Pfizer 2012 Annual Report Download - page 68

Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
2012 Financial Report 67
Capsugel Business
On August 1, 2011, we completed the sale of our Capsugel business for approximately $2.4 billion in cash and recognized a gain of
approximately $1.3 billion, net of tax, in Gain/(loss) on sale of discontinued operations––net of tax. The operating results of this business are
reported as Income/(loss) from discontinued operations––net of tax for 2011 and 2010.
Discontinued Operations
The following table provides the components of Discontinued operations—net of tax:
Year Ended December 31,(a)
(MILLIONS OF DOLLARS) 2012 2011 2010
Revenues $2,258 $2,673 $2,643
Pre-tax income/(loss) from discontinued operations 414 487 (50)
Provision/(benefit) for taxes on income(b) 117 137 (31)
Income/(loss) from discontinued operations––net of tax 297 350 (19)
Pre-tax gain/(loss) on sale of discontinued operations 7,123 1,688 (11)
Provision for taxes on income(c) 2,340 384 —
Gain/(loss) on sale of discontinued operations––net of tax 4,783 1,304 (11)
Discontinued operations––net of tax $5,080 $1,654 $(30)
(a) Includes the Nutrition business for all periods presented (through November 30, 2012) and the Capsugel business for 2011 (through August 1, 2011) and 2010
only. The net loss in 2010 includes the impairment of an indefinite-lived Brand intangible asset in the Nutrition business of approximately $385 million (pre-tax).
(b) Includes a deferred tax expense of $24 million for 2012, a deferred tax benefit of $43 million for 2011, and a deferred tax benefit of $156 million for 2010. These
deferred tax provisions include deferred taxes related to investments in certain foreign subsidiaries resulting from our intention not to hold these subsidiaries
indefinitely.
(c) Includes a deferred tax expense of $1.4 billion for 2012 and $190 million for 2011. These deferred tax provisions include deferred tax expense of $2.2 billion for
2012 and $190 million for 2011 on certain current-year funds earned outside the U.S. that will not be indefinitely reinvested overseas.
The following table provides the components of Assets of discontinued operations and other assets held for sale and Liabilities of
discontinued operations:
As of December 31,
(MILLIONS OF DOLLARS) 2012 2011
Accounts receivable, less allowance for doubtful accounts $—$550
Other current assets —419
Property, plant and equipment, less accumulated depreciation 70 1,118
Goodwill —498
Identifiable intangible assets, less accumulated amortization —2,648
Other noncurrent assets —84
Assets of discontinued operations and other assets held for sale $70$5,317
Current liabilities $—$385
Other liabilities —839
Liabilities of discontinued operations $—$1,224
The net cash flows of our discontinued operations for each of the categories of operating, investing and financing activities are not significant
for any period presented, except that investing activities includes the proceeds from the sale of these businesses.
C. Collaborative Arrangements
In the normal course of business, we enter into collaborative arrangements with respect to in-line medicines, as well as medicines in
development that require completion of research and regulatory approval. Collaborative arrangements are contractual agreements with third
parties that involve a joint operating activity, typically a research and/or commercialization effort, where both we and our partner are active
participants in the activity and are exposed to the significant risks and rewards of the activity. Our rights and obligations under our collaborative
arrangements vary. For example, we have agreements to co-promote pharmaceutical products discovered by us or other companies, and we
have agreements where we partner to co-develop and/or participate together in commercializing, marketing, promoting, manufacturing and/or
distributing a drug product.