Pfizer 2012 Annual Report Download - page 30

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Financial Review
Pfizer Inc. and Subsidiary Companies
2012 Financial Report
29
• a shift in geographic and business mix; and
• the unfavorable impact of foreign exchange of 2% in 2011.
Selling, Informational and Administrative (SI&A) Expenses
Year Ended December 31, % Change
(MILLIONS OF DOLLARS) 2012 2011 2010 12/11 11/10
Selling, informational and administrative expenses $16,616 $18,832 $18,973 (12)(1)
2012 v. 2011
SI&A expenses decreased 12% in 2012, compared to 2011, primarily due to:
• savings generated from a reduction in the field force and a decrease in promotional spending, both partly in response to product losses of
exclusivity;
• more streamlined corporate support functions; and
• the favorable impact of foreign exchange of 2%,
partially offset by:
• costs associated with the separation of Zoetis employees, net assets and operations from Pfizer.
2011 v. 2010
SI&A expenses were largely unchanged in 2011, compared to 2010, primarily due to:
• the fee provided for under the U.S. Healthcare Legislation beginning in 2011;
• the addition of legacy King operating costs; and
• the unfavorable impact of foreign exchange of 2%,
offset by:
• savings associated with our cost-reduction and productivity initiatives.
Research and Development (R&D) Expenses
Year Ended December 31, % Change
(MILLIONS OF DOLLARS) 2012 2011 2010 12/11 11/10
Research and development expenses $7,870 $9,074 $9,483 (13)(4)
2012 v. 2011
R&D expenses decreased 13% in 2012, compared to 2011, primarily due to:
• savings generated by the discontinuation of certain therapeutic areas and R&D programs in connection with our previously announced
cost-reduction and productivity initiatives; and
• lower charges related to implementing our cost-reduction and productivity initiatives,
partially offset by:
• a $250 million payment to AstraZeneca to obtain the exclusive global over-the-counter rights to Nexium.
2011 v. 2010
R&D expenses decreased 4% in 2011, compared to 2010, primarily due to:
• savings associated with our cost-reduction and productivity initiatives,
partially offset by:
• higher charges related to implementing our cost-reduction and productivity initiatives;
• the addition of legacy King expenses; and
• the unfavorable impact of foreign exchange of 1%.
R&D expenses also include payments for intellectual property rights of $371 million in 2012, $306 million in 2011 and $393 million in 2010 (for
further discussion, see the “Our Business Development Initiatives” section of this Financial Review).