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PFIZER INC.
(Exact name of registrant as specified in its charter)
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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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60
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61
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Three Months Ended
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(millions, except per common share data)
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April 3,
2011
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April 4,
2010
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||||||
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Revenues
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$ | 16,502 | $ | 16,576 | ||||
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Costs and expenses:
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||||||||
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Cost of sales(a)
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3,693 | 4,202 | ||||||
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Selling, informational and administrative expenses(a)
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4,503 | 4,403 | ||||||
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Research and development expenses(a)
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2,091 | 2,221 | ||||||
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Amortization of intangible assets
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1,376 | 1,409 | ||||||
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Acquisition-related in-process research and development charges
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- | 74 | ||||||
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Restructuring charges and certain acquisition-related costs
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894 | 706 | ||||||
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Other deductions––net
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827 | 412 | ||||||
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Income from continuing operations before provision for taxes on income
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3,118 | 3,149 | ||||||
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Provision for taxes on income
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894 | 1,135 | ||||||
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Income from continuing operations
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2,224 | 2,014 | ||||||
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Discontinued operations:
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||||||||
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Income from operations––net of tax
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10 | 19 | ||||||
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Gain on sale of discontinued operations––net of tax
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- | 2 | ||||||
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Discontinued operations––net of tax
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10 | 21 | ||||||
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Net income before allocation to noncontrolling interests
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2,234 | 2,035 | ||||||
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Less: Net income attributable to noncontrolling interests
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12 | 9 | ||||||
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Net income attributable to Pfizer Inc.
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$ | 2,222 | $ | 2,026 | ||||
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Earnings per common share––basic:
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||||||||
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Income from continuing operations attributable to Pfizer Inc. common shareholders
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$ | 0.28 | $ | 0.25 | ||||
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Discontinued operations––net of tax
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–– | –– | ||||||
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Net income attributable to Pfizer Inc. common shareholders
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$ | 0.28 | $ | 0.25 | ||||
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Earnings per common share––diluted:
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||||||||
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Income from continuing operations attributable to Pfizer Inc. common shareholders
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$ | 0.28 | $ | 0.25 | ||||
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Discontinued operations––net of tax
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–– | –– | ||||||
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Net income attributable to Pfizer Inc. common shareholders
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$ | 0.28 | $ | 0.25 | ||||
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Weighted-average shares used to calculate earnings per common share:
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||||||||
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Basic
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7,982 | 8,061 | ||||||
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Diluted
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8,035 | 8,101 | ||||||
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Cash dividends paid per common share
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$ | 0.20 | $ | 0.18 | ||||
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(a)
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Exclusive of amortization of intangible assets, except as disclosed in Note 11.B Goodwill and Other Intangible Assets: Other Intangible Assets.
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(millions of dollars)
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April 3,
2011
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Dec. 31,
2010
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||||||
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(Unaudited)
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Assets
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||||||||
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Cash and cash equivalents
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$ | 730 | $ | 1,735 | ||||
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Short-term investments
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23,279 | 26,277 | ||||||
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Accounts receivable, less allowance for doubtful accounts
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15,182 | 14,426 | ||||||
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Short-term loans
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406 | 467 | ||||||
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Inventories
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8,467 | 8,275 | ||||||
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Taxes and other current assets
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8,755 | 8,394 | ||||||
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Assets of discontinued operations and other assets held for sale
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1,425 | 1,439 | ||||||
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Total current assets
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58,244 | 61,013 | ||||||
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Long-term investments and loans
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9,811 | 9,747 | ||||||
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Property, plant and equipment, less accumulated depreciation
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18,833 | 18,645 | ||||||
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Goodwill
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44,853 | 43,928 | ||||||
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Identifiable intangible assets, less accumulated amortization
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58,497 | 57,555 | ||||||
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Taxes and other noncurrent assets
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4,718 | 4,126 | ||||||
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Total assets
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$ | 194,956 | $ | 195,014 | ||||
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Liabilities and Shareholders’ Equity
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Short-term borrowings, including current portion of long-term debt
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$ | 6,093 | $ | 5,603 | ||||
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Accounts payable
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3,750 | 3,994 | ||||||
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Dividends payable
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1 | 1,601 | ||||||
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Income taxes payable
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1,958 | 951 | ||||||
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Accrued compensation and related items
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1,849 | 2,080 | ||||||
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Other current liabilities
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15,338 | 14,256 | ||||||
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Liabilities of discontinued operations
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182 | 151 | ||||||
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Total current liabilities
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29,171 | 28,636 | ||||||
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Long-term debt
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35,308 | 38,410 | ||||||
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Pension benefit obligations
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5,929 | 6,194 | ||||||
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Postretirement benefit obligations
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3,041 | 3,035 | ||||||
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Noncurrent deferred tax liabilities
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19,414 | 18,628 | ||||||
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Other taxes payable
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6,590 | 6,245 | ||||||
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Other noncurrent liabilities
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4,970 | 5,601 | ||||||
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Total liabilities
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104,423 | 106,749 | ||||||
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Preferred stock
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49 | 52 | ||||||
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Common stock
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444 | 444 | ||||||
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Additional paid-in capital
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70,925 | 70,760 | ||||||
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Employee benefit trusts
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(6 | ) | (7 | ) | ||||
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Treasury stock
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(24,215 | ) | (22,712 | ) | ||||
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Retained earnings
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44,926 | 42,716 | ||||||
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Accumulated other comprehensive loss
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(2,056 | ) | (3,440 | ) | ||||
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Total Pfizer Inc. shareholders’ equity
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90,067 | 87,813 | ||||||
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Equity attributable to noncontrolling interests
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466 | 452 | ||||||
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Total shareholders’ equity
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90,533 | 88,265 | ||||||
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Total liabilities and shareholders’ equity
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$ | 194,956 | $ | 195,014 | ||||
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Three Months Ended
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(millions of dollars)
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April 3,
2011
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April 4,
2010
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Operating Activities:
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Net income before allocation to noncontrolling interests
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$ | 2,234 | $ | 2,035 | ||||
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Adjustments to reconcile net income before allocation to noncontrolling interests to net
cash provided by/(used in) operating activities:
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Depreciation and amortization
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2,104 | 2,051 | ||||||
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Share-based compensation expense
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122 | 138 | ||||||
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Asset write-offs and impairment charges
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165 | 59 | ||||||
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Acquisition-related in-process research and development charges
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- | 74 | ||||||
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Deferred taxes from continuing operations
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(120 | ) | 840 | |||||
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Other non-cash adjustments
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(2 | ) | 260 | |||||
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Benefit plan contributions (in excess of)/less than expense
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(383 | ) | 163 | |||||
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Other changes in assets and liabilities, net of acquisitions and divestitures
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522 | (11,980 | ) | |||||
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Net cash provided by/(used in) operating activities
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4,642 | (6,360 | ) | |||||
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Investing Activities:
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Purchases of property, plant and equipment
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(250 | ) | (305 | ) | ||||
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Purchases of short-term investments
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(3,352 | ) | (2,178 | ) | ||||
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Proceeds from redemptions and sales of short-term investments, net
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8,406 | 11,388 | ||||||
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Purchases of long-term investments
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(1,932 | ) | (858 | ) | ||||
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Proceeds from redemptions and sales of long-term investments
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888 | 1,127 | ||||||
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Acquisitions, net of cash acquired
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(3,169 | ) | - | |||||
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Other investing activities
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134 | 220 | ||||||
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Net cash provided by investing activities
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725 | 9,394 | ||||||
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Financing Activities:
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||||||||
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Increase in short-term borrowings
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2,682 | 1,892 | ||||||
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Principal payments on short-term borrowings, net
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(2,220 | ) | (3,663 | ) | ||||
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Principal payments on long-term debt
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(3,878 | ) | (9 | ) | ||||
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Purchases of common stock
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(1,430 | ) | - | |||||
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Cash dividends paid
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(1,591 | ) | (1,441 | ) | ||||
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Other financing activities
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33 | 10 | ||||||
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Net cash used in financing activities
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(6,404 | ) | (3,211 | ) | ||||
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Effect of exchange-rate changes on cash and cash equivalents
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32 | (42 | ) | |||||
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Net decrease in cash and cash equivalents
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(1,005 | ) | (219 | ) | ||||
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Cash and cash equivalents at beginning of period
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1,735 | 1,978 | ||||||
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Cash and cash equivalents at end of period
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$ | 730 | $ | 1,759 | ||||
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Supplemental Cash Flow Information:
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Cash (refunded)/paid for income taxes
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$ | (134 | ) | $ | 10,547 | |||
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Cash paid for interest
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687 | 792 | ||||||
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●
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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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|||
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Working capital, excluding inventories
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$ | 210 | ||
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Inventories
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340 | |||
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Property, plant and equipment
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413 | |||
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Identifiable intangible assets, excluding in-process research and development
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1,781 | |||
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In-process research and development
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301 | |||
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Net tax accounts
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(384 | ) | ||
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All other long-term assets and liabilities, net
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114 | |||
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Total identifiable net assets
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2,775 | |||
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Goodwill
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780 | |||
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Net assets acquired/total consideration transferred
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$ | 3,555 | ||
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●
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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, inventory and property, plant and equipment (PP&E), pending finalization of valuation efforts for acquired intangible assets as well as the completion of certain physical inventory counts and the confirmation of the physical existence and condition of certain PP&E assets.
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●
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Amounts for environmental contingencies, pending the finalization of our assessment and valuation of environmental matters.
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Amounts for legal contingencies, pending the finalization of our examination and evaluation of the portfolio of filed cases.
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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.
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●
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The allocation of goodwill among reporting units.
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(millions of dollars)
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King’s Operations
Included in Pfizer’s First
Quarter 2011 Results
|
|||
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Revenues
|
$ | 224 | ||
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Loss from continuing operations attributable to Pfizer Inc. common shareholders(a)
|
(69 | ) | ||
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(a)
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Includes purchase accounting adjustments related to the fair value adjustments for acquisition-date inventory estimated to have been sold ($57 million pre-tax), amortization of identifiable intangible assets acquired from King ($29 million pre-tax) and restructuring and integration costs ($95 million pre-tax).
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Pro Forma Consolidated Results
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||||||||
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Three Months Ended
|
||||||||
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(millions of dollars, except per share data)
|
April 3,
2011
|
April 4,
2010
|
||||||
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Revenues
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$ | 16,611 | $ | 16,949 | ||||
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Income from continuing operations attributable to Pfizer Inc. common shareholders
|
2,313 | 1,910 | ||||||
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Diluted earnings per share attributable to Pfizer Inc. common shareholders
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0.29 | 0.24 | ||||||
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●
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Elimination of King’s historical intangible asset amortization expense ($6 million in 2011 and $41 million in 2010).
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●
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Additional amortization expense (approximately $14 million in 2011 and $43 million in 2010) related to the fair value of identifiable intangible assets acquired.
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●
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Additional depreciation expense (approximately $1 million in 2011 and $3 million in 2010) related to the fair value adjustment to property, plant and equipment acquired.
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●
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Adjustment related to the fair value adjustments to acquisition-date inventory estimated to have been sold (elimination of $57 million charge in 2011 and addition of $57 million charge in 2010).
|
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●
|
Adjustment for acquisition-related costs directly attributable to the acquisition (elimination of $117 million of charges in 2011 and addition of $117 million of charges in 2010, reflecting charges incurred by both King and Pfizer).
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Three Months Ended
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||||||||
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(millions of dollars)
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April 3,
2011
|
April 4,
2010
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||||||
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Revenues
|
$ | 177 | $ | 174 | ||||
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Pre-tax income from discontinued operations
|
$ | 28 | $ | 30 | ||||
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Provision for taxes
|
(18 | ) | (11 | ) | ||||
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Income from discontinued operations––net of tax
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10 | 19 | ||||||
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Pre-tax gain on sale of discontinued operations
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–– | 3 | ||||||
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Provision for income taxes
|
–– | (1 | ) | |||||
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Discontinued operations––net of tax
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$ | 10 | $ | 21 | ||||
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(millions of dollars)
|
April 3,
2011
|
Dec. 31,
2010
|
||||||
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Accounts receivable
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$ | 179 | $ | 186 | ||||
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Inventories
|
144 | 130 | ||||||
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Taxes and other current assets
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39 | 47 | ||||||
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Property, plant and equipment
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993 | 1,009 | ||||||
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Goodwill
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19 | 19 | ||||||
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Identifiable intangible assets
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6 | 3 | ||||||
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Taxes and other noncurrent assets
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45 | 45 | ||||||
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Assets of discontinued operations and other assets held for sale
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$ | 1,425 | $ | 1,439 | ||||
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Current liabilities
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$ | 133 | $ | 124 | ||||
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Other liabilities
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49 | 27 | ||||||
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Liabilities of discontinued operations
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$ | 182 | $ | 151 | ||||
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●
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for our cost-reduction 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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●
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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 systems integration) and restructuring charges, related to employees, assets and activities that will not continue in the combined company.
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Three Months Ended
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||||||||
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(millions of dollars)
|
April 3,
2011
|
April 4,
2010
|
||||||
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Transaction costs(a)
|
$ | 10 | $ | 9 | ||||
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Integration costs(b)
|
179 | 208 | ||||||
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Restructuring charges(c):
|
||||||||
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Employee termination costs
|
667 | 458 | ||||||
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Asset impairments
|
25 | 6 | ||||||
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Other
|
13 | 25 | ||||||
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Restructuring charges and certain acquisition-related costs
|
894 | 706 | ||||||
|
Additional depreciation––asset restructuring (d)
|
||||||||
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Cost of sales
|
172 | 13 | ||||||
|
Selling, informational and administrative expenses
|
7 | 60 | ||||||
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Research and development expenses
|
64 | 20 | ||||||
|
Total additional depreciation––asset restructuring
|
243 | 93 | ||||||
|
Implementation costs(e)
|
||||||||
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Research and development expenses
|
10 | –– | ||||||
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Total implementation costs
|
10 | –– | ||||||
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Total costs associated with cost-reduction initiatives and acquisition activity
|
$ | 1,147 | $ | 799 | ||||
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(a)
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Transaction costs represent external costs directly related to business combinations and primarily include expenditures for banking, legal, accounting and other similar services.
|
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(b)
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Integration costs represent external, incremental costs directly related to integrating acquired businesses and primarily include expenditures for consulting and systems integration.
|
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(c)
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From the beginning of our cost-reduction and transformation initiatives in 2005 through April 3, 2011, Employee termination costs represent the expected reduction of the workforce by approximately 53,500 employees, mainly in manufacturing and sales and research of which approximately 37,900 employees have been terminated as of April 3, 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. These restructuring charges in 2011 are associated with the following: Primary Care operating segment ($46 million), Specialty Care and Oncology operating segment ($35 million), Established Products and Emerging Markets operating segment ($3 million), Animal Health and Consumer Healthcare operating segment ($10 million), Nutrition operating segment ($2 million), Worldwide Research and Development ($422 million) and Corporate ($187 million).
|
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(d)
|
Additional depreciation – asset restructuring represents the impact of changes in the estimated useful lives of assets involved in restructuring actions related to acquisitions.
|
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(e)
|
Implementation costs represent external, incremental costs directly related to implementing our non-acquisition-related cost-reduction initiatives.
|
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Costs Incurred
|
Activity
|
Accrual
|
||||||||||
|
(millions of dollars)
|
2005-2011 |
Through
April 3,
2011(a)
|
As of
April 3,
2011(b)
|
|||||||||
|
Employee termination costs
|
$ | 9,478 | $ | 7,160 | $ | 2,318 | ||||||
|
Asset impairments
|
2,333 | 2,333 | –– | |||||||||
|
Other
|
914 | 822 | 92 | |||||||||
|
Total restructuring charges
|
$ | 12,725 | $ | 10,315 | $ | 2,410 | ||||||
|
(a)
|
Includes adjustments for foreign currency translation.
|
|
(b)
|
Included in Other current liabilities ($1.7 billion) and Other noncurrent liabilities ($700 million).
|
|
Three Months Ended
|
||||||||
|
(millions of dollars)
|
April 3,
2011
|
April 4,
2010
|
||||||
|
Interest income(a)
|
$ | (105 | ) | $ | (112 | ) | ||
|
Interest expense(a)
|
458 | 522 | ||||||
|
Net interest expense
|
353 | 410 | ||||||
|
Royalty-related income
|
(171 | ) | (142 | ) | ||||
|
Net gain on asset disposals
|
(12 | ) | (45 | ) | ||||
|
Certain legal matters, net(b)
|
501 | 137 | ||||||
|
Certain asset impairment charges(c)
|
157 | –– | ||||||
|
Other, net
|
(1 | ) | 52 | |||||
|
Other deductions––net
|
$ | 827 | $ | 412 | ||||
|
(a)
|
Interest income decreased in 2011 due to lower interest rates. Interest expense decreased in 2011 due to lower long- and short-term debt balances and the conversion of some fixed-rate liabilities to floating-rate liabilities.
|
|
(b)
|
In 2011, primarily relates to a charge for hormone-replacement therapy litigation (see Note 14. Legal Proceedings and Contingencies).
|
|
(c)
|
In 2011, relates to an IPR&D compound acquired as part of our acquisition of Wyeth.
|
|
●
|
the extension of the U.S. research and development credit, which was signed into law on December 17, 2010;
|
|
●
|
the change in the jurisdictional mix of earnings; and
|
|
●
|
the tax impact of the charges incurred for certain legal matters (see Note 14. Legal Proceedings and Contingencies).
|
|
Three Months Ended
|
||||||||
|
(millions of dollars)
|
April 3,
2011
|
April 4,
2010
|
||||||
|
Net income before allocation to noncontrolling interests
|
$ | 2,234 | $ | 2,035 | ||||
|
Other comprehensive income/(loss):
|
||||||||
|
Currency translation adjustment and other
|
1,541 | (2,749 | ) | |||||
|
Net unrealized (losses)/gains on derivative financial instruments
|
(135 | ) | 134 | |||||
|
Net unrealized losses on available-for-sale securities
|
(24 | ) | (15 | ) | ||||
|
Benefit plan adjustments
|
2 | 117 | ||||||
|
Total other comprehensive income/(loss)
|
1,384 | (2,513 | ) | |||||
|
Total comprehensive income/(loss) before allocation to noncontrolling interests
|
3,618 | (478 | ) | |||||
|
Less: Comprehensive income/(loss) attributable to noncontrolling interests
|
16 | (10 | ) | |||||
|
Comprehensive income/(loss) attributable to Pfizer Inc.
|
$ | 3,602 | $ | (468 | ) | |||
|
(millions of dollars)
|
April 3,
2011
|
Dec. 31,
2010
|
||||||
|
Selected financial assets measured at fair value on a recurring basis (a) :
|
||||||||
|
Trading securities
|
$ | 155 | $ | 173 | ||||
|
Available-for-sale debt securities(b)
|
29,482 | 32,699 | ||||||
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Available-for-sale money market funds
|
1,396 | 1,217 | ||||||
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Available-for-sale equity securities, excluding money market funds(b)
|
343 | 230 | ||||||
|
Derivative financial instruments in receivable positions(c):
|
||||||||
|
Interest rate swaps
|
339 | 603 | ||||||
|
Foreign currency swaps
|
268 | 128 | ||||||
|
Foreign currency forward-exchange contracts
|
134 | 494 | ||||||
|
Total
|
32,117 | 35,544 | ||||||
|
Other selected financial assets(d):
|
||||||||
|
Held-to-maturity debt securities, carried at amortized cost(b)
|
848 | 1,178 | ||||||
|
Private equity securities, carried at cost or equity method
|
1,156 | 1,134 | ||||||
|
Short-term loans, carried at cost
|
406 | 467 | ||||||
|
Long-term loans, carried at cost
|
237 | 299 | ||||||
|
Total
|
2,647 | 3,078 | ||||||
|
Total selected financial assets (e)
|
$ | 34,764 | $ | 38,622 | ||||
|
Financial liabilities measured at fair value on a recurring basis(a):
|
||||||||
|
Derivative financial instruments in a liability position(f):
|
||||||||
|
Foreign currency swaps
|
$ | 572 | $ | 623 | ||||
|
Foreign currency forward-exchange contracts
|
304 | 257 | ||||||
|
Interest rate swaps
|
7 | 4 | ||||||
|
Total
|
883 | 884 | ||||||
|
Other financial liabilities:
|
||||||||
|
Short-term borrowings, carried at historical proceeds, as adjusted(d), (g)
|
6,093 | 5,603 | ||||||
|
Long-term debt, carried at historical proceeds, as adjusted(h), (i)
|
35,308 | 38,410 | ||||||
|
Total
|
41,401 | 44,013 | ||||||
|
Total selected financial liabilities
|
$ | 42,284 | $ | 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 $109 million as of April 3, 2011 and $105 million as of December 31, 2010 of investments that use Level 1 inputs in the calculation of fair value, and $125 million that use Level 3 inputs as of April 3, 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 swaps with fair values of $70 million and foreign currency forward-exchange contracts with fair values of $69 million at April 3, 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 April 3, 2011 or December 31, 2010.
|
|
(e)
|
The decrease in selected financial assets is primarily due to sales 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 $107 million and foreign currency swaps with fair values of $37 million at April 3, 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 borrowings with fair values of $920 million at April 3, 2011 and $2.0 billion at December 31, 2010, which are used to hedge the exposure of certain foreign currency denominated net investments.
|
|
(h)
|
Includes foreign currency debt with fair values of $838 million at April 3, 2011 and $880 million at December 31, 2010, which are used to hedge the exposure of certain foreign currency denominated net investments.
|
|
(i)
|
The fair value of our long-term debt is $38.7 billion at April 3, 2011 and $42.3 billion at December 31, 2010.
|
|
(millions of dollars)
|
April 3,
2011
|
Dec. 31,
2010
|
||||||
|
Assets
|
||||||||
|
Cash and cash equivalents
|
$ | 527 | $ | 906 | ||||
|
Short-term investments
|
23,279 | 26,277 | ||||||
|
Short-term loans
|
406 | 467 | ||||||
|
Long-term investments and loans
|
9,811 | 9,747 | ||||||
|
Taxes and other current assets(a)
|
324 | 515 | ||||||
|
Taxes and other noncurrent assets(b)
|
417 | 710 | ||||||
|
Total selected financial assets
|
$ | 34,764 | $ | 38,622 | ||||
|
Liabilities
|
||||||||
|
Short-term borrowings, including current portion of long-term debt
|
$ | 6,093 | $ | 5,603 | ||||
|
Other current liabilities(c)
|
435 | 339 | ||||||
|
Long-term debt
|
35,308 | 38,410 | ||||||
|
Other noncurrent liabilities(d)
|
448 | 545 | ||||||
|
Total selected financial liabilities
|
$ | 42,284 | $ | 44,897 | ||||
|
(a)
|
At April 3, 2011, derivative instruments at fair value include foreign currency swaps ($153 million), foreign currency forward-exchange contracts ($134 million) and interest rate swaps ($37 million) and at December 31, 2010, include foreign currency forward-exchange contracts ($494 million) and foreign currency swaps ($21 million).
|
|
(b)
|
At April 3, 2011, derivative instruments at fair value include foreign currency swaps ($115 million) and interest rate swaps ($302 million) and at December 31, 2010, include interest rate swaps ($603 million) and foreign currency swaps ($107 million).
|
|
(c)
|
At April 3, 2011, derivative instruments at fair value include foreign currency forward-exchange contracts ($304 million), foreign currency swaps ($129 million) and interest rate swaps ($2 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 April 3, 2011, derivative instruments at fair value include foreign currency swaps ($443 million) and interest rate swaps ($5 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
April 3,
2011
|
||||||||||||
|
Available-for-sale debt securities:
|
||||||||||||||||
|
Western European and other government debt
|
$ | 17,725 | $ | 969 | $ | –– | $ | 18,694 | ||||||||
|
Corporate debt
|
1,372 | 2,447 | –– | 3,819 | ||||||||||||
|
Federal Home Loan Mortgage Corporation and Federal National Mortgage
Association asset-backed securities
|
–– | 2,627 | –– | 2,627 | ||||||||||||
|
Western European and other government agency debt
|
1,487 | 168 | 62 | 1,717 | ||||||||||||
|
Supranational debt
|
937 | 647 | –– | 1,584 | ||||||||||||
|
Reverse repurchase agreements
|
759 | –– | –– | 759 | ||||||||||||
|
U.S. government Federal Deposit Insurance Corporation
guaranteed debt
|
–– | 155 | –– | 155 | ||||||||||||
|
Other asset-backed securities
|
16 | 25 | 48 | 89 | ||||||||||||
|
Certificates of deposit
|
38 | –– | –– | 38 | ||||||||||||
|
Held-to-maturity debt securities:
|
||||||||||||||||
|
Certificates of deposit and other
|
712 | 136 | — | 848 | ||||||||||||
|
Total debt securities
|
$ | 23,046 | $ | 7,174 | $ | 110 | $ | 30,330 | ||||||||
|
Trading securities
|
155 | |||||||||||||||
|
Available-for-sale money market funds
|
1,396 | |||||||||||||||
|
Available-for-sale equity securities, excluding money market funds
|
343 | |||||||||||||||
|
Total
|
$ | 32,224 | ||||||||||||||
|
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)
|
April 3,
2011
|
April 4,
2010
|
April 3,
2011
|
April 4,
2010
|
April 3,
2011
|
April 4,
2010
|
||||||||||||||||||
|
Three Months Ended
|
||||||||||||||||||||||||
|
Derivative Financial Instruments in Fair Value
Hedge Relationships(b)
|
||||||||||||||||||||||||
|
Interest rate swaps
|
$ | –– | $ | –– | $ | –– | $ | –– | $ | –– | $ | –– | ||||||||||||
|
Foreign currency swaps
|
(1 | ) | –– | –– | –– | –– | –– | |||||||||||||||||
|
Derivative Financial Instruments in Cash Flow
Hedge Relationships
|
||||||||||||||||||||||||
|
Foreign currency swaps
|
$ | –– | $ | –– | $ | 305 | $ | (438 | ) | $ | 506 | $ | (628 | ) | ||||||||||
|
Foreign currency forward-exchange contracts
|
–– | –– | 2 | –– | 4 | 1 | ||||||||||||||||||
|
Derivative Financial Instruments in Net
Investment Hedge Relationships
|
||||||||||||||||||||||||
|
Foreign currency swaps
|
$ | 2 | $ | 1 | $ | 33 | $ | 11 | $ | –– | $ | –– | ||||||||||||
|
Derivative Financial Instruments Not
Designated as Hedges
|
||||||||||||||||||||||||
|
Foreign currency swaps
|
$ | 30 | $ | 4 | $ | –– | $ | –– | $ | –– | $ | –– | ||||||||||||
|
Foreign currency forward-exchange contracts
|
(197 | ) | (890 | ) | –– | –– | –– | –– | ||||||||||||||||
|
Non-Derivative Financial Instruments in Net
Investment Hedge Relationships
|
||||||||||||||||||||||||
|
Foreign currency short-term borrowings
|
$ | –– | $ | –– | $ | 43 | $ | 31 | $ | –– | $ | –– | ||||||||||||
|
Foreign currency long-term debt
|
–– | –– | 28 | 16 | –– | –– | ||||||||||||||||||
|
Total
|
$ | (166 | ) | $ | (885 | ) | $ | 411 | $ | (380 | ) | $ | 510 | $ | (627 | ) | ||||||||
|
(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 first quarters 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)
|
April 3,
2011
|
Dec. 31,
2010
|
||||||
|
Finished goods
|
$ | 3,739 | $ | 3,665 | ||||
|
Work-in-process
|
3,909 | 3,727 | ||||||
|
Raw materials and supplies
|
819 | 883 | ||||||
|
Total inventories(a)
|
$ | 8,467 | $ | 8,275 | ||||
|
(a)
|
Certain amounts of inventories are in excess of one year’s supply. There are no recoverability issues associated with these quantities.
|
|
(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)
|
–– | –– | 780 | 780 | ||||||||||||||||||||||||
|
Other(c)
|
12 | 5 | 128 | 145 | ||||||||||||||||||||||||
|
Balance, April 3, 2011
|
$ | $ | $ | $ | 2,461 | $ | 501 | $ | 41,891 | $ | 44,853 | |||||||||||||||||
|
(a)
|
The amount to be allocated includes the former Biopharmaceutical goodwill (see below), as well as newly acquired goodwill 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)
|
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.
|
|
April 3, 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
|
$ | 71,003 | $ | (28,029 | ) | $ | 42,974 | $ | 68,432 | $ | (26,223 | ) | $ | 42,209 | ||||||||||
|
Brands
|
1,635 | (628 | ) | 1,007 | 1,626 | (607 | ) | 1,019 | ||||||||||||||||
|
License agreements
|
637 | (277 | ) | 360 | 637 | (248 | ) | 389 | ||||||||||||||||
|
Trademarks and other
|
541 | (337 | ) | 204 | 533 | (324 | ) | 209 | ||||||||||||||||
|
Total amortized finite-lived intangible assets
|
73,816 | (29,271 | ) | 44,545 | 71,228 | (27,402 | ) | 43,826 | ||||||||||||||||
|
Indefinite-lived intangible assets:
|
||||||||||||||||||||||||
|
Brands
|
10,287 | –– | 10,287 | 10,219 | — | 10,219 | ||||||||||||||||||
|
In-process research and development
|
3,593 | –– | 3,593 | 3,438 | — | 3,438 | ||||||||||||||||||
|
Trademarks
|
72 | –– | 72 | 72 | — | 72 | ||||||||||||||||||
|
Total indefinite-lived intangible assets
|
13,952 | –– | 13,952 | 13,729 | — | 13,729 | ||||||||||||||||||
|
Total identifiable intangible assets(a)
|
$ | 87,768 | $ | (29,271 | ) | $ | 58,497 | $ | 84,957 | $ | (27,402 | ) | $ | 57,555 | ||||||||||
|
(a)
|
The increase is primarily related to the assets acquired as part of the acquisition of King (see Note 3. Acquisition of King Pharmaceuticals, Inc.) and the impact of foreign exchange, partially offset by amortization of intangible assets.
|
|
●
|
Developed Technology Rights: Specialty Care (62%); Primary Care (17%); Established Products (17%); Animal Health (2%); Oncology (1%) and Nutrition (1%)
|
|
●
|
Finite-Lived Brands: Consumer Healthcare (56%); Established Products (30%); and Animal Health (14%)
|
|
●
|
Indefinite-Lived Brands: Consumer Healthcare (51%); Established Products (27%); and Nutrition (22%)
|
|
●
|
IPR&D: Specialty Care (70%); Worldwide Research and Development (18%); Primary Care (6%); Oncology (3%); Established Products (2%); and Consumer Healthcare (1%)
|
|
Pension Plans
|
||||||||||||||||||||||||||||||||
|
U.S.
Qualified
|
U.S.
Supplemental
(Non-Qualified)
|
International
|
Postretirement
Plans
|
|||||||||||||||||||||||||||||
|
(millions of dollars)
|
April 3,
2011
|
April 4,
2010
|
April 3,
2011
|
April 4,
2010
|
April 3,
2011
|
April 4,
2010
|
April 3,
2011
|
April 4,
2010
|
||||||||||||||||||||||||
|
For the Three Months Ended:
|
||||||||||||||||||||||||||||||||
|
Service cost
|
$ | 90 | $ | 94 | $ | 9 | $ | 8 | $ | 62 | $ | 60 | $ | 17 | $ | 22 | ||||||||||||||||
|
Interest cost
|
185 | 191 | 19 | 19 | 111 | 111 | 49 | 54 | ||||||||||||||||||||||||
|
Expected return on plan assets
|
(221 | ) | (202 | ) | –– | –– | (109 | ) | (112 | ) | (9 | ) | (8 | ) | ||||||||||||||||||
|
Amortization of:
|
||||||||||||||||||||||||||||||||
|
Actuarial losses
|
35 | 38 | 9 | 7 | 21 | 17 | 4 | –– | ||||||||||||||||||||||||
|
Prior service credits
|
(2 | ) | –– | (1 | ) | (1 | ) | (1 | ) | (1 | ) | (14 | ) | (4 | ) | |||||||||||||||||
|
Curtailments and settlements––net
|
17 | (33 | ) | 12 | (1 | ) | (2 | ) | 1 | (6 | ) | –– | ||||||||||||||||||||
|
Special termination benefits
|
5 | 14 | 7 | 90 | 3 | 1 | –– | 6 | ||||||||||||||||||||||||
|
Net periodic benefit costs
|
$ | 109 | $ | 102 | $ | 55 | $ | 122 | $ | 85 | $ | 77 | $ | 41 | $ | 70 | ||||||||||||||||
|
Three Months Ended
|
||||||||
|
(millions)
|
April 3,
2011
|
April 4,
2010
|
||||||
|
EPS Numerator––Basic:
|
||||||||
|
Income from continuing operations
|
$ | 2,224 | $ | 2,014 | ||||
|
Less: Net income attributable to noncontrolling interests
|
12 | 9 | ||||||
|
Income from continuing operations attributable to Pfizer Inc.
|
2,212 | 2,005 | ||||||
|
Less: Preferred stock dividends––net of tax
|
–– | 1 | ||||||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders
|
2,212 | 2,004 | ||||||
|
Discontinued operations––net of tax
|
10 | 21 | ||||||
|
Net income attributable to Pfizer Inc. common shareholders
|
$ | 2,222 | $ | 2,025 | ||||
|
EPS Numerator––Diluted:
|
||||||||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders and
assumed conversions
|
$ | 2,212 | $ | 2,005 | ||||
|
Discontinued operations––net of tax
|
10 | 21 | ||||||
|
Net income attributable to Pfizer Inc. common shareholders and assumed conversions
|
$ | 2,222 | $ | 2,026 | ||||
|
EPS Denominator:
|
||||||||
|
Weighted-average number of common shares outstanding––Basic
|
7,982 | 8,061 | ||||||
|
Common-share equivalents: stock options, stock issuable under employee
compensation plans and convertible preferred stock
|
53 | 40 | ||||||
|
Weighted-average number of common shares outstanding––Diluted
|
8,035 | 8,101 | ||||||
|
Stock options that had exercise prices greater than the average market price of our
common stock issuable under employee compensation plans(a)
|
290 | 366 | ||||||
|
(a)
|
These common stock equivalents were outstanding during the first quarters of 2011 and 2010, but were not included in the computation of diluted EPS for those periods because their inclusion would have had an anti-dilutive effect.
|
|
●
|
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), major depressive disorder, genitourinary, osteoporosis, pain and respiratory. Examples of products in this unit include Celebrex, 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 human pharmaceutical products primarily prescribed by physicians who are specialists, and may include products in the following therapeutic and disease areas: antibacterials, antifungals, antivirals, bone, inflammation, growth hormones, multiple sclerosis, ophthalmology, pulmonary arterial hypertension, psychosis and vaccines. Examples of products in this unit include, Enbrel, Genotropin, Geodon, the Prevnar/Prevenar franchise, Xalatan 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 and Torisel. 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 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 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 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, dietary supplements, pain management and respiratory. Examples of products in Consumer Healthcare are Advil, Caltrate, Centrum, ChapStick and Robitussin.
|
|
●
|
Nutrition operating segment (Nutri)––generally includes revenues and earnings, as defined by management, from a full line of infant and toddler nutritional products sold outside of North America.
|
|
●
|
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. 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 (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, science and technology, 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, implementation 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
|
Earnings(a)
|
|||||||||||||||
|
Three Months Ended
|
||||||||||||||||
|
(millions of dollars)
|
April 3,
2011
|
April 4,
2010
|
April 3,
2011
|
April 4,
2010
|
||||||||||||
|
Primary Care
|
$ | 5,441 | $ | 5,866 | $ | 3,546 | $ | 4,083 | ||||||||
|
Specialty Care and Oncology
|
4,238 | 3,882 | 2,873 | 2,661 | ||||||||||||
|
Established Products and Emerging Markets
|
4,545 | 4,758 | 2,490 | 2,992 | ||||||||||||
|
Animal Health and Consumer Healthcare
|
1,727 | 1,509 | 489 | 397 | ||||||||||||
|
Total reportable segments
|
15,951 | 16,015 | 9,398 | 10,133 | ||||||||||||
|
Nutrition and other business activities(b)
|
551 | 561 | (722 | ) | (793 | ) | ||||||||||
|
Reconciling Items:
|
||||||||||||||||
|
Corporate(c)
|
–– | –– | (1,660 | ) | (1,879 | ) | ||||||||||
|
Purchase accounting adjustments(d)
|
–– | –– | (1,785 | ) | (2,839 | ) | ||||||||||
|
Acquisition-related costs(e)
|
–– | –– | (575 | ) | (799 | ) | ||||||||||
|
Certain significant items(f)
|
–– | –– | (1,208 | ) | (183 | ) | ||||||||||
|
Other unallocated(g)
|
–– | –– | (330 | ) | (491 | ) | ||||||||||
| $ | 16,502 | $ | 16,576 | $ | 3,118 | $ | 3,149 | |||||||||
|
(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 includes, among other things, administration expenses, interest income/(expense), certain performance-based and all share-based compensation expenses.
|
|
(d)
|
Significant impacts of purchase accounting 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, integrating and restructuring newly 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 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 productivity initiatives that are not associated with an acquisition, the impact of certain tax and/or legal settlements and certain asset impairments.
|
|
|
For the first quarter of 2011, certain significant items includes: (i) restructuring charges and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $572 million, (ii) charges for certain legal matters of $472 million, (iii) certain asset impairment charges of $157 million and (iv) other charges of $7 million (see Note 5. Costs Associated with Cost-Reduction Initiatives and Acquisition Activity and Note 6. Other (Income)/Deductions––Net for additional information).
|
|
|
For the first quarter of 2010, certain significant items includes: (i) charges for certain legal matters of $142 million, and (ii) other charges of $41 million.
|
|
(g)
|
Includes overhead expenses associated with our manufacturing and commercial operations not directly attributable to an operating segment.
|
|
Three Months Ended
|
||||||||
|
(millions of dollars)
|
April 3,
2011
|
April 4,
2010
|
||||||
|
Revenues from biopharmaceutical products:
|
||||||||
|
Lipitor
|
$ | 2,385 | $ | 2,757 | ||||
|
Prevnar/Prevenar 13
|
996 | 286 | ||||||
|
Enbrel(a)
|
870 | 802 | ||||||
|
Lyrica
|
826 | 723 | ||||||
|
Celebrex
|
591 | 570 | ||||||
|
Viagra
|
470 | 479 | ||||||
|
Xalatan/Xalacom
|
392 | 422 | ||||||
|
Norvasc
|
356 | 368 | ||||||
|
Zyvox
|
319 | 292 | ||||||
|
Sutent
|
276 | 259 | ||||||
|
Premarin family
|
235 | 256 | ||||||
|
Geodon/Zeldox
|
232 | 254 | ||||||
|
Detrol/Detrol LA
|
225 | 261 | ||||||
|
Genotropin
|
209 | 206 | ||||||
|
Effexor XR
|
204 | 716 | ||||||
|
Chantix/Champix
|
199 | 189 | ||||||
|
Vfend
|
195 | 188 | ||||||
|
Zosyn/Tazocin
|
179 | 264 | ||||||
|
BeneFIX
|
164 | 154 | ||||||
|
Prevnar/Prevenar (7-valent)
|
153 | 520 | ||||||
|
Caduet
|
142 | 135 | ||||||
|
Zoloft
|
135 | 120 | ||||||
|
Pristiq
|
129 | 110 | ||||||
|
Zithromax/Zmax
|
128 | 103 | ||||||
|
Revatio
|
123 | 114 | ||||||
|
Medrol
|
121 | 109 | ||||||
|
ReFacto AF/Xyntha
|
117 | 90 | ||||||
|
Aromasin
|
114 | 128 | ||||||
|
Aricept(b)
|
99 | 107 | ||||||
|
Cardura
|
96 | 107 | ||||||
|
BMP2
|
93 | 98 | ||||||
|
Fragmin
|
91 | 90 | ||||||
|
Rapamune
|
89 | 91 | ||||||
|
Tygacil
|
73 | 84 | ||||||
|
Protonix
|
59 | 158 | ||||||
|
Alliance revenues(c)
|
884 | 1,004 | ||||||
|
All other
|
2,255 | 1,892 | ||||||
|
Total revenues from biopharmaceutical products
|
14,224 | 14,506 | ||||||
|
Revenues from other products:
|
||||||||
|
Animal Health
|
982 | 846 | ||||||
|
Consumer Healthcare
|
745 | 663 | ||||||
|
Nutrition
|
470 | 458 | ||||||
|
Pfizer CentreSource
|
81 | 103 | ||||||
|
Total revenues
|
$ | 16,502 | $ | 16,576 | ||||
|
(a)
|
Outside the U.S. and Canada.
|
|
(b)
|
Represents direct sales under license agreement with Eisai Co., Ltd.
|
|
(c)
|
Enbrel (in the U.S. and Canada), Aricept, Exforge, Rebif, Spiriva and Metaxalone.
|
|
Three Months Ended
|
||||||||||||
|
(millions of dollars)
|
April 3,
2011
|
April 4,
2010
|
% Change
|
|||||||||
|
Revenues
|
||||||||||||
|
United States
|
$ | 7,024 | $ | 7,265 | (3 | ) | ||||||
|
Developed Europe(a)
|
3,884 | 4,261 | (9 | ) | ||||||||
|
Developed Rest of World(b)
|
2,546 | 2,302 | 11 | |||||||||
|
Emerging Markets(c)
|
3,048 | 2,748 | 11 | |||||||||
|
Total Revenues
|
$ | 16,502 | $ | 16,576 | –– | |||||||
|
(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 27, provides information about the following: our business; our performance during the first quarter 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 32, and consists of the following sub-sections:
|
|
|
o
|
Revenues. This section, beginning on page 32, provides an analysis of our products and revenues for the first quarters of 2011 and 2010, as well as an overview of important product developments.
|
|
|
o
|
Costs and Expenses. This section, beginning on page 44, provides a discussion about our costs and expenses.
|
|
|
o
|
Provision for Taxes on Income. This section, on page 46, provides a discussion of items impacting our tax provision for the periods presented.
|
|
|
o
|
Adjusted Income. This section, beginning on page 46, provides a discussion of an alternative view of performance used by management.
|
|
●
|
Analysis of Our Condensed Consolidated Balance Sheets. This section, on page 50, provides a discussion of changes in certain balance sheet accounts.
|
|
●
|
Analysis of Our Condensed Consolidated Statements of Cash Flows. This section, on page 50, provides an analysis of our cash flows for the first quarters of 2011 and 2010.
|
|
●
|
Financial Condition, Liquidity and Capital Resources. This section, beginning on page 51, provides an analysis of our financial assets and liabilities as of April 3, 2011 and December 31, 2010 and a discussion of our outstanding debt and commitments that existed as of April 3, 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, on page 53, discusses recently adopted accounting standards.
|
|
●
|
Forward-Looking Information and Factors That May Affect Future Results. This section, beginning on page 53, 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 based on management’s current expectations about future events, which are inherently susceptible to uncertainty and changes in circumstances. Also included in this section is a discussion of legal proceedings and contingencies.
|
|
Three Months Ended
|
||||||||||||
|
(millions of dollars, except per common share data)
|
April 3,
2011
|
April 4,
2010
|
% Change
|
|||||||||
|
Revenues
|
$ | 16,502 | $ | 16,576 | –– | |||||||
|
Cost of sales
|
3,693 | 4,202 | (12 | ) | ||||||||
|
% of revenues
|
22.4 | % | 25.3 | % | ||||||||
|
Selling, informational and administrative expenses
|
4,503 | 4,403 | 2 | |||||||||
|
% of revenues
|
27.3 | % | 26.6 | % | ||||||||
|
Research and development expenses
|
2,091 | 2,221 | (6 | ) | ||||||||
|
% of revenues
|
12.7 | % | 13.4 | % | ||||||||
|
Amortization of intangible assets
|
1,376 | 1,409 | (2 | ) | ||||||||
|
% of revenues
|
8.3 | % | 8.5 | % | ||||||||
|
Acquisition-related in-process research and development charges
|
–– | 74 | (100 | ) | ||||||||
|
% of revenues
|
–– | 0.4 | % | |||||||||
|
Restructuring charges and certain acquisition-related costs
|
894 | 706 | 27 | |||||||||
|
% of revenues
|
5.4 | % | 4.3 | % | ||||||||
|
Other deductions––net
|
827 | 412 | 101 | |||||||||
|
Income from continuing operations before provision for taxes on income
|
3,118 | 3,149 | (1 | ) | ||||||||
|
% of revenues
|
18.9 | % | 19.0 | % | ||||||||
|
Provision for taxes on income
|
894 | 1,135 | (21 | ) | ||||||||
|
Effective tax rate
|
28.7 | % | 36.0 | % | ||||||||
|
Income from continuing operations
|
2,224 | 2,014 | 10 | |||||||||
|
% of revenues
|
13.5 | % | 12.2 | % | ||||||||
|
Discontinued operations––net of tax
|
10 | 21 | (52 | ) | ||||||||
|
Net income before allocation to noncontrolling interests
|
2,234 | 2,035 | 10 | |||||||||
|
% of revenues
|
13.5 | % | 12.3 | % | ||||||||
|
Less: Net income attributable to noncontrolling interests
|
12 | 9 | 33 | |||||||||
|
Net income attributable to Pfizer Inc.
|
$ | 2,222 | $ | 2,026 | 10 | |||||||
|
% of revenues
|
13.5 | % | 12.2 | % | ||||||||
|
Earnings per common share––basic:
|
||||||||||||
|
Income from continuing operations attributable to Pfizer Inc.
common shareholders
|
$ | 0.28 | $ | 0.25 | 12 | |||||||
|
Discontinued operations––net of tax
|
–– | –– | –– | |||||||||
|
Net income attributable to Pfizer Inc. common shareholders
|
$ | 0.28 | $ | 0.25 | 12 | |||||||
|
Earnings per common share––diluted:
|
||||||||||||
|
Income from continuing operations attributable to Pfizer Inc.
common shareholders
|
$ | 0.28 | $ | 0.25 | 12 | |||||||
|
Discontinued operations––net of tax
|
–– | –– | –– | |||||||||
|
Net income attributable to Pfizer Inc. common shareholders
|
$ | 0.28 | $ | 0.25 | 12 | |||||||
|
Cash dividends paid per common share
|
$ | 0.20 | $ | 0.18 | 11 | |||||||
|
●
|
lower revenues from legacy Pfizer products; and
|
|
●
|
a reduction in revenues of $166 million, or 1%, due to U.S. healthcare reform,
|
|
●
|
the favorable impact of foreign exchange, which increased revenues by approximately $97 million or 1%; and
|
|
●
|
the inclusion of revenues from legacy King products of $224 million, which favorably impacted revenues by 1%.
|
|
Three Months Ended
|
||||||||||||||||
|
(millions of dollars)
|
April 3, 2011 vs.
April 4, 2010
Worldwide
Incr./(Decr.)
|
% Change
Worldwide
|
% Change
U.S.
|
% Change
International
|
||||||||||||
|
Prevnar/Prevenar 13
|
$ | 710 | 248 | 213 | * | |||||||||||
|
Lyrica
|
103 | 14 | 3 | 25 | ||||||||||||
|
Enbrel (outside the U.S. and Canada)
|
68 | 8 | –– | 8 | ||||||||||||
|
Zyvox
|
27 | 9 | 7 | 12 | ||||||||||||
|
ReFacto AF/Xyntha
|
27 | 30 | 24 | 32 | ||||||||||||
|
Zithromax/Zmax
|
25 | 24 | 75 | 22 | ||||||||||||
|
Celebrex
|
21 | 4 | (1 | ) | 14 | |||||||||||
|
Premarin family
|
(21 | ) | (8 | ) | (9 | ) | –– | |||||||||
|
Geodon/Zeldox
|
(22 | ) | (9 | ) | (9 | ) | (7 | ) | ||||||||
|
Xalatan/Xalacom(a)
|
(30 | ) | (7 | ) | (6 | ) | (8 | ) | ||||||||
|
Detrol/Detrol LA
|
(36 | ) | (14 | ) | (20 | ) | (1 | ) | ||||||||
|
Zosyn/Tazocin
|
(85 | ) | (32 | ) | (40 | ) | (16 | ) | ||||||||
|
Protonix(a)
|
(99 | ) | (63 | ) | (63 | ) | –– | |||||||||
|
Prevnar/Prevenar 7
|
(367 | ) | (71 | ) | (100 | ) | (55 | ) | ||||||||
|
Lipitor(a)
|
(372 | ) | (13 | ) | –– | (25 | ) | |||||||||
|
Effexor XR(a)
|
(512 | ) | (72 | ) | (83 | ) | (16 | ) | ||||||||
|
Alliance revenues
|
(120 | ) | (12 | ) | (23 | ) | 17 | |||||||||
|
All other biopharmaceutical products(b)
|
363 | 19 | 83 | 2 | ||||||||||||
|
Animal Health products
|
136 | 16 | 28 | 10 | ||||||||||||
|
Consumer Healthcare products
|
82 | 12 | 15 | 10 | ||||||||||||
|
(a)
|
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.
|
|
(b)
|
Relates to “All other biopharmaceutical products” category included in the “Selected Revenues from Biopharmaceutical Products” table presented in this MD&A.
|
|
*
|
Calculation not meaningful.
|
|
●
|
lower purchase accounting adjustments and acquisition-related costs associated with the Wyeth acquisition in the first quarter of 2011, compared to the same period last year; and
|
|
●
|
a decrease in the effective tax rate to approximately 29% in the first quarter of 2011 from 36% in the first quarter of 2010 (see discussion in the “Provision for Taxes” section of this MD&A),
|
|
●
|
legal charges of $501 million, which included a charge of $472 million related to hormone-replacement therapy litigation (see Notes to Condensed Consolidated Financial Statements––Note 6. Other (Income)/Deductions––Net, Note 14. Legal Proceedings and Contingencies and Part II––Other Information; Item 1. Legal Proceedings, of this Form 10-Q); and
|
|
●
|
higher Restructuring charges and certain acquisition-related costs primarily related to our R&D initiative (see the “Costs Associated with Cost-Reduction Initiatives and Acquisition Activity” section of this MD&A for additional information).
|
|
●
|
approximately $166 million, recorded as a reduction to Revenues; and
|
|
●
|
approximately $69 million, 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.
|
|
●
|
Aromasin in the European Union (EU) and Japan in July 2011;
|
|
●
|
Xalatan and Xalacom in the majority of major European markets in July 2011. We are pursuing a pediatric extension for Xalatan in the EU. If we are successful, the exclusivity period for both Xalatan and Xalacom in the majority of major European markets will be extended by six months from July 2011 to January 2012. To date, we have received pediatric extensions in ten European countries; and
|
|
●
|
Lipitor and Caduet in the U.S. in November 2011 (see additional discussion below).
|
|
●
|
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 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 $413 million, Identifiable intangible assets of $2.1 billion and goodwill of $780 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, Skelaxin and Flector Patch, among others.
|
|
|
o
|
IPR&D of approximately $300 million, which includes Embeda, Vanquix, Oxycodone and Remoxy, among others.
|
|
|
o
|
Amounts for intangibles, inventory and PP&E, pending finalization of valuation efforts for acquired intangible assets as well as the completion of certain physical inventory counts and the confirmation of the physical existence and condition of certain property, plant and equipment assets.
|
|
|
o
|
Amounts for environmental contingencies, pending the finalization of our assessment and valuation of environmental matters.
|
|
|
o
|
Amounts for legal contingencies, pending the finalization of our examination and evaluation of the portfolio of filed cases.
|
|
|
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.
|
|
●
|
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 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 during the third quarter of 2011.
|
|
●
|
On April 4, 2011, we announced that we entered into an agreement to sell our Capsugel business for $2.375 billion in cash. The transaction, which is subject to customary closing conditions, including regulatory approval in certain jurisdictions including the U.S. and EU, is expected to close during the third quarter of 2011. For additional information, see Notes to Condensed Consolidated Financial Statements—Note 4. Discontinued Operations.
|
|
Full-Year 2011 Guidance
|
||
|
($ billions, except per share amounts)
|
Net Income(a)
|
Diluted EPS(a)
|
|
Adjusted income/diluted EPS(b) guidance
|
~$17.1-$17.9
|
~$2.16-$2.26
|
|
Purchase accounting impacts of transactions completed as of 4/3/11
|
(4.7)
|
(0.59)
|
|
Acquisition-related costs
|
(1.9-2.2)
|
(0.25-0.28)
|
|
Non-Acquisition-related costs(c)
|
(1.0-1.2)
|
(0.13-0.15)
|
|
Other Certain Significant Items
|
(0.4)
|
(0.05)
|
|
Reported Net income attributable to Pfizer Inc./diluted EPS guidance
|
~$8.6-$9.9
|
~$1.09-$1.24
|
|
(a)
|
Includes the revenue and expenses related to the Capsugel business as a discontinued operation, but does not include any gain on the sale of Capsugel. Does not assume the completion of any business-development transactions not completed as of April 3, 2011. Also excludes the potential effects of the resolution of litigation-related matters not substantially resolved as of April 3, 2011.
|
|
(b)
|
For an understanding of Adjusted income, see the “Adjusted Income” section of this MD&A.
|
|
(c)
|
Amounts relate to actions in connection with our reduction in R&D spending, including our realigned R&D footprint. In our reconciliation between Net income attributable to Pfizer Inc., as reported under principles generally accepted in the United States of America (U.S. GAAP), and Adjusted income, these amounts are categorized as Certain Significant Items (see the “Adjusted Income––Reconciliation” section of this MD&A).
|
|
Full-Year 2012 Targets
|
||
|
($ billions, except per share amounts)
|
Net Income (a), (b)
|
Diluted EPS (a), (b)
|
|
Adjusted income/diluted EPS(c) targets
|
~$17.2-$17.9
|
~$2.25-$2.35
|
|
Purchase accounting impacts of transactions completed as of 4/3/11
|
(3.8)
|
(0.50)
|
|
Acquisition-related costs
|
(0.7-1.0)
|
(0.09-0.12)
|
|
Non-acquisition-related costs(d)
|
(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)
|
Includes the revenues and expenses related to the Capsugel business as a discontinued operation, but does not include any gain on the sale of Capsugel. Does not assume the completion of any business-development transactions not completed as of April 3, 2011. Also excludes the potential effects of the resolution of litigation-related matters not substantially resolved as of April 3, 2011.
|
|
(b)
|
Given the longer-term nature of these targets, they are subject to greater variability and less certainty as a result of potential material impacts related to foreign exchange fluctuations, macroeconomic activity including inflation, and industry-specific challenges including changes to government healthcare policy, among others.
|
|
(c)
|
For an understanding of Adjusted income, see the “Adjusted Income” section of this MD&A.
|
|
(d)
|
Amounts relate to actions in connection with our reduction in R&D spending, including our realigned R&D footprint. In our reconciliation between Net income attributable to Pfizer Inc., as reported under U.S. GAAP, and Adjusted income, these amounts are categorized as Certain Significant Items (see the “Adjusted Income––Reconciliation” section of this MD&A).
|
|
% Change in Revenues
|
||||||||||||||||||||||||||||||||||||
|
Worldwide
|
U.S.
|
International
|
World-
wide |
U.S.
|
Inter-
national |
|||||||||||||||||||||||||||||||
|
April 3,
|
April 4,
|
April 3,
|
April 4,
|
April 3,
|
April 4,
|
|||||||||||||||||||||||||||||||
|
(millions of dollars)
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
11/10 | 11/10 | 11/10 | |||||||||||||||||||||||||||
|
Three Months Ended:
|
||||||||||||||||||||||||||||||||||||
|
Biopharmaceutical revenues:
|
||||||||||||||||||||||||||||||||||||
|
Primary Care Operating Segment
|
$ | 5,441 | $ | 5,866 | $ | 3,193 | $ | 3,409 | $ | 2,248 | $ | 2,457 | (7 | ) | (6 | ) | (9 | ) | ||||||||||||||||||
|
Specialty Care
|
3,927 | 3,521 | 1,949 | 1,679 | 1,978 | 1,842 | 12 | 16 | 7 | |||||||||||||||||||||||||||
|
Oncology
|
311 | 361 | 89 | 136 | 222 | 225 | (14 | ) | (35 | ) | (1 | ) | ||||||||||||||||||||||||
|
SC&O Operating Segment
|
4,238 | 3,882 | 2,038 | 1,815 | 2,200 | 2,067 | 9 | 12 | 6 | |||||||||||||||||||||||||||
|
Established Products
|
2,367 | 2,786 | 1,032 | 1,383 | 1,335 | 1,403 | (15 | ) | (25 | ) | (5 | ) | ||||||||||||||||||||||||
|
Emerging Markets
|
2,178 | 1,972 | –– | –– | 2,178 | 1,972 | 10 | –– | 10 | |||||||||||||||||||||||||||
|
EP&EM Operating Segment
|
4,545 | 4,758 | 1,032 | 1,383 | 3,513 | 3,375 | (4 | ) | (25 | ) | 4 | |||||||||||||||||||||||||
|
|
14,224 | 14,506 | 6,263 | 6,607 | 7,961 | 7,899 | (2 | ) | (5 | ) | 1 | |||||||||||||||||||||||||
|
Other product revenues:
|
||||||||||||||||||||||||||||||||||||
|
Animal Health
|
982 | 846 | 382 | 299 | 600 | 547 | 16 | 28 | 10 | |||||||||||||||||||||||||||
|
Consumer Healthcare
|
745 | 663 | 361 | 315 | 384 | 348 | 12 | 15 | 10 | |||||||||||||||||||||||||||
|
AH&CH Operating Segment
|
1,727 | 1,509 | 743 | 614 | 984 | 895 | 14 | 21 | 10 | |||||||||||||||||||||||||||
|
Nutrition Operating Segment
|
470 | 458 | –– | –– | 470 | 458 | 3 | –– | 3 | |||||||||||||||||||||||||||
|
Pfizer CentreSource(a)
|
81 | 103 | 18 | 44 | 63 | 59 | (21 | ) | (59 | ) | 7 | |||||||||||||||||||||||||
| 551 | 561 | 18 | 44 | 533 | 517 | (2 | ) | (59 | ) | 3 | ||||||||||||||||||||||||||
|
Total revenues
|
$ | 16,502 | $ | 16,576 | $ | 7,024 | $ | 7,265 | $ | 9,478 | $ | 9,311 | –– | (3 | ) | 2 | ||||||||||||||||||||
|
(a)
|
Our contract manufacturing and bulk pharmaceutical chemical sales organization.
|
|
●
|
lower revenues from Effexor XR, Lipitor, Protonix and Zosyn/Tazocin and lower Alliance revenues, all due to a loss of exclusivity in certain markets,
|
|
●
|
the solid performance from the Prevnar/Prevenar franchise, Lyrica and Enbrel; and
|
|
●
|
revenues from legacy King biopharmaceutical products of approximately $174 million.
|
|
●
|
in the U.S., revenues from biopharmaceutical products decreased 5% in the first quarter of 2011, compared to the same period in 2010, primarily reflecting lower revenues from Effexor XR, Protonix, Zosyn/Tazocin all due to loss of exclusivity, and lower Alliance revenues due to loss of exclusivity of Aricept 5mg and 10mg tablets in November 2010 and lower revenues from Detrol/Detrol LA. 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 $171 million.
|
|
●
|
in our international markets, revenues from biopharmaceutical products increased 1% in the first quarter of 2011, compared to the first quarter of 2010, primarily due to the favorable impact of foreign exchange and the solid operational performance from the Prevnar/Prevenar franchise, Lyrica, Enbrel, Celebrex, Zithromax/Zmax and Alliance revenues. The impact of these favorable factors was partially offset by declines in Lipitor, Xalatan/Xalacom and Effexor XR. International revenues from legacy King products were not significant to our international revenues in the quarter.
|
|
|
During the first quarter of 2011, revenues from international biopharmaceutical products represented 56% of total revenues from biopharmaceutical products, compared to 54% in 2010.
|
|
Three Months Ended
|
||||||||
|
(millions of dollars)
|
April 3,
2011
|
April 4,
2010
|
||||||
|
Medicaid and related state program rebates(a)
|
$ | 407 | $ | 306 | ||||
|
Medicare rebates(a)
|
363 | 276 | ||||||
|
Performance-based contract rebates(a), (b)
|
755 | 649 | ||||||
|
Chargebacks(c)
|
800 | 814 | ||||||
|
Total
|
$ | 2,325 | $ | 2,045 | ||||
|
(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;
|
|
●
|
the impact of increased Medicare rebates due to discounts to Medicare Part D participants who are in the Medicare “Coverage Gap” under the U.S. Healthcare Legislation; and
|
|
●
|
an increase in chargebacks for our branded products as a result of increasing competitive pressures and increasing sales for certain branded products subject to chargebacks,
|
|
●
|
changes in product mix;
|
|
●
|
the impact of decreased Medicare rebates for certain products that have lost exclusivity; and
|
|
●
|
the impact on chargebacks of decreased sales for products that have lost exclusivity during the first quarter of 2011.
|
|
Three Months Ended
|
|||||||||
|
% Change
|
|||||||||
|
(millions of dollars)
|
April 3,
|
From April 4,
|
|||||||
|
Product
|
Primary Indications
|
2011
|
2010
|
||||||
|
Lipitor
|
Reduction of LDL cholesterol
|
$ | 2,385 | (13 | ) | ||||
|
Prevnar/Prevenar 13
|
Vaccine for prevention of invasive pneumococcal disease
|
996 | 248 | ||||||
|
Enbrel(a)
|
Rheumatoid, juvenile rheumatoid and psoriatic arthritis,
plaque psoriasis and ankylosing spondylitis
|
870 | 8 | ||||||
|
Lyrica
|
Epilepsy, post-herpetic neuralgia and diabetic
peripheral neuropathy, fibromyalgia
|
826 | 14 | ||||||
|
Celebrex
|
Arthritis pain and inflammation, acute pain
|
591 | 4 | ||||||
|
Viagra
|
Erectile dysfunction
|
470 | (2 | ) | |||||
|
Xalatan/Xalacom
|
Glaucoma and ocular hypertension
|
392 | (7 | ) | |||||
|
Norvasc
|
Hypertension
|
356 | (3 | ) | |||||
|
Zyvox
|
Bacterial infections
|
319 | 9 | ||||||
|
Sutent
|
Advanced and/or metastatic renal cell carcinoma (mRCC)
and refractory gastrointestinal stromal tumors (GIST)
|
276 | 7 | ||||||
|
Premarin family
|
Menopause
|
235 | (8 | ) | |||||
|
Geodon/Zeldox
|
Schizophrenia; acute manic or mixed episodes
associated with bipolar disorder; maintenance
treatment of bipolar mania
|
232 | (9 | ) | |||||
|
Detrol/Detrol LA
|
Overactive bladder
|
225 | (14 | ) | |||||
|
Genotropin
|
Replacement of human growth hormone
|
209 | 1 | ||||||
|
Effexor XR
|
Depression and certain anxiety disorders
|
204 | (72 | ) | |||||
|
Chantix/Champix
|
An aid to smoking cessation
|
199 | 5 | ||||||
|
Vfend
|
Fungal infections
|
195 | 4 | ||||||
|
Zosyn/Tazocin
|
Antibiotic
|
179 | (32 | ) | |||||
|
BeneFIX
|
Hemophilia
|
164 | 6 | ||||||
|
Prevnar/Prevenar (7-valent)
|
Vaccine for prevention of invasive pneumococcal disease
|
153 | (71 | ) | |||||
|
Caduet
|
Reduction of LDL cholesterol and hypertension
|
142 | 5 | ||||||
|
Zoloft
|
Depression and certain anxiety disorders
|
135 | 13 | ||||||
|
Pristiq
|
Depression
|
129 | 17 | ||||||
|
Zithromax/Zmax
|
Bacterial infections
|
128 | 24 | ||||||
|
Revatio
|
Pulmonary arterial hypertension (PAH)
|
123 | 8 | ||||||
|
Medrol
|
Inflammation
|
121 | 11 | ||||||
|
ReFacto AF/Xyntha
|
Hemophilia
|
117 | 30 | ||||||
|
Aromasin
|
Breast cancer
|
114 | (11 | ) | |||||
|
Aricept(b)
|
Alzheimer’s disease
|
99 | (7 | ) | |||||
|
Cardura
|
Hypertension/Benign prostatic hyperplasia
|
96 | (10 | ) | |||||
|
BMP2
|
Development of bone and cartilage
|
93 | (5 | ) | |||||
|
Fragmin
|
Anticoagulant
|
91 | 1 | ||||||
|
Rapamune
|
Immunosuppressant
|
89 | (2 | ) | |||||
|
Tygacil
|
Antibiotic
|
73 | (13 | ) | |||||
|
Protonix
|
Gastroesophageal reflux disease
|
59 | (63 | ) | |||||
|
Alliance revenues(c)
|
Various
|
884 | (12 | ) | |||||
|
All other biopharmaceutical products
|
Various
|
2,255 | 19 | ||||||
|
(a)
|
Outside the U.S. and Canada.
|
|
(b)
|
Represents direct sales under license agreement with Eisai Co., Ltd.
|
|
(c)
|
Enbrel (in the U.S. and Canada), Aricept, Exforge, Rebif, Spiriva and Metaxalone.
|
|
●
|
Lipitor, for the treatment of elevated LDL cholesterol levels in the blood, is the most widely used branded prescription treatment for lowering cholesterol and the best-selling prescription pharmaceutical product of any kind in the world. Lipitor recorded worldwide revenues of $2.4 billion, or a decrease of 13%, in the first quarter of 2011, compared to the same period in 2010 due to:
|
|
|
o
|
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;
|
|
|
o
|
increased payer pressure worldwide, including the need for flexible rebate policies; and
|
|
|
o
|
slower growth in the lipid-lowering market in the U.S. due, in part, to a slower rate of growth in the Medicare Part D population and, reflecting challenging economic conditions, heightened overall patient cost-sensitivity in the U.S. and adoption of non-prescription treatment options,
|
|
|
o
|
the favorable impact of foreign exchange, which increased revenues by $7 million.
|
|
|
o
|
in the U.S., Lipitor revenues were $1.3 billion in the first quarter of 2011, relatively flat compared to the same period in 2010; and
|
|
|
o
|
in our international markets, Lipitor revenues were $1.1 billion, a decrease of 25%, in the first quarter of 2011, compared to the same period in 2010, primarily due to the loss of exclusivity in several markets in 2010 referred to above. The impact of foreign exchange increased international revenues by 1% in the first quarter of 2011, compared to the same period in 2010.
|
|
●
|
Prevnar/Prevenar 13, is our 13-valent pneumococcal conjugate vaccine for preventing invasive pneumococcal disease in infants and young children. Prevnar/Prevenar 13 recorded an increase in worldwide revenues of 248% in the first quarter of 2011, compared to the same period in 2010. To date, Prevnar/Prevenar 13 has been approved in over 90 countries and launched in over 70 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 rheumatoid arthritis, polyarticular juvenile rheumatoid arthritis, psoriatic arthritis, plaque psoriasis and ankylosing spondylitis, a type of arthritis affecting the spine, recorded an increase in worldwide revenues, excluding the U.S. and Canada, of 8% in the first quarter of 2011, compared to the same period in 2010. Enbrel revenues from the U.S. and Canada are included in Alliance revenues. The approval of competing products for the treatment of psoriasis has increased competition with respect to Enbrel.
|
|
|
Under our co-promotion agreement with Amgen Inc. (Amgen), we and Amgen co-promote Enbrel in the U.S. and Canada and share in the profits from Enbrel sales in those countries, recorded as Alliance revenues. The co-promotion term is scheduled to end in October 2013, and, subject to the terms of the agreement, we are entitled to a royalty stream for 36 months thereafter, which is significantly less than our current share of Enbrel profits from U.S. and Canadian sales. Following the end of the royalty period, we will not be entitled to any further Alliance revenues from Enbrel sales in the U.S. and Canada. Our exclusive rights to Enbrel outside the U.S. and Canada will not be affected by the expiration of the co-promotion agreement with Amgen.
|
|
●
|
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 neuropathic pain, adjunctive treatment of epilepsy and general anxiety disorder (GAD) in certain countries outside the U.S., recorded an increase in worldwide revenues of 14% in the first quarter of 2011, compared to the same period in 2010. Lyrica had a strong operational performance in international markets in the first quarter of 2011, including Japan, where Lyrica was launched in 2010 as the first product approved for the peripheral neuropathic indication, followed by an approval for peripheral neuropathic pain in October. In the U.S., revenues increased 3%, compared to the same period in 2010, and continue to be affected by increased generic competition, 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 other countries, recorded an increase in worldwide revenues of 4% in the first quarter of 2011, compared to the same period in 2010. In the U.S., Celebrex revenues decreased 1% in the first quarter of 2011, compared to the same period in 2010, due to generic competition 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 and one of the world’s most recognized pharmaceutical brands after more than a decade. Viagra worldwide revenues decreased 2% in the first quarter of 2011, compared to the same period in 2010. In the U.S., Viagra revenues decreased 6% in the first quarter of 2011, compared to the same period in 2010. Internationally, Viagra revenues increased 3% in the first quarter of 2011, compared to the same period in 2010, largely due to the favorable impact of foreign exchange. Viagra began facing generic competition in Spain and Finland in December 2009.
|
|
●
|
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 7% in the first quarter of 2011, compared to the same period in 2010. The decrease was due to lower revenues in the U.S., and also lower revenues internationally due to the launch of generic latanoprost in Japan in May 2010 and in Italy in July 2010. We lost exclusivity for Xalatan in the U.S. in March 2011 and we expect to lose exclusivity for Xalatan and Xalacom in the majority of major European markets in July 2011. We are pursuing a pediatric extension for Xalatan in the EU. If we are successful, the exclusivity period for both Xalatan and Xalacom in the majority of major European markets will be extended by six months from July 2011 to January 2012. To date, we have successfully obtained pediatric extensions in ten European countries.
|
|
●
|
Norvasc, for treating hypertension, lost exclusivity in the U.S. and other major markets a few years ago. Norvasc worldwide revenues decreased 3% in the first quarter of 2011, compared to the same period 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 9% in the first quarter of 2011, compared to the same period 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.
|
|
●
|
Sutent is for the treatment of advanced renal cell carcinoma, including metastatic renal cell carcinoma (mRCC), and gastrointestinal stromal tumors (GIST) after disease progression on, or intolerance to, imatinib mesylate. Sutent worldwide revenues increased 7% in the first quarter of 2011, compared to the same period in 2010, due to strong operational performance in international markets. We continue to drive total revenue and prescription growth, supported by cost-effectiveness data and efficacy data in first-line 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 April 3, 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 a decrease in worldwide revenues of 8% in the first quarter of 2011, compared to the same period 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 decreased 9% in the first quarter of 2011, compared to the same period in 2010, due in part to higher rebates in the current year due to the impact of the U.S. Healthcare Legislation, partially offset by moderate growth in the U.S. antipsychotic market and the recent U.S. approval of Geodon for adjunctive bipolar maintenance therapy in adults.
|
|
●
|
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 14% in the first quarter of 2011, compared to the same period in 2010, primarily due to increased competition from other branded medicines and a shift in promotional focus to Toviaz 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 1% in the first quarter of 2011, compared to the same period in 2010.
|
|
●
|
Effexor XR (extended release capsules), an antidepressant for treating adult patients with major depressive disorder, GAD, social anxiety disorder and panic disorder, recorded a decrease in worldwide revenues of 72% in the first quarter of 2011, compared to the same period 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 in the first quarter of 2011, and will continue to have a significant adverse impact on our revenues for Effexor XR.
|
|
●
|
Chantix/Champix is an aid to smoking cessation treatment in adults. Chantix/Champix worldwide revenues increased 5% in the first quarter of 2011, compared to the same period in 2010. Revenues in the first quarter of 2011 were impacted by strong operational performance in international markets and the favorable impact of 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.
|
|
●
|
Vfend is the only branded antifungal agent available in intravenous and oral forms. Vfend worldwide revenues increased 4% in the first quarter of 2011, compared to the same period 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 in February 2011.
|
|
|
In October 2009, we settled a challenge by Mylan, Inc. (Mylan) and its subsidiary, Matrix Laboratories Limited (Matrix), to four of our patents relating to Vfend by entering into an agreement granting Matrix and another subsidiary of Mylan the right to market their voriconazole (generic Vfend) tablet in the U.S. Pursuant to that settlement agreement, Matrix and the other Mylan subsidiary launched their generic voriconazole tablet in the U.S. in February 2011. In addition, the basic patent for Vfend tablets in Brazil expired on January 1, 2011. |
|
●
|
Zosyn/Tazocin, our broad-spectrum intravenous antibiotic, faces generic competition in the U.S. and certain other markets. It recorded a decrease in worldwide revenues of 32% in the first quarter of 2011, compared to the same period in 2010.
|
|
●
|
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 an increase in worldwide revenues of 6% in the first quarter of 2011, compared to the same period in 2010. ReFacto AF/Xyntha recorded an increase in worldwide revenue of 30% in the first quarter of 2011, compared to the same period in 2010.
|
|
●
|
Prevnar/Prevenar (7-valent), our 7-valent pneumococcal conjugate vaccine for preventing invasive pneumococcal disease in infants and young children, recorded a decrease in worldwide revenues of 71% in the first quarter of 2011, compared to the same period in 2010. Certain 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.
|
|
●
|
Caduet is a single-pill therapy combining Norvasc and Lipitor. Caduet worldwide revenues increased 5% in the first quarter of 2011, compared to the same period 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. in November 2011.
|
|
●
|
Pristiq was approved for the treatment of Major Depressive Disorder (MDD) 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, Equador and the Philippines. Pristiq recorded an increase in worldwide revenues of 17% in the first quarter of 2011, compared to the same period in 2010.
|
|
●
|
Revatio, for the treatment of PAH, had an increase in worldwide revenues of 8% in the first quarter of 2011, compared to the same period in 2010, due in part to increased PAH awareness driving earlier diagnosis in the U.S. and EU.
|
|
●
|
Protonix, our proton pump inhibitor for gastroesophageal reflux disease, recorded a decrease in revenues of 63% in the first quarter of 2011, compared to the same period 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.
|
|
●
|
Alliance revenues worldwide decreased 12% in the first quarter of 2011, compared to the same period in 2010, mainly due to the loss of exclusivity for Aricept 5mg and 10mg tablets in the U.S. in November 2010, partially offset by the strong performance of Enbrel in the U.S. and Canada and of Spiriva, as well as the inclusion of sales of Metaxalone, a legacy King product. We expect that the Aricept 23mg tablet will have exclusivity in the U.S. until July 2013.
|
|
Pending U.S. new drug applications (NDA) and supplemental filings:
|
||
|
PRODUCT
|
INDICATION
|
DATE SUBMITTED
|
|
Immediate release oxycodone with Aversion technology (formerly Acurox) (without niacin)
|
Management of moderate-to-severe pain where the use of an opioid analgesic is appropriate
|
December 2010
|
|
Prevnar 13 Adult
|
Prevention of pneumococcal disease in adults 50 years of age and older
|
December 2010
|
|
Sutent
|
Unresectable pancreatic neuroendocrine tumor
|
December 2009
|
|
Taliglucerase alfa
|
Treatment of Gaucher disease
|
December 2009
|
|
Genotropin
|
Replacement of human growth hormone deficiency (Mark VII multidose disposable device)
|
October 2009
|
|
Celebrex
|
Chronic pain
|
August 2009
|
|
Immediate release oxycodone with Aversion technology (formerly Acurox) (with niacin)
|
Management of moderate-to-severe pain where the use of an opioid
analgesic is appropriate
|
December 2008
|
|
Geodon
|
Treatment of bipolar disorder––pediatric filing
|
October 2008
|
|
Remoxy
|
Management of moderate to severe pain when a continuous, around-the-clock opioid analgesic is needed for an extended period of time
|
June 2008
|
|
Spiriva
|
Respimat device for chronic obstructive pulmonary disease
|
November 2007
|
|
Zmax
|
Treatment of bacterial infections––sustained release––acute otitis media (AOM) and sinusitis––pediatric filing
|
November 2006
|
|
Viviant
|
Osteoporosis treatment and prevention
|
June 2006
|
|
Pristiq
|
Vasomotor symptoms of menopause
|
June 2006
|
|
Vfend
|
Treatment of fungal infections––pediatric filing
|
June 2005
|
|
●
|
In 2007, King entered into an agreement with Acura Pharmaceuticals, Inc. (Acura) pursuant to which Acura granted King an exclusive license to develop and commercialize immediate release oxycodone with Aversion technology (formerly Acurox) tablets in the U.S., Canada and Mexico. King and Acura submitted an NDA with the FDA in December 2008 for immediate release oxycodone with Aversion technology (formerly Acurox) with niacin. In June 2009, the FDA issued a “complete response” letter, and in April 2010 an FDA advisory committee determined that it did not have sufficient evidence to support approval of immediate release oxycodone with Aversion technology (formerly Acurox) with niacin. The presence of niacin in immediate release oxycodone with Aversion technology (formerly Acurox) was central to the deliberations. We are evaluating next steps in view of the developments.
|
|
●
|
In December 2010, King and Acura submitted an NDA with the FDA for immediate release oxycodone with Aversion technology (formerly Acurox) without niacin.
|
|
●
|
In 2005, King entered into an agreement with Pain Therapeutics, Inc. (PT) to develop and commercialize Remoxy. In June 2008, King and PT submitted an NDA with the FDA for Remoxy. 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. We currently are seeking to address a specific issue in the manufacturing section of that NDA, and also to assess the potential implications of the FDA’s recent announcement of a class-wide Risk Evaluation and Mitigation Strategies (REMS) proposal for extended-release opioids. These developments could potentially delay the FDA’s decision regarding the Remoxy NDA.
|
|
Regulatory approvals and filings in the EU and Japan:
|
|||
|
PRODUCT
|
DESCRIPTION OF EVENT
|
DATE APPROVED
|
DATE SUBMITTED
|
|
Revatio
|
Approval in the EU for pediatric PAH
|
May 2011
|
—
|
|
Celebrex
|
Application submitted in Japan for treatment of acute pain
|
—
|
March 2011
|
|
Xiapex
|
Approval in the EU for treatment of Dupuytren’s contracture
|
February 2011
|
—
|
|
Prevenar 13 Adult
|
Application submitted in the EU for prevention of
pneumococcal disease in adults 50 years of age and older
|
—
|
December 2010
|
|
Taliglucerase alfa
|
Application submitted in the EU for treatment of Gaucher disease
|
—
|
November 2010
|
|
tafamidis meglumine
|
Application submitted in the EU for TTR-FAP
|
—
|
July 2010
|
|
Macugen
|
Application submitted in the EU for type II variation for treatment
of diabetic macular edema
|
—
|
June 2010
|
|
ELIQUIS (formerly Apixaban)
|
Application submitted in the EU for prevention of venous
thromboembolism
|
—
|
February 2010
|
|
Prevenar 13 Infant
|
Application submitted in Japan for prevention of invasive
pneumococcal disease in infants and young children
|
—
|
December 2009
|
|
Toviaz
|
Application submitted in Japan for overactive bladder
|
—
|
September 2009
|
|
Late-stage clinical trials for additional uses and dosage forms for in-line products :
|
|
|
PRODUCT
|
INDICATION
|
|
Eraxis/Vfend Combination
|
Aspergillosis fungal infections
|
|
Lyrica
|
Epilepsy monotherapy; central neuropathic pain due to spinal cord injury; peripheral neuropathic pain; QD dosing
|
|
Revatio
|
Pediatric PAH
|
|
Sutent
|
Adjuvant renal cell carcinoma
|
|
Torisel
|
Renal cell carcinoma
|
|
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
|
|
Aprela (Bazedoxifene-conjugated estrogens)
|
A tissue-selective estrogen complex for the treatment of menopausal vasomotor symptoms
|
|
Axitinib
|
Oral and selective inhibitor of vascular endothelial growth factor (VEGF) receptor 1, 2, & 3 for the treatment of advanced renal cell carcinoma
|
|
Bapineuzumab
|
A beta amyloid inhibitor for the treatment of Alzheimer’s disease being developed in collaboration with Janssen Alzheimer Immunotherapy Research & Development, LLC (Janssen AI), a subsidiary of Johnson & Johnson
|
|
Bosutinib
|
An Abl and src kinase inhibitor for the treatment of chronic myelogenous leukemia
|
|
Crizotinib (PF-02341066)
|
An oral ALK and c-Met inhibitor for the treatment of advanced non-small-cell lung cancer
|
|
Dimebon (latrepirdine)
|
A novel mitochondrial protectant and enhancer being developed in collaboration with Medivation, Inc., for the treatment of Alzheimer’s disease
|
|
ELIQUIS (formerly Apixaban)
|
For the prevention and treatment of venous thromboembolism and prevention of stroke in patients with atrial fibrillation, which is being developed in collaboration with Bristol-Myers Squibb Company (BMS)
|
|
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
|
|
Moxidectin
|
Treatment of onchocerciasis (river blindness)
|
|
Neratinib
|
A pan-HER inhibitor for the treatment of breast cancer
|
|
PF-0299804
|
A pan-HER tyrosine kinase inhibitor for the treatment of advanced non-small-cell lung cancer
|
|
Tanezumab
|
An anti-nerve growth factor monoclonal antibody for the treatment of pain (on clinical hold)
|
|
Tofacitinib (CP-690,550)
|
A JAK kinase inhibitor for the treatment of rheumatoid arthritis and psoriasis
|
|
●
|
lower purchase accounting adjustments; and
|
|
●
|
lower costs as a result of our cost-reduction initiatives,
|
|
●
|
the addition of King’s manufacturing operations in 2011, and
|
|
●
|
the unfavorable impact of foreign exchange of 2%.
|
|
●
|
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 1%.
|
|
●
|
savings from our cost-reduction initiatives,
|
|
●
|
the addition of legacy King operations.
|
|
●
|
for our cost-reduction initiatives, we typically incur costs 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
|
||||||||
|
(millions of dollars)
|
April 3,
2011
|
April 4,
2010
|
||||||
|
Transaction costs(a)
|
$ | 10 | $ | 9 | ||||
|
Integration costs(b)
|
179 | 208 | ||||||
|
Restructuring charges(c):
|
||||||||
|
Employee termination costs
|
667 | 458 | ||||||
|
Asset impairments
|
25 | 6 | ||||||
|
Other
|
13 | 25 | ||||||
|
Restructuring charges and certain acquisition-related costs
|
894 | 706 | ||||||
|
Additional depreciation––asset restructuring(d):
|
||||||||
|
Cost of sales
|
172 | 13 | ||||||
|
Selling, informational and administrative expenses
|
7 | 60 | ||||||
|
Research and development expenses
|
64 | 20 | ||||||
|
Total additional depreciation––asset restructuring
|
243 | 93 | ||||||
|
Implementation costs(e)
|
||||||||
|
Research and development expenses
|
10 | –– | ||||||
|
Total implementation costs
|
10 | –– | ||||||
|
Total costs associated with cost-reduction initiatives and acquisition activity
|
$ | 1,147 | $ | 799 | ||||
|
(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 April 3, 2011, Employee termination costs represent the expected reduction of the workforce by approximately 53,500 employees, mainly in manufacturing, sales and research, of which approximately 37,900 employees have been terminated as of April 3, 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. These restructuring charges in 2011 are associated with the following: Primary Care operating segment ($46 million), Specialty Care and Oncology operating segment ($35 million), Established Products and Emerging Markets operating segment ($3 million), Animal Health and Consumer Healthcare operating segment ($10 million), Nutrition operating segment ($2 million), Worldwide Research and Development ($422 million) and Corporate ($187 million).
|
|
(d)
|
Additional depreciation––asset restructuring represents the impact of changes in the estimated useful lives of assets involved in restructuring actions related to acquisitions.
|
|
(e)
|
Implementation costs represent external, incremental costs directly related to implementing our non-acquisition-related cost-reduction initiatives.
|
|
Costs Incurred
|
Activity
|
Accrual
|
||||||||||
|
(millions of dollars)
|
2005-2011 |
Through
April 3,
2011(a)
|
As of
April 3,
2011(b)
|
|||||||||
|
Employee termination costs
|
$ | 9,478 | $ | 7,160 | $ | 2,318 | ||||||
|
Asset impairments
|
2,333 | 2,333 | –– | |||||||||
|
Other
|
914 | 822 | 92 | |||||||||
|
Total restructuring charges
|
$ | 12,725 | $ | 10,315 | $ | 2,410 | ||||||
|
(a)
|
Includes adjustments for foreign currency translation.
|
|
(b)
|
Included in Other current liabilities ($1.7 billion) and Other noncurrent liabilities ($700 million).
|
|
●
|
higher charges for legal matters of $364 million, primarily as the result of a $472 million charge related to hormone-replacement therapy litigation (for additional information, see Notes to Condensed Consolidated Financial Statements––Note 14. Legal Proceedings and Contingencies and Part II––Other Information; Item 1. Legal Proceedings, of this Form 10Q); and
|
|
●
|
higher asset impairment charges of $157 million related to an IPR&D compound acquired as part of our acquisition of Wyeth,
|
|
●
|
lower net interest expense of $57 million; and
|
|
●
|
higher royalty-related income.
|
|
●
|
the extension of the U.S. research and development credit, which was signed into law on December 17, 2010;
|
|
●
|
the change in the jurisdictional mix of earnings; and
|
|
●
|
the tax impact of the charges incurred for certain legal matters (see Notes to Condensed Consolidated Financial Statements—Note 14. Legal Proceedings and Contingencies).
|
|
●
|
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
|
||||||||||||
|
(millions of dollars)
|
April 3,
2011
|
April 4,
2010
|
% Incr./
(Decr.)
|
|||||||||
|
Reported net income attributable to Pfizer Inc.
|
$ | 2,222 | $ | 2,026 | 10 | |||||||
|
Purchase accounting adjustments––net of tax
|
1,343 | 2,127 | (37 | ) | ||||||||
|
Acquisition-related costs––net of tax
|
456 | 573 | (20 | ) | ||||||||
|
Discontinued operations––net of tax
|
(10 | ) | (21 | ) | 52 | |||||||
|
Certain significant items––net of tax
|
797 | 157 | * | |||||||||
|
Adjusted income(a)
|
$ | 4,808 | $ | 4,862 | (1 | ) | ||||||
|
(a)
|
The effective tax rate on Adjusted income was 27.9% in the first quarter of 2011, compared with 30.1% in the first quarter of 2010. The decrease in the effective tax rate on Adjusted income was 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 during the first quarter of 2011.
|
|
*
|
Calculation not meaningful.
|
|
Three Months Ended
|
||||||||||||
|
April 3,
2011
|
April 4,
2010
|
% Incr./
(Decr.)
|
||||||||||
|
Earnings per common share––diluted:
|
||||||||||||
|
Reported net income attributable to Pfizer Inc. common shareholders
|
$ | 0.28 | $ | 0.25 | 12 | |||||||
|
Purchase accounting adjustments––net of tax
|
0.17 | 0.26 | (35 | ) | ||||||||
|
Acquisition-related costs––net of tax
|
0.05 | 0.07 | (29 | ) | ||||||||
|
Discontinued operations––net of tax
|
— | — | — | |||||||||
|
Certain significant items––net of tax
|
0.10 | 0.02 | * | |||||||||
|
Adjusted net income attributable to Pfizer Inc. common shareholders
|
$ | 0.60 | $ | 0.60 | — | |||||||
|
*
|
Calculation not meaningful.
|
|
Three Months Ended
|
||||||||
|
(millions of dollars)
|
April 3,
2011
|
April 4,
2010
|
||||||
|
Purchase accounting adjustments:
|
||||||||
|
Amortization, depreciation and other(a)
|
$ | 1,354 | $ | 1,415 | ||||
|
Cost of sales, primarily related to fair value adjustments of acquired inventory
|
431 | 1,350 | ||||||
|
In-process research and development charges(b)
|
— | 74 | ||||||
|
Total purchase accounting adjustments, pre-tax
|
1,785 | 2,839 | ||||||
|
Income taxes
|
(442 | ) | (712 | ) | ||||
|
Total purchase accounting adjustments––net of tax
|
1,343 | 2,127 | ||||||
|
Acquisition-related costs:
|
||||||||
|
Transaction costs(c)
|
10 | 9 | ||||||
|
Integration costs(c)
|
179 | 208 | ||||||
|
Restructuring charges(c)
|
203 | 489 | ||||||
|
Additional depreciation––asset restructuring(d)
|
183 | 93 | ||||||
|
Total acquisition-related costs, pre-tax
|
575 | 799 | ||||||
|
Income taxes
|
(119 | ) | (226 | ) | ||||
|
Total acquisition-related costs––net of tax
|
456 | 573 | ||||||
|
Discontinued operations:
|
||||||||
|
Income from operations––net of tax
|
(10 | ) | (19 | ) | ||||
|
Gain on sale of discontinued operations
|
— | (2 | ) | |||||
|
Total discontinued operations––net of tax
|
(10 | ) | (21 | ) | ||||
|
Certain significant items:
|
||||||||
|
Restructuring charges––R&D productivity initiative(e)
|
502 | — | ||||||
|
Implementation costs and additional depreciation––asset restructuring––R&D productivity initiative(f)
|
70 | — | ||||||
|
Certain legal matters(g)
|
472 | 142 | ||||||
|
Certain asset impairment charges(g)
|
157 | — | ||||||
|
Other
|
7 | 41 | ||||||
|
Total certain significant items, pre-tax
|
1,208 | 183 | ||||||
|
Income taxes
|
(411 | ) | (26 | ) | ||||
|
Total certain significant items––net of tax
|
797 | 157 | ||||||
|
Total purchase accounting adjustments, acquisition-related costs,
discontinued operations and certain significant items––net of tax
|
$ | 2,586 | $ | 2,836 | ||||
|
(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.
|
|
(d)
|
Represents the impact of changes in estimated useful lives of assets involved in restructuring actions related to acquisitions. For the first quarter of 2011, included in Cost of sales ($172 million), Selling, informational and administrative expenses ($7 million), and Research and development expenses ($4 million). For the first quarter of 2010, included in Cost of sales ($13 million), Selling, informational and administrative expenses ($60 million), and Research and development expenses ($20 million).
|
|
(e)
|
Included in Restructuring charges and certain acquisition-related costs (see Notes to Condensed Consolidated Financial Statements—Note 5.Costs Associated with Cost-Reduction Initiatives and Acquisition Activity).
|
|
(f)
|
For the first quarter of 2011, included in Research and development expenses.
|
|
(g)
|
Included in Other deductions––net.
|
|
Three Months Ended
|
||||||||||||
|
(millions of dollars)
|
April 3,
2011
|
April 4,
2010
|
Incr./
(Decr.)
|
|||||||||
|
Cash provided by (used in) operating activities
|
$ | 4,642 | $ | (6,360 | ) | 11,002 | ||||||
|
Cash provided by investing activities
|
725 | 9,394 | (8,669 | ) | ||||||||
|
Cash used in financing activities
|
(6,404 | ) | (3,211 | ) | (3,193 | ) | ||||||
|
●
|
the non-recurrence of income tax payments made in the first quarter of 2010 of approximately $10.5 billion, 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 $4.0 billion in the first quarter of 2011, which were used to finance our acquisition of King, compared to net proceeds from redemption and sales of investments of $9.5 billion in the first quarter of 2010, which were used for income tax payments in the first quarter of 2010, and
|
|
●
|
cash paid of $3.2 billion, net of cash acquired, for our acquisition of King in the first quarter of 2011.
|
|
●
|
net repayments of borrowings of $3.4 billion in the first quarter of 2011, compared to net repayments of borrowings of $1.8 billion in the first quarter of 2010;
|
|
●
|
purchases of common stock of $1.4 billion in the first quarter of 2011, compared to no purchases in the first quarter of 2010; and
|
|
●
|
dividend payments of $1.6 billion in the first quarter of 2011, compared to $1.4 billion in the first quarter of 2010.
|
|
(millions of dollars)
|
April 3,
2011
|
Dec. 31,
2010
|
||||||
|
Financial assets:
|
||||||||
|
Cash and cash equivalents
|
$ | 730 | $ | 1,735 | ||||
|
Short-term investments
|
23,279 | 26,277 | ||||||
|
Short-term loans
|
406 | 467 | ||||||
|
Long-term investments and loans
|
9,811 | 9,747 | ||||||
|
Total financial assets
|
$ | 34,226 | $ | 38,226 | ||||
|
Debt:
|
||||||||
|
Short-term borrowings, including current portion of long-term debt
|
$ | 6,093 | $ | 5,603 | ||||
|
Long-term debt
|
35,308 | 38,410 | ||||||
|
Total debt
|
$ | 41,401 | $ | 44,013 | ||||
|
Net financial liabilities
|
$ | (7,175 | ) | $ | (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 $5 billion and $7 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)
|
April 3,
2011
|
Dec. 31,
2010
|
||||||
|
Cash and cash equivalents and short-term investments and loans(a)
|
$ | 24,415 | $ | 28,479 | ||||
|
Working capital(b)
|
$ | 29,073 | $ | 32,377 | ||||
|
Ratio of current assets to current liabilities
|
2.00:1
|
2.13:1
|
||||||
|
Shareholders’ equity per common share(c)
|
$ | 11.33 | $ | 10.96 | ||||
|
(a)
|
See Notes to Condensed Consolidated Financial Statements––Note 9B. Financial Instruments: Investments in Debt and Equity Securities for a description of assets held, and also see Note 9E. Financial Instruments: Credit Risk 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 $1.4 billion as of April 3, 2011 and December 31, 2010. Working capital also includes liabilities of discontinued operations of $182 million as of April 3, 2011and $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 drug 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. 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;
|
|
●
|
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 and the risk of an adverse decision or settlement 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;
|
|
●
|
Our ability and the ability of Kohlberg Kravis Roberts & Co. L.P. (KKR) to satisfy the conditions to closing our sale of Capsugel to KKR; and
|
|
●
|
Impact of acquisitions, divestitures, restructurings, product recalls and 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 and King; (iii) our ability to realize projected benefits of our cost-reduction initiatives, including those related to the Wyeth integration and to our research and development function; and (iv) the impact of any strategic actions that we may take following the completion of our current review of our business portfolio.
|
|
●
|
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 all asbestos-related claims against Pfizer Inc. from Ad Hoc Committee claimants holding $500 million in the aggregate of claims;
|
|
●
|
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 all 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; 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.
|
|
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)
|
||||||||||||
|
January 1, 2011, through January 30, 2011
|
63,936 | $ | 18.05 | –– | 4,034,050,592 | |||||||||||
|
January 31, 2011, through February 27, 2011
|
21,872,589 | $ | 19.04 | 20,990,385 | 8,634,053,835 | |||||||||||
|
February 28, 2011, through April 3, 2011
|
55,612,894 | $ | 19.60 | 52,485,700 | 7,604,136,549 | |||||||||||
|
Total
|
77,549,419 | $ | 19.44 | 73,476,085 | ||||||||||||
|
(a)
|
On January 23, 2008, we announced that the Board of Directors 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 which, together with the balance remaining under the 2008 Stock Purchase Plan, increased our total authorization to $9 billion.
|
|
(b)
|
In addition to purchases under the 2008 Stock Repurchase Plan, these columns reflect the following transactions during the fiscal first quarter of 2011: (i) the surrender to Pfizer of 3,790,560 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 282,774 shares of common stock to satisfy tax withholding obligations in connection with the vesting of performance-contingent share awards issued to employees.
|
|
1) Exhibit 10.1
|
Offer letter to G. Mikael Dolsten dated April 6, 2009
|
|
|
2) Exhibit 10.2
|
Offer letter to Geno J. Germano dated April 6, 2009
|
|
|
3) Exhibit 12
|
-
|
Computation of Ratio of Earnings to Fixed Charges
|
|
4) Exhibit 15
|
-
|
Accountants’ Acknowledgement
|
|
5) Exhibit 31.1
|
-
|
Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
6) Exhibit 31.2
|
-
|
Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
7) 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
|
|
8) 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
|
|
9) 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: May 12, 2011
|
/s/ Loretta V. Cangialosi
|
|
Loretta V. Cangialosi, Senior Vice President and
Controller
(Principal Accounting Officer and
Duly Authorized Officer)
|