Pfizer 2007 Annual Report Download - page 85

Financial Summary
Pfizer Inc and Subsidiary Companies
On April 16, 2003, Pfizer acquired Pharmacia Corporation in a
transaction accounted for as a purchase. All financial information
reflects the following as discontinued operations: our Consumer
Healthcare, in-vitro allergy and autoimmune diagnostic testing, certain
European generics, surgical ophthalmic, confectionery, shaving and fish-
care products businesses and the femhrt, Loestrin and Estrostep
women’s health product lines, as applicable.
(a)
Research and development expenses includes co-promotion charges
and milestone payments for intellectual property rights of $603
million in 2007, $292 million in 2006: $156 million in 2005; $160
million in 2004; $380 million in 2003; and $32 million in 2002.
(b) In 2007, 2006, 2005, 2004 and 2003, we recorded charges for the
estimated portion of the purchase price of acquisitions allocated
to in-process research and development.
(c)
Restructuring charges and acquisition-related costs primarily includes
the following:
2007 — Restructuring charges of $2.5 billion related to our cost-
reduction initiatives.
2006 — Restructuring charges of $1.3 billion related to our cost-
reduction initiatives.
2005 — Integration costs of $532 million and restructuring
charges of $372 million related to our acquisition of Pharmacia in
2003 and restructuring charges of $438 million related to our cost-
reduction initiatives.
2004 — Integration costs of $454 million and restructuring charges
of $680 million related to our acquisition of Pharmacia in 2003.
2003 — Integration costs of $808 million and restructuring charges
of $166 million related to our acquisition of Pharmacia in 2003.
2002 — Integration costs of $333 million and restructuring
charges of $167 million related to our merger with Warner-
Lambert in 2000 and pre-integration costs of $94 million related
to our pending acquisition of Pharmacia.
(d) In 2005, as a result of adopting FIN 47,
Accounting for Conditional
Asset Retirement Obligations, we recorded a non-cash pre-tax
charge of $40 million ($23 million, net of tax). In 2003, as a result
of adopting SFAS No. 143, Accounting for Asset Retirement
Obligations, we recorded a non-cash pre-tax charge of $47 million
($30 million, net of tax). In 2002, as a result of adopting SFAS No.
142, Goodwill and Other Intangible Assets, we recorded pre-tax
charges of $565 million ($410 million, net of tax).
(e) Includes discontinued operations, (see Notes to Consolidated
Financial Statements— Note 21. Segment, Geographic and
Revenue Information. )
(f) For 2005 through 2002, includes assets held for sale of our
Consumer Healthcare business, and for 2004 through 2002, also
includes in-vitro allergy and autoimmune diagnostic testing,
surgical ophthalmic, certain European generics, confectionery and
shaving businesses and the femhrt, Loestrin and Estrostep
women’s health product lines.
(g) Defined as long-term debt, deferred taxes, minority interests and
shareholders’ equity.
2007 Financial Report 83
Peer Group Performance Graph
Five Year Performance
Since 2005, Pfizer’s pharmaceutical peer group has consisted of the following companies: Abbott
Laboratories, Amgen, AstraZeneca, Bristol-Myers Squibb Company, Eli Lilly and Company, GlaxoSmithKline,
Johnson & Johnson, Merck and Co., Schering-Plough Corporation and Wyeth (New Peer Group). Prior to
that, Pfizer’s pharmaceutical peer group was comprised of Abbot Laboratories, Baxter International, Bristol-
Myers Squibb Company, Colgate-Palmolive Company, Eli Lilly and Company, Johnson & Johnson, Merck and
Co., Schering-Plough Corporation and Wyeth (Old Peer Group).
We believe that the companies included in the New Peer Group are more reflective of the Company’s core
business, and therefore will provide a more meaningful comparison of stock performance. We have
included the New Peer Group in the graph to show what the comparison to those companies would have
been if the New Peer Group had been in place during the periods shown on the graph.
0.0
50.0
100.0
150.0
200.0
2002 2003 2004 2005 2006 2007
2002 2003
2004 2005 2006 2007
Pfizer 100.0 117.8 91.5 81.8 94.2 86.5
Old Peer Group 100.0 103.3 105.1 104.5 122.9 137.1
New Peer Group 100.0 113.8 114.5 121.7 135.0 137.2
S&P 500 100.0 128.7 142.7 149.7 173.3 182.8
PFIZER OLD PEER GROUP NEW PEER GROUP S&P 500