Pfizer Reports Third-Quarter 2010 Results

Pfizer Reports Third-Quarter 2010 Results
Nov 2, 2010
7:00am

NEW YORK, Nov. 2, 2010 /PRNewswire-FirstCall/ --

  • Third-Quarter 2010 Revenues of $16.2 Billion


•Third-Quarter 2010 Adjusted Diluted EPS(1) of $0.54; Reported Diluted EPS(2) of $0.11


•Tightens Ranges for 2010 Financial Guidance Components, Increases Range for Adjusted Diluted EPS(1) and Reduces Range for Reported Diluted EPS(2); Reaffirms 2012 Financial Targets


•Advances Strategic Priorities with Agreement to Acquire King Pharmaceuticals, Inc., Acquisition of  FoldRx, Alliance with Biocon and Pending Alliance with Laboratorio Teuto Brasileiro S.A.; Reviewing Alternatives for Capsugel


($ in millions, except per share amounts)
 

 Third-Quarter
 
 Year-to-Date
 

 2010
 
 2009
 
 Change
 
 2010
 
 2009
 
 Change
 
Reported Revenues
 $  16,171
 
 $ 11,621
 
 39%
 
 $  50,248
 
 $  33,472
 
 50%
 
Reported Net Income(2)
 866
 
 2,878
 
 (70%)
 
 5,367
 
 7,868
 
 (32%)
 
Reported Diluted EPS(2)
 0.11
 
 0.43
 
 (74%)
 
 0.66
 
 1.16
 
 (43%)
 
Adjusted Income(1)
 4,372
 
 3,461
 
 26%
 
 14,213
 
 10,377
 
 37%
 
Adjusted Diluted EPS(1)
 0.54
 
 0.51
 
 6%
 
 1.76
 
 1.54
 
 14%
 

 
 
 
 
 
 
 
 
 
 
 
 
See end of text prior to tables for notes.
 
           

 

Pfizer Inc. (NYSE: PFE) today reported financial results for third-quarter 2010.  Since the acquisition of Wyeth was completed on October 15, 2009, legacy Wyeth products and operations are reflected in the first three quarters of 2010, but not reflected in the first three quarters of 2009.  Third-quarter 2010 revenues were $16.2 billion, an increase of 39% compared with $11.6 billion in the year-ago quarter.  Revenues for third-quarter 2010 compared with the year-ago quarter were favorably impacted by $5.2 billion, or 44%, due to the addition of the legacy Wyeth products, negatively impacted by $458 million, or 4%, due to legacy Pfizer products, and negatively impacted by $160 million, or 1%, due to foreign exchange.  For third-quarter 2010, U.S. revenues were $7.1 billion, an increase of 48% compared with the year-ago quarter.  International revenues were $9.1 billion, an increase of 33% compared with the prior-year quarter, which reflected 35% operational growth partially offset by a 2% unfavorable impact of foreign exchange.  U.S. revenues represented 44% of total revenues in third-quarter 2010 compared with 41% in the year-ago quarter, while international revenues represented 56% of total revenues in third-quarter 2010 compared with 59% in the year-ago quarter.

For the first nine months of 2010, revenues were $50.2 billion, an increase of 50% compared with $33.5 billion in the same period in 2009.   Revenues for the first nine months of  2010 compared with the year-ago period were favorably impacted by $15.9 billion, or 48%, due to the addition of the legacy Wyeth products, and by $1.2 billion, or 3%, due to foreign exchange, and negatively impacted by $285 million, or 1%, due to legacy Pfizer products.  U.S. revenues were $21.8 billion, an increase of 52% compared with the first nine month of 2009.  International revenues were $28.4 billion, an increase of 48% compared with the same period last year, which reflected 42% operational growth and a 6% favorable impact of foreign exchange.  U.S. revenues represented 43% and international revenues represented 57% of total revenues in the first nine months of 2010, comparable with the first nine months of 2009.  

Business Revenues

Pfizer operates two distinct commercial organizations: Biopharmaceutical and Diversified.  Biopharmaceutical includes the Primary Care, Specialty Care, Established Products, Emerging Markets and Oncology customer-focused units, while Diversified includes Animal Health, Consumer Healthcare, Nutrition and Capsugel.  


 

 Third-Quarter(13)
 

 
 
 
 
 
 
 
 
 
 Operational
 
($ in millions)
 2010
 
 2009(13)
 
 Change
 
 
 Foreign Exchange
 
 Total
 
 Legacy Pfizer
 

 
 
 
 
 
 
 
 
 
 
 
 
 
Primary Care(3)
 $ 5,653
 
 $ 5,540
 
 2%
 
 
 (1%)
 
 3%
 
 (3%)
 
Specialty Care(4)
 3,717
 
 1,577
 
 136%
 
 
 (6%)
 
 142%
 
 (1%)
 
Established Products(5)
 2,168
 
 1,657
 
 31%
 
 
 (1%)
 
 32%
 
 (13%)
 
Emerging Markets(6)
 2,072
 
 1,529
 
 36%
 
 
 2%
 
 34%
 
 --
 
Oncology(7)
 335
 
 374
 
 (10%)
 
 
 (4%)
 
 (6%)
 
 (15%)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
Biopharmaceutical
 13,945
 
 10,677
 
 31%
 
 
 (2%)
 
 33%
 
 (4%)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
Animal Health(8)
 860
 
 678
 
 27%
 
 
 (1%)
 
 28%
 
 5%
 
Consumer Healthcare(9)
 673
 
 --
 
 N/A
 
 
 N/A
 
 N/A
 
 N/A
 
Nutrition(10)
 441
 
 --
 
 N/A
 
 
 N/A
 
 N/A
 
 N/A
 
Capsugel(11)
 176
 
 177
 
 (1%)
 
 
 (3%)
 
 2%
 
 2%
 

 
 
 
 
 
 
 
 
 
 
 
 
 
Diversified
 2,150
 
 855
 
 151%
 
 
 --
 
 151%
 
 4%
 

 
 
 
 
 
 
 
 
 
 
 
 
 
Other(12)
 76
 
 89
 
 (15%)
 
 
 16%
 
 (31%)
 
 (31%)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
  Total
 $ 16,171
 
 $ 11,621
 
 39%
 
 
 (1%)
 
 40%
 
 (4%)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
See end of text prior to tables for notes.

N/A - Not applicable
 
            

 

For third-quarter 2010, revenues from Biopharmaceutical were $13.9 billion, an increase of 31% compared with $10.7 billion in the year-ago quarter.  Operationally, revenues increased $3.4 billion, or 33%, which included $3.9 billion, or 37%, attributable to legacy Wyeth products, primarily Premarin in the Primary Care unit, Enbrel and the Prevnar/Prevenar franchise in the Specialty Care unit, Protonix and Zosyn/Tazocin in the Established Products unit as well as Enbrel and the Prevenar franchise in the Emerging Markets unit, partially offset by a decline of $468 million, or 4%, due to legacy Pfizer products.  In addition, foreign exchange unfavorably impacted Biopharmaceutical revenues by 2% or $173 million.

Within the Biopharmaceutical units, legacy Pfizer operational performance was impacted in third-quarter 2010 compared with the year-ago quarter primarily by the loss of exclusivity of certain products and by the resulting reclassification of Camptosar European revenues among the units.  Legacy Pfizer Primary Care unit revenues in third-quarter 2010 were negatively impacted by 4% due to the loss of exclusivity of Lipitor in Canada in May 2010 and in Spain in July 2010.  Legacy Pfizer Oncology unit revenues no longer include Camptosar's European revenues due to its loss of exclusivity in July 2009.  Camptosar's European revenues are included in the Established Products unit beginning in first-quarter 2010.  This reclassification of revenues negatively impacted the legacy Pfizer Oncology unit's performance by 16% in third-quarter 2010 compared with the prior-year quarter.  Further, legacy Pfizer Established Products unit revenues in third-quarter 2010 were adversely impacted by 6% due to the loss of exclusivity for Norvasc in Canada in July 2009, partially offset by the favorable impact of 1% due to the addition of Camptosar's European revenues.  Finally, legacy Pfizer Emerging Markets unit revenues in third-quarter 2010 were essentially flat reflecting solid growth in key priority countries, most notably China, offset by Eastern European pricing pressure and wholesaler purchasing patterns driven by economic conditions.

For third-quarter 2010, revenues from Diversified were $2.2 billion, an increase of 151% compared with $855 million in the year-ago quarter.  This increase of $1.3 billion was primarily attributable to legacy Wyeth products, principally Centrum, Advil and Caltrate in Consumer Healthcare and infant and toddler Nutrition products.  The impact of foreign exchange on Diversified revenues was immaterial.

Reported Net Income(2) and Reported Diluted EPS(2) 

For third-quarter 2010, Pfizer posted reported net income(2) of $866 million, a decrease of 70% compared with $2.9 billion in the prior-year quarter, and reported diluted EPS(2) of $0.11, a decrease of 74% compared with $0.43 in the prior-year quarter.  For the first nine months of 2010, Pfizer posted reported net income(2) of $5.4 billion, a decrease of 32% compared with $7.9 billion in the first nine months of 2009, and reported diluted EPS(2) of $0.66, a decline of 43% compared with $1.16 in the prior-year period.  Third-quarter 2010 results were favorably impacted by revenues from legacy Wyeth products, and negatively impacted primarily by the expenses associated with the legacy Wyeth operations as well as purchase accounting adjustments, integration charges and restructuring charges associated with the Wyeth acquisition, impairment charges of $1.5 billion (pre-tax) related to certain intangible assets acquired in connection with the Wyeth acquisition and a $701 million (pre-tax) charge for asbestos litigation related to our wholly owned subsidiary Quigley Company, Inc.  For the first nine months of 2010, results were impacted by the aforementioned items as well as the favorable impact of foreign exchange and the unfavorable impact of higher net interest expense primarily due to borrowings used to partially fund the Wyeth acquisition.

In addition, the effective tax rate on reported results increased to approximately 39% in third-quarter 2010 from approximately 28% in third-quarter 2009, and approximately 37% in the first nine months of 2010 from approximately 27% in the first nine months of 2009.  These increases were primarily the result of higher expenses incurred as a result of the acquisition of Wyeth and the mix of jurisdictions in which those expenses were incurred.  Also, the lower rates in the third quarter and first nine months of 2009 compared to the same periods in 2010 reflected a tax benefit of $174 million related to the final resolution of a previously disclosed settlement.

Additionally, reported diluted EPS(2) in third-quarter 2010 and the first nine months of 2010 was impacted by the increased number of shares outstanding in comparison with the corresponding periods in 2009 resulting from shares issued to partially fund the Wyeth acquisition.

Adjusted Income(1) and Adjusted Diluted EPS(1)

Third-quarter 2010 adjusted income(1) was $4.4 billion, an increase of 26% compared with $3.5 billion in the year-ago quarter, and adjusted diluted EPS(1) was $0.54, an increase of 6% compared with $0.51 in the year-ago quarter.  For the first nine months of 2010, Pfizer posted adjusted income(1) of $14.2 billion, an increase of 37% compared with $10.4 billion in the first nine months of 2009, and adjusted diluted EPS(1) of $1.76, an increase of 14% compared with $1.54 in the prior-year period.  Results were favorably impacted by revenues from legacy Wyeth products and, to a lesser extent, foreign exchange, which were partially offset by the expenses associated with the legacy Wyeth operations as well as lower overall revenues from legacy Pfizer products and higher net interest expense primarily due to borrowings used to partially fund the acquisition of Wyeth. 

In addition, the effective tax rate on adjusted income(1) decreased to approximately 30% in third-quarter 2010 compared with approximately 32% in third-quarter 2009, and increased to approximately 31% in the first nine months of 2010 compared with approximately 30% in the first nine months of 2009.  The changes in the effective tax rate on adjusted income(1)  were primarily the result of the change in the jurisdictional mix of earnings in the respective periods.

Additionally, adjusted diluted EPS(1) in third-quarter 2010 and the first nine months of 2010 was impacted by the increased number of shares outstanding in comparison with the corresponding periods in 2009 resulting from shares issued to partially fund the Wyeth acquisition.

In third-quarter 2010, adjusted cost of sales(1) as a percentage of revenues was 18.3% compared with 15.4% in third-quarter 2009.  This increase primarily reflects the change in the mix of products and businesses as a result of the Wyeth acquisition.  Excluding the impact of foreign exchange, adjusted cost of sales(1) as a percentage of revenues was 19.7% in third-quarter 2010. 

Adjusted SI&A expenses(1) were $4.6 billion in third-quarter 2010, an increase of 43% compared with $3.2 billion in the prior-year quarter.  This increase was attributable primarily to the addition of the legacy Wyeth operations.  Foreign exchange decreased third-quarter 2010 adjusted SI&A expenses(1) by $32 million compared with the year-ago quarter. 

Adjusted R&D expenses(1) were $2.2 billion in third-quarter 2010, an increase of 33% compared with $1.6 billion in the prior-year period. This increase was attributable primarily to the addition of the legacy Wyeth operations and continued investment in the late-stage development portfolio.  Foreign exchange decreased third-quarter 2010 adjusted R&D expenses(1) by $15 million compared with the year-ago quarter.

Overall, foreign exchange decreased adjusted total costs(14) by $298 million, or 4%, in third-quarter 2010 compared with the prior-year period.

Executive Commentary

Jeff Kindler, Chairman and Chief Executive Officer, stated, "It's been just over a year since the closing of the Wyeth acquisition.  I am particularly pleased with the speed of the integration, the cost synergies achieved to date as well as our solid financial performance this quarter and year-to-date in this difficult economic environment.  This combination is clearly creating opportunities to provide greater value for our shareholders."

"We continue to carefully evaluate and make prudent capital allocation decisions.  We recently announced several business development transactions that we believe will enhance shareholder value by enabling continued growth in several of our business units.  Our pending acquisition of King Pharmaceuticals, Inc. is consistent with our stated objective of seeking a larger presence in the pain market within the Primary Care unit, while our acquisition of FoldRx enhances the orphan and rare disease pipeline portfolio of our Specialty Care unit.  Further, our alliance with Biocon is expected to advance our biosimilars strategy by positioning us competitively in the diabetes market over time, while our agreement with Laboratorio Teuto Brasileiro S.A. is expected to broaden our Emerging Markets presence.  Also, we are reviewing strategic alternatives for Capsugel in order to optimize the value of this asset.  We believe these actions, taken together, will serve to improve our business profile and provide both near-term and longer-term financial benefit," continued Mr. Kindler.

Frank D'Amelio, Chief Financial Officer, stated, "Given our solid year-to-date performance and continued confidence in the business, we are once again reaffirming our 2012 financial targets, and we are narrowing the ranges for the components of our 2010 financial guidance.  Additionally, we are increasing our 2010 adjusted diluted EPS(1) guidance to a range of  $2.17 to $2.22 from a range of $2.10 to $2.20.  Further, we repurchased approximately $500 million, or 30 million shares, of our common stock in the third quarter, and we continue to review our capital allocation options with the goal of maximizing value for our shareholders."

2010 Financial Guidance(16)

For full-year 2010, Pfizer's financial guidance, at current exchange rates(15), is summarized below.


 
Reported Revenues
 $67.0 to $68.0 billion

(previously $67.0 to $69.0 billion)
 
Adjusted Cost of Sales(1) as a Percentage of Revenues
 18.5% to 19.0%

(previously 19.0% to 20.0%)
 
Adjusted SI&A Expenses(1)
 $19.2 to $19.7 billion

(previously $19.0 to $20.0 billion)
 
Adjusted R&D Expenses(1)
 $9.1 to $9.5 billion

(previously $9.1 to $9.6 billion)
 
Adjusted Other (Income)/Deductions(1)
 Approximately $1.0 billion

(previously $1.2 to $1.4 billion)
 
Effective Tax Rate on Adjusted Income(1)
 Approximately 30%
 
Reported Diluted EPS(2)
 $0.84 to $0.94

(previously $0.95 to $1.10)
 
Adjusted Diluted EPS(1)
 $2.17 to $2.22

(previously $2.10 to $2.20)
 

 
 

 

2012 Financial Targets

The Company is reaffirming all elements of its 2012 financial targets.  As previously stated, given the longer-term nature of these targets, they are subject to greater variability and less certainty as a result of potential material impacts related to foreign exchange fluctuations, macroeconomic activity including inflation, and industry-specific challenges including changes to government healthcare policy, among others.

For 2012, at current exchange rates(15), Pfizer is targeting reported revenues between $65.2 and $67.7 billion, reported diluted EPS(2) between $1.58 and $1.73, adjusted diluted EPS(1) between $2.25 and $2.35, adjusted R&D expenses(1) between $8.0 and $8.5 billion, adjusted operating margin(1) in a range of the high 30%s to low 40%s and adjusted other (income)/deductions(1) between $1.0 and $1.2 billion in deductions.  The effective tax rate on adjusted income(1) is targeted at approximately 30%, while operating cash flow is expected to be at least $19.0 billion.

Additionally, the Company remains on-track to achieve the cost-reduction target of approximately $4 to $5 billion, by the end of 2012, at 2008 average foreign exchange rates, in comparison with the 2008 pro-forma adjusted total costs(14) of the legacy Pfizer and legacy Wyeth operations. 

For additional details, please see the attached financial schedules, product revenue tables, supplemental information and disclosure notice.

1."Adjusted Income" and its components and "Adjusted Diluted Earnings Per Share (EPS)" are defined as reported net income(2) and its components and reported diluted EPS(2) excluding purchase accounting adjustments, acquisition-related costs, discontinued operations and certain significant items.  Adjusted Cost of Sales, Adjusted SI&A expenses, Adjusted 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 Form 10-Q for the fiscal quarter ended July 4, 2010, 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. Reconciliations of third-quarter 2010 and 2009 and the first nine months of 2010 and 2009 adjusted income and its components and adjusted diluted EPS to reported net income(2) and its components and reported diluted EPS(2), as well as reconciliations of full-year 2010 guidance and 2012 targets for adjusted income and adjusted diluted EPS to full-year 2010 guidance and 2012 targets for reported net income(2) and reported diluted EPS(2), are provided in the materials accompanying this report. The adjusted income and its components and adjusted diluted EPS measures are not, and should not be viewed as, substitutes for U.S. generally accepted accounting principles (GAAP) net income and its components and diluted EPS.
2."Reported Net Income" is defined as net income attributable to Pfizer Inc. in accordance with U.S. generally accepted accounting principles. "Reported Diluted EPS" is defined as reported diluted EPS attributable to Pfizer Inc. common shareholders in accordance with U.S. GAAP.
3.The Primary Care unit includes revenues from human pharmaceutical products primarily prescribed by primary-care physicians, and may include, but are not limited to, products in the following therapeutic and disease areas: Alzheimer's disease, anxiety, cardiovascular (excluding pulmonary arterial hypertension), diabetes, pain, genitourinary, obesity, osteoporosis and respiratory.  Examples of products in this unit include, but are not limited to, Celebrex, Lipitor, Lyrica, Premarin, Pristiq and Viagra.  All revenues for such products are allocated to the Primary Care unit, except those generated in emerging markets(6) and those that are managed by the Established Products(5) unit.
4.The Specialty Care unit includes revenues from human pharmaceutical products primarily prescribed by physicians who are specialists, and may include, but are not limited to, products in the following therapeutic and disease areas: antibacterials, antifungals, antivirals, bone, inflammation, gastrointestinal, growth hormones, multiple sclerosis, ophthalmology, pulmonary arterial hypertension and psychosis.  Examples of products in this unit include, but are not limited to, Enbrel, Genotropin, Geodon, the Prevnar/Prevenar franchise, Xalatan and Zyvox.  All revenues for such products are allocated to the Specialty Care unit, except those generated in emerging markets(6) and those that are managed by the Established Products(5) unit.
5.The Established Products unit generally includes revenues from human prescription pharmaceutical products that have lost patent protection or marketing exclusivity in certain countries and/or regions.  In certain situations, products may be transferred to this unit before losing patent protection or marketing exclusivity in order to maximize their value.  This unit also excludes revenues generated in emerging markets(6).  Examples of products in this unit include, but are not limited to, Arthrotec, Effexor, Medrol, Norvasc, Protonix, Relpax and Zosyn/Tazocin.
6.The Emerging Markets unit includes revenues from all human prescription pharmaceutical products sold in emerging markets, including, but not limited to, Asia (excluding Japan and South Korea), Latin America, Middle East, Africa, Central and Eastern Europe, Russia and Turkey. 
7.The Oncology unit includes revenues from human oncology and oncology-related products.  Examples of products in this unit include, but are not limited to, Aromasin, Sutent and Torisel.  All revenues for such products are allocated to the Oncology unit, except those generated in emerging markets(6) and those that are managed by the Established Products(5) unit.
8.Animal Health includes worldwide revenues from products to prevent and treat disease in livestock and companion animals, including vaccines, paraciticides and anti-infectives.
9.Consumer Healthcare generally includes worldwide revenues from non-prescription medicines and vitamins and may include, but are not limited to, products in the following therapeutic categories: pain management, nutritionals, respiratory and GI-topicals.  Examples of products in Consumer Healthcare include, but are not limited to, Advil, Centrum, Caltrate, ChapStick and Robitussin.
10.Nutrition generally includes revenues from a full line of infant and toddler nutritional products sold outside of North America.  Examples of products in Nutrition include, but are not limited to, the S-26 and SMA product lines as well as formula for infants with special nutritional needs.
11.Capsugel generally includes worldwide revenues from capsule products and services for the pharmaceutical and associated healthcare industries.  On October 6, 2010, the Company announced that it is reviewing strategic alternatives for Capsugel, which may include a divestiture.
12.Includes revenues generated primarily from Pfizer Centersource.
13.In Biopharmaceutical, revenues from South Korea in 2009 have been reclassified from the Emerging Markets unit to the appropriate developed market units to conform to the current-year presentation, which reflects the fact that the commercial operations of South Korea, effective January 1, 2010, are managed within the appropriate developed market units. 
14.Represents the total of Adjusted Cost of Sales(1), Adjusted SI&A expenses(1) and Adjusted R&D expenses(1).
15.The current exchange rates assumed in connection with the 2010 financial guidance are a blend of the average of the actual exchange rates in effect from December 2009 through September 2010 and the mid-October 2010 exchange rates for the remainder of the year.  The current exchanges rates assumed in connection with the 2012 financial targets are the mid-October 2010 exchange rates.
16.This guidance does not assume the completion of any business-development transactions not completed as of October 3, 2010, with the exception of the Biocon transaction.  This guidance also excludes the potential effects of the resolution of litigation-related matters not substantially resolved as of October 3, 2010. 


PFIZER INC. AND SUBSIDIARY COMPANIES
 
CONSOLIDATED STATEMENTS OF INCOME
 
(UNAUDITED)
 
(millions, except per common share data)
 

 

 

 
 
 Third Quarter
 
 % Incr. /
 
 Nine Months
 
 % Incr. /
 

 
 
 2010
 
 2009
 
 (Decr.)
 
 2010
 
 2009
 
 (Decr.)
 

 Revenues
 $
 16,171
 
 $
 11,621
 
 39
 
 $
 50,248
 
 $
 33,472
 
 50
 

 Costs and expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Cost of sales (a)
 
 3,896
 
 
 1,789
 
 118
 
 
 11,997
 
 
 4,953
 
 142
 

 
 Selling, informational and administrative expenses (a)
 
 4,633
 
 
 3,282
 
 41
 
 
 13,876
 
 
 9,508
 
 46
 

 
 Research and development expenses (a)
 
 2,194
 
 
 1,632
 
 34
 
 
 6,607
 
 
 5,032
 
 31
 

 
 Amortization of intangible assets
 
 1,156
 
 
 594
 
 95
 
 
 3,972
 
 
 1,755
 
 126
 

 
 Acquisition-related in-process research and development charges
 
 -
 
 
 -
 
 -
 
 
 74
 
 
 20
 
 270
 

 
 Restructuring charges and certain acquisition-related costs
 
 499
 
 
 193
 
 159
 
 
 2,091
 
 
 1,206
 
 73
 

 
 Other deductions--net
 
 2,353
 
 
 160
 
 *
 
 
 3,038
 
 
 175
 
 *
 

 Income from continuing operations before provision
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 for taxes on income
 
 1,440
 
 
 3,971
 
 (64)
 
 
 8,593
 
 
 10,823
 
 (21)
 

 Provision for taxes on income
 
 564
 
 
 1,092
 
 (48)
 
 
 3,198
 
 
 2,952
 
 8
 

 Income from continuing operations
 
 876
 
 
 2,879
 
 (70)
 
 
 5,395
 
 
 7,871
 
 (31)
 

 Discontinued operations--net of tax
 
 (5)
 
 
 2
 
 *
 
 
 (4)
 
 
 6
 
 *
 

 Net income before allocation to noncontrolling interests
 
 871
 
 
 2,881
 
 (70)
 
 
 5,391
 
 
 7,877
 
 (32)
 

 Less: Net income attributable to noncontrolling interests
 
 5
 
 
 3
 
 67
 
 
 24
 
 
 9
 
 167
 

 Net income attributable to Pfizer Inc.
 $
 866
 
 $
 2,878
 
 (70)
 
 $
 5,367
 
 $
 7,868
 
 (32)
 

 Earnings per share - basic:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Income from continuing operations attributable to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
    Pfizer Inc. common shareholders
 $
 0.11
 
 $
 0.43
 
 (74)
 
 $
 0.67
 
 $
 1.17
 
 (43)
 

 
 Discontinued operations--net of tax
 
 -
 
 
 -
 
 --
 
 
 -
 
 
 -
 
 --
 

 
 Net income attributable to Pfizer Inc. common shareholders
 $
 0.11
 
 $
 0.43
 
 (74)
 
 $
 0.67
 
 $
 1.17
 
 (43)
 

 Earnings per share - diluted:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Income from continuing operations attributable to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
    Pfizer Inc. common shareholders
 $
 0.11
 
 $
 0.43
 
 (74)
 
 $
 0.66
 
 $
 1.16
 
 (43)
 

 
 Discontinued operations--net of tax
 
 -
 
 
 -
 
 --
 
 
 -
 
 
 -
 
 --
 

 
 Net income attributable to Pfizer Inc. common shareholders
 $
 0.11
 
 $
 0.43
 
 (74)
 
 $
 0.66
 
 $
 1.16
 
 (43)
 

 Weighted-average shares used to calculate earnings per
common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Basic
 
 8,027
 
 
 6,730
 
 
 
 
 8,045
 
 
 6,727
 
 
 

 
 Diluted
 
 8,057
 
 
 6,762
 
 
 
 
 8,079
 
 
 6,758
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
 Exclusive of amortization of intangible assets, except as discussed in footnote 3 below.
 
*
 Calculation not meaningful.
 

 Certain amounts and percentages may reflect rounding adjustments.
 

 
 
1.
 The above financial statements present the three-month and nine-month periods ended October 3, 2010 and September 27, 2009.  Subsidiaries
 

 operating outside the United States are included for the three-month and nine-month periods ended August 29, 2010 and August 23, 2009.
 

 Wyeth's results are included in our consolidated financial statements commencing from the acquisition date of October 15, 2009, in accordance
 

 with Pfizer's domestic and international year-ends. Therefore, our results of operations for the three-month and nine-month periods ended
 

 September 27, 2009 do not include Wyeth's results of operations. Cost of sales for 2010 includes the significant impacts of purchase accounting
 

 adjustments associated with inventory acquired from Wyeth that was sold in 2010 as well as a write-off of certain Wyeth-related inventory.
 

 Amortization of intangible assets for 2010 includes the amortization of intangible assets acquired from Wyeth. Other deductions-net includes
 

 impairment charges related to certain intangible assets acquired as part of our acquisition of Wyeth. See Supplemental Information that
 

 accompanies these materials for additional details related to the impairment charges and inventory write-off recorded in the third quarter of
 

 2010 that impacted Other deductions-net and Cost of sales.
 

 
 
2.
 The financial results for the three-month and nine-month periods ended October 3, 2010, are not necessarily indicative of the results which could
 

 ultimately be achieved for the current year.
 

 
 
3.
 Amortization expense related to acquired intangible assets that contribute to our ability to sell, manufacture, research, market and distribute our
 

 products is included in Amortization of intangible assets as these intangible assets benefit multiple business functions. Amortization expense
 

 related to acquired 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. AND SUBSIDIARY COMPANIES
 
RECONCILIATION OF REPORTED NET INCOME ATTRIBUTABLE TO PFIZER INC. AND ITS COMPONENTS
 
AND REPORTED DILUTED EPS ATTRIBUTABLE TO PFIZER INC. COMMON SHAREHOLDERS
 
TO ADJUSTED INCOME AND ITS COMPONENTS AND ADJUSTED DILUTED EPS (a)
 
(UNAUDITED)
 
(millions of dollars, except per common share data)
 

 

 

 

 
 
 
 Quarter Ended October 3, 2010
 

 
 
 
 
 
 Purchase
 
 Acquisition-
 
 
 
 Certain
 
 
 

 
 
 
 
 
 Accounting
 
 Related
 
 Discontinued
 
 Significant
 
 
 

 
 
 Reported
 
 Adjustments
 
 Costs(2)
 
 Operations
 
 Items(3)
 
 Adjusted
 

 Revenues
 $
 16,171
 $
 -
 $
 -
 $
 -
 $
 (5)
 $
 16,166
 

 Costs and expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 

 Cost of sales (b)
 
 3,896
 
 (487)
 
 (241)
 
 -
 
 (209)
 
 2,959
 

 Selling, informational and administrative expenses (b)
 
 4,633
 
 8
 
 (28)
 
 -
 
 2
 
 4,615
 

 Research and development expenses (b)
 
 2,194
 
 (8)
 
 (26)
 
 -
 
 -
 
 2,160
 

 Amortization of intangible assets
 
 1,156
 
 (1,124)
 
 -
 
 -
 
 -
 
 32
 

 Acquisition-related in-process research and development charges
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 

 Restructuring charges and certain acquisition-related costs
 
 499
 
 -
 
 (499)
 
 -
 
 -
 
 -
 

 Other (income)/deductions--net
 
 2,353
 
 (14)
 
 -
 
 -
 
 (2,208)
 
 131
 

 Income from continuing operations before provision for taxes on income
 
 1,440
 
 1,625
 
 794
 
 -
 
 2,410
 
 6,269
 

 Provision for taxes on income
 
 564
 
 379
 
 232
 
 -
 
 717
 
 1,892
 

 Income from continuing operations
 
 876
 
 1,246
 
 562
 
 -
 
 1,693
 -
 4,377
 

 Discontinued operations--net of tax
 
 (5)
 
 -
 
 -
 
 5
 
 -
 
 -
 

 Net income before allocation to noncontrolling interests
 
 871
 
 1,246
 
 562
 
 5
 
 1,693
 
 4,377
 

 Less: Net income attributable to noncontrolling interests
 
 5
 
 -
 
 -
 
 -
 
 -
 
 5
 

 Net income attributable to Pfizer Inc.
 $
 866
 $
 1,246
 $
 562
 $
 5
 $
 1,693
 $
 4,372
 

 Earnings per common share - diluted:
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Income from continuing operations attributable to Pfizer Inc.
common shareholders
 $
 0.11
 $
 0.15
 $
 0.07
 $
 -
 $
 0.21
 $
 0.54
 

 
 Discontinued operations--net of tax
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 

 
 Net income attributable to Pfizer Inc. common shareholders
 $
 0.11
 $
 0.15
 $
 0.07
 $
 -
 $
 0.21
 $
 0.54
 
               

 


 
 
 Nine Months Ended October 3, 2010
 

 
 
 
 
 Purchase
 
 Acquisition-
 
 
 
 Certain
 
 
 

 
 
 
 
 Accounting
 
 Related
 
 Discontinued
 
 Significant
 
 
 

 
 
 Reported
 
 Adjustments
 
 Costs(2)
 
 Operations
 
 Items(3)
 
 Adjusted
 

 Revenues
 $
 50,248
 $
 -
 $
 -
 $
 -
 $
 (18)
 $
 50,230
 

 Costs and expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 

 Cost of sales (b)
 
 11,997
 
 (2,564)
 
 (367)
 
 -
 
 (221)
 
 8,845
 

 Selling, informational and administrative expenses (b)
 
 13,876
 
 17
 
 (190)
 
 -
 
 14
 
 13,717
 

 Research and development expenses (b)
 
 6,607
 
 (23)
 
 (46)
 
 -
 
 -
 
 6,538
 

 Amortization of intangible assets
 
 3,972
 
 (3,880)
 
 -
 
 -
 
 -
 
 92
 

 Acquisition-related in-process research and development charges
 
 74
 
 (74)
 
 -
 
 -
 
 -
 
 -
 

 Restructuring charges and certain acquisition-related costs
 
 2,091
 
 -
 
 (2,091)
 
 -
 
 -
 
 -
 

 Other (income)/deductions--net
 
 3,038
 
 (40)
 
 -
 
 -
 
 (2,500)
 
 498
 

 Income from continuing operations before provision for taxes on income
 
 8,593
 
 6,564
 
 2,694
 
 -
 
 2,689
 
 20,540
 

 Provision for taxes on income
 
 3,198
 
 1,631
 
 695
 
 -
 
 779
 
 6,303
 

 Income from continuing operations
 
 5,395
 
 4,933
 
 1,999
 
 -
 
 1,910
 -
 14,237
 

 Discontinued operations--net of tax
 
 (4)
 
 -
 
 -
 
 4
 
 -
 
 -
 

 Net income before allocation to noncontrolling interests
 
 5,391
 
 4,933
 
 1,999
 
 4
 
 1,910
 
 14,237
 

 Less: Net income attributable to noncontrolling interests
 
 24
 
 -
 
 -
 
 -
 
 -
 
 24
 

 Net income attributable to Pfizer Inc.
 $
 5,367
 $
 4,933
 $
 1,999
 $
 4
 $
 1,910
 $
 14,213
 

 Earnings per common share - diluted:
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Income from continuing operations attributable to Pfizer Inc.
common shareholders
 $
 0.66
 $
 0.61
 $
 0.25
 $
 -
 $
 0.24
 $
 1.76
 

 
 Discontinued operations--net of tax
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 

 
 Net income attributable to Pfizer Inc. common shareholders
 $
 0.66
 $
 0.61
 $
 0.25
 $
 -
 $
 0.24
 $
 1.76
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 (a)
 Adjusted income and its components and adjusted diluted EPS are not, and should not be viewed as, substitutes for U.S. GAAP net income and
 

 
 its components and diluted EPS.
 

 (b)
 Exclusive of amortization of intangible assets, except as discussed in note 1.
 

 
 

 See end of tables for notes.
 

 Certain amounts may reflect rounding adjustments.
 
              

 

PFIZER INC. AND SUBSIDIARY COMPANIES
 
RECONCILIATION OF REPORTED NET INCOME ATTRIBUTABLE TO PFIZER INC. AND ITS COMPONENTS
 
AND REPORTED DILUTED EPS ATTRIBUTABLE TO PFIZER INC. COMMON SHAREHOLDERS
 
TO ADJUSTED INCOME AND ITS COMPONENTS AND ADJUSTED DILUTED EPS (a)
 
(UNAUDITED)
 
(millions of dollars, except per common share data)
 

 

 

 
 Quarter Ended September 27, 2009
 

 
 
 
 Purchase
 
 Acquisition-
 
 
 
 Certain
 
 
 

 
 
 
 Accounting
 
 Related
 
 Discontinued
 
 Significant
 
 
 

 
 Reported
 
 Adjustments
 
 Costs(2)
 
 Operations
 
 Items(3)
 
 Adjusted
 
Revenues
 $
 11,621
 $
 -
 $
 -
 $
 -
 $
 (18)
 $
 11,603
 
Costs and expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of sales (b)
 
 1,789
 
 -
 
 -
 
 -
 
 (2)
 
 1,787
 
Selling, informational and administrative expenses (b)
 
 3,282
 
 3
 
 -
 
 -
 
 (60)
 
 3,225
 
Research and development expenses (b)
 
 1,632
 
 (8)
 
 -
 
 -
 
 (5)
 
 1,619
 
Amortization of intangible assets
 
 594
 
 (560)
 
 -
 
 -
 
 -
 
 34
 
Acquisition-related in-process research and development charges
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
Restructuring charges and certain acquisition-related costs
 
 193
 
 -
 
 (132)
 
 -
 
 (61)
 
 -
 
Other (income)/deductions--net
 
 160
 
 1
 
 -
 
 -
 
 (303)
 
 (142)
 
Income from continuing operations before provision for taxes on income
 
 3,971
 
 564
 
 132
 
 -
 
 413
 
 5,080
 
Provision for taxes on income
 
 1,092
 
 167
 
 45
 
 -
 
 312
 
 1,616
 
Income from continuing operations
 
 2,879
 
 397
 
 87
 
 -
 
 101
 -
 3,464
 
Discontinued operations--net of tax
 
 2
 
 -
 
 -
 
 (2)
 
 -
 
 -
 
Net income before allocation to noncontrolling interests
 
 2,881
 
 397
 
 87
 
 (2)
 
 101
 
 3,464
 
Less: Net income attributable to noncontrolling interests
 
 3
 
 -
 
 -
 
 -
 
 -
 
 3
 
Net income attributable to Pfizer Inc.
 $
 2,878
 $
 397
 $
 87
 $
 (2)
 $
 101
 $
 3,461
 
Earnings per common share - diluted:
 
 
 
 
 
 
 
 
 
 
 
 
 

 Income from continuing operations attributable to Pfizer Inc. common shareholders
 $
 0.43
 $
 0.06
 $
 0.01
 $
 -
 $
 0.01
 $
 0.51
 

 Discontinued operations--net of tax
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 

 Net income attributable to Pfizer Inc. common shareholders
 $
 0.43
 $
 0.06
 $
 0.01
 $
 -
 $
 0.01
 $
 0.51
 
             

 


 
 Nine Months Ended September 27, 2009
 

 
 Reported
 
 Purchase

Accounting

Adjustments
 
 Acquisition-

Related

Costs(2)
 
 Discontinued

Operations
 
 Certain

Significant

Items(3)
 
 Adjusted
 
Revenues
 $
 33,472
 $
 -
 $
 -
 $
 -
 $
 (58)
 $
 33,414
 
Costs and expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of sales (b)
 
 4,953
 
 -
 
 -
 
 -
 
 (166)
 
 4,787
 
Selling, informational and administrative expenses (b)
 
 9,508
 
 9
 
 -
 
 -
 
 (195)
 
 9,322
 
Research and development expenses (b)
 
 5,032
 
 (22)
 
 -
 
 -
 
 (70)
 
 4,940
 
Amortization of intangible assets
 
 1,755
 
 (1,656)
 
 -
 
 -
 
 -
 
 99
 
Acquisition-related in-process research and development charges
 
 20
 
 (20)
 
 -
 
 -
 
 -
 
 -
 
Restructuring charges and certain acquisition-related costs
 
 1,206
 
 -
 
 (814)
 
 -
 
 (392)
 
 -
 
Other (income)/deductions--net
 
 175
 
 (2)
 
 -
 
 -
 
 (731)
 
 (558)
 
Income from continuing operations before provision for taxes on income
 
 10,823
 
 1,691
 
 814
 
 -
 
 1,496
 
 14,824
 
Provision for taxes on income
 
 2,952
 
 524
 
 290
 
 -
 
 672
 
 4,438
 
Income from continuing operations
 
 7,871
 
 1,167
 
 524
 
 -
 
 824
 
 10,386
 
Discontinued operations--net of tax
 
 6
 
 -
 
 -
 
 (6)
 
 -
 
 -
 
Net income before allocation to noncontrolling interests
 
 7,877
 
 1,167
 
 524
 
 (6)
 
 824
 
 10,386
 
Less: Net income attributable to noncontrolling interests
 
 9
 
 -
 
 -
 
 -
 
 -
 
 9
 
Net income attributable to Pfizer Inc.
 $
 7,868
 $
 1,167
 $
 524
 $
 (6)
 $
 824
 $
 10,377
 
Earnings per common share - diluted:
 
 
 
 
 
 
 
 
 
 
 
 
 

 Income from continuing operations attributable to Pfizer Inc. common shareholders
 $
 1.16
 $
 0.17
 $
 0.08
 $
 -
 $
 0.13
 $
 1.54
 

 Discontinued operations--net of tax
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 

 Net income attributable to Pfizer Inc. common shareholders
 $
 1.16
 $
 0.17
 $
 0.08
 $
 -
 $
 0.13
 $
 1.54
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
 Adjusted income and its components and adjusted diluted EPS are not, and should not be viewed as, substitutes for U.S. GAAP net income and
 

 its components and diluted EPS.
 
(b)
 Exclusive of amortization of intangible assets, except as discussed in note 1.
 

 
 
See end of tables for notes.
 
Certain amounts may reflect rounding adjustments.
 
             

 

PFIZER INC. AND SUBSIDIARY COMPANIES
 
RECONCILIATION OF REPORTED NET INCOME ATTRIBUTABLE TO PFIZER INC. AND ITS COMPONENTS
 
AND REPORTED DILUTED EPS ATTRIBUTABLE TO PFIZER INC. COMMON SHAREHOLDERS
 
TO ADJUSTED INCOME AND ITS COMPONENTS AND ADJUSTED DILUTED EPS*
 
(UNAUDITED)
 

 

 
1)
 Amortization expense related to acquired intangible assets that contribute to our ability to sell, manufacture, research, market and distribute our products
 

 is included in Amortization of intangible assets as these intangible assets benefit multiple business functions. Amortization expense related to acquired
 

 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.
 

 
 
2)
 Acquisition-related costs includes the following:
 

 
 

 
 
 
 
 
 Third Quarter
 
 Nine Months
 

 (millions of dollars)
 
 
 2010
 
 2009
 
 2010
 
 2009
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Transaction costs(a)
 
 $
 -
 $
 19
 $
 13
 $
 572
 

 
 Integration costs(a)
 231
 
 113
 
 650
 
 242
 

 
 Restructuring charges(a)
 268
 
 -
 
 1,428
 
 -
 

 
 Additional depreciation - asset
restructuring(b)
 295
 
 -
 
 603
 
 -
 

 
 Total acquisition-related costs -- pre-tax
 
 
 794
 
 132
 
 2,694
 
 814
 

 
 Income taxes(c)
 (232)
 
 (45)
 
 (695)
 
 (290)
 

 
 Total acquisition-related costs -- net of tax
 
  $
 562
 $
 87
 $
 1,999
 $
 524
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 (a)
 Transaction costs include costs directly related to our acquisition of Wyeth, such as banking, legal, accounting and other similar costs. Integration
 

 
 costs represent external, incremental costs directly related to integrating Wyeth and primarily include expenditures for consulting and systems
 

 
 integration. Restructuring charges relate to our acquisition of Wyeth and include employee termination costs, asset impairments and exit costs.
 

 
 
 

 (b)
 Represents the impact of changes in the estimated useful lives of assets involved in restructuring actions related to our acquisition of Wyeth. Included in Cost of Sales ($241 million), Selling, informational and administrative expenses ($28 million), and Research and development expenses ($26 million) for the three months ended October 3, 2010. Included in Cost of sales ($367 million), Selling, informational and administrative expenses ($190 million) and Research and development expenses ($46 million) for the nine months ended October 3, 2010.  
 

 
 
 

 (c)
 Included in Provision for taxes on income.
 
            

 

3)
 Certain significant items includes the following:
 

 
 
 
 
 
 Third Quarter
 
 Nine Months
 

 (millions of dollars)
 
 
 2010
 
 2009
 
 2010
 
 2009
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Restructuring charges - Cost-reduction initiatives(a)
 $                         -
 
 $                  61
 
 $                   -
 
 $                  392
 

 
 Implementation costs - Cost-reduction initiatives(b)
 -
 
 80
 
 -
 
 410
 

 
 Certain legal matters(c)
 701
 
 40
 
 843
 
 170
 

 
 Net interest expense(d)
 -
 
 299
 
 -
 
 528
 

 
 Certain asset impairment charges(e)
 
 
 1,468
 
 -
 
 1,668
 
 66
 

 
 Inventory write-off(f)
 
 212
 
 -
 
 212
 
 -
 

 
 Other(g)
 29
 
 (67)
 
 (34)
 
 (70)
 

 
           Total certain significant items -- pre-tax
 2,410
 
 413
 
 2,689
 
 1,496
 

 
 Income taxes(h)
 (717)
 
 (312)
 
 (779)
 
 (672)
 

 
           Total certain significant items -- net of tax
 $                 1,693
 
 $                101
 
 $           1,910
 
 $                  824
 

 
 
 
 
 
 
 
 
 

 (a)
 Included in Restructuring charges and certain acquisition-related costs.
 

 
 
 

 (b)
 Included in Cost of sales ($23 million), Selling, informational and administrative expenses ($51 million), Research and development expenses
 

 
 ($5 million), and Other deductions - net ($1 million) for the three months ended September 27, 2009. Included in Cost of sales ($144 million),
 

 
 Selling, informational and administrative expenses ($182 million), Research and development expenses ($78 million), and Other
 

 
 deductions - net ($6 million) for the nine months ended September 27, 2009.
 

 
 
 

 (c)
 Included in Other deductions - net.  The three-month and nine-month periods ended October 3, 2010 include an additional $701 million charge
 

 
 for asbestos litigation related to our wholly owned subsidiary, Quigley Company, Inc.
 

 
 
 

 (d)
 Included in Other deductions - net. Includes interest expense on the senior unsecured notes issued in connection with our acquisition of
 

 
 Wyeth less interest income earned on the proceeds of those notes.
 

 
 
 

 (e)
 Included in Other deductions - net. Amounts in 2010 represent impairment charges related to certain intangible assets acquired as part of
 

 
 our acquisition of Wyeth (see Supplemental Information that accompanies these materials).
 

 
 
 

 (f)
 Included in Cost of sales (see Supplemental Information that accompanies these materials).
 

 
 
 

 (g)
 Primarily included in Other deductions - net.  Amounts in the nine-month period of 2010 include the gain on the sale of certain Pfizer Animal
 

 
 Health products.
 

 
 
 

 (h)
 Included in Provision for taxes on income.  The three-month and nine-month periods ended September 27, 2009 include a tax benefit of
 

 
 approximately $174 million related to the final resolution of a previously disclosed settlement that resulted in the receipt of information that
 

 
 raised our assessment of the likelihood of prevailing on the technical merits of our tax position.
 

 
 

 
 

 
 
*
 Adjusted income and its components and adjusted diluted EPS are not, and should not be viewed as, substitutes for U.S. GAAP net income and its
 

 components and diluted EPS.
 
            

 

PFIZER INC.
 
BUSINESS REVENUES(1),(2)
 
FIRST NINE MONTHS OF 2010 and 2009
 
(UNAUDITED)
 
(millions of dollars)
 

 

 

 
 
 
 
 
 
 
 
 
 Operational
 

 
 
 2010
 
 2009(2)
 
 % Change
 % Foreign
Exchange
 
 Total %
 
 Legacy
Pfizer %
 

 Primary Care
 
 $     17,442
 
 $     16,040
 
 9
 2
 
 7
 
 -
 

 Specialty Care
 
 11,009
 
 4,465
 
 147
 2
 
 145
 
 1
 

 Established Products
 
 7,682
 
 4,986
 
 54
 3
 
 51
 
 (11)
 

 Emerging Markets
 
 6,294
 
 4,270
 
 47
 7
 
 40
 
 6
 

 Oncology
 
 1,045
 
 1,081
 
 (3)
 1
 
 (4)
 
 (14)
 

   Biopharmaceutical
 
 43,472
 
 30,842
 
 41
 3
 
 38
 
 (1)
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 Animal Health
 
 2,599
 
 1,863
 
 40
 5
 
 35
 
 7
 

 Consumer Healthcare
 
 2,014
 
 -
 
 *
 *
 
 *
 
 *
 

 Nutrition
 
 1,375
 
 -
 
 *
 *
 
 *
 
 *
 

 Capsugel
 
 545
 
 516
 
 6
 1
 
 5
 
 5
 

   Diversified
 
 6,533
 
 2,379
 
 175
 9
 
 166
 
 7
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 Other
 
 243
 
 251
 
 (3)
 6
 
 (9)
 
 (9)
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 TOTAL
 
 $     50,248
 
 $     33,472
 
 50
 3
 
 47
 
 (1)
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 * Calculation not meaningful
 

 
 

 (1) See notes 3-12 in the accompanying earnings release for a description of each business unit and of "Other". 
 

 
 

 (2) In Biopharmaceutical, revenues from South Korea in 2009 have been reclassified from the Emerging Markets unit
 

     to the appropriate developed market units to conform to the current-year presentation, which reflects the fact that
 

     the commercial operations of South Korea, effective January 1, 2010, are managed within the appropriate developed
 

     market units.
 
            

 

PFIZER INC.
 
REVENUES
 
THIRD QUARTER 2010 and 2009
 
(UNAUDITED)
 
(millions of dollars)
 

 

 

 WORLDWIDE
 UNITED STATES
 TOTAL INTERNATIONAL(1)
 

 

 2010
 2009
 % Change
 2010
 2009
 % Change
 2010
 2009
 % Change
 

 
 
 Total
 Oper.
 
 
 Total
 
 
 Total
 Oper.
 
TOTAL REVENUES
 $16,171
 $11,621
 39%
 40%
 $7,112
 $4,816
 48%
 $9,059
 $6,805
 33%
 35%
 
TOTAL BIOPHARMACEUTICAL:
 $13,945
 $10,677
 31%
 33%
 $6,298
 $4,448
 42%
 $7,647
 $6,229
 23%
 26%
 
Lipitor
 2,534
 2,853
 (11%)
 (10%)
 1,298
 1,379
 (6%)
 1,236
 1,474
 (16%)
 (14%)
 
Enbrel (Outside the U.S. and Canada)***
 799
 -
 *
 *
 -
 -
 -
 799
 -
 *
 *
 
Lyrica
 757
 708
 7%
 10%
 356
 352
 1%
 401
 356
 13%
 19%
 
Celebrex
 578
 602
 (4%)
 (5%)
 390
 421
 (7%)
 188
 181
 4%
 1%
 
Prevnar / Prevenar 13***
 735
 -
 *
 *
 540
 -
 *
 195
 -
 *
 *
 
Effexor***
 175
 -
 *
 *
 58
 -
 *
 117
 -
 *
 *
 
Viagra
 459
 466
 (2%)
 -
 242
 232
 4%
 217
 234
 (7%)
 (5%)
 
Xalatan / Xalacom
 416
 436
 (5%)
 (3%)
 157
 143
 10%
 259
 293
 (12%)
 (9%)
 
Norvasc
 330
 488
 (32%)
 (35%)
 -
 14
 *
 330
 474
 (30%)
 (32%)
 
Prevnar / Prevenar 7***
 179
 -
 *
 *
 -
 -
 -
 179
 -
 *
 *
 
Zyvox
 285
 271
 5%
 6%
 148
 146
 1%
 137
 125
 10%
 12%
 
Premarin Family***
 263
 -
 *
 *
 241
 -
 *
 22
 -
 *
 *
 
Sutent
 257
 246
 4%
 9%
 67
 69
 (3%)
 190
 177
 7%
 12%
 
Geodon / Zeldox
 262
 252
 4%
 4%
 224
 210
 7%
 38
 42
 (10%)
 (9%)
 
Detrol / Detrol LA
 237
 283
 (16%)
 (16%)
 163
 197
 (17%)
 74
 86
 (14%)
 (12%)
 
Zosyn / Tazocin***
 255
 -
 *
 *
 177
 -
 *
 78
 -
 *
 *
 
Genotropin
 211
 232
 (9%)
 (6%)
 51
 56
 (9%)
 160
 176
 (9%)
 (6%)
 
Vfend
 200
 196
 2%
 5%
 64
 61
 5%
 136
 135
 1%
 4%
 
Protonix***
 203
 -
 *
 *
 203
 -
 *
 -
 -
 -
 -
 
Chantix / Champix
 163
 155
 5%
 5%
 74
 75
 (1%)
 89
 80
 11%
 11%
 
Benefix***
 156
 -
 *
 *
 67
 -
 *
 89
 -
 *
 *
 
Zoloft
 126
 128
 (2%)
 (3%)
 18
 19
 (5%)
 108
 109
 (1%)
 (3%)
 
Caduet
 127
 130
 (2%)
 (3%)
 86
 91
 (5%)
 41
 39
 5%
 5%
 
Aromasin
 111
 123
 (10%)
 (6%)
 39
 40
 (3%)
 72
 83
 (13%)
 (6%)
 
Revatio
 116
 111
 5%
 7%
 72
 71
 1%
 44
 40
 10%
 15%
 
Pristiq***
 118
 -
 *
 *
 102
 -
 *
 16
 -
 *
 *
 
Medrol
 119
 106
 12%
 13%
 33
 29
 14%
 86
 77
 12%
 13%
 
Cardura
 95
 109
 (13%)
 (11%)
 1
 1
 -
 94
 108
 (13%)
 (11%)
 
Aricept**
 100
 108
 (7%)
 (5%)
 -
 -
 -
 100
 108
 (7%)
 (5%)
 
Zithromax / Zmax
 90
 85
 6%
 4%
 4
 2
 100%
 86
 83
 4%
 2%
 
BMP2***
 101
 -
 *
 *
 98
 -
 *
 3
 -
 *
 *
 
Rapamune***
 104
 -
 *
 *
 55
 -
 *
 49
 -
 *
 *
 
Refacto AF/Xyntha***
 102
 -
 *
 *
 22
 -
 *
 80
 -
 *
 *
 
Fragmin
 84
 82
 2%
 5%
 13
 14
 (7%)
 71
 68
 4%
 6%
 
Tygacil***
 78
 -
 *
 *
 40
 -
 *
 38
 -
 *
 *
 
Alliance Revenue****
 1,042
 692
 51%
 51%
 741
 422
 76%
 301
 270
 11%
 12%
 
All Other Biopharmaceutical
 1,978
 1,815
 9%
 11%
 454
 404
 12%
 1,524
 1,411
 8%
 9%
 
   All Other Established Products
 1,680
 1,502
 12%
 13%
 377
 361
 4%
 1,303
 1,141
 14%
 15%
 
       Legacy Pfizer Other established Products
 1,452
 1,502
 (3%)
 (3%)
 368
 361
 2%
 1,084
 1,141
 (5%)
 (4%)
 
TOTAL DIVERSIFIED:
 $2,150
 $855
 151%
 151%
 $792
 $347
 128%
 $1,358
 $508
 167%
 168%
 
ANIMAL HEALTH***
 860
 678
 27%
 28%
 369
 294
 26%
 491
 384
 28%
 29%
 
CONSUMER HEALTHCARE***
 673
 -
 *
 *
 374
 -
 *
 299
 -
 *
 *
 
NUTRITION***
 441
 -
 *
 *
 -
 -
 -
 441
 -
 *
 *
 
CAPSUGEL
 176
 177
 (1%)
 2%
 49
 53
 (8%)
 127
 124
 2%
 7%
 
OTHER*****
 $76
 $89
 (15%)
 (31%)
 $22
 $21
 5%
 $54
 $68
 (21%)
 (18%)
 

 
 
 
 
 
 
 
 
 
 
 
 
           

 

*
 -  Calculation not meaningful.
 
**
 -  Includes direct sales under license agreement with Eisai Co., Ltd.
 
***
 -  Legacy Wyeth products and operations. Animal Health results for the first nine months of 2010 also reflect the addition of legacy Wyeth
   products.
 

    Wyeth's results are included in our financial statements commencing from the acquisition date of October 15, 2009, in accordance with
   Pfizer's domestic and international year-ends. Therefore, our results for the first nine months of 2009 do not include Wyeth's results of
   operations.
 
****
 -  Enbrel (in the U.S. and Canada)***, Aricept, Rebif, and Exforge.
 
*****
 -  Includes revenues generated primarily from Pfizer Centresource.
 
Certain amounts and percentages may reflect rounding adjustments.
 

 
 

 
 
(1)
 Total International represents Developed Europe region + Developed Rest of World region + Emerging Markets region. Details for these regions are located on the following page.
 
 

 

PFIZER INC.
 
REVENUES
 
DETAIL OF INTERNATIONAL REVENUES BY GEOGRAPHIC REGION
 
THIRD QUARTER 2010 and 2009
 
(UNAUDITED)
 
(millions of dollars)
 

 

 

 DEVELOPED EUROPE(1)
 DEVELOPED REST OF WORLD(2)
 EMERGING MARKETS(3)
 

 
 
 
 

 2010
 2009
 % Change
 2010
 2009
 % Change
 2010
 2009
 % Change
 

 
 
 Total
 Oper.
 
 
 Total
 Oper.
 
 
 Total
 Oper.
 
TOTAL INTERNATIONAL REVENUES
 $3,840
 $3,137
 22%
 35%
 $2,377
 $1,958
 21%
 12%
 $2,842
 $1,710
 66%
 64%
 
TOTAL INTERNATIONAL BIOPHARMACEUTICAL:
 $3,466
 $2,853
 21%
 34%
 $2,109
 $1,847
 14%
 6%
 $2,072
 $1,529
 36%
 34%
 
Lipitor
 628
 752
 (16%)
 (8%)
 397
 512
 (22%)
 (28%)
 211
 210
 -
 (2%)
 
Enbrel (Outside the U.S. and Canada)***
 531
 -
 *
 *
 97
 -
 *
 *
 171
 -
 *
 *
 
Lyrica
 268
 256
 5%
 16%
 63
 42
 50%
 40%
 70
 58
 21%
 17%
 
Celebrex
 42
 53
 (21%)
 (13%)
 86
 64
 34%
 22%
 60
 64
 (6%)
 (6%)
 
Prevnar / Prevenar 13***
 129
 -
 *
 *
 21
 -
 *
 *
 45
 -
 *
 *
 
Effexor***
 55
 -
 *
 *
 37
 -
 *
 *
 25
 -
 *
 *
 
Viagra
 95
 109
 (13%)
 (5%)
 47
 42
 12%
 5%
 75
 83
 (10%)
 (11%)
 
Xalatan / Xalacom
 134
 155
 (14%)
 (5%)
 81
 92
 (12%)
 (18%)
 44
 46
 (4%)
 (6%)
 
Norvasc
 45
 58
 (22%)
 (12%)
 178
 311
 (43%)
 (47%)
 107
 105
 2%
 2%
 
Prevnar / Prevenar 7***
 23
 -
 *
 *
 56
 -
 *
 *
 100
 -
 *
 *
 
Zyvox
 69
 71
 (3%)
 6%
 32
 27
 19%
 7%
 36
 27
 33%
 30%
 
Premarin Family***
 3
 -
 *
 *
 7
 -
 *
 *
 12
 -
 *
 *
 
Sutent
 104
 108
 (4%)
 6%
 36
 27
 33%
 27%
 50
 42
 19%
 19%
 
Geodon / Zeldox
 19
 25
 (24%)
 (16%)
 5
 3
 67%
 -
 14
 14
 -
 -
 
Detrol / Detrol LA
 39
 50
 (22%)
 (18%)
 22
 22
 -
 -
 13
 14
 (7%)
 (7%)
 
Zosyn / Tazocin***
 22
 -
 *
 *
 5
 -
 *
 *
 51
 -
 *
 *
 
Genotropin
 90
 100
 (10%)
 -
 42
 45
 (7%)
 (15%)
 28
 31
 (10%)
 (10%)
 
Vfend
 70
 75
 (7%)
 3%
 30
 28
 7%
 4%
 36
 32
 13%
 13%
 
Protonix***
 -
 -
 -
 -
 -
 -
 -
 -
 -
 -
 -
 -
 
Chantix / Champix
 35
 38
 (8%)
 3%
 46
 32
 44%
 31%
 8
 10
 (20%)
 (27%)
 
Benefix***
 62
 -
 *
 *
 24
 -
 *
 *
 3
 -
 *
 *
 
Zoloft
 21
 24
 (13%)
 (8%)
 57
 54
 6%
 -
 30
 31
 (3%)
 (3%)
 
Caduet
 5
 6
 (17%)
 (17%)
 22
 21
 5%
 5%
 14
 12
 17%
 17%
 
Aromasin
 44
 55
 (20%)
 (9%)
 15
 14
 7%
 -
 13
 14
 (7%)
 (7%)
 
Revatio
 30
 31
 (3%)
 10%
 8
 4
 100%
 60%
 6
 5
 20%
 -
 
Pristiq***
 -
 -
 -
 -
 10
 -
 *
 *
 6
 -
 *
 *
 
Medrol
 22
 27
 (19%)
 (4%)
 12
 11
 9%
 (9%)
 52
 39
 33%
 33%
 
Cardura
 36
 43
 (16%)
 (9%)
 36
 42
 (14%)
 (20%)
 22
 23
 (4%)
 -
 
Aricept**
 53
 65
 (18%)
 (11%)
 39
 34
 15%
 9%
 8
 9
 (11%)
 (10%)
 
Zithromax / Zmax
 15
 22
 (32%)
 (19%)
 34
 27
 26%
 19%
 37
 34
 9%
 6%
 
BMP2***
 3
 -
 *
 *
 -
 -
 -
 -
 -
 -
 -
 -
 
Rapamune***
 14
 -
 *
 *
 4
 -
 *
 *
 31
 -
 *
 *
 
Refacto AF/Xyntha***
 73
 -
 *
 *
 7
 -
 *
 *
 -
 -
 -
 -
 
Fragmin
 33
 35
 (6%)
 3%
 18
 16
 13%
 6%
 20
 17
 18%
 18%
 
Tygacil***
 19
 -
 *
 *
 1
 -
 *
 *
 18
 -
 *
 *
 
Alliance Revenue****
 130
 137
 (5%)
 5%
 153
 116
 32%
 21%
 18
 17
 6%
 13%
 
All Other Biopharmaceutical
 505
 558
 (9%)
 -
 381
 261
 46%
 33%
 638
 592
 8%
 7%
 
   All Other Established Products
 390
 376
 4%
 14%
 329
 223
 48%
 37%
 584
 542
 8%
 7%
 
       Legacy Pfizer Other
       Established Products
 314
 376
 (16%)
 (8%)
 237
 223
 6%
 (1%)
 533
 542
 (2%)
 (3%)
 
TOTAL INTERNATIONAL DIVERSIFIED:
 $336
 $245
 37%
 51%
 $260
 $97
 168%
 138%
 $762
 $166
 *
 *
 
OTHER INTERNATIONAL*****
 $38
 $39
 (3%)
 3%
 $8
 $14
 (43%)
 (38%)
 $8
 $15
 (47%)
 (50%)
 
            

 

*
 -  Calculation not meaningful.
 
**
 -  Includes direct sales under license agreement with Eisai Co., Ltd.
 
***
 -  Legacy Wyeth products and operations. Animal Health results for the first nine months of 2010 also reflect the addition of legacy Wyeth products.
 

    Wyeth's results are included in our financial statements commencing from the acquisition date of October 15, 2009, in accordance with
   Pfizer's domestic and international year-ends. Therefore, our results for the first nine months of 2009 do not include Wyeth's results of operations.
 
****
 -  Enbrel (in the U.S. and Canada)***, Aricept, Rebif, and Exforge.
 
*****
 -  Includes revenues generated primarily from Pfizer Centresource.
 
Certain amounts and percentages may reflect rounding adjustments.
 

 
 

 
 
(1)
 Developed Europe region includes the following markets: Western Europe and the Scandinavian countries.
 
(2)
 Developed Rest of World region includes the following markets:  Australia, Canada, Japan, New Zealand, and South Korea.
 
(3)
 Emerging Markets region includes, but is not limited to, the following markets:  Asia (excluding Japan and South Korea), Latin America, Middle East, Africa, Central and Eastern Europe, Russia and Turkey. In Biopharmaceutical, revenues from South Korea in 2009 have been reclassified from the Emerging Markets unit to the appropriate developed market units to conform to the current-year presentation, which reflects the fact that the commercial operations of South Korea, effective January 1, 2010, are managed within the appropriate developed market units. 
 
 

 

PFIZER INC.
 
REVENUES
 
FIRST NINE MONTHS OF 2010 and 2009
 
(UNAUDITED)
 
(millions of dollars)
 

 

 

 WORLDWIDE
 UNITED STATES
 TOTAL INTERNATIONAL(1)
 

 

 2010
 2009
 % Change
 2010
 2009
 % Change
 2010
 2009
 % Change
 

 
 
 Total
 Oper.
 
 
 Total
 
 
 Total
 Oper.
 
TOTAL REVENUES
 $50,248
 $33,472
 50%
 47%
 $21,807
 $14,309
 52%
 $28,441
 $19,163
 48%
 42%
 
TOTAL BIOPHARMACEUTICAL:
 $43,472
 $30,842
 41%
 38%
 $19,554
 $13,347
 47%
 $23,918
 $17,495
 37%
 31%
 
Lipitor
 8,104
 8,259
 (2%)
 (5%)
 3,921
 4,145
 (5%)
 4,183
 4,114
 2%
 (4%)
 
Enbrel (Outside the U.S. and Canada)***
 2,409
 -
 *
 *
 -
 -
 *
 2,409
 -
 *
 *
 
Lyrica
 2,242
 2,020
 11%
 10%
 1,073
 1,094
 (2%)
 1,169
 926
 26%
 24%
 
Celebrex
 1,752
 1,714
 2%
 -
 1,176
 1,230
 (4%)
 576
 484
 19%
 11%
 
Prevnar / Prevenar 13***
 1,590
 -
 *
 *
 1,231
 -
 *
 359
 -
 *
 *
 
Effexor***
 1,512
 -
 *
 *
 1,142
 -
 *
 370
 -
 *
 *
 
Viagra
 1,429
 1,343
 6%
 4%
 729
 697
 5%
 700
 646
 8%
 3%
 
Xalatan / Xalacom
 1,287
 1,238
 4%
 2%
 453
 414
 9%
 834
 824
 1%
 (2%)
 
Norvasc
 1,120
 1,487
 (25%)
 (28%)
 24
 49
 (51%)
 1,096
 1,438
 (24%)
 (27%)
 
Prevnar / Prevenar 7***
 1,030
 -
 *
 *
 214
 -
 *
 816
 -
 *
 *
 
Zyvox
 876
 811
 8%
 7%
 463
 459
 1%
 413
 352
 17%
 14%
 
Premarin Family***
 779
 -
 *
 *
 713
 -
 *
 66
 -
 *
 *
 
Sutent
 771
 671
 15%
 13%
 198
 192
 3%
 573
 479
 20%
 17%
 
Geodon / Zeldox
 763
 713
 7%
 6%
 642
 597
 8%
 121
 116
 4%
 -
 
Detrol / Detrol LA
 758
 845
 (10%)
 (12%)
 515
 600
 (14%)
 243
 245
 (1%)
 (5%)
 
Zosyn / Tazocin***
 749
 -
 *
 *
 505
 -
 *
 244
 -
 *
 *
 
Genotropin
 650
 636
 2%
 -
 156
 160
 (3%)
 494
 476
 4%
 1%
 
Vfend
 595
 555
 7%
 5%
 187
 177
 6%
 408
 378
 8%
 5%
 
Protonix***
 535
 -
 *
 *
 535
 -
 *
 -
 -
 -
 -
 
Chantix / Champix
 522
 524
 -
 (4%)
 252
 303
 (17%)
 270
 221
 22%
 14%
 
Benefix***
 474
 -
 *
 *
 211
 -
 *
 263
 -
 *
 *
 
Zoloft
 390
 368
 6%
 2%
 54
 62
 (13%)
 336
 306
 10%
 5%
 
Caduet
 388
 392
 (1%)
 (5%)
 256
 294
 (13%)
 132
 98
 35%
 20%
 
Aromasin
 361
 347
 4%
 3%
 122
 121
 1%
 239
 226
 6%
 4%
 
Revatio
 352
 319
 10%
 9%
 216
 212
 2%
 136
 107
 27%
 24%
 
Pristiq***
 341
 -
 *
 *
 301
 -
 *
 40
 -
 *
 *
 
Medrol
 341
 334
 2%
 1%
 88
 105
 (16%)
 253
 229
 10%
 8%
 
Cardura
 312
 330
 (5%)
 (8%)
 11
 4
 175%
 301
 326
 (8%)
 (10%)
 
Aricept**
 310
 311
 -
 (6%)
 -
 -
 -
 310
 311
 -
 (6%)
 
Zithromax / Zmax
 303
 299
 1%
 (2%)
 10
 10
 -
 293
 289
 1%
 (2%)
 
BMP2***
 298
 -
 *
 *
 286
 -
 *
 12
 -
 *
 *
 
Rapamune***
 292
 -
 *
 *
 150
 -
 *
 142
 -
 *
 *
 
Refacto AF/Xyntha***
 290
 -
 *
 *
 61
 -
 *
 229
 -
 *
 *
 
Fragmin
 258
 244
 6%
 2%
 40
 51
 (22%)
 218
 193
 13%
 8%
 
Tygacil***
 250
 -
 *
 *
 133
 -
 *
 117
 -
 *
 *
 
Alliance Revenue****
 3,107
 1,872
 66%
 64%
 2,211
 1,133
 95%
 896
 739
 21%
 17%
 
All Other Biopharmaceutical
 5,932
 5,210
 14%
 11%
 1,275
 1,238
 3%
 4,657
 3,972
 17%
 13%
 
   All Other Established Products
 5,071
 4,325
 17%
 14%
 1,106
 1,101
 -
 3,965
 3,224
 23%
 18%
 
       Legacy Pfizer Other
       Established Products
 4,351
 4,325
 1%
 (2%)
 1,084
 1,101
 (2%)
 3,267
 3,224
 1%
 (3%)
 
TOTAL DIVERSIFIED:
 $6,533
 $2,379
 175%
 166%
 $2,168
 $901
 141%
 $4,365
 $1,478
 195%
 181%
 
ANIMAL HEALTH***
 2,599
 1,863
 40%
 35%
 1,006
 749
 34%
 1,593
 1,114
 43%
 35%
 
CONSUMER HEALTHCARE***
 2,014
 -
 *
 *
 1,016
 -
 *
 998
 -
 *
 *
 
NUTRITION***
 1,375
 -
 *
 *
 -
 -
 -
 1,375
 -
 *
 *
 
CAPSUGEL
 545
 516
 6%
 5%
 146
 152
 (4%)
 399
 364
 10%
 9%
 
OTHER*****
 $243
 $251
 (3%)
 (9%)
 $85
 $61
 39%
 $158
 $190
 (17%)
 (16%)
 
           

 

*
 -  Calculation not meaningful.
 
**
 -  Includes direct sales under license agreement with Eisai Co., Ltd.
 
***
 -  Legacy Wyeth products and operations. Animal Health results for the first nine months of 2010 also reflect the addition of legacy Wyeth products.
 

    Wyeth's results are included in our financial statements commencing from the acquisition date of October 15, 2009, in accordance with
   Pfizer's domestic and international year-ends. Therefore, our results for the first nine months of 2009 do not include Wyeth's results of operations.
 
****
 -  Enbrel (in the U.S. and Canada)***, Aricept, Rebif, and Exforge.
 
*****
 -  Includes revenues generated primarily from Pfizer Centresource.
 
Certain amounts and percentages may reflect rounding adjustments.
 

 
 

 
 
(1)
 Total International represents Developed Europe region + Developed Rest of World region + Emerging Markets region. Details for these regions are located on the following page.
 
 

 

PFIZER INC.
 
REVENUES
 
DETAIL OF INTERNATIONAL REVENUES BY GEOGRAPHIC REGION
 
FIRST NINE MONTHS OF 2010 and 2009
 
(UNAUDITED)
 
(millions of dollars)
 

 

 

 DEVELOPED EUROPE(1)
 DEVELOPED REST OF WORLD(2)
 EMERGING MARKETS(3)
 

 

 2010
 2009
 % Change
 2010
 2009
 % Change
 2010
 2009
 % Change
 

 
 
 Total
 Oper.
 
 
 Total
 Oper.
 
 
 Total
 Oper.
 
TOTAL INTERNATIONAL REVENUES
 $12,313
 $8,726
 41%
 41%
 $7,401
 $5,648
 31%
 18%
 $8,727
 $4,789
 82%
 73%
 
TOTAL INTERNATIONAL BIOPHARMACEUTICAL:
 $10,974
 $7,892
 39%
 39%
 $6,650
 $5,333
 25%
 13%
 $6,294
 $4,270
 47%
 40%
 
Lipitor
 1,987
 2,049
 (3%)
 (3%)
 1,505
 1,450
 4%
 (10%)
 691
 615
 12%
 5%
 
Enbrel (Outside the U.S. and Canada)***
 1,659
 -
 *
 *
 288
 -
 *
 *
 462
 -
 *
 *
 
Lyrica
 802
 666
 20%
 21%
 162
 107
 51%
 33%
 205
 153
 34%
 27%
 
Celebrex
 132
 142
 (7%)
 (7%)
 245
 170
 44%
 29%
 199
 172
 16%
 9%
 
Prevnar / Prevenar 13***
 274
 -
 *
 *
 23
 -
 *
 *
 62
 -
 *
 *
 
Effexor***
 184
 -
 *
 *
 113
 -
 *
 *
 73
 -
 *
 *
 
Viagra
 299
 299
 -
 -
 143
 119
 20%
 7%
 258
 228
 13%
 7%
 
Xalatan / Xalacom
 430
 424
 1%
 2%
 265
 272
 (3%)
 (10%)
 139
 128
 9%
 2%
 
Norvasc
 154
 171
 (10%)
 (9%)
 601
 940
 (36%)
 (40%)
 341
 327
 4%
 2%
 
Prevnar / Prevenar 7***
 230
 -
 *
 *
 172
 -
 *
 *
 414
 -
 *
 *
 
Zyvox
 215
 194
 11%
 12%
 93
 83
 12%
 5%
 105
 75
 40%
 31%
 
Premarin Family***
 8
 -
 *
 *
 21
 -
 *
 *
 37
 -
 *
 *
 
Sutent
 322
 304
 6%
 7%
 100
 62
 61%
 47%
 151
 113
 34%
 28%
 
Geodon / Zeldox
 66
 67
 (1%)
 (1%)
 13
 9
 44%
 10%
 42
 40
 5%
 (5%)
 
Detrol / Detrol LA
 129
 143
 (10%)
 (11%)
 71
 62
 15%
 3%
 43
 40
 8%
 3%
 
Zosyn / Tazocin***
 83
 -
 *
 *
 12
 -
 *
 *
 149
 -
 *
 *
 
Genotropin
 277
 266
 4%
 4%
 133
 131
 2%
 (5%)
 84
 79
 6%
 -
 
Vfend
 219
 210
 4%
 5%
 92
 81
 14%
 6%
 97
 87
 11%
 6%
 
Protonix***
 -
 -
 -
 -
 -
 -
 -
 -
 -
 -
 -
 -
 
Chantix / Champix
 123
 109
 13%
 12%
 124
 88
 41%
 22%
 23
 24
 (4%)
 (8%)
 
Benefix***
 187
 -
 *
 *
 65
 -
 *
 *
 11
 -
 *
 *
 
Zoloft
 66
 69
 (4%)
 (4%)
 181
 151
 20%
 13%
 89
 86
 3%
 -
 
Caduet
 15
 14
 7%
 14%
 79
 52
 52%
 27%
 38
 32
 19%
 16%
 
Aromasin
 146
 148
 (1%)
 (1%)
 45
 40
 13%
 5%
 48
 38
 26%
 21%
 
Revatio
 94
 81
 16%
 16%
 24
 14
 71%
 53%
 18
 12
 50%
 33%
 
Pristiq***
 -
 -
 *
 *
 27
 -
 *
 *
 13
 -
 *
 *
 
Medrol
 74
 76
 (3%)
 (1%)
 34
 36
 (6%)
 (14%)
 145
 117
 24%
 21%
 
Cardura
 114
 124
 (8%)
 (8%)
 116
 131
 (11%)
 (15%)
 71
 71
 -
 (3%)
 
Aricept**
 172
 190
 (9%)
 (10%)
 111
 90
 23%
 7%
 27
 31
 (13%)
 (16%)
 
Zithromax / Zmax
 61
 86
 (29%)
 (30%)
 115
 103
 12%
 6%
 117
 100
 17%
 13%
 
BMP2***
 12
 -
 *
 *
 -
 -
 -
 -
 -
 -
 -
 -
 
Rapamune***
 41
 -
 *
 *
 13
 -
 *
 *
 88
 -
 *
 *
 
Refacto AF/Xyntha***
 209
 -
 *
 *
 20
 -
 *
 *
 -
 -
 -
 -
 
Fragmin
 110
 97
 13%
 11%
 48
 41
 17%
 2%
 60
 55
 9%
 5%
 
Tygacil***.
 60
 -
 *
 *
 3
 -
 *
 *
 54
 -
 *
 *
 
Alliance Revenue****
 399
 377
 6%
 7%
 442
 317
 39%
 29%
 55
 45
 22%
 16%
 
All Other Biopharmaceutical
 1,621
 1,586
 2%
 2%
 1,151
 784
 47%
 35%
 1,885
 1,602
 18%
 12%
 
   All Other Established
   Products
 1,273
 1,082
 18%
 18%
 1,008
 670
 50%
 38%
 1,684
 1,472
 14%
 10%
 
       Legacy Pfizer Other
      Established Products
 1,030
 1,082
 (5%)
 (5%)
 706
 670
 5%
 (4%)
 1,531
 1,472
 4%
 -
 
TOTAL INTERNATIONAL DIVERSIFIED:
 $1,238
 $725
 71%
 71%
 $728
 $281
 159%
 123%
 $2,399
 $472
 *
 *
 
OTHER INTERNATIONAL*****
 $101
 $109
 (7%)
 (7%)
 $23
 $34
 (32%)
 (24%)
 $34
 $47
 (28%)
 (30%)
 
            

 

*
 -  Calculation not meaningful.
 
**
 -  Includes direct sales under license agreement with Eisai Co., Ltd.
 
***
 -  Legacy Wyeth products and operations. Animal Health results for the first nine months of 2010 also reflect the addition of legacy Wyeth products.
 

    Wyeth's results are included in our financial statements commencing from the acquisition date of October 15, 2009, in accordance with
   Pfizer's domestic and international year-ends. Therefore, our results for the first nine months of 2009 do not include Wyeth's results of operations.
 
****
 -  Enbrel (in the U.S. and Canada)***, Aricept, Rebif, and Exforge.
 
*****
 -  Includes revenues generated primarily from Pfizer Centresource.
 
Certain amounts and percentages may reflect rounding adjustments.
 

 
 

 
 
(1)
 Developed Europe region includes the following markets: Western Europe and the Scandinavian countries.
 
(2)
 Developed Rest of World region includes the following markets:  Australia, Canada, Japan, New Zealand, and South Korea.
 
(3)
 Emerging Markets region includes, but is not limited to, the following markets:  Asia (excluding Japan and South Korea), Latin America, Middle East, Africa, Central and Eastern Europe, Russia and Turkey. In Biopharmaceutical, revenues from South Korea in 2009 have been reclassified from the Emerging Markets unit to the appropriate developed market units to conform to the current-year presentation, which reflects the fact that the commercial operations of South Korea, effective January 1, 2010, are managed within the appropriate developed market units. 
 
 

 

PFIZER INC.

SUPPLEMENTAL INFORMATION

1. Change in Reported Cost of Sales

Reported cost of sales increased 118% in the third quarter of 2010, compared to the same period in 2009, and increased 142% in the first nine months of 2010, compared to the same period in 2009. The increases primarily reflect purchase accounting adjustments associated with the Wyeth acquisition, a write-off of Wyeth-related inventory of $212 million (which includes a purchase accounting fair value adjustment of $104 million), the addition of Wyeth manufacturing costs, as well as the change in the mix of products and businesses as a result of the Wyeth acquisition, partially offset by a favorable impact of foreign exchange for both the third quarter and first nine months of 2010. The write-off of inventory primarily relates to unfinished inventory acquired from Wyeth that became unusable after the acquisition date.

Reported cost of sales as a percentage of revenues increased 8.7 percentage points to 24.1% in third-quarter 2010, compared to the same period in 2009, reflecting the aforementioned factors.

2. Change in Reported Selling, Informational & Administrative (SI&A) Expenses and Reported Research & Development (R&D) Expenses

Reported SI&A expenses increased 41% in the third quarter of 2010, compared to the same period in 2009, and increased 46% in the first nine months of 2010, compared to the same period in 2009. The increases primarily reflect the addition of Wyeth operating costs. Foreign exchange had a favorable impact on reported SI&A expenses in the third quarter of 2010 and an unfavorable impact for the first nine months of 2010.  

Reported R&D expenses increased 34% in the third quarter of 2010, compared to the same period in 2009, and increased 31% in the first nine months of 2010, compared to the same period in 2009. The increases are primarily due to the addition of legacy Wyeth operations and continued investment in the late-stage development portfolio. Foreign exchange had a favorable impact on reported R&D expenses in the third quarter of 2010 and an unfavorable impact for the first nine months of 2010.  

3. Other (Income)/Deductions - Net


 
($ in millions)
 
 Third Quarter
 
 Nine Months
 

 
 2010
 
 2009
 
 2010
 
 2009
 
Interest income(a)
 $
 (100)
 $
 (171)
 $
 (297)
 $
 (620)
 
Interest expense(a)
 
 428
 
 369
 
 1,339
 
 769
 
Net interest expense
 
 328
 
 198
 
 1,042
 
 149
 
Royalty-related income
 
 (158)
 
 (35)
 
 (395)
 
 (142)
 
Net gain on asset disposals
 
 (13)
 
 (40)
 
 (243)
 
 (81)
 
Legal matters, net(b)
 
 712
 
 54
 
 886
 
 130
 
Certain asset impairment charges(c)
 
 1,478
 
 6
 
 1,710
 
 96
 
Other, net
 
 6
 
 (23)
 
 38
 
 23
 
Other deductions-net
 $
 2,353
 $
 160
 $
 3,038
 $
 175
 
(a) Interest expense increased in 2010 due to our issuance of $13.5 billion of senior unsecured notes on March 24, 2009 and $10.5 billion of senior
     unsecured notes on June 3, 2009, primarily related to the acquisition of Wyeth. Interest income decreased in 2010 due to lower interest rates coupled
     with lower average cash balances. 

(b) The three-month and nine-month periods ended October 3, 2010 include an additional $701 million charge for asbestos litigation related to our wholly
     owned subsidiary, Quigley Company, Inc.

(c) Amounts in 2010 represent impairment charges related to intangible assets, including certain in-process research and development ("IPR&D") intangible
     assets, that were acquired in connection with our acquisition of Wyeth.  These impairment charges primarily resulted from our current estimate of the
     fair value of these assets based upon updated forecasts of these Wyeth assets as compared to their assigned fair values at the closing of the Wyeth
     acquisition last year. Our updated forecasts are based on projected development and regulatory timeframes, and for brand assets and developed
     technology, the current market environment as well as planned investment support.
 
        

 

4. Effective Tax Rate

Reported

The effective tax rate on reported Income from continuing operations before provision for taxes on income for third-quarter 2010 was 39.2% compared to 27.5% in the third quarter of 2009, and in the first nine months of 2010 was 37.2% compared to 27.3% in the first nine months of 2009. The higher tax rates in the third quarter and first nine months of 2010 are primarily the result of:

 

  • higher expenses, incurred as a result of our acquisition of Wyeth, and the mix of jurisdictions in which those expenses were incurred;
  • the expiration of the U.S. research and development tax credit; and

•the non-recurrence of a tax benefit of $174 million that was recorded in the third quarter of 2009 related to the final resolution of a previously disclosed settlement that resulted in the receipt of information that raised our assessment of the likelihood of prevailing on the technical merits of our tax position;

 


partially offset by:

  • the tax impact of the charge incurred for asbestos litigation.


The effective tax rate for the first nine months of 2010 was additionally impacted by the write-off of the deferred tax asset of approximately $270 million related to the Medicare Part D subsidy for retiree prescription drug coverage, resulting from changes in the U.S. healthcare legislation enacted in March 2010 concerning the tax treatment of that subsidy effective for tax years beginning after December 31, 2012, offset by $460 million in tax benefits for the resolution of certain tax positions pertaining to prior years with various foreign tax authorities. 

Adjusted

The effective tax rate on adjusted income(1) decreased to 30.2% in third-quarter 2010 compared to 31.8% in third-quarter 2009, as a result of the change in the jurisdictional mix of earnings, partially offset by the expiration of the U.S. research and development tax credit.

The effective tax rate on adjusted income(1) for the first nine months of 2010 was 30.7% compared to 29.9% in the first nine months of 2009.  In addition to the aforementioned factors, the effective tax rate on adjusted income(1) for the first nine months of 2010 was impacted by the write-off of the deferred tax asset of approximately $270 million related to the Medicare Part D subsidy for retiree prescription drug coverage, resulting from changes in the U.S. healthcare legislation enacted in March 2010 concerning the tax treatment of that subsidy effective for tax years beginning after December 31, 2012, offset by $460 million in tax benefits for the resolution of certain tax positions pertaining to prior years with various foreign tax authorities.

5. Reconciliation of 2010 Adjusted Income(1) and Adjusted Diluted EPS(1) Guidance to 2010 Reported Net Income Attributable to Pfizer Inc. and Reported Diluted EPS Attributable to Pfizer Inc. Common Shareholders Guidance (a)


 

 Full-Year 2010 Guidance
 
($ in billions, except per share amounts)
 Net Income(b)
 Diluted EPS(b)
 
Income/(Expense)
 
 
 
Adjusted Income/Diluted EPS(1) Guidance
 ~$17.6 - $18.0
 ~$2.17 - $2.22
 
Purchase Accounting Impacts of Transactions Completed as of 10/3/10
 (6.1)
 (0.75)
 
Acquisition-Related Costs
 (2.4 - 2.8)
 (0.29 - 0.34)
 
Certain Significant Items
 (1.9)
 (0.24)
 
Reported Net Income Attributable to Pfizer Inc./Diluted EPS Guidance
 ~$6.8 - $7.6
 ~$0.84 - $0.94
 
(a) The current exchange rates assumed in connection with the 2010 financial guidance are a blend of the average of the actual exchange rates in effect from
     December 2009 through September 2010 and the mid-October 2010 exchange rates for the remainder of the year.

(b) Does not assume the completion of any business-development transactions not completed as of October 3, 2010 with the exception of the Biocon transaction.
     Amounts exclude the potential effects of the resolution of litigation-related matters not substantially resolved as of October 3, 2010.
 
  

 

6. Reconciliation of 2012 Adjusted Income(1) and Adjusted Diluted EPS(1) Targets to 2012 Reported Net Income Attributable to Pfizer Inc. and Reported Diluted EPS Attributable to Pfizer Inc. Common Shareholders Targets (a)


 

 Full-Year 2012 Targets
 
($ in billions, except per share amounts)
 Net Income(b)
 Diluted EPS(b)
 
Income/(Expense)
 
 
 
Adjusted Income/Diluted EPS(1) Targets
 ~$18.3 - $19.1
 ~$2.25 - $2.35
 
Purchase Accounting Impacts of Transactions Completed as of 10/3/10
 (3.8)
 (0.47)
 
Acquisition-Related Costs
 (1.2 - 1.6)
 (0.15 - 0.20)
 
Reported Net Income Attributable to Pfizer Inc./Diluted EPS Targets
 ~$12.9 - $14.1
 ~$1.58 - $1.73
 
(a) The current exchange rates assumed in connection with the 2012 financial targets are the mid-October 2010 exchange rates.

(b) Given the longer-term nature of these targets, they are subject to greater variability and less certainty as a result of potential material impacts related to
     foreign exchange fluctuations, macroeconomic activity including inflation, and industry-specific challenges including changes to government healthcare
     policy, among others.
 
  

 

(1) "Adjusted income" and "adjusted diluted earnings per share (EPS)" are defined as reported net income attributable to Pfizer Inc. and reported diluted EPS attributable to Pfizer Inc. common shareholders excluding purchase accounting adjustments, acquisition-related costs, discontinued operations and certain significant items. As described under Adjusted Income in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of Pfizer's Form 10-Q for the fiscal quarter ended July 4, 2010, 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. The adjusted income and adjusted diluted EPS measures are not, and should not be viewed as, substitutes for U.S. GAAP net income and diluted EPS.

DISCLOSURE NOTICE: The information contained in this earnings release and the attachments is as of November 2, 2010. The Company assumes no obligation to update forward-looking statements contained in this earnings release or the attachments as a result of new information or future events or developments.

This earnings release and the attachments contain forward-looking information about the Company's financial results and estimates, business plans and prospects, in-line products and product candidates that involves substantial risks and uncertainties.  You can identify these statements by the fact that they use words such as "will," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "target," "forecast" and other words and terms of similar meaning in connection with any discussion of future operating or financial performance or business plans and prospects.  Among the factors that could cause actual results to differ materially are the following: the success of research and development activities, including, without limitation, the ability to meet anticipated clinical trial completion dates and regulatory submission dates for product candidates; 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 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 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 U.S. healthcare legislation enacted in 2010 - the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act; U.S. 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; 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; significant breakdown, infiltration, or interruption of our information technology systems and infrastructure; legal defense costs, insurance expenses, settlement costs and the risk of an adverse decision or settlement related to product liability, patent protection, government investigations, consumer, commercial, securities, environmental and tax issues, ongoing efforts to explore various means for resolving asbestos litigation, and other legal proceedings; the Company's ability to protect its patents and other intellectual property both domestically and internationally; interest rate and foreign currency exchange rate fluctuations; 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 result from the enactment in August 2010 of the Education Jobs and Medicaid Assistance Act of 2010 and that may result from pending and possible future proposals; 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 lenders, our customers, our suppliers and counterparties to our foreign exchange and interest rate agreements of weak global economic conditions and recent and possible future changes in global financial markets; 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, product withdrawals and other unusual items, including our ability to realize the projected benefits of our acquisition of Wyeth and of our cost-reduction initiatives. A further list and description of risks, uncertainties and other matters can be found in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2009, and in its reports on Forms 10-Q and 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.

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SOURCE Pfizer Inc.

For further information: Media, Joan Campion, +1-212-733-2798; Investors, Suzanne Harnett, +1-212-733-8009, or Jennifer Davis, +1-212-733-0717
 
 

News Releases  Link to this Press Release
Pfizer Reports Third-Quarter 2010 Results
Nov 2, 2010
7:00am

NEW YORK, Nov. 2, 2010 /PRNewswire-FirstCall/ --

  • Third-Quarter 2010 Revenues of $16.2 Billion


•Third-Quarter 2010 Adjusted Diluted EPS(1) of $0.54; Reported Diluted EPS(2) of $0.11


•Tightens Ranges for 2010 Financial Guidance Components, Increases Range for Adjusted Diluted EPS(1) and Reduces Range for Reported Diluted EPS(2); Reaffirms 2012 Financial Targets


•Advances Strategic Priorities with Agreement to Acquire King Pharmaceuticals, Inc., Acquisition of  FoldRx, Alliance with Biocon and Pending Alliance with Laboratorio Teuto Brasileiro S.A.; Reviewing Alternatives for Capsugel


($ in millions, except per share amounts)
 

 Third-Quarter
 
 Year-to-Date
 

 2010
 
 2009
 
 Change
 
 2010
 
 2009
 
 Change
 
Reported Revenues
 $  16,171
 
 $ 11,621
 
 39%
 
 $  50,248
 
 $  33,472
 
 50%
 
Reported Net Income(2)
 866
 
 2,878
 
 (70%)
 
 5,367
 
 7,868
 
 (32%)
 
Reported Diluted EPS(2)
 0.11
 
 0.43
 
 (74%)
 
 0.66
 
 1.16
 
 (43%)
 
Adjusted Income(1)
 4,372
 
 3,461
 
 26%
 
 14,213
 
 10,377
 
 37%
 
Adjusted Diluted EPS(1)
 0.54
 
 0.51
 
 6%
 
 1.76
 
 1.54
 
 14%
 

 
 
 
 
 
 
 
 
 
 
 
 
See end of text prior to tables for notes.
 
           

 

Pfizer Inc. (NYSE: PFE) today reported financial results for third-quarter 2010.  Since the acquisition of Wyeth was completed on October 15, 2009, legacy Wyeth products and operations are reflected in the first three quarters of 2010, but not reflected in the first three quarters of 2009.  Third-quarter 2010 revenues were $16.2 billion, an increase of 39% compared with $11.6 billion in the year-ago quarter.  Revenues for third-quarter 2010 compared with the year-ago quarter were favorably impacted by $5.2 billion, or 44%, due to the addition of the legacy Wyeth products, negatively impacted by $458 million, or 4%, due to legacy Pfizer products, and negatively impacted by $160 million, or 1%, due to foreign exchange.  For third-quarter 2010, U.S. revenues were $7.1 billion, an increase of 48% compared with the year-ago quarter.  International revenues were $9.1 billion, an increase of 33% compared with the prior-year quarter, which reflected 35% operational growth partially offset by a 2% unfavorable impact of foreign exchange.  U.S. revenues represented 44% of total revenues in third-quarter 2010 compared with 41% in the year-ago quarter, while international revenues represented 56% of total revenues in third-quarter 2010 compared with 59% in the year-ago quarter.

For the first nine months of 2010, revenues were $50.2 billion, an increase of 50% compared with $33.5 billion in the same period in 2009.   Revenues for the first nine months of  2010 compared with the year-ago period were favorably impacted by $15.9 billion, or 48%, due to the addition of the legacy Wyeth products, and by $1.2 billion, or 3%, due to foreign exchange, and negatively impacted by $285 million, or 1%, due to legacy Pfizer products.  U.S. revenues were $21.8 billion, an increase of 52% compared with the first nine month of 2009.  International revenues were $28.4 billion, an increase of 48% compared with the same period last year, which reflected 42% operational growth and a 6% favorable impact of foreign exchange.  U.S. revenues represented 43% and international revenues represented 57% of total revenues in the first nine months of 2010, comparable with the first nine months of 2009.  

Business Revenues

Pfizer operates two distinct commercial organizations: Biopharmaceutical and Diversified.  Biopharmaceutical includes the Primary Care, Specialty Care, Established Products, Emerging Markets and Oncology customer-focused units, while Diversified includes Animal Health, Consumer Healthcare, Nutrition and Capsugel.  


 

 Third-Quarter(13)
 

 
 
 
 
 
 
 
 
 
 Operational
 
($ in millions)
 2010
 
 2009(13)
 
 Change
 
 
 Foreign Exchange
 
 Total
 
 Legacy Pfizer
 

 
 
 
 
 
 
 
 
 
 
 
 
 
Primary Care(3)
 $ 5,653
 
 $ 5,540
 
 2%
 
 
 (1%)
 
 3%
 
 (3%)
 
Specialty Care(4)
 3,717
 
 1,577
 
 136%
 
 
 (6%)
 
 142%
 
 (1%)
 
Established Products(5)
 2,168
 
 1,657
 
 31%
 
 
 (1%)
 
 32%
 
 (13%)
 
Emerging Markets(6)
 2,072
 
 1,529
 
 36%
 
 
 2%
 
 34%
 
 --
 
Oncology(7)
 335
 
 374
 
 (10%)
 
 
 (4%)
 
 (6%)
 
 (15%)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
Biopharmaceutical
 13,945
 
 10,677
 
 31%
 
 
 (2%)
 
 33%
 
 (4%)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
Animal Health(8)
 860
 
 678
 
 27%
 
 
 (1%)
 
 28%
 
 5%
 
Consumer Healthcare(9)
 673
 
 --
 
 N/A
 
 
 N/A
 
 N/A
 
 N/A
 
Nutrition(10)
 441
 
 --
 
 N/A
 
 
 N/A
 
 N/A
 
 N/A
 
Capsugel(11)
 176
 
 177
 
 (1%)
 
 
 (3%)
 
 2%
 
 2%
 

 
 
 
 
 
 
 
 
 
 
 
 
 
Diversified
 2,150
 
 855
 
 151%
 
 
 --
 
 151%
 
 4%
 

 
 
 
 
 
 
 
 
 
 
 
 
 
Other(12)
 76
 
 89
 
 (15%)
 
 
 16%
 
 (31%)
 
 (31%)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
  Total
 $ 16,171
 
 $ 11,621
 
 39%
 
 
 (1%)
 
 40%
 
 (4%)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
See end of text prior to tables for notes.

N/A - Not applicable
 
            

 

For third-quarter 2010, revenues from Biopharmaceutical were $13.9 billion, an increase of 31% compared with $10.7 billion in the year-ago quarter.  Operationally, revenues increased $3.4 billion, or 33%, which included $3.9 billion, or 37%, attributable to legacy Wyeth products, primarily Premarin in the Primary Care unit, Enbrel and the Prevnar/Prevenar franchise in the Specialty Care unit, Protonix and Zosyn/Tazocin in the Established Products unit as well as Enbrel and the Prevenar franchise in the Emerging Markets unit, partially offset by a decline of $468 million, or 4%, due to legacy Pfizer products.  In addition, foreign exchange unfavorably impacted Biopharmaceutical revenues by 2% or $173 million.

Within the Biopharmaceutical units, legacy Pfizer operational performance was impacted in third-quarter 2010 compared with the year-ago quarter primarily by the loss of exclusivity of certain products and by the resulting reclassification of Camptosar European revenues among the units.  Legacy Pfizer Primary Care unit revenues in third-quarter 2010 were negatively impacted by 4% due to the loss of exclusivity of Lipitor in Canada in May 2010 and in Spain in July 2010.  Legacy Pfizer Oncology unit revenues no longer include Camptosar's European revenues due to its loss of exclusivity in July 2009.  Camptosar's European revenues are included in the Established Products unit beginning in first-quarter 2010.  This reclassification of revenues negatively impacted the legacy Pfizer Oncology unit's performance by 16% in third-quarter 2010 compared with the prior-year quarter.  Further, legacy Pfizer Established Products unit revenues in third-quarter 2010 were adversely impacted by 6% due to the loss of exclusivity for Norvasc in Canada in July 2009, partially offset by the favorable impact of 1% due to the addition of Camptosar's European revenues.  Finally, legacy Pfizer Emerging Markets unit revenues in third-quarter 2010 were essentially flat reflecting solid growth in key priority countries, most notably China, offset by Eastern European pricing pressure and wholesaler purchasing patterns driven by economic conditions.

For third-quarter 2010, revenues from Diversified were $2.2 billion, an increase of 151% compared with $855 million in the year-ago quarter.  This increase of $1.3 billion was primarily attributable to legacy Wyeth products, principally Centrum, Advil and Caltrate in Consumer Healthcare and infant and toddler Nutrition products.  The impact of foreign exchange on Diversified revenues was immaterial.

Reported Net Income(2) and Reported Diluted EPS(2) 

For third-quarter 2010, Pfizer posted reported net income(2) of $866 million, a decrease of 70% compared with $2.9 billion in the prior-year quarter, and reported diluted EPS(2) of $0.11, a decrease of 74% compared with $0.43 in the prior-year quarter.  For the first nine months of 2010, Pfizer posted reported net income(2) of $5.4 billion, a decrease of 32% compared with $7.9 billion in the first nine months of 2009, and reported diluted EPS(2) of $0.66, a decline of 43% compared with $1.16 in the prior-year period.  Third-quarter 2010 results were favorably impacted by revenues from legacy Wyeth products, and negatively impacted primarily by the expenses associated with the legacy Wyeth operations as well as purchase accounting adjustments, integration charges and restructuring charges associated with the Wyeth acquisition, impairment charges of $1.5 billion (pre-tax) related to certain intangible assets acquired in connection with the Wyeth acquisition and a $701 million (pre-tax) charge for asbestos litigation related to our wholly owned subsidiary Quigley Company, Inc.  For the first nine months of 2010, results were impacted by the aforementioned items as well as the favorable impact of foreign exchange and the unfavorable impact of higher net interest expense primarily due to borrowings used to partially fund the Wyeth acquisition.

In addition, the effective tax rate on reported results increased to approximately 39% in third-quarter 2010 from approximately 28% in third-quarter 2009, and approximately 37% in the first nine months of 2010 from approximately 27% in the first nine months of 2009.  These increases were primarily the result of higher expenses incurred as a result of the acquisition of Wyeth and the mix of jurisdictions in which those expenses were incurred.  Also, the lower rates in the third quarter and first nine months of 2009 compared to the same periods in 2010 reflected a tax benefit of $174 million related to the final resolution of a previously disclosed settlement.

Additionally, reported diluted EPS(2) in third-quarter 2010 and the first nine months of 2010 was impacted by the increased number of shares outstanding in comparison with the corresponding periods in 2009 resulting from shares issued to partially fund the Wyeth acquisition.

Adjusted Income(1) and Adjusted Diluted EPS(1)

Third-quarter 2010 adjusted income(1) was $4.4 billion, an increase of 26% compared with $3.5 billion in the year-ago quarter, and adjusted diluted EPS(1) was $0.54, an increase of 6% compared with $0.51 in the year-ago quarter.  For the first nine months of 2010, Pfizer posted adjusted income(1) of $14.2 billion, an increase of 37% compared with $10.4 billion in the first nine months of 2009, and adjusted diluted EPS(1) of $1.76, an increase of 14% compared with $1.54 in the prior-year period.  Results were favorably impacted by revenues from legacy Wyeth products and, to a lesser extent, foreign exchange, which were partially offset by the expenses associated with the legacy Wyeth operations as well as lower overall revenues from legacy Pfizer products and higher net interest expense primarily due to borrowings used to partially fund the acquisition of Wyeth. 

In addition, the effective tax rate on adjusted income(1) decreased to approximately 30% in third-quarter 2010 compared with approximately 32% in third-quarter 2009, and increased to approximately 31% in the first nine months of 2010 compared with approximately 30% in the first nine months of 2009.  The changes in the effective tax rate on adjusted income(1)  were primarily the result of the change in the jurisdictional mix of earnings in the respective periods.

Additionally, adjusted diluted EPS(1) in third-quarter 2010 and the first nine months of 2010 was impacted by the increased number of shares outstanding in comparison with the corresponding periods in 2009 resulting from shares issued to partially fund the Wyeth acquisition.

In third-quarter 2010, adjusted cost of sales(1) as a percentage of revenues was 18.3% compared with 15.4% in third-quarter 2009.  This increase primarily reflects the change in the mix of products and businesses as a result of the Wyeth acquisition.  Excluding the impact of foreign exchange, adjusted cost of sales(1) as a percentage of revenues was 19.7% in third-quarter 2010. 

Adjusted SI&A expenses(1) were $4.6 billion in third-quarter 2010, an increase of 43% compared with $3.2 billion in the prior-year quarter.  This increase was attributable primarily to the addition of the legacy Wyeth operations.  Foreign exchange decreased third-quarter 2010 adjusted SI&A expenses(1) by $32 million compared with the year-ago quarter. 

Adjusted R&D expenses(1) were $2.2 billion in third-quarter 2010, an increase of 33% compared with $1.6 billion in the prior-year period. This increase was attributable primarily to the addition of the legacy Wyeth operations and continued investment in the late-stage development portfolio.  Foreign exchange decreased third-quarter 2010 adjusted R&D expenses(1) by $15 million compared with the year-ago quarter.

Overall, foreign exchange decreased adjusted total costs(14) by $298 million, or 4%, in third-quarter 2010 compared with the prior-year period.

Executive Commentary

Jeff Kindler, Chairman and Chief Executive Officer, stated, "It's been just over a year since the closing of the Wyeth acquisition.  I am particularly pleased with the speed of the integration, the cost synergies achieved to date as well as our solid financial performance this quarter and year-to-date in this difficult economic environment.  This combination is clearly creating opportunities to provide greater value for our shareholders."

"We continue to carefully evaluate and make prudent capital allocation decisions.  We recently announced several business development transactions that we believe will enhance shareholder value by enabling continued growth in several of our business units.  Our pending acquisition of King Pharmaceuticals, Inc. is consistent with our stated objective of seeking a larger presence in the pain market within the Primary Care unit, while our acquisition of FoldRx enhances the orphan and rare disease pipeline portfolio of our Specialty Care unit.  Further, our alliance with Biocon is expected to advance our biosimilars strategy by positioning us competitively in the diabetes market over time, while our agreement with Laboratorio Teuto Brasileiro S.A. is expected to broaden our Emerging Markets presence.  Also, we are reviewing strategic alternatives for Capsugel in order to optimize the value of this asset.  We believe these actions, taken together, will serve to improve our business profile and provide both near-term and longer-term financial benefit," continued Mr. Kindler.

Frank D'Amelio, Chief Financial Officer, stated, "Given our solid year-to-date performance and continued confidence in the business, we are once again reaffirming our 2012 financial targets, and we are narrowing the ranges for the components of our 2010 financial guidance.  Additionally, we are increasing our 2010 adjusted diluted EPS(1) guidance to a range of  $2.17 to $2.22 from a range of $2.10 to $2.20.  Further, we repurchased approximately $500 million, or 30 million shares, of our common stock in the third quarter, and we continue to review our capital allocation options with the goal of maximizing value for our shareholders."

2010 Financial Guidance(16)

For full-year 2010, Pfizer's financial guidance, at current exchange rates(15), is summarized below.


 
Reported Revenues
 $67.0 to $68.0 billion

(previously $67.0 to $69.0 billion)
 
Adjusted Cost of Sales(1) as a Percentage of Revenues
 18.5% to 19.0%

(previously 19.0% to 20.0%)
 
Adjusted SI&A Expenses(1)
 $19.2 to $19.7 billion

(previously $19.0 to $20.0 billion)
 
Adjusted R&D Expenses(1)
 $9.1 to $9.5 billion

(previously $9.1 to $9.6 billion)
 
Adjusted Other (Income)/Deductions(1)
 Approximately $1.0 billion

(previously $1.2 to $1.4 billion)
 
Effective Tax Rate on Adjusted Income(1)
 Approximately 30%
 
Reported Diluted EPS(2)
 $0.84 to $0.94

(previously $0.95 to $1.10)
 
Adjusted Diluted EPS(1)
 $2.17 to $2.22

(previously $2.10 to $2.20)
 

 
 

 

2012 Financial Targets

The Company is reaffirming all elements of its 2012 financial targets.  As previously stated, given the longer-term nature of these targets, they are subject to greater variability and less certainty as a result of potential material impacts related to foreign exchange fluctuations, macroeconomic activity including inflation, and industry-specific challenges including changes to government healthcare policy, among others.

For 2012, at current exchange rates(15), Pfizer is targeting reported revenues between $65.2 and $67.7 billion, reported diluted EPS(2) between $1.58 and $1.73, adjusted diluted EPS(1) between $2.25 and $2.35, adjusted R&D expenses(1) between $8.0 and $8.5 billion, adjusted operating margin(1) in a range of the high 30%s to low 40%s and adjusted other (income)/deductions(1) between $1.0 and $1.2 billion in deductions.  The effective tax rate on adjusted income(1) is targeted at approximately 30%, while operating cash flow is expected to be at least $19.0 billion.

Additionally, the Company remains on-track to achieve the cost-reduction target of approximately $4 to $5 billion, by the end of 2012, at 2008 average foreign exchange rates, in comparison with the 2008 pro-forma adjusted total costs(14) of the legacy Pfizer and legacy Wyeth operations. 

For additional details, please see the attached financial schedules, product revenue tables, supplemental information and disclosure notice.

1."Adjusted Income" and its components and "Adjusted Diluted Earnings Per Share (EPS)" are defined as reported net income(2) and its components and reported diluted EPS(2) excluding purchase accounting adjustments, acquisition-related costs, discontinued operations and certain significant items.  Adjusted Cost of Sales, Adjusted SI&A expenses, Adjusted 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 Form 10-Q for the fiscal quarter ended July 4, 2010, 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. Reconciliations of third-quarter 2010 and 2009 and the first nine months of 2010 and 2009 adjusted income and its components and adjusted diluted EPS to reported net income(2) and its components and reported diluted EPS(2), as well as reconciliations of full-year 2010 guidance and 2012 targets for adjusted income and adjusted diluted EPS to full-year 2010 guidance and 2012 targets for reported net income(2) and reported diluted EPS(2), are provided in the materials accompanying this report. The adjusted income and its components and adjusted diluted EPS measures are not, and should not be viewed as, substitutes for U.S. generally accepted accounting principles (GAAP) net income and its components and diluted EPS.
2."Reported Net Income" is defined as net income attributable to Pfizer Inc. in accordance with U.S. generally accepted accounting principles. "Reported Diluted EPS" is defined as reported diluted EPS attributable to Pfizer Inc. common shareholders in accordance with U.S. GAAP.
3.The Primary Care unit includes revenues from human pharmaceutical products primarily prescribed by primary-care physicians, and may include, but are not limited to, products in the following therapeutic and disease areas: Alzheimer's disease, anxiety, cardiovascular (excluding pulmonary arterial hypertension), diabetes, pain, genitourinary, obesity, osteoporosis and respiratory.  Examples of products in this unit include, but are not limited to, Celebrex, Lipitor, Lyrica, Premarin, Pristiq and Viagra.  All revenues for such products are allocated to the Primary Care unit, except those generated in emerging markets(6) and those that are managed by the Established Products(5) unit.
4.The Specialty Care unit includes revenues from human pharmaceutical products primarily prescribed by physicians who are specialists, and may include, but are not limited to, products in the following therapeutic and disease areas: antibacterials, antifungals, antivirals, bone, inflammation, gastrointestinal, growth hormones, multiple sclerosis, ophthalmology, pulmonary arterial hypertension and psychosis.  Examples of products in this unit include, but are not limited to, Enbrel, Genotropin, Geodon, the Prevnar/Prevenar franchise, Xalatan and Zyvox.  All revenues for such products are allocated to the Specialty Care unit, except those generated in emerging markets(6) and those that are managed by the Established Products(5) unit.
5.The Established Products unit generally includes revenues from human prescription pharmaceutical products that have lost patent protection or marketing exclusivity in certain countries and/or regions.  In certain situations, products may be transferred to this unit before losing patent protection or marketing exclusivity in order to maximize their value.  This unit also excludes revenues generated in emerging markets(6).  Examples of products in this unit include, but are not limited to, Arthrotec, Effexor, Medrol, Norvasc, Protonix, Relpax and Zosyn/Tazocin.
6.The Emerging Markets unit includes revenues from all human prescription pharmaceutical products sold in emerging markets, including, but not limited to, Asia (excluding Japan and South Korea), Latin America, Middle East, Africa, Central and Eastern Europe, Russia and Turkey. 
7.The Oncology unit includes revenues from human oncology and oncology-related products.  Examples of products in this unit include, but are not limited to, Aromasin, Sutent and Torisel.  All revenues for such products are allocated to the Oncology unit, except those generated in emerging markets(6) and those that are managed by the Established Products(5) unit.
8.Animal Health includes worldwide revenues from products to prevent and treat disease in livestock and companion animals, including vaccines, paraciticides and anti-infectives.
9.Consumer Healthcare generally includes worldwide revenues from non-prescription medicines and vitamins and may include, but are not limited to, products in the following therapeutic categories: pain management, nutritionals, respiratory and GI-topicals.  Examples of products in Consumer Healthcare include, but are not limited to, Advil, Centrum, Caltrate, ChapStick and Robitussin.
10.Nutrition generally includes revenues from a full line of infant and toddler nutritional products sold outside of North America.  Examples of products in Nutrition include, but are not limited to, the S-26 and SMA product lines as well as formula for infants with special nutritional needs.
11.Capsugel generally includes worldwide revenues from capsule products and services for the pharmaceutical and associated healthcare industries.  On October 6, 2010, the Company announced that it is reviewing strategic alternatives for Capsugel, which may include a divestiture.
12.Includes revenues generated primarily from Pfizer Centersource.
13.In Biopharmaceutical, revenues from South Korea in 2009 have been reclassified from the Emerging Markets unit to the appropriate developed market units to conform to the current-year presentation, which reflects the fact that the commercial operations of South Korea, effective January 1, 2010, are managed within the appropriate developed market units. 
14.Represents the total of Adjusted Cost of Sales(1), Adjusted SI&A expenses(1) and Adjusted R&D expenses(1).
15.The current exchange rates assumed in connection with the 2010 financial guidance are a blend of the average of the actual exchange rates in effect from December 2009 through September 2010 and the mid-October 2010 exchange rates for the remainder of the year.  The current exchanges rates assumed in connection with the 2012 financial targets are the mid-October 2010 exchange rates.
16.This guidance does not assume the completion of any business-development transactions not completed as of October 3, 2010, with the exception of the Biocon transaction.  This guidance also excludes the potential effects of the resolution of litigation-related matters not substantially resolved as of October 3, 2010. 


PFIZER INC. AND SUBSIDIARY COMPANIES
 
CONSOLIDATED STATEMENTS OF INCOME
 
(UNAUDITED)
 
(millions, except per common share data)
 

 

 

 
 
 Third Quarter
 
 % Incr. /
 
 Nine Months
 
 % Incr. /
 

 
 
 2010
 
 2009
 
 (Decr.)
 
 2010
 
 2009
 
 (Decr.)
 

 Revenues
 $
 16,171
 
 $
 11,621
 
 39
 
 $
 50,248
 
 $
 33,472
 
 50
 

 Costs and expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Cost of sales (a)
 
 3,896
 
 
 1,789
 
 118
 
 
 11,997
 
 
 4,953
 
 142
 

 
 Selling, informational and administrative expenses (a)
 
 4,633
 
 
 3,282
 
 41
 
 
 13,876
 
 
 9,508
 
 46
 

 
 Research and development expenses (a)
 
 2,194
 
 
 1,632
 
 34
 
 
 6,607
 
 
 5,032
 
 31
 

 
 Amortization of intangible assets
 
 1,156
 
 
 594
 
 95
 
 
 3,972
 
 
 1,755
 
 126
 

 
 Acquisition-related in-process research and development charges
 
 -
 
 
 -
 
 -
 
 
 74
 
 
 20
 
 270
 

 
 Restructuring charges and certain acquisition-related costs
 
 499
 
 
 193
 
 159
 
 
 2,091
 
 
 1,206
 
 73
 

 
 Other deductions--net
 
 2,353
 
 
 160
 
 *
 
 
 3,038
 
 
 175
 
 *
 

 Income from continuing operations before provision
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 for taxes on income
 
 1,440
 
 
 3,971
 
 (64)
 
 
 8,593
 
 
 10,823
 
 (21)
 

 Provision for taxes on income
 
 564
 
 
 1,092
 
 (48)
 
 
 3,198
 
 
 2,952
 
 8
 

 Income from continuing operations
 
 876
 
 
 2,879
 
 (70)
 
 
 5,395
 
 
 7,871
 
 (31)
 

 Discontinued operations--net of tax
 
 (5)
 
 
 2
 
 *
 
 
 (4)
 
 
 6
 
 *
 

 Net income before allocation to noncontrolling interests
 
 871
 
 
 2,881
 
 (70)
 
 
 5,391
 
 
 7,877
 
 (32)
 

 Less: Net income attributable to noncontrolling interests
 
 5
 
 
 3
 
 67
 
 
 24
 
 
 9
 
 167
 

 Net income attributable to Pfizer Inc.
 $
 866
 
 $
 2,878
 
 (70)
 
 $
 5,367
 
 $
 7,868
 
 (32)
 

 Earnings per share - basic:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Income from continuing operations attributable to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
    Pfizer Inc. common shareholders
 $
 0.11
 
 $
 0.43
 
 (74)
 
 $
 0.67
 
 $
 1.17
 
 (43)
 

 
 Discontinued operations--net of tax
 
 -
 
 
 -
 
 --
 
 
 -
 
 
 -
 
 --
 

 
 Net income attributable to Pfizer Inc. common shareholders
 $
 0.11
 
 $
 0.43
 
 (74)
 
 $
 0.67
 
 $
 1.17
 
 (43)
 

 Earnings per share - diluted:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Income from continuing operations attributable to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
    Pfizer Inc. common shareholders
 $
 0.11
 
 $
 0.43
 
 (74)
 
 $
 0.66
 
 $
 1.16
 
 (43)
 

 
 Discontinued operations--net of tax
 
 -
 
 
 -
 
 --
 
 
 -
 
 
 -
 
 --
 

 
 Net income attributable to Pfizer Inc. common shareholders
 $
 0.11
 
 $
 0.43
 
 (74)
 
 $
 0.66
 
 $
 1.16
 
 (43)
 

 Weighted-average shares used to calculate earnings per
common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Basic
 
 8,027
 
 
 6,730
 
 
 
 
 8,045
 
 
 6,727
 
 
 

 
 Diluted
 
 8,057
 
 
 6,762
 
 
 
 
 8,079
 
 
 6,758
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
 Exclusive of amortization of intangible assets, except as discussed in footnote 3 below.
 
*
 Calculation not meaningful.
 

 Certain amounts and percentages may reflect rounding adjustments.
 

 
 
1.
 The above financial statements present the three-month and nine-month periods ended October 3, 2010 and September 27, 2009.  Subsidiaries
 

 operating outside the United States are included for the three-month and nine-month periods ended August 29, 2010 and August 23, 2009.
 

 Wyeth's results are included in our consolidated financial statements commencing from the acquisition date of October 15, 2009, in accordance
 

 with Pfizer's domestic and international year-ends. Therefore, our results of operations for the three-month and nine-month periods ended
 

 September 27, 2009 do not include Wyeth's results of operations. Cost of sales for 2010 includes the significant impacts of purchase accounting
 

 adjustments associated with inventory acquired from Wyeth that was sold in 2010 as well as a write-off of certain Wyeth-related inventory.
 

 Amortization of intangible assets for 2010 includes the amortization of intangible assets acquired from Wyeth. Other deductions-net includes
 

 impairment charges related to certain intangible assets acquired as part of our acquisition of Wyeth. See Supplemental Information that
 

 accompanies these materials for additional details related to the impairment charges and inventory write-off recorded in the third quarter of
 

 2010 that impacted Other deductions-net and Cost of sales.
 

 
 
2.
 The financial results for the three-month and nine-month periods ended October 3, 2010, are not necessarily indicative of the results which could
 

 ultimately be achieved for the current year.
 

 
 
3.
 Amortization expense related to acquired intangible assets that contribute to our ability to sell, manufacture, research, market and distribute our
 

 products is included in Amortization of intangible assets as these intangible assets benefit multiple business functions. Amortization expense
 

 related to acquired 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. AND SUBSIDIARY COMPANIES
 
RECONCILIATION OF REPORTED NET INCOME ATTRIBUTABLE TO PFIZER INC. AND ITS COMPONENTS
 
AND REPORTED DILUTED EPS ATTRIBUTABLE TO PFIZER INC. COMMON SHAREHOLDERS
 
TO ADJUSTED INCOME AND ITS COMPONENTS AND ADJUSTED DILUTED EPS (a)
 
(UNAUDITED)
 
(millions of dollars, except per common share data)
 

 

 

 

 
 
 
 Quarter Ended October 3, 2010
 

 
 
 
 
 
 Purchase
 
 Acquisition-
 
 
 
 Certain
 
 
 

 
 
 
 
 
 Accounting
 
 Related
 
 Discontinued
 
 Significant
 
 
 

 
 
 Reported
 
 Adjustments
 
 Costs(2)
 
 Operations
 
 Items(3)
 
 Adjusted
 

 Revenues
 $
 16,171
 $
 -
 $
 -
 $
 -
 $
 (5)
 $
 16,166
 

 Costs and expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 

 Cost of sales (b)
 
 3,896
 
 (487)
 
 (241)
 
 -
 
 (209)
 
 2,959
 

 Selling, informational and administrative expenses (b)
 
 4,633
 
 8
 
 (28)
 
 -
 
 2
 
 4,615
 

 Research and development expenses (b)
 
 2,194
 
 (8)
 
 (26)
 
 -
 
 -
 
 2,160
 

 Amortization of intangible assets
 
 1,156
 
 (1,124)
 
 -
 
 -
 
 -
 
 32
 

 Acquisition-related in-process research and development charges
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 

 Restructuring charges and certain acquisition-related costs
 
 499
 
 -
 
 (499)
 
 -
 
 -
 
 -
 

 Other (income)/deductions--net
 
 2,353
 
 (14)
 
 -
 
 -
 
 (2,208)
 
 131
 

 Income from continuing operations before provision for taxes on income
 
 1,440
 
 1,625
 
 794
 
 -
 
 2,410
 
 6,269
 

 Provision for taxes on income
 
 564
 
 379
 
 232
 
 -
 
 717
 
 1,892
 

 Income from continuing operations
 
 876
 
 1,246
 
 562
 
 -
 
 1,693
 -
 4,377
 

 Discontinued operations--net of tax
 
 (5)
 
 -
 
 -
 
 5
 
 -
 
 -
 

 Net income before allocation to noncontrolling interests
 
 871
 
 1,246
 
 562
 
 5
 
 1,693
 
 4,377
 

 Less: Net income attributable to noncontrolling interests
 
 5
 
 -
 
 -
 
 -
 
 -
 
 5
 

 Net income attributable to Pfizer Inc.
 $
 866
 $
 1,246
 $
 562
 $
 5
 $
 1,693
 $
 4,372
 

 Earnings per common share - diluted:
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Income from continuing operations attributable to Pfizer Inc.
common shareholders
 $
 0.11
 $
 0.15
 $
 0.07
 $
 -
 $
 0.21
 $
 0.54
 

 
 Discontinued operations--net of tax
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 

 
 Net income attributable to Pfizer Inc. common shareholders
 $
 0.11
 $
 0.15
 $
 0.07
 $
 -
 $
 0.21
 $
 0.54
 
               

 


 
 
 Nine Months Ended October 3, 2010
 

 
 
 
 
 Purchase
 
 Acquisition-
 
 
 
 Certain
 
 
 

 
 
 
 
 Accounting
 
 Related
 
 Discontinued
 
 Significant
 
 
 

 
 
 Reported
 
 Adjustments
 
 Costs(2)
 
 Operations
 
 Items(3)
 
 Adjusted
 

 Revenues
 $
 50,248
 $
 -
 $
 -
 $
 -
 $
 (18)
 $
 50,230
 

 Costs and expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 

 Cost of sales (b)
 
 11,997
 
 (2,564)
 
 (367)
 
 -
 
 (221)
 
 8,845
 

 Selling, informational and administrative expenses (b)
 
 13,876
 
 17
 
 (190)
 
 -
 
 14
 
 13,717
 

 Research and development expenses (b)
 
 6,607
 
 (23)
 
 (46)
 
 -
 
 -
 
 6,538
 

 Amortization of intangible assets
 
 3,972
 
 (3,880)
 
 -
 
 -
 
 -
 
 92
 

 Acquisition-related in-process research and development charges
 
 74
 
 (74)
 
 -
 
 -
 
 -
 
 -
 

 Restructuring charges and certain acquisition-related costs
 
 2,091
 
 -
 
 (2,091)
 
 -
 
 -
 
 -
 

 Other (income)/deductions--net
 
 3,038
 
 (40)
 
 -
 
 -
 
 (2,500)
 
 498
 

 Income from continuing operations before provision for taxes on income
 
 8,593
 
 6,564
 
 2,694
 
 -
 
 2,689
 
 20,540
 

 Provision for taxes on income
 
 3,198
 
 1,631
 
 695
 
 -
 
 779
 
 6,303
 

 Income from continuing operations
 
 5,395
 
 4,933
 
 1,999
 
 -
 
 1,910
 -
 14,237
 

 Discontinued operations--net of tax
 
 (4)
 
 -
 
 -
 
 4
 
 -
 
 -
 

 Net income before allocation to noncontrolling interests
 
 5,391
 
 4,933
 
 1,999
 
 4
 
 1,910
 
 14,237
 

 Less: Net income attributable to noncontrolling interests
 
 24
 
 -
 
 -
 
 -
 
 -
 
 24
 

 Net income attributable to Pfizer Inc.
 $
 5,367
 $
 4,933
 $
 1,999
 $
 4
 $
 1,910
 $
 14,213
 

 Earnings per common share - diluted:
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Income from continuing operations attributable to Pfizer Inc.
common shareholders
 $
 0.66
 $
 0.61
 $
 0.25
 $
 -
 $
 0.24
 $
 1.76
 

 
 Discontinued operations--net of tax
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 

 
 Net income attributable to Pfizer Inc. common shareholders
 $
 0.66
 $
 0.61
 $
 0.25
 $
 -
 $
 0.24
 $
 1.76
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 (a)
 Adjusted income and its components and adjusted diluted EPS are not, and should not be viewed as, substitutes for U.S. GAAP net income and
 

 
 its components and diluted EPS.
 

 (b)
 Exclusive of amortization of intangible assets, except as discussed in note 1.
 

 
 

 See end of tables for notes.
 

 Certain amounts may reflect rounding adjustments.
 
              

 

PFIZER INC. AND SUBSIDIARY COMPANIES
 
RECONCILIATION OF REPORTED NET INCOME ATTRIBUTABLE TO PFIZER INC. AND ITS COMPONENTS
 
AND REPORTED DILUTED EPS ATTRIBUTABLE TO PFIZER INC. COMMON SHAREHOLDERS
 
TO ADJUSTED INCOME AND ITS COMPONENTS AND ADJUSTED DILUTED EPS (a)
 
(UNAUDITED)
 
(millions of dollars, except per common share data)
 

 

 

 
 Quarter Ended September 27, 2009
 

 
 
 
 Purchase
 
 Acquisition-
 
 
 
 Certain
 
 
 

 
 
 
 Accounting
 
 Related
 
 Discontinued
 
 Significant
 
 
 

 
 Reported
 
 Adjustments
 
 Costs(2)
 
 Operations
 
 Items(3)
 
 Adjusted
 
Revenues
 $
 11,621
 $
 -
 $
 -
 $
 -
 $
 (18)
 $
 11,603
 
Costs and expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of sales (b)
 
 1,789
 
 -
 
 -
 
 -
 
 (2)
 
 1,787
 
Selling, informational and administrative expenses (b)
 
 3,282
 
 3
 
 -
 
 -
 
 (60)
 
 3,225
 
Research and development expenses (b)
 
 1,632
 
 (8)
 
 -
 
 -
 
 (5)
 
 1,619
 
Amortization of intangible assets
 
 594
 
 (560)
 
 -
 
 -
 
 -
 
 34
 
Acquisition-related in-process research and development charges
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
Restructuring charges and certain acquisition-related costs
 
 193
 
 -
 
 (132)
 
 -
 
 (61)
 
 -
 
Other (income)/deductions--net
 
 160
 
 1
 
 -
 
 -
 
 (303)
 
 (142)
 
Income from continuing operations before provision for taxes on income
 
 3,971
 
 564
 
 132
 
 -
 
 413
 
 5,080
 
Provision for taxes on income
 
 1,092
 
 167
 
 45
 
 -
 
 312
 
 1,616
 
Income from continuing operations
 
 2,879
 
 397
 
 87
 
 -
 
 101
 -
 3,464
 
Discontinued operations--net of tax
 
 2
 
 -
 
 -
 
 (2)
 
 -
 
 -
 
Net income before allocation to noncontrolling interests
 
 2,881
 
 397
 
 87
 
 (2)
 
 101
 
 3,464
 
Less: Net income attributable to noncontrolling interests
 
 3
 
 -
 
 -
 
 -
 
 -
 
 3
 
Net income attributable to Pfizer Inc.
 $
 2,878
 $
 397
 $
 87
 $
 (2)
 $
 101
 $
 3,461
 
Earnings per common share - diluted:
 
 
 
 
 
 
 
 
 
 
 
 
 

 Income from continuing operations attributable to Pfizer Inc. common shareholders
 $
 0.43
 $
 0.06
 $
 0.01
 $
 -
 $
 0.01
 $
 0.51
 

 Discontinued operations--net of tax
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 

 Net income attributable to Pfizer Inc. common shareholders
 $
 0.43
 $
 0.06
 $
 0.01
 $
 -
 $
 0.01
 $
 0.51
 
             

 


 
 Nine Months Ended September 27, 2009
 

 
 Reported
 
 Purchase

Accounting

Adjustments
 
 Acquisition-

Related

Costs(2)
 
 Discontinued

Operations
 
 Certain

Significant

Items(3)
 
 Adjusted
 
Revenues
 $
 33,472
 $
 -
 $
 -
 $
 -
 $
 (58)
 $
 33,414
 
Costs and expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of sales (b)
 
 4,953
 
 -
 
 -
 
 -
 
 (166)
 
 4,787
 
Selling, informational and administrative expenses (b)
 
 9,508
 
 9
 
 -
 
 -
 
 (195)
 
 9,322
 
Research and development expenses (b)
 
 5,032
 
 (22)
 
 -
 
 -
 
 (70)
 
 4,940
 
Amortization of intangible assets
 
 1,755
 
 (1,656)
 
 -
 
 -
 
 -
 
 99
 
Acquisition-related in-process research and development charges
 
 20
 
 (20)
 
 -
 
 -
 
 -
 
 -
 
Restructuring charges and certain acquisition-related costs
 
 1,206
 
 -
 
 (814)
 
 -
 
 (392)
 
 -
 
Other (income)/deductions--net
 
 175
 
 (2)
 
 -
 
 -
 
 (731)
 
 (558)
 
Income from continuing operations before provision for taxes on income
 
 10,823
 
 1,691
 
 814
 
 -
 
 1,496
 
 14,824
 
Provision for taxes on income
 
 2,952
 
 524
 
 290
 
 -
 
 672
 
 4,438
 
Income from continuing operations
 
 7,871
 
 1,167
 
 524
 
 -
 
 824
 
 10,386
 
Discontinued operations--net of tax
 
 6
 
 -
 
 -
 
 (6)
 
 -
 
 -
 
Net income before allocation to noncontrolling interests
 
 7,877
 
 1,167
 
 524
 
 (6)
 
 824
 
 10,386
 
Less: Net income attributable to noncontrolling interests
 
 9
 
 -
 
 -
 
 -
 
 -
 
 9
 
Net income attributable to Pfizer Inc.
 $
 7,868
 $
 1,167
 $
 524
 $
 (6)
 $
 824
 $
 10,377
 
Earnings per common share - diluted:
 
 
 
 
 
 
 
 
 
 
 
 
 

 Income from continuing operations attributable to Pfizer Inc. common shareholders
 $
 1.16
 $
 0.17
 $
 0.08
 $
 -
 $
 0.13
 $
 1.54
 

 Discontinued operations--net of tax
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 

 Net income attributable to Pfizer Inc. common shareholders
 $
 1.16
 $
 0.17
 $
 0.08
 $
 -
 $
 0.13
 $
 1.54
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
 Adjusted income and its components and adjusted diluted EPS are not, and should not be viewed as, substitutes for U.S. GAAP net income and
 

 its components and diluted EPS.
 
(b)
 Exclusive of amortization of intangible assets, except as discussed in note 1.
 

 
 
See end of tables for notes.
 
Certain amounts may reflect rounding adjustments.
 
             

 

PFIZER INC. AND SUBSIDIARY COMPANIES
 
RECONCILIATION OF REPORTED NET INCOME ATTRIBUTABLE TO PFIZER INC. AND ITS COMPONENTS
 
AND REPORTED DILUTED EPS ATTRIBUTABLE TO PFIZER INC. COMMON SHAREHOLDERS
 
TO ADJUSTED INCOME AND ITS COMPONENTS AND ADJUSTED DILUTED EPS*
 
(UNAUDITED)
 

 

 
1)
 Amortization expense related to acquired intangible assets that contribute to our ability to sell, manufacture, research, market and distribute our products
 

 is included in Amortization of intangible assets as these intangible assets benefit multiple business functions. Amortization expense related to acquired
 

 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.
 

 
 
2)
 Acquisition-related costs includes the following:
 

 
 

 
 
 
 
 
 Third Quarter
 
 Nine Months
 

 (millions of dollars)
 
 
 2010
 
 2009
 
 2010
 
 2009
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Transaction costs(a)
 
 $
 -
 $
 19
 $
 13
 $
 572
 

 
 Integration costs(a)
 231
 
 113
 
 650
 
 242
 

 
 Restructuring charges(a)
 268
 
 -
 
 1,428
 
 -
 

 
 Additional depreciation - asset
restructuring(b)
 295
 
 -
 
 603
 
 -
 

 
 Total acquisition-related costs -- pre-tax
 
 
 794
 
 132
 
 2,694
 
 814
 

 
 Income taxes(c)
 (232)
 
 (45)
 
 (695)
 
 (290)
 

 
 Total acquisition-related costs -- net of tax
 
  $
 562
 $
 87
 $
 1,999
 $
 524
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 (a)
 Transaction costs include costs directly related to our acquisition of Wyeth, such as banking, legal, accounting and other similar costs. Integration
 

 
 costs represent external, incremental costs directly related to integrating Wyeth and primarily include expenditures for consulting and systems
 

 
 integration. Restructuring charges relate to our acquisition of Wyeth and include employee termination costs, asset impairments and exit costs.
 

 
 
 

 (b)
 Represents the impact of changes in the estimated useful lives of assets involved in restructuring actions related to our acquisition of Wyeth. Included in Cost of Sales ($241 million), Selling, informational and administrative expenses ($28 million), and Research and development expenses ($26 million) for the three months ended October 3, 2010. Included in Cost of sales ($367 million), Selling, informational and administrative expenses ($190 million) and Research and development expenses ($46 million) for the nine months ended October 3, 2010.  
 

 
 
 

 (c)
 Included in Provision for taxes on income.
 
            

 

3)
 Certain significant items includes the following:
 

 
 
 
 
 
 Third Quarter
 
 Nine Months
 

 (millions of dollars)
 
 
 2010
 
 2009
 
 2010
 
 2009
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Restructuring charges - Cost-reduction initiatives(a)
 $                         -
 
 $                  61
 
 $                   -
 
 $                  392
 

 
 Implementation costs - Cost-reduction initiatives(b)
 -
 
 80
 
 -
 
 410
 

 
 Certain legal matters(c)
 701
 
 40
 
 843
 
 170
 

 
 Net interest expense(d)
 -
 
 299
 
 -
 
 528
 

 
 Certain asset impairment charges(e)
 
 
 1,468
 
 -
 
 1,668
 
 66
 

 
 Inventory write-off(f)
 
 212
 
 -
 
 212
 
 -
 

 
 Other(g)
 29
 
 (67)
 
 (34)
 
 (70)
 

 
           Total certain significant items -- pre-tax
 2,410
 
 413
 
 2,689
 
 1,496
 

 
 Income taxes(h)
 (717)
 
 (312)
 
 (779)
 
 (672)
 

 
           Total certain significant items -- net of tax
 $                 1,693
 
 $                101
 
 $           1,910
 
 $                  824
 

 
 
 
 
 
 
 
 
 

 (a)
 Included in Restructuring charges and certain acquisition-related costs.
 

 
 
 

 (b)
 Included in Cost of sales ($23 million), Selling, informational and administrative expenses ($51 million), Research and development expenses
 

 
 ($5 million), and Other deductions - net ($1 million) for the three months ended September 27, 2009. Included in Cost of sales ($144 million),
 

 
 Selling, informational and administrative expenses ($182 million), Research and development expenses ($78 million), and Other
 

 
 deductions - net ($6 million) for the nine months ended September 27, 2009.
 

 
 
 

 (c)
 Included in Other deductions - net.  The three-month and nine-month periods ended October 3, 2010 include an additional $701 million charge
 

 
 for asbestos litigation related to our wholly owned subsidiary, Quigley Company, Inc.
 

 
 
 

 (d)
 Included in Other deductions - net. Includes interest expense on the senior unsecured notes issued in connection with our acquisition of
 

 
 Wyeth less interest income earned on the proceeds of those notes.
 

 
 
 

 (e)
 Included in Other deductions - net. Amounts in 2010 represent impairment charges related to certain intangible assets acquired as part of
 

 
 our acquisition of Wyeth (see Supplemental Information that accompanies these materials).
 

 
 
 

 (f)
 Included in Cost of sales (see Supplemental Information that accompanies these materials).
 

 
 
 

 (g)
 Primarily included in Other deductions - net.  Amounts in the nine-month period of 2010 include the gain on the sale of certain Pfizer Animal
 

 
 Health products.
 

 
 
 

 (h)
 Included in Provision for taxes on income.  The three-month and nine-month periods ended September 27, 2009 include a tax benefit of
 

 
 approximately $174 million related to the final resolution of a previously disclosed settlement that resulted in the receipt of information that
 

 
 raised our assessment of the likelihood of prevailing on the technical merits of our tax position.
 

 
 

 
 

 
 
*
 Adjusted income and its components and adjusted diluted EPS are not, and should not be viewed as, substitutes for U.S. GAAP net income and its
 

 components and diluted EPS.
 
            

 

PFIZER INC.
 
BUSINESS REVENUES(1),(2)
 
FIRST NINE MONTHS OF 2010 and 2009
 
(UNAUDITED)
 
(millions of dollars)
 

 

 

 
 
 
 
 
 
 
 
 
 Operational
 

 
 
 2010
 
 2009(2)
 
 % Change
 % Foreign
Exchange
 
 Total %
 
 Legacy
Pfizer %
 

 Primary Care
 
 $     17,442
 
 $     16,040
 
 9
 2
 
 7
 
 -
 

 Specialty Care
 
 11,009
 
 4,465
 
 147
 2
 
 145
 
 1
 

 Established Products
 
 7,682
 
 4,986
 
 54
 3
 
 51
 
 (11)
 

 Emerging Markets
 
 6,294
 
 4,270
 
 47
 7
 
 40
 
 6
 

 Oncology
 
 1,045
 
 1,081
 
 (3)
 1
 
 (4)
 
 (14)
 

   Biopharmaceutical
 
 43,472
 
 30,842
 
 41
 3
 
 38
 
 (1)
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 Animal Health
 
 2,599
 
 1,863
 
 40
 5
 
 35
 
 7
 

 Consumer Healthcare
 
 2,014
 
 -
 
 *
 *
 
 *
 
 *
 

 Nutrition
 
 1,375
 
 -
 
 *
 *
 
 *
 
 *
 

 Capsugel
 
 545
 
 516
 
 6
 1
 
 5
 
 5
 

   Diversified
 
 6,533
 
 2,379
 
 175
 9
 
 166
 
 7
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 Other
 
 243
 
 251
 
 (3)
 6
 
 (9)
 
 (9)
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 TOTAL
 
 $     50,248
 
 $     33,472
 
 50
 3
 
 47
 
 (1)
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 * Calculation not meaningful
 

 
 

 (1) See notes 3-12 in the accompanying earnings release for a description of each business unit and of "Other". 
 

 
 

 (2) In Biopharmaceutical, revenues from South Korea in 2009 have been reclassified from the Emerging Markets unit
 

     to the appropriate developed market units to conform to the current-year presentation, which reflects the fact that
 

     the commercial operations of South Korea, effective January 1, 2010, are managed within the appropriate developed
 

     market units.
 
            

 

PFIZER INC.
 
REVENUES
 
THIRD QUARTER 2010 and 2009
 
(UNAUDITED)
 
(millions of dollars)
 

 

 

 WORLDWIDE
 UNITED STATES
 TOTAL INTERNATIONAL(1)
 

 

 2010
 2009
 % Change
 2010
 2009
 % Change
 2010
 2009
 % Change
 

 
 
 Total
 Oper.
 
 
 Total
 
 
 Total
 Oper.
 
TOTAL REVENUES
 $16,171
 $11,621
 39%
 40%
 $7,112
 $4,816
 48%
 $9,059
 $6,805
 33%
 35%
 
TOTAL BIOPHARMACEUTICAL:
 $13,945
 $10,677
 31%
 33%
 $6,298
 $4,448
 42%
 $7,647
 $6,229
 23%
 26%
 
Lipitor
 2,534
 2,853
 (11%)
 (10%)
 1,298
 1,379
 (6%)
 1,236
 1,474
 (16%)
 (14%)
 
Enbrel (Outside the U.S. and Canada)***
 799
 -
 *
 *
 -
 -
 -
 799
 -
 *
 *
 
Lyrica
 757
 708
 7%
 10%
 356
 352
 1%
 401
 356
 13%
 19%
 
Celebrex
 578
 602
 (4%)
 (5%)
 390
 421
 (7%)
 188
 181
 4%
 1%
 
Prevnar / Prevenar 13***
 735
 -
 *
 *
 540
 -
 *
 195
 -
 *
 *
 
Effexor***
 175
 -
 *
 *
 58
 -
 *
 117
 -
 *
 *
 
Viagra
 459
 466
 (2%)
 -
 242
 232
 4%
 217
 234
 (7%)
 (5%)
 
Xalatan / Xalacom
 416
 436
 (5%)
 (3%)
 157
 143
 10%
 259
 293
 (12%)
 (9%)
 
Norvasc
 330
 488
 (32%)
 (35%)
 -
 14
 *
 330
 474
 (30%)
 (32%)
 
Prevnar / Prevenar 7***
 179
 -
 *
 *
 -
 -
 -
 179
 -
 *
 *
 
Zyvox
 285
 271
 5%
 6%
 148
 146
 1%
 137
 125
 10%
 12%
 
Premarin Family***
 263
 -
 *
 *
 241
 -
 *
 22
 -
 *
 *
 
Sutent
 257
 246
 4%
 9%
 67
 69
 (3%)
 190
 177
 7%
 12%
 
Geodon / Zeldox
 262
 252
 4%
 4%
 224
 210
 7%
 38
 42
 (10%)
 (9%)
 
Detrol / Detrol LA
 237
 283
 (16%)
 (16%)
 163
 197
 (17%)
 74
 86
 (14%)
 (12%)
 
Zosyn / Tazocin***
 255
 -
 *
 *
 177
 -
 *
 78
 -
 *
 *
 
Genotropin
 211
 232
 (9%)
 (6%)
 51
 56
 (9%)
 160
 176
 (9%)
 (6%)
 
Vfend
 200
 196
 2%
 5%
 64
 61
 5%
 136
 135
 1%
 4%
 
Protonix***
 203
 -
 *
 *
 203
 -
 *
 -
 -
 -
 -
 
Chantix / Champix
 163
 155
 5%
 5%
 74
 75
 (1%)
 89
 80
 11%
 11%
 
Benefix***
 156
 -
 *
 *
 67
 -
 *
 89
 -
 *
 *
 
Zoloft
 126
 128
 (2%)
 (3%)
 18
 19
 (5%)
 108
 109
 (1%)
 (3%)
 
Caduet
 127
 130
 (2%)
 (3%)
 86
 91
 (5%)
 41
 39
 5%
 5%
 
Aromasin
 111
 123
 (10%)
 (6%)
 39
 40
 (3%)
 72
 83
 (13%)
 (6%)
 
Revatio
 116
 111
 5%
 7%
 72
 71
 1%
 44
 40
 10%
 15%
 
Pristiq***
 118
 -
 *
 *
 102
 -
 *
 16
 -
 *
 *
 
Medrol
 119
 106
 12%
 13%
 33
 29
 14%
 86
 77
 12%
 13%
 
Cardura
 95
 109
 (13%)
 (11%)
 1
 1
 -
 94
 108
 (13%)
 (11%)
 
Aricept**
 100
 108
 (7%)
 (5%)
 -
 -
 -
 100
 108
 (7%)
 (5%)
 
Zithromax / Zmax
 90
 85
 6%
 4%
 4
 2
 100%
 86
 83
 4%
 2%
 
BMP2***
 101
 -
 *
 *
 98
 -
 *
 3
 -
 *
 *
 
Rapamune***
 104
 -
 *
 *
 55
 -
 *
 49
 -
 *
 *
 
Refacto AF/Xyntha***
 102
 -
 *
 *
 22
 -
 *
 80
 -
 *
 *
 
Fragmin
 84
 82
 2%
 5%
 13
 14
 (7%)
 71
 68
 4%
 6%
 
Tygacil***
 78
 -
 *
 *
 40
 -
 *
 38
 -
 *
 *
 
Alliance Revenue****
 1,042
 692
 51%
 51%
 741
 422
 76%
 301
 270
 11%
 12%
 
All Other Biopharmaceutical
 1,978
 1,815
 9%
 11%
 454
 404
 12%
 1,524
 1,411
 8%
 9%
 
   All Other Established Products
 1,680
 1,502
 12%
 13%
 377
 361
 4%
 1,303
 1,141
 14%
 15%
 
       Legacy Pfizer Other established Products
 1,452
 1,502
 (3%)
 (3%)
 368
 361
 2%
 1,084
 1,141
 (5%)
 (4%)
 
TOTAL DIVERSIFIED:
 $2,150
 $855
 151%
 151%
 $792
 $347
 128%
 $1,358
 $508
 167%
 168%
 
ANIMAL HEALTH***
 860
 678
 27%
 28%
 369
 294
 26%
 491
 384
 28%
 29%
 
CONSUMER HEALTHCARE***
 673
 -
 *
 *
 374
 -
 *
 299
 -
 *
 *
 
NUTRITION***
 441
 -
 *
 *
 -
 -
 -
 441
 -
 *
 *
 
CAPSUGEL
 176
 177
 (1%)
 2%
 49
 53
 (8%)
 127
 124
 2%
 7%
 
OTHER*****
 $76
 $89
 (15%)
 (31%)
 $22
 $21
 5%
 $54
 $68
 (21%)
 (18%)
 

 
 
 
 
 
 
 
 
 
 
 
 
           

 

*
 -  Calculation not meaningful.
 
**
 -  Includes direct sales under license agreement with Eisai Co., Ltd.
 
***
 -  Legacy Wyeth products and operations. Animal Health results for the first nine months of 2010 also reflect the addition of legacy Wyeth
   products.
 

    Wyeth's results are included in our financial statements commencing from the acquisition date of October 15, 2009, in accordance with
   Pfizer's domestic and international year-ends. Therefore, our results for the first nine months of 2009 do not include Wyeth's results of
   operations.
 
****
 -  Enbrel (in the U.S. and Canada)***, Aricept, Rebif, and Exforge.
 
*****
 -  Includes revenues generated primarily from Pfizer Centresource.
 
Certain amounts and percentages may reflect rounding adjustments.
 

 
 

 
 
(1)
 Total International represents Developed Europe region + Developed Rest of World region + Emerging Markets region. Details for these regions are located on the following page.
 
 

 

PFIZER INC.
 
REVENUES
 
DETAIL OF INTERNATIONAL REVENUES BY GEOGRAPHIC REGION
 
THIRD QUARTER 2010 and 2009
 
(UNAUDITED)
 
(millions of dollars)
 

 

 

 DEVELOPED EUROPE(1)
 DEVELOPED REST OF WORLD(2)
 EMERGING MARKETS(3)
 

 
 
 
 

 2010
 2009
 % Change
 2010
 2009
 % Change
 2010
 2009
 % Change
 

 
 
 Total
 Oper.
 
 
 Total
 Oper.
 
 
 Total
 Oper.
 
TOTAL INTERNATIONAL REVENUES
 $3,840
 $3,137
 22%
 35%
 $2,377
 $1,958
 21%
 12%
 $2,842
 $1,710
 66%
 64%
 
TOTAL INTERNATIONAL BIOPHARMACEUTICAL:
 $3,466
 $2,853
 21%
 34%
 $2,109
 $1,847
 14%
 6%
 $2,072
 $1,529
 36%
 34%
 
Lipitor
 628
 752
 (16%)
 (8%)
 397
 512
 (22%)
 (28%)
 211
 210
 -
 (2%)
 
Enbrel (Outside the U.S. and Canada)***
 531
 -
 *
 *
 97
 -
 *
 *
 171
 -
 *
 *
 
Lyrica
 268
 256
 5%
 16%
 63
 42
 50%
 40%
 70
 58
 21%
 17%
 
Celebrex
 42
 53
 (21%)
 (13%)
 86
 64
 34%
 22%
 60
 64
 (6%)
 (6%)
 
Prevnar / Prevenar 13***
 129
 -
 *
 *
 21
 -
 *
 *
 45
 -
 *
 *
 
Effexor***
 55
 -
 *
 *
 37
 -
 *
 *
 25
 -
 *
 *
 
Viagra
 95
 109
 (13%)
 (5%)
 47
 42
 12%
 5%
 75
 83
 (10%)
 (11%)
 
Xalatan / Xalacom
 134
 155
 (14%)
 (5%)
 81
 92
 (12%)
 (18%)
 44
 46
 (4%)
 (6%)
 
Norvasc
 45
 58
 (22%)
 (12%)
 178
 311
 (43%)
 (47%)
 107
 105
 2%
 2%
 
Prevnar / Prevenar 7***
 23
 -
 *
 *
 56
 -
 *
 *
 100
 -
 *
 *
 
Zyvox
 69
 71
 (3%)
 6%
 32
 27
 19%
 7%
 36
 27
 33%
 30%
 
Premarin Family***
 3
 -
 *
 *
 7
 -
 *
 *
 12
 -
 *
 *
 
Sutent
 104
 108
 (4%)
 6%
 36
 27
 33%
 27%
 50
 42
 19%
 19%
 
Geodon / Zeldox
 19
 25
 (24%)
 (16%)
 5
 3
 67%
 -
 14
 14
 -
 -
 
Detrol / Detrol LA
 39
 50
 (22%)
 (18%)
 22
 22
 -
 -
 13
 14
 (7%)
 (7%)
 
Zosyn / Tazocin***
 22
 -
 *
 *
 5
 -
 *
 *
 51
 -
 *
 *
 
Genotropin
 90
 100
 (10%)
 -
 42
 45
 (7%)
 (15%)
 28
 31
 (10%)
 (10%)
 
Vfend
 70
 75
 (7%)
 3%
 30
 28
 7%
 4%
 36
 32
 13%
 13%
 
Protonix***
 -
 -
 -
 -
 -
 -
 -
 -
 -
 -
 -
 -
 
Chantix / Champix
 35
 38
 (8%)
 3%
 46
 32
 44%
 31%
 8
 10
 (20%)
 (27%)
 
Benefix***
 62
 -
 *
 *
 24
 -
 *
 *
 3
 -
 *
 *
 
Zoloft
 21
 24
 (13%)
 (8%)
 57
 54
 6%
 -
 30
 31
 (3%)
 (3%)
 
Caduet
 5
 6
 (17%)
 (17%)
 22
 21
 5%
 5%
 14
 12
 17%
 17%
 
Aromasin
 44
 55
 (20%)
 (9%)
 15
 14
 7%
 -
 13
 14
 (7%)
 (7%)
 
Revatio
 30
 31
 (3%)
 10%
 8
 4
 100%
 60%
 6
 5
 20%
 -
 
Pristiq***
 -
 -
 -
 -
 10
 -
 *
 *
 6
 -
 *
 *
 
Medrol
 22
 27
 (19%)
 (4%)
 12
 11
 9%
 (9%)
 52
 39
 33%
 33%
 
Cardura
 36
 43
 (16%)
 (9%)
 36
 42
 (14%)
 (20%)
 22
 23
 (4%)
 -
 
Aricept**
 53
 65
 (18%)
 (11%)
 39
 34
 15%
 9%
 8
 9
 (11%)
 (10%)
 
Zithromax / Zmax
 15
 22
 (32%)
 (19%)
 34
 27
 26%
 19%
 37
 34
 9%
 6%
 
BMP2***
 3
 -
 *
 *
 -
 -
 -
 -
 -
 -
 -
 -
 
Rapamune***
 14
 -
 *
 *
 4
 -
 *
 *
 31
 -
 *
 *
 
Refacto AF/Xyntha***
 73
 -
 *
 *
 7
 -
 *
 *
 -
 -
 -
 -
 
Fragmin
 33
 35
 (6%)
 3%
 18
 16
 13%
 6%
 20
 17
 18%
 18%
 
Tygacil***
 19
 -
 *
 *
 1
 -
 *
 *
 18
 -
 *
 *
 
Alliance Revenue****
 130
 137
 (5%)
 5%
 153
 116
 32%
 21%
 18
 17
 6%
 13%
 
All Other Biopharmaceutical
 505
 558
 (9%)
 -
 381
 261
 46%
 33%
 638
 592
 8%
 7%
 
   All Other Established Products
 390
 376
 4%
 14%
 329
 223
 48%
 37%
 584
 542
 8%
 7%
 
       Legacy Pfizer Other
       Established Products
 314
 376
 (16%)
 (8%)
 237
 223
 6%
 (1%)
 533
 542
 (2%)
 (3%)
 
TOTAL INTERNATIONAL DIVERSIFIED:
 $336
 $245
 37%
 51%
 $260
 $97
 168%
 138%
 $762
 $166
 *
 *
 
OTHER INTERNATIONAL*****
 $38
 $39
 (3%)
 3%
 $8
 $14
 (43%)
 (38%)
 $8
 $15
 (47%)
 (50%)
 
            

 

*
 -  Calculation not meaningful.
 
**
 -  Includes direct sales under license agreement with Eisai Co., Ltd.
 
***
 -  Legacy Wyeth products and operations. Animal Health results for the first nine months of 2010 also reflect the addition of legacy Wyeth products.
 

    Wyeth's results are included in our financial statements commencing from the acquisition date of October 15, 2009, in accordance with
   Pfizer's domestic and international year-ends. Therefore, our results for the first nine months of 2009 do not include Wyeth's results of operations.
 
****
 -  Enbrel (in the U.S. and Canada)***, Aricept, Rebif, and Exforge.
 
*****
 -  Includes revenues generated primarily from Pfizer Centresource.
 
Certain amounts and percentages may reflect rounding adjustments.
 

 
 

 
 
(1)
 Developed Europe region includes the following markets: Western Europe and the Scandinavian countries.
 
(2)
 Developed Rest of World region includes the following markets:  Australia, Canada, Japan, New Zealand, and South Korea.
 
(3)
 Emerging Markets region includes, but is not limited to, the following markets:  Asia (excluding Japan and South Korea), Latin America, Middle East, Africa, Central and Eastern Europe, Russia and Turkey. In Biopharmaceutical, revenues from South Korea in 2009 have been reclassified from the Emerging Markets unit to the appropriate developed market units to conform to the current-year presentation, which reflects the fact that the commercial operations of South Korea, effective January 1, 2010, are managed within the appropriate developed market units. 
 
 

 

PFIZER INC.
 
REVENUES
 
FIRST NINE MONTHS OF 2010 and 2009
 
(UNAUDITED)
 
(millions of dollars)
 

 

 

 WORLDWIDE
 UNITED STATES
 TOTAL INTERNATIONAL(1)
 

 

 2010
 2009
 % Change
 2010
 2009
 % Change
 2010
 2009
 % Change
 

 
 
 Total
 Oper.
 
 
 Total
 
 
 Total
 Oper.
 
TOTAL REVENUES
 $50,248
 $33,472
 50%
 47%
 $21,807
 $14,309
 52%
 $28,441
 $19,163
 48%
 42%
 
TOTAL BIOPHARMACEUTICAL:
 $43,472
 $30,842
 41%
 38%
 $19,554
 $13,347
 47%
 $23,918
 $17,495
 37%
 31%
 
Lipitor
 8,104
 8,259
 (2%)
 (5%)
 3,921
 4,145
 (5%)
 4,183
 4,114
 2%
 (4%)
 
Enbrel (Outside the U.S. and Canada)***
 2,409
 -
 *
 *
 -
 -
 *
 2,409
 -
 *
 *
 
Lyrica
 2,242
 2,020
 11%
 10%
 1,073
 1,094
 (2%)
 1,169
 926
 26%
 24%
 
Celebrex
 1,752
 1,714
 2%
 -
 1,176
 1,230
 (4%)
 576
 484
 19%
 11%
 
Prevnar / Prevenar 13***
 1,590
 -
 *
 *
 1,231
 -
 *
 359
 -
 *
 *
 
Effexor***
 1,512
 -
 *
 *
 1,142
 -
 *
 370
 -
 *
 *
 
Viagra
 1,429
 1,343
 6%
 4%
 729
 697
 5%
 700
 646
 8%
 3%
 
Xalatan / Xalacom
 1,287
 1,238
 4%
 2%
 453
 414
 9%
 834
 824
 1%
 (2%)
 
Norvasc
 1,120
 1,487
 (25%)
 (28%)
 24
 49
 (51%)
 1,096
 1,438
 (24%)
 (27%)
 
Prevnar / Prevenar 7***
 1,030
 -
 *
 *
 214
 -
 *
 816
 -
 *
 *
 
Zyvox
 876
 811
 8%
 7%
 463
 459
 1%
 413
 352
 17%
 14%
 
Premarin Family***
 779
 -
 *
 *
 713
 -
 *
 66
 -
 *
 *
 
Sutent
 771
 671
 15%
 13%
 198
 192
 3%
 573
 479
 20%
 17%
 
Geodon / Zeldox
 763
 713
 7%
 6%
 642
 597
 8%
 121
 116
 4%
 -
 
Detrol / Detrol LA
 758
 845
 (10%)
 (12%)
 515
 600
 (14%)
 243
 245
 (1%)
 (5%)
 
Zosyn / Tazocin***
 749
 -
 *
 *
 505
 -
 *
 244
 -
 *
 *
 
Genotropin
 650
 636
 2%
 -
 156
 160
 (3%)
 494
 476
 4%
 1%
 
Vfend
 595
 555
 7%
 5%
 187
 177
 6%
 408
 378
 8%
 5%
 
Protonix***
 535
 -
 *
 *
 535
 -
 *
 -
 -
 -
 -
 
Chantix / Champix
 522
 524
 -
 (4%)
 252
 303
 (17%)
 270
 221
 22%
 14%
 
Benefix***
 474
 -
 *
 *
 211
 -
 *
 263
 -
 *
 *
 
Zoloft
 390
 368
 6%
 2%
 54
 62
 (13%)
 336
 306
 10%
 5%
 
Caduet
 388
 392
 (1%)
 (5%)
 256
 294
 (13%)
 132
 98
 35%
 20%
 
Aromasin
 361
 347
 4%
 3%
 122
 121
 1%
 239
 226
 6%
 4%
 
Revatio
 352
 319
 10%
 9%
 216
 212
 2%
 136
 107
 27%
 24%
 
Pristiq***
 341
 -
 *
 *
 301
 -
 *
 40
 -
 *
 *
 
Medrol
 341
 334
 2%
 1%
 88
 105
 (16%)
 253
 229
 10%
 8%
 
Cardura
 312
 330
 (5%)
 (8%)
 11
 4
 175%
 301
 326
 (8%)
 (10%)
 
Aricept**
 310
 311
 -
 (6%)
 -
 -
 -
 310
 311
 -
 (6%)
 
Zithromax / Zmax
 303
 299
 1%
 (2%)
 10
 10
 -
 293
 289
 1%
 (2%)
 
BMP2***
 298
 -
 *
 *
 286
 -
 *
 12
 -
 *
 *
 
Rapamune***
 292
 -
 *
 *
 150
 -
 *
 142
 -
 *
 *
 
Refacto AF/Xyntha***
 290
 -
 *
 *
 61
 -
 *
 229
 -
 *
 *
 
Fragmin
 258
 244
 6%
 2%
 40
 51
 (22%)
 218
 193
 13%
 8%
 
Tygacil***
 250
 -
 *
 *
 133
 -
 *
 117
 -
 *
 *
 
Alliance Revenue****
 3,107
 1,872
 66%
 64%
 2,211
 1,133
 95%
 896
 739
 21%
 17%
 
All Other Biopharmaceutical
 5,932
 5,210
 14%
 11%
 1,275
 1,238
 3%
 4,657
 3,972
 17%
 13%
 
   All Other Established Products
 5,071
 4,325
 17%
 14%
 1,106
 1,101
 -
 3,965
 3,224
 23%
 18%
 
       Legacy Pfizer Other
       Established Products
 4,351
 4,325
 1%
 (2%)
 1,084
 1,101
 (2%)
 3,267
 3,224
 1%
 (3%)
 
TOTAL DIVERSIFIED:
 $6,533
 $2,379
 175%
 166%
 $2,168
 $901
 141%
 $4,365
 $1,478
 195%
 181%
 
ANIMAL HEALTH***
 2,599
 1,863
 40%
 35%
 1,006
 749
 34%
 1,593
 1,114
 43%
 35%
 
CONSUMER HEALTHCARE***
 2,014
 -
 *
 *
 1,016
 -
 *
 998
 -
 *
 *
 
NUTRITION***
 1,375
 -
 *
 *
 -
 -
 -
 1,375
 -
 *
 *
 
CAPSUGEL
 545
 516
 6%
 5%
 146
 152
 (4%)
 399
 364
 10%
 9%
 
OTHER*****
 $243
 $251
 (3%)
 (9%)
 $85
 $61
 39%
 $158
 $190
 (17%)
 (16%)
 
           

 

*
 -  Calculation not meaningful.
 
**
 -  Includes direct sales under license agreement with Eisai Co., Ltd.
 
***
 -  Legacy Wyeth products and operations. Animal Health results for the first nine months of 2010 also reflect the addition of legacy Wyeth products.
 

    Wyeth's results are included in our financial statements commencing from the acquisition date of October 15, 2009, in accordance with
   Pfizer's domestic and international year-ends. Therefore, our results for the first nine months of 2009 do not include Wyeth's results of operations.
 
****
 -  Enbrel (in the U.S. and Canada)***, Aricept, Rebif, and Exforge.
 
*****
 -  Includes revenues generated primarily from Pfizer Centresource.
 
Certain amounts and percentages may reflect rounding adjustments.
 

 
 

 
 
(1)
 Total International represents Developed Europe region + Developed Rest of World region + Emerging Markets region. Details for these regions are located on the following page.
 
 

 

PFIZER INC.
 
REVENUES
 
DETAIL OF INTERNATIONAL REVENUES BY GEOGRAPHIC REGION
 
FIRST NINE MONTHS OF 2010 and 2009
 
(UNAUDITED)
 
(millions of dollars)
 

 

 

 DEVELOPED EUROPE(1)
 DEVELOPED REST OF WORLD(2)
 EMERGING MARKETS(3)
 

 

 2010
 2009
 % Change
 2010
 2009
 % Change
 2010
 2009
 % Change
 

 
 
 Total
 Oper.
 
 
 Total
 Oper.
 
 
 Total
 Oper.
 
TOTAL INTERNATIONAL REVENUES
 $12,313
 $8,726
 41%
 41%
 $7,401
 $5,648
 31%
 18%
 $8,727
 $4,789
 82%
 73%
 
TOTAL INTERNATIONAL BIOPHARMACEUTICAL:
 $10,974
 $7,892
 39%
 39%
 $6,650
 $5,333
 25%
 13%
 $6,294
 $4,270
 47%
 40%
 
Lipitor
 1,987
 2,049
 (3%)
 (3%)
 1,505
 1,450
 4%
 (10%)
 691
 615
 12%
 5%
 
Enbrel (Outside the U.S. and Canada)***
 1,659
 -
 *
 *
 288
 -
 *
 *
 462
 -
 *
 *
 
Lyrica
 802
 666
 20%
 21%
 162
 107
 51%
 33%
 205
 153
 34%
 27%
 
Celebrex
 132
 142
 (7%)
 (7%)
 245
 170
 44%
 29%
 199
 172
 16%
 9%
 
Prevnar / Prevenar 13***
 274
 -
 *
 *
 23
 -
 *
 *
 62
 -
 *
 *
 
Effexor***
 184
 -
 *
 *
 113
 -
 *
 *
 73
 -
 *
 *
 
Viagra
 299
 299
 -
 -
 143
 119
 20%
 7%
 258
 228
 13%
 7%
 
Xalatan / Xalacom
 430
 424
 1%
 2%
 265
 272
 (3%)
 (10%)
 139
 128
 9%
 2%
 
Norvasc
 154
 171
 (10%)
 (9%)
 601
 940
 (36%)
 (40%)
 341
 327
 4%
 2%
 
Prevnar / Prevenar 7***
 230
 -
 *
 *
 172
 -
 *
 *
 414
 -
 *
 *
 
Zyvox
 215
 194
 11%
 12%
 93
 83
 12%
 5%
 105
 75
 40%
 31%
 
Premarin Family***
 8
 -
 *
 *
 21
 -
 *
 *
 37
 -
 *
 *
 
Sutent
 322
 304
 6%
 7%
 100
 62
 61%
 47%
 151
 113
 34%
 28%
 
Geodon / Zeldox
 66
 67
 (1%)
 (1%)
 13
 9
 44%
 10%
 42
 40
 5%
 (5%)
 
Detrol / Detrol LA
 129
 143
 (10%)
 (11%)
 71
 62
 15%
 3%
 43
 40
 8%
 3%
 
Zosyn / Tazocin***
 83
 -
 *
 *
 12
 -
 *
 *
 149
 -
 *
 *
 
Genotropin
 277
 266
 4%
 4%
 133
 131
 2%
 (5%)
 84
 79
 6%
 -
 
Vfend
 219
 210
 4%
 5%
 92
 81
 14%
 6%
 97
 87
 11%
 6%
 
Protonix***
 -
 -
 -
 -
 -
 -
 -
 -
 -
 -
 -
 -
 
Chantix / Champix
 123
 109
 13%
 12%
 124
 88
 41%
 22%
 23
 24
 (4%)
 (8%)
 
Benefix***
 187
 -
 *
 *
 65
 -
 *
 *
 11
 -
 *
 *
 
Zoloft
 66
 69
 (4%)
 (4%)
 181
 151
 20%
 13%
 89
 86
 3%
 -
 
Caduet
 15
 14
 7%
 14%
 79
 52
 52%
 27%
 38
 32
 19%
 16%
 
Aromasin
 146
 148
 (1%)
 (1%)
 45
 40
 13%
 5%
 48
 38
 26%
 21%
 
Revatio
 94
 81
 16%
 16%
 24
 14
 71%
 53%
 18
 12
 50%
 33%
 
Pristiq***
 -
 -
 *
 *
 27
 -
 *
 *
 13
 -
 *
 *
 
Medrol
 74
 76
 (3%)
 (1%)
 34
 36
 (6%)
 (14%)
 145
 117
 24%
 21%
 
Cardura
 114
 124
 (8%)
 (8%)
 116
 131
 (11%)
 (15%)
 71
 71
 -
 (3%)
 
Aricept**
 172
 190
 (9%)
 (10%)
 111
 90
 23%
 7%
 27
 31
 (13%)
 (16%)
 
Zithromax / Zmax
 61
 86
 (29%)
 (30%)
 115
 103
 12%
 6%
 117
 100
 17%
 13%
 
BMP2***
 12
 -
 *
 *
 -
 -
 -
 -
 -
 -
 -
 -
 
Rapamune***
 41
 -
 *
 *
 13
 -
 *
 *
 88
 -
 *
 *
 
Refacto AF/Xyntha***
 209
 -
 *
 *
 20
 -
 *
 *
 -
 -
 -
 -
 
Fragmin
 110
 97
 13%
 11%
 48
 41
 17%
 2%
 60
 55
 9%
 5%
 
Tygacil***.
 60
 -
 *
 *
 3
 -
 *
 *
 54
 -
 *
 *
 
Alliance Revenue****
 399
 377
 6%
 7%
 442
 317
 39%
 29%
 55
 45
 22%
 16%
 
All Other Biopharmaceutical
 1,621
 1,586
 2%
 2%
 1,151
 784
 47%
 35%
 1,885
 1,602
 18%
 12%
 
   All Other Established
   Products
 1,273
 1,082
 18%
 18%
 1,008
 670
 50%
 38%
 1,684
 1,472
 14%
 10%
 
       Legacy Pfizer Other
      Established Products
 1,030
 1,082
 (5%)
 (5%)
 706
 670
 5%
 (4%)
 1,531
 1,472
 4%
 -
 
TOTAL INTERNATIONAL DIVERSIFIED:
 $1,238
 $725
 71%
 71%
 $728
 $281
 159%
 123%
 $2,399
 $472
 *
 *
 
OTHER INTERNATIONAL*****
 $101
 $109
 (7%)
 (7%)
 $23
 $34
 (32%)
 (24%)
 $34
 $47
 (28%)
 (30%)
 
            

 

*
 -  Calculation not meaningful.
 
**
 -  Includes direct sales under license agreement with Eisai Co., Ltd.
 
***
 -  Legacy Wyeth products and operations. Animal Health results for the first nine months of 2010 also reflect the addition of legacy Wyeth products.
 

    Wyeth's results are included in our financial statements commencing from the acquisition date of October 15, 2009, in accordance with
   Pfizer's domestic and international year-ends. Therefore, our results for the first nine months of 2009 do not include Wyeth's results of operations.
 
****
 -  Enbrel (in the U.S. and Canada)***, Aricept, Rebif, and Exforge.
 
*****
 -  Includes revenues generated primarily from Pfizer Centresource.
 
Certain amounts and percentages may reflect rounding adjustments.
 

 
 

 
 
(1)
 Developed Europe region includes the following markets: Western Europe and the Scandinavian countries.
 
(2)
 Developed Rest of World region includes the following markets:  Australia, Canada, Japan, New Zealand, and South Korea.
 
(3)
 Emerging Markets region includes, but is not limited to, the following markets:  Asia (excluding Japan and South Korea), Latin America, Middle East, Africa, Central and Eastern Europe, Russia and Turkey. In Biopharmaceutical, revenues from South Korea in 2009 have been reclassified from the Emerging Markets unit to the appropriate developed market units to conform to the current-year presentation, which reflects the fact that the commercial operations of South Korea, effective January 1, 2010, are managed within the appropriate developed market units. 
 
 

 

PFIZER INC.

SUPPLEMENTAL INFORMATION

1. Change in Reported Cost of Sales

Reported cost of sales increased 118% in the third quarter of 2010, compared to the same period in 2009, and increased 142% in the first nine months of 2010, compared to the same period in 2009. The increases primarily reflect purchase accounting adjustments associated with the Wyeth acquisition, a write-off of Wyeth-related inventory of $212 million (which includes a purchase accounting fair value adjustment of $104 million), the addition of Wyeth manufacturing costs, as well as the change in the mix of products and businesses as a result of the Wyeth acquisition, partially offset by a favorable impact of foreign exchange for both the third quarter and first nine months of 2010. The write-off of inventory primarily relates to unfinished inventory acquired from Wyeth that became unusable after the acquisition date.

Reported cost of sales as a percentage of revenues increased 8.7 percentage points to 24.1% in third-quarter 2010, compared to the same period in 2009, reflecting the aforementioned factors.

2. Change in Reported Selling, Informational & Administrative (SI&A) Expenses and Reported Research & Development (R&D) Expenses

Reported SI&A expenses increased 41% in the third quarter of 2010, compared to the same period in 2009, and increased 46% in the first nine months of 2010, compared to the same period in 2009. The increases primarily reflect the addition of Wyeth operating costs. Foreign exchange had a favorable impact on reported SI&A expenses in the third quarter of 2010 and an unfavorable impact for the first nine months of 2010.  

Reported R&D expenses increased 34% in the third quarter of 2010, compared to the same period in 2009, and increased 31% in the first nine months of 2010, compared to the same period in 2009. The increases are primarily due to the addition of legacy Wyeth operations and continued investment in the late-stage development portfolio. Foreign exchange had a favorable impact on reported R&D expenses in the third quarter of 2010 and an unfavorable impact for the first nine months of 2010.  

3. Other (Income)/Deductions - Net


 
($ in millions)
 
 Third Quarter
 
 Nine Months
 

 
 2010
 
 2009
 
 2010
 
 2009
 
Interest income(a)
 $
 (100)
 $
 (171)
 $
 (297)
 $
 (620)
 
Interest expense(a)
 
 428
 
 369
 
 1,339
 
 769
 
Net interest expense
 
 328
 
 198
 
 1,042
 
 149
 
Royalty-related income
 
 (158)
 
 (35)
 
 (395)
 
 (142)
 
Net gain on asset disposals
 
 (13)
 
 (40)
 
 (243)
 
 (81)
 
Legal matters, net(b)
 
 712
 
 54
 
 886
 
 130
 
Certain asset impairment charges(c)
 
 1,478
 
 6
 
 1,710
 
 96
 
Other, net
 
 6
 
 (23)
 
 38
 
 23
 
Other deductions-net
 $
 2,353
 $
 160
 $
 3,038
 $
 175
 
(a) Interest expense increased in 2010 due to our issuance of $13.5 billion of senior unsecured notes on March 24, 2009 and $10.5 billion of senior
     unsecured notes on June 3, 2009, primarily related to the acquisition of Wyeth. Interest income decreased in 2010 due to lower interest rates coupled
     with lower average cash balances. 

(b) The three-month and nine-month periods ended October 3, 2010 include an additional $701 million charge for asbestos litigation related to our wholly
     owned subsidiary, Quigley Company, Inc.

(c) Amounts in 2010 represent impairment charges related to intangible assets, including certain in-process research and development ("IPR&D") intangible
     assets, that were acquired in connection with our acquisition of Wyeth.  These impairment charges primarily resulted from our current estimate of the
     fair value of these assets based upon updated forecasts of these Wyeth assets as compared to their assigned fair values at the closing of the Wyeth
     acquisition last year. Our updated forecasts are based on projected development and regulatory timeframes, and for brand assets and developed
     technology, the current market environment as well as planned investment support.
 
        

 

4. Effective Tax Rate

Reported

The effective tax rate on reported Income from continuing operations before provision for taxes on income for third-quarter 2010 was 39.2% compared to 27.5% in the third quarter of 2009, and in the first nine months of 2010 was 37.2% compared to 27.3% in the first nine months of 2009. The higher tax rates in the third quarter and first nine months of 2010 are primarily the result of:

 

  • higher expenses, incurred as a result of our acquisition of Wyeth, and the mix of jurisdictions in which those expenses were incurred;
  • the expiration of the U.S. research and development tax credit; and

•the non-recurrence of a tax benefit of $174 million that was recorded in the third quarter of 2009 related to the final resolution of a previously disclosed settlement that resulted in the receipt of information that raised our assessment of the likelihood of prevailing on the technical merits of our tax position;

 


partially offset by:

  • the tax impact of the charge incurred for asbestos litigation.


The effective tax rate for the first nine months of 2010 was additionally impacted by the write-off of the deferred tax asset of approximately $270 million related to the Medicare Part D subsidy for retiree prescription drug coverage, resulting from changes in the U.S. healthcare legislation enacted in March 2010 concerning the tax treatment of that subsidy effective for tax years beginning after December 31, 2012, offset by $460 million in tax benefits for the resolution of certain tax positions pertaining to prior years with various foreign tax authorities. 

Adjusted

The effective tax rate on adjusted income(1) decreased to 30.2% in third-quarter 2010 compared to 31.8% in third-quarter 2009, as a result of the change in the jurisdictional mix of earnings, partially offset by the expiration of the U.S. research and development tax credit.

The effective tax rate on adjusted income(1) for the first nine months of 2010 was 30.7% compared to 29.9% in the first nine months of 2009.  In addition to the aforementioned factors, the effective tax rate on adjusted income(1) for the first nine months of 2010 was impacted by the write-off of the deferred tax asset of approximately $270 million related to the Medicare Part D subsidy for retiree prescription drug coverage, resulting from changes in the U.S. healthcare legislation enacted in March 2010 concerning the tax treatment of that subsidy effective for tax years beginning after December 31, 2012, offset by $460 million in tax benefits for the resolution of certain tax positions pertaining to prior years with various foreign tax authorities.

5. Reconciliation of 2010 Adjusted Income(1) and Adjusted Diluted EPS(1) Guidance to 2010 Reported Net Income Attributable to Pfizer Inc. and Reported Diluted EPS Attributable to Pfizer Inc. Common Shareholders Guidance (a)


 

 Full-Year 2010 Guidance
 
($ in billions, except per share amounts)
 Net Income(b)
 Diluted EPS(b)
 
Income/(Expense)
 
 
 
Adjusted Income/Diluted EPS(1) Guidance
 ~$17.6 - $18.0
 ~$2.17 - $2.22
 
Purchase Accounting Impacts of Transactions Completed as of 10/3/10
 (6.1)
 (0.75)
 
Acquisition-Related Costs
 (2.4 - 2.8)
 (0.29 - 0.34)
 
Certain Significant Items
 (1.9)
 (0.24)
 
Reported Net Income Attributable to Pfizer Inc./Diluted EPS Guidance
 ~$6.8 - $7.6
 ~$0.84 - $0.94
 
(a) The current exchange rates assumed in connection with the 2010 financial guidance are a blend of the average of the actual exchange rates in effect from
     December 2009 through September 2010 and the mid-October 2010 exchange rates for the remainder of the year.

(b) Does not assume the completion of any business-development transactions not completed as of October 3, 2010 with the exception of the Biocon transaction.
     Amounts exclude the potential effects of the resolution of litigation-related matters not substantially resolved as of October 3, 2010.
 
  

 

6. Reconciliation of 2012 Adjusted Income(1) and Adjusted Diluted EPS(1) Targets to 2012 Reported Net Income Attributable to Pfizer Inc. and Reported Diluted EPS Attributable to Pfizer Inc. Common Shareholders Targets (a)


 

 Full-Year 2012 Targets
 
($ in billions, except per share amounts)
 Net Income(b)
 Diluted EPS(b)
 
Income/(Expense)
 
 
 
Adjusted Income/Diluted EPS(1) Targets
 ~$18.3 - $19.1
 ~$2.25 - $2.35
 
Purchase Accounting Impacts of Transactions Completed as of 10/3/10
 (3.8)
 (0.47)
 
Acquisition-Related Costs
 (1.2 - 1.6)
 (0.15 - 0.20)
 
Reported Net Income Attributable to Pfizer Inc./Diluted EPS Targets
 ~$12.9 - $14.1
 ~$1.58 - $1.73
 
(a) The current exchange rates assumed in connection with the 2012 financial targets are the mid-October 2010 exchange rates.

(b) Given the longer-term nature of these targets, they are subject to greater variability and less certainty as a result of potential material impacts related to
     foreign exchange fluctuations, macroeconomic activity including inflation, and industry-specific challenges including changes to government healthcare
     policy, among others.
 
  

 

(1) "Adjusted income" and "adjusted diluted earnings per share (EPS)" are defined as reported net income attributable to Pfizer Inc. and reported diluted EPS attributable to Pfizer Inc. common shareholders excluding purchase accounting adjustments, acquisition-related costs, discontinued operations and certain significant items. As described under Adjusted Income in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of Pfizer's Form 10-Q for the fiscal quarter ended July 4, 2010, 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. The adjusted income and adjusted diluted EPS measures are not, and should not be viewed as, substitutes for U.S. GAAP net income and diluted EPS.

DISCLOSURE NOTICE: The information contained in this earnings release and the attachments is as of November 2, 2010. The Company assumes no obligation to update forward-looking statements contained in this earnings release or the attachments as a result of new information or future events or developments.

This earnings release and the attachments contain forward-looking information about the Company's financial results and estimates, business plans and prospects, in-line products and product candidates that involves substantial risks and uncertainties.  You can identify these statements by the fact that they use words such as "will," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "target," "forecast" and other words and terms of similar meaning in connection with any discussion of future operating or financial performance or business plans and prospects.  Among the factors that could cause actual results to differ materially are the following: the success of research and development activities, including, without limitation, the ability to meet anticipated clinical trial completion dates and regulatory submission dates for product candidates; 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 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 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 U.S. healthcare legislation enacted in 2010 - the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act; U.S. 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; 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; significant breakdown, infiltration, or interruption of our information technology systems and infrastructure; legal defense costs, insurance expenses, settlement costs and the risk of an adverse decision or settlement related to product liability, patent protection, government investigations, consumer, commercial, securities, environmental and tax issues, ongoing efforts to explore various means for resolving asbestos litigation, and other legal proceedings; the Company's ability to protect its patents and other intellectual property both domestically and internationally; interest rate and foreign currency exchange rate fluctuations; 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 result from the enactment in August 2010 of the Education Jobs and Medicaid Assistance Act of 2010 and that may result from pending and possible future proposals; 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 lenders, our customers, our suppliers and counterparties to our foreign exchange and interest rate agreements of weak global economic conditions and recent and possible future changes in global financial markets; 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, product withdrawals and other unusual items, including our ability to realize the projected benefits of our acquisition of Wyeth and of our cost-reduction initiatives. A further list and description of risks, uncertainties and other matters can be found in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2009, and in its reports on Forms 10-Q and 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.

(Logo: http://photos.prnewswire.com/prnh/20100416/PFIZERLOGO )

(Logo: http://www.newscom.com/cgi-bin/prnh/20100416/PFIZERLOGO )

SOURCE Pfizer Inc.

For further information: Media, Joan Campion, +1-212-733-2798; Investors, Suzanne Harnett, +1-212-733-8009, or Jennifer Davis, +1-212-733-0717
 
 

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