Exhibit 12
PFIZER INC. AND SUBSIDIARY COMPANIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Nine Months Ended Oct. 3, | Year Ended December 31, | |||||||||||||||||||||||
(in millions, except ratios) | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||
Determination of earnings: | ||||||||||||||||||||||||
Income from continuing operations before provision for taxes on income, noncontrolling interests and cumulative effect of a change in accounting principles | $ | 8,593 | $ | 10,827 | $ | 9,694 | $ | 9,278 | $ | 13,028 | $ | 10,800 | ||||||||||||
Less: | ||||||||||||||||||||||||
Noncontrolling interests | 24 | 9 | 23 | 42 | 12 | 12 | ||||||||||||||||||
Income attributable to Pfizer Inc. | 8,569 | 10,818 | 9,671 | 9,236 | 13,016 | 10,788 | ||||||||||||||||||
Add: | ||||||||||||||||||||||||
Fixed charges | 1,434 | 1,361 | 647 | 541 | 642 | 622 | ||||||||||||||||||
Total earnings as defined | $ | 10,003 | $ | 12,179 | $ | 10,318 | $ | 9,777 | $ | 13,658 | $ | 11,410 | ||||||||||||
Fixed charges: | ||||||||||||||||||||||||
Interest expense(a) | $ | 1,339 | $ | 1,233 | $ | 516 | $ | 397 | $ | 488 | $ | 471 | ||||||||||||
Preferred stock dividend(b) | 4 | 7 | 8 | 11 | 14 | 14 | ||||||||||||||||||
Rents(c) | 91 | 121 | 123 | 133 | 140 | 137 | ||||||||||||||||||
Fixed charges | 1,434 | 1,361 | 647 | 541 | 642 | 622 | ||||||||||||||||||
Capitalized interest | 29 | 34 | 46 | 43 | 29 | 17 | ||||||||||||||||||
Total fixed charges | $ | 1,463 | $ | 1,395 | $ | 693 | $ | 584 | $ | 671 | $ | 639 | ||||||||||||
Ratio of earnings to fixed charges | 6.8 | 8.7 | 14.9 | 16.7 | 20.4 | 17.9 |
All financial information reflects the following as discontinued operations for 2006 and 2005: the Company’s former consumer healthcare business, and certain European generics business.
(a) | Interest expense includes amortization of debt premium, discount and expenses. Interest expense does not include interest related to uncertain tax positions of $290 million for the first nine months of 2010; $337 million for 2009; $333 million for 2008; $331 million for 2007; $200 million for 2006; and $203 million for 2005. |
(b) | Preferred stock dividends are from our Series A convertible perpetual preferred stock held by an Employee Stock Ownership Plan assumed in connection with our acquisition of Pharmacia in 2003. |
(c) | Rents included in the computation consist of one-third of rental expense, which we believe to be a conservative estimate of an interest factor in our leases, which are not material. |