Document Information
Document Information | |
6 Months Ended
Jun. 28, 2009 USD / shares | |
Document information | |
Document type | 10-Q |
Amendment flag | false |
Document period end date | 2009-06-28 |
Entity Information
Entity Information (USD $) | |||
6 Months Ended
Jun. 28, 2009 | Aug. 04, 2009
| Jun. 29, 2008
| |
Entity Information [Line Items] | |||
Entity registrant name | Pfizer Inc. | ||
Entity central index key | 0000078003 | ||
Current fiscal year end date | --12-31 | ||
Entity well known seasoned issuer | Yes | ||
Entity voluntary filers | No | ||
Entity current reporting status | Yes | ||
Entity filer category | Large Accelerated Filer | ||
Entity public float | $116,000,000,000 | ||
Entity Listings [Line Items] | |||
Entity common stock shares outstanding | 6,749,143,013 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Income (USD $) | |||||||||||||||||||
In Millions, except Per Share data | 3 Months Ended
Jun. 28, 2009 | 3 Months Ended
Jun. 29, 2008 | 6 Months Ended
Jun. 28, 2009 | 6 Months Ended
Jun. 29, 2008 | |||||||||||||||
Revenues | $10,984 | $12,129 | $21,851 | $23,977 | |||||||||||||||
Costs and expenses: | |||||||||||||||||||
Cost of sales | 1,756 | [1] | 2,289 | [1] | 3,164 | [1] | 4,275 | [1] | |||||||||||
Selling, informational and administrative expenses | 3,350 | [1] | 3,863 | [1] | 6,226 | [1] | 7,355 | [1] | |||||||||||
Research and development expenses | 1,695 | [1] | 1,966 | [1] | 3,400 | [1] | 3,757 | [1] | |||||||||||
Amortization of intangible assets | 583 | 663 | 1,161 | 1,442 | |||||||||||||||
Acquisition-related in-process research and development charges | 20 | 156 | 20 | 554 | |||||||||||||||
Restructuring charges and acquisition-related costs | 459 | 569 | 1,013 | 747 | |||||||||||||||
Other (income)/deductions - net | 72 | (167) | 15 | (500) | |||||||||||||||
Income from continuing operations before provision for taxes on income | 3,049 | 2,790 | 6,852 | 6,347 | |||||||||||||||
Provision for taxes on income | 786 | 25 | 1,860 | 788 | |||||||||||||||
Income from continuing operations | 2,263 | 2,765 | 4,992 | 5,559 | |||||||||||||||
Discontinued operations - net of tax | 3 | 17 | 4 | 13 | |||||||||||||||
Net income before allocation to noncontrolling interests | 2,266 | 2,782 | 4,996 | 5,572 | |||||||||||||||
Less: Net income attributable to noncontrolling interests | 5 | 6 | 6 | 12 | |||||||||||||||
Net income attributable to Pfizer Inc. | $2,261 | $2,776 | $4,990 | $5,560 | |||||||||||||||
Earnings per share - basic: | |||||||||||||||||||
Income from continuing operations attributable to Pfizer Inc. common shareholders | 0.34 | 0.41 | 0.74 | 0.82 | |||||||||||||||
Discontinued operations - net of tax | $0 | $0 | $0 | 0.01 | |||||||||||||||
Net income attributable to Pfizer Inc. common shareholders | 0.34 | 0.41 | 0.74 | 0.83 | |||||||||||||||
Earnings per share - diluted: | |||||||||||||||||||
Income from continuing operations attributable to Pfizer Inc. common shareholders | 0.34 | 0.41 | 0.74 | 0.82 | |||||||||||||||
Discontinued operations - net of tax | $0 | $0 | $0 | $0 | |||||||||||||||
Net income attributable to Pfizer Inc. common shareholders | 0.34 | 0.41 | 0.74 | 0.82 | |||||||||||||||
Weighted-average shares used to calculate earnings per common share: | |||||||||||||||||||
Basic | 6,728 | 6,732 | 6,726 | 6,736 | |||||||||||||||
Diluted | 6,752 | 6,748 | 6,752 | 6,754 | |||||||||||||||
Cash dividends paid per common share | 0.16 | 0.32 | 0.48 | 0.64 | |||||||||||||||
[1]Exclusive of amortization of intangible assets, except as disclosed in Note 10B. Goodwill and Other Intangible Assets: Other Intangible Assets. |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (USD $) | ||
In Millions | Jun. 28, 2009
| Dec. 31, 2008
|
Assets | ||
Cash and cash equivalents | $2,244 | $2,122 |
Short-term investments | 47,403 | 21,609 |
Accounts receivable, less allowance for doubtful accounts | 10,446 | 8,958 |
Short-term loans | 935 | 824 |
Inventories | 4,993 | 4,381 |
Taxes and other current assets | 5,310 | 5,034 |
Assets held for sale | 219 | 148 |
Total current assets | 71,550 | 43,076 |
Long-term investments and loans | 12,576 | 11,478 |
Property, plant and equipment, less accumulated depreciation | 13,194 | 13,287 |
Goodwill | 21,794 | 21,464 |
Identifiable intangible assets, less accumulated amortization | 16,611 | 17,721 |
Other non-current assets, deferred taxes and deferred charges | 3,614 | 4,122 |
Total assets | 139,339 | 111,148 |
Liabilities and Shareholders' Equity | ||
Short-term borrowings, including current portion of long-term debt | 7,645 | 9,320 |
Accounts payable | 2,595 | 1,751 |
Dividends payable | 1,081 | 2,159 |
Income taxes payable | 607 | 656 |
Accrued compensation and related items | 1,549 | 1,667 |
Other current liabilities | 12,632 | 11,456 |
Total current liabilities | 26,109 | 27,009 |
Long-term debt | 31,864 | 7,963 |
Pension benefit obligations | 4,159 | 4,235 |
Postretirement benefit obligations | 1,602 | 1,604 |
Deferred taxes | 2,356 | 2,959 |
Other taxes payable | 7,029 | 6,568 |
Other non-current liabilities | 2,985 | 3,070 |
Total liabilities | 76,104 | 53,408 |
Preferred stock | 66 | 73 |
Common stock | 443 | 443 |
Additional paid-in capital | 70,314 | 70,283 |
Employee benefit trust, at fair value | (304) | (425) |
Treasury stock | (57,364) | (57,391) |
Retained earnings | 51,965 | 49,142 |
Accumulated other comprehensive expense | (2,079) | (4,569) |
Total Pfizer Inc. shareholders' equity | 63,041 | 57,556 |
Equity attributable to noncontrolling interests | 194 | 184 |
Total shareholders' equity | 63,235 | 57,740 |
Total liabilities and shareholders' equity | $139,339 | $111,148 |
1_Condensed Consolidated Statem
Condensed Consolidated Statements of Cash Flows (USD $) | ||
In Millions | 6 Months Ended
Jun. 28, 2009 | 6 Months Ended
Jun. 29, 2008 |
Operating Activities | ||
Net income before allocation to noncontrolling interests | $4,996 | $5,572 |
Adjustments to reconcile net income before noncontrolling interests to net cash provided by operating activities: | ||
Depreciation and amortization | 2,014 | 2,716 |
Share-based compensation expense | 169 | 166 |
Acquisition-related in-process research and development charges | 20 | 554 |
Deferred taxes from continuing operations | 731 | 439 |
Other non-cash adjustments | (22) | 497 |
Changes in assets and liabilities (net of businesses acquired and divested) | (247) | (1,631) |
Net cash provided by operating activities | 7,661 | 8,313 |
Investing Activities | ||
Purchases of property, plant and equipment | (522) | (868) |
Purchases of short-term investments | (38,900) | (16,106) |
Proceeds from sales and redemptions of short-term investments | 14,251 | 12,463 |
Purchases of long-term investments | (5,266) | (3,856) |
Proceeds from sales and redemptions of long-term investments | 3,484 | 632 |
Acquisitions, net of cash acquired | 0 | (962) |
Other investing activities | 346 | (251) |
Net cash used in investing activities | (26,607) | (8,948) |
Financing Activities | ||
Increase in short-term borrowings, net | 21,754 | 16,310 |
Principal payments on other short-term borrowings, net | (22,493) | (14,097) |
Proceeds from issuances of long-term debt | 23,996 | 602 |
Principal payments on long-term debt | (908) | 0 |
Purchases of common stock | 0 | (500) |
Cash dividends paid | (3,200) | (4,277) |
Stock option transactions and other | (106) | 33 |
Net cash provided by/(used in) financing activities | 19,043 | (1,929) |
Effect of exchange-rate changes on cash and cash equivalents | 25 | (22) |
Net increase/(decrease) in cash and cash equivalents | 122 | (2,586) |
Cash and cash equivalents at beginning of period | 2,122 | 3,406 |
Cash and cash equivalents at end of period | 2,244 | 820 |
Supplemental Cash Flow Information - Cash paid during the period for: | ||
Income taxes | 1,109 | 1,056 |
Interest | $299 | $446 |
Basis of Presentation
Basis of Presentation | |
6 Months Ended
Jun. 28, 2009 USD / shares | |
Basis of Presentation [Abstract] | |
Basis of Presentation [Text Block] | Note 1. Basis of Presentation We prepared the condensed consolidated financial statements following the requirements of the Securities and Exchange Commission (SEC) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by accounting principles generally accepted in the United States of America (U.S. GAAP) can be condensed or omitted. Balance sheet amounts and operating results for subsidiaries operating outside the U.S. are as of and for the three-month and six-month periods ended May 24, 2009, and May 25, 2008. Subsequent events have been evaluated through August 6, 2009. We made certain reclassifications to prior-period amounts to conform to the second-quarter and six-month 2009 presentations related to the presentation of noncontrolling interests as a result of adopting a new accounting standard (see Note 2. Adoption of New Accounting Policies). 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. We are responsible for the unaudited financial statements included in this document.The financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of our financial position and operating results. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in Pfizers Annual Report on Form 10-K for the year ended December 31, 2008. On January 26, 2009, we announced that we entered into a definitive merger agreement under which we will acquire Wyeth in a cash-and-stock transaction valued on that date at $50.19 per share, or a total of $68 billion. While we have taken actions and incurred costs associated with the pending transaction that are reflected in our financial statements, the pending acquisition of Wyeth will not be reflected in our financial statements until consummation. (See Note 14. Pending Acquisition of Wyeth.) Included in Other current liabilities at June 28, 2009 are $1.5 billion of deferred income taxes. |
Adoption of New Accounting Poli
Adoption of New Accounting Policies | |
6 Months Ended
Jun. 28, 2009 USD / shares | |
Adoption of New Accounting Policies [Abstract] | |
Adoption of New Accounting Policies [Text Block] | Note 2. Adoption of New Accounting Policies As of March 30, 2009, we adopted Financial Accounting Standards Board (FASB) Staff Position (FSP) No. Statement of Financial Accounting Standards (SFAS) 115-2 and SFAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments. FSP SFAS 115-2 and SFAS 124-2 amend the guidance for evaluating and measuring other-than-temporary impairments for available-for-sale or held-to-maturity debt securities. The adoption of FSP SFAS 115-2 and SFAS 124-2 did not have a significant impact on our consolidated financial statements. As of March 30, 2009, we adopted FSP No. SFAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly. FSP SFAS 157-4 provides additional guidance for estimating fair value in inactive markets and the identification of disorderly transactions. FSP SFAS 157-4 was adopted prospectively and did not have a significant impact on our consolidated financial statements, but could impact the accounting for acquisitions after adoption, including our pending acquisition of Wyeth, and other events, balances and transactions measured at fair value. As of January 1, 2009, we adopted SFAS No. 141R, Business Combinations, as amended. SFAS 141R, as amended, retains the purchase method of accounting for acquisitions, but requires a number of changes, including changes in the way assets and liabilities are recognized in purchase accounting. It also changes the recognition of assets acquired and liabilities assumed arising from contingencies, requires the capitalization of in-process research and development costs at fair value and requires the expensing of acquisition-related costs as incurred. The adoption of SFAS 141R, as amended, did not impact our consolidated financial statements upon adoption, but will impact the accounting for acquisitions after adoption, including our pending acquisition of Wyeth. As of January 1, 2009, we adopted FSP No. SFAS 142-3, Determination of the Useful Life of Intangible Assets. FSP SFAS 142-3 amends the factors considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset. Among other things, in the absence of historical experience, an entity will be required to consider assumptions used by market participants. The adoption of FSP SFAS 142-3 did not impact our consolidated financial statements upon adoption, but could impact the accounting for acquisitions after adoption, including our pending acquisition of Wyeth. As of January 1, 2009, we adopted the provisions of SFAS No. 157, Fair Value Measurements, as amended, that we did not adopt as of January 1, 2008. SFAS 157, as amended, defines fair value, expands related disclosure requirements and specifies a hierarchy of valuation techniques based on the nature of the inputs used to develop the fair value measures. The adoption of the remaining provisions of SFAS 157, as amended, did not have a significant impact on our consolidated financial statements upon adoption, but will impact the accounting for acquisitions after |
Acquisitions
Acquisitions | |
6 Months Ended
Jun. 28, 2009 USD / shares | |
Acquisitions [Abstract] | |
Acquisitions [Text Block] | Note 3. Acquisitions In the second quarter of 2008, we acquired Encysive Pharmaceuticals Inc. (Encysive), a biopharmaceutical company whose main asset is Thelin, which is used for the treatment of pulmonary arterial hypertension. The cost of acquiring Encysive, through a tender offer and subsequent merger, was approximately $200million, including transaction costs. Upon our acquisition of Encysive, Encysive's change of control repurchase obligations under its outstanding $130 million 2.5% convertible notes were triggered and, as a result, Encysive repurchased the convertible notes in consideration for their par value plus accrued interest in June 2008. In addition, in the second quarter of 2008, we acquired Serenex, Inc. (Serenex), a privately held biotechnology company, whose main asset is SNX-5422, an oral Heat Shock Protein 90 (Hsp90) for the potential treatment of solid tumors and hematological malignancies and an extensive Hsp90 inhibitor compound library, which has potential uses in treating cancer, inflammatory and neurodegenerative diseases. In connection with these acquisitions, through the second quarter of 2008, we recorded $156 million in Acquisition-related in-process research and development charges and approximately $450 million in intangible assets. In the first quarter of 2008, we acquired CovX, a privately held biotherapeutics company specializing in preclinical oncology and metabolic research and the developer of a biotherapeutics technology platform. Also in the first quarter of 2008, we acquired all the outstanding shares of Coley Pharmaceutical Group, Inc., (Coley), a biopharmaceutical company specializing in vaccines and drug candidates designed to fight certain cancers, allergy and asthma disorders, and autoimmune diseases, for approximately $230 million. In connection with these and two smaller acquisitions related to Animal Health, we recorded approximately $398 million in Acquisition-related in-process research and development charges during the first quarter of 2008. In the second quarter of 2009, we resolved a contingency associated with CovX and recognized $20 million in Acquisition-related in-process research and development charges. |
Collaborative Arrangements
Collaborative Arrangements | |
6 Months Ended
Jun. 28, 2009 USD / shares | |
Collaborative Arrangements [Abstract] | |
Collaborative Arrangements [Text Block] | Note 4. Collaborative Arrangements In the normal course of business, we enter into collaborative arrangements with respect to in-line medicines, as well as medicines in development that require completion of research and regulatory approval. Collaborative arrangements are contractual agreements with third parties that involve a joint operating activity, typically a research and/or commercialization effort, where both we and our partner are active participants in the activity and are exposed to the significant risks and rewards of the activity. Our rights and obligations under our collaborative arrangements vary. For example, we have agreements to co-promote pharmaceutical products discovered by other companies, and we have agreements where we partner to co-develop and/or participate together in commercializing, marketing, promoting, manufacturing, and/or distributing a drug product. Payments to or from our collaboration partners are presented in the statement of income based on the nature of the arrangement (including its contractual terms), the nature of the payments and applicable accounting guidance. Under co-promotion agreements, we record the amounts received from our partners as alliance revenues, a component of Revenues, when our co-promotion partners are the principal in the transaction and we receive a share in their net sales or profits. Alliance revenues are recorded when our co-promotion partners ship the product and title passes to their customer. Expenses for selling and marketing these products are included in Selling, informational and administrative expenses. In arrangements where we manufacture a product for our partner, we record revenues when our partner sells the product and title passes to their customer. All royalty payments to collaboration partners are recorded as part of Cost of sales. The amounts and classifications of payments (income/(expense)) between us and our collaboration partners follow: Three Months Ended Six Months Ended (millions of dollars) June 28, 2009 June 29, 2008 June 28, 2009 June 29, 2008 Revenues Revenues(a) $ 146 $ 126 $ 278 $ 226 Revenues Alliance revenues (b) 598 563 1,180 1,051 Total Revenues from collaborative arrangements 744 689 1,458 1,277 Cost of sales (c) (35 ) (36 ) (91 ) (67 ) Selling, informational and administrative expenses(d) 14 26 (3 ) 19 Research and development expenses(e) (50 ) (46 ) (244 ) (96 ) (a) Represents sales to our partners of products manufactured by us. (b) Substantially all related to amounts earned from our partners under co-promotion agreements. (c) Primarily related to royalties earned by our partners and cost of sales associated with inventory purchased from our partners. (d) Represents net reimbursements from our partners and reimbursements to our partners for Selling, informational and administrative expenses incurred. (e) Primarily related to net reimbursements earned by our p |
Cost-Reduction Initiatives
Cost-Reduction Initiatives | |
6 Months Ended
Jun. 28, 2009 USD / shares | |
Cost-Reduction Initiatives [Abstract] | |
Cost-Reduction Initiatives [Text Block] | Note 5. Cost-Reduction Initiatives We incurred the following costs in connection with all of our cost-reduction initiatives, which began in 2005: Three Months Ended Six Months Ended (millions of dollars) June 28, 2009 June 29, 2008 June 28, 2009 June 29, 2008 Implementation costs(a) $ 156 $ 405 $ 330 $ 762 Restructuring charges(b) 174 562 331 739 Total costs related to our cost-reduction initiatives $ 330 $ 967 $ 661 $ 1,501 (a) For the second quarter of 2009, included in Cost of sales ($45 million), Selling, informational and administrative expenses ($85 million), Research and development expenses ($32 million), and Other (income)/deductions - net ($6 million income). For the second quarter of 2008, included in Cost of sales ($210 million), Selling, informational and administrative expenses ($100 million), Research and development expenses ($94 million) and Other (income)/deductions - net ($1 million). For the first six months of 2009, included in Cost of sales ($121 million), Selling, informational and administrative expenses ($131 million), Research and development expenses ($73 million), and Other (income)/deductions - net ($5 million). For the first six months of 2008, included in Cost of sales ($348 million), Selling, informational and administrative expenses ($175 million), Research and development expenses ($240 million) and Other (income)/deductions - net ($1 million income). (b) Included in Restructuring charges and acquisition-related costs. From the beginning of the cost-reduction initiatives in 2005 through June 28, 2009, the restructuring charges primarily relate to our supply network transformation efforts and the restructuring of our worldwide marketing and research and development operations, and the implementation costs primarily relate to depreciation arising from the shortening of the useful lives of certain assets, as well as system and process standardization and the expansion of shared services. The components of restructuring charges associated with all of our cost-reduction initiatives follow: (millions of dollars) Costs Incurred Through June 28, 2009 Activity Through June 28, 2009(a) Accrual as of June 28, 2009(b) Employee termination costs $ 5,314 $ 3,947 $ 1,367 Asset impairments 1,384 1,384 Other 516 420 96 Total restructuring charges $ 7,214 $ 5,751 $ 1,463 (a) Includes adjustments for foreign currency translation. (b) Included in Other current liabilities ($954 million) and Other noncurrent liabilities ($509 million). During the second quarter of 2009, we expensed $29million for Employee termination costs, $73 million for Asset impairments and $72 million for Other. During the first six months of 2009, we expensed $164 million for Employee termination costs, $91 million for Asset impairments and $76 million for Other. From June 2005 through June 28, 2009, Employee termination costs, net of the impact of a change |
Acquisition-Related Costs
Acquisition-Related Costs | |
6 Months Ended
Jun. 28, 2009 USD / shares | |
Acquisition-Related Costs [Abstract] | |
Acquisition-Related Costs [Text Block] | Note 6. Acquisition-Related Costs We incurred the following acquisition-related costs primarily in connection with our pending acquisition of Wyeth: Three Months Ended Six Months Ended (millions of dollars) June 28, 2009 June 29, 2008 June 28, 2009 June 29, 2008 Transaction costs (a) $ 184 $ $ 553 $ Pre-integration costs and other(b) 101 7 129 8 Total acquisition-related costs(c) $ 285 $ 7 $ 682 $ 8 (a) Transaction costs include banking, legal, accounting and other costs directly related to our pending acquisition of Wyeth. Substantially all of the costs incurred to date are fees related to a $22.5 billion bridge term loan credit agreement entered into with certain financial institutions on March 12, 2009, to partially fund our pending acquisition of Wyeth. The bridge term loan credit agreement was terminated in June 2009 as a result of our issuance of approximately $24.0 billion of senior unsecured notes during the first six months of 2009. All bridge term loan commitment fees have been expensed, and we are no longer subject to the covenants under that agreement (see Note 8D: Financial Instruments: Long-Term Debt). (b) Pre-integration costs and other primarily represent external, incremental costs of integration planning that are directly related to our pending acquisition of Wyeth and include costs associated with preparing for systems and other integration activities. (c) Included in Restructuring charges and acquisition-related costs. |
Comprehensive Income
Comprehensive Income (Expense) | |
6 Months Ended
Jun. 28, 2009 USD / shares | |
Comprehensive Income/(Expense) [Abstract] | |
Comprehensive Income/(Expense) [Text Block] | Note 7. Comprehensive Income/(Expense) The components of comprehensive income/(expense) follow: Three Months Ended Six Months Ended (millions of dollars) June 28, 2009 June 29, 2008 June 28, 2009 June 29, 2008 Net income before allocation to noncontrolling interests $ 2,266 $ 2,782 $ 4,996 $ 5,572 Other comprehensive expense: Currency translation adjustment and other 2,638 1,109 2,254 534 Net unrealized gains/(losses) on derivative financial instruments (144 ) 27 (167 ) 28 Net unrealized gains/(losses) on available-for-sale securities 81 226 (14 ) Benefit plan adjustments 18 1 177 85 Total other comprehensive loss 2,593 1,137 2,490 633 Total comprehensive income before allocation to noncontrolling interests 4,859 3,919 7,486 6,205 Less: Comprehensive income attributable to noncontrolling interests 12 15 14 23 Comprehensive income attributable to Pfizer Inc. $ 4,847 $ 3,904 $ 7,472 $ 6,182 |
Financial Instruments
Financial Instruments | |
6 Months Ended
Jun. 28, 2009 USD / shares | |
Financial Instruments [Abstract] | |
Financial Instruments [Text Block] | Note 8. Financial Instruments A. Selected Financial Assets and Liabilities Information about certain of our financial assets and liabilities follows: (millions of dollars) June 28, 2009 Dec. 31, 2008 Selected financial assets measured at fair value on a recurring basis (a) : Trading securities (b) $ 172 $ 190 Available-for-sale debt securities (c) 50,592 30,061 Available-for-sale money market funds 7,543 398 Available-for-sale equity securities, excluding money market funds (c) 182 319 Derivative financial instruments in receivable positions (d) : Interest rate swaps 283 732 Foreign currency swaps 85 128 Foreign currency forward-exchange contracts 640 399 Total 59,497 32,227 Other selected financial assets (e): Held-to-maturity debt securities, carried at amortized cost (c) 953 2,349 Short-term loans, carried at cost 935 824 Long-term loans, carried at cost 1,181 1,568 Private equity securities, carried at cost 168 182 Total 3,237 4,923 Total selected financial assets $ 62,734 $ 37,150 Financial liabilities measured at fair value on a recurring basis (a): Derivative financial instruments in a liability position(f): Interest rate swaps $ 8 $ 7 Foreign currency swaps 352 153 Foreign currency forward-exchange contracts 1,381 1,083 Total 1,741 1,243 Other financial liabilities (e) , (g): Short-term borrowings, carried at historical proceeds, as adjusted (h) 7,645 9,320 Long-term debt, carried at historical proceeds, as adjusted (i) 31,864 7,963 Total 39,509 17,283 Total selected financial liabilities $ 41,250 $ 18,526 (a) Fair values are determined based on valuation techniques categorized as follows: Level 1 means the use of quoted prices for identical instruments in active markets; Level 2 means the use of quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active or are directly or indirectly observable; Level 3 means the use of unobservable inputs. Virtually all of our financial assets and liabilities measured at fair value on a recurring basis use Level 2 inputs in the calculation of fair value, except that included in available-for-sale equity securities, excluding money market funds, are $101 million as of June 28, 2009 and $87 million as of December 31, 2008 of investments that use Level 1 inputs in the calculation of fair value. None of our financial assets and liabilities measured at fair value on a recurring basis are valued based on Level 3 inputs at June 28, 2009 or December 31, 2008. (b) Trading securities are held in trust for legacy Pharmacia severance benefits. (c) Gross unrealized gains and losses are not significant. (d) Designated as hedging instruments except for certain foreign curre |
Inventories
Inventories | |
6 Months Ended
Jun. 28, 2009 USD / shares | |
Inventories [Abstract] | |
Inventories [Text Block] | Note 9. Inventories The components of inventories follow: (millions of dollars) June 28, 2009 Dec. 31, 2008 Finished goods $ 2,237 $ 2,024 Work-in-process 1,897 1,527 Raw materials and supplies 859 830 Total inventories(a) $ 4,993 $ 4,381 (a) Certain amounts of inventories are in excess of one years supply. There are no recoverability issues associated with these quantities, and the amounts are not significant. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | |
6 Months Ended
Jun. 28, 2009 USD / shares | |
Goodwill and Other Intangible Assets [Abstract] | |
Goodwill and Other Intangible Assets [Text Block] | Note 10. Goodwill and Other Intangible Assets A. Goodwill The changes in the carrying amount of goodwill by segment for the six months ended June 28, 2009, follow: (millions of dollars) Pharmaceutical Animal Health Other Total Balance, December 31, 2008 $ 21,317 $ 129 $ 18 $ 21,464 Additions Other(a) 316 13 1 330 Balance, June 28, 2009 $ 21,633 $ 142 $ 19 $ 21,794 (a) Primarily related to the impact of foreign exchange, except that Pharmaceutical also includes a reclassification of approximately $150 million to Assets held for sale. B. Other Intangible Assets The components of identifiable intangible assets, primarily included in our Pharmaceutical segment, follow: June 28, 2009 Dec. 31, 2008 (millions of dollars) 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 $ 31,974 $ (19,237 ) $ 12,737 $ 31,484 $ (17,673 ) $ 13,811 Brands 1,016 (505 ) 511 1,016 (487 ) 529 License agreements 252 (90 ) 162 246 (78 ) 168 Trademarks 124 (84 ) 40 118 (78 ) 40 Other(a) 520 (292 ) 228 531 (291 ) 240 Total 33,886 (20,208 ) 13,678 33,395 (18,607 ) 14,788 Indefinite-lived intangible assets: Brands 2,863 2,863 2,860 2,860 Trademarks 68 68 70 70 Other 2 2 3 3 Total 2,933 2,933 2,933 2,933 Total identifiable intangible assets $ 36,819 $ (20,208 ) $ 16,611 (b) $ 36,328 $ (18,607 ) $ 17,721 (a) Includes patents, non-compete agreements, customer contracts and other intangible assets. (b) Decrease from December 31, 2008 is primarily related to amortization and the impact of foreign exchange. Amortization expense related to acquired intangible assets that contribute to our ability to sell, manufacture, research, market and distribute products, compounds and intellectual property is included in Amortization of intangible assets as it benefits multiple business functions. Amortization expense related to acquired intangible assets that are associated with a single function is included in Cost of sales, Selling, informational and administrative expenses and Research and development expenses, as appropriate. Total amortization expense for finite-lived intangible assets was $615 million for the second quarter of 2009, $694 million for the second quarter of 2008, $1.2 billion for the first six months of 200 |
Pension and Postretirement Bene
Pension and Postretirement Benefit Plans | |
6 Months Ended
Jun. 28, 2009 USD / shares | |
Pension and Postretirement Benefit Plans [Abstract] | |
Pension and Postretirement Benefit Plans | Note 11. Pension and Postretirement Benefit Plans The components of net periodic benefit costs of the U.S. and international pension plans and the postretirement plans, which provide medical and life insurance benefits to retirees and their eligible dependents, follow: Pension Plans U.S. Qualified U.S.Supplemental (Non-Qualified) International Postretirement Plans June 28, June 29, June 28, June 29, June 28, June 29, June 28, June 29, (millions of dollars) 2009 2008 2009 2008 2009 2008 2009 2008 For the Three Months Ended: Service cost $ 52 $ 59 $ 5 $ 6 $ 42 $ 65 $ 7 $ 11 Interest cost 116 115 12 9 77 101 31 37 Expected return on plan assets (116 ) (162 ) (86 ) (111 ) (7 ) (9 ) Amortization of: Actuarial losses 53 8 8 6 6 11 5 9 Prior service costs/(credits) 1 (1 ) (1 ) 1 Curtailments and settlements net 30 1 6 1 (1 ) 6 3 Special termination benefits 6 9 1 6 3 4 Net periodic benefit costs $ 141 $ 31 $ 31 $ 22 $ 38 $ 78 $ 38 $ 56 For the Six Months Ended: Service cost $ 111 $ 120 $ 10 $ 12 $ 87 $ 128 $ 15 $ 20 Interest cost 235 231 25 21 155 200 61 71 Expected return on plan assets (234 ) (325 ) (172 ) (222 ) (13 ) (18 ) Amortization of: Actuarial losses 110 16 16 15 12 22 9 15 Prior service costs/(credits) 1 2 (1 ) (1 ) (2 ) (2 ) 1 Curtailments and settlements net 54 4 13 113 1 4 5 6 Special termination benefits 19 16 2 13 15 8 Net periodic benefit costs $ 296 $ 64 $ 63 $ 160 $ 83 $ 145 $ 90 $ 103 The increase in net periodic benefit costs in the first six months of 2009, compared to the first six months of 2008, for our U.S. qualified plans was primarily driven by the amortization of actual investment losses incurred in 2008, lower than expected returns on plan assets due to the smaller asset base and the impact of our settlement losses due to our ongoing cost-restructuring efforts. The decrease in net periodic benefit costs in the first six months of 2009, compared to the first six months of 2008, for our U.S. supplemental (non-qualified) pension plans was largely driven by settlement charges required to be recognized in 2008 due to the lump sum benefit payments made to certai |
Earnings Per Share Attributable
Earnings Per Share Attributable to Common Shareholders | |
6 Months Ended
Jun. 28, 2009 USD / shares | |
Earnings Per Share Attributable to Common Shareholders [Abstract] | |
Earnings Per Share Attributable to Common Shareholders | Note 12. Earnings Per Share Attributable to Common Shareholders Basic and diluted earnings per share (EPS) attributable to Pfizer Inc. common shareholders were computed using the following data: Three Months Ended Six Months Ended (in millions) June 28, 2009 June 29, 2008 June 28, 2009 June 29, 2008 EPS Numerator - Basic: Income from continuing operations attributable to Pfizer Inc. $ 2,258 $ 2,759 $ 4,986 $ 5,547 Less: Preferred stock dividends - net of tax 1 2 1 2 Income from continuing operations attributable to Pfizer Inc. common shareholders 2,257 2,757 4,985 5,545 Discontinued operations - net of tax 3 17 4 13 Net income attributable to Pfizer Inc. common shareholders $ 2,260 $ 2,774 $ 4,989 $ 5,558 EPS Denominator - Basic: Weighted-average number of common shares outstanding 6,728 6,732 6,726 6,736 EPS Numerator - Diluted: Income from continuing operations attributable to Pfizer Inc. $ 2,258 $ 2,759 $ 4,986 $ 5,547 Less: ESOP contribution - net of tax Income from continuing operations attributable to Pfizer Inc. common shareholders 2,258 2,759 4,986 5,547 Discontinued operations - net of tax 3 17 4 13 Net income attributable to Pfizer Inc. common shareholders $ 2,261 $ 2,776 $ 4,990 $ 5,560 EPS Denominator - Diluted: Weighted-average number of common shares outstanding 6,728 6,732 6,726 6,736 Common share equivalents: stock options, restricted stock units, stock issuable under other employee compensation plans and convertible preferred stock 24 16 26 18 Weighted-average number of common shares outstanding and common share equivalents 6,752 6,748 6,752 6,754 Stock options that had exercise prices greaterthan the average market price of our common stock issuable under employee compensation plans (a) 422 542 422 542 (a) These common stock equivalents were outstanding during the three months and six months ended June 28, 2009 and June 29, 2008, but were not included in the computation of diluted EPS for those periods because their inclusion would have had an anti-dilutive effect. In the computation of diluted EPS, Income from continuing operations attributable to Pfizer Inc. is reduced by the incremental contribution to the Employee Stock Ownership Plans (ESOPs), which were acquired as part of our Pharmacia acquisition. This contribution is the after-tax difference between the income that the ESOPs would have received in preferred stock dividends and the dividend on the common shares assumed to have been outstanding. |
Segment Information
Segment Information | |
6 Months Ended
Jun. 28, 2009 USD / shares | |
Segment Information [Abstract] | |
Segment Information [Text Block] | Note 13. Segment Information We operate in the following business segments: Pharmaceutical The Pharmaceutical segment includes products that prevent and treat cardiovascular and metabolic diseases, central nervous system disorders, arthritis and pain, infectious and respiratory diseases, urogenital conditions, cancer, eye diseases and endocrine disorders, among others. Animal Health The Animal Health segment includes products that prevent and treat diseases in livestock and companion animals. Segment profit/(loss) is measured based on income from continuing operations before provision for taxes on income. Certain costs, such as significant impacts of purchase accounting for acquisitions, acquisition-related costs, and costs related to our cost-reduction initiatives, are included in Corporate/Other only. This methodology is utilized by management to evaluate our businesses. Revenues and profit/(loss) by segment for the three months and six months ended June 28, 2009 and June 29, 2008 follow: Three Months Ended Six Months Ended (millions of dollars) June 28, 2009 June 29, 2008 June 28, 2009 June 29, 2008 Revenues Pharmaceutical $ 10,063 $ 11,053 $ 20,165 $ 21,957 Animal Health 648 715 1,185 1,334 Corporate/Other(a) 273 361 501 686 Total revenues $ 10,984 $ 12,129 $ 21,851 $ 23,977 Segment profit/(loss)(b) Pharmaceutical $ 4,960 $ 5,068 $ 10,367 $ 10,662 Animal Health 164 175 296 320 Corporate/Other(a) (2,075 )(c) (2,453 )(e) (3,811 )(d) (4,635 )(f) Total segment profit/(loss) $ 3,049 $ 2,790 $ 6,852 $ 6,347 (a) Corporate/Other includes our gelatin capsules business, our contract manufacturing business and a bulk pharmaceutical chemicals business, and transition activity associated with our former Consumer Healthcare business (sold in December 2006). Corporate/Other under Segment profit/(loss) also includes interest income/(expense), corporate expenses (e.g., corporate administration costs), other income/(expense) (e.g., realized gains and losses attributable to our investments in debt and equity securities), certain performance-based and all share-based compensation expenses, significant impacts of purchase accounting for acquisitions, acquisition-related costs, intangible asset impairments and costs related to our cost-reduction initiatives. (b) Segment profit/(loss) equals Income from continuing operations before provision for taxes on income. (c) For the three months ended June 28, 2009, Corporate/Other includes: (i) significant impacts of purchase accounting for acquisitions of $581 million, including intangible asset amortization and other charges, primarily related to our acquisition of Pharmacia in 2003; (ii) restructuring charges and implementation costs associated with our cost-reduction initiatives of $330 million; (iii) acquisition-related |
Pending Acquisition of Wyeth
Pending Acquisition of Wyeth | |
6 Months Ended
Jun. 28, 2009 USD / shares | |
Pending Acquisition [Abstract] | |
Pending Acquisition of Wyeth [Text Block] | Note 14. Pending Acquisition of Wyeth On January 26, 2009, we announced that we signed a definitive Agreement and Plan of Merger dated as of January 25, 2009 (the Merger Agreement) to acquire Wyeth in a cash-and-stock-transaction valued on that date at approximately $68 billion. Under terms of the Merger Agreement, which has been approved by the Board of Directors of each of the companies, each outstanding share of Wyeth common stock will be converted into the right to receive $33.00 in cash, without interest, and 0.985 of a share of Pfizer common stock in a taxable transaction, subject to the terms of the Merger Agreement. Each outstanding Wyeth stock option and each outstanding share of Wyeth restricted stock, deferred stock unit award and restricted stock unit award will be exchanged for cash, in accordance with the terms of the Merger Agreement. In July 2009, pursuant to a request from us made in accordance with the terms and conditions of the Merger Agreement, all of Wyeths outstanding $2 convertible preferred stock that was not previously converted to Wyeth common stock at the option of the holders of such stock was redeemed by Wyeth, and as a result, we will not issue any preferred stock in connection with the merger. The merger was approved by Wyeths shareholders in July 2009. Also in July 2009, the European Commission approved the transaction, a decision that included our commitment to divest certain animal-health assets in the European Union. The merger remains subject to other governmental and regulatory approvals and other usual and customary closing conditions. We expect the merger will be completed at the end of the third quarter or during the fourth quarter of 2009. We issued $13.5 billion of senior unsecured notes on March 24, 2009 and approximately $10.5 billion of senior unsecured notes on June 3, 2009, of which virtually all of the proceeds will be used to partially finance our pending acquisition of Wyeth. |