UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October ~~3, 2021~~2, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13

OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

COMMISSION FILE NUMBER 1-3619

----

PFIZER INC.

(Exact name of registrant as specified in its charter)


Delaware			13-5315170
(State of Incorporation)			(I.R.S. Employer Identification No.)

235 East 42nd Street, New York, New York 10017

(Address of principal executive offices) (zip code)

(212) 733-2323

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $.05 par value

PFE

~~New York Stock Exchange~~

~~0.250% Notes due 2022~~

~~PFE22~~

New York Stock Exchange

1.000% Notes due 2027

PFE27

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Yes			x			No			☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).


Yes			x			No			☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large Accelerated filer x Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Yes			☐			No			x

At November ~~8, 2021,~~4, 2022, ~~5,612,866,598~~5,613,314,537 shares of the issuer’s voting common stock were outstanding.


TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION			Page

Item 1.
Financial Statements

Condensed Consolidated Statements of Income			5

Condensed Consolidated Statements of Comprehensive Income			6

Condensed Consolidated Balance Sheets			7

Condensed Consolidated Statements of Equity			8

Condensed Consolidated Statements of Cash Flows			109

Notes to Condensed Consolidated Financial Statements			1110

Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations			3938

Item 3.
Quantitative and Qualitative Disclosures About Market Risk			6259

Item 4.
Controls and Procedures			6259

PART II. OTHER INFORMATION

Item 1.
Legal Proceedings			6260

Item 1A.
Risk Factors			6260

Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds			6260

Item 3.
Defaults Upon Senior Securities			N/A

Item 4.
Mine Safety Disclosures			N/A

Item 5.
Other Information			N/A

Item 6 .
Exhibits			6360

Signature			6360

N/A = Not Applicable


DEFINED TERMS

Unless the context requires otherwise, references to “Pfizer,” “the Company,” “we,” “us” or “our” in this Form 10-Q (defined below) refer to Pfizer Inc. and its subsidiaries. Pfizer’s fiscal quarter-end for subsidiaries operating outside the U.S. is as of and for the three and nine months ended August ~~29, 2021~~28, 2022 and August ~~23, 2020,~~29, 2021, and for U.S. subsidiaries is as of and for the three and nine months ended October 2, 2022 and October 3, ~~2021 and September 27, 2020.~~2021. References to “Notes” in this Form 10-Q are to the ~~notes~~Notes to the ~~condensed~~Condensed or ~~consolidated financial statements~~Consolidated Financial Statements in this Form 10-Q or in our ~~2020~~2021 Form 10-K. We also have used several other terms in this Form 10-Q, most of which are explained or ~~defined:~~defined below:


~~2020~~2021 Form 10-K			Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021
ACIP			Advisory Committee on Immunization Practices
ALK			anaplastic lymphoma kinase
Alliance revenues			Revenues from alliance agreements under which we co-promote products discovered or developed by other companies or us
~~Allogene~~Arena			~~Allogene Therapeutics, Inc.~~
~~Array~~			~~Array BioPharma Inc.~~
~~Arvinas~~			~~Arvinas,~~Arena Pharmaceuticals, Inc.
Astellas			Astellas Pharma Inc., Astellas US LLC and Astellas Pharma US, Inc.
Arvinas			Arvinas, Inc.
ATTR-CM			transthyretin amyloid cardiomyopathy
Biohaven			Biohaven Pharmaceutical Holding Company Ltd.
BioNTech			BioNTech SE
Biopharma			Global Biopharmaceuticals Business
BLA			Biologics License Application
BMS			Bristol-Myers Squibb Company
~~BNT162b2~~			~~Pfizer BioNTech COVID-19 Vaccine~~
~~Comirnaty~~			~~Pfizer-BioNTech COVID-19 Vaccine~~
BOD			Board of Directors
CDC			U.S. Centers for Disease Control and Prevention
CGRP			calcitonin gene-related peptide
CMA			conditional marketing ~~authorization~~authorisation
Comirnaty*			Unless otherwise noted, refers to, as applicable, and as authorized or approved, the Pfizer-BioNTech COVID-19 Vaccine, the Pfizer-BioNTech COVID-19 Vaccine, Bivalent (Original and Omicron BA.4/BA.5), the Comirnaty Original/Omicron BA.1 Vaccine, and Comirnaty Original/Omicron BA.4/BA.5 Vaccine
Cond. J-NDA			Conditional Japan New Drug Application
Consumer Healthcare JV			GSK Consumer Healthcare JV
COVID-19			novel coronavirus disease of 2019
Developed Europe			Includes the following markets: Western Europe, Scandinavian countries and Finland
Developed Markets			Includes the following markets: U.S., Developed Europe, Japan, Australia, Canada, South Korea ~~Australia~~ and New Zealand
Developed Rest of World			Includes the following markets: Japan, Australia, Canada, South Korea ~~Australia~~ and New Zealand
EC			European Commission
EMA			European Medicines Agency
Emerging Markets			Includes, but is not limited to, the following markets: Asia (excluding Japan and South Korea), Latin America, Central Europe, Eastern Europe, the Middle East, Africa and Turkey
EPS			earnings per share
EU			European Union
EUA			emergency use authorization
Exchange Act			Securities Exchange Act of 1934, as amended
FASB			Financial Accounting Standards Board
FDA			U.S. Food and Drug Administration
FFDCA			U.S. Federal Food, Drug and Cosmetic Act
Form 10-Q			This Quarterly Report on Form 10-Q for the quarterly period ended October ~~3, 2021~~2, 2022
GAAP			Generally Accepted Accounting Principles
GIST			gastrointestinal stromal tumors
GPD			Global Product Development organization
GSK			GlaxoSmithKline plc
Haleon			Haleon plc
HIPAA			Health Insurance Portability and Accountability Act of 1996
Hospira			Hospira, Inc.
IPR&D			in-process research and development
IRA			Inflation Reduction Act of 2022
IRS			U.S. Internal Revenue Service
JAK			Janus kinase
JV			joint venture
King			King Pharmaceuticals LLC (formerly King Pharmaceuticals, Inc.)
LIBOR			London Interbank Offered Rate
~~Lilly~~			~~Eli Lilly & Company~~
LOE			loss of exclusivity

~~MCO~~	~~managed care organization~~
mCRC		metastatic colorectal cancer
mCRPC		metastatic castration-resistant prostate cancer
mCSPC		metastatic castration-sensitive prostate cancer
MD&A		Management’s Discussion and Analysis of Financial Condition and Results of Operations
Meridian		Meridian Medical Technologies, Inc.

mRNA		messenger ribonucleic acid
~~MTM~~MSA	~~mark-to-market~~Manufacturing Supply Agreement
Mylan	Mylan N.V.
~~Mylan-Japan collaboration~~	~~a pre-existing strategic collaboration between Pfizer and Mylan for generic drugs in Japan that terminated on December 21, 2020~~
Myovant	Myovant Sciences Ltd.
NDA	New Drug Application
nmCRPC	non-metastatic castration-resistant prostate cancer
NSCLC	non-small cell lung cancer
ODT	oral disintegrating tablet
OPKO	OPKO Health, Inc.
OTC	over-the-counter
~~Paxlovid~~Paxlovid*	~~PF-07321332 (SARS-CoV-2 3CL protease inhibitor (oral anti-viral));~~an oral COVID-19 treatment (nirmatrelvir [PF-07321332] tablets and ritonavir tablets)
~~PBM~~PC1	~~pharmacy benefit manager~~
~~PDUFA~~	~~Prescription Drug User Fee Act~~Pfizer CentreOne
PGS	Pfizer Global Supply
Pharmacia	Pharmacia Corporation

PRAC	Pharmacovigilance Risk Assessment Committee
PsA	psoriatic arthritis
QTD	Quarter-to-date or three months ended
RA	rheumatoid arthritis
RCC	renal cell carcinoma
R&D	research and development
~~Sandoz~~ReViral	~~Sandoz, Inc., a division of Novartis AG~~ReViral Ltd.
SEC	U.S. Securities and Exchange Commission
~~SI&A~~sNDA	~~selling, informational and administrative~~supplemental new drug application
TSAs	transition service arrangements
UC	ulcerative colitis
U.K.	United Kingdom
U.S.	United States
Upjohn Business	Pfizer’s former global, primarily off-patent branded and generics business, which included a portfolio of 20 globally recognized solid oral dose brands, including Lipitor, Lyrica, Norvasc, Celebrex and Viagra, as well as a U.S.-based generics platform, Greenstone, that was spun-off on November 16, 2020 and combined with Mylan to create Viatris
~~Valneva~~	~~Valneva SE~~
Viatris	Viatris Inc.
ViiV	ViiV Healthcare Limited
WRDM	Worldwide Research, Development and Medical
YTD	Year-to-date or nine months ended

*Paxlovid and emergency uses of the Pfizer-BioNTech COVID-19 Vaccine or the Pfizer-BioNTech COVID-19 Vaccine, Bivalent (Original and Omicron BA.4/BA.5), have not been approved or licensed by the FDA. Paxlovid has not been approved, but has been authorized for emergency use by the FDA under an EUA, for the treatment of mild-to-moderate COVID-19 in adults and pediatric patients (12 years of age and older weighing at least 40 kg [88 lbs]) with positive results of direct SARS-CoV-2 viral testing, and who are at high-risk for progression to severe COVID-19, including hospitalization or death. Emergency uses of the vaccines have been authorized by the FDA under an EUA to prevent COVID-19 in individuals aged 6 months and older for the Pfizer-BioNTech COVID-19 Vaccine and 5 years and older for the Pfizer-BioNTech COVID-19 Vaccine, Bivalent. The emergency uses are only authorized for the duration of the declaration that circumstances exist justifying the authorization of emergency use of the medical product during the COVID-19 pandemic under Section 564(b)(1) of the FFDCA unless the declaration is terminated or authorization revoked sooner. Please see the EUA Fact Sheets at www.covid19oralrx.com and www.cvdvaccine-us.com.

This Form 10-Q includes 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. In addition, clinical trial data are subject to differing interpretations, and, even when we view data as sufficient to support the safety and/or effectiveness of a product candidate or a new indication for an in-line product, regulatory authorities may not share our views and may require additional data or may deny approval altogether.

Some amounts in this Form 10-Q may not add due to rounding. All percentages have been calculated using unrounded amounts. All trademarks mentioned are the property of their owners.

The information contained on our website, our Facebook, Instagram, YouTube and LinkedIn pages or our Twitter accounts, or any third-party website, is not incorporated by reference into this Form 10-Q.


PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PFIZER INC. AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)


		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
(MILLIONS, EXCEPT PER COMMON SHARE DATA)	(MILLIONS, EXCEPT PER COMMON SHARE DATA)	October 3, 2021		September 27, 2020		October 3, 2021		September 27, 2020		(MILLIONS, EXCEPT PER COMMON SHARE DATA)	October 2, 2022		October 3, 2021		October 2, 2022		October 3, 2021
Revenues	Revenues	$	24,094	$	10,277	$	57,653	$	30,224	Revenues	$	22,638	$	24,035	$	76,040	$	57,450
Costs and expenses:	Costs and expenses:									Costs and expenses:
Cost of sales(a)	Cost of sales(a)	9,973		2,007		21,232		5,773		Cost of sales(a)	6,063		9,932		24,696		21,085
Selling, informational and administrative expenses(a)	Selling, informational and administrative expenses(a)	2,905		2,658		8,617		7,858		Selling, informational and administrative expenses(a)	3,391		2,899		9,032		8,599
Research and development expenses(a)	Research and development expenses(a)	3,447		2,300		7,920		6,050		Research and development expenses(a)	2,696		2,681		7,813		6,914
Acquired in-process research and development expenses(b)										Acquired in-process research and development expenses(b)	524		762		880		1,000
Amortization of intangible assets	Amortization of intangible assets	981		862		2,784		2,579		Amortization of intangible assets	822		968		2,478		2,743
Restructuring charges and certain acquisition-related costs	Restructuring charges and certain acquisition-related costs	646		2		668		417		Restructuring charges and certain acquisition-related costs	199		646		580		667
(Gain) on completion of Consumer Healthcare JV transaction		—		—		—		(6)

Other (income)/deductions––net	Other (income)/deductions––net	(1,696)		1,878		(3,697)		1,114		Other (income)/deductions––net	(59)		(1,696)		1,063		(4,043)
Income from continuing operations before provision/(benefit) for taxes on income	Income from continuing operations before provision/(benefit) for taxes on income	7,836		570		20,128		6,438		Income from continuing operations before provision/(benefit) for taxes on income	9,001		7,843		29,498		20,484
Provision/(benefit) for taxes on income	Provision/(benefit) for taxes on income	(331)		(347)		1,518		434		Provision/(benefit) for taxes on income	356		(328)		3,098		1,603
Income from continuing operations	Income from continuing operations	8,167		917		18,610		6,004		Income from continuing operations	8,645		8,171		26,400		18,881

Income/(loss) from discontinued operations––net of tax		(9)		560		24		2,334
Discontinued operations––net of tax										Discontinued operations––net of tax	(21)		(13)		4		(248)

Net income before allocation to noncontrolling interests	Net income before allocation to noncontrolling interests	8,159		1,477		18,633		8,338		Net income before allocation to noncontrolling interests	8,623		8,159		26,404		18,633
Less: Net income attributable to noncontrolling interests	Less: Net income attributable to noncontrolling interests	12		8		47		25		Less: Net income attributable to noncontrolling interests	15		12		27		47
Net income attributable to Pfizer Inc. common shareholders	Net income attributable to Pfizer Inc. common shareholders	$	8,146	$	1,469	$	18,586	$	8,313	Net income attributable to Pfizer Inc. common shareholders	$	8,608	$	8,146	$	26,378	$	18,586

Earnings per common share––basic:	Earnings per common share––basic:									Earnings per common share––basic:
Income from continuing operations attributable to Pfizer Inc. common shareholders	Income from continuing operations attributable to Pfizer Inc. common shareholders	$	1.45	$	0.16	$	3.32	$	1.08	Income from continuing operations attributable to Pfizer Inc. common shareholders	$	1.54	$	1.45	$	4.70	$	3.37
Income/(loss) from discontinued operations––net of tax		—		0.10		—		0.42
Discontinued operations––net of tax										Discontinued operations––net of tax	—		—		—		(0.04)
Net income attributable to Pfizer Inc. common shareholders	Net income attributable to Pfizer Inc. common shareholders	$	1.45	$	0.26	$	3.32	$	1.50	Net income attributable to Pfizer Inc. common shareholders	$	1.54	$	1.45	$	4.71	$	3.32

Earnings per common share––diluted:	Earnings per common share––diluted:									Earnings per common share––diluted:
Income from continuing operations attributable to Pfizer Inc. common shareholders	Income from continuing operations attributable to Pfizer Inc. common shareholders	$	1.42	$	0.16	$	3.26	$	1.06	Income from continuing operations attributable to Pfizer Inc. common shareholders	$	1.51	$	1.43	$	4.60	$	3.31
Income/(loss) from discontinued operations––net of tax		—		0.10		—		0.42
Discontinued operations––net of tax										Discontinued operations––net of tax	—		—		—		(0.04)
Net income attributable to Pfizer Inc. common shareholders	Net income attributable to Pfizer Inc. common shareholders	$	1.42	$	0.26	$	3.27	$	1.48	Net income attributable to Pfizer Inc. common shareholders	$	1.51	$	1.42	$	4.60	$	3.27

Weighted-average shares––basic	Weighted-average shares––basic	5,609		5,557		5,597		5,552		Weighted-average shares––basic	5,607		5,609		5,606		5,597
Weighted-average shares––diluted	Weighted-average shares––diluted	5,725		5,633		5,688		5,622		Weighted-average shares––diluted	5,718		5,725		5,729		5,688

(a)Exclusive of amortization of intangible ~~assets, except as disclosed in~~assets.

(b)See Note 9 ~~in this Form 10-Q and~~ ~~Note 1L~~ ~~in our 2020 Form 10-K.~~1D.

See Accompanying Notes.

PFIZER INC. AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)


		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
(MILLIONS)	(MILLIONS)	October 3, 2021		September 27, 2020		October 3, 2021		September 27, 2020		(MILLIONS)	October 2, 2022		October 3, 2021		October 2, 2022		October 3, 2021
Net income before allocation to noncontrolling interests	Net income before allocation to noncontrolling interests	$	8,159	$	1,477	$	18,633	$	8,338	Net income before allocation to noncontrolling interests	$	8,623	$	8,159	$	26,404	$	18,633

Foreign currency translation adjustments, net	Foreign currency translation adjustments, net	(866)		1,403		(366)		(27)		Foreign currency translation adjustments, net	(918)		(866)		(2,549)		(366)

Unrealized holding gains/(losses) on derivative financial instruments, net	Unrealized holding gains/(losses) on derivative financial instruments, net	213		(372)		179		(661)		Unrealized holding gains/(losses) on derivative financial instruments, net	589		213		1,443		179
Reclassification adjustments for (gains)/losses included in net income(a)	Reclassification adjustments for (gains)/losses included in net income(a)	48		143		286		(25)		Reclassification adjustments for (gains)/losses included in net income(a)	(615)		48		(972)		286
		261		(230)		464		(685)			(26)		261		471		464
Unrealized holding gains/(losses) on available-for-sale securities, net	Unrealized holding gains/(losses) on available-for-sale securities, net	(266)		239		(128)		231		Unrealized holding gains/(losses) on available-for-sale securities, net	(777)		(266)		(1,397)		(128)
Reclassification adjustments for (gains)/losses included in net income(b)	Reclassification adjustments for (gains)/losses included in net income(b)	9		(85)		(172)		(25)		Reclassification adjustments for (gains)/losses included in net income(b)	606		9		1,094		(172)

		(257)		155		(300)		205			(171)		(257)		(303)		(300)

Reclassification adjustments related to amortization of prior service costs and other, net	Reclassification adjustments related to amortization of prior service costs and other, net	(39)		(45)		(119)		(134)		Reclassification adjustments related to amortization of prior service costs and other, net	(31)		(39)		(99)		(119)
Reclassification adjustments related to curtailments of prior service costs and other, net	Reclassification adjustments related to curtailments of prior service costs and other, net	(59)		—		(59)		—		Reclassification adjustments related to curtailments of prior service costs and other, net	2		(58)		(8)		(62)
Other		2		(3)		(3)		1

		(97)		(47)		(181)		(133)			(29)		(97)		(107)		(181)
Other comprehensive income/(loss), before tax	Other comprehensive income/(loss), before tax	(959)		1,280		(382)		(640)		Other comprehensive income/(loss), before tax	(1,144)		(959)		(2,488)		(382)
Tax provision/(benefit) on other comprehensive income/(loss)	Tax provision/(benefit) on other comprehensive income/(loss)	(65)		(19)		(44)		(311)		Tax provision/(benefit) on other comprehensive income/(loss)	(33)		(65)		(149)		(44)
Other comprehensive income/(loss) before allocation to noncontrolling interests	Other comprehensive income/(loss) before allocation to noncontrolling interests	$	(894)	$	1,299	$	(338)	$	(329)	Other comprehensive income/(loss) before allocation to noncontrolling interests	$	(1,111)	$	(894)	$	(2,339)	$	(338)

Comprehensive income/(loss) before allocation to noncontrolling interests	Comprehensive income/(loss) before allocation to noncontrolling interests	$	7,265	$	2,776	$	18,296	$	8,009	Comprehensive income/(loss) before allocation to noncontrolling interests	$	7,512	$	7,265	$	24,065	$	18,296
Less: Comprehensive income/(loss) attributable to noncontrolling interests	Less: Comprehensive income/(loss) attributable to noncontrolling interests	9		11		48		16		Less: Comprehensive income/(loss) attributable to noncontrolling interests	10		9		16		48
Comprehensive income/(loss) attributable to Pfizer Inc.	Comprehensive income/(loss) attributable to Pfizer Inc.	$	7,256	$	2,766	$	18,248	$	7,993	Comprehensive income/(loss) attributable to Pfizer Inc.	$	7,503	$	7,256	$	24,049	$	18,248

(a)Reclassified into Other (income)/deductions—net and Cost of sales. See Note 7E.

(b)Reclassified into Other (income)/deductions—net.

See Accompanying Notes.

PFIZER INC. AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED BALANCE SHEETS


(MILLIONS)	(MILLIONS)	October 3, 2021		December 31, 2020		(MILLIONS)	October 2, 2022		December 31, 2021
		(Unaudited)					(Unaudited)
Assets	Assets					Assets
Cash and cash equivalents	Cash and cash equivalents	$	1,966	$	1,784	Cash and cash equivalents	$	1,298	$	1,944
Short-term investments	Short-term investments	27,730		10,437		Short-term investments	34,825		29,125
Trade accounts receivable, less allowance for doubtful accounts: 2021—$494; 2020—$508		11,897		7,930
Trade accounts receivable, less allowance for doubtful accounts: 2022—$474; 2021—$492						Trade accounts receivable, less allowance for doubtful accounts: 2022—$474; 2021—$492	16,076		11,479
Inventories	Inventories	8,640		8,046		Inventories	9,513		9,059
Current tax assets	Current tax assets	3,877		3,264		Current tax assets	2,544		4,266
Other current assets	Other current assets	3,790		3,605		Other current assets	6,149		3,820
Total current assets	Total current assets	57,900		35,067		Total current assets	70,403		59,693
Equity-method investments	Equity-method investments	16,349		16,856		Equity-method investments	9,826		16,472
Long-term investments	Long-term investments	5,248		3,406		Long-term investments	4,062		5,054
Property, plant and equipment, less accumulated depreciation: 2021—$15,403; 2020—$14,812		14,436		13,900
Property, plant and equipment, less accumulated depreciation: 2022—$14,931; 2021—$15,074						Property, plant and equipment, less accumulated depreciation: 2022—$14,931; 2021—$15,074	15,441		14,882
Identifiable intangible assets	Identifiable intangible assets	26,306		28,471		Identifiable intangible assets	28,151		25,146
Goodwill	Goodwill	49,489		49,577		Goodwill	49,441		49,208
Noncurrent deferred tax assets and other noncurrent tax assets	Noncurrent deferred tax assets and other noncurrent tax assets	2,755		2,383		Noncurrent deferred tax assets and other noncurrent tax assets	7,136		3,341
Other noncurrent assets	Other noncurrent assets	6,705		4,569		Other noncurrent assets	10,890		7,679

Total assets	Total assets	$	179,188	$	154,229	Total assets	$	195,350	$	181,476

Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Short-term borrowings, including current portion of long-term debt: 2021—$2,663; 2020—$2,002		$	3,629	$	2,703
Short-term borrowings, including current portion of long-term debt: 2022—$2,566; 2021—$1,636						Short-term borrowings, including current portion of long-term debt: 2022—$2,566; 2021—$1,636	$	4,040	$	2,241
Trade accounts payable	Trade accounts payable	4,698		4,309		Trade accounts payable	6,267		5,578
Dividends payable	Dividends payable	2,191		2,162		Dividends payable	2,245		2,249
Income taxes payable	Income taxes payable	4,496		1,049		Income taxes payable	3,071		1,266
Accrued compensation and related items	Accrued compensation and related items	2,571		3,058		Accrued compensation and related items	2,852		3,332
Deferred revenues	Deferred revenues	3,529		1,113		Deferred revenues	6,191		3,067
Other current liabilities	Other current liabilities	20,690		11,527		Other current liabilities	19,647		24,939

Total current liabilities	Total current liabilities	41,803		25,920		Total current liabilities	44,314		42,671

Long-term debt	Long-term debt	36,250		37,133		Long-term debt	32,629		36,195
Pension benefit obligations	Pension benefit obligations	3,676		4,766		Pension benefit obligations	2,738		3,489
Postretirement benefit obligations	Postretirement benefit obligations	627		645		Postretirement benefit obligations	222		235
Noncurrent deferred tax liabilities	Noncurrent deferred tax liabilities	328		4,063		Noncurrent deferred tax liabilities	616		349
Other taxes payable	Other taxes payable	11,336		11,560		Other taxes payable	9,701		11,331
Other noncurrent liabilities	Other noncurrent liabilities	9,201		6,669		Other noncurrent liabilities	12,239		9,743
Total liabilities	Total liabilities	103,221		90,756		Total liabilities	102,459		104,013

Commitments and Contingencies	Commitments and Contingencies	0		0		Commitments and Contingencies

Common stock	Common stock	473		470		Common stock	476		473
Additional paid-in capital	Additional paid-in capital	89,973		88,674		Additional paid-in capital	91,359		90,591

Treasury stock	Treasury stock	(111,359)		(110,988)		Treasury stock	(113,945)		(111,361)
Retained earnings	Retained earnings	102,252		90,392		Retained earnings	122,967		103,394
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(5,649)		(5,310)		Accumulated other comprehensive loss	(8,225)		(5,897)
Total Pfizer Inc. shareholders’ equity	Total Pfizer Inc. shareholders’ equity	75,691		63,238		Total Pfizer Inc. shareholders’ equity	92,631		77,201
Equity attributable to noncontrolling interests	Equity attributable to noncontrolling interests	275		235		Equity attributable to noncontrolling interests	259		262
Total equity	Total equity	75,967		63,473		Total equity	92,891		77,462
Total liabilities and equity	Total liabilities and equity	$	179,188	$	154,229	Total liabilities and equity	$	195,350	$	181,476

See Accompanying Notes.

PFIZER INC. AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)


		PFIZER INC. SHAREHOLDERS																												PFIZER INC. SHAREHOLDERS
		Preferred Stock			Common Stock					Treasury Stock																	Common Stock									Treasury Stock
(MILLIONS, EXCEPT PREFERRED SHARES)		Shares	Stated Value		Shares	Par Value		Add’l Paid-In Capital		Shares	Cost		Retained Earnings		Accum. Other Comp. Loss		Share- holders’ Equity			Non-controlling interests		Total Equity
(MILLIONS, EXCEPT PER COMMON SHARE DATA)																			(MILLIONS, EXCEPT PER COMMON SHARE DATA)							Shares		Par Value			Add’l Paid-In Capital				Shares			Cost			Retained Earnings				Accum. Other Comp. Loss				Share- holders’ Equity				Non-controlling interests				Total Equity
Balance, July 3, 2022																			Balance, July 3, 2022							9,496		$	476		$	91,183			(3,903)			$	(113,939)		$	116,608			$	(7,119)			$	87,208			$	261			$	87,469
Net income																			Net income																						8,608								8,608				15				8,623
Other comprehensive income/(loss), net of tax																			Other comprehensive income/(loss), net of tax																										(1,106)				(1,106)				(5)				(1,111)
Cash dividends declared, per share: $0.40																			Cash dividends declared, per share: $0.40
Common stock																			Common stock																						(2,245)								(2,245)								(2,245)

Noncontrolling interests																			Noncontrolling interests																														—				(7)				(7)
Share-based payment transactions																			Share-based payment transactions							20		—			172				—			(6)			(5)								161								161
Purchases of common stock																			Purchases of common stock																—			—											—								—

Other																			Other												4				—			—			—								4				(4)				—
Balance, October 2, 2022																			Balance, October 2, 2022							9,515		$	476		$	91,359			(3,903)			$	(113,945)		$	122,967			$	(8,225)			$	92,631			$	259			$	92,891

																										PFIZER INC. SHAREHOLDERS
																									Common Stock						Treasury Stock
(MILLIONS, EXCEPT PER COMMON SHARE DATA)																			(MILLIONS, EXCEPT PER COMMON SHARE DATA)							Shares		Par Value			Add’l Paid-In Capital				Shares			Cost			Retained Earnings				Accum. Other Comp. Loss				Share- holders’ Equity				Non-controlling interests				Total Equity
Balance, July 4, 2021	Balance, July 4, 2021	—	$	—	9,450	$	472	$	89,336	(3,851)	$	(111,356)	$	96,346	$	(4,758)	$	70,042		$	273	$	70,315	Balance, July 4, 2021						9,450			$	472		$	89,336			(3,851)			$	(111,356)			$	96,346			$	(4,758)			$	70,042			$	273	$	70,315
Net income	Net income												8,146				8,146			12		8,159		Net income																							8,146								8,146				12		8,159
Other comprehensive income/(loss), net of tax	Other comprehensive income/(loss), net of tax														(891)		(891)			(3)		(894)		Other comprehensive income/(loss), net of tax																											(891)				(891)				(3)		(894)
Cash dividends declared, per share: $0.39	Cash dividends declared, per share: $0.39																				Cash dividends declared, per share: $0.39
Common stock	Common stock												(2,192)				(2,192)					(2,192)		Common stock																							(2,192)								(2,192)						(2,192)
Preferred stock																	—					—

Noncontrolling interests	Noncontrolling interests																—			(8)		(8)		Noncontrolling interests																															—				(8)		(8)
Share-based payment transactions	Share-based payment transactions				13	1		637		—	(3)		(1)				634					634		Share-based payment transactions						13			1			637				—			(3)				(1)								634						634
Purchases of common stock	Purchases of common stock									—	—						—					—		Purchases of common stock																—			—												—						—
Preferred stock conversions and redemptions		—	—					—		—	—						—					—

Other	Other							—		—	—		(47)				(47)			1		(46)		Other												—				—			—				(47)								(47)				1		(46)
Balance, October 3, 2021	Balance, October 3, 2021	—	$	—	9,462	$	473	$	89,973	(3,851)	$	(111,359)	$	102,252	$	(5,649)	$	75,691		$	275	$	75,967	Balance, October 3, 2021						9,462			$	473		$	89,973			(3,851)			$	(111,359)			$	102,252			$	(5,649)			$	75,691			$	275	$	75,967

		PFIZER INC. SHAREHOLDERS
		Preferred Stock			Common Stock					Treasury Stock
(MILLIONS, EXCEPT PREFERRED SHARES)		Shares	Stated Value		Shares	Par Value		Add’l Paid-In Capital		Shares	Cost		Retained Earnings		Accum. Other Comp. Loss		Share- holders’ Equity			Non-controlling interests		Total Equity
Balance, June 28, 2020		—	$	—	9,394	$	470	$	87,886	(3,840)	$	(110,978)	$	93,946	$	(6,983)	$	64,342		$	228	$	64,570
Net income													1,469				1,469			8		1,477
Other comprehensive income/(loss), net of tax															1,296		1,296			3		1,299
Cash dividends declared, per share: $0.38
Common stock													(2,113)				(2,113)					(2,113)
Preferred stock																	—					—
Noncontrolling interests																	—			(1)		(1)
Share-based payment transactions					3	—		275		—	(2)						273					273
Purchases of common stock										—	—						—					—
Preferred stock conversions and redemptions		—	—					—		—	—						—					—
Other								—		—	—		—				—			(1)		(1)
Balance, September 27, 2020		—	$	—	9,397	$	470	$	88,161	(3,840)	$	(110,980)	$	93,302	$	(5,687)	$	65,267		$	236	$	65,503


		PFIZER INC. SHAREHOLDERS
	Common Stock				Treasury Stock
(MILLIONS, EXCEPT PER COMMON SHARE DATA)		Shares	Par Value		Add’l Paid-In Capital		Shares	Cost		Retained Earnings		Accum. Other Comp. Loss		Share- holders’ Equity		Non-controlling interests		Total Equity
Balance, January 1, 2022		9,471	$	473	$	90,591	(3,851)	$	(111,361)	$	103,394	$	(5,897)	$	77,201	$	262	$	77,462
Net income										26,378				26,378		27		26,404
Other comprehensive income/(loss), net of tax												(2,328)		(2,328)		(11)		(2,339)
Cash dividends declared, per share: $1.20
Common stock										(6,734)				(6,734)				(6,734)

Noncontrolling interests														—		(7)		(7)
Share-based payment transactions		45	2		760		(12)	(584)		(71)				108				108
Purchases of common stock							(39)	(2,000)						(2,000)				(2,000)

Other					7		—	—		—				7		(11)		(4)
Balance, October 2, 2022		9,515	$	476	$	91,359	(3,903)	$	(113,945)	$	122,967	$	(8,225)	$	92,631	$	259	$	92,891

		PFIZER INC. SHAREHOLDERS
	Common Stock				Treasury Stock
(MILLIONS, EXCEPT PER COMMON SHARE DATA)		Shares	Par Value		Add’l Paid-In Capital		Shares	Cost		Retained Earnings		Accum. Other Comp. Loss		Share- holders’ Equity		Non-controlling interests		Total Equity
Balance, January 1, 2021		9,407	$	470	$	88,674	(3,840)	$	(110,988)	$	90,392	$	(5,310)	$	63,238	$	235	$	63,473
Net income										18,586				18,586		47		18,633
Other comprehensive income/(loss), net of tax												(338)		(338)		—		(338)
Cash dividends declared, per share: $1.17
Common stock										(6,569)				(6,569)				(6,569)

Noncontrolling interests														—		(8)		(8)
Share-based payment transactions		56	3		1,300		(11)	(371)		(77)				855				855
Purchases of common stock							—	—						—				—

Other					—		—	—		(81)				(81)		1		(79)
Balance, October 3, 2021		9,462	$	473	$	89,973	(3,851)	$	(111,359)	$	102,252	$	(5,649)	$	75,691	$	275	$	75,967

See Accompanying Notes.

~~PFIZER INC. AND SUBSIDIARY COMPANIES~~

~~CONDENSED CONSOLIDATED STATEMENTS OF EQUITY~~

~~(UNAUDITED)~~

PFIZER INC. SHAREHOLDERS
Preferred Stock Common Stock Treasury Stock
(MILLIONS, EXCEPT PREFERRED SHARES) Shares Stated Value Shares Par Value Add’l
Paid-In Capital Shares Cost Retained Earnings Accum. Other Comp.
Loss Share-
holders’ Equity Non-controlling interests Total Equity
Balance, January 1, 2021 — $ — 9,407 $ 470 $ 88,674 (3,840) $ (110,988) $ 90,392 $ (5,310) $ 63,238 $ 235 $ 63,473
Net income 18,586 18,586 47 18,633
Other comprehensive income/(loss), net of tax (338) (338) — (338)
Cash dividends declared, per share: $1.17
Common stock (6,569) (6,569) (6,569)
Preferred stock — —
Noncontrolling interests — (8) (8)
Share-based payment transactions 56 3 1,300 (11) (371) (77) 855 855
Purchases of common stock — — — —
Preferred stock conversions and redemptions — — — — — — —
Other — — — (81) (81) 1 (79)
Balance, October 3, 2021 — $ — 9,462 $ 473 $ 89,973 (3,851) $ (111,359) $ 102,252 $ (5,649) $ 75,691 $ 275 $ 75,967
PFIZER INC. SHAREHOLDERS
Preferred Stock Common Stock Treasury Stock
(MILLIONS, EXCEPT PREFERRED SHARES) Shares Stated Value Shares Par Value Add’l
Paid-In Capital Shares Cost Retained Earnings Accum. Other Comp.
Loss Share-
holders’ Equity Non-controlling interests Total Equity
Balance, January 1, 2020 431 $ 17 9,369 $ 468 $ 87,428 (3,835) $ (110,801) $ 91,397 $ (5,367) $ 63,143 $ 303 $ 63,447
Net income 8,313 8,313 25 8,338
Other comprehensive income/(loss), net of tax (319) (319) (9) (329)
Cash dividends declared, per share: $1.14
Common stock (6,408) (6,408) (6,408)
Preferred stock — — —
Noncontrolling interests — (81) (81)
Share-based payment transactions 28 1 748 (6) (210) 539 539
Purchases of common stock — — — —
Preferred stock conversions and redemptions (431) (17) (15) 1 31 (1) (1)
Other — — — — — (1) (1)
Balance, September 27, 2020 — $ — 9,397 $ 470 $ 88,161 (3,840) $ (110,980) $ 93,302 $ (5,687) $ 65,267 $ 236 $ 65,503

~~See Accompanying Notes.~~

PFIZER INC. AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


		Nine Months Ended					Nine Months Ended
(MILLIONS)	(MILLIONS)	October 3, 2021		September 27, 2020		(MILLIONS)	October 2, 2022		October 3, 2021
Operating Activities	Operating Activities					Operating Activities
Net income before allocation to noncontrolling interests	Net income before allocation to noncontrolling interests	$	18,633	$	8,338	Net income before allocation to noncontrolling interests	$	26,404	$	18,633
Income from discontinued operations—net of tax		24		2,334
Discontinued operations—net of tax						Discontinued operations—net of tax	4		(248)
Net income from continuing operations before allocation to noncontrolling interests	Net income from continuing operations before allocation to noncontrolling interests	18,610		6,004		Net income from continuing operations before allocation to noncontrolling interests	26,400		18,881
Adjustments to reconcile net income before allocation to noncontrolling interests to net cash provided by operating activities:	Adjustments to reconcile net income before allocation to noncontrolling interests to net cash provided by operating activities:					Adjustments to reconcile net income before allocation to noncontrolling interests to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	3,914		3,573		Depreciation and amortization	3,545		3,856
Asset write-offs and impairments	Asset write-offs and impairments	115		989		Asset write-offs and impairments	287		93
Gain on completion of Consumer Healthcare JV transaction, net of cash conveyed		—		(6)

Deferred taxes from continuing operations	Deferred taxes from continuing operations	(3,702)		(735)		Deferred taxes from continuing operations	(3,399)		(3,610)

Share-based compensation expense	Share-based compensation expense	687		468		Share-based compensation expense	508		686
Benefit plan contributions in excess of expense/income	Benefit plan contributions in excess of expense/income	(1,933)		(760)		Benefit plan contributions in excess of expense/income	(532)		(1,933)
Other adjustments, net	Other adjustments, net	(1,848)		(313)		Other adjustments, net	1,481		(1,848)
Other changes in assets and liabilities, net of acquisitions and divestitures	Other changes in assets and liabilities, net of acquisitions and divestitures	10,816		(2,856)		Other changes in assets and liabilities, net of acquisitions and divestitures	(7,605)		10,867
Net cash provided by operating activities from continuing operations	Net cash provided by operating activities from continuing operations	26,660		6,364		Net cash provided by operating activities from continuing operations	20,685		26,993
Net cash provided by operating activities from discontinued operations		6		2,414
Net cash provided by/(used in) operating activities from discontinued operations						Net cash provided by/(used in) operating activities from discontinued operations	—		(327)
Net cash provided by operating activities	Net cash provided by operating activities	26,666		8,778		Net cash provided by operating activities	20,685		26,666

Investing Activities	Investing Activities					Investing Activities
Purchases of property, plant and equipment	Purchases of property, plant and equipment	(1,718)		(1,413)		Purchases of property, plant and equipment	(2,235)		(1,709)
Purchases of short-term investments	Purchases of short-term investments	(26,280)		(9,309)		Purchases of short-term investments	(29,701)		(26,280)
Proceeds from redemptions/sales of short-term investments	Proceeds from redemptions/sales of short-term investments	15,852		8,397		Proceeds from redemptions/sales of short-term investments	35,087		15,852
Net (purchases of)/proceeds from redemptions/sales of short-term investments with original maturities of three months or less	Net (purchases of)/proceeds from redemptions/sales of short-term investments with original maturities of three months or less	(7,152)		671		Net (purchases of)/proceeds from redemptions/sales of short-term investments with original maturities of three months or less	(10,877)		(7,152)
Purchases of long-term investments	Purchases of long-term investments	(861)		(284)		Purchases of long-term investments	(1,627)		(861)
Proceeds from redemptions/sales of long-term investments	Proceeds from redemptions/sales of long-term investments	569		648		Proceeds from redemptions/sales of long-term investments	446		569

Acquisition of business, net of cash acquired						Acquisition of business, net of cash acquired	(6,225)		—
Dividends received from Haleon/GSK Consumer Healthcare JV (Note 2C)						Dividends received from Haleon/GSK Consumer Healthcare JV (Note 2C)	3,960		—
Other investing activities, net	Other investing activities, net	(370)		160		Other investing activities, net	(200)		(370)
Net cash provided by/(used in) investing activities from continuing operations	Net cash provided by/(used in) investing activities from continuing operations	(19,960)		(1,129)		Net cash provided by/(used in) investing activities from continuing operations	(11,373)		(19,951)
Net cash provided by/(used in) investing activities from discontinued operations	Net cash provided by/(used in) investing activities from discontinued operations	—		(11,472)		Net cash provided by/(used in) investing activities from discontinued operations	—		(8)
Net cash provided by/(used in) investing activities	Net cash provided by/(used in) investing activities	(19,960)		(12,601)		Net cash provided by/(used in) investing activities	(11,373)		(19,960)

Financing Activities	Financing Activities					Financing Activities
Proceeds from short-term borrowings	Proceeds from short-term borrowings	—		12,352		Proceeds from short-term borrowings	3,887		—
Principal payments on short-term borrowings		(1)		(17,449)
Payments on short-term borrowings						Payments on short-term borrowings	(3,887)		(1)
Net (payments on)/proceeds from short-term borrowings with original maturities of three months or less	Net (payments on)/proceeds from short-term borrowings with original maturities of three months or less	265		1,624		Net (payments on)/proceeds from short-term borrowings with original maturities of three months or less	870		265
Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	997		5,222		Proceeds from issuance of long-term debt	—		997
Principal payments on long-term debt		(1,001)		(2,511)

Payments on long-term debt						Payments on long-term debt	(1,609)		(1,001)
Purchases of common stock						Purchases of common stock	(2,000)		—
Cash dividends paid	Cash dividends paid	(6,540)		(6,328)		Cash dividends paid	(6,738)		(6,540)
Other financing activities, net	Other financing activities, net	(185)		(166)		Other financing activities, net	(342)		(185)
Net cash provided by/(used in) financing activities from continuing operations		(6,465)		(7,257)
Net cash provided by/(used in) financing activities from discontinued operations		—		11,395

Net cash provided by/(used in) financing activities	Net cash provided by/(used in) financing activities	(6,465)		4,138		Net cash provided by/(used in) financing activities	(9,819)		(6,465)
Effect of exchange-rate changes on cash and cash equivalents and restricted cash and cash equivalents	Effect of exchange-rate changes on cash and cash equivalents and restricted cash and cash equivalents	(32)		(39)		Effect of exchange-rate changes on cash and cash equivalents and restricted cash and cash equivalents	(139)		(32)
Net increase/(decrease) in cash and cash equivalents and restricted cash and cash equivalents	Net increase/(decrease) in cash and cash equivalents and restricted cash and cash equivalents	209		277		Net increase/(decrease) in cash and cash equivalents and restricted cash and cash equivalents	(646)		209
Cash and cash equivalents and restricted cash and cash equivalents, at beginning of period	Cash and cash equivalents and restricted cash and cash equivalents, at beginning of period	1,825		1,350		Cash and cash equivalents and restricted cash and cash equivalents, at beginning of period	1,983		1,825
Cash and cash equivalents and restricted cash and cash equivalents, at end of period	Cash and cash equivalents and restricted cash and cash equivalents, at end of period	$	2,034	$	1,627	Cash and cash equivalents and restricted cash and cash equivalents, at end of period	$	1,338	$	2,034
Supplemental Cash Flow Information	Supplemental Cash Flow Information					Supplemental Cash Flow Information

Cash paid/(received) during the period for:	Cash paid/(received) during the period for:					Cash paid/(received) during the period for:
Income taxes	Income taxes	$	2,943	$	2,445	Income taxes	$	4,919	$	2,943
Interest paid	Interest paid	1,205		1,297		Interest paid	1,121		1,205
Interest rate hedges	Interest rate hedges	(26)		(45)		Interest rate hedges	28		(26)

Non-cash transaction:	Non-cash transaction:					Non-cash transaction:
Right-of-use assets obtained in exchange for lease liabilities	Right-of-use assets obtained in exchange for lease liabilities	$	1,552	$	157	Right-of-use assets obtained in exchange for lease liabilities	$	463	$	1,552

See Accompanying Notes.

109

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1. Basis of Presentation and Significant Accounting Policies

A. Basis of Presentation

We prepared these condensed consolidated financial statements in conformity with U.S. GAAP, consistent in all material respects with those applied in our ~~2020~~2021 Form ~~10-K, except as disclosed in~~ ~~Note 1C~~.10-K. As permitted under the SEC requirements for interim reporting, certain footnotes or other financial information have been condensed or omitted.

These financial statements include all normal and recurring adjustments that are considered necessary for the fair statement of results for the interim periods presented. The information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our ~~2020~~2021 Form 10-K. Revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be representative of those for the full year.

Pfizer’s fiscal quarter-end for subsidiaries operating outside the U.S. is as of and for the three and nine months ended August ~~29, 2021~~28, 2022 and August ~~23, 2020,~~29, 2021, and for U.S. subsidiaries is as of and for the three and nine months ended October 2, 2022 and October 3, 2021.

Beginning in the fourth quarter of 2021, we reorganized our commercial operations and ~~September 27, 2020.~~began to manage our commercial operations through a global structure consisting of two operating segments, each led by a single manager: Biopharma, our innovative science-based biopharmaceutical business, and PC1, our global contract development and manufacturing organization and a leading supplier of specialty active pharmaceutical ingredients. Beginning in the third quarter of 2022, we made several additionalorganizational changes to further transform our operations to better leverage our expertise in certain areas and in anticipation of potential future new product launches. These changes include establishing a new commercial structure within our Biopharma operating segment and realigning certain enabling and platform functions across the organization to ensure alignment with this new operating structure. Biopharma is the only reportable segment. See Note 17A in our 2021 Form 10-K and Notes 9B and 13A below.

Business development activities completed in 2021 and 2022 impacted financial results in the periods presented. Discontinued operations in the periods presented relate to the previously divested Meridian subsidiary and post-closing adjustments for other previously divested businesses. See ~~Note~~Notes 1A and 2B in our ~~2020~~2021 Form 10-K, and Note 2. ~~On November 16, 2020, we completed the spin-off and the combination of our Upjohn Business with Mylan to form Viatris. For additional information, see~~ ~~Note~~ 2B ~~in our 2020 Form 10-K. On December 21, 2020, which fell in Pfizer’s international first quarter of 2021, Pfizer~~below.

We have made certain reclassification adjustments to conform prior-period amounts to the current presentation for discontinued operations, acquired IPR&D expenses and Viatris completed the termination of the Mylan-Japan collaboration pursuant to an agreement dated November 13, 2020, and we transferred related inventories and operations that were part of the Mylan-Japan collaboration to Viatris. As a result, the financial position and results of operations of the Upjohn Business and the Mylan-Japan collaboration are presented as discontinued operations. Prior-period information has been restated to reflect our current organization structure.segment reporting.

B. New Accounting Standard Adopted in ~~2021~~2022

On January 1, ~~2021,~~2022, we early adopted a new accounting standard for ~~income tax that eliminates certain exceptions~~contract assets and contract liabilities acquired in a business combination. Under the new standard, acquired contract assets and contract liabilities are required to be recognized and measured by the ~~guidance related to~~acquirer on the ~~approach for intraperiod tax allocation, the methodology for calculating income taxes~~acquisition date in ~~an interim period and the recognition of deferred tax liabilities for outside basis differences. The~~accordance with Accounting Standards Codification 606. This new guidance ~~also simplifies aspects~~generally results in the acquirer recognizing contract assets and contract liabilities at the same amounts that were recorded by the acquiree. Previously, these amounts were recognized by the acquirer at fair value as of the ~~accounting for franchise taxes~~acquisition date. We adopted this new standard on a prospective basis and ~~enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The adoption of this guidance did not have a material~~there was no impact onto our ~~condensed~~ consolidated financial statements.

C. Revenues and Trade Accounts Receivable

Revenue Recognition––We record revenues from product sales when there is a transfer of control of the product from us to the customer. We typically determine transfer of control based on when the product is shipped or delivered and title passes to the customer. For ~~information~~certain contracts, the finished product may temporarily be stored at our or our third-party subcontractors’ locations under a bill-and-hold arrangement. Revenue is recognized on ~~new accounting standards adopted~~bill-and-hold arrangements at the point in ~~2020, see~~ ~~Note 1B~~ ~~in our 2020 Form 10-K.~~time when the customer obtains control of the product and all of the following criteria have been met: the arrangement is substantive; the product is identified separately as belonging to the customer; the product is ready for physical transfer to the customer; and we do not have the ability to use the product or direct it to another customer. In determining when the customer obtains control of the product, we consider certain indicators, including whether we have a present right to payment from the customer, whether title and/or significant risks and rewards of ownership have transferred to the customer and whether customer acceptance has been received.

Customers––

~~C. Change in Accounting Principle~~

InOur prescription pharmaceutical products, with the ~~first quarter~~exception of ~~2021,~~Paxlovid, are sold principally to wholesalers, but we ~~adopted a change in accounting principle~~also sell directly to ~~a more preferable policy under U.S. GAAP~~retailers, hospitals, clinics, government agencies and pharmacies. We principally sell Paxlovid to ~~immediately recognize actuarial gains and losses arising from the remeasurement of our pension and postretirement plans (MTM Accounting).Under the prior policy, we deferred recognition of these gains and losses in~~ ~~Accumulated other comprehensive loss~~. The accumulated actuarial gains/losses outside of a “corridor” were then amortized into net periodic benefit costs over the average remaining service period or the average life expectancy of participants. This change has been applied to all pension and postretirement plans on a retrospective basis for all prior periods presented, and as of January 1, 2020, resulted in a cumulative effect decrease to ~~Retained earnings~~ ~~of $6.3 billion, with a corresponding offset to~~ ~~Accumulated other comprehensive loss. Each time a pension or postretirement plan is remeasured, the actuarial gain or loss is recognized immediately and classified as~~ ~~Other (income)/deductions––net~~.

We believe that MTM Accounting is a more preferable policy as it provides improved transparency of results and performance, better alignment with fair value accounting principles and a better reflection of current economic and interest rate trends on plan investments and assumptions and the actuarial impact of plan remeasurements.

1110

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The impacts of the adjustments on our condensed consolidated financial statements are summarized as follows:
Three Months Ended
October 3, 2021 September 27, 2020
(MILLIONS, EXCEPT PER COMMON SHARE DATA) Previous
Accounting
Principle Impact of Change As Reported Previous Accounting Principle Impact of Change As Adjusted
Condensed Consolidated Statements of Income:
Other (income)/deductions––net $ (641) $ (1,055) $ (1,696) $ 889 $ 989 $ 1,878
Income from continuing operations before provision/(benefit) for taxes on income 6,782 1,055 7,836 1,559 (989) 570
Provision/(benefit) for taxes on income (561) 230 (331) (104) (243) (347)
Income/(loss) from discontinued operations––net of tax (9) — (9) 539 21 560
Net income before allocation to noncontrolling interests 7,334 825 8,159 2,202 (724) 1,477
Net income attributable to Pfizer Inc. common shareholders 7,322 825 8,146 2,194 (724) 1,469
Earnings per common share––basic:
Income from continuing operations attributable to Pfizer Inc. common shareholders $ 1.30 $ 0.15 $ 1.45 $ 0.30 $ (0.13) $ 0.16
Income/(loss) from discontinued operations––net of tax — — — 0.10 — 0.10
Net income attributable to Pfizer Inc. common shareholders 1.30 0.15 1.45 0.39 (0.13) 0.26
Earnings per common share––diluted:
Income from continuing operations attributable to Pfizer Inc. common shareholders $ 1.27 $ 0.15 $ 1.42 $ 0.29 $ (0.13) $ 0.16
Income/(loss) from discontinued operations––net of tax — — — 0.10 — 0.10
Net income attributable to Pfizer Inc. common shareholders 1.27 0.15 1.42 0.39 (0.13) 0.26
Condensed Consolidated Statements of Comprehensive Income:
Foreign currency translation adjustments, net $ (961) $ 95 $ (866) $ 1,609 $ (206) $ 1,403
Benefit plans: actuarial gains/(losses), net 836 (836) — (1,211) 1,211 —
Reclassification adjustments related to amortization 74 (74) — 67 (67) —
Reclassification adjustments related to settlements, net 139 (139) — 174 (174) —
Other 95 (95) — (206) 206 —
Tax provision/(benefit) on other comprehensive income/(loss) (89) 23 (65) (262) 243 (19)
Nine Months Ended
October 3, 2021 September 27, 2020
(MILLIONS, EXCEPT PER COMMON SHARE DATA) Previous
Accounting
Principle Impact of Change As Reported Previous Accounting Principle Impact of Change As Adjusted
Condensed Consolidated Statements of Income:
Other (income)/deductions––net $ (2,414) $ (1,283) $ (3,697) $ 232 $ 881 $ 1,114
Income from continuing operations before provision/(benefit) for taxes on income 18,845 1,283 20,128 7,320 (881) 6,438
Provision/(benefit) for taxes on income 1,237 281 1,518 647 (213) 434
Income/(loss) from discontinued operations––net of tax 24 — 24 2,374 (40) 2,334
Net income before allocation to noncontrolling interests 17,631 1,002 18,633 9,046 (709) 8,338
Net income attributable to Pfizer Inc. common shareholders 17,584 1,002 18,586 9,022 (709) 8,313
Earnings per common share––basic:
Income from continuing operations attributable to Pfizer Inc. common shareholders $ 3.14 $ 0.18 $ 3.32 $ 1.20 $ (0.12) $ 1.08
Income/(loss) from discontinued operations––net of tax — — — 0.43 (0.01) 0.42
Net income attributable to Pfizer Inc. common shareholders 3.14 0.18 3.32 1.62 (0.13) 1.50
Earnings per common share––diluted:
Income from continuing operations attributable to Pfizer Inc. common shareholders $ 3.08 $ 0.18 $ 3.26 $ 1.18 $ (0.12) $ 1.06
Income/(loss) from discontinued operations––net of tax — — — 0.42 (0.01) 0.42
Net income attributable to Pfizer Inc. common shareholders 3.09 0.18 3.27 1.60 (0.13) 1.48

~~PFIZER INC. AND SUBSIDIARY COMPANIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

Nine Months Ended
October 3, 2021 September 27, 2020
(MILLIONS) Previous
Accounting
Principle Impact of Change As Reported Previous Accounting Principle Impact of Change As Adjusted
Condensed Consolidated Statements of Comprehensive Income:
Foreign currency translation adjustments, net $ (354) $ (11) $ (366) $ 96 $ (123) $ (27)
Benefit plans: actuarial gains/(losses), net 881 (881) — (1,372) 1,372 —
Reclassification adjustments related to amortization 222 (222) — 200 (200) —
Reclassification adjustments related to settlements, net 162 (162) — 240 (240) —
Other (11) 11 — (123) 123 —
Tax provision/(benefit) on other comprehensive income/(loss) (20) (24) (44) (527) 215 (311)
Condensed Consolidated Statements of Cash Flows:
Deferred taxes from continuing operations $ (3,983) $ 281 $ (3,702) $ (522) $ (213) $ (735)
Benefit plan contributions in excess of expense/income (650) (1,283) (1,933) (1,642) 881 (760)
October 3, 2021 December 31, 2020
(MILLIONS) Previous Accounting Principle Impact of Change As Reported Previous Accounting Principle Impact of Change As Adjusted
Condensed Consolidated Balance Sheets:
Noncurrent deferred tax assets and other noncurrent tax assets $ 3,012 $ (257) $ 2,755 $ 2,383 $ — $ 2,383
Other noncurrent assets 6,687 18 6,705 4,569 — 4,569
Pension benefit obligations 3,677 — 3,676 4,766 — 4,766
Retained earnings 101,250 1,002 102,252 96,770 (6,378) 90,392
Accumulated other comprehensive loss (4,408) (1,241) (5,649) (11,688) 6,378 (5,310)

~~D. Revenues and Trade Accounts Receivable~~

~~Customers––Our prescription pharmaceutical products are sold principally to wholesalers, but we also sell directly to retailers, hospitals, clinics,~~ government ~~agencies and pharmacies.~~agencies. In the U.S., we primarily sell our vaccine products directly to the federal government, CDC, wholesalers, individual provider offices, retail pharmacies and integrated delivery networks. Outside the U.S., we primarily sell our vaccines to government and non-government institutions.

Deductions from Revenues––Our accruals for Medicare, Medicaid and related state program and performance-based contract rebates, chargebacks, sales allowances and sales returns and cash discounts are as follows:


(MILLIONS)	(MILLIONS)	October 3, 2021		December 31, 2020		(MILLIONS)	October 2, 2022		December 31, 2021
Reserve against Trade accounts receivable, less allowance for doubtful accounts	Reserve against Trade accounts receivable, less allowance for doubtful accounts	$	996	$	861	Reserve against Trade accounts receivable, less allowance for doubtful accounts	$	1,133	$	1,077
Other current liabilities:	Other current liabilities:					Other current liabilities:
Accrued rebates	Accrued rebates	3,470		3,017		Accrued rebates	3,991		3,811
Other accruals	Other accruals	470		436		Other accruals	418		528
Other noncurrent liabilities	Other noncurrent liabilities	503		399		Other noncurrent liabilities	497		433
Total accrued rebates and other sales-related accruals	Total accrued rebates and other sales-related accruals	$	5,439	$	4,712	Total accrued rebates and other sales-related accruals	$	6,038	$	5,850

Trade Accounts Receivable––Trade accounts receivable are stated at their net realizable value. The allowance for credit losses reflects our best estimate of expected credit losses of the receivables portfolio determined on the basis of historical experience, current information, and forecasts of future economic conditions. In developing the estimate for expected credit losses, trade accounts receivables are segmented into pools of assets depending on market (U.S. versus international), delinquency status, and customer type (high risk versus low risk and government versus non-government), and fixed reserve percentages are established for each pool of trade accounts receivables.

In determining the reserve percentages for each pool of trade accounts receivables, we considered our historical experience with certain customers and customer types, regulatory and legal environments, country and political risk, and other relevant current and future forecasted macroeconomic factors. These credit risk indicators are monitored on a quarterly basis to determine whether there have been any changes in the economic environment that would indicate the established reserve percentages should be adjusted, and are considered on a regional basis to reflect more geographic-specific metrics. Additionally, write-offs and recoveries of customer receivables are tracked against collections on a quarterly basis to determine whether the reserve percentages remain appropriate. When management becomes aware of certain customer-specific factors that impact credit risk,

~~PFIZER INC. AND SUBSIDIARY COMPANIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

specific allowances for these known troubled accounts are recorded. Trade accounts receivable are written off after all reasonable means to collect the full amount (including litigation, where appropriate) have been exhausted.

During the three and nine months ended October 2, 2022 and October 3, 2021, ~~and September 27, 2020,~~ additions to the allowance for credit losses, write-offs and recoveries of customer receivables were not material to our condensed consolidated financial statements. For additional information on our trade accounts receivable, see Note 1G1H in our ~~2020~~2021 Form 10-K.

D. Acquired In-Process Research and Development Expenses

In the first quarter of 2022, we began reporting acquired IPR&D expense as a separate line item in our consolidated statements of income. Acquired in-process research and development expenses includes costs incurred in connection with (a) all upfront and milestone payments on collaboration and in-license agreements, including premiums on equity securities and (b) asset acquisitions of acquired IPR&D. These costs were previously recorded in Research and development expenses. When we acquire net assets that do not constitute a business, as defined in U.S. GAAP, no goodwill is recognized and acquired IPR&D is expensed. The fair value of IPR&D acquired in connection with a business combination is recorded on the balance sheet as Identifiable intangible assets. See Notes 1E and 10 in our2021 Form 10-K.

Note 2.Acquisitions, Discontinued Operations, Equity-Method Investment and Collaborative Arrangement

A. Acquisitions

ReViral––On June 9, 2022, which fell in our international third quarter of 2022, we acquired ReViral, a privately held, clinical-stage biopharmaceutical company focused on discovering, developing and commercializing novel antiviral therapeutics that target respiratory syncytial virus, for a total consideration of up to $536 million, including upfront payments of $436 million upon closing (including a base payment of $425 million plus working capital adjustments) and an additional $100 million contingent upon future development milestones.

We accounted for the transaction as an asset acquisition since the lead asset, sisunatovir, represented substantially all of the fair value of the gross assets acquired. At the acquisition date, we recorded a $426 million charge representing an acquired IPR&D asset with no alternative use in Acquired in-process research and development expenses, which is presented as a cash outflow from operating activities. Other assets acquired and liabilities assumed were not significant.

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Arena––On March 11, 2022, we acquired Arena, a clinical stage company, for $100 per share in cash. The total fair value of the consideration transferred was $6.6 billion ($6.2 billion, net of cash acquired). In addition, $138 million in payments to Arena employees for the fair value of previously unvested long-term incentive awards was recognized as post-closing compensation expense and recorded in Restructuring charges and certain acquisition-related costs (see Note 3).

Arena’s portfolio includes development-stage therapeutic candidates in gastroenterology, dermatology, and cardiology, including etrasimod, an oral, selective sphingosine 1-phosphate (S1P) receptor modulator currently in development for a range of immuno-inflammatory diseases including UC, Crohn’s disease, atopic dermatitis, eosinophilic esophagitis, and alopecia areata. In connection with this acquisition, we provisionally recorded: (i) $5.5 billion in Identifiable intangible assets, consisting of $5.0 billion of IPR&D and $460 million of indefinite-lived Licensing agreements and other, (ii) $1.0 billion of Goodwill and (iii) $505 million of net deferred tax liabilities. The allocation of the consideration transferred to the assets acquired and the liabilities assumed has not yet been finalized.

B. Discontinued Operations

Meridian––On December 31, 2021, we completed the sale of our Meridian subsidiary. In the three and nine months ended October 2, 2022, the amounts recorded under the interim TSAs and MSA were not material.

Upjohn Separation and Combination with ~~Mylan~~

Mylan––On November 16, 2020, we completed the spin-off and the combination of the Upjohn Business with Mylan to form Viatris. ~~See~~ ~~Note 1A.~~

In connection with this transaction, Pfizer and Viatris entered into various agreements to effect the separation and combination and to provide a framework for our relationship after the combination, including a separation and distribution agreement, interim operating models, including agency arrangements, ~~manufacturing and supply agreements (MSAs), transition service agreements (TSAs),~~MSAs, TSAs, a tax matters agreement, and an employee matters agreement, among others. The interim agency operating model arrangements primarily include billings, collections and remittance of rebates that we are performing on a transitional basis on behalf of Viatris. Under the MSAs, Pfizer or Viatris, as the case may be, manufactures, labels and packages products for the other party. In the three and nine months ended October 3, 2021, the amounts recorded under ~~the above~~these agreements were not material to our consolidated results of ~~operations.~~operations in the three and nine months ended October 2, 2022 and October 3, 2021. Net amounts due from Viatris under the ~~above~~ agreements were approximately ~~$197~~$167 million as of October ~~3, 2021~~2, 2022 and ~~$401~~$53 million as of December 31, ~~2020.~~2021. The cash flows associated with the ~~above~~ agreements are included in Net cash provided by operating activities from continuing operations, except for a $277 million payment to Viatris made in the first quarter of 2021 pursuant to terms of the separation agreement, which is reported in Other financing activities, net.

Discontinued operations—net of tax for the three and nine months ended October 3, 2021 reflects pre-tax loss from discontinued operations of $17 million and $353 million, respectively, and primarily includes pre-disposal operations related to our former Meridian subsidiary including a $345 million pre-tax expense in the first nine months of 2021 to resolve a Multi-District Litigation relating to EpiPen against the Company in the U.S. District Court for the District of Kansas (prior to presenting Meridian as discontinued operations, this EpiPen litigation amount was ~~recorded as a payable to Viatris~~included in Other ~~current liabilities~~(income)/deductions––net). ~~as of December 31, 2020. In addition, Pfizer~~For the three and ~~Mylan had pre-existing arms-length commercial agreements, which are continuing with Viatris and are not material to Pfizer’s consolidated financial statements.~~

~~The operating results of the Upjohn Business and the Mylan-Japan collaboration are reported as~~nine months ended October 2, 2022, ~~Income/(loss) from discontinued operations––net of tax.~~

Components of Income/(loss) from discontinued operations––net of tax:
Three Months Ended(a)
Nine Months Ended(a)
(MILLIONS) October 3,
2021 September 27,
2020 October 3,
2021 September 27,
2020
Revenues $ — $ 1,854 $ 27 $ 5,737
Costs and expenses:
Cost of sales 4 526 18 1,425
Selling, informational and administrative expenses 2 359 (1) 1,061
Research and development expenses — 60 1 165
Amortization of intangible assets — 37 — 109
Restructuring charges and certain acquisition-related costs — 1 — 18
Other (income)/deductions––net 5 233 6 304
Pre-tax income/(loss) from discontinued operations (10) 639 3 2,654
Provision/(benefit) for taxes on income (2) 79 (21) 320
Income/(loss) from discontinued operations––net of tax $ (9) $ 560 $ 24 $ 2,334

~~(a)In the third quarter of 2021,~~ ~~Income/(loss) from discontinued~~Discontinued operations—net of tax reflects pre-tax loss of $15 million and pre-tax income of $9 million from discontinued operations, respectively, and relates to post-closing adjustments ~~directly related to our discontinued operations, including adjustments~~ for ~~legal and tax related matters. In the first nine months of 2021,~~ ~~Income/(loss) from discontinued operations—net of tax~~ includes the operations of the Mylan-Japan collaboration, which terminated during Pfizer’s international first quarter of 2021, and post-closing adjustments directly related to our discontinued operations, including adjustmentspreviously divested businesses primarily for tax ~~benefits~~ and legal ~~related~~ matters. ~~In the three and nine months ended September 27, 2020,~~ ~~Income/(loss) from discontinued operations—net of tax~~ relates to the Upjohn Business and the Mylan-Japan collaboration and includes the change in accounting principle in the first quarter of 2021 to MTM Accounting, which has been applied on a retrospective basis for all prior periods presented. See ~~Note 1C. In the three and nine months ended September 27, 2020,~~ ~~Income/(loss) from discontinued operations—net of tax~~ includes interest expense of $76 million associated with the U.S. dollar and Euro denominated senior unsecured notes issued by Upjohn Inc. and Upjohn Finance B.V. in the second quarter of 2020 and charges of $144 million related to the remeasurement of Euro debt issued by Upjohn Finance B.V. in the second quarter of 2020.

~~PFIZER INC. AND SUBSIDIARY COMPANIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

B.C. Equity-Method Investment

~~Formation of~~ Haleon/Consumer Healthcare JV

JV––

On July 31, 2019, we completed a transaction in which we and GSK combined our respective consumer healthcare businesses into a new JV that ~~operates~~operated globally under the GSK Consumer Healthcare name. In exchange for the contribution of our consumer healthcare business to the JV, we received a 32% equity stake in the new company and GSK ~~owns~~owned the remaining 68%.

On July 18, 2022, GSK completed a demerger of the Consumer Healthcare JV which became Haleon, an independent, publicly traded company listed on the London Stock Exchange that holds the joint Consumer Healthcare business of GSK and Pfizer following the demerger. We ~~are accounting~~continue to own 32% of the ordinary shares of Haleon after the demerger. We continue to account for our interest in ~~the Consumer Healthcare JV~~Haleon as an equity-method investment. The carrying value of our investment in Haleon as of October 2, 2022 and in the Consumer Healthcare JV ~~is $16.1 billion as of October 3, 2021 and $16.7 billion~~ as of December 31, ~~2020~~2021 is $9.6 billion and $16.3 billion, respectively, and is reported ~~as a private equity investment~~ in Equity-method investments. The fair value of our investment in Haleon as of October ~~3, 2021 and December 31, 2020. The~~2, 2022, based on quoted market prices of Haleon stock, was $9.1 billion. Haleon/the Consumer Healthcare JV is a foreign investee whose reporting currency is the U.K. pound, and therefore we translate its financial statements into U.S. dollars and recognize the impact of foreign currency translation adjustments in the carrying value of our investment and in other comprehensive income. The decrease in the value of our investment from December 31, ~~2020~~2021 is primarily due to ~~$549~~dividends totaling approximately $4.5 billion, of which cash flows of $4.0 billion are included in Net cash used in investing activities from continuing operations and $584 million are included in Net cash provided by operating activities from continuing operations, as well as $2.4 billion in pre-tax foreign currency translation adjustments (see Note 6), ~~as well as dividends totaling approximately $295 million,~~ partially offset by our share of the JV’s earnings. We record our share of earnings from Haleon/the Consumer Healthcare JV on a quarterly basis on a one-quarter lag in Other (income)/deductions––net. Our total share of the JV’s earnings generated in the second quarter of 2022, which we recorded in our operating results in the third quarter of 2022, was $67 million. Our total share of the JV’s earnings generated in the fourth quarter of 2021 and first six months of 2022, which we recorded in our operating results in the first nine months of

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

2022, was $402 million. Our total share of the JV’s earnings generated in the second quarter of 2021, which we recorded in our operating results in the third quarter of 2021, was $106 million. Our total share of the JV’s earnings generated in the fourth quarter of 2020 and first six months of 2021, which we recorded in our operating results in the first nine months of 2021, was $324 million. ~~Our total share of the JV’s earnings generated in the second quarter of 2020, which we recorded in our operating results in~~In the third quarter ~~of 2020, was $166 million. Our total share of the JV’s earnings generated in the fourth quarter of 2019~~ and ~~first six months of 2020, which we recorded in our operating results in the~~ first nine months of ~~2020, was $306 million.~~2022, our equity-method income included in Other (income)/deductions––net also includes charges of $118 million and $119 million, respectively, primarily for adjustments to our equity-method basis differences related to the separation of Haleon/the GSK Consumer Healthcare JV from GSK. The total amortization and adjustment of basis differences resulting from the excess of the initial fair value of our investment over the underlying equity in the carrying value of the net assets of the JV ~~is included in~~ ~~Other (income)/deductions––net~~ ~~and~~ was not material to our results of operations in the ~~periods presented.~~third quarter and first nine months of 2021. See Note 4.


Summarized financial information for our equity method investee, the Consumer Healthcare JV, for the three and nine months ending June 30, 2021, the most recent period available, and for the three and nine months ending June 30, 2020, is as follows:
Summarized financial information for our equity method investee, the Consumer Healthcare JV, for the three and nine months ending June 30, 2022, the most recent period available, and for the three and nine months ending June 30, 2021, is as follows:										Summarized financial information for our equity method investee, the Consumer Healthcare JV, for the three and nine months ending June 30, 2022, the most recent period available, and for the three and nine months ending June 30, 2021, is as follows:
		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
(MILLIONS)	(MILLIONS)	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020		(MILLIONS)	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Net sales	Net sales	$	3,152	$	2,927	$	9,428	$	9,618	Net sales	$	3,218	$	3,152	$	10,164	$	9,428
Cost of sales	Cost of sales	(1,180)		(1,061)		(3,536)		(4,266)		Cost of sales	(1,196)		(1,180)		(3,830)		(3,536)
Gross profit	Gross profit	$	1,972	$	1,866	$	5,892	$	5,352	Gross profit	$	2,022	$	1,972	$	6,334	$	5,892
Income from continuing operations	Income from continuing operations	348		524		1,064		995		Income from continuing operations	226		348		1,303		1,064
Net income	Net income	348		524		1,064		995		Net income	226		348		1,303		1,064
Income attributable to shareholders	Income attributable to shareholders	330		518		1,012		959		Income attributable to shareholders	210		330		1,256		1,012

~~C. Collaboration~~In connection with GSK’s previously announced planned demerger of at least 80% of GSK’s 68% equity interest in the Consumer Healthcare JV, in March 2022 the Consumer Healthcare JV completed its offering of a total aggregate principal amount of $8.75 billion in U.S. dollar-denominated senior notes of various maturities, €2.35 billion in euro-denominated senior notes of various maturities and £700 million in U.K. pound-denominated senior notes of various maturities (collectively, the “notes”). The notes were guaranteed by GSK generally up to and excluding the date of the demerger (the “Guarantee Assumption Date”). We agreed to indemnify GSK for 32% (representing our pro rata equity interest in the Consumer Healthcare JV) of any amount payable by GSK pursuant to its guarantee of the notes. Our indemnity was provided solely for the benefit of GSK. Neither we nor any of our subsidiaries were an issuer or guarantor of any of the notes.

Following its issuance of the notes in March 2022, which fell in our international second quarter of 2022, the Consumer Healthcare JV loaned to us and GSK the net proceeds received from the notes on a pro rata equity ownership basis, for which we received a loan of £2.9 billion ($3.7 billion as of the end of our second quarter of 2022), at an interest rate of 1.365% per annum payable semi-annually in arrears. In conjunction with the demerger, we received £3.5 billion ($4.2 billion) in dividends from the JV in July 2022, of which $4.0 billion related to a one-time pre-separation dividend, which decreased the carrying value of our investment (as discussed above). Simultaneous with the receipt of the dividends, we repaid the £2.9 billion loan from the JV. GSK similarly received pro rata dividends and simultaneously repaid its pro rata loan from the JV. In conjunction with these transactions, our indemnification of GSK’s guarantee discussed above was terminated.

D. Collaborative Arrangement

Collaboration with ~~Arvinas~~

Biohaven––~~On July 22,~~In November 2021, we ~~announced~~entered into a ~~global~~ collaboration and license agreement and related sublicense agreement with ~~Arvinas~~Biohaven and certain of its subsidiaries to ~~develop~~commercialize rimegepant and ~~commercialize ARV-471, an investigational oral PROTAC~~® ~~(PROteolysis TArgeting Chimera) estrogen receptor protein degrader. The estrogen receptor is a well-known disease driver in most breast cancers.~~zavegepant for the treatment and prevention of migraines outside of the U.S., subject to regulatory approval. Under the terms of the ~~collaboration~~ agreement, Biohaven would lead R&D globally and we ~~made~~would have the exclusive right to commercialization globally, outside of the U.S. Upon the closing of the transaction on January 4, 2022, we paid Biohaven $500 million, including an upfront payment ~~to Arvinas~~ of ~~$650~~$150 million and an equity investment of $350 million. We recognized $263 million for the upfront payment and premium paid on our equity investment in ~~July 2021, which was recorded to~~ ~~Research~~Acquired in-process research and development expenses. ~~On September 13, 2021,~~In October 2022, within our fiscal fourth quarter of 2022, we ~~made a $350 million equity investment in Arvinas, receiving approximately 3.5 million newly issued~~acquired all outstanding common shares of ~~Arvinas common stock, priced at a 30% premium to the 30-day volume weighted average price on July 20, 2021, representing an equity ownership stake~~Biohaven not already owned by ~~Pfizer~~us for $148.50 per share, in cash, for payments of approximately 7% as of September 13, 2021. Arvinas is also eligible to receive up to $400 million in approval milestones and up to $1 billion in commercial milestones. The companies will equally share worldwide development costs, commercialization expenses and profits.$11.5 billion.

Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives

A. Transforming to a More Focused Company Program

With the formation of the Consumer Healthcare JV in 2019 and the spin-off of our Upjohn Business in the fourth quarter of 2020, Pfizer has transformed into a focused, global leader in science-based innovative medicines and vaccines. We ~~have~~continue our

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(UNAUDITED)

~~undertaken~~ efforts to ensure our cost base and support model align appropriately with our ~~new~~ operating structure. While certain direct costs transferred to the Consumer Healthcare JV, and to the Upjohn Business in connection with the spin-off, there are indirect costs which did not transfer. This program is primarily composed of the following three initiatives:

•We are taking steps to restructure our corporate enabling functions to appropriately support our business, R&D and PGS platform functions. We expect costs, primarily related to restructuring our corporate enabling functions, of $1.8 billion, to ~~total $1.6 billion,~~be incurred primarily from 2020 through 2022, with substantially all costs to be cash expenditures. Actions include, among others, changes in location of certain activities, expanded use and co-location of centers of excellence and shared services, and increased use of digital technologies. The associated actions and the specific costs ~~will~~ primarily include severance and benefit plan impacts, exit costs as well as associated implementation costs.

•In addition, we are transforming our commercial go-to market model in the way we engage patients and physicians. We have also made several organizational changes in the third quarter of 2022 to further transform our operations to better leverage our expertise in certain areas and in anticipation of potential future new product launches (see Note 1A). We expect costs of ~~$1.1~~$1.4 billion to be incurred primarily from 2020 through 2022, with ~~substantially~~ all costs to be cash expenditures. Actions include, among others, centralization of certain activities and enhanced use of digital technologies. The costs for this effort primarily include severance and associated implementation costs.

•We are also optimizing our manufacturing network under this program and incurring ~~certain legacy~~one-time costs for cost-reduction initiatives related to our manufacturing ~~business.~~operations. We expect to incur costs of ~~$500~~$800 million to be incurred primarily from 2020 through 2023, with approximately ~~20%~~25% of the costs to be non-cash. The costs for this effort include, among other things, severance costs, implementation costs, product transfer costs, site exit costs, as well as accelerated depreciation.

The program costs discussed above ~~are expected to be incurred primarily from 2020 through 2022, and~~ may be rounded and represent approximations.

From the start of this program in the fourth quarter of 2019 through October ~~3, 2021,~~2, 2022, we incurred costs of ~~$2.0 billion.~~$2.8 billion, of which $1.1 billion ($862 million of restructuring charges) is associated with Biopharma.

B. Key Activities


The following summarizes acquisitions and cost-reduction/productivity initiatives costs and credits, which are composed primarily of the Transforming to a More Focused Company program:
The following summarizes acquisitions and cost-reduction/productivity initiatives costs and credits:										The following summarizes acquisitions and cost-reduction/productivity initiatives costs and credits:
		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
(MILLIONS)	(MILLIONS)	October 3, 2021		September 27, 2020		October 3, 2021		September 27, 2020		(MILLIONS)	October 2, 2022		October 3, 2021		October 2, 2022		October 3, 2021
Restructuring charges/(credits):	Restructuring charges/(credits):									Restructuring charges/(credits):
Employee terminations	Employee terminations	$	630	$	(15)	$	649	$	340	Employee terminations	$	158	$	630	$	293	$	649
Asset impairments	Asset impairments	10		20		9		43		Asset impairments	17		10		44		7
Exit costs/(credits)	Exit costs/(credits)	3		(11)		—		(10)		Exit costs/(credits)	2		3		31		—
Restructuring charges/(credits)(a)	Restructuring charges/(credits)(a)	643		(5)		657		374		Restructuring charges/(credits)(a)	177		643		368		656
Transaction costs(b)	Transaction costs(b)	—		—		—		14		Transaction costs(b)	—		—		42		—
Integration costs and other(c)	Integration costs and other(c)	3		7		11		29		Integration costs and other(c)	22		3		170		11
Restructuring charges and certain acquisition-related costs	Restructuring charges and certain acquisition-related costs	646		2		668		417		Restructuring charges and certain acquisition-related costs	199		646		580		667
Net periodic benefit costs/(credits) recorded in Other (income)/deductions––net~~(d)~~	Net periodic benefit costs/(credits) recorded in Other (income)/deductions––net~~(d)~~	(63)		—		(51)		2		Net periodic benefit costs/(credits) recorded in Other (income)/deductions––net~~(d)~~	—		(63)		(5)		(51)
Additional depreciation––asset restructuring recorded in our condensed consolidated statements of income as follows(e):
Additional depreciation––asset restructuring recorded in our condensed consolidated statements of income as follows(d):										Additional depreciation––asset restructuring recorded in our condensed consolidated statements of income as follows(d):
Cost of sales	Cost of sales	23		4		64		14		Cost of sales	7		19		22		53
Selling, informational and administrative expenses	Selling, informational and administrative expenses	8		—		23		—		Selling, informational and administrative expenses	1		8		1		23
Research and development expenses		—		—		—		(3)

Total additional depreciation––asset restructuring	Total additional depreciation––asset restructuring	31		4		87		10		Total additional depreciation––asset restructuring	7		27		22		76
Implementation costs recorded in our condensed consolidated statements of income as follows(f):
Implementation costs recorded in our condensed consolidated statements of income as follows(e):										Implementation costs recorded in our condensed consolidated statements of income as follows(e):
Cost of sales	Cost of sales	8		9		29		27		Cost of sales	14		8		40		29
Selling, informational and administrative expenses	Selling, informational and administrative expenses	142		36		287		114		Selling, informational and administrative expenses	136		142		344		287
Research and development expenses	Research and development expenses	—		1		1		2		Research and development expenses	—		—		—		1

Total implementation costs	Total implementation costs	151		47		316		142		Total implementation costs	150		151		384		316
Total costs associated with acquisitions and cost-reduction/productivity initiatives	Total costs associated with acquisitions and cost-reduction/productivity initiatives	$	764	$	52	$	1,020	$	571	Total costs associated with acquisitions and cost-reduction/productivity initiatives	$	357	$	760	$	982	$	1,008

(a)Primarily represents cost reduction initiatives. Restructuring charges/(credits) associated with Biopharma: charges of $62 million and $108 million for the three and nine months ended October 2, 2022, respectively, and charges of $616 million and $617 million for the three and nine months ended October 3, 2021, respectively.

(b)Represents external costs for banking, legal, accounting and other similar services.

~~(c)~~Represents external, incremental costs directly related to integrating acquired businesses, such as expenditures for consulting and the integration of systems and processes, and certain other qualifying costs.

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~~(d)~~(c)~~Amounts~~Represents external, incremental costs directly related to integrating acquired businesses, such as expenditures for consulting and the integration of systems and processes, and certain other qualifying costs. In the three and nine months ended ~~September 27, 2020 include~~October 2, 2022, integration costs and other were mostly related to our acquisition of Arena, including $138 million in payments to Arena employees in the ~~impact~~first quarter of ~~a change in accounting principle.~~2022 for the fair value of previously unvested long-term incentive awards. See Note ~~1C.~~2A.

~~(e)~~(d)Represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.

~~(f)~~(e)Represents external, incremental costs directly related to implementing our non-acquisition-related cost-reduction/productivity initiatives.


The following summarizes the components and changes in restructuring accruals:	The following summarizes the components and changes in restructuring accruals:									The following summarizes the components and changes in restructuring accruals:
(MILLIONS)	(MILLIONS)	Employee Termination Costs		Asset Impairment Charges		Exit Costs		Accrual		(MILLIONS)	Employee Termination Costs		Asset Impairment Charges		Exit Costs		Accrual
Balance, December 31, 2020(a)		$	782	$	—	$	15	$	798
Balance, December 31, 2021(a)										Balance, December 31, 2021(a)	$	1,014	$	—	$	57	$	1,071
Provision	Provision	649		9		—		657		Provision	293		44		31		368
Utilization and other(b)	Utilization and other(b)	(306)		(9)		(5)		(319)		Utilization and other(b)	(447)		(44)		(80)		(572)
Balance, October 3, 2021(c)		$	1,125	$	—	$	10	$	1,135
Balance, October 2, 2022(c)										Balance, October 2, 2022(c)	$	859	$	—	$	8	$	867

(a)Included in Other current liabilities ($~~628~~816 million) and Other noncurrent liabilities ($~~169~~255 million).

(b)Includes adjustments for foreign currency translation.

(c)Included in Other current liabilities ($~~860~~758 million) and Other noncurrent liabilities ($~~275~~110 million).

Note 4. Other (Income)/Deductions—Net


Components of Other (income)/deductions––net include:	Components of Other (income)/deductions––net include:									Components of Other (income)/deductions––net include:
		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
(MILLIONS)	(MILLIONS)	October 3, 2021		September 27, 2020		October 3, 2021		September 27, 2020		(MILLIONS)	October 2, 2022		October 3, 2021		October 2, 2022		October 3, 2021
Interest income	Interest income	$	(10)	$	(15)	$	(21)	$	(68)	Interest income	$	(70)	$	(10)	$	(114)	$	(21)
Interest expense	Interest expense	325		345		975		1,102		Interest expense	311		325		925		975
Net interest expense	Net interest expense	315		330		954		1,034		Net interest expense	240		315		811		954
Royalty-related income	Royalty-related income	(261)		(214)		(649)		(524)		Royalty-related income	(239)		(261)		(628)		(649)
Net (gains)/losses on asset disposals	Net (gains)/losses on asset disposals	(1)		(2)		(99)		—		Net (gains)/losses on asset disposals	7		(1)		6		(99)
Net (gains)/losses recognized during the period on equity securities(a)	Net (gains)/losses recognized during the period on equity securities(a)	(400)		70		(1,601)		(408)		Net (gains)/losses recognized during the period on equity securities(a)	112		(400)		1,353		(1,601)
Income from collaborations, out-licensing arrangements and sales of compound/product rights(b)	Income from collaborations, out-licensing arrangements and sales of compound/product rights(b)	(65)		(30)		(317)		(245)		Income from collaborations, out-licensing arrangements and sales of compound/product rights(b)	(4)		(65)		(17)		(317)
Net periodic benefit costs/(credits) other than service costs~~(c)~~	Net periodic benefit costs/(credits) other than service costs~~(c)~~	(1,132)		1,043		(1,635)		749		Net periodic benefit costs/(credits) other than service costs~~(c)~~	(306)		(1,132)		(294)		(1,635)
Certain legal matters, net~~(d)~~	Certain legal matters, net~~(d)~~	38		(17)		458		5		Certain legal matters, net~~(d)~~	77		38		175		112
Certain asset impairments~~(e)~~(c)	Certain asset impairments~~(e)~~(c)	—		900		—		900		Certain asset impairments~~(e)~~(c)	200		—		200		—
Consumer Healthcare JV equity method (income)/loss(f)		(105)		(103)		(307)		(196)
Haleon/Consumer Healthcare JV equity method (income)/loss(d)										Haleon/Consumer Healthcare JV equity method (income)/loss(d)	51		(105)		(283)		(307)
Other, net	Other, net	(84)		(99)		(501)		(202)		Other, net	(198)		(84)		(260)		(502)
Other (income)/deductions––net	Other (income)/deductions––net	$	(1,696)	$	1,878	$	(3,697)	$	1,114	Other (income)/deductions––net	$	(59)	$	(1,696)	$	1,063	$	(4,043)

(a)The losses in the first nine months of 2022 include, among other things, unrealized losses of $974 million related to investments in BioNTech, Cerevel Therapeutics Holdings, Inc. (Cerevel) and Arvinas. The gains in the third quarter and first nine months of 2021 ~~include,~~included, among other things, unrealized gains of $420 million and $1.5 billion, respectively, related to investments in BioNTech and Cerevel Therapeutics, LLC. The losses in the third quarter of 2020 included, among other things, unrealized losses of $131 million related to our investment in Allogene. The gains in the first nine months of 2020 included, among other things, unrealized gains of $397 million related to our investments in Allogene and BioNTech.Cerevel.

(b)The first nine months of 2021 ~~includes,~~included, among other things, $188 million of net collaboration income from BioNTech in the first quarter of 2021 related to the COVID-19 vaccine. The first nine months of 2020 mainly included, among other things, (i) an upfront payment to us of $75 million from our sale of our CK1 assets to Biogen, Inc., (ii) $40 million of milestone income from Puma Biotechnology, Inc. related to Neratinib regulatory approvals in the EU and (iii) $30 million of milestone income from Lilly related to the first commercial sale in the U.S. of LOXO-292 for the treatment of RET fusion-positive NSCLC.Comirnaty.

(c)~~Amounts include the impact of a change in accounting principle. See~~ ~~Notes 1C~~ ~~and~~ ~~10.~~

~~(d)~~The ~~first nine months of 2021 primarily includes an~~ amount ~~to resolve a Multi-District Litigation relating to EpiPen pending against the Company~~ in the ~~U.S. District Court for the District of Kansas for $345 million, which remains subject to court approval. See~~ ~~Note 12A5~~.

~~(e)The~~ third quarter and first nine months of ~~2020 included~~2022 represents an intangible asset impairment ~~charges~~charge associated with our Biopharma segment, representing an IPR&D asset for the unapproved indication of ~~$900 million related~~symptomatic dilated cardiomyopathy (DCM) due to ~~IPR&D assets for unapproved indications~~a mutation of ~~certain cancer medicines,~~the gene encoding the lamin A/C protein (LMNA), acquired in our Array ~~acquisition, and reflected, among other things, updated commercial forecasts.~~BioPharma Inc. acquisition. The intangible asset impairment charge was a result of the Phase 3 trial reaching futility at a pre-planned interim analysis.

~~(f)~~(d)See Note 2B2C.


Additional information about the intangible asset that was impaired during 2022 (impairment recorded in Other (income)/deductions–net) follows:
	Fair Value(a)								Nine Months Ended October 2, 2022
(MILLIONS)	Amount		Level 1		Level 2		Level 3		Impairment
Intangible asset––IPR&D(b)	$	—	$	—	$	—	$	—	$	200

(a)The fair value amount is presented as of the date of impairment, as this asset is not measured at fair value on a recurring basis. See also Note 1F in our 2021 Form 10-K.

~~Note 5. Tax Matters~~

~~A. Taxes on Income from Continuing Operations~~

Our effective tax rate for continuing operations was (4.2)% for the third quarter of 2021, compared to (60.9)% for the third quarter of 2020, and was 7.5% for the first nine months of 2021, compared to 6.7% for the first nine months of 2020.

The negative effective tax rate for the third quarter of 2021 was primarily a result of certain initiatives executed in the third quarter of 2021 associated with our investment in the Consumer Healthcare JV with GSK based on estimates and assumptions

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~~that we believe~~(b)Reflects an intangible asset written down to ~~be reasonable. The negative~~fair value in 2022. Fair value was determined using the income approach, specifically the multi-period excess earnings method, also known as the discounted cash flow method. We started with a forecast of all the expected net cash flows for the asset and then applied an asset-specific discount rate to arrive at a net present value amount. Some of the more significant estimates and assumptions inherent in this approach include: the amount and timing of the projected net cash flows, which includes the expected impact of competitive, legal and/or regulatory forces on the product; the discount rate, which seeks to reflect the various risks inherent in the projected cash flows; and the tax rate, which seeks to incorporate the geographic diversity of the projected cash flows.

Note 5. Tax Matters

A. Taxes on Income from Continuing Operations

Our effective tax rate for continuing operations was 4.0% for the third quarter of ~~2020~~2022, compared to (4.2)% for the third quarter of 2021, and was ~~primarily a result of benefits associated with certain intangible asset impairments (see~~ ~~Note 4(e)). The increase in the effective tax rate~~10.5% for the first nine months of ~~2021,~~2022, compared to 7.8% for the first nine months of ~~2020, was~~2021. The higher effective tax rates for the third quarter and first nine months of 2022, compared to the third quarter and first nine months of 2021, were mainly due to the ~~change in the jurisdictional mix of earnings primarily related to Comirnaty and the~~ non-recurrence of ~~benefits associated with certain intangible asset impairments, partially offset by~~ certain initiatives executed in the third quarter of 2021 associated with our investment in the Consumer Healthcare JV with ~~GSK.~~GSK, partially offset by tax benefits in the third quarter of 2022 related to global income tax resolutions in multiple tax jurisdictions spanning multiple tax years that included the closing of U.S. IRS audits covering five tax years.

We elected, with the filing of our 2018 U.S. Federal Consolidated Income Tax Return, to pay our initial estimated $15 billion repatriation tax liability on accumulated post-1986 foreign earnings over eight years through 2026. The ~~third~~fourth annual installment of this liability was paid by its April ~~15, 2021~~18, 2022 due date. The ~~fourth~~fifth annual installment is due April ~~15, 2022~~18, 2023 and is reported in current Income taxes payableas of October ~~3, 2021.~~ 2, 2022. The remaining liability is reported in noncurrent Other taxes payable. Our obligations may vary as a result of changes in our uncertain tax positions and/or availability of attributes such as foreign tax and other credit carryforwards.

B. Tax Contingencies

We are subject to income tax in many jurisdictions, and a certain degree of estimation is required in recording the assets and liabilities related to income taxes. All of our tax positions are subject to audit by the local taxing authorities in each tax jurisdiction. These tax audits can involve complex issues, interpretations and judgments and the resolution of matters may span multiple years, particularly if subject to negotiation or litigation.

The U.S. is one of our major tax jurisdictions, and we are regularly audited by the IRS. During the third quarter of 2022, Pfizer reached resolution of disputed issues at the IRS Independent Office of Appeals, thereby settling all issues related to U.S. tax returns of Pfizer for the years 2011-2015. With respect to Pfizer, ~~the IRS has issued Revenue Agent’s Reports (RARs) for~~ tax ~~years 2011-2013 and 2014-2015. We are not in agreement with the RARs and are currently appealing certain disputed issues. Tax~~ years 2016-2018 are ~~currently~~ under audit. Tax years ~~2019-2021~~2019-2022 are open but not under audit. All other tax years are closed. In addition to the open audit years in the U.S., we have open audit years in certain major international tax jurisdictions dating back to 2011.

For additional information, see Note 5D in our ~~2020~~2021 Form 10-K.

~~C. Tax Provision/(Benefit) on Other Comprehensive Income/(Loss)~~

Components of Tax provision/(benefit) on other comprehensive income/(loss) include:
Three Months Ended Nine Months Ended
(MILLIONS) October 3,
2021 September 27,
2020 October 3,
2021 September 27,
2020
Foreign currency translation adjustments, net(a)
$ (32) $ 10 $ (30) $ (167)
Unrealized holding gains/(losses) on derivative financial instruments, net 21 (43) 28 (126)
Reclassification adjustments for (gains)/losses included in net income 13 7 48 (13)
34 (37) 76 (139)
Unrealized holding gains/(losses) on available-for-sale securities, net (33) 30 (16) 29
Reclassification adjustments for (gains)/losses included in net income 1 (11) (22) (3)
(32) 19 (37) 26
Reclassification adjustments related to amortization of prior service costs and other, net (22) (11) (39) (32)
Reclassification adjustments related to curtailments of prior service costs and other, net (14) — (14) —
Other — (1) (1) 1
(36) (11) (54) (31)
Tax provision/(benefit) on other comprehensive income/(loss) $ (65) $ (19) $ (44) $ (311)

~~(a)Taxes are not provided for foreign currency translation adjustments relating to investments in international subsidiaries that we intend to hold indefinitely.~~

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(UNAUDITED)

C. Tax Provision/(Benefit) on Other Comprehensive Income/(Loss)


Components of Tax provision/(benefit) on other comprehensive income/(loss) include:
	Three Months Ended				Nine Months Ended
(MILLIONS)	October 2, 2022		October 3, 2021		October 2, 2022		October 3, 2021
Foreign currency translation adjustments, net(a)	$	20	$	(32)	$	(165)	$	(30)
Unrealized holding gains/(losses) on derivative financial instruments, net	47		21		177		28
Reclassification adjustments for (gains)/losses included in net income	(72)		13		(97)		48
	(25)		34		80		76
Unrealized holding gains/(losses) on available-for-sale securities, net	(97)		(33)		(175)		(16)
Reclassification adjustments for (gains)/losses included in net income	76		1		137		(22)
	(21)		(32)		(38)		(37)






Reclassification adjustments related to amortization of prior service costs and other, net	(7)		(22)		(23)		(39)
Reclassification adjustments related to curtailments of prior service costs and other, net	—		(14)		(3)		(15)

	(8)		(36)		(26)		(54)
Tax provision/(benefit) on other comprehensive income/(loss)	$	(33)	$	(65)	$	(149)	$	(44)

(a)Taxes are not provided for foreign currency translation adjustments relating to investments in international subsidiaries that we intend to hold indefinitely.

Note 6. Accumulated Other Comprehensive Loss, Excluding Noncontrolling Interests


The following summarizes the changes, net of tax, in Accumulated other comprehensive loss:	The following summarizes the changes, net of tax, in Accumulated other comprehensive loss:										The following summarizes the changes, net of tax, in Accumulated other comprehensive loss:
		Net Unrealized Gains/(Losses)						Benefit Plans							Net Unrealized Gains/(Losses)						Benefit Plans
(MILLIONS)	(MILLIONS)	Foreign Currency Translation Adjustments		Derivative Financial Instruments		Available-For-Sale Securities			Prior Service (Costs)/Credits and Other			Accumulated Other Comprehensive Income/(Loss)		(MILLIONS)	Foreign Currency Translation Adjustments(a)		Derivative Financial Instruments		Available-For-Sale Securities		Prior Service (Costs)/Credits and Other		Accumulated Other Comprehensive Income/(Loss)
Balance, December 31, 2020(a)		$	(5,450)	$	(428)	$	116		$	452		$	(5,310)
Balance, December 31, 2021														Balance, December 31, 2021	$	(6,172)	$	119	$	(220)	$	377	$	(5,897)
Other comprehensive income/(loss)~~(b)~~	Other comprehensive income/(loss)~~(b)~~	(336)		388		(262)			(127)			(338)		Other comprehensive income/(loss)~~(b)~~	(2,373)		391		(265)		(81)		(2,328)

Balance, October 3, 2021		$	(5,787)	$	(40)	$	(146)		$	325		$	(5,649)
Balance, October 2, 2022														Balance, October 2, 2022	$	(8,545)	$	509	$	(485)	$	296	$	(8,225)

(a)~~Amounts include the impact of a change in accounting principle. See~~ ~~Note 1C.~~

~~(b)~~Amounts do not include foreign currency translation adjustments attributable to noncontrolling interests. Foreign currency translation adjustments include net losses related to our equity method investment in Haleon/the Consumer Healthcare JV (see Note 2B2C) and ~~net gains related to~~ the impact of our net investment hedging program.

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(UNAUDITED)

Note 7. Financial Instruments

A. Fair Value Measurements

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis and Fair Value Hierarchy, using a Market Approach:


		October 3, 2021						December 31, 2020							October 2, 2022						December 31, 2021
(MILLIONS)	(MILLIONS)	Total		Level 1		Level 2		Total		Level 1		Level 2		(MILLIONS)	Total		Level 1		Level 2		Total		Level 1		Level 2
Financial assets:	Financial assets:													Financial assets:
Short-term investments	Short-term investments													Short-term investments
Classified as equity securities with readily determinable fair values:
Equity securities with readily determinable fair values:														Equity securities with readily determinable fair values:
Money market funds	Money market funds	$	2,367	$	—	$	2,367	$	567	$	—	$	567	Money market funds	$	12,154	$	—	$	12,154	$	5,365	$	—	$	5,365

Classified as available-for-sale debt securities:
Available-for-sale debt securities:														Available-for-sale debt securities:
Government and agency—non-U.S.	Government and agency—non-U.S.	16,826		—		16,826		7,719		—		7,719		Government and agency—non-U.S.	15,885		—		15,885		17,318		—		17,318
Government and agency—U.S.	Government and agency—U.S.	4,881		—		4,881		982		—		982		Government and agency—U.S.	2,931		—		2,931		4,050		—		4,050
Corporate and other	Corporate and other	1,181		—		1,181		1,008		—		1,008		Corporate and other	1,361		—		1,361		647		—		647
		22,887		—		22,887		9,709		—		9,709			20,176		—		20,176		22,014		—		22,014
Total short-term investments	Total short-term investments	25,254		—		25,254		10,276		—		10,276		Total short-term investments	32,330		—		32,330		27,379		—		27,379
Other current assets	Other current assets													Other current assets
Derivative assets:	Derivative assets:													Derivative assets:
Interest rate contracts	Interest rate contracts	6		—		6		18		—		18		Interest rate contracts	9		—		9		4		—		4
Foreign exchange contracts	Foreign exchange contracts	478		—		478		234		—		234		Foreign exchange contracts	1,950		—		1,950		704		—		704
Total other current assets	Total other current assets	484		—		484		251		—		251		Total other current assets	1,959		—		1,959		709		—		709
Long-term investments	Long-term investments													Long-term investments
Classified as equity securities with readily determinable fair values(a)		4,165		4,141		25		2,809		2,776		32
Equity securities with readily determinable fair values(a)														Equity securities with readily determinable fair values(a)	2,972		2,960		12		3,876		3,849		27

Classified as available-for-sale debt securities:
Available-for-sale debt securities:														Available-for-sale debt securities:
Government and agency—non-U.S.	Government and agency—non-U.S.	425		—		425		6		—		6		Government and agency—non-U.S.	285		—		285		465		—		465
Government and agency—U.S.	Government and agency—U.S.	9		—		9		121		—		121		Government and agency—U.S.	—		—		—		6		—		6
Corporate and other	Corporate and other	—		—		—		—		—		—		Corporate and other	73		—		73		50		—		50
		434		—		434		128		—		128			358		—		358		521		—		521
Total long-term investments	Total long-term investments	4,600		4,141		459		2,936		2,776		160		Total long-term investments	3,330		2,960		370		4,397		3,849		548
Other noncurrent assets	Other noncurrent assets													Other noncurrent assets
Derivative assets:	Derivative assets:													Derivative assets:
Interest rate contracts	Interest rate contracts	18		—		18		117		—		117		Interest rate contracts	—		—		—		16		—		16
Foreign exchange contracts	Foreign exchange contracts	219		—		219		5		—		5		Foreign exchange contracts	812		—		812		242		—		242
Total derivative assets	Total derivative assets	236		—		236		122		—		122		Total derivative assets	812		—		812		259		—		259
Insurance contracts(b)	Insurance contracts(b)	762		—		762		693		—		693		Insurance contracts(b)	631		—		631		808		—		808
Total other noncurrent assets	Total other noncurrent assets	998		—		998		814		—		814		Total other noncurrent assets	1,444		—		1,444		1,067		—		1,067
Total assets	Total assets	$	31,336	$	4,141	$	27,195	$	14,278	$	2,776	$	11,501	Total assets	$	39,063	$	2,960	$	36,103	$	33,552	$	3,849	$	29,703

Financial liabilities:	Financial liabilities:													Financial liabilities:
Other current liabilities	Other current liabilities													Other current liabilities
Derivative liabilities:	Derivative liabilities:													Derivative liabilities:

Foreign exchange contracts	Foreign exchange contracts	$	346	$	—	$	346	$	501	$	—	$	501	Foreign exchange contracts	$	295	$	—	$	295	$	476	$	—	$	476
Total other current liabilities	Total other current liabilities	346		—		346		501		—		501		Total other current liabilities	295		—		295		476		—		476
Other noncurrent liabilities	Other noncurrent liabilities													Other noncurrent liabilities
Derivative liabilities:	Derivative liabilities:													Derivative liabilities:

Interest rate contracts														Interest rate contracts	330		—		330		—		—		—
Foreign exchange contracts	Foreign exchange contracts	477		—		477		599		—		599		Foreign exchange contracts	1,153		—		1,153		405		—		405
Total other noncurrent liabilities	Total other noncurrent liabilities	477		—		477		599		—		599		Total other noncurrent liabilities	1,482		—		1,482		405		—		405
Total liabilities	Total liabilities	$	823	$	—	$	823	$	1,100	$	—	$	1,100	Total liabilities	$	1,777	$	—	$	1,777	$	881	$	—	$	881

(a)Long-term equity securities of ~~$191~~$139 million as of October ~~3, 2021~~2, 2022 and ~~$190~~$194 million as of December 31, ~~2020~~2021 were held in restricted trusts for U.S. non-qualified employee benefit plans.

(b)Includes life insurance policies held in restricted trusts for U.S. non-qualified employee benefit plans. The underlying invested assets in these contracts are marketable securities, which are carried at fair value, with changes in fair value recognized in Other (income)/deductions—net (see Note 4).

Financial Assets and Liabilities Not Measured at Fair Value on a Recurring Basis––The carrying value of Long-term debt, excluding the current portion was $33 billion as of October 2, 2022 and $36 billion as of December 31, 2021. The estimated fair value of such debt, using a market approach and Level 2 inputs, was $29 billion as of October 2, 2022 and $42 billion as of December 31, 2021.

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

~~Financial Assets and Liabilities Not Measured at Fair Value on a Recurring Basis~~

Carrying values and estimated fair values using a market approach:
October 3, 2021 December 31, 2020
(MILLIONS) Carrying Value Estimated Fair Value at Level 2 Carrying Value Estimated Fair Value at Level 2
Financial Liabilities
Long-term debt, excluding the current portion $ 36,250 $ 42,228 $ 37,133 $ 45,533

The differences between the estimated fair values and carrying values of held-to-maturity debt securities, private equity securities, long-term receivables and short-term borrowings not measured at fair value on a recurring basis were not significant as of October ~~3, 2021~~2, 2022 and December 31, ~~2020.~~2021. The fair value measurements of our held-to-maturity debt securities and short-term borrowings are based on Level 2 inputs. The fair value measurements of our long-term receivables and private equity securities are based on Level 3 inputs.

B. Investments

Total Short-Term, Long-Term and Equity-Method Investments


The following summarizes our investments by classification type:	The following summarizes our investments by classification type:					The following summarizes our investments by classification type:
(MILLIONS)	(MILLIONS)	October 3, 2021		December 31, 2020		(MILLIONS)	October 2, 2022		December 31, 2021
Short-term investments	Short-term investments					Short-term investments
Equity securities with readily determinable fair values(a)	Equity securities with readily determinable fair values(a)	$	2,367	$	567	Equity securities with readily determinable fair values(a)	$	12,154	$	5,365
Available-for-sale debt securities	Available-for-sale debt securities	22,887		9,709		Available-for-sale debt securities	20,176		22,014
Held-to-maturity debt securities	Held-to-maturity debt securities	2,476		161		Held-to-maturity debt securities	2,495		1,746
Total Short-term investments	Total Short-term investments	$	27,730	$	10,437	Total Short-term investments	$	34,825	$	29,125

Long-term investments	Long-term investments					Long-term investments
Equity securities with readily determinable fair values(b)	Equity securities with readily determinable fair values(b)	$	4,165	$	2,809	Equity securities with readily determinable fair values(b)	$	2,972	$	3,876

Available-for-sale debt securities	Available-for-sale debt securities	434		128		Available-for-sale debt securities	358		521
Held-to-maturity debt securities	Held-to-maturity debt securities	32		37		Held-to-maturity debt securities	36		34
Private equity securities at cost(b)	Private equity securities at cost(b)	616		432		Private equity securities at cost(b)	696		623
Total Long-term investments	Total Long-term investments	$	5,248	$	3,406	Total Long-term investments	$	4,062	$	5,054
Equity-method investments	Equity-method investments	16,349		16,856		Equity-method investments	9,826		16,472
Total long-term investments and equity-method investments	Total long-term investments and equity-method investments	$	21,596	$	20,262	Total long-term investments and equity-method investments	$	13,888	$	21,526
Held-to-maturity cash equivalents	Held-to-maturity cash equivalents	$	467	$	89	Held-to-maturity cash equivalents	$	969	$	268

(a)~~As of October 3, 2021 and December 31, 2020, includes~~Includes money market funds primarily invested in U.S. Treasury and government debt.

(b)Represent investments in the life sciences sector.

Debt Securities


At October 3, 2021, our debt investment portfolio consisted of debt securities issued across diverse governments, corporate and financial institutions, which are investment-grade. The contractual or estimated maturities, are as follows:
At October 2, 2022, our investment portfolio consisted of debt securities issued across diverse governments, corporate and financial institutions, which are investment-grade. The contractual or estimated maturities, are as follows:																						At October 2, 2022, our investment portfolio consisted of debt securities issued across diverse governments, corporate and financial institutions, which are investment-grade. The contractual or estimated maturities, are as follows:
		October 3, 2021														December 31, 2020											October 2, 2022														December 31, 2021
				Gross Unrealized						Maturities (in Years)								Gross Unrealized											Gross Unrealized						Maturities (in Years)								Gross Unrealized
(MILLIONS)	(MILLIONS)	Amortized Cost		Gains		Losses		Fair Value		Within 1		Over 1 to 5		Over 5		Amortized Cost		Gains		Losses				Fair Value		(MILLIONS)	Amortized Cost		Gains		Losses		Fair Value		Within 1		Over 1 to 5		Over 5		Amortized Cost		Gains		Losses		Fair Value
Available-for-sale debt securities	Available-for-sale debt securities																									Available-for-sale debt securities
Government and agency––non-U.S.	Government and agency––non-U.S.	$	17,414	$	16	$	(179)	$	17,251	$	16,826	$	425	$	—	$	7,593	$	136	$	(4)			$	7,725	Government and agency––non-U.S.	$	16,711	$	26	$	(567)	$	16,169	$	15,885	$	285	$	—	$	18,032	$	13	$	(263)	$	17,783
Government and agency––U.S.	Government and agency––U.S.	4,890		—		(1)		4,889		4,881		9		—		1,104		—		(1)				1,103		Government and agency––U.S.	2,932		—		(1)		2,931		2,931		—		—		4,056		—		(1)		4,055
Corporate and other	Corporate and other	1,185		—		(4)		1,181		1,181		—		—		1,006		2		—				1,008		Corporate and other	1,446		—		(12)		1,434		1,361		73		—		698		—		(1)		697
Held-to-maturity debt securities	Held-to-maturity debt securities																						Held-to-maturity debt securities
Time deposits and other	Time deposits and other	986		—		—		986		959		16		11		283		—		—				283		Time deposits and other	1,557		—		—		1,557		1,525		20		12		947		—		—		947
Government and agency––non-U.S.	Government and agency––non-U.S.	1,988		—		—		1,988		1,984		4		1		5		—		—				5		Government and agency––non-U.S.	1,943		—		—		1,943		1,939		3		1		1,102		—		—		1,102
Total debt securities	Total debt securities	$	26,463	$	16	$	(183)	$	26,297	$	25,830	$	454	$	12	$	9,991	$	138	$	(5)			$	10,124	Total debt securities	$	24,589	$	26	$	(580)	$	24,034	$	23,641	$	381	$	13	$	24,835	$	14	$	(265)	$	24,584

Any expected credit losses to these portfolios would be immaterial to our financial statements.

2119

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Equity Securities


The following presents the calculation of the portion of unrealized (gains)/losses that relates to equity securities, excluding equity-method investments, held at the reporting date:	The following presents the calculation of the portion of unrealized (gains)/losses that relates to equity securities, excluding equity-method investments, held at the reporting date:									The following presents the calculation of the portion of unrealized (gains)/losses that relates to equity securities, excluding equity-method investments, held at the reporting date:
		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
(MILLIONS)	(MILLIONS)	October 3, 2021		September 27, 2020		October 3, 2021		September 27, 2020		(MILLIONS)	October 2, 2022		October 3, 2021		October 2, 2022		October 3, 2021
Net (gains)/losses recognized during the period on equity securities(a)		$	(400)	$	70	$	(1,601)	$	(408)
Net (gains)/losses recognized during the period on equity securities(a)										Net (gains)/losses recognized during the period on equity securities(a)	$	112	$	(400)	$	1,353	$	(1,601)
Less: Net (gains)/losses recognized during the period on equity securities sold during the period	Less: Net (gains)/losses recognized during the period on equity securities sold during the period	(78)		2		(83)		(16)		Less: Net (gains)/losses recognized during the period on equity securities sold during the period	(5)		(78)		(84)		(83)
Net unrealized (gains)/losses during the reporting period on equity securities still held at the reporting date(b)	Net unrealized (gains)/losses during the reporting period on equity securities still held at the reporting date(b)	$	(322)	$	68	$	(1,518)	$	(391)	Net unrealized (gains)/losses during the reporting period on equity securities still held at the reporting date(b)	$	116	$	(322)	$	1,436	$	(1,518)

(a)Reported in Other (income)/deductions––net. See Note 4.

(b)Included in net unrealized ~~gains~~(gains)/losses are observable price changes on equity securities without readily determinable fair values. As of October ~~3, 2021,~~2, 2022, there were cumulative impairments and downward adjustments of ~~$95~~$148 million and upward adjustments of ~~$151~~$201 million. Impairments, downward and upward adjustments were not significant in the third quarter and first nine months of ~~2021~~2022 and ~~2020.~~2021.

C. Short-Term Borrowings


Short-term borrowings include:	Short-term borrowings include:					Short-term borrowings include:
(MILLIONS)	(MILLIONS)	October 3, 2021		December 31, 2020		(MILLIONS)	October 2, 2022		December 31, 2021
Commercial paper		$	100	$	556

Current portion of long-term debt, principal amount	Current portion of long-term debt, principal amount	2,664		2,004		Current portion of long-term debt, principal amount	$	2,550	$	1,636
Other short-term borrowings, principal amount(a)	Other short-term borrowings, principal amount(a)	866		145		Other short-term borrowings, principal amount(a)	1,474		605
Total short-term borrowings, principal amount	Total short-term borrowings, principal amount	3,630		2,705		Total short-term borrowings, principal amount	4,024		2,241
Net fair value adjustments related to hedging and purchase accounting						Net fair value adjustments related to hedging and purchase accounting	16		—

Net unamortized discounts, premiums and debt issuance costs		(1)		(2)
Total Short-term borrowings, including current portion of long-term debt, carried at historical proceeds, as adjusted	Total Short-term borrowings, including current portion of long-term debt, carried at historical proceeds, as adjusted	$	3,629	$	2,703	Total Short-term borrowings, including current portion of long-term debt, carried at historical proceeds, as adjusted	$	4,040	$	2,241

(a)~~Includes~~Primarily includes cash collateral. SeeNote 7F.

D. Long-Term Debt

~~New Issuance~~

~~In the third quarter of 2021, we issued the following senior unsecured notes at an effective interest rate of 1.79%:~~

~~(MILLIONS)~~

~~Principal~~

~~Interest Rate~~

~~Maturity Date~~

As of October 3,
2021

~~1.750%(a)~~

~~August 18, 2031~~

~~1,000~~

~~(a)The notes may be redeemed by us at any time, in whole, or in part, at a redemption price plus accrued and unpaid interest.~~


The following summarizes the aggregate principal amount of our senior unsecured long-term debt, and adjustments to report our aggregate long-term debt:	The following summarizes the aggregate principal amount of our senior unsecured long-term debt, and adjustments to report our aggregate long-term debt:					The following summarizes the aggregate principal amount of our senior unsecured long-term debt, and adjustments to report our aggregate long-term debt:
(MILLIONS)	(MILLIONS)	October 3, 2021		December 31, 2020		(MILLIONS)	October 2, 2022		December 31, 2021
Total long-term debt, principal amount	Total long-term debt, principal amount	$	34,975	$	35,774	Total long-term debt, principal amount	$	31,831	$	34,948
Net fair value adjustments related to hedging and purchase accounting	Net fair value adjustments related to hedging and purchase accounting	1,470		1,562		Net fair value adjustments related to hedging and purchase accounting	976		1,438
Net unamortized discounts, premiums and debt issuance costs	Net unamortized discounts, premiums and debt issuance costs	(200)		(207)		Net unamortized discounts, premiums and debt issuance costs	(178)		(195)
Other long-term debt	Other long-term debt	4		4		Other long-term debt	—		4
Total long-term debt, carried at historical proceeds, as adjusted	Total long-term debt, carried at historical proceeds, as adjusted	$	36,250	$	37,133	Total long-term debt, carried at historical proceeds, as adjusted	$	32,629	$	36,195
Current portion of long-term debt, carried at historical proceeds, as adjusted (not included above)		$	2,663	$	2,002

E. Derivative Financial Instruments and Hedging Activities

Foreign Exchange ~~Risk~~

Risk––A significant portion of our revenues, earnings and net investments in foreign affiliates is exposed to changes in foreign exchange rates. WeWhere foreign exchange risk is not offset by other exposures, we manage our foreign exchange risk principally through the use of derivative financial instruments and

~~PFIZER INC. AND SUBSIDIARY COMPANIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

foreign currency debt. These financial instruments serve to mitigate the impact on net income as a result of remeasurement into another currency, or against the impact of translation into U.S. dollars of certain foreign exchange-denominated transactions.

The derivative financial instruments primarily hedge or offset exposures in the euro, U.K. pound, Japanese yen, and Canadian ~~dollar. We hedge~~dollar, and include a portion of our forecasted foreign exchange-denominated intercompany inventory sales ~~denominated in euro, Japanese yen, Canadian dollar, Chinese renminbi, U.K. pound and Australian dollar for~~hedged up to two years. We may seek to protect against possible declines in the reported net investments of our foreign business entities.

Interest Rate ~~Risk~~

Risk––Our interest-bearing investments and borrowings are subject to interest rate risk. Depending on market conditions, we may change the profile of our outstanding debt or investments by entering into derivative financial instruments like interest rate swaps, either to hedge or offset the exposure to changes in the fair value of hedged items with fixed interest rates, or to convert variable rate debt or investments to fixed rates. The derivative financial instruments primarily hedge U.S. dollar fixed-rate debt.

The following summarizes the fair value of the derivative financial instruments and notional amounts (including those reported as part of discontinued operations):
October 3, 2021 December 31, 2020
Fair Value Fair Value
(MILLIONS) Notional Asset Liability Notional Asset Liability
Derivatives designated as hedging instruments:
Foreign exchange contracts(a)
$ 27,798 $ 568 $ 743 $ 24,369 $ 145 $ 1,005
Interest rate contracts 1,250 24 — 1,950 135 —
592 743 280 1,005
Derivatives not designated as hedging instruments:
Foreign exchange contracts $ 24,150 129 81 $ 15,063 94 95
Total $ 720 $ 823 $ 373 $ 1,100

~~(a)The notional amount of outstanding foreign exchange contracts hedging our intercompany forecasted inventory sales was $4.9 billion as of October 3, 2021 and $5.0 billion as of December 31, 2020.~~

The following summarizes information about the gains/(losses) incurred to hedge or offset operational foreign exchange or interest rate risk exposures (including those reported as part of discontinued operations):

Gains/(Losses)
Recognized in OID(a)
Gains/(Losses)
Recognized in OCI(a)
Gains/(Losses)
Reclassified from
OCI into OID and COS(a)
Three Months Ended
(MILLIONS) Oct. 3, 2021 Sept. 27, 2020 Oct. 3, 2021 Sept. 27, 2020 Oct. 3, 2021 Sept. 27, 2020
Derivative Financial Instruments in Cash Flow Hedge Relationships:
Foreign exchange contracts(b)
$ — $ — $ 204 $ (379) $ (59) $ (149)
Amount excluded from effectiveness testing and amortized into earnings(c)
— — 10 7 10 7
Derivative Financial Instruments in Fair Value Hedge Relationships:
Interest rate contracts (5) (9) — — — —
Hedged item 5 9 — — — —
Derivative Financial Instruments in Net Investment Hedge Relationships:
Foreign exchange contracts — — 177 (257) — —
The portion of foreign exchange contracts excluded from the assessment of hedge effectiveness(c)
— — 19 9 26 38
Non-Derivative Financial Instruments in Net Investment Hedge Relationships:(d)

Foreign currency short-term borrowings — — 25 — — —
Foreign currency long-term debt — — 19 (72) — —
Derivative Financial Instruments Not Designated as Hedges:
Foreign exchange contracts (74) 255 — — — —
All other net(c)
— — — — — —
$ (74) $ 255 $ 453 $ (692) $ (21) $ (104)

2320

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Gains/(Losses)
Recognized in OID(a)
Gains/(Losses)
Recognized in OCI(a)
Gains/(Losses)
Reclassified from
OCI into OID and COS(a)
Nine Months Ended
(MILLIONS) Oct. 3, 2021 Sept. 27, 2020 Oct. 3, 2021 Sept. 27, 2020 Oct. 3, 2021 Sept. 27, 2020
Derivative Financial Instruments in Cash Flow Hedge Relationships:
Foreign exchange contracts(b)
$ — $ — $ 147 $ (721) $ (314) $ (23)
Amount excluded from effectiveness testing and amortized into earnings(c)
— — 31 49 28 48
Derivative Financial Instruments in Fair Value Hedge Relationships:
Interest rate contracts (6) 383 — — — —
Hedged item 6 (383) — — — —
Derivative Financial Instruments in Net Investment Hedge Relationships:
Foreign exchange contracts — — 332 (17) — —
The portion of foreign exchange contracts excluded from the assessment of hedge effectiveness(c)
— — 54 185 82 122
Non-Derivative Financial Instruments in Net Investment Hedge Relationships:(d)
Foreign currency short-term borrowings — — 52 8 — —
Foreign currency long-term debt — — 66 (69) — —
Derivative Financial Instruments Not Designated as Hedges:
Foreign exchange contracts (97) 205 — — — —
All other net(c)
— — 1 12 1 (1)
$ (97) $ 205 $ 683 $ (553) $ (204) $ 147


The following summarizes the fair value of the derivative financial instruments and notional amounts (including those reported as part of discontinued operations):
	October 2, 2022						December 31, 2021
			Fair Value						Fair Value
(MILLIONS)	Notional		Asset		Liability		Notional		Asset		Liability
Derivatives designated as hedging instruments:
Foreign exchange contracts(a)	$	33,274	$	2,479	$	1,175	$	29,576	$	787	$	717
Interest rate contracts	2,250		9		330		2,250		21		—
			2,488		1,505				808		717
Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	26,426	283		273		$	21,419	160		164
Total			$	2,771	$	1,777			$	968	$	881

(a)The notional amount of outstanding foreign exchange contracts hedging our intercompany forecasted inventory sales was $4.5 billion as of October 2, 2022 and $4.8 billion as of December 31, 2021.


The following summarizes information about the gains/(losses) incurred to hedge or offset operational foreign exchange or interest rate risk exposures (including those reported as part of discontinued operations):
	Gains/(Losses) Recognized in OID(a)				Gains/(Losses) Recognized in OCI(a)				Gains/(Losses) Reclassified from OCI into OID and COS(a)
	Three Months Ended
(MILLIONS)	October 2, 2022		October 3, 2021		October 2, 2022		October 3, 2021		October 2, 2022		October 3, 2021
Derivative Financial Instruments in Cash Flow Hedge Relationships:
Foreign exchange contracts(b)	$	—	$	—	$	528	$	204	$	558	$	(59)
Amount excluded from effectiveness testing and amortized into earnings(c)	—		—		61		10		57		10
Derivative Financial Instruments in Fair Value Hedge Relationships:
Interest rate contracts	(124)		(5)		—		—		—		—
Hedged item	124		5		—		—		—		—


Derivative Financial Instruments in Net Investment Hedge Relationships:
Foreign exchange contracts	—		—		680		177		—		—
Amount excluded from effectiveness testing and amortized into earnings(c)	—		—		78		19		32		26
Non-Derivative Financial Instruments in Net Investment Hedge Relationships:(d)
Foreign currency short-term borrowings	—		—		—		25		—		—
Foreign currency long-term debt	—		—		49		19		—		—
Derivative Financial Instruments Not Designated as Hedges:
Foreign exchange contracts	(420)		(74)		—		—		—		—
All other net(c)	—		—		—		—		—		—
	$	(420)	$	(74)	$	1,396	$	453	$	647	$	(21)

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)



	Gains/(Losses) Recognized in OID(a)				Gains/(Losses) Recognized in OCI(a)				Gains/(Losses) Reclassified from OCI into OID and COS(a)
	Nine Months Ended
(MILLIONS)	October 2, 2022		October 3, 2021		October 2, 2022		October 3, 2021		October 2, 2022		October 3, 2021
Derivative Financial Instruments in Cash Flow Hedge Relationships:
Foreign exchange contracts(b)	$	—	$	—	$	1,339	$	147	$	872	$	(314)
Amount excluded from effectiveness testing and amortized into earnings(c)	—		—		105		31		100		28
Derivative Financial Instruments in Fair Value Hedge Relationships:
Interest rate contracts	(346)		(6)		—		—		—		—
Hedged item	346		6		—		—		—		—


Derivative Financial Instruments in Net Investment Hedge Relationships:
Foreign exchange contracts	—		—		1,613		332		—		—
Amount excluded from effectiveness testing and amortized into earnings(c)	—		—		63		54		95		82
Non-Derivative Financial Instruments in Net Investment Hedge Relationships:(d)
Foreign currency short-term borrowings	—		—		26		52		—		—
Foreign currency long-term debt	—		—		119		66		—		—
Derivative Financial Instruments Not Designated as Hedges:
Foreign exchange contracts	(832)		(97)		—		—		—		—
All other net(c)	—		—		—		1		—		1
	$	(832)	$	(97)	$	3,264	$	683	$	1,068	$	(204)

(a)OID = Other (income)/deductions—net, included in Other (income)/deductions—net in the condensed consolidated statements of income. COS = Cost of Sales, included in Cost of sales in the condensed consolidated statements of income. OCI = Other comprehensive income/(loss), included in the condensed consolidated statements of comprehensive income.

(b)The amounts reclassified from OCI into COS were:

•a net gain of $125 million in the third quarter of 2022;

•a net gain of $227 million in the first nine months of 2022;

•a net loss of $18 million in the third quarter of 2021; and

•a net loss of $94 million in the first nine months of ~~2021;~~

•~~a net gain of $34 million in the third quarter of 2020; and~~

•~~a net gain of $184 million in the first nine months of 2020.~~2021.

The remaining amounts were reclassified from OCI into OID. Based on quarter-end foreign exchange rates that are subject to change, we expect to reclassify a pre-tax gain of ~~$202 million~~$1 billion within the next 12 months into income. The maximum length of time over which we are hedging our exposure to the variability in future foreign exchange cash flows is approximately 2221 years and relates to foreign currency debt.

(c)The amounts reclassified from OCI were reclassified into OID.

(d)Short-term borrowings and long-term debt include foreign currency borrowings, which are used in net investment hedges. The related short-term ~~borrowings~~borrowings’ carrying value as of ~~October 3,~~December 31, 2021 was ~~$1.2~~$1.1 billion. The related long-term debt carrying values as of October ~~3, 2021~~2, 2022 and December 31, ~~2020~~2021 were ~~$862~~$726 million and ~~$2.1 billion,~~$844 million, respectively.


The following summarizes cumulative basis adjustments for fair value hedges to our long-term debt:
The following summarizes cumulative basis adjustments to our debt in fair value hedges:														The following summarizes cumulative basis adjustments to our debt in fair value hedges:
		October 3, 2021						December 31, 2020							October 2, 2022						December 31, 2021
				Cumulative Amount of Fair Value Hedging Adjustment Increase/(Decrease) to Carrying Amount						Cumulative Amount of Fair Value Hedging Adjustment Increase/(Decrease) to Carrying Amount							Cumulative Amount of Fair Value Hedging Adjustment Increase/(Decrease) to Carrying Amount						Cumulative Amount of Fair Value Hedging Adjustment Increase/(Decrease) to Carrying Amount
(MILLIONS)	(MILLIONS)	Carrying Amount of Hedged Assets/Liabilities(a)		Active Hedging Relationships		Discontinued Hedging Relationships		Carrying Amount of Hedged Assets/Liabilities(a)		Active Hedging Relationships		Discontinued Hedging Relationships		(MILLIONS)	Carrying Amount of Hedged Assets/Liabilities(a)		Active Hedging Relationships		Discontinued Hedging Relationships		Carrying Amount of Hedged Assets/Liabilities(a)		Active Hedging Relationships		Discontinued Hedging Relationships

Short-term borrowings, including current portion of long-term debt														Short-term borrowings, including current portion of long-term debt	$	—	$	—	$	16	$	—	$	—	$	—

Long-term debt	Long-term debt	$	1,241	$	18	$	1,178	$	2,016	$	117	$	1,149	Long-term debt	$	2,235	$	(330)	$	1,061	$	2,233	$	16	$	1,154

(a)Carrying amounts exclude the cumulative amount of fair value hedging adjustments.

2422

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

F. Credit Risk

A significant portion of our trade accounts receivable balances are due from wholesalers and governments. For additional information on our trade accounts receivables with significant customers, see Note ~~13B~~13C below and Note ~~17B~~17C in our ~~2020~~2021 Form 10-K.

As of October ~~3, 2021,~~2, 2022, the largest investment exposures in our portfolio represent primarily sovereign debt instruments issued by Germany, the U.S., ~~Canada, Germany,~~the Netherlands, Japan, the U.K., France, ~~Australia, Sweden, Denmark, Switzerland,~~ and ~~Finland.~~

Canada, as well as money market funds primarily invested in U.S. Treasury and government debt.

With respect to our derivative financial instrument agreements with financial institutions, we do not expect to incur a significant loss from failure of any counterparty. Derivative financial instruments are executed under International Swaps and Derivatives Association ~~(ISDA)~~ master agreements with credit-support annexes that contain zero threshold provisions requiring collateral to be exchanged daily depending on levels of exposure. As a result, there are no significant concentrations of credit risk with any individual financial institution. As of October ~~3, 2021,~~2, 2022, the aggregate fair value of these derivative financial instruments that are in a net payable position was ~~$357~~$595 million, for which we have posted collateral of ~~$357~~$612 million with a corresponding amount reported in Short-term investments. As of October ~~3, 2021,~~2, 2022, the aggregate fair value of our derivative financial instruments that are in a net receivable position was ~~$246 million,~~$1.5 billion, for which we have received collateral of ~~$236 million~~$1.5 billion with a corresponding amount reported in Short-term borrowings, including current portion of long-term debt.

Note 8. Other Financial Information

A. Inventories


The following summarizes the components of Inventories:	The following summarizes the components of Inventories:					The following summarizes the components of Inventories:
(MILLIONS)	(MILLIONS)	October 3, 2021		December 31, 2020		(MILLIONS)	October 2, 2022		December 31, 2021
Finished goods	Finished goods	$	3,280	$	2,878	Finished goods	$	3,159	$	3,641
Work-in-process	Work-in-process	4,469		4,430		Work-in-process	4,540		4,424
Raw materials and supplies	Raw materials and supplies	891		738		Raw materials and supplies	1,813		994
Inventories(a)	Inventories(a)	$	8,640	$	8,046	Inventories(a)	$	9,513	$	9,059
Noncurrent inventories not included above(b)	Noncurrent inventories not included above(b)	$	935	$	890	Noncurrent inventories not included above(b)	$	3,327	$	939

(a)The ~~change~~increase from December 31, ~~2020~~2021 primarily reflects ~~increases~~higher inventory levels for ~~certain products, including inventory build for new product launches (primarily Comirnaty), supply recovery and network strategy,~~Paxlovid, partially offset by decreases due to net supply recovery and inventory build, and market demand.

(b)Included in Other noncurrent assets. The increase from December 31, 2021 is primarily due to strategic inventory build related to Paxlovid. There are no recoverability issues for these amounts.

B. Other Current Liabilities

Other current liabilities includes, among other things, amounts payable to BioNTech for the gross profit split for Comirnaty, which totaled ~~$7.8~~$4.5 billion as of October ~~3, 2021~~2, 2022 and ~~$25 million~~$9.7 billion as of December 31, ~~2020.~~2021.

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 9. Identifiable Intangible Assets

The following summarizes the components of Identifiable intangible assets:
October 3, 2021 December 31, 2020
(MILLIONS) Gross
Carrying
Amount Accumulated
Amortization Identifiable
Intangible
Assets, less
Accumulated
Amortization Gross
Carrying
Amount Accumulated
Amortization Identifiable
Intangible
Assets, less
Accumulated
Amortization
Finite-lived intangible assets
Developed technology rights(a)
$ 74,144 $ (53,472) $ 20,673 $ 73,545 $ (50,902) $ 22,643
Brands 922 (799) 123 922 (774) 148
Licensing agreements and other 2,284 (1,273) 1,011 2,292 (1,186) 1,106
77,350 (55,544) 21,807 76,759 (52,862) 23,896
Indefinite-lived intangible assets
Brands 827 827 827 827
IPR&D 3,100 3,100 3,175 3,175
Licensing agreements and other 573 573 573 573
4,500 4,500 4,575 4,575
Identifiable intangible assets(b)
$ 81,850 $ (55,544) $ 26,306 $ 81,334 $ (52,862) $ 28,471
A. Identifiable Intangible Assets


The following summarizes the components of Identifiable intangible assets:
	October 2, 2022						December 31, 2021
(MILLIONS)	Gross Carrying Amount		Accumulated Amortization		Identifiable Intangible Assets, less Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization		Identifiable Intangible Assets, less Accumulated Amortization
Finite-lived intangible assets
Developed technology rights	$	72,818	$	(55,309)	$	17,509	$	73,346	$	(53,732)	$	19,614
Brands	922		(832)		90		922		(807)		115
Licensing agreements and other	2,296		(1,373)		923		2,284		(1,299)		985

	76,036		(57,514)		18,522		76,552		(55,838)		20,714
Indefinite-lived intangible assets
Brands	827				827		827				827
IPR&D(a)	7,829				7,829		3,092				3,092
Licensing agreements and other(a)	972				972		513				513
	9,629				9,629		4,432				4,432
Identifiable intangible assets(a), (b)	$	85,665	$	(57,514)	$	28,151	$	80,984	$	(55,838)	$	25,146

(a)The increase in the gross carrying amounts mainly reflect the impact of the acquisition of Arena (see Note 2A), and for IPR&D, is partially offset by an impairment (see Note 4).

~~PFIZER INC. AND SUBSIDIARY COMPANIES~~(b)The increase is primarily due to the acquisition of Arena, partially offset by amortization expense.

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~B. Goodwill


The following summarizes the changes in the carrying amount of Goodwill:
(MILLIONS)	Total(a)
Balance, January 1, 2022	$	49,208
Additions(b)	1,029
Other(c)	(797)
Balance, October 2, 2022	$	49,441

(a)~~The increase in~~All goodwill is assigned within the ~~gross carrying amount primarily reflects $500 million of capitalized Comirnaty sales milestones to BioNTech.~~

~~(b)The decrease is primarily due to amortization, partially offset by the capitalization~~Biopharma reportable segment. As a result of the ~~Comirnaty milestones described above.~~

~~Amortization~~

~~Total amortization of finite-lived intangible assets was $993 million for~~organizational changes to the commercial structure within the Biopharma operating segment effective in the third quarter of ~~2021~~2022 (see Note 1A), our goodwill is required to be reallocated amongst impacted reporting units. The allocation of goodwill is a complex process that requires, among other things, that we determine the fair value of each reporting unit under our old and ~~$873 million for~~new organizational structure and the ~~third quarter~~portions being transferred. Therefore, we have not yet completed the allocation, but it will be completed in the current year.

(b)Additions relate to our acquisition of ~~2020, and $2.8 billion for~~Arena. See Note 2A.

(c)Other represents the ~~first nine months~~impact of ~~2021 and $2.6 billion for the first nine months of 2020.~~foreign exchange.

Note 10. Pension and Postretirement Benefit Plans

~~As discussed in~~ ~~Note 1C~~, we adopted a change in accounting principle to a more preferable policy under U.S. GAAP to immediately recognize actuarial gains and losses arising from the remeasurement of pension and postretirement plans. This change has been applied to all pension and postretirement plans on a retrospective basis for all prior periods presented.

The following summarizes the components of net periodic benefit cost/(credit), including in 2020 costs/(credits) reported as part of discontinued operations:
Pension Plans
U.S. International Postretirement
Plans
Three Months Ended
(MILLIONS) Oct. 3, 2021 Sept. 27, 2020 Oct. 3, 2021 Sept. 27, 2020 Oct. 3, 2021 Sept. 27, 2020
Service cost $ — $ — $ 32 $ 36 $ 9 $ 10
Interest cost 114 139 37 40 7 13
Expected return on plan assets (261) (251) (83) (79) (10) (9)
Amortization of prior service credits — (1) — (1) (39) (43)
Curtailments — — — — (64) —
Actuarial (gains)/losses(a)
(836) 1,212 — — — —
Special termination benefits — — — — — —
Net periodic benefit cost/(credit) reported in income $ (983) $ 1,099 $ (14) $ (3) $ (96) $ (30)
Pension Plans
U.S. International Postretirement
Plans
Nine Months Ended
(MILLIONS) Oct. 3, 2021 Sept. 27, 2020 Oct. 3, 2021 Sept. 27, 2020 Oct. 3, 2021 Sept. 27, 2020
Service cost $ — $ — $ 98 $ 108 $ 27 $ 29
Interest cost 341 419 110 122 22 38
Expected return on plan assets (782) (754) (246) (238) (29) (27)
Amortization of prior service credits (1) (3) (1) (2) (116) (129)
Curtailments — — (1) — (64) —
Actuarial (gains)/losses(a)
(881) 1,369 — 2 — —
Special termination benefits 12 1 — — 1 —
Net periodic benefit cost/(credit) reported in income $ (1,312) $ 1,033 $ (40) $ (7) $ (160) $ (89)

~~(a)~~Mainly reflects interim actuarial remeasurement gains in 2021, primarily due to favorable plan asset performance and an increase in the discount rate, and interim actuarial remeasurement losses in 2020, primarily due to a reduction in the discount rate.

~~The components of net periodic benefit cost/(credit) other than the service cost component are included in~~ ~~Other (income)/deductions––net~~ ~~(see~~ ~~Note 4~~).

For the nine months ended October 3, 2021, we contributed $127 million, $259 million, and $35 million to our U.S. Pension Plans, International Pension Plans, and Postretirement Plans, respectively, from our general assets, which include direct employer benefit payments.


The following summarizes the components of net periodic benefit cost/(credit):
	Pension Plans
	U.S.				International				Postretirement Plans
	Three Months Ended
(MILLIONS)	Oct. 2, 2022		Oct. 3, 2021		Oct. 2, 2022		Oct. 3, 2021		Oct. 2, 2022		Oct. 3, 2021
Service cost	$	—	$	—	$	29	$	32	$	7	$	9
Interest cost	151		114		38		37		7		7
Expected return on plan assets	(195)		(261)		(72)		(83)		(12)		(10)
Amortization of prior service cost/(credit)	—		—		—		—		(31)		(39)
Actuarial (gains)/losses(a)	(193)		(836)		—		—		—		—
Curtailments	—		—		—		—		(1)		(64)
Special termination benefits	1		—		—		—		—		—
Net periodic benefit cost/(credit) reported in income	$	(235)	$	(983)	$	(6)	$	(14)	$	(30)	$	(96)

2624

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)



	Pension Plans
	U.S.				International				Postretirement Plans
	Nine Months Ended
(MILLIONS)	Oct. 2, 2022		Oct. 3, 2021		Oct. 2, 2022		Oct. 3, 2021		Oct. 2, 2022		Oct. 3, 2021
Service cost	$	—	$	—	$	89	$	98	$	22	$	27
Interest cost	387		341		121		110		21		22
Expected return on plan assets	(685)		(782)		(229)		(246)		(35)		(29)
Amortization of prior service credits	1		(1)		(1)		(1)		(99)		(116)
Actuarial (gains)/losses(a)	231		(881)		—		—		—		—
Curtailments	—		—		—		(1)		(14)		(64)
Special termination benefits	8		12		—		—		1		1
Net periodic benefit cost/(credit) reported in income	$	(57)	$	(1,312)	$	(20)	$	(40)	$	(106)	$	(160)

(a)The third quarter of 2022 mainly reflects interim actuarial remeasurement gains, primarily driven by an increase in the discount rate, partially offset by unfavorable plan asset performance. The first nine months of 2022 mainly reflects interim actuarial remeasurement losses, primarily driven by unfavorable plan asset performance, partially offset by gains due to an increase in the discount rate. In the third quarter and first nine months of 2021, mainly reflects interim actuarial remeasurement gains, primarily due to favorable plan asset performance and an increase in the discount rate.

The components of net periodic benefit cost/(credit) other than the service cost component are primarily included in Other (income)/deductions––net (see Note 4).

For the nine months ended October 2, 2022, we contributed $207 million, $127 million, and $16 million to our U.S. Pension Plans, International Pension Plans, and Postretirement Plans, respectively, from our general assets, which include direct employer benefit payments.

Note 11. Earnings Per Common Share Attributable to Pfizer Inc. Common Shareholders


The following presents the detailed calculation of EPS:	The following presents the detailed calculation of EPS:									The following presents the detailed calculation of EPS:
		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
(MILLIONS)	(MILLIONS)	October 3, 2021		September 27, 2020		October 3, 2021		September 27, 2020		(MILLIONS)	October 2, 2022		October 3, 2021		October 2, 2022		October 3, 2021
EPS Numerator––Basic	EPS Numerator––Basic									EPS Numerator––Basic
Income from continuing operations attributable to Pfizer Inc.		$	8,155	$	909	$	18,563	$	5,979
Less: Preferred stock dividends––net of tax		—		—		—		—

Income from continuing operations attributable to Pfizer Inc. common shareholders	Income from continuing operations attributable to Pfizer Inc. common shareholders	8,155		909		18,563		5,979		Income from continuing operations attributable to Pfizer Inc. common shareholders	$	8,630	$	8,159	$	26,373	$	18,834
Income/(loss) from discontinued operations––net of tax		(9)		560		24		2,334
Discontinued operations––net of tax										Discontinued operations––net of tax	(21)		(13)		4		(248)

Net income attributable to Pfizer Inc. common shareholders	Net income attributable to Pfizer Inc. common shareholders	$	8,146	$	1,469	$	18,586	$	8,313	Net income attributable to Pfizer Inc. common shareholders	$	8,608	$	8,146	$	26,378	$	18,586
EPS Numerator––Diluted	EPS Numerator––Diluted									EPS Numerator––Diluted
Income from continuing operations attributable to Pfizer Inc. common shareholders and assumed conversions	Income from continuing operations attributable to Pfizer Inc. common shareholders and assumed conversions	$	8,155	$	909	$	18,563	$	5,979	Income from continuing operations attributable to Pfizer Inc. common shareholders and assumed conversions	$	8,630	$	8,159	$	26,373	$	18,834
Income/(loss) from discontinued operations––net of tax, attributable to Pfizer Inc. common shareholders and assumed conversions		(9)		560		24		2,334
Discontinued operations––net of tax, attributable to Pfizer Inc. common shareholders and assumed conversions										Discontinued operations––net of tax, attributable to Pfizer Inc. common shareholders and assumed conversions	(21)		(13)		4		(248)
Net income attributable to Pfizer Inc. common shareholders and assumed conversions	Net income attributable to Pfizer Inc. common shareholders and assumed conversions	$	8,146	$	1,469	$	18,586	$	8,313	Net income attributable to Pfizer Inc. common shareholders and assumed conversions	$	8,608	$	8,146	$	26,378	$	18,586
EPS Denominator	EPS Denominator									EPS Denominator
Weighted-average number of common shares outstanding––Basic	Weighted-average number of common shares outstanding––Basic	5,609		5,557		5,597		5,552		Weighted-average number of common shares outstanding––Basic	5,607		5,609		5,606		5,597
Common-share equivalents: stock options, stock issuable under employee compensation plans, convertible preferred stock and accelerated share repurchase agreements		116		76		91		70
Common-share equivalents: stock options and stock issuable under employee compensation plans										Common-share equivalents: stock options and stock issuable under employee compensation plans	111		116		124		91
Weighted-average number of common shares outstanding––Diluted	Weighted-average number of common shares outstanding––Diluted	5,725		5,633		5,688		5,622		Weighted-average number of common shares outstanding––Diluted	5,718		5,725		5,729		5,688
Anti-dilutive common stock equivalents(a)	Anti-dilutive common stock equivalents(a)	—		7		3		5		Anti-dilutive common stock equivalents(a)	3		—		1		3

(a)These common stock equivalents were outstanding for the periods presented, but were not included in the computation of diluted EPS for those periods because their inclusion would have had an anti-dilutive effect.

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 12. Contingencies and Certain Commitments

We and certain of our subsidiaries are subject to numerous contingencies arising in the ordinary course of business, including tax and legal contingencies. The following outlines our legal contingencies. For a discussion of our tax contingencies, see Note 5B.

A. Legal Proceedings

Our legal contingencies include, but are not limited to, the following:

•Patent litigation, which typically involves challenges to the coverage and/or validity of patents on various products, processes or dosage forms. ~~We are the plaintiff in the majority of these actions.~~ An adverse outcome ~~in actions in which we are the plaintiff~~ could result in loss of patent protection for a product, a significant loss of revenues from ~~that~~a product or impairment of the value of associated assets. We are the plaintiff in the majority of these actions.

•Product liability and other product-related litigation related to current or former products, which can include personal injury, consumer, off-label promotion, securities, antitrust and breach of contract claims, among others, and often involves highly complex issues relating to medical causation, label warnings and reliance on those warnings, scientific evidence and findings, actual, provable injury and other matters.

•Commercial and other asserted or unasserted matters, which can include acquisition-, licensing-, intellectual property-, collaboration- or co-promotion-related and product-pricing claims and environmental claims and proceedings, and can involve complexities that will vary from matter to matter.

~~PFIZER INC. AND SUBSIDIARY COMPANIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

•Government investigations, which often are related to the extensive regulation of pharmaceutical companies by national, state and local government agencies in the U.S. and in other jurisdictions.

Certain of these contingencies could result in increased expenses and/or losses, including damages, royalty payments, fines and/or civil penalties, which could be substantial, and/or criminal charges.

We believe that our claims and defenses in matters in which we are a defendant are substantial, but litigation is inherently unpredictable and excessive verdicts do occur. We do not believe that any of these matters will have a material adverse effect on our financial position. However, we could incur judgments, enter into settlements or revise our expectations regarding the outcome of matters, which could have a material adverse effect on our results of operations and/or our cash flows in the period in which the amounts are accrued or paid.

We have accrued for losses that are both probable and reasonably estimable. Substantially all of our contingencies are subject to significant uncertainties and, therefore, determining the likelihood of a loss and/or the measurement of any loss can be complex. Consequently, we are unable to estimate the range of reasonably possible loss in excess of amounts accrued. Our assessments, which result from a complex series of judgments about future events and uncertainties, are based on estimates and assumptions that have been deemed reasonable by management, but that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions.

Amounts recorded for legal and environmental contingencies can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions. For proceedings under environmental laws to which a governmental authority is a party, we have adopted a disclosure threshold of $1 million in potential or actual governmental monetary sanctions.

The principal pending matters to which we are a party are discussed below. In determining whether a pending matter is a principal matter, we consider both quantitative and qualitative factors to assess materiality, such as, among others, the amount of damages and the nature of other relief sought, if specified; our view of the merits of the claims and of the strength of our defenses; whether the action purports to be, or is, a class action and, if not certified, our view of the likelihood that a class will be certified by the court; the jurisdiction in which the proceeding is pending; whether related actions have been transferred to multidistrict litigation; any experience that we or, to our knowledge, other companies have had in similar proceedings; whether disclosure of the action would be important to a reader of our financial statements, including whether disclosure might change a reader’s judgment about our financial statements in light of all of the information that is available to the reader; the potential impact of the proceeding on our reputation; and the extent of public interest in the matter. In addition, with respect to patent matters in which we are the plaintiff, we consider, among other things, the financial significance of the product protected by the patent(s) at issue. Some of the matters discussed below include those which management believes that the likelihood of possible loss in excess of amounts accrued is remote.

A1. Legal Proceedings––Patent Litigation

We are involved in suits relating to our patents, including but not limited to, those discussed below. Most involve claims by generic drug manufacturers that patents covering our products (or those of our collaboration/licensing partners to which we

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

have licenses or co-promotion rights and to which we may or may not be a party), processes or dosage forms are invalid and/or do not cover the product of the generic drug manufacturer. Also, counterclaims, as well as various independent actions, have been filed alleging that our assertions of, or attempts to enforce, patent rights with respect to certain products constitute unfair competition and/or violations of antitrust laws. In addition to the challenges to the U.S. patents that are discussed below, patent rights to certain of our products or those of our collaboration/licensing partners are being challenged in various other jurisdictions. ~~For example, some~~Some of our collaboration or licensing partners face challenges to the validity of their patent rights in non-U.S. jurisdictions. For example, in April 2022, the U.K. High Court issued a judgment finding invalid a BMS patent related to Eliquis due to expire in 2026. In November 2022, BMS received permission to appeal the High Court’s decision. Additional challenges remain pending in other jurisdictions. Also, for example, in July 2022, CureVac AG (CureVac) brought a patent infringement action against BioNTech and certain of its subsidiaries in the German Regional Court alleging that Comirnaty infringes certain German utility model patents and certain expired and unexpired European patents. Additional challenges involving Comirnaty patents may be filed against us and/or BioNTech in other jurisdictions in the future. In addition, in October 2022, Accord Healthcare Ltd. brought suit in the U.K. against the Regents of the University of California challenging the validity of the U.K. patent covering the active ingredient in Xtandi, which expires in 2028. Adverse decisions in these matters could have a material adverse effect on our results of operations.We are also party to patent damages suits in various jurisdictions pursuant to which generic drug manufacturers, payers, governments or other parties are seeking damages from us for allegedly causing delay of generic entry.

We also are often involved in other proceedings, such as inter partes review, post-grant review, re-examination or opposition proceedings, before the U.S. Patent and Trademark Office, the European Patent Office, or other foreign counterparts relating to our intellectual property or the intellectual property rights of others. Also, if one of our patents is found to be invalid by such proceedings, generic or competitive products could be introduced into the market resulting in the erosion of sales of our existing products. For example, several of the patents in our pneumococcal vaccine portfolio ~~were~~have been challenged in inter partes review and post-grant review proceedings in the U.S. Patent and Trademark Office. In 2017, the Patent Trial and Appeal Board (PTAB) initiated proceedings with respect to 2 of our pneumococcal vaccine patents. However, the PTAB declined to initiate proceedings as to two other pneumococcal vaccine patents; those 2 patents, and 1 otheraddition, another patent ~~were~~was challenged in federal court in ~~Delaware. In~~Delaware; and that case was settled in September 2021 ~~Pfizer and a challenger entered into a settlement and license agreement, resolving all worldwide legal proceedings involving that challenger, related~~on terms not material to ~~our pneumococcal vaccine patents.~~the company. Other challenges to pneumococcal vaccine patents remain pending at the ~~PTAB~~Patent Trial and Appeal Board and outside the U.S. The invalidation of any of the patents in our pneumococcal portfolio

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could potentially allow additional competitor vaccines, ~~into~~if approved, to enter the ~~marketplace.~~marketplace earlier than anticipated. In the event that any of the patents are found valid and infringed, a competitor’s vaccine, if approved, might be prohibited from entering the market or a competitor might be required to pay us a royalty.

We are also subject to patent litigation pursuant to which one or more third parties seek damages and/or injunctive relief to compensate for alleged infringement of its patents by our commercial or other activities. For example, our Hospira subsidiaries are involved in patent and patent-related disputes over their attempts to bring generic pharmaceutical ~~and biosimilar~~ products to market. If one of our marketed products is found to infringe valid patent rights of a third party, such third party may be awarded significant damages or royalty payments, or we may be prevented from further sales of that product. Such damages may be enhanced as much as three-fold if we or one of our subsidiaries is found to have willfully infringed valid patent rights of a third party.

Actions In Which We Are The Plaintiff

~~EpiPen~~

In 2010, King, which we acquired in 2011 and is a wholly-owned subsidiary, brought a patent-infringement action against Sandoz in the U.S. District Court for the District of New Jersey in connection with Sandoz’s abbreviated new drug application (ANDA) filed with the FDA seeking approval to market an epinephrine injectable product. Sandoz is challenging patents, which expire in 2025, covering the next-generation autoinjector for use with epinephrine that is sold under the EpiPen brand name.

Xeljanz (tofacitinib)

Beginning in 2017, we brought patent-infringement actions against several generic manufacturers that filed separate ANDAs with the FDA seeking approval to market their generic versions of tofacitinib tablets in one or both of 5 mg and 10 mg dosage strengths, and in both immediate and extended release forms. To date, we have settled actions with several manufacturers on terms not material to us. The remaining actions continue in the U.S. District Court for the District of Delaware as described below.

In 2018, we brought a separate patent infringement action against Teva Pharmaceuticals USA, Inc. (Teva) asserting the infringement and validity of our patent covering extended release formulations of tofacitinib that was challenged by Teva in its ANDA seeking approval to market a generic version of tofacitinib 11 mg extended release tablets. In September 2021, we settled the case against Teva on terms not material to us.

In January 2021, we brought a separate patent-infringement action against Aurobindo Pharma Limited (Aurobindo) asserting the infringement and validity of the patent covering the active ingredient expiring in December 2025 and the patent covering a polymorphic form of tofacitinib expiring in 2023, which Aurobindo challenged in its ANDA seeking approval to market a generic version of tofacitinib 5 mg and 10 mg tablets.

In October 2021, we brought a separate patent-infringement action against Sinotherapeutics Inc. (Sinotherapeutics) asserting the infringement and validity of our patent covering extended release formulations of tofacitinib that was challenged by Sinotherapeutics in its ANDA seeking approval to market a generic version of tofacitinib 11 mg extended release tablets.

In June 2022, we brought a separate patent infringement action against MSN Laboratories Private Ltd. (MSN) asserting the infringement and validity of our compound patent covering the active agreement that was challenged by MSN in its ANDAs seeking approval to market generic versions of tofacitinib immediate release tablets (5 mg, 10 mg) and oral solution 1 mg/mL. In August 2022, we settled our action against MSN on terms not material to us.

Inlyta (axitinib)

In 2019, Glenmark Pharmaceuticals ~~Limited~~Ltd. (Glenmark) notified us that it had filed an ANDA with the FDA seeking approval to market a generic version of Inlyta. Glenmark asserts the invalidity and non-infringement of the crystalline form patent for Inlyta that expires in 2030. In 2019, we filed suit against Glenmark in the U.S. District Court for the District of Delaware, asserting the validity and infringement of the crystalline form patent for Inlyta.

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Ibrance (palbociclib)

In 2019, several generic companies notified us that they had filed ANDAs with the FDA seeking approval to market generic versions of Ibrance capsules. The companies asserted the invalidity and non-infringement of 2 composition of matter patents, one of which expires in 2023 and one of which expires in 2027, as a result of a U.S. Patent Term Extension certificate issued in January 2021, and a method of use patent covering palbociclib, which expires in 2023. In 2019, we brought patent infringement actions against each of the generic filers in various federal courts, asserting the validity and infringement of the patents challenged by the generic companies. In August 2021, the litigation concluded without settlements or a court decision.

Beginning in September 2020, we received correspondence from several generic companies notifying us that they would seek approval to market generic versions of Ibrance capsules. The generic companies assert the invalidity and non-infringement of our crystalline form patent which expires in 2034. Beginning in October 2020, we brought patent infringement actions against each of these generic companies in various federal courts, asserting the validity and infringement of the crystalline form patent. We have settled with certain of these generic companies on terms not material to the company.

Beginning in January 2021, several generic companies notified us that they had filed ANDAs with the FDA seeking approval to market generic versions of Ibrance tablets. The generic companies are challenging some or all of the following patents: (i) the

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composition of matter patent expiring in 2027; (ii) the composition of matter patent expiring in 2023; (iii) the method of use patent expiring in 2023; (iv) the crystalline form patent expiring in 2034; and (v) a tablet formulation patent expiring in 2036. We brought patent infringement actions against each of the generic filers in various U.S. federal courts, asserting the validity and infringement of the patents challenged by the generic companies. We have settled with one of these generic companies on terms not material to us, and we dismissed the patent infringement actions relating to the crystalline form of patent, the composition of matter patent expiring in 2023, the method of use patent, and the tablet formulation patent against the generic companies that had challenged these patents. The composition of matter patent expiring in 2027 remains in suit.

Eucrisa

Beginning in September 2021, several generic companies notified us that they had filed ANDAs with the FDA seeking approval to market generic versions of Eucrisa. The companies assert the invalidity and non-infringement of a composition of matter patent expiring in 2026, two method of use patents expiring in 2027, and one other method of use patent expiring in 2030. In September 2021, we brought patent infringement actions against the generic filers in the U.S. District Court for the District of Delaware, asserting the validity and infringement of the patents challenged by the generic companies.

~~Matter~~Braftovi (encorafenib)

In August 2022, a generic company notified us that it had filed an ANDA with the FDA seeking approval to market a generic version of Braftovi. The company asserts the invalidity and non-infringement of, among others, a method of use patent expiring in 2033. In September 2022, we brought a patent infringement action against the generic company in the U.S. District Court for the District of Delaware, asserting the validity and infringement of the method of use patent expiring in 2033.

Mektovi (binimetinib)

Beginning in August 2022, several generic companies notified us that they had filed ANDAs with the FDA seeking approval to market generic versions of Mektovi. The companies assert the invalidity and non-infringement of two method of use patents expiring in 2030, a method of use patent expiring in 2031, two method of use patents expiring in 2033, and a product by process patent expiring in 2033. Beginning in September 2022, we brought patent infringement actions against the generic filers in the U.S. District Court for the District of Delaware, asserting the validity and infringement of all six patents.

Actions in Which We are the Defendant

Comirnaty

In March 2022, Alnylam Pharmaceuticals, Inc. (Alnylam) filed a complaint in the U.S. District Court for the District of Delaware against Pfizer and Pharmacia & Upjohn Co. LLC, our wholly owned subsidiary, alleging that Comirnaty infringes U.S. Patent No. 11,246,933, which was issued in February 2022, and seeking unspecified monetary damages. In July 2022, Alnylam filed a second complaint in the U.S. District Court for the District of Delaware against Pfizer, Pharmacia & Upjohn Co. LLC, BioNTech and BioNTech Manufacturing GmbH, alleging that Comirnaty infringes U.S. Patent No. 11,382,979, which was issued in July 2022, and seeking unspecified monetary damages.

In August 2022, ModernaTX, Inc. (ModernaTX) and Moderna US, Inc. (Moderna) sued Pfizer, BioNTech, BioNTech Manufacturing GmbH and BioNTech US Inc. in the U.S. District Court for the District of Massachusetts, alleging that Comirnaty infringes three U.S. patents. In its complaint, Moderna stated that it is seeking damages for alleged infringement occurring only after March 7, 2022.

In August 2022, ModernaTX filed a patent infringement action in Germany against Pfizer and certain subsidiary companies, as well as BioNTech and certain subsidiary companies, alleging that Comirnaty infringes two European patents. In September 2022, ModernaTX filed patent infringement actions in the U.K and in the Netherlands against Pfizer Inc. and certain subsidiary companies, as well as BioNTech and certain subsidiary companies, on the same two patents. In its complaints, Moderna stated that it is seeking damages for alleged infringement occurring only after March 7, 2022. In the U.K., Pfizer and BioNTech have brought an action against ModernaTX seeking to revoke these European patents.

Paxlovid

In June 2022, Enanta Pharmaceuticals, Inc. filed a complaint in the U.S. District Court for the District of Massachusetts against Pfizer alleging that the active ingredient in Paxlovid, nirmatrelvir, infringes U.S. Patent No. 11,358,953, which was issued in June 2022, and seeking unspecified monetary damages.

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Matters Involving ~~Our~~Pfizer and its Collaboration/Licensing Partners

Eliquis

In 2017, ~~NaN~~twenty-five generic companies sent BMS Paragraph-IV certification letters informing BMS that they had filed ANDAs seeking approval of generic versions of Eliquis, challenging the validity and infringement of one or more of the 3three patents listed in the Orange Book for Eliquis. ~~NaN~~One of the patents expired in December 2019 and the remaining patents currently are set to expire in 2026 and 2031. Eliquis has been jointly developed and is being commercialized by BMS and Pfizer. BMS and Pfizer filed patent-infringement actions against all generic filers in the U.S. District Court for the District of Delaware and the U.S. District Court for the District of West Virginia, asserting that each of the generic companies’ proposed products would infringe each of the patent(s) that each generic filer challenged. Some generic filers challenged only the 2031 patent, some challenged both the 2031 and 2026 patent, and one generic company challenged all 3three patents. In August 2020, the U.S. District Court for the District of Delaware ruled that both the 2026 patent and the 2031 patent are valid and infringed by the proposed generic products. In August and September 2020, the generic filers appealed the District Court’s decision to the U.S. Court of Appeals for the Federal Circuit. Prior to the August 2020 ruling, we and BMS settled with certain of the companies on terms not material to us, and we and BMS may settle with other generic companies in the future. In September 2021, the U.S. Court of Appeals for the Federal Circuit affirmed the District Court’s decision.

Comirnaty

In July 2022, Pfizer, BioNTech and BioNTech Manufacturing GmbH filed a declaratory judgment complaint against CureVac in the U.S. District Court for the District of Massachusetts seeking a judgment of non-infringement for the following three patents relating to Comirnaty: U.S. Patent Nos. 11,135,312, 11,149,278, and 11,241,493. Outside of the U.S., in the U.K., Pfizer and BioNTech have sued CureVac seeking a judgment of invalidity of several patents and CureVac has made certain infringement counterclaims.

A2. Legal Proceedings––Product Litigation

We are defendants in numerous cases, including but not limited to those discussed below, related to our pharmaceutical and other products. Plaintiffs in these cases seek damages and other relief on various grounds for alleged personal injury and economic loss.

Asbestos

Between 1967 and 1982, Warner-Lambert owned American Optical Corporation (American Optical), which manufactured and sold respiratory protective devices and asbestos safety clothing. In connection with the sale of American Optical in 1982, Warner-Lambert agreed to indemnify the purchaser for certain liabilities, including certain asbestos-related and other claims. Warner-Lambert was acquired by Pfizer in 2000 and is a wholly owned subsidiary of Pfizer. Warner-Lambert is actively engaged in the defense of, and will continue to explore various means of resolving, these claims.

Numerous lawsuits against American Optical, Pfizer and certain of its previously owned subsidiaries are pending in various federal and state courts seeking damages for alleged personal injury from exposure to products allegedly containing asbestos and other allegedly hazardous materials sold by Pfizer and certain of its previously owned subsidiaries.

There also are a small number of lawsuits pending in various federal and state courts seeking damages for alleged exposure to asbestos in facilities owned or formerly owned by Pfizer or its subsidiaries.

Effexor

Beginning in 2011, actions, including purported class actions, were filed in various federal courts against Wyeth and, in certain of the actions, affiliates of Wyeth and certain other defendants relating to Effexor XR, which is the extended-release formulation of Effexor. The plaintiffs in each of the class actions seek to represent a class consisting of all persons in the U.S. and its territories who directly purchased, indirectly purchased or reimbursed patients for the purchase of Effexor XR or generic Effexor XR from any of the defendants from June 14, 2008 until the time the defendants’ allegedly unlawful conduct ceased. The plaintiffs in all of the actions allege delay in the launch of generic Effexor XR in the U.S. and its territories, in violation of federal antitrust laws and, in certain of the actions, the antitrust, consumer protection and various other laws of certain states, as the result of Wyeth fraudulently obtaining and improperly listing certain patents for Effexor XR in the Orange Book, enforcing certain patents for Effexor XR and entering into a litigation settlement agreement with a generic drug manufacturer with respect to Effexor XR. Each of the plaintiffs seeks treble damages (for itself in the individual actions or on behalf of the putative class

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in the purported class actions) for alleged price overcharges for Effexor XR or generic Effexor XR in the U.S. and its territories since June 14, 2008. All of these actions have been consolidated in the U.S. District Court for the District of New Jersey.

In 2014, the District Court dismissed the direct purchaser plaintiffs’ claims based on the litigation settlement agreement, but declined to dismiss the other direct purchaser plaintiff claims. In 2015, the District Court entered partial final judgments as to all settlement agreement claims, including those asserted by direct purchasers and end-payer plaintiffs, which plaintiffs

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appealed to the U.S. Court of Appeals for the Third Circuit. In 2017, the U.S. Court of Appeals for the Third Circuit reversed the District Court’s decisions and remanded the claims to the District Court.

Lipitor

Beginning in 2011, purported class actions relating to Lipitor were filed in various federal courts against, among others, Pfizer, certain Pfizer affiliates, and, in most of the actions, Ranbaxy Laboratories Ltd. (Ranbaxy) and certain Ranbaxy affiliates. The plaintiffs in these various actions seek to represent nationwide, multi-state or statewide classes consisting of persons or entities who directly purchased, indirectly purchased or reimbursed patients for the purchase of Lipitor (or, in certain of the actions, generic Lipitor) from any of the defendants from March 2010 until the cessation of the defendants’ allegedly unlawful conduct (the Class Period). The plaintiffs allege delay in the launch of generic Lipitor, in violation of federal antitrust laws and/or state antitrust, consumer protection and various other laws, resulting from (i) the 2008 agreement pursuant to which Pfizer and Ranbaxy settled certain patent litigation involving Lipitor and Pfizer granted Ranbaxy a license to sell a generic version of Lipitor in various markets beginning on varying dates, and (ii) in certain of the actions, the procurement and/or enforcement of certain patents for Lipitor. Each of the actions seeks, among other things, treble damages on behalf of the putative class for alleged price overcharges for Lipitor (or, in certain of the actions, generic Lipitor) during the Class Period. In addition, individual actions have been filed against Pfizer, Ranbaxy and certain of their affiliates, among others, that assert claims and seek relief for the plaintiffs that are substantially similar to the claims asserted and the relief sought in the purported class actions described above. These various actions have been consolidated for pre-trial proceedings in a Multi-District Litigation in the U.S. District Court for the District of New Jersey.

In September 2013 and 2014, the District Court dismissed with prejudice the claims of the direct purchasers. In October and November 2014, the District Court dismissed with prejudice the claims of all other Multi-District Litigation plaintiffs. All plaintiffs ~~have~~ appealed the District Court’s orders dismissing their claims with prejudice to the U.S. Court of Appeals for the Third Circuit. In addition, the direct purchaser class plaintiffs appealed the order denying their motion to amend the judgment and for leave to amend their complaint to the Court of Appeals. In 2017, the Court of Appeals reversed the District Court’s decisions and remanded the claims to the District Court.

Also, in 2013, the State of West Virginia filed an action in West Virginia state court against Pfizer and Ranbaxy, among others, that asserts claims and seeks relief on behalf of the State of West Virginia and residents of that state that are substantially similar to the claims asserted and the relief sought in the purported class actions described above.

EpiPen (Direct Purchaser)

In February 2020, a lawsuit was filed in the U.S. District Court for the District of Kansas against Pfizer, its current and former affiliates King and Meridian, and various Mylan entities, on behalf of a purported U.S. nationwide class of direct purchaser plaintiffs who purchased EpiPen devices directly from the defendants. Plaintiffs in this action generally allege that Pfizer and Mylan conspired to delay market entry of generic EpiPen through the settlement of patent litigation regarding EpiPen, and thereby delayed market entry of generic EpiPen in violation of federal antitrust law. Plaintiffs seek treble damages for alleged overcharges for EpiPen since 2011. In July 2021, the District Court granted defendants’ motion to dismiss the direct purchaser complaint, without prejudice. In September 2021, plaintiffs filed an amended complaint. In August 2022, the District Court granted Pfizer’s motion to dismiss the complaint.

Nexium 24HR and Protonix

A number of individual and multi-plaintiff lawsuits have been filed against Pfizer, certain of its subsidiaries and/or other pharmaceutical manufacturers in various federal and state courts alleging that the plaintiffs developed kidney-related injuries purportedly as a result of the ingestion of certain proton pump inhibitors. The cases against Pfizer involve Protonix and/or Nexium 24HR and seek compensatory and punitive damages and, in some cases, treble damages, restitution or disgorgement. In 2017, the federal actions were ordered transferred for coordinated pre-trial proceedings to a Multi-District Litigation in the U.S. District Court for the District of New Jersey. As part of our Consumer Healthcare JV transaction with GSK, the JV has agreed to assume, and to indemnify Pfizer for, liabilities arising out of such litigation to the extent related to Nexium 24HR.

Docetaxel

•Personal Injury Actions

A number of lawsuits have been filed against Hospira and Pfizer in various federal and state courts alleging that plaintiffs who were treated with Docetaxel developed permanent hair loss. The significant majority of the cases also name other defendants, including the manufacturer of the branded product, Taxotere. Plaintiffs seek compensatory and punitive damages. Additional lawsuits have been filed in which plaintiffs allege they developed blocked tear ducts following their treatment with Docetaxel.

In 2016, the federal cases were transferred for coordinated pre-trial proceedings to a Multi-District Litigation in the U.S. District Court for the Eastern District of Louisiana. In 2022, the eye injury cases were transferred for coordinated pre-trial proceedings to a Multi-District Litigation in the U.S. District Court for the Eastern District of Louisiana.

3130

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~~In 2016, the federal cases were transferred for coordinated pre-trial proceedings to a Multi-District Litigation in the U.S. District Court for the Eastern District of Louisiana.~~

•Mississippi Attorney General Government Action

In 2018, the Attorney General of Mississippi filed a complaint in Mississippi state court against the manufacturer of the branded product and 8eight other manufacturers including Pfizer and Hospira, alleging, with respect to Pfizer and Hospira, a failure to warn about a risk of permanent hair loss in violation of the Mississippi Consumer Protection Act. The action seeks civil penalties and injunctive relief.

~~Array Securities Litigation~~

In 2017, 2 purported class actions were filed in the U.S. District Court for the District of Colorado alleging that Array, which we acquired in 2019 and is our wholly owned subsidiary, and certain of its former officers violated federal securities laws in connection with certain disclosures made, or omitted, by Array regarding the NRAS-mutant melanoma program. In 2018, the actions were consolidated into a single proceeding. In March 2021, the parties reached an agreement in principle to resolve the litigation on terms not material to Pfizer.

Zantac

A number of lawsuits have been filed against Pfizer in various federal and state courts alleging that plaintiffs developed various types of cancer, or face an increased risk of developing cancer, purportedly as a result of the ingestion of Zantac. The significant majority of these cases also name other defendants that have historically manufactured and/or sold Zantac. Pfizer has not sold Zantac since 2006, and only sold an OTC version of the product. In 2006, Pfizer sold the consumer business that included its Zantac OTC rights to Johnson & Johnson and transferred the assets and liabilities related to Zantac OTC to Johnson & Johnson in connection with the sale. Plaintiffs in these cases seek compensatory and punitive damages.

In February 2020, the federal actions were transferred for coordinated pre-trial proceedings to a Multi-District Litigation in the U.S. District Court for the Southern District of Florida. Plaintiffs in the Multi-District Litigation have filed against Pfizer and many other defendants a master personal injury complaint, asserting a consolidated consumer class action ~~complaint~~ alleging, among other things, claims under consumer protection statutes of all 50 states, and a medical monitoring complaint seeking to certify medical monitoring classes under the laws of 13 states. Plaintiffs previously had filed a consolidated third-party payor class action complaint alleging violation of the RICO statute and seeking reimbursement for payments made for the prescription version of Zantac, but the Multi-District Litigation court dismissed that complaint; Plaintiffs have appealed the dismissal to the U.S. Court of Appeals for the Eleventh Circuit. In addition, (i) Pfizer has received service of 2 Canadian class action complaints naming Pfizer and other defendants, and seeking compensatory and punitive damages for personal injury and economic loss, allegedly arising from the defendants’ sale of Zantac in Canada; and (ii) the State of New Mexico and the Mayor and City Council of Baltimore separately filed civil actions against Pfizer and many other defendants in state ~~court,~~courts, alleging various state statutory and common law claims in connection with the defendants’ alleged sale of Zantac in those jurisdictions. In April 2021, a Judicial Council Coordinated Proceeding was created in the Superior Court of California in Alameda County to coordinate personal injury actions against Pfizer and other defendants filed in California state court. Coordinated proceedings have also been created in other state courts.

Chantix

Beginning in August 2021, a number of putative class actions have been filed against Pfizer in various U.S. federal courts following Pfizer’s voluntary recall of Chantix due to the presence of a nitrosamine, N-nitroso-varenicline. Plaintiffs assert that they suffered economic harm purportedly as a result of purchasing Chantix or generic varenicline medicines sold by Pfizer. Plaintiffs seek to represent nationwide and state-specific classes and seek various remedies, including damages and medical monitoring. Similar putative class actions have been filed in Canada and Israel, where the product brand is Champix.

A3. Legal Proceedings––Commercial and Other Matters

Monsanto-Related Matters

In 1997, Monsanto Company (Former Monsanto) contributed certain chemical manufacturing operations and facilities to a newly formed corporation, Solutia Inc. (Solutia), and spun off the shares of Solutia. In 2000, Former Monsanto merged with Pharmacia & Upjohn Company to form Pharmacia. Pharmacia then transferred its agricultural operations to a newly created subsidiary, named Monsanto Company (New Monsanto), which it spun off in a two-stage process that was completed in 2002. Pharmacia was acquired by Pfizer in 2003 and is a wholly owned subsidiary of Pfizer.

In connection with its spin-off that was completed in 2002, New Monsanto assumed, and agreed to indemnify Pharmacia for, any liabilities related to Pharmacia’s former agricultural business. New Monsanto has defended and/or is defending Pharmacia in connection with various claims and litigation arising out of, or related to, the agricultural business, and has been indemnifying Pharmacia when liability has been imposed or settlement has been reached regarding such claims and litigation.

In connection with its spin-off in 1997, Solutia assumed, and agreed to indemnify Pharmacia for, liabilities related to Former Monsanto’s chemical businesses. As the result of its reorganization under Chapter 11 of the U.S. Bankruptcy Code, Solutia’s

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indemnification obligations relating to Former Monsanto’s chemical businesses are primarily limited to sites that Solutia has owned or operated. In addition, in connection with its spin-off that was completed in 2002, New Monsanto assumed, and agreed to indemnify Pharmacia for, any liabilities primarily related to Former Monsanto’s chemical businesses, including, but not limited to, any such liabilities that Solutia assumed. Solutia’s and New Monsanto’s assumption of, and agreement to indemnify Pharmacia for, these liabilities apply to pending actions and any future actions related to Former Monsanto’s chemical businesses in which Pharmacia is named as a defendant, including, without limitation, actions asserting environmental claims, including alleged exposure to polychlorinated biphenyls. Solutia and/or New Monsanto are defending Pharmacia in connection with various claims and litigation arising out of, or related to, Former Monsanto’s chemical businesses, and have been indemnifying Pharmacia when liability has been imposed or settlement has been reached regarding such claims and litigation.

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Environmental Matters

In 2009, as part of our acquisition of Wyeth, we ~~submitted a revised site-wide feasibility study with regard to~~assumed responsibility for environmental remediation at the Wyeth Holdings LLC (formerly known as, Wyeth Holdings Corporation ~~(formerly,~~and American Cyanamid Company) discontinued industrial chemical facility in Bound Brook, New Jersey. ~~In 2011, Wyeth Holdings Corporation~~Since that time, we have executed ~~an Administrative Settlement Agreement and Order~~or have become a party to a number of administrative settlement agreements, orders on ~~Consent for Removal Action (the 2011 Administrative Settlement Agreement)~~consent, and/or judicial consent decrees, with the U.S. Environmental Protection Agency ~~(EPA) with regard~~and/or New Jersey Department of Environmental Protection to perform remedial design, removal and remedial actions, and related environmental remediation activities at the Bound Brook facility. In accordance with the 2011 Administrative Settlement Agreement, we completed construction of an interim remedy. In 2012, the EPA issued a final remediation plan for the Bound Brook facility’s main plant area. In 2013, Wyeth Holdings Corporation (now Wyeth Holdings LLC) entered into an Administrative Settlement Agreement and Order on Consent with the EPA to allow us to undertake detailed engineering design of the remedy for the main plant area and to perform a focused feasibility study for 2 adjacent lagoons. In 2015, the U.S., on behalf of the EPA, filed a complaint and consent decree with the federal District Court for the District of New Jersey that allows Wyeth Holdings LLC to complete the design and to implement the remedy for the main plant area. The consent decree (which supersedes the 2011 Administrative Settlement Agreement) was entered by the District Court in 2015. In 2018, the EPA issued a final remediation plan for the 2 adjacent lagoons. In 2019, Wyeth Holdings LLC entered into an Administrative Settlement Agreement and Order on Consent with the EPA to allow us to undertake detailed engineering design of the remedy for the lagoons. In September 2021, the U.S., on behalf of the EPA, filed a complaint and consent decree with the federal District Court for the District of New Jersey that will allow Wyeth Holdings LLC to complete the design and implement the remedy for the 2 adjacent lagoons.

We have accrued for the currently estimated costs of ~~the site remedies for the Bound Brook facility.~~these activities.

We are a party to a number of other proceedings brought under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, and other state, local or foreign laws in which the primary relief sought is the cost of past and/or future remediation.

Contracts with Iraqi Ministry of Health

In 2017, a number of U.S. service members, civilians, and their families brought a complaint in the U.S. District Court for the District of Columbia against a number of pharmaceutical and medical devices companies, including Pfizer and certain of its subsidiaries, alleging that the defendants violated the U.S. Anti-Terrorism Act. The complaint alleges that the defendants provided funding for terrorist organizations through their sales practices pursuant to pharmaceutical and medical device contracts with the Iraqi Ministry of Health, and seeks monetary relief. In July 2020, the District Court granted defendants’ motions to dismiss and dismissed all of plaintiffs’ claims. ~~The plaintiffs are appealing~~In January 2022, the Court of Appeals reversed the District Court’s decision. In February 2022, the defendants filed for en banc review of the Court of Appeals’ decision.

Allergan Complaint for Indemnity

In 2019, Pfizer was named as a defendant in a complaint, along with King, filed by Allergan Finance LLC (Allergan) in the Supreme Court of the State of New York, asserting claims for indemnity related to Kadian, which was owned for a short period by King in 2008, prior to Pfizer's acquisition of King in 2010. This suit was voluntarily discontinued without prejudice in January 2021.

~~Breach of Contract––Xalkori/Lorbrena~~

We are a defendant in a breach of contract action brought by New York University (NYU) in the Supreme Court of the State of New York (Supreme Court). NYU alleges that it is entitled to royalties on Pfizer’s sales of~~Xalkori under the terms of a Research and License Agreement between NYU and Sugen, Inc. Sugen, Inc. was acquired by Pharmacia in August 1999, and~~ ~~Pharmacia was acquired by Pfizer in 2003 and is a wholly owned subsidiary of Pfizer.~~ The action was originally filed in 2013. In 2015, the Supreme Court dismissed the action and, in 2017, the New York State Appellate Division reversed the decision and remanded the proceedings to the Supreme Court. In January 2020, the Supreme Court denied both parties’ summary judgment motions.Viatris Securities Litigation

In October ~~2020, NYU~~2021, a putative class action was filed ~~a separate breach~~in the Court of ~~contract action against Pfizer alleging that it is entitled to royalties~~Common Pleas of Allegheny County, Pennsylvania on ~~sales~~behalf of ~~Lorbrena under~~former Mylan N.V. shareholders who received Viatris common stock in exchange for Mylan shares in connection with the ~~terms~~spin-off of the ~~same NYU-Sugen, Inc. Research~~Upjohn Business and ~~Licensing Agreement.~~

~~PFIZER INC. AND SUBSIDIARY COMPANIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

its combination with Mylan (the Transactions). Viatris, Pfizer, and certain of each company’s current and former officers, directors and employees are named as defendants. The complaint alleges that the defendants violated certain provisions of the Securities Act of 1933 in connection with certain disclosures made in or omitted from the registration statement and related prospectus issued in connection with the Transactions. Plaintiff seeks damages, costs and expenses and other equitable and injunctive relief.

A4. Legal Proceedings––Government Investigations

We are subject to extensive regulation by government agencies in the U.S., other developed markets and multiple emerging markets in which we operate. Criminal charges, substantial fines and/or civil penalties, limitations on our ability to conduct business in applicable jurisdictions, corporate integrity or deferred prosecution agreements, as well as reputational harm and increased public interest in the matter could result from government investigations in the U.S. and other jurisdictions in which we do business. These matters often involve government requests for information on a voluntary basis or through subpoenas after which the government may seek additional information through follow-up requests or additional subpoenas. In addition, in a qui tam lawsuit in which the government declines to intervene, the relator may still pursue a suit for the recovery of civil damages and penalties on behalf of the government. Among the investigations by government agencies are the matters discussed below.

Greenstone Investigations

•U.S. Department of Justice Antitrust Division Investigation

Since July 2017, the U.S. Department of Justice's Antitrust Division has been investigating our former Greenstone generics business. We believe this is related to an ongoing broader antitrust investigation of the generic pharmaceutical industry. We have produced records relating to this investigation.

•State Attorneys General and Multi-District Generics Antitrust Litigation

In April 2018, Greenstone received requests for information from the Antitrust Department of the Connecticut Office of the Attorney General. In May 2019, Attorneys General of more than 40 states plus the District of Columbia and Puerto Rico filed a complaint against a number of pharmaceutical companies, including Greenstone and Pfizer. The matter has been consolidated with a Multi-District Litigation in the Eastern District of Pennsylvania. As to Greenstone and Pfizer, the complaint alleges

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

anticompetitive conduct in violation of federal and state antitrust laws and state consumer protection laws. In June 2020, the State Attorneys General filed a new complaint against a large number of companies, including Greenstone and Pfizer, making similar allegations, but concerning a new set of drugs. This complaint was transferred to the Multi-District Litigation in July 2020. The Multi-District Litigation also includes civil complaints filed by private plaintiffs and state counties against Pfizer, Greenstone and a significant number of other defendants asserting allegations that generally overlap with those asserted by the State Attorneys General.

Subpoena & Civil Investigative Demand relating to ~~Manufacturing of~~ Tris Pharma/Quillivant XR

In October 2018, we received a subpoena from the U.S. Attorney’s Office for the Southern District of New York (SDNY) seeking records relating to our relationship with another drug manufacturer and its production and manufacturing of drugs including, but not limited to, Quillivant XR. We responded to that subpoena in full and have ~~produced~~had no communication with the SDNY in connection with the subpoena since June 2019. Additionally, in September 2020, we received a Civil Investigative Demand (CID) from the Texas Attorney General’s office seeking records ~~pursuant~~of a similar nature to those requested by the ~~subpoena.~~SDNY. We are producing records in response to this request.

Government Inquiries relating to Meridian Medical Technologies

In February 2019, we received a ~~civil investigative demand~~CID from the U.S. Attorney’s Office for the SDNY. The ~~civil investigative demand~~CID seeks records and information related to alleged quality issues involving the manufacture of auto-injectors at ~~our~~the Meridian site. In August 2019, we received a HIPAA subpoena from the U.S. Attorney’s Office for the Eastern District of Missouri seeking similar records and information. We are producing records in response to these requests.

U.S. Department of Justice/SEC Inquiry relating to Russian Operations

In June 2019, we received an informal request from the U.S. Department of Justice’s Foreign Corrupt Practices Act (FCPA) Unit seeking documents relating to our operations in Russia. In September 2019, we received a similar request from the SEC’s FCPA Unit. We have produced records pursuant to these requests.

Docetaxel––Mississippi Attorney General Government Investigation

See Legal Proceedings––Product Litigation––Docetaxel––Mississippi Attorney General Government Investigation above for information regarding a government investigation related to Docetaxel marketing practices.

U.S. Department of Justice Inquiries relating to India Operations

In March 2020, we received an informal request from the U.S. Department of Justice's Consumer Protection Branch seeking documents relating to our manufacturing operations in India, including at our former facility located at Irrungattukottai in India. In April 2020, we received a similar request from the U.S. Attorney’s Office for the SDNY regarding a civil investigation concerning operations at our facilities in India. We are producing records pursuant to these requests.

U.S. Department of Justice/SEC Inquiry relating to China Operations

In June 2020, we received an informal request from the U.S. Department of Justice's FCPA Unit seeking documents relating to our operations in China. In August 2020, we received a similar request from the SEC’s FCPA Unit. We ~~are producing~~have produced records pursuant to these requests.

Zantac––State of New Mexico and Mayor and City Council of Baltimore Civil Actions

See ~~Note 12A2. Contingencies and Certain Commitments:~~ Legal Proceedings––Product Litigation––Zantac above for information regarding civil actions separately filed by the State of New Mexico and the Mayor and City Council of Baltimore alleging various state statutory and common law claims in connection with the defendants’ alleged sale of Zantac in those jurisdictions.

~~PFIZER INC. AND SUBSIDIARY COMPANIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

~~A5. Legal Proceedings––Matters Resolved During the First Nine Months of 2021~~

During the first nine months of 2021, certain matters, including the matter discussed below, were resolved or became the subject of definitive settlement agreements or settlement agreements-in-principle.

~~EpiPen~~

Beginning in 2017, purported class actions were filed in various federal courts by indirect purchasers of EpiPen against Pfizer, and/or its affiliates King and Meridian, and/or various entities affiliated with Mylan, and Mylan former Chief Executive Officer, Heather Bresch. The plaintiffs in these actions represent U.S. nationwide classes comprising persons or entities who paid for any portion of the end-user purchase price of an EpiPen between 2009 until the cessation of the defendants’ allegedly unlawful conduct. Against Pfizer and/or its affiliates, plaintiffs in these actions generally allege that Pfizer’s and/or its affiliates’ settlement of patent litigation regarding EpiPen delayed market entry of generic EpiPen in violation of federal and various state antitrust laws. At least one lawsuit also alleges that Pfizer and/or Mylan violated the federal Racketeer Influenced and Corrupt Organizations Act (RICO). Plaintiffs also filed various federal antitrust, state consumer protection and unjust enrichment claims against, andGovernment Inquiries relating to ~~conduct attributable solely to, Mylan and/or its affiliates regarding EpiPen. Plaintiffs seek treble damages for alleged overcharges for EpiPen since 2011.~~ Biohaven

In ~~2017, all of these indirect purchase actions were consolidated for coordinated pre-trial proceedings in a Multi-District Litigation in~~June 2022, the U.S. ~~District Court~~Department of Justice's Commercial Litigation Branch and the U.S. Attorney’s Office for the Western District of ~~Kansas~~New York issued a CID relating to Biohaven. The CID seeks records and information related to, among other things, engagements with ~~other EpiPen-related actions against Mylan and/or its affiliates~~health care professionals and co-pay coupons cards. Biohaven is a wholly-owned subsidiary that we acquired in October 2022. We are producing records in response to ~~which Pfizer, King and Meridian are not parties.~~In July 2021, Pfizer and plaintiffs filed a stipulation of settlement to resolve the Multi-District Litigation for $345 million. The settlement is subject to court approval, and the payment has been made in accordance with the terms of the settlement agreement.these requests.

B. Guarantees and Indemnifications

In the ordinary course of business and in connection with the sale of assets and businesses and other transactions, we often indemnify our counterparties against certain liabilities that may arise in connection with the transaction or that are related to events and activities prior to or following a transaction. If the indemnified party were to make a successful claim pursuant to the terms of the indemnification, we may be required to reimburse the loss. These indemnifications are generally subject to various

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

restrictions and limitations. Historically, we have not paid significant amounts under these provisions and, as of October ~~3, 2021,~~2, 2022, the estimated fair value of these indemnification obligations ~~was~~is not ~~significant.~~material to Pfizer. See Note 2C for a description of the March 2022 indemnity provided by Pfizer to GSK in connection with the issuance of notes by the Consumer Healthcare JV. In conjunction with the completion of GSK’s demerger transactions in July 2022, GSK’s guarantee and our related indemnification of GSK’s guarantee were terminated.

In addition, in connection with our entry into certain agreements and other transactions, our counterparties may ~~agree~~be obligated to indemnify us. For example, in November 2020, we and Mylan completed the transaction to spin-off our Upjohn Business and combine it with Mylan to form Viatris. As part of the transaction and as previously disclosed, each of Viatris and Pfizer has agreed to assume, and to indemnify ~~Pfizer~~the other for, liabilities arising out of certain matters. Also, our global agreement with BioNTech to co-develop a mRNA-based coronavirus vaccine program aimed at preventing COVID-19 infection, includes certain indemnity provisions pursuant to which each of BioNTech and Pfizer has agreed to indemnify the other for certain liabilities that may arise in connection with certain third-party claims relating to Comirnaty.

We have also guaranteed the long-term debt of certain companies that we acquired ~~which~~and that now are ~~now~~ subsidiaries of Pfizer. See Note 7D.

C. Contingent Consideration for Acquisitions

We may be required to make payments to sellers for certain prior business combinations that are contingent upon future events or outcomes. For additional information, see Note 1D1E in our ~~2020~~2021 Form 10-K.

Note 13. ~~Product,~~Segment, Geographic and Other Revenue Information

A. ~~Geographic~~Segment Information

The following summarizes revenues by geographic area:
Three Months Ended Nine Months Ended
(MILLIONS) October 3,
2021 September 27,
2020 %
Change October 3,
2021 September 27,
2020 %
Change
United States $ 7,079 $ 5,425 30 $ 22,269 $ 15,827 41
Developed Europe 6,221 1,864 234 13,836 5,437 154
Developed Rest of World 4,498 1,065 322 8,617 2,974 190
Emerging Markets 6,296 1,923 227 12,930 5,986 116
Revenues $ 24,094 $ 10,277 134 $ 57,653 $ 30,224 91

We manage our commercial operations through two operating segments, Biopharma and PC1, which are each led by a single manager. Biopharma is the only reportable segment. Each operating segment has responsibility for its commercial activities. Regional commercial organizations market, distribute and sell our ~~collaboration partner, BioNTech, have entered into agreements to~~products and are supported by global platform functions that are responsible for the research, development, manufacturing and supply ~~pre-specified doses~~ of ~~Comirnaty with multiple~~our products and global corporate enabling functions. Biopharma receives its R&D services from WRDM and GPD. These services include IPR&D projects for new investigational products and additional indications for in-line products. Each operating segment has a geographic footprint across developed and emerging ~~nations around~~markets. Our chief operating decision maker uses the ~~world~~revenues and earnings of the operating segments, among other factors, for performance evaluation and resource allocation.

After the organizational changes in the third quarter of 2022 (see Note 1A), the new commercial structure within Biopharma is designed to better support and optimize performance across three broad therapeutic areas:

•Primary Care consists of the former Internal Medicine and Vaccines product portfolios, as well as COVID-19 products and potential future mRNA products.

•Specialty Care consists of the former Inflammation & Immunology, Rare Disease and Hospital (excluding Paxlovid) product portfolios.

•Oncology consists of the former Oncology product portfolio.

Other Costs and Business Activities––Certain pre-tax costs are not allocated to our operating segment results, such as costs included in Other business activities that are associated with: (i) R&D and medical expenses managed by our WRDM and GPD organizations; (ii) corporate enabling functions and other corporate costs; (iii) overhead costs primarily associated with our manufacturing operations; and (iv) our share of earnings from Haleon/the Consumer Healthcare JV. Additionally, all amortization of intangible assets, acquisition-related items, and certain significant items, representing substantive and/or unusual, and in some cases recurring, items that are evaluated on an individual basis by management and that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis, are not allocated to our operating segment results. Beginning in the first quarter of 2022, acquisition-related items may now include purchase accounting impacts that previously were included as part of a reconciling item entitled “Purchase accounting adjustments” that we no longer separately present, such as the incremental charge to cost of sales from the sale of acquired inventory that was written up to fair value, depreciation related to the increase/decrease in fair value of acquired fixed assets, amortization related to the increase in fair value of acquired debt, and the fair value changes for contingent consideration. The operating results of PC1 are included in Other business activities.

Segment Assets––We manage our assets on a total company basis, not by operating segment, as our operating assets are shared or commingled. Therefore, our chief operating decision maker does not regularly review any asset information by operating

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

segment and, accordingly, we do not report asset information by operating segment. Total assets were $195 billion as of October 2, 2022 and $181 billion as of December 31, 2021.

Selected Income Statement Information


The following provides selected income statement information by reportable segment:
	Three Months Ended								Nine Months Ended
	Revenues				Earnings(a)				Revenues				Earnings(a)
(MILLIONS)	October 2, 2022		October 3, 2021		October 2, 2022		October 3, 2021		October 2, 2022		October 3, 2021		October 2, 2022		October 3, 2021
Reportable Segment:
Biopharma	$	22,319	$	23,513	$	14,665	$	11,848	$	75,066	$	56,101	$	45,222	$	29,952
Other business activities(b)	319		521		(4,007)		(3,303)		974		1,348		(9,820)		(7,778)
Reconciling Items:
Amortization of intangible assets	—		—		(822)		(980)		—		—		(2,478)		(2,778)
Acquisition-related items	—		—		(62)		(41)		—		—		(331)		(14)
Certain significant items(c)	—		—		(773)		318		—		—		(3,095)		1,102
	$	22,638	$	24,035	$	9,001	$	7,843	$	76,040	$	57,450	$	29,498	$	20,484

(a)Income from continuing ~~to deliver doses~~operations before provision/(benefit) for taxes on income. Biopharma’s earnings include dividend income from our investment in ViiV of ~~Comirnaty under such agreements. We currently sell~~$112 million in the ~~Comirnaty vaccine directly to government~~third quarter of 2022 and ~~government sponsored customers. This includes supply agreements entered into~~$38 million in ~~November 2020~~the third quarter of 2021, and ~~February~~$237 million in the first nine months of 2022 and ~~May 2021~~$127 million in the first nine months of 2021. In connection with the ~~European Commission (EC)~~organizational changes effective in the third quarter of 2022, certain functions transferred between Biopharma and corporate enabling functions and certain activities were realigned within the GPD organization. We have reclassified $105 million of costs for the first six months of 2022, $57 million of costs in the third quarter of 2021 and $153 million of costs in the first nine months of 2021 from corporate enabling functions, which are included in Other business activities, to Biopharma to conform to the current period presentation.

(b)Other business activities include revenues and costs associated with PC1 and costs that we do not allocate to our operating segments, per above, including acquired IPR&Dexpenses in the periods presented. In the third quarter and first nine months of 2022, earnings include $426 million of acquired IPR&D expenses for an upfront payment related to the closing of the acquisition of ReViral, as well as a charge to Cost of sales of approximately $400 million related to excess raw materials for Paxlovid. Earnings in the first nine months of 2022 also include write-offs to Cost of sales of inventory, related to COVID-19 products that have exceeded or are expected to exceed their approved shelf-lives prior to being used, of $516 million. In the third quarter and first nine months of 2021, earnings include $706 million of acquired IPR&D expenses associated with our collaboration with Arvinas.

(c)Certain significant items are substantive and/or unusual, and in some cases recurring, items (as noted above). Earnings in the first nine months of 2022 includes, among other items: (i) net losses on equity securities of $1.3 billion recorded in Other (income)/deductions––net and (ii) restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring of $701 million ($344 million recorded in Selling, informational and administrative expenses and the remaining amounts primarily recorded in Restructuring charges and certain acquisition-related costs). Earnings in the first nine months of 2021 includes, among other items: (i) net gains on equity securities of $1.6 billion recorded in Other (income)/deductions––net and (ii) actuarial valuation and other pension and postretirement plan gains of $932 million recorded in Other (income)/deductions––net, partially offset by (iii) restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring of $1.1 billion ($310 million recorded in Selling, informational and administrative expenses and the remaining amount primarily recorded in Restructuring charges and certain acquisition-related costs). Earnings in the third quarter of 2021 includes, among other items: (i) actuarial valuation and other pension and postretirement plan gains of $899 million recorded in Other (income)/deductions––net, partially offset by (ii) restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring of $823 million ($150 million recorded in Selling, informational and administrative expenses and the remaining amount primarily recorded in Restructuring charges and certain acquisition-related costs). For additional information, see Notes3 and 4.

B. Geographic Information


The following summarizes revenues by geographic area:
	Three Months Ended					Nine Months Ended
(MILLIONS)	October 2, 2022		October 3, 2021		% Change	October 2, 2022		October 3, 2021		% Change
United States	$	13,851	$	7,020	97	$	33,991	$	22,066	54
Developed Europe	3,136		6,221		(50)	14,705		13,836		6
Developed Rest of World	2,351		4,498		(48)	10,671		8,617		24
Emerging Markets	3,300		6,296		(48)	16,673		12,930		29
Revenues	$	22,638	$	24,035	(6)	$	76,040	$	57,450	32

C. Other Revenue Information

Significant Customers––For information on our significant wholesale customers, see Note 17C in our 2021 Form 10-K. Additionally, revenues from the U.S. government represented 38% and 27% of total revenues for the three and nine months ended October 2, 2022, respectively, and primarily represent sales of Paxlovid and Comirnaty. Accounts receivable from the

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

on behalf of the different EU member states and certain other countries. Each EU member state submits its own Comirnaty vaccine order to us and is responsible for payment pursuant to terms of the supply agreements negotiated by the EC.

~~B. Other Revenue Information~~

~~Significant Customers~~

~~For information on our significant wholesale customers, see~~ ~~Note 17B~~ ~~in our 2020 Form 10-K. Additionally, revenues from the~~ U.S. government represented 10% and 12% of total revenues for the three and nine months ended October 3, 2021, respectively, and primarily represent sales of Comirnaty. Accounts receivable from the U.S. government represented 8%44% of total trade accounts receivable as of October ~~3, 2021,~~2, 2022, and primarily relate to sales of Paxlovid and Comirnaty.

Significant Product Revenues

The following provides detailed revenue information for several of our major products:

(MILLIONS) Three Months Ended Nine Months Ended
PRODUCT PRIMARY INDICATION OR CLASS Oct. 3, 2021 Sept. 27, 2020 Oct. 3, 2021 Sept. 27, 2020
TOTAL REVENUES(a)
$ 24,094 $ 10,277 $ 57,653 $ 30,224
Vaccines $ 14,583 $ 1,717 $ 28,711 $ 4,574
Comirnaty direct sales and alliance revenues Active immunization to prevent COVID-19 12,977 — 24,277 —
Prevnar family(b)
Pneumococcal disease 1,447 1,534 3,971 4,100
FSME/IMMUN-TicoVac Tick-borne encephalitis disease 47 77 161 170
Nimenrix Meningococcal ACWY disease 51 50 145 180
Trumenba Meningococcal B disease 52 48 102 85
All other Vaccines Various 10 8 55 39
Oncology $ 3,085 $ 2,761 $ 9,091 $ 7,843
Ibrance HR-positive/HER2-negative metastatic breast cancer 1,381 1,357 4,039 3,955
Xtandi alliance revenues mCRPC, nmCRPC, mCSPC 309 266 879 741
Inlyta Advanced RCC 256 195 742 559
Sutent Advanced and/or metastatic RCC, adjuvant RCC, refractory GIST (after disease progression on, or intolerance to, imatinib mesylate) and advanced pancreatic neuroendocrine tumor 142 202 537 616
Bosulif Philadelphia chromosome–positive chronic myelogenous leukemia 136 111 395 324
Xalkori ALK-positive and ROS1-positive advanced NSCLC 116 122 371 409
Ruxience(c)
Non-hodgkin’s lymphoma, chronic lymphocytic leukemia, granulomatosis with polyangiitis (Wegener’s Granulomatosis) and microscopic polyangiitis 124 59 343 78
Retacrit(c)
Anemia 110 102 322 278
Zirabev(c)
Treatment of mCRC; unresectable, locally advanced, recurrent or metastatic NSCLC; recurrent glioblastoma; metastatic RCC; and persistent, recurrent or metastatic cervical cancer 96 48 311 63
Lorbrena ALK-positive metastatic NSCLC 67 55 193 142
Aromasin Post-menopausal early and advanced breast cancer 56 35 159 107
Besponsa Relapsed or refractory B-cell acute lymphoblastic leukemia 50 44 145 134
Braftovi
In combination with Mektovi for metastatic melanoma in patients with a BRAFV600E/K mutation and, in combination with Erbitux® (cetuximab), for the treatment of
BRAFV600E-mutant mCRC after prior therapy
47 42 136 116
Bavencio alliance revenues Locally advanced or metastatic urothelial carcinoma; metastatic Merkel cell carcinoma; immunotherapy and tyrosine kinase inhibitor combination for patients with advanced RCC 54 21 122 51
Mektovi
In combination with Braftovi for metastatic melanoma in patients with a BRAFV600E/K mutation
41 34 112 103
All other Oncology Various 98 69 286 167
Internal Medicine $ 2,097 $ 2,085 $ 7,093 $ 6,695
Eliquis direct sales and alliance revenues Nonvalvular atrial fibrillation, deep vein thrombosis, pulmonary embolism 1,346 1,114 4,470 3,686
Premarin family Symptoms of menopause 148 168 420 471
Chantix/Champix An aid to smoking cessation treatment in adults 18 years of age or older 7 223 409 728
BMP2 Development of bone and cartilage 71 70 186 197


(MILLIONS)		Three Months Ended				Nine Months Ended
PRODUCT	PRIMARY INDICATION OR CLASS	Oct. 2, 2022		Oct. 3, 2021		Oct. 2, 2022		Oct. 3, 2021
TOTAL REVENUES(a)		$	22,638	$	24,035	$	76,040	$	57,450
GLOBAL BIOPHARMACEUTICALS BUSINESS (BIOPHARMA)(a), (b)		$	22,319	$	23,513	$	75,066	$	56,101
Primary Care		$	15,846	$	16,680	$	55,676	$	35,804
Comirnaty direct sales and alliance revenues(c)	Active immunization to prevent COVID-19	4,402		12,977		26,477		24,277
Paxlovid	COVID-19 infection (high risk population)	7,514		—		17,099		—
Eliquis alliance revenues and direct sales	Nonvalvular atrial fibrillation, deep vein thrombosis, pulmonary embolism	1,464		1,346		5,001		4,470
Prevnar family(d)	Pneumococcal disease	1,607		1,447		4,601		3,971
Premarin family	Symptoms of menopause	110		148		327		420
Nimenrix	Meningococcal ACWY disease	79		51		221		145
BMP2	Development of bone and cartilage	58		71		201		186
FSME-IMMUN/TicoVac	Tick-borne encephalitis disease	67		47		177		161
Toviaz	Overactive bladder	30		56		130		174
Trumenba	Meningococcal B disease	60		52		108		102
Chantix/Champix	An aid to smoking cessation treatment in adults 18 years of age or older	4		7		8		409
All other Primary Care	Various	451		479		1,326		1,490
Specialty Care		$	3,404	$	3,749	$	10,267	$	11,205
Vyndaqel/Vyndamax	ATTR-CM and polyneuropathy	602		501		1,766		1,454
Xeljanz	RA, PsA, UC, active polyarticular course juvenile idiopathic arthritis, ankylosing spondylitis	502		610		1,304		1,734
Enbrel (Outside the U.S. and Canada)	RA, juvenile idiopathic arthritis, PsA, plaque psoriasis, pediatric plaque psoriasis, ankylosing spondylitis and nonradiographic axial spondyloarthritis	230		283		767		888
Sulperazon	Bacterial infections	178		181		598		515
Inflectra	Crohn’s disease, pediatric Crohn’s disease, UC, pediatric UC, RA in combination with methotrexate, ankylosing spondylitis, PsA and plaque psoriasis	131		172		403		485
Ig Portfolio(e)	Various	124		99		356		311
BeneFIX	Hemophilia B	99		104		325		328
Zavicefta	Bacterial infections	98		107		302		306
Genotropin	Replacement of human growth hormone	90		95		261		284
Zithromax	Bacterial infections	71		66		250		198
Medrol	Anti-inflammatory glucocorticoid	79		109		235		320
Fragmin	Treatment/prevention of venous thromboembolism	60		74		202		223
Somavert	Acromegaly	70		70		202		203
Refacto AF/Xyntha	Hemophilia A	58		69		188		235
Vfend	Fungal infections	51		51		171		204
All other Anti-infectives	Various	374		455		1,123		1,384
All other Specialty Care	Various	586		702		1,816		2,134
Oncology		$	3,070	$	3,085	$	9,124	$	9,091
Ibrance	HR-positive/HER2-negative metastatic breast cancer	1,283		1,381		3,841		4,039
Xtandi alliance revenues	mCRPC, nmCRPC, mCSPC	320		309		878		879
Inlyta	Advanced RCC	252		256		760		742
Zirabev	Treatment of mCRC; unresectable, locally advanced, recurrent or metastatic NSCLC; recurrent glioblastoma; metastatic RCC; and persistent, recurrent or metastatic cervical cancer	146		96		432		311
Bosulif	Philadelphia chromosome–positive chronic myelogenous leukemia	141		136		425		395
Xalkori	ALK-positive and ROS1-positive advanced NSCLC	118		116		362		371
Ruxience	Non-hodgkin’s lymphoma, chronic lymphocytic leukemia, granulomatosis with polyangiitis (Wegener’s Granulomatosis) and microscopic polyangiitis	120		124		357		343

PFIZER INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(MILLIONS) Three Months Ended Nine Months Ended
PRODUCT PRIMARY INDICATION OR CLASS Oct. 3, 2021 Sept. 27, 2020 Oct. 3, 2021 Sept. 27, 2020
Toviaz Overactive bladder 56 59 174 183
Pristiq Depression 43 40 144 124
All other Internal Medicine Various 426 411 1,291 1,305
Hospital(a)
$ 2,367 $ 1,790 $ 6,968 $ 5,741
Sulperazon Bacterial infections 181 143 515 432
Medrol Anti-inflammatory glucocorticoid 109 87 320 295
Zavicefta Bacterial infections 107 49 306 143
EpiPen Epinephrine injection used in treatment of life-threatening allergic reactions 78 75 225 234
Fragmin Treatment/prevention of venous thromboembolism 74 60 223 178
Vfend Fungal infections 51 52 204 201
Zithromax Bacterial infections 66 25 198 218
Tygacil Bacterial infections 56 33 153 115
Precedex Sedation agent in surgery or intensive care 50 55 147 211
Zyvox Bacterial infections 41 51 144 176
IVIg Products(d)
Various 99 88 311 271
Pfizer CentreOne(e)
Various 521 242 1,348 618
All other Anti-infectives Various 355 301 1,081 936
All other Hospital Various 577 529 1,794 1,713
Inflammation & Immunology (I&I) $ 1,094 $ 1,173 $ 3,200 $ 3,299
Xeljanz RA, PsA, UC, active polyarticular course juvenile idiopathic arthritis 610 654 1,734 1,741
Enbrel (Outside the U.S. and Canada) RA, juvenile idiopathic arthritis, PsA, plaque psoriasis, pediatric plaque psoriasis, ankylosing spondylitis and nonradiographic axial spondyloarthritis 283 321 888 1,005
Inflectra/Remsima(c)
Crohn’s disease, pediatric Crohn’s disease, UC, pediatric UC, RA in combination with methotrexate, ankylosing spondylitis, PsA and plaque psoriasis 172 162 485 471
All other I&I Various 28 35 93 83
Rare Disease $ 869 $ 752 $ 2,588 $ 2,071
Vyndaqel/Vyndamax ATTR-cardiomyopathy and polyneuropathy 501 351 1,454 859
BeneFIX Hemophilia B 104 107 328 337
Genotropin Replacement of human growth hormone 95 107 284 316
Refacto AF/Xyntha Hemophilia A 69 92 235 272
Somavert Acromegaly 70 67 203 198
All other Rare Disease Various 30 27 84 89
Total Alliance revenues $ 2,068 $ 1,250 $ 5,718 $ 4,036
Total Biosimilars(c)
$ 575 $ 424 $ 1,663 $ 1,001
Total Sterile Injectable Pharmaceuticals(f)
$ 1,443 $ 1,192 $ 4,306 $ 3,826


(MILLIONS)		Three Months Ended				Nine Months Ended
PRODUCT	PRIMARY INDICATION OR CLASS	Oct. 2, 2022		Oct. 3, 2021		Oct. 2, 2022		Oct. 3, 2021
Retacrit	Anemia	87		110		308		322
Sutent	Advanced and/or metastatic RCC, adjuvant RCC, refractory GIST (after disease progression on, or intolerance to, imatinib mesylate) and advanced pancreatic neuroendocrine tumor	75		142		287		537
Lorbrena	ALK-positive metastatic NSCLC	99		67		247		193
Bavencio alliance revenues	Locally advanced or metastatic urothelial carcinoma; metastatic Merkel cell carcinoma; immunotherapy and tyrosine kinase inhibitor combination for patients with advanced RCC	73		54		198		122
Aromasin	Post-menopausal early and advanced breast cancer	66		56		187		159
Besponsa	Relapsed or refractory B-cell acute lymphoblastic leukemia	55		50		164		145
Braftovi	In combination with Mektovi for metastatic melanoma in patients with a BRAFV600E/K mutation and, in combination with Erbitux® (cetuximab)(f), for the treatment of BRAFV600E -mutant mCRC after prior therapy	58		47		156		136
Trazimera	HER-positive breast cancer and metastatic stomach cancers	51		45		149		131
Mektovi	In combination with Braftovi for metastatic melanoma in patients with a BRAFV600E/K mutation	45		41		129		112
All other Oncology	Various	80		53		243		155
PFIZER CENTREONE(b)		$	319	$	521	$	974	$	1,348

Total Alliance revenues included above		$	1,689	$	2,068	$	6,320	$	5,718

(a)On ~~November 16, 2020,~~December 31, 2021, we completed the ~~spin-off and the combination~~sale of our ~~Upjohn Business with Mylan~~Meridian subsidiary. Prior to ~~form Viatris. See~~ ~~Note 1A~~its sale, Meridian was managed as part of the former Hospital therapeutic area (see footnote (b) below). Beginning in the fourth quarter of ~~2020,~~2021, the financial results of ~~our~~ Meridian ~~subsidiary, which was previously included in our former Upjohn operating segment,~~ are ~~reported in the Hospital therapeutic area for all periods presented.~~reflected as discontinued operations. See Note 1A.

(b)~~Prevnar family include revenues from Prevnar 13/Prevenar 13 (pediatric and adult) and Prevnar 20 (adult).~~

~~(c)~~See ~~Biosimilars are highly similar versions of approved and authorized biological medicines and primarily include revenues from Inflectra/Remsima, Ruxience, Retacrit and Zirabev.~~

~~(d)~~Note 1A ~~Intravenous immunoglobulin (IVIg) products include the revenues from Panzyga, Octagam and Cutaquig.~~

~~(e)Pfizer CentreOne~~for information about our recent organizational changes. PC1 includes revenues from our contract manufacturing, including certain Comirnaty-related manufacturing activities performed on behalf of BioNTech ($~~187~~7 million and $108 million for the third quarter and the first nine months of 2022, respectively, and $187 million and $274 million for the third quarter and the first nine months of 2021, respectively), and revenues from our active pharmaceutical ingredient sales operation, as well as revenues related to our manufacturing and supply agreements with former legacy Pfizer businesses/partnerships, including but not limited to, transitional manufacturing and supply agreements with Viatris following the spin-off of the Upjohn Business. Prior to the fourth quarter of 2021, PC1 was managed within our former Hospital product portfolio.

(c)Excludes revenues for certain Comirnaty-related manufacturing activities performed on behalf of BioNTech, which are included in the PC1 contract development and manufacturing organization.

(d)Prevnar family include revenues from Prevnar 13/Prevenar 13 (pediatric and adult) and Prevnar 20/Apexxnar (adult).

(e)Immunoglobulin (Ig) portfolio includes the revenues from Panzyga, Octagam and Cutaquig.

(f)~~Total Sterile Injectable Pharmaceuticals represents~~Erbitux® is a registered trademark of ImClone LLC.

Remaining Performance Obligations––Contracted revenue expected to be recognized from remaining performance obligations for firm orders in long-term contracts to supply Comirnaty to our customers totaled approximately $22 billion as of October 2, 2022, which includes amounts received in advance and deferred, as well as amounts that will be invoiced as we deliver these products to our customers in future periods. Of this amount, we expect to recognize revenue of approximately $9 billion in 2022, $13 billion in 2023 and $200 million in 2024. Remaining performance obligations are based on foreign exchange rates as of the ~~total~~end of ~~all branded~~the third quarter of 2022 and ~~generic injectable products in the Hospital therapeutic area, including anti-infective sterile injectable pharmaceuticals.~~exclude arrangements with an original expected contract duration of less than one year.

Deferred ~~Revenues~~

Revenues––Our deferred revenues primarily relate to advance payments received or receivable ~~in connection with contracts that we entered into during 2021 and 2020 with~~from various government or government sponsored customers in international markets for supply of ~~Comirnaty.~~Comirnaty and Paxlovid. The deferred revenues ~~associated~~related to Comirnaty and Paxlovid total $6.2 billion as of October 2, 2022, with ~~the advance payments~~$6.1 billion and $126 million recorded in current and noncurrent liabilities, respectively. The deferred revenues related to Comirnaty total ~~$3.7~~$3.3 billion ~~as of October 3, 2021 and $957 million~~ as of December 31, ~~2020,~~2021, with ~~$3.4~~$3.0 billion and ~~$264~~$249 million recorded in current liabilities and noncurrent liabilities, ~~respectively as of October 3, 2021, and $957 million recorded in current liabilities~~respectively. There were no deferred revenues associated with Paxlovid as of December 31, ~~2020.~~2021. The increase in ~~the~~ Comirnaty and Paxlovid deferred revenues during the first nine months of ~~2021~~2022 was primarily the result of additional advance

~~PFIZER INC. AND SUBSIDIARY COMPANIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

payments received as we entered into new or amended contracts, ~~or as we invoiced customers in~~including new advance ~~of vaccine deliveries~~payments received for Paxlovid contracts, less amounts recognized in Revenues as we delivered ~~doses~~the products to our ~~customers.~~customers and the impact of foreign exchange. During the third quarter and first nine months of ~~2021,~~2022, we recognized revenue of ~~$136~~$68 million and ~~$950 million,~~$2.5 billion, respectively, that was included in the balance of Comirnaty deferred revenues as of December 31, ~~2020.~~2021. The Comirnaty and Paxlovid deferred revenues as of October ~~3, 2021~~2, 2022 will be recognized in Revenues proportionately as we ~~deliver doses~~transfer control of the ~~vaccine~~products to our customers and satisfy our performance obligation under the contracts, with the amounts included in current liabilities expected to be recognized in Revenues within the next 12 months, and the amounts included in noncurrent liabilities expected to be recognized in Revenues in the ~~fourth~~last three months of 2023 and in the first quarter of 2024. Deferred revenues associated with contracts for other products were not significant as of October 2, 2022 ~~and in 2023.~~or December 31, 2021.

3837

ITEM 2. ~~MANAGEMENTS’S~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

OVERVIEW OF OUR PERFORMANCE, OPERATING ENVIRONMENT, STRATEGY AND OUTLOOK

~~Our Business and Strategy~~

Most of our revenues come from the manufacture and sale of biopharmaceutical products. With the formation of the Consumer Healthcare JV in 2019 and the completion of the spin-off and combination of our Upjohn Business with Mylan in November 2020, Pfizer has transformed into a focused, global leader in science-based innovative medicines and vaccines. We operate as a single operating segment engaged in the discovery, development, manufacturing, marketing, sale and distribution of biopharmaceutical products worldwide. The financial results of the Upjohn Business and the Mylan-Japan collaboration are reflected as discontinued operations. Prior-period information has been restated to reflect our current organization structure. We expect to incur costs of approximately $700 million in connection with separating Upjohn, of which approximately 75% has been incurred since inception and through the third quarter of 2021. These charges include costs and expenses related to separation of legal entities and transaction costs.

~~For additional information about our business, strategy and operating environment, see the~~ ~~Item 1. Business~~ ~~section and~~ ~~Overview of Our Performance, Operating Environment, Strategy and Outlook~~ ~~section within MD&A of our 2020 Form 10-K.~~

References to operational variances pertain to period-over-period changes that exclude the impact of foreign exchange rates. Although foreign exchange rate changes are part of our business, they are not within our control and since they can mask positive or negative trends in the business, we believe presenting operational variances excluding these foreign exchange changes provides useful information to evaluate our results.

Our Business and Strategy––We apply science and our global resources to bring therapies to people that extend and significantly improve their lives through the discovery, development, manufacture, marketing, sale and distribution of biopharmaceutical products worldwide. Beginning in the fourth quarter of 2021, we reorganized our commercial operations and began to manage our commercial operations through a global structure consisting of two operating segments: Biopharma and PC1. Beginning in the third quarter of 2022, we made several additionalorganizational changes to further transform our operations to better leverage our expertise in certain areas and in anticipation of potential future new product launches. Biopharma is the only reportable segment. See Note 1A. We expect to incur costs of approximately $700 million in connection with separating Upjohn, of which approximately 85% has been incurred since inception and through the third quarter of 2022. These charges include costs and expenses related to separation of legal entities and transaction costs.

For additional information about our business, strategy and operating environment, see the Item 1. Business section and Overview of Our Performance, Operating Environment, Strategy and Outlook section within MD&A of our 2021 Form 10-K.

Our Business Development Initiatives

––We are committed to strategically capitalizing on growth opportunities, primarily by advancing our own product pipeline and maximizing the value of our existing products, ~~as well as~~but also through various business development activities.

Our significant recent business development activities ~~include:~~

~~Collaboration with Biohaven~~include the transactions discussed in ––In November 2021, we entered into a collaboration and license agreement and related sublicense agreement with Biohaven Pharmaceutical Holding Company Ltd., Biohaven Pharmaceutical Ireland DAC and Bioshin LTD. (collectively, Biohaven) pursuant to which we will acquire rights to commercialize rimegepant and zavegepant for the treatment and prevention of migraines outside of the U.S., subject to regulatory approval. Rimegepant is currently commercialized in the U.S. under the brand name Nurtec®Note 2 ~~ODT, with certain applications pending outside of~~and the U.S. Biohaven will continue to lead R&D globally and we have the exclusive right to commercialization globally, outside of the U.S. Under the financial terms of the transaction agreements, we will make an upfront payment of $500 million, consisting of $150 million cash and $350 million in the purchase of Biohaven equity. Biohaven is also eligible to receive up to $740 million in non-U.S. commercialization milestones, in addition to tiered double-digit royalties on net sales outside of the U.S. In addition to the milestones and royalties above, we will also reimburse Biohaven for the portion of certain additional milestones and royalties due to third parties in accordance with preexisting agreements, which are attributed to ex-U.S. sales. The transaction is subject to customary closing conditions, including completion of review under applicable antitrust laws.

~~Agreement with Altaris Capital Partners, LLC (Altaris)~~––In November 2021, we entered into an agreement with Altaris, a healthcare investment firm based in New York, for Altaris to purchase Meridian. Meridian was acquired by Pfizer in 2011 as part of the King Pharmaceuticals acquisition and has maintained relative operational autonomy since that time. Meridian’s operations, which generate approximately $300 million in annual revenues, consist of manufacturing and distributing medical countermeasures used by the U.S. Department of Defense, Emergency Medical Services, Homeland Security and foreign ministries of health and defense, as well as rescue auto-injectors for the emergency treatment of allergic reactions including anaphylaxis. The transaction is expected to close in the coming months, subject to customary closing conditions including the receipt of regulatory approvals.following:

Acquisition of ~~Trillium~~Global Blood Therapeutics, Inc.~~(Trillium)~~ (GBT)––~~In August 2021,~~On October 5, 2022, we acquired GBT, a biopharmaceutical company dedicated to the discovery, development and ~~Trillium announced~~delivery of life-changing treatments that provide hope to underserved patient communities, starting with sickle cell disease, for $68.50 per share, in cash, for payments of approximately $5.3 billion, net of cash acquired, plus repayment of third-party debt of $331 million.

Acquisition of Biohaven––On October 3, 2022, we acquired Biohaven, the ~~companies entered into~~maker of Nurtec ODT (rimegepant), an innovative dual-acting migraine therapy approved for both acute treatment and episodic prevention of migraine in adults. The transaction includes the acquisition of Biohaven’s CGRP programs, including rimegepant, zavegepant and a ~~definitive agreement under which we will acquire Trillium, a clinical stage immuno-oncology company developing innovative therapies for the treatment~~portfolio of ~~cancer. We currently hold a 2% ownership investment in Trillium.~~five pre-clinical CGRP assets. Under the terms of the agreement, we ~~will acquire~~acquired all outstanding common shares of ~~Trillium~~Biohaven not already owned by us for ~~$18.50~~$148.50 per share, in cash, ~~or an aggregate purchase price~~for payments of approximately ~~$2.2 billion. The~~$11.5 billion, plus repayment of third-party debt of $863 million and redemption of Biohaven’s redeemable preferred stock for $495 million. Effective immediately prior to the closing of the acquisition, Biohaven completed the spin-off of Biohaven Ltd. (NYSE: BHVN), distributing Biohaven Ltd.’s shares to Biohaven shareholders. Biohaven Ltd. is ~~expected to close~~a new publicly traded company that retained Biohaven’s non-CGRP development stage pipeline compounds. Pfizer, a Biohaven shareholder, received a pro rata portion of Biohaven Ltd.’s shares in the ~~fourth quarter~~distribution and currently owns approximately 1.5% of ~~2021 or first half of 2022, subject to customary closing conditions, including regulatory approvals.~~Biohaven Ltd.

~~Collaboration~~This acquisition follows on the November 2021 collaboration for the commercialization of rimegepant and zavegepant outside the U.S., in connection with ~~Arvinas, Inc. (Arvinas)––In July 2021, we announced a global collaboration with Arvinas to develop and commercialize ARV-471, an investigational oral PROTAC~~® ~~(PROteolysis TArgeting Chimera) estrogen receptor protein degrader. See~~which Pfizer acquired 2.6% of Biohaven’s common stock (see Note 2 2D~~for additional information~~). Biohaven Ltd. will also have the right to receive tiered royalties from Pfizer on any annual net sales of rimegepant and zavegepant in the U.S. in excess of $5.25 billion.

~~Acquisition of Amplyx Pharmaceuticals, Inc.(Amplyx)~~––In April 2021, we announced that we acquired Amplyx, a privately-held company dedicated to the development of therapies for debilitating and life-threatening diseases that affect people with compromised immune systems. Amplyx’s lead compound, Fosmanogepix (APX001), is a novel investigational asset in Phase 2 development for the treatment of invasive fungal infections.

~~For a discussion of recent significant business development activities, see~~ ~~Note 2.~~ For a description of the more significant recent transactions through February ~~25, 2021,~~24, 2022, the filing date of our ~~2020~~2021 Form 10-K, see Note 2 in our ~~2020~~2021 Form 10-K.

Our Third Quarter ~~2021~~2022 and First Nine Months of ~~2021~~2022 Performance

~~Revenues~~

Revenues ~~increased $13.8~~––Revenues decreased $1.4 billion, or ~~134%~~6%, in the third quarter of ~~2021~~2022 to ~~$24.1~~$22.6 billion from ~~$10.3~~$24.0 billion in the third quarter of ~~2020,~~2021, reflecting an operational ~~increase~~decrease of ~~$13.4 billion,~~$441 million, or ~~130%~~2%, as well as ~~a favorable~~an unfavorable impact of foreign exchange of ~~$421~~$957 million, or 4%. ~~Excluding direct sales and alliance revenues of~~The operational decrease was primarily driven by a decline in Comirnaty, ~~of $13.0 billion, revenues increased 7% operationally, reflecting strong growth in Eliquis, Vyndaqel/Vyndamax, Inlyta, Xtandi, Biosimilars and the Hospital therapeutic area,~~ partially offset by ~~declines in Chantix/Champix, Prevnar family, Sutent, Xeljanz and Enbrel.~~

growth from Paxlovid. Revenues increased ~~$27.4~~$18.6 billion, or ~~91%~~32%, in the first nine months of ~~2021~~2022 to ~~$57.7~~$76.0 billion from ~~$30.2~~$57.4 billion in the first nine months of ~~2020,~~2021, reflecting an operational increase of ~~$26.1~~$21.6 billion, or ~~86%~~38%, as well as ~~a favorable~~an unfavorable impact of foreign exchange of ~~$1.3~~$3.0 billion, or 4%5%. The operational increase was primarily driven by growth from Paxlovid and Comirnaty.

Excluding ~~direct sales~~the impact of Paxlovid and ~~alliance revenues of~~ Comirnaty, ~~of $24.3 billion,~~ revenues increased 8%2% operationally in both the third quarter and first nine months of 2022, reflecting strong growth in Eliquis, the Prevnar family and Vyndaqel/Vyndamax, ~~Inlyta, Xtandi, Biosimilars and the Hospital therapeutic area,~~ partially offset by declines in

Xeljanz, Sutent and certain Comirnaty-related manufacturing activities performed on behalf of BioNTech, which are included in the PC1 contract development and manufacturing organization. Revenues in the first nine months of 2022 were also negatively impacted by declines in Chantix/~~Champix, Prevnar family, Enbrel and Sutent.~~Champix.

See the Analysis of the Condensed Consolidated Statements of Income––Revenues by Geography and Revenues––Selected Product Discussion sections for more information, including a discussion of key drivers of our revenue performance. For information regarding the primary indications or class of certain products, see Note ~~13B.~~13C.

Income from Continuing Operations Before Provision/(Benefit) for Taxes on Income

––The ~~increases~~increase in Income from continuing operations before provision/(benefit) for taxes on income of ~~$7.3~~$1.2 billion in the third quarter of ~~2021 and $13.7 billion in the first nine months of 2021,~~2022, compared to the same ~~periods~~period in ~~2020, respectively, were~~2021, was primarily attributable ~~to:~~to decreases in Cost of sales and Restructuring charges and certain acquisition-related costs, partially offset by: (i) ~~higher revenues,~~lower revenues; (ii) lower net periodic benefit credits associated with pension and other postretirement plans; (iii)net losses on equity securities in ~~2021~~the third quarter of 2022 versus ~~net periodic benefit costs in 2020, (iii)~~ net gains on equity securities in the third quarter of 2021 ~~versus~~ and (iv) an increase in Selling, informational and administrative expenses.

The increase in Income from continuing operations before provision/(benefit) for taxes on income of $9.0 billion in the first nine months of 2022, compared to the same period in 2021, was primarily attributable to higher revenues, partially offset by: (i) an increase in Cost of sales; (ii)net losses on equity securities in the ~~third quarter~~first nine months of ~~2020, and higher~~2022 versus net gains on equity securities in the first nine months of ~~2021~~2021; (iii) lower net periodic benefit credits associated with pension and other postretirement plans and (iv) ~~the non-recurrence of certain asset impairment charges~~increases in ~~2020, partially offset by (v) increases in:~~ ~~Cost of sales,~~ Research and development expenses and Selling, informational and administrative ~~expenses~~ ~~and~~ ~~Restructuring charges and certain acquisition-related costs.~~expenses.

See the Analysis of the Condensed Consolidated Statements of Income within ~~this~~ MD&A and Note 4 for additional information.

For information on our tax provision and effective tax rate, see the Provision/(Benefit) for Taxes on Income section within MD&A and Note 5.

Our Operating Environment

––We, like other businesses in our industry, are subject to certain industry-specific challenges. These include, among others, the topics listed below, as well as in the Item 1. Business––Government Regulation and inPrice Constraints and Item 1A. Risk Factors sections,and the Overview of Our Performance, Operating Environment, Strategy and Outlook––Our Operating Environment section of the MD&Aof our ~~2020~~2021 Form 10-K.

Intellectual Property Rights and Collaboration/Licensing Rights

––The loss, expiration or invalidation of intellectual property rights, patent litigation settlements with manufacturers and the expiration of co-promotion and licensing rights can have a material adverse effect on our revenues. Certain of our products have experienced patent-based expirations or loss of regulatory exclusivity in certain markets in the last few years, and we expect certain products to face ~~significantly~~ increased generic competition over the next few years. ~~Examples of products experiencing recent expirations of their basic product patent are Chantix in the U.S. in November 2020 and Sutent in the U.S. in August 2021.~~ While additional patent expiries will continue, we expect a moderate impact of reduced revenues due to patent expiries from ~~2021~~2022 through 2025. Further, legal or regulatory action by various stakeholders or governments could potentially result in us not seeking intellectual property protection for or agreeing not to enforce or being restricted from enforcing intellectual property related to our products. For example, in May 2021, the Brazilian Supreme Court voted to invalidate Article 40 of

~~Brazil’s Patent Law, which guaranteed a minimum 10-year patent term from patent grant, and to give retroactive effect to such decision.~~ We continue to vigorously defend our patent rights against infringement, and we will continue to support efforts that strengthen worldwide recognition of patent rights while taking necessary steps to help ensure appropriate patient access.

For additional information on patent rights we consider most significant in relation to our business as a whole, see the Item 1. Business––Patents and Other Intellectual Property Rights section of our ~~2020~~2021 Form 10-K. For a discussion of recent developments with respect to patent litigation, see Note 12A1.

Regulatory Environment/Pricing and Access––Government and Other Payer Group Pressures

The pricing of medicines and vaccines by pharmaceutical manufacturers and the cost of healthcare, which includes medicines, vaccines, medical services and hospital services, continues to be important to payers, governments, patients, and other stakeholders. Federal and state governments and––Governments globally, as well as private third-party payers in the U.S. continue to take action to manage the utilization of drugs and cost of drugs, including increasingly employing formularies to control costs by taking into account discounts in connection with decisions about formulary inclusion or favorable formulary placement. We consider a number of factors impacting the pricing of our medicines and vaccines. Within the U.S., we often engage with patients, doctors and healthcare plans. We also often provide significant discounts from the list price to insurers, including PBMs and MCOs. The price that patients pay in the U.S. for prescribed medicines and vaccines is ultimately set by healthcare providers and insurers. Governments globally may use a variety of measures to control costs, including, among others, proposing pricing reform or legislation, employing formularies to control costs, cross country collaboration and procurement, price cuts, mandatory rebates, health technology assessments, forced localization as a condition of market access, “international reference pricing” (i.e., the practice of a country linking its regulated medicine prices to those of other countries), quality consistency evaluation processes and volume-based procurement. In the U.S., we expect to see continued focus by Congress and the Biden Administration on regulating pricing resulting in legislative and regulatory efforts designed to control costs. Congress is currently considering a budget reconciliation package that includes drug pricing changes to Medicare Part B and D. We anticipate that these and similar initiatives will continue to increase pricing and access pressures globally. In the U.S., in August 2022, President Biden signed into law the IRA, which includes significant drug pricing provisions, including (i) inflation rebates, where drug manufacturers must pay a rebate to the government if the prices of their covered single-source drugs and biologics rise faster than the rate of inflation; (ii) Medicare Part D redesign whereby beneficiaries’ out-of-pocket costs are capped, payment obligation for initial coverage is redistributed with drug manufacturers paying 10% on all drugs and the coverage gap is eliminated, as well as requiring Part D plans to pay a larger portion of the catastrophic phase with drug manufacturers covering 20% of the costs; and (iii) Medicare negotiation, which requires the Secretary of the U.S. Department of Health and Human Services (HHS) to negotiate prices for certain drugs covered by Medicare Part B and Part D through a Drug Price Negotiation Program. We continue to evaluate the impact of the IRA on our business, operations and financial condition and results as the full effect of the IRA on our business and the pharmaceutical industry remains uncertain. In addition, in October 2022, President Biden signed an executive order that instructs the Secretary of HHS to consider whether to select for testing new health care payment and delivery models that would lower drug costs and promote access to innovative drug therapies for beneficiaries enrolled in the Medicare and Medicaid

programs. Also in the U.S., we implemented a policy in 2022 that will help improve contract pharmacy integrity. HHS has sent letters to numerous manufacturers that have also implemented contract pharmacy integrity initiatives expressing the view that their programs are in violation of the 340B statute, and referring those programs for potential enforcement action. We believe that our program is consistent with the statute. Additional legal or legislative developments with respect to the 340B program may have an adverse impact on our integrity initiative, and we may face enforcement action or penalties, depending upon such developments. For additional information, see the Item 1. Business––Pricing Pressures and Managed Care Organizations and ––Government Regulation and Price Constraints and the Item 1A. Risk Factors––Pricing and Reimbursement sections in our ~~2020~~2021 Form 10-K and the Overview of Our Performance, Operating Environment, Strategy and Outlook––Our Operating Environment section of the MD&A in our 2021 Form 10-K.

Product Supply

––We periodically encounter supply delays, disruptions and shortages, including due to a voluntary recall of a product. In July and August, Pfizer recalled 16 lots of Chantix in the U.S. due to the presence of a nitrosamine, N-nitroso-varenicline, at or above the FDA interim acceptable intake limit. In September 2021, Pfizer expanded its voluntary recall in the U.S. to include all lots of Chantix. We currently also have a voluntary recall across multiple markets and a global pause in shipments of Chantix. Nitrosamines are impurities common in water and foods and everyone is exposed to some level of nitrosamines.product recalls. In response to requests from various regulatory authorities, manufacturers across the pharmaceutical industry, including Pfizer, ~~have been~~are evaluating their product portfolios for the potential ~~for the~~ presence or formation of nitrosamines. This has led to recalls, including our voluntary recall of Chantix in 2021 and additional voluntary recalls initiated for other products in 2022 due to the presence of nitrosamines ~~in pharmaceutical~~above the applicable acceptable intake limit, and may lead to additional recalls or other market actions for Pfizer products. ~~We are currently undertaking an evaluation of our entire portfolio.~~ For information on our Chantix recall in 2021 and risks related to product manufacturing, see the Item 1A. Risk Factors––Product Manufacturing, Sales and Marketing Risks section of our ~~2020~~2021 Form 10-K.

The Global Economic Environment

––In addition to the industry-specific factors discussed above, we, like other businesses of our size and global extent of activities, are exposed to ~~the~~ economic ~~cycle.~~cycles. For additional information, ~~please~~ see the Overview of Our Performance, Operating Environment, Strategy and Outlook––The Global Economic Environment section of the MD&A of our ~~2020~~2021 Form 10-K.

Russia/Ukraine Conflict––Our global operations may be impacted by certain factors in the global economic environment including impacts of political or civil unrest or military action, including the armed conflict between Russia and Ukraine. Consistent with our commitment to putting patients first, we are maintaining the supply of medicines to Russia, including the provision of needed medicines to patients already enrolled in clinical trials. Effective March 14, 2022, Pfizer is donating the equivalent of profits of our Russian subsidiary to causes that provide direct humanitarian support to the people of Ukraine, in addition to our ongoing efforts to support the humanitarian response in the region. To date, we have donated $20 million to 10 global and local non-governmental organizations to support humanitarian relief and response efforts. We will continue to support Ukrainian relief efforts through this method until peace is achieved. Additionally, we are not initiating new clinical trials in Russia, have stopped recruiting new patients in our ongoing clinical trials in the country, and halted all new investments with local suppliers intended to build manufacturing capacity in Russia. For both the nine months ended October 2, 2022 and the fiscal year ended December 31, 2021, the business of our Russia and Ukraine subsidiaries represented less than 1% of our consolidated revenues and assets, and while we are monitoring the effects of the armed conflict between Russia and Ukraine, the situation continues to evolve and the long-term implications, including the broader economic consequences of the conflict, are difficult to predict at this time. While as of now, we do not anticipate any significant negative impacts on our business from this conflict, continued regional instability, geopolitical shifts, potential additional sanctions and other restrictive measures against Russia, neighboring countries or allies of Russia, any retaliatory measures taken by Russia, neighboring countries or allies of Russia, and actions by our customers or suppliers in response to such measures could adversely affect the global macroeconomic environment, our operations, currency exchange rates and financial markets, which could in turn adversely impact our business and results of operations.

COVID-19 Pandemic

––The ~~continuation of the~~ COVID-19 pandemic has impacted our business, operations and financial condition and results.

Our Response to COVID-19

~~We are committed~~Pfizer is continuing to ~~confronting~~help lead the ~~public health challenge posed by~~global effort to confront the COVID-19 pandemic by ~~collaborating with industry partners,~~advancing a vision for industry-wide collaboration while continuing to make significant investments in breakthrough science and global ~~regulators and academic institutions to develop potential approaches to prevent and treat COVID-19. We have made some important advances, including, among others:~~manufacturing.

•~~COVID-19 Vaccine Development Program~~:Comirnaty

◦~~The FDA has approved~~We have collaborated with BioNTech to jointly develop Comirnaty, ~~in the U.S. to prevent COVID-19 in individuals 16 years of age and older as~~ a ~~two-dose primary series (30 µg per dose). Comirnaty is the first COVID-19~~mRNA-based coronavirus vaccine to be granted approval by the FDA and had previously been available to this patient population in the U.S. under an EUA since December 2020. The vaccine remains available to individuals 12 to 15 years old under an EUA granted by the FDA in May 2021. Emergency use and distribution of this product is subject to the conditions set forth in the EUA, and onlyhelp prevent COVID-19. For additional information, including information regarding EUAs for ~~the duration of the declaration by the Department of Health & Human Services that circumstances exist justifying authorization of emergency use of drugs~~

and biological products during the COVID-19 pandemic under Section 564 of the U.S. Federal Food, Drug and Cosmetic Act (the Declaration), or until revocation of the EUA by the FDA. The FDA has issued EUAs to certain other companies for products intended for the prevention or treatment of COVID-19 and may continue to do so during the duration of the Declaration. In September 2021, the FDA authorized for emergency use a booster dose of ~~Comirnaty/BNT162b2~~an Omicron-adapted bivalent vaccine for individuals 65ages 5 years ~~of age~~ and older, individuals 18 through 64 years of age at high risk of severe COVID-19, and individuals 18 through 64 years of age with frequent institutional or occupational exposure to SARS-CoV-2. In addition, in October 2021,see the FDA authorized for emergency use a booster dose to eligible individuals who have completed primary vaccination with a different authorized COVID-19 vaccine. The FDA also authorized BNT162b2 (10 µg per dose) for emergency use for children 5 through 11 years of age. In November 2021, we and BioNTech submitted a request to the FDA to amend the EUA of a booster dose of Comirnaty/BNT162b2 to include all individuals 18 years of age and older. Comirnaty/BNT162b2 has been granted an approval or a temporary authorization in many other countries around the world in populations varying by country.Product Developments section within MD&A. We continue to evaluate our vaccine ~~including for potential maternal and additional pediatric indications,~~ and the short- and long-term safety and efficacy of Comirnaty. We are also studying ~~vaccines~~monovalent, bivalent and variant-adapted vaccine candidates to potentially help prevent COVID-19 caused by ~~new and emerging~~ variants ~~or an updated~~of concern, as well as a next-generation mRNA vaccine ~~as needed.~~candidate.

◦The companies have entered into agreements to supply pre-specified doses of Comirnaty in 2022 with multiple developed and emerging countries around the world and are continuing to deliver doses of Comirnaty to governments under such agreements. We also signed agreements with multiple countries to supply Comirnaty doses in ~~2022 and beyond~~2023 and are currently negotiating similar potential agreements with multiple ~~other countries.~~countries as well. Additionally, we will continue our efforts to help

◦
~~As of November 2, 2021, we forecasted approximately $36.0 billion in revenues in 2021 from~~

ensure equitable access to Comirnaty with gross profit to be split evenly with BioNTech, reflecting approximately 2.3 billion doses that are expected to be delivered in fiscal 2021 based on expected ordering patterns through the end of December 2021 for the U.S. and through the end of November 2021 for the rest of the world. Pfizer and BioNTech continue to expect to manufacture 3 billion doses in total by the end of December 2021. The difference between the number of doses expected to contribute to 2021 revenues versus the number of doses expected to be manufactured by year-end relates to anticipated international deliveries in December 2021, which will be recorded as revenue in 2022 due to our international fiscal calendar, and, to a lesser extent, doses expected to be produced but not yet delivered as of December 31, 2021. We anticipate delivering at least two billion doses to low- and middle-income ~~countries by the end of 2022 - at least~~ countries—one billion ~~to be~~of which were delivered in 2021 and ~~one billion~~approximately 600 million of which were delivered in ~~2022, with~~ the ~~possibility~~first nine months of 2022. Certain of the aforementioned doses to ~~increase those deliveries if more orders~~low- and middle-income countries are ~~placed by these countries for 2022. One billion of these doses will be~~being supplied to the U.S. government at a not-for-profit price to be donated to the world’s poorest ~~nations at no charge~~nations.

◦While to ~~those countries.~~date sales of Comirnaty in the U.S. have been to the government, we expect in 2023, sales of Comirnaty in the U.S. will transition to commercial market sales only as we anticipate the expiration of current contracts and depletion of the vaccines purchased through them. Internationally, we expect sales of Comirnaty in international developed markets to generally be under government contracts in 2023, and in emerging markets, under a combination of private channels and government contracts; in both cases, we expect to generally transition to commercial markets in 2024.

◦As of November 1, 2022, we forecasted approximately $34 billion of revenues for Comirnaty in 2022, with gross profit to be split evenly with BioNTech, which includes doses expected to be delivered in fiscal 2022, primarily under contracts signed as of mid-October 2022.

•~~COVID-19 Protease Inhibitors~~:Paxlovid

◦In ~~July~~December 2021, the FDA authorized the emergency use of Paxlovid, a novel oral COVID-19 treatment, for the treatment of mild-to-moderate COVID-19 in adults and pediatric patients (12 years of age and older weighing at least 40 kg [88 lbs]) with positive results of direct SARS-CoV-2 viral testing, and who are at high risk for progression to severe COVID-19, including hospitalization or death. Paxlovid has been granted an authorization or approval in many other countries. In June 2022, we ~~initiated~~submitted an NDA to the ~~Phase~~FDA for approval of Paxlovid for the treatment of COVID-19 in both vaccinated and unvaccinated individuals who are at high risk for progression to severe illness from COVID-19 consistent with the current EUA. For additional information, see the Product Developments section within MD&A.

◦We continue to evaluate Paxlovid in other populations, including in non-hospitalized, symptomatic, pediatric patients with a confirmed diagnosis of COVID-19 who are at risk of progression to severe disease (Phase 2/3 ~~EPIC-HR~~study, EPIC-PEDS (Evaluation of Protease Inhibition for COVID-19 in ~~High-Risk~~Pediatric Patients) ~~study~~) and those who are immunocompromised, hospitalized with severe COVID-19 and at increased risk for poor outcomes due to ~~evaluate~~ the efficacy, safety and tolerability of Paxlovid (PF-07321332; ritonavir), an investigational, novel oral antiviral therapeutic for COVID-19, which is a SARS-CoV2-3CL protease inhibitor and is co-administered with a low dose of ritonavir, in non-hospitalized, high-risk adult participants with COVID-19.~~In August 2021, we initiated the pivotal Phase 2/3 EPIC-SR~~disease (Phase 2, EPIC-Hos (Evaluation of Protease Inhibition for COVID-19 in ~~Standard-Risk~~Hospitalized Patients) ~~study to evaluate~~). We are also studying Paxlovid ~~(PF-07321332; ritonavir)~~ in ~~patients with a confirmed diagnosis of SARS-CoV-2 infection~~those who are at standard risk (i.e., low risk of hospitalization or death). In September 2021, we initiated the Phase 2/3 EPIC-PEP (Evaluation of Protease Inhibition for COVID-19 in Post-Exposure Prophylaxis) study to evaluate Paxlovid (PF-07321332; ritonavir) for the prevention of COVID-19 infection in adults living in the same household as someone with a confirmed COVID-19 infection. In November 2021, Pfizer announced the scheduled interim analysis of EPIC-HR, which showed an 89% reduction in risk of COVID-19-related hospitalization or death from any cause compared to placebo in patients treated within three days of symptom onset (primary endpoint). Pfizer plans to submit the data as part of its ongoing rolling submission to the FDA for EUA as soon as possible. pregnant.

◦We have ~~also~~ entered into agreements to supply pre-specified courses of ~~treatment~~Paxlovid to multiple countries, such as the U.S. and U.K., as well as agreements with ~~several countries~~UNICEF and ~~are currently in negotiations with other markets~~the Global Fund to supply low- and middle-income countries. Through the ~~product, if authorized or approved.~~nine months of 2022, we have shipped 31 million treatment courses globally, and we have capacity to meet the demand for Paxlovid in a flexible manner going forward.

◦~~In September 2021, the National Institute~~As of ~~Allergy and Infectious Disease initiated a study~~November 1, 2022, we forecasted approximately $22 billion of ~~our intravenously administered investigational protease inhibitor~~revenues for ~~COVID-19, PF-07304814,~~Paxlovid in 2022, which ~~is a SARS-CoV2-3CL protease inhibitor,~~includes treatment courses expected to be delivered in ~~adults hospitalized with COVID-19,~~fiscal 2022, primarily relating to supply contracts signed or committed as ~~part~~ of ~~the National Institutes of Health’s Accelerating COVID-19 Therapeutic Interventions and Vaccines (ACTIV)-3 program.~~mid-October 2022.

Despite our significant investments and efforts, any of our ongoing development programs related to COVID-19 may not be successful as the risk of failure is significant, and there can be no certainty these efforts will yield a successful product or that costs will ultimately be recouped.

Impact of COVID-19 on Our Business and Operations

As part of our on-going monitoring and assessment, we have made certain assumptions regarding the pandemic for purposes of our operational planning and financial projections, including assumptions regarding the duration, severity and the global macroeconomic impact of the pandemic, as well as COVID-19 vaccine and oral COVID-19 treatment revenues, supply and contracts, which remain dynamic. Despite careful tracking and planning, we are unable to accurately predict the extent of the impact of the pandemic on our business, operations and financial condition and results due to the uncertainty of future developments. We are focused on all aspects of our business and are implementing measures aimed at mitigating issues where possible, including by using digital technology to assist in operations for our commercial, manufacturing, R&D and corporate enabling functions globally.

As discussed in our ~~2020~~2021 Form 10-K, in addition to our introduction of Comirnaty and Paxlovid, our business and operations were impacted ~~in 2020~~ by the pandemic in various ways; certain of those impacts have continued in ~~2021.~~2022. For additional detail and discussion on the impact of the COVID-19 pandemic on certain of our products, sales and marketing, supply chain and clinical trials, see the Analysis of the Condensed Consolidated Statements of Income—Revenues by Geographyand ~~and~~ Revenues—Selected Product Discussion sections within ~~this~~ MD~~&A. In 2021, engagement with healthcare professionals has started to return to pre-pandemic levels~~&A and ~~we continue to review~~the Overview of Our Performance, Operating Environment, Strategy and ~~assess epidemiological data to inform in-person engagements with healthcare professionals~~ Outlook—The Global Economic Environment and ~~to ensure~~—COVID-19 Pandemic sections of the ~~safety~~MD&A of our colleagues, customers and communities. As part of our commitment to engaging our customers in the manner they prefer, we are also taking a hybrid approach of virtual and in person engagements and are seeing customer response to both approaches. During the pandemic, we adapted our promotional platform by amplifying our digital capabilities to reach healthcare professionals and customers to provide critical education and information, including increasing the scale of our remote engagement. Also, in 2021 we have continued not to see a significant disruption to our supply chain to date, and all of our manufacturing sites globally have continued to operate at or near normal levels. However, we are seeing an increase in overall demand in the industry for certain components and raw materials potentially constraining available supply, which could have a future impact on our business. We are continuing to monitor and implement mitigation strategies in an effort to reduce any potential impact.Form 10-K.

We will continue to pursue efforts to maintain the continuity of our operations while monitoring for new developments related to the pandemic. Future developments could result in additional favorable or unfavorable impacts on our business, operations or financial condition and results. If we experience significant disruption in our manufacturing or supply chains or significant disruptions in clinical trials or other operations, or if demand for our products is significantly reduced as a result of the COVID-19 pandemic, or if demand for our COVID-19 vaccine or oral COVID-19 treatment is reduced or no longer exists, we could experience a material adverse impact on our business, operations and financial condition and results.

For additional information, ~~please~~ see the Item 1A. Risk Factors—COVID-19 Pandemic section and the Overview of Our Performance, Operating Environment, Strategy and Outlook section of the MD&A of our ~~2020~~2021 Form 10-K.

SIGNIFICANT ACCOUNTING POLICIES AND APPLICATION OF CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

For a description of our significant accounting policies, see Note 1 in our ~~2020~~2021 Form 10-K. Of these policies, the following are considered critical to an understanding of our consolidated financial statements as they require the application of the most subjective and the most complex judgments: Acquisitions (Note 1D1E); Fair Value (Note 1E1F); Revenues (Note 1G1H); Asset Impairments (Note 1L1M); Tax Assets and Liabilities and Income Tax Contingencies (Note 1P1Q); Pension and Postretirement Benefit Plans (Note 1Q1R); and Legal and Environmental Contingencies (Note 1R1S).

For a discussion about the critical accounting estimates and assumptions impacting our consolidated financial statements, see the Significant Accounting Policies and Application of Critical Accounting Estimates and Assumptions section within MD&A in our ~~2020~~2021 Form 10-K. See also Note 1C1D in our ~~2020~~2021 Form 10-K for a discussion about the risks associated with estimates and assumptions.

For a discussion of a recently adopted accounting standard, ~~a change in accounting principle related to our pension and postretirement plans, and significant accounting policies,~~ see ~~Notes~~Note 1B 1C ~~and~~. For a discussion of presentation changes for Acquired in-process research and development expenses, see Note 1D.

ANALYSIS OF THE CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Revenues by Geography


The following presents worldwide revenues by geography:	The following presents worldwide revenues by geography:																The following presents worldwide revenues by geography:
		Three Months Ended																Three Months Ended
		Worldwide				U.S.				International				World-wide	U.S.	Inter-national		Worldwide				U.S.				International				World-wide	U.S.	Inter-national
(MILLIONS)	(MILLIONS)	Oct. 3, 2021		Sept. 27, 2020		Oct. 3, 2021		Sept. 27, 2020		Oct. 3, 2021		Sept. 27, 2020		% Change in Revenues			(MILLIONS)	Oct. 2, 2022		Oct. 3, 2021		Oct. 2, 2022		Oct. 3, 2021		Oct. 2, 2022		Oct. 3, 2021		% Change in Revenues
Operating segments:																	Operating segments:
Biopharma																	Biopharma	$	22,319	$	23,513	$	13,748	$	6,899	$	8,571	$	16,614	(5)	99	(48)
Pfizer CentreOne																	Pfizer CentreOne	319		521		103		121		216		400		(39)	(15)	(46)
Total revenues	Total revenues	$	24,094	$	10,277	$	7,079	$	5,425	$	17,014	$	4,852	134	30	251	Total revenues	$	22,638	$	24,035	$	13,851	$	7,020	$	8,786	$	17,014	(6)	97	(48)

		Nine Months Ended																Nine Months Ended
		Worldwide				U.S.				International				World-wide	U.S.	Inter-national		Worldwide				U.S.				International				World-wide	U.S.	Inter-national
(MILLIONS)	(MILLIONS)	Oct. 3, 2021		Sept. 27, 2020		Oct. 3, 2021		Sept. 27, 2020		Oct. 3, 2021		Sept. 27, 2020		% Change in Revenues			(MILLIONS)	Oct. 2, 2022		Oct. 3, 2021		Oct. 2, 2022		Oct. 3, 2021		Oct. 2, 2022		Oct. 3, 2021		% Change in Revenues
Operating segments:																	Operating segments:
Biopharma																	Biopharma	$	75,066	$	56,101	$	33,700	$	21,657	$	41,366	$	34,444	34	56	20
Pfizer CentreOne																	Pfizer CentreOne	974		1,348		291		409		683		939		(28)	(29)	(27)
Total revenues	Total revenues	$	57,653	$	30,224	$	22,269	$	15,827	$	35,384	$	14,396	91	41	146	Total revenues	$	76,040	$	57,450	$	33,991	$	22,066	$	42,049	$	35,384	32	54	19

Third Quarter of ~~2021~~2022 vs. Third Quarter of ~~2020~~2021


The following provides an analysis of the worldwide change in revenues by geographic areas in the third quarter of 2021:
The following provides an analysis of the change in worldwide revenues by geographic areas in the third quarter of 2022:								The following provides an analysis of the change in worldwide revenues by geographic areas in the third quarter of 2022:
		Three Months Ended October 3, 2021							Three Months Ended October 2, 2022
(MILLIONS)	(MILLIONS)	Worldwide		U.S.		International		(MILLIONS)	Worldwide		U.S.		International
Operational growth/(decline):	Operational growth/(decline):							Operational growth/(decline):
Growth from Comirnaty, Eliquis, Vyndaqel/Vyndamax, Inlyta, Xtandi, Ibrance outside the U.S., Biosimilars and the Hospital therapeutic area, partially offset by declines from Prevnar family and Xeljanz. See the Analysis of the Condensed Consolidated Statements of Income––Revenues––Selected Product Discussion within MD&A for additional analysis		$	13,695	$	1,877	$	11,818
Lower revenues for Chantix/Champix, Sutent and Enbrel: •The decrease in Chantix/Champix was driven by the voluntary recall across multiple markets and the global pause in shipments of Chantix due to the presence of N-nitroso-varenicline above an acceptable level of intake set by various global regulators, the ultimate timing for resolution of which may vary by country •The decrease in Sutent primarily reflects lower volume demand in the U.S. resulting from its loss of exclusivity in August 2021 •The decrease for Enbrel internationally primarily reflects continued biosimilar competition, which is expected to continue		(319)		(220)		(99)
Worldwide declines from Comirnaty, Xeljanz and Ibrance, partially offset by worldwide growth from Paxlovid, Eliquis, Prevnar family, Vyndaqel/Vyndamax, Xtandi and Inlyta(a)								Worldwide declines from Comirnaty, Xeljanz and Ibrance, partially offset by worldwide growth from Paxlovid, Eliquis, Prevnar family, Vyndaqel/Vyndamax, Xtandi and Inlyta(a)	$	(226)	$	6,849	$	(7,075)
Decline from PC1(a)								Decline from PC1(a)	(180)		(18)		(162)
Lower revenues for Sutent, primarily reflecting lower volume demand in Europe following its loss of exclusivity in January 2022								Lower revenues for Sutent, primarily reflecting lower volume demand in Europe following its loss of exclusivity in January 2022	(61)		(4)		(57)
Other operational factors, net	Other operational factors, net	19		(3)		22		Other operational factors, net	26		4		22
Operational growth/(decline), net	Operational growth/(decline), net	13,395		1,654		11,741		Operational growth/(decline), net	(441)		6,831		(7,272)

Favorable impact of foreign exchange		421		—		421
Unfavorable impact of foreign exchange								Unfavorable impact of foreign exchange	(957)		—		(957)
Revenues increase/(decrease)	Revenues increase/(decrease)	$	13,817	$	1,654	$	12,162	Revenues increase/(decrease)	$	(1,397)	$	6,831	$	(8,228)

(a)See the Analysis of the Condensed Consolidated Statements of Income––Revenues––Selected Product Discussion within MD&A for additional analysis.

Emerging markets revenues ~~increased $4.4~~decreased $3.0 billion, or ~~227%~~48%, in the third quarter of ~~2021~~2022 to ~~$6.3~~$3.3 billion from ~~$1.9~~$6.3 billion in the third quarter of ~~2020,~~2021, reflecting an operational decrease of $2.8 billion, or 45%, and an unfavorable impact from foreign exchange of approximately 3%. The operational decrease in emerging markets was primarily driven by declines from Comirnaty and certain Comirnaty-related manufacturing activities performed on behalf of BioNTech, partially offset by growth from Paxlovid.

First Nine Months of 2022 vs. First Nine Months of 2021


The following provides an analysis of the worldwide change in revenues by geographic areas in the first nine months of 2022:
	Nine Months Ended October 2, 2022
(MILLIONS)	Worldwide		U.S.		International
Operational growth/(decline):
Worldwide growth from Paxlovid, Comirnaty, Eliquis, Prevnar family, Vyndaqel/Vyndamax and Inlyta, partially offset by worldwide declines from Xeljanz and Ibrance(a)	$	22,507	$	12,440	$	10,066
Decline from PC1(a)	(332)		(118)		(214)
Lower revenues for Chantix/Champix and Sutent: •The decrease in Chantix/Champix was driven by the ongoing global pause in shipments of Chantix due to the presence of N-nitroso-varenicline above an acceptable level of intake set by various global regulators, the ultimate timing for resolution of which may vary by country •The decrease for Sutent primarily reflects lower volume demand in Europe and the U.S. following its loss of exclusivity in January 2022 and August 2021, respectively	(632)		(386)		(246)
Other operational factors, net	42		(11)		53
Operational growth/(decline), net	21,585		11,925		9,659

Unfavorable impact of foreign exchange	(2,995)		—		(2,995)
Revenues increase/(decrease)	$	18,590	$	11,925	$	6,665

(a)See the Analysis of the Condensed Consolidated Statements of Income––Revenues––Selected Product Discussion within MD&A for additional analysis.

Emerging markets revenues increased $3.7 billion, or 29%, in the first nine months of 2022 to $16.7 billion from $12.9 billion in the first nine months of 2021, reflecting an operational increase of ~~$4.3~~$4.4 billion, or ~~222%~~34%, and ~~a favorable~~an unfavorable impact from foreign exchange of approximately 5%. The operational increase in emerging markets was primarily driven by ~~revenues~~growth from Comirnaty, Paxlovid and ~~growth from~~Nimenrix, partially offset by declines in certain ~~products in~~Comirnaty-related manufacturing activities performed on behalf of BioNTech, as well as the ~~Hospital therapeutic area and Eliquis.~~Prevnar family.

~~First Nine Months of 2021 vs. First Nine Months of 2020~~

The following provides an analysis of the worldwide change in revenues by geographic areas in the first nine months of 2021:
Nine Months Ended October 3, 2021
(MILLIONS) Worldwide U.S. International
Operational growth/(decline):
Growth from Comirnaty, Eliquis, Vyndaqel/Vyndamax, Inlyta, Xtandi, Ibrance outside the U.S., Biosimilars and the Hospital therapeutic area, partially offset by declines from Prevnar family and Xeljanz. See the Analysis of the Condensed Consolidated Statements of Income––Revenues––Selected Product Discussion within MD&A for additional analysis
$ 26,647 $ 6,776 $ 19,871
Lower revenues for Chantix/Champix, Enbrel and Sutent:
•The decrease in Chantix/Champix was driven by the voluntary recall across multiple markets and the global pause in shipments of Chantix due to the presence of N-nitroso-varenicline above an acceptable level of intake set by various global regulators, the ultimate timing for resolution of which may vary by country and the negative impact of the COVID-19 pandemic resulting in a decline in patient visits to doctors for preventive health purposes
•The decrease for Enbrel internationally primarily reflects continued biosimilar competition, which is expected to continue
•The decrease in Sutent primarily reflects lower volume demand in the U.S. resulting from its loss of exclusivity in August 2021, as well as continued erosion as a result of increased competition in certain international developed markets
(562) (320) (241)
Other operational factors, net 2 (14) 15
Operational growth/(decline), net 26,087 6,442 19,644
Favorable impact of foreign exchange 1,342 — 1,342
Revenues increase/(decrease)
$ 27,429 $ 6,442 $ 20,987

Emerging markets revenues increased $6.9 billion, or 116%, in the first nine months of 2021 to $12.9 billion from $6.0 billion in the first nine months of 2020, reflecting an operational increase of $6.7 billion, or 113%, and a favorable impact from foreign exchange of approximately 3%. The operational increase in emerging markets was primarily driven by revenues from Comirnaty and growth from certain products in the Hospital therapeutic area and Eliquis.

Revenue Deductions

––Our gross product revenues are subject to a variety of deductions, which generally are estimated and recorded in the same period that the revenues are recognized. These deductions represent estimates of related obligations and, as such, knowledge and judgment are required when estimating the impact of these revenue deductions on gross sales for a reporting period. Historically, adjustments to these estimates to reflect actual results or updated expectations, have not been material to our overall business and generally have been less than 1% of revenues. Product-specific rebates, however, can have a significant impact on year-over-year individual product revenue growth trends.


The following presents information about revenue deductions:	The following presents information about revenue deductions:									The following presents information about revenue deductions:
		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
(MILLIONS)	(MILLIONS)	October 3, 2021		September 27, 2020		October 3, 2021		September 27, 2020		(MILLIONS)	October 2, 2022		October 3, 2021		October 2, 2022		October 3, 2021
Medicare rebates	Medicare rebates	$	175	$	163	$	546	$	489	Medicare rebates	$	195	$	175	$	582	$	546
Medicaid and related state program rebates	Medicaid and related state program rebates	252		252		904		832		Medicaid and related state program rebates	223		252		689		904
Performance-based contract rebates	Performance-based contract rebates	883		616		2,424		1,886		Performance-based contract rebates	851		883		2,518		2,424
Chargebacks	Chargebacks	1,618		1,127		4,567		3,190		Chargebacks	1,946		1,618		5,480		4,567
Sales allowances	Sales allowances	1,218		904		3,575		2,790		Sales allowances	1,334		1,216		3,905		3,569
Sales returns and cash discounts	Sales returns and cash discounts	267		229		727		668		Sales returns and cash discounts	247		267		845		726
Total	Total	$	4,414	$	3,291	$	12,743	$	9,855	Total	$	4,796	$	4,411	$	14,019	$	12,737

Revenue deductions are primarily a function of product sales volume, mix of products sold, contractual or legislative discounts and rebates.

For information on our accruals for revenue deductions, including the balance sheet classification of these accruals, see Note ~~1D.~~1C.

4543

Revenues––Selected Product Discussion

(MILLIONS) Revenue % Change
Product Period Global
Revenues Region Oct. 3, 2021 Sept. 27, 2020 Total Oper. Operational Results Commentary
Comirnaty(a)
QTD
$12,977

*
U.S. $ 1,586 $ — * Driven by global uptake, following a growing number of regulatory approvals and temporary authorizations.
Int’l. 11,391 — * *
Worldwide $ 12,977 $ — * *
YTD
$24,277

*
U.S. $ 5,657 $ — *
Int’l. 18,619 — * *
Worldwide $ 24,277 $ — * *
Eliquis QTD
$1,346

Up 19%

(operationally)
U.S. $ 629 $ 557 13
Global growth driven primarily by continued increased adoption in non-valvular atrial fibrillation and oral anti-coagulant market share gains.
YTD was also impacted by a favorable adjustment related to the Medicare “coverage gap” provision resulting from lower than previously expected discounts in prior periods.
Int’l. 717 557 29 25
Worldwide $ 1,346 $ 1,114 21 19
YTD
$4,470

Up 19%

(operationally)
U.S. $ 2,440 $ 2,084 17
Int’l. 2,030 1,602 27 21
Worldwide $ 4,470 $ 3,686 21 19
Ibrance QTD
$1,381

Up 1%

(operationally)
U.S. $ 883 $ 909 (3)
Growth driven primarily by accelerating demand internationally as the delays in diagnosis and treatment initiations caused by COVID-19 show signs of recovery across several international markets, partially offset by a decline in the U.S., driven by an increase in the proportion of patients accessing Ibrance through our Patient Assistance Program.

Int’l. 498 448 11 9
Worldwide $ 1,381 $ 1,357 2 1
YTD
$4,039

Up 1%

(operationally)
U.S. $ 2,539 $ 2,689 (6)
Int’l. 1,500 1,266 18 14
Worldwide $ 4,039 $ 3,955 2 1
Prevnar family QTD
$1,447

Down 7%

(operationally)
U.S. $ 850 $ 868 (2)
Decline primarily resulting from:
•continued impact of the lower remaining unvaccinated eligible adult population in the U.S. and the June 2019 change to the ACIP recommendation for the Prevnar 13 adult indication to shared clinical decision-making; and
•the adult indication in the U.S. due to the ongoing prioritization of primary and booster vaccination campaigns for COVID-19 by U.S. health authorities, and a later start to the flu season compared to the prior year.
This decline was partially offset by:
•U.S. growth in the pediatric indication, driven by government purchasing patterns.
YTD was also impacted by:
•a decline, primarily in developed Europe, reflecting significantly increased adult demand in the prior year in Germany and certain other markets resulting from greater vaccine awareness for respiratory illnesses due to the COVID-19 pandemic.
Int’l. 596 665 (10) (13)
Worldwide $ 1,447 $ 1,534 (6) (7)
YTD
$3,971

Down 4%

(operationally)
U.S. $ 2,130 $ 2,143 (1)
Int’l. 1,841 1,957 (6) (8)
Worldwide $ 3,971 $ 4,100 (3) (4)
Biopharma


(MILLIONS)				Revenue				% Change
Product	Period	Global Revenues	Region	Oct. 2, 2022		Oct. 3, 2021		Total	Oper.	Operational Results Commentary
Comirnaty(a)	QTD	$4,402 Down 65% (operationally)	U.S.	$	2,908	$	1,586	83		QTD declines largely driven by a previously announced amendment to the supply agreement with the EC whereby all doses scheduled for delivery in June through August 2022 would instead be delivered in the fourth quarter of 2022 and similar shifts in scheduled deliveries to other developed countries, as well as slower demand in emerging markets. Declines were partially offset by growth in the U.S., driven primarily by deliveries of the Omicron BA.4/BA.5-adapted bivalent booster, following its EUA in late-August 2022, as well as the granting of an EUA in June 2022 for a primary vaccination series for children 6 months to less than 5 years of age. YTD performance was largely driven by operational growth in international markets, led by increased sales of doses to serve emerging markets and increased deliveries to certain international developed markets in the first six months of 2022, as well as the granting of an EUA in the U.S. in October 2021 for a primary vaccination series for children 5 to 11 years of age and QTD U.S. growth drivers noted above, partially offset by QTD declines noted above.
			Int’l.	1,494		11,391		(87)	(86)
			Worldwide	$	4,402	$	12,977	(66)	(65)
	YTD	$26,477 Up 14% (operationally)	U.S.	$	6,303	$	5,657	11
			Int’l.	20,174		18,619		8	14
			Worldwide	$	26,477	$	24,277	9	14
Paxlovid	QTD	$7,514 *	U.S.	$	5,044	$	—	*		Driven by the U.S. launch under EUA in December 2021 and international launches in late 2021 and early 2022 following regulatory approvals or EUAs.
			Int’l.	2,470		—		*	*
			Worldwide	$	7,514	$	—	*	*
	YTD	$17,099 *	U.S.	$	10,514	$	—	*
			Int’l.	6,584		—		*	*
			Worldwide	$	17,099	$	—	*	*
Eliquis	QTD	$1,464 Up 15% (operationally)	U.S.	$	835	$	629	33		Growth driven primarily by continued oral anti-coagulant adoption and market share gains in non-valvular atrial fibrillation in the U.S., as well as favorable changes in channel mix in the U.S., partially offset by declines in certain emerging markets. In addition, YTD performance was impacted by growth in oral anti-coagulant adoption and market share gains in certain markets in Europe, partially offset by the non-recurrence of an $80 million favorable adjustment related to the Medicare “coverage gap” provision recorded in the first quarter of 2021 in the U.S.
			Int’l.	628		717		(12)	(1)
			Worldwide	$	1,464	$	1,346	9	15
	YTD	$5,001 Up 16% (operationally)	U.S.	$	2,979	$	2,440	22
			Int’l.	2,022		2,030		—	10
			Worldwide	$	5,001	$	4,470	12	16
Prevnar family	QTD	$1,607 Up 14% (operationally)	U.S.	$	1,089	$	850	28		Growth primarily driven by the adult indications in the U.S. due to strong patient demand following the launch of Prevnar 20 for the eligible adult population, partially offset by unfavorable timing of government and private purchasing of Prevnar 13 for the pediatric indication globally and adult indication internationally. YTD growth was partially offset by competitive pressures in China for the pediatric indication.
			Int’l.	517		596		(13)	(7)
			Worldwide	$	1,607	$	1,447	11	14
	YTD	$4,601 Up 18% (operationally)	U.S.	$	3,010	$	2,130	41
			Int’l.	1,591		1,841		(14)	(9)
			Worldwide	$	4,601	$	3,971	16	18
Ibrance	QTD	$1,283 Down 3% (operationally)	U.S.	$	872	$	883	(1)		Global declines primarily driven by prior-year clinical trial purchases internationally, planned price decreases that recently went into effect in international developed markets, and continued increase in the proportion of patients accessing Ibrance through the U.S. Patient Assistance Program. YTD declines were partially offset by higher volumes in emerging markets.
			Int’l.	411		498		(17)	(6)
			Worldwide	$	1,283	$	1,381	(7)	(3)
	YTD	$3,841 Down 2% (operationally)	U.S.	$	2,493	$	2,539	(2)
			Int’l.	1,347		1,500		(10)	(1)
			Worldwide	$	3,841	$	4,039	(5)	(2)
Vyndaqel/ Vyndamax	QTD	$602 Up 29% (operationally)	U.S.	$	329	$	228	44		Growth largely driven by continued strong uptake of the ATTR-CM indication, primarily in developed Europe and the U.S., partially offset by a planned price decrease that went into effect in Japan in the second quarter of 2022.
			Int’l.	273		273		—	15
			Worldwide	$	602	$	501	20	29
	YTD	$1,766 Up 28% (operationally)	U.S.	$	890	$	658	35
			Int’l.	876		796		10	22
			Worldwide	$	1,766	$	1,454	21	28
Xeljanz	QTD	$502 Down 14% (operationally)	U.S.	$	345	$	410	(16)		Declines driven primarily by decreased prescription volumes globally resulting from ongoing shifts in prescribing patterns related to JAK class label changes. In addition, YTD was impacted by declines in net price due to unfavorable changes in channel mix and unfavorable wholesaler inventory buying patterns in the U.S.
			Int’l.	157		201		(22)	(11)
			Worldwide	$	502	$	610	(18)	(14)
	YTD	$1,304 Down 22% (operationally)	U.S.	$	802	$	1,132	(29)
			Int’l.	502		602		(17)	(9)
			Worldwide	$	1,304	$	1,734	(25)	(22)

4644


(MILLIONS)	(MILLIONS)					Revenue					% Change					(MILLIONS)								Revenue							% Change
Product	Product	Period	Global Revenues		Region	Oct. 3, 2021		Sept. 27, 2020			Total		Oper.		Operational Results Commentary	Product		Period	Global Revenues		Region			Oct. 2, 2022				Oct. 3, 2021			Total		Oper.		Operational Results Commentary
Xeljanz		QTD	$610 Down 7% (operationally)		U.S.	$	410	$	469		(13)				Decline driven by the U.S., reflecting the negative impact of a review by the FDA which resulted in a Drug Safety Communication related to Xeljanz and two competitors’ arthritis medicines in the same drug class, as well as an unfavorable change in channel mix toward lower-priced channels and continued investments to improve formulary positioning and unlock access to additional patient lives. This decline was partially offset by operational growth internationally mainly driven by continued uptake in the UC indication in certain developed markets.
					Int’l.	201		185			8		7
					Worldwide	$	610	$	654		(7)		(7)
		YTD	td,734 Down 1% (operationally)		U.S.	$	1,132	$	1,213		(7)
						602		528			14		11
						$	1,734	$	1,741		—		(1)
Vyndaqel/ Vyndamax		QTD	$501 Up 42% (operationally)		U.S.	$	228	$	158		44				Growth primarily driven by continued strong uptake of the ATTR-CM indication in the U.S., developed Europe and Japan.
								193			41		40
								$	351		43		42
			$	658		$	431			53
						429				86		78
						$	859			69		66
Xtandi	Xtandi					$	266			16				Growth primarily driven by strong demand across the mCRPC, nmCRPC and mCSPC indications.		Xtandi		QTD	$320 Up 3% (operationally)		U.S.			$	320			$	309		3				Performance largely due to steady demand growth across the mCRPC, nmCRPC, and mCSPC indications. YTD demand growth was offset largely by unfavorable changes in channel mix and fluctuating enrollment rates in the Xtandi Patient Assistance Program.
						—				—		Int’l.										—				—				—		—
						$	266			16		16									Worldwide			$	320			$	309		3		3
						$	741			19								YTD	$878 Flat (operationally)		U.S.			$	878			$	879		—
						—				—		—										—				—				—		—
						$	741			19		19										$	878			$	879			—		—
Inlyta	Inlyta					$	124			22				Growth primarily reflects continued adoption in the U.S. and developed Europe of combinations of certain immune checkpoint inhibitors and Inlyta for the first-line treatment of patients with advanced RCC.	Inlyta		QTD	td52 Up 3% (operationally)	U.S.			$	152			$	151			—				Growth primarily reflects continued adoption in emerging markets of combinations of certain immune checkpoint inhibitors and Inlyta for the first-line treatment of patients with advanced RCC. YTD growth also driven by continued adoption in developed Europe.
						71				47		43												104						(4)		6
						$	195			31		30												$	256					(1)		3
						$	372			20							YTD	U.S.						1
						187				57		51						Int’l.	306											4		13
						$	559			33		31						Worldwide	$	760										2		6
Biosimilars						$	260			50				Growth primarily driven by recent oncology monoclonal antibody biosimilar launches and continued growth from Retacrit in the U.S.
						164				13		9
						$	424			36		34
						$	588			84
						414				41		32
						$	1,001			66		62
Hospital						$	765			7				Growth primarily driven by Pfizer CentreOne, our contract manufacturing operation, reflecting certain Comirnaty-related manufacturing activities performed on behalf of BioNTech and manufacturing of legacy Upjohn products for Viatris under manufacturing and supply agreements, as well as growth from international markets, primarily driven by the anti-infectives portfolio.
						1,025				51		46
						$	1,790			32		29
						$	2,485			3
						3,256				36		30
						$	5,741			21		18

Pfizer CentreOne


(MILLIONS)				Revenue				% Change
Operating Segment	Period	Global Revenues	Region	Oct. 2, 2022		Oct. 3, 2021		Total	Oper.	Operational Results Commentary
PC1	QTD	$319 Down 35% (operationally)	U.S.	$	103	$	121	(15)		Declines primarily driven by lower COVID-19 manufacturing activities performed on behalf of customers, including Comirnaty supply to BioNTech, and lower manufacturing of divested products under manufacturing and supply agreements.
			Int’l.	216		400		(46)	(40)
			Worldwide	$	319	$	521	(39)	(35)
	YTD	$974 Down 25% (operationally)	U.S.	$	291	$	409	(29)
			Int’l.	683		939		(27)	(23)
			Worldwide	$	974	$	1,348	(28)	(25)

(a)Comirnaty includes direct sales and alliance revenues related to sales of the Pfizer-BioNTech COVID-19 vaccine, which are recorded within our ~~Vaccines~~Primary Care therapeutic area. It does not include revenues for certain Comirnaty-related manufacturing activities performed on behalf of BioNTech, which are included in the Pfizer CentreOne contract manufacturing operation within the Hospital area. Revenues related to these manufacturing activities totaled $187 million and $274 million for the third quarter and the first nine months of 2021, respectively.PC1. See Note 13C.

* ~~Calculation is~~Indicates calculation not ~~meaningful or results are equal to or greater than 100%.~~meaningful.

See the Item 1. Business—Patents and Other Intellectual Property Rights section of our ~~2020~~2021 Form 10-K for information regarding the expiration of various patent rights, Note 12 for a discussion of recent developments concerning patent and product litigation relating to certain of the products discussed above, and Note ~~13B~~13C for information regarding the primary indications or class of the selected products discussed.

Costs and Expenses


Costs and expenses follow:
	Three Months Ended							Nine Months Ended
(MILLIONS)	October 2, 2022			October 3, 2021			% Change	October 2, 2022			October 3, 2021			% Change
Cost of sales	$	6,063		$	9,932		(39)	$	24,696		$	21,085		17
Percentage of Revenues	26.8		%	41.3		%		32.5		%	36.7		%
Selling, informational and administrative expenses	3,391			2,899			17	9,032			8,599			5
Research and development expenses	2,696			2,681			1	7,813			6,914			13
Acquired in-process research and development expenses	524			762			(31)	880			1,000			(12)
Amortization of intangible assets	822			968			(15)	2,478			2,743			(10)
Restructuring charges and certain acquisition-related costs	199			646			(69)	580			667			(13)
Other (income)/deductions—net	(59)			(1,696)			(97)	1,063			(4,043)			*
* Indicates calculation not meaningful.

Cost of Sales

Cost of sales decreased $3.9 billion in the third quarter of 2022, primarily due to:

•a reduction of $4.1 billion due to lower sales of Comirnaty (see the Analysis of the Condensed Consolidated Statements of Income––Revenues––Selected Product ~~Developments~~Discussion within MD&A); and

•a $600 million favorable impact of foreign exchange and hedging activity,

partially offset by:

•an increase of $800 million for Paxlovid, including a charge of $400 million related to excess raw materials.

Cost of sales increased $3.6 billion in the first nine months of 2022, mainly due to:

•an unfavorable impact of $3.4 billion due to increased sales of Comirnaty, which includes a charge for the 50% gross profit split with BioNTech and applicable royalty expenses;

•an increase of $1.8 billion for Paxlovid, which includes the charge of $400 million discussed above; and

•a $450 million write off of inventory related to COVID-19 products that have exceeded or are expected to exceed their approved shelf-lives prior to being used, which was recorded in the second quarter of 2022,

partially offset by:

•a $2.0 billion favorable impact of foreign exchange and hedging activity.

The decrease in Cost of sales as a percentage of revenues in the third quarter of 2022 was primarily driven by favorable changes in sales mix, including significant sales of Paxlovid, and lower sales of Comirnaty, as well as the favorable impacts of foreign exchange and hedging activity, partially offset by the charge of $400 million related to Paxlovid discussed above.

The decrease in Cost of sales as a percentage of revenues in the first nine months of 2022 was primarily due to the favorable impacts of Paxlovid, foreign exchange and hedging activity, partially offset by the unfavorable impact of Comirnaty, as well as the $450 million inventory write-off related to COVID-19 products and the charge of $400 million related to Paxlovid discussed above.

Selling, Informational and Administrative (SI&A) Expenses

SI&A expenses increased $492 million in the third quarter of 2022, primarily due to:

•an increase of $290 million for Paxlovid and Comirnaty marketing and promotional expenses and a higher provision for U.S. healthcare reform fees based on sales of Paxlovid and Comirnaty; and

•an increase of $125 million for marketing and promotional expenses for recently launched products,

partially offset by:

•a $112 million favorable impact of foreign exchange.

SI&A expenses increased $433 million in the first nine months of 2022, mainly due to:

•an increase of $720 million for Paxlovid and Comirnaty marketing and promotional expenses and a higher provision for U.S. healthcare reform fees based on sales of Paxlovid and Comirnaty; and

•an increase of $300 million for marketing and promotional expenses for recently launched products,

partially offset by:

•a decrease of $270 million in our liability to be paid to participants of our supplemental savings plan; and

•a $244 million favorable impact of foreign exchange.

Research and Development (R&D) Expenses

R&D expenses increased $15 million in the third quarter, primarily due to:

•increased costs of $290 million to develop recently acquired assets, as well as investments for certain oncology and non-COVID-19 vaccines programs,

partially offset by:

•lower spending of $270 million on programs to prevent and treat COVID-19 and various late-stage clinical programs.

R&D expenses increased $898 million in the first nine months of 2022,primarily driven by increased costs of $800 million to develop recently acquired assets, as well as investments across multiple late-stage clinical programs, including development costs and at-risk manufacturing related to programs to prevent and treat COVID-19.

Acquired In-Process Research and Development (IPR&D) Expenses

Acquired IPR&D expenses decreased $237 million in the third quarter of 2022, primarily reflecting an upfront payment to Arvinas and a premium paid on our equity investment in Arvinas totaling $706 million in the third quarter of 2021, partially offset by an upfront payment of $426 million related to the closing of the acquisition of ReViral in the third quarter of 2022.

Acquired IPR&D expenses decreased $120 million in the first nine months of 2022, largely due to:

•the payments to Arvinas in the third quarter of 2021; and

•the acquisition of Amplyx Pharmaceuticals, Inc. in the second quarter of 2021,

partially offset by:

•the upfront payment related to the closing of the acquisition of ReViral in the third quarter of 2022;

•an upfront payment to Biohaven and a premium paid on our equity investment in Biohaven totaling $263 million in the first quarter of 2022; and

•a $76 million premium paid on our equity investment in BioNTech to develop a potential mRNA vaccine against shingles in the first quarter of 2022.

See Note 2A and 2D for additional information.

Amortization of Intangible Assets

Amortization of intangible assets decreased $146 million in the third quarter and $265 million in the first nine months of 2022, primarily as a result of lower amortization of Comirnaty sales milestones to BioNTech.

Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives

Transforming to a More Focused Company Program––For a description of our program, as well as the anticipated and actual costs, see Note 3. The program savings discussed below may be rounded and represent approximations. In connection with restructuring our corporate enabling functions, we expect gross cost savings of $1.0 billion, or net cost savings, excluding merit and inflation growth and certain real estate cost increases, of $700 million, to be achieved primarily from 2021 through 2022. In connection with transforming our marketing strategy, we expect net cost savings of $1.4 billion, to be achieved primarily from 2022 through 2024. In connection with manufacturing network optimization, we expect net cost savings of $550 million to be achieved primarily from 2020 through 2023.

Certain qualifying costs for this program were recorded in the first three quarters of 2022 and 2021 and are reflected as Certain Significant Items and excluded from our non-GAAP measure of Adjusted Income. See the Non-GAAP Financial Measure: Adjusted Income section within MD&A.

In addition to this program, we continuously monitor our operations for cost reduction and/or productivity opportunities, especially in light of the losses of exclusivity and the expiration of collaborative arrangements for various products.

Other (Income)/Deductions—Net

The period-over-period changes were primarily driven by:

•net losses on equity securities in 2022 versus net gains recognized in 2021;

•lower net periodic benefit credits associated with pension and postretirement plans incurred in 2022 compared to 2021; and

•an intangible asset impairment charge recorded in the third quarter of 2022.

See Note 4 for additional information.

Provision/(Benefit) for Taxes on Income


	Three Months Ended							Nine Months Ended
(MILLIONS)	October 2, 2022			October 3, 2021			% Change	October 2, 2022			October 3, 2021			% Change
Provision/(benefit) for taxes on income	$	356		$	(328)		*	$	3,098		$	1,603		93
Effective tax rate on continuing operations	4.0		%	(4.2)		%		10.5		%	7.8		%
* Indicates calculation not meaningful.

For information about our effective tax rate and the events and circumstances contributing to the changes between periods, as well as details about discrete elements that impacted our tax provisions, see Note 5.

Discontinued Operations

For information about our discontinued operations, see Note 2B.

PRODUCT DEVELOPMENTS

A comprehensive update of Pfizer’s development pipeline was published as of November ~~2, 2021~~1, 2022 and is available at www.pfizer.com/science/drug-product-pipeline. It includes an overview of our research and a list of compounds in

development with targeted indication and phase of development, as well as mechanism of action for some candidates in Phase 1 and all candidates from Phase 2 through registration.

The following provides information as of the date of this filing about significant marketing application-related regulatory actions by, and filings pending with, the FDA and regulatory authorities in the EU and Japan.

The ~~table~~tables below ~~includes only approvals~~include filing and approval milestones for products that have occurred in the last twelve months and ~~does~~generally do not include approvals that may have occurred prior to that time. The ~~table includes~~tables include filings with regulatory decisions pending (even if the filing occurred outside of the last twelve-month period).

COVID-19 Vaccine Products

PATIENT POPULATION AND DATE OF APPROVAL/FILING

COVID-19 VACCINE PRODUCT(a)

PRIMARY SERIES
OR BOOSTER

16 Years of age and older

12-15 Years of age

5-11 Years of age

6 Months through 4 Years of age

U.S.

JAPAN

U.S.

JAPAN

U.S.

JAPAN

U.S.

JAPAN

Comirnaty

30-µg 2-dose primary(b)

10-µg 2-dose primary(c)

3-µg 3-dose primary

Primary

Approved

Aug.

2021

CMA

Dec.

2020

Cond.

J-NDA Feb.

2021

EUA

May 2021

CMA

May 2021

Cond.

J-NDA

May

2021

EUA

Oct. 2021

CMA

Nov. 2021

Cond.

J-NDA

Jan.

2022

EUA

June 2022

CMA

Oct.

2022

Cond.

J-NDA

Oct.

2022

30-µg booster dose(d)

10-µg booster dose

Booster

EUA(e)

Dec.

2021

CMA

Oct. 2021

Cond.

J-NDA

Nov.

2021

EUA(e) Jan. 2022

CMA Feb. 2022

Cond.

J-NDA Jan.

2022

EUA(e)

May 2022

CMA Sep. 2022

Cond.

J-NDA June

2022

Comirnaty Original/Omicron BA.4/BA.5 Vaccine(f)

Booster

30-µg booster dose

10-µg booster dose

EUA

Aug.

2022

CMA

Sep. 2022

Cond.

J-NDA Oct.

2022

EUA

Aug. 2022

CMA

Sep. 2022

Cond.

J-NDA Oct.

2022

EUA

Oct. 2022

Filed

Sep. 2022

Comirnaty Original/Omicron BA.1 Vaccine

Booster

30-µg booster dose

CMA

Sep.

2022

Cond.

J-NDA Sep.

2022

CMA

Sep.

2022

Cond.

J-NDA Sep.

2022

(a)All COVID-19 vaccine products listed in this table are being developed in collaboration with BioNTech.

(b)FDA has authorized a third 30-µg primary series dose to individuals 12 years of age and older with certain kinds of immunocompromise.

(c)FDA has authorized a third 10-µg primary series dose to individuals 5-11 years of age with certain kinds of immunocompromise.

(d)FDA has authorized a second booster dose in adults ages 50 years and older who have previously received a first booster of any authorized COVID-19 vaccine. The FDA also has authorized a second booster dose for individuals 12 years of age and older who have been determined to have certain kinds of immunocompromise and who have received a first booster dose of any authorized COVID-19 vaccine.

(e)Comirnaty wild-type booster in these populations has been replaced by the booster of the Pfizer-BioNTech COVID-19 Vaccine, Bivalent (Original and Omicron BA.4/BA.5).

(f)Refers to the Pfizer-BioNTech COVID-19 Vaccine, Bivalent (Original and Omicron BA.4/BA.5) and Comirnaty Original/Omicron BA.4/BA.5 Vaccine.

Other Products

PRODUCT

DISEASE AREA

APPROVED/FILED*

U.S.

JAPAN

~~Comirnaty/BNT162b2~~

~~(PF-07302048)(a)~~

~~Immunization to prevent COVID-19 (16 years of age and older)~~

~~BLA~~

~~Aug.~~

~~2021~~

~~CMA~~

~~Dec.~~

~~2020~~

~~Approved~~

~~Feb.~~

~~2021~~

~~Immunization to prevent COVID-19 (12-15 years of age)~~

~~EUA~~

~~May~~

~~2021~~

~~CMA~~

~~May~~

~~2021~~

~~Approved~~

~~May~~

~~2021~~

~~Immunization to prevent COVID-19 (booster, adults)~~

~~EUA~~

~~Sep.~~

~~2021~~

~~CMA~~

~~Oct.~~

~~2021~~

~~Approved~~

~~Nov.~~

~~2021~~

~~Immunization to prevent COVID-19 (5-11 years of age)~~

~~EUA~~

~~Oct.~~

~~2021~~

~~Filed~~

~~Oct.~~

~~2021~~

~~Filed~~

~~Nov.~~

~~2021~~

~~Bavencio~~

~~(avelumab)(b)~~

~~First-line maintenance urothelial cancer~~

~~Approved~~

~~Jan.~~

~~2021~~

~~Approved~~

~~Feb.~~

~~2021~~

Nyvepria
(pegfilgrastim-apgf)

~~Neutropenia in patients undergoing cancer chemotherapy (biosimilar)~~

~~Approved~~

~~Nov.~~

~~2020~~

~~Braftovi (encorafenib)(c)~~

~~Second or third-line BRAFv600E-mutant mCRC (combination with Erbitux~~® ~~(cetuximab))~~

~~Approved~~

~~Nov.~~

~~2020~~

~~Braftovi (encorafenib) and Mektovi (binimetinib)(c)~~

~~Second or third-line BRAFV600E-mutant mCRC (combination with Erbitux~~® ~~(cetuximab))~~

~~Approved~~

~~Nov.~~

~~2020~~

~~Xtandi~~

~~(enzalutamide)(d)~~

~~mCSPC~~

~~Approved~~

~~April~~

~~2021~~

Cibinqo
(abrocitinib)~~(e)~~

Atopic dermatitis

~~Filed~~Approved

~~Oct.~~Jan.

~~2020~~2022

~~Filed~~Approved

~~Oct.~~Dec.

~~2020~~2021

Approved

Sep.

2021

Xeljanz

(tofacitinib)~~(e)~~

Ankylosing spondylitis

~~Filed~~Approved

~~Aug.~~Dec.

~~2020~~2021

~~Filed~~Approved

~~Feb.~~Nov.

2021

Myfembree

(relugolix fixed dose combination)~~(f)~~(a)

Uterine fibroids (combination with estradiol and norethindrone acetate)

Approved

May

2021

Endometriosis (combination with estradiol and norethindrone acetate)

~~Filed~~Approved

~~Sep.~~Aug.

~~2021~~2022

~~Lorbrena~~Lorbrena/Lorviqua

(lorlatinib)

~~First- line~~First-line ALK-positive NSCLC

Approved

Mar.

2021

~~Filed~~Approved

~~Feb.~~Jan.

~~2021~~2022

~~Filed~~Approved

~~Dec.~~Nov.

~~2020~~2021

~~somatrogon~~Ngenla

~~(PF-06836922)~~(somatrogon)~~(g)~~(b)

Pediatric growth hormone deficiency

Filed

Jan.

2021

~~Filed~~Approved

Feb.

~~2021~~2022

~~Filed~~Approved

Jan.

~~2021~~2022

Prevnar 2020/Apexxnar

(Vaccine)~~(h)~~(c)

Immunization to prevent invasive and non-invasive pneumococcal infections (adults)

Approved

June

2021

~~Filed~~Approved

Feb.

~~2021~~2022

TicoVac
(Vaccine)

Immunization to prevent tick-borne encephalitis

Approved

Aug.

2021

Paxlovid(d)(nirmatrelvir [PF-07321332]; ritonavir)

COVID-19 infection (high risk population)

EUA

Dec.

2021

CMA

Jan.

2022

Approved

Feb.

2022

Nurtec ODT/Vydura

(rimegepant)

Acute migraine

Approved Feb.

2020

Approved

Apr.

2022

Migraine prevention

Approved May

2021

Approved

Apr.

2022

ritlecitinib (PF-06651600)

Alopecia areata

Filed

Sep.

2022

Filed

Sep.

2022

Filed

Sep.

2022

zavegepant
(intranasal)

Acute migraine

Filed

May

2022

*For the U.S., the filing date is the date on which the FDA accepted our submission. For the EU, the filing date is the date on which the EMA validated our submission.

(a)Being developed in collaboration with ~~BioNTech. Prior~~Myovant. In June 2022, the FDA accepted for review a sNDA for Myfembree (relugolix 40 mg, estradiol 1 mg, and norethindrone acetate 0.5 mg) proposing updates to ~~BLA, Comirnaty/BNT162b2 for ages 16~~Myfembree’s U.S. Prescribing Information based on safety and ~~up was available pursuant to an EUA~~efficacy data from the ~~FDA on December 11, 2020. A booster dose received EUA from the FDA on September 22, 2021~~Phase 3 LIBERTY randomized withdrawal study in premenopausal women with heavy menstrual bleeding associated with uterine fibroids for individuals 65 years of age and older, individuals 18 through 64 years of age at high risk of severe COVID-19, and individuals 18 through 64 years of age with frequent institutional or occupational exposureup to ~~SARS-CoV-2. In addition, in October 2021, the FDA authorized~~two years. The Prescription Drug User Fee Act goal date for emergency use a booster dose to eligible individuals who have completed primary vaccination with a different authorized COVID-19 vaccine. A booster dose received conditional marketing authorization from the EMA on October 5, 2021 and approval in Japan on November 10, 2021 for 18 years of age and older. In November 2021, we and BioNTech submitted a request to the FDA to amend the EUA of a booster dose of Comirnaty/BNT162b2 to include all individuals 18 years of age and older.this sNDA is January 29, 2023.

(b)Being developed in collaboration with ~~Merck KGaA, Germany.~~OPKO. In January 2022, Pfizer and OPKO received a Complete Response Letter (CRL) from the FDA for the BLA for somatrogon. Discussions are ongoing with the FDA regarding the CRL and how to best address their concerns.

(c)~~Erbitux~~® ~~is a registered trademark of ImClone LLC. In the EU, we are developing in collaboration with the Pierre Fabre Group. In Japan, we are developing in collaboration with Ono Pharmaceutical Co., Ltd.~~

~~(d)Being developed in collaboration with Astellas.~~

~~(e)~~In July 2021, the FDA notified the company that it will not meet the PDUFA goal dates for the New Drug Application for abrocitinib and the supplemental New Drug Application for Xeljanz/Xeljanz XR (tofacitinib). The FDA cited its ongoing review of Pfizer's post-marketing safety study, ORAL Surveillance, evaluating tofacitinib in rheumatoid arthritis patients, as a factor for the extensions.In October 2021, the EMA’s Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion recommending the approval of abrocitinib to treat moderate to severe atopic dermatitis in adults who are candidates for systemic therapy. The CHMP also adopted a positive opinion recommending an extension to the existing indications for Xeljanz (tofacitinib) to include the treatment of adults with active ankylosing spondylitis who have responded inadequately to conventional therapy.

~~(f)Being developed in collaboration with Myovant.~~

~~(g)Being developed in collaboration with OPKO.~~

~~(h)~~In October 2021, the CDC’s ACIP voted to recommend Prevnar 20 for routine use in adults. Specifically, the ACIP voted to recommend the following: (i) adults 65 years of age or older who have not previously received a pneumococcal conjugate vaccine or whose previous vaccination history is unknown should receive a pneumococcal conjugate vaccine

~~(either~~ (either pneumococcal 20-valent conjugate vaccine (PCV20) or pneumococcal 15-valent conjugate vaccine (PCV15)). If PCV15 is used, this should be followed by a dose of pneumococcal polysaccharide vaccine (PPSV23); and (ii) adults aged 19 years of age or older with certain underlying medical conditions or other risk factors who have not previously received a pneumococcal conjugate vaccine or whose previous vaccination history is unknown should receive a pneumococcal conjugate vaccine (either PCV20 or PCV15). If PCV15 is used, this should be followed by a dose of PPSV23. The recommendations ~~will be forwarded to the director of the CDC and the U.S. Department of Health and Human Services for review and following approval, the recommendations are~~were published in the Morbidity and Mortality Weekly ~~Report.~~

Report on January 28, 2022. The publication also notes “for adults who have received pneumococcal conjugate vaccine (PCV13) but have not completed their recommended pneumococcal vaccine series with PPSV23, one dose of Prevnar 20 may be used if PPSV23 is not available.” In October ~~2021, Pfizer~~2022, the CDC’s ACIP voted to recommend a single dose of Prevnar 20 to help protect adults previously vaccinated with Prevnar 13 or both Prevnar 13 and ~~Lilly discontinued~~PPSV23 against invasive disease and pneumonia caused by the ~~global clinical development program~~20 Streptococcus pneumoniae serotypes in Prevnar 20.

(d)In January 2022, the EMA approved the CMA of Paxlovid for ~~tanezumab,~~treating COVID-19 in adults who do not require supplemental oxygen and who are at increased risk of the disease becoming severe. In June 2022, we announced the submission of an ~~investigational nerve growth factor inhibitor. This decision was made following receipt of a Complete Response Letter from~~NDA to the FDA for approval of Paxlovid for the ~~tanezumab application~~treatment of COVID-19 in ~~osteoarthritis (OA)~~both vaccinated and ~~a negative opinion adopted by~~unvaccinated individuals who are at high risk for progression to severe illness from COVID-19.

In December 2021, in light of the ~~EMA's Committee~~results from the completed required postmarketing safety study of Xeljanz, ORAL Surveillance (A3921133), the U.S. label for ~~Medicinal Products~~Xeljanz was revised. In addition, in October 2022, the PRAC of the EMA concluded their assessment of JAK inhibitors authorized for ~~Human Use on~~inflammatory diseases in the ~~tanezumab Marketing Authorization Application~~EU, including Xeljanz and Cibinqo, and recommended that risk minimization measures, including special warnings and precautions for use, should be revised for such JAK inhibitors. The resulting label changes are expected to be finalized in ~~OA.~~January 2023. For additional information, see Item 1A. Risk Factors—Post-Authorization/Approval Data andthe Product Development sections of our 2021 Form 10-K.

In ~~September 2021,~~China, the ~~FDA issued a Drug Safety Communication (DSC) related to Xeljanz/Xeljanz XR and two competitors’ arthritis medicines~~following products received regulatory approvals in the ~~same drug class, based on its completed review of the ORAL Surveillance trial. The DSC stated that the FDA will require revisions to the Boxed Warnings~~last twelve months: Cresemba for ~~each of these medicines to include information about the risks of serious heart-related events,~~fungal infection and Besponsa for second line acute lymphoblastic leukemia, both in December 2021; Paxlovid for COVID-19 infection in February 2022; Cibinqo for atopic dermatitis in April 2022; Lorbrena for non-small cell lung cancer ~~blood clots,~~(first line and death. In addition, the DSC indicates the FDA’s intention to limit approved uses of these products to certain patients who have not responded or cannot tolerate one or more tumor necrosis factor (TNF) blockers.second line therapy) in April 2022.

The following provides information about additional indications and new drug candidates in late-stage development:

~~PRODUCT/CANDIDATE~~

~~PROPOSED DISEASE AREA~~

LATE-STAGE CLINICAL PROGRAMS FOR ADDITIONAL USES AND DOSAGE FORMS

FOR IN-LINE AND IN-REGISTRATION PRODUCTS

~~Bavencio (avelumab)(a)~~

~~First-line NSCLC~~PRODUCT/CANDIDATE

PROPOSED DISEASE AREA

Ibrance (palbociclib)~~(b)~~(a)

ER+/HER2+ metastatic breast cancer

Xtandi (enzalutamide)~~(c)~~(b)

Non-metastatic high-risk castration sensitive prostate cancer

Talzenna (talazoparib)

Combination with Xtandi (enzalutamide) for first-line mCRPC

Combination with Xtandi (enzalutamide) for DNA Damage Repair (DDR)-deficient mCSPC

PF-06482077 (Vaccine)

Immunization to prevent invasive and non-invasive pneumococcal infections (pediatric)

somatrogon (PF-06836922)~~(d)~~(c)

Adult growth hormone deficiency

Braftovi (encorafenib) and Erbitux® (cetuximab)~~(e)~~(d)

First-line BRAFv600E-mutant mCRC

~~Myfembree~~

~~(relugolix fixed dose combination)(f)~~

~~Combination with estradiol and norethindrone acetate for contraceptive efficacy~~

Braftovi (encorafenib) and Mektovi (binimetinib) and Keytruda® (pembrolizumab)~~(g)~~(e)

BRAFv600E-mutant metastatic or unresectable locally advanced melanoma

Paxlovid (nirmatrelvir [PF-07321332]; ritonavir)

~~Comirnaty~~COVID-19 infection (/~~BNT162b2~~pediatric)

~~(PF-07302048)(h)~~

~~Immunization to prevent COVID-19 (children 2 to <5 years of age)~~

~~Immunization to prevent COVID-19 (infants 6 months to <24 months)~~

~~Immunization to prevent COVID-19 (maternal)~~

zavegepant (oral)

Migraine prevention

NEW DRUG CANDIDATES IN LATE-STAGE DEVELOPMENT

aztreonam-avibactam
(PF-06947387)

Treatment of infections caused by Gram-negative bacteria with limited or no treatment options

fidanacogene elaparvovec (PF-06838435)~~(i)~~(f)

Hemophilia B

giroctocogene fitelparvovec

(PF-07055480)~~(j)~~(g)

Hemophilia A

PF-06425090 (Vaccine)

Immunization to prevent primary clostridioides difficile infection

PF-06886992 (Vaccine)

Immunization to prevent serogroups meningococcal infection (adolescent and young adults)

PF-06928316 (Vaccine)

Immunization to prevent respiratory syncytial virus infection (maternal)

Immunization to prevent respiratory syncytial virus infection (older adults)

~~PF-07265803~~

~~Dilated cardiomyopathy due to Lamin A/C gene mutation~~

~~ritlecitinib (PF-06651600)~~

~~Alopecia areata~~

sasanlimab (PF-06801591)

Combination with Bacillus Calmette-Guerin for non-muscle-invasive bladder cancer

fordadistrogene movaparvovec (PF-06939926)

Duchenne muscular dystrophy (ambulatory)

marstacimab (PF-06741086)

Hemophilia

~~Elranatamab~~elranatamab (PF-06863135)(h)

Multiple myeloma triple-class refractory

Multiple myeloma double-class exposed

Newly diagnosed multiple myeloma

Omicron-based mRNA vaccine(i)

~~Multiple Myeloma Double-Class Exposed~~Immunization to prevent COVID-19 (adults)

~~Paxlovid (PF-07321332; ritonavir)~~etrasimod (PF-07915503)

Ulcerative colitis (moderately to severely active)

~~COVID-19 Infection (~~VLA15 (PF-07307405) vaccine~~high risk population)~~(j)

Immunization to prevent Lyme Disease

~~COVID-19 Infection (~~PF-07252220 (quadrivalent mRNA-based vaccine)

~~low risk population)~~Immunization to prevent influenza

~~COVID-19 Infection (~~inclacumab (PF-07940370)

~~post exposure prophylaxis)~~Sickle Cell Disease

(a)Being developed in collaboration with ~~Merck KGaA, Germany.~~The Alliance Foundation Trials, LLC.

(b)Being developed in collaboration with ~~the Alliance Foundation Trial.~~Astellas.

(c)Being developed in collaboration with ~~Astellas.~~OPKO.

(d)~~Being developed in collaboration with OPKO.~~

~~(e)~~Erbitux® is a registered trademark of ImClone LLC. In the EU, we are developing in collaboration with the Pierre Fabre Group. In Japan, we are developing in collaboration with Ono Pharmaceutical Co., Ltd.

~~(f)Being developed in collaboration with Myovant.~~

~~(g)~~(e)Keytruda® is a registered trademark of Merck Sharp & Dohme Corp.

~~(h)Being developed~~ In the EU, we are developing in collaboration with ~~BioNTech.~~the Pierre Fabre Group. In Japan, we are developing in collaboration with Ono Pharmaceutical Co., Ltd.

~~(i)~~(f)Being developed in collaboration with Spark Therapeutics, Inc.

~~(j)~~(g)Being developed in collaboration with Sangamo Therapeutics, Inc.

(h)Multiple myeloma triple-class refractory is currently in a Phase 2 registration-enabling study.

(i)Being developed in collaboration with BioNTech.

(j)Being developed in collaboration with Valneva SE.

Myfembree combination with estradiol and norethindrone acetate for contraceptive efficacy is currently enrolling in a Phase 3 study as of November 2022 as a potential label update rather than a distinct registration, and has been removed from the table above.

For additional information about our R&D organization, see the Item 1. Business—Research and Development section of our ~~2020~~2021 Form 10-K.

~~COSTS AND EXPENSES~~

Costs and expenses follow:
Three Months Ended Nine Months Ended
(MILLIONS) October 3,
2021 September 27,
2020 %
Change October 3,
2021 September 27,
2020 %
Change
Cost of sales $ 9,973 $ 2,007 * $ 21,232 $ 5,773 *
Percentage of Revenues
41.4 % 19.5 % 36.8 % 19.1 %
Selling, informational and administrative expenses 2,905 2,658 9 8,617 7,858 10
Research and development expenses 3,447 2,300 50 7,920 6,050 31
Amortization of intangible assets 981 862 14 2,784 2,579 8
Restructuring charges and certain acquisition-related costs 646 2 * 668 417 60
Other (income)/deductions—net (1,696) 1,878 * (3,697) 1,114 *
* Indicates calculation not meaningful or results are equal to or greater than 100%.

~~Cost of Sales~~

~~Cost of sales~~ ~~increased $8.0 billion in the third quarter and $15.5 billion in the first nine months of 2021, primarily due to:~~

•~~the impact of Comirnaty, which includes a charge for the 50% gross profit split with BioNTech and applicable royalty expenses;~~

•~~increased sales volumes of other products, driven mostly by Pfizer CentreOne; and~~

•~~the unfavorable impact of foreign exchange and hedging activity on intercompany inventory.~~

~~The increase in~~ ~~Cost of sales~~ as a percentage of revenues in the third quarter of 2021, compared to the same period in 2020, was primarily due to all of the factors discussed above, in addition to the unfavorable impact of the voluntary recall and global pause in shipments of Chantix, partially offset by an increase in alliance revenues, which have no associated cost of sales.

~~The increase in~~ ~~Cost of sales~~ as a percentage of revenues in the first nine months of 2021, compared to the same period in 2020, was primarily due to all of the factors discussed above, partially offset by an increase in alliance revenues, which have no associated cost of sales.

~~Selling, Informational and Administrative Expenses~~

~~SI&A expenses increased $248 million in the third quarter of 2021, mostly due to:~~

•~~an increase in external, incremental costs directly related to implementing our cost-reduction/productivity initiatives; and~~

•~~increased product-related spending across multiple therapeutic areas and other costs associated with activity that is closer to pre-pandemic levels as compared to the prior-year quarter.~~

~~SI&A expenses increased $759 million in the first nine months of 2021, mostly due to:~~

•~~increased product-related spending across multiple therapeutic areas and other costs associated with activity that is closer to pre-pandemic levels as compared to the prior-year period;~~

•~~an increase in external, incremental costs directly related to implementing our cost-reduction/productivity initiatives;~~

•~~costs related to Comirnaty, driven by a higher provision for healthcare reform fees based on sales;~~

•~~the unfavorable impact of foreign exchange; and~~

•~~an increase to expense resulting from the increase in our liability to be paid to participants of our supplemental savings plan,~~

~~partially offset by:~~

•~~lower spending on Chantix following the loss of patent protection in the U.S. in November 2020.~~

~~Research and Development (R&D) Expenses~~

~~R&D expenses increased $1.1 billion in the third quarter primarily due to:~~

•~~an upfront payment related to the global collaboration agreement with Arvinas to develop and commercialize ARV-471; and~~

•~~increased investments across multiple therapeutic areas, including additional spending related to the development and at-risk manufacturing of the COVID-19 anti-viral programs.~~

~~R&D expenses increased $1.9 billion in the first nine months of 2021, primarily due to:~~

•~~increased investments across multiple therapeutic areas, including additional spending related to the development and at-risk manufacturing of the COVID-19 anti-viral programs;~~

•~~the upfront payment related to the global collaboration agreement with Arvinas to develop and commercialize ARV-471;~~

•~~a charge for IPR&D related to an asset acquisition completed in the second quarter of 2021; and~~

•an increase in the value of the portfolio performance share grants reflecting changes in the price of Pfizer’s common stock, as well as management’s assessment of the probability that the specific performance criteria will be achieved,

~~partially offset by:~~

•~~the non-recurrence of 2020 upfront payments to Valneva and BioNTech; and~~

•~~lower spending across the Inflammation & Immunology and Internal medicine portfolios.~~

~~Amortization of Intangible Assets~~

Amortization of intangible assets increased $120 million in the third quarter and $204 million in the first nine months of 2021, primarily as a result of amortization of capitalized Comirnaty sales milestones to BioNTech.

~~Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives~~

~~Transforming to a More Focused Company Program~~

~~For a description of our program, as well as the anticipated and actual costs, see~~ ~~Note 3.~~ The program savings discussed below may be rounded and represent approximations. In connection with restructuring our corporate enabling functions, we expect gross cost savings of $1.0 billion, or net cost savings, excluding merit and inflation growth and certain real estate cost increases, of $700 million to be achieved primarily from 2021 through 2022. In connection with transforming our marketing strategy, we expect net cost savings of $1.3 billion, to be achieved primarily from 2022 through 2024. In connection with manufacturing network optimization, including legacy cost reduction initiatives, we expect net cost savings of $300 million to be achieved primarily from 2020 through 2022.

Certain qualifying costs for this program were recorded in the first three quarters of 2021 and 2020 and are reflected as Certain Significant Items and excluded from our non-GAAP measure of Adjusted Income. See the ~~Non-GAAP Financial Measure: Adjusted Income~~ ~~section of this MD&A.~~

~~Other (Income)/Deductions—Net~~

~~Other income—net increased $3.6 billion in the third quarter of 2021, mainly due to:~~

•~~net periodic benefit credits recorded in the third quarter of 2021 versus net periodic benefit costs recorded in the third quarter of 2020;~~

•~~the non-recurrence of certain asset impairment charges that were incurred in the third quarter of 2020; and~~

•~~net gains on equity securities in the third quarter of 2021 versus net losses on equity securities recognized in the third quarter of 2020.~~

~~Other income—net increased $4.8 billion in the first nine months of 2021, mainly due to:~~

•~~net periodic benefit credits recorded in the first nine months of 2021 versus net periodic benefit costs recorded in the first nine months of 2020;~~

•~~higher net gains on equity securities; and~~

•~~the non-recurrence of certain asset impairment charges that were incurred in the first nine months of 2020.~~

~~See~~ ~~Note 4~~ ~~for additional information~~.

~~PROVISION/(BENEFIT) FOR TAXES ON INCOME~~

Three Months Ended Nine Months Ended
(MILLIONS) October 3,
2021 September 27,
2020 %
Change October 3,
2021 September 27,
2020 %
Change
Provision/(benefit) for taxes on income $ (331) $ (347) (5) $ 1,518 $ 434 *
Effective tax rate on continuing operations (4.2) % (60.9) % 7.5 % 6.7 %
* Indicates calculation not meaningful or results are equal to or greater than 100%.

~~DISCONTINUED OPERATIONS~~

~~For information about our discontinued operations, see~~ ~~Note 2A~~.

NON-GAAP FINANCIAL MEASURE: ADJUSTED INCOME

Adjusted income is an alternative measure of performance used by management to evaluate our overall performance ~~in conjunction with other~~as a supplement to our GAAP reported performance measures. As such, we believe that investors’ understanding of our performance is enhanced by disclosing this measure. We use Adjusted income, certain components of Adjusted income and

Adjusted diluted EPS to present the results of our major operations––the discovery, development, manufacture, marketing, sale and distribution of biopharmaceutical products worldwide––prior to considering certain income statement elements as follows:

Measure

Definition

~~Illustrative Use~~Relevance of Metrics to Our Business Performance

Adjusted income

Net income attributable to Pfizer Inc. common shareholders(a) before the impact of ~~purchase accounting for acquisitions,~~amortization of intangible assets, certain acquisition-related items, discontinued operations and certain significant items

•~~Monthly managerial analysis of our operating results~~Provides investors useful information to:

◦evaluate the normal recurring operational activities, and ~~our annual budgets are prepared using these non-GAAP measures~~their components, on a comparable year-over-year basis

◦assist in modeling expected future performance on a normalized basis

•~~Senior management’s compensation is determined, in part, using these non-GAAP measures~~Provides investors insight into the way we manage our budgeting and forecasting, how we evaluate and manage our recurring operations and how we reward and compensate our senior management(b)

Adjusted cost of sales, Adjusted selling, informational and administrative expenses, Adjusted research and development expenses ~~Adjusted amortization of intangible assets~~ and Adjusted other (income)/deductions––net

Cost of sales, Selling, informational and administrative expenses, Research and development expenses ~~Amortization of intangible assets~~ and Other (income)/deductions––net (a), each before the impact of ~~purchase accounting for acquisitions,~~amortization of intangible assets, certain acquisition-related items, discontinued operations and certain significant items, which are components of the Adjusted income measure

Adjusted diluted EPS

EPS attributable to Pfizer Inc. common shareholders––diluted(a) before the impact of ~~purchase accounting for acquisitions,~~amortization of intangible assets, certain acquisition-related items, discontinued operations and certain significant items

(a)Most directly comparable GAAP measure.

(b)The short-term incentive plans for substantially all non-sales-force employees worldwide are funded from a pool based on our performance, measured in significant part byversus three budgeted metrics, one of which is Adjusted diluted EPS (as defined for annual incentive compensation purposes), which is derived from Adjusted income and accounts for 40% of the bonus pool ~~funding.~~funding tied to financial performance. Additionally, the payout for ~~Performance Share Awards~~performance share awards is determined in part by Adjusted net income, which is derived from Adjusted income. ~~Starting with~~Beginning in the ~~2020~~first quarter of 2022, we no longer exclude any expenses for acquired IPR&D from our non-GAAP Adjusted results but we continue to exclude certain of these expenses for our financial results for annual incentive compensation purposes. The bonus pool funding, which is largely based on financial performance, ~~year and consistent with shareholder feedback received in 2019, the Compensation Committee of the BOD approved adding an~~is adjusted by our R&D pipeline ~~achievement factor to the existing short-term incentive financial metrics.~~performance, as measured by four metrics, and performance against certain of our environmental, social and governance (ESG) metrics, and may be further modified by our Compensation Committee’s assessment of other factors.

Adjusted income and its components and Adjusted diluted EPS are non-GAAP financial measures that have no standardized meaning prescribed by GAAP and, therefore, are limited in their usefulness to investors. Because of their non-standardized definitions, they may not be comparable to the calculation of similar measures of other companies and are presented ~~solely~~ to permit investors to more fully understand how management assesses performance. A limitation of these measures is that they provide a view of our operations without including all events during a period, and do not provide a comparable view of our performance to peers. These measures are not, and should not be viewed as, substitutes for their most directly comparable GAAP measures of Net income attributable to Pfizer Inc. common shareholders, components of Net income attributable to Pfizer Inc. common shareholders and EPS attributable to Pfizer Inc. common shareholders—diluted, respectively. ~~See the accompanying reconciliations of certain GAAP reported to non-GAAP adjusted information for the third quarter and first nine months of 2021 and 2020 below.~~

We also recognize that, as internal measures of performance, these measures have limitations, and we do not restrict our performance-management process solely to these measures. We also use other tools designed to achieve the highest levels of performance. For example, our R&D organization has productivity targets, upon which its effectiveness is measured. In

addition, total shareholder return, both on an absolute basis and relative to a publicly traded pharmaceutical index, plays a significant role in determining payouts under certain of our incentive compensation plans.

~~Purchase Accounting Adjustments~~Beginning in the first quarter of 2022, our reconciliation of certain GAAP reported to non-GAAP adjusted information is updated to reflect the following, and prior-period information has been revised to conform to the current period presentation:

Adjusted ~~income excludes certain significant purchase accounting impacts resulting from business combinations~~Income and ~~net~~Adjusted Diluted EPS

Acquired IPR&D—Non-GAAP Adjusted financial measures include expenses for all acquired IPR&D costs incurred in connection with upfront and milestone payments on collaboration and in-license agreements, including premiums on equity securities, as well as asset ~~acquisitions. These impacts can include the incremental charge to cost of sales from the sale~~acquisitions of acquired ~~inventory~~IPR&D. Previously, certain of these items were excluded from our non-GAAP adjusted results. Acquired IPR&D expenses that ~~was written up~~previously would have been excluded from non-GAAP Adjusted income but are now included in both GAAP Reported income and non-GAAP Adjusted income were approximately: (i) $426 million pre-tax ($389 million, net of tax), or $0.07 per share, in the third quarter of 2022; (ii) $765 million pre-tax ($665 million, net of tax), or $0.12 per share, in the first nine months of 2022; (iii) $706 million pre-tax ($540 million, net of tax), or $0.09 per share, in the third quarter of 2021 and (iv) $892 million pre-tax ($726 million, net of tax), or $0.13 per share, in the first nine months of 2021.

Amortization of Intangible Assets—We began excluding all amortization of intangibles from non-GAAP Adjusted income, compared to ~~fair value,~~excluding only amortization of intangibles related to large mergers or acquisitions under the ~~increase~~prior methodology, and presenting it as a separate reconciling line. Previously, the adjustment under the prior methodology was included as part of a reconciling line entitled “Purchase accounting adjustments” that we no longer separately present. The impact of this policy change resulted in ~~fair value~~benefits of $0.01 and $0.04 on Adjusted diluted EPS in the ~~acquired finite-lived intangible assets,~~third quarter and ~~to a much lesser extent, depreciation related to~~first nine months of 2022, respectively, and $0.02 and $0.07 in the ~~increase/decrease in fair value~~third quarter and first nine months of ~~the acquired fixed assets, amortization related to the increase in fair value of acquired debt, and the fair value changes for contingent consideration. Therefore, the~~ 2021, respectively.

Acquisition-Related Items—Adjusted income ~~measure includes the revenues earned upon the sale of the acquired products without considering the acquisition cost of those products.~~

~~Acquisition-Related Items~~

~~Adjusted income excludes~~continues to exclude certain acquisition-related items, which are comprised of transaction, integration, restructuring charges and additional depreciation costs for business combinations because these costs are unique to each transaction and represent costs that were incurred to restructure and integrate businesses as a result of an acquisition. We have made no adjustments for resulting synergies. Beginning in the first quarter of 2022, acquisition-related items may now include purchase accounting impacts that previously would have been included as part of a reconciling line entitled “Purchase accounting adjustments” that we no longer separately present, such as: (i) the incremental charge to cost of sales from the sale of acquired inventory that was written up to fair value; (ii) depreciation related to the increase/decrease in fair value of acquired fixed assets; (iii) amortization related to the increase in fair value of acquired debt and (iv) the fair value changes for contingent consideration.

Discontinued Operations

—Adjusted income ~~excludes~~continues to exclude the results of discontinued operations, as well as any related gains or losses on the disposal of such operations. We believe that this presentation is meaningful to investors because, while we review our therapeutic areas and product lines for strategic fit with our operations, we do not build or run our business with the intent to discontinue parts of our business. Restatements due to discontinued operations do not impact compensation or change the Adjusted income measure for the compensation in respect of the restated periods, but are presented for consistency across all periods.

Certain Significant Items

—Adjusted income ~~excludes~~continues to exclude certain significant items representing substantive and/or unusual items that are evaluated individually on a quantitative and qualitative basis. Certain significant items may be highly variable and difficult to predict. Furthermore, in some cases it is reasonably possible that they could reoccur in future periods. For example, although major non-acquisition-related ~~cost-reduction/productivity~~cost-reduction programs are specific to an event or goal with a defined term, we may have subsequent programs based on reorganizations of the business, ~~cost-reduction/~~cost productivity or in response to LOE or economic conditions. Legal charges to resolve litigation are also related to specific cases, which are facts and circumstances specific and, in some cases, may also be the result of litigation matters at acquired companies that were inestimable, not probable or unresolved at the date of acquisition. Gains and losses on equity securities, and pension and postretirement actuarial remeasurement gains and losses have a very high degree of inherent market volatility, which we do not control and cannot predict with any level of certainty and because we do not believe including these gains and losses assists investors in understanding our business or is reflective of our core operations and business. Unusual items represent items that are not part of our ongoing business; items that, either as a result of their nature or size, we would not expect to occur as part of our normal business on a regular basis; items that would be non-recurring; or items that relate to products we no longer sell. ~~For~~

See the Reconciliations of GAAP Reported to Non-GAAP Adjusted information—Certain Line Items below for a non-inclusive list of certain significant items ~~see~~and the ~~Details of Income Statement Items Included in GAAP Reported but Excluded from Non-GAAP Adjusted Income~~ ~~below.~~

Beginning in 2021, we exclude pension and postretirement actuarial remeasurement gains and losses from our measure of Adjusted income because of their inherent market volatility, which we do not control and cannot predict with any level of certainty and because we do not believe including these gains and losses assists investors in understanding our business or is reflective of our core operations and business.

~~Also, see the~~Non-GAAP Financial Measure: Adjusted Income section ~~of the~~within MD&A of our ~~2020~~2021 Form 10-K for additional information.

5352

Reconciliations of GAAP Reported to Non-GAAP Adjusted Information––Certain Line Items

Three Months Ended October 3, 2021
(MILLIONS, EXCEPT PER COMMON SHARE DATA) GAAP Reported
Purchase Accounting Adjustments(a)
Acquisition-Related Items(a)
Discontinued Operations(a)
Certain Significant Items(a)
Non-GAAP Adjusted
Revenues $ 24,094 $ — $ — $ — $ — $ 24,094
Cost of sales 9,973 6 — — (42) 9,937
Selling, informational and administrative expenses 2,905 (1) — — (173) 2,732
Research and development expenses 3,447 1 — — (708) 2,740
Amortization of intangible assets 981 (813) — — — 169
Restructuring charges and certain acquisition-related costs 646 — (1) — (645) —
(Gain) on completion of Consumer Healthcare JV transaction — — — — — —
Other (income)/deductions––net (1,696) (47) — — 1,174 (569)
Income from continuing operations before provision/(benefit) for taxes on income 7,836 852 1 — 395 9,084
Provision/(benefit) for taxes on income(b)
(331) 127 2 — 1,587 1,385
Income from continuing operations 8,167 725 (1) — (1,192) 7,699
Income/(loss) from discontinued operations––net of tax (9) — — 9 — —
Net income attributable to noncontrolling interests 12 — — — — 12
Net income attributable to Pfizer Inc. common shareholders 8,146 725 (1) 9 (1,192) 7,687
Earnings per common share attributable to Pfizer Inc. common shareholders––diluted 1.42 0.13 — — (0.21) 1.34


	Three Months Ended October 2, 2022
Data presented will not (in all cases) aggregate to totals. (MILLIONS, EXCEPT PER COMMON SHARE DATA)	Cost of sales(a)		Selling, informational and administrative expenses(a)		Other (income)/deductions––net(a)		Net income attributable to Pfizer Inc. common shareholders(a)		Earnings per common share attributable to Pfizer Inc. common shareholders––diluted
GAAP reported	$	6,063	$	3,391	$	(59)	$	8,608	$	1.51
Amortization of intangible assets	—		—		—		822
Acquisition-related items(b)	3		(2)		(12)		62
Discontinued operations(c)	—		—		—		15
Certain significant items:
Restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring(d)	(20)		(137)		—		306
Certain asset impairments(e)	—		—		(200)		200
(Gains)/losses on equity securities	—		—		(111)		111
Actuarial valuation and other pension and postretirement plan (gains)/losses	—		—		193		(193)
Other(f)	(8)		(12)		(325)		349
Income tax provision—non-GAAP items							(109)
Non-GAAP adjusted	$	6,038	$	3,239	$	(515)	$	10,172	$	1.78

Nine Months Ended October 3, 2021
(MILLIONS, EXCEPT PER COMMON SHARE DATA) GAAP Reported
Purchase Accounting Adjustments(a)
Acquisition-Related Items(a)
Discontinued Operations(a)
Certain Significant Items(a)
Non-GAAP Adjusted
Revenues $ 57,653 $ — $ — $ — $ — $ 57,653
Cost of sales 21,232 17 — — (138) 21,112
Selling, informational and administrative expenses 8,617 (2) — — (432) 8,183
Research and development expenses 7,920 4 — — (899) 7,026
Amortization of intangible assets 2,784 (2,338) — — — 446
Restructuring charges and certain acquisition-related costs 668 — (3) — (666) —
(Gain) on completion of Consumer Healthcare JV transaction — — — — — —
Other (income)/deductions––net (3,697) (31) — — 1,984 (1,744)
Income from continuing operations before provision/(benefit) for taxes on income 20,128 2,349 3 — 151 22,631
Provision/(benefit) for taxes on income(b)
1,518 482 3 — 1,549 3,551
Income from continuing operations 18,610 1,868 — — (1,398) 19,080
Income/(loss) from discontinued operations––net of tax 24 — — (24) — —
Net income attributable to noncontrolling interests 47 — — — — 47
Net income attributable to Pfizer Inc. common shareholders 18,586 1,868 — (24) (1,398) 19,033
Earnings per common share attributable to Pfizer Inc. common shareholders––diluted 3.27 0.33 — — (0.25) 3.35


	Nine Months Ended October 2, 2022
Data presented will not (in all cases) aggregate to totals. (MILLIONS, EXCEPT PER COMMON SHARE DATA)	Cost of sales(a)		Selling, informational and administrative expenses(a)		Other (income)/deductions––net(a)		Net income attributable to Pfizer Inc. common shareholders(a)		Earnings per common share attributable to Pfizer Inc. common shareholders––diluted
GAAP reported	$	24,696	$	9,032	$	1,063	$	26,378	$	4.60
Amortization of intangible assets	—		—		—		2,478
Acquisition-related items(b)	12		(5)		(51)		331
Discontinued operations(c)	—		—		—		(9)
Certain significant items:
Restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring(d)	(62)		(344)		—		701
Certain asset impairments(e)	—		—		(200)		200
(Gains)/losses on equity securities	—		—		(1,348)		1,348
Actuarial valuation and other pension and postretirement plan (gains)/losses	—		—		(225)		225
Other(f)	(24)		(47)		(536)		621
Income tax provision—Non-GAAP items							(1,107)
Non-GAAP adjusted	$	24,621	$	8,635	$	(1,298)	$	31,165	$	5.44

5453

Three Months Ended September 27, 2020
(MILLIONS, EXCEPT PER COMMON SHARE DATA) GAAP Reported
Purchase Accounting Adjustments(a)
Acquisition-Related Items(a)
Discontinued Operations(a)
Certain Significant Items(a)
Non-GAAP Adjusted
Revenues $ 10,277 $ — $ — $ — $ — $ 10,277
Cost of sales 2,007 5 — — (24) 1,989
Selling, informational and administrative expenses 2,658 (1) — — (95) 2,562
Research and development expenses 2,300 1 — — (3) 2,298
Amortization of intangible assets 862 (789) — — — 73
Restructuring charges and certain acquisition-related costs 2 — (11) — 9 —
(Gain) on completion of Consumer Healthcare JV transaction — — — — — —
Other (income)/deductions––net 1,878 (4) — — (2,271) (397)
Income from continuing operations before provision/(benefit) for taxes on income 570 787 11 — 2,384 3,752
Provision/(benefit) for taxes on income(b)
(347) 190 3 — 596 441
Income from continuing operations 917 596 9 — 1,789 3,311
Income/(loss) from discontinued operations––net of tax 560 — — (560) — —
Net income attributable to noncontrolling interests 8 — — — — 8
Net income attributable to Pfizer Inc. common shareholders 1,469 596 9 (560) 1,789 3,303
Earnings per common share attributable to Pfizer Inc. common shareholders––diluted 0.26 0.11 — (0.10) 0.32 0.59
Nine Months Ended September 27, 2020
(MILLIONS, EXCEPT PER COMMON SHARE DATA) GAAP Reported
Purchase Accounting Adjustments(a)
Acquisition-Related Items(a)
Discontinued Operations(a)
Certain Significant Items(a)
Non-GAAP Adjusted
Revenues $ 30,224 $ — $ — $ — $ — $ 30,224
Cost of sales 5,773 14 — — (86) 5,701
Selling, informational and administrative expenses 7,858 (1) — — (318) 7,540
Research and development expenses 6,050 4 — — (242) 5,812
Amortization of intangible assets 2,579 (2,365) — — — 214
Restructuring charges and certain acquisition-related costs 417 — (46) — (371) —
(Gain) on completion of Consumer Healthcare JV transaction (6) — — — 6 —
Other (income)/deductions––net 1,114 (89) — — (2,126) (1,101)
Income from continuing operations before provision/(benefit) for taxes on income 6,438 2,437 46 — 3,137 12,057
Provision/(benefit) for taxes on income(b)
434 546 11 — 719 1,710
Income from continuing operations 6,004 1,891 35 — 2,417 10,347
Income/(loss) from discontinued operations––net of tax 2,334 — — (2,334) — —
Net income attributable to noncontrolling interests 25 — — — — 25
Net income attributable to Pfizer Inc. common shareholders 8,313 1,891 35 (2,334) 2,417 10,322
Earnings per common share attributable to Pfizer Inc. common shareholders––diluted 1.48 0.34 0.01 (0.42) 0.43 1.84


	Three Months Ended October 3, 2021
Data presented will not (in all cases) aggregate to totals. (MILLIONS, EXCEPT PER COMMON SHARE DATA)	Cost of sales(a)		Selling, informational and administrative expenses(a)		Other (income)/deductions––net(a)		Net income attributable to Pfizer Inc. common shareholders(a)		Earnings per common share attributable to Pfizer Inc. common shareholders––diluted
GAAP reported	$	9,932	$	2,899	$	(1,696)	$	8,146	$	1.42
Amortization of intangible assets	—		(9)		(1)		980
Acquisition-related items	6		(1)		(47)		41
Discontinued operations(c)	—		—		—		17
Certain significant items:
Restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring(d)	(28)		(150)		—		823

(Gains)/losses on equity securities	—		—		400		(400)
Actuarial valuation and other pension and postretirement plan (gains)/losses	—		—		899		(899)
Other(f)	(11)		(20)		(126)		159
Income tax provision—non-GAAP items							(1,587)
Non-GAAP adjusted	$	9,899	$	2,719	$	(570)	$	7,279	$	1.27


	Nine Months Ended October 3, 2021
Data presented will not (in all cases) aggregate to totals. (MILLIONS, EXCEPT PER COMMON SHARE DATA)	Cost of sales(a)		Selling, informational and administrative expenses(a)		Other (income)/deductions––net(a)		Net income attributable to Pfizer Inc. common shareholders(a)		Earnings per common share attributable to Pfizer Inc. common shareholders––diluted
GAAP reported	$	21,085	$	8,599	$	(4,043)	$	18,586	$	3.27
Amortization of intangible assets	—		(29)		(2)		2,778
Acquisition-related items	17		(2)		(31)		14
Discontinued operations(c)	—		—		—		353
Certain significant items:
Restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring(d)	(82)		(310)		—		1,057

(Gains)/losses on equity securities	—		—		1,597		(1,597)
Actuarial valuation and other pension and postretirement plan (gains)/losses	—		—		932		(932)
Other(f)	(45)		(119)		(200)		370
Income tax provision—Non-GAAP items							(1,976)
Non-GAAP adjusted	$	20,975	$	8,140	$	(1,747)	$	18,653	$	3.28

(a)~~For details of adjustments, see~~ ~~Details of Income Statement~~ Items ~~Included in~~that reconcile GAAP Reported ~~but Excluded~~to non-GAAP Adjusted balances are shown pre-tax. Our effective tax rates for GAAP reported income from ~~Non-GAAP Adjusted Income~~continuing operations were: 4.0% and 10.5% in the three and nine months ended October 2, 2022, respectively, and (4.2)% and 7.8% in the three and nine months ended October 3, 2021, respectively. See Note 5. Our effective tax rates on non-GAAP adjusted income were: 4.4% and 11.9% in the three and nine months ended October 2, 2022, respectively, and 14.7% and 15.7% in the three and nine months ended October 3, 2021, respectively.

(b)Acquisition-related items in the three and nine months ended October 2, 2022 primarily represent integration and other costs for the acquisition of Arena in March 2022. See Note 2A.

~~(b)~~The effective tax rate on Non-GAAP Adjusted income was 15.3% in the third quarter of 2021, compared to 11.8% in the third quarter of 2020. The effective tax rate on Non-GAAP Adjusted income was 15.7% in the first nine months of 2021, compared to 14.2% in the first nine months of 2020. The increases were due to a change in the jurisdictional mix of earnings, primarily related to Comirnaty.

~~Details of Income Statement Items Included in GAAP Reported but Excluded from Non-GAAP Adjusted Income~~

Three Months Ended Nine Months Ended
(MILLIONS) Oct. 3, 2021 Sept. 27, 2020 Oct. 3, 2021 Sept. 27, 2020
Purchase accounting adjustments
Amortization, depreciation and other(a)
$ 859 $ 792 $ 2,367 $ 2,451
Cost of sales (6) (5) (17) (14)
Total purchase accounting adjustments––pre-tax 852 787 2,349 2,437
Income taxes(b)
(127) (190) (482) (546)
Total purchase accounting adjustments––net of tax 725 596 1,868 1,891
Acquisition-related items
Restructuring charges/(credits)(c)
(2) 4 (9) 3
Transaction costs(c)
— — — 14
Integration costs and other(c)
3 7 11 29
Total acquisition-related items––pre-tax 1 11 3 46
Income taxes(b)
(2) (3) (3) (11)
Total acquisition-related items––net of tax (1) 9 — 35
Discontinued operations
Income/(loss) from discontinued operations––net of tax(d)
9 (560) (24) (2,334)
Certain significant items
Restructuring charges/(credits)––cost reduction initiatives(e)
645 (9) 666 371
Implementation costs and additional depreciation––asset restructuring(f)
181 50 403 153
Net (gains)/losses on asset disposals(g)
1 — (57) —
Net (gains)/losses recognized during the period on equity securities(g)
(400) 73 (1,597) (429)
Certain legal matters, net(g)
64 (17) 438 5
Certain asset impairments(g)
— 900 — 900
Business and legal entity alignment costs(h)
31 63 156 212
Actuarial valuation and other pension and postretirement plan (gains)/losses(i)
(899) 1,230 (932) 1,306
(Gain) on completion of Consumer Healthcare JV transaction(j)
— — — (6)
Other(k)
772 94 1,075 624
Total certain significant items––pre-tax 395 2,384 151 3,137
Income taxes(l)
(1,587) (596) (1,549) (719)
Total certain significant items––net of tax (1,192) 1,789 (1,398) 2,417
Total purchase accounting adjustments, acquisition-related items, discontinued operations and certain significant items––net of tax, attributable to Pfizer Inc. $ (460) $ 1,834 $ 446 $ 2,009

~~(a)Included primarily in~~ ~~Amortization of intangible assets.~~

~~(b)Included in~~ ~~Provision/(benefit) for taxes on income.~~ ~~Includes the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pre-tax amounts and applying the applicable tax rate.~~

(c)~~Included in~~ ~~Restructuring charges~~Relates to the previously divested Meridian subsidiary and ~~certain acquisition-related costs.~~ ~~See~~ ~~Note 3.~~

~~(d)Included in~~ ~~Income/(loss) from discontinued operations––net of tax.~~ post-closing adjustments for other previously divested businesses. See Note ~~2A.~~2B.

~~(e)~~(d)Includes employee termination costs, asset impairments and other exit costs ~~not associated with acquisitions, which are included in~~ ~~Restructuring charges and certain acquisition-related costs.~~ ~~See~~ ~~Note 3~~.

~~(f)Relates~~related to our cost-reduction and productivity initiatives not ~~related to acquisitions (see~~associated with acquisitions. See Note 3~~). For the third quarter of 2021, primarily included in~~ ~~Cost of sales~~ ~~($31 million) and~~ ~~Selling, informational and administrative expenses~~ ~~($150 million). For the first nine months of 2021, primarily included in~~ ~~Cost of sales~~ ~~($93 million) and~~ ~~Selling, informational and administrative expenses~~ ~~($310 million). For the third quarter of 2020, primarily included in~~ ~~Cost of sales~~ ~~($13 million) and~~ ~~Selling, informational and administrative expenses~~ ~~($36 million). For the first nine months of 2020, primarily included in~~ ~~Cost of sales~~ ~~($40 million) and~~ ~~Selling, informational and administrative expenses~~ ~~($114 million).~~3.

~~(g)Included in~~ ~~Other (income)/deductions~~—~~net.~~ (e)See Note 4.

~~(h)~~(f)~~Mainly represents~~For the third quarter of 2022, the total Other (income)/deductions––net adjustment of $325 million primarily includes charges of $212 million mostly representing our equity-method accounting pro rata share of costs of preparing for separation from GSK recorded by Haleon/the GSK Consumer Healthcare JV, and adjustments to our equity-method basis differences which are also related to the separation of Haleon/the GSK Consumer Healthcare JV from GSK, and charges of $77 million for certain legal matters. For the first nine months of 2022, the total Other (income)/deductions––net adjustment of $536 million primarily includes charges of $273 million mostly representing our equity-method accounting pro rata share of restructuring charges and costs of preparing for separation from GSK recorded by Haleon/the GSK Consumer Healthcare JV, and adjustments to our equity-method basis differences which are also related to the separation of Haleon/the GSK Consumer Healthcare JV from GSK, and charges of $175 million for certain legal matters. For the third quarter of 2021, the total Other (income)/deductions––net adjustment of $126 million primarily includes charges of $64 million for certain legal matters and charges of $55 million mostly representing our equity-method accounting pro rata share of restructuring charges and costs of preparing for separation from GSK recorded by the GSK Consumer Healthcare JV. For the first nine months of 2021, amounts in Selling, informational and administrative expenses of $119 million primarily include costs for consulting, legal, tax and advisory services associated with ~~the~~a non-recurring internal reorganization of legal entities. For the ~~third quarter of 2021, primarily included in~~ ~~Cost of sales~~ ~~($11 million) and~~ ~~Selling, informational and administrative expenses~~ ~~($20 million), and for the~~ first nine months of 2021, ~~primarily included in~~ ~~Cost of sales~~ ~~($43 million) and~~ ~~Selling, informational and administrative expenses~~ ~~($107 million). For~~ the ~~third quarter of 2020, primarily included in~~ ~~Cost of sales~~ ~~($12 million) and~~ ~~Selling, informational and administrative expenses~~ ~~($50 million),and for the first nine months of 2020, primarily included in~~ ~~Cost of sales~~ ~~($42 million),~~ ~~Selling, informational and administrative expenses~~ ~~($157 million) and~~ ~~Research and development expenses~~ ~~($13 million).~~

~~(i)Included in~~ ~~Other (income)/deductions––net.~~ Primarily includes pension plan interim actuarial remeasurement pre-tax gains of $836 million in the third quarter of 2021 and $881 million in the first nine months of 2021, and pension plan interim actuarial remeasurement pre-tax losses of $1.2 billion in the third quarter of 2020 and $1.3 billion in the first nine months of 2020. See ~~Note 1C~~.

~~(j)Included in~~ ~~(Gain) on completion of Consumer Healthcare JV transaction.~~ ~~See~~ ~~Note 2B~~.

~~(k)For the third quarter of 2021, primarily included in~~ ~~Research and development expenses~~ ~~($707 million) and~~total Other (income)/deductions––net ~~($61 million). For the first nine months~~adjustment of ~~2021,~~$200 million primarily ~~included in~~ ~~Selling, informational and administrative expenses~~ ~~($15 million), Research and development expenses~~ ~~($892 million)and~~ ~~Other (income)/deductions––net~~ ~~($165 million). For the third quarter of 2020, primarily included in~~ ~~Other (income)/deductions––net~~ ~~($86 million). For the first nine months of 2020, primarily included in~~ ~~Selling, informational and administrative expenses~~ ~~($46 million),~~ ~~Research and development expenses~~ ~~($231 million) and~~ ~~Other (income)/deductions––net~~ ~~($343 million). Among other things, the third quarter and first nine months of 2021 include an upfront payment of $650 million to Arvinas, which was recorded to~~ ~~Research and development expenses,~~ ~~and the first nine months of 2021 include a charge of $186 million for IPR&D related to an asset acquisition completed in the second quarter of 2021. Also, the third quarter of 2021~~ includes ~~charges of $55 million and the first nine months of 2021 include~~ charges of $136 million ~~recorded in~~ ~~Other (income)/deductions––net,~~ ~~primarily~~mostly representing our equity-method accounting pro rata share of ~~accounting~~restructuring charges ~~related to restructuring costs~~ and costs of preparing for separation from GSK ~~that were~~ recorded by the ~~Consumer Healthcare JV. Among other things, the first nine months of 2020 included (i) charges of $297 million recorded in~~ ~~Other (income)/deductions––net,~~ ~~primarily~~representing our pro rata share of restructuring and business combination accounting charges recorded by the Consumer Healthcare JV, partially offset by gains from the divestiture of certain of the JV’s brands recorded by theGSK Consumer Healthcare JV, and ~~our write-off and amortization~~charges of ~~equity method basis differences primarily related to those brand divestitures and to inventory and (ii) upfront payments of $130~~$92 million ~~to Valneva and $72 million to BioNTech, which were recorded to~~ ~~Research and development expenses.~~

~~(l)Included in~~ ~~Provision/(benefit)~~ for ~~taxes on income. Includes the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pre-tax amounts and applying the applicable tax rate.~~certain legal matters. The third quarter and first nine months of 2022 and 2021 ~~were favorably impacted by benefits associated with certain initiatives executed in the third quarter of 2021 associated with our investment in the Consumer Healthcare JV with GSK (see~~include insignificant reconciling amounts for ~~Note 5A~~Research and development expenses~~). The third quarter and first nine months of 2020 were favorably impacted by benefits associated with certain intangible asset impairment charges (see~~ ~~Note 4~~).

ANALYSIS OF THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Cash Flows from Continuing Operations


		Nine Months Ended						Nine Months Ended
(MILLIONS)	(MILLIONS)	October 3, 2021		September 27, 2020		Drivers of change	(MILLIONS)		October 2, 2022		October 3, 2021		Drivers of change
Cash provided by/(used in):	Cash provided by/(used in):						Cash provided by/(used in):
Operating activities from continuing operations	Operating activities from continuing operations	$	26,660	$	6,364	The change is driven primarily by higher net income and advance payments in 2021 for Comirnaty recorded in deferred revenue and the impact of timing of receipts and payments in the ordinary course of business, including a $7.8 billion accrual for the gross profit split due to BioNTech, partially offset by a non-cash change in Other Adjustments, net, primarily resulting from an increase in unrealized gains on equity securities.	Operating activities from continuing operations		$	20,685	$	26,993	The change was driven primarily by (i) a decrease in the change in amounts due to BioNTech for the gross profit split for Comirnaty (see Note 8), as well as (ii) the impact of timing of receipts and payments in the ordinary course of business, partially offset by (iii) higher net income adjusted for non-cash items, including an increase from non-cash unrealized losses on equity securities recognized in 2022, compared to unrealized gains recognized in 2021.
Investing activities from continuing operations	Investing activities from continuing operations	$	(19,960)	$	(1,129)	The change is driven mainly by a $17.0 billion increase in purchases of short-term investments with original maturities of greater than three months and a $7.8 billion increase in net purchases of short-term investments with original maturities of three months or less, partially offset by a $7.5 billion increase in redemptions of short-term investments with original maturities of greater than three months.	Investing activities from continuing operations		$	(11,373)	$	(19,951)	The change was driven mainly by a $19.2 billion increase in redemptions of short-term investments with original maturities of greater than three months and $4.0 billion of dividends received from our Haleon/GSK Consumer Healthcare JV investment that were allocated to investing activities, partially offset by $6.2 billion cash paid for the acquisition of Arena, net of cash acquired, a $3.7 billion increase in net purchases of short-term investments with original maturities of three months or less, and a $3.4 billion increase in purchases of short-term investments with original maturities of greater than three months.
Financing activities from continuing operations	Financing activities from continuing operations	$	(6,465)	$	(7,257)	The change is driven mostly by a $5.1 billion net reduction in repayments of short-term borrowings with maturities of greater than three months and a $1.5 billion reduction in repayments of long-term debt, partially offset by a $4.2 billion decrease in proceeds from issuances of long-term debt and a $1.4 billion net decrease in proceeds from short-term borrowings with maturities of three months or less.	Financing activities from continuing operations		$	(9,819)	$	(6,465)	The change was driven mostly by $2.0 billion purchases of the Company’s common stock in 2022 and a $997 million decrease in proceeds from the issuance of long-term debt.

Cash Flows from Discontinued Operations

––Cash flows from discontinued operations ~~primarily~~ relate to ~~our former Upjohn Business and the Mylan-Japan collaboration~~previously divested businesses (see Note 2A2B). ~~In 2020, investing and financing activities from discontinued operations primarily reflect investments in money market funds with proceeds from issuances of long-term debt~~.

ANALYSIS OF FINANCIAL CONDITION, LIQUIDITY, CAPITAL RESOURCES AND MARKET RISK

We rely largely on operating cash flows, short-term investments or commercial paper borrowings and long-term debt to provide for our liquidity requirements. We strive to improve cash inflows through working capital efficiencies. Due to our significant operating cash flows, which is a key strength of our liquidity and capital resources and our primary funding source, as well as our financial assets, access to capital markets, revolving credit agreements, and available lines of credit, ~~and revolving credit agreements,~~ we believe that we have, and will maintain, the ability to meet our liquidity needs to support ongoing operations, our capital allocation objectives, and our contractual and other obligations for the foreseeable future. ~~We have taken~~For additional information, including information about off-balance sheet arrangements, see the Analysis of Financial Condition, Liquidity, Capital Resources and ~~will continue to take a conservative approach to~~Market Risk section within MD&A in our ~~financial investments~~2021 Form 10-K. For information about the sources and ~~monitoring~~uses of our ~~liquidity position in response to~~funds, as well as our operating cash flows, see our condensed consolidated statements of cash flows, condensed consolidated balance sheets, condensed consolidated statements of equity, and the Analysis of the Condensed Consolidated Statements of Cash Flows within MD&A. For information on our money market ~~changes. Our~~funds, available-for sale-debt securities and long-term debt, ~~investments consist primarily of high-quality, highly liquid, well-diversified available-for-sale debt securities.~~see Note 7.

Debt Capacity––Lines of Credit

We have available lines of credit and revolving credit agreements with a group of banks and other financial intermediaries. We typically maintain cash and cash equivalent balances and short-term investments which, together with our available revolving credit facilities, are in excess of our commercial paper and other short-term borrowings. ––As of October ~~3, 2021~~,2, 2022, we had access to a $7 billion committed U.S. revolving credit facility expiring in ~~2025.~~2026, which may be used for general corporate purposes including to support our commercial paper borrowings. In addition to the U.S. revolving credit facility, our lenders have provided us an additional ~~$377~~$332 million in lines of credit, of which ~~$336~~$302 million expire within one year. Essentially all lines of credit were unused as of October ~~3, 2021.~~2, 2022.

~~Selected Measures~~Capital Allocation Framework––Our capital allocation framework is primarily devised to facilitate (i) the achievement of ~~Liquidity~~medical breakthroughs through R&D investments and ~~Capital Resources~~business development activities and (ii) returning capital to shareholders through dividends and share repurchases. See the Overview of Our Performance, Operating Environment, Strategy and Outlook section within this MD&A and within the MD&A of our 2021 Form 10-K.

The following presents certain relevant measures of our liquidity and capital resources:
(MILLIONS, EXCEPT RATIOS) October 3,
2021 December 31, 2020
Selected financial assets(a):

Cash and cash equivalents $ 1,966 $ 1,784
Short-term investments 27,730 10,437
Long-term investments, excluding private equity securities at cost 4,632 2,973
34,328 15,195
Debt:
Short-term borrowings, including current portion of long-term debt 3,629 2,703
Long-term debt 36,250 37,133
39,878 39,835
Selected net financial liabilities $ (5,551) $ (24,641)
Working capital(b)
$ 16,097 $ 9,147
Ratio of current assets to current liabilities 1.39:1 1.35:1
In September 2022, our BOD declared a dividend of $0.40 per share, payable on December 5, 2022, to shareholders of record at the close of business on November 4, 2022.

~~(a)~~In the first quarter of 2022, we purchased 39 million shares of our common stock at a cost of $2.0 billion under our publicly announced share purchase plan. See Note 712 in our 2021 Form 10-K and Unregistered Sales of Equity Securities and Use of Proceeds in Part II, Item 2 for ~~a description of certain assets held and for a description of credit risk related to~~more information. At October 2, 2022, our ~~financial instruments held.~~

~~(b)The increase in working capital~~remaining share-purchase authorization was primarily driven by an increase in short-term investments due to operating cash flow generation, partially offset by the timing of accruals, cash receipts and payments in the ordinary course of business and capital expenditures.approximately $3.3 billion.

In ~~August 2021,~~keeping with Pfizer’s transformation into a more focused, global leader in science-based innovative medicines and vaccines, we ~~completed~~intend to exit our 32% ownership interest in Haleon in a public offering of $1 billion aggregate principal amount of senior unsecured sustainability notes. We are using the net proceeds to finance or refinance, in whole or in part as follows: R&D expenses related to our COVID-19 vaccine, capital expenditures in connectiondisciplined manner, with the ~~manufacture and distribution~~objective of ~~COVID-19 vaccines and other projects that have environmental and/or social benefits. For additional information, see~~maximizing value for our shareholders. See Note 7D2C.

Off-Balance Sheet Arrangements––For information about ~~the sources and uses of our funds, see the~~ ~~Analysis of the Condensed Consolidated Statements of Cash Flows~~ ~~section within MD&A.~~

~~For information about credit ratings, LIBOR, global economic conditions, and market risk,~~off-balance sheet arrangements, see the Analysis of Financial Condition, Liquidity, Capital Resources and Market ~~Risk—Selected Measures of Liquidity and Capital Resources~~Risk sectionwithin MD&A in our ~~2020~~2021 Form 10-K.

~~Off-Balance Sheet Arrangements~~

~~Additionally, certain~~In March 2022, in connection with GSK’s previously announced planned demerger, the Consumer Healthcare JV issued notes of $8.75 billion, €2.35 billion and £700 million with various maturities. GSK guaranteed the notes and we agreed to indemnify GSK for 32% of any amount payable by GSK. In conjunction with the completion of GSK’s demerger transactions in July 2022, GSK’s guarantee and our co-promotion or license agreements give our licensors or partners the rights to negotiate for, or in some cases to obtain under certain financial conditions, co-promotion or other rights in specified countries with respect to certainrelated indemnification of ~~our products.~~

~~Share-Purchase Plans and Accelerated Share Repurchase Agreements~~

~~At October 3, 2021, our remaining share-purchase authorization was approximately $5.3 billion, with no repurchases in the first nine months of 2021.~~GSK’s guarantee were terminated. See Note 122C.

Global Economic Conditions––Beginning in our ~~2020 Form 10-K for~~second quarter of 2022, our operations in Turkey function in a hyperinflationary economy. The impact to Pfizer is not considered material. For more information onabout global economic conditions, see the Overview of Our Performance, Operating Environment, Strategy and Outlook—The Global Economic Environment section within MD&A.

For additional information about our ~~publicly announced share-purchase plans.~~diverse sources of funds, global economic conditions, and information about credit ratings, market risk and LIBOR, see the

~~Dividends on Common Stock~~

~~In September~~Analysis of Financial Condition, Liquidity, Capital Resources and Market Risk sectionwithin MD&A in our 2021 ~~our BOD declared a dividend of $0.39 per share, payable on December 6, 2021, to shareholders of record at the close of business on November 5, 2021~~. Our current and projected dividends provide a return to shareholders while maintaining sufficient capital to invest in growing our business. Our dividends are not restricted by debt covenants. While the dividend level remains a decision of Pfizer’s BOD and will continue to be evaluated in the context of future business performance, we currently believe that we can support future annual dividend increases, barring significant unforeseen events.Form 10-K.

NEW ACCOUNTING STANDARDS

Recently Adopted Accounting Standard

See Note 1B.

Recently Issued Accounting ~~Standard,~~Standards, Not Adopted as of October ~~3, 2021~~2, 2022

Standard/Description

Effective Date

Effect on the
Financial Statements

Reference rate reform provides temporary optional expedients and exceptions to the guidance for contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued after 2021 because of reference rate reform.

The new guidance provides the following optional expedients:

1.Simplify accounting analyses under current U.S. GAAP for contract modifications.

2.Simplify the assessment of hedge effectiveness and allow hedging relationships affected by reference rate reform to continue.

3.Allow a one-time election to sell or transfer debt securities classified as held to maturity that reference a rate affected by reference rate reform.

Elections can be adopted prospectively at any time through December 31, 2022.

We are assessing the impact, ~~of the provisions of this new guidance on our consolidated financial statements.~~

~~Accounting for contract assets and contract liabilities from contracts with customers~~ requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606. This new guidance will generally result in the acquirer recognizing contract assets and contract liabilities at the same amounts that were recorded by the acquiree. Previously, these amounts were recognized by the acquirer at fair value as of the acquisition date.

~~January 1, 2023. Early adoption is permitted.~~

Webut currently do not expect this new guidance to have a material impact on our consolidated financial statements.

In June 2022, the FASB issued final guidance to clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered when measuring fair value. Recognizing a contractual sale restriction as a separate unit of account is not permitted.

January 1, 2024, with early adoption permitted.

We are assessing the impact, but currently do not expect this new guidance to have a material impact on our consolidated financial statements.

In September 2022, the FASB issued final guidance to enhance transparency about an entity’s use of supplier finance programs. Under the final guidance, the buyer in a supplier finance program is required to disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented.

January 1, 2023, except for the amendment on rollforward information, which is effective January 1, 2024. Early adoption is permitted.

We are assessing the impact, but currently we expect this new guidance to result in increased disclosure in the notes to financial statements.

FORWARD-LOOKING INFORMATION AND FACTORS THAT MAY AFFECT FUTURE RESULTS

This Form 10-Q contains forward-looking statements. We also provide forward-looking statements in other materials we release to the public, as well as public oral statements. Given their forward-looking nature, these statements involve substantial risks, uncertainties and potentially inaccurate assumptions.

We have tried, wherever possible, to identify such statements by using words such as “will,” “may,” “could,” “likely,” “ongoing,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “assume,” “target,” “forecast,” ~~“guidance,~~

“guidance,” “goal,” “objective,” “aim,” ~~“seek”~~“seek,” “potential,” “hope” and other words and terms of similar meaning or by using future dates.

We include forward-looking information in our discussion of the following, among other topics:

•our anticipated operating and financial performance, reorganizations, business plans, strategy and prospects;

•expectations for our product pipeline, in-line products and product candidates, including anticipated regulatory submissions, data read-outs, study starts, approvals, launches, clinical trial results and other developing data, revenue contribution, growth, performance, timing of exclusivity and potential benefits;

•strategic reviews, capital allocation objectives, dividends and share repurchases;

•plans for and prospects of our acquisitions, dispositions and other business development activities, and our ability to successfully capitalize on these opportunities;

•sales, expenses, interest rates, foreign exchange rates and the outcome of contingencies, such as legal proceedings;

•expectations for impact of or changes to existing or new government regulations or laws;

•our ability to anticipate and respond to macroeconomic, geopolitical, health and industry trends, pandemics, acts of war and other large-scale crises; and

•manufacturing and product supply.

In particular, forward-looking information in this Form 10-Q includes statements relating to specific future actions and effects, including, among others, the expected benefits of the organizational changes to further transform our operations, our efforts to respond to COVID-19, including our ~~development of a vaccine to help prevent COVID-19~~plans and ~~our investigational protease inhibitors,~~expectations regarding Comirnaty and Paxlovid, and any potential future vaccines or treatments; the forecasted revenue, ~~contribution~~demand, manufacturing and supply of Comirnaty and Paxlovid, including expectations of the ~~potential number of doses that we and BioNTech believe can be manufactured;~~commercial market for Comirnaty; our expectations regarding the impact of COVID-19 on our business; the expected impact of patent expiries and competition from generic manufacturers; the expected pricing pressures on our products and the anticipated impact to our business; the availability of raw materials for 2022; the expected charges and/or costs in connection with the spin-off of the Upjohn Business and its combination with Mylan; the benefits expected from our business development transactions; our anticipated liquidity position; the anticipated costs and savings from certain of our initiatives, including our Transforming to a More Focused Company program; ~~anticipated study starts;~~and our planned capital ~~spending; and the expectations for our quarterly dividend payments.~~spending.

Given their nature, we cannot assure that any outcome expressed in these forward-looking statements will be realized in whole or in part. Actual outcomes may vary materially from past results and those anticipated, estimated, implied or projected. These forward-looking statements may be affected by underlying assumptions that may prove inaccurate or incomplete, or by known or unknown risks and uncertainties, including those described in this section and in the Item 1A. Risk Factors section in our ~~2020~~2021 Form 10-K.

Therefore, you are cautioned not to unduly rely on forward-looking statements, which speak only as of the date of this Form 10-Q. We undertake no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities law. You are advised, however, to consult any further disclosures we make on related subjects.

Some of the factors that could cause actual results to differ are identified below, as well as those discussed in the Item 1A. Risk Factors section in our ~~2020~~2021 Form 10-K and within ~~this~~ MD&A. We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. The occurrence of any of the risks identified below, or in the Item 1A. Risk Factors section in our ~~2020~~2021 Form 10-K or within MD&A, or other risks currently unknown, could have a material adverse effect on our business, financial condition or results, ~~of operations,~~ or we may be required to increase our accruals for contingencies. It is not possible to predict or identify all such factors. Consequently, you should not consider the following to be a complete discussion of all potential risks or uncertainties:

Risks Related to Our Business, Industry and Operations, and Business ~~Development:~~Development

•the outcome of R&D activities, including, the ability to meet anticipated pre-clinical or clinical endpoints, commencement and/or completion dates for our pre-clinical or clinical trials, regulatory submission dates, and/or regulatory approval and/or launch dates; the possibility of unfavorable pre-clinical and clinical trial results, including the possibility of unfavorable new pre-clinical or clinical data ~~and~~and/or further analyses of existing pre-clinical or clinical data; risks associated with preliminary, early stage or interim data; the risk that pre-clinical and clinical trial data are subject to differing interpretations and assessments, including during the peer review/publication process, in the scientific community generally, and by regulatory authorities; and whether and when additional data from our pipeline programs will be published in scientific journal publications, and if so, when and with what modifications and interpretations;

•our ability to successfully address comments received from regulatory authorities such as the FDA or the EMA, or obtain approval for new products and indications from regulators on a timely basis or at all; regulatory decisions impacting labeling, including the scope of indicated patient populations, product dosage, manufacturing processes, safety and/or other matters, including decisions relating to emerging developments regarding potential product impurities; the impact of, or uncertainties

regarding the ability to obtain, recommendations by technical or advisory committees; and the timing of pricing approvals and product launches;

•claims and concerns that may arise regarding the safety or efficacy of in-line products and product candidates, including claims and concerns that may arise from the outcome of post-approval clinical trials, which could impact marketing approval, product labeling, and/or availability or commercial potential, including uncertainties regarding the commercial or other impact of the results of the Xeljanz ORAL Surveillance (A3921133) study or ~~any potential~~ actions by regulatory authorities based on analysis of ORAL Surveillance or other data, including on other ~~Janus kinase (JAK)~~JAK inhibitors in our portfolio;

•the success and impact of external business development activities, including the ability to identify and execute on potential business development opportunities; the ability to satisfy the conditions to closing of announced transactions in the anticipated time frame or at all; the ability to realize the anticipated benefits of any such transactions in the anticipated time frame or at all; the potential need for and impact of additional equity or debt financing to pursue these opportunities, which could result in increased leverage and/or a downgrade of our credit ratings; challenges integrating the businesses and operations; disruption to business and operations relationships; risks related to growing revenues for certain acquired products; significant transaction costs; and unknown liabilities;

•competition, including from new product entrants, in-line branded products, generic products, private label products, biosimilars and product candidates that treat or prevent diseases and conditions similar to those treated or intended to be prevented by our in-line products and product candidates;

•the ability to successfully market both new and existing products, including biosimilars;

•difficulties or delays in manufacturing, sales or marketing; supply disruptions, shortages or stock-outs at our facilities or ~~our third party suppliers’ facilities;~~third-party facilities that we rely on; and legal or regulatory actions;

•the impact of public health outbreaks, epidemics or pandemics (such as the COVID-19 pandemic), including the impact of vaccine mandates where applicable, on our business, operations and financial condition and results, including impacts on our employees, manufacturing, supply chain, sales and marketing, R&D and clinical trials;

•risks and uncertainties related to our efforts to develop and commercialize a vaccine to help prevent COVID-19 and ~~potential treatments for~~an oral COVID-19 treatment, as well as challenges related to their manufacturing, supply and distribution;

•risks related to our ability to achieve our revenue forecasts for Comirnaty and Paxlovid or any potential future COVID-19 vaccines or treatments, including, among other things, whether and when additional supply or purchase agreements will be reached, the risk that demand for any products may be reduced or no longer exist and the possibility that COVID-19 will diminish in severity or prevalence or disappear entirely, which may lead to reduced revenues or excess inventory;

•trends toward managed care and healthcare cost containment, and our ability to obtain or maintain timely or adequate pricing or favorable formulary placement for our products;

•interest rate and foreign currency exchange rate fluctuations, including the impact of possible currency devaluations in countries experiencing high inflation rates;

•any significant issues involving our largest wholesale distributors or government customers, which account for a substantial portion of our revenues;

•the impact of the increased presence of counterfeit medicines or vaccines in the pharmaceutical supply chain;

•any significant issues related to the outsourcing of certain operational and staff functions to third parties; and any significant issues related to our JVs and other third-party business arrangements;

•uncertainties related to general economic, political, business, industry, regulatory and market conditions including, without limitation, uncertainties related to the impact on us, our customers, suppliers and lenders and counterparties to our foreign-exchange and interest-rate agreements of challenging global economic conditions, such as inflation, 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, geopolitical instability, civil unrest or military action;

•the impact of product recalls, withdrawals and other unusual items, including uncertainties related to regulator-directed risk evaluations and ~~assessments;~~assessments, including our ongoing evaluation of our product portfolio for the potential presence or formation of nitrosamines;

•trade buying patterns;

•the risk of an impairment charge related to our intangible assets, goodwill or equity-method investments;

•the impact of, and risks and uncertainties related to, restructurings and internal reorganizations, as well as any other corporate strategic initiatives, and cost-reduction and productivity initiatives, each of which requires upfront costs but may fail to yield anticipated benefits and may result in unexpected costs or organizational disruption;

Risks Related to Government Regulation and Legal ~~Proceedings:~~Proceedings

•the impact of any U.S. healthcare reform or legislation or any significant spending reductions or cost controls affecting Medicare, Medicaid or other publicly funded or subsidized health programs, including the IRA, or changes in the tax treatment of employer-sponsored health insurance that may be implemented;

•U.S. federal or state legislation or regulatory action and/or policy efforts affecting, among other things, pharmaceutical product pricing, intellectual property, reimbursement or access or restrictions on U.S. direct-to-consumer advertising; limitations on interactions with healthcare professionals and other industry stakeholders; as well as pricing pressures for our products as a result of highly competitive insurance markets;

•legislation or regulatory action in markets outside of the U.S., including China, affecting pharmaceutical product pricing, intellectual property, reimbursement or access, including, in particular, continued government-mandated reductions in prices and access restrictions for certain biopharmaceutical products to control costs in those markets;

•the exposure of our operations globally to possible capital and exchange controls, economic conditions, expropriation and other restrictive government actions, changes in intellectual property legal protections and remedies, as well as the impact of political unrest or civil unrest or military action, including the ongoing conflict between Russia and Ukraine and the continued economic consequences, unstable governments and legal systems and inter-governmental disputes;

•legal defense costs, insurance expenses, settlement costs and contingencies, including those related to actual or alleged environmental contamination;

•the risk and impact of an adverse decision or settlement and the adequacy of reserves related to legal proceedings;

•the risk and impact of tax related litigation;

•governmental laws and regulations affecting our operations, including, without limitation, the recently enacted IRA, changes in laws and regulations or their interpretation, including, among others, changes in tax laws and regulations ~~including, among others, any~~internationally and in the U.S., the potential adoption of global minimum taxation requirements and potential changes to ~~the~~ existing tax law by the current U.S. Presidential administration and ~~Congress increasing the corporate tax rate and/or the tax rate on foreign earnings;~~Congress;

Risks Related to Intellectual Property, Technology and ~~Security:~~Security

•any significant breakdown or interruption of our information technology systems and ~~infrastructure;~~infrastructure (including cloud services);

•any business disruption, theft of confidential or proprietary information, extortion or integrity compromise resulting from a ~~cyberattack;~~cyber-attack or other malfeasance by third parties, including, but not limited to, nation states, employees, business partners or others;

•the risk that our currently pending or future patent applications may not be granted on a timely basis or at all, or any patent-term extensions that we seek may not be granted on a timely basis, if at all; and

•our ability to protect our patents and other intellectual property, ~~including~~such as against claims of invalidity that could result in ~~LOE,~~LOE; claims of patent infringement, including asserted and/or unasserted intellectual property ~~claims~~claims; challenges faced by our collaboration or licensing partners to the validity of their patent rights; and in response to any pressure, or legal or regulatory action by, various stakeholders or governments that could potentially result in us not seeking intellectual property protection for or agreeing not to enforce or being restricted from enforcing intellectual property related to our products, including ~~our vaccine to help prevent COVID-19~~Comirnaty and ~~potential treatments for COVID-19.~~Paxlovid.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information required by this item is incorporated by reference from the discussion in the Analysis of Financial Condition, Liquidity, Capital Resources and Market ~~Risk—Selected Measures of Liquidity and Capital Resources—Market~~ Risk section within MD&A of our ~~2020~~2021 Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective in alerting them in a timely manner to material information required to be disclosed in our periodic reports filed with the SEC.

During our most recent fiscal quarter, there has not been any change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Certain legal proceedings in which we are involved are discussed in Note 12A.

ITEM 1A. RISK FACTORS

We refer to the ~~“Our~~Overview of Our Performance, Operating ~~Environment”, “The~~Environment, Strategy and Outlook—Our Operating Environment and —The Global Economic ~~Environment”, “COVID-19 Pandemic”~~Environment sections and ~~“Forward-Looking~~the Forward-Looking Information and Factors That May Affect Future ~~Results” sections~~Results section of the MD&A of this Form 10-Q and ~~to Part I, Item 1A, “Risk Factors”~~ of our ~~2020~~2021 Form 10-K and to the Item 1A. Risk Factors section of our 2021 Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following summarizes purchases of our common stock during the third quarter of ~~2021:~~2022:

Period
Total Number of
Shares Purchased(a)
Average Price
Paid per Share(a)
Total Number of Shares Purchased as Part of Publicly Announced Plan
Approximate Value of Shares That May Yet Be Purchased Under the Plan(b)
July 5 through August 1, 2021 2,792 $ 39.78 — $ 5,292,881,709
August 2 through August 29, 2021 40,687 $ 43.01 — $ 5,292,881,709
August 30 through October 3, 2021 24,743 $ 45.01 — $ 5,292,881,709
Total 68,222 $ 43.60 —


Period	Total Number of Shares Purchased(a)	Average Price Paid per Share(a)		Total Number of Shares Purchased as Part of Publicly Announced Plan	Approximate Value of Shares That May Yet Be Purchased Under the Plan(b)
July 4 through July 31, 2022	29,527	$	52.06	—	$	3,292,882,444
August 1 through August 28, 2022	18,768	$	50.29	—	$	3,292,882,444
August 29 through October 2, 2022	85,565	$	45.46	—	$	3,292,882,444
Total	133,860	$	47.59	—

(a)Represents (i) ~~65,860~~131,564 shares of common stock surrendered to the Company to satisfy tax withholding obligations in connection with the vesting of awards under our long-term incentive programs and (ii) the open market purchase by the trustee of ~~2,362~~2,296 shares of common stock in connection with the reinvestment of dividends paid on common stock held in trust for employees who deferred receipt of performance share awards.

(b)See the Analysis of Financial Condition, Liquidity, Capital Resources and Market Risk—Capital Allocation Framework section within the MD&A of this Form 10-Q and Note 12 in our ~~2020~~2021 Form 10-K.

ITEM 6. EXHIBITS


Exhibit 31.1	-	Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2	-	Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1	-	Certification by the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.2	-	Certification by the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 101:
EX-101.INS		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
EX-101.SCH EX-101.CAL EX-101.LAB EX-101.PRE EX-101.DEF		Inline XBRL Taxonomy Extension Schema Inline XBRL Taxonomy Extension Calculation Linkbase Inline XBRL Taxonomy Extension Label Linkbase Inline XBRL Taxonomy Extension Presentation Linkbase Inline XBRL Taxonomy Extension Definition Document
Exhibit 104		Cover Page Interactive Data File––the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Pfizer Inc.
		(Registrant)


Dated:	November ~~12, 2021~~9, 2022	/s/ Jennifer B. Damico
		Jennifer B. Damico Senior Vice President and Controller (Principal Accounting Officer and Duly Authorized Officer)

6360



	Nine Months Ended
	October 3, 2021						September 27, 2020
(MILLIONS)	Previous Accounting Principle		Impact of Change		As Reported		Previous Accounting Principle		Impact of Change		As Adjusted
Condensed Consolidated Statements of Comprehensive Income:
Foreign currency translation adjustments, net	$	(354)	$	(11)	$	(366)	$	96	$	(123)	$	(27)
Benefit plans: actuarial gains/(losses), net	881		(881)		—		(1,372)		1,372		—
Reclassification adjustments related to amortization	222		(222)		—		200		(200)		—
Reclassification adjustments related to settlements, net	162		(162)		—		240		(240)		—
Other	(11)		11		—		(123)		123		—
Tax provision/(benefit) on other comprehensive income/(loss)	(20)		(24)		(44)		(527)		215		(311)
Condensed Consolidated Statements of Cash Flows:
Deferred taxes from continuing operations	$	(3,983)	$	281	$	(3,702)	$	(522)	$	(213)	$	(735)
Benefit plan contributions in excess of expense/income	(650)		(1,283)		(1,933)		(1,642)		881		(760)

	October 3, 2021						December 31, 2020
(MILLIONS)	Previous Accounting Principle		Impact of Change		As Reported		Previous Accounting Principle		Impact of Change		As Adjusted
Condensed Consolidated Balance Sheets:
Noncurrent deferred tax assets and other noncurrent tax assets	$	3,012	$	(257)	$	2,755	$	2,383	$	—	$	2,383
Other noncurrent assets	6,687		18		6,705		4,569		—		4,569
Pension benefit obligations	3,677		—		3,676		4,766		—		4,766
Retained earnings	101,250		1,002		102,252		96,770		(6,378)		90,392
Accumulated other comprehensive loss	(4,408)		(1,241)		(5,649)		(11,688)		6,378		(5,310)


Components of Income/(loss) from discontinued operations––net of tax:
	Three Months Ended(a)				Nine Months Ended(a)
(MILLIONS)	October 3, 2021		September 27, 2020		October 3, 2021		September 27, 2020
Revenues	$	—	$	1,854	$	27	$	5,737
Costs and expenses:
Cost of sales	4		526		18		1,425
Selling, informational and administrative expenses	2		359		(1)		1,061
Research and development expenses	—		60		1		165
Amortization of intangible assets	—		37		—		109
Restructuring charges and certain acquisition-related costs	—		1		—		18
Other (income)/deductions––net	5		233		6		304
Pre-tax income/(loss) from discontinued operations	(10)		639		3		2,654
Provision/(benefit) for taxes on income	(2)		79		(21)		320




Income/(loss) from discontinued operations––net of tax	$	(9)	$	560	$	24	$	2,334


	Three Months Ended September 27, 2020
(MILLIONS, EXCEPT PER COMMON SHARE DATA)	GAAP Reported		Purchase Accounting Adjustments(a)		Acquisition-Related Items(a)		Discontinued Operations(a)		Certain Significant Items(a)		Non-GAAP Adjusted
Revenues	$	10,277	$	—	$	—	$	—	$	—	$	10,277
Cost of sales	2,007		5		—		—		(24)		1,989
Selling, informational and administrative expenses	2,658		(1)		—		—		(95)		2,562
Research and development expenses	2,300		1		—		—		(3)		2,298
Amortization of intangible assets	862		(789)		—		—		—		73
Restructuring charges and certain acquisition-related costs	2		—		(11)		—		9		—
(Gain) on completion of Consumer Healthcare JV transaction	—		—		—		—		—		—
Other (income)/deductions––net	1,878		(4)		—		—		(2,271)		(397)
Income from continuing operations before provision/(benefit) for taxes on income	570		787		11		—		2,384		3,752
Provision/(benefit) for taxes on income(b)	(347)		190		3		—		596		441
Income from continuing operations	917		596		9		—		1,789		3,311
Income/(loss) from discontinued operations––net of tax	560		—		—		(560)		—		—
Net income attributable to noncontrolling interests	8		—		—		—		—		8
Net income attributable to Pfizer Inc. common shareholders	1,469		596		9		(560)		1,789		3,303
Earnings per common share attributable to Pfizer Inc. common shareholders––diluted	0.26		0.11		—		(0.10)		0.32		0.59


	Nine Months Ended September 27, 2020
(MILLIONS, EXCEPT PER COMMON SHARE DATA)	GAAP Reported		Purchase Accounting Adjustments(a)		Acquisition-Related Items(a)		Discontinued Operations(a)		Certain Significant Items(a)		Non-GAAP Adjusted
Revenues	$	30,224	$	—	$	—	$	—	$	—	$	30,224
Cost of sales	5,773		14		—		—		(86)		5,701
Selling, informational and administrative expenses	7,858		(1)		—		—		(318)		7,540
Research and development expenses	6,050		4		—		—		(242)		5,812
Amortization of intangible assets	2,579		(2,365)		—		—		—		214
Restructuring charges and certain acquisition-related costs	417		—		(46)		—		(371)		—
(Gain) on completion of Consumer Healthcare JV transaction	(6)		—		—		—		6		—
Other (income)/deductions––net	1,114		(89)		—		—		(2,126)		(1,101)
Income from continuing operations before provision/(benefit) for taxes on income	6,438		2,437		46		—		3,137		12,057
Provision/(benefit) for taxes on income(b)	434		546		11		—		719		1,710
Income from continuing operations	6,004		1,891		35		—		2,417		10,347
Income/(loss) from discontinued operations––net of tax	2,334		—		—		(2,334)		—		—
Net income attributable to noncontrolling interests	25		—		—		—		—		25
Net income attributable to Pfizer Inc. common shareholders	8,313		1,891		35		(2,334)		2,417		10,322
Earnings per common share attributable to Pfizer Inc. common shareholders––diluted	1.48		0.34		0.01		(0.42)		0.43		1.84


The following presents certain relevant measures of our liquidity and capital resources:
(MILLIONS, EXCEPT RATIOS)	October 3, 2021		December 31, 2020
Selected financial assets(a):
Cash and cash equivalents	$	1,966	$	1,784
Short-term investments	27,730		10,437
Long-term investments, excluding private equity securities at cost	4,632		2,973
	34,328		15,195
Debt:
Short-term borrowings, including current portion of long-term debt	3,629		2,703
Long-term debt	36,250		37,133
	39,878		39,835
Selected net financial liabilities	$	(5,551)	$	(24,641)
Working capital(b)	$	16,097	$	9,147
Ratio of current assets to current liabilities	1.39:1		1.35:1