Pfizer 2009 Annual Report Download - page 3

Financial Review
Pfizer Inc. and Subsidiary Companies
Introduction
Our Financial Review is provided to assist readers in understanding the results of operations, financial condition and cash flows of
Pfizer Inc. (the Company). It should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated
Financial Statements. The discussion in this Financial Review contains forward-looking statements that involve substantial risks and
uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of
various factors such as those discussed in Part 1, Item 1A, “Risk Factors” of our 2009 Annual Report on Form 10-K and in the
“Forward-Looking Information and Factors That May Affect Future Results” section of this Financial Review.
The Financial Review is organized as follows:
•Overview of Our Performance and Operating Environment. This section provides information about the following: our business; our
2009 performance; our operating environment, strategy and response to key opportunities and challenges; our cost-reduction
initiatives; our strategic initiatives, such as acquisitions, dispositions, licensing and collaborations; and our financial guidance for 2010
and our financial targets for 2012.
•Accounting Policies. This section, beginning on page 8, discusses those accounting policies that we consider important in
understanding Pfizer’s consolidated financial statements. For additional discussion of our accounting policies, see Notes to
Consolidated Financial Statements—Note 1. Significant Accounting Policies.
•Acquisition of Wyeth. This section, beginning on page 11, discusses our acquisition of Wyeth, the use of fair value and the recognition
of assets acquired and liabilities assumed in connection with our acquisition of Wyeth. For additional details related to the acquisition of
Wyeth, see Notes to Consolidated Financial Statements—Note 2. Acquisition of Wyeth.
•Analysis of the Consolidated Statements of Income. This section, beginning on page 16, provides an analysis of our revenues and
products for the three years ended December 31, 2009, including an overview of important product developments; a discussion about
our costs and expenses; and a discussion of Adjusted Income, which is an alternative view of performance used by management.
•Financial Condition, Liquidity and Capital Resources. This section, beginning on page 35, provides an analysis of our consolidated
balance sheets as of December 31, 2009 and 2008, and consolidated cash flows for each of the three years ended December 31,
2009, 2008 and 2007, as well as a discussion of our outstanding debt and other commitments that existed as of December 31, 2009.
Included in the discussion of outstanding debt is a discussion of the amount of financial capacity available to help fund Pfizer’s future
activities.
•New Accounting Standards. This section, beginning on page 39, discusses accounting standards that we recently have adopted, as
well as those that recently have been issued but not yet adopted by us.
•Forward-Looking Information and Factors That May Affect Future Results. This section, beginning on page 39, provides a description of
the risks and uncertainties that could cause actual results to differ materially from those discussed in forward-looking statements
presented in this Financial Review relating to our financial results, operations and business plans and prospects. Such forward-looking
statements are based on management’s current expectations about future events, which are inherently susceptible to uncertainty and
changes in circumstances. Also included in this section are discussions of Financial Risk Management and Legal Proceedings and
Contingencies.
Overview of Our Performance and Operating Environment
Our Business
On October 15, 2009, we completed our acquisition of Wyeth. Our mission continues to be to apply science and our global
resources to improve health and well-being at every stage of life. We strive to set the standard for quality, safety and value in the
discovery, development and manufacturing of medicines for people and animals. Our diversified global healthcare portfolio includes
human and animal biologic and small molecule medicines and vaccines, as well as nutritional products and many of the world’s
best-known consumer products. Every day, we work across developed and emerging markets to advance wellness, prevention,
treatments and cures that challenge the most feared diseases of our time. We also collaborate with other biopharmaceutical
companies, healthcare providers, governments and local communities to support and expand access to reliable, affordable
healthcare around the world. Our revenues are derived from the sale of our products, as well as through alliance agreements, under
which we co-promote products discovered by other companies.
In accordance with Pfizer’s international year-end, the financial information included in our consolidated financial statements for our
subsidiaries operating outside the United States (U.S.) is as of and for the year ended November 30 for each year presented.
The acquisition 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 Wyeth commencing from the acquisition date. In accordance with our domestic
and international fiscal year-ends, approximately two-and-a-half months of the fourth calendar quarter of 2009 in the case of Wyeth’s
domestic operations and approximately one-and-a-half months of the fourth calendar quarter of 2009 in the case of Wyeth’s
international operations are included in our consolidated financial statements for the year ended December 31, 2009.
2009 Financial Report 1