--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K
---------------
(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
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 or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
235 East 42nd Street
New York, New York 10017
(Address of principal executive (Zip Code)
offices)
(212) 573-2323
(Registrant's telephone number including area code)
------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
Common Stock, $.10 par value New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
4% Convertible Subordinated Debentures Due 1997 New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
------------------------
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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in the definitive proxy or information statement
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /
The aggregate market value of the voting stock held by non-affiliates of
the registrant computed by reference to the closing price at which the stock was
sold as of February 27, 1995 was approximately $25.8 billion.
The number of shares outstanding of each of the registrant's classes of
common stock as of February 27, 1995 was: 314,219,772 shares of common stock,
all of one class.
DOCUMENTS INCORPORATED BY REFERENCE
Annual Report to Shareholders for the fiscal year ended December 31, 1994 Parts I, II and IV
Proxy Statement dated March 16, 1995 Part III
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TABLE OF CONTENTS
PART I
ITEM PAGE
----- ----
1. Business...................... 2
General....................... 2
Comparative Segment and
Geographic Data.............. 2
Health Care................... 2
Animal Health................. 4
Consumer Health Care.......... 5
Food Science.................. 5
Financial Subsidiaries........ 6
International Operations...... 6
Tax Matters................... 6
Patents and Research.......... 7
Employees..................... 8
Regulation.................... 8
Raw Materials and Energy...... 9
Environment................... 9
2. Properties.................... 9
3. Legal Proceedings............. 11
4. Submission of Matters to a
Vote of Security Holders..... 14
PART II
5. Market for the Registrant's
Common Equity and Related
Stockholder Matters.......... 15
6. Selected Financial Data....... 15
7. Management's Discussion and
Analysis of Financial
Condition and Results of
Operations................... 16
8. Financial Statements and
Supplementary Data........... 16
9. Changes in and Disagreements
with Accountants on
Accounting and Financial
Disclosure................... 16
PART III
10. Directors and Executive
Officers of the Registrant... 16
11. Executive Compensation........ 22
12. Security Ownership of Certain
Beneficial Owners and
Management................... 22
13. Certain Relationships and
Related Transactions......... 22
PART IV
14. Exhibits, Financial Statement
Schedules and Reports on Form
8-K.......................... 22
Signatures.................... 24
Financial Statement Schedule
Exhibit 11
Exhibit 12
Exhibit 23
PART I
ITEM 1. BUSINESS
GENERAL
Pfizer Inc. (the "Company") is a diversified, research-based health care
company with global operations. The Company discovers, develops, manufactures
and sells technology-intensive products in four business segments: Health Care,
which includes a broad range of prescription pharmaceuticals, orthopedic
implants, medical devices and surgical equipment; Animal Health, which includes
animal health products and feed supplements; Consumer Health Care, which
includes a variety of nonprescription drugs and personal care products; and Food
Science, which includes ingredients for the food and beverage industries.
Additionally, the Company's Financial Subsidiaries include a banking operation
in Europe and a small captive insurance operation.
COMPARATIVE SEGMENT AND GEOGRAPHIC DATA
Comparative segment and geographic data for the three years ended December
31, 1994 are set forth on pages 35 and 36, and in the Note "Financial
Subsidiaries" on page 42 of the Company's Annual Report to Shareholders for the
fiscal year ended December 31, 1994 and are incorporated herein by reference.
HEALTH CARE
The Company's Health Care business is comprised of pharmaceuticals and
hospital products. The Company competes with numerous other health care
companies in the discovery and development of new, technologically advanced
pharmaceutical and hospital products; in seeking use of its products by the
medical profession; and in the sale of its product lines to wholesale and retail
outlets, public and private hospitals, managed care organizations, government
and the medical profession.
Methods of competition in health care vary with the product category. There
are a significant number of innovative companies in the field. A critical factor
in most markets in which the Company competes is the ability to offer
technological advances over competitive products. The productivity of scientific
discovery and clinical development efforts is central to long-term operational
success since there are many companies that specialize in marketing products
that no longer have patent or regulatory protection. Other important factors in
these markets include the ability to transfer knowledge of technological
advances to the medical community, product quality, prompt delivery and price.
The United States pharmaceutical marketplace has in recent years experienced
intensified price competition, brought about by a range of market forces,
including: new product development, increased generic competition, growth of
managed care organizations and legislation requiring pharmaceutical companies to
provide rebates and discounts to government purchasers. Similar competitive
forces, in varying degrees, have also been present in various other countries in
which the Company operates.
Prescription pharmaceutical and hospital products, both in the United States
and abroad, are promoted directly to physicians, as well as to a variety of
managed care organizations. Pharmaceutical products are distributed in large
part to wholesale and retail outlets, hospitals, clinics and managed care
organizations. Hospital products are generally sold directly to medical
institutions and, in some cases, through distributors and surgical supply
dealers.
PHARMACEUTICALS
The Company's worldwide pharmaceutical products are comprised primarily of
drugs which fall into the following major therapeutic classes: cardiovascular
agents, anti-infectives, central nervous system agents, anti-inflammatories and
anti-diabetes agents. In 1994, pharmaceuticals made up 70%
2
of the Company's consolidated net sales, an increase from 69% in 1993 and 63% in
1992. Increases in both United States and international pharmaceutical revenues
in 1994 were principally the result of strong sales of products launched in the
1990s, including Norvasc (amlodipine besylate), Cardura (doxazosin mesylate),
Diflucan (fluconazole), Zithromax (azithromycin) and Zoloft (sertraline).
Cardiovascular products are the Company's largest therapeutic product line
accounting for 29% of the Company's consolidated 1994 net sales, an increase
from 27% in 1993 and 23% in 1992. These products realized sales growth of 20% in
1994, including an 85% increase in sales of Norvasc, an intrinsically once-a-day
calcium channel blocker for hypertension and angina, as well as a 27% increase
in sales of Cardura, an alpha blocker for hypertension. A supplemental New Drug
Application for the use of Cardura in the treatment of benign prostatic
hyperplasia ("BPH") was approved by the United States Food and Drug
Administration ("FDA") in February 1995. Sales of Procardia XL (nifedipine
GITS), a once-a-day calcium channel blocker for hypertension and angina,
increased by less than 1% in 1994. The Company's U.S. cardiovascular sales grew
12% and international sales of cardiovascular agents rose 38% in 1994.
Worldwide anti-infective sales increased 7% in 1994 on the strength of
Diflucan and Zithromax. U.S. anti-infective sales grew 14% while international
sales rose by 3%. Diflucan, an antifungal agent, is indicated for use in a
variety of fungal infections including certain types which afflict AIDS and
immunosuppressed cancer patients. The product also received U.S. approval for
the indication of vaginal candidiasis in 1994. Diflucan posted a sales increase
of 14% in 1994 and Zithromax, an oral antibiotic, posted a sales increase of
43%. Total anti-infective sales accounted for 21% of the Company's consolidated
1994 net sales, compared to 22% in 1993 and 20% in 1992.
Sales of Pfizer's central nervous system agents rose 46% in 1994, reflecting
increased sales of Zoloft, an anti-depressant introduced in the U.S. in 1992.
Central nervous system agents grew to 13% of 1994 net pharmaceutical sales and
9% of the Company's consolidated 1994 net sales.
The Company's anti-inflammatory agents, including Feldene (piroxicam),
accounted for less than 10% of the Company's consolidated 1994 net sales.
The Company's anti-diabetes agents, including Glucotrol (glipizide) and
Glucotrol XL (glipizide GITS), a sustained release anti-diabetic approved in the
U.S. in 1994, accounted for less than 10% of the Company's consolidated 1994 net
sales.
The Company currently is seeking approval by the FDA for the following
products for the indications listed:
PRODUCT INDICATION(S)
----------------------------------- --------------------------------------------------
Cetirizine (launched in Canada in
1991 under the name Reactine;
received "approvable" letter from
the FDA in February 1995 for
cetirizine as an antihistamine)... Low-sedating antihistamine; Pediatric
Enable (tenidap) (known as Enablex
outside the United States)........ Osteo- and rheumatoid arthritis
Unasyn (sulbactam/ampicillin)...... Injectable antibiotic-pediatric
Zithromax (received "approvable"
letter from the FDA in January
1995 for pediatric indications)... Oral antibiotic-pediatric; sexually transmitted
diseases
Zoloft............................. Obsessive-compulsive disorder ("OCD")
3
In addition, the Company has marketing rights in the United States and Japan
to XOMA Corporation, Inc.'s E5, a monoclonal antibody for the treatment of gram
negative sepsis, which is undergoing FDA regulatory review.
To date, Diflucan has been launched in 62 countries and regulatory approvals
have been obtained in 16 additional countries. Norvasc has been launched in 74
countries and approvals have been obtained in 14 additional countries. Cardura
has been launched in 23 countries and approvals have been obtained in 35
additional countries. In addition, Cardura for BPH has been approved in five
countries. Zithromax has been launched in 38 countries and approvals have been
obtained in 24 additional countries. Zoloft has been launched in 31 countries
for depression. Approvals have been obtained in an additional 16 countries.
Applications for regulatory approval for the OCD indication have been made
worldwide and approvals have been obtained in four additional countries,
although it has not yet been launched in these countries. In addition to the
United States, where regulatory approval is being sought for both the osteo- and
rheumatoid arthritis indications, regulatory approvals for Enablex capsules for
rheumatoid arthritis have been applied for in 29 countries and have been
obtained in two countries. No launches of Enablex have yet taken place.
HOSPITAL PRODUCTS
The Company's Hospital Products Group consists of two divisions -- Howmedica
and Medical Devices. Howmedica manufactures and markets orthopedic implants.
Medical Devices consists of three core businesses -- Valleylab, Schneider, and
American Medical Systems and two smaller businesses -- Strato/Infusaid and
Biomedical Sensors.
Howmedica's reconstructive hip, knee and bone cement products are used to
replace joints which have deteriorated as a result of disease or injury. Major
product lines are P.C.A. Hips, ABG Hips, Duracon Knees and Simplex Bone Cement.
Howmedica's trauma products are used by orthopedic surgeons to aid in trauma
surgery and in setting fractures and include the Gamma Nail, Luhr System and
Alta System.
Schneider, an international leader in angioplasty catheters, is also a
market leader in vascular and non-vascular stent applications. In March 1995,
the Company acquired NAMIC U.S.A. Corporation ("NAMIC"), a Company that designs,
manufactures and markets a broad range of single-patient use medical products,
primarily for use in the diagnosis of atherosclerotic cardiovascular disease.
NAMIC's product lines complement those of Schneider and are expected to expand
the opportunities for this business. Valleylab is a worldwide leader in
electrosurgical devices. Valleylab continues to invest in new product lines to
enhance patient and physician safety. American Medical Systems is a leader in
impotence and incontinence implants. Its major product development activities in
1994 were focused on new therapies for the treatment of BPH and urological
strictures.
The merger and the consolidation of operations of Strato Medical
Corporation, a supplier of implantable vascular access ports, and Infusaid, an
innovator of implantable infusion pumps, were completed in 1994. The combined
operation will focus on advanced drug delivery systems. Biomedical Sensors grew
in 1994 reflecting the full year launch of the Paratrend 7 intravascular
continuous blood gas monitoring system, incorporating both electrochemical and
fiberoptic technology.
ANIMAL HEALTH
The Company's Animal Health Group discovers, develops, manufactures and
sells animal health products for the prevention and treatment of diseases in
livestock, poultry and other animals. The principal products are: Dectomax
(doramectin), the Company's new antiparasitic which was first launched in 1993
and is now available in much of Latin America, South Africa and the United
Kingdom; Terramycin LA-200 (oxytetracycline) (marketed as TM/LA outside of North
America), a broad-spectrum injectable antibiotic; the Banminth (pyrantel
tartrate), Nemex (pyrantel pamoate) and Paratect (morantel tartrate)
anthelmintics; Coxistac and Posistac (salinomycin) anticoccidials primarily for
poultry; Terramycin (oxytetracycline), a broad-spectrum antibiotic used for a
variety of
4
animal diseases; Mecadox (carbadox), an antibacterial for pigs; and Advocin
(danofloxacin), the Company's new antibacterial for treating respiratory
diseases in livestock and poultry. Aviax (semduramicin), a potent,
broad-spectrum ionophore anticoccidial used to prevent coccidiosis in poultry,
is to be launched in 1995. Aviax is currently under regulatory review in many
countries, with approvals already received in a number of countries, including
the United States and Japan. In 1995, the Animal Health Group plans a total of
49 new market launches of Dectomax, Advocin and Aviax.
Animal health and nutrition products are sold through drug wholesalers,
distributors, retail outlets and directly to users, including feed
manufacturers, animal producers and veterinarians. Methods of competition with
respect to animal health products vary somewhat but include product innovation,
service, price, quality and effective transfer of technological advances to the
market through advertising and promotion.
In January 1995, the Company acquired the SmithKline Beecham Animal Health
("SBAH") business. SBAH is a world leader in animal vaccines and companion
animal health products, which complement the Company's existing animal health
business in terms of product, species and regional sales coverage. SBAH's
principal products are Stafac (virginiamycin), a feed additive anti-infective
for poultry, cattle and swine; Valbazen (albendazole), a bovine parasiticide;
Filaribits (diethylcarbamazine citrate), a pet parasiticide; and a variety of
vaccines including BoviShield, Leukocell, RespiSure and Vanguard.
A substantial number of other companies manufacture and sell one or more
similar products for animal health use. There are hundreds of producers of
animal health products throughout the world. The Company is a significant
manufacturer of injectable antibiotics, anthelmintics and anticoccidial products
for food animals. With the acquisition of SBAH, the Company became a significant
manufacturer of biologicals and pet products as well.
CONSUMER HEALTH CARE
The Company's Consumer Health Care Group's products include proprietary
health items, baby care products and toiletries, Plax pre-brushing dental rinse,
and a number of products sold only in selected international markets, including
Vanart hair care products in Mexico and Migraleve over-the-counter ("OTC")
migraine medication and the TCP line of antiseptic and germicidal products
marketed primarily in the United Kingdom.
Among the better-known OTC brands manufactured and marketed by Consumer
Health Care are Visine (tetrahydrozoline HCl) eyedrops, Ben-Gay topical
analgesics, Desitin diaper rash ointments, Unisom (doxylamine succinate) sleep
aids, Plax pre-brushing dental rinse, Rid anti-lice products and Barbasol shave
creams and gels. Line extensions introduced in recent years include: Unisom
SleepGels, soft liquid-filled gels with a maximum-strength sleep aid formula,
Daily Care from Desitin, a lotion for the prevention of diaper rash and new
formulations of Rid and Plax.
Many other OTC companies, large and small, manufacture and sell one or more
similar consumer products. The Company is a significant competitor in this
extensive OTC market, and its principal methods of competition include product
quality, product innovation, customer satisfaction, broad distribution
capabilities, significant advertising and promotion and price. In general, the
winning and retaining of consumer acceptance of the Company's consumer products
involve heavy expenditures for advertising, promotion and marketing.
FOOD SCIENCE
The Company's Food Science Group serves the global food processing industry
with innovative food ingredients to meet worldwide trends toward convenient and
healthful foods. Specialty ingredients with quality parameters of appeal, taste
and freshness, coupled with Food Science's technical,
5
application and discovery skills, serve the needs of the worldwide food
industry. Food Science's longer-term goals are linked to the Company's
healthcare strategies by targeting a new generation of food ingredients to allow
better health maintenance through diet.
Food Science's specialty ingredients include: "lite" food ingredients such
as Litesse (polydextrose); flavors (veltols); food protectants (erythorbates);
and brewery ingredients. Currently under development are products for calorie
control utilizing bulking agents; products for fat replacement and reduced
calorie intake from fats; high temperature fat substitutes; intense sweeteners;
food protectants; and flavors. In October 1994, Food Science acquired certain
assets of Flavor Technology Inc., a company that specializes in the design,
customization and manufacture of proprietary flavorings.
The Food Science business competes with other organizations for sales of
most of its ingredients as well as substitute products. Some of these
organizations produce and sell products that are either identical to, or serve
the same function as, ingredients marketed by Food Science. The number of
competitors varies with each particular ingredient. Methods of competition vary
by ingredient but include innovation and quality, prompt delivery, ability to
meet exacting specifications, technical service and cost.
FINANCIAL SUBSIDIARIES
In 1992, the Company completed the transfer of its international banking
operations from Puerto Rico to the Republic of Ireland. This subsidiary, Pfizer
International Bank Europe (PIBE), operates under a full banking license from the
Central Bank of Ireland. This reorganization and transfer was made in
anticipation of the integration and unification of the European Union's
financial markets. PIBE makes loans and accepts deposits in U.S. dollars in
international markets and is an active Euromarket lender with a portfolio of
loans, floating rate notes and Euronotes of high quality corporations and
sovereigns. Loans are made primarily on a short- and medium-term basis, with
floating interest rates.
The Company's insurance operation, The Kodiak Company Limited, reinsures
certain assets, inland transport and marine cargo of Pfizer subsidiaries.
INTERNATIONAL OPERATIONS
Outside the United States, the Company has significant operations, both
direct and through distributors that, in general, parallel its United States
businesses. The Company's international businesses are subject, in varying
degrees, to a number of risks inherent in carrying on business in certain
countries outside the United States, including possible nationalization,
expropriation and other restrictive government actions such as capital
regulations. In addition, changes in the values of currencies take place from
time to time and can be either favorable or unfavorable to the net income and
net assets of the Company. It is impossible to predict future changes in foreign
exchange values or the effect they will have on the Company. The Company
actively manages its foreign exchange risk through routine transactional hedging
programs. In addition, from time to time, the Company engages in hedging
programs designed to protect selected balance sheet positions and future cash
flow exposures. Further information with respect to the financial instruments
used to carry out these hedging programs is incorporated by reference to the
note entitled "Financial Instruments and Concentrations of Credit Risk" found on
pages 42 and 43 of the Annual Report to Shareholders for the fiscal year ended
December 31, 1994.
TAX MATTERS
For tax years beginning after December 31, 1993, the Omnibus Budget
Reconciliation Act of 1993 ("OBRA") reduced by 40% the benefits accruing to the
Company under Section 936 of the Internal
6
Revenue Code (the "Puerto Rico tax credit"). Such tax benefits will decline an
additional 5% per year through 1998. For tax years beginning after December 31,
1997, the Puerto Rico tax credit will be fixed at 40% of the level allowed prior
to the enactment of OBRA.
The Internal Revenue Service ("IRS") is currently auditing the years 1987
through 1989. In October 1994, the Company received a Notice of Proposed
Adjustments from the IRS. The proposed adjustments relate primarily to the tax
accounting treatment of certain swaps and related transactions undertaken by the
Company in 1987 and 1988. These transactions resulted in the receipt of cash in
those years, which the Company duly reported as income for tax purposes. In 1989
(in Notice 89-21), the IRS announced that it believed cash received in certain
swap transactions should be reported as income for tax purposes over the life of
the swaps, rather than when received. In the case of the Company, this would
cause some of the income to be reported in years subject to the Tax Reform Act
of 1986. The IRS proposed adjustment involves approximately $72 million in
federal taxes for the years 1987 through 1989, plus interest. If the proposed
adjustment is carried through to the maturity of the transactions in 1992, an
additional tax deficiency of approximately $86 million, plus interest, would
result. The Company disagrees with the proposed adjustment and continues to
believe that its tax accounting treatment for the transactions in question was
proper.
While it is impossible to determine the final disposition, the Company is of
the opinion that the ultimate resolution of this matter should not have a
material adverse effect on the financial position or the results of operations
of the Company.
The Company has satisfactorily resolved all issues with the Internal Revenue
Service for the years through 1986. The Company believes that its accrued tax
liabilities are adequate for all open years.
PATENTS AND RESEARCH
The Company owns or is licensed under a number of patents relating to its
products and manufacturing processes which, in the aggregate, are believed to be
of material importance in its business. Based on current product sales, and in
view of the vigorous competition with products sold by others, the Company does
not consider any single patent or related group of patents to be significant in
relation to the enterprise as a whole, except for the Procardia XL, Zithromax,
Diflucan, Zoloft and Norvasc patents. Procardia XL employs a novel drug delivery
system developed and patented by Alza Corporation. The Company holds an
exclusive license to use this delivery system with nifedipine until 2003.
Zithromax is a novel, broad spectrum macrolide antibiotic patented by Pliva and
exclusively licensed to the Company for sales and marketing in all major
countries of the world. The U.S. product patent on Zithromax (azithromycin)
expires in 2005. The Company holds patents relating to Diflucan, Zoloft, and
Norvasc.
The Company spent in excess of $1.1 billion in 1994, $974 million in 1993,
and $863 million in 1992 on Company-sponsored research and development
throughout the world. In 1995, the Company plans to spend approximately $1.4
billion on research and development. In 1991, the Company also established
Pfizer Research and Development Company (PRDCO) in Ireland. In 1992, the Company
provided PRDCO with an initial capitalization of approximately $1 billion to
enable PRDCO to engage in research and development through a cost-sharing
arrangement with Pfizer Ltd. (a Pfizer U.K. subsidiary) in exchange for PRDCO's
receiving a portion of property rights relating to the development of specific
products.
Competition in research, involving the development of new products and
processes and the improvement of existing products and processes, is
particularly significant and results from time to time in product and process
obsolescence. The development of new and improved products is important to the
Company's success in all areas of its business.
7
EMPLOYEES
Approximately 40,800 persons were employed by the Company, as of December
31, 1994, throughout the world as follows: United States, 15,700; Europe,
11,600; Asia, 7,500; Canada/Latin America, 4,500; and Africa/Middle East, 1,500.
The Company has a good relationship with its employees.
REGULATION
Most of the Company's businesses are subject to varying degrees of
governmental regulation in the countries in which operations are conducted. Such
regulation in the United States involves a more complex product approval process
than in many other countries and therefore often results in later marketing
clearances and a corresponding increase in the expense of introducing new
products in the United States. In many international markets, prices of
pharmaceuticals are controlled by the government.
The 1990 Omnibus Budget Reconciliation Act requires pharmaceutical companies
to extend rebates to state Medicaid agencies based on each state's reimbursement
of pharmaceutical products under the Medicaid program. The Veterans Health Care
Act, passed in 1992, requires manufacturers to provide discounts on purchases of
pharmaceutical products by the Department of Veterans Affairs (DVA) and by
certain entities funded by the Public Health Service. The Company's net sales in
1994 were reduced by Medicaid rebates and rebates under related state programs
which amounted to $74 million. In addition, in 1994, Pfizer provided $56 million
in discounts to the federal government, primarily to the DVA and the Department
of Defense, for drugs purchased in accordance with the Veterans Health Care Act.
In 1990, the FDA announced a call for data for ingredients contained in
products bearing anti-plaque and related claims. The call for data is part of
the FDA's ongoing review, begun in 1972, of over-the-counter drug products. The
FDA is taking this administrative approach to evaluate the safety and efficacy
of anti-plaque products and has not proceeded further with regard to 1989
regulatory letters it issued to the Company and several other manufacturers of
products bearing anti-plaque claims. The Company submitted its response to the
call for data relating to Plax, its pre-brushing dental rinse, on June 17, 1991.
This filing, as well as filings of other manufacturers, is still under review
and is currently being considered by an FDA Advisory Panel.
On January 1, 1995, the new European Medicines Evaluation Agency ("EMEA")
instituted a new drug-approval process for the member states of the European
Union ("EU"). The EMEA provides two new drug-approval procedures. A "centralized
procedure" allows for a single central approval that is valid in all EU states.
A "decentralized procedure" provides for approval in all EU states through
recognition of a first approval in one member state. The centralized procedure
must be used for all biotechnology products (including products derived from
recombinant DNA technology, hybridoma and monoclonal antibody methods) and is
available at the applicant's option for other products. While it is envisioned
that it will take several years for EMEA to be fully operational, it is expected
that a harmonized, centralized regulatory agency in Europe would offer benefits
to the human and veterinary drug industries.
During 1994, Congress continued debate on reform of the U.S. health care
system. While numerous health care reform bills were introduced, including the
Administration's "Health Security Act," Congress was unable to reach consensus
on an approach to health care reform. Health care has been identified by the
current Republican Congressional majority as a long-term priority item. The
focus in Congress on balancing the Federal budget may have a more immediate
impact on health care, however, if the Medicare and Medicaid programs are
targeted for significant cuts. Medicaid managed care systems driven by budget
concerns are already under consideration in several states. If the Medicare and
Medicaid programs implement managed care systems that severely restrict the
access of program participants to innovative new medicines, this could have a
significant adverse effect on the Company.
8
RAW MATERIALS AND ENERGY
Raw materials essential to the business of the Company and its subsidiaries
are generally obtainable from multiple sources. The Company did not experience
any significant restrictions on availability of raw materials or supplies during
the last year and none is expected in 1995. Energy was available to the Company
in sufficient quantities to meet Company requirements and this condition is
expected to continue in 1995.
ENVIRONMENT
Certain of the Company's operations are affected by Federal, State and local
laws and regulations relating to environmental quality. The Company has made and
intends to continue to make the necessary expenditures for environmental
protection. Compliance with such laws and regulations is not expected to have a
material adverse effect on the financial position or the results of operations
of the Company.
UNITED STATES ALL OTHER TOTAL
---------------- ----------- --------
(MILLIONS OF DOLLARS)
Environment-related capital expenditures:
1994 Actual..................................... $ 41.1 $13.7 $54.8
1995 Estimated.................................. 56.8 4.6 61.4
1996 Estimated.................................. 65.8 1.4 67.2
Other environmental-related expenses:
1994 Actual..................................... 34.7 11.6 46.3
1995 Estimated.................................. 37.9 13.9 51.8
ITEM 2. PROPERTIES
Following is a summary description of the Company's principal plants and
properties:
Groton Plant and Research Laboratories -- These facilities are located in
Groton, Connecticut, and surrounding towns, on approximately 649 acres, and
include a number of buildings of one to eight stories, containing approximately
3,250,000 square feet of floor space either existing or under construction.
Principal products produced at Groton are bulk pharmaceuticals, specialty
chemicals and food ingredients. Since acquiring the plant in 1946, the Company
has made major improvements, including construction of production facilities, a
powerhouse and generating equipment and a large research complex adjacent to the
plant. In 1992, major improvements to plant facilities were initiated, including
a process effluent and waste water treatment facility and a major pharmaceutical
capacity replacement project. Both projects are expected to be completed by
1996. In the research complex, construction of significant new buildings is
continuing, with major enlargement (116,000 square feet) of the pharmaceutical
research and development facilities. These improvements are also scheduled for
completion by 1996. Construction was completed in 1993 on several research
expansions including a 156,000-square-foot drug-safety building addition, a
30,000-square-foot central-utilities building, and a 442,000-square-foot parking
facility.
Brooklyn Plant -- The Company's site in Brooklyn, New York, is on
approximately 17 acres, including a number of buildings containing approximately
888,000 square feet of floor space. The primary operations, pharmaceutical
dosage-form manufacturing and packaging, are housed in an eight-story production
facility containing 545,000 square feet.
Vigo Plant and Research Facility -- These facilities, located in Vigo County
near Terre Haute, Indiana, are on a site of approximately 2,100 acres owned in
fee and consist of a number of buildings of
9
one to five stories containing approximately 740,000 square feet of floor space.
Principal products produced at this plant are pharmaceutical products, bulk
antibiotics, polydextrose and chymosin. Animal health research is also performed
on this site.
Barceloneta Plant -- Pfizer Pharmaceuticals Inc. is located on an 89-acre
property owned by the Company at Barceloneta, Puerto Rico. An additional 151
acres of land adjacent to this property were purchased in 1991 for future
utilization. Acquisition of an adjacent 9-acre site was recently approved. The
facilities contain four major manufacturing buildings (of two to four floors)
and twelve support buildings with a total approximate area of 403,000 square
feet of floor space; and ten additional facilities (tank farms, electrical
substations, cooling towers, etc.) with an approximate area of 81,000 square
feet, for a total plant facilities area of approximately 484,000 square feet.
The plant houses organic synthesis manufacturing, pharmaceutical dosage-form
manufacturing and packaging facilities and the required service areas, such as
bulk and drum liquid storage, laboratories, utilities, engineering shops,
employee services and administration.
Other U.S. Locations -- The Company also operates 15 other production
facilities in the United States and has five regional sales and distribution
centers in various parts of the country which are owned in fee.
The Company's world headquarters is located at 235 East 42nd Street, New
York, NY. The Company owns this 33-story office building which contains
approximately 650,000 square feet. The building stands on slightly less than one
acre of land which is leased under an agreement expiring in 2057. In 1983, the
Company purchased a nine-story office building located at 219 East 42nd Street,
containing approximately 263,400 square feet which is immediately adjacent to
the Company's headquarters. The Company also leases additional office space in
New York City consisting of approximately 111,000 square feet.
Outside the United States -- The Company's major manufacturing facilities
outside the United States are located in Australia, Belgium, Brazil, France,
Germany, Great Britain, India, Ireland, Italy, Japan, Mexico and Spain. The
plants in these twelve countries have an aggregate of over two million square
feet of floor space. Other plants are located in over 17 additional countries
located in various parts of the world.
Sandwich -- A large medicinal and animal health research unit is located in
Sandwich, England, where an 82,000-square-foot clinical-sciences building became
operational in 1993 and a 99,000-square-foot animal-sciences building became
operational in early 1994. Construction is in progress on a 97,000-square-foot
pharmaceutical sciences building due for occupancy in 1996 and also on a
120,000-square-foot administration and services building which is scheduled for
completion in early 1995. An effluent treatment plant is also under construction
at this location.
Ringaskiddy -- The Ringaskiddy facility in Ireland comprises three important
bulk organic synthesis manufacturing plants, two of which are now in full
operation. The third has just been completed and is scheduled for startup in
early 1995. Ringaskiddy manufactures the majority of bulk products required by
the International Pharmaceuticals Group in its worldwide dosage-form operations.
These manufacturing plants are computer controlled and among them provide
considerable flexibility in supplying both the current and foreseeable
requirements for the Group. Ringaskiddy's manufacturing operations are
self-supported by a modern and efficient infrastructure, providing such services
as utilities, quality assurance, environmental treatment systems and
maintenance.
Nagoya -- The Nagoya facility in Japan encompasses several significant
individual operations in addition to its research function. Fermentation, bulk
organic synthesis and dosage-form manufacturing are important to the supply of
the Company's operations in Japan (the country with the second largest sales
after the United States) as well as elsewhere in the world. Various facilities
on the site are computer controlled and, similar to Ringaskiddy, the
manufacturing operations are self-supported by utility services, quality
assurance, environmental treatment systems and maintenance functions.
10
In addition to the facilities outlined above, research laboratories also
exist in France and Germany.
The Company's major manufacturing facilities in the U.S. and the other
locations referred to above manufacture various products for all of the
Company's businesses. These properties are maintained in good operating
condition and the manufacturing facilities have capacities considered adequate
to meet the Company's needs.
ITEM 3. LEGAL PROCEEDINGS
The Company is involved in a number of claims and litigations, including
product liability claims and litigations considered normal in the nature of its
businesses. These include suits involving various pharmaceutical and hospital
products that allege either reaction to or injury from use of the product.
As previously disclosed, numerous claims have been brought against the
Company and Shiley Incorporated, a wholly owned subsidiary, alleging either
personal injury from fracture of 60(degree) or 70(degree) Shiley Convexo-Concave
(C/C) heart valves, or anxiety that properly functioning implanted valves might
fracture in the future or, in a few cases, personal injury from a prophylactic
replacement of a functioning valve.
In an attempt to resolve all claims alleging anxiety that properly
functioning valves might fracture in the future, the Company entered into a
settlement agreement in January 1992 in Bowling v. Shiley et al., a case brought
in the United States District Court for the Southern District of Ohio that
establishes a worldwide settlement class of people with C/C heart valves and
their spouses, except those who elect to exclude themselves. The settlement
provides for a Consultation Fund of $90 to $140 million (depending on the number
of claims filed) from which valve recipients who make claims will receive
payments that are intended to cover their cost of consultation with
cardiologists or other health care providers with respect to their valves. The
settlement agreement establishes a second fund of at least $75 million to
support C/C valve-related research, including the development of techniques to
identify valve recipients who may have significant risk of fracture, and to
cover the unreimbursed medical expenses that valve recipients may incur for
certain procedures related to the valves. The Company's obligation as to
coverage of these unreimbursed medical expenses is not subject to any dollar
limitation. Following a hearing on the fairness of the settlement, it was
approved by the court on August 19, 1992. An appeal of the court's approval of
the settlement was dismissed on December 20, 1993 by the United States Court of
Appeals for the Sixth Circuit. A motion for rehearing en banc was denied on
March 8, 1994, and the U.S. Supreme Court denied a writ of certiorari on October
4, 1994. It is expected that most of the costs arising from the Bowling class
settlement will be covered by insurance and the proceeds of the sale of certain
product lines of the Shiley businesses in 1992. Of approximately 900 implantees
(and spouses of some of them) who opted out of the Bowling settlement class,
eight have cases pending; approximately 792 have been resolved; and
approximately 100 have never filed a case or claim.
Several claims relating to elective reoperations of valve recipients are
currently pending. Some of these claims relate to elective reoperations covered
by the Bowling class settlement described above, and, therefore, the claimants
are entitled to certain benefits in accordance with the settlement. Such
claimants, if they irrevocably waive all of the benefits of the settlement, may
pursue separate litigation to recover damages in spite of the class settlement.
The Company is defending these claims.
Generally, the plaintiffs in all of the pending heart valve litigations
discussed above seek money damages. Based on the experience of the Company in
defending these claims to date, including available insurance and reserves, the
Company is of the opinion that these actions should not have a material adverse
effect on the financial position or the results of operations of the Company.
On September 30, 1993, Dairyland Insurance Co., a carrier providing excess
liability coverage ("excess carrier") in the early 1980s, commenced an action in
the California Superior Court in Orange County, seeking a declaratory judgment
that it was not obligated to provide insurance coverage for
11
Shiley heart valve liability claims. On October 8, 1993, Pfizer filed
cross-complaints against Dairyland and filed third-party complaints against 73
other excess carriers who sold excess liability policies covering periods from
1978 to 1985, seeking damages and declaratory judgments that they are obligated
to pay for defense and indemnity to the extent not paid by other carriers.
The Company's operations are subject to federal, state and local
environmental laws and regulations. Under the Comprehensive Environmental
Response Compensation and Liability Act of 1980, as amended ("CERCLA" or
"Superfund"), the Company has been designated as a potentially responsible party
by the United States Environmental Protection Agency with respect to certain
waste sites with which the Company may have had direct or indirect involvement.
Similar designations have been made by some state environmental agencies under
applicable state superfund laws. Such designations are made regardless of the
extent of the Company's involvement. There are also claims that the Company is a
potentially responsible party or participant with respect to several waste sites
in Canada. Such claims have been made by the filing of a complaint, the issuance
of an administrative directive or order, or the issuance of a notice or demand
letter. These claims are in various stages of administrative or judicial
proceedings. They include demands for recovery of past governmental costs and
for future investigative or remedial actions. In many cases, the dollar amount
of the claim is not specified. In most cases, claims have been asserted against
a number of other entities for the same recovery or other relief as was asserted
against the Company. The Company is currently participating in remedial action
at a number of sites under federal, state and local laws.
To the extent possible with the limited amount of information available at
this time, the Company has evaluated its responsibility for costs and related
liability with respect to the above sites and is of the opinion that the
Company's liability with respect to these sites should not have a material
adverse effect on the financial position or the results of operations of the
Company. In arriving at this conclusion, the Company has considered, among other
things, the payments that have been made with respect to the sites in the past;
the factors, such as volume and relative toxicity, ordinarily applied to
allocate defense and remedial costs at such sites; the probable costs to be paid
by the other potentially responsible parties; total projected remedial costs for
a site, if known; existing technology; and the currently enacted laws and
regulations. The Company anticipates that a portion of these costs and related
liability will be covered by available insurance.
Through the early 1970s, Pfizer (Minerals Division) and Quigley Company,
Inc., a wholly owned subsidiary, sold a minimal amount of one construction
product and several refractory products containing some asbestos. These sales
were discontinued thereafter. Although these sales represented a minor market
share, the Company has been named as one of a number of defendants in numerous
lawsuits. These actions, and actions related to the Company's sale of talc
products in the past, claim personal injury resulting from exposure to
asbestos-containing products, and nearly all seek general and punitive damages.
In these actions, the Company or Quigley is typically one of a number of
defendants, and both are members of the Center for Claims Resolution (the
"CCR"), a joint defense organization that is defending these claims. The Company
and Quigley are responsible for varying percentages of defense and liability
payments for all members of the CCR. Prior to September 1990, the cases
involving talc products were defended by the CCR, but the Company is now
overseeing its own defense of these actions. A number of cases alleging property
damage from asbestos-containing products installed in buildings have also been
brought against Pfizer.
On January 15, 1993, a class action complaint and settlement agreement were
filed in the United States District Court for the Eastern District of
Pennsylvania involving all personal injury claims by persons who have been
exposed to asbestos-containing products, but who have not yet filed a personal
injury action against the 20 members of the CCR. The settlement agreement
establishes a claims-processing mechanism that will provide historic settlement
values upon proof of impaired medical condition as well as claims-processing
rates over 10 years. In addition, the shares allocated to the CCR members
eliminate joint and several liability. The court has determined that the
settlement is fair and reasonable. Subsequently, the court entered an injunction
enforcing its determination. An appeal from that injunction is pending in the
United States Court of Appeals for the Third Circuit.
12
Concurrently with the filing of the future claims class action, the CCR
settled approximately 16,360 personal injury cases on behalf of Pfizer and
Quigley. It is the CCR's intention to settle remaining and opt-out cases and
claims on a similar basis to past settlements. The total pending number of cases
as of December 31, 1994 is 14,543 asbestos cases against Quigley, 5,643 asbestos
cases against Pfizer Inc. and 147 talc cases against Pfizer Inc.
Costs incurred by the Company in defending the asbestos personal injury
claims and the property damage claims, as well as settlements and damage awards
in connection therewith, are largely insured against under policies issued by
several primary insurance carriers and a number of excess carriers. The Company
believes that its costs incurred in defending and ultimately disposing of the
asbestos personal injury claims, as well as the property damage claims, will be
largely covered by insurance policies issued by carriers that have agreed to
provide coverage, subject to deductibles, exclusions, retentions and policy
limits. In connection with the future claims settlement, the defendants have
commenced a third-party action against their respective excess insurance
carriers that have not agreed to provide coverage seeking a declaratory judgment
that (a) the future claims settlement is fair and reasonable as to the carriers;
(b) the carriers had adequate notice of the future claims class settlement; and
(c) the carriers are obligated to provide coverage for asbestos personal injury
claims. Based on the Company's experience in defending the claims to date and
the amount of insurance coverage available, the Company is of the opinion that
the actions should not ultimately have a material adverse effect on the
financial position or the results of operations of the Company.
In connection with the divestiture of Minerals Technologies Inc. (MTI), to
which the net assets of the Pfizer Minerals and the Quigley businesses were
transferred, Pfizer and Quigley agreed to indemnify MTI against any liability
with respect to products manufactured and sold prior to October 30, 1992, as
well as against liability for certain environmental matters.
The Company has been named, together with numerous other manufacturers of
brand name prescription drugs and certain companies that distribute brand name
prescription drugs, in suits brought by retail pharmacy companies in federal and
state courts. The federal cases consist principally of a class action by retail
pharmacies (including approximately 30 named plaintiffs), as well as additional
actions by approximately 1,900 individual retail pharmacies (the "individual
actions"). These cases, all of which have been or are in the process of being
transferred to the United States District Court for the Northern District of
Illinois and coordinated for pretrial purposes, allege that the defendant drug
manufacturers have violated the Sherman Act in that they have unlawfully agreed
with each other (and, as alleged in some cases, with wholesalers) not to extend
to retail pharmacy companies the same discounts allegedly extended to managed
care companies, mail order pharmacies and certain other institutional
purchasers. In addition, the individual actions also allege violations of the
Robinson-Patman Act in that the manufacturers allegedly have unlawfully
discriminated against retail pharmacy companies by not extending them such
discounts.
The federal court has certified a class consisting of all persons or
entities who, since October 15, 1989, bought prescription brand name drugs from
any manufacturer or wholesaler defendant, but specifically excluding government
entities, mail order pharmacies, HMOs, hospitals, clinics and nursing homes. The
federal court had denied a motion for certification made by a purported class of
Alabama consumers (in a case that was originally filed in state court, then
removed to federal court). In the state cases, motions for class certification
are anticipated, except in one Alabama action still in state court, where
plaintiffs have stated that they intend to amend their complaint to withdraw
their class allegations.
The Company believes that these cases are without merit and is vigorously
defending them.
FDA administrative proceedings relating to Plax are pending, principally an
industry-wide call for data on all anti-plaque products by the FDA. The call for
data notice specified that products that have been marketed for a material time
and to a material extent may remain on the market pending FDA review of the
data, provided the manufacturer has a good faith belief that the product is
generally recognized as safe and effective and is not misbranded. The Company
believes that Plax satisfied these
13
requirements and prepared a response to the FDA's request, which was filed on
June 17, 1991. This filing, as well as the filings of other manufacturers, is
still under review and is currently being considered by an FDA Advisory
Committee.
A consolidated class action on behalf of persons who allegedly purchased
Pfizer common stock during the March 24, 1989 through February 26, 1990 period
is pending in the United States District Court for the Southern District of New
York. This lawsuit, which commenced on July 13, 1990, alleges that the Company
and certain officers and former directors and officers violated federal
securities law by failing to disclose potential liability arising out of
personal injury suits involving Shiley heart valves and seeks damages in an
unspecified amount. The defendants in this action believe that the suit is
without merit and are vigorously defending it. A derivative action commenced on
April 2, 1990 against certain directors and officers and former directors and
officers alleging breaches of fiduciary duty and other common law violations in
connection with the manufacture and distribution of Shiley heart valves is
pending in the Superior Court, Orange County, California. The complaint seeks,
among other forms of relief, damages in an unspecified amount. The defendants in
the action believe that the suit is without merit and are vigorously defending
it.
On January 28, 1993, a purported class action entitled Kearse v. Pfizer Inc.
and Howmedica Inc. was commenced in the United States District Court for the
Northern District of Ohio. Howmedica Inc. ("Howmedica") is a wholly owned
subsidiary of the Company. The action sought monetary and injunctive relief,
including medical monitoring, on behalf of patients implanted with the Howmedica
P.C.A. one-piece acetabular hip component, which was manufactured by Howmedica
from 1983 to 1990. The complaint alleged that the prostheses were defectively
designed and manufactured and posed undisclosed risks to implantees. On August
3, 1993, a virtually identical purported class action, Bradshaw/Davids v. Pfizer
Inc. and Howmedica Inc., was brought and the Kearse case was subsequently
voluntarily dismissed. The district court has denied the plaintiffs' motion to
certify the case as a class action. The Company believes that the suit is
without merit and is vigorously defending it.
During 1994, seven purported class actions were filed against American
Medical Systems ("AMS") in federal courts in South Carolina (later transferred
to Minnesota), California, Minnesota (2), Indiana, Ohio and Louisiana. In
January 1995, an additional purported class action was filed in state court in
Louisiana, replicating the federal suit. The California and Indiana suits and
one Minnesota suit also name Pfizer Inc. as a defendant, based on its ownership
of AMS. The suits seek monetary and injunctive relief on the basis of
allegations that implantable penile prostheses are prone to unreasonably high
rates of mechanical failure and/or various autoimmune diseases as a result of
silicone materials. On September 30, 1994, the federal Judicial Panel on
Multidistrict Litigation denied the various plaintiffs' motions to consolidate
or coordinate the cases for pretrial proceedings. On February 28, 1995, the
Court in the Ohio suit conditionally granted plaintiffs' motion for class
certification and on March 3, 1995, the Court in the California suit denied
plaintiffs' motion for class certification. The Company believes the suits are
without merit and is vigorously defending them.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
14
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Information required by this item is incorporated by reference to the
"Quarterly Consolidated Statement of Income (Unaudited)" found on page 53 and to
page 58 of the Annual Report to Shareholders for the fiscal year ended December
31, 1994.
ITEM 6. SELECTED FINANCIAL DATA
SELECTED CONSOLIDATED STATEMENT OF INCOME DATA
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------
1994 1993 1992 1991 1990
----------- ------------- -------------- ------------- ----------
(MILLIONS OF DOLLARS, EXCEPT PER SHARE DATA)
Net sales............................... $ 8,281.3 $ 7,477.7 $ 7,230.2 $ 6,950.0 $ 6,406.0
----------- ------------- -------------- ------------- ----------
----------- ------------- -------------- ------------- ----------
Income before cumulative effect of
accounting changes..................... $ 1,298.4 $ 657.5(a) $ 1,093.5(b) $ 722.1(d) $ 801.2
Cumulative effect of accounting
changes................................ -- -- (282.6)(c) -- --
----------- ------------- -------------- ------------- ----------
Net income.............................. $ 1,298.4 $ 657.5(a) $ 810.9(b) $ 722.1(d) $ 801.2
----------- ------------- -------------- ------------- ----------
----------- ------------- -------------- ------------- ----------
Earnings per common share (e):
Income before cumulative effect of
accounting changes..................... $ 4.19 $ 2.05 $ 3.25 $ 2.13 $ 2.38
Cumulative effect of accounting
changes................................ -- -- (.84)(c) -- --
----------- ------------- -------------- ------------- ----------
Net income.............................. $ 4.19 $ 2.05 $ 2.41 $ 2.13 $ 2.38
----------- ------------- -------------- ------------- ----------
----------- ------------- -------------- ------------- ----------
Cash dividends paid per common share
(e).................................... $ 1.88 $ 1.68 $ 1.48 $ 1.32 $ 1.20
----------- ------------- -------------- ------------- ----------
----------- ------------- -------------- ------------- ----------
SELECTED CONSOLIDATED BALANCE SHEET DATA
DECEMBER 31,
---------------------------------------------------------------------
1994 1993 1992 1991 1990
----------- ------------- -------------- ------------- ----------
(MILLIONS OF DOLLARS)
Total assets............................ $ 11,098.5 $ 9,330.9 $ 9,590.1 $ 9,634.6 $ 9,052.0
----------- ------------- -------------- ------------- ----------
----------- ------------- -------------- ------------- ----------
Long-term debt.......................... $ 604.2 $ 570.5 $ 571.3 $ 396.6 $ 193.3
----------- ------------- -------------- ------------- ----------
----------- ------------- -------------- ------------- ----------
<FN>
------------------------
(a) Includes pre-tax charges of $690.2 million for restructuring programs,
$121.7 million of unusual items relating to the write-down of goodwill and
a pre-tax gain of $59.9 million on the sale of a business.
(b) Includes a pre-tax gain of $258.6 million representing the gain on the sale
of certain businesses and pre-tax charges of $204.6 million for
restructuring, consolidating and streamlining. In addition, it includes
pre-tax curtailment gains of $56.5 million associated with postretirement
benefits of divested operations.
(c) Represents a pre-tax charge of $520.5 million ($312.6 million after-tax or
$.93 per share) for the cumulative effect of adopting Statement of
Financial Accounting Standards ("SFAS") No. 106, Employers' Accounting for
Postretirement Benefits Other Than Pensions and a credit of $30.0 million
($.09 per share) for the cumulative effect of adopting SFAS No. 109,
Accounting for Income Taxes.
(d) Includes an after-tax special charge of $195.0 million for potential future
Shiley C/C heart valve fracture claims.
(e) In 1991, the Company effected a two-for-one stock split of its common
stock. The year ended December 31, 1990 has been restated to reflect this
stock split.
15
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Information required by this item is incorporated by reference to the
"Financial Review" on pages 26 through 33 of the Annual Report to Shareholders
for the fiscal year ended December 31, 1994.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information required by this item is incorporated by reference to the
"Independent Auditors' Report" found on page 34 and to pages 35 through 53 of
the Annual Report to Shareholders for the fiscal year ended December 31, 1994.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information with regard to the Directors of the Company, including those of
the following Executive Officers who are Directors, is incorporated by reference
to pages 3 through 7 of the Company's Proxy Statement dated March 16, 1995.
The Board of Directors elects officers at its first meeting after each
annual meeting of shareholders. The Board may also elect officers from time to
time throughout the year. Elected officers of the Company hold office until
their successors are chosen or until their earlier death, resignation or
removal.
AGE AS OF THE DATE OF THE
COMPANY'S ANNUAL MEETING POSITIONS AND OFFICES
NAME APRIL 27, 1995 WITH COMPANY PRESENTLY HELD
--------------------------------- ----------------------------- ------------------------------------------------------
Brian W. Barrett................. 55 Vice President; President, Northern Asia, Australasia
and Canada -- International Pharmaceuticals Group
Edward C. Bessey................. 60 Vice Chairman; President -- U.S. Pharmaceuticals
Group; Director; Member of the Corporate Management
Committee
M. Kenneth Bowler................ 52 Vice President -- Federal Government Relations
C. L. Clemente................... 57 Senior Vice President -- Corporate Affairs; Secretary
and Corporate Counsel; Member of the Corporate
Management Committee
Bruce R. Ellig................... 58 Vice President -- Personnel
Donald F. Farley................. 52 Vice President; President -- Food Science Group
David M. Fitzgerald.............. 61 Vice President; Executive Vice President -- Hospital
Products Group, and President, Howmedica Division
George A. Forcier................ 56 Vice President -- Quality Control
P. Nigel Gray.................... 56 Vice President; Executive Vice President -- Hospital
Products Group, and President, Medical Devices
Division
16
AGE AS OF THE DATE OF THE
COMPANY'S ANNUAL MEETING POSITIONS AND OFFICES
NAME APRIL 27, 1995 WITH COMPANY PRESENTLY HELD
--------------------------------- ----------------------------- ------------------------------------------------------
William E. Harvey................ 64 Vice President; Treasurer (Retired on December 31,
1994)
Gary N. Jortner.................. 50 Vice President; Group Vice President, Disease
Management -- U.S. Pharmaceuticals Group
Karen L. Katen................... 46 Vice President; Executive Vice President -- U.S.
Pharmaceuticals Group
Alan G. Levin.................... 33 Treasurer
Henry A. McKinnell............... 52 Executive Vice President and Chief Financial Officer;
President -- Hospital Products Group; Member of the
Corporate Management Committee
Brower A. Merriam................ 60 Vice President; President -- Animal Health Group
John C. Mesloh................... 60 Vice President -- Corporate Purchasing
Victor P. Micati................. 55 Vice President; President, Europe -- International
Pharmaceuticals Group
Paul S. Miller................... 56 Senior Vice President; General Counsel; Member of the
Corporate Management Committee
George M. Milne, Jr.............. 51 Vice President; President -- Central Research
Robert Neimeth................... 59 Executive Vice President; President -- International
Pharmaceuticals Group; Member of the Corporate
Management Committee
John F. Niblack.................. 56 Executive Vice President -- Research and Development;
Member of the Corporate Management Committee
William J. Robison............... 59 Vice President; President -- Consumer Health Care
Group
Herbert V. Ryan.................. 58 Controller
Craig Saxton..................... 52 Vice President; Executive Vice President -- Central
Research
Gerald H. Schulze................ 47 Vice President -- Pharmaceutical Planning
Robert L. Shafer................. 62 Vice President -- Public Affairs
David L. Shedlarz................ 47 Vice President -- Finance
William C. Steere, Jr............ 58 Chairman of the Board and Chief Executive Officer;
Director; Member of the Corporate Management
Committee
Frederick W. Telling............. 43 Vice President -- Corporate Strategic Planning and
Policy
17
BUSINESS EXPERIENCE OF NON-DIRECTOR OFFICERS
BRIAN W. BARRETT
Mr. Barrett joined Pfizer Canada in 1966, where he served in various
financial positions, including Chief Financial Officer of the Canadian
subsidiary. In 1971, he was appointed Assistant Controller of Pfizer
International in New York; in 1973, Director of International Planning and in
1976, Director of Planning. In 1980, Mr. Barrett was appointed Vice President --
Corporate Strategic Planning; in 1983, he became Vice President -- Finance for
Pfizer International; in 1985, President -- Africa/ Middle East and in 1991,
President -- Asia/Canada. In 1992, Mr. Barrett was elected Vice President of the
Company. He assumed the responsibilities of his present position, President,
Northern Asia, Australasia and Canada -- International Pharmaceuticals Group, in
1993.
M. KENNETH BOWLER
Mr. Bowler joined the Company in 1989, and has been Vice President --
Federal Government Relations since 1990. He formerly served as Staff Director
for the House Ways and Means Committee.
C. L. CLEMENTE
Mr. Clemente joined the Company in 1964 and has served as Vice President;
General Counsel and Secretary, Pfizer International, Inc. He has also held the
position of Vice President of Coty, formerly Pfizer's fragrance and cosmetic
division. In 1983, he was named Associate General Counsel of Pfizer Inc. In
1986, he was elected Vice President; General Counsel and Secretary of the
Company. He became a member of the Corporate Management Committee of the Company
in 1991. In 1992, he was elected Senior Vice President -- Corporate Affairs;
Secretary and Corporate Counsel.
BRUCE R. ELLIG
Mr. Ellig joined the Company in 1960. He progressed through a number of
positions of increasing responsibility in the Corporate Personnel Division
including Vice President -- Compensation and Benefits in 1978 and Vice President
-- Employee Relations in 1983. In 1985, he was elected Vice President --
Personnel of the Company.
DONALD F. FARLEY
Mr. Farley joined the Company in 1965 as Production Engineer for the
Chemical Division. After serving in a number of positions of increasing
responsibility within the Chemical Division, he was named its Vice President,
Operations in 1982. In 1986 he became Senior Vice President of the Division, and
in 1988, Executive Vice President -- Specialty Chemicals. In 1992, Mr. Farley
was named President of the Food Science Group and in February 1993 was elected a
Vice President of the Company.
DAVID M. FITZGERALD
Mr. Fitzgerald joined the Company's Howmedica division in 1970 as
Controller. In 1974, he was promoted to Corporate Controller of Howmedica. He
served as Assistant General Manager and Vice President -- General Manager and in
1980 he assumed responsibility for Howmedica's worldwide orthopedics operations.
In 1982, he was appointed Senior Vice President of Howmedica. In 1984, he became
President of Howmedica and Senior Vice President of Hospital Products. In 1988,
he became Executive Vice President of the Hospital Products Group. In 1992, Mr.
Fitzgerald was elected Vice President of the Company.
18
GEORGE A. FORCIER
Dr. Forcier joined the Company in 1966 as Analytical Research Chemist for
the Company's Medical Research Laboratories. In 1970, he was named Project
Leader, in 1979 Manager, and in 1981, Assistant Director of the Analytical
Research Department. In 1986, he was named Director of the Analytical Research
and Development Department and in 1991, he became Group Director. Dr. Forcier
was elected Vice President -- Quality Control of the Company, effective January
1, 1994.
P. NIGEL GRAY
Mr. Gray joined the Company in 1975 as Export Sales Manager for Howmedica
U.K., Ltd. in England and progressed through a number of positions of increasing
responsibility before being named Vice President, Marketing for Howmedica Europe
in 1983. In 1987, Mr. Gray became Senior Vice President and General Manager of
Howmedica International in Staines, England, then President of Howmedica
International in 1992. In 1993, he came to New York as Executive Vice President
of the Company's Hospital Products Division and President of the Medical Devices
Division and in October 1994, he was elected a Vice President of the Company.
WILLIAM E. HARVEY
Mr. Harvey joined the Company in 1966 as Assistant to the Treasurer of
Pfizer International. In 1969, he was appointed Assistant Treasurer,
International and in 1981, he became Assistant Treasurer of the Company. In
1990, Mr. Harvey was elected Vice President; Treasurer of the Company and served
in this capacity until his retirement on December 31, 1994.
GARY N. JORTNER
Mr. Jortner joined the Company in 1973 as a Systems Analyst for Pfizer
Pharmaceuticals. In 1974, he transferred to product management and progressed
through a series of promotions that resulted in his being named Group Product
Manager for Pfizer Labs in 1978. In 1981, he became Vice President of Marketing
for Pfizer Labs. In 1986, he was promoted to Vice President of Operations for
Labs. In 1991, he was named Vice President and General Manager, Pfizer Labs
Division. In 1992, Mr. Jortner was elected Vice President of the Company. In
1994, he was named Vice President; Group Vice President, Disease Management --
U.S. Pharmaceuticals Group.
KAREN L. KATEN
Ms. Katen joined the Company in 1974 as a Marketing Associate for Pfizer
Pharmaceuticals. Beginning in 1975, she progressed through a number of positions
of increasing responsibility in the Roerig product management group which
resulted in her being named Group Product Manager in 1978. In 1980, she
transferred to Pfizer Labs as a Group Product Manager and later became Director,
Product Management. In 1983, she returned to Roerig as Vice President --
Marketing. In 1986, she was named Vice President and General Manager -- Roerig
Division. In 1992, she was elected Vice President of the Company. In May 1993,
Ms. Katen became Executive Vice President of the U.S. Pharmaceuticals Group.
ALAN G. LEVIN
Mr. Levin joined the Company in 1987 as Senior Operations Auditor for the
Controllers Division, and in 1988 joined the Treasurer's Division as Controller,
Pfizer International Bank. He became Director -- Finance, International in 1991
and in 1993 was named Senior Director -- Finance, Asia. On January 1, 1995, Mr.
Levin was elected Treasurer of the Company.
19
HENRY A. MCKINNELL
Dr. McKinnell joined the Company in 1971. In 1977, he became Vice President
-- Area Manager for Pfizer Asia. In 1979, he became Executive Vice President and
in 1981, President of Pfizer Asia. In 1984, Dr. McKinnell was named Vice
President -- Corporate Strategic Planning and in 1986, he was elected a Vice
President of the Company. In 1990, Dr. McKinnell became the Company's Chief
Financial Officer and was named Vice President -- Finance of the Company. In
1992, he became a member of the Corporate Management Committee of the Company.
In that same year, he became Executive Vice President of the Company and
President of the Company's Hospital Products Group, in addition to remaining the
Company's Chief Financial Officer.
BROWER A. MERRIAM
Mr. Merriam joined the Company in 1969 as Country Manager for Peru, and in
1971, he was appointed Country Manager for Argentina. In 1973, he was appointed
President of Pfizer Latin America. He was appointed Director of Pfizer
International in 1984, and in 1988 assumed the position of President for Latin
America, Southeast Asia, Indo-Pacific and Canada. In 1990, he was appointed
Executive Vice President of Pfizer International. In 1991, he became Executive
Vice President of the Animal Health Group and in 1992 was appointed its
President. Mr. Merriam was elected a Vice President of the Company in 1992.
JOHN C. MESLOH
Mr. Mesloh joined Howmedica, Inc. as Controller in 1973. In 1974, he was
appointed Vice President -- Finance and Treasurer of Howmedica, and in 1980 he
was elected Corporate Controller of the Company. In 1989, Mr. Mesloh was elected
Vice President of the Company. Mr. Mesloh was elected Vice President, Corporate
Purchasing, effective January 1993.
VICTOR P. MICATI
Mr. Micati joined the Company in 1965 as a Management Candidate for Pfizer
Labs. Beginning in 1966, he progressed through a number of positions of
increasing responsibility in the Pfizer Labs Division, which resulted in his
being named Vice President -- Marketing in 1971. In 1972 he became Vice
President of Pharmaceutical Development for International Pharmaceuticals. In
1980, he was named Executive Vice President of the European Management Center.
He returned to the International Pharmaceutical Division in 1984 as Senior Vice
President, and in 1990 was named President, Pfizer Europe. In 1992, Mr. Micati
was elected Vice President of the Company.
PAUL S. MILLER
Mr. Miller joined the Company in 1971 and was appointed an Assistant
Secretary and Assistant General Counsel in 1975. In 1983, he was named Associate
General Counsel. In 1986, he became Secretary of the Corporate Management
Committee and in that same year he was elected Vice President; General Counsel
of the Company. He became a member of the Corporate Management Committee of the
Company in 1991. In 1992, Mr. Miller was elected Senior Vice President --
General Counsel of the Company.
GEORGE M. MILNE, JR.
Dr. Milne joined the Company in 1970 as a Research Scientist. In 1973, he
was named Senior Research Scientist and progressed through a number of positions
of increasing responsibility which resulted in his being named Vice President,
Research and Development Operations in 1985. In 1988, Dr. Milne became Senior
Vice President, Research and Development, and in September 1993, he was elected
Vice President of the Company and President, Central Research.
20
ROBERT NEIMETH
Mr. Neimeth joined the Company in 1962 as a management trainee, subsequently
serving as Country Manager, Nigeria, as Vice President, Pharmaceutical
Development in Asia, and then as President of Pfizer Asia from 1972 to 1977. He
then served as Vice President and Director of Operations for Pfizer Labs in the
U.S. In 1980 he became President, Pfizer Europe and, in 1983, Mr. Neimeth became
a Vice President of the Company. In 1984, he was also elected Executive Vice
President of Pfizer International Subsidiaries and assumed supervision of the
pharmaceutical business in Africa and the Middle East, in addition to his
responsibilities in Europe. In 1990, he was named President, Pfizer
International Subsidiaries. In 1991, he became Chairman, President and Chief
Executive Officer of Pfizer International. He also became a member of the
Corporate Management Committee of the Company in 1991. In 1992, he was elected
Executive Vice President of the Company, and President, International
Pharmaceuticals Group. In this capacity, Mr. Neimeth supervises the Company's
International Pharmaceutical and worldwide Animal Health operations.
JOHN F. NIBLACK
Dr. Niblack joined the Company in 1967 and held various management positions
in new-drug discovery operations before being appointed in 1984 as Vice
President, Medicinal Products Research and in 1986 as Executive Vice President,
Central Research. In 1990, Dr. Niblack was named President -- Central Research
and elected a Vice President of the Company. In September 1993, Dr. Niblack was
elected Executive Vice President -- Research and Development, and became a
member of the Corporate Management Committee of the Company.
WILLIAM J. ROBISON
Mr. Robison joined the Company in 1961 as a Sales Representative for Pfizer
Labs. After serving in a number of positions of increasing responsibility in the
Labs division, he was appointed Vice President of Sales in 1980, and Senior Vice
President, Pfizer Labs in 1986. In 1990 he was appointed Vice President and
General Manager of Pratt Pharmaceuticals, and in 1992 assumed his present
position as President of the Consumer Health Care Group. In 1992, Mr. Robison
was also elected Vice President of the Company.
HERBERT V. RYAN
Mr. Ryan joined the Company in 1962 as Supervisor, Capital Assets. In 1964
he was named Supervisor, Corporate Ledger and in 1966 became Director, Corporate
Accounting. In 1981 he was appointed Assistant Controller, Corporate Accounting.
In 1993, Mr. Ryan was elected Controller.
CRAIG SAXTON
Dr. Saxton joined the Company in 1976 as Clinical Projects Director for the
Central Research Division of Pfizer Ltd. in Sandwich, England. In 1981, he was
named Senior Associate Medical Director for the International Division of Pfizer
Inc., and in 1982 became the Division's Vice President, Medical Director. Dr.
Saxton became Senior Vice President, Clinical Research and Development for the
Central Research Division in 1988. In September 1993, he was named Executive
Vice President -- Central Research and was elected a Vice President of the
Company.
GERALD H. SCHULZE
Mr. Schulze joined the Company in 1971 as a Medical Service Representative
for Roerig. He served in a number of positions of increasing responsibility in
the Pharmaceuticals and International divisions before being named Vice
President -- Business Development for the Consumer Products division in 1985. In
1987, he was named Vice President -- Business Development for Hospital Products,
and in 1988, became that division's Senior Vice President. In 1992, he was
elected a Vice President of the Company and was named Executive Vice President
for the Hospital Products Group
21
and President of the Medical Devices Division. In November 1993, Mr. Schulze was
elected Vice President, Corporate Strategic Planning of the Company. In October
1994, he was elected Vice President, Pharmaceutical Planning.
ROBERT L. SHAFER
Mr. Shafer joined the Company in 1966 as Assistant to the Director of
Government Relations. In 1967, he became Associate Director of Government
Relations and in 1968, Director of Government Relations. In 1973, Mr. Shafer was
elected a Vice President of the Company. In 1982, he was elected Vice President
-- Public Affairs.
DAVID L. SHEDLARZ
Mr. Shedlarz joined the Company in 1976 as Senior Financial Analyst for the
Pharmaceuticals Division. After serving in a number of positions of increasing
responsibility, he was named Production Controller in 1979 and Assistant Group
Controller in 1981. In 1984, he became Group Controller and in 1989 was named
Vice President of Finance for the Pharmaceuticals Group. In 1992, Mr. Shedlarz
was elected Vice President -- Finance of the Company.
FREDERICK W. TELLING
Dr. Telling joined the Company in 1977 as Associate Personnel Manager for
the Pharmaceuticals Division and progressed through a number of positions of
increasing responsibility before being named Director of Planning for the
Pharmaceuticals Division in 1981. In 1987, he was named the Vice President of
Planning and Policy, and in 1994, Senior Vice President of Planning and Policy
for the Company's U.S. Pharmaceuticals Group. In October 1994, Dr. Telling was
elected Vice President, Corporate Strategic Planning and Policy.
ITEM 11. EXECUTIVE COMPENSATION
Information with regard to executive compensation is incorporated by
reference to pages 8 through 19 of the Company's Proxy Statement dated March 16,
1995.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information with regard to security ownership of certain beneficial owners
and management is incorporated by reference to pages 2 through 7 of the
Company's Proxy Statement dated March 16, 1995.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information with regard to certain relationships and related transactions is
incorporated by reference to pages 20 and 21 of the Company's Proxy Statement
dated March 16, 1995.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
The following is a list of all Financial Statement Schedules and Exhibits
filed as a part of this Annual Report.
(a)(1) Financial Statements
See Part II
(a)(2) Financial Statement Schedule
PAGE
----
Schedule II -- Valuation and Qualifying Accounts...................... 26
Schedules not listed above have been omitted for the reason that they are
inapplicable or not required or the information is given elsewhere in the
financial statements. The financial statements of unconsolidated subsidiaries
are omitted on the basis that these subsidiaries, considered in the aggregate,
would not constitute a significant subsidiary.
22
(a)(3) Exhibits
3(i) -- Restated Certificate of Incorporation of the Company, as of April 1991
(incorporated by reference to Exhibit 4(a) of Form S-8, Registration No.
33-44053), as corrected by the Certificate of Correction of the Restated
Certificate of Incorporation of the Company (as filed in the Office of the
Secretary of State of the State of Delaware on January 3, 1995, and as
filed herewith).
3(ii) -- By-laws of the Company, as amended June 23, 1994 (incorporated by
reference to Exhibit 3(ii) of the Company's Form 8-K Current Report dated
June 23, 1994).
10(a) -- Executive Compensation Plans and Arrangements:
10.1 -- Form of Severance Agreement for Certain Executive Officers of the
Company.
10.2 -- Pfizer Inc. Performance-Contingent Share Award Program
(incorporated by reference to Exhibit 4 of Form S-8, Registration No.
33-56977).
10(b) -- Stock and Asset Purchase Agreement, dated as of November 23, 1994, between
SmithKline Beecham plc and Pfizer Inc., as amended (incorporated by
reference to Exhibit 2 of the Company's Form 8-K Report dated February 7,
1995).
11 -- Computation of Earnings Per Common Share and Fully Diluted Earnings Per
Common Share.
12 -- Computation of Ratio of Earnings to Fixed Charges.
13(a) -- Portions of the Annual Report of the Company for the fiscal year ended
December 31, 1994 which are expressly incorporated by reference herein.
13(b) -- Copy of the Annual Report of the Pfizer Savings and Investment Plan on
Form 11-K for the fiscal year ended December 31, 1994.
13(c) -- Copy of the Annual Report of the Pfizer Savings and Investment Plan for
Employees Resident in Puerto Rico on Form 11-K for the fiscal year ended
December 31, 1994.
21 -- Subsidiaries of the Registrant.
23 -- Report and consent of KPMG Peat Marwick LLP, independent certified public
accountants.
27 -- Financial Data Schedule
(b) The Company filed a report on Form 8-K dated December 13, 1994.
Exhibits to the Form 10-K are available upon request at the charges set out
below. Requests should be directed to C. L. Clemente, Secretary, Pfizer Inc.,
235 East 42nd Street, New York, N.Y. 10017.
Exhibit 13(b)........... $ 1.40
Exhibit 13(c)........... 1.30
Exhibit 21.............. .60
23
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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)
By /s/ C.L. CLEMENTE
-----------------------------------
C.L. Clemente
(Secretary)
Dated: March 23, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
SIGNATURES TITLE DATE
------------------------------------------------ ------------------------------------------- ------------------
/s/ WILLIAM C. STEERE, JR.
-------------------------------------- Chairman of the Board, Director (Principal March 23, 1995
William C. Steere, Jr.) Executive Officer)
/s/ HENRY A. MCKINNELL
-------------------------------------- Executive Vice President (Principal March 23, 1995
(Henry A. McKinnell) Financial Officer)
/s/ HERBERT V. RYAN
-------------------------------------- Controller (Principal Accounting Officer) March 23, 1995
(Herbert V. Ryan)
/s/ EDWARD C. BESSEY
-------------------------------------- Director March 23, 1995
(Edward C. Bessey)
/s/ M. ANTHONY BURNS
-------------------------------------- Director March 23, 1995
(M. Anthony Burns)
-------------------------------------- Director March , 1995
(Grace J. Fippinger)
/s/ GEORGE B. HARVEY
-------------------------------------- Director March 23, 1995
(George B. Harvey)
/s/ CONSTANCE J. HORNER
-------------------------------------- Director March 23, 1995
(Constance J. Horner)
24
SIGNATURES TITLE DATE
------------------------------------------------ ------------------------------------------- ------------------
/s/ STANLEY O. IKENBERRY
-------------------------------------- Director March 23, 1995
(Stanley O. Ikenberry)
/s/ THOMAS G. LABRECQUE
-------------------------------------- Director March 23, 1995
(Thomas G. Labrecque)
/s/ JAMES T. LYNN
-------------------------------------- Director March 23, 1995
(James T. Lynn)
/s/ PAUL A. MARKS
-------------------------------------- Director March 23, 1995
(Paul A. Marks)
/s/ EDMUND T. PRATT, JR.
-------------------------------------- Director March 23, 1995
(Edmund T. Pratt, Jr.)
/s/ FRANKLIN D. RAINES
-------------------------------------- Director March 23, 1995
(Franklin D. Raines)
/s/ FELIX G. ROHATYN
-------------------------------------- Director March 23, 1995
(Felix G. Rohatyn)
/s/ JEAN-PAUL VALLES
-------------------------------------- Director March 23, 1995
(Jean-Paul Valles)
25
PFIZER INC. AND SUBSIDIARY COMPANIES
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
ADDITIONS
-------------------------
BALANCE AT CHARGED TO CHARGED TO BALANCE
BEGINNING OF COSTS AND OTHER AT END OF
DESCRIPTION PERIOD EXPENSES ACCOUNTS(B) DEDUCTIONS(A)(C) PERIOD
-------------------------------------------------- ------------ ----------- ----------- -------------- ---------
(MILLIONS OF DOLLARS)
Year ended December 31, 1994
Valuation and qualifying accounts deducted from
assets to which they apply
Allowance for doubtful accounts............. $40.6 $11.5 $-- $ 8.0 $44.1
----- ----- --- ----- ---------
----- ----- --- ----- ---------
Allowance for credit losses................. $13.5 $ 7.0 $-- $-- $20.5
----- ----- --- ----- ---------
----- ----- --- ----- ---------
Year ended December 31, 1993
Valuation and qualifying accounts deducted from
assets to which they apply
Allowance for doubtful accounts............. $36.2 $12.1 $ 0.4 $ 8.1 $40.6
----- ----- --- ----- ---------
----- ----- --- ----- ---------
Allowance for credit losses................. $14.5 $-- $-- $ 1.0(d) $13.5
----- ----- --- ----- ---------
----- ----- --- ----- ---------
Year ended December 31, 1992
Valuation and qualifying accounts deducted from
assets to which they apply
Allowance for doubtful accounts............. $38.8 $11.5 $ 0.5 $14.6(e) $36.2
----- ----- --- ----- ---------
----- ----- --- ----- ---------
Allowance for credit losses................. $11.5 $ 3.0 $-- $-- $14.5
----- ----- --- ----- ---------
----- ----- --- ----- ---------
<FN>
------------------------
(a) Includes impact of translation of foreign currencies.
(b) Recoveries of accounts previously written off.
(c) Uncollectible accounts charged against allowance accounts.
(d) Decrease in allowance arising from lower loan loss exposure.
(e) Includes $6.4 million of adjustments arising from businesses divested.
26
The following trademarks, found in this report, are among those used by
Pfizer Inc.
CARDURA (DOXAZOSIN MESYLATE)
DIFLUCAN (FLUCONAZOLE)
ENABLE (TENIDAP)
ENABLEX (TENIDAP)
E5 (ANTI-ENDOTOXIN ANTIBODY)
FELDENE (PIROXICAM)
GLUCOTROL (GLIPIZIDE)
GLUCOTROL XL (GLIPIZIDE GITS)
NORVASC (AMLODIPINE BESYLATE)
PROCARDIA (NIFEDIPINE)
PROCARDIA XL (NIFEDIPINE GITS)
REACTINE (CETIRIZINE)
UNASYN (SULBACTAM/AMPICILLIN)
ZITHROMAX (AZITHROMYCIN)
ZOLOFT (SERTRALINE)
ABG
ALTA
DURACON
GAMMA
LUHR
PARATREND
P.C.A.
SIMPLEX
LITESSE (POLYDEXTROSE)
ADVOCIN (DANOFLOXACIN)
AVIAX (SEMDURAMICIN)
BANMINTH (PYRANTEL TARTRATE)
BOVISHIELD
COXISTAC (SALINOMYCIN)
DECTOMAX (DORAMECTIN)
FILARIBITS (DIETHYLCARBAMAZINE CITRATE)
LEUKOCELL
MECADOX (CARBADOX)
NEMEX (PYRANTEL PAMOATE)
RESPISURE
STAFAC (VIRGINIAMYCIN)
TERRAMYCIN LA-200 (OXYTETRACYCLINE)
TM/LA (OXYTETRACYCLINE)
PARATECT (MORANTEL TARTRATE)
POSISTAC (SALINOMYCIN)
VALBAZEN (ALBENDAZOLE)
VANGUARD
BARBASOL
BEN-GAY
DAILY CARE FROM DESITIN
DESITIN
PLAX
RID
UNISOM (DOXYLAMINE SUCCINATE)
UNISOM SLEEPGELS
VISINE (TETRAHYDROZOLINE HCI)
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE
--------------- ---------------------------------------------------------------------------------------- ---------
3(i) Restated Certificate of Incorporation of the Company, as of April 1991 (incorporated by
reference to Exhibit 4(a) of Form S-8, Registration No. 33-44053) as corrected by the
Certificate of Correction of the Restated Certificate of Incorporation of the Company
(as filed in the Office of the Secretary of State of the State of Delaware on January
3, 1995, and as filed herewith)........................................................
3(ii) By-laws of the Company, as amended June 23, 1994 (incorporated by reference to Exhibit
3(ii) of the Company's Form 8-K Current Report dated June 23, 1994)....................
10(a) Executive Compensation Plans and Arrangements...........................................
10.1 Form of Severance Agreement for Certain Executive Officers of the Company...............
10.2 Pfizer Inc. Performance-Contingent Share Award Program (incorporated by reference to
Exhibit 4 of Form S-8, Registration No. 33-56977)......................................
10(b) Stock and Asset Purchase Agreement, dated as of November 23, 1994, between SmithKline
Beecham plc and Pfizer Inc., as amended (incorporated by reference to Exhibit 2 of the
Company's Form 8-K Report dated February 7, 1995)......................................
11 Computation of Earnings Per Common Share and Fully Diluted Earnings Per Common Share....
12 Computation of Ratio of Earnings to Fixed Charges.......................................
13(a) Portions of the Annual Report of the Company for the fiscal year ended December 31, 1994
which are expressly incorporated by reference herein...................................
13(b) Copy of the Annual Report of the Pfizer Savings and Investment Plan on Form 11-K for the
fiscal year ended December 31, 1994....................................................
13(c) Copy of the Annual Report of the Pfizer Savings and Investment Plan for Employees
Resident in Puerto Rico on Form 11-K for the fiscal year ended December 31, 1994.......
21 Subsidiaries of the Registrant..........................................................
23 Report and consent of KPMG Peat Marwick LLP, independent certified public accountants...
27 Financial Data Schedule.................................................................