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(a)	Excludes amortization of intangible assets, except as disclosed in Note 9A. Identifiable Intangible Assets and Goodwill:Identifiable Intangible Assets.

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(a)	Reclassified into Discontinued operations—net of tax in the condensed consolidated statements of income.

(b)	Reclassified into Other (income)/deductions—net in the condensed consolidated statements of income.

(c)	Generally reclassified, as part of net periodic pension cost, into Cost of sales, Selling, informational and administrative expenses, and/or Research and development expenses, as appropriate, in the condensed consolidated statements of income. For additional information, see Note 10. Pension and Postretirement Benefit Plans.

(d)	See Note 5C. Tax Matters: Tax Provision/(Benefit) on Other Comprehensive Loss.

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•	Quoted prices for identical assets or liabilities in active markets (Level 1 inputs).

•	Quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are directly or indirectly observable, or inputs that are derived principally from, or corroborated by, observable market data by correlation or other means (Level 2 inputs).

•	Unobservable inputs that reflect estimates and assumptions (Level 3 inputs).

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In connection with acquisition activity, we typically incur costs associated with executing the transactions, integrating the acquired operations (which may include expenditures for consulting and the integration of systems and processes), and restructuring the combined company (which may include charges related to employees, assets and activities that will not continue in the combined company); and

•	In connection with our cost-reduction/productivity initiatives, we typically incur costs and charges associated with site closings and other facility rationalization actions, workforce reductions and the expansion of shared services, including the development of global systems.

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Manufacturing plant network rationalization and optimization, where execution timelines are necessarily long. Our plant network strategy is expected to result in the exit of six sites over the next several years. In connection with these activities, during 2014-2016, we expect to incur costs of approximately $300 million associated with prior acquisition activity and costs of approximately $1.5 billion associated with new non-acquisition-related cost-reduction initiatives. Through March 29, 2015, we incurred approximately $205 million and $293 million, respectively, associated with these initiatives.

•

New global commercial structure reorganization, which primarily includes the streamlining of certain functions, the realignment of regional locations and colleagues to support the businesses, as well as implementing the necessary system changes to support future reporting requirements. In connection with this reorganization, during 2014-2016, we expect to incur costs of approximately $300 million. Through March 29, 2015, we incurred approximately $179 million associated with this reorganization.

•	Other new cost-reduction/productivity initiatives, primarily related to commercial property rationalization and consolidation. In connection with these cost-reduction activities, during 2014-2016, we expect to incur costs of approximately $850 million. Through March 29, 2015, we incurred approximately $231 million associated with these initiatives.

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(a)	In the three months ended March 29, 2015, Employee terminations represent the expected reduction of the workforce by approximately 200 employees, mainly in manufacturing and sales.

•	the Global Innovative Pharmaceutical segment (GIP) ($12 million); the Global Vaccines, Oncology and Consumer Healthcare segment (VOC) ($13 million); the Global Established Pharmaceutical segment (GEP) ($10 million); Worldwide Research and Development and Medical ($12 million); manufacturing operations ($22 million income); and Corporate ($18 million).

•	the Global Innovative Pharmaceutical segment (GIP) ($2 million); the Global Established Pharmaceutical segment (GEP) ($7 million); Worldwide Research and Development and Medical ($1 million); manufacturing operations ($26 million); and Corporate ($4 million).

(b)	Transaction costs represent external costs directly related to acquired businesses and primarily include expenditures for banking, legal, accounting and other similar services.

(c)	Integration costs represent external, incremental costs directly related to integrating acquired businesses, and primarily include expenditures for consulting and the integration of systems and processes.

(d)	Additional depreciation––asset restructuring represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.

(e)	Implementation costs represent external, incremental costs directly related to implementing our non-acquisition-related cost-reduction/productivity initiatives.

(a)	Included in Other current liabilities ($735 million) and Other noncurrent liabilities ($431 million).

(b)	Includes adjustments for foreign currency translation.

(c)	Included in Other current liabilities ($648 million) and Other noncurrent liabilities ($398 million).

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(a)	Interest expense decreased in the first quarter of 2015, primarily due to lower interest rates on new fixed rate debt added in the second quarter of 2014 and the benefit of the effective conversion of some fixed-rate liabilities to floating-rate liabilities.

(b)	Royalty-related income decreased in the first quarter of 2015, primarily due to a decrease in royalties earned on Amgen Inc.'s sales of Enbrel in the U.S. and Canada due to a decrease in the royalty rate per the terms of the collaboration agreement.

(c)	In the first quarter of 2014, primarily includes approximately $620 million for Neurontin-related matters (including off-label promotion actions and antitrust actions) and approximately $50 million for an Effexor-related matter.

(d)

In the first quarter of 2015, primarily includes gains on sales/out-licensing of product and compound rights (approximately $45 million) and gains on sales of investments in equity securities (approximately $120 million). In the first quarter of 2014, primarily includes gains on sales/out-licensing of product and compound rights (approximately $70 million) and gains on sales of investments in equity securities (approximately $95 million).

(e)

In the first quarter of 2014, includes an intangible asset impairment charge of $114 million, virtually all of which relates to an in-process research and development (IPR&D) compound for the treatment of skin fibrosis. The intangible asset impairment charge for the first quarter of 2014 is associated with Worldwide Research and Development and reflects, among other things, the impact of changes to the development program.

(f)	In the first quarter of 2015 and 2014, represents expenses for planning and implementing changes to our infrastructure to align our operations and reporting for our business segments established in 2014.

•	a decline in favorable benefits associated with the resolution of certain tax positions pertaining to prior years, primarily with various foreign tax authorities, and the expiration of certain statutes of limitations,

•	the favorable change in the jurisdictional mix of earnings as a result of operating fluctuations in the normal course of business.

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•	With respect to Pfizer Inc., tax years 2009-2013 are currently under audit. Tax years 2014 and 2015 are open, but not under audit. All other tax years are closed.

(a)	Taxes are not provided for foreign currency translation adjustments relating to investments in international subsidiaries that will be held indefinitely.

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(a)	Amounts do not include foreign currency translation adjustments attributable to noncontrolling interests of $16 million loss for the first three months of 2015.

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(a)	We use a market approach in valuing financial instruments on a recurring basis. For additional information, see Note 1C. All of our financial assets and liabilities measured at fair value on a recurring basis use Level 2 inputs in the calculation of fair value, except less than 1% that use Level 1 inputs.

(b)	Trading securities are equity securities as of March 27, 2015, and debt and equity securities as of December 31, 2014, held in trust for benefits attributable to the former Pharmacia Savings Plus Plan.

(c)	Gross unrealized gains and losses are not significant.

(d)	Designated as hedging instruments, except for certain contracts used as offsets; namely, foreign currency forward-exchange contracts with fair values of $114 million as of March 29, 2015; and foreign currency forward-exchange contracts with fair values of $159 million as of December 31, 2014.

(e)

The differences between the estimated fair values and carrying values of held-to-maturity debt securities, private equity securities at cost and short-term borrowings not measured at fair value on a recurring basis were not significant as of March 29, 2015 or December 31, 2014. The fair value measurements of our held-to-maturity debt securities and our short-term borrowings are based on Level 2 inputs, using a market approach. The fair value measurements of our private equity securities carried at cost are based on Level 3 inputs.

(f)	Our private equity securities represent investments in the life sciences sector.

(g)

Designated as hedging instruments, except for certain contracts used as offsets; namely, foreign currency swaps with fair values of $233 million and foreign currency forward-exchange contracts with fair values of $59 million as of March 29, 2015; and foreign currency swaps with fair values of $121 million and foreign currency forward-exchange contracts with fair values of $54 million as of December 31, 2014.

(h)	Some carrying amounts may include adjustments for discount or premium amortization or for the effect of hedging the interest rate fair value risk associated with certain financial liabilities by interest rate swaps.

(i)	Includes foreign currency debt with fair values of $557 million as of March 29, 2015 and $560 million as of December 31, 2014, which are used as hedging instruments.

(j)	The fair value of our long-term debt (not including the current portion of long-term debt) was $34.8 billion as of March 29, 2015 and $36.6 billion as of December 31, 2014. The fair value measurements for our long-term debt are based on Level 2 inputs, using a market approach. Generally, the

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(a)	As of March 29, 2015, derivative instruments at fair value include interest rate swaps ($1 million), foreign currency swaps ($500 million) and foreign currency forward-exchange contracts ($572 million) and, as of December 31, 2014, include interest rate swaps ($34 million), foreign currency swaps ($494 million) and foreign currency forward-exchange contracts ($531 million).

(b)	As of March 29, 2015, derivative instruments at fair value include interest rate swaps ($934 million), foreign currency swaps ($76 million) and foreign currency forward-exchange contracts ($22 million) and, as of December 31, 2014, include interest rate swaps ($767 million), foreign currency swaps ($99 million) and foreign currency forward-exchange contracts ($15 million).

(c)	As of March 29, 2015, derivative instruments at fair value include interest rate swaps ($1 million), foreign currency swaps ($33 million) and foreign currency forward-exchange contracts ($140 million) and, as of December 31, 2014, include interest rate swaps ($1 million), foreign currency swaps ($13 million) and foreign currency forward-exchange contracts ($78 million).

(d)	As of March 29, 2015, derivative instruments at fair value include interest rate swaps ($71 million), foreign currency swaps ($1.3 billion) and foreign currency forward-exchange contracts ($1 million) and, as of December 31, 2014, include interest rate swaps ($16 million) and foreign currency swaps ($581 million).

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(a)	Issued by governments, government agencies or supranational entities, as applicable, all of which are investment-grade.

(b)	Issued by a diverse group of corporations, largely consisting of financial institutions, virtually all of which are investment-grade.

(c)

Includes loan-backed, receivable-backed, and mortgage-backed securities, all of which are investment-grade and in senior positions in the capital structure of the security. Loan-backed securities are collateralized by senior secured obligations of a diverse pool of companies or student loans, and receivable-backed securities are collateralized by credit cards receivables. Mortgage-backed securities are collateralized by diversified pools of residential and commercial mortgages.

(d)	Involving U.S. securities.

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(a)	OID = Other (income)/deductions—net, included in Other (income)/deductions—net in the condensed consolidated statements of income. OCI = Other comprehensive income/(loss), included in the condensed consolidated statements of comprehensive income.

(b)	Also, includes gains and losses attributable to derivative instruments designated and qualifying as fair value hedges, as well as the offsetting gains and losses attributable to the hedged items in such hedging relationships.

(c)	There was no significant ineffectiveness for any period presented.

(d)

For derivative financial instruments in cash flow hedge relationships, the effective portion is included in Other comprehensive loss––Unrealized holding losses on derivative financial instruments, net. 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 loss––Foreign currency translation adjustments.

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(a)	Included in Other noncurrent assets. There are no recoverability issues associated with these amounts.

(a)	The decrease in identifiable intangible assets, less accumulated amortization, is primarily related to amortization, partially offset by assets acquired as part of the acquisition of Baxter's portfolio of marketed vaccines. For information about the assets acquired as part of the acquisition of Baxter's portfolio of marketed vaccines, see Note 2A.

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(a)	Primarily reflects the impact of foreign exchange.

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(a)

The increase in net periodic benefit costs for the three months ended March 29, 2015, compared to the three months ended March 30, 2014, for our U.S. qualified pension plans was primarily driven by (i) the increase in the amounts amortized for actuarial losses resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation (which increased the amount of deferred actuarial losses) and, to a lesser extent, a 2014 change in mortality assumptions (reflecting a longer life expectancy for plan participants), and (ii) higher settlement activity. The aforementioned increases were partially offset by (i) a greater expected return on plan assets resulting from an increased plan asset base due to a voluntary contribution of $1.0 billion made at the beginning of January 2015, which in turn was partially offset by a decrease in the expected rate of return on plan assets from 8.5% to 8.25%, and (ii) lower interest costs resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation.

(b)

The increase in net periodic benefit costs for the three months ended March 29, 2015, compared to the three months ended March 30, 2014, for our U.S. supplemental (non-qualified) pension plans was primarily driven by (i) the increase in the amounts amortized for actuarial losses resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation and, to a lesser extent, a 2014 change in mortality assumptions (reflecting a longer life expectancy for plan participants), and (ii) higher settlement activity.

(c)

The decrease in net periodic benefit costs for the three months ended March 29, 2015, compared to the three months ended March 30, 2014, for our international pension plans was primarily driven by (i) the decrease in interest cost resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation, (ii) a decrease in service cost related to changes in actuarial assumptions (lower inflation and lower rate of wage increases) and the U.K. pension plan freeze in 2014, which offset the impact of the decrease in 2014, in the discount rate used to determine the benefit obligation (the effect of which is an increase in service costs). The aforementioned decreases to net periodic benefit costs were partially offset by (i) a decrease in the expected return on plan assets due to a lower expected rate of return on plan assets and (ii) an increase in the amounts amortized for actuarial losses resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation.

(d)

The decrease in net periodic benefit costs for the three months ended March 29, 2015, compared to the three months ended March 30, 2014, for our postretirement plans was primarily driven by (i) the increase in the amounts amortized for prior service credits and (ii) an increase in curtailment gain resulting from the implementation of changes related to the employer group waiver plan, which went into effect on January 1, 2015, as well as (iii) a decrease in interest cost resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation. The aforementioned decreases were partially offset by an increase in actuarial losses resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation.

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(a)	Contributions to the postretirement plans were offset by reimbursements of approximately $133 million received for eligible 2014 prescription expenses for certain retirees.

(b)

Contributions expected to be made for 2015 are inclusive of amounts contributed during the three months ended March 29, 2015, including the $1.0 billion voluntary contribution that was made in January 2015 for the U.S. Qualified plan. The U.S. supplemental (non-qualified) pension plan, international pension plan and the postretirement plan contributions from our general assets include direct employer benefit payments.

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(a)	These common stock equivalents were outstanding for the three months ended March 29, 2015 and March 30, 2014, but were not included in the computation of diluted EPS for those periods because their inclusion would have had an anti-dilutive effect.

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Patent litigation, which typically involves challenges to the coverage and/or validity of our patents on various products, processes or dosage forms. We are the plaintiff in the vast majority of these actions. An adverse outcome in actions in which we are the plaintiff could result in a loss of patent protection for the drug at issue, a significant loss of revenues from that drug and impairments of any associated assets.

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•	Product liability and other product-related litigation, which can include personal injury, consumer, off-label promotion, securities-law, antitrust and breach of contract claims, among others, often involves highly complex issues relating to medical causation, label warnings and reliance on those warnings, scientific evidence and findings, actual, provable injury and other matters.

•	Commercial and other matters, which can include merger-related and product-pricing claims and environmental claims and proceedings, can involve complexities that will vary from matter to matter.

•	Government investigations, which often are related to the extensive regulation of pharmaceutical companies by national, state and local government agencies in the U.S. and in other countries.

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•	Personal Injury Actions

•	Antitrust Actions

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•	Whistleblower Action

•	Antitrust Actions

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•	Personal Injury Actions

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Global Innovative Pharmaceutical segment––GIP is focused on developing, registering and commercializing novel, value-creating medicines that significantly improve patients’ lives. These therapeutic areas include inflammation, cardiovascular/metabolic, neuroscience and pain, rare diseases and women’s/men’s health and include leading brands, such as Xeljanz, Eliquis and Lyrica (U.S., Japan). GIP has a pipeline of medicines in inflammation, cardiovascular/metabolic disease, neuroscience and pain, and rare diseases.

•

Global Vaccines, Oncology and Consumer Healthcare segment––VOC focuses on the development and commercialization of vaccines and products for oncology and consumer healthcare. Consumer Healthcare manufactures and markets several well known, OTC products. Each of the three businesses in VOC operates as a separate, global business with distinct specialization in terms of the science and market approach necessary to deliver value to consumers and patients.

•	Global Established Pharmaceutical segment––GEP includes the brands that have lost market exclusivity and, generally, the mature, patent-protected products that are expected to lose exclusivity through 2015 in most major markets and, to a much smaller extent, generic pharmaceuticals. Additionally, GEP includes our sterile injectable products and biosimilar development portfolio.

•

Worldwide Research and Development (WRD), which is generally responsible for research projects until proof-of-concept is achieved and then for transitioning those projects to the appropriate operating segment for possible clinical and commercial development. R&D spending may include upfront and milestone payments for intellectual property rights. This organization also has responsibility for certain science-based and other platform-services organizations, which provide technical expertise and other services to the various R&D projects. WRD is also responsible for facilitating all regulatory submissions and interactions with regulatory agencies, including all safety-event activities.

•

Pfizer Medical, which is responsible for the provision of medical information to healthcare providers, patients and other parties, transparency and disclosure activities, clinical trial results publication, grants for healthcare quality improvement and medical education, partnerships with global public health and medical associations, regulatory inspection readiness reviews, internal audits of Pfizer-sponsored clinical trials and internal regulatory compliance processes.

•	Corporate, representing platform functions (such as worldwide technology, global real estate operations, legal, finance, human resources, worldwide public affairs, compliance and worldwide procurement) and certain compensation and other corporate costs, such as interest income and expense, and gains and losses on investments.

•	Other unallocated costs, representing overhead expenses associated with our manufacturing and commercial operations not directly attributable to an operating segment.

•

Certain transactions and events such as (i) purchase accounting adjustments, where we incur expenses associated with the amortization of fair value adjustments to inventory, intangible assets and property, plant and equipment; (ii) acquisition-related costs, where we incur costs for executing the transaction, integrating the acquired operations and restructuring the combined company; and (iii) certain significant items, which include non-acquisition-related restructuring costs, as well as costs incurred for legal settlements, asset impairments and disposals of assets or businesses, including, as applicable, any associated transition activities.

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(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 costs managed by our Worldwide Research and Development organization and our Pfizer Medical organization.

(c)	For a description, see the “Other Costs and Business Activities” section above.

(d)	Certain significant items are substantive, unusual items that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis.

(a)	Developed Europe region includes the following markets: Western Europe, Finland and the Scandinavian countries. Revenues denominated in euros were $1.8 billion in the first quarter of 2015 and $2.2 billion in the first quarter of 2014.

(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, the Middle East, Eastern Europe, Africa, Turkey and Central Europe.

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(a)	Indicates the business to which the revenues relate. GIP = the Global Innovative Pharmaceutical segment; V = the Global Vaccines

(b)	In the first quarter of 2015, all revenues were composed of Prevnar 13/Prevenar 13. In the first quarter of 2014, revenues were composed of the Prevnar family of products, which included Prevnar 13/Prevenar 13 and, to a much lesser extent, Prevenar (7-valent).

(c)	Lyrica revenues from all of Europe are included in GEP. All other Lyrica revenues are included in GIP.

(d)	Viagra revenues from the U.S. and Canada are included in GIP. All other Viagra revenues are included in GEP.

(e)	Includes Eliquis (GIP), Rebif (GIP), Spiriva (GEP) and Aricept (GEP).

(f)	Other includes revenues generated from Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical sales organization, and revenues related to our transitional manufacturing and supply agreements with Zoetis.

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•	the performance of certain key products in developed markets, including Prevnar 13 and Eliquis, as well as Lyrica, Nexium 24HR, Xeljanz and Viagra primarily in the U.S., and the launch of Ibrance (palbociclib) in the U.S. in February 2015 (collectively, up approximately $800 million); and

•	a 12% operational increase in revenues in emerging markets, reflecting continued strong operational growth from Prevnar 13, Lipitor, Viagra and Norvasc (collectively, up approximately $160 million),

•	the loss of exclusivity and immediate multi-source generic competition for Celebrex in the U.S. in December 2014 (down approximately $380 million);

•	the loss of exclusivity for Zyvox IV, Rapamune, Aricept in Canada, Lyrica (GEP), Viagra (GEP), and Inspra (collectively, down $165 million);

•	the loss of exclusivity for certain other products and the performance of certain other products such as Lipitor in developed markets and Enbrel internationally (collectively, down approximately $130 million); and

•	the termination of the Spiriva co-promotion collaboration in certain countries (down approximately $70 million).

•	lower legal charges (down $694 million) (see the “Costs and Expenses––Other (Income)/Deductions––Net” section of this MD&A and Notes to Condensed Consolidated Financial Statements––Note 4. Other (Income)/Deductions––Net);

•	lower cost of sales (down $207 million) (see also the “Costs and Expenses––Cost of Sales” section of this MD&A);

•	lower amortization of intangible assets (down $177 million) (see also the “Costs and Expenses––Amortization of Intangible Assets ” section of this MD&A); and

•	lower asset impairments (down $115 million) (see also the “Costs and Expenses––Other (Income)/Deductions––Net” section of this MD&A and Notes to Condensed Consolidated Financial Statements––Note 4. Other (Income)/Deductions––Net),

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•	higher research and development expenses (up $262 million) (see also the “Costs and Expenses––Research and Development (R&D) Expenses” section of this MD&A);

•	a higher effective tax rate (up 2.5 percentage points to 22.9%) (see also the “Provision for Taxes on Income” section of this MD&A and Notes to Condensed Consolidated Financial Statements––Note 5. Tax Matters);

•	higher charges for business and legal entity alignment activities (up $72 million) (see also the “Costs and Expenses––Other (Income)/Deductions––Net” section of this MD&A and Notes to Condensed Consolidated Financial Statements––Note 4. Other (Income)/Deductions––Net); and

•	higher selling, informational and administrative expenses (up $64 million) (see also the “Costs and Expenses––Selling, Information and Administrative Expenses (SI&A) Expenses” section of this MD&A).

•	$233 million in the first quarter of 2015 and $176 million in the first quarter of 2014 recorded as a reduction to Revenues, related to the higher, extended and expanded rebate provisions and the Medicare “coverage gap” discount provision; and

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$32 million of expense in the first quarter of 2015 and $29 million of income in the first quarter of 2014 recorded in Selling, informational and administrative expenses, related to the 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 income in the first quarter of 2014 reflected a favorable true-up associated with the final 2013 invoice received from the federal government, which reflected a lower share than that of the initial 2013 invoice.

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Sustainable Growth Rate Replacement—Until recently the Medicare physician payment formula known as the Sustainable Growth Rate (SGR) was annually overridden by Congressional action because it would have led to dramatic decreases in physician payment. On April 16, 2015, a permanent replacement for the SGR, the Medicare Access and Children's Health Insurance Program Reauthorization Act of 2015, was signed into law. We do not believe the new payment methodology will pose a risk to Pfizer’s revenues or that the offsets identified to fund the replacement will have any direct impact on our business.

•	Deficit Reduction—Any significant spending reductions affecting Medicare, Medicaid or other publicly funded or subsidized health programs that may be implemented, and/or any significant additional taxes or fees that may be imposed on us, as part of any broad deficit-reduction effort could have an adverse impact on our results of operations.

•

We believe that patients, who are experiencing increases in co-pays and restrictions on access to medicines as payers seek to control costs, sometimes switch to generic products, delay treatments, skip doses or use less effective treatments. We are exposed to negative pricing pressure in various markets around the world. The U.S. has highly competitive insurance markets, and Europe, Japan, China, Canada, South Korea and a number of other international markets have government-mandated reductions in prices and access restrictions for certain biopharmaceutical products to control costs for the government-sponsored healthcare system, particularly under recent global pressures. Furthermore, some government agencies and third-party payers use health technology assessments in ways that, at times, lead to restricted access to and lower prices for new medicines.

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•	We continue to monitor developments regarding government and government agency receivables in several European markets where economic conditions remain challenging and uncertain. For further information about our Accounts Receivable, see the “Analysis of Financial Condition, Liquidity and Capital Resources” section of this MD&A.

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Significant portions of our revenues and earnings, as well as our substantial international assets, are exposed to changes in foreign exchange rates. We seek to manage our foreign exchange risk in part through operational means, including managing same-currency revenues in relation to same-currency costs and same-currency assets in relation to same-currency liabilities. Depending on market conditions, foreign exchange risk also is managed through the use of derivative financial instruments and foreign currency debt. As we operate in multiple foreign currencies, including the euro, the Japanese yen, the Chinese renminbi, the U.K. pound, the Canadian dollar and approximately 100 other currencies, changes in those currencies relative to the U.S. dollar will impact our revenues and expenses. If the U.S. dollar were to weaken against another currency, assuming all other variables remained constant, our revenues would increase, having a positive impact on earnings, and our overall expenses would increase, having a negative impact on earnings. Conversely, if the U.S. dollar were to strengthen against another currency, assuming all other variables remained constant, our revenues would decrease, having a negative impact on earnings, and our overall expenses would decrease, having a positive impact on earnings. Therefore, significant changes in foreign exchange rates can impact our results and our financial guidance.

•	Global Innovative Pharmaceutical segment––GIP is focused on developing, registering and commercializing novel, value-creating medicines that significantly improve patients’ lives. These therapeutic areas include inflammation, cardiovascular/metabolic, neuroscience and pain, rare diseases and women’s/men’s health and include leading brands, such as Xeljanz,

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Global Vaccines, Oncology and Consumer Healthcare segment––VOC focuses on the development and commercialization of vaccines and products for oncology and consumer healthcare. Consumer Healthcare manufactures and markets several well known, over-the-counter (OTC) products. Each of the three businesses in VOC operates as a separate, global business with distinct specialization in terms of the science and market approach necessary to deliver value to consumers and patients.

•	Global Established Pharmaceutical segment––GEP includes the brands that have lost market exclusivity and, generally, the mature, patent-protected products that are expected to lose exclusivity through 2015 in most major markets and, to a much smaller extent, generic pharmaceuticals. Additionally, GEP includes our sterile injectable products and biosimilar development portfolio.

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Agreement to Acquire Hospira, Inc. (Hospira)––On February 5, 2015, we announced that we have entered into a definitive merger agreement under which we agreed to acquire Hospira, the world’s leading provider of injectable drugs and infusion technologies and a global leader in biosimilars, for $90 per share in cash, for a total enterprise value of approximately $17 billion. We expect to finance the transaction through a combination of existing cash and new debt, with approximately two-thirds of the value financed from cash and one-third from debt. The transaction is subject to customary closing conditions, including regulatory approvals in several jurisdictions and the approval of Hospira's shareholders, and is expected to close in the second half of 2015.

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Collaboration with OPKO Health, Inc. (OPKO)––On December 13, 2014, we entered into a collaborative agreement with OPKO to develop and commercialize OPKO’s long-acting human growth hormone (hGH-CTP) for the treatment of growth hormone deficiency (GHD) in adults and children, as well as for the treatment of growth failure in children born small for gestational age (SGA) who fail to show catch-up growth by two years of age. hGH-CTP has the potential to reduce the required dosing frequency of human growth hormone to a single weekly injection from the current standard of one injection per day. The transaction closed on January 28, 2015, upon termination of the waiting period under the Hart-Scott-Rodino Act. In February 2015, we made an upfront payment of $295 million to OPKO, which was recorded in Research and development expenses, and OPKO is eligible to receive up to an additional $275 million upon the achievement of certain regulatory milestones. We have received the exclusive license to commercialize hGH-CTP worldwide. Subject to regulatory approval, OPKO is eligible to receive royalty payments associated with the commercialization of hGH-CTP for Adult GHD. Upon the launch of hGH-CTP for Pediatric GHD, the royalties will transition to tiered gross profit sharing for both hGH-CTP and our product, Genotropin. OPKO will lead the clinical activities and will be responsible for funding the development programs for the key indications, which includes Adult and Pediatric GHD and Pediatric SGA. We will be responsible for all development costs for additional indications, as well as all postmarketing studies and the commercialization activities for all indications, and lead the manufacturing activities covered by the global development plan.

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Acquisition of Marketed Vaccines Business of Baxter International Inc. (Baxter)––On December 1, 2014 (which falls in the first fiscal quarter of 2015 for our international operations), we completed the acquisition of Baxter's portfolio of marketed vaccines for a final purchase price of $648 million. The portfolio that was acquired consists of NeisVac-C and FSME-IMMUN/TicoVac. NeisVac-C is a vaccine that helps protect against meningitis caused by group C meningococcal meningitis and FSME-IMMUN/TicoVac is a vaccine that helps protect against tick-borne encephalitis.

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Collaboration with Merck KGaA––On November 17, 2014, we entered into a collaborative agreement with Merck KGaA, to jointly develop and commercialize avelumab, an investigational anti-PD-L1 antibody currently in development as a potential treatment for multiple types of cancer. We and Merck KGaA are exploring the therapeutic potential of this novel anti-PD-L1 antibody as a single agent as well as in various combinations with our and Merck KGaA’s broad portfolio of approved and investigational oncology therapies. Both companies are collaborating on up to 20 high priority immuno-oncology clinical development programs expected to commence in 2015. These clinical development programs include up to six trials (Phase 2 or 3) that could be pivotal for potential product registrations. We and Merck KGaA are also combining resources and expertise to advance Pfizer’s anti-PD-1 antibody into Phase 1 trials. Under the terms of the agreement, we made an upfront payment of $850 million to Merck KGaA and Merck KGaA is eligible to receive regulatory and commercial milestone payments of up to approximately $2.0 billion. Both companies will jointly fund all development and commercialization costs, and split equally any profits generated from selling any anti-PD-L1 or anti-PD-1 products from this collaboration. Also, as part of the agreement, we gave Merck KGaA certain co-promotion rights for Xalkori in the U.S. and several other key markets. In 2014, we recorded $1.2 billion of Research and development expenses associated with this collaborative arrangement, composed of the $850 million upfront cash payment as well as an additional amount of $309 million, reflecting the estimated fair value of the co-promotion rights given to Merck KGaA.

•	Acquisition of InnoPharma, Inc. (InnoPharma)––On September 24, 2014, we completed our acquisition of InnoPharma, a privately-held pharmaceutical development company, for an upfront cash payment of $225 million and contingent milestone payments of up to $135 million.

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License from Cellectis SA (Cellectis)––On June 18, 2014, we entered into a global arrangement with Cellectis to develop Chimeric Antigen Receptor T-cell immunotherapies in the field of oncology directed at select cellular surface antigen targets. In August 2014, we made an upfront payment of $80 million to Cellectis, which was recorded in Research and development expenses. We will also fund R&D costs associated with 15 Pfizer-selected targets and, for the benefit of Cellectis, a portion of the R&D costs associated with four Cellectis-selected targets within the arrangement. Cellectis is eligible to receive development, regulatory and commercial milestone payments of up to $185 million per product that results from the Pfizer-selected targets. Cellectis is also eligible to receive tiered royalties on net sales of any products that are commercialized by Pfizer.

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Investment in ViiV Healthcare Limited (ViiV)––On January 21, 2014, the European Commission approved Tivicay (dolutegravir), a product for the treatment of HIV-1 infection, developed by ViiV, an equity-method investee. This approval, in accordance with the agreement between GlaxoSmithKline plc and Pfizer, triggered a reduction in our equity interest in ViiV from 12.6% to 11.7% and an increase in GlaxoSmithKline plc’s equity interest in ViiV from 77.4% to 78.3%, effective April 1, 2014. As a result, in the first quarter of 2014, we recognized a loss of approximately $36 million in Other (income)/deductions––net. We continue to account for our investment in ViiV under the equity method due to the significant influence that we continue to have through our board representation and minority veto rights.

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Collaboration with Eli Lilly & Company (Lilly)––In October 2013, we entered into a collaboration agreement with Lilly to jointly develop and globally commercialize Pfizer's tanezumab, which provides that Pfizer and Lilly will equally share product-development expenses as well as potential revenues and certain product-related costs. On March 23, 2015, Pfizer and Lilly announced that the companies are preparing to resume the Phase 3 clinical program for tanezumab. As a result, we received a $200 million upfront payment from Lilly in accordance with the collaboration agreement between Pfizer and Lilly, which was recorded as deferred revenue in our condensed consolidated balance sheet as of March 29, 2015 and is being recognized into Other (income)/deductions––net over a multi-year period beginning in the second quarter of 2015. This announcement followed a decision by the FDA to lift the partial clinical hold on the tanezumab development program after a review of nonclinical data characterizing the sympathetic nervous system response to tanezumab. Under the agreement with Lilly, we are eligible to receive certain payments from Lilly upon the achievement of specified regulatory and commercial milestones, including the aforementioned upfront payment of $200 million, which was contingent upon the parties continuing in the collaboration after receipt of the FDA’s response to the submission of the nonclinical data.

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License of Nexium OTC Rights––In August 2012, we entered into an agreement with AstraZeneca PLC (AstraZeneca) for the exclusive, global, over-the-counter (OTC) rights for Nexium, a leading prescription drug approved to treat the symptoms of gastroesophageal reflux disease. In connection with this Consumer Healthcare licensing agreement, we made an upfront payment of $250 million to AstraZeneca, which was recorded in Research and development expenses in our consolidated statement of income for the year ended December 31, 2012. On May 27, 2014, we launched Nexium 24HR in the U.S., and on July 11, 2014, we paid AstraZeneca a related $200 million product launch milestone payment; and on August 1, 2014, we launched Nexium Control in Europe, and on September 15, 2014, we paid AstraZeneca a related $50 million product launch milestone payment. These post-approval milestone payments were recorded in Identifiable intangible assets, less accumulated amortization in the consolidated balance sheet and will be amortized over the estimated useful life of the Nexium brand. AstraZeneca is eligible to receive additional milestone payments of up to $300 million, based on the level of worldwide sales as well as royalty payments, based on worldwide sales.

(a)	The 2015 financial guidance reflects the following:

•	Does not assume the completion of any business development transactions not completed as of March 29, 2015, including any one-time upfront payments associated with such transactions. Our 2015 financial guidance does not reflect any impact from our proposed acquisition of Hospira, which is expected to close during the second half of 2015.

•	Excludes the potential effects of the resolution of litigation-related matters not substantially resolved as of March 29, 2015.

•	Exchange rates assumed are a blend of the actual exchange rates in effect during the first quarter of 2015 and the mid-April 2015 exchange rates for the remainder of the year. Excludes the impact of a potential devaluation of the Venezuelan bolivar.

•	Guidance for reported revenues reflects the anticipated negative impact of $3.5 billion due to recent and expected generic competition for certain products that have recently lost or are anticipated to soon lose patent protection, partially offset by anticipated revenue growth from certain other products.

•	Guidance for reported revenues also reflects the anticipated negative impact of $3.3 billion as a result of unfavorable changes in essentially all foreign exchange rates relative to the U.S. dollar compared to foreign exchange rates from 2014, which results in an anticipated $0.22 negative impact to 2015 reported and adjusted diluted EPS.

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•	Guidance for the effective tax rate on Adjusted income does not assume the renewal of the U.S. research and development (R&D) tax credit. The renewal of the U.S. R&D tax credit is not anticipated to have a material impact on the effective tax rate on Adjusted income.

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Guidance for reported and adjusted diluted EPS assumes diluted weighted-average shares outstanding of approximately 6.25 billion shares, inclusive of share repurchases totaling $6 billion in 2015 composed of $1 billion of shares repurchased through January 30, 2015 and a $5 billion accelerated share repurchase agreement executed on February 9, 2015, partially offset by actual and projected dilution related to employee compensation programs.

(b)	For an understanding of Adjusted income and its components and Adjusted diluted EPS (all of which are non-GAAP financial measures), see the “Adjusted Income” section of this MD&A.

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(a)	GIP = the Global Innovative Pharmaceutical segment; VOC = the Global Vaccines, Oncology and Consumer Healthcare segment; and GEP = the Global Established Pharmaceutical segment.

(b)	Includes revenues generated from Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical sales organization, and also includes the revenues related to our transitional manufacturing and supply agreements with Zoetis.

•	in the U.S., revenues increased $159 million, or 4%, in the first quarter of 2015, compared to the same period in 2014, reflecting, among other things:

◦	the performance of certain key products, including Prevnar 13, Lyrica, Eliquis, Nexium 24HR, Xeljanz, Viagra and the launch of Ibrance (palbociclib) in the U.S. in February 2015 (collectively, up approximately $700 million),

◦	losses of exclusivity and immediate multi-source generic competition for Celebrex in the U.S. in December 2014 (down approximately $380 million); and

◦	the loss of exclusivity for Zyvox IV and Rapamune, as well as the termination of our Spiriva co-promotion collaboration (collectively, down approximately $140 million).

•	in our international markets, revenues decreased $648 million, or 9%, in the first quarter of 2015 compared to the same period in 2014. Foreign exchange unfavorably impacted international revenues by approximately $739 million, or 10%. Operationally, revenues increased $91 million, or 1%, in the first quarter of 2015, reflecting, among other things:

◦	the operational growth of Prevenar 13, Lipitor, Viagra and Norvasc in emerging markets (up approximately $160 million); and

◦	higher revenues for Eliquis and Xalkori in developed markets (collectively, up approximately $70 million),

◦	lower revenues for Celebrex, Viagra, Lyrica and Inspra as a result of the loss of exclusivity, as well as Enbrel, Lipitor and Norvasc in developed markets (collectively, down approximately $210 million).

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(a)	Rebates are product-specific and, therefore, for any given year are impacted by the mix of products sold.

(b)

Performance-based contract rebates include contract rebates with managed care customers within the U.S., including health maintenance organizations and pharmacy benefit managers, who receive rebates based on the achievement of contracted performance terms and claims under these contracts. Outside the U.S., performance-based contract rebates include rebates to wholesalers/distributors based on achievement of contracted performance for specific products or sales milestones.

(c)	Chargebacks primarily represent reimbursements to U.S. wholesalers for honoring contracted prices to third parties.

(d)	Sales allowances primarily represent price reductions that are contractual or legislatively mandated outside the U.S., discounts and distribution fees.

(e)	For the three months ended March 29, 2015, associated with the following segments: GIP ($0.9 billion); VOC ($0.3 billion); and GEP ($1.9 billion). For the three months ended March 30, 2014, associated with the following segments: GIP ($0.7 billion); VOC ($0.2 billion); and GEP ($2.0 billion).

•	an increase in chargebacks primarily due to products that have lost exclusivity in the U.S. and then as a result of increasing competitive pressures, as well as increases for certain U.S. branded products; and

•	an increase in Medicaid and related state program rebates, primarily as a result of updated estimates of sales related to these programs,

•	a decrease in performance-based contract rebates primarily in Europe and the U.S.

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(a)	Indicates the business to which the revenues relate. GIP = the Global Innovative Pharmaceutical segment; V = the Global Vaccines business; O = the Global Oncology business; and GEP = the Global Established Pharmaceutical segment.

(b)	As compared to the three months ended March 30, 2014.

(c)	In the first quarter of 2015, all revenues were composed of Prevnar 13/Prevenar 13. In the first quarter of 2014, revenues were composed of the Prevnar family of products, which included Prevnar 13/Prevenar 13 and, to a much lesser extent, Prevenar (7-valent).

(d)	Lyrica revenues from all of Europe are included in GEP. All other Lyrica revenues are included in GIP.

(e)	Viagra revenues from the U.S. and Canada are included in GIP. All other Viagra revenues are included in GEP.

(f)	Includes Eliquis (GIP), Rebif (GIP), Spiriva (GEP) and Aricept (GEP).

(g)	All other GIP, All other GEP and All other V/O are subsets of All other biopharmaceutical revenues.

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•	Prevnar/Prevenar 13 (V), is our pneumococcal conjugate vaccine for the prevention of various syndromes of pneumococcal disease. Overall, worldwide operational revenues for Prevnar increased 48% in the first quarter of 2015, compared to the same period in 2014. Foreign exchange had an unfavorable impact on worldwide revenues of 7% in the first quarter of 2015, compared to the same period in 2014.

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Lyrica (GIP/GEP) is indicated in the U.S. for three neuropathic pain conditions, fibromyalgia and adjunctive therapy for adult patients with partial onset seizures. In certain countries outside the U.S., indications include neuropathic pain (peripheral and central), fibromyalgia, adjunctive treatment of epilepsy and generalized anxiety disorder. Worldwide operational revenues for Lyrica increased 10% in the first quarter of 2015, compared to the same period in 2014. Foreign exchange had an unfavorable impact on worldwide revenues of 7% in the first quarter of 2015, compared to the same period in 2014.

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Enbrel (GIP, outside the U.S. and Canada), indicated for the treatment of moderate-to-severe rheumatoid arthritis, polyarticular juvenile rheumatoid arthritis, psoriatic arthritis, plaque psoriasis, ankylosing spondylitis, a type of arthritis affecting the spine, and nonradiographic axial spondyloarthritis, recorded a decrease in worldwide operational revenues, excluding the U.S. and Canada, of 6% in the first quarter of 2015, compared to the same period in 2014. Results were unfavorably impacted by a change in the distribution channel in the U.K. and the timing of prior year purchases in Japan, partially offset by operational growth in emerging markets. Foreign exchange had an unfavorable impact of 11% in the first quarter of 2015, compared to the same period in 2014.

•	Lipitor (GEP) is indicated for the treatment of elevated LDL-cholesterol levels in the blood. Lipitor faces generic competition in all major developed markets. Branded Lipitor recorded worldwide revenues of $441 million, or an operational increase of 2% in the first quarter of 2015, compared to the same period in 2014, primarily due to strong volume

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Viagra (GEP/GIP) is indicated for the treatment for erectile dysfunction. Viagra worldwide operational revenues increased 10% in the first quarter of 2015, compared to the same period in 2014, primarily due to strong operational performance in the U.S. and emerging markets. International (GEP) operational revenues decreased 1% in the first quarter of 2015, compared to the same period in 2014, primarily due to the impact of generic competition in Europe and developed Asia, partially offset by strong operational performance in Russia and China. Foreign exchange had an unfavorable impact on international revenues of 11% in the first quarter of 2015, compared to the same period in 2014. Revenues in the U.S. (GIP) increased 16% in the first quarter of 2015, compared to the same period in 2014 primarily driven by price increases, favorable changes in wholesaler inventory and higher purchases from the U.S. Department of Veterans Affairs/Department of Defense, partially offset by lower cash and commercial demand resulting from price sensitivity.

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Zyvox (GEP) is among the world’s best-selling branded agents used to treat serious Gram-positive pathogens, including methicillin-resistant staphylococcus-aureus. Zyvox worldwide operational revenues decreased 10% in the first quarter of 2015, compared to the same period in 2014, due to Zyvox IV generic competition beginning in the U.S. in January 2015, partially offset by solid growth in emerging markets. Foreign exchange had an unfavorable impact of 5% in the first quarter of 2015, compared to the same period in 2014.

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Norvasc (GEP) is indicated for the treatment of hypertension. Norvasc worldwide operational revenues decreased 3% in the first quarter of 2015 compared to the same period in 2014, and reflects, among other factors, erosion of generics in Japan, partially offset by strong volume growth in China. Foreign exchange had an unfavorable impact of 6% in the first quarter of 2015, compared to the same period in 2014.

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Sutent (O) is indicated for the treatment of advanced renal cell carcinoma, including metastatic renal cell carcinoma (mRCC); gastrointestinal stromal tumors after disease progression on, or intolerance to, imatinib mesylate; and advanced pancreatic neuroendocrine tumor. Sutent worldwide operational revenues were relatively flat in the first quarter of 2015, compared to the same period in 2014, primarily due to continued competitive pressure in the developed markets, offset by strong operational performance in emerging markets. Foreign exchange had an unfavorable impact of 10% in the first quarter of 2015, compared to the same period in 2014.

•	Our Premarin family of products (GEP) helps women address moderate-to-severe menopausal symptoms. Premarin worldwide operational revenues decreased 6% in the first quarter of 2015, compared to the same period in 2014. Revenues in the U.S. were unfavorably impacted by prescription volume declines for Premarin Family Oral brands, partially offset by price increases.

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Celebrex (GEP), indicated for the treatment of the signs and symptoms of osteoarthritis and rheumatoid arthritis worldwide and for the management of acute pain in adults in the U.S., Japan and certain other markets, recorded a decrease in worldwide operational revenues of 64% in the first quarter of 2015, compared to the same period in 2014, primarily driven by the loss of exclusivity and immediate launch of multi-source generic competition in the U.S. (December 2014) and in most other developed markets. Foreign exchange had an unfavorable impact of 3% in the first quarter of 2015, compared to the same period in 2014.

•	BeneFIX and ReFacto AF/Xyntha (GIP) are hemophilia products using state-of-the-art manufacturing that assist patients with their lifelong hemophilia bleeding disorders. BeneFIX worldwide operational revenues decreased 7% in the first

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Pristiq (GEP) is indicated for the treatment of major depressive disorder in the U.S. and in various other countries. Pristiq has also been indicated for treatment of moderate-to-severe vasomotor symptoms (VMS) associated with menopause in Thailand, Mexico, the Philippines and Ecuador. Pristiq recorded a decrease in worldwide operational revenues of 4% in the first quarter of 2015, compared to the same period in 2014, primarily due to a decline in the U.S. market share, partially offset by prescription growth in the developed international markets, primarily including Spain, Canada and Australia. Foreign exchange had an unfavorable impact on revenues of 2% in the first quarter of 2015, compared to the same period in 2014.

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Chantix/Champix (GIP) is an aid to smoking-cessation treatment in adults 18 years of age and older. Worldwide operational revenues increased 12% in the first quarter of 2015, compared to the same period in 2014. Revenues in the U.S. increased 12% in the first quarter of 2015, compared to the same period in 2014, primarily due to higher demand, price increases and a steadily improving willingness by payers to cover the cost of this medicine in response to the requirements of the Affordable Care Act, partially offset by intensified competition by electronic cigarettes and over-the-counter nicotine replacement therapies (NRT). International operational revenues increased 12% in the first quarter of 2015, compared to the same period in 2014, primarily due to a shift from a two week to a four week starter pack in Canada, a significant tobacco tax increase in Korea and the timing of Champix purchases by the Ministry of Health in Turkey, partially offset by declines in the U.K. and Belgium due to strong competitive pressure from aggressive NRT consumer promotion and the widespread availability of e-cigarettes as well as low Champix inventory levels in Brazil, which have been resolved. Foreign exchange had an unfavorable impact on international revenues of 12% in the first quarter of 2015, compared to the same period in 2014.

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Xalkori (O) is indicated for the treatment of patients with locally advanced or metastatic non-small cell lung cancer (NSCLC) that is anaplastic lymphoma kinase (ALK)-positive, and is now approved in 86 countries, including the U.S., EU (conditional), Japan, South Korea, Canada, Australia and Switzerland, as well as in many emerging markets, including China, Russia, Mexico, India and Turkey. Xalkori recorded worldwide revenues of $111 million in the first quarter of 2015, an operational increase of 34%, compared to the same period in 2014, as a result of (i) an increase in diagnostic rates for the ALK gene mutation, which has led to more patients being treated, and (ii) price increases in the U.S. Foreign exchange had an 8% unfavorable impact in the first quarter of 2015, compared to the same period in 2014.

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Xeljanz (GIP) is indicated in the U.S. for the treatment of adult patients with moderate to severe active rheumatoid arthritis and is approved for use as a second-line therapy for the treatment of adult patients with moderate to severe active rheumatoid arthritis (after traditional disease-modifying antirheumatic drugs) in more than 40 markets including the U.S., Japan, Australia, Canada, Switzerland and Brazil. Xeljanz recorded an increase in worldwide operational revenues of 87% in the first quarter of 2015, compared to the same period in 2014, primarily in the U.S., driven by continued growth through rheumatologist acceptance and consumer awareness. Foreign exchange had a 2% unfavorable impact in the first quarter of 2015, compared to the same period in 2014.

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Inlyta (O), indicated for the treatment of patients with advanced renal cell carcinoma (RCC) after failure of a prior systemic treatment, is now approved in 81 countries, including the U.S., EU, Switzerland, Japan, Canada, Australia and South Korea (exact indications vary by region). Worldwide operational revenues increased 16% in the first quarter of 2015, compared to the same period in 2014, primarily due to increased market share. Revenues in the U.S. increased 10% in the first quarter of 2015, compared to the same period in 2014, primarily due to increased market share and price increases in January 2015. International operational revenues increased 22% in the first quarter of 2015, compared to the same period in 2014, primarily due to strong growth in developed markets in Europe, where a large proportion of oncologists are prescribing Inlyta. Foreign exchange had an unfavorable impact on international revenues of 15% in the first quarter of 2015, compared to the same period in 2014.

•	Ibrance (O), indicated as a first-line treatment for certain forms of advanced breast cancer, was approved and launched in the U.S. in February 2015. Ibrance recorded Worldwide revenues of $38 million in the first quarter of 2015.

•	Alliance revenues (GEP/GIP) increased 10% operationally worldwide in the first quarter of 2015, compared to the same period in 2014, mainly due to:

◦	an increase in Eliquis alliance revenues,

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◦	the termination of the co-promotion collaboration for Spiriva (GEP) in most developed markets, which resulted in an operational decrease in Pfizer's share of Spiriva revenues of $75 million in the first quarter of 2015, compared to the same period in 2014.

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Eliquis (apixaban) (GIP) is being jointly developed and commercialized by Pfizer and Bristol-Myers Squibb (BMS). The two companies share commercialization expenses and profit/losses equally on a global basis. Eliquis is part of the Novel Oral Anticoagulant (NOAC) market; the agents in this class were developed as alternative treatment options to warfarin in appropriate patients. Eliquis (apixaban) is approved for multiple indications in major markets around the world:

◦	to reduce the risk of stroke and systemic embolism in patients with nonvalvular atrial fibrillation (NVAF);

◦	for the treatment of deep vein thrombosis (DVT) and pulmonary embolism (PE), and for the reduction in the risk of recurrent DVT and PE following initial therapy; and

◦	for the prophylaxis of DVT, which may lead to PE, in patients who have undergone hip or knee replacement surgery.

•	Embeda (GIP)—In October 2014, the FDA approved an updated label for Embeda extended release capsules, for oral use, to include abuse-deterrence study data. Embeda is indicated for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate. Embeda became available in the U.S. in February 2015.

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(a)	This indication for Eliquis (apixaban) was developed and is being commercialized in collaboration with Bristol-Myers Squibb.

*	The dates set forth in this column are the dates on which the FDA accepted our submissions.

(a)

In May 2012, the FDA's Peripheral and Central Nervous System Drugs Advisory Committee voted that the tafamidis meglumine data provide substantial evidence of efficacy for a surrogate endpoint that is reasonably likely to predict a clinical benefit. In June 2012, the FDA issued a “complete response” letter with respect to the tafamidis NDA. The FDA has requested the completion of a second efficacy study, and also has asked for additional information on the data within the current tafamidis NDA. We continue to work with the FDA to define a path forward.

(b)

In June 2010, we received a “complete response” letter from the FDA for the Celebrex chronic pain supplemental NDA. The supplemental NDA remains pending while we await the completion of the PRECISION trial, anticipated in 2016, which will inform our next steps. There are no additional granted patents related to this potential approval. The PRECISION trial is designed to assess the relative long-term cardiovascular safety of Celebrex compared to prescription doses of ibuprofen and naproxen in the treatment of arthritis pain.

(c)

NDAs for Viviant (bazedoxifene) for treatment and prevention of post-menopausal osteoporosis remain pending before the FDA. In February 2008, the FDA advised it expected to convene an advisory committee pending responses to the “approvable letters” received in December 2007 and May 2008 with respect to the NDAs. In view of the approval of Duavee (conjugated estrogens/bazedoxifene), we continue to assess next steps for Viviant.

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*	For applications in the EU, the dates set forth in this column are the dates on which the European Medicines Agency (EMA) validated our submissions.

(a)	This indication for Eliquis (apixaban) was developed and is being commercialized in collaboration with BMS.

(a)	We are currently conducting pivotal Phase 1 studies with registrational intent for Tofacitinib QD.

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(a)	Remicade® is a registered trademark of Janssen Biotech, Inc.

(b)	Herceptin® is a registered trademark of Genentech, Inc.

(c)	Rituxan® is a registered trademark of Biogen Idec, Inc.

(d)	Avastin® is a registered trademark of Genentech, Inc.

(e)

In March 2015, we and our alliance partner, Eli Lilly and Company, announced that we are preparing to resume the Phase 3 program for tanezumab. This announcement followed a decision by the FDA to lift the partial clinical hold on the tanezumab development program after a review of nonclinical data characterizing the sympathetic nervous system response to tanezumab. A partial clinical hold had been in place for tanezumab since December 2012 due to adverse changes in the sympathetic nervous system of mature animals.

•	favorable foreign exchange of 14%; and

•	to a lesser extent, a decrease in the costs to implement cost-reduction/productivity initiatives,

•	an unfavorable change in product mix resulting from the impact of losses of exclusivity; and

•	an increase in sales volume.

•	favorable foreign exchange; and

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•	to a lesser extent, a decrease in the costs to implement cost-reduction/productivity initiatives,

•	an unfavorable change in product mix.

•	increased investments to support several recent product launches and other in-line products; and

•

a higher cost for the Branded Prescription Drug Fee compared to the same period in 2014, as SI&A expenses for the first quarter of 2014 were favorably impacted by a reduction related to a true-up of the 2013 fee payable to the federal government under the U.S. Healthcare Legislation based on our prior-calendar-year share relative to other companies of branded prescription drug sales to specified government programs,

•	the favorable impact of foreign exchange of 5%; and

•	lower expenses for field force, advertising and promotional expenses, reflecting the benefits of cost-reduction and productivity initiatives.

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(a)	Comprises Restructuring charges and certain acquisition-related costs as well as costs associated with our cost-reduction/productivity initiatives included in Cost of sales, Research and development expenses and/or Selling, informational and administrative expenses, as appropriate.

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•	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. See the "Adjusted Income––General Description of Adjusted Income Measure" section of our 2014 Financial Report for additional information.

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(a)	For details of adjustments, see “Details of Income Statement Items Excluded from Adjusted Income” below.

(b)

The effective tax rate on Non-GAAP Adjusted income was 24.4% in the first quarter of 2015, compared with 25.0% in the first quarter of 2014. This decline was primarily due to a favorable change in the jurisdictional mix of earnings as a result of operating fluctuations in the normal course of business, partially offset by a decrease in the favorable impact of the resolution of certain tax positions pertaining to prior years, primarily with various foreign tax authorities.

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(a)	Included primarily in Amortization of intangible assets.

(b)	Included in Provision for taxes on income. Income taxes includes the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pre-tax amounts and applying that jurisdiction’s applicable tax rate.

(c)

Included in Restructuring charges and certain acquisition-related costs (see Notes to Condensed Consolidated Financial Statements—Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives). Restructuring charges include employee termination costs, asset impairments and other exit costs associated with business combinations. Transaction costs represent external costs directly related to acquired businesses and primarily include expenditures for banking, legal, accounting and other similar services. Integration costs represent external, incremental costs directly related to integrating acquired businesses, and primarily include expenditures for consulting and the integration of systems and processes.

(d)	Represents the impact of changes in estimated useful lives of assets involved in restructuring actions related to acquisitions. Included in Cost of sales for both the three months ended March 29, 2015 and March 30, 2014.

(e)	Included in Provision for taxes on income. Income taxes includes the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pre-tax amounts and applying that jurisdiction’s applicable tax rate.

(f)	Included in Discontinued operations––net of tax. For the three months ended March 30, 2014, represents post-close adjustments.

(g)	Amounts relate to our cost-reduction/productivity initiatives. Included in Restructuring charges and certain acquisition-related costs (see Notes to Condensed Consolidated Financial Statements—Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives).

(h)	Amounts relate to our cost-reduction/productivity initiatives (see Notes to Condensed Consolidated Financial Statements—Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives).

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(i)	Included in Other (income)/deductions—net (see the “Other (Income)/Deductions—Net” section of this MD&A and Notes to Condensed Consolidated Financial Statements—Note 4. Other (Income)/Deductions—Net).

(j)	Included in Other (income)/deductions––net. Represents expenses for planning and implementing changes to align our operations and reporting for our business segments established in 2014.

(k)	Virtually all included in Other (income)/deductions––net.

(l)	Included in Provision for taxes on income. Income taxes includes the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pre-tax amounts and applying that jurisdiction’s applicable tax rate.

(a)	Amounts represent the revenues and costs managed by each of our operating segments. The expenses generally include only those costs directly attributable to the operating segment.

(b)	Total Innovative Products represents the sum of the GIP and VOC segments.

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(c)	Other comprises the revenues and costs included in our Adjusted income components (see footnote (d) below) that are managed outside our three operating segments and includes the following:

(i)	PCS—the revenues and costs of Pfizer CentreSource (PCS), our contract manufacturing and bulk pharmaceutical chemical sales operation. In the first quarter of 2015, PCS revenues also include revenues related to our transitional manufacturing and supply agreements with Zoetis.

(ii)

WRD—the research and development expenses managed by our Worldwide Research and Development organization (WRD), which is generally responsible for research projects until proof-of-concept is achieved and then for transitioning those projects to the appropriate operating segment for possible clinical and commercial development. This organization also has responsibility for certain science-based and other platform-services organizations, which provide technical expertise and other services to the various R&D projects. WRD is also responsible for facilitating all regulatory submissions and interactions with regulatory agencies, including all safety-event activities.

(iii)

Medical—the costs associated with our Pfizer Medical organization (Medical), which is responsible for the provision of medical information to healthcare providers, patients and other parties, transparency and disclosure activities, clinical trial results publication, grants for healthcare quality improvement and medical education, partnerships with global public health and medical associations, regulatory inspection readiness reviews, internal audits of Pfizer-sponsored clinical trials and internal regulatory compliance processes.

(iv)	Corporate—the costs associated with Corporate, representing platform functions (such as worldwide technology, global real estate operations, legal, finance, human resources, worldwide public affairs, compliance, and worldwide procurement) and certain compensation and other corporate costs, such as interest income and expense, and gains and losses on investments.

(v)	Other Unallocated—other unallocated costs, representing overhead expenses associated with our manufacturing and commercial operations not directly attributable to an operating segment.

(vi)	See the "Analysis of Operating Segment Information" section of Pfizer's 2014 Financial Report for certain qualitative information about our Other costs. This information will be provided on an annual basis.

(d)	Includes costs associated with (i) purchase accounting adjustments; (ii) acquisition-related costs; and (iii) certain significant items, which are substantive, unusual items that are evaluated on an individual basis by management. For additional information about these reconciling items and/or our Non-GAAP Adjusted measure of performance, see the “Adjusted Income” section of this MD&A.

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•	Revenues were relatively flat in the first quarter of 2015, compared to the same period in 2014. Foreign exchange had an unfavorable impact of 7% on GIP revenues in the first quarter of 2015, compared to the same period in 2014. Operational revenues increased by 7%, primarily due to:

◦	strong operational growth from Lyrica, primarily in the U.S. and Japan (up approximately $130 million); and

◦	strong operational performance from recently launched products, including Eliquis globally and Xeljanz, primarily in the U.S. (up approximately $170 million),

◦	generic competition for Rapamune in the U.S., which began in October 2014 (down approximately $30 million).

•

Cost of sales as a percentage of Revenues decreased in the first quarter of 2015, compared to the same period in 2014, primarily driven by favorable foreign exchange and an increase in alliance revenue, which has no associated cost of sales. The decrease in Cost of sales of 18% in the first quarter of 2015, compared to the same period in 2014, was primarily driven by favorable foreign exchange and, to a lesser extent, by a favorable change in product mix.

•	Selling, informational and administrative expenses increased 6% in the first quarter of 2015, compared to the same period in 2014, reflecting additional investment in recently launched products and certain in-line products, partially offset by favorable foreign exchange.

•	Research and development expenses increased 58% in the first quarter of 2015, compared to the same periods in 2014, reflecting incremental investment in collaborations, primarily the $295 million upfront payment to OPKO , partially offset by lower clinical trial expenses as a result of the completion of Phase 3 studies and post marketing commitments for certain products.

•	The unfavorable change in Other (income)/deductions––net in the first quarter of 2015, compared to the same period in 2014, primarily reflects a decrease in royalty income and a decrease in our share in the income of certain equity method investments.

•	Revenues increased 23% in the first quarter of 2015, compared to the same period in 2014, which includes an increase in operational revenues of 29%.

◦

Global Vaccines Revenues increased 44% to $1,328 million in the first quarter of 2015, compared to $925 million in the same period in 2014, reflecting an increase in operational revenues of 51%. The increase was primarily due to an 80% increase in Prevnar 13 revenue in the U.S., primarily driven by continued strong uptake among adults following the positive recommendation from the U.S. Centers for Disease Control and Prevention's Advisory Committee on Immunization Practices for use in adults aged 65 and older in the third quarter of 2014, as well as the timing of government purchases for the pediatric indication compared to the same period in 2014. International revenues increased 21% operationally, driven by Prevenar 13, which grew 15% operationally in the first quarter of 2015, primarily reflecting the favorable impact of Prevenar's inclusion in additional national immunization programs in certain emerging markets compared to the same period in 2014, as well as the inclusion in the first quarter of 2015 of revenues associated with the acquisition of Baxter International Inc.'s portfolio of marketed vaccines in Europe.

◦	Global Oncology Revenues increased 8% to $528 million in the first quarter of 2015, compared to $488 million in the same period in 2014, reflecting an increase in operational revenues of 17%, primarily driven by our launch of Ibrance in the U.S. in February 2015 for advanced breast cancer, as well as continued strong underlying demand for Xalkori and Inlyta globally.

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◦	Consumer Healthcare Revenues increased 6% to $808 million in the first quarter of 2015, compared to $761 million in the same period in 2014, reflecting an increase in operational revenues of 12%, primarily due to the launch of Nexium 24HR in the U.S. in late-May 2014, as well as growth in the base business in certain emerging markets.

•

Cost of sales as a percentage of Revenues decreased in the first quarter of 2015, compared to the same period in 2014, primarily driven by favorable foreign exchange and a favorable change in product mix. The increase in Cost of sales of 4% in the first quarter of 2015, compared to the same period in 2014, was primarily due to an increase in sales volumes and, to a lesser extent, an increase in royalty expense, largely offset by favorable foreign exchange.

•	Selling informational and administrative expenses increased 12% in the first quarter of 2015, compared to the same period in 2014, primarily driven by promotional expenses for Prevnar 13 adult indication and Nexium 24HR, as well as the launch expenses for Trumenba and Ibrance , partially offset by favorable foreign exchange.

•	Research and development expenses increased 5% in the first quarter of 2015, compared to the same period in 2014, primarily reflecting increased investment in Ibrance program expenses as well as costs associated with our anti-PD-LI alliance with Merck KGaA and other oncology products, partially offset by lower Prevnar 13 adult and Trumenba clinical spend.

•	Revenues decreased 16%, to $5,014 million in the first quarter of 2015, compared to $5,990 million in the same period in 2014, including a decrease in operational revenues of 10%, primarily due to:

◦	the loss of exclusivity and immediate launch of multi-source generic competition for Celebrex in the U.S. in December 2014 as well as generic competition for Zyvox IV in the U.S. beginning in January 2015 and for Lyrica in certain developed Europe markets beginning in the first quarter of 2015 (aggregate decline of approximately $450 million);

◦	a decline in Lipitor revenues in developed markets as a result of continued generic competition (down approximately $40 million); and

◦	the termination in most countries of the co-promotion collaboration for Spiriva, including in the U.S. (where the collaboration expired in April 2014), which has resulted in a decline in Pfizer’s share of Spiriva revenues (down approximately $70 million),

◦	the strong operational performance in emerging markets, where revenues increased 10% operationally, primarily driven by Lipitor, Viagra and Norvasc (growth of approximately $90 million).

•

Cost of sales as a percentage of Revenues increased in the first quarter of 2015, compared to the same period in 2014, primarily due to the impact of losses of exclusivity resulting in an unfavorable change in product mix, partially offset by favorable foreign exchange. The decrease in Cost of sales of 11% in the first quarter of 2015, compared to the same period in 2014, was primarily driven by favorable foreign exchange, partially offset by the unfavorable change in product mix.

•

Selling, informational and administrative expenses decreased 16% in the first quarter of 2015, compared to the same period in 2014, primarily due to lower field force, advertising and promotional expenses, reflecting the benefits of cost-reduction and productivity initiatives, and the favorable impact of foreign exchange, partially offset by a higher cost for the Branded Prescription Drug Fee compared to the prior year.

•	Research and development expenses were largely unchanged in the first quarter of 2015, compared to the same period in 2014, reflecting increased investment in biosimilars development programs, offset by lower clinical trial expenses related to postmarketing commitments, primarily for Celebrex.

•	The unfavorable change in Other (income)/deductions––net in the first quarter of 2015, compared to the same period in 2014, primarily reflects the non-recurrence of prior year gains on the sale of product rights.

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(a)	The selected balance sheet information is presented as of December 31, 2014 after all significant intercompany balances and transactions between legal entities have been eliminated. For subsidiaries operating outside the U.S., the selected balance sheet information is included as of November 30, 2014.

•	Trade accounts receivable, less allowance for doubtful accounts––significantly all amounts were derived using specific identification methods.

•	Inventories (including noncurrent portion)–– these amounts were derived using specific identification methods and with respect to shared inventory components, these amounts were derived using proportional allocation methods based on associated manufacturing costs and related product-specific inventory.

•

Current deferred tax assets and other current tax assets––for current deferred tax assets, these amounts were derived by calculating the estimated tax effect of the associated attributed pre-tax amounts; for other current tax assets (prepaid taxes associated with intercompany profits that are eliminated in consolidation), these amounts were derived using proportional allocation methods based on the associated unrealized intercompany profits.

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•	Other current assets––a majority of these amounts was derived using proportional allocation methods based on country-specific revenues, or associated costs, as appropriate, and the remaining portion was derived using specific identification methods.

•	Trade accounts payable––the amounts were derived using specific identification methods and, to a lesser extent, using proportional allocation methods based on associated manufacturing costs, certain research and development costs or other operating costs, as appropriate.

•

Accrued compensation and related items––a majority of these amounts were derived using proportional allocation methods based on country specific compensation expenses and, with respect to amounts related to our enabling functions and other supporting functions, based on country-specific revenues and associated operating costs, as appropriate. In addition, to a lesser extent, amounts were derived using specific identification methods.

•	Other current liabilities–– these amounts were derived using specific identification methods or estimates for the amounts associated with each operating segment, as well as proportional allocation methods based on country, global or regional revenue, country specific manufacturing costs, certain research and development costs or other associated operating costs, as appropriate.

(c)	Corporate/Unallocated includes the following line items:

•	Cash and cash equivalents, Short-term investments, Short-term borrowings, including current portion of long-term debt and Dividends payable as these accounts are predominately non-operating financial assets and liabilities. Identification of amounts by operating segment is not meaningful as none of our operating segments operate as a standalone company with an identifiable debt/capital structure.

•	Income taxes payable as this account represents liabilities associated with specific legal entities and none of our operating segments operate as a standalone company with identifiable legal entities.

•	Trade accounts receivable, less allowance for doubtful accounts, Inventories and Trade accounts payable––the portion of these accounts included as Corporate/Unallocated primarily relates to amounts associated with Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical sales operation.

•

Current deferred tax assets and other current tax assets––the portion of these accounts included as Corporate/Unallocated primarily relates to (i) net deferred tax assets associated with pre-tax amounts included in Corporate/Unallocated, primarily deferred tax assets associated with legal and environmental liabilities; and (ii) tax assets associated with specific legal entities as none of our operating segments operate as a standalone company with identifiable legal entities.

•	Other current assets––the portion of these accounts included as Corporate/Unallocated primarily relates to derivative financial instruments. Identification of these amounts by operating segment is not meaningful as none of our operating segments operate as a standalone company with an identifiable debt/capital structure.

•

Accrued compensation and related items––the portion of these accounts included as Corporate/Unallocated primarily relates to our pension and post-retirement benefit obligations associated with former employees. We have not identified any of these amounts with a particular operating segment as these types of liabilities are theoretically funded through accumulated earnings and/or excess cash/investments and none of our operating segments operate as a standalone company with an identifiable debt/capital structure.

•	Other current liabilities––the portion of these accounts included as Corporate/Unallocated primarily relates to:

•

Amounts associated with legal and environmental liabilities. Although some of these amounts may be associated with products sold in our current operating segments, we have not identified any of these amounts with a particular operating segment as these types of liabilities are theoretically funded through accumulated earnings and/or excess cash/investments and none of our operating segments operate as a standalone company with an identifiable debt/capital structure.

•	Accrued interest and derivative financial instruments. Identification of these amounts by operating segment is not meaningful as none of our operating segments operate as a standalone company with an identifiable debt/capital structure.

(d)	Included in Other noncurrent assets on the consolidated balance sheet.

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•	For Trade accounts receivable, less allowance for doubtful accounts, the change also reflects the timing of sales and collections in the normal course of business.

•	For Inventories, the change also reflects the inventory acquired as part of the acquisition of Baxter's portfolio, recorded at acquisition date fair value, as well as inventory builds in advance of plant shutdowns/product transfers and new product launches, partially offset by planned inventory reductions.

•	For Property, plant and equipment, less accumulated depreciation, the change also reflects depreciation, offset by capital additions in the normal course of business.

•

For Identifiable intangible assets, less accumulated amortization, the change reflects amortization, partially offset by assets acquired as part of the acquisition of Baxter's portfolio of marketed vaccines. For additional information about our intangible assets, see Notes to Condensed Consolidated Financial Statements—Note 9A. Identifiable Intangible Assets and Goodwill:Identifiable Intangible Assets.

•	For Other noncurrent assets, the change also reflects an increase in the receivables associated with our derivative financial instruments.

•	For Trade accounts payable, the change also reflects the timing of purchases and payments in the normal course of business.

•	For Dividends payable, the change reflects the payment of the first-quarter 2015 dividends declared on December 15, 2014.

•	For Other current liabilities, the change also reflects payments of certain legal claims, as well as the timing of other payments and accruals in the normal course of business.

•	For Pension benefit obligations, net and Postretirement benefit obligations, net, the change also reflects, among other things, a $1.0 billion voluntary pension contribution in January 2015. For additional information, see Notes to Condensed Consolidated Financial Statements—Note 10. Pension and Postretirement Benefit Plans.

•	For Other noncurrent liabilities, the change also reflects an increase in the payables associated with our derivative financial instruments and, to a lesser extent, the deferral of an upfront payment received from Eli Lilly and Company as part of a collaboration agreement.

*	Calculation not meaningful.

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•	net redemptions of investments of $7.2 billion in the first quarter of 2015, compared to net purchases of investments of $6.0 million in the first quarter of 2014,

•	cash paid of $678 million, net of cash acquired, primarily for the acquisition of Baxter's portfolio of marketed vaccines in the first quarter of 2015 (see Notes to Condensed Consolidated Financial Statements—Note 2A. Acquisition, Collaborative Arrangements and Equity-Method Investment: Acquisition.)

•	purchases of common stock of $6.0 billion in the first quarter of 2015, compared to $1.2 billion in the first quarter of 2014, and

•	net payments on borrowings of $140 million in the first quarter of 2015, compared to net proceeds from borrowings of $276 million in the first quarter of 2014,

•	proceeds from the exercise of stock options of $794 million in the first quarter of 2015, compared to $425 million in the first quarter of 2014.

•	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;

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•	the cash requirements associated with our cost-reduction/productivity initiatives;

•	paying down outstanding debt;

•	contributions to our pension and postretirement plans; and

•	business-development activities.

(a)	See Notes to Condensed Consolidated Financial Statements––Note 7. Financial Instruments for a description of certain assets held and for a description of the credit risk related to our financial instruments held.

(b)	Net financial assets decreased as net cash provided by operating activities decreased, and dividend payments and share purchases, among other things, more than offset the net redemptions of investments and proceeds from the exercise of stock options. For additional information, see the “Analysis of the Condensed Consolidated Statements of Cash Flows” section of this MD&A.

(c)	Represents total Pfizer Inc. shareholders’ equity divided by the actual number of common shares outstanding (which excludes treasury shares).

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(a)	In April 2015, the FASB issued an exposure draft to propose a one-year deferral of the effective date.

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•

the outcome of research and development activities including, without limitation, the ability to meet anticipated clinical trial commencement and completion dates, regulatory submission and approval dates, and launch dates for product candidates, as well as the possibility of unfavorable clinical trial results, including unfavorable new clinical data and additional analyses of existing clinical data;

•

decisions by regulatory authorities regarding whether and when to approve our drug applications, which will depend on the assessment by such regulatory authorities of the benefit-risk profile suggested by the totality of the efficacy and safety information submitted; and decisions by regulatory authorities regarding labeling, ingredients and other matters that could affect the availability or commercial potential of our products;

•	the speed with which regulatory authorizations, pricing approvals and product launches may be achieved;

•	the outcome of post-approval clinical trials, which could result in the loss of marketing approval for a product or changes in the labeling for, and/or increased or new concerns about the safety or efficacy of, a product that could affect its availability or commercial potential;

•	risks associated with interim data, including the risk that final results of studies for which interim data have been provided and/or additional clinical trials may be different from (including less favorable than) the interim data results and may not support further clinical development of the applicable product candidate or indication;

•	the success of external business-development activities, including the ability to satisfy the conditions to closing of announced transactions in the anticipated timeframe or at all, including our and Hospira’s ability to satisfy the conditions to closing our merger agreement;

•	competitive developments, including the impact on our competitive position of new product entrants, in-line branded products, generic products, private label products and product candidates that treat diseases and conditions similar to those treated by our in-line drugs and drug candidates;

•	the implementation by the FDA of an abbreviated legal pathway to approve biosimilar products, which could subject our biologic products to competition from biosimilar products in the U.S., with attendant competitive pressures, after the expiration of any applicable exclusivity period and patent rights;

•	the ability to meet generic and branded competition after the loss of patent protection for our products or competitor products;

•	the ability to successfully market both new and existing products domestically and internationally;

•	difficulties or delays in manufacturing;

•	trade buying patterns;

•	the impact of existing and future legislation and regulatory provisions on product exclusivity;

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•	trends toward managed care and healthcare cost containment;

•	the impact of any significant spending reductions affecting Medicare, Medicaid or other publicly funded or subsidized health programs or changes in the tax treatment of employer-sponsored health insurance that may be implemented, and/or any significant additional taxes or fees that may be imposed on the pharmaceutical industry as part of any broad deficit-reduction effort;

•	the impact of U.S. healthcare legislation enacted in 2010—the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act––and of any modification or repeal of any of the provisions thereof;

•

U.S. federal or state 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; as well as pricing pressures as a result of highly competitive insurance markets;

•	legislation or regulatory action in markets outside the U.S. affecting pharmaceutical product pricing, reimbursement or access, including, in particular, continued government-mandated price reductions for certain biopharmaceutical products and government-imposed access restrictions in certain countries;

•	the exposure of our operations outside the U.S. to possible capital and exchange controls, expropriation and other restrictive government actions, changes in intellectual property legal protections and remedies, as well as political unrest and unstable governments and legal systems;

•	contingencies related to actual or alleged environmental contamination;

•	claims and concerns that may arise regarding the safety or efficacy of in-line products and product candidates;

•	any significant breakdown, infiltration or interruption of our information technology systems and infrastructure;

•	legal defense costs, insurance expenses, settlement costs, the risk of an adverse decision or settlement and the adequacy of reserves related to product liability, patent protection, government investigations, consumer, commercial, securities, antitrust, environmental and tax issues, ongoing efforts to explore various means for resolving asbestos litigation, and other legal proceedings;

•	our ability to protect our patents and other intellectual property, both domestically and internationally;

•	interest rate and foreign currency exchange rate fluctuations, including the impact of possible currency devaluations in countries experiencing high inflation rates;

•	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 the U.S. that may result from pending and possible future proposals;

•	any significant issues involving our largest wholesaler customers, which account for a substantial portion of our revenues;

•	the possible impact of the increased presence of counterfeit medicines in the pharmaceutical supply chain on our revenues and on patient confidence in the integrity of our medicines;

•	any significant issues that may arise related to the outsourcing of certain operational and staff functions to third parties, including with regard to quality, timeliness and compliance with applicable legal requirements and industry standards;

•	any significant issues that may arise related to our joint ventures and other third-party business arrangements;

•	changes in U.S. generally accepted accounting principles;

•

uncertainties related to general economic, political, business, industry, regulatory and market conditions including, without limitation, uncertainties related to the impact on us, our customers, suppliers and lenders and counterparties to our foreign-exchange and interest-rate agreements of challenging global economic conditions and recent and possible future changes in global financial markets; and the related risk that our allowance for doubtful accounts may not be adequate;

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•	any changes in business, political and economic conditions due to actual or threatened terrorist activity in the U.S. and other parts of the world, and related U.S. military action overseas;

•	growth in costs and expenses;

•	changes in our product, segment and geographic mix; and

•

the impact of acquisitions, divestitures, restructurings, internal reorganizations, product recalls and withdrawals and other unusual items, including our ability to realize the projected benefits of our cost-reduction and productivity initiatives, including those related to our research and development organization, of the internal separation of our commercial operations into our new operating structure and of our proposed acquisition of Hospira.

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(a)

On June 27, 2013, we announced that the Board of Directors had authorized a $10 billion share-purchase plan, which was exhausted in the first quarter of 2015 (the June 2013 Stock Purchase Plan). On October 23, 2014, we announced that the Board of Directors had authorized an additional $11 billion share-purchase plan, and share purchases commenced thereunder in January 2015 (the October 2014 Stock Purchase Plan). On February 9, 2015, we entered into an accelerated share repurchase agreement with Goldman, Sachs & Co. (GS&Co.) to repurchase $5 billion of our common stock. Pursuant to the terms of the agreement, approximately 150 million shares of our common stock were received by us on February 11, 2015. At settlement of the agreement, which is expected to occur during or prior to the third quarter of 2015, GS&Co. may be required to deliver additional shares of common stock to us, or, under certain circumstances, we may be required to deliver shares of our common stock or may elect to make a cash payment to GS&Co., with the number of shares to be delivered or the amount of such payment based on the difference between the volume-weighted average price, less a discount, of our common stock during the term of the transaction and the initial $5 billion paid. This agreement was entered into pursuant to Pfizer’s previously announced share repurchase authorization.

(b)

In addition to amounts purchased under the June 2013 Stock Purchase Plan and the October 2014 Stock Purchase Plan, these columns and row reflect the following transactions during the first fiscal quarter of 2015: (i) the surrender to Pfizer of 3,436,561 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock units issued to employees; (ii) the open market purchase by the trustee of 17,187 shares of common stock in connection with the reinvestment of dividends paid on common stock held in trust for employees who were granted performance share awards and who deferred receipt of such awards; (iii) the surrender to Pfizer of 1,950,684 shares of common stock to satisfy tax withholding obligations in connection with the vesting of performance share awards issued to employees; and (iv) the surrender to Pfizer of 40,441 shares of common stock to pay the exercise price and to satisfy tax withholding obligations in connection with the exercise of employee stock options.

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