Pfizer Reports Fourth-Quarter and Full-Year 2013 Results; Provides 2014 Financial Guidance

Pfizer Reports Fourth-Quarter and Full-Year 2013 Results; Provides 2014 Financial Guidance

Tuesday, January 28, 2014 - 7:00am EST
Fourth-Quarter 2013 Reported Revenues(1) of $13.6 Billion; Full-Year 2013 Reported Revenues(1) of $51.6 Billion
Fourth-Quarter 2013 Adjusted Diluted EPS(2) of $0.56, Reported Diluted EPS(1) of $0.39; Full-Year 2013 Adjusted Diluted EPS(2) of $2.22, Reported Diluted EPS(1) of $3.19
Repurchased $4.6 Billion and $16.3 Billion of Common Stock in Fourth-Quarter and Full-Year 2013, Respectively; Returned Approximately $23 Billion to Shareholders Through Share Repurchases and Dividends in 2013
Provides 2014 Financial Guidance
NEW YORK--(BUSINESS WIRE)-- Pfizer Inc. (NYSE: PFE) reported financial results for fourth-quarter and full-year 2013. As a result of the full disposition of Zoetis(3) on June 24, 2013, the financial results of the Animal Health business are reported as a discontinued operation in the consolidated statements of income for full-year 2013, and fourth-quarter and full-year 2012. Results and guidance are summarized below.

OVERALL RESULTS
($ in millions, except
per share amounts)
      Fourth-Quarter           Full-Year
       
  2013 
    
  2012 
    
Change
       
  2013 
    
  2012 
    
Change
Reported Revenues(1)      
$ 13,558
    
$ 13,891
      (2%)         
$ 51,584
    
$ 54,657
      (6%)
Adjusted Income(2)        3,686        3,391        9%           15,288        15,749        (3%)
Adjusted Diluted EPS(2)        0.56        0.46        22%           2.22        2.10        6%
Reported Net Income(1)        2,568        6,315        (59%)           22,003        14,570        51%
Reported Diluted EPS(1)        0.39        0.85        (54%)           3.19        1.94        64%
                                                         
BUSINESS UNIT(4) REVENUES
($ in millions)
Favorable/(Unfavorable)
      Fourth-Quarter           Full-Year
       
  2013 
      2012        % Change           2013        2012        % Change
                   
Total
    
  Oper. 
                   
Total
    
  Oper. 
Primary Care        $ 3,442        $ 3,833        (10%)        (8%)           $ 13,272        $ 15,558        (15%)        (13%)
Specialty Care        3,397        3,668        (7%)        (5%)           13,288        14,151        (6%)        (4%)
Emerging Markets        2,749        2,652        4%        9%           10,215        9,960        3%        6%
Established Products        2,424        2,370        2%        6%           9,457        10,235        (8%)        (5%)
Consumer Healthcare        943        936        1%        2%           3,342        3,212        4%        5%
Oncology        468        370        26%        29%           1,646        1,310        26%        29%
Other(5)        135        62        *        *           364        231        58%        57%
Total        $ 13,558        $ 13,891        (2%)        1%           $ 51,584        $ 54,657        (6%)        (4%)
                                                                           
* Calculation not meaningful.

SELECTED ADJUSTED COSTS AND EXPENSES(2)
($ in millions)
(Favorable)/Unfavorable
 

Fourth-Quarter           Full-Year
         2013        2012        % Change           2013        2012        % Change
                   
Total
    
  Oper. 
                   
Total
    
  Oper. 
Cost of Sales(2)        $ 2,672        $ 2,686        (1%)        5%           $ 9,273        $ 9,492        (2%)        2%
Percent of Revenues(2)        19.8  %        19.3  %        N/A        N/A           18.0  %        17.4  %        N/A        N/A
SI&A Expenses(2)        4,093        4,276        (4%)        (2%)           14,172        15,029        (6%)        (5%)
R&D Expenses(2)        1,790        1,884        (5%)        (4%)           6,554        6,958        (6%)        (6%)
Total        $ 8,555        $ 8,846        (3%)        —           $ 29,999        $ 31,479        (5%)        (3%)
                                                                           
Effective Tax Rate(2)        27.7  %        29.7  %                             27.5  %        28.7  %                 
                                                                                       
2014 FINANCIAL GUIDANCE(6)

Pfizer's 2014 financial guidance is summarized below.

            
Adjusted Revenues(2)           $49.2 to $51.2 billion
Adjusted Cost of Sales(2) as a Percentage of Adjusted Revenues(2)           19.0% to 20.0%
Adjusted SI&A Expenses(2)           $13.5 to $14.5 billion
Adjusted R&D Expenses(2)           $6.4 to $6.9 billion
Adjusted Other (Income)/Deductions(2)           Approximately $100 million
Effective Tax Rate on Adjusted Income(2)           Approximately 27.0%
Reported Diluted EPS(1)           $1.57 to $1.72
Adjusted Diluted EPS(2)           $2.20 to $2.30
            
EXECUTIVE COMMENTARY

Ian Read, Chairman and Chief Executive Officer, stated, "The just-completed year was highlighted by solid financial performance and shareholder-friendly capital allocation, a strengthening of our innovative core as well as the formation of our new commercial structure designed to enable each business to have a sharper focus on its distinct market opportunities and challenges."

"We enter 2014 with confidence in the competitive positioning of our commercial businesses, the prospects for our recently launched products and the strength of our research pipeline. We remain focused on those areas and opportunities we believe will continue to create value for our shareholders, and we seek to identify additional opportunities that will strengthen our innovative and established pharmaceutical businesses as well as our Consumer business. We will focus on advancing science and innovation to deliver new therapies in areas with unmet need and ensuring our shareholders' capital is allocated toward the most attractive opportunities for value creation."

Mr. Read continued, "During 2014, we expect to report on several, important clinical data readouts for our mid- and late-stage pipeline compounds. In the near term, we expect to report top-line results for the Phase 2 study for palbociclib in patients with post-menopausal, ER-positive, advanced breast cancer and for the CAPiTA study for Prevnar 13 in adults age 65 and older. In addition, we anticipate data presentations at upcoming medical conferences of Phase 2b data for bococizumab, our PCSK9 inhibitor for LDL cholesterol reduction, and Phase 2a data for our staphylococcus aureus vaccine. During the second quarter, we anticipate reporting top-line results for two pivotal Phase 3 studies for Xeljanz in psoriasis."

"We see attractive opportunities globally to deliver value to patients, payors and other stakeholders through a combination of innovative, established and over-the-counter pharmaceutical products. I believe we have the business structure, leadership team and financial capability firmly in place to facilitate our continued success," Mr. Read concluded.

Frank D'Amelio, Chief Financial Officer, stated, "For full-year 2013, I am pleased with our financial performance, our strategic accomplishments and our ability to continue delivering shareholder value through prudent capital allocation. Regarding our financial performance, we achieved or exceeded all elements of our 2013 financial guidance despite an operating environment that remains challenging. We completed two important strategic initiatives in 2013: the separation of our Animal Health business through the disposition of Zoetis(3), and the formation of the new commercial structure that was successfully implemented at the start of 2014. Finally, we delivered significant shareholder value through share repurchases and dividends. With our strong operating cash flow as well as the proceeds generated from the separations of our Nutrition and Animal Health businesses, we repurchased $16.3 billion of our common stock in 2013. As a result of those share repurchases as well as Pfizer common stock tendered in the Zoetis(3) exchange offer, we reduced the number of shares of outstanding common stock by approximately one billion, or 13%, in 2013 compared to year-end 2012. In addition, we paid $6.6 billion in dividends. In total, we returned approximately $23 billion to shareholders through share repurchases and dividends in 2013."

"We are also providing our 2014 financial guidance, including ranges for adjusted revenues(2) of $49.2 to $51.2 billion and for adjusted diluted EPS(2) of $2.20 to $2.30. Our guidance for adjusted revenues(2)reflects the anticipated negative impact of approximately $3.0 billion due to recent and expected product losses of exclusivity, as well as the expiration and near-term termination of certain collaboration agreements that continue to significantly negatively impact alliance revenue, partially offset by anticipated revenue growth from certain other products. We expect adjusted R&D expenses(2) to be between $6.4 billion and $6.9 billion, which reflects the late-2013 and early-2014 initiations of Phase 3 clinical programs for certain pipeline compounds. Lastly, our reported(1) and adjusted(2) diluted EPS guidance reflects anticipated share repurchases totaling approximately $5 billion this year. These planned repurchases will more than offset the potential dilution related to employee compensation programs," concluded Mr. D'Amelio.

QUARTERLY FINANCIAL HIGHLIGHTS (Fourth-Quarter 2013 vs. Fourth-Quarter 2012)

Reported revenues(1) decreased $333 million, or 2%, which reflects operational growth of $64 million, or 1%, and the unfavorable impact of foreign exchange of $397 million, or 3%. The operational increase was primarily due to the strong growth of Lyrica, Inlyta and Xalkori globally, Enbrel outside of North America, as well as Celebrex, Eliquis and Xeljanz, primarily in the U.S. In addition, fourth-quarter 2013 reported revenues(1) included $65 million from the transitional manufacturing and supply agreements with Zoetis(3). Revenues were negatively impacted primarily by the expiration on October 31, 2013 of the collaboration agreement for Enbrel in North America, continued erosion for branded Lipitor in developed Europe and certain other developed markets, the ongoing expiration of the Spiriva collaboration in certain countries, other product losses of exclusivity in certain markets, decreased government purchases of Prevnar in certain emerging markets, and various other events.
Business unit revenues were impacted by the following:
Primary Care: Revenues declined 8% operationally, primarily due to the shift in the reporting of Lipitor revenues in developed Europe and Australia to the Established Products unit beginning January 1, 2013, as well as certain other product losses of exclusivity in various markets, including Viagra in most major European markets in June 2013 and Lyrica in Canada in February 2013, and the termination of the co-promotion agreement for Aricept in Japan in December 2012. Additionally, in the U.S. and certain European countries, the co-promotion collaboration for Spiriva is in its final year, which, per the terms of the collaboration agreement, has resulted in a decline in Pfizer's share of Spiriva revenues; the agreement has terminated in certain other countries. These declines were partially offset by the strong operational performance of Lyrica in developed markets as well as Celebrex, Eliquis and Premarin, primarily in the U.S.
Specialty Care: Revenues decreased 5% operationally, primarily due to the expiration of the collaboration agreement for Enbrel in North America on October 31, 2013; for a 36-month period thereafter, Pfizer is entitled to royalty payments that are expected to be significantly less than the share of Enbrel profits prior to the expiration of the collaboration agreement, and those royalty payments are and will be included in Other (income)/deductions–net rather than in Revenues. Revenues were also negatively impacted by the shift in the reporting of Geodon and Revatio revenues in the U.S. and Xalabrands revenues in developed Europe and Australia to the Established Products unit beginning January 1, 2013. These declines were partially offset by the growth of Prevnar, Enbrel outside of North America as well as Xeljanz and the hemophilia portfolio (BeneFIX and ReFacto AF/Xyntha) in the U.S.
Emerging Markets: Revenues grew 9% operationally, primarily due to volume growth in China, most notably for Lipitor, which was partially offset by the impact of the transfer of certain product rights to the Pfizer-Hisun joint venture in first-quarter 2013. Revenues were also negatively impacted by decreased government purchases of Prevnar as well as government cost-containment measures in certain other emerging markets.
Established Products: Revenues increased 6% operationally. This performance was driven by the favorable impact of revenues from products in certain markets that were shifted to the Established Products unit from other business units beginning January 1, 2013, including Lipitor, Caduet and Xalbrands in developed Europe and Australia and Geodon in the U.S., as well as the contribution from the collaboration with Mylan Inc. to market generic drugs in Japan. Revenues were unfavorably impacted by the continued erosion of branded Lipitor in Japan due to generic competition and additional generic competition for Metaxalone/Skelaxin in the U.S.
Consumer Healthcare: Revenues increased 2% operationally, primarily due to strong emerging markets growth for core supplement products, including Centrum and Caltrate, as a result of several recent product launches and increased promotional activities in those markets, as well as growth of Emergen-C in the U.S. due to additional promotional activities. This growth was partially offset by a decline in revenues for pain management products in the U.S., primarily due to increased competition resulting from the return to the market of certain competing analgesic brands.
Oncology: Revenues increased 29% operationally, driven by the continued solid uptake of new products, most notably Inlyta and Xalkori in several major markets. Inlyta's market share is stable in the U.S. and continues to increase in international developed markets as physician and patient feedback remains positive both in terms of efficacy and tolerability, and as pricing and reimbursement are being granted in additional developed Europe markets. Revenues were negatively impacted by the performance of Sutent due to increased competitive pressures in certain international developed markets as well as government cost-containment measures in certain European markets.
Adjusted cost of sales, adjusted SI&A expenses and adjusted R&D expenses(2) in the aggregate were flat operationally. Overall, they decreased $291 million, or 3%, primarily reflecting the favorable impact of foreign exchange and the benefits of cost-reduction and productivity initiatives, partially offset by higher adjusted cost of sales(2) on an operational basis due to an unfavorable shift in product mix and adjusted SI&A expenses(2) to support several new product launches.
The effective tax rate on adjusted income(2) declined 2.0 percentage points to 27.7% from 29.7%. This decline was primarily due to an increase in tax benefits compared to fourth-quarter 2012 related to audit settlements with foreign jurisdictions for multiple years and the extension of the U.S. research and development tax credit that was signed into law in January 2013, partially offset by a change in the jurisdictional mix of earnings.
The diluted weighted-average shares outstanding declined by approximately 862 million shares, due to the company's ongoing share repurchase program and the impact of the Zoetis(3) exchange offer, which was completed on June 24, 2013.
In addition to the aforementioned factors, fourth-quarter 2013 reported earnings were significantly unfavorably impacted by the non-recurrence of income from discontinued operations attributable to the company's Animal Health and Nutrition businesses, including the gain on the sale of the Nutrition business, in the year-ago quarter. Reported earnings were favorably impacted by a lower effective tax rate, lower charges related to asset impairments and legal matters, and lower acquisition-related expenses. The effective tax rate on reported income(1) decreased in fourth-quarter 2013 in comparison with the year-ago quarter primarily due to an increase in tax benefits related to an audit settlement with the U.S. Internal Revenue Service as well as audit settlements with foreign jurisdictions for multiple years.
FULL-YEAR FINANCIAL HIGHLIGHTS (Full-Year 2013 vs. Full-Year 2012)

Reported revenues(1) decreased $3.1 billion, or 6%, which reflects an operational decline of $1.9 billion, or 4%, and the unfavorable impact of foreign exchange of $1.2 billion, or 2%. In addition to the aforementioned factors that negatively impacted fourth-quarter 2013 revenues, full-year 2013 revenues were negatively impacted by erosion of branded Lipitor in the U.S. and decreased government purchases of Enbrel in certain emerging markets. Revenues were positively impacted by the operational growth of Lyrica, Celebrex, Inlyta and Xalkori globally, Eliquis and Xeljanz in the U.S., as well as the contribution from the collaboration with Mylan Inc. to market generic drugs in Japan. In addition, reported revenues(1) in full-year 2013 included $132 million from the transitional manufacturing and supply agreements with Zoetis(3).
Adjusted cost of sales, adjusted SI&A expenses and adjusted R&D expenses(2) in the aggregate decreased $1.5 billion, or 5%, primarily reflecting the benefits of cost-reduction and productivity initiatives, the non-recurrence of a $250 million payment included in adjusted R&D expenses(2) in third-quarter 2012 to obtain the exclusive global over-the-counter rights to Nexium, and the favorable impact of foreign exchange, partially offset by higher adjusted cost of sales(2) on an operational basis due to an unfavorable shift in product mix and adjusted SI&A expenses(2) to support several new product launches.
The effective tax rate on adjusted income(2) declined 1.2 percentage points to 27.5% from 28.7%. This decline was primarily due to an increase in tax benefits compared to 2012 related to audit settlements with foreign jurisdictions for multiple years and the extension of the U.S. research and development tax credit that was signed into law in January 2013.
The diluted weighted-average shares outstanding declined by approximately 613 million shares, due to the company's ongoing share repurchase program and the partial-year impact of the Zoetis(3)exchange offer, which was completed on June 24, 2013.
In addition to the aforementioned factors, full-year 2013 reported earnings were impacted by the following:
Favorable impacts:

the gain associated with the full disposition of Zoetis(3) in second-quarter 2013;
income from a litigation settlement in second-quarter 2013 with Teva Pharmaceuticals Industries Ltd. and Sun Pharmaceutical Industries Ltd. for patent-infringement damages resulting from their "at-risk" launches of generic Protonix in the U.S.;
the gain associated with the transfer of certain product rights to Pfizer's joint venture with Zhejiang Hisun Pharmaceuticals (Hisun) in China in first-quarter 2013; and
lower charges related to other legal matters, lower acquisition-related costs and lower expenses related to cost-reduction and productivity initiatives.
Unfavorable impacts:

the non-recurrence in full-year 2013 of the income from discontinued operations attributable to the company's Nutrition business in 2012, including the gain on the sale of the Nutrition business in fourth-quarter 2012;
the non-recurrence after June 24, 2013 of the income from discontinued operations attributable to the company's Animal Health business in 2012;
higher asset impairments and related charges; and
a higher effective tax rate. The effective tax rate on reported income(1) increased primarily due to a decrease in tax benefits related to certain audit settlements in multiple jurisdictions covering various periods and a change in the jurisdictional mix of earnings.
RECENT NOTABLE DEVELOPMENTS

Product Developments

Viagra -- Pfizer settled its litigation against Teva Pharmaceuticals, USA Inc. (Teva) relating to Pfizer's patent covering the use of Viagra to treat erectile dysfunction, which expires in April 2020 (including pediatric exclusivity). As a result of the settlement, Teva will be allowed to launch a generic version of Viagra in the U.S. on December 11, 2017, or earlier under certain circumstances. Teva will pay Pfizer a royalty for a license to produce its generic version. The terms of the settlement agreement are otherwise confidential.
Xalkori -- The U.S. Food and Drug Administration (FDA) granted regular approval for the treatment of patients with metastatic ALK-positive non-small cell lung cancer (NSCLC) as detected by an FDA-approved test. Xalkori was previously granted accelerated approval in August 2011 due to the critical need for new agents for people living with ALK-positive NSCLC.
Xeljanz
The FDA approved a supplemental New Drug Application (sNDA) to include additional patient-reported outcomes data in the label for adults with moderately to severely active rheumatoid arthritis. These additional data show improvement in patients receiving Xeljanz based on health-related outcome measures reported by patients.
The top-line results were announced from the first two (OPT Compare and OPT Retreatment) of five Phase 3 clinical trials in adults with moderate-to-severe chronic plaque psoriasis. In OPT Compare, Xeljanz met the primary endpoint of non-inferiority to high-dose Enbrel at the 10 mg twice-daily (BID) dose, but did not at the 5 mg BID dose. In OPT Retreatment, Xeljanz met the primary efficacy endpoints at the 5 and 10 mg BID doses by demonstrating that a greater proportion of patients continuing Xeljanz treatment maintained their response during the treatment-withdrawal phase compared to patients who switched to placebo. Additionally, among patients who lost an adequate response, many were able to recapture their response upon retreatment with Xeljanz. No new safety signals were observed in these two studies.
Eliquis -- The FDA accepted for review an sNDA for Eliquis for the treatment of deep vein thrombosis (DVT) and pulmonary embolism (PE), and for the reduction in the risk of recurrent DVT and PE. The Prescription Drug User Fee Act (PDUFA) goal date for a decision by the FDA is August 25, 2014. Additionally, the European Medicines Agency accepted for review an application for Eliquis for the treatment of DVT and PE, and prevention of recurrent DVT and PE.
Duavee -- The FDA approved Duavee (0.45 mg/20 mg tablets), a novel therapy for women with a uterus, for the treatment of moderate-to-severe vasomotor symptoms associated with menopause and the prevention of postmenopausal osteoporosis. Duavee is expected to be available in the U.S. in February 2014.
Embeda -- The FDA approved a Prior Approval Supplement for Embeda Extended Release Capsules CII. The Prior Approval Supplement included an update to the Embeda manufacturing process that addressed the pre-specified stability requirement that led to the voluntary recall of Embeda from the market in March 2011. Pfizer anticipates product availability beginning in the second quarter of 2014.
Remoxy -- Pfizer will continue the development program for Remoxy Extended-Release Capsules CII. Having achieved technical milestones related to manufacturing and following guidance received from the FDA in 2013, Pfizer is proceeding with the additional clinical studies and other actions required to address the Complete Response Letter received in June 2011. As previously disclosed, the complete response submission is not expected to occur prior to mid-2015.
Lipitor Over-the-Counter (OTC) -- A Phase 3 "actual use" trial intended to simulate the OTC use of atorvastatin calcium 10 mg began enrolling patients.
Pipeline Developments

Palbociclib
A Phase 3 trial (PENELOPE-B) in early-stage breast cancer began enrolling patients. This is a randomized global study that will evaluate palbociclib in combination with endocrine therapy versus placebo plus endocrine therapy in prolonging investigator-assessed, invasive disease-free survival in women with hormone receptor positive (HR+), human epidermal growth factor receptor 2 negative (HER2-) early-stage breast cancer with high risk of relapse after neoadjuvant chemotherapy. This trial is sponsored by the German Breast Group, a leading cooperative group with extensive experience conducting clinical trials in breast cancer, in collaboration with Pfizer.
Pfizer entered into an agreement with GSK to explore the anti-cancer efficacy and the safety of GSK's trametinib (GSK1120212) combined with palbociclib in a Phase I/II study in patients with advanced/metastatic melanoma. The two companies will collaborate on the study, which GSK will conduct.
Dacomitinib -- Pfizer announced top-line results from two Phase 3 studies of dacomitinib in patients with previously treated advanced NSCLC. Neither study met its primary endpoint. In the ARCHER 1009 trial, dacomitinib did not demonstrate statistically significant improvement in progression-free survival (PFS) when compared with erlotinib and in the BR.26 trial, dacomitinib did not prolong overall survival versus placebo. A third Phase 3 trial, ARCHER 1050, is ongoing and evaluating PFS of dacomitinib in treatment-naïve patients with EGFR-mutant advanced NSCLC; results are expected in 2015.
ALO-02 -- Pfizer announced top-line results from a Phase 3 study of ALO-02 (oxycodone hydrochloride and naltrexone hydrochloride extended-release capsules) in patients with moderate-to-severe chronic low back pain. In this study, ALO-02 met the primary efficacy endpoint, demonstrating a statistically significant difference from placebo in the mean change in the daily average pain numerical rating scale scores from baseline to the final two weeks of the double-blind treatment period.
Tafamidis -- Pfizer initiated a global Phase 3 program for tafamidis in transthyretin cardiomyopathy (TTR-CM), the first study of its kind in this rare, progressive and universally fatal disease. Tafamidis is approved for the treatment of transthyretin familial amyloid polyneuropathy (TTR-FAP) in the European Union and Japan under the trade name Vyndaqel.
Bococizumab (RN316) -- The Phase 3 program was initiated for this PCSK9 monoclonal antibody to lower LDL cholesterol. This is a global program expected to involve more than 22,000 patients, which includes multiple lipid-lowering studies as well as two cardiovascular outcomes studies. This program includes the broadest range of high-risk patients including a focus on patients in greatest need of LDL-lowering.
Ertugliflozin -- Pfizer in collaboration with Merck initiated a Phase 3 program for this SGLT2 inhibitor for the treatment of type 2 diabetes.
Tanezumab -- Pfizer entered into a collaboration agreement with Eli Lilly & Company (Lilly) to jointly develop and globally commercialize tanezumab, which provides that Pfizer and Lilly will equally share product-development expenses as well as potential revenues and certain product-related costs. The tanezumab program currently is subject to a partial clinical hold by the FDA pending submission of nonclinical data to the FDA. Pfizer now anticipates submitting that data by the end of 2014.
Other Developments

Pfizer successfully implemented its previously announced plans to internally separate its commercial operations into three businesses at the start of the 2014 fiscal year. The company remains on track to provide greater financial transparency for each of these businesses beginning with first-quarter 2014 financial results.
For additional details, see the attached financial schedules, product revenue tables and disclosure notice.

(1)     "Reported Revenues" is defined as revenues in accordance with U.S. generally accepted accounting principles (GAAP). "Reported Net Income" is defined as net income attributable to Pfizer Inc. in accordance with U.S. GAAP. "Reported Diluted EPS" is defined as reported diluted EPS attributable to Pfizer Inc. common shareholders in accordance with U.S. GAAP.

(2)   
"Adjusted Income" and its components and "Adjusted Diluted Earnings Per Share (EPS)" are defined as reported U.S. GAAP net income(1) and its components and reported diluted EPS(1) excluding purchase accounting adjustments, acquisition-related costs, discontinued operations and certain significant items. Adjusted Revenues, Adjusted Cost of Sales, Adjusted Selling, Informational and Administrative (SI&A) expenses, Adjusted Research and Development (R&D) expenses and Adjusted Other (Income)/Deductions are income statement line items prepared on the same basis, and, therefore, components of the overall adjusted income measure. As described under Adjusted Income in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of Pfizer's Quarterly Report on Form 10-Q for the fiscal quarter ended September 29, 2013, management uses adjusted income, among other factors, to set performance goals and to measure the performance of the overall company. We believe that investors' understanding of our performance is enhanced by disclosing this measure. See the accompanying reconciliations of certain GAAP reported to non-GAAP adjusted information for the fourth quarter and twelve months ended 2013 and 2012, as well as reconciliations of full-year 2014 guidance for adjusted income and adjusted diluted EPS to full-year 2014 guidance for reported net income(1) and reported diluted EPS(1). The adjusted income and its components and adjusted diluted EPS measures are not, and should not be viewed as, substitutes for U.S. GAAP net income and its components and diluted EPS.

(3)   
On June 24, 2013, we completed the full disposition of Zoetis, Inc. (Zoetis) and recognized a gain of approximately $10.3 billion, net of tax, in Discontinued operations––net of tax for the twelve months ended December 31, 2013. The financial results of our Animal Health business are reported as Discontinued operations––net of tax through June 24, 2013, the date of disposal.

(4)     For a description of the revenues in each business unit, see Note 13 to Pfizer's condensed consolidated financial statements included in Pfizer's Quarterly Report on Form 10-Q for the fiscal quarter ended September 29, 2013.

(5)     Other represents revenues generated from Pfizer CentreSource, Pfizer's contract manufacturing and bulk pharmaceutical chemical sales organization, and includes, in 2013, revenues related to our transitional manufacturing and supply agreements with Zoetis(3).

(6)     The 2014 financial guidance reflects the following:
Does not assume the completion of any business development transactions not completed as of December 31, 2013, including any one-time upfront payments associated with such transactions.
Excludes the potential effects of the resolution of litigation-related matters not substantially resolved as of December 31, 2013.
Exchange rates assumed are as of mid-January 2014.
Assumes diluted weighted-average shares outstanding of approximately 6.4 billion shares.
Revenues and cost of sales from the transitional manufacturing and supply agreements with Zoetis(3) have been excluded from the applicable Adjusted components of the financial guidance.
Reconciliation of the 2014 Adjusted Income(2) and Adjusted Diluted EPS(2) guidance to the 2014 Reported Net Income Attributable to Pfizer Inc. and Reported Diluted EPS Attributable to Pfizer Inc. common shareholders guidance:
                                             
                     ($ in billions, except per share amounts)                       
                     Income/(Expense)        Net Income           Diluted EPS  
                     Adjusted income/diluted EPS(2) guidance        $14.1 - $14.8           $2.20 - $2.30  
                     Purchase accounting impacts of transactions completed as of December 31, 2013        (2.8)           (0.43)  
                     Restructuring and implementation costs        (1.0 - 1.3)           (0.15 - 0.20)  
                     Reported net income attributable to Pfizer Inc./diluted EPS(1) guidance        $10.0 - $11.0           $1.57 - $1.72  
                                             
PFIZER INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME(1)
(UNAUDITED)
(millions, except per common share data)

      Fourth-Quarter     % Incr. /     Full-Year     % Incr. /
      2013     2012     (Decr.)     2013     2012     (Decr.)
Revenues     $  13,558        $  13,891        (2)     $  51,584        $  54,657        (6)
Costs and expenses:                                   
Cost of sales(2)     2,794        2,753        1     9,586        9,821        (2)
Selling, informational and administrative expenses(2)     4,152        4,337        (4)     14,355        15,171        (5)
Research and development expenses(2)     1,811        2,021        (10)     6,678        7,482        (11)
Amortization of intangible assets(3)     1,123        1,220        (8)     4,599        5,109        (10)
Restructuring charges and certain acquisition-related costs     635        725        (12)     1,182        1,810        (35)
Other (income)/deductions––net(4)     (18  )     758        *     (532  )     4,022        *
                                    
Income from continuing operations before provision for taxes on income     3,061        2,077        47     15,716        11,242        40
Provision for taxes on income(5)     430        599        (28)     4,306        2,221        94
Income from continuing operations     2,631        1,478        78     11,410        9,021        26
Discontinued operations––net of tax     (57  )     4,843        *     10,662        5,577        91
Net income before allocation to noncontrolling interests     2,574        6,321        (59)     22,072        14,598        51
Less: Net income attributable to noncontrolling interests     6        6        —     69        28      
*
Net income attributable to Pfizer Inc.     $  2,568        $  6,315        (59)     $  22,003        $  14,570        51
                                    
Earnings per common share––basic:                                   
Income from continuing operations attributable to Pfizer Inc. common shareholders     $  0.41        $  0.20      
*
   $  1.67        $  1.21        38
Discontinued operations––net of tax     (0.01  )     0.66      
*
   1.56        0.75        *
Net income attributable to Pfizer Inc. common shareholders     $  0.40        $  0.86        (53)     $  3.23        $  1.96        65
                                    
Earnings per common share––diluted:                                   
Income from continuing operations attributable to Pfizer Inc. common shareholders     $  0.40        $  0.20        100     $  1.65        $  1.20        38
Discontinued operations––net of tax     (0.01  )     0.65        *     1.54        0.74        *
Net income attributable to Pfizer Inc. common shareholders     $  0.39        $  0.85        (54)     $  3.19        $  1.94        64
Weighted-average shares used to calculate earnings per common share:                                   
Basic     6,443        7,319              6,813        7,442        
Diluted     6,533        7,395              6,895        7,508        
                                                
* Calculation not meaningful.
See next pages for notes (1) through (5).
Certain amounts and percentages may reflect rounding adjustments.

PFIZER INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
      
(1)   
The financial statements present the three and twelve months ended December 31, 2013 and 2012. Subsidiaries operating outside the United States are included for the three and twelve months ended November 30, 2013 and 2012.

    
On June 24, 2013, we completed the full disposition of our Animal Health business (Zoetis) and recognized a gain of approximately $10.3 billion, net of tax, in Discontinued operations––net of tax for the twelve months ended December 31, 2013. The operating results of this business are reported as Discontinued operations––net of tax through June 24, 2013, the date of disposal.

    
On November 30, 2012, we completed the sale of our Nutrition business and recognized a gain of approximately $4.8 billion, net of tax, in Discontinued operations––net of tax for the three and twelve months ended December 31, 2012. The operating results of this business are reported as Discontinued operations––net of tax through November 30, 2012, the date of disposal.

(2)     Exclusive of amortization of intangible assets, except as discussed in footnote (3) below.

(3)   
Amortization expense related to finite-lived acquired intangible assets that contribute to our ability to sell, manufacture, research, market and distribute products, compounds and intellectual property is included in Amortization of intangible assets as these intangible assets benefit multiple business functions. Amortization expense related to intangible assets that are associated with a single function is included in Cost of sales, Selling, informational and administrative expenses or Research and development expenses, as appropriate.

(4)   
Other (income)/deductions––net includes the following:
      
                     Fourth-Quarter           Full-Year
            (millions of dollars)      
  2013 
    
  2012 
       
  2013 
    
  2012 
            Interest income(a)        $  (112  )        $  (107  )           $  (403  )        $  (382  )
            Interest expense(a)        347           373              1,414           1,522  
            Net interest expense        235           266              1,011           1,140  
            Royalty-related income(b)        (218  )        (108  )           (523  )        (451  )
            Patent litigation settlement income(c)        —           —              (1,342  )        —  
            Other legal matters, net(d)        129           206              35           2,220  
            Gain associated with the transfer of certain product rights to an equity-method investment(e)        —           —              (459  )        —  
            Net gains on asset disposals(f)        (220  )        (7  )           (320  )        (52  )
            Certain asset impairments and related charges(g)        133           366              1,101           890  
            Costs associated with the Zoetis IPO(h)        —           32              18           125  
            Other, net        (77  )        3              (53  )        150  
           Other (income)/deductions––net        $  (18  )        $  758              $  (532  )        $  4,022  
                                                                           
            (a)     Interest income increased in fourth-quarter and full-year 2013 due to higher cash and investment balances. Interest expense decreased in fourth-quarter and full-year 2013 due to lower outstanding debt, refinancings and lower rates, and the benefit of the conversion of some fixed-rate liabilities to floating-rate liabilities.
                  
            (b)     Royalty-related income increased in fourth-quarter and full-year 2013 due to royalties earned on sales of Enbrel in North America after October 31, 2013. On that date, our collaboration agreement for Enbrel in North America expired, and we became entitled to royalties for a 36-month period.
                  
            (c)     Reflects income from a litigation settlement with Teva Pharmaceutical Industries Ltd. and Sun Pharmaceutical Industries Ltd. for patent-infringement damages resulting from their "at-risk" launches of generic Protonix in the U.S.
                  
            (d)     In full-year 2012, primarily includes a $491 million charge related to the resolution of an investigation by the U.S. Department of Justice into Wyeth's historical promotional practices in connection with Rapamune, a $450 million settlement of a lawsuit by Brigham Young University related to Celebrex, and charges for hormone-replacement therapy litigation and Chantix litigation.
                  
            (e)     Represents the gain associated with the transfer of certain product rights to Pfizer's 49%-owned equity-method investment in China.
                  
            (f)     In fourth-quarter and full-year 2013, includes a gain of $125 million on the sale of a portion of our in-licensed generic sterile injectibles portfolio.
                  
            (g)     In full-year 2013, primarily includes impairment charges related to developed technology (for use in the development of bone and cartilage) acquired in connection with our acquisition of Wyeth, and in-process research and development (IPR&D) compounds. Full-year 2013 also includes a loss on an option to acquire the remaining interest in a 40%-owned generics company in Brazil (approximately $220 million). In fourth-quarter and full-year 2012, primarily includes impairment charges related to certain intangible assets acquired in connection with our acquisitions of Wyeth and King Pharmaceuticals Inc. (King), including IPR&D intangible assets.
                  
            (h)     Costs incurred in connection with the initial public offering (IPO) of an approximate 19.8% ownership interest in Zoetis. Includes expenditures for banking, legal, accounting and similar services.
                  
(5)   
The Provision for taxes on income for fourth-quarter and full-year 2013 was favorably impacted by U.S. tax benefits of approximately $430 million, representing tax and interest, resulting from a settlement with the U.S. Internal Revenue Service (IRS) with respect to audits of the Wyeth tax returns for the years 2006 through date of acquisition. Full-year 2013 was also favorably impacted by international tax benefits of approximately $470 million, most of which occurred in the fourth quarter, representing tax and interest, resulting from the resolution of certain tax positions pertaining to prior years with various foreign tax authorities and from the expiration of certain statutes of limitations, as well as the extension of the U.S. research and development tax credit that was signed into law in January 2013. The Provision for taxes on income for full-year 2012 was favorably impacted by a $1.1 billion settlement (representing tax and interest) with the IRS related to audits for multiple tax years, as well as approximately $300 million related to the resolution of foreign audits pertaining to multiple tax years, partially offset by the unfavorable impact of the non-deductibility of a legal charge related to Rapamune.
      
PFIZER INC. AND SUBSIDIARY COMPANIES
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
CERTAIN LINE ITEMS
(UNAUDITED)
(millions of dollars, except per common share data)


      Quarter Ended December 31, 2013
    
GAAP
Reported(1)
 
Purchase
Accounting
Adjustments
 
Acquisition-
Related
Costs(2)
 
Discontinued
Operations
 
Certain
Significant
Items(3)
 
Non-GAAP
Adjusted(4)
Revenues    $ 13,558        $  —        $  —        $  —        $  (65  )     $  13,493  
Cost of sales(5)    2,794        7        (15  )     —        (114  )     2,672  
Selling, informational and administrative expenses(5)    4,152        3        —        —        (62  )     4,093  
Research and development expenses(5)    1,811        2        —        —        (23  )     1,790  
Amortization of intangible assets(6)    1,123        (1,086  )     —        —        —        37  
Restructuring charges and certain acquisition-related costs    635        —        (97  )     —        (538  )     —  
Other (income)/deductions––net    (18 )     17        —        —        (200  )     (201  )
Income from continuing operations before provision for taxes on income    3,061        1,057        112        —        872        5,102  
Provision for taxes on income    430        257        35        —        689        1,411  
Income from continuing operations    2,631        800        77        —        183        3,691  
Discontinued operations––net of tax    (57 )     —        —        57        —        —  
Net income attributable to noncontrolling interests    6        —        —        (1  )     —        5  
Net income attributable to Pfizer Inc.    2,568        800        77        58        183        3,686  
Earnings per common share attributable to Pfizer Inc.––diluted    0.39        0.12        0.01        0.01        0.03        0.56  
                                                      
      Twelve Months Ended December 31, 2013
    
GAAP
Reported(1)
 
Purchase
Accounting
Adjustments
 
Acquisition-
Related
Costs(2)
 
Discontinued
Operations
 
Certain
Significant
Items(3)
 
Non-GAAP
Adjusted(4)
Revenues    $ 51,584        $  —        $  —        $  —        $  (132  )     $  51,452
Cost of sales(5)    9,586        23        (116  )     —        (220  )     9,273
Selling, informational and administrative expenses(5)    14,355        8        (8  )     —        (183  )     14,172
Research and development expenses(5)    6,678        3        —        —        (127  )     6,554
Amortization of intangible assets(6)    4,599        (4,438  )     —        —        —        161
Restructuring charges and certain acquisition-related costs    1,182        —        (252  )     —        (930  )     —
Other (income)/deductions––net    (532 )     60        —        —        636        164
Income from continuing operations before provision for taxes on income    15,716        4,344        376        —        692        21,128
Provision for taxes on income    4,306        1,198        (7  )     —        313        5,810
Income from continuing operations    11,410        3,146        383        —        379        15,318
Discontinued operations––net of tax    10,662        —        —        (10,662  )     —        —
Net income attributable to noncontrolling interests    69        —        —        (39  )     —        30
Net income attributable to Pfizer Inc.    22,003        3,146        383        (10,623  )     379        15,288
Earnings per common share attributable to Pfizer Inc.––diluted    3.19        0.46        0.06        (1.54  )     0.05        2.22
                                                   
See end of tables for notes (1) through (6).
Certain amounts may reflect rounding adjustments.

PFIZER INC. AND SUBSIDIARY COMPANIES
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
CERTAIN LINE ITEMS
(UNAUDITED)
(millions of dollars, except per common share data)

                                    
      Quarter Ended December 31, 2012
    
GAAP
Reported(1)
 
Purchase
Accounting
Adjustments
 
Acquisition-
Related
Costs(2)
 
Discontinued
Operations
 
Certain
Significant
Items(3)
 
Non-GAAP
Adjusted(4)
Revenues    $ 13,891        $  —        $  —        $  —        $  —        $  13,891
Cost of sales(5)    2,753        5        (53  )     —        (19  )     2,686
Selling, informational and administrative expenses(5)    4,337        8        (2  )     —        (67  )     4,276
Research and development expenses(5)    2,021        (1  )     (1  )     —        (135  )     1,884
Amortization of intangible assets(6)    1,220        (1,198  )     —        —        —        22
Restructuring charges and certain acquisition-related costs    725        —        (252  )     —        (473  )     —
Other (income)/deductions––net    758        (6  )     —        —        (561  )     191
Income from continuing operations before provision for taxes on income    2,077        1,192        308        —        1,255        4,832
Provision for taxes on income    599        329        47        —        460        1,435
Income from continuing operations    1,478        863        261        —        795        3,397
Discontinued operations––net of tax    4,843        —        —        (4,843  )     —        —
Net income attributable to noncontrolling interests    6        —        —        —        —        6
Net income attributable to Pfizer Inc.    6,315        863        261        (4,843  )     795        3,391
Earnings per common share attributable to Pfizer Inc.––diluted    0.85        0.12        0.04        (0.65  )     0.11        0.46
                                                   
      Twelve Months Ended December 31, 2012
    
GAAP
Reported(1)
 
Purchase
Accounting
Adjustments
 
Acquisition-
Related
Costs(2)
 
Discontinued
Operations
 
Certain
Significant
Items(3)
 
Non-GAAP
Adjusted(4)
Revenues    $ 54,657        $  —        $  —        $  —        $  —        $  54,657
Cost of sales(5)    9,821        (1  )     (258  )     —        (70  )     9,492
Selling, informational and administrative expenses(5)    15,171        11        (9  )     —        (144  )     15,029
Research and development expenses(5)    7,482        3        (6  )     —        (521  )     6,958
Amortization of intangible assets(6)    5,109        (4,924  )     —        —        —        185
Restructuring charges and certain acquisition-related costs    1,810        —        (673  )     —        (1,137  )     —
Other (income)/deductions––net    4,022        6        —        —        (3,167  )     861
Income from continuing operations before provision for taxes on income    11,242        4,905        946        —        5,039        22,132
Provision for taxes on income    2,221        1,343        203        —        2,588        6,355
Income from continuing operations    9,021        3,562        743        —        2,451        15,777
Discontinued operations––net of tax    5,577        —        —        (5,577  )     —        —
Net income attributable to noncontrolling interests    28        —        —        —        —        28
Net income attributable to Pfizer Inc.    14,570        3,562        743        (5,577  )     2,451        15,749
Earnings per common share attributable to Pfizer Inc.––diluted    1.94        0.47        0.10        (0.74  )     0.33        2.10
                                                   
See end of tables for notes (1) through (6).
Certain amounts may reflect rounding adjustments.
EPS amounts may not add due to rounding.

PFIZER INC. AND SUBSIDIARY COMPANIES
NOTES TO RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
CERTAIN LINE ITEMS
(UNAUDITED)
      
(1)     The financial statements present the three and twelve months ended December 31, 2013 and 2012. Subsidiaries operating outside the United States are included for the three and twelve months ended November 30, 2013 and 2012.
      
    
On June 24, 2013, we completed the full disposition of our Animal Health business (Zoetis) and recognized a gain of approximately $10.3 billion, net of tax, in Discontinued operations––net of tax for the twelve months ended December 31, 2013. The operating results of this business are reported as Discontinued operations––net of tax through June 24, 2013, the date of disposal.
      
    
On November 30, 2012, we completed the sale of our Nutrition business and recognized a gain of approximately $4.8 billion, net of tax, in Discontinued operations––net of tax for the three and twelve months ended December 31, 2012. The operating results of this business are reported as Discontinued operations––net of tax through November 30, 2012, the date of disposal.
      
(2)     Acquisition-related costs include the following:
      
                     Fourth-Quarter           Full-Year
            (millions of dollars)      
  2013 
    
  2012 
       
  2013 
    
  2012 
            Restructuring charges(a)        $  60           $  149              $  108           $  291  
            Transaction costs(a)        —           1              —           1  
            Integration costs(a)        37           102              144           381  
            Additional depreciation––asset restructuring(b)        15           56              124           273  
            Total acquisition-related costs––pre-tax        112           308              376           946  
            Income taxes(c)        (35  )        (47  )           7           (203  )
            Total acquisition-related costs––net of tax        $  77           $  261              $  383           $  743  
                                                                           
            (a)   
Restructuring charges include employee termination costs, asset impairments and other exit costs associated with business combinations. Transaction costs represent external costs directly related to acquired businesses and primarily include expenditures for banking, legal, accounting and other similar services. 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. All of these costs and charges are included in Restructuring charges and certain acquisition-related costs.
                  
            (b)   
Represents the impact of changes in the estimated useful lives of assets involved in restructuring actions related to acquisitions. Included in Cost of sales for the three months ended December 31, 2013. Included in Cost of sales ($116 million) and Selling, informational and administrative expenses ($8 million) for the twelve months ended December 31, 2013. Included in Cost of sales ($53 million), Selling, informational and administrative expenses ($2 million) and Research and development expenses ($1 million) for the three months ended December 31, 2012. Included in Cost of sales ($258 million),Selling, informational and administrative expenses ($9 million) and Research and development expenses ($6 million) for the twelve months ended December 31, 2012.
                  
            (c)   
Included in Provision for taxes on income. Income taxes includes the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pre-tax amounts and applying that jurisdiction's applicable tax rate. The full-year 2013 also includes the unfavorable impact of the remeasurement of certain deferred tax liabilities resulting from plant network restructuring activities.
                  
(3)     Certain significant items include the following:
      
                     Fourth-Quarter           Full-Year
            (millions of dollars)      
  2013 
    
  2012 
       
  2013 
    
  2012 
            Restructuring charges(a)        $  538           $  473              $  930           $  1,137  
            Implementation costs and additional depreciation––asset restructuring(b)        128           207              398           692  
            Patent litigation settlement income(c)        —           —              (1,342  )        —  
            Other legal matters, net(d)        120           210              21           2,191  
            Gain associated with the transfer of certain product rights to an equity-method investment(e)        —           —              (459  )        —  
            Certain asset impairments and related charges(f)        130           369              1,059           875  
            Costs associated with the Zoetis IPO(g)        —           32              18           125  
            Income associated with the transitional manufacturing and supply agreements with Zoetis(h)        (6  )        —              (16  )        —  
            Other(i)        (38  )        (36  )           83           19  
            Total certain significant items––pre-tax        872           1,255              692           5,039  
            Income taxes(j)        (689  )        (460  )           (313  )        (2,588  )
            Total certain significant items––net of tax        $  183           $  795              $  379           $  2,451  
                                                                           
            (a)   
Primarily related to our cost-reduction and productivity initiatives. Included in Restructuring charges and certain acquisition-related costs.
                  
            (b)   
Primarily related to our cost-reduction and productivity initiatives. Included in Cost of sales ($55 million), Selling, informational and administrative expenses ($50 million) and Research and development expenses ($23 million) for the three months ended December 31, 2013. Included in Cost of sales ($115 million), Selling, informational and administrative expenses ($156 million) and Research and development expenses ($127 million) for the twelve months ended December 31, 2013. Included in Cost of sales ($8 million), Selling, informational and administrative expenses ($64 million) and Research and development expenses ($135 million) for the three months ended December 31, 2012. Included in Cost of sales ($30 million), Selling, informational and administrative expenses ($141 million) andResearch and development expenses ($521 million) for the twelve months ended December 31, 2012.
                  
            (c)   
Included in Other (income)/deductions––net. Reflects income from a litigation settlement with Teva Pharmaceutical Industries Ltd. and Sun Pharmaceutical Industries Ltd. for patent-infringement damages resulting from their "at-risk" launches of generic Protonix in the U.S.
                  
            (d)   
Primarily included in Other (income)/deductions––net. In full-year 2012, primarily includes a $491 million charge related to the resolution of an investigation by the U.S. Department of Justice into Wyeth's historical promotional practices in connection with Rapamune, a $450 million settlement of a lawsuit by Brigham Young University related to Celebrex, and charges for hormone-replacement therapy litigation and Chantix litigation.
                  
            (e)   
Included in Other (income)/deductions––net. Represents the gain associated with the transfer of certain product rights to Pfizer's 49%-owned equity-method investment in China.
                  
            (f)   
Primarily included in Other (income)/deductions––net. In full-year 2013, primarily includes impairment charges related to developed technology (for use in the development of bone and cartilage) acquired in connection with our acquisition of Wyeth, and in-process research and development (IPR&D) compounds. Full-year 2013 also includes a loss on an option to acquire the remaining interest in a 40%-owned generics company in Brazil (approximately $220 million). In fourth-quarter and full-year 2012, primarily includes impairment charges related to certain intangible assets acquired in connection with our acquisitions of Wyeth and King, including IPR&D intangible assets.
                  
            (g)   
Included in Other (income)/deductions––net. Costs incurred in connection with the initial public offering of an approximate 19.8% ownership interest in Zoetis. Includes expenditures for banking, legal, accounting and similar services.
                  
            (h)   
Included in Revenues ($65 million) and Cost of sales ($59 million) for the three months ended December 31, 2013. Included in Revenues ($132 million) and Cost of sales ($116 million) for the twelve months ended December 31, 2013.
                  
            (i)   
Primarily included in Other (income)/deductions––net.
                  
            (j)   
Included in Provision for taxes on income. Income taxes includes the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pre-tax amounts and applying that jurisdiction's applicable tax rate. The fourth quarter of 2013 was favorably impacted by U.S. tax benefits of approximately $430 million, representing tax and interest, resulting from a settlement with the U.S. Internal Revenue Service (IRS) with respect to audits of the Wyeth tax returns for the years 2006 through date of acquisition. The full-year 2013 was unfavorably impacted by (i) the tax liability associated with the patent litigation settlement income, (ii) the non-deductibility of goodwill derecognized and the jurisdictional mix of the other intangible assets divested as part of the transfer of certain product rights to Pfizer's 49%-owned equity-method investment in China, and (iii) the non-deductibility of the loss on an option to acquire the remaining interest in a 40%-owned generics company in Brazil since we expect to retain the investment indefinitely, and was favorably impacted by the aforementioned fourth quarter tax settlement. In full-year 2012, includes a settlement with the IRS related to audits for multiple tax years that favorably impacted GAAP Reported net income by $1.1 billion, representing tax and interest.
                  
(4)     Non-GAAP Adjusted income and its components and Non-GAAP Adjusted diluted EPS are not, and should not be viewed as, substitutes for U.S. GAAP net income and its components and diluted EPS. Despite the importance of these measures to management in goal setting and performance measurement, Non-GAAP Adjusted income and its components and Non-GAAP Adjusted diluted EPS are Non-GAAP financial measures that have no standardized meaning prescribed by U.S. GAAP and, therefore, have limits in their usefulness to investors. Because of the non-standardized definitions, Non-GAAP Adjusted income and its components and Non-GAAP Adjusted diluted EPS (unlike U.S. GAAP net income and its components and diluted EPS) may not be comparable to the calculation of similar measures of other companies. Non-GAAP Adjusted income and its components and Non-GAAP Adjusted diluted EPS are presented solely to permit investors to more fully understand how management assesses performance.
      
(5)     Exclusive of amortization of intangible assets, except as discussed in footnote (6) below.
      
(6)   
Amortization expense related to finite-lived acquired intangible assets that contribute to our ability to sell, manufacture, research, market and distribute products, compounds and intellectual property is included in Amortization of intangible assets as these intangible assets benefit multiple business functions. Amortization expense related to intangible assets that are associated with a single function is included in Cost of sales, Selling, informational and administrative expenses or Research and development expenses, as appropriate.
      
PFIZER INC.
REVENUES
FOURTH QUARTER 2013 and 2012
(UNAUDITED)
(millions of dollars)

     WORLDWIDE    UNITED STATES    TOTAL INTERNATIONAL(a)
     2013    2012    % Change    2013    2012    % Change    2013    2012    % Change
           Total    Oper.          Total          Total    Oper.
TOTAL REVENUES    $ 13,558       $ 13,891       (2%)    1%    $ 5,084       $ 5,301       (4%)    $ 8,474       $ 8,590       (1%)    3%
REVENUES FROM
BIOPHARMACEUTICAL PRODUCTS:
  $ 12,480       $ 12,893       (3%)    —    $ 4,568       $ 4,809       (5%)    $ 7,912       $ 8,084       (2%)    3%
Lyrica     1,260        1,132        11%     14%     525        443        19%     735        689        7%     11%
Prevnar family     1,119        1,089        3%     4%     468        464        1%     651        625        4%     7%
Enbrel (Outside the U.S. and Canada)     1,005        957        5%     8%     —        —        —     1,005        957        5%     8%
Celebrex     798        750        6%     9%     524        479        9%     274        271        1%     9%
Lipitor     611        584        5%     8%     97        61        59%     514        523        (2%)     3%
Viagra     476        553        (14%)     (13%)     313        313        —     163        240        (32%)     (30%)
Zyvox     346        349        (1%)     1%     177        175        1%     169        174        (3%)     1%
Norvasc     312        348        (10%)     (3%)     8        10        (20%)     304        338        (10%)     (3%)
Sutent     312        323        (3%)     (2%)     90        82        10%     222        241        (8%)     (6%)
Premarin family     299        276        8%     9%     275        253        9%     24        23        4%     9%
BeneFIX     213        198        8%     8%     97        86        13%     116        112        4%     5%
Vfend     218        211        3%     7%     12        25        (52%)     206        186        11%     14%
Genotropin     202        213        (5%)     —     54        54        —     148        159        (7%)     —
Pristiq     182        169        8%     10%     138        128        8%     44        41        7%     15%
Chantix/Champix     162        174        (7%)     (4%)     90        79        14%     72        95        (24%)     (18%)
Refacto AF/Xyntha     169        164        3%     2%     34        27        26%     135        137        (1%)     (3%)
Xalatan/Xalacom     155        189        (18%)     (12%)     7        8        (13%)     148        181        (18%)     (12%)
Detrol/Detrol LA     125        185        (32%)     (31%)     78        124        (37%)     47        61        (23%)     (19%)
Zoloft     128        143        (10%)     —     14        19        (26%)     114        124        (8%)     4%
Medrol     121        135        (10%)     (8%)     38        35        9%     83        100        (17%)     (13%)
Effexor     114        83        37%     40%     45        7        *     69        76        (9%)     (7%)
Zosyn/Tazocin     102        106        (4%)     (3%)     45        42        7%     57        64        (11%)     (10%)
Zithromax/Zmax     104        117        (11%)     (3%)     2        3        (33%)     102        114        (11%)     (2%)
Fragmin     96        98        (2%)     (2%)     2        6        (67%)     94        92        2%     4%
Relpax     96        102        (6%)     (4%)     57        59        (3%)     39        43        (9%)     (5%)
Tygacil     87        86        1%     3%     28        37        (24%)     59        49        20%     23%
Rapamune     89        87        2%     4%     49        45        9%     40        42        (5%)     1%
Inlyta     102        47        117%     126%     43        30        43%     59        17        *     *
Sulperazon     87        71        23%     24%     —        —        —     87        71        23%     24%
Revatio     82        120        (32%)     (30%)     15        62        (76%)     67        58        16%     20%
Cardura     75        84        (11%)     (4%)     1        1        —     74        83        (11%)     (4%)
Xalkori     89        45        98%     105%     41        24        71%     48        21        129%     147%
Xanax XR     72        71        1%     2%     13        12        8%     59        59        —     2%
Diflucan     78        74        5%     7%     1        —        *     77        74        4%     6%
Toviaz     62        57        9%     9%     31        31        —     31        26        19%     18%
Aricept(b)     62        77        (19%)     (16%)     —        —        —     62        77        (19%)     (16%)
Inspra     69        58        19%     22%     2        1        100%     67        57        18%     22%
Caduet     59        67        (12%)     (3%)     7        7        —     52        60        (13%)     (2%)
Somavert     58        55        5%     6%     14        13        8%     44        42        5%     6%
Neurontin     58        63        (8%)     (4%)     12        11        9%     46        52        (12%)     (5%)
Unasyn     54        63        (14%)     —     —        —        —     54        63        (14%)     —
BMP2     51        71        (28%)     (28%)     51        71        (28%)     —        —        —     —
Geodon     77        31        148%     149%     50        —        *     27        31        (13%)     (21%)
Depo-Provera     52        45        16%     18%     11        11        —     41        34        21%     24%
Aromasin     50        48        4%     7%     3        3        —     47        45        4%     9%
Xeljanz     46        6        *     *     45        6        *     1        —        *     *
Alliance revenues(c)     441        915        (52%)     (51%)     366        712        (49%)     75        203        (63%)     (61%)
All other biopharmaceutical products(d)     1,855        2,004        (7%)     (3%)     595        750        (21%)     1,260        1,254        —     8%
All other established products(d)     1,561        1,565        —     4%     532        532        —     1,029        1,033        —     5%
REVENUES FROM OTHER PRODUCTS:
                                                               
CONSUMER HEALTHCARE    $ 943       $ 936       1%    2%    $ 469       $ 472       (1%)    $ 474       $ 464       2%    5%
OTHER(e)    $ 135       $ 62       *    *    $ 47       $ 20       *    $ 88       $ 42       *    *

*
   Indicates calculation not meaningful.
(a)     Total International represents Developed Europe region + Developed Rest of World region + Emerging Markets region. Details for these regions are located on the following page.
(b)     Represents direct sales under license agreement with Eisai Co., Ltd.
(c)     Includes Enbrel (in the U.S. and Canada through October 31, 2013), Spiriva, Rebif, Aricept and Eliquis.
(d)     All other established products is a subset of All other biopharmaceutical products.
(e)     Other represents revenues generated from Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical sales organization, and includes, in 2013, the revenues related to our transitional manufacturing and supply agreements with Zoetis.
Certain amounts and percentages may reflect rounding adjustments.

PFIZER INC.
INTERNATIONAL REVENUES BY GEOGRAPHIC REGION
FOURTH QUARTER 2013 and 2012
(UNAUDITED)
(millions of dollars)

     DEVELOPED EUROPE(a)    DEVELOPED REST OF WORLD(b)    EMERGING MARKETS(c)
     2013    2012    % Change    2013    2012    % Change    2013    2012    % Change
           Total    Oper.          Total    Oper.          Total    Oper.
TOTAL INTERNATIONAL REVENUES    $ 3,237       $ 3,128       3%    —    $ 2,207       $ 2,558       (14%)    1%    $ 3,030       $ 2,904       4%    9%
REVENUES FROM
BIOPHARMACEUTICAL PRODUCTS -
INTERNATIONAL:
  $ 3,073       $ 2,984       3%    (1%)    $ 2,090       $ 2,448       (15%)    —    $ 2,749       $ 2,652       4%    9%
Lyrica     413        364        13%     9%     183        217        (16%)     2%     139        108        29%     37%
Prevnar family     251        208        21%     16%     151        153        (1%)     11%     249        264        (6%)     (2%)
Enbrel (Outside Canada)     659        627        5%     2%     137        104        32%     56%     209        226        (8%)     3%
Celebrex     41        40        3%     (2%)     130        138        (6%)     8%     103        93        11%     14%
Lipitor     92        107        (14%)     (18%)     129        201        (36%)     (25%)     293        215        36%     39%
Viagra     37        103        (64%)     (65%)     39        49        (20%)     (14%)     87        88        (1%)     1%
Zyvox     87        78        12%     7%     35        39        (10%)     8%     47        57        (18%)     (12%)
Norvasc     28        28        —     (5%)     121        171        (29%)     (15%)     155        139        12%     13%
Sutent     109        114        (4%)     (8%)     37        48        (23%)     (9%)     76        79        (4%)     —
Premarin family     2        3        (33%)     (2%)     11        9        22%     13%     11        11        —     7%
BeneFIX     71        66        8%     4%     38        39        (3%)     7%     7        7        —     18%
Vfend     83        78        6%     2%     44        44        —     16%     79        64        23%     28%
Genotropin     71        71        —     (3%)     50        58        (14%)     6%     27        30        (10%)     (5%)
Pristiq     1        —        *     *     31        28        11%     21%     12        13        (8%)     (7%)
Chantix/Champix     28        35        (20%)     (24%)     34        47        (28%)     (16%)     10        13        (23%)     (12%)
Refacto AF/Xyntha     108        99        9%     6%     18        20        (10%)     (1%)     9        18        (50%)     (50%)
Xalatan/Xalacom     44        55        (20%)     (23%)     60        79        (24%)     (7%)     44        47        (6%)     (6%)
Detrol/Detrol LA     12        22        (45%)     (50%)     23        28        (18%)     (7%)     12        11        9%     10%
Zoloft     16        15        7%     5%     58        71        (18%)     1%     40        38        5%     9%
Medrol     23        24        (4%)     (5%)     10        12        (17%)     (5%)     50        64        (22%)     (18%)
Effexor     26        26        —     (2%)     17        22        (23%)     (16%)     26        28        (7%)     (3%)
Zosyn/Tazocin     10        11        (9%)     (14%)     2        2        —     18%     45        51        (12%)     (10%)
Zithromax/Zmax     15        14        7%     8%     35        52        (33%)     (16%)     52        48        8%     11%
Fragmin     53        47        13%     9%     24        26        (8%)     8%     17        19        (11%)     (14%)
Relpax     19        20        (5%)     (9%)     14        17        (18%)     (1%)     6        6        —     (2%)
Tygacil     19        17        12%     7%     2        2        —     (14%)     38        30        27%     35%
Rapamune     14        15        (7%)     (8%)     4        5        (20%)     4%     22        22        —     6%
Inlyta     31        3        *     *     25        13        92%     123%     3        1        *     *
Sulperazon     —        —        —     —     8        9        (11%)     (5%)     79        62        27%     28%
Revatio     45        33        36%     33%     15        16        (6%)     16%     7        9        (22%)     (20%)
Cardura     22        25        (12%)     (17%)     24        32        (25%)     (6%)     28        26        8%     12%
Xalkori     24        8        *     *     12        8        50%     75%     12        5        140%     155%
Xanax XR     28        24        17%     12%     9        11        (18%)     (6%)     22        24        (8%)     (5%)
Diflucan     15        13        15%     5%     9        11        (18%)     —     53        50        6%     8%
Toviaz     24        22        9%     6%     4        1        *     *     3        3        —     18%
Aricept(d)     9        17        (47%)     (49%)     44        51        (14%)     (9%)     9        9        —     5%
Inspra     46        35        31%     28%     16        17        (6%)     14%     5        5        —     9%
Caduet     5        4        25%     3%     36        41        (12%)     5%     11        15        (27%)     (22%)
Somavert     36        34        6%     2%     4        5        (20%)     5%     4        3        33%     48%
Neurontin     16        13        23%     15%     9        14        (36%)     (17%)     21        25        (16%)     (10%)
Unasyn     11        12        (8%)     (18%)     17        21        (19%)     4%     26        30        (13%)     3%
BMP2     —        —        —     —     —        —        —     —     —        —        —     —
Geodon     8        13        (38%)     (46%)     5        5        —     13%     14        13        8%     2%
Depo-Provera     7        8        (13%)     —     4        3        33%     —     30        23        30%     36%
Aromasin     15        16        (6%)     (12%)     8        13        (38%)     (20%)     24        16        50%     55%
Xeljanz     —        —        —     —     —        —        —     —     1        —        *     *
Alliance revenues(e)     29        38        (24%)     (28%)     37        151        (75%)     (71%)     9        14        (36%)     (35%)
All other biopharmaceutical products(f)     370        379        (2%)     (6%)     367        345        6%     25%     523        530        (1%)     6%
All other established products(f)     289        281        3%     (1%)     284        265        7%     25%     456        487        (6%)     (2%)
REVENUES FROM OTHER
PRODUCTS - INTERNATIONAL
  $ 164       $ 144       14%    11%    $ 117       $ 110       6%    12%    $ 281       $ 252       12%    15%
                                                                                                            
*     Indicates calculation not meaningful.
(a)     Developed Europe region includes the following markets: Western Europe, Finland and the Scandinavian countries.
(b)     Developed Rest of World region includes the following markets: Australia, Canada, Japan, New Zealand and South Korea.
(c)     Emerging Markets region includes, but is not limited to, the following markets: Asia (excluding Japan and South Korea), Latin America, the Middle East, Eastern Europe, Africa, Turkey and Central Europe.
(d)     Represents direct sales under license agreement with Eisai Co., Ltd.
(e)     Includes Enbrel (in Canada through October 31, 2013), Spiriva, Aricept and Eliquis.
(f)     All other established products is a subset of All other biopharmaceutical products.
Certain amounts and percentages may reflect rounding adjustments.

PFIZER INC.
REVENUES
TWELVE MONTHS 2013 and 2012
(UNAUDITED)
(millions of dollars)

     WORLDWIDE    UNITED STATES    TOTAL INTERNATIONAL(a)
     2013    2012    % Change    2013    2012    % Change    2013    2012    % Change
           Total    Oper.          Total          Total    Oper.
TOTAL REVENUES    $ 51,584       $ 54,657       (6%)    (4%)    $ 20,274       $ 21,313       (5%)    $ 31,310       $ 33,344       (6%)    (3%)
REVENUES FROM
BIOPHARMACEUTICAL PRODUCTS:
  $ 47,878       $ 51,214       (7%)    (4%)    $ 18,570       $ 19,708       (6%)    $ 29,308       $ 31,506       (7%)    (3%)
Lyrica     4,595        4,158        11%     13%     1,963        1,672        17%     2,632        2,486        6%     10%
Prevnar family     3,974        4,117        (3%)     (2%)     1,804        1,887        (4%)     2,170        2,230        (3%)     —
Enbrel (Outside the U.S. and Canada)     3,774        3,737        1%     4%     —        —      

   3,774        3,737        1%     4%
Celebrex     2,918        2,719        7%     9%     1,933        1,745        11%     985        974        1%     7%
Lipitor     2,315        3,948        (41%)     (40%)     432        932        (54%)     1,883        3,016        (38%)     (35%)
Viagra     1,881        2,051        (8%)     (8%)     1,132        1,135        —     749        916        (18%)     (17%)
Zyvox     1,353        1,345        1%     3%     688        665        3%     665        680        (2%)     2%
Norvasc     1,229        1,349        (9%)     (3%)     39        48        (19%)     1,190        1,301        (9%)     (2%)
Sutent     1,204        1,236        (3%)     (1%)     351        337        4%     853        899        (5%)     (3%)
Premarin family     1,092        1,073        2%     2%     1,001        977        2%     91        96        (5%)     (1%)
BeneFIX     832        775        7%     8%     395        358        10%     437        417        5%     7%
Vfend     775        754        3%     6%     61        89        (31%)     714        665        7%     11%
Genotropin     772        832        (7%)     (3%)     199        204        (2%)     573        628        (9%)     (3%)
Pristiq     698        630        11%     12%     540        493        10%     158        137        15%     20%
Chantix/Champix     648        670        (3%)     (1%)     343        313        10%     305        357        (15%)     (10%)
Refacto AF/Xyntha     602        584        3%     2%     123        106        16%     479        478      

   (1%)
Xalatan/Xalacom     589        806        (27%)     (22%)     30        38        (21%)     559        768        (27%)     (22%)
Detrol/Detrol LA     562        761        (26%)     (25%)     375        486        (23%)     187        275        (32%)     (29%)
Zoloft     469        541        (13%)     (5%)     44        68        (35%)     425        473        (10%)     —
Medrol     464        523        (11%)     (9%)     148        140        6%     316        383        (17%)     (15%)
Effexor     440        425        4%     4%     173        109        59%     267        316        (16%)     (15%)
Zosyn/Tazocin     395        484        (18%)     (18%)     172        217        (21%)     223        267        (16%)     (16%)
Zithromax/Zmax     387        435        (11%)     (5%)     7        12        (42%)     380        423        (10%)     (4%)
Fragmin     359        381        (6%)     (6%)     23        42        (45%)     336        339        (1%)     (1%)
Relpax     359        368        (2%)     (1%)     218        219        —     141        149        (5%)     (2%)
Tygacil     358        335        7%     8%     150        152        (1%)     208        183        14%     16%
Rapamune     350        346        1%     2%     201        185        9%     149        161        (7%)     (4%)
Inlyta     319        100        *     *     155        82        89%     164        18        *     *
Sulperazon     309        262        18%     19%     —        —        —     309        262        18%     19%
Revatio     307        534        (43%)     (41%)     67        312        (79%)     240        222        8%     11%
Cardura     296        338        (12%)     (7%)     4        5        (20%)     292        333        (12%)     (7%)
Xalkori     282        123        129%     134%     139        80        74%     143        43        *     *
Xanax     276        274        1%     2%     49        50        (2%)     227        224        1%     3%
Diflucan     242        259        (7%)     (4%)     3        4        (25%)     239        255        (6%)     (4%)
Toviaz     236        207        14%     14%     120        113        6%     116        94        23%     24%
Aricept(b)     235        326        (28%)     (27%)     —        —        —     235        326        (28%)     (27%)
Inspra     233        214        9%     13%     6        5        20%     227        209        9%     13%
Caduet     223        258        (14%)     (7%)     23        33        (30%)     200        225        (11%)     (4%)
Somavert     217        197        10%     10%     52        46        13%     165        151        9%     9%
Neurontin     216        235        (8%)     (5%)     45        48        (6%)     171        187        (9%)     (5%)
Unasyn     212        228        (7%)     5%     1        2        (50%)     211        226        (7%)     5%
BMP2     209        263        (21%)     (21%)     209        263        (21%)     —        —        —     —
Geodon     194        353        (45%)     (45%)     84        214        (61%)     110        139        (21%)     (20%)
Depo-Provera     191        148        29%     31%     57        33        73%     134        115        17%     19%
Aromasin     185        210        (12%)     (9%)     12        14        (14%)     173        196        (12%)     (10%)
Xeljanz     114        6        *     *     112        6        *     2        —        *     *
Alliance revenues(c)     2,628        3,492        (25%)     (24%)     2,267        2,620        (13%)     361        872        (59%)     (57%)
All other biopharmaceutical products(d)     7,360        7,804        (6%)     (2%)     2,620        3,149        (17%)     4,740        4,655        2%     8%
All other established products(d)     5,966        6,074        (2%)     1%     2,038        2,165        (6%)     3,928        3,909        1%     5%
REVENUES FROM OTHER PRODUCTS:                                                                 
CONSUMER HEALTHCARE    $ 3,342       $ 3,212       4%    5%    $ 1,580       $ 1,526       4%    $ 1,762       $ 1,686       5%    6%
OTHER(e)    $ 364       $ 231       58%    57%    $ 124       $ 79       57%    $ 240       $ 152       58%    57%
                                                                                                      
*     Indicates calculation not meaningful.
(a)     Total International represents Developed Europe region + Developed Rest of World region + Emerging Markets region. Details for these regions are located on the following page.
(b)     Represents direct sales under license agreement with Eisai Co., Ltd.
(c)     Includes Enbrel (in the U.S. and Canada through October 31, 2013), Spiriva, Rebif, Aricept and Eliquis.
(d)     All other established products is a subset of All other biopharmaceutical products.
(e)     Other represents revenues generated from Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical sales organization, and includes, in 2013, the revenues related to our transitional manufacturing and supply agreements with Zoetis.
Certain amounts and percentages may reflect rounding adjustments.

PFIZER INC.
INTERNATIONAL REVENUES BY GEOGRAPHIC REGION
TWELVE MONTHS 2013 and 2012
(UNAUDITED)
(millions of dollars)

     DEVELOPED EUROPE(a)    DEVELOPED REST OF WORLD(b)    EMERGING MARKETS(c)
     2013    2012    % Change    2013    2012    % Change    2013    2012    % Change
           Total    Oper.          Total    Oper.          Total    Oper.
TOTAL INTERNATIONAL REVENUES    $ 11,739       $ 12,545       (6%)    (8%)    $ 8,346       $ 9,956       (16%)    (5%)    $ 11,225       $ 10,843       4%    7%
REVENUES FROM
BIOPHARMACEUTICAL PRODUCTS -
INTERNATIONAL:
  $ 11,156       $ 12,010       (7%)    (9%)    $ 7,937       $ 9,536       (17%)    (6%)    $ 10,215       $ 9,960       3%    6%
Lyrica     1,458        1,319        11%     8%     680        743        (8%)     6%     494        424        17%     20%
Prevnar family     758        704        8%     5%     536        612        (12%)     (2%)     876        914        (4%)     (2%)
Enbrel (Outside Canada)     2,413        2,318        4%     2%     516        555        (7%)     7%     845        864        (2%)     6%
Celebrex     151        161        (6%)     (9%)     464        479        (3%)     8%     370        334        11%     12%
Lipitor     319        1,149        (72%)     (73%)     510        978        (48%)     (41%)     1,054        889        19%     20%
Viagra     265        370        (28%)     (29%)     152        201        (24%)     (19%)     332        345        (4%)     (3%)
Zyvox     325        302        8%     5%     136        154        (12%)     3%     204        224        (9%)     (3%)
Norvasc     108        119        (9%)     (12%)     485        659        (26%)     (14%)     597        523        14%     14%
Sutent     402        439        (8%)     (11%)     140        176        (20%)     (11%)     311        284        10%     13%
Premarin family     9        10        (10%)     (5%)     37        36        3%     4%     45        50        (10%)     (4%)
BeneFIX     257        248        4%     1%     139        137        1%     10%     41        32        28%     33%
Vfend     305        281        9%     6%     154        162        (5%)     10%     255        222        15%     17%
Genotropin     268        295        (9%)     (11%)     197        224        (12%)     4%     108        109        (1%)     5%
Pristiq     1        —        *     *     105        90        17%     21%     52        47        11%     16%
Chantix/Champix     116        129        (10%)     (11%)     143        179        (20%)     (13%)     46        49        (6%)     —
Refacto AF/Xyntha     386        373        3%     1%     70        64        9%     15%     23        41        (44%)     (42%)
Xalatan/Xalacom     161        275        (41%)     (43%)     232        311        (25%)     (13%)     166        182        (9%)     (7%)
Detrol/Detrol LA     53        119        (55%)     (56%)     86        102        (16%)     (7%)     48        54        (11%)     (9%)
Zoloft     63        59        7%     5%     221        278        (21%)     (5%)     141        136        4%     7%
Medrol     90        94        (4%)     (6%)     39        48        (19%)     (7%)     187        241        (22%)     (20%)
Effexor     96        110        (13%)     (14%)     68        102        (33%)     (32%)     103        104        (1%)     3%
Zosyn/Tazocin     40        48        (17%)     (19%)     12        13        (8%)     (10%)     171        206        (17%)     (15%)
Zithromax/Zmax     59        59        —     (2%)     130        186        (30%)     (17%)     191        178        7%     9%
Fragmin     183        182        1%     (1%)     89        84        6%     10%     64        73        (12%)     (13%)
Relpax     69        70        (1%)     (4%)     52        60        (13%)     (2%)     20        19        5%     7%
Tygacil     72        67        7%     5%     7        7        —     7%     129        109        18%     23%
Rapamune     52        54        (4%)     (6%)     17        18        (6%)     3%     80        89        (10%)     (5%)
Inlyta     77        4        *     *     81        13        *     *     6        1        *     *
Sulperazon     —        —        —     —     28        36        (22%)     (8%)     281        226        24%     23%
Revatio     157        133        18%     16%     52        56        (7%)     10%     31        33        (6%)     (5%)
Cardura     86        97        (11%)     (13%)     100        134        (25%)     (11%)     106        102        4%     6%
Xalkori     65        19        *     *     45        17        165%     *     33        7        *     *
Xanax     101        89        13%     10%     35        44        (20%)     (9%)     91        91        —     1%
Diflucan     52        60        (13%)     (16%)     33        41        (20%)     (6%)     154        154        —     1%
Toviaz     85        76        12%     9%     19        8        138%     142%     12        10        20%     30%
Aricept(d)     43        110        (61%)     (62%)     160        177        (10%)     (8%)     32        39        (18%)     (15%)
Inspra     150        131        15%     12%     58        61        (5%)     13%     19        17        12%     20%
Caduet     14        14        —     (7%)     142        149        (5%)     6%     44        62        (29%)     (27%)
Somavert     134        123        9%     6%     16        17        (6%)     11%     15        11        36%     37%
Neurontin     53        58        (9%)     (10%)     37        45        (18%)     (9%)     81        84        (4%)     1%
Unasyn     40        39        3%     (1%)     68        76        (11%)     8%     103        111        (7%)     5%
BMP2     —        —        —     —     —        —        —     —     —        —        —     —
Geodon     43        61        (30%)     (32%)     19        21        (10%)     (8%)     48        57        (16%)     (11%)
Depo-Provera     27        27        —     3%     13        13        —     (2%)     94        75        25%     28%
Aromasin     57        73        (22%)     (24%)     36        54        (33%)     (21%)     80        69        16%     15%
Xeljanz     —        —        —     —     1        —        *     *     1        —        *     *
Alliance revenues(e)     118        242        (51%)     (53%)     201        565        (64%)     (61%)     42        65        (35%)     (34%)
All other biopharmaceutical products(f)     1,375        1,300        6%     3%     1,376        1,351        2%     17%     1,989        2,004        (1%)     4%
All other established products(f)     1,083        1,050        3%     1%     1,063        1,051        1%     15%     1,782        1,808        (1%)     1%
REVENUES FROM OTHER
PRODUCTS - INTERNATIONAL
  $ 583       $ 535       9%    7%    $ 409       $ 420       (3%)    —    $ 1,010       $ 883       14%    17%
                                                                                                            
*     Indicates calculation not meaningful.
(a)     Developed Europe region includes the following markets: Western Europe, Finland and the Scandinavian countries.
(b)     Developed Rest of World region includes the following markets: Australia, Canada, Japan, New Zealand and South Korea.
(c)     Emerging Markets region includes, but is not limited to, the following markets: Asia (excluding Japan and South Korea), Latin America, the Middle East, Eastern Europe, Africa, Turkey and Central Europe.
(d)     Represents direct sales under license agreement with Eisai Co., Ltd.
(e)     Includes Enbrel (in Canada through October 31, 2013), Spiriva, Aricept and Eliquis.
(f)     All other established products is a subset of All other biopharmaceutical products.
Certain amounts and percentages may reflect rounding adjustments.

DISCLOSURE NOTICE: The information contained in this earnings release and the attachments is as of January 28, 2014. We assume no obligation to update forward-looking statements contained in this earnings release and the attachments as a result of new information or future events or developments.

This earnings release and the attachments contain forward-looking statements about our future operating and financial performance, business plans and prospects, in-line products and product candidates, strategic reviews, capital allocation, business-development plans, and plans relating to share repurchases and dividends, among other things, that involve substantial risks and uncertainties. You can identify these statements by the fact that they use future dates or use words such as "will," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "target," "forecast," "goal," "objective," "aim" and other words and terms of similar meaning. Among the factors that could cause actual results to differ materially from past results and future plans and projected future results are the following:

the outcome of research and development activities, including, without limitation, the ability to meet anticipated clinical trial commencement and completion dates, regulatory submission and approval dates, and launch dates for product candidates, as well as the possibility of unfavorable clinical trial results, including unfavorable new clinical data and additional analyses of existing clinical data;
decisions by regulatory authorities regarding whether and when to approve our drug applications, as well as their decisions regarding labeling, ingredients and other matters that could affect the availability or commercial potential of our products;
the speed with which regulatory authorizations, pricing approvals and product launches may be achieved;
the outcome of post-approval clinical trials, which could result in the loss of marketing approval for a product or changes in the labeling for, and/or increased or new concerns about the safety or efficacy of, a product that could affect its availability or commercial potential;
the success of external business-development activities;
competitive developments, including the impact on our competitive position of new product entrants, in-line branded products, generic products, private label products and product candidates that treat diseases and conditions similar to those treated by our in-line drugs and drug candidates;
the implementation by the FDA of an abbreviated legal pathway to approve biosimilar products, which could subject our biologic products to competition from biosimilar products in the U.S., with attendant competitive pressures, after the expiration of any applicable exclusivity period and patent rights;
the ability to meet generic and branded competition after the loss of patent protection for our products or competitor products;
the ability to successfully market both new and existing products domestically and internationally;
difficulties or delays in manufacturing;
trade buying patterns;
the impact of existing and future legislation and regulatory provisions on product exclusivity;
trends toward managed care and healthcare cost containment;
the impact of the U.S. Budget Control Act of 2011 (the Budget Control Act) and the deficit-reduction actions to be taken pursuant to the Budget Control Act in order to achieve the deficit-reduction targets provided for therein, and the impact of any broader deficit-reduction efforts;
the inability of the U.S. federal government to conduct drug review and approval activities or to satisfy its financial obligations, including under Medicare, Medicaid and other publicly funded or subsidized health programs, that may result from the possible failure of the U.S. federal government in the future to provide funding to avoid a partial or total shutdown of its operations and/or to suspend enforcement of or to increase the federal debt ceiling;
the impact of U.S. healthcare legislation enacted in 2010—the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act—and of any modification or repeal of any of the provisions thereof;
U.S. federal or state legislation or regulatory action affecting, among other things: pharmaceutical product pricing, reimbursement or access, including under Medicaid, Medicare and other publicly funded or subsidized health programs; the importation of prescription drugs from outside the U.S. at prices that are regulated by governments of various foreign countries; direct-to-consumer advertising and interactions with healthcare professionals; and the use of comparative effectiveness methodologies that could be implemented in a manner that focuses primarily on the cost differences and minimizes the therapeutic differences among pharmaceutical products and restricts access to innovative medicines;
legislation or regulatory action in markets outside the U.S. affecting pharmaceutical product pricing, reimbursement or access, including, in particular, continued government-mandated price reductions for certain biopharmaceutical products in certain European and emerging market countries;
the exposure of our operations outside the U.S. to possible capital and exchange controls, expropriation and other restrictive government actions, changes in intellectual property legal protections and remedies, as well as political unrest and unstable governments and legal systems;
contingencies related to actual or alleged environmental contamination;
claims and concerns that may arise regarding the safety or efficacy of in-line products and product candidates;
any significant breakdown, infiltration, or interruption of our information technology systems and infrastructure;
legal defense costs, insurance expenses, settlement costs, the risk of an adverse decision or settlement and the adequacy of reserves related to product liability, patent protection, government investigations, consumer, commercial, securities, antitrust, environmental and tax issues, ongoing efforts to explore various means for resolving asbestos litigation, and other legal proceedings;
our ability to protect our patents and other intellectual property, both domestically and internationally;
interest rate and foreign currency exchange rate fluctuations, including the impact of possible currency devaluations in countries experiencing high inflation rates;
governmental laws and regulations affecting domestic and foreign operations, including, without limitation, tax obligations and changes affecting the tax treatment by the U.S. of income earned outside of the U.S. that may result from pending and possible future proposals;
any significant issues involving our largest wholesaler customers, which account for a substantial portion of our revenues;
the possible impact of the increased presence of counterfeit medicines in the pharmaceutical supply chain on our revenues and on patient confidence in the integrity of our medicines;
any significant issues that may arise related to the outsourcing of certain operational and staff functions to third parties, including with regard to quality, timeliness and compliance with applicable legal requirements and industry standards;
changes in U.S. generally accepted accounting principles;
uncertainties related to general economic, political, business, industry, regulatory and market conditions including, without limitation, uncertainties related to the impact on us, our customers, suppliers and lenders and counterparties to our foreign-exchange and interest-rate agreements of challenging global economic conditions and recent and possible future changes in global financial markets; and the related risk that our allowance for doubtful accounts may not be adequate;
any changes in business, political and economic conditions due to actual or threatened terrorist activity in the U.S. and other parts of the world, and related U.S. military action overseas;
growth in costs and expenses;
changes in our product, segment and geographic mix; and
the impact of acquisitions, divestitures, restructurings, internal reorganizations, product recalls and withdrawals and other unusual items, including our ability to realize the projected benefits of our cost-reduction and productivity initiatives, including those related to our research and development organization, and of the internal separation of our commercial operations into three, new, global businesses effective January 1, 2014.
A further list and description of risks, uncertainties and other matters can be found in our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2012 and in our reports on Form 10-Q, in each case including in the sections thereof captioned "Forward-Looking Information and Factors That May Affect Future Results" and "Item 1A. Risk Factors", and in our reports on Form 8-K.

This earnings release may include discussion of certain clinical studies relating to various in-line products and/or product candidates. These studies typically are part of a larger body of clinical data relating to such products or product candidates, and the discussion herein should be considered in the context of the larger body of data.

Contact:

Media

Joan Campion, 212-733-2798

or

Investors

Chuck Triano, 212-733-3901

Ryan Crowe, 212-733-8160

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