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Pfizer Inc.
2009 Financial Report

Table of contents

  • Page 1
    Pfizer Inc. 2009 Financial Report

  • Page 2

  • Page 3
    ... of Wyeth was a cash-and-stock transaction valued, based on the closing market price of Pfizer's common stock on the acquisition date, at $50.40 per share of Wyeth common stock, or a total of approximately $68 billion. Our financial statements reflect the assets, liabilities and operating results of...

  • Page 4
    ... to its label in 2008 and additional label changes in July 2009 (see the "Revenues-Biopharmaceutical-Selected Product Descriptions" section of this Financial Review). Represents direct sales under our license agreement with Eisai Co., Ltd. Legacy Wyeth products and operations. 2009 includes Enbrel...

  • Page 5
    ...managed care organizations and other payer groups continue to seek increasing discounts on our products through a variety of means such as leveraging their purchasing power, implementing price controls, and demanding price cuts (directly or by rebate actions). Also, health insurers and benefit plans...

  • Page 6
    ... growth in emerging markets; Creating new opportunities for established products; Investing in complementary businesses; and Creating a lower, more flexible cost base for the combined company. We believe the realization of these strategic priorities through the acquisition of Wyeth enhances...

  • Page 7
    ... the "Adjusted Income" section of this Financial Review). We plan to reinvest approximately $1 billion of these savings in the business, resulting in an expected $2 billion net cost reduction. Additionally, as a result of the Wyeth acquisition, Pfizer expects to generate synergies of approximately...

  • Page 8
    ... of the outstanding equity of Wyeth in a cash-and-stock transaction, valued, based on the closing market price of Pfizer common stock on the acquisition date, at $50.40 per share of Wyeth common stock, or a total of approximately $68 billion. We are required to divest certain animal health assets in...

  • Page 9
    ...the outstanding shares of Coley Pharmaceutical Group, Inc., (Coley), a biopharmaceutical company. In connection with these and two smaller acquisitions related to Animal Health, we recorded approximately $440 million in Acquisition-related in-process research and development charges in 2008. In 2009...

  • Page 10
    ... to Key Opportunities and Challenges" sections of this Financial Review and in Part I, Item 1A, "Risk Factors", of our 2009 Annual Report on Form 10-K. Accounting Policies We consider the following accounting policies important in understanding our operating results and financial condition. For...

  • Page 11
    ...in a business combination and when accounting for and reporting on certain financial instruments. We estimate fair value using an exit price approach, which requires, among other things, that we determine the price that would be received to sell an asset or paid to transfer a liability in an orderly...

  • Page 12
    ... and we receive a share of their net sales or profits. Alliance revenues are recorded when our co-promotion partners ship the product and title passes to their customers and the related expenses for selling and marketing these products are included in Selling, informational and administrative...

  • Page 13
    ... on the acquisition date, at $50.40 per share of Wyeth common stock, or a total of approximately $68 billion. For additional information related to the Wyeth acquisition, see Notes to Consolidated Financial Statements-Note 2. Acquisition of Wyeth. Wyeth's core business was the discovery, development...

  • Page 14
    ... Property, plant and equipment Identifiable intangible assets, excluding in-process research and development In-process research and development Other noncurrent assets Long-term debt Benefit obligations Net tax accounts(b) Other noncurrent liabilities Total identifiable net assets Goodwill Net...

  • Page 15
    ...Construction in Progress-Replacement cost, generally assumed to equal historical book value. O O O O The amounts recorded for the major components of acquired property, plant and equipment are as follows: USEFUL LIFE (YEARS) AMOUNTS RECOGNIZED AS OF ACQUISITION DATE (MILLIONS OF DOLLARS) Land...

  • Page 16
    ...: O Revenue-We use historical, forecast, industry or other sources of market data, including estimates of the number of units to be sold, selling prices, market penetration, market share and year-over-year growth rates over the product's life cycle. Cost of sales, Sales and marketing expenses...

  • Page 17
    ... model as previously used by Wyeth (see Notes to Consolidated Financial Statements-Note 1P. Significant Accounting Policies: Income Tax Contingencies). Net liabilities for income taxes approximate $24.8 billion as of the acquisition date, which includes $1.8 billion for uncertain tax positions...

  • Page 18
    Financial Review Pfizer Inc. and Subsidiary Companies Analysis of the Consolidated Statements of Income (MILLIONS OF DOLLARS) YEAR ENDED DECEMBER 31, 2009 2008 2007 % CHANGE 09/08 08/07 Revenues Cost of sales % of revenues Selling, informational and administrative expenses % of revenues R&D ...

  • Page 19
    ... which represents our gelatin capsule products and services business. Diversified's segment profit includes costs related to our research and development, manufacturing, and sales and marketing activities that are associated with the products in our Diversified segment. 2009 Financial Report 17 •

  • Page 20
    ... healthcare business (sold in December 2006). Revenues by Segment(a) Worldwide revenues follow: (MILLIONS OF DOLLARS) YEAR ENDED DECEMBER 31, 2009 2008 2007 % CHANGE 09/08 08/07 Biopharmaceutical: Primary Care Specialty Care Oncology Established Products Emerging Markets Returns adjustment Total...

  • Page 21
    ... prior years' liabilities for product returns (approximately $60 million) recorded in the third quarter of 2008. • Diversified Revenues 2009 vs. 2008 Worldwide Diversified revenues in 2009 were $4.2 billion, an increase of 17% compared to 2008 due to: • revenues from legacy Wyeth products of...

  • Page 22
    Financial Review Pfizer Inc. and Subsidiary Companies partially offset by: • a decrease in revenues from legacy Pfizer Animal Health products and the Capsugel business primarily due to the unfavorable impact of foreign exchange. Revenues from Animal Health products decreased 2% in 2009 ...

  • Page 23
    .... (b) Represents direct sales under license agreement with Eisai Co., Ltd. (c) Outside the U.S. and Canada. (d) Includes legacy Pfizer and legacy Wyeth products in 2009. * Calculation not meaningful. Certain amounts and percentages may reflect rounding adjustments. 2009 Financial Report 21

  • Page 24
    ..., is the most widely used branded prescription treatment for lowering cholesterol and the best-selling prescription pharmaceutical product of any kind in the world. Lipitor recorded worldwide revenues of $11.4 billion in 2009, a decrease of 8% compared to 2008. These results, in part, reflect the...

  • Page 25
    ... enhance discussions between physicians and patients about the benefits and risks of Chantix. • Caduet, a single-pill therapy combining Norvasc and Lipitor, recorded decreases in worldwide revenues of 7% in 2009 compared to 2008, primarily due to increased generic competition, as well as an...

  • Page 26
    ... products that offer patients with this lifelong bleeding disorder the potential for a near-normal life. See Notes to Consolidated Financial Statements-Note 19. Legal Proceedings and Contingencies for a discussion of certain patent litigation relating to ReFacto and Xyntha. • Alliance revenues...

  • Page 27
    Financial Review Pfizer Inc. and Subsidiary Companies On April 16, 2009, we announced that we entered into an agreement with GSK to create a new company focused solely on research, development and commercialization of HIV medicines. The transaction closed on October 30, 2009 and the new company, ...

  • Page 28
    ... 2009, Fablyn received approval in Europe for the treatment of osteoporosis. Subsequently, following a strategic review, we decided to explore strategic options for Fablyn, including out-licensing or sale. In April 2009, the European Medicines Agency's Committee for Medicinal Products for Human Use...

  • Page 29
    Financial Review Pfizer Inc. and Subsidiary Companies We no longer are seeking approval in the EU for Celsentri (maraviroc) for the treatment of HIV in treatment-naïve patients. Celsentri (maraviroc) remains approved in the EU for use in combination with other antiretroviral medicinal products for...

  • Page 30
    ... SI&A expenses increased 2% in 2009 compared to 2008, primarily as a result of: the addition of Wyeth's operating costs; and increased investment in potential high-growth and new opportunities for existing products, partially offset by: the favorable impact of foreign exchange on SI&A expenses...

  • Page 31
    ... after January 1, 2009, we record acquired IPR&D on our consolidated balance sheet as indefinite-lived intangible assets. In 2009, we resolved certain contingencies associated with CovX and recorded $68 million in Acquisition-related in-process research and development charges. In 2008, we expensed...

  • Page 32
    ...costs directly related to effecting the acquisition of Wyeth and primarily include expenditures for banking, legal, accounting and other similar services. Substantially all of the costs incurred are fees related to a $22.5 billion bridge term loan credit agreement entered into with certain financial...

  • Page 33
    ...prescription medicines for humans and animals, consumer healthcare (over-the-counter) products, vaccines and nutritional products-prior to considering certain income statement elements. We have defined Adjusted income as Net income attributable to Pfizer Inc. before the impact of purchase accounting...

  • Page 34
    ... using relative total shareholder return. Purchase Accounting Adjustments Adjusted income is calculated prior to considering certain significant purchase accounting impacts, such as those related to business combinations and net asset acquisitions (see Notes to Consolidated Financial Statements...

  • Page 35
    ...per share in 2009 were impacted by the increased number of shares outstanding in comparison with 2008 resulting primarily from shares issued to partially fund the Wyeth acquisition. Certain amounts and percentages may reflect rounding adjustments. * Calculation not meaningful. 2009 Financial Report...

  • Page 36
    ... legal matters(h) Net interest expense-Wyeth acquisition(i) Returns liabilities adjustment(j) Gain related to ViiV(k) Asset impairment charges and other associated costs(l) Other(m) Total certain significant items, pre-tax Income taxes(n) Total certain significant items-net of tax Total purchase...

  • Page 37
    ... rates. Financial Condition, Liquidity and Capital Resources Net Financial Assets/(Liabilities) as shown below: AS OF DECEMBER 31, (MILLIONS OF DOLLARS) 2009 2008 Financial assets: Cash and cash equivalents Short-term investments Short-term loans Long-term investments and loans Total financial...

  • Page 38
    ... to the timing of accruals, cash receipts and payments in the ordinary course of business. Also contributing to the working capital increase was the acquisition of Wyeth (see Notes to Consolidated Financial Statements-Note 2. Acquisition of Wyeth). The increase in accounts receivable, less allowance...

  • Page 39
    ... Taxes reflects current taxes provided but not yet paid due to the increased tax costs associated with certain business decisions executed to finance the Wyeth acquisition. In 2008, the cash flow line item called Accounts payable and accrued liabilities primarily reflects the $3.2 billion accrued in...

  • Page 40
    ... under certain financial conditions, co-promotion or other rights in specified countries with respect to certain of our products. Dividends on Common Stock We declared dividends of $5.5 billion in 2009 and $8.6 billion in 2008 on our common stock. In December 2009, our Board of Directors declared...

  • Page 41
    ... include statements relating to future actions, business plans and prospects, prospective products or product approvals, future performance or results of current and anticipated products, sales efforts, expenses, interest rates, foreign exchange rates, the outcome of contingencies, such as legal...

  • Page 42
    ...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. Foreign exchange risk is also managed through the use...

  • Page 43
    ... or through the use of derivative financial instruments such as interest rate swaps. In light of current market conditions, our current borrowings are primarily on a long-term, fixed-rate basis. We may change this practice as market conditions change. Our financial instrument holdings at year-end...

  • Page 44
    ... financial reporting includes all of the Company's consolidated operations except for the operations of Wyeth, which the Company acquired on October 15, 2009. Wyeth's operations represent 7% of the Company's consolidated revenues for the year ended December 31, 2009, and assets associated with Wyeth...

  • Page 45
    Audit Committee's Report The Audit Committee reviews the Company's financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process, including the system of internal controls. In this context, the ...

  • Page 46
    Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements The Board of Directors and Shareholders of Pfizer Inc.: We have audited the accompanying consolidated balance sheets of Pfizer Inc. and Subsidiary Companies as of December 31, 2009 and 2008, and the ...

  • Page 47
    ... financial reporting of Wyeth. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Pfizer Inc. and Subsidiary Companies as of December 31, 2009 and 2008, and the related consolidated statements...

  • Page 48
    Consolidated Statements of Income Pfizer Inc. and Subsidiary Companies (MILLIONS, EXCEPT PER COMMON SHARE DATA) YEAR ENDED DECEMBER 31, 2009 2008 2007 Revenues Costs and expenses: Cost of sales(a) Selling, informational and administrative expenses(a) Research and development expenses(a) ...

  • Page 49
    Consolidated Balance Sheets Pfizer Inc. and Subsidiary Companies (MILLIONS, EXCEPT PREFERRED STOCK ISSUED AND PER COMMON SHARE DATA) AS OF DECEMBER 31, 2009 2008 Assets Cash and cash equivalents Short-term investments Accounts receivable, less allowance for doubtful accounts: 2009-$176; 2008-$190...

  • Page 50
    ...Balance, December 31, 2008 1,804 Comprehensive income: Net income Other comprehensive income, net of tax Total comprehensive income Acquisition of Wyeth Cash dividends declared- common stock preferred stock Noncontrolling interests Stock option transactions Purchases of common stock Employee benefit...

  • Page 51
    ...: Accounts receivable Inventories Other assets Accounts payable and accrued liabilities Taxes Other liabilities Net cash provided by operating activities Investing Activities Purchases of property, plant and equipment Purchases of short-term investments with original maturities greater than 90 days...

  • Page 52
    ... on February 26, 2010. On October 15, 2009, we completed our acquisition of Wyeth in a cash-and-stock transaction valued at approximately $68 billion. Commencing from the acquisition date, our financial statements reflect the assets, liabilities and operating results of Wyeth. In accordance with...

  • Page 53
    .... On the consolidated balance sheets, estimates are used in determining the valuation and recoverability of assets, such as accounts receivables, investments, inventories, fixed assets and intangible assets (including acquired in-process research & development (IPR&D) assets, beginning in 2009, and...

  • Page 54
    Notes to Consolidated Financial Statements Pfizer Inc. and Subsidiary Companies approach, which requires, among other things, that we determine the price that would be received to sell an asset or paid to transfer a liability in an orderly market. The determination of an exit price is considered ...

  • Page 55
    ... and we receive a share of their net sales or profits. Alliance revenues are recorded when our co-promotion partners ship the product and title passes to their customers. The related expenses for selling and marketing these products are included in Selling, informational and administrative...

  • Page 56
    ...certain acquisition-related costs are all restructuring charges and certain costs associated with integrating an acquired business (if the restructuring action results in a change in the estimated useful life of an asset, that incremental impact is classified in Cost of sales, Selling, informational...

  • Page 57
    .... Our acquisition of Wyeth has made us a more diversified health care company, with product offerings in human, animal, and consumer health, including vaccines, biologics, small molecules and nutrition, across developed and emerging markets. The acquisition of Wyeth also added to our pipeline of...

  • Page 58
    ... on the acquisition date, was canceled for a cash payment equal to the excess of the per share value of the merger consideration (calculated on the basis of the volume-weighted average of the per share price of Pfizer common stock on the New York Stock Exchange Transaction Reporting System for...

  • Page 59
    ... model as previously used by Wyeth (see Note 1P. Significant Accounting Policies: Income Tax Contingencies). Net liabilities for income taxes approximate $24.8 billion as of the acquisition date, which includes $1.8 billion for uncertain tax positions. The net tax liability includes the recording...

  • Page 60
    ... share attributable to Pfizer Inc. common shareholders $68,599 11,537 1.43 $71,130 8,917 1.11 The unaudited pro forma consolidated results were prepared using the acquisition method of accounting and are based on the historical financial information of Pfizer and Wyeth, reflecting both in 2009...

  • Page 61
    ... the outstanding shares of Coley Pharmaceutical Group, Inc. (Coley), a biopharmaceutical company. In connection with these and two smaller acquisitions related to Animal Health, we recorded approximately $440 million in Acquisition-related in-process research and development charges in 2008. In 2009...

  • Page 62
    ...costs directly related to effecting the acquisition of Wyeth and primarily include expenditures for banking, legal, accounting and other similar services. Substantially all of the costs incurred are fees related to a $22.5 billion bridge term loan credit agreement entered into with certain financial...

  • Page 63
    ... useful lives of assets involved in restructuring actions and are included in our consolidated statements of income as follows: YEAR ENDED DECEMBER 31, 2009 2008 2007 (MILLIONS OF DOLLARS) Cost of sales Selling, informational and administrative expenses Research and development expenses Total...

  • Page 64
    ... used to partially finance the Wyeth acquisition (see Note 2. Acquisition of Wyeth). Interest income decreased in 2009 due to lower interest rates, partially offset by higher average cash balances. The decrease in net interest income in 2008 compared to 2007 was due primarily to lower net financial...

  • Page 65
    ... taxed at other than U.S. statutory rate Sales of biopharmaceutical companies Resolution of certain tax positions U.S. research tax credit and manufacturing deduction Legal settlements Acquired IPR&D Costs associated with Wyeth acquisition All other-net Effective tax rate for income from continuing...

  • Page 66
    ...: 2009 DEFERRED TAX ASSETS (LIABILITIES) 2008 DEFERRED TAX ASSETS (LIABILITIES) (MILLIONS OF DOLLARS) Prepaid/deferred items Inventories Intangibles Property, plant and equipment Employee benefits Restructurings and other charges Legal and product liability reserves Net operating loss/credit...

  • Page 67
    ... tax assets and other current assets ($44 million) and Other taxes payable ($5.2 billion). Interest expense related to our unrecognized tax benefits is recorded in Provision for taxes on income in our consolidated statements of income and totaled $191 million in 2009, $106 million in 2008 and...

  • Page 68
    ... Financial Statements Pfizer Inc. and Subsidiary Companies 8. Other Comprehensive Income/(Expense) Changes, net of tax, in accumulated other comprehensive income/(expense) and the components of comprehensive income follow: NET UNREALIZED GAINS /(LOSSES) BENEFIT PLANS PRIOR SERVICE (COSTS)/ CREDITS...

  • Page 69
    ..., carried at amortized cost(c) Private equity securities, carried at cost Long-term loans, carried at cost Total Total selected financial assets Financial liabilities measured at fair value on a recurring basis(a): Derivative financial instruments in a liability position(g): Foreign currency swaps...

  • Page 70
    ... credit ratings and for the same remaining maturities. These selected financial assets and liabilities are in the following captions in the consolidated balance sheets as follows: (MILLIONS OF DOLLARS) AS OF DECEMBER 31, 2009 2008 Assets Cash and cash equivalents Short-term investments Short-term...

  • Page 71
    ...to Consolidated Financial Statements Pfizer Inc. and Subsidiary Companies B. Investments in Debt and Equity Securities The contractual maturities of the available-for-sale and held-to-maturity debt securities as of December 31, 2009, follow: YEARS OVER 1 TO 5 (MILLIONS OF DOLLARS) WITHIN 1 TOTAL...

  • Page 72
    ...to Consolidated Financial Statements Pfizer Inc. and Subsidiary Companies D. Long-Term Debt We issued long-term debt in the first and second quarters of 2009, virtually all of the proceeds of which were used to partially finance our acquisition of Wyeth on October 15, 2009. Also, our long-term debt...

  • Page 73
    ...through operational means, including managing expected same-currency revenues in relation to same-currency costs and same-currency assets in relation to samecurrency liabilities. Depending on market conditions, foreign exchange risk also is managed through the use of derivative financial instruments...

  • Page 74
    ... million of collateral to our counterparties. The collateral advanced receivables are reported in Short-term loans. F. Credit Risk On an ongoing basis, we review the creditworthiness of counterparties to our foreign exchange and interest rate agreements and do not expect to incur a significant loss...

  • Page 75
    Notes to Consolidated Financial Statements Pfizer Inc. and Subsidiary Companies 10. Inventories The components of inventories follow: AS OF DECEMBER 31, (MILLIONS OF DOLLARS) 2009 2008 Finished goods Work-in-process Raw materials and supplies Total inventories(a), (b) (a) $ 5,249 5,776 1,378 $...

  • Page 76
    ... specified conditions and management judgment. At that time, we will determine the useful life of the asset, reclassify the asset out of in-process research and development and begin amortization. In 2009, Prevnar/Prevenar 13 Infant received regulatory approval in a major market, and as a result, we...

  • Page 77
    ... in 2008, and, in 2007, we recorded charges of $1.1 billion in Cost of sales and Selling, informational and administrative expenses related to the impairment of Exubera (see Note 3F. Other Significant Transactions and Events: Exubera). 13. Pension and Postretirement Benefit Plans and Defined...

  • Page 78
    ... acquisition-related activities, which was partially offset by lower expected returns on plan assets. The increase in the 2008 international plans' net periodic benefit costs compared to 2007 was attributable to a settlement gain of $106 million resulting from a transfer of pension obligations...

  • Page 79
    ...and financial market conditions. The 2009 expected rates of return for these plans reflect our long-term outlook for a globally diversified portfolio, which is influenced by a combination of return expectations for individual asset classes, actual historical experience and our diversified investment...

  • Page 80
    ... 2008 2009 2008 Change in benefit obligation: Benefit obligation at beginning of year Service cost Interest cost Employee contributions Plan amendments Increases/(decreases) arising primarily from changes in actuarial assumptions Foreign exchange impact Acquisitions(a) Curtailments Settlements...

  • Page 81
    ... pension plans was $8.0 billion in 2009 and $5.3 billion in 2008. The U.S. qualified pension plans loan securities to other companies. Such securities may be onward loaned, sold or pledged by the other companies, but they may be required to be returned in a short period of time. We also require cash...

  • Page 82
    ... contracts Other Total U.S. postretirement plans(a),(b): Cash and cash equivalents Equity securities: Global equity securities Equity commingled funds Debt securities: Fixed income commingled funds Government bonds Corporate debt securities Other investments Total $ $ 80 2009 Financial Report

  • Page 83
    ...ACTUAL RETURN ON PLAN ASSETS FAIR VALUE, BEGINNING OF YEAR ASSETS HELD, END OF YEAR PURCHASES, FAIR ASSETS SOLD SALES AND TRANSFER EXCHANGE VALUE, DURING THE SETTLEMENTS, INTO/(OUT OF) RATE END OF PERIOD NET LEVEL 3 CHANGES YEAR (MILLIONS OF DOLLARS) U.S. qualified pension plans: Equity securities...

  • Page 84
    ... plans' assets are managed with the objectives of minimizing pension expense and cash contributions over the long term. Asset liability studies are performed periodically in order to support asset allocations. Assets include equity and fixed income securities, as well as investments in private real...

  • Page 85
    ...from $5 billion to $18 billion. On January 23, 2008, we announced that the Board of Directors had authorized a new $5 billion share-purchase plan, to be funded by operating cash flows, that may be utilized from time to time. In total, under the 2005 Stock Purchase Plan, through December 31, 2009, we...

  • Page 86
    ... only Pfizer plan under which equity-based compensation may currently be awarded to executives and other employees. The Company's shareholders originally approved the 2004 Stock Plan at the Annual Meeting of Shareholders held on April 22, 2004, and, effective upon that approval, new stock option and...

  • Page 87
    ... basis over the vesting term into Cost of sales, Selling, informational and administrative expenses, and Research and development expenses, as appropriate. All employees may receive stock option grants. No stock options were awarded to senior and key management in 2009; however, stock options were...

  • Page 88
    ... employees in the industry peer group. We measure PCSA grants at intrinsic value whereby the probable award is allocated over the term of the award, and then the resultant shares are adjusted to the fair value of our common stock at each accounting period until the date of payment. 86 2009 Financial...

  • Page 89
    ...The model incorporates a number of valuation assumptions noted in the following table, shown at their weighted-average values: TSRUs 2009 TSRUs 2008 Expected dividend yield(a) Risk-free interest rate(b) Expected stock price volatility(c) Expected term(d) (years) Determined using a constant dividend...

  • Page 90
    ... Net income attributable to Pfizer Inc. common shareholders EPS Denominator-Diluted: Weighted-average number of common shares outstanding Common-share equivalents-stock options, stock issuable under employee compensation plans and convertible preferred stock Weighted-average number of common shares...

  • Page 91
    ...to Consolidated Financial Statements Pfizer Inc. and Subsidiary Companies 17. Lease Commitments We lease properties and equipment for use in our operations. In addition to rent, the leases may require us to pay directly for taxes, insurance, maintenance and other operating expenses or to pay higher...

  • Page 92
    Notes to Consolidated Financial Statements Pfizer Inc. and Subsidiary Companies In May 2009, Matrix Laboratories Limited (Matrix), a subsidiary of Mylan Inc. (Mylan), notified us that it had filed an abbreviated new drug application with the FDA seeking approval to market a generic version of ...

  • Page 93
    ... action seeking to recover lost profits and other damages resulting from Teva USA's and Teva Industries' and Sun's at-risk launches. To Wyeth's knowledge, KUDCO Ireland has not launched its generic product to date. In July 2009, Apotex notified Wyeth that it had filed an abbreviated new drug...

  • Page 94
    ..., Warner-Lambert owned American Optical Corporation (American Optical), which manufactured and sold respiratory protective devices and asbestos safety clothing. In connection with the sale of American Optical in 1982, WarnerLambert agreed to indemnify the purchaser for certain liabilities, including...

  • Page 95
    ... to Consolidated Financial Statements Pfizer Inc. and Subsidiary Companies Beginning in late 2004, actions, including purported class actions, have been filed in various federal and state courts against Pfizer, Pharmacia and certain current and former officers, directors and employees of Pfizer and...

  • Page 96
    ... 2010. Pfizer and/or its affiliated companies also have received inquiries from various federal and state agencies and officials relating to the marketing of their hormone-replacement products. In November 2008, the State of Nevada filed an action against Pfizer, Pharmacia & Upjohn Company and Wyeth...

  • Page 97
    ... patients for the purchase of Champix. This action asserts claims under Canadian product liability law, including with respect to the safety and efficacy of Champix, and, on behalf of the putative class, seeks monetary relief, including punitive damages. In April and October 2009 and February 2010...

  • Page 98
    ...Pfizer did not report to the states their best price for certain products under the Medicaid program. In addition, Pharmacia, Pfizer and other pharmaceutical manufacturers are defendants in a number of purported class action suits in various federal and state courts brought by employee benefit plans...

  • Page 99
    ...Pension Plan In 2006, several current and former employees of Pharmacia Corporation filed a purported class action in the U.S. District Court for the Southern District of Illinois against the Pharmacia Cash Balance Pension Plan (the Plan), Pharmacia Corporation, Pharmacia & Upjohn Company and Pfizer...

  • Page 100
    ... segment profit includes costs related to research and development, manufacturing, and sales and marketing activities that are associated with the products in our Biopharmaceutical segment. Diversified includes animal health products that prevent and treat diseases in livestock and companion animals...

  • Page 101
    Notes to Consolidated Financial Statements Pfizer Inc. and Subsidiary Companies We sell our products primarily to customers in the wholesale sector. In 2009, sales to our three largest U.S. wholesaler customers represented approximately 17%, 11% and 10% of total revenues and, collectively, ...

  • Page 102
    ... Wyeth amounts in 2009 commencing on the Wyeth acquisition date, October 15, 2009. Includes operations in Puerto Rico. Includes Africa and the Middle East. Long-lived assets include identifiable intangible assets (excluding goodwill) and property, plant and equipment. 100 2009 Financial Report

  • Page 103
    Notes to Consolidated Financial Statements Pfizer Inc. and Subsidiary Companies Revenues by Product Significant product revenues are as follows: YEAR ENDED DECEMBER 31, (MILLIONS OF DOLLARS) 2009 2008 2007 Biopharmaceutical products: Lipitor Lyrica Celebrex Norvasc Viagra Xalatan/Xalacom Detrol/...

  • Page 104
    Quarterly Consolidated Financial Data (Unaudited) Pfizer Inc. and Subsidiary Companies (MILLIONS OF DOLLARS, EXCEPT PER COMMON SHARE DATA) FIRST QUARTER SECOND THIRD FOURTH(a) 2009 Revenues Costs and expenses Acquisition-related in-process research and development charges Restructuring charges ...

  • Page 105
    ... of 2008 associated with the resolution of certain litigation involving our NSAID pain medicines. Acquisition-related in-process research and development charges primarily includes amounts incurred in connection with our acquisitions of Serenex, Encysive, CovX, Coley and a number of animal health...

  • Page 106
    ...(d) Net income attributable to Pfizer Inc. Effective tax rate-continuing operations Depreciation and amortization(f) Property, plant and equipment additions(f) Cash dividends paid Working capital(g) Property, plant and equipment, less accumulated depreciation Total assets(g) Long-term debt Long-term...

  • Page 107
    ... women's health product lines. Defined as long-term debt, deferred taxes and total shareholders' equity. In 2009, increase reflects the deferred tax liabilities associated with the acquisition of Wyeth. Represents total shareholders' equity divided by the actual number of common shares outstanding...

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