarily related to biopharmaceutical inventory.
|
|
For the first nine months of 2011, certain significant items for R&D expenses includes implementation costs and additional depreciation - asset restructuring associated with our cost-reduction and productivity initiatives that are not associated with an acquisition, and for Earnings includes (i) restructuring charges and implementation costs of $1.9 billion associated with our cost-reduction and productivity initiatives that are not associated with an acquisition, (ii) charges for certain legal matters of $657 million and (iii) certain asset impairment charges of $582 million (see Note 5. Costs Associated with Cost-Reduction and Productivity Initiatives and Acquisition Activity and Note 6. Other (Income)/Deductions––Net for additional information).
|
|
For the first nine months of 2010, certain significant items for Earnings includes (i) asset impairment charges of $1.7 billion, (ii) charges for certain legal matters of $843 million and (iii) Wyeth-related inventory write-off of $212 million (which included a purchase accounting fair value adjustment of $104 million), primarily related to biopharmaceutical inventory.
|
(g)
|
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)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
Oct. 2,
2011
|
Oct. 3,
2010
|
||||||||||||
Revenues from biopharmaceutical products:
|
||||||||||||||||
Lipitor
|
$ | 2,602 | $ | 2,534 | $ | 7,578 | $ | 8,104 | ||||||||
Prevnar/Prevenar 13
|
1,006 | 735 | 2,823 | 1,590 | ||||||||||||
Enbrel(a)
|
957 | 799 | 2,741 | 2,409 | ||||||||||||
Lyrica
|
961 | 757 | 2,695 | 2,242 | ||||||||||||
Celebrex
|
643 | 578 | 1,856 | 1,752 | ||||||||||||
Viagra
|
493 | 459 | 1,458 | 1,429 | ||||||||||||
Norvasc
|
350 | 330 | 1,081 | 1,120 | ||||||||||||
Zyvox
|
321 | 285 | 965 | 876 | ||||||||||||
Xalatan/Xalacom
|
277 | 416 | 960 | 1,287 | ||||||||||||
Sutent
|
298 | 257 | 870 | 771 | ||||||||||||
Premarin family
|
267 | 263 | 757 | 779 | ||||||||||||
Geodon/Zeldox
|
263 | 262 | 753 | 763 | ||||||||||||
Detrol/Detrol LA
|
213 | 237 | 668 | 758 | ||||||||||||
Genotropin
|
215 | 211 | 654 | 650 | ||||||||||||
Vfend
|
171 | 200 | 558 | 595 | ||||||||||||
Chantix/Champix
|
156 | 163 | 545 | 522 | ||||||||||||
Effexor XR
|
165 | 175 | 537 | 1,512 | ||||||||||||
BeneFIX
|
178 | 156 | 518 | 474 | ||||||||||||
Zosyn/Tazocin
|
149 | 255 | 490 | 749 | ||||||||||||
Caduet
|
150 | 127 | 435 | 388 | ||||||||||||
Pristiq
|
146 | 118 | 422 | 341 | ||||||||||||
Zoloft
|
139 | 126 | 420 | 390 | ||||||||||||
Prevnar/Prevenar (7-valent)
|
98 | 179 | 406 | 1,030 | ||||||||||||
Revatio
|
140 | 116 | 393 | 352 | ||||||||||||
Medrol
|
127 | 119 | 383 | 341 | ||||||||||||
ReFacto AF/Xyntha
|
140 | 102 | 380 | 290 | ||||||||||||
Zithromax/Zmax
|
93 | 90 | 335 | 303 | ||||||||||||
Aricept(b)
|
117 | 106 | 335 | 337 | ||||||||||||
Aromasin
|
85 | 111 | 294 | 361 | ||||||||||||
Cardura
|
92 | 95 | 289 | 312 | ||||||||||||
Rapamune
|
96 | 104 | 285 | 292 | ||||||||||||
Fragmin
|
95 | 84 | 283 | 258 | ||||||||||||
BMP2
|
83 | 101 | 277 | 298 | ||||||||||||
Relpax
|
86 | 75 | 250 | 239 | ||||||||||||
Xanax XR
|
77 | 72 | 232 | 224 | ||||||||||||
Tygacil
|
76 | 78 | 224 | 250 | ||||||||||||
Neurontin
|
67 | 80 | 222 | 238 | ||||||||||||
Diflucan
|
72 | 74 | 201 | 205 | ||||||||||||
Arthrotec
|
61 | 61 | 182 | 185 | ||||||||||||
Unasyn
|
58 | 61 | 172 | 182 | ||||||||||||
Protonix
|
65 | 203 | 168 | 535 | ||||||||||||
EpiPen(c)
|
59 | - | 160 | - | ||||||||||||
Sulperazon
|
51 | 49 | 155 | 153 | ||||||||||||
Skelaxin(c)
|
58 | - | 145 | - | ||||||||||||
Inspra
|
51 | 37 | 142 | 113 | ||||||||||||
Dalacin/Cleocin
|
51 | 54 | 139 | 168 | ||||||||||||
Alliance revenues(d)
|
919 | 1,042 | 2,678 | 3,107 | ||||||||||||
All other biopharmaceutical products
|
1,710 | 1,409 | 5,097 | 4,198 | ||||||||||||
Total revenues from biopharmaceutical products
|
14,747 | 13,945 | 43,611 | 43,472 | ||||||||||||
Revenues from other products:
|
||||||||||||||||
Animal Health
|
1,041 | 860 | 3,078 | 2,599 | ||||||||||||
Consumer Healthcare
|
774 | 673 | 2,240 | 2,014 | ||||||||||||
Nutrition
|
577 | 441 | 1,540 | 1,375 | ||||||||||||
Pfizer CentreSource
|
54 | 76 | 210 | 243 | ||||||||||||
Total revenues
|
$ | 17,193 | $ | 15,995 | $ | 50,679 | $ | 49,703 |
(a)
|
Outside the U.S. and Canada.
|
(b)
|
Represents direct sales under license agreement with Eisai Co., Ltd.
|
(c)
|
Legacy King product. King’s results are included in our financial statements commencing from the acquisition date of January 31, 2011, in accordance with Pfizer’s domestic and international year-ends. Therefore, our results for both periods in 2010 do not include King’s results of operations.
|
(d)
|
Enbrel (in the U.S. and Canada), Aricept, Exforge, Rebif and Spiriva.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||||||||
(millions of dollars)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
% Change
|
Oct. 2,
2011
|
Oct. 3,
2010
|
% Change
|
||||||||||||||||||
Revenues
|
||||||||||||||||||||||||
United States
|
$ | 6,879 | $ | 7,063 | (3 | ) | $ | 20,603 | $ | 21,661 | (5 | ) | ||||||||||||
Developed Europe(a)
|
4,074 | 3,762 | 8 | 12,223 | 12,079 | 1 | ||||||||||||||||||
Developed Rest of World(b)
|
2,840 | 2,349 | 21 | 8,059 | 7,344 | 10 | ||||||||||||||||||
Emerging Markets(c)
|
3,400 | 2,821 | 21 | 9,794 | 8,619 | 14 | ||||||||||||||||||
Total Revenues
|
$ | 17,193 | $ | 15,995 | 7 | $ | 50,679 | $ | 49,703 | 2 |
(a)
|
Developed Europe region includes the following markets: Western Europe and the Scandinavian countries.
|
(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.
|
●
|
Overview of Our Performance, Operating Environment and Outlook. This section, beginning on page 43, provides information about the following: our business; our performance during the third quarter and first nine months of 2011; our operating environment; our business development initiatives; our financial guidance for 2011; and our financial targets for 2012.
|
●
|
Analysis of Our Condensed Consolidated Statements of Income. This section begins on page 50, and consists of the following sub-sections:
|
|
o
|
Revenues. This sub-section, beginning on page 50, provides an analysis of our products and revenues for the third quarter and first nine months of 2011 and 2010, as well as an overview of research and development expenses and important biopharmaceutical product developments.
|
|
o
|
Costs and Expenses. This sub-section, beginning on page 65, provides a discussion about our costs and expenses.
|
|
o
|
Provision for Taxes on Income. This sub-section, on page 68, provides a discussion of items impacting our tax provision for the periods presented.
|
|
o
|
Discontinued Operations. This sub-section, beginning on page 69, provides an analysis of the financial statement impact of our discontinued operations during the periods presented.
|
|
o
|
Adjusted Income. This sub-section, beginning on page 69, provides a discussion of an alternative view of performance used by management.
|
●
|
Analysis of Our Condensed Consolidated Balance Sheets. This section, on page 73, provides a discussion of changes in certain balance sheet accounts.
|
●
|
Analysis of Our Condensed Consolidated Statements of Cash Flows. This section, beginning on page 73, provides an analysis of our cash flows for the first nine months of 2011 and 2010.
|
●
|
Financial Condition, Liquidity and Capital Resources. This section, beginning on page 74, provides an analysis of our financial assets and liabilities as of October 2, 2011 and December 31, 2010 and a discussion of our outstanding debt and commitments that existed as of October 2, 2011 and December 31, 2010. 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 76, discusses recently adopted and recently issued accounting standards.
|
●
|
Forward-Looking Information and Factors That May Affect Future Results. This section, beginning on page 77, 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, and share-repurchase and dividend-rate plans. Such forward-looking statements are inherently susceptible to uncertainty and changes in circumstances.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||||||||
(MILLIONS OF DOLLARS, EXCEPT PER COMMON SHARE DATA)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
% Incr./
(Decr.)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
% Incr./
(Decr.)
|
||||||||||||||||||
Revenues
|
$ | 17,193 | $ | 15,995 | 7 | % | $ | 50,679 | $ | 49,703 | 2 | % | ||||||||||||
|
||||||||||||||||||||||||
Cost of sales
|
3,679 | 3,790 | (3 | ) | 11,177 | 11,676 | (4 | ) | ||||||||||||||||
% of revenues
|
21.4 | % | 23.7 | % | 22.1 | % | 23.5 | % | ||||||||||||||||
|
||||||||||||||||||||||||
Selling, informational and administrative expenses
|
4,621 | 4,599 | — | 14,097 | 13,776 | 2 | ||||||||||||||||||
% of revenues
|
26.9 | % | 28.8 | % | 27.8 | % | 27.7 | % | ||||||||||||||||
|
||||||||||||||||||||||||
Research and development expenses
|
2,188 | 2,188 | — | 6,516 | 6,590 | (1 | ) | |||||||||||||||||
% of revenues
|
12.7 | % | 13.7 | % | 12.9 | % | 13.3 | % | ||||||||||||||||
|
||||||||||||||||||||||||
Amortization of intangible assets
|
1,397 | 1,156 | 21 | 4,168 | 3,972 | 5 | ||||||||||||||||||
% of revenues
|
8.1 | % | 7.2 | % | 8.2 | % | 8.0 | % | ||||||||||||||||
|
||||||||||||||||||||||||
Acquisition-related in-process research and development charges
|
–– | — | — | –– | 74 | (100 | ) | |||||||||||||||||
% of revenues
|
–– | % | — | % | –– | % | 0.1 | % | ||||||||||||||||
|
||||||||||||||||||||||||
Restructuring charges and certain acquisition-related costs
|
1,101 | 499 | 121 | 2,474 | 2,090 | 18 | ||||||||||||||||||
% of revenues
|
6.4 | % | 3.1 | % | 4.9 | % | 4.2 | % | ||||||||||||||||
|
||||||||||||||||||||||||
Other deductions––net
|
538 | 2,349 | (77 | ) | 1,778 | 3,036 | (41 | ) | ||||||||||||||||
|
||||||||||||||||||||||||
Income from continuing operations before provision for taxes on income
|
3,669 | 1,414 | 159 | 10,469 | 8,489 | 23 | ||||||||||||||||||
% of revenues
|
21.3 | % | 8.8 | % | 20.7 | % | 17.1 | % | ||||||||||||||||
|
||||||||||||||||||||||||
Provision for taxes on income
|
1,235 | 558 | 121 | 3,223 | 3,165 | 2 | ||||||||||||||||||
Effective tax rate
|
33.7 | % | 39.5 | % | 30.8 | % | 37.3 | % | ||||||||||||||||
Income from continuing operations
|
2,434 | 856 | 184 | 7,246 | 5,324 | 36 | ||||||||||||||||||
% of revenues
|
14.2 | % | 5.4 | % | 14.3 | % | 10.7 | % | ||||||||||||||||
|
||||||||||||||||||||||||
Discontinued operations––net of tax
|
1,315 | 15 | * | 1,355 | 67 | * | ||||||||||||||||||
|
||||||||||||||||||||||||
Net income before allocation to noncontrolling interests
|
3,749 | 871 | * | 8,601 | 5,391 | 60 | ||||||||||||||||||
% of revenues
|
21.8 | % | 5.4 | % | 17.0 | % | 10.8 | % | ||||||||||||||||
Less: net income attributable to noncontrolling interests
|
11 | 5 | 120 | 31 | 24 | 29 | ||||||||||||||||||
Net income attributable to Pfizer Inc.
|
$ | 3,738 | $ | 866 | * | $ | 8,570 | $ | 5,367 | 60 | ||||||||||||||
% of revenues
|
21.7 | % | 5.4 | % | 16.9 | % | 10.8 | % | ||||||||||||||||
Earnings per common share––basic: (a)
|
||||||||||||||||||||||||
Income from continuing operations attributable to Pfizer Inc. common shareholders
|
$ | 0.31 | $ | 0.11 | 182 | $ | 0.92 | $ | 0.66 | 39 | ||||||||||||||
Discontinued operations––net of tax
|
0.17 | — | * | 0.17 | 0.01 | * | ||||||||||||||||||
Net income attributable to Pfizer Inc. common shareholders
|
$ | 0.48 | $ | 0.11 | * | $ | 1.09 | $ | 0.67 | 63 | ||||||||||||||
Earnings per common share––diluted: (a)
|
||||||||||||||||||||||||
Income from continuing operations attributable to Pfizer Inc. common shareholders
|
$ | 0.31 | $ | 0.11 | 182 | $ | 0.91 | $ | 0.66 | 38 | ||||||||||||||
Discontinued operations––net of tax
|
0.17 | — | * | 0.17 | 0.01 | * | ||||||||||||||||||
Net income attributable to Pfizer Inc. common shareholders
|
$ | 0.48 | $ | 0.11 | * | $ | 1.08 | $ | 0.66 | 64 | ||||||||||||||
|
||||||||||||||||||||||||
Cash dividends paid per common share
|
$ | 0.20 | $ | 0.18 | $ | 0.60 | $ | 0.54 |
(a) | EPS amounts may not add due to rounding. |
* | Calculation not meaningful. |
|
●
|
growth in certain key biopharmaceutical products, such as Lipitor in the U.S. as well as Lyrica, the Prevenar franchise and Enbrel, and growth in our Animal Health, Consumer Healthcare and Nutrition businesses;
|
|
●
|
the favorable impact of foreign exchange, which increased revenues by approximately $951 million, or 6%; and
|
|
●
|
the inclusion of revenues from legacy King products of $357 million, which favorably impacted revenues by 2%,
|
|
●
|
lower revenues of approximately $950 million, or 6%, due to the impact of the loss of exclusivity for several biopharmaceutical products in certain geographies; and
|
|
●
|
a reduction in revenues of $151 million, or 1%, due to U.S. healthcare reform.
|
|
●
|
growth in certain key biopharmaceutical products, such as Lipitor in the U.S. as well as Lyrica, the Prevenar franchise and Enbrel, and growth in our Animal Health, Consumer Healthcare and Nutrition businesses;
|
|
●
|
the favorable impact of foreign exchange, which increased revenues by approximately $1.8 billion, or 4%; and
|
|
●
|
the inclusion of revenues from legacy King products of $938 million, which favorably impacted revenues by 2%,
|
|
●
|
lower revenues of $3.8 billion, or 8%, due to the impact of the loss of exclusivity for several biopharmaceutical products in certain geographies; and
|
|
●
|
a reduction in revenues of $357 million, or 1%, due to U.S. healthcare reform.
|
(millions of dollars)
|
Oct. 2, 2011
vs.
Oct. 3, 2010
Worldwide
Incr./(Decr.)
|
% Change
Worldwide
|
% Change
U.S.
|
% Change
International
|
||||||||||||
For the Three Months Ended:
|
||||||||||||||||
Prevnar/Prevenar 13
|
$ | 271 | 37 | (16 | ) | 183 | ||||||||||
Lyrica
|
204 | 27 | 6 | 45 | ||||||||||||
Enbrel (outside the U.S. and Canada)
|
158 | 20 | - | 20 | ||||||||||||
EpiPen(a)
|
59 | * | * | * | ||||||||||||
Skelaxin(a)
|
58 | * | * | * | ||||||||||||
Celebrex
|
65 | 11 | 4 | 27 | ||||||||||||
Sutent
|
41 | 16 | 16 | 16 | ||||||||||||
ReFacto AF/Xyntha
|
38 | 37 | 45 | 35 | ||||||||||||
Zyvox
|
36 | 13 | 4 | 22 | ||||||||||||
Pristiq
|
28 | 24 | 17 | 69 | ||||||||||||
Caduet
|
23 | 18 | (7 | ) | 71 | |||||||||||
Norvasc
|
20 | 6 | 100 | 5 | ||||||||||||
Aromasin(b)
|
(26 | ) | (23 | ) | (79 | ) | 7 | |||||||||
Detrol/Detrol LA
|
(24 | ) | (10 | ) | (17 | ) | 4 | |||||||||
Zosyn/Tazocin
|
(106 | ) | (42 | ) | (58 | ) | (5 | ) | ||||||||
Xalatan/Xalacom(b)
|
(139 | ) | (33 | ) | (94 | ) | 3 | |||||||||
Protonix(b)
|
(138 | ) | (68 | ) | (68 | ) | - | |||||||||
Lipitor(b)
|
68 | 3 | 13 | (8 | ) | |||||||||||
Prevnar/Prevenar (7-valent)
|
(81 | ) | (45 | ) | - | (45 | ) | |||||||||
Effexor XR(b)
|
(10 | ) | (6 | ) | (10 | ) | (3 | ) | ||||||||
Alliance revenues(b)
|
(123 | ) | (12 | ) | (23 | ) | 16 | |||||||||
All other biopharmaceutical products(c)
|
301 | 21 | 56 | 11 | ||||||||||||
Animal Health products
|
181 | 21 | 17 | 24 | ||||||||||||
Consumer Healthcare products
|
101 | 15 | 9 | 22 | ||||||||||||
Nutrition products
|
136 | 31 | - | 31 | ||||||||||||
For the Nine Months Ended:
|
||||||||||||||||
Prevnar/Prevenar 13
|
$ | 1,233 | 78 | 25 | 259 | |||||||||||
Lyrica
|
453 | 20 | 4 | 35 | ||||||||||||
Enbrel (outside the U.S. and Canada)
|
332 | 14 | - | 14 | ||||||||||||
EpiPen(a)
|
160 | * | * | * | ||||||||||||
Skelaxin(a)
|
145 | * | * | * | ||||||||||||
Celebrex
|
104 | 6 | - | 18 | ||||||||||||
Sutent
|
99 | 13 | 10 | 14 | ||||||||||||
ReFacto AF/Xyntha
|
90 | 31 | 23 | 33 | ||||||||||||
Zyvox
|
89 | 10 | 5 | 16 | ||||||||||||
Pristiq
|
81 | 24 | 16 | 85 | ||||||||||||
Caduet
|
47 | 12 | (8 | ) | 52 | |||||||||||
Norvasc
|
(39 | ) | (3 | ) | (4 | ) | (3 | ) | ||||||||
Aromasin(b)
|
(67 | ) | (19 | ) | (57 | ) | 1 | |||||||||
Detrol/Detrol LA
|
(90 | ) | (12 | ) | (18 | ) | 1 | |||||||||
Zosyn/Tazocin
|
(259 | ) | (35 | ) | (47 | ) | (9 | ) | ||||||||
Xalatan/Xalacom(b)
|
(327 | ) | (25 | ) | (65 | ) | (4 | ) | ||||||||
Protonix(b)
|
(367 | ) | (69 | ) | (69 | ) | - | |||||||||
Lipitor(b)
|
(526 | ) | (6 | ) | 7 | (19 | ) | |||||||||
Prevnar/Prevenar (7-valent)
|
(624 | ) | (61 | ) | (100 | ) | (50 | ) | ||||||||
Effexor XR(b)
|
(975 | ) | (64 | ) | (82 | ) | (11 | ) | ||||||||
Alliance revenues(b)
|
(429 | ) | (14 | ) | (26 | ) | 17 | |||||||||
All other biopharmaceutical products(c)
|
899 | 21 | 85 | 5 | ||||||||||||
Animal Health products
|
479 | 18 | 20 | 18 | ||||||||||||
Consumer Healthcare products
|
226 | 11 | 7 | 16 | ||||||||||||
Nutrition products
|
165 | 12 | - | 12 |
(a) |
Third quarter and first nine months of 2011 reflect the inclusion of revenues from legacy King products.
|
(b) | Aromasin lost exclusivity in the U.S. in April 2011. Xalatan lost exclusivity in the U.S. in March 2011. The basic U.S. patent (including the six-month pediatric exclusivity period) for Protonix expired in January 2011. Lipitor lost exclusivity in Canada in May 2010, Spain in July 2010, Brazil in August 2010 and Mexico in December 2010. Effexor XR lost exclusivity in the U.S. in July 2010. We lost exclusivity for Aricept 5mg and 10mg tablets, which are included in Alliance revenues, in November 2010. |
(c) | Relates to “All other biopharmaceutical products” category included in the “Selected Revenues from Biopharmaceutical Products” table presented in this MD&A. |
* | Calculation not meaningful. |
|
●
|
higher impairment charges of $1.5 billion (pre-tax) in the third quarter of 2010, and $1.7 billion (pre-tax) in the first nine months of 2010 related to certain intangible assets acquired as part of the Wyeth acquisition, and a $701 million (pre-tax) charge in the third quarter and first nine months of 2010 for asbestos litigation related to our wholly owned subsidiary, Quigley Company, Inc. (see further discussion in Notes to Condensed Consolidated Financial Statements––Note 6. Other(Income)/Deductions––Net); and
|
|
●
|
a decrease in the effective tax rate to 33.7% in the third quarter of 2011 from 39.5% in the third quarter of 2010 and to 30.8% in first nine months of 2011 from 37.3% in the first nine months of 2010 (see discussion in the “Provision for Taxes on Income” section of this MD&A),
|
|
●
|
higher charges related to our non-acquisition related cost-reduction and productivity initiatives in the third quarter and first nine months of 2011 compared to the same periods in 2010.
|
●
|
approximately $215 million in the third quarter of 2011 and approximately $539 million in the first nine months of 2011, recorded as a reduction to Revenues; and
|
●
|
approximately $45 million in the third quarter of 2011 and approximately $183 million in the first nine months of 2011, recorded in Selling, informational and administrative expenses, 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 (the total fee to be paid each year by the pharmaceutical industry will increase annually through 2018). We are recording the annual fee ratably throughout the year.
|
●
|
Lipitor and Caduet in the U.S. on November 30, 2011 (see additional Lipitor discussion below);
|
●
|
Xalatan and Xalacom in 15 major European markets in January 2012. The exclusivity period in these markets was extended from July 2011 to January 2012 as a result of pediatric extensions;
|
●
|
Geodon in the U.S. in March 2012;
|
●
|
Revatio (tablet) in the U.S. in March 2012. We are pursuing a pediatric extension for Revatio in the U.S. If we are successful, the exclusivity period for Revaio (tablet) in the U.S. will be extended by six months to September 2012; and
|
●
|
Detrol IR in the U.S. in September 2012.
|
●
|
On September 20, 2011, we completed our cash tender offer for all of the outstanding shares of Icagen, Inc. (Icagen), resulting in an approximately 70% ownership of the outstanding shares of Icagen, a biopharmaceutical company focused on discovery, development and commercialization of novel orally-administered small molecule drugs that modulate ion channel targets. On October 27, 2011, we acquired all of the remaining shares of Icagen, which is now a wholly-owned subsidiary of Pfizer, Inc. The allocation of the consideration transferred has not been finalized.
|
●
|
On April 4, 2011, we announced that we entered into an agreement to sell our Capsugel business for approximately $2.4 billion in cash. The transaction closed on August 1, 2011. For additional information, see Notes to Condensed Consolidated Financial Statements—Note 4. Discontinued Operations.
|
●
|
Earlier this year, we announced that we were conducting a strategic review of all of our other businesses and assets. On July 7, 2011, we announced our decisions to explore strategic alternatives for our Animal Health and Nutrition businesses that may include, among other things, a full or partial separation of each of these businesses through a spin-off, sale, or other transaction.
|
●
|
On February 7, 2011, we announced that we entered into an agreement to purchase the Ferrosan consumer healthcare business, which is principally comprised of dietary supplement products, including multivitamins, probiotics and Omega-3 fish oils. Ferrosan markets its products in the Nordic region, as well as in Russia and many countries in Central and Eastern Europe. The transaction, which is subject to customary closing conditions, including regulatory approval in certain jurisdictions, is expected to close in December 2011 (which falls in our first fiscal quarter of 2012 for our international operations).
|
●
|
On January 31, 2011 (the acquisition date), we completed our tender offer for all of the outstanding shares of common stock of King at a purchase price of $14.25 per share in cash and acquired approximately 92.5% of the outstanding shares. On February 28, 2011, we acquired all of the remaining shares of King for $14.25 per share in cash. As a result, the total fair value of consideration transferred for King was approximately $3.6 billion in cash ($3.2 billion, net of cash acquired). For additional information on our acquisition of King, see Notes to Condensed Consolidated Financial Statements—Note 3. Acquisition of King Pharmaceuticals, Inc.
|
|
King’s principal businesses consist of a prescription pharmaceutical business focused on delivering new formulations of pain treatments designed to discourage common methods of misuse and abuse; the Meridian auto-injector business for emergency drug delivery, which develops and manufactures the EpiPen; an established products portfolio; and an animal health business that offers a variety of feed-additive products for a wide range of species.
|
|
As a result of our acquisition of King, we recorded Inventories of $340 million, Property, plant and equipment (PP&E) of $412 million, Identifiable intangible assets of $2.1 billion and Goodwill of $783 million. For additional information related to the provisional recording of assets acquired and liabilities assumed, see Notes to Condensed Consolidated Financial Statements—Note 3. Acquisition of King Pharmaceuticals, Inc.
|
|
o
|
Developed technology rights of approximately $1.8 billion, which includes EpiPen, Thrombin, Levoxyl, Bicillin, Skelaxin and Flector Patch, among others.
|
|
o
|
IPR&D of approximately $300 million, which includes Embeda, Vanquix and Remoxy, among others.
|
|
o
|
Amounts for intangibles and inventory, pending finalization of valuation efforts.
|
|
o
|
Amounts for income tax assets, receivables and liabilities, pending the filing of King’s pre-acquisition tax returns and the receipt of information from taxing authorities, which may change certain estimates and assumptions used.
|
|
o
|
The allocation of goodwill among reporting units.
|
Full-Year 2011 Guidance
|
||
($ billions, except per share amounts)
|
Net Income(a)
|
Diluted EPS(a)
|
Adjusted income/diluted EPS(b) guidance
|
~$17.7-$18.1
|
~$2.24-$2.29
|
Purchase accounting impacts of transactions completed as of 10/2/11
|
(4.8)
|
(0.62)
|
Acquisition-related costs
|
(1.5-1.7)
|
(0.19-0.21)
|
Non-acquisition-related restructuring costs(c)
|
(2.0-2.2)
|
(0.25-0.28)
|
Gain on sale of and income from Capsugel discontinued operations(d)
|
1.3
|
0.17
|
Other Certain Significant Items
|
(0.8)
|
(0.10)
|
Reported Net income attributable to Pfizer Inc./diluted EPS guidance
|
~$9.5-$10.3
|
~$1.20-$1.30
|
(a) | Does not assume the completion of any business-development transactions not completed as of October 2, 2011, including any one-time upfront payments associated with such transactions. Also excludes the potential effects of the resolution of litigation-related matters not substantially resolved as of October 2, 2011. |
(b) | For an understanding of Adjusted income, see the “Adjusted Income” section of this MD&A. |
(c) | Includes amounts related to our initiatives to reduce R&D spending, including our realigned R&D footprint, and amounts related to other cost-reduction and productivity initiatives. In our reconciliation between Net income attributable to Pfizer Inc., as reported under accounting principles generally accepted in the United States of America (U.S. GAAP), and Adjusted income, and in our reconciliation between diluted EPS, as reported under U.S. GAAP, and Adjusted diluted EPS, these amounts are categorized as Certain Significant Items (see the “Adjusted Income––Reconciliation” section of this MD&A). |
(d) | Includes revenues and expenses related to the Capsugel business as a discontinued operation through July 31, 2011. |
Full-Year 2012 Targets
|
||
($ billions, except per share amounts)
|
Net Income (a)
|
Diluted EPS (a)
|
Adjusted income/diluted EPS(b) targets
|
~$17.2-$17.9
|
~$2.25-$2.35
|
Purchase accounting impacts of transactions completed as of 10/2/11
|
(3.8)
|
(0.50)
|
Acquisition-related costs
|
(0.7-1.0)
|
(0.09-0.12)
|
Non-acquisition-related restructuring costs(c)
|
(0.3-0.4)
|
(0.03-0.05)
|
Reported Net income attributable to Pfizer Inc./diluted EPS targets
|
~$12.0-$13.1
|
~$1.58-$1.73
|
(a) |
Does not assume the completion of any business-development transactions not completed as of October 2, 2011, 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 October 2, 2011.
|
(b) |
For an understanding of Adjusted income, 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 our reconciliation between Net income attributable to Pfizer Inc., as reported under U.S. GAAP, and Adjusted income, and in our 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).
|
% Change in Revenues
|
||||||||||||||||||||||||||||||||||||
World-
|
Inter-
|
|||||||||||||||||||||||||||||||||||
Worldwide
|
U.S.
|
International
|
wide
|
U.S.
|
national
|
|||||||||||||||||||||||||||||||
Oct. 2,
|
Oct. 3,
|
Oct. 2,
|
Oct. 3,
|
Oct. 2,
|
Oct. 3,
|
|||||||||||||||||||||||||||||||
(millions of dollars)
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
||||||||||||||||||||||||||||||
Three Months Ended:
|
||||||||||||||||||||||||||||||||||||
Biopharmaceutical revenues:
|
||||||||||||||||||||||||||||||||||||
Primary Care Operating Segment
|
$ | 5,948 | $ | 5,653 | $ | 3,451 | $ | 3,373 | $ | 2,497 | $ | 2,280 | 5 | 2 | 10 | |||||||||||||||||||||
Specialty Care
|
3,799 | 3,717 | 1,636 | 1,925 | 2,163 | 1,792 | 2 | (15 | ) | 21 | ||||||||||||||||||||||||||
Oncology
|
332 | 335 | 97 | 119 | 235 | 216 | (1 | ) | (18 | ) | 9 | |||||||||||||||||||||||||
SC&O Operating Segment
|
4,131 | 4,052 | 1,733 | 2,044 | 2,398 | 2,008 | 2 | (15 | ) | 19 | ||||||||||||||||||||||||||
Established Products
|
2,230 | 2,168 | 835 | 881 | 1,395 | 1,287 | 3 | (5 | ) | 8 | ||||||||||||||||||||||||||
Emerging Markets
|
2,438 | 2,072 | — | — | 2,438 | 2,072 | 18 | — | 18 | |||||||||||||||||||||||||||
EP&EM Operating Segment
|
4,668 | 4,240 | 835 | 881 | 3,833 | 3,359 | 10 | (5 | ) | 14 | ||||||||||||||||||||||||||
|
14,747 | 13,945 | 6,019 | 6,298 | 8,728 | 7,647 | 6 | (4 | ) | 14 | ||||||||||||||||||||||||||
Other product revenues:
|
||||||||||||||||||||||||||||||||||||
Animal Health
|
1,041 | 860 | 433 | 369 | 608 | 491 | 21 | 17 | 24 | |||||||||||||||||||||||||||
Consumer Healthcare
|
774 | 673 | 408 | 374 | 366 | 299 | 15 | 9 | 22 | |||||||||||||||||||||||||||
AH&CH Operating Segment
|
1,815 | 1,533 | 841 | 743 | 974 | 790 | 18 | 13 | 23 | |||||||||||||||||||||||||||
Nutrition Operating Segment
|
577 | 441 | — | — | 577 | 441 | 31 | — | 31 | |||||||||||||||||||||||||||
Pfizer CentreSource(a)
|
54 | 76 | 19 | 22 | 35 | 54 | (29 | ) | (14 | ) | (35 | ) | ||||||||||||||||||||||||
631 | 517 | 19 | 22 | 612 | 495 | 22 | (14 | ) | 24 | |||||||||||||||||||||||||||
Total revenues
|
$ | 17,193 | $ | 15,995 | $ | 6,879 | $ | 7,063 | $ | 10,314 | $ | 8,932 | 7 | (3 | ) | 15 | ||||||||||||||||||||
Nine Months Ended:
|
||||||||||||||||||||||||||||||||||||
Biopharmaceutical revenues:
|
||||||||||||||||||||||||||||||||||||
Primary Care Operating Segment
|
$ | 17,259 | $ | 17,442 | $ | 10,007 | $ | 10,183 | $ | 7,252 | $ | 7,259 | (1 | ) | (2 | ) | — | |||||||||||||||||||
Specialty Care
|
11,425 | 11,009 | 5,226 | 5,479 | 6,199 | 5,530 | 4 | (5 | ) | 12 | ||||||||||||||||||||||||||
Oncology
|
982 | 1,045 | 274 | 380 | 708 | 665 | (6 | ) | (28 | ) | 6 | |||||||||||||||||||||||||
SC&O Operating Segment
|
12,407 | 12,054 | 5,500 | 5,859 | 6,907 | 6,195 | 3 | (6 | ) | 11 | ||||||||||||||||||||||||||
Established Products
|
6,914 | 7,682 | 2,739 | 3,512 | 4,175 | 4,170 | (10 | ) | (22 | ) | — | |||||||||||||||||||||||||
Emerging Markets
|
7,031 | 6,294 | — | — | 7,031 | 6,294 | 12 | — | 12 | |||||||||||||||||||||||||||
EP&EM Operating Segment
|
13,945 | 13,976 | 2,739 | 3,512 | 11,206 | 10,464 | — | (22 | ) | 7 | ||||||||||||||||||||||||||
|
43,611 | 43,472 | 18,246 | 19,554 | 25,365 | 23,918 | — | (7 | ) | 6 | ||||||||||||||||||||||||||
Other product revenues:
|
||||||||||||||||||||||||||||||||||||
Animal Health
|
3,078 | 2,599 | 1,205 | 1,006 | 1,873 | 1,593 | 18 | 20 | 18 | |||||||||||||||||||||||||||
Consumer Healthcare
|
2,240 | 2,014 | 1,087 | 1,016 | 1,153 | 998 | 11 | 7 | 16 | |||||||||||||||||||||||||||
AH&CH Operating Segment
|
5,318 | 4,613 | 2,292 | 2,022 | 3,026 | 2,591 | 15 | 13 | 17 | |||||||||||||||||||||||||||
Nutrition Operating Segment
|
1,540 | 1,375 | — | — | 1,540 | 1,375 | 12 | — | 12 | |||||||||||||||||||||||||||
Pfizer CentreSource(a)
|
210 | 243 | 65 | 85 | 145 | 158 | (14 | ) | (24 | ) | (8 | ) | ||||||||||||||||||||||||
1,750 | 1,618 | 65 | 85 | 1,685 | 1,533 | 8 | (24 | ) | 10 | |||||||||||||||||||||||||||
Total revenues
|
$ | 50,679 | $ | 49,703 | $ | 20,603 | $ | 21,661 | $ | 30,076 | $ | 28,042 | 2 | (5 | ) | 7 |
(a) | Our contract manufacturing and bulk pharmaceutical chemical sales organization. |
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●
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the solid performance from Lipitor in the U.S. and from the Prevenar franchise, Lyrica and Enbrel;
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revenues from legacy King biopharmaceutical products of approximately $263 million; and
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the favorable impact of foreign exchange of 6%,
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|
lower revenues from Lipitor in international markets and from Effexor XR, Protonix, Xalatan/Xalacom and Zosyn and lower Alliance revenues for Aricept, all due to loss of exclusivity in certain markets; and
|
|
●
|
a reduction in revenues of $151 million due to the U.S. Healthcare Legislation.
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●
|
lower revenues from Lipitor in international markets and from Effexor XR, Protonix, Xalatan/Xalacom and Zosyn and lower Alliance revenues for Aricept, all due to loss of exclusivity in certain markets; and
|
|
●
|
a reduction in revenues of $357 million due to the U.S. Healthcare Legislation;
|
|
●
|
the solid performance from Lipitor in the U.S. and from the Prevnar/Prevenar franchise, Lyrica and Enbrel;
|
|
●
|
revenues from legacy King biopharmaceutical products of approximately $707 million; and
|
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●
|
the favorable impact of foreign exchange of 3%.
|
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●
|
in the U.S., revenues from biopharmaceutical products decreased 4% in the third quarter of 2011 and 7% in the first nine months of 2011, compared to the same periods in 2010.
|
|
o
|
The decreases in U.S. revenues from biopharmaceutical products in the third quarter and first nine months of 2011 reflect lower revenues from Protonix, Effexor XR, Zosyn, Xalatan, Vfend and Aromasin, all due to loss of exclusivity, lower Alliance revenues due to loss of exclusivity of Aricept 5mg and 10mg tablets in November 2010 and lower revenues from Detrol/Detrol LA, as well as the reduction in revenues of $151 million in the third quarter of 2011 and $357 million in the first nine months of 2011 due to the U.S. Healthcare Legislation. Also, Prevnar 13 revenues in the U.S. were lower in the third quarter of 2011 than in the third quarter of 2010 as fewer patients received the Prevnar 13 catch-up dose as the timeframe for eligibility has nearly expired. The impact of these adverse factors was partially offset by the strong performance of certain other biopharmaceutical products and the addition of U.S. revenues from legacy King products of approximately $250 million in the third quarter and approximately $677 million in the first nine months of 2011.
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|
·
|
in our international markets, revenues from biopharmaceutical products increased 14% in the third quarter of 2011 and 6% in the first nine months of 2011, compared to the same periods in 2010.
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|
o
|
The increases in international revenues from biopharmaceutical products in the third quarter and first nine months of 2011 reflect the favorable impact of foreign exchange of 11% in the third quarter of 2011 and 6% in the first nine months of 2011, as well as an operational increase of 3% in the third quarter of 2011. Operational revenues were flat in the first nine months of 2011. Operationally, revenues were favorably impacted by increases in the Prevenar franchise, Enbrel, Celebrex, Alliance revenues and, in the first nine months of 2011, Lyrica, and unfavorably impacted by declines in Lipitor and Effexor XR and, in the first nine months of 2011, Norvasc and Xalatan/Xalacom. International revenues from legacy King products were not significant to our international revenues in the third quarter or first nine months of 2011.
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|
o
|
During the third quarter of 2011, revenues from international biopharmaceutical products represented 59% of total revenues from biopharmaceutical products, compared to 55% in the third quarter of 2010. During the first nine months of 2011, revenues from international biopharmaceutical products represented 58% of total revenues from biopharmaceutical products, compared to 55% in the first nine months of 2010.
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●
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increased 3% in the third quarter of 2011, compared to the same period last year, due to the favorable impact of foreign exchange of 7%, partially offset by lower operational revenues of 4%. For the third quarter of 2011, Established Product unit revenues were mainly impacted by the loss of exclusivity of Protonix and Zosyn in the U.S., which taken together reduced Established Products unit revenues by $242 million, or 11%, in comparison with third-quarter 2010. This decline was more than offset by the favorable impact of foreign exchange and by $144 million, or 7%, from the addition of legacy King products.
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●
|
decreased 10% in the first nine months of 2011, compared to the same period last year, due to lower operational revenues of 14%, partially offset by a 4% favorable impact of foreign exchange. The decrease in Established Products unit operational revenues in the first nine months of 2011 was mainly due to the U.S. loss of exclusivity of Effexor XR, Protonix and Zosyn. Taken together, the loss of exclusivity for these products decreased Established Products unit revenues by $1.5 billion, or 20%, in comparison with the first nine months of 2010. These declines were partially offset by the addition of revenues from legacy King products of $396 million, or 5%, in the first nine months of 2011.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
(millions of dollars)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
Oct. 2,
2011
|
Oct. 3,
2010
|
||||||||||||
Medicaid and related state program rebates(a)
|
$ | 307 | $ | 314 | $ | 1,081 | $ | 955 | ||||||||
Medicare rebates(a)
|
372 | 343 | 1,099 | 912 | ||||||||||||
Performance-based contract rebates(a), (b)
|
723 | 597 | 2,227 | 1,891 | ||||||||||||
Chargebacks(c)
|
813 | 744 | 2,416 | 2,224 | ||||||||||||
Total
|
$ | 2,215 | $ | 1,998 | $ | 6,823 | $ | 5,982 |
(a) | Rebates are product-specific and, therefore, for any given year are impacted by the mix of products sold as well as the loss of exclusivity of branded products. |
(b) | Performance-based contracts are with managed care customers, including health maintenance organizations and pharmacy benefit managers, who receive rebates based on the achievement of contracted performance terms for products. |
(c) | Chargebacks primarily represent reimbursements to wholesalers for honoring contracted prices to third parties. |
|
●
|
the impact of increased Medicaid rebate rates due to the U.S. Healthcare Legislation, in addition to higher rates for certain products that are subject to rebates;
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●
|
the impact of increased Medicare rebates under the U.S. Healthcare Legislation due to discounts to Medicare Part D participants who are in the Medicare “Coverage Gap”; and
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●
|
an increase in chargebacks for our branded products as a result of increasing competitive pressures and increasing sales for certain branded products and certain generic products sold by our Greenstone unit that are subject to chargebacks,
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●
|
changes in product mix;
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●
|
the impact of decreased Medicare rebates for certain products that have lost exclusivity; and
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●
|
the impact on chargebacks of decreased sales for products that have lost exclusivity, among other factors.
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||||
% Change
|
% Change
|
||||||||||||||||
(millions of dollars)
|
Oct. 2,
|
From Oct. 3,
|
Oct. 2,
|
From Oct. 3,
|
|||||||||||||
Product
|
Primary Indications
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Lipitor
|
Reduction of LDL cholesterol
|
$ | 2,602 | 3 | $ | 7,578 | (6 | ) | |||||||||
Prevnar/Prevenar 13
|
Vaccine for prevention of invasive pneumococcal disease
|
1,006 | 37 | 2,823 | 78 | ||||||||||||
Enbrel(a)
|
Rheumatoid, juvenile rheumatoid and psoriatic arthritis,
plaque psoriasis and ankylosing spondylitis
|
957 | 20 | 2,741 | 14 | ||||||||||||
Lyrica
|
Epilepsy, post-herpetic neuralgia and diabetic peripheral
neuropathy, fibromyalgia
|
961 | 27 | 2,695 | 20 | ||||||||||||
Celebrex
|
Arthritis pain and inflammation, acute pain
|
643 | 11 | 1,856 | 6 | ||||||||||||
Viagra
|
Erectile dysfunction
|
493 | 7 | 1,458 | 2 | ||||||||||||
Norvasc
|
Hypertension
|
350 | 6 | 1,081 | (3 | ) | |||||||||||
Zyvox
|
Bacterial infections
|
321 | 13 | 965 | 10 | ||||||||||||
Xalatan/Xalacom
|
Glaucoma and ocular hypertension
|
277 | (33 | ) | 960 | (25 | ) | ||||||||||
Sutent
|
Advanced and/or metastatic renal cell carcinoma (mRCC),
refractory gastrointestinal stromal tumors (GIST) and
advanced pancreatic neuroendocrine tumor
|
298 | 16 | 870 | 13 | ||||||||||||
Premarin family
|
Menopause
|
267 | 2 | 757 | (3 | ) | |||||||||||
Geodon/Zeldox
|
Schizophrenia; acute manic or mixed episodes associated
with bipolar disorder; maintenance treatment of bipolar
mania
|
263 | - | 753 | (1 | ) | |||||||||||
Detrol/Detrol LA
|
Overactive bladder
|
213 | (10 | ) | 668 | (12 | ) | ||||||||||
Genotropin
|
Replacement of human growth hormone
|
215 | 2 | 654 | 1 | ||||||||||||
Vfend
|
Fungal infections
|
171 | (15 | ) | 558 | (6 | ) | ||||||||||
Chantix/Champix
|
An aid to smoking cessation
|
156 | (4 | ) | 545 | 4 | |||||||||||
Effexor XR
|
Depression and certain anxiety disorders
|
165 | (6 | ) | 537 | (64 | ) | ||||||||||
BeneFIX
|
Hemophilia
|
178 | 14 | 518 | 9 | ||||||||||||
Zosyn/Tazocin
|
Antibiotic
|
149 | (42 | ) | 490 | (35 | ) | ||||||||||
Caduet
|
Reduction of LDL cholesterol and hypertension
|
150 | 18 | 435 | 12 | ||||||||||||
Pristiq
|
Depression
|
146 | 24 | 422 | 24 | ||||||||||||
Zoloft
|
Depression and certain anxiety disorders
|
139 | 10 | 420 | 8 | ||||||||||||
Prevnar/Prevenar (7-valent)
|
Vaccine for prevention of invasive pneumococcal disease
|
98 | (45 | ) | 406 | (61 | ) | ||||||||||
Revatio
|
Pulmonary arterial hypertension (PAH)
|
140 | 21 | 393 | 12 | ||||||||||||
Medrol
|
Inflammation
|
127 | 7 | 383 | 12 | ||||||||||||
ReFacto AF/Xyntha
|
Hemophilia
|
140 | 37 | 380 | 31 | ||||||||||||
Zithromax/Zmax
|
Bacterial infections
|
93 | 3 | 335 | 11 | ||||||||||||
Aricept(b)
|
Alzheimer’s disease
|
117 | 10 | 335 | (1 | ) | |||||||||||
Aromasin
|
Breast cancer
|
85 | (23 | ) | 294 | (19 | ) | ||||||||||
Cardura
|
Hypertension/Benign prostatic hyperplasia
|
92 | (3 | ) | 289 | (7 | ) | ||||||||||
Rapamune
|
Immunosuppressant
|
96 | (8 | ) | 285 | (2 | ) | ||||||||||
Fragmin
|
Anticoagulant
|
95 | 13 | 283 | 10 | ||||||||||||
BMP2
|
Development of bone and cartilage
|
83 | (18 | ) | 277 | (7 | ) | ||||||||||
Relpax
|
Treat the symptoms of migraine headache
|
86 | 15 | 250 | 5 | ||||||||||||
Xanax XR
|
Anxiety disorders
|
77 | 7 | 232 | 4 | ||||||||||||
Tygacil
|
Antibiotic
|
76 | (3 | ) | 224 | (10 | ) | ||||||||||
Neurontin
|
Seizures
|
67 | (16 | ) | 222 | (7 | ) | ||||||||||
Diflucan
|
Fungal infections
|
72 | (3 | ) | 201 | (2 | ) | ||||||||||
Arthrotec
|
Osteoarthritis and rheumatoid arthritis
|
61 | - | 182 | (2 | ) | |||||||||||
Unasyn
|
Injectable antibacterial
|
58 | (5 | ) | 172 | (5 | ) | ||||||||||
Protonix
|
Erosive gastroesophageal reflux disease
|
65 | (68 | ) | 168 | (69 | ) | ||||||||||
EpiPen(c)
|
Epinephrine injection used in treatment of life-threatening
allergic reactions
|
59 | * | 160 | * | ||||||||||||
Sulperazon
|
Antibiotic
|
51 | 4 | 155 | 1 | ||||||||||||
Skelaxin(c)
|
Muscle relaxant
|
58 | * | 145 | * | ||||||||||||
Inspra
|
High blood pressure
|
51 | 38 | 142 | 26 | ||||||||||||
Dalacin/Cleocin
|
Antibiotic for bacterial infections
|
51 | (6 | ) | 139 | (17 | ) | ||||||||||
Alliance revenues(d)
|
Various
|
919 | (12 | ) | 2,678 | (14 | ) | ||||||||||
All other biopharmaceutical
products
|
Various
|
1,710 | 21 | 5,097 | 21 |
(a) | Outside the U.S. and Canada. |
(b) | Represents direct sales under license agreement with Eisai Co., Ltd. |
(c) | Legacy King product. King’s results are included in our financial statements commencing from the acquisition date of January 31, 2011, in accordance with Pfizer’s domestic and international year-ends. Therefore, our results for both periods in 2010 do not include King’s results of operations. |
(d) | Enbrel (in the U.S. and Canada), Aricept, Exforge, Rebif and Spiriva. |
* | Calculation not meaningful. |
●
|
Lipitor, for the treatment of elevated LDL cholesterol levels in the blood, is the most widely used branded prescription treatment for lowering cholesterol. Lipitor recorded worldwide revenues of $2.6 billion, or an increase of 3%, in the third quarter of 2011 compared to the same period in 2010 due to:
|
|
o
|
the favorable impact of foreign exchange, which increased revenues by $124 million in the third quarter of 2011; and
|
|
o
|
continued brand promotion in the U.S. to maximize opportunities both pre- and post-loss of exclusivity,
|
|
o
|
the impact of loss of exclusivity in Canada in May 2010, Spain in July 2010, Brazil in August 2010 and Mexico in December 2010;
|
|
o
|
the continuing impact of an intensely competitive lipid-lowering market, with competition from generics and branded products worldwide; and
|
|
o
|
increased payer pressure worldwide, including the need for flexible rebate policies.
|
|
o
|
in the U.S., Lipitor revenues were $1.5 billion, or an increase of 13%, in the third quarter of 2011, and $4.2 billion, or an increase of 7%, in the first nine months of 2011, compared to the same periods in 2010. These increases were driven by price increases on January 1 and July 1, 2011; and
|
|
o
|
in our international markets, Lipitor revenues were $1.1 billion, or a decrease of 8%, in the third quarter of 2011, and $3.4 billion, or a decrease of 19%, in the first nine months of 2011, compared to the same periods in 2010. The decreases were primarily due to the loss of exclusivity in several markets in 2010 referred to above. The impact of foreign exchange increased international revenues by 10% in the third quarter of 2011 and 5% in the first nine months of 2011, compared to the same periods in 2010.
|
●
|
Prevnar/Prevenar 13 Pediatric is our 13-valent pneumococcal conjugate vaccine for preventing invasive pneumococcal disease in infants and young children. Prevnar/Prevenar 13 recorded increases in worldwide revenues of 37% in the third quarter of 2011 and 78% in the first nine months of 2011, compared to the same periods in 2010. In the U.S., Prevnar 13 revenues declined 16% in the third quarter of 2011 compared to the year-ago quarter as fewer patients received the Prevnar 13 catch-up dose as the timeframe for eligibility has nearly expired. To date, Prevnar/Prevenar 13 has been approved in over 110 countries and launched in over 100 of those countries. The launch of Prevnar/Prevenar 13 has resulted in a reduction of our Prevnar/Prevenar (7-valent) revenues (see discussion below). We expect this trend to continue.
|
●
|
Enbrel, for the treatment of moderate-to-severe rheumatoid arthritis, polyarticular juvenile rheumatoid arthritis, psoriatic arthritis, plaque psoriasis and ankylosing spondylitis, a type of arthritis affecting the spine, recorded increases in worldwide revenues, excluding the U.S. and Canada, of 20% in the third quarter of 2011 and 14% in the first nine months of 2011, compared to the same periods in 2010, primarily due to increased penetration of Enbrel in developed Europe and developed Asia. Enbrel revenues from the U.S. and Canada are included in Alliance revenues.
|
●
|
Lyrica, indicated for the management of post-herpetic neuralgia (PHN), diabetic peripheral neuropathy (DPN), fibromyalgia, and as adjunctive therapy for adult patients with partial onset seizures in the U.S., and for peripheral and dental neuropathic pain, adjunctive treatment of epilepsy and general anxiety disorder (GAD) in certain countries outside the U.S., recorded increases in worldwide revenues of 27% in the third quarter of 2011 and 20% in the first nine months of 2011, compared to the same periods in 2010. Lyrica had a strong operational performance in international markets in the third quarter of 2011, including Japan, where Lyrica was launched in 2010 as the first product approved for the peripheral neuropathic pain indication. In the U.S., revenues increased 6% in the third quarter of 2011 and 4% in the first nine months of 2011, compared to the same periods in 2010. 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.
|
●
|
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. and certain markets in the EU, recorded increases in worldwide revenues of 11% in the third quarter of 2011 and 6% in the first nine months of 2011, compared to the same periods in 2010. In the U.S., revenues were up 4% in the third quarter of 2011 and were flat in the first nine months of 2011, compared to the same periods in 2010, reflecting 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 remains the leading treatment for erectile dysfunction. Viagra worldwide revenues increased 7% in the third quarter of 2011 and 2% in the first nine months of 2011, compared to the same periods in 2010. In the U.S., Viagra revenues increased 1% in the third quarter of 2011 and were relatively flat in the first nine months of 2011, compared to the same periods in 2010. Internationally, Viagra revenues increased 15% in the third quarter of 2011, primarily due to the favorable impact of foreign exchange, and 4% in the first nine months of 2011, due to the favorable impact of foreign exchange, compared to the same periods in 2010.
|
●
|
Norvasc, for treating hypertension, lost exclusivity in the U.S. and other major markets a few years ago. Norvasc worldwide revenues increased 6% in the third quarter of 2011, due to the favorable impact of foreign exchange, and decreased 3% in the first nine months of 2011, compared to the same periods in 2010.
|
●
|
Zyvox is the world’s best-selling branded agent for the treatment of certain serious Gram-positive pathogens, including Methicillin-Resistant Staphylococcus-Aureus (MRSA). Zyvox worldwide revenues increased 13% in the third quarter and 10% in the first nine months of 2011, compared to the same periods in 2010, primarily due to growth in emerging markets as well as growth in certain other markets driven by secondary bacterial infections arising from the stronger flu season in 2011.
|
●
|
Xalabrands consists of Xalatan, a prostaglandin, the world’s leading branded agent 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) that is available outside the U.S. Xalatan/Xalacom worldwide revenues decreased 33% in the third quarter of 2011 and 25% in the first nine months of 2011, compared to the same periods in 2010. Lower revenues in the U.S. are due to the loss of exclusivity in March 2011. Lower operational revenues internationally are due to the launch of generic latanoprost (generic Xalatan) in Japan in May 2010 and in Italy in July 2010. As a result of pediatric extensions, the exclusivity period for Xalatan and Xalacom has been extended from July 2011 to January 2012 in 15 major European markets.
|
●
|
Sutent is for the treatment of advanced renal cell carcinoma and gastrointestinal stromal tumors after disease progression on, or intolerance to, imatinib mesylate, and advanced pancreatic neuroendocrine tumor. Sutent worldwide revenues increased 16% in the third quarter of 2011 and 13% in the first nine months of 2011, compared to the same periods in 2010, due to strong operational performance and the favorable impact of foreign exchange. We continue to drive total revenue and prescription growth, supported by cost-effectiveness data and efficacy data in first-line metastatic renal cell carcinoma (mRCC)––including two-year survival data, which represent the first time that overall survival of two years has been seen in the treatment of advanced kidney cancer, as well as through increasing access and healthcare coverage. As of October 2, 2011, Sutent was the best-selling medicine in the world for the treatment of first-line mRCC.
|
●
|
Our Premarin family of products remains the leading therapy to help women address moderate-to-severe menopausal symptoms. It recorded an increase in worldwide revenues of 2% in the third quarter of 2011 and a decrease of 3% in the first nine months of 2011, compared to the same periods in 2010.
|
●
|
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 were relatively flat in the third quarter of 2011 and decreased 1% in the first nine months of 2011, compared to the same periods in 2010, which reflects higher rebates in the first nine months of 2011 due to the impact of the U.S. Healthcare Legislation and moderate growth in the U.S. antipsychotic market.
|
●
|
Detrol/Detrol LA, a muscarinic receptor antagonist, is the most prescribed branded medicine worldwide for overactive bladder. Detrol LA is an extended-release formulation taken once a day. Detrol/Detrol LA worldwide revenues declined 10% in the third quarter of 2011 and 12% in the first nine months of 2011, compared to the same periods in 2010, primarily due to increased competition from other branded medicines and a shift in promotional focus to our Toviaz product in most major markets.
|
●
|
Genotropin, the world’s leading human growth hormone, 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. Genotropin worldwide revenues increased 2% in the third quarter of 2011 and 1% in the first nine months of 2011, compared to the same periods in 2010, due to the favorable impact of foreign exchange.
|
●
|
Vfend is the only branded antifungal agent available in intravenous and oral forms. Vfend worldwide revenues decreased 15% in the third quarter of 2011 and 6% in the first nine months of 2011, compared to the same periods in 2010. While international revenues of Vfend continued to be driven in 2011 by its acceptance as an excellent broad-spectrum agent for treating yeast and molds, revenues in the U.S. declined primarily due to a loss of exclusivity of Vfend tablets and the launch of generic voriconazole (generic Vfend) in February 2011.
|
●
|
Chantix/Champix is a treatment for smoking cessation in adults. Chantix/Champix worldwide revenues decreased 4% in the third quarter of 2011 and increased 4% in the first nine months of 2011, compared to the same periods in 2010. Revenues in the first nine months of 2011 were favorably impacted by strong operational performance in international markets, and revenues in the third quarter and first nine months of 2011 were favorably impacted by foreign exchange, partially offset by the impact of changes to the product’s label and other factors, especially in the U.S. We are continuing our educational and promotional efforts, which are focused on the Chantix benefit-risk proposition, the significant health consequences of smoking and the importance of the physician-patient dialogue in helping patients quit smoking.
|
●
|
Effexor XR (extended release capsules), an antidepressant for treating adult patients with major depressive disorder, GAD, social anxiety disorder and panic disorder, recorded decreases in worldwide revenues of 6% in the third quarter of 2011 and 64% in the first nine months of 2011, compared to the same periods in 2010. Effexor XR faces generic competition outside the U.S., and it has faced generic competition in the U.S. since July 1, 2010. This generic competition had a negative impact in the third quarter and first nine months of 2011, and will continue to have a significant adverse impact on our revenues for Effexor XR.
|
●
|
BeneFIX and ReFacto AF/Xyntha are hemophilia products that use state-of-the-art manufacturing to assist patients with this 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 14% in the third quarter and 9% in the first nine months of 2011, compared to the same periods in 2010. ReFacto AF/Xyntha recorded increases in worldwide revenue of 37% in the third quarter of 2011 and 31% in the first nine months of 2011, compared to the same periods in 2010. The increases for all of these products were due to strong operational performance and the favorable impact of foreign exchange.
|
●
|
Zosyn/Tazocin, our broad-spectrum intravenous antibiotic, faces generic competition in the U.S. and certain other markets. It recorded decreases in worldwide revenues of 42% in the third quarter of 2011 and 35% in the first nine months of 2011, compared to the same periods in 2010.
|
●
|
Caduet is a single-pill therapy combining Norvasc and Lipitor. Caduet worldwide revenues increased 18% in the third quarter of 2011 and 12% in the first nine months of 2011, compared to the same periods in 2010, due to strong operational performance in international markets and the favorable impact of foreign exchange, partially offset by increased generic competition, as well as an overall decline in U.S. hypertension market volume. We expect that Caduet will lose exclusivity in the U.S. on November 30, 2011.
|
●
|
Pristiq was approved for the treatment of major depressive disorder in the U.S. in February 2008 and subsequently was approved for that indication in 29 other countries. Pristiq has also been approved for treatment of moderate-to-severe vasomotor symptoms (VMS) associated with menopause in Thailand, Mexico, Ecuador and the Philippines. Pristiq recorded increases in worldwide revenues of 24% in the third quarter and in the first nine months of 2011, compared to the same periods in 2010. These increases were driven by promotional activities in the U.S., and targeted international markets where Pristiq was recently launched. The activities are designed to educate physicians and pharmacists about the benefit-risk profile of Pristiq.
|
●
|
Prevnar/Prevenar (7-valent), our 7-valent pneumococcal conjugate vaccine for preventing invasive pneumococcal disease in infants and young children, recorded decreases in worldwide revenues of 45% in the third quarter of 2011 and 61% in the first nine months of 2011, compared to the same periods in 2010. Many markets have transitioned from the use of Prevnar/Prevenar (7-valent) to Prevnar/Prevenar 13 (see discussion above), resulting in lower revenues for Prevnar/Prevenar (7-valent). We expect this trend to continue.
|
●
|
Revatio, for the treatment of PAH, had increases in worldwide revenues of 21% in the third quarter and 12% in the first nine months of 2011, compared to the same periods in 2010, due in part to increased PAH awareness driving earlier diagnosis in the U.S. and EU and the favorable impact of foreign exchange.
|
●
|
Protonix, our proton pump inhibitor for erosive gastroesophageal reflux disease, recorded decreases in revenues of 68% in the third quarter of 2011 and 69% in the first nine months of 2011, compared to the same periods in 2010. We have an exclusive license from Nycomed GmbH to sell Protonix in the U.S., where it faces generic competition as the result of at-risk launches by certain generic manufacturers that began in December 2007 and the expiration of the basic U.S. patent (including the six-month pediatric exclusivity period) in January 2011.
|
Research and Development Expenses
|
||||||||||||||||||||||||
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||||||||
(millions of dollars)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
% Incr./
(Decr.)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
% Incr./
(Decr.)
|
||||||||||||||||||
Primary Care Operating Segment(a)
|
$ | 285 | $ | 353 | (19 | ) | $ | 912 | $ | 1,128 | (19 | ) | ||||||||||||
Specialty Care and Oncology Operating Segment(a)
|
400 | 388 | 3 | 1,122 | 1,129 | (1 | ) | |||||||||||||||||
Established Products and Emerging Markets Operating Segment(a)
|
71 | 100 | (29 | ) | 206 | 197 | 5 | |||||||||||||||||
Animal Health and Consumer Healthcare Operating Segment(a)
|
97 | 93 | 4 | 304 | 296 | 3 | ||||||||||||||||||
Nutrition and Pfizer CentreSource(a)
|
11 | 10 | 10 | 32 | 25 | 28 | ||||||||||||||||||
Worldwide Research and Development/Pfizer Medical(b)
|
833 | 851 | (2 | ) | 2,536 | 2,605 | (3 | ) | ||||||||||||||||
Corporate and other(c)
|
491 | 393 | 25 | 1,404 | 1,210 | 16 | ||||||||||||||||||
$ | 2,188 | $ | 2,188 | — | $ | 6,516 | $ | 6,590 | (1 | ) |
(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) |
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. Pfizer Medical is responsible for all human-health-related regulatory submissions and interactions with regulatory agencies, including all safety event activities, for conducting clinical trial audits and readiness reviews and for providing Pfizer-related medical information to healthcare providers.
|
(c) |
Corporate and other includes unallocated costs, primarily facility costs, information technology, share-based compensation, and restructuring related costs.
|
Recent FDA approvals:
|
||
PRODUCT
|
INDICATION
|
DATE APPROVED
|
Xalkori (Crizotinib)
|
Treatment of ALK-positive advanced non-small cell lung cancer
|
August 2011
|
Oxecta––Immediate release oxycodone with Aversion technology (formerly Acurox) (without niacin)(a)
|
Management of moderate-to-severe pain where the use of an opioid analgesic is appropriate
|
June 2011
|
Sutent
|
Treatment of unresectable pancreatic neuroendocrine tumor
|
May 2011
|
(a) | In early 2011, we acquired King, which has an exclusive license from Acura Pharmaceuticals, Inc. (Acura) to sell Oxecta in the U.S., Canada and Mexico. |
Pending U.S. new drug applications (NDA) and supplemental filings:
|
||
PRODUCT
|
INDICATION
|
DATE FILED*
|
Axitinib
|
Treatment of advanced renal cell carcinoma
|
June 2011
|
Prevnar 13 Adult(a)
|
Prevention of pneumococcal disease in adults 50 years of age and older
|
February 2011
|
Taliglucerase alfa(b)
|
Treatment of Gaucher disease
|
April 2010
|
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(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
|
Zmax(h)
|
Treatment of bacterial infections––sustained release––acute otitis media (AOM) and sinusitis––pediatric filing
|
January 2007
|
Viviant(i)
|
Osteoporosis treatment and prevention
|
August 2006
|
Pristiq(j)
|
Vasomotor symptoms of menopause
|
August 2006
|
Vfend(k)
|
Treatment of fungal infections––pediatric filing
|
August 2005
|
(a)
|
In July 2011, we announced that the FDA issued a 90-day extension to the action date with respect to Prevnar 13 in adults age 50 and older. This extends the review period to January 2012. The extension is due to additional data that we elected to submit to further assess the immune responses to Prevnar 13 from two studies that were part of our original submission. These data, which are derived from an additional immune response assay method, were submitted to support the FDA in the evaluation of the concomitant use of Prevnar 13 and trivalent inactivated influenza vaccine.
|
(b)
|
In November 2009, we entered into a license and supply agreement with Protalix BioTherapeutics (Protalix), which provides us exclusive worldwide rights, except in Israel, to develop and commercialize taliglucerase alfa for the treatment of Gaucher disease. In April 2010, Protalix completed a rolling NDA with the FDA for taliglucerase alfa. Taliglucerase alfa was granted orphan drug designation in the U.S. in September 2009. In February 2011, Protalix received a “complete response” letter from the FDA for the taliglucerase alfa NDA that set forth additional requirements for approval. On August 1, 2011, Protalix announced that it had submitted its response to the FDA letter.
|
(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 assessing the requests and recommendations included in the FDA’s letter.
|
(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 are working to address the issues raised in the 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. We are working to better understand the issues raised in the letter.
|
(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 are working to address the issues raised in the letter, which primarily relate to manufacturing, and we plan to engage in further discussions with the FDA.
|
(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)
|
In September 2007, we received an “approvable” letter from the FDA for Zmax that set forth requirements to obtain approval for the pediatric acute otitis media (AOM) indication based on pharmacokinetic data. In January 2010, we filed a supplemental NDA, which proposed the inclusion of the new indications for AOM and acute bacterial sinusitis (ABS) in pediatric patients. In May 2011, we received a “complete response” letter from the FDA with respect to the supplemental NDA. We are working to determine the next steps.
|
(i)
|
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.
|
(j)
|
In July 2007, Wyeth received an “approvable” letter from the FDA with respect to its NDA for the use of Pristiq in the treatment of moderate-to-severe vasomotor symptoms (VMS) associated with menopause. The FDA requested an additional one-year study of the safety of Pristiq for this indication. This study was completed, and the results were provided to the FDA in December 2010. In September 2011, we received a “complete response” letter from the FDA regarding our supplemental NDA. We are evaluating the content of the letter and will determine the next steps.
|
(k)
|
In December 2005, we received an “approvable” letter from the FDA for our Vfend pediatric filing that set forth the additional requirements for approval. In April 2010, based on data from a new pharmacokinetics study, we and the FDA agreed on a Vfend dosing regimen for pediatric patients in three ongoing trials. We continue to work to determine the next steps.
|
Regulatory approvals and filings in the EU and Japan:
|
|||
PRODUCT
|
DESCRIPTION OF EVENT
|
DATE APPROVED
|
DATE FILED*
|
Prevenar 13 Adult
|
Approval in the EU for prevention of invasive pneumococcal disease in adults 50 years of age and older
|
October 2011
|
—
|
Lyrica
|
Application filed in Japan for treatment of fibromyalgia
|
—
|
October 2011
|
ELIQUIS (Apixaban)(a)
|
Application filed in the EU for prevention of stroke in patients with atrial fibrillation
|
—
|
October 2011
|
Bosutinib
|
Application filed in the EU for treatment of chronic myelogenous leukemia
|
—
|
August 2011
|
Xalkori (Crizotinib)
|
Application filed in the EU for treatment of previously treated ALK-positive advanced non-small cell lung cancer
|
—
|
August 2011
|
ELIQUIS
(Apixaban)(b)
|
Approval in the EU for prevention of venous thromboembolism following elective hip or knee-replacement surgery
|
May 2011
|
—
|
Axitinib
|
Application filed in the EU for treatment of advanced renal cell carcinoma after failure of prior systemic treatment
|
—
|
May 2011
|
Xalkori (Crizotinib)
|
Application filed in Japan for treatment of ALK-positive advanced non-small cell lung cancer
|
—
|
May 2011
|
Revatio
|
Approval in the EU for pediatric PAH
|
May 2011
|
—
|
Celebrex
|
Application filed in Japan for treatment of acute pain
|
—
|
March 2011
|
Xiapex
|
Approval in the EU for treatment of Dupuytren’s contracture
|
February 2011
|
—
|
Sutent
|
Approval in the EU for treatment of unresectable pancreatic neuroendocrine tumor
|
December 2010
|
—
|
Taliglucerase alfa
|
Application filed in the EU for treatment of Gaucher disease
|
—
|
November 2010
|
Vyndaqel (Tafamidis)(c)
|
Application filed in the EU for TTR-FAP
|
—
|
August 2010
|
Prevenar 13 Infant
|
Application filed in Japan for prevention of invasive pneumococcal disease in infants and young children
|
—
|
December 2009
|
*
|
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)
|
This indication for ELIQUIS is being developed in collaboration with our alliance partner, Bristol-Myers Squibb Company (BMS).
|
(b)
|
This indication for ELIQUIS was developed and is being commercialized in collaboration with BMS.
|
(c)
|
In July 2011, the Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion recommending that the European Commission approve Vyndaqel (Tafamidis) for the treatment of transthyretin amyloidosis in adult patients with stage 1 symptomatic polyneuropathy to delay peripheral neurologic impairment.
|
Late-stage clinical trials for additional uses and dosage forms for in-line and in-registration products:
|
|
PRODUCT
|
INDICATION
|
Axitinib
|
Oral and selective inhibitor of vascular endothelial growth factor (VEGF) receptor 1, 2 & 3 for the treatment of renal cell carcinoma in treatment-naïve patients
|
Eraxis/Vfend Combination | Aspergillosis fungal infections |
Lyrica
|
Central neuropathic pain due to spinal cord injury; peripheral neuropathic pain; CR (once-a-day) dosing
|
Revatio
|
Pediatric PAH
|
Sutent
|
Adjuvant renal cell carcinoma
|
Torisel
|
Renal cell carcinoma
|
Xalkori (Crizotinib)
|
An oral ALK and c-Met inhibitor for the treatment of ALK-positive 1st and 2nd line non-small cell lung cancer
|
Xiapex
|
Peyronie’s disease
|
Zithromax/chloroquine
|
Malaria
|
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
|
Bapineuzumab(a)
|
A beta amyloid inhibitor for the treatment of mild-to-moderate Alzheimer’s disease being developed in collaboration with Janssen Alzheimer Immunotherapy Research & Development, LLC (Janssen AI), a subsidiary of Johnson & Johnson
|
Bazedoxifene-conjugated estrogens
|
A tissue-selective estrogen complex for the treatment of menopausal vasomotor symptoms
|
Bosutinib
|
An Abl and src kinase inhibitor for the treatment of chronic myelogenous leukemia (An application has been filed in the EU.)
|
Dacomitinib
|
A pan-HER tyrosine kinase inhibitor for the treatment of advanced non-small cell lung cancer
|
Dimebon (latrepirdine)(b)
|
A novel mitochondrial protectant and enhancer being developed in collaboration with Medivation, Inc., for the treatment of mild-to-moderate Alzheimer’s disease
|
ELIQUIS (Apixaban)(c)
|
For the prevention and treatment of venous thromboembolism and prevention of stroke in patients with atrial fibrillation, which is being developed in collaboration with BMS (An application for stroke prevention in atrial fibrillation patients has been filed in the EU.)
|
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
|
Tanezumab(d)
|
An anti-nerve growth factor monoclonal antibody for the treatment of pain (on clinical hold)
|
Tofacitinib
|
A JAK kinase inhibitor for the treatment of rheumatoid arthritis and psoriasis
|
(a)
|
Our collaboration with Janssen AI on bapineuzumab, a potential treatment for mild-to-moderate Alzheimer’s disease, continues with four Phase 3 studies. In December 2010, Janssen AI confirmed that enrollment was complete for its two Phase 3 primarily North American studies (301 and 302), including the biomarker sub studies. The other two Phase 3 primarily international studies (3000 and 3001) continue to enroll. In April 2010, Johnson & Johnson announced that the two Janssen AI North American studies would be completed (last patient out) in mid-2012. We announced in May 2010 that we expect that the last patient will have completed our two primarily international 18-month trials, including associated biomarker studies, in 2014.
|
(b)
|
In March 2010, we and Medivation, Inc. announced that a Phase 3 trial of dimebon (latrepiridine) did not meet its co-primary or secondary endpoints. Subsequently, we and Medivation, Inc. agreed to discontinue the CONSTELLATION and CONTACT Phase 3 trials in patients with moderate-to-severe Alzheimer’s disease. The two companies continue to investigate dimebon's potential clinical benefit in the 12-month Phase 3 CONCERT trial in patients with mild-to-moderate Alzheimer’s disease. In December 2010, we and Medivation, Inc. announced that patient enrollment was completed on November 30, 2010, in the CONCERT study. In April 2011, we and Medivation, Inc. announced that the Phase 3 HORIZON trial in patients with Huntington’s disease did not meet its co-primary endpoints and that, as a result, development of dimebon in Huntington’s disease has been discontinued.
|
(c)
|
The atrial fibrillation (AF) program of the investigational drug ELIQUIS consists of two trials. First, the data from the Phase 3 AVERROES trial demonstrated that ELIQUIS significantly reduced the relative risk of a composite stroke or systemic embolism by 55% without a significant increase in major bleeding, fatal bleeding or intracranial bleeding compared with aspirin. Minor bleeding, however, was increased compared to aspirin. Second, the Phase 3 ARISTOTLE trial investigated ELIQUIS compared to warfarin for the prevention of stroke in approximately 18,000 patients with AF and at least one additional risk factor for stroke. In June 2011, we and BMS announced that ELIQUIS met the primary efficacy objective of non-inferiority to warfarin on the combined outcome of stroke (ischemic, hemorrhagic or unspecified type) and systemic embolism. In addition, ELIQUIS met key secondary endpoints of superiority on efficacy and on ISTH (International Society on Thrombosis and Haemostasis) major bleeding compared to warfarin. We submitted a regulatory application for stroke prevention in atrial fibrillation in Europe, which was validated for review by the EMA in October 2011. Our alliance partner, BMS, expects to have an accepted filing in the U.S. for this indication by the end of 2011.
|
(d)
|
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 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., including our study for chronic pancreatitis. Studies of tanezumab in cancer pain were allowed to continue. We continue to work with the FDA to reach an understanding about the appropriate scope of continued clinical investigation of tanezumab. In July 2011, we submitted our response to the “clinical hold” letter from the FDA, and we anticipate that an FDA Arthritis Advisory Committee meeting will be held to discuss the anti-nerve growth factor class of investigational drugs.
|
|
●
|
lower purchase accounting adjustments;
|
|
●
|
lower inventory write-offs in 2011; and
|
|
●
|
savings associated with our cost-reduction and productivity initiatives,
|
|
●
|
the unfavorable impact of foreign exchange of 8% in the third quarter of 2011 and 7% in the first nine months of 2011; and
|
|
●
|
the addition of King’s manufacturing operations.
|
|
●
|
the annual fee under the 2010 U.S. Healthcare Legislation beginning in 2011;
|
|
●
|
the addition of legacy King operating costs; and
|
|
●
|
the unfavorable impact of foreign exchange of 5% in the third quarter of 2011 and 3% in the first nine months of 2011.
|
|
●
|
savings associated with our cost-reduction and productivity initiatives.
|
|
●
|
savings associated with our cost-reduction and productivity initiatives.
|
|
●
|
higher charges related to our cost-reduction and productivity initiatives;
|
|
●
|
the addition of legacy King operations; and
|
|
●
|
the unfavorable impact of foreign exchange of 2%.
|
●
|
for our cost-reduction and productivity initiatives, 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
|
●
|
for our acquisition activity, we typically incur costs that can include transaction costs, integration costs (such as expenditures for consulting and systems integration) and restructuring charges, related to employees, assets and activities that will not continue in the combined company.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
(millions of dollars)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
Oct. 2,
2011
|
Oct. 3,
2010
|
||||||||||||
Transaction costs(a)
|
$ | 5 | $ | –– | $ | 28 | $ | 13 | ||||||||
Integration costs(b)
|
187 | 231 | 567 | 650 | ||||||||||||
Restructuring charges(c):
|
||||||||||||||||
Employee termination costs
|
770 | 27 | 1,626 | 603 | ||||||||||||
Asset impairments
|
99 | 174 | 157 | 677 | ||||||||||||
Other
|
40 | 67 | 96 | 147 | ||||||||||||
Restructuring charges and certain acquisition-related costs
|
1,101 | 499 | 2,474 | 2,090 | ||||||||||||
Additional depreciation––asset restructuring(d) :
|
||||||||||||||||
Cost of sales
|
68 | 241 | 411 | 367 | ||||||||||||
Selling, informational and administrative expenses
|
39 | 27 | 69 | 190 | ||||||||||||
Research and development expenses
|
146 | 25 | 378 | 45 | ||||||||||||
Total additional depreciation––asset restructuring
|
253 | 293 | 858 | 602 | ||||||||||||
Implementation costs(e) :
|
||||||||||||||||
Selling, informational and administrative expenses
|
11 | –– | 11 | –– | ||||||||||||
Research and development expenses
|
8 | –– | 28 | –– | ||||||||||||
Total implementation costs
|
19 | –– | 39 | –– | ||||||||||||
Total costs associated with cost-reduction initiatives and
acquisition activity
|
$ | 1,373 | $ | 792 | $ | 3,371 | $ | 2,692 |
(a) |
Transaction costs represent external costs directly related to business combinations 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 systems integration.
|
(c) |
From the beginning of our cost-reduction and transformation initiatives in 2005 through October 2, 2011, Employee termination costs represent the expected reduction of the workforce by approximately 57,800 employees, mainly in manufacturing and sales and research, of which approximately 41,000 employees have been terminated as of October 2, 2011. Employee termination costs are generally recorded when the actions are probable and estimable and include accrued severance benefits, pension and postretirement benefits, many of which may be paid out during periods after termination. Asset impairments primarily include charges to write down property, plant and equipment to fair value. Other primarily includes costs to exit certain assets and activities.
|
|
●
|
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 ($65 million), Animal Health and Consumer Healthcare operating segment ($30 million), Nutrition operating segment ($2 million), research and development operations ($47 million income), manufacturing operations ($47 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), Animal Health and Consumer Healthcare operating segment ($44 million), Nutrition operating segment ($4 million), research and development operations ($426 million), manufacturing operations ($203 million) and Corporate ($288 million).
|
|
●
|
For the three months ended October 3, 2010, Primary Care operating segment ($14 million), Specialty Care and Oncology operating segment ($53 million), Established Products and Emerging Markets operating segment ($14 million), Nutrition operating segment ($1 million), research and development operations ($17 million), manufacturing operations ($161 million) and Corporate ($8 million).
|
|
●
|
For the nine months ended October 3, 2010, Primary Care operating segment ($1 million), Specialty Care and Oncology operating segment ($99 million), Established Products and Emerging Markets operating segment ($23 million), Animal Health and Consumer Healthcare operating segment ($33 million), Nutrition operating segment ($12 million income), research and development operations ($239 million), manufacturing operations ($970 million) and Corporate ($74 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. |
Costs Incurred
|
Activity
|
Accrual
|
||||||||||
(millions of dollars)
|
2005-2011 |
Through
Oct. 2,
2011(a)
|
As of
Oct. 2,
2011(b)
|
|||||||||
Employee termination costs
|
$ | 10,437 | $ | 7,720 | $ | 2,717 | ||||||
Asset impairments
|
2,465 | 2,465 | –– | |||||||||
Other
|
996 | 889 | 107 | |||||||||
Total restructuring charges
|
$ | 13,898 | $ | 11,074 | $ | 2,824 |
(a) |
Includes adjustments for foreign currency translation.
|
(b) |
Included in Other current liabilities ($1.7 billion) and Other noncurrent liabilities ($1.1 billion).
|
|
●
|
higher 2010 impairment charges ($1.5 billion (pre-tax) in the third quarter of 2010) related to certain intangible assets acquired as part of the Wyeth acquisition in the third quarter of 2010 (see below); and
|
|
●
|
a $701 million (pre-tax) charge for asbestos litigation related to our wholly owned subsidiary, Quigley Company, Inc., in the third quarter of 2010.
|
|
●
|
higher 2010 impairment charges ($1.7 billion (pre-tax) in the first nine months of 2010) related to certain intangible assets acquired as part of the Wyeth acquisition (see below).
|
|
●
|
the extension of the U.S. research and development credit, which was signed into law on December 17, 2010;
|
|
●
|
the decrease and jurisdictional mix of certain impairment charges related to assets acquired in connection with the Wyeth acquisition; and
|
|
●
|
the change in the jurisdictional mix of earnings.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
(millions of dollars)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
Oct. 2,
2011
|
Oct. 3,
2010
|
||||||||||||
Revenues
|
$ | 116 | $ | 176 | $ | 507 | $ | 545 | ||||||||
Pre-tax (loss)/income from discontinued operations
|
$ | (7 | ) | $ | 29 | $ | 78 | $ | 106 | |||||||
Provision for taxes on income(a)
|
6 | 3 | 39 | 30 | ||||||||||||
(Loss)/income from discontinued operations––net of tax
|
(13 | ) | 26 | 39 | 76 | |||||||||||
Pre-tax gain/(loss) on sale of discontinued operations
|
1,695 | (12 | ) | 1,683 | (9 | ) | ||||||||||
Provision/(benefit) for taxes on income(b)
|
367 | (1 | ) | 367 | –– | |||||||||||
Discontinued operations––net of tax
|
$ | 1,315 | $ | 15 | $ | 1,355 | $ | 67 |
(a) |
Includes a deferred tax expense of $13 million for the first nine months of 2011.
|
(b) |
Includes a deferred tax expense of $162 million for the third quarter and first nine months of 2011.
|
●
|
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. Beginning in 2011, this metric which is derived from Adjusted income will account 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)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
% Incr./
(Decr.)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
% Incr./
(Decr.)
|
||||||||||||||||||
Reported net income attributable to Pfizer Inc.
|
$ | 3,738 | $ | 866 | * | $ | 8,570 | $ | 5,367 | 60 | ||||||||||||||
Purchase accounting adjustments––net of tax
|
1,264 | 1,247 | 1 | 3,878 | 4,933 | (21 | ) | |||||||||||||||||
Acquisition-related costs––net of tax
|
242 | 559 | (57 | ) | 1,144 | 1,996 | (43 | ) | ||||||||||||||||
Discontinued operations––net of tax
|
(1,315 | ) | (15 | ) | * | (1,355 | ) | (67 | ) | * | ||||||||||||||
Certain significant items––net of tax
|
891 | 1,695 | (47 | ) | 2,117 | 1,912 | 11 | |||||||||||||||||
Adjusted income(a)
|
$ | 4,820 | $ | 4,352 | 11 | $ | 14,354 | $ | 14,141 | 2 |
(a) |
The effective tax rate on Adjusted income was 30.9% in the third quarter of 2011, compared with 30.2% in the same period last year. For the first nine months of 2011 the effective tax rate on Adjusted income was 29.3%, compared to 30.7% in the same period last year. The changes in the effective tax rate on Adjusted income were primarily due to the extension of the U.S. research and development credit that was signed into law in December 2010, as well as a change in the jurisdictional mix of earnings.
|
* |
Calculation not meaningful.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||||||||
(millions of dollars)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
% Incr./
(Decr.)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
% Incr./
(Decr.)
|
||||||||||||||||||
Earnings per common share––diluted(a):
|
||||||||||||||||||||||||
Reported net income attributable to Pfizer Inc. common shareholders
|
$ | 0.48 | $ | 0.11 | * | $ | 1.08 | $ | 0.66 | 64 | ||||||||||||||
Purchase accounting adjustments––net of tax
|
0.16 | 0.15 | 7 | 0.49 | 0.61 | (20 | ) | |||||||||||||||||
Acquisition-related costs––net of tax
|
0.03 | 0.07 | (57 | ) | 0.14 | 0.25 | (44 | ) | ||||||||||||||||
Discontinued operations––net of tax
|
(0.17 | ) | –– | * | (0.17 | ) | (0.01 | ) | * | |||||||||||||||
Certain significant items––net of tax
|
0.11 | 0.21 | (48 | ) | 0.27 | 0.24 | 13 | |||||||||||||||||
Adjusted net income attributable to Pfizer Inc. common shareholders
|
$ | 0.62 | $ | 0.54 | 15 | 1.81 | $ | 1.75 | 3 |
(a) |
EPS amounts may not add due to rounding.
|
* |
Calculation not meaningful.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
(millions of dollars)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
Oct. 2,
2011
|
Oct. 3,
2010
|
||||||||||||
Purchase accounting adjustments:
|
||||||||||||||||
Amortization, depreciation and other(a)
|
$ | 1,422 | $ | 1,138 | $ | 4,146 | $ | 3,926 | ||||||||
Cost of sales, primarily related to fair value adjustments of
acquired inventory
|
289 | 487 | 1,086 | 2,564 | ||||||||||||
In-process research and development charges(b)
|
–– | –– | –– | 74 | ||||||||||||
Total purchase accounting adjustments, pre-tax
|
1,711 | 1,625 | 5,232 | 6,564 | ||||||||||||
Income taxes
|
447 | 378 | 1,354 | 1,631 | ||||||||||||
Total purchase accounting adjustments––net of tax
|
1,264 | 1,247 | 3,878 | 4,933 | ||||||||||||
Acquisition-related costs:
|
||||||||||||||||
Transaction costs(c)
|
5 | –– | 28 | 13 | ||||||||||||
Integration costs(c)
|
187 | 231 | 567 | 650 | ||||||||||||
Restructuring charges(c)
|
19 | 268 | 415 | 1,427 | ||||||||||||
Additional depreciation––asset restructuring(d)
|
90 | 293 | 461 | 602 | ||||||||||||
Total acquisition-related costs, pre-tax
|
301 | 792 | 1,471 | 2,692 | ||||||||||||
Income taxes
|
59 | 233 | 327 | 696 | ||||||||||||
Total acquisition-related costs––net of tax
|
242 | 559 | 1,144 | 1,996 | ||||||||||||
Discontinued operations:
|
||||||||||||||||
Loss/(income) from operations––net of tax
|
13 | (26 | ) | (39 | ) | (76 | ) | |||||||||
(Gain)/loss on sale of discontinued operations
|
(1,328 | ) | 11 | (1,316 | ) | 9 | ||||||||||
Total discontinued operations––net of tax
|
(1,315 | ) | (15 | ) | (1,355 | ) | (67 | ) | ||||||||
Certain significant items:
|
||||||||||||||||
Restructuring charges––cost-reduction and productivity
initiatives(c)
|
890 | –– | 1,464 | –– | ||||||||||||
Implementation costs and additional depreciation––asset
restructuring––cost-reduction and productivity initiatives(e)
|
182 | –– | 436 | –– | ||||||||||||
Certain legal matters(f)
|
132 | 701 | 657 | 843 | ||||||||||||
Certain asset impairment charges(g)
|
105 | 1,468 | 582 | 1,668 | ||||||||||||
Inventory write-off(h)
|
(1 | ) | 212 | 11 | 212 | |||||||||||
Other(i)
|
2 | 32 | 26 | (32 | ) | |||||||||||
Total certain significant items, pre-tax
|
1,310 | 2,413 | 3,176 | 2,691 | ||||||||||||
Income taxes
|
419 | 718 | 1,059 | 779 | ||||||||||||
Total certain significant items––net of tax
|
891 | 1,695 | 2,117 | 1,912 | ||||||||||||
Total purchase accounting adjustments, acquisition-related costs,
discontinued operations and certain significant items––net of tax
|
$ | 1,082 | $ | 3,486 | $ | 5,784 | $ | 8,774 |
(a) |
Included primarily in Amortization of intangible assets.
|
(b) | Included in Acquisition-related in-process research and development charges. |
(c) | Included in Restructuring charges and certain acquisition-related costs (see Notes to Condensed Consolidated Financial Statements—Note 5.Costs Associated with Cost-Reduction and Productivity Initiatives and Acquisition Activity). |
(d) |
Represents the impact of changes in estimated useful lives of assets involved in restructuring actions related to acquisitions.
|
For the third quarter of 2011, included in Cost of sales ($68 million), Selling, informational and administrative expenses ($17 million) and in Research and Development expenses ($5 million). For the third quarter of 2010, included in Cost of sales ($241 million), Selling, informational and administrative expenses ($27 million) and Research and development expenses ($25 million).
|
|
For the first nine months of 2011, included in Cost of sales ($411 million), Selling, informational and administrative expenses ($41 million), and Research and development expenses ($9 million). For the first nine months of 2010, included in Cost of sales ($367 million), Selling, informational and administrative expenses ($190 million) and Research and development expenses ($45 million). | |
(e) | Included in Selling, informational and administrative expenses ($33 million) and Research and development expenses ($149 million) for the three months ended October 2, 2011. Included in Selling, informational and administrative expenses ($39 million) and Research and development expenses ($397 million) for the nine months ended October 2, 2011. |
(f) | Included in Other deductions––net. In the first nine months of 2011, primarily relates to charges for hormone-replacement therapy litigation. In both periods of 2010, primarily includes a charge for asbestos litigation related to our wholly owned subsidiary Quigley Company, Inc. |
(g) | Included in Other deductions––net. In 2011 and 2010, primarily relates to certain Wyeth assets, including in-process research and development (IPR&D) intangible assets. |
(h) | Included in Cost of sales. In 2010, primarily relates to unfinished inventory acquired as part of the Wyeth acquisition that became unusable after the acquisition date. |
(i) |
Primarily included in Other deductions––net.
|
Nine Months Ended
|
||||||||||||
(millions of dollars)
|
Oct. 2,
2011
|
Oct. 3,
2010
|
Incr./
(Decr.)
|
|||||||||
Cash provided by operating activities
|
$ | 14,979 | $ | 5,196 | 9,783 | |||||||
Cash provided by investing activities
|
1,301 | 5,153 | (3,852 | ) | ||||||||
Cash used in financing activities
|
(14,357 | ) | (10,095 | ) | (4,262 | ) |
|
●
|
the significant income tax payments made in the first nine months of 2010 of approximately $11.5 billion ($10.0 billion more than in 2011) associated with certain business decisions executed to finance the Wyeth acquisition, including the decision to repatriate certain funds earned outside the U.S.; and
|
|
●
|
the timing of receipts and payments in the ordinary course of business.
|
|
●
|
net proceeds from redemption and sales of investments of $2.6 billion in the first nine months of 2011, which were used to finance our acquisition of King, compared to net proceeds from redemption and sales of investments of $5.6 billion in the first nine months of 2010, which were used for repayment of short-term borrowings and income tax payments in 2010; and
|
|
●
|
cash paid of $3.2 billion, net of cash acquired, for our acquisition of King in 2011 (see Notes to Condensed Consolidated Financial Statements – Note 3. Acquisition of King Pharmaceuticals, Inc.),
|
|
●
|
proceeds of $2.4 billion received from the sale of Capsugel (see Notes to Condensed Consolidated Financial Statements – Note 4. Discontinued Operations).
|
|
●
|
purchases of common stock of $5.8 billion in the first nine months of 2011, compared to purchases of $1.0 billion in the first nine months of 2010,
|
|
●
|
net repayments of borrowings of $3.9 billion in the first nine months of 2011, compared to net repayments of borrowings of $4.6 billion in the first nine months of 2010.
|
(millions of dollars)
|
Oct. 2,
2011
|
Dec. 31,
2010
|
||||||
Financial assets:
|
||||||||
Cash and cash equivalents
|
$ | 3,706 | $ | 1,735 | ||||
Short-term investments
|
25,257 | 26,277 | ||||||
Short-term loans
|
184 | 467 | ||||||
Long-term investments and loans
|
9,468 | 9,747 | ||||||
Total financial assets
|
$ | 38,615 | $ | 38,226 | ||||
Debt:
|
||||||||
Short-term borrowings, including current portion of long-term debt
|
$ | 5,637 | $ | 5,603 | ||||
Long-term debt
|
35,399 | 38,410 | ||||||
Total debt
|
$ | 41,036 | $ | 44,013 | ||||
Net financial liabilities
|
$ | (2,421 | ) | $ | (5,787 | ) |
|
●
|
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, including our plan to repurchase between approximately $7 billion and $9 billion of our common stock in 2011;
|
|
●
|
the cash requirements associated with our productivity/cost-reduction 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)
|
Oct. 2,
2011
|
Dec. 31,
2010
|
||||||
Cash, cash equivalents and short-term investments(a)
|
$ | 28,963 | $ | 28,012 | ||||
Working capital(b)
|
$ | 34,876 | $ | 32,377 | ||||
Ratio of current assets to current liabilities
|
2.25:1
|
2.13:1
|
||||||
Shareholders’ equity per common share(c)
|
$ | 11.65 | $ | 10.96 |
(a) |
See Notes to Condensed Consolidated Financial Statements––Note 9. Financial Instruments for a description of assets held and for a description of credit risk related to our financial instruments held.
|
(b) |
Working capital includes assets of discontinued operations and other assets held for sale of $122 million as of October 2, 2011 and $1.4 billion as of December 31, 2010. Working capital also includes liabilities of discontinued operations of $151 million as of December 31, 2010.
|
(c) |
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).
|
●
|
Success of research and development activities including, without limitation, the ability to meet anticipated clinical trial 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;
|
●
|
Speed with which regulatory authorizations, pricing approvals and product launches may be achieved;
|
●
|
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;
|
●
|
Ability to meet generic and branded competition after the loss of patent protection for our products or competitor products;
|
●
|
Ability to successfully market both new and existing products domestically and internationally;
|
●
|
Difficulties or delays in manufacturing;
|
●
|
Trade buying patterns;
|
●
|
Impact of existing and future legislation and regulatory provisions on product exclusivity;
|
●
|
Trends toward managed care and healthcare cost containment;
|
●
|
Impact of 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;
|
●
|
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, repeal or invalidation 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;
|
●
|
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;
|
●
|
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, environmental and tax issues; ongoing efforts to explore various means for resolving asbestos litigation; and other legal proceedings;
|
●
|
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 result from the enactment in August 2010 of the Education Jobs and Medicaid Assistance Act of 2010 and that may result from pending and possible future proposals;
|
●
|
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 lenders, our customers, our suppliers 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;
|
●
|
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; and
|
●
|
Impact of acquisitions, divestitures, restructurings, product withdrawals and other unusual items, including (i) our ability to successfully implement our plans, announced on February 1, 2011, regarding the Company’s research and development function, including the planned exit from the Company’s Sandwich, U.K. site, subject to works council and union consultations; (ii) our ability to realize the projected benefits of our acquisitions of Wyeth; (iii) our ability to realize the projected benefits of our cost-reduction and productivity initiatives, including those related to the Wyeth integration and to our research and development function; and (iv) the impact of the strategic alternatives that we decide to pursue for our Animal Health and Nutrition businesses.
|
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)
|
July 4, 2011, through July 31, 2011
|
29,514,313
|
$20.18
|
29,474,600
|
$4,759,572,160
|
August 1, 2011, through August 28, 2011
|
39,525,190
|
$18.01
|
39,414,641
|
$4,049,644,440
|
August 29, 2011, through October 2, 2011
|
44,117,666
|
$18.30
|
43,982,940
|
$3,244,724,625
|
Total
|
113,157,169
|
$18.69
|
112,872,181
|
(a) | On January 23, 2008, we announced that the Board of Directors had authorized a $5 billion share-purchase plan (the 2008 Stock Purchase Plan) to be utilized from time to time. On February 1, 2011, we announced that the Board of Directors had authorized a new $5 billion share-repurchase plan (the 2011 Stock Purchase Plan). |
(b) | In addition to purchases under the 2008 Stock Purchase Plan and the 2011 Stock Purchase Plan, these columns reflect the following transactions during the third fiscal quarter of 2011: (i) the surrender to Pfizer of 276,125 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock and restricted stock units issued to employees, and (ii) the surrender to Pfizer of 8,863 shares of common stock to satisfy tax withholding obligations in connection with the vesting of performance-contingent share awards issued to employees. |
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
|
-
|
Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
5) Exhibit 32.1
|
-
|
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
|
|
6) Exhibit 32.2
|
-
|
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
|
|
7) Exhibit 101:
|
|||
EX-101.INS
EX-101.SCH
EX-101.CAL
EX-101.LAB
EX-101.PRE
EX-101.DEF
|
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
|
Pfizer Inc.
|
|
(Registrant)
|
|
Dated: November 10, 2011
|
/s/ Loretta V. Cangialosi
|
Loretta V. Cangialosi, Senior Vice President and
Controller
(Principal Accounting Officer and
Duly Authorized Officer)
|
Nine
Months
Ended
Oct. 2,
|
Year Ended December 31,
|
|||||||||||||||||||||||
(in millions, except ratios)
|
2011
|
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||||
Determination of earnings:
|
||||||||||||||||||||||||
Income from continuing operations
|
||||||||||||||||||||||||
before provision for taxes on income,
noncontrolling interests and
cumulative effect of a change in
accounting principles
|
$ | 10,469 | $ | 9,274 | $ | 10,668 | $ | 9,513 | $ | 9,120 | $ | 12,886 | ||||||||||||
Less:
|
||||||||||||||||||||||||
Noncontrolling interests
|
31 | 32 | 9 | 23 | 42 | 12 | ||||||||||||||||||
Income attributable to Pfizer Inc.
|
10,438 | 9,242 | 10,659 | 9,490 | 9,078 | $ | 12,874 | |||||||||||||||||
Add:
|
||||||||||||||||||||||||
Fixed charges
|
1,387 | 1,936 | 1,361 | 647 | 541 | 642 | ||||||||||||||||||
Total earnings as defined
|
$ | 11,825 | $ | 11,178 | $ | 12,020 | $ | 10,137 | $ | 9,619 | $ | 13,516 | ||||||||||||
Fixed charges:
|
||||||||||||||||||||||||
Interest expense(a)
|
$ | 1,285 | $ | 1,799 | $ | 1,233 | $ | 516 | $ | 397 | $ | 488 | ||||||||||||
Preferred stock dividends(b)
|
4 | 6 | 7 | 8 | 11 | 14 | ||||||||||||||||||
Rents(c)
|
98 | 131 | 121 | 123 | 133 | 140 | ||||||||||||||||||
Fixed charges
|
1,387 | 1,936 | 1,361 | 647 | 541 | 642 | ||||||||||||||||||
Capitalized interest
|
17 | 36 | 34 | 46 | 43 | 29 | ||||||||||||||||||
Total fixed charges
|
$ | 1,404 | $ | 1,972 | $ | 1,395 | $ | 693 | $ | 584 | $ | 671 | ||||||||||||
Ratio of earnings to fixed charges
|
8.4 | 5.7 | 8.6 | 14.6 | 16.5 | 20.1 |
(a)
|
Interest expense includes amortization of debt premium, discount and expenses. Interest expense does not include interest related to uncertain tax positions of $240 million for the first nine months of 2011; $384 million for 2010; $337 million for 2009; $333 million for 2008; $331 million for 2007; and $200 million for 2006.
|
(b)
|
Preferred stock dividends are from our Series A convertible perpetual preferred stock held by an Employee Stock Ownership Plan assumed in connection with our acquisition of Pharmacia in 2003.
|
(c)
|
Rents included in the computation consist of one-third of rental expense, which we believe to be a conservative estimate of an interest factor in our leases, which are not material.
|
1.
|
I have reviewed this report on Form 10-Q of Pfizer Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
1.
|
I have reviewed this report on Form 10-Q of Pfizer Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Inventories (Detail) (USD $) In Millions | 9 Months Ended | |||||
---|---|---|---|---|---|---|
Oct. 02, 2011 | Dec. 31, 2010 | |||||
Inventories [Line Items] | ||||||
Finished goods | $ 3,975 | $ 3,665 | ||||
Work-in-process | 3,577 | 3,727 | ||||
Raw materials and supplies | 874 | 883 | ||||
Total inventories | $ 8,426 | [1] | $ 8,275 | [1] | ||
Excess inventories | Certain inventories are in excess of one year's supply | |||||
|
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (USD $) In Millions | Oct. 02, 2011 | Dec. 31, 2010 | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Assets | ||||||||||||||
Cash and cash equivalents | $ 3,706 | $ 1,735 | ||||||||||||
Short-term investments | 25,257 | 26,277 | ||||||||||||
Accounts receivable, less allowance for doubtful accounts | 15,749 | 14,426 | ||||||||||||
Short-term loans | 184 | 467 | ||||||||||||
Inventories | 8,426 | [1] | 8,275 | [1] | ||||||||||
Taxes and other current assets | 9,288 | 8,394 | ||||||||||||
Assets of discontinued operations and other assets held for sale | 122 | 1,439 | ||||||||||||
Total current assets | 62,732 | 61,013 | ||||||||||||
Long-term investments and loans | 9,468 | 9,747 | ||||||||||||
Property, plant and equipment, less accumulated depreciation | 17,721 | 18,645 | ||||||||||||
Goodwill | 45,409 | 43,928 | ||||||||||||
Identifiable intangible assets, less accumulated amortization | 55,597 | [2] | 57,555 | [2] | ||||||||||
Taxes and other noncurrent assets | 5,205 | 4,126 | ||||||||||||
Total assets | 196,132 | 195,014 | ||||||||||||
Liabilities and Shareholders' Equity | ||||||||||||||
Short-term borrowings, including current portion of long-term debt | 5,637 | [3] | 5,603 | [3] | ||||||||||
Accounts payable | 3,765 | 3,994 | ||||||||||||
Dividends payable | 1,601 | |||||||||||||
Income taxes payable | 2,215 | 951 | ||||||||||||
Accrued compensation and related items | 1,999 | 2,080 | ||||||||||||
Other current liabilities | 14,240 | 14,256 | ||||||||||||
Liabilities of discontinued operations | 151 | |||||||||||||
Total current liabilities | 27,856 | 28,636 | ||||||||||||
Long-term debt | 35,399 | [4],[5] | 38,410 | [4],[5] | ||||||||||
Pension benefit obligations | 5,734 | 6,194 | ||||||||||||
Postretirement benefit obligations | 3,059 | 3,035 | ||||||||||||
Noncurrent deferred tax liabilities | 20,415 | 18,628 | ||||||||||||
Other taxes payable | 6,900 | 6,245 | ||||||||||||
Other noncurrent liabilities | 6,239 | 5,601 | ||||||||||||
Total liabilities | 105,602 | 106,749 | ||||||||||||
Commitments and Contingencies | ||||||||||||||
Preferred stock | 46 | 52 | ||||||||||||
Common stock | 445 | 444 | ||||||||||||
Additional paid-in capital | 71,235 | 70,760 | ||||||||||||
Employee benefit trusts | (3) | (7) | ||||||||||||
Treasury stock | (28,586) | (22,712) | ||||||||||||
Retained earnings | 48,121 | 42,716 | ||||||||||||
Accumulated other comprehensive loss | (1,211) | (3,440) | ||||||||||||
Total Pfizer Inc. shareholders' equity | 90,047 | 87,813 | ||||||||||||
Equity attributable to noncontrolling interests | 483 | 452 | ||||||||||||
Total shareholders' equity | 90,530 | 88,265 | ||||||||||||
Total liabilities and shareholders' equity | $ 196,132 | $ 195,014 | ||||||||||||
|
Goodwill and Other Intangible Assets Narrative (Detail) (USD $) In Billions, unless otherwise specified | 3 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2011 | Oct. 03, 2010 | Oct. 02, 2011 | Oct. 03, 2010 | Oct. 02, 2011
Primary Care [Member]
Developed Technology Rights [Member] | Oct. 02, 2011
Nutrition [Member]
Developed Technology Rights [Member] | Oct. 02, 2011
Developed Technology Rights [Member]
Specialty Care [Member] | Oct. 02, 2011
Developed Technology Rights [Member]
Established Products [Member] | Oct. 02, 2011
Developed Technology Rights [Member]
Animal Health [Member] | Oct. 02, 2011
Developed Technology Rights [Member]
Oncology [Member] | Oct. 25, 2011
Developed Technology Rights [Member]
Change in Product Status [Member]
Prevnar / Prevenar 13 Adult [Member] | Oct. 02, 2011
Finite Lived Brands [Member]
Established Products [Member] | Oct. 02, 2011
Finite Lived Brands [Member]
Animal Health [Member] | Oct. 02, 2011
Finite Lived Brands [Member]
Consumer Healthcare [Member] | Oct. 02, 2011
Nutrition [Member]
Indefinite Lived Brands [Member] | Oct. 02, 2011
Indefinite Lived Brands [Member]
Established Products [Member] | Oct. 02, 2011
Indefinite Lived Brands [Member]
Consumer Healthcare [Member] | Oct. 02, 2011
Primary Care [Member]
In Process Research And Development [Member] | Oct. 02, 2011
In Process Research And Development [Member]
Specialty Care [Member] | Oct. 02, 2011
In Process Research And Development [Member]
Established Products [Member] | Oct. 02, 2011
In Process Research And Development [Member]
Animal Health [Member] | Oct. 02, 2011
In Process Research And Development [Member]
Oncology [Member] | Oct. 02, 2011
In Process Research And Development [Member]
Worldwide Research and Development [Member] | Oct. 25, 2011
In Process Research And Development [Member]
Change in Product Status [Member]
Prevnar / Prevenar 13 Adult [Member] | |
Finite Lived and Indefinite Lived Intangible Assets [Line Items] | ||||||||||||||||||||||||
Percentage Of Finite-lived Intangible Asset Amortized Cost By Segment | 16.00% | 1.00% | 62.00% | 18.00% | 2.00% | 1.00% | 29.00% | 14.00% | 57.00% | |||||||||||||||
Percentage Of Indefinite-lived Intangible Asset Unamortized Costs By Segment | 22.00% | 28.00% | 50.00% | 6.00% | 75.00% | 3.00% | 1.00% | 2.00% | 13.00% | |||||||||||||||
Asset Reclassification Amount Increase | $ 1.8 | |||||||||||||||||||||||
Asset Reclassification Amount Decrease | 1.8 | |||||||||||||||||||||||
Amortization expense for finite-lived intangible assets | $ 1.4 | $ 1.2 | $ 4.3 | $ 4.1 |
Costs Associated with Cost-Reduction and Productivity Initiatives and Acquisition Activity (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 02, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Costs in Connection with Cost-Reduction and Productivity Initiatives and Acquisition Activity [Table Text Block] | We
incurred the following costs in connection with our cost-reduction
and productivity initiatives and acquisition activity, such as King
(acquired in 2011) and Wyeth (acquired in 2009):
The
restructuring charges in 2011 are associated with the
following:
The
restructuring charges in 2010 are associated with the
following:
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Charges [Table Text Block] | The
components of restructuring charges associated with all of our
cost-reduction and productivity initiatives and acquisition
activity follow:
|
Document and Entity Information | 9 Months Ended | |
---|---|---|
Oct. 02, 2011 | Nov. 07, 2011 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Oct. 02, 2011 | |
Document Fiscal Year Focus | 2011 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | PFE | |
Entity Registrant Name | PFIZER INC | |
Entity Central Index Key | 0000078003 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 7,686,966,786 |
Financial Instruments Narrative (Detail) (USD $) | 9 Months Ended | |||||
---|---|---|---|---|---|---|
Oct. 02, 2011
Commercial Paper [Member] | Dec. 31, 2010
Commercial Paper [Member] | Oct. 02, 2011
Foreign Exchange Contract [Member] | Oct. 02, 2011
Interest Rate Contract [Member] | Oct. 02, 2011
Credit Risk Contract [Member] | Oct. 02, 2011
Derivative Instruments Issued By Counterparties [Member] | |
Short - Term Borrowings [Abstract] | ||||||
Commercial paper outstanding | $ 600,000,000 | $ 1,200,000,000 | ||||
Derivative Financial Instruments and Hedging Activities [Abstract] | ||||||
Aggregate notional amount of foreign exchange derivative financial instruments | 51,400,000,000 | |||||
Aggregate notional amount of interest rate derivative financial instruments | 13,400,000,000 | |||||
Credit Risk Derivatives [Abstract] | ||||||
Aggregate fair value of net derivative liabilities | 667,000,000 | |||||
Posted collateral | 662,000,000 | |||||
Additional collateral | 22,000,000 | |||||
Concentration risk maximum exposure | 3,300,000,000 | |||||
Securities received as collateral | $ 647,000,000 |
Financial Instruments (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 02, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information about Certain Financial Assets and Liabilities [Table Text Block] | Information
about certain of our financial assets and liabilities
follows:
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Financial Assets and Liabilities Presented in the Condensed Consolidated Balance Sheets [Table Text Block] | These
selected financial assets and liabilities are presented in the
Condensed Consolidated Balance Sheets as follows:
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contractual Maturities of Available-for-sale and Held-to-maturity Debt Securities [Table Text Block] | The
contractual maturities of the available-for-sale and
held-to-maturity debt securities at October 2, 2011,
follow:
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Gains (Losses) on Interest Rate Risk [Table Text Block] | Information
about gains/(losses) incurred to hedge or offset foreign exchange
or interest rate risk is as follows:
|
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Comprehensive Income/(Loss) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 02, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income/(Loss) |
Note 8.
Comprehensive Income/(Loss)
The
components of comprehensive income/(loss) follow:
|
Inventories (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Inventories [Table Text Block] | The
components of inventories follow:
|
Comprehensive Income/(Loss) (Detail) (USD $) In Millions | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 02, 2011 | Oct. 03, 2010 | Oct. 02, 2011 | Oct. 03, 2010 | |
Comprehensive Income (Loss) [Line Items] | ||||
Net income before allocation to noncontrolling interests | $ 3,749 | $ 871 | $ 8,601 | $ 5,391 |
Other comprehensive income/(loss): | ||||
Currency translation adjustment and other | (68) | 786 | 2,479 | (4,105) |
Net unrealized (losses)/gains on derivative financial instruments | (230) | (59) | (354) | (300) |
Net unrealized (losses)/gains on available-for-sale securities | (36) | 26 | (48) | (86) |
Benefit plan adjustments | 72 | (45) | 151 | 239 |
Total other comprehensive (loss)/income | (262) | 708 | 2,228 | (4,252) |
Total comprehensive income before allocation to noncontrolling interests | 3,487 | 1,579 | 10,829 | 1,139 |
Less: comprehensive income attributable to noncontrolling interests | 7 | 5 | 35 | 23 |
Comprehensive income attributable to Pfizer Inc. | $ 3,480 | $ 1,574 | $ 10,794 | $ 1,116 |
Discontinued Operations - Assets of Discontinued Operations and Other Assets Held For Sale and Liabilities of Discontinued Operations in Condensed Consolidated Balance Sheets (Detail) (USD $) In Millions | Oct. 02, 2011 | Dec. 31, 2010 |
---|---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Assets of discontinued operations and other assets held for sale | $ 122 | $ 1,439 |
Liabilities of discontinued operations | 151 | |
Capsugel [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Accounts receivable | 186 | |
Inventories | 130 | |
Taxes and other current assets | 12 | 47 |
Property, plant and equipment | 110 | 1,009 |
Goodwill | 19 | |
Identifiable intangible assets | 3 | |
Taxes and other noncurrent assets | 45 | |
Assets of discontinued operations and other assets held for sale | 122 | 1,439 |
Current liabilities | 124 | |
Other liabilities | 27 | |
Liabilities of discontinued operations | $ 151 |
Comprehensive Income/(Loss) (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 02, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Comprehensive Income [Table Text Block] | The
components of comprehensive income/(loss) follow:
|
Earnings Per Share Attributable to Common Shareholders | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 02, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share Attributable to Common Shareholders |
Note 13.
Earnings Per Share Attributable to Common
Shareholders
Basic
and diluted earnings per share (EPS) were computed using the
following data:
|
Discontinued Operations | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Discontinued Operations |
Note 4.
Discontinued Operations
We
evaluate our businesses and product lines periodically for their
strategic fit within our operations. In 2011, we decided to sell
our Capsugel business. In connection with the decision to sell this
business, for all periods presented, the operating results
associated with this business have been reclassified into
Discontinued
operations––net of tax in the Condensed
Consolidated Statements of Income, and the assets and liabilities
associated with this business have been reclassified into
Assets of
discontinued operations and other assets held for sale and
Liabilities of
discontinued operations, as appropriate, in the Condensed
Consolidated Balance Sheets.
On
April 4, 2011, we announced that we had entered into an agreement
to sell Capsugel to an affiliate of Kohlberg Kravis Roberts &
Co. L.P. for approximately $2.4 billion in cash. The transaction
closed on August 1, 2011.
The
following amounts, substantially all of which relate to our
Capsugel business, have been segregated from continuing operations
and included in Discontinued
operations—net of tax in our Condensed Consolidated
Statements of Income:
The
following assets and liabilities, which in 2010 include the assets
and liabilities related to our Capsugel business, have been
segregated and included in Assets of discontinued
operations and other assets held for sale and Liabilities of discontinued
operations, as appropriate, in our Condensed Consolidated
Balance Sheets:
The
net cash flows of our discontinued operations for each of the
categories of operating, investing and financing activities were
not significant for the first nine months of 2011 or
2010.
|
Acquisition of King Pharmaceuticals Inc - Pro Forma Information (Detail) (King [Member], Pro Forma Consolidated Results [Member], USD $) In Millions, except Per Share data | 3 Months Ended | 9 Months Ended | |
---|---|---|---|
Oct. 03, 2010 | Oct. 02, 2011 | Oct. 03, 2010 | |
King [Member] | Pro Forma Consolidated Results [Member] | |||
Business Acquisition [Line Items] | |||
Revenues | $ 16,335 | $ 50,788 | $ 50,749 |
Net income attributable to Pfizer Inc. common shareholders | $ 854 | $ 8,769 | $ 5,163 |
Diluted earnings per share attributable to Pfizer Inc. common shareholders | $ 0.11 | $ 1.11 | $ 0.64 |
Inventories | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories |
Note 10.
Inventories
The
components of inventories follow:
|
Segment, Product and Geographic Area Information | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 02, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment, Product and Geographic Area Information |
Note 15.
Segment, Product and Geographic Area
Information
A. Segment Information
We
manage our operations through five operating
segments––Primary Care (PC), Specialty Care and
Oncology (SC&O), Established Products and Emerging Markets
(EP&EM), Animal Health and Consumer Healthcare (AH&CH) and
Nutrition. Each operating segment has responsibility for its
commercial activities and for certain research and development
activities related to in-line products and IPR&D projects that
generally have achieved proof-of-concept. Previously, we managed
our operations through two operating
segments––Biopharmaceutical and
Diversified.
We
regularly review our segments and the approach used by management
to evaluate performance and allocate resources.
A
description of each of our five operating segments
follows:
Our
chief operating decision maker uses the revenues and earnings of
the five operating segments, among other factors, for performance
evaluation and resource allocation. For the operating segments that
comprise more than one business unit, a single segment manager is
responsible for target setting, performance evaluation and resource
allocation among those business units.
Certain
costs are not allocated to our operating segment results, such as
costs associated with the following:
We
manage our assets on a total company basis, not by operating
segment, as many of our operating assets are shared (such as our
plant network assets) or commingled (such as accounts receivable,
as many of our customers are served by multiple operating
segments). Therefore, our chief operating decision maker does not
regularly review any asset information by operating segment and,
accordingly, we do not report asset information by operating
segment. Total assets were approximately $196 billion at October 2,
2011 and approximately $195 billion at December 31,
2010.
Certain
information by operating segment follows:
B. Product Information
Significant
product revenues follow:
C. Geographic Area Information
Revenues
by geographic area follow:
|
Goodwill and Other Intangible Assets | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Goodwill and Other Intangible Assets |
Note 11.
Goodwill and Other Intangible Assets
A. Goodwill
The
changes in the carrying amount of goodwill for the nine months
ended October 2, 2011, follow:
Our
company was previously managed through two operating segments
(Biopharmaceutical and Diversified), and is now managed through
five operating segments (see Note 15. Segment, Product and
Geographic Area Information for further information). As a
result of this change, the goodwill previously associated with our
Biopharmaceutical operating segment is required to be allocated
among the Primary Care, Specialty Care and Oncology, and
Established Products and Emerging Markets operating segments. The
allocation of goodwill is a complex process that requires, among
other things, that we determine the fair value of each reporting
unit. Therefore, we have not yet completed the allocation, but we
expect that it will be completed in the current year. While all
reporting units can confront events and circumstances that can lead
to impairments (such as, among other things, unanticipated
competition, an adverse action or assessment by a regulator, a
significant adverse change in legal matters or in the business
climate and/or a failure to replace the contributions of products
that lose exclusivity), in general, the increased number of
Biopharmaceutical reporting units significantly increases our risk
of goodwill impairment charges as smaller reporting units are
inherently less able to absorb negative developments that might
affect certain operating assets but not others.
B. Other Intangible Assets
The
components of identifiable intangible assets follow:
At
October 2, 2011, our identifiable intangible assets are associated
with the following, as a percentage of identifiable intangible
assets, less accumulated amortization:
For
IPR&D assets, the risk of failure is significant and there can
be no certainty that these assets ultimately will yield a
successful product. The nature of the biopharmaceutical business is
high-risk and requires that we invest in a large number of projects
in an effort to achieve a successful portfolio of approved
products. As such, we expect that many of these IPR&D assets
will become impaired and be written off at some time in the
future.
On
October 25, 2011, the European Commission approved the
Company’s pneumococcal conjugate vaccine, Prevenar 13 Adult,
for active immunization for the prevention of vaccine-type invasive
disease caused by Streptococcus pneumoniae in adults age 50 years
and older. As a result of this fourth-quarter 2011 approval in a
major market, as of the approval date, the associated asset, with a
net book value of $1.8 billion as of October 2, 2011, will be
reclassified from IPR&D to Developed Technology Rights and will
begin to be amortized.
Amortization
expense related to acquired intangible assets that contribute to
our ability to sell, manufacture, research, market and distribute
products, compounds and intellectual property is included in
Amortization of
intangible assets as it benefits multiple business
functions. Amortization expense related to acquired intangible
assets that are associated with a single function is included in
Cost of sales,
Selling, informational and administrative expenses and
Research and
development expenses, as appropriate. Total amortization
expense for finite-lived intangible assets was $1.4 billion for the
third quarter of 2011, $1.2 billion for the third quarter of 2010,
$4.3 billion for the first nine months of 2011 and $4.1 billion for
the first nine months of 2010.
|
Basis of Presentation Narrative (Detail) (USD $) | 9 Months Ended | |||
---|---|---|---|---|
Feb. 28, 2011
King [Member] | Jan. 31, 2011
King [Member] | Oct. 02, 2011
King US [Member] | Oct. 02, 2011
King International [Member] | |
Basis of Presentation [Line Items] | ||||
Acquisition purchase price paid | $ 3,300,000,000 | |||
Percent of outstanding shares initially acquired | 92.50% | |||
Acquisition price for remaining outstanding shares | $ 300,000,000 | |||
Time period of King's operations included in parent's financial statements | P8M | P7M |
Financial Instruments | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 02, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments |
Note 9.
Financial Instruments
A. Selected Financial Assets and Liabilities
Information
about certain of our financial assets and liabilities
follows:
These
selected financial assets and liabilities are presented in the
Condensed Consolidated Balance Sheets as follows:
There
were no significant impairments of financial assets recognized in
the third quarter and first nine months of 2011 or
2010.
B. Investments in Debt Securities
The
contractual maturities of the available-for-sale and
held-to-maturity debt securities at October 2, 2011,
follow:
C. Short-Term Borrowings
Short-term
borrowings include amounts for commercial paper of $600 million as
of October 2, 2011 and $1.2 billion as of December 31,
2010.
D. Derivative Financial Instruments and Hedging
Activities
Foreign Exchange Risk—As of October 2, 2011, the
aggregate notional amount of foreign exchange derivative financial
instruments hedging or offsetting foreign currency exposures is
$51.4 billion. The derivative financial instruments primarily hedge
or offset exposures in the euro, Japanese yen and U.K.
pound.
Interest Rate Risk—As of October 2, 2011, the
aggregate notional amount of interest rate derivative financial
instruments is $13.4 billion. The derivative financial instruments
hedge U.S. dollar and euro fixed-rate debt.
Information
about gains/(losses) incurred to hedge or offset foreign exchange
or interest rate risk is as follows:
For
information about the fair value of our derivative financial
instruments, and the impact on our Condensed Consolidated Balance
Sheets, see Note
9A. Financial Instruments: Selected Financial Assets and
Liabilities. Certain of our derivative instruments are
covered by associated credit-support agreements that have
credit-risk-related contingent features designed to reduce our
counterparties’ exposure to our risk of defaulting on amounts
owed. The aggregate fair value of these derivative instruments that
are in a liability position is $667 million, for which we have
posted collateral of $662 million in the normal course of business.
These features include the requirement to pay additional collateral
in the event of a downgrade in our debt ratings. If there had been
a downgrade to below an A rating by S&P or the equivalent
rating by Moody’s Investors Service, on October 2, 2011, we
would have been required to post an additional $22 million of
collateral to our counterparties. The collateral advanced
receivables are reported in Cash and cash
equivalents.
E. Credit Risk
On
an ongoing basis, we review the creditworthiness of counterparties
to our foreign exchange and interest rate agreements and do not
expect to incur a significant loss from failure of any
counterparties to perform under the agreements. There are no
significant concentrations of credit risk related to our financial
instruments with any individual counterparty. As of October 2,
2011, we had $3.3 billion due from a well-diversified, highly rated
group (S&P ratings of primarily A+ or better) of bank
counterparties around the world. See Note 9B. Financial
Instruments: Investments in Debt Securities for a
distribution of our investments.
In
general, there is no requirement for collateral from customers.
However, derivative financial instruments are executed under master
netting agreements with financial institutions. These agreements
contain provisions that provide for the ability for collateral
payments, depending on levels of exposure, our credit rating and
the credit rating of the counterparty. As of October 2, 2011, we
received cash collateral of $647 million against various
counterparties. The collateral primarily supports the approximate
fair value of our derivative contracts. The collateral received
obligations are reported in Short-term borrowings,
including current portion of long-term debt.
|
Goodwill and Other Intangible Assets - Finite-lived and Indefinite-lived Intangible Assets (Detail) (USD $) In Millions | Oct. 02, 2011 | Dec. 31, 2010 | ||||
---|---|---|---|---|---|---|
Finite Lived and Indefinite Lived Intangible Assets [Line Items] | ||||||
Finite-lived Intangible Assets, Gross Carrying Amount | $ 74,128 | $ 71,228 | ||||
Finite-lived Intangible Assets, Accumulated Amortization | (32,226) | [1] | (27,402) | [1] | ||
Identifiable Intangible Assets, less Accumulated Amortization | 41,902 | 43,826 | ||||
Indefinite-lived intangible assets: | ||||||
Brands | 10,291 | 10,219 | ||||
In-process research and development | 3,332 | 3,438 | ||||
Trademarks | 72 | 72 | ||||
Total indefinite-lived intangible assets | 13,695 | 13,729 | ||||
Total identifiable intangible assets, less accumulated amortization | 55,597 | [1] | 57,555 | [1] | ||
Intangible assets, gross carrying amount | 87,823 | [1] | 84,957 | [1] | ||
Developed Technology Rights [Member] | ||||||
Finite Lived and Indefinite Lived Intangible Assets [Line Items] | ||||||
Finite-lived Intangible Assets, Gross Carrying Amount | 71,288 | 68,432 | ||||
Finite-lived Intangible Assets, Accumulated Amortization | (30,932) | (26,223) | ||||
Identifiable Intangible Assets, less Accumulated Amortization | 40,356 | 42,209 | ||||
Finite Lived Brands [Member] | ||||||
Finite Lived and Indefinite Lived Intangible Assets [Line Items] | ||||||
Finite-lived Intangible Assets, Gross Carrying Amount | 1,693 | 1,626 | ||||
Finite-lived Intangible Assets, Accumulated Amortization | (569) | (607) | ||||
Identifiable Intangible Assets, less Accumulated Amortization | 1,124 | 1,019 | ||||
License Agreements [Member] | ||||||
Finite Lived and Indefinite Lived Intangible Assets [Line Items] | ||||||
Finite-lived Intangible Assets, Gross Carrying Amount | 589 | 637 | ||||
Finite-lived Intangible Assets, Accumulated Amortization | (284) | (248) | ||||
Identifiable Intangible Assets, less Accumulated Amortization | 305 | 389 | ||||
Trademarks And Other [Member] | ||||||
Finite Lived and Indefinite Lived Intangible Assets [Line Items] | ||||||
Finite-lived Intangible Assets, Gross Carrying Amount | 558 | 533 | ||||
Finite-lived Intangible Assets, Accumulated Amortization | (441) | (324) | ||||
Identifiable Intangible Assets, less Accumulated Amortization | $ 117 | $ 209 | ||||
|
Adoption of New Accounting Standards | 9 Months Ended | ||||
---|---|---|---|---|---|
Oct. 02, 2011 | |||||
Adoption of New Accounting Standards |
Note 2.
Adoption of New Accounting Standards
The
provisions of the following new accounting standards were adopted
as of January 1, 2011 and did not have a significant impact on our
condensed consolidated financial statements:
|
Costs Associated with Cost-Reduction and Productivity Initiatives and Acquisition Activity | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 02, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Costs Associated with Cost-Reduction and Productivity Initiatives and Acquisition Activity |
Note 5.
Costs Associated with Cost-Reduction and Productivity Initiatives
and Acquisition Activity
We
incur significant costs in connection with acquiring businesses and
restructuring and integrating acquired businesses and in connection
with our global cost-reduction and productivity initiatives. For
example:
On
February 1, 2011, we announced a new research and productivity
initiative to accelerate our strategies to improve innovation and
overall productivity in R&D by prioritizing areas with the
greatest scientific and commercial promise, utilizing appropriate
risk/return profiles and focusing on areas with the highest
potential to deliver value in the near term and over
time.
We
incurred the following costs in connection with our cost-reduction
and productivity initiatives and acquisition activity, such as King
(acquired in 2011) and Wyeth (acquired in 2009):
The
restructuring charges in 2011 are associated with the
following:
The
restructuring charges in 2010 are associated with the
following:
The
components of restructuring charges associated with all of our
cost-reduction and productivity initiatives and acquisition
activity follow:
|
Costs Associated with Cost-Reduction and Productivity Initiatives and Acquisition Activity - Restructuring Charges (Detail) (USD $) In Millions | 82 Months Ended | 9 Months Ended | 82 Months Ended | 9 Months Ended | 82 Months Ended | 9 Months Ended | 82 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2011 | Dec. 31, 2010 | Oct. 02, 2011
Employee termination costs [Member] | Oct. 02, 2011
Employee termination costs [Member] | Oct. 02, 2011
Asset impairments [Member] | Oct. 02, 2011
Asset impairments [Member] | Oct. 02, 2011
Other [Member] | Oct. 02, 2011
Other [Member] | Oct. 02, 2011
Restructuring Accrual [Member] | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||
Costs Incurred | $ 13,898 | $ 10,437 | $ 2,465 | $ 996 | |||||||||||||||
Activity | 11,074 | [1] | 7,720 | [1] | 2,465 | [1] | 889 | [1] | |||||||||||
Accrual | 2,824 | [2] | 2,717 | [2] | 2,717 | [2] | 107 | [2] | 107 | [2] | |||||||||
Other current liabilities | 14,240 | 14,256 | 1,700 | ||||||||||||||||
Other noncurrent liabilities | $ 6,239 | $ 5,601 | $ 1,100 | ||||||||||||||||
Restructuring and Related Activities, Initiation Date | Jan. 01, 2005 | Jan. 01, 2005 | Jan. 01, 2005 | ||||||||||||||||
Restructuring and Related Activities, Current Date | Oct. 02, 2011 | Oct. 02, 2011 | Oct. 02, 2011 | ||||||||||||||||
|
Segment, Product and Geographic Area Information (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 02, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information by Segment [Table Text Block] | Certain
information by operating segment follows:
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue by Products [Table Text Block] | Significant
product revenues follow:
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenues by Geographic Area [Table Text Block] | Revenues
by geographic area follow:
|
Legal Proceedings and Contingencies Narrative (Detail) (USD $) In Millions, unless otherwise specified | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2011 | Oct. 03, 2010 | Oct. 02, 2011 | Oct. 03, 2010 | Dec. 31, 2005
Pending or Threatened Litigation [Member]
March 2005 proposed settlement [Member]
Quigley Co, Inc., a wholly owned subsidiary [Member] | Mar. 31, 2005
Pending or Threatened Litigation [Member]
March 2005 proposed settlement [Member]
Quigley Co, Inc., a wholly owned subsidiary [Member] | Sep. 26, 2004
Pending or Threatened Litigation [Member]
March 2005 proposed settlement [Member]
Quigley Co, Inc., a wholly owned subsidiary [Member] | Oct. 02, 2011
Pending or Threatened Litigation [Member]
Court settlement rejection and Pfizer motion to appeal [Member]
Quigley Co, Inc., a wholly owned subsidiary [Member] | Dec. 31, 2010
Pending or Threatened Litigation [Member]
Court settlement rejection and Pfizer motion to appeal [Member]
Quigley Co, Inc., a wholly owned subsidiary [Member] | Mar. 31, 2011
Pending or Threatened Litigation [Member]
March 2011 proposed settlement [Member]
Quigley Co, Inc., a wholly owned subsidiary [Member]
Claimant | Oct. 02, 2011
Pending or Threatened Litigation [Member]
March 2011 proposed settlement [Member]
Quigley Co, Inc., a wholly owned subsidiary [Member] | Oct. 02, 2011
Pending or Threatened Litigation [Member]
Hormone Replacement Therapy [Member]
Claim | Aug. 31, 2004
Pending or Threatened Litigation [Member]
Quigley Co, Inc., a wholly owned subsidiary [Member] | Sep. 30, 2011
Pending or Threatened Litigation [Member]
American Optical Corp subsidiary of Warner-Lambert [Member]
Claim | Oct. 02, 2011
Pending or Threatened Litigation [Member]
Pfizer - Neurontin Product [Member] | Jan. 31, 2011
Pending or Threatened Litigation [Member]
Pfizer - Neurontin Product [Member] | Nov. 30, 2010
Pending or Threatened Litigation [Member]
Pfizer - Neurontin Product [Member] | Dec. 31, 2008
Pending or Threatened Litigation [Member]
Pharmacia - Average Wholesale Price Litigation [Member]
Defendant | Jul. 31, 2009
Pending or Threatened Litigation [Member]
IREF -Trade Secrets Action [Member] | Dec. 31, 2008
Pending or Threatened Litigation [Member]
IREF -Trade Secrets Action [Member] | Oct. 02, 2011
Hormone Replacement Therapy [Member] | |||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||||||||
Product litigation charge, pre-tax | $ 132 | [1] | $ 712 | [1] | $ 619 | [1] | $ 886 | [1] | $ 369 | $ 1,300 | |||||||||||||||||
Product litigation charge, after-tax | 229 | 800 | |||||||||||||||||||||||||
Notice of appeal and related motion | October 2010 | ||||||||||||||||||||||||||
The minimum percentage of votes needed from claimants to approve the proposed bankruptcy reorganization plan | 75.00% | ||||||||||||||||||||||||||
Number of defendants | 11 | ||||||||||||||||||||||||||
Percentage of claimants that agreed to 2004 proposed settlement | 80.00% | ||||||||||||||||||||||||||
Gross settlement amount offered | 430 | 125 | |||||||||||||||||||||||||
Claims payment amount for qualified claimants, first or only payment | 215 | 500 | |||||||||||||||||||||||||
Number of Ad Hoc Committee claimants agreeing to the company's proposed settlement offer | 40,000 | ||||||||||||||||||||||||||
Claims payment amount for qualified claimants, second payment | 300 | ||||||||||||||||||||||||||
Claims installment, payment terms | Following the earlier of the effective date of a revised plan of reorganization and April 6, 2013 | ||||||||||||||||||||||||||
Agreed-upon payment amount of plaintiff's legal fees and expenses | 19 | ||||||||||||||||||||||||||
Agreed upon amount of assets (cash and non-cash) to be contributed to a special purpose trust created to pay claimants, if Quigley's proposed reorganization plan is approved by the court | 550 | ||||||||||||||||||||||||||
Insurance settlement, gross recovery | 405 | ||||||||||||||||||||||||||
Insurance settlement collection period | 10 years | ||||||||||||||||||||||||||
Number of claims seeking damages | 10,000 | 68,000 | |||||||||||||||||||||||||
Litigation settlement expense | 280 | ||||||||||||||||||||||||||
Cumulative product liability charges in prior years | 300 | ||||||||||||||||||||||||||
Estimated minimum cost to resolve outstanding actions | 260 | ||||||||||||||||||||||||||
Cumulative percentage of actions settled | 46.00% | ||||||||||||||||||||||||||
Damages awarded by the court | 47.4 | 65.4 | 38.7 | ||||||||||||||||||||||||
Treble damages amount awarded, under appeal | $ 142.1 | ||||||||||||||||||||||||||
Actions being taken by Pfizer | In August 2011, Pfizer appealed the District Court's judgment to the US Court of Appeals | The court has granted Pfizer's motion for a new trial and vacated the jury verdict | |||||||||||||||||||||||||
|
Segment, Product and Geographic Area Information (Detail) (USD $) In Millions | 3 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2011 | Oct. 03, 2010 | Oct. 02, 2011 | Oct. 03, 2010 | |||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
Revenues | $ 17,193 | $ 15,995 | $ 50,679 | $ 49,703 | ||||||||||||||||||||||||
R&D Expenses | 2,188 | [1] | 2,188 | [1] | 6,516 | [1] | 6,590 | [1] | ||||||||||||||||||||
Earnings | 3,669 | [2] | 1,414 | [2] | 10,469 | [2] | 8,489 | [2] | ||||||||||||||||||||
Certain legal matters, net | 132 | [3] | 712 | [3] | 619 | [3] | 886 | [3] | ||||||||||||||||||||
Certain asset impairment charges | 105 | [4] | 1,478 | [4] | 585 | [4] | 1,710 | [4] | ||||||||||||||||||||
Primary Care [Member] | ||||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
Revenues | 5,948 | 5,653 | 17,259 | 17,442 | ||||||||||||||||||||||||
R&D Expenses | 285 | 353 | 912 | 1,128 | ||||||||||||||||||||||||
Earnings | 4,156 | [2] | 3,817 | [2] | 11,513 | [2] | 11,954 | [2] | ||||||||||||||||||||
Specialty Care And Oncology [Member] | ||||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
Revenues | 4,131 | 4,052 | 12,407 | 12,054 | ||||||||||||||||||||||||
R&D Expenses | 400 | 388 | 1,122 | 1,129 | ||||||||||||||||||||||||
Earnings | 2,678 | [2] | 2,730 | [2] | 8,137 | [2] | 8,120 | [2] | ||||||||||||||||||||
Established Products and Emerging Markets [Member] | ||||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
Revenues | 4,668 | 4,240 | 13,945 | 13,976 | ||||||||||||||||||||||||
R&D Expenses | 71 | 100 | 206 | 197 | ||||||||||||||||||||||||
Earnings | 2,432 | [2] | 2,158 | [2] | 7,397 | [2] | 8,074 | [2] | ||||||||||||||||||||
Animal Health and Consumer Healthcare [Member] | ||||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
Revenues | 1,815 | 1,533 | 5,318 | 4,613 | ||||||||||||||||||||||||
R&D Expenses | 97 | 93 | 304 | 296 | ||||||||||||||||||||||||
Earnings | 595 | [2] | 423 | [2] | 1,598 | [2] | 1,302 | [2] | ||||||||||||||||||||
Reportable Segments [Member] | ||||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
Revenues | 16,562 | 15,478 | 48,929 | 48,085 | ||||||||||||||||||||||||
R&D Expenses | 853 | 934 | 2,544 | 2,750 | ||||||||||||||||||||||||
Earnings | 9,861 | [2] | 9,128 | [2] | 28,645 | [2] | 29,450 | [2] | ||||||||||||||||||||
Nutrition and other business activities [Member] | ||||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
Revenues | 631 | [5] | 517 | [5] | 1,750 | [5] | 1,618 | [5] | ||||||||||||||||||||
R&D Expenses | 844 | [5] | 861 | [5] | 2,568 | [5] | 2,630 | [5] | ||||||||||||||||||||
Earnings | (697) | [2],[5] | (749) | [2],[5] | (2,178) | [2],[5] | (2,270) | [2],[5] | ||||||||||||||||||||
Corporate [Member] | ||||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
R&D Expenses | 337 | [6] | 360 | [6] | 998 | [6] | 1,142 | [6] | ||||||||||||||||||||
Earnings | (1,866) | [2],[6] | (1,893) | [2],[6] | (5,553) | [2],[6] | (5,911) | [2],[6] | ||||||||||||||||||||
Purchase Accounting Adjustments [Member] | ||||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
R&D Expenses | 8 | [7] | 23 | [7] | ||||||||||||||||||||||||
Earnings | (1,711) | [2],[7] | (1,625) | [2],[7] | (5,232) | [2],[7] | (6,564) | [2],[7] | ||||||||||||||||||||
Acquisition-related costs [Member] | ||||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
R&D Expenses | 5 | [8] | 25 | [8] | 9 | [8] | 45 | [8] | ||||||||||||||||||||
Earnings | (301) | [2],[8] | (792) | [2],[8] | (1,471) | [2],[8] | (2,692) | [2],[8] | ||||||||||||||||||||
Certain significant items [Member] | ||||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
R&D Expenses | 149 | 397 | [9] | |||||||||||||||||||||||||
Earnings | (1,310) | [2] | (2,413) | [2] | (3,176) | [2],[9] | (2,691) | [2],[9] | ||||||||||||||||||||
Certain significant items [Member] | Earnings [Member] | ||||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
Restructuring charges and implementation costs associated with cost-reduction and productivity initiatives, excluding acquisition-related costs | 1,100 | 1,900 | ||||||||||||||||||||||||||
Certain legal matters, net | 132 | 701 | 657 | 843 | ||||||||||||||||||||||||
Certain asset impairment charges | 105 | 1,500 | 582 | 1,700 | ||||||||||||||||||||||||
Certain significant items [Member] | Earnings [Member] | Wyeth [Member] | ||||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
Inventory write off | 212 | 212 | ||||||||||||||||||||||||||
Purchase accounting fair value adjustment related to inventory write off | 104 | 104 | ||||||||||||||||||||||||||
Other unallocated [Member] | ||||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||
Earnings | $ (307) | [10],[2] | $ (242) | [10],[2] | $ (566) | [10],[2] | $ (833) | [10],[2] | ||||||||||||||||||||
|
Goodwill and Other Intangible Assets-Goodwill (Detail) (USD $) In Millions | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Oct. 02, 2011 | ||||||||
Goodwill [Line Items] | ||||||||
Balance, December 31, 2010 | $ 43,928 | |||||||
Additions | 825 | [1] | ||||||
Other | 656 | [2] | ||||||
Balance, October 2, 2011 | 45,409 | |||||||
Animal Health and Consumer Healthcare [Member] | ||||||||
Goodwill [Line Items] | ||||||||
Balance, December 31, 2010 | 2,449 | |||||||
Other | 15 | [2] | ||||||
Balance, October 2, 2011 | 2,464 | |||||||
Nutrition [Member] | ||||||||
Goodwill [Line Items] | ||||||||
Balance, December 31, 2010 | 496 | |||||||
Other | 11 | [2] | ||||||
Balance, October 2, 2011 | 507 | |||||||
To be Allocated [Member] | ||||||||
Goodwill [Line Items] | ||||||||
Balance, December 31, 2010 | 40,983 | [3] | ||||||
Additions | 825 | [1],[3] | ||||||
Other | 630 | [2],[3] | ||||||
Balance, October 2, 2011 | $ 42,438 | [3] | ||||||
|
Other (Income)/Deductions-Net | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other (Income)/Deductions-Net |
Note 6.
Other (Income)/Deductions—Net
The
following table sets forth details related to amounts recorded in
Other
deductions––net:
|
Taxes on Income Narrative (Detail) (USD $) In Millions, unless otherwise specified | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2011 | Oct. 03, 2010 | Oct. 02, 2011 | Oct. 03, 2010 | Oct. 02, 2011
U.S. Internal Revenue Service [Member] | Apr. 03, 2011
U.S. Internal Revenue Service [Member]
Wyeth [Member] | Oct. 02, 2011
U.S. Internal Revenue Service [Member]
Wyeth [Member] | Oct. 02, 2011
Canadian federal tax authority [Member] | Oct. 02, 2011
Japan tax authority [Member] | Oct. 02, 2011
European tax authorities (primarily Ireland, UK, France, Italy, Spain and Germany) [Member] | Oct. 02, 2011
Puerto Rico tax authority [Member] | |
Income Taxes [Line Items] | |||||||||||
Effective tax rate | 33.70% | 39.50% | 30.80% | 37.30% | |||||||
Tax years under examination | 2006, 2007, 2008 | ||||||||||
Years open to tax audits | 2009-2011 | 2006-October 15, 2009 | 1998-2011 | 2006-2011 | 1997-2011 | 2006-2011 | |||||
A settlement with the IRS regarding the audits for the tax years 2002 through 2005 resulted in an income tax benefit to Pfizer for income tax and interest | $ 80 | $ 80 |
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Changes in Carrying Amount of Goodwill [Table Text Block] |
The
changes in the carrying amount of goodwill for the nine months
ended October 2, 2011, follow:
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Schedule of Identifiable Intangible Assets [Table Text Block] |
The
components of identifiable intangible assets follow:
|
Segment, Product and Geographic Area Information - Revenues By Geographic Area (Detail) (USD $) In Millions, unless otherwise specified | 3 Months Ended | 9 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2011 | Oct. 03, 2010 | Oct. 02, 2011 | Oct. 03, 2010 | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Total Revenues | $ 17,193 | $ 15,995 | $ 50,679 | $ 49,703 | ||||||||||
Percentage Change in Revenue | 7.00% | 2.00% | ||||||||||||
United States [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Revenue by geographic area - United States | 6,879 | 7,063 | 20,603 | 21,661 | ||||||||||
Percentage Change in Revenue | (3.00%) | (5.00%) | ||||||||||||
Developed Europe [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Revenue by geographic area - Foreign Countries | 4,074 | [1] | 3,762 | [1] | 12,223 | [1] | 12,079 | [1] | ||||||
Percentage Change in Revenue | 8.00% | [1] | 1.00% | [1] | ||||||||||
Developed Rest Of World [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Revenue by geographic area - Foreign Countries | 2,840 | [2] | 2,349 | [2] | 8,059 | [2] | 7,344 | [2] | ||||||
Percentage Change in Revenue | 21.00% | [2] | 10.00% | [2] | ||||||||||
Emerging Markets [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Revenue by geographic area - Foreign Countries | $ 3,400 | [3] | $ 2,821 | [3] | $ 9,794 | [3] | $ 8,619 | [3] | ||||||
Percentage Change in Revenue | 21.00% | [3] | 14.00% | [3] | ||||||||||
|
Acquisition of King Pharmaceuticals, Inc. Narrative (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2011 | Oct. 03, 2010 | Oct. 02, 2011 | Oct. 03, 2010 | Oct. 02, 2011
King [Member] | Oct. 02, 2011
King [Member] | Feb. 28, 2011
King [Member] | Jan. 31, 2011
King [Member] | Oct. 03, 2010
King [Member]
Pro Forma Consolidated Results [Member] | Oct. 02, 2011
King [Member]
Pro Forma Consolidated Results [Member] | Oct. 03, 2010
King [Member]
Pro Forma Consolidated Results [Member] | |||||||
Business Acquisition [Line Items] | |||||||||||||||||
Acquisition purchase price per share | $ 14.25 | $ 14.25 | |||||||||||||||
Percent of outstanding shares initially acquired | 92.50% | ||||||||||||||||
Payments to acquire businesses, net of cash acquired | $ 3,188 | $ 3,188 | |||||||||||||||
Gross contractual amount receivable | 200 | ||||||||||||||||
Revenues | 357 | 938 | |||||||||||||||
Elimination of intangible asset amortization | 18 | 6 | 98 | ||||||||||||||
Additional amortization of intangible assets | 48 | 15 | 136 | ||||||||||||||
Additional depreciation expense | 9 | 3 | 26 | ||||||||||||||
Purchase accounting adjustment for estimated sales of acquisition-date inventory at fair value | 3,679 | [1] | 3,790 | [1] | 11,177 | [1] | 11,676 | [1] | 33 | (146) | 146 | ||||||
Adjustment for acquisition-related costs | $ 11 | $ (205) | $ 205 | ||||||||||||||
|
Other (Income)/Deductions - Net (Detail) (USD $) In Millions | 3 Months Ended | 9 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2011 | Oct. 03, 2010 | Oct. 02, 2011 | Oct. 03, 2010 | |||||||||||
Other (Income) Deductions - Net [Line Items] | ||||||||||||||
Interest income | $ (110) | [1] | $ (100) | [1] | $ (332) | [1] | $ (297) | [1] | ||||||
Interest expense | 423 | [1] | 427 | [1] | 1,285 | [1] | 1,338 | [1] | ||||||
Net interest expense | 313 | 327 | 953 | 1,041 | ||||||||||
Royalty-related income | (135) | (158) | (447) | (395) | ||||||||||
Net losses/(gains) on asset disposals | 18 | (13) | (8) | (243) | ||||||||||
Certain legal matters, net | 132 | [2] | 712 | [2] | 619 | [2] | 886 | [2] | ||||||
Certain asset impairment charges | 105 | [3] | 1,478 | [3] | 585 | [3] | 1,710 | [3] | ||||||
Other, net | 105 | 3 | 76 | 37 | ||||||||||
Other deductions-net | 538 | 2,349 | 1,778 | 3,036 | ||||||||||
Certain asset impairment charges | 773 | 2,956 | ||||||||||||
Wyeth [Member] | ||||||||||||||
Other (Income) Deductions - Net [Line Items] | ||||||||||||||
Certain asset impairment charges | 585 | 1,700 | ||||||||||||
Wyeth [Member] | In Process Research And Development [Member] | ||||||||||||||
Other (Income) Deductions - Net [Line Items] | ||||||||||||||
Certain asset impairment charges | 440 | 900 | ||||||||||||
Wyeth [Member] | Indefinite Lived Brands [Member] | ||||||||||||||
Other (Income) Deductions - Net [Line Items] | ||||||||||||||
Certain asset impairment charges | 600 | |||||||||||||
Wyeth [Member] | Developed Technology Rights [Member] | ||||||||||||||
Other (Income) Deductions - Net [Line Items] | ||||||||||||||
Certain asset impairment charges | $ 145 | $ 200 | ||||||||||||
|
Earnings Per Share Attributable to Common Shareholders (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Earnings Per Share Basic by Common Class and Schedule of Earnings Per Share Diluted by Common Class [Table Text Block] | Basic
and diluted earnings per share (EPS) were computed using the
following data:
|
Legal Proceedings and Contingencies | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
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Oct. 02, 2011 | |||||||||||||||||||||||||||||||||||||||||||||
Legal Proceedings and Contingencies |
Note 14.
Legal Proceedings and Contingencies
We
and certain of our subsidiaries are subject to numerous
contingencies arising in the ordinary course of business. For a
discussion of our tax contingencies, see Notes to Condensed
Consolidated Financial Statements – Note 7. Taxes
on Income. Our non-tax contingencies include,
among others, the following:
Certain
of these contingencies could result in losses, including damages,
fines and/or civil penalties, and/or criminal charges, which could
be substantial.
We
believe that our claims and defenses in these matters are
substantial, but litigation is inherently unpredictable and
excessive verdicts do occur. We do not believe that any of these
matters will have a material adverse effect on our financial
position. However, we could incur judgments, enter into settlements
or revise our expectations regarding the outcome of certain
matters, and such developments could have a material adverse effect
on our results of operations or cash flows in the period in which
the applicable amounts are paid and/or accrued.
We
have accrued for losses that are both probable and reasonably
estimable. Substantially all of these contingencies are subject to
significant uncertainties and, therefore, determining the
likelihood of a loss and/or the measurement of any loss can be
complex. Consequently, we are unable to estimate the range of
reasonably possible loss in excess of amounts accrued. Our
assessments are based on estimates and assumptions that have been
deemed reasonable by management, but the assessment process relies
heavily on estimates and assumptions that may prove to be
incomplete or inaccurate, and unanticipated events and
circumstances may occur that might cause us to change those
estimates and assumptions.
The
principal pending matters to which we are a party are discussed
below. In determining whether a pending matter is a principal
matter, we consider both quantitative and qualitative factors in
order to assess materiality, such as, among other things, the
amount of damages and the nature of any other relief sought in the
proceeding, if such damages and other relief are specified; our
view of the merits of the claims and of the strength of our
defenses; whether the action purports to be a class action and our
view of the likelihood that a class will be certified by the court;
the jurisdiction in which the proceeding is pending; any experience
that we or, to our knowledge, other companies have had in similar
proceedings; whether disclosure of the action would be important to
a reader of our financial statements, including whether disclosure
might change a reader’s judgment about our financial
statements in light of all of the information about the Company
that is available to the reader; the potential impact of the
proceeding on our reputation; and the extent of public interest in
the matter. In addition, with respect to patent matters, we
consider, among other things, the financial significance of the
product protected by the patent. As a result of considering
qualitative factors in our determination of principal matters,
there are some matters discussed below with respect to which
management believes that the likelihood of possible loss in excess
of amounts accrued is remote.
A. Patent Litigation
Like
other pharmaceutical companies, we are involved in numerous suits
relating to our patents, including but not limited to those
discussed below. Most of the suits involve claims by generic drug
manufacturers that patents covering our products, processes or
dosage forms are invalid and/or do not cover the product of the
generic manufacturer. Also, counterclaims as well as various
independent actions have been filed claiming that our assertions
of, or attempts to enforce, our patent rights with respect to
certain products constitute unfair competition and/or violations of
the antitrust laws. In addition to the challenges to the U.S.
patents on a number of our products that are discussed below, we
note that the patent rights to certain of our products, including
without limitation Lipitor, are being challenged in various other
countries.
Lipitor (atorvastatin)
In
November 2008, Apotex Inc. notified us that it had filed an
abbreviated new drug application with the FDA seeking approval to
market a generic version of Lipitor. In December 2008,
we filed patent-infringement suits against Apotex Inc. in the U.S.
District Court for the District of Delaware and the U.S. District
Court for the Northern District of Illinois. In August 2009, our
action in the District of Delaware was transferred to the Northern
District of Illinois and consolidated with our pending action
there. Apotex Inc. asserts the invalidity of our patent covering
the crystalline form of atorvastatin, which (including the
pediatric exclusivity period) expires in 2017. We assert the
infringement of our crystalline patent and are defending against
the allegations of invalidity.
In
October 2009, Dr. Reddy's Laboratories Ltd. and Dr. Reddy’s
Laboratories, Inc. (collectively, Dr. Reddy's) and KUDCO Ireland,
Ltd. and Kremers Urban LLC (collectively, KUDCO) notified us that
they had filed abbreviated new drug applications with the FDA
seeking approval to market generic versions of Lipitor. Both of the
abbreviated new drug applications cover the 10mg, 20mg and 40mg
dosage strengths, and KUDCO’s abbreviated new drug
application also covers the 80mg dosage strength. Dr. Reddy’s
and KUDCO assert the invalidity and/or non-infringement of our
patent covering the crystalline form of atorvastatin and two other
Lipitor patents. In December 2009, we filed actions against Dr.
Reddy’s and KUDCO in the U.S. District Court for the District
of Delaware asserting the infringement of our crystalline patent.
In addition, in December 2010, we filed an action against Dr.
Reddy’s in the same court asserting the infringement of the
same patent in connection with Dr. Reddy’s additional
abbreviated new drug application seeking approval to market a
generic version of the 80mg dosage strength. In August 2011, we
settled our patent-infringement actions against Dr. Reddy’s
on terms that are not material to Pfizer.
In
July 2010, Actavis, Inc. and Actavis Pharma Manufacturing Pvt. Ltd.
(collectively, Actavis) notified us that they had filed an
abbreviated new drug application with the FDA seeking approval to
market a generic version of Lipitor. Actavis asserts the
non-infringement of our patent covering the crystalline form of
atorvastatin and two other Lipitor patents. In August 2010, we
filed an action against Actavis in the U.S. District Court for the
District of Delaware asserting the infringement of our crystalline
patent. In September 2011, this action was settled on terms that
are not material to Pfizer.
In
May 2011, Aurobindo Pharma Ltd. (Aurobindo) notified us that it had
filed an abbreviated new drug application with the FDA seeking
approval to market a generic version of Lipitor. Aurobindo asserts
the non-infringement of our patent covering the crystalline form of
atorvastatin as well as two formulation patents, all of which
(including the six-month pediatric exclusivity period) expire in
2017. In June 2011, we filed an action against Aurobindo in the
U.S. District Court for the District of Delaware asserting the
validity and infringement of the challenged patents.
Our
basic U.K. patent for Lipitor, including the supplementary
protection certificate (SPC) and pediatric extension period,
expires in May 2012. In the U.K., on June 20, 2011, certain
wholesalers and certain of their pharmacy customers began selling
generic atorvastatin that had been supplied to the wholesalers by
Teva UK Limited (Teva UK). On the same day, we obtained a
preliminary injunction from the High Court of Justice prohibiting
Teva UK and the wholesalers from further sales of generic
atorvastatin. On July 11, 2011, Teva UK and the wholesalers
consented to the continuation of the preliminary injunction during
the pendency of the case. On October 5, 2011, a consent judgment
was filed with the court in which Teva UK and the other defendants
admitted the validity and infringement of our basic U.K. patent and
submitted to an injunction prohibiting the sale of Teva UK’s
generic atorvastatin product in the U.K. before our patent
(including the SPC and pediatric extension period) expires in May
2012. Separately, in September 2011, Dr. Reddy’s Laboratories
(UK) Limited filed an action in the High Court of Justice seeking
revocation of the six-month pediatric extension, which extended
exclusivity for Lipitor in the U.K. from November 2011 to May 2012.
We are defending this action, which is based upon the
interpretation of the EU Pediatric Medicines
Regulation.
Caduet (atorvastatin/amlodipine combination)
In
August 2009, Sandoz Inc., a division of Novartis AG (Sandoz),
notified us that it had filed an abbreviated new drug application
with the FDA seeking approval to market a generic version of
Caduet. In that filing and in a declaratory judgment action brought
by Sandoz in October 2009 in the U.S. District Court for the
District of Colorado, collectively, Sandoz asserts the invalidity
of our patent covering the atorvastatin/amlodipine combination,
which expires in 2018, and the invalidity and non-infringement of
three patents for Lipitor which (including the six-month pediatric
exclusivity period) expire between 2013 and 2017. In October 2009,
we filed suit against Sandoz in the U.S. District Court for the
District of Delaware and the U.S. District Court for the District
of Colorado asserting the infringement of the
atorvastatin/amlodipine combination patent. In February 2010, our
action and Sandoz’s action in the District of Colorado were
transferred to the District of Delaware and consolidated with our
pending action there.
Viagra (sildenafil)
In
March 2010, we brought a patent-infringement action in the U.S.
District Court for the Eastern District of Virginia against Teva
Pharmaceuticals USA, Inc. (Teva USA) and Teva Pharmaceutical
Industries Ltd. (Teva Pharmaceutical Industries), which had filed
an abbreviated new drug application with the FDA seeking approval
to market a generic version of Viagra. Teva USA and Teva
Pharmaceutical Industries assert the invalidity and
non-infringement of the Viagra use patent, which expires in 2019,
but have not challenged the basic patent, which expires in 2012. In
August 2011, the court ruled that our Viagra use patent is valid
and infringed, thereby preventing Teva USA and Teva Pharmaceutical
Industries from receiving approval for a generic version of Viagra
before October 2019. In September 2011, Teva USA and Teva
Pharmaceutical Industries appealed the decision to the U.S. Court
of Appeals for the Federal Circuit.
In
October 2010, we filed a patent-infringement action with respect to
Viagra in the U.S. District Court for the Southern District of New
York against Apotex Inc. and Apotex Corp., Mylan Pharmaceuticals
Inc. and Mylan Inc., Actavis and Amneal Pharmaceuticals LLC. These
generic manufacturers have filed abbreviated new drug applications
with the FDA seeking approval to market their generic versions of
Viagra. They assert the invalidity and non-infringement of the
Viagra use patent, but have not challenged the basic
patent.
In
May and June 2011, respectively, Watson Laboratories Inc. (Watson)
and Hetero Labs Limited (Hetero) notified us that they had filed
abbreviated new drug applications with the FDA seeking approval to
market their generic versions of Viagra. Each asserts the
invalidity and non-infringement of the Viagra use patent. Neither
has challenged the basic patent. In June and July 2011,
respectively, we filed actions against Watson and Hetero in the
U.S. District Court for the Southern District of New York asserting
the validity and infringement of the use patent.
Sutent (sunitinib malate)
In
May 2010, Mylan Pharmaceuticals Inc. notified us that it had filed
an abbreviated new drug application with the FDA seeking approval
to market a generic version of Sutent and challenging on various
grounds the Sutent basic patent, which expires in 2021, and two
other patents, which expire in 2020 and 2021. In June 2010, we
filed suit against Mylan Pharmaceuticals Inc. in the U.S. District
Court for the District of Delaware asserting the infringement of
those three patents.
Detrol and Detrol LA (tolterodine)
In
January 2008, Impax Laboratories, Inc. (Impax) notified us that it
had filed an abbreviated new drug application with the FDA seeking
approval to market a generic version of Detrol LA. Impax is
challenging on various grounds the basic patent, which (including
the six-month pediatric exclusivity period) expires in 2012, and
three formulation patents, which (including the six-month pediatric
exclusivity period) expire in 2020. We filed an action against
Impax in the U.S. District Court for the Southern District of New
York asserting the infringement of the basic patent and two of the
formulation patents. This action subsequently was transferred to
the U.S. District Court for the District of New
Jersey.
In
March 2008 and May 2010, respectively, Sandoz and Mylan
Pharmaceuticals Inc. notified us that they had filed abbreviated
new drug applications with the FDA seeking approval to market
generic versions of Detrol LA. They assert the invalidity and/or
non-infringement of three formulation patents for Detrol LA. They
have not challenged the basic patent. In June 2010, we filed
actions against Sandoz and Mylan Pharmaceuticals Inc. in the U.S.
District Court for the District of New Jersey asserting the
infringement of two of the formulation patents.
In
April 2011, Impax notified us that it had filed an abbreviated new
drug application with the FDA seeking approval to market a generic
version of Detrol. Impax asserts the non-infringement of the basic
patent, which (including the six-month pediatric exclusivity
period) expires in 2012. In June 2011, we filed an action against
Impax in the U.S. District Court for the District of New Jersey
asserting infringement of the basic patent.
In
June 2011, Torrent Pharmaceuticals Ltd. (Torrent) notified us that
it had filed an abbreviated new drug application with the FDA
seeking approval to market a generic version of Detrol LA. Torrent
asserts the invalidity and non-infringement of three formulation
patents. Torrent has not challenged the basic patent. In July 2011,
we filed an action against Torrent in the U.S. District Court for
the District of New Jersey asserting the validity and infringement
of the challenged patents.
Lyrica (pregabalin)
Beginning
in March 2009, several generic manufacturers notified us that they
had filed abbreviated new drug applications with the FDA seeking
approval to market generic versions of Lyrica capsules. Each of the
generic manufacturers is challenging one or more of three patents
for Lyrica: the basic patent, which expires in 2018, and two other
patents, which expire in 2013 and 2018. Each of the generic
manufacturers asserts the invalidity and/or the non-infringement of
the patents subject to challenge. Beginning in April 2009, we filed
actions against these generic manufacturers in the U.S. District
Court for the District of Delaware asserting the infringement and
validity of our patents for Lyrica. All of these cases have been
consolidated in the District of Delaware.
In
August and November 2010, respectively, Lupin Limited (Lupin) and
Novel Laboratories, Inc. (Novel) notified us that they had filed
abbreviated new drug applications with the FDA seeking approval to
market generic versions of Lyrica oral solution and asserting the
invalidity and/or infringement of our three patents for Lyrica
referred to above. In October 2010 and January 2011, respectively,
we filed actions against Lupin and Novel in the U.S. District Court
for the District of Delaware asserting the validity and
infringement of all three patents.
Apotex
Inc. notified us, in May and June 2011, respectively, that it had
filed abbreviated new drug applications with the FDA seeking
approval to market generic versions of Lyrica oral solution and
Lyrica capsules. Apotex Inc. asserts the invalidity and
non-infringement of the basic patent, as well as the seizure patent
that expires in 2013. In July 2011, we filed an action against
Apotex Inc. in the U.S. District Court for the District of Delaware
asserting the validity and infringement of the challenged patents
in connection with both of the abbreviated new drug
applications.
We
also have filed patent-infringement actions in Canada against
certain generic manufacturers who are seeking approval to market
generic versions of Lyrica capsules in that country.
Zyvox (linezolid)
In
December 2009, Teva Parenteral Medicines Inc. (Teva Parenteral)
notified us that it had filed an abbreviated new drug application
with the FDA seeking approval to market a generic version of Zyvox.
Teva Parenteral asserts the invalidity and non-infringement of the
basic Zyvox patent, which (including the six-month pediatric
exclusivity period) expires in 2015, and another patent that
expires in 2021. In January 2010, we filed suit against Teva
Parenteral in the U.S. District Court for the District of Delaware
asserting the infringement of the basic patent.
Relpax (eletriptan)
In
June 2010, we received notices from Apotex Inc. and Apotex Corp.
and from Teva USA that they had filed abbreviated new drug
applications with the FDA seeking approval to market generic
versions of Relpax. They assert the non-infringement of our patent
covering the crystalline form of eletriptan, which expires in 2017.
They have not challenged the basic patent, which expires in 2016.
In July 2010, we filed actions against Apotex Inc. and Apotex Corp.
and against Teva USA in the U.S. District Court for the Southern
District of New York asserting the infringement of the crystalline
patent.
Protonix (pantoprazole sodium)
Wyeth
has a license to market Protonix in the U.S. from Nycomed GmbH
(Nycomed), which owns the patents relating to Protonix. The basic
patent (including the six-month pediatric exclusivity period) for
Protonix expired in January 2011.
Following
their respective filings of abbreviated new drug applications with
the FDA, Teva USA and Teva Pharmaceutical Industries, Sun
Pharmaceutical Advanced Research Centre Ltd. and Sun Pharmaceutical
Industries Ltd. (collectively, Sun) and KUDCO Ireland, Ltd. (KUDCO
Ireland) received final FDA approval to market their generic
versions of Protonix 20mg and 40mg delayed-release tablets. Wyeth
and Nycomed filed actions against those generic manufacturers in
the U.S. District Court for the District of New Jersey, which
subsequently were consolidated into a single proceeding, alleging
infringement of the basic patent and seeking declaratory and
injunctive relief. Following the court's denial of a preliminary
injunction sought by Wyeth and Nycomed, Teva USA and Teva
Pharmaceutical Industries and Sun launched their generic versions
of Protonix tablets at risk in December 2007 and January 2008,
respectively. Wyeth launched its own generic version of Protonix
tablets in January 2008, and Wyeth and Nycomed filed amended
complaints in the pending patent-infringement action seeking
compensation for damages resulting from Teva USA’s, Teva
Pharmaceutical Industries’ and Sun's at-risk
launches.
In
April 2010, the jury in the pending patent-infringement action
upheld the validity of the basic patent for Protonix. In July 2010,
the court upheld the jury verdict, but it did not issue a judgment
against Teva USA, Teva Pharmaceutical Industries or Sun because of
their other claims relating to the patent that still are pending.
Wyeth and Nycomed will continue to pursue all available legal
remedies against those generic manufacturers, including
compensation for damages resulting from their at-risk
launches.
Separately,
Wyeth and Nycomed are defendants in purported class actions brought
by direct and indirect purchasers of Protonix in the U.S. District
Court for the District of New Jersey. Plaintiffs seek damages, on
behalf of the respective putative classes, for the alleged
violation of antitrust laws in connection with the procurement and
enforcement of the patents for Protonix. These purported class
actions have been stayed pending resolution of the underlying
patent litigation in the U.S. District Court for the District of
New Jersey.
Rapamune (sirolimus)
In
March 2010, Watson and Ranbaxy Laboratories Limited (Ranbaxy)
notified us that they had filed abbreviated new drug applications
with the FDA seeking approval to market generic versions of
Rapamune. Watson and Ranbaxy assert the invalidity and
non-infringement of a method-of-use patent which (including the
six-month pediatric exclusivity period) expires in 2014 and a
solid-dosage formulation patent which (including the six-month
pediatric exclusivity period) expires in 2018. In April 2010, we
filed actions against Watson and Ranbaxy in the U.S. District Court
for the District of Delaware and against Watson in the U.S.
District Court for the Southern District of Florida asserting the
infringement of the method-of-use patent. In June 2010, our action
in the Southern District of Florida was transferred to the District
of Delaware and consolidated with our pending action
there.
Tygacil (tigecycline)
In
October 2009, Sandoz notified Wyeth that it had filed an
abbreviated new drug application with the FDA seeking approval to
market a generic version of Tygacil. Sandoz asserts the invalidity
and non-infringement of two of Wyeth’s patents relating to
Tygacil, including the basic patent, which expires in 2016. In
December 2009, Wyeth filed suit against Sandoz in the U.S. District
Court for the District of Delaware asserting infringement of the
basic patent.
Avinza (morphine sulfate)
King
Pharmaceuticals, Inc. (King) and Elan Pharma International LTD
(EPI) brought a patent-infringement action in the U.S. District
Court for the District of New Jersey against Sandoz in July 2009 as
the result of its abbreviated new drug application with
the FDA seeking approval to a market generic version of Avinza.
Sandoz is challenging a formulation patent for Avinza, which is
owned by EPI that expires in 2017.
EpiPen
King
brought patent-infringement actions against Sandoz in the U.S
District Court for the District of New Jersey in July 2010 and
against Teva Pharmaceutical Industries and Intelliject, Inc.
(Intelliject) in the U.S. District Court for the District of
Delaware in August 2009 and January 2011, respectively, as the
result of their abbreviated new drug applications with the FDA
seeking approval to market epinephrine injectable products. The two
actions in Delaware subsequently were consolidated. Sandoz, Teva
Pharmaceutical Industries and Intelliject are challenging two
patents, which expire in 2025, covering the next-generation
autoinjector for use with epinephrine that is sold under the EpiPen
brand name.
Embeda (morphine sulfate/naltrexone hydrochloride extended-release
capsules)
In
August 2011, Watson Laboratories Inc. – Florida (Watson
Florida) notified us that it had filed an abbreviated new drug
application with the FDA seeking approval to market a generic
version of Embeda extended-release capsules. Watson Florida asserts
the invalidity and non-infringement of three formulation patents
that expire in 2027. In October 2011, we filed an action against
Watson Florida in the U.S. District Court for the District of
Delaware asserting the infringement of, and defending against the
allegations of the invalidity of, the three formulation
patents.
ReFacto and Xyntha
In
February 2008, Novartis Vaccines and Diagnostics, Inc. (Novartis)
filed suit against Wyeth and a subsidiary of Wyeth in the U.S.
District Court for the Eastern District of Texas alleging that
Wyeth’s ReFacto and Xyntha products infringe two Novartis
patents. Novartis’s complaint seeks damages, including treble
damages, for alleged willful infringement. Wyeth and its subsidiary
assert, among other things, the invalidity and non-infringement of
the Novartis patents. In November 2009, Novartis added a third
patent to its infringement claim against Wyeth and its subsidiary.
In August 2010, Novartis granted Wyeth and its subsidiary a
covenant not to sue on the third patent and withdrew that patent
from its pending action.
In
May 2008, a subsidiary of Wyeth filed suit in the U.S. District
Court for the District of Delaware against Novartis seeking
a declaration that the two Novartis patents initially asserted
against Wyeth and its subsidiary in the action referred to in the
preceding paragraph are invalid on the ground that the Wyeth
subsidiary was the first to invent the subject matter. In February
2010, the District of Delaware declined to invalidate those two
Novartis patents. In March 2010, the Wyeth subsidiary appealed the
decision to the U.S. Court of Appeals for the Federal Circuit. In
August 2011, the Federal Circuit affirmed the District
Court’s decision. In September 2011, the Wyeth subsidiary
filed a petition for a rehearing with the Federal Circuit. The
Federal Circuit’s decision does not address the defenses that
Wyeth and its subsidiary are asserting in the action referred to in
the previous paragraph.
B. Product Litigation
Like
other pharmaceutical companies, we are defendants in numerous
cases, including but not limited to those discussed below, related
to our pharmaceutical and other products. Plaintiffs in these cases
seek damages and other relief on various grounds for alleged
personal injury and economic loss.
Asbestos
Quigley
Company, Inc. (Quigley), a wholly owned subsidiary, was acquired by
Pfizer in 1968 and sold products containing small amounts of
asbestos until the early 1970s. In September 2004, Pfizer and
Quigley took steps that were intended to resolve all pending and
future claims against Pfizer and Quigley in which the claimants
allege personal injury from exposure to Quigley products containing
asbestos, silica or mixed dust. We recorded a charge of $369
million pre-tax ($229 million after-tax) in the third quarter of
2004 in connection with these matters.
In
September 2004, Quigley filed a petition in the U.S. Bankruptcy
Court for the Southern District of New York seeking reorganization
under Chapter 11 of the U.S. Bankruptcy Code. In March 2005,
Quigley filed a reorganization plan in the Bankruptcy Court that
needed the approval of 75% of the voting claimants as well as the
Bankruptcy Court and the U.S. District Court for the Southern
District of New York. In connection with that filing, Pfizer
entered into settlement agreements with lawyers representing more
than 80% of the individuals with claims related to Quigley products
against Quigley and Pfizer. The agreements provide for a total of
$430 million in payments, of which $215 million became due in
December 2005 and has been and is being paid to claimants upon
receipt by the Company of certain required documentation from each
of the claimants. The reorganization plan provided for the
establishment of a Trust (the Trust) for the evaluation and, as
appropriate, payment of all unsettled pending claims as well as any
future claims alleging injury from exposure to Quigley
products.
In
February 2008, the Bankruptcy Court authorized Quigley to solicit
an amended reorganization plan for acceptance by claimants.
According to the official report filed with the court by the
balloting agent in July 2008, the requisite votes were cast in
favor of the amended plan of reorganization.
The
Bankruptcy Court held a confirmation hearing with respect to
Quigley’s amended plan of reorganization that concluded in
December 2009. In September 2010, the Bankruptcy Court declined to
confirm the amended reorganization plan. As a result of the
foregoing, Pfizer recorded additional charges for this matter of
approximately $1.3 billion pre-tax (approximately $800 million
after-tax) in 2010. Further, in order to preserve its right to
address certain legal issues raised in the court’s opinion,
in October 2010, Pfizer filed a notice of appeal and motion for
leave to appeal the Bankruptcy Court’s decision denying
confirmation.
In
March 2011, Pfizer entered into a settlement agreement with a
committee (the Ad Hoc Committee) representing approximately 40,000
claimants in the Quigley bankruptcy proceeding (the Ad Hoc
Committee claimants). Consistent with the additional charges
recorded in 2010 referred to above, the principal provisions of the
settlement agreement provide for a settlement payment in two
installments and other consideration, as follows:
Following
the execution of the settlement agreement with the Ad Hoc
Committee, Quigley filed a revised plan of reorganization and
accompanying disclosure statement with the Bankruptcy Court in
April 2011. Under the revised plan, and consistent with the
additional charges recorded in 2010 referred to above, we expect to
contribute an additional amount to the Trust, if and when the
Bankruptcy Court confirms the plan, of cash and non-cash assets
(including insurance proceeds) with a value in excess of $550
million. The Bankruptcy Court must find that the revised plan meets
the requisite standards of the U.S. Bankruptcy Code before it
confirms the plan. We expect that, if approved by claimants,
confirmed by the Bankruptcy Court and the District Court and upheld
on any subsequent appeal, the revised reorganization plan will
result in the District Court entering a permanent injunction
directing pending claims as well as future claims alleging personal
injury from exposure to Quigley products to the Trust. There is no
assurance that the plan will be confirmed by the
courts.
In
a separately negotiated transaction with an insurance company in
August 2004, we agreed to a settlement related to certain insurance
coverage which provides for payments to an insurance proceeds trust
established by Pfizer and Quigley over a ten-year period of amounts
totaling $405 million. Most of these insurance proceeds, as well as
other payments from insurers that issued policies covering Pfizer
and Quigley, would be paid, following confirmation, to the Trust
for the benefit of present unsettled and future claimants with
claims arising from exposure to Quigley products.
Between
1967 and 1982, Warner-Lambert owned American Optical Corporation,
which manufactured and sold respiratory protective devices and
asbestos safety clothing. In connection with the sale of American
Optical in 1982, Warner-Lambert agreed to indemnify the purchaser
for certain liabilities, including certain asbestos-related and
other claims. As of September 30, 2011, approximately 68,000 claims
naming American Optical and numerous other defendants were pending
in various federal and state courts seeking damages for alleged
personal injury from exposure to asbestos and other allegedly
hazardous materials. Warner-Lambert is actively engaged in the
defense of, and will continue to explore various means to resolve,
these claims.
Warner-Lambert
and American Optical brought suit in state court in New Jersey
against the insurance carriers that provided coverage for the
asbestos and other allegedly hazardous materials claims related to
American Optical. A majority of the carriers subsequently agreed to
pay for a portion of the costs of defending and resolving those
claims. The litigation continues against the carriers who have
disputed coverage or how costs should be allocated to their
policies, and the court held that Warner-Lambert and American
Optical are entitled to payment from each of those carriers of a
proportionate share of the costs associated with those claims.
Under New Jersey law, a special allocation master was appointed to
implement certain aspects of the court’s
rulings.
Numerous
lawsuits are pending against Pfizer in various federal and state
courts seeking damages for alleged personal injury from exposure to
products containing asbestos and other allegedly hazardous
materials sold by Gibsonburg Lime Products Company (Gibsonburg).
Gibsonburg was acquired by Pfizer in the 1960s and sold products
containing small amounts of asbestos until the early
1970s.
There
also is a small number of lawsuits pending in various federal and
state courts seeking damages for alleged exposure to asbestos in
facilities owned or formerly owned by Pfizer or its
subsidiaries.
Celebrex and Bextra
Beginning
in late 2004, actions, including purported class actions, were
filed in various federal and state courts against Pfizer, Pharmacia
Corporation (Pharmacia) and certain current and former officers,
directors and employees of Pfizer and Pharmacia. These actions
include (i) purported class actions alleging that Pfizer and
certain current and former officers of Pfizer violated federal
securities laws by misrepresenting the safety of Celebrex and
Bextra, and (ii) purported class actions filed by persons who claim
to be participants in the Pfizer or Pharmacia Savings Plan alleging
that Pfizer and certain current and former officers, directors and
employees of Pfizer or, where applicable, Pharmacia and certain
former officers, directors and employees of Pharmacia, violated
certain provisions of the Employee Retirement Income Security Act
of 1974 (ERISA) by selecting and maintaining Pfizer stock or
Pharmacia stock as an investment alternative when it allegedly no
longer was a suitable or prudent investment option. In June 2005,
the federal securities and ERISA actions were transferred for
consolidated pre-trial proceedings to a Multi-District Litigation
(In re Pfizer
Inc. Securities, Derivative and "ERISA" Litigation
MDL-1688) in the U.S. District Court for the Southern
District of New York.
In
2003, several purported class action complaints were filed in the
U.S. District Court for the District of New Jersey against
Pharmacia, Pfizer and certain former officers of Pharmacia. The
plaintiffs seek damages, alleging that the defendants violated
federal securities laws by misrepresenting the data from a study
concerning the gastrointestinal effects of Celebrex. These cases
were consolidated for pre-trial proceedings in the District of New
Jersey (Alaska
Electrical Pension Fund et al. v. Pharmacia Corporation et
al.). In January 2007, the court certified a class
consisting of all persons who purchased Pharmacia securities from
April 17, 2000 through February 6, 2001 and were damaged as a
result of the decline in the price of Pharmacia's securities
allegedly attributable to the misrepresentations.
In
October 2007, the court granted defendants’ motion for
summary judgment and dismissed the plaintiffs’ claims. In
November 2007, the plaintiffs appealed the decision to the U.S.
Court of Appeals for the Third Circuit. In January 2009, the Third
Circuit vacated the District Court’s grant of summary
judgment in favor of defendants and remanded the case to the
District Court for further proceedings. The Third Circuit also held
that the District Court erred in determining that the class period
ended on February 6, 2001, and directed that the class period end
on August 5, 2001. In June 2009, the District Court stayed
proceedings in the case pending a determination by the U.S. Supreme
Court with regard to defendants’ petition for certiorari
seeking reversal of the Third Circuit’s decision. In May
2010, the U.S. Supreme Court denied defendants’ petition for
certiorari, and the case was remanded to the District Court for
further proceedings.
Pfizer
and several predecessor and affiliated companies, including
Monsanto Company (Monsanto), are defendants in an action brought by
Brigham Young University (BYU) and a BYU professor in the U.S.
District Court for the District of Utah alleging, among other
things, breach by Monsanto of a 1991 research agreement with BYU.
Plaintiffs claim that research under that agreement led to the
discovery of Celebrex and that, as a result, they are entitled to a
share of the profits from Celebrex sales. Plaintiffs seek, among
other things, compensatory and punitive damages.
Various Drugs: Off-Label Promotion Actions
In
May 2010, a purported class action was filed in the U.S. District
Court for the Southern District of New York against Pfizer and
several of our current and former officers. The complaint alleges
that the defendants violated federal securities laws by failing to
disclose that Pfizer was engaged in off-label marketing of certain
drugs. Plaintiffs seek damages in an unspecified
amount.
In
June 2010, Health Care Service Corporation (HCSC), for itself and
its affiliates, Blue Cross and Blue Shield plans in Illinois, New
Mexico, Oklahoma and Texas, filed an action against us in the U.S.
District Court for the Eastern District of Texas. In July 2010,
HCSC amended its complaint. The complaint, as amended, alleges that
we engaged in deceptive marketing activities, including off-label
promotion, and the payment of improper remuneration to health care
professionals with respect to Bextra and Celebrex in violation of,
among other things, the federal Racketeer Influenced and Corrupt
Organizations (RICO) Act and the Illinois Consumer Fraud Act. In
December 2010, this action was transferred to a Multi-District
Litigation (In re
Celebrex and Bextra Marketing, Sales Practices and Product
Liability Litigation MDL-1699) in the U.S. District Court
for the Northern District of California. In July 2010, HCSC also
filed a separate lawsuit against us in the U.S. District Court for
the Eastern District of Texas including substantially similar
allegations regarding Geodon, Lyrica and Zyvox. In this latter
action, in October 2011, HCSC filed an amended complaint that is
substantially similar to the original complaint except that it no
longer includes allegations regarding Lyrica or claims under the
Illinois Consumer Fraud Act. In both actions, HCSC seeks to recover
the amounts that it paid for the specified drugs on behalf of its
members in Illinois, New Mexico, Oklahoma, and Texas, as well as
treble damages and punitive damages.
Hormone-Replacement Therapy
Pfizer
and certain wholly owned subsidiaries and limited liability
companies, including Wyeth and King, along with several other
pharmaceutical manufacturers, have been named as defendants in
approximately 10,000 actions in various federal and state courts
alleging personal injury or economic loss related the use or
purchase of certain estrogen and progestin medications prescribed
for women to treat the symptoms of menopause. Although new actions
are occasionally filed, the number of new actions was not
significant in the third quarter of 2011, and we do not expect a
substantial change in the rate of new actions being filed.
Plaintiffs in these suits allege a variety of personal injuries,
including breast cancer, ovarian cancer, stroke and heart disease.
Certain co-defendants in some of these actions have asserted
indemnification rights against Pfizer and its affiliated companies.
The cases against Pfizer and its affiliated companies involve one
or more of the following products, all of which remain approved by
the FDA: femhrt (which Pfizer divested in 2003); Activella and
Vagifem (which are Novo Nordisk products that were marketed by a
Pfizer affiliate from 2000 to 2004); Premarin, Prempro, Aygestin,
Cycrin and Premphase (which are legacy Wyeth products); and
Provera, Ogen, Depo-Estradiol, Estring and generic MPA (which are
legacy Pharmacia & Upjohn products). The federal cases have
been transferred for consolidated pre-trial proceedings to a
Multi-District Litigation (In re Prempro Products
Liability Litigation MDL-1507) in the U.S. District Court
for the Eastern District of Arkansas. Certain of the federal cases
have been remanded to their respective District Courts for further
proceedings including, if necessary, trial.
This
litigation consists of individual actions, a few purported
statewide class actions and a purported provincewide class action
in Quebec, Canada, a statewide class action in California and a
nationwide class action in Canada. In March 2011, in an action
against Wyeth seeking the refund of the purchase price paid for
Wyeth’s hormone-replacement therapy products by individuals
in the State of California during the period from January 1995 to
January 2003, the U.S. District Court for the Southern District of
California certified a class consisting of all individual
purchasers of such products in California who actually heard or
read Wyeth’s alleged misrepresentations regarding such
products. This is the only hormone-replacement therapy action to
date against Pfizer and its affiliated companies in the U.S. in
which a class has been certified. In addition, in August 2011, in
an action against Wyeth seeking damages for personal injury, the
Supreme Court of British Columbia certified a class consisting of
all women who were prescribed Premplus and/or Premarin in
combination with progestin in Canada between January 1, 1997 and
December 1, 2003 and who thereafter were diagnosed with breast
cancer.
Pfizer
and its affiliated companies have prevailed in many of the
hormone-replacement therapy actions that have been resolved to
date, whether by voluntary dismissal by the plaintiffs, summary
judgment, defense verdict or judgment notwithstanding the verdict;
a number of these cases have been appealed by the plaintiffs.
Certain other hormone-replacement therapy actions have resulted in
verdicts for the plaintiffs and have included the award of
compensatory and, in some instances, punitive damages; each of
these cases has been appealed by Pfizer and/or its affiliated
companies. The decisions in a few of the cases that had been
appealed by Pfizer and/or its affiliated companies or by the
plaintiffs have been upheld by the appellate courts, while several
other cases that had been appealed by Pfizer and/or its affiliated
companies or by the plaintiffs have been remanded by the appellate
courts to their respective trial courts for further proceedings.
Trials of additional hormone-replacement therapy actions are
underway or scheduled for 2011.
As
of October 2, 2011, Pfizer and its affiliated companies had
settled, or entered into definitive agreements or
agreements-in-principle to settle, approximately 46% of the
hormone-replacement therapy actions pending against us and our
affiliated companies. We have recorded aggregate charges with
respect to those actions, as well as with respect to the actions
that have resulted in verdicts against us or our affiliated
companies, of $280 million in the first nine months of 2011 and
$300 million in prior years. In addition, we have recorded a charge
of $260 million in the first nine months of 2011 that provides for
the minimum expected costs to resolve all remaining
hormone-replacement therapy actions against Pfizer and its
affiliated companies, consistent with our current ability to
quantify such future costs. The $260 million charge is an
estimate and, while we cannot reasonably estimate the range of
reasonably possible loss in excess of the amount accrued for these
contingencies given the uncertainties inherent in this product
liability litigation, as described below, additional charges may be
required in the future.
Most
of the unresolved actions against Pfizer and/or its affiliated
companies have been outstanding for more than five years and could
take many more years to resolve. However, opportunistic settlements
could occur at any time. The litigation process is time-consuming,
as every hormone-replacement action being litigated involves
contested issues of medical causation and knowledge of risk. Even
though the vast majority of hormone-replacement therapy actions
concern breast cancer, the underlying facts (e.g., medial
causation, family history, reliance on warnings, physician/patient
interaction, analysis of labels, actual provable injury and other
critical factors) can differ significantly from action to action,
and the process of discovery has not yet begun for a majority of
the unresolved actions. Our ability to estimate the range of
possible loss in excess of amounts accrued is complicated by these
factors.
In
addition, the hormone-replacement therapy litigation involves
fundamental issues of science and medicine that often are uncertain
and continue to evolve. Key scientific court rulings may have a
significant impact on the litigation as a whole. An integral part
of the litigation process involves understanding the evolving
science as well as seeking key scientific rulings. Equally
important, the discovery process is lengthy and complex and has not
yet begun for a majority of the unresolved actions. Therefore,
we may not have sufficient information to determine the percentage
of unresolved actions that could be impacted by scientific
developments and/or key scientific rulings. Our ability to estimate
the range of possible loss in excess of amounts accrued is
complicated by these fundamental issues of science and medicine,
because we do not know how the science may evolve, how the courts
will rule on key motions or which unresolved actions will be
impacted by these scientific matters.
Accordingly,
we cannot reasonably estimate the range of possible loss in excess
of amounts accrued for these contingencies.
Pfizer
and/or its affiliated companies also have received inquiries from
various federal and state agencies and officials relating to the
marketing of their hormone-replacement products. In November 2008,
the State of Nevada filed an action against Pfizer, Pharmacia &
Upjohn Company and Wyeth in state court in Nevada alleging that
they had engaged in deceptive marketing of their respective
hormone-replacement therapy medications in Nevada in violation of
the Nevada Deceptive Trade Practices Act. The action seeks monetary
relief, including civil penalties and treble damages. In February
2010, the action was dismissed by the court on the grounds that the
statute of limitations had expired. In July 2011, the Nevada
Supreme Court reversed the dismissal and remanded the case to the
district court for further proceedings.
Zoloft and Effexor
A
number of individual lawsuits, as well as a multi-plaintiff lawsuit
with respect to Effexor, have been filed against us and/or our
subsidiaries in various federal and state courts alleging personal
injury as a result of the purported ingesting of Zoloft or
Effexor.
Neurontin
A
number of lawsuits, including purported class actions, have been
filed against us in various federal and state courts alleging
claims arising from the promotion and sale of Neurontin. The
plaintiffs in the purported class actions seek to represent
nationwide and certain statewide classes consisting of persons,
including individuals, health insurers, employee benefit plans and
other third-party payers, who purchased or reimbursed patients for
the purchase of Neurontin that allegedly was used for indications
other than those included in the product labeling approved by the
FDA. In 2004, many of the suits pending in federal courts,
including individual actions as well as purported class actions,
were transferred for consolidated pre-trial proceedings to a
Multi-District Litigation (In re Neurontin Marketing,
Sales Practices and Product Liability Litigation MDL-1629)
in the U.S. District Court for the District of
Massachusetts.
In
the Multi-District Litigation, in 2009, the court denied the
plaintiffs’ renewed motion for certification of a nationwide
class of all consumers and third-party payers who allegedly
purchased or reimbursed patients for the purchase of Neurontin for
off-label uses from 1994 through 2004. In May 2011, the court
denied a motion to reconsider its class certification
ruling.
In
2010, the Multi-District Litigation court partially granted the
Company’s motion for summary judgment, dismissing the claims
of all of the proposed class representatives for third-party payers
and four of the six proposed class representatives for individual
consumers. In June 2011, the plaintiffs whose claims were dismissed
appealed both the dismissal and the denial of class certification
to the U.S. Court of Appeals for the First Circuit.
Also
in the Multi-District Litigation, in February 2011, a third-party
payer who was not included in the proposed class action appealed a
dismissal order to the U.S. Court of Appeals for the First
Circuit.
Plaintiffs
are seeking certification of statewide classes of Neurontin
purchasers in actions pending in California, Illinois and Oklahoma.
State courts in New York, Pennsylvania, Missouri and New Mexico
have declined to certify statewide classes of Neurontin
purchasers.
In
January 2011, the U.S. District Court for the District of
Massachusetts entered an order trebling a jury verdict against us
in an action by a third-party payer seeking damages for the alleged
off-label promotion of Neurontin in violation of the federal
Racketeer Influenced and Corrupt Organizations (RICO) Act. The
verdict was for $47.4 million, which was subject to automatic
trebling to $142.1 million under the RICO Act. In November 2010,
the court had entered a separate verdict against us in the amount
of $65.4 million, together with prejudgment interest, under
California’s Unfair Trade Practices law relating to the same
alleged conduct, which amount is included within and is not
additional to the $142.1 million trebled amount of the jury
verdict. In August 2011, we appealed the District Court’s
judgment to the U.S. Court of Appeals for the First
Circuit.
A
number of individual lawsuits have been filed against us in various
U.S. federal and state courts and in certain other countries
alleging suicide, attempted suicide and other personal injuries as
a result of the purported ingesting of Neurontin. Certain of the
U.S. federal actions have been transferred for consolidated
pre-trial proceedings to the same Multi-District Litigation
referred to in the first paragraph of this section.
In
addition, purported class actions have been filed against us in
various Canadian provincial courts alleging claims arising from the
promotion, sale and labeling of Neurontin and generic gabapentin.
In February 2010, in a proceeding pending in Ontario, Canada, the
court certified a class consisting of all persons in Canada, except
in Quebec, who purchased and ingested Neurontin prior to August
2004. The plaintiffs claim that Pfizer failed to provide adequate
warning of the alleged risks of personal injury associated with
Neurontin. Two purported provincewide class actions pending in
Quebec that include substantially similar allegations will be
included in that national class action by agreement of the parties
and order of the Quebec court, subject to approval by the Ontario
court.
In
January 2011, in a Multi-District Litigation (In re Neurontin Antitrust
Litigation MDL-1479) that consolidates four actions, the
U.S. District Court for the District of New Jersey certified a
nationwide class consisting of wholesalers and other entities who
purchased Neurontin directly from Pfizer and Warner-Lambert during
the period from December 11, 2002 to August 31, 2008 and who also
purchased generic gabapentin after it became available. The
complaints allege that Pfizer and Warner-Lambert engaged in
anticompetitive conduct in violation of the Sherman Act that
included, among other things, submitting patents for listing in the
Orange Book and prosecuting and enforcing certain patents relating
to Neurontin, as well as engaging in off-label marketing of
Neurontin. Plaintiffs seek compensatory damages, which may be
subject to trebling.
Lipitor
In
2004, a former employee filed a “whistleblower” action
against us in the U.S. District Court for the Eastern District of
New York. The complaint remained under seal until September 2007,
at which time the U.S. Attorney for the Eastern District of New
York declined to intervene in the case. We were served with the
complaint in December 2007. Plaintiff alleges that, through patient
and medical education programs, written materials and other actions
aimed at doctors, consumers, payers and investors, the Company
promoted Lipitor for use by certain patients contrary to national
cholesterol guidelines that plaintiff claims are a part of the
labeled indications for the product. Plaintiff alleges violations
of the Federal Civil False Claims Act and the false claims acts of
certain states and seeks treble damages and civil penalties on
behalf of the federal government and the specified states as the
result their purchase, or reimbursement of patients for the
purchase, of Lipitor allegedly for such off-label uses. Plaintiff
also seeks compensation as a whistleblower under those federal and
state statutes. In addition, plaintiff alleges that he was
wrongfully terminated, in violation of the anti-retaliation
provisions of the Federal Civil False Claims Act, the Civil Rights
Act of 1964 and applicable New York law, for raising concerns about
the alleged off-label promotion of Lipitor and about alleged
instances of sexual harassment in the workplace, and he seeks
damages and the reinstatement of his employment. In 2009, the court
dismissed without prejudice the claims alleging violations of the
Federal Civil False Claims Act and the false claims acts of certain
states. In 2010, plaintiff filed an amended complaint containing
allegations concerning violations of the Federal Civil False Claims
Act and the false claims acts of certain states that are
substantially similar to the allegations in the original
complaint.
On
November 8, 2011, 11 California pharmacies filed suit in
the U.S. District Court for the Northern District of
California against Pfizer and Ranbaxy Laboratories Ltd. Plaintiffs
allege antitrust violations in connection with the 2008 agreement
pursuant to which Pfizer and Ranbaxy settled certain patent
litigation involving Lipitor and Pfizer granted Ranbaxy a license
to sell a generic version of Lipitor in various markets
beginning on varying dates. The plaintiffs allege that the
settlement agreement constituted a conspiracy to delay the launch
of generic Lipitor in the U.S. The suit seeks to recover damages
for alleged price overcharges for Lipitor from March 24, 2010 to
the present that plaintiffs claim were attributable to the delay in
the launch of generic Lipitor in the U.S. Plaintiffs also seek
injunctive relief, invalidating the settlement agreement and
Pfizer's remaining Lipitor patents, as well as treble
damages.
On November 9, 2011, a purported class action was
filed in the U.S. District Court for the Eastern District of
Pennsylvania against Pfizer and certain affiliates of Pfizer,
including Warner-Lambert Company. The plaintiffs seek to represent
a class consisting of all persons in the U.S. who purchased and/or
paid for Lipitor directly from any of the defendants between March
25, 2010 and the present. The plaintiffs allege fraud in connection
with Warner-Lambert Company’s application to the U.S. Patent
and Trademark Office for the enantiomer patent for Lipitor, which
(including the six-month pediatric exclusivity period) expired in
June 2011, as well as antitrust violations in connection with the
enforcement of that patent. The suit seeks to recover treble
damages on behalf of the putative class for alleged price
overcharges for Lipitor in the U.S. from March 25, 2010 to the
present that plaintiffs claim resulted from the delay in the launch
of generic Lipitor in the U.S. attributable to the enantiomer
patent.
Chantix/Champix
A
number of individual lawsuits have been filed against us in various
federal and state courts alleging suicide, attempted suicide and
other personal injuries as a result of the purported ingesting of
Chantix, as well as economic loss. Plaintiffs in these actions seek
compensatory and punitive damages and the disgorgement of profits
resulting from the sale of Chantix. In October 2009, the federal
cases were transferred for consolidated pre-trial proceedings to a
Multi-District Litigation (In re Chantix (Varenicline)
Products Liability Litigation MDL-2092) in the U.S. District
Court for the Northern District of Alabama.
Beginning
in December 2008, purported class actions were filed against us in
the Ontario Superior Court of Justice (Toronto Region), the
Superior Court of Quebec (District of Montreal), the Court of
Queen’s Bench of Alberta, Judicial District of Calgary, and
the Superior Court of British Columbia (Vancouver Registry) on
behalf of all individuals and third-party payers in Canada who have
purchased and ingested Champix or reimbursed patients for the
purchase of Champix. Each of these actions asserts claims under
Canadian product liability law, including with respect to the
safety and efficacy of Champix, and, on behalf of the putative
class, seeks monetary relief, including punitive damages. The
actions in Quebec, Alberta and British Columbia have been stayed
pending the decision regarding class certification in the Ontario
action.
Bapineuzumab
In
June 2010, a purported class action was filed in the U.S. District
Court for the District of New Jersey against Pfizer, as successor
to Wyeth, and several former officers of Wyeth. The complaint
alleges that Wyeth and the individual defendants violated federal
securities laws by making or causing Wyeth to make false and
misleading statements, and by failing to disclose or causing Wyeth
to fail to disclose material information, concerning the results of
a clinical trial involving bapineuzumab, a product in development
for the treatment of Alzheimer’s disease. The plaintiff seeks
to represent a class consisting of all persons who purchased Wyeth
securities from May 21, 2007 through July 2008 and seeks damages in
an unspecified amount on behalf of the purported
class.
In
July 2010, a related action was filed in the U.S. District Court
for the Southern District of New York against Elan Corporation
(Elan), certain directors and officers of Elan, and Pfizer, as
successor to Wyeth. Elan participated in the development of
bapineuzumab until September 2009. The complaint alleges that Elan,
Wyeth and the individual defendants violated federal securities
laws by making or causing Elan to make false and misleading
statements, and by failing to disclose or causing Elan to fail to
disclose material information, concerning the results of a clinical
trial involving bapineuzumab. The plaintiff seeks to represent a
class consisting of all persons who purchased Elan call options
from June 17, 2008 through July 29, 2008 and seeks damages in an
unspecified amount on behalf of the purported class. In June 2011,
the court granted Pfizer’s and Elan’s motions to
dismiss the complaint. In July 2011, the plaintiff filed a
supplemental memorandum setting forth the bases that the plaintiff
believed supported amendment of the complaint. In August 2011, the
court dismissed the complaint with prejudice. In September 2011,
the plaintiff appealed the District Court’s decision to the
U.S. Court of Appeals for the Second Circuit.
Thimerosal
Wyeth
is a defendant in a number of suits by or on behalf of vaccine
recipients alleging that exposure through vaccines to cumulative
doses of thimerosal, a preservative used in certain childhood
vaccines formerly manufactured and distributed by Wyeth and other
vaccine manufacturers, caused severe neurological damage and/or
autism in children. While several suits were filed as purported
nationwide or statewide class actions, all of the purported class
actions have been dismissed, either by the courts or voluntarily by
the plaintiffs. In addition to the suits alleging injury from
exposure to thimerosal, certain of the cases were brought by
parents in their individual capacities for, among other things,
loss of services and loss of consortium of the injured
child.
The
National Childhood Vaccine Injury Act (the Vaccine Act) requires
that persons alleging injury from childhood vaccines first file a
petition in the U.S. Court of Federal Claims asserting a
vaccine-related injury. At the conclusion of that proceeding,
petitioners may bring a lawsuit against the manufacturer in federal
or state court, provided that they have satisfied certain
procedural requirements. Also under the terms of the Vaccine Act,
if a petition has not been adjudicated by the U.S. Court of Federal
Claims within a specified time period after filing, the petitioner
may opt out of the proceeding and pursue a lawsuit against the
manufacturer by following certain procedures. Some of the vaccine
recipients who have sued Wyeth to date may not have satisfied the
conditions to filing a lawsuit that are mandated by the Vaccine
Act. The claims brought by parents for, among other things, loss of
services and loss of consortium of the injured child are not
covered by the Vaccine Act.
In
2002, the Office of Special Masters of the U.S. Court of Federal
Claims established an Omnibus Autism Proceeding with jurisdiction
over petitions in which vaccine recipients claim to suffer from
autism or autism spectrum disorder as a result of receiving
thimerosal-containing childhood vaccines and/or the measles, mumps
and rubella (MMR) vaccine. There currently are several thousand
petitions pending in the Omnibus Autism Proceeding. Special masters
of the court have heard six test cases on petitioners’
theories that either thimerosal-containing vaccines in combination
with the MMR vaccine or thimerosal-containing vaccines alone can
cause autism or autism spectrum disorder.
Pristiq
In
late 2007 and early 2008, the following actions were filed in
various federal courts: (i) a purported class action alleging that
Wyeth and certain former officers of Wyeth violated federal
securities laws by misrepresenting the safety of Pristiq during the
period before the FDA’s issuance in July 2007 of an
“approvable letter” for Pristiq for the treatment of
vasomotor symptoms, which allegedly caused a decline in the price
of Wyeth stock; (ii) a shareholder derivative action alleging that
certain former officers of Wyeth and certain former directors of
Wyeth, two of whom are now directors of Pfizer, breached fiduciary
duties and violated federal securities laws by virtue of the
aforementioned alleged misrepresentation; and (iii) a purported
class action against Wyeth, the Wyeth Savings Plan Committee, the
Wyeth Savings Plan-Puerto Rico Committee, the Wyeth Retirement
Committee and certain former Wyeth officers and committee members
alleging that they violated certain provisions of ERISA by
maintaining Wyeth stock as an investment alternative under certain
Wyeth plans notwithstanding their alleged knowledge of the
aforementioned alleged misrepresentation.
The
U.S. District Court for the Southern District of New York dismissed
the ERISA action and denied the plaintiff’s motion to amend
the complaint in March and August 2010, respectively. In September
2010, the plaintiff appealed both of those rulings to the U.S.
Court of Appeals for the Second Circuit. In November 2010, the
plaintiff withdrew the appeal, but reserved the right to reinstate
the appeal by December 2011. In addition, in January 2011, the
shareholder derivative action was voluntarily dismissed by the
plaintiff. The purported securities class action remains
pending.
Rebif
We
have an exclusive collaboration agreement with EMD Serono, Inc.
(Serono) to co-promote Rebif, a treatment for multiple sclerosis,
in the U.S. In August 2011, Serono filed a complaint in the
Philadelphia Court of Common Pleas seeking a declaratory judgment
that we are not entitled to a 24-month extension of the Rebif
co-promotion agreement, which otherwise would terminate at the end
of 2013. We disagree with Serono's interpretation of the agreement
and believe that we have the right to extend the agreement to the
end of 2015. In October 2011, the court sustained our preliminary
objections and dismissed the complaint, and Serono appealed the
decision to the Superior Court of Pennsylvania.
C. Commercial and Other Matters
Acquisition of Wyeth
In
2009, a number of retail pharmacies in California brought an action
against Pfizer and Wyeth in the U.S. District Court for the
Northern District of California. The plaintiffs allege, among other
things, that our acquisition of Wyeth violated various federal
antitrust laws by creating a monopoly in the manufacture,
distribution and sale of prescription drugs in the U.S. In April
2010, the District Court granted our motion to dismiss the second
amended complaint. In May 2011, the U.S. Court of Appeals for the
Ninth Circuit affirmed the dismissal by the District Court and, in
June 2011, it denied plaintiffs’ petition for a rehearing. In
October 2011, the plaintiffs filed a petition for certiorari with
the U.S. Supreme Court seeking reversal of the Ninth
Circuit’s decision.
Acquisition of King Pharmaceuticals, Inc.
In
October 2010, several purported class action complaints were filed
in federal and state court in Tennessee by shareholders of King
challenging Pfizer’s acquisition of King. King and the
individuals who served as the members of King’s Board of
Directors at the time of the execution of the merger agreement are
named as defendants in all of these actions. Pfizer and Parker
Tennessee Corp., a subsidiary of Pfizer, also are named as
defendants in most of these actions.
In
November 2010, all of the actions filed in state court were
consolidated in the Chancery Court for Sullivan County, Tennessee
Second Judicial District, at Bristol. The parties to the
consolidated state court action have reached an
agreement-in-principle to resolve that action as a result of
certain disclosures regarding the transaction made by King in its
amended Schedule 14D-9 recommendation statement for the tender
offer dated January 21, 2011. The proposed settlement is subject
to, among other things, court approval.
In
September 2011, the court granted defendants’ unopposed
motion to dismiss the federal action.
Average Wholesale Price Litigation
A
number of states as well as most counties in New York have sued
Pharmacia, Pfizer and other pharmaceutical manufacturers alleging
that they provided average wholesale price (AWP) information for
certain of their products that was higher than the actual prices at
which those products were sold. The AWP is used to determine
reimbursement levels under Medicare Part B and Medicaid and in many
private-sector insurance policies and medical plans. The plaintiffs
claim that the alleged spread between the AWPs at which purchasers
were reimbursed and the actual sale prices was promoted by the
defendants as an incentive to purchase certain of their products.
In addition to suing on their own behalf, many of the plaintiff
states seek to recover on behalf of individual Medicare Part B
co-payers and private-sector insurance companies and medical plans
in their states. These various actions generally assert fraud
claims as well as claims under state deceptive trade practice laws,
and seek monetary and other relief, including civil penalties and
treble damages. Several of the suits also allege that Pharmacia
and/or Pfizer did not report to the states their best price for
certain products under the Medicaid program.
In
addition, Pharmacia, Pfizer and other pharmaceutical manufacturers
are defendants in a number of purported class action suits in
various federal and state courts brought by employee benefit plans
and other third-party payers that assert claims similar to those in
the state and county actions. These suits allege, among other
things, fraud, unfair competition and unfair trade practices and
seek monetary and other relief, including civil penalties and
treble damages.
All
of these state, county and purported class action suits were
transferred for consolidated pre-trial proceedings to a
Multi-District Litigation (In re Pharmaceutical Industry
Average Wholesale Price Litigation MDL-1456) in the U.S.
District Court for the District of Massachusetts. Certain of the
state and private suits have been remanded to their respective
state courts. In 2006, the claims against Pfizer in the
Multi-District Litigation were dismissed with prejudice; the claims
against Pharmacia are still pending.
In
2008, the court in the Multi-District Litigation granted
preliminary approval with respect to the fairness of a proposed
settlement of the claims against 11 defendants, including
Pharmacia, for a total of $125 million. It is expected that the
court will consider final approval of the settlement later this
year. If the settlement is approved, Pharmacia’s contribution
would not be material.
In
addition, Wyeth is a defendant in AWP actions brought by certain
states, which are not included in the Multi-District Litigation, as
well as AWP actions brought by most counties in New York, almost
all of which are included in the Multi-District Litigation. Wyeth
also is a defendant in a purported class action in state court in
New Jersey brought by two union health and welfare plans on behalf
of a putative class consisting of third-party payers, certain
consumers and Medicare beneficiaries. In addition, King and/or
certain of its subsidiaries are defendants in AWP actions brought
by certain states, which are not included in the Multi-District
Litigation. These actions against Wyeth and King would not be
included in the proposed settlement referred to in the previous
paragraph.
Monsanto-Related Matters
In
1997, Monsanto Company (Former Monsanto) contributed certain
chemical manufacturing operations and facilities to a newly formed
corporation, Solutia Inc. (Solutia), and spun off the shares of
Solutia. In 2000, Former Monsanto merged with Pharmacia &
Upjohn Company to form Pharmacia Corporation (Pharmacia). Pharmacia
then transferred its agricultural operations to a newly created
subsidiary, named Monsanto Company (New Monsanto), which it spun
off in a two-stage process that was completed in 2002. Pharmacia
was acquired by Pfizer in 2003 and is now a wholly owned subsidiary
of Pfizer.
In
connection with its spin-off that was completed in 2002, New
Monsanto assumed, and agreed to indemnify Pharmacia for, any
liabilities related to Pharmacia’s former agricultural
business. New Monsanto is defending and indemnifying Pharmacia for
various claims and litigation arising out of, or related to, the
agricultural business.
In
connection with its spin-off in 1997, Solutia assumed, and agreed
to indemnify Pharmacia for, liabilities related to Former
Monsanto's chemical businesses. As the result of its reorganization
under Chapter 11 of the U.S. Bankruptcy Code, Solutia’s
indemnification obligations related to Former Monsanto’s
chemical businesses are limited to sites that Solutia has owned or
operated. In addition, in connection with its spin-off that was
completed in 2002, New Monsanto assumed, and agreed to indemnify
Pharmacia for, any liabilities primarily related to Former
Monsanto's chemical businesses, including, but not limited to, any
such liabilities that Solutia assumed. Solutia's and New Monsanto's
assumption of and agreement to indemnify Pharmacia for these
liabilities apply to pending actions and any future actions related
to Former Monsanto's chemical businesses in which Pharmacia is
named as a defendant, including, without limitation, actions
asserting environmental claims, including alleged exposure to
polychlorinated biphenyls.
Trade Secrets Action in California
In
2004, Ischemia Research and Education Foundation (IREF) and its
chief executive officer brought an action in California Superior
Court, Santa Clara County, against a former IREF employee and
Pfizer. Plaintiffs allege that defendants conspired to
misappropriate certain information from IREF’s allegedly
proprietary database in order to assist Pfizer in designing and
executing a clinical study of a Pfizer drug. In 2008, the jury
returned a verdict for compensatory damages of approximately $38.7
million. In March 2009, the court awarded prejudgment interest, but
declined to award punitive damages. In July 2009, the court granted
our motion for a new trial and vacated the jury
verdict.
Trimegestone
Aventis
filed a breach of contract action against Wyeth in the Commercial
Court of Nanterre in France arising out of the December 2003
termination by Wyeth of an October 2000 agreement between Wyeth and
Aventis relating to the development of hormone-therapy drugs
utilizing Aventis’s trimegestone (TMG) progestin. Aventis
alleges that the termination was improper and seeks monetary
damages. In 2009, a three-judge tribunal rendered its decision in
favor of Wyeth. In May 2010, the Versailles Court of Appeals
reversed the Commercial Court’s decision and appointed
experts to hear evidence and make a recommendation to the Court of
Appeals concerning damages. In August 2010, Wyeth filed a notice of
appeal of the Court of Appeals’ decision with the Supreme
Court of France. Notwithstanding the appeal, the damage proceeding
by the experts appointed by the Court of Appeals is
continuing.
Environmental Matters
In
2009, we submitted to the U.S. Environmental Protection Agency
(EPA) a corrective measures study report with regard to Pharmacia
Corporation's discontinued industrial chemical facility in North
Haven, Connecticut and a revised site-wide feasibility study with
regard to Wyeth’s discontinued industrial chemical facility
in Bound Brook, New Jersey. In September 2010, our corrective
measures study report with regard to the North Haven facility was
approved by the EPA. In July 2011, we finalized an Administrative
Settlement Agreement and Order on Consent for Removal Action with
the EPA with regard to the Bound Brook facility to address the
discharge of impacted groundwater from that facility.
We
are a party to a number of other proceedings brought under the
Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended (CERCLA or Superfund), and other state,
local or foreign laws in which the primary relief sought is the
cost of past and/or future remediation.
In
February 2011, King received notice from the U.S. Department of
Justice (DOJ) advising that the EPA has requested that DOJ initiate
enforcement action seeking injunctive relief and penalties against
King for alleged non-compliance with certain provisions of the
federal Clean Air Act at its Bristol, Tennessee manufacturing
facility. King has executed a tolling agreement with the DOJ in
order to facilitate the possible resolution of this
matter.
In
October 2011, we voluntarily disclosed to the EPA potential
non-compliance with certain provisions of the federal Clean Air Act
at our Barceloneta, Puerto Rico manufacturing facility. We do not
expect that any penalties that may result from this matter will be
material to the Company.
D. Government Investigations
Like
other pharmaceutical companies, we are subject to extensive
regulation by national, state and local government agencies in the
U.S. and in the other countries in which we operate. As a result,
we have interactions with government agencies on an ongoing basis.
Among the investigations by government agencies are those discussed
below. It is possible that criminal charges and substantial fines
and/or civil penalties could result from government investigations,
including but not limited to those discussed below.
The
Company has voluntarily provided the DOJ and the U.S. Securities
and Exchange Commission (SEC) with information concerning
potentially improper payments made by certain Pfizer and Wyeth
subsidiaries in connection with certain sales activities outside
the U.S. In recent discussions, we have reached
agreements-in-principle with the SEC staff and with the DOJ for the
resolution of these matters. We anticipate entering into and
announcing final agreements in the fourth quarter. In addition,
certain potentially improper payments and other matters are the
subject of investigations by government authorities in certain
foreign countries, including a civil and criminal investigation in
Germany with respect to certain tax matters relating to a wholly
owned subsidiary of Pfizer.
The
DOJ is conducting civil and criminal investigations regarding
Wyeth’s promotional practices with respect to Protonix and
its practices relating to the pricing for Protonix for Medicaid
rebate purposes. In connection with the pricing investigation, in
2009, the DOJ filed a civil complaint in intervention in two qui
tam actions that had been filed under seal in the U.S. District
Court for the District of Massachusetts. The complaint alleges that
Wyeth’s practices relating to the pricing for Protonix for
Medicaid rebate purposes between 2001 and 2006 violated the Federal
Civil False Claims Act and federal common law. The two qui tam
actions have been unsealed and the complaints include substantially
similar allegations. In addition, in 2009, several states and the
District of Columbia filed a complaint under the same docket number
asserting violations of various state laws based on allegations
substantially similar to those set forth in the civil complaint
filed by the DOJ. We are exploring with the DOJ various ways to
resolve its civil and criminal investigations relating to
Protonix.
The
U.S. Attorney’s Office for the Western District of Oklahoma
is conducting a civil and criminal investigation with respect to
Wyeth’s promotional practices relating to Rapamune. In
addition, in October 2010, the federal government was permitted to
intervene in a qui tam action, which alleges off-label promotion of
Rapamune that was pending in the U.S. District Court for the
Eastern District of Pennsylvania. In December 2010, the qui tam
action was transferred to the Western District of Oklahoma, where
it was consolidated with the proceedings under way there. We are
exploring with the U.S. Attorney’s Office various ways to
resolve this matter.
We
have received civil investigative demands and informal inquiries
from the consumer protection divisions of several states seeking
information and documents concerning the promotion of Lyrica and
Zyvox. These requests appear to relate to the same past promotional
practices concerning these products that were the subject of
previously reported settlements in September 2009 with the DOJ and
the Medicaid fraud control units of various states. We are
exploring with the coalition of states various ways to resolve this
matter.
E. Guarantees and Indemnifications
In
the ordinary course of business and in connection with the sale of
assets and businesses, we often indemnify our counterparties
against certain liabilities that may arise in connection with the
transaction or are related to activities prior to the transaction.
These indemnifications typically pertain to environmental, tax,
employee and/or product-related matters and patent-infringement
claims. If the indemnified party were to make a successful claim
pursuant to the terms of the indemnification, we would be required
to reimburse the loss. These indemnifications are generally subject
to threshold amounts, specified claim periods and other
restrictions and limitations. Historically, we have not paid
significant amounts under these provisions and, as of October 2,
2011, recorded amounts for the estimated fair value of these
indemnifications were not significant.
|
Earnings Per Share Attributable to Common Shareholders - Diluted Numerator (Detail) (USD $) In Millions | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 02, 2011 | Oct. 03, 2010 | Oct. 02, 2011 | Oct. 03, 2010 | |
EPS Numerator-Diluted: | ||||
Income from continuing operations attributable to Pfizer Inc. common shareholders and assumed conversions | $ 2,423 | $ 851 | $ 7,215 | $ 5,300 |
Discontinued operations-net of tax | 1,315 | 15 | 1,355 | 67 |
Net income attributable to Pfizer Inc. common shareholders and assumed conversions | $ 3,738 | $ 866 | $ 8,570 | $ 5,367 |
Segment, Product and Geographic Area Information - Revenues By Products (Detail) (USD $) In Millions | 3 Months Ended | 9 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2011 | Oct. 03, 2010 | Oct. 02, 2011 | Oct. 03, 2010 | |||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | $ 17,193 | $ 15,995 | $ 50,679 | $ 49,703 | ||||||||||||
Biopharmaceutical [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 14,747 | 13,945 | 43,611 | 43,472 | ||||||||||||
Biopharmaceutical [Member] | Lipitor [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 2,602 | 2,534 | 7,578 | 8,104 | ||||||||||||
Biopharmaceutical [Member] | Prevnar / Prevenar 13 [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 1,006 | 735 | 2,823 | 1,590 | ||||||||||||
Biopharmaceutical [Member] | Enbrel [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 957 | [1] | 799 | [1] | 2,741 | [1] | 2,409 | [1] | ||||||||
Biopharmaceutical [Member] | Lyrica [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 961 | 757 | 2,695 | 2,242 | ||||||||||||
Biopharmaceutical [Member] | Celebrex [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 643 | 578 | 1,856 | 1,752 | ||||||||||||
Biopharmaceutical [Member] | Viagra [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 493 | 459 | 1,458 | 1,429 | ||||||||||||
Biopharmaceutical [Member] | Norvasc [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 350 | 330 | 1,081 | 1,120 | ||||||||||||
Biopharmaceutical [Member] | Zyvox [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 321 | 285 | 965 | 876 | ||||||||||||
Biopharmaceutical [Member] | Xalatan / Xalacom [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 277 | 416 | 960 | 1,287 | ||||||||||||
Biopharmaceutical [Member] | Sutent [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 298 | 257 | 870 | 771 | ||||||||||||
Biopharmaceutical [Member] | Premarin family [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 267 | 263 | 757 | 779 | ||||||||||||
Biopharmaceutical [Member] | Geodon / Zeldox [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 263 | 262 | 753 | 763 | ||||||||||||
Biopharmaceutical [Member] | Detrol / Detrol LA [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 213 | 237 | 668 | 758 | ||||||||||||
Biopharmaceutical [Member] | Genotropin [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 215 | 211 | 654 | 650 | ||||||||||||
Biopharmaceutical [Member] | Vfend [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 171 | 200 | 558 | 595 | ||||||||||||
Biopharmaceutical [Member] | Chantix / Champix [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 156 | 163 | 545 | 522 | ||||||||||||
Biopharmaceutical [Member] | Effexor XR [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 165 | 175 | 537 | 1,512 | ||||||||||||
Biopharmaceutical [Member] | BeneFIX [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 178 | 156 | 518 | 474 | ||||||||||||
Biopharmaceutical [Member] | Zosyn / Tazocin [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 149 | 255 | 490 | 749 | ||||||||||||
Biopharmaceutical [Member] | Caduet [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 150 | 127 | 435 | 388 | ||||||||||||
Biopharmaceutical [Member] | Pristiq [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 146 | 118 | 422 | 341 | ||||||||||||
Biopharmaceutical [Member] | Zoloft [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 139 | 126 | 420 | 390 | ||||||||||||
Biopharmaceutical [Member] | Prevnar / Prevenar (7-valent) [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 98 | 179 | 406 | 1,030 | ||||||||||||
Biopharmaceutical [Member] | Revatio [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 140 | 116 | 393 | 352 | ||||||||||||
Biopharmaceutical [Member] | Medrol [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 127 | 119 | 383 | 341 | ||||||||||||
Biopharmaceutical [Member] | ReFacto AF/ Xyntha [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 140 | 102 | 380 | 290 | ||||||||||||
Biopharmaceutical [Member] | Zithromax / Zmax [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 93 | 90 | 335 | 303 | ||||||||||||
Biopharmaceutical [Member] | Aricept [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 117 | [2] | 106 | [2] | 335 | [2] | 337 | [2] | ||||||||
Biopharmaceutical [Member] | Aromasin [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 85 | 111 | 294 | 361 | ||||||||||||
Biopharmaceutical [Member] | Cardura [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 92 | 95 | 289 | 312 | ||||||||||||
Biopharmaceutical [Member] | Rapamune [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 96 | 104 | 285 | 292 | ||||||||||||
Biopharmaceutical [Member] | Fragmin [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 95 | 84 | 283 | 258 | ||||||||||||
Biopharmaceutical [Member] | BMP2 [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 83 | 101 | 277 | 298 | ||||||||||||
Biopharmaceutical [Member] | Relpax [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 86 | 75 | 250 | 239 | ||||||||||||
Biopharmaceutical [Member] | Xanax XR [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 77 | 72 | 232 | 224 | ||||||||||||
Biopharmaceutical [Member] | Tygacil [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 76 | 78 | 224 | 250 | ||||||||||||
Biopharmaceutical [Member] | Neurontin [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 67 | 80 | 222 | 238 | ||||||||||||
Biopharmaceutical [Member] | Diflucan [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 72 | 74 | 201 | 205 | ||||||||||||
Biopharmaceutical [Member] | Arthrotec [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 61 | 61 | 182 | 185 | ||||||||||||
Biopharmaceutical [Member] | Unasyn [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 58 | 61 | 172 | 182 | ||||||||||||
Biopharmaceutical [Member] | Protonix [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 65 | 203 | 168 | 535 | ||||||||||||
Biopharmaceutical [Member] | EpiPen [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 59 | [3] | 160 | [3] | ||||||||||||
Biopharmaceutical [Member] | Sulperazon [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 51 | 49 | 155 | 153 | ||||||||||||
Biopharmaceutical [Member] | Skelaxin [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 58 | [3] | 145 | [3] | ||||||||||||
Biopharmaceutical [Member] | Inspra [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 51 | 37 | 142 | 113 | ||||||||||||
Biopharmaceutical [Member] | Dalacin / Cleocin [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 51 | 54 | 139 | 168 | ||||||||||||
Biopharmaceutical [Member] | Alliance revenues [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 919 | [4] | 1,042 | [4] | 2,678 | [4] | 3,107 | [4] | ||||||||
Biopharmaceutical [Member] | All Other Biopharmaceutical Products [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 1,710 | 1,409 | 5,097 | 4,198 | ||||||||||||
Other products [Member] | Animal Health [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 1,041 | 860 | 3,078 | 2,599 | ||||||||||||
Other products [Member] | Consumer Healthcare [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 774 | 673 | 2,240 | 2,014 | ||||||||||||
Other products [Member] | Nutrition [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | 577 | 441 | 1,540 | 1,375 | ||||||||||||
Other products [Member] | Pfizer CentreSource [Member] | ||||||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||||||
Revenues | $ 54 | $ 76 | $ 210 | $ 243 | ||||||||||||
|
Taxes on Income | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Oct. 02, 2011 | |||||||
Taxes on Income |
Note 7.
Taxes on Income
A. Taxes on Income
Our
effective tax rate for continuing operations was 33.7% for the
third quarter of 2011, compared to 39.5% for the third quarter of
2010, and in the first nine months of 2011 was 30.8%, compared to
37.3% in the first nine months of 2010. The decreases in the
effective tax rate were primarily the result of:
B. Tax Contingencies
We
are subject to income tax in many jurisdictions, and a certain
degree of estimation is required in recording the assets and
liabilities related to income taxes. All of our tax positions are
subject to audit by the local taxing authorities in each tax
jurisdiction. These tax audits can involve complex issues,
interpretations and judgments and the resolution of matters may
span multiple years, particularly if subject to negotiation or
litigation. As a result, our evaluation of tax contingencies can
involve a series of complex judgments about future events and can
rely heavily on estimates and assumptions deemed reasonable by
management. However, if our estimates and assumptions are not
representative of actual outcomes, our results could be materially
impacted.
The
United States (U.S.) is one of our major tax jurisdictions. The
U.S. Internal Revenue Service (IRS) is currently auditing the 2006,
2007 and 2008 tax years for Pfizer Inc. The 2009 through 2011 tax
years are not yet under audit. The tax years 2002 through 2005 are
settled and closed with the IRS. All other tax years in the U.S.
for Pfizer Inc. are closed under the statute of
limitations.
With respect to Wyeth, during the first quarter of 2011, we reached
a settlement with the IRS regarding the audits for the tax years
2002 through 2005. The settlement resulted in an income tax benefit
to Pfizer of approximately $80 million for income tax and interest
in the first quarter and first nine months of 2011. The tax years
2002 through 2005 are now settled and closed with the IRS.
Tax years 2006 through the Wyeth acquisition date (October 15,
2009) are now under audit.
In
addition to the open audit years in the U.S., we have open audit
years in other major tax jurisdictions, such as Canada (1998-2011),
Japan (2006-2011), Europe (1997-2011, primarily reflecting Ireland,
the United Kingdom, France, Italy, Spain and Germany) and Puerto
Rico (2006-2011).
|
Acquisition of King Pharmaceuticals, Inc. (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identifiable Assets Acquired and Liabilities Assumed as Part of Business Combination [Table Text Block] | The
following table summarizes the provisional amounts recognized for
assets acquired and liabilities assumed as of the acquisition
date:
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Pro Forma Information Related to the Acquisition [Table Text Block] | The
following table presents supplemental pro forma information as if
the acquisition of King had occurred on January 1,
2010:
|
Costs Associated with Cost-Reduction and Productivity Initiatives and Acquisition Activity (Detail) (USD $) In Millions, unless otherwise specified | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 82 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2011 | Oct. 03, 2010 | Oct. 02, 2011 | Oct. 03, 2010 | Oct. 02, 2011
Additional depreciation asset restructuring [Member] | Oct. 03, 2010
Additional depreciation asset restructuring [Member] | Oct. 02, 2011
Additional depreciation asset restructuring [Member] | Oct. 03, 2010
Additional depreciation asset restructuring [Member] | Oct. 02, 2011
Additional depreciation asset restructuring [Member]
Cost of Sales [Member] | Oct. 03, 2010
Additional depreciation asset restructuring [Member]
Cost of Sales [Member] | Oct. 02, 2011
Additional depreciation asset restructuring [Member]
Cost of Sales [Member] | Oct. 03, 2010
Additional depreciation asset restructuring [Member]
Cost of Sales [Member] | Oct. 02, 2011
Additional depreciation asset restructuring [Member]
Selling Informational And Administrative Expenses [Member] | Oct. 03, 2010
Additional depreciation asset restructuring [Member]
Selling Informational And Administrative Expenses [Member] | Oct. 02, 2011
Additional depreciation asset restructuring [Member]
Selling Informational And Administrative Expenses [Member] | Oct. 03, 2010
Additional depreciation asset restructuring [Member]
Selling Informational And Administrative Expenses [Member] | Oct. 02, 2011
Additional depreciation asset restructuring [Member]
Research and Development Expenses [Member] | Oct. 03, 2010
Additional depreciation asset restructuring [Member]
Research and Development Expenses [Member] | Oct. 02, 2011
Additional depreciation asset restructuring [Member]
Research and Development Expenses [Member] | Oct. 03, 2010
Additional depreciation asset restructuring [Member]
Research and Development Expenses [Member] | Oct. 02, 2011
Implementation costs [Member] | Oct. 02, 2011
Implementation costs [Member] | Oct. 02, 2011
Employee termination costs [Member] | Oct. 02, 2011
Employee termination costs [Member]
Employee | Oct. 02, 2011
Primary Care [Member] | Oct. 03, 2010
Primary Care [Member] | Oct. 02, 2011
Primary Care [Member] | Oct. 03, 2010
Primary Care [Member] | Oct. 02, 2011
Specialty Care And Oncology [Member] | Oct. 03, 2010
Specialty Care And Oncology [Member] | Oct. 02, 2011
Specialty Care And Oncology [Member] | Oct. 03, 2010
Specialty Care And Oncology [Member] | Oct. 02, 2011
Established Products and Emerging Markets [Member] | Oct. 03, 2010
Established Products and Emerging Markets [Member] | Oct. 02, 2011
Established Products and Emerging Markets [Member] | Oct. 03, 2010
Established Products and Emerging Markets [Member] | Oct. 02, 2011
Animal Health and Consumer Healthcare [Member] | Oct. 03, 2010
Animal Health and Consumer Healthcare [Member] | Oct. 02, 2011
Animal Health and Consumer Healthcare [Member] | Oct. 03, 2010
Animal Health and Consumer Healthcare [Member] | Oct. 02, 2011
Nutrition [Member] | Oct. 03, 2010
Nutrition [Member] | Oct. 02, 2011
Nutrition [Member] | Oct. 03, 2010
Nutrition [Member] | Oct. 02, 2011
Research and Development Operations [Member] | Oct. 03, 2010
Research and Development Operations [Member] | Oct. 02, 2011
Research and Development Operations [Member] | Oct. 03, 2010
Research and Development Operations [Member] | Oct. 02, 2011
Manufacturing Operations [Member] | Oct. 03, 2010
Manufacturing Operations [Member] | Oct. 02, 2011
Manufacturing Operations [Member] | Oct. 03, 2010
Manufacturing Operations [Member] | Oct. 02, 2011
Corporate [Member] | Oct. 03, 2010
Corporate [Member] | Oct. 02, 2011
Corporate [Member] | Oct. 03, 2010
Corporate [Member] | |||||||||||||||||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transaction costs | $ 5 | [1] | $ 28 | [1] | $ 13 | [1] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Integration costs | 187 | [2] | 231 | [2] | 567 | [2] | 650 | [2] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring charges: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee termination costs | 770 | 27 | 1,626 | 603 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset impairments | 99 | 174 | 157 | 677 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | 40 | 67 | 96 | 147 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring charges and certain acquisition-related costs | 1,101 | [3] | 499 | [3] | 2,474 | [3] | 2,090 | [3] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total costs associated with cost-reduction and productivity initiatives and acquisition activity | 1,373 | 792 | 3,371 | 2,692 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional depreciation - asset restructuring [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional depreciation - asset restructuring | 253 | [4] | 293 | [4] | 858 | [4] | 602 | [4] | 68 | 241 | 411 | 367 | 39 | 27 | 69 | 190 | 146 | 25 | 378 | 45 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selling, informational and administrative expenses | 4,621 | [5] | 4,599 | [5] | 14,097 | [5] | 13,776 | [5] | 11 | 11 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Research and development expenses | 2,188 | [5] | 2,188 | [5] | 6,516 | [5] | 6,590 | [5] | 8 | 28 | 285 | 353 | 912 | 1,128 | 400 | 388 | 1,122 | 1,129 | 71 | 100 | 206 | 197 | 97 | 93 | 304 | 296 | 337 | [6] | 360 | [6] | 998 | [6] | 1,142 | [6] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total implementation costs | 19 | [7] | 39 | [7] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Employee Terminations | 57,800 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities, Initiation Date | Jan. 01, 2005 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities, Current Date | Oct. 02, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Actual Employees Terminated | 41,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring charges | $ 473 | $ 14 | $ 606 | $ 1 | $ 186 | $ 53 | $ 228 | $ 99 | $ 65 | $ 14 | $ 80 | $ 23 | $ 30 | $ 44 | $ 33 | $ 2 | $ 1 | $ 4 | $ 12 | $ 47 | $ 17 | $ 426 | $ 239 | $ 47 | $ 161 | $ 203 | $ 970 | $ 153 | $ 8 | $ 288 | $ 74 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Pension and Postretirement Benefit Plans (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 02, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Periodic Benefit Costs of Pension and Postretirement Benefit Plans [Table Text Block] | The
components of net periodic benefit costs of the U.S. and
international pension plans and the postretirement plans, which
provide medical and life insurance benefits to retirees and their
eligible dependents, follow:
|
Basis of Presentation | 9 Months Ended |
---|---|
Oct. 02, 2011 | |
Basis of Presentation |
Note 1.
Basis of Presentation
We
prepared the condensed consolidated financial statements following
the requirements of the Securities and Exchange Commission (SEC)
for interim reporting. As permitted under those rules, certain
footnotes or other financial information that are normally required
by accounting principles generally accepted in the United States of
America (U.S. GAAP) can be condensed or omitted. Balance sheet
amounts and operating results for subsidiaries operating outside
the U.S. are as of and for the three-month and nine-month periods
ended August 28, 2011, and August 29, 2010. We have made certain
reclassification adjustments to conform prior-period amounts to the
current presentation, primarily related to discontinued operations
(see Note 4.
Discontinued Operations) and segment reporting (see
Note 15. Segment,
Product and Geographic Area Information).
On
January 31, 2011, we completed the tender offer for all of the
outstanding shares of common stock of King Pharmaceuticals, Inc.
(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 Note 3. Acquisition of King
Pharmaceuticals, Inc.). Commencing from January 31, 2011,
our financial statements include the assets, liabilities, operating
results and cash flows of King. Therefore, in accordance with our
domestic and international reporting periods, our condensed
consolidated financial statements for the nine months ended October
2, 2011 reflect approximately eight months of King’s U.S.
operations and approximately seven months of King’s
international operations.
Revenues,
expenses, assets and liabilities can vary during each quarter of
the year. Therefore, the results and trends in these interim
financial statements may not be representative of those for the
full year.
We
are responsible for the unaudited financial statements included in
this document. The financial statements include all normal and
recurring adjustments that are considered necessary for the fair
presentation of our financial position and operating
results.
The
information included in this Quarterly Report on Form 10-Q should
be read in conjunction with the consolidated financial statements
and accompanying notes included in our Annual Report on Form 10-K
for the year ended December
31, 2010.
|
Discontinued Operations (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 02, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disposal Groups Including Discontinued Operations Income Statement [Table Text Block] | The
following amounts, substantially all of which relate to our
Capsugel business, have been segregated from continuing operations
and included in Discontinued
operations—net of tax in our Condensed Consolidated
Statements of Income:
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disposal Groups Including Discontinued Operations Balance Sheet [Table Text Block] | The
following assets and liabilities, which in 2010 include the assets
and liabilities related to our Capsugel business, have been
segregated and included in Assets of discontinued
operations and other assets held for sale and Liabilities of discontinued
operations, as appropriate, in our Condensed Consolidated
Balance Sheets:
|
Financial Instruments Assets and Liabilities Measured on Recurring Basis (Detail) (USD $) | Oct. 02, 2011 | Dec. 31, 2010 | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||||
Financial assets measured at fair value on a recurring basis | $ 34,372,000,000 | [1] | $ 35,544,000,000 | [1] | ||||||||||||||||
Other selected financial assets: | ||||||||||||||||||||
Held-to-maturity debt securities, carried at amortized cost | 1,204,000,000 | [2] | 1,178,000,000 | [2] | ||||||||||||||||
Private equity securities, carried at cost or equity method | 1,016,000,000 | 1,134,000,000 | ||||||||||||||||||
Short-term loans, carried at cost | 184,000,000 | 467,000,000 | ||||||||||||||||||
Long-term loans, carried at cost | 383,000,000 | 299,000,000 | ||||||||||||||||||
Total | 2,787,000,000 | [3] | 3,078,000,000 | [3] | ||||||||||||||||
Total selected financial assets | 37,159,000,000 | [4] | 38,622,000,000 | [4] | ||||||||||||||||
Selected financial instruments measured at fair value on a recurring basis: | ||||||||||||||||||||
Financial liabilities measured at fair value on a recurring basis | 2,112,000,000 | [1] | 884,000,000 | [1] | ||||||||||||||||
Other selected financial liabilities: | ||||||||||||||||||||
Short-term borrowings, carried at historical proceeds, as adjusted | 5,637,000,000 | [3] | 5,603,000,000 | [3] | ||||||||||||||||
Long-term debt, carried at historical proceeds, as adjusted | 35,399,000,000 | [5],[6] | 38,410,000,000 | [5],[6] | ||||||||||||||||
Total | 41,036,000,000 | 44,013,000,000 | ||||||||||||||||||
Fair value of long term debt | 40,100,000,000 | 42,300,000,000 | ||||||||||||||||||
Total selected financial liabilities | 43,148,000,000 | 44,897,000,000 | ||||||||||||||||||
Trading securities [Member] | ||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||||
Financial assets measured at fair value on a recurring basis | 148,000,000 | 173,000,000 | ||||||||||||||||||
Available - for - sale debt securities [Member] | ||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||||
Financial assets measured at fair value on a recurring basis | 31,368,000,000 | [2] | 32,699,000,000 | [2] | ||||||||||||||||
Available - for - sale money market funds [Member] | ||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||||
Financial assets measured at fair value on a recurring basis | 1,320,000,000 | 1,217,000,000 | ||||||||||||||||||
Available - for - sale equity securities, excluding money market funds [Member] | ||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||||||||||||
Financial assets measured at fair value on a recurring basis | 317,000,000 | [2] | 230,000,000 | [2] | ||||||||||||||||
Interest rate swaps [Member] | ||||||||||||||||||||
Selected financial instruments measured at fair value on a recurring basis: | ||||||||||||||||||||
Financial liabilities measured at fair value on a recurring basis | 15,000,000 | [7] | 4,000,000 | [7] | ||||||||||||||||
Derivative assets measured at fair value on a recurring basis | 963,000,000 | [8] | 603,000,000 | [8] | ||||||||||||||||
Foreign Exchange Contract [Member] | ||||||||||||||||||||
Selected financial instruments measured at fair value on a recurring basis: | ||||||||||||||||||||
Financial liabilities measured at fair value on a recurring basis | 1,671,000,000 | [7] | 623,000,000 | [7] | ||||||||||||||||
Derivative assets measured at fair value on a recurring basis | 133,000,000 | [8] | 128,000,000 | [8] | ||||||||||||||||
Footnotes to selected financial assets and liabilities [Abstract] | ||||||||||||||||||||
Instruments used as offsets (assets) | 27,000,000 | 17,000,000 | ||||||||||||||||||
Instruments used as offsets (liabilities) | 82,000,000 | 93,000,000 | ||||||||||||||||||
Foreign currency forward-exchange contracts [Member] | ||||||||||||||||||||
Selected financial instruments measured at fair value on a recurring basis: | ||||||||||||||||||||
Financial liabilities measured at fair value on a recurring basis | 426,000,000 | [7] | 257,000,000 | [7] | ||||||||||||||||
Derivative assets measured at fair value on a recurring basis | 123,000,000 | [8] | 494,000,000 | [8] | ||||||||||||||||
Footnotes to selected financial assets and liabilities [Abstract] | ||||||||||||||||||||
Instruments used as offsets (assets) | 68,000,000 | 326,000,000 | ||||||||||||||||||
Instruments used as offsets (liabilities) | 113,000,000 | 186,000,000 | ||||||||||||||||||
Fair value inputs Level 1 [Member] | ||||||||||||||||||||
Footnotes to selected financial assets and liabilities [Abstract] | ||||||||||||||||||||
Available - for - sale equity securities, excluding money market funds | 84,000,000 | 105,000,000 | ||||||||||||||||||
Fair value inputs Level 3 [Member] | ||||||||||||||||||||
Footnotes to selected financial assets and liabilities [Abstract] | ||||||||||||||||||||
Available - for - sale equity securities, excluding money market funds | 26,000,000 | |||||||||||||||||||
Foreign Currency Debt Designated As Hedging Instruments Long Term Liability At Fair Value [Member] | ||||||||||||||||||||
Other selected financial liabilities: | ||||||||||||||||||||
Long-term debt, carried at historical proceeds, as adjusted | $ 919,000,000 | $ 880,000,000 | ||||||||||||||||||
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Other (Income)/Deductions-Net (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Other (Income)/Deductions - Net [Table Text Block] | The
following table sets forth details related to amounts recorded in
Other
deductions––net:
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Acquisition of King Pharmaceuticals, Inc. | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Acquisition of King Pharmaceuticals, Inc. |
Note 3.
Acquisition of King Pharmaceuticals, Inc.
On
January 31, 2011 (the acquisition date), we completed the
tender offer for all of the outstanding shares of common stock of
King at a purchase price of $14.25 per share in cash and acquired
approximately 92.5% of the outstanding shares. On February 28,
2011, we acquired all of the remaining shares of King for $14.25
per share in cash. As a result, the total fair value of
consideration transferred for King was approximately $3.6 billion
in cash ($3.2 billion, net of cash acquired).
King’s
principal businesses consist of a prescription pharmaceutical
business focused on delivering new formulations of pain treatments
designed to discourage common methods of misuse and abuse; the
Meridian auto-injector business for emergency drug delivery, which
develops and manufactures the EpiPen; an established products
portfolio; and an animal health business that offers a variety of
feed-additive products for a wide range of species.
The
following table summarizes the provisional amounts recognized for
assets acquired and liabilities assumed as of the acquisition
date:
As
of the acquisition date, the fair value of accounts receivable
approximated the book value acquired. The gross contractual amount
receivable was $200 million, virtually all of which was expected to
be collected.
Goodwill
is calculated as the excess of the consideration transferred over
the net assets recognized and represents the future economic
benefits arising from other assets acquired that could not be
individually identified and separately recognized. Specifically,
the goodwill recorded as part of the acquisition of King includes
the following:
Goodwill
is not amortized and is not deductible for tax purposes. While the
allocation of goodwill among reporting units is not complete, we
expect that substantially all of the goodwill will be related to
our biopharmaceutical reporting units (see Note 11. Goodwill and Other
Intangible Assets for additional information).
The
assets and liabilities arising from contingencies recognized at
acquisition date, some of which are subject to change, are not
significant to Pfizer’s condensed consolidated financial
statements.
The
recorded amounts are provisional and subject to change.
Specifically, the following items are subject to
change:
Revenues
from King are included in Pfizer’s condensed consolidated
statements of income from the acquisition date, January 31, 2011,
through Pfizer’s third-quarter 2011 domestic and
international quarter-ends and were $357 million for the third
quarter of 2011 and $938 million in the first nine months of
2011. We
are no longer able to provide the results of operations
attributable to King as those operations have now been
substantially integrated into the larger Pfizer
operation.
The
following table presents supplemental pro forma information as if
the acquisition of King had occurred on January 1,
2010:
The
unaudited pro forma consolidated results do not purport to project
the future results of operations of the combined company nor do
they reflect the expected realization of any cost savings
associated with the acquisition. The unaudited pro forma
consolidated results reflect the historical financial information
of Pfizer and King, adjusted for the following pre-tax
amounts:
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Pension and Postretirement Benefit Plans | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Pension and Postretirement Benefit Plans |
Note 12.
Pension and Postretirement Benefit Plans
The
components of net periodic benefit costs of the U.S. and
international pension plans and the postretirement plans, which
provide medical and life insurance benefits to retirees and their
eligible dependents, follow:
For
the first nine months of 2011, we contributed from our general
assets $487 million to our U.S. qualified pension plans, $314
million to our international pension plans, $183 million to our
postretirement plans and $162 million to our U.S. supplemental
(non-qualified) pension plans.
During
2011, we expect to contribute from our general assets a total of
$487 million to our U.S. qualified pension plans, $483 million to
our international pension plans, $249 million to our postretirement
plans and $188 million to our U.S. supplemental (non-qualified)
pension plans. Contributions expected to be made for 2011 are
inclusive of amounts contributed during the first nine months of
2011. The international pension plan, postretirement plan and U.S.
supplemental (non-qualified) pension plan contributions from our
general assets include direct employer benefit
payments.
|
Pension and Postretirement Benefit Plans Narrative (Detail) (USD $) In Millions | 9 Months Ended |
---|---|
Oct. 02, 2011 | |
U.S. Qualified Pension Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Contributions | $ 487 |
Expected contributions in next fiscal year | 487 |
International Pension Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Contributions | 314 |
Expected contributions in next fiscal year | 483 |
Postretirement Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Contributions | 183 |
Expected contributions in next fiscal year | 249 |
U.S. Supplemental (Non-Qualified) Pension Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Contributions | 162 |
Expected contributions in next fiscal year | $ 188 |
Segment, Product and Geographic Area Information Narrative (Detail) (USD $) In Millions | Oct. 02, 2011 | Dec. 31, 2010 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Total assets | $ 196,132 | $ 195,014 |
Acquisition of King Pharmaceuticals Inc - Assets Acquired and Liabilities Assumed (Detail) (USD $) In Millions | Oct. 02, 2011 | Dec. 31, 2010 |
---|---|---|
Business Acquisition [Line Items] | ||
Goodwill | $ 45,409 | $ 43,928 |
King [Member] | Amounts Recognized as of Acquisition Date (Provisional) [Member] | ||
Business Acquisition [Line Items] | ||
Working capital, excluding inventories | 174 | |
Inventories | 340 | |
Property, plant and equipment | 412 | |
Identifiable intangible assets, excluding in-process research and development | 1,822 | |
In-process research and development | 312 | |
Net tax accounts | (389) | |
All other long-term assets and liabilities, net | 101 | |
Total identifiable net assets | 2,772 | |
Goodwill | 783 | |
Net assets acquired | 3,555 | |
Total consideration transferred | $ 3,555 |
Adoption of New Accounting Standards (Policies) | 9 Months Ended | ||||
---|---|---|---|---|---|
Oct. 02, 2011 | |||||
New Accounting Pronouncements [Policy Text Block] | The
provisions of the following new accounting standards were adopted
as of January 1, 2011 and did not have a significant impact on our
condensed consolidated financial statements:
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (USD $) In Millions, except Per Share data | 3 Months Ended | 9 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2011 | Oct. 03, 2010 | Oct. 02, 2011 | Oct. 03, 2010 | |||||||||||||
Revenues | $ 17,193 | $ 15,995 | $ 50,679 | $ 49,703 | ||||||||||||
Costs and expenses: | ||||||||||||||||
Cost of sales | 3,679 | [1] | 3,790 | [1] | 11,177 | [1] | 11,676 | [1] | ||||||||
Selling, informational and administrative expenses | 4,621 | [1] | 4,599 | [1] | 14,097 | [1] | 13,776 | [1] | ||||||||
Research and development expenses | 2,188 | [1] | 2,188 | [1] | 6,516 | [1] | 6,590 | [1] | ||||||||
Amortization of intangible assets | 1,397 | 1,156 | 4,168 | 3,972 | ||||||||||||
Acquisition-related in-process research and development charges | 74 | |||||||||||||||
Restructuring charges and certain acquisition-related costs | 1,101 | [2] | 499 | [2] | 2,474 | [2] | 2,090 | [2] | ||||||||
Other deductions-net | 538 | 2,349 | 1,778 | 3,036 | ||||||||||||
Income from continuing operations before provision for taxes on income | 3,669 | [3] | 1,414 | [3] | 10,469 | [3] | 8,489 | [3] | ||||||||
Provision for taxes on income | 1,235 | 558 | 3,223 | 3,165 | ||||||||||||
Income from continuing operations | 2,434 | 856 | 7,246 | 5,324 | ||||||||||||
Discontinued operations: | ||||||||||||||||
(Loss)/income from discontinued operations-net of tax | (13) | 26 | 39 | 76 | ||||||||||||
Gain/(loss) on sale of discontinued operations-net of tax | 1,328 | (11) | 1,316 | (9) | ||||||||||||
Discontinued operations-net of tax | 1,315 | 15 | 1,355 | 67 | ||||||||||||
Net income before allocation to noncontrolling interests | 3,749 | 871 | 8,601 | 5,391 | ||||||||||||
Less: net income attributable to noncontrolling interests | 11 | 5 | 31 | 24 | ||||||||||||
Net income attributable to Pfizer Inc. | $ 3,738 | $ 866 | $ 8,570 | $ 5,367 | ||||||||||||
Earnings per share-basic: | ||||||||||||||||
Income from continuing operations attributable to Pfizer Inc. common shareholders (in dollars per share) | $ 0.31 | $ 0.11 | $ 0.92 | $ 0.66 | ||||||||||||
Discontinued operations-net of tax (in dollars per share) | $ 0.17 | $ 0.17 | $ 0.01 | |||||||||||||
Net income attributable to Pfizer Inc. common shareholders (in dollars per share) | $ 0.48 | [4] | $ 0.11 | [4] | $ 1.09 | [4] | $ 0.67 | [4] | ||||||||
Earnings per share-diluted: | ||||||||||||||||
Income from continuing operations attributable to Pfizer Inc. common shareholders (in dollars per share) | $ 0.31 | $ 0.11 | $ 0.91 | $ 0.66 | ||||||||||||
Discontinued operations-net of tax (in dollars per share) | $ 0.17 | $ 0.17 | $ 0.01 | |||||||||||||
Net income attributable to Pfizer Inc. common shareholders (in dollars per share) | $ 0.48 | [4] | $ 0.11 | [4] | $ 1.08 | [4] | $ 0.66 | [4] | ||||||||
Weighted-average shares used to calculate earnings per common share: | ||||||||||||||||
Basic (in shares) | 7,770 | 8,027 | 7,877 | 8,045 | ||||||||||||
Diluted (in shares) | 7,810 | 8,057 | 7,925 | 8,079 | ||||||||||||
Cash dividends paid per common share (in dollars per share) | $ 0.20 | $ 0.18 | $ 0.60 | $ 0.54 | ||||||||||||
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Discontinued Operations Narrative (Detail) (Capsugel [Member], USD $) In Billions | 0 Months Ended | 9 Months Ended |
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Apr. 05, 2011 | Oct. 02, 2011 | |
Capsugel [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Sale price for discontinued operation | $ 2.4 | |
Date of agreement with buyer | Apr. 04, 2011 | |
Date transaction closed | Aug. 01, 2011 |