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Financial Review
Pfizer Inc. and Subsidiary Companies
2013 Financial Report
17
ANALYSIS OF THE CONSOLIDATED STATEMENTS OF INCOME
Year Ended December 31, % Change
(MILLIONS OF DOLLARS) 2013 2012 2011 13/12 12/11
Revenues $51,584 $ 54,657 $ 61,035 (6) (10)
Cost of sales 9,586 9,821 12,500 (2) (21)
% of revenues 18.6%18.0%20.5%
Selling, informational and administrative expenses 14,355 15,171 17,581 (5) (14)
% of revenues 27.8%27.8%28.8%
Research and development expenses 6,678 7,482 8,681 (11)(14)
% of revenues 12.9%13.7%14.2%
Amortization of intangible assets 4,599 5,109 5,465 (10)(7)
% of revenues 8.9% 9.3% 9.0%
Restructuring charges and certain acquisition-related
costs 1,182 1,810 2,841 (35)(36)
% of revenues 2.3% 3.3% 4.7%
Other (income)/deductions—net (532)4,022 2,486 *62
Income from continuing operations before provision for
taxes on income 15,716 11,242 11,481 40 (2)
% of revenues 30.5%20.6%18.8%
Provision for taxes on income 4,306 2,221 3,621 94 (39)
Effective tax rate 27.4%19.8%31.5%
Income from continuing operations 11,410 9,021 7,860 26 15
% of revenues 22.1%16.5%12.9%
Discontinued operations—net of tax 10,662 5,577 2,189 91 *
Net income before allocation to noncontrolling interests 22,072 14,598 10,049 51 45
% of revenues 42.8%26.7%16.5%
Less: Net income attributable to noncontrolling interests 69 28 40 146 (30)
Net income attributable to Pfizer Inc. $22,003 $ 14,570 $ 10,009 51 46
% of revenues 42.7%26.7%16.4%
Certain amounts and percentages may reflect rounding adjustments.
* Calculation not meaningful.
Revenues-Overview
Total revenues were $51.6 billion in 2013, a decrease of 6% compared to 2012, which reflects an operational decline of $1.9 billion, or 4%.
The operational decrease was primarily the result of:
• the continued erosion of branded Lipitor in the U.S., developed Europe and certain other developed markets (approximately $1.7 billion);
• the loss of exclusivity for Geodon in March 2012 in the U.S. (approximately $130 million);
• other product losses of exclusivity (approximately $1.3 billion);
• the ongoing expiration of the Spiriva collaboration in certain countries (approximately $475 million);
• decreased government purchases of the Prevnar family of products and Enbrel in certain emerging markets (approximately $160 million);
and
• lower revenues from generic atorvastatin (approximately $145 million),
partially offset by:
• the growth of certain products, including Lyrica, Inlyta, Celebrex and Xalkori in developed markets and Xeljanz in the U.S. (approximately
$1.1 billion);
• the overall growth in the rest of the Emerging Markets business unit (approximately $751 million), excluding the aforementioned decrease
in the government purchases of the Prevnar family of products and Enbrel;
• the overall growth in the Consumer Healthcare business unit (approximately $153 million); and
• revenues from the transitional manufacturing and supply agreements with Zoetis (approximately $132 million).
In addition, Revenues were unfavorably impacted by foreign exchange of approximately $1.2 billion, or 2%, in 2013 compared to 2012.