Document Information
Document Information | |
9 Months Ended
Sep. 27, 2009 USD / shares | |
Document information | |
Document type | 10-Q |
Amendment flag | false |
Document period end date | 2009-09-27 |
Entity Information
Entity Information (USD $) | |||
9 Months Ended
Sep. 27, 2009 | Nov. 02, 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 | 8,069,536,059 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Income (Unaudited) (USD $) | |||||||||||||||||||
In Millions, except Per Share data | 3 Months Ended
Sep. 27, 2009 | 3 Months Ended
Sep. 28, 2008 | 9 Months Ended
Sep. 27, 2009 | 9 Months Ended
Sep. 28, 2008 | |||||||||||||||
Revenues | $11,621 | $11,973 | $33,472 | $35,950 | |||||||||||||||
Costs and expenses: | |||||||||||||||||||
Cost of sales | 1,789 | [1] | 2,122 | [1] | 4,953 | [1] | 6,397 | [1] | |||||||||||
Selling, informational and administrative expenses | 3,282 | [1] | 3,523 | [1] | 9,508 | [1] | 10,878 | [1] | |||||||||||
Research and development expenses | 1,632 | [1] | 1,885 | [1] | 5,032 | [1] | 5,642 | [1] | |||||||||||
Amortization of intangible assets | 594 | 621 | 1,755 | 2,063 | |||||||||||||||
Acquisition-related in-process research and development charges | 0 | 13 | 20 | 567 | |||||||||||||||
Restructuring charges and acquisition-related costs | 193 | 366 | 1,206 | 1,113 | |||||||||||||||
Other (income)/deductions - net | 160 | 721 | 175 | 221 | |||||||||||||||
Income from continuing operations before provision for taxes on income | 3,971 | 2,722 | 10,823 | 9,069 | |||||||||||||||
Provision for taxes on income | 1,092 | 463 | 2,952 | 1,251 | |||||||||||||||
Income from continuing operations | 2,879 | 2,259 | 7,871 | 7,818 | |||||||||||||||
Discontinued operations - net of tax | 2 | 25 | 6 | 38 | |||||||||||||||
Net income before allocation to noncontrolling interests | 2,881 | 2,284 | 7,877 | 7,856 | |||||||||||||||
Less: Net income attributable to noncontrolling interests | 3 | 6 | 9 | 18 | |||||||||||||||
Net income attributable to Pfizer Inc. | $2,878 | $2,278 | $7,868 | $7,838 | |||||||||||||||
Earnings per share - basic: | |||||||||||||||||||
Income from continuing operations attributable to Pfizer Inc. common shareholders | 0.43 | 0.34 | 1.17 | 1.16 | |||||||||||||||
Discontinued operations - net of tax | $0 | $0 | $0 | $0 | |||||||||||||||
Net income attributable to Pfizer Inc. common shareholders | 0.43 | 0.34 | 1.17 | 1.16 | |||||||||||||||
Earnings per share - diluted: | |||||||||||||||||||
Income from continuing operations attributable to Pfizer Inc. common shareholders | 0.43 | 0.33 | 1.16 | 1.16 | |||||||||||||||
Discontinued operations - net of tax | $0 | 0.01 | $0 | $0 | |||||||||||||||
Net income attributable to Pfizer Inc. common shareholders | 0.43 | 0.34 | 1.16 | 1.16 | |||||||||||||||
Weighted-average shares used to calculate earnings per common share: | |||||||||||||||||||
Basic | 6,730 | 6,718 | 6,727 | 6,730 | |||||||||||||||
Diluted | 6,762 | 6,736 | 6,758 | 6,750 | |||||||||||||||
Cash dividends paid per common share | 0.16 | 0.32 | 0.64 | 0.96 | |||||||||||||||
[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 (Unaudited) (USD $) | ||
In Millions | Sep. 27, 2009
| Dec. 31, 2008
|
Assets | ||
Cash and cash equivalents | $4,234 | $2,122 |
Short-term investments | 48,239 | 21,609 |
Accounts receivable, less allowance for doubtful accounts | 10,552 | 8,958 |
Short-term loans | 791 | 824 |
Inventories | 5,058 | 4,381 |
Taxes and other current assets | 4,679 | 5,034 |
Assets held for sale | 231 | 148 |
Total current assets | 73,784 | 43,076 |
Long-term investments and loans | 12,166 | 11,478 |
Property, plant and equipment, less accumulated depreciation | 13,173 | 13,287 |
Goodwill | 21,796 | 21,464 |
Identifiable intangible assets, less accumulated amortization | 16,125 | 17,721 |
Deferred taxes and other non-current assets | 4,250 | 4,122 |
Total assets | 141,294 | 111,148 |
Liabilities and Shareholders' Equity | ||
Short-term borrowings, including current portion of long-term debt | 6,954 | 9,320 |
Accounts payable | 2,481 | 1,751 |
Dividends payable | 1 | 2,159 |
Income taxes payable | 485 | 656 |
Accrued compensation and related items | 1,678 | 1,667 |
Deferred taxes | 1,816 | 414 |
Other current liabilities | 10,577 | 11,042 |
Total current liabilities | 23,992 | 27,009 |
Long-term debt | 32,402 | 7,963 |
Pension benefit obligations | 4,647 | 4,235 |
Postretirement benefit obligations | 1,605 | 1,604 |
Deferred taxes | 2,419 | 2,959 |
Other taxes payable | 6,843 | 6,568 |
Other non-current liabilities | 3,136 | 3,070 |
Total liabilities | 75,044 | 53,408 |
Preferred stock | 64 | 73 |
Common stock | 443 | 443 |
Additional paid-in capital | 70,373 | 70,283 |
Employee benefit trust, at fair value | (298) | (425) |
Treasury stock | (57,364) | (57,391) |
Retained earnings | 54,835 | 49,142 |
Accumulated other comprehensive expense | (1,896) | (4,569) |
Total Pfizer Inc. shareholders' equity | 66,157 | 57,556 |
Equity attributable to noncontrolling interests | 93 | 184 |
Total shareholders' equity | 66,250 | 57,740 |
Total liabilities and shareholders' equity | $141,294 | $111,148 |
1_Condensed Consolidated Statem
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | ||
In Millions | 9 Months Ended
Sep. 27, 2009 | 9 Months Ended
Sep. 28, 2008 |
Operating Activities | ||
Net income before allocation to noncontrolling interests | $7,877 | $7,856 |
Adjustments to reconcile net income before noncontrolling interests to net cash provided by operating activities: | ||
Depreciation and amortization | 2,983 | 3,912 |
Share-based compensation expense | 258 | 263 |
Acquisition-related in-process research and development charges | 20 | 567 |
Deferred taxes from continuing operations | 1,121 | 580 |
Other non-cash adjustments | 25 | 631 |
Changes in assets and liabilities (net of businesses acquired and divested) | (522) | (1,544) |
Net cash provided by operating activities | 11,762 | 12,265 |
Investing Activities | ||
Purchases of property, plant and equipment | (783) | (1,312) |
Purchases of short-term investments | (57,148) | (22,369) |
Proceeds from sales and redemptions of short-term investments | 31,747 | 20,642 |
Purchases of long-term investments | (6,053) | (5,292) |
Proceeds from sales and redemptions of long-term investments | 4,824 | 639 |
Acquisitions, net of cash acquired | 0 | (962) |
Other investing activities | 508 | (1,401) |
Net cash used in investing activities | (26,905) | (10,055) |
Financing Activities | ||
Increase in short-term borrowings, net | 28,473 | 31,035 |
Principal payments on other short-term borrowings, net | (29,976) | (28,518) |
Proceeds from issuances of long-term debt | 23,997 | 605 |
Principal payments on long-term debt | (910) | (561) |
Purchases of common stock | 0 | (500) |
Cash dividends paid | (4,268) | (6,409) |
Other financing activities | (101) | 41 |
Net cash provided by/(used in) financing activities | 17,215 | (4,307) |
Effect of exchange-rate changes on cash and cash equivalents | 40 | (44) |
Net increase/(decrease) in cash and cash equivalents | 2,112 | (2,141) |
Cash and cash equivalents at beginning of period | 2,122 | 3,406 |
Cash and cash equivalents at end of period | 4,234 | 1,265 |
Supplemental Cash Flow Information - Cash paid during the period for: | ||
Income taxes | 1,748 | 1,707 |
Interest | $723 | $541 |
Basis of Presentation
Basis of Presentation | |
9 Months Ended
Sep. 27, 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 nine-month periods ended August 23, 2009, and August 24, 2008. Subsequent events have been evaluated through November 4, 2009. On October 15, 2009, we completed our acquisition of Wyeth in a cash-and-stock transaction valued, based on the closing market price of Pfizers common stock on that date, at $50.40 per share of Wyeth common stock, or a total of approximately $68 billion. We have taken certain actions and incurred certain costs associated with the transaction prior to the acquisition closing date that are reflected in our financial statements. However, the assets acquired and liabilities assumed from Wyeth, the consideration paid to acquire Wyeth, as well as the results of Wyeths operations, are not reflected in our Condensed Consolidated Financial Statements as of and for the three and nine month periods ended September 27, 2009. See Note 14. Subsequent Event Acquisition of Wyeth for additional information. We made certain reclassifications to prior-period amounts to conform to the third-quarter and nine-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. |
Adoption of New Accounting Poli
Adoption of New Accounting Policies | |
9 Months Ended
Sep. 27, 2009 USD / shares | |
Adoption of New Accounting Policies [Abstract] | |
Adoption of New Accounting Policies [Text Block] | Note 2. Adoption of New Accounting Policies The Financial Accounting Standards Board (FASB) has issued FASB Statement No.168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles (Statement 168). Statement 168 establishes the FASB Accounting Standards Codification (Codification) as a source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. As a result, these changes will have a significant impact on how companies reference U.S. GAAP in their financial statements and in their accounting policies for financial statements issued for interim and annual periods ending after September15, 2009.We have begun the process of implementing the Codification in this quarterly report by providing references to the Codification topics, as appropriate. As of July 1, 2009, we adopted the provisions of FASB Accounting Standards Update (ASU) No. 2009-5 that provides additional guidance on measuring the fair value of liabilities in the absence of observable market information, transfer restrictions and non-performance risk assessment.The adoption of these provisions did not have a significant impact on our consolidated financial statements. As of March 30, 2009, we adopted the provisions of a new accounting standard issued by the FASB that amends the guidance for evaluating and measuring other-than-temporary impairments for available-for-sale or held-to-maturity debt securities. The adoption of these provisions did not have a significant impact on our consolidated financial statements. As of March 30, 2009, we adopted the provisions of a new accounting standard issued by the FASB that provide additional guidance for estimating fair value in inactive markets and the identification of disorderly transactions. We adopted these provisions prospectively and they did not have a significant impact on our consolidated financial statements, but could impact the accounting for acquisitions after adoption, including our acquisition of Wyeth, and other events, balances and transactions measured at fair value. As of January 1, 2009, we adopted several new accounting standards issued by the FASB. The adoption of these new standards did not have a significant impact on our consolidated financial statements.In summary, these provisions: retain the purchase method of accounting for acquisitions, but require a number of changes, including changes in the way assets and liabilities are recognized in purchase accounting. They also change the recognition of assets acquired and liabilities assumed arising from contingencies, require the capitalization of in-process research and development costs at fair value and require the expensing of acquisition-related costs as incurred. The adoption of these provisions will impact the accounting for acquisitions after adoption, including our acquisition of Wyeth. amend 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 |
Acquisitions
Acquisitions | |
9 Months Ended
Sep. 27, 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 third quarter of 2008, we recorded approximately $170 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 nine months of 2008. In the first nine months of 2009, we resolved a contingency associated with CovX and recorded $20 million in Acquisition-related in-process research and development charges. We did not consummate any acquisitions in the first nine months of 2009. |
Collaborative Arrangements
Collaborative Arrangements | |
9 Months Ended
Sep. 27, 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 customers. 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 its 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 Nine Months Ended (millions of dollars) Sept. 27, 2009 Sept. 28, 2008 Sept. 27, 2009 Sept. 28, 2008 Revenues Revenues(a) $ 131 $ 143 $ 409 $ 369 Revenues Alliance revenues (b) 692 571 1,872 1,622 Total Revenues from collaborative arrangements 823 714 2,281 1,991 Cost of sales (c) (40 ) (62 ) (131 ) (129 ) Selling, informational and administrative expenses(d) 27 38 24 57 Research and development expenses(e) (58 ) (51 ) (302 ) (147 ) (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 partners, except that the first nine months of 2009 |
Cost-Reduction Initiatives
Cost-Reduction Initiatives | |
9 Months Ended
Sep. 27, 2009 USD / shares | |
Cost-Reduction Initiatives [Abstract] | |
Pfizer Cost-Reduction Initiatives [Text Block] | Note 5. Pfizer Cost-Reduction Initiatives The following costs were incurred in connection with all of our Pfizer cost-reduction initiatives, which began in 2005, and do not include any amounts related to Wyeth: Three Months Ended Nine Months Ended (millions of dollars) Sept. 27, 2009 Sept. 28, 2008 Sept. 27, 2009 Sept. 28, 2008 Implementation costs(a) $ 80 $ 378 $ 410 $ 1,140 Restructuring charges(b) 61 338 392 1,077 Total costs related to our Pfizer cost-reduction initiatives $ 141 $ 716 $ 802 $ 2,217 (a) For the third quarter of 2009, included in Cost of sales ($23 million), Selling, informational and administrative expenses ($51 million), Research and development expenses ($5 million), and Other (income)/deductions - net ($1 million). For the third quarter of 2008, included in Cost of sales ($172 million), Selling, informational and administrative expenses ($95 million), Research and development expenses ($108 million) and Other (income)/deductions - net ($3 million). For the first nine months of 2009, included in Cost of sales ($144 million), Selling, informational and administrative expenses ($182 million), Research and development expenses ($78 million), and Other (income)/deductions - net ($6 million). For the first nine months of 2008, included in Cost of sales ($520 million), Selling, informational and administrative expenses ($270 million), Research and development expenses ($348 million) and Other (income)/deductions - net ($2 million). (b) Included in Restructuring charges and acquisition-related costs. From the beginning of the Pfizer cost-reduction initiatives in 2005 through September 27, 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 following components of restructuring charges are associated with all of our Pfizer cost-reduction initiatives, which began in 2005, and do not include any amounts related to Wyeth: (millions of dollars) Costs Incurred Through Sept. 27, 2009 Activity Through Sept. 27, 2009(a) Accrual as of Sept. 27, 2009(b) Employee termination costs $ 5,350 $ 4,245 $ 1,105 Asset impairments 1,401 1,401 Other 524 438 86 Total restructuring charges $ 7,275 $ 6,084 $ 1,191 (a) Includes adjustments for foreign currency translation. (b) Included in Other current liabilities ($712 million) and Other non-current liabilities ($479 million). During the third quarter of 2009, we expensed $36million for Employee termination costs, $17 million for Asset impairments and $8 million for Other. During the first nine months of 2009 we expensed $200 million for Employee termination costs, $108 million for Asset impai |
Acquisition-Related Costs
Acquisition-Related Costs | |
9 Months Ended
Sep. 27, 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 acquisition of Wyeth: Three Months Ended Nine Months Ended (millions of dollars) Sept. 27, 2009 Sept. 28, 2008 Sept. 27, 2009 Sept. 28, 2008 Transaction costs (a) $ 19 $ $ 572 $ Pre-integration costs and other(b) 113 28 242 36 Total acquisition-related costs(c) $ 132 $ 28 $ 814 $ 36 (a) Transaction costs include banking, legal, accounting and other costs directly related to our 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 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 in the first half 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 in 2009 primarily represent external, incremental costs of integration planning that are directly related to our acquisition of Wyeth and include costs associated with preparing for systems and other integration activities. 2008 amounts relate to other restructuring charges. (c) Included in Restructuring charges and acquisition-related costs. |
Comprehensive Income
Comprehensive Income (Expense) | |
9 Months Ended
Sep. 27, 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 Nine Months Ended (millions of dollars) Sept. 27, 2009 Sept. 28, 2008 Sept. 27, 2009 Sept. 28, 2008 Net income before allocation to noncontrolling interests $ 2,881 $ 2,284 $ 7,877 $ 7,856 Other comprehensive income/(expense): Currency translation adjustment and other 599 (1,766 ) 2,853 (1,232 ) Net unrealized gains/(losses) on derivative financial instruments (43 ) 13 (210 ) 41 Net unrealized gains/(losses) on available-for-sale securities 86 (25 ) 312 (39 ) Benefit plan adjustments (459 ) 159 (282 ) 244 Total other comprehensive gains/(loss) 183 (1,619 ) 2,673 (986 ) Total comprehensive income before allocation to noncontrolling interests 3,064 665 10,550 6,870 Comprehensive (income)/loss attributable to noncontrolling interests 3 (8 ) (11 ) (31 ) Comprehensive income attributable to Pfizer Inc. $ 3,067 $ 657 $ 10,539 $ 6,839 |
Financial Instruments
Financial Instruments | |
9 Months Ended
Sep. 27, 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) Sept. 27, 2009 Dec. 31, 2008 Selected financial assets measured at fair value on a recurring basis (a) : Trading securities (b) $ 181 $ 190 Available-for-sale debt securities (c) 50,915 30,061 Available-for-sale money market funds 7,581 398 Available-for-sale equity securities, excluding money market funds (c) 252 319 Derivative financial instruments in receivable positions (d) : Interest rate swaps 370 732 Foreign currency swaps 670 128 Foreign currency forward-exchange contracts 489 399 Total 60,458 32,227 Other selected financial assets (e): Held-to-maturity debt securities, carried at amortized cost (c) 3,779 2,349 Short-term loans, carried at cost 791 824 Long-term loans, carried at cost 1,194 1,568 Private equity securities, carried at cost 150 182 Total 5,914 4,923 Total selected financial assets $ 66,372 $ 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 647 153 Foreign currency forward-exchange contracts 1,020 1,083 Total 1,675 1,243 Other financial liabilities (e) , (g): Short-term borrowings, carried at historical proceeds, as adjusted (h) 6,954 9,320 Long-term debt, carried at historical proceeds, as adjusted (i) 32,402 7,963 Total 39,356 17,283 Total selected financial liabilities $ 41,031 $ 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 $159 million as of September 27, 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 September 27, 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 currency contracts used as offsets, namely, for |
Inventories
Inventories | |
9 Months Ended
Sep. 27, 2009 USD / shares | |
Inventories [Abstract] | |
Inventories [Text Block] | Note 9. Inventories The components of inventories follow: (millions of dollars) Sept. 27, 2009 Dec. 31, 2008 Finished goods $ 2,101 $ 2,024 Work-in-process 2,114 1,527 Raw materials and supplies 843 830 Total inventories(a) $ 5,058 $ 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 | |
9 Months Ended
Sep. 27, 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 nine months ended September 27, 2009 follow: (millions of dollars) Pharmaceutical Animal Health Other Total Balance, December 31, 2008 $ 21,317 $ 129 $ 18 $ 21,464 Additions Other(a) 312 19 1 332 Balance, September 27, 2009 $ 21,629 $ 148 $ 19 $ 21,796 (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: Sept. 27, 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 $ 32,312 $ (20,040 ) $ 12,272 $ 31,484 $ (17,673 ) $ 13,811 Brands 1,016 (513 ) 503 1,016 (487 ) 529 License agreements 252 (95 ) 157 246 (78 ) 168 Trademarks 125 (87 ) 38 118 (78 ) 40 Other(a) 524 (304 ) 220 531 (291 ) 240 Total 34,229 (21,039 ) 13,190 33,395 (18,607 ) 14,788 Indefinite-lived intangible assets: Brands 2,865 2,865 2,860 2,860 Trademarks 68 68 70 70 Other 2 2 3 3 Total 2,935 2,935 2,933 2,933 Total identifiable intangible assets $ 37,164 $ (21,039 ) $ 16,125 (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, partially offset by 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 these intangible assets benefit multiple business functions. Amortization expense related to acquired intangible assets that are associated with a single function is included in Cost of sales, Selling, informational and administrative expenses and Research and development expenses, as appropriate. Total amortization expense for finite-lived intangible assets was $626 million for the third quarter of 2009, $652 million for the third quarter of 2008, $1.9 billion for the first nine months of 2009 and $2.2 bill |
Pension and Postretirement Bene
Pension and Postretirement Benefit Plans | |
9 Months Ended
Sep. 27, 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 Sept. 27, Sept. 28, Sept. 27, Sept. 28, Sept. 27, Sept. 28, Sept. 27, Sept. 28, (millions of dollars) 2009 2008 2009 2008 2009 2008 2009 2008 For the Three Months Ended: Service cost $ 51 $ 59 $ 5 $ 5 $ 46 $ 63 $ 7 $ 10 Interest cost 116 115 12 9 85 100 30 35 Expected return on plan assets (115 ) (162 ) (96 ) (111 ) (6 ) (8 ) Amortization of: Actuarial losses 51 8 7 7 6 10 4 6 Prior service costs/(credits) 1 (1 ) (1 ) 1 (1 ) Curtailments and settlements net 47 9 2 8 1 2 Special termination benefits 5 5 3 6 2 3 Net periodic benefit costs $ 156 $ 34 $ 25 $ 28 $ 45 $ 69 $ 38 $ 46 For the Nine Months Ended: Service cost $ 162 $ 179 $ 15 $ 17 $ 133 $ 191 $ 22 $ 30 Interest cost 351 346 37 30 240 300 91 106 Expected return on plan assets (349 ) (487 ) (268 ) (333 ) (19 ) (26 ) Amortization of: Actuarial losses 161 24 23 22 18 32 13 21 Prior service costs/(credits) 2 2 (2 ) (2 ) (2 ) 1 (3 ) 1 Curtailments and settlements net 101 13 15 121 2 4 7 6 Special termination benefits 24 21 5 19 17 11 Net periodic benefit costs $ 452 $ 98 $ 88 $ 188 $ 128 $ 214 $ 128 $ 149 The increase in net periodic benefit costs in the first nine months of 2009, compared to the first nine 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 Pfizer cost-reduction initiatives. The decrease in net periodic benefit costs in the first nine months of 2009, compared to the first nine 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 bene |
Earnings Per Share Attributable
Earnings Per Share Attributable to Common Shareholders | |
9 Months Ended
Sep. 27, 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 Nine Months Ended (in millions) Sept. 27, 2009 Sept. 28, 2008 Sept. 27, 2009 Sept. 28, 2008 EPS Numerator - Basic: Income from continuing operations attributable to Pfizer Inc. $ 2,876 $ 2,253 $ 7,862 $ 7,800 Less: Preferred stock dividends - net of tax 2 2 Income from continuing operations attributable to Pfizer Inc. common shareholders 2,876 2,253 7,860 7,798 Discontinued operations - net of tax 2 25 6 38 Net income attributable to Pfizer Inc. common shareholders $ 2,878 $ 2,278 $ 7,866 $ 7,836 EPS Denominator - Basic: Weighted-average number of common shares outstanding 6,730 6,718 6,727 6,730 EPS Numerator - Diluted: Income from continuing operations attributable to Pfizer Inc. common shareholders $ 2,876 $ 2,253 $ 7,862 $ 7,800 Discontinued operations - net of tax 2 25 6 38 Net income attributable to Pfizer Inc. common shareholders $ 2,878 $ 2,278 $ 7,868 $ 7,838 EPS Denominator - Diluted: Weighted-average number of common shares outstanding 6,730 6,718 6,727 6,730 Common share equivalents: stock options, restricted stock units, stock issuable under other employee compensation plans and convertible preferred stock 32 18 31 20 Weighted-average number of common shares outstanding and common share equivalents 6,762 6,736 6,758 6,750 Stock options that had exercise prices greater than the average market price of our common stock issuable under employee compensation plans (a) 406 499 406 499 (a) These common stock equivalents were outstanding during the three months and nine months ended September 27, 2009 and September 28, 2008, but were not included in the computation of diluted EPS for those periods because their inclusion would have had an anti-dilutive effect. |
Segment Information
Segment Information | |
9 Months Ended
Sep. 27, 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, restructuring charges and acquisition-related costs, and certain significant items, 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 nine months ended September 27, 2009 and September 28, 2008 follow: Three Months Ended Nine Months Ended (millions of dollars) Sept. 27, 2009 Sept. 28, 2008 Sept. 27, 2009 Sept. 28, 2008 Revenues Pharmaceutical $ 10,677 $ 10,976 $ 30,842 $ 32,933 Animal Health 678 708 1,863 2,042 Corporate/Other(a) 266 289 767 975 Total revenues(b) $ 11,621 $ 11,973 $ 33,472 $ 35,950 Segment profit/(loss)(c) Pharmaceutical $ 5,501 $ 5,335 $ 15,868 $ 15,997 Animal Health 187 192 483 512 Corporate/Other(a) (1,717 ) (d) (2,805 ) (f) (5,528 ) (e) (7,440 ) (g) Total segment profit/(loss) $ 3,971 $ 2,722 $ 10,823 $ 9,069 (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 Pfizer cost-reduction initiatives. (b) For the three-and nine-months ended September 28, 2008, includes a $217 million reduction to adjust prior years liabilities for product returns. (c) Segment profit/(loss) equals Income from continuing operations before provision for taxes on income. (d) For the three months ended September 27, 2009, Corporate/Other includes: (i) significant impacts of purchase accounting for acquisitions of $564 million, inclu |
Subsequent Events
Subsequent Events | |
9 Months Ended
Sep. 27, 2009 USD / shares | |
Schedule of Subsequent Events [Abstract] | |
Subsequent Event - Acquisition of Wyeth | Note 14. Subsequent Event Acquisition of Wyeth A. Description of the Transaction On October 15, 2009 (the acquisition date), we acquired all of the outstanding equity of Wyeth in a cash-and-stock transaction, valued at approximately $68 billion, in which each share of Wyeth common stock outstanding, with certain limited exceptions, was cancelled and converted into the right to receive $33.00 in cash without interest and 0.985 of a share of Pfizer common stock. The stock component was valued at $17.40 per share of Wyeth common stock based on the closing market price of Pfizers common stock on the acquisition date, resulting in a total merger consideration value of $50.40 per share of Wyeth common stock. While Wyeth is now a wholly owned subsidiary of Pfizer, the merger of local Pfizer and Wyeth entities may be pending or delayed in various jurisdictions and integration in these jurisdictions is subject to completion of various local legal and regulatory obligations. We have taken certain actions and incurred certain costs associated with the transaction prior to the acquisition date that are reflected in our financial statements. However, the assets acquired and liabilities assumed from Wyeth, the consideration paid to acquire Wyeth, as well as the results of Wyeths operations, are not reflected in our Condensed Consolidated Financial Statements as of and for the three and nine month periods ended September 27, 2009. Wyeths core business was the discovery, development, manufacture and sale of prescription pharmaceutical products for humans. Other operations of Wyeth included consumer health care products (over-the-counter products), vaccines, nutritionals and animal health products. With the acquisition of Wyeth, we are now a more diversified health care company, with product offerings in human, animal, and consumer health, including vaccines, biologics, small molecules and nutrition across developed and emerging markets.The acquisition of Wyeth also strengthens our pipeline of biopharmaceutical development projects to help patients in critical areas, including Alzheimers disease, oncology, pain, neuroscience, diabetes and inflammation. Divestiture of Certain Animal Health Assets We are required to divest certain animal health assets in connection with the regulatory approval process associated with our acquisition of Wyeth.Certain animal health assets have been divested, and the divestitures of certain other animal health assets are pending or planned. These assets will be accounted for at fair value, less costs to sell. Guarantee of Certain Wyeth Debt On October 30, 2009, Pfizer Inc. guaranteed $10.3 billion in aggregate principal amount of certain Wyeth debt. Such debt has a weighted-average maturity in 2021, ranging from 2011 through 2037. The guarantee is an unconditional and irrevocable guarantee of the prompt payment, when due, of any amounts owed in respect of such debt. It is an unsecured unsubordinated obligation of Pfizer Inc. B. Fair Value of Consideration Transferred The table below details the consideration transferred to acquire Wyeth: (In millions, except per share amounts) Conversion Calc |