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Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
74
2013 Financial Report
The restructuring charges in 2012 are associated with the following:
• Primary Care operating segment ($295 million), Specialty Care and Oncology operating segment ($174 million), Established Products and Emerging
Markets operating segment ($125 million), Consumer Healthcare operating segment ($46 million), research and development operations ($6 million
income), manufacturing operations ($281 million) and Corporate ($513 million).
The restructuring charges in 2011 are associated with the following:
• Primary Care operating segment ($593 million), Specialty Care and Oncology operating segment ($220 million), Established Products and Emerging
Markets operating segment ($110 million), Consumer Healthcare operating segment ($8 million), research and development operations ($490 million),
manufacturing operations ($277 million) and Corporate ($420 million).
(b) Transaction costs represent external costs directly related to acquired businesses and primarily include expenditures for banking, legal, accounting and other
similar services.
(c) Integration costs represent external, incremental costs directly related to integrating acquired businesses, and primarily include expenditures for consulting and
the integration of systems and processes.
(d) Additional depreciation––asset restructuring represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.
(e) Implementation costs represent external, incremental costs directly related to implementing our non-acquisition-related cost-reduction/productivity initiatives.
The following table provides the components of and changes in our restructuring accruals:
(MILLIONS OF DOLLARS)
Employee
Termination
Costs
Asset
Impairment
Charges Exit Costs Accrual
Balance, January 1, 2012 $ 2,429 $—$92$
2,521
Provision 953 325 150 1,428
Utilization and other(a) (1,648) (325)(90)(2,063)
Balance, December 31, 2012(b) 1,734 —152 1,886
Provision 805 165 68 1,038
Utilization and other(a) (854)(165)(126)(1,145)
Balance, December 31, 2013(c) $1,685 $—$94$
1,779
(a) Includes adjustments for foreign currency translation.
(b) Included in Other current liabilities ($1.2 billion) and Other noncurrent liabilities ($720 million).
(c) Included in Other current liabilities ($1.0 billion) and Other noncurrent liabilities ($767 million).
Total restructuring charges incurred from the beginning of our cost-reduction/productivity initiatives in 2005 through December 31, 2013 were
$16.3 billion.
The asset impairment charges included in restructuring charges for 2013 are based on an estimate of fair value, which was determined to be
lower than the carrying value of the assets prior to the impairment charge.
The following table provides additional information about the long-lived assets that were impaired during 2013 in Restructuring charges and
certain acquisition-related costs:
Fair Value(a)
Year Ended
December 31,
2013
(MILLIONS OF DOLLARS) Amount Level 1 Level 2 Level 3 Impairment
Assets held for sale(b) $ 116 $ — $ 116 $—$ 47
Assets abandoned/demolished ———— 118
Long-lived assets $ 116 $ — $ 116 $—$ 165
(a) The fair value amount is presented as of the date of impairment, as these assets are not measured at fair value on a recurring basis. See also Note 1E. Basis of
Presentation and Significant Accounting Policies: Fair Value.
(b) Reflects property, plant and equipment and other long-lived held-for-sale assets written down to their fair value, less costs to sell of $4 million (a net of $112
million) in 2013. Fair value was determined primarily using a market approach, with various inputs, such as recent sales transactions.