Pfizer Reports Third-Quarter 2010 Results

NEW YORK, November 02, 2010, 2010 /PRNewswire-FirstCall/ --

    ($ in millions, except per share amounts)
                        Third-Quarter         Year-to-Date
                        -------------         ------------
                          2010 2009 Change      2010  2009 Change
                          ----                  ----  ---- ------
    Reported Revenues  $16,171 $11,621   39% $50,248 $33,472   50%
    Reported Net
     Income(2)             866   2,878 (70%)   5,367   7,868 (32%)
    Reported Diluted
     EPS(2)               0.11    0.43 (74%)    0.66    1.16 (43%)
    Adjusted Income(1)   4,372   3,461   26%  14,213  10,377   37%
    Adjusted Diluted
     EPS(1)               0.54    0.51    6%    1.76    1.54   14%
    See end of text prior to tables for notes.

Pfizer Inc. today reported financial results for third-quarter 2010. Since the acquisition of Wyeth was completed on October 15, 2009, legacy Wyeth products and operations are reflected in the first three quarters of 2010, but not reflected in the first three quarters of 2009. Third-quarter 2010 revenues were $16.2 billion, an increase of 39% compared with $11.6 billion in the year-ago quarter. Revenues for third-quarter 2010 compared with the year-ago quarter were favorably impacted by $5.2 billion, or 44%, due to the addition of the legacy Wyeth products, negatively impacted by $458 million, or 4%, due to legacy Pfizer products, and negatively impacted by $160 million, or 1%, due to foreign exchange. For third-quarter 2010, U.S. revenues were $7.1 billion, an increase of 48% compared with the year-ago quarter. International revenues were $9.1 billion, an increase of 33% compared with the prior-year quarter, which reflected 35% operational growth partially offset by a 2% unfavorable impact of foreign exchange. U.S. revenues represented 44% of total revenues in third-quarter 2010 compared with 41% in the year-ago quarter, while international revenues represented 56% of total revenues in third-quarter 2010 compared with 59% in the year-ago quarter.

For the first nine months of 2010, revenues were $50.2 billion, an increase of 50% compared with $33.5 billion in the same period in 2009. Revenues for the first nine months of 2010 compared with the year-ago period were favorably impacted by $15.9 billion, or 48%, due to the addition of the legacy Wyeth products, and by $1.2 billion, or 3%, due to foreign exchange, and negatively impacted by $285 million, or 1%, due to legacy Pfizer products. U.S. revenues were $21.8 billion, an increase of 52% compared with the first nine month of 2009. International revenues were $28.4 billion, an increase of 48% compared with the same period last year, which reflected 42% operational growth and a 6% favorable impact of foreign exchange. U.S. revenues represented 43% and international revenues represented 57% of total revenues in the first nine months of 2010, comparable with the first nine months of 2009.

Pfizer operates two distinct commercial organizations: Biopharmaceutical and Diversified. Biopharmaceutical includes the Primary Care, Specialty Care, Established Products, Emerging Markets and Oncology customer-focused units, while Diversified includes Animal Health, Consumer Healthcare, Nutrition and Capsugel.


                                               Third-Quarter(13)
                                                ----------------
                                                             Operational
                                                             -----------
    ($ in                                         Foreign            Legacy
     millions)           2010  2009(13) Change    Exchange  Total    Pfizer
                       ----   -------   ------   --------   -----   -------

    Primary
     Care(3)           $5,653    $5,540       2%       (1%)      3%      (3%)
    Specialty
     Care(4)            3,717     1,577     136%       (6%)    142%      (1%)
    Established
     Products(5)        2,168     1,657      31%       (1%)     32%     (13%)
    Emerging
     Markets(6)         2,072     1,529      36%         2%     34%       --
    Oncology(7)           335       374    (10%)       (4%)    (6%)     (15%)
                          ---       ---   -----       ----    ----     -----

    Biopharmaceutical  13,945    10,677      31%       (2%)     33%      (4%)
                       ------    ------     ---       ----     ---      ----

    Animal
     Health(8)            860       678      27%       (1%)     28%        5%
    Consumer
     Healthcare(9)        673        --     N/A        N/A     N/A       N/A
    Nutrition(10)         441        --     N/A        N/A     N/A       N/A
    Capsugel(11)          176       177     (1%)       (3%)      2%        2%

    Diversified         2,150       855     151%        --     151%        4%
                        -----       ---     ---        ---     ---       ---

    Other(12)              76        89    (15%)        16%   (31%)     (31%)
                          ---       ---   -----        ---   -----     -----

       Total          $16,171   $11,621      39%       (1%)     40%      (4%)
                      =======   =======     ===       ====     ===      ====
    See end of text prior to tables for notes.
    N/A - Not applicable

For third-quarter 2010, revenues from Biopharmaceutical were $13.9 billion, an increase of 31% compared with $10.7 billion in the year-ago quarter. Operationally, revenues increased $3.4 billion, or 33%, which included $3.9 billion, or 37%, attributable to legacy Wyeth products, primarily Premarin in the Primary Care unit, Enbrel and the Prevnar/Prevenar franchise in the Specialty Care unit, Protonix and Zosyn/Tazocin in the Established Products unit as well as Enbrel and the Prevenar franchise in the Emerging Markets unit, partially offset by a decline of $468 million, or 4%, due to legacy Pfizer products. In addition, foreign exchange unfavorably impacted Biopharmaceutical revenues by 2% or $173 million.

Within the Biopharmaceutical units, legacy Pfizer operational performance was impacted in third-quarter 2010 compared with the year-ago quarter primarily by the loss of exclusivity of certain products and by the resulting reclassification of Camptosar European revenues among the units. Legacy Pfizer Primary Care unit revenues in third-quarter 2010 were negatively impacted by 4% due to the loss of exclusivity of Lipitor in Canada in May 2010 and in Spain in July 2010. Legacy Pfizer Oncology unit revenues no longer include Camptosar's European revenues due to its loss of exclusivity in July 2009. Camptosar's European revenues are included in the Established Products unit beginning in first-quarter 2010. This reclassification of revenues negatively impacted the legacy Pfizer Oncology unit's performance by 16% in third-quarter 2010 compared with the prior-year quarter. Further, legacy Pfizer Established Products unit revenues in third-quarter 2010 were adversely impacted by 6% due to the loss of exclusivity for Norvasc in Canada in July 2009, partially offset by the favorable impact of 1% due to the addition of Camptosar's European revenues. Finally, legacy Pfizer Emerging Markets unit revenues in third-quarter 2010 were essentially flat reflecting solid growth in key priority countries, most notably China, offset by Eastern European pricing pressure and wholesaler purchasing patterns driven by economic conditions.

For third-quarter 2010, revenues from Diversified were $2.2 billion, an increase of 151% compared with $855 million in the year-ago quarter. This increase of $1.3 billion was primarily attributable to legacy Wyeth products, principally Centrum, Advil and Caltrate in Consumer Healthcare and infant and toddler Nutrition products. The impact of foreign exchange on Diversified revenues was immaterial.

For third-quarter 2010, Pfizer posted reported net income of $866 million, a decrease of 70% compared with $2.9 billion in the prior-year quarter, and reported diluted EPS of $0.11, a decrease of 74% compared with $0.43 in the prior-year quarter. For the first nine months of 2010, Pfizer posted reported net income of $5.4 billion, a decrease of 32% compared with $7.9 billion in the first nine months of 2009, and reported diluted EPS of $0.66, a decline of 43% compared with $1.16 in the prior-year period. Third-quarter 2010 results were favorably impacted by revenues from legacy Wyeth products, and negatively impacted primarily by the expenses associated with the legacy Wyeth operations as well as purchase accounting adjustments, integration charges and restructuring charges associated with the Wyeth acquisition, impairment charges of $1.5 billion (pre-tax) related to certain intangible assets acquired in connection with the Wyeth acquisition and a $701 million (pre-tax) charge for asbestos litigation related to our wholly owned subsidiary Quigley Company, Inc. For the first nine months of 2010, results were impacted by the aforementioned items as well as the favorable impact of foreign exchange and the unfavorable impact of higher net interest expense primarily due to borrowings used to partially fund the Wyeth acquisition.

In addition, the effective tax rate on reported results increased to approximately 39% in third-quarter 2010 from approximately 28% in third-quarter 2009, and approximately 37% in the first nine months of 2010 from approximately 27% in the first nine months of 2009. These increases were primarily the result of higher expenses incurred as a result of the acquisition of Wyeth and the mix of jurisdictions in which those expenses were incurred. Also, the lower rates in the third quarter and first nine months of 2009 compared to the same periods in 2010 reflected a tax benefit of $174 million related to the final resolution of a previously disclosed settlement.

Additionally, reported diluted EPS((2)) in third-quarter 2010 and the first nine months of 2010 was impacted by the increased number of shares outstanding in comparison with the corresponding periods in 2009 resulting from shares issued to partially fund the Wyeth acquisition.

Third-quarter 2010 adjusted income was $4.4 billion, an increase of 26% compared with $3.5 billion in the year-ago quarter, and adjusted diluted EPS((1)) was $0.54, an increase of 6% compared with $0.51 in the year-ago quarter. For the first nine months of 2010, Pfizer posted adjusted income of $14.2 billion, an increase of 37% compared with $10.4 billion in the first nine months of 2009, and adjusted diluted EPS((1)) of $1.76, an increase of 14% compared with $1.54 in the prior-year period. Results were favorably impacted by revenues from legacy Wyeth products and, to a lesser extent, foreign exchange, which were partially offset by the expenses associated with the legacy Wyeth operations as well as lower overall revenues from legacy Pfizer products and higher net interest expense primarily due to borrowings used to partially fund the acquisition of Wyeth.

In addition, the effective tax rate on adjusted income decreased to approximately 30% in third-quarter 2010 compared with approximately 32% in third-quarter 2009, and increased to approximately 31% in the first nine months of 2010 compared with approximately 30% in the first nine months of 2009. The changes in the effective tax rate on adjusted income((1)) were primarily the result of the change in the jurisdictional mix of earnings in the respective periods.

Additionally, adjusted diluted EPS((1)) in third-quarter 2010 and the first nine months of 2010 was impacted by the increased number of shares outstanding in comparison with the corresponding periods in 2009 resulting from shares issued to partially fund the Wyeth acquisition.

In third-quarter 2010, adjusted cost of sales((1)) as a percentage of revenues was 18.3% compared with 15.4% in third-quarter 2009. This increase primarily reflects the change in the mix of products and businesses as a result of the Wyeth acquisition. Excluding the impact of foreign exchange, adjusted cost of sales((1)) as a percentage of revenues was 19.7% in third-quarter 2010.

Adjusted SI&A expenses((1)) were $4.6 billion in third-quarter 2010, an increase of 43% compared with $3.2 billion in the prior-year quarter. This increase was attributable primarily to the addition of the legacy Wyeth operations. Foreign exchange decreased third-quarter 2010 adjusted SI&A expenses((1)) by $32 million compared with the year-ago quarter.

Adjusted R&D expenses((1)) were $2.2 billion in third-quarter 2010, an increase of 33% compared with $1.6 billion in the prior-year period. This increase was attributable primarily to the addition of the legacy Wyeth operations and continued investment in the late-stage development portfolio. Foreign exchange decreased third-quarter 2010 adjusted R&D expenses((1)) by $15 million compared with the year-ago quarter.

Overall, foreign exchange decreased adjusted total costs by $298 million, or 4%, in third-quarter 2010 compared with the prior-year period.

Jeff Kindler, Chairman and Chief Executive Officer, stated, "It's been just over a year since the closing of the Wyeth acquisition. I am particularly pleased with the speed of the integration, the cost synergies achieved to date as well as our solid financial performance this quarter and year-to-date in this difficult economic environment. This combination is clearly creating opportunities to provide greater value for our shareholders."

"We continue to carefully evaluate and make prudent capital allocation decisions. We recently announced several business development transactions that we believe will enhance shareholder value by enabling continued growth in several of our business units. Our pending acquisition of King Pharmaceuticals, Inc. is consistent with our stated objective of seeking a larger presence in the pain market within the Primary Care unit, while our acquisition of FoldRx enhances the orphan and rare disease pipeline portfolio of our Specialty Care unit. Further, our alliance with Biocon is expected to advance our biosimilars strategy by positioning us competitively in the diabetes market over time, while our agreement with Laboratorio Teuto Brasileiro S.A. is expected to broaden our Emerging Markets presence. Also, we are reviewing strategic alternatives for Capsugel in order to optimize the value of this asset. We believe these actions, taken together, will serve to improve our business profile and provide both near-term and longer-term financial benefit," continued Mr. Kindler.

Frank D'Amelio, Chief Financial Officer, stated, "Given our solid year-to-date performance and continued confidence in the business, we are once again reaffirming our 2012 financial targets, and we are narrowing the ranges for the components of our 2010 financial guidance. Additionally, we are increasing our 2010 adjusted diluted EPS((1)) guidance to a range of $2.17 to $2.22 from a range of $2.10 to $2.20. Further, we repurchased approximately $500 million, or 30 million shares, of our common stock in the third quarter, and we continue to review our capital allocation options with the goal of maximizing value for our shareholders."

((16))

For full-year 2010, Pfizer's financial guidance, at current exchange rates((15)), is summarized below.



    Reported Revenues                                $67.0 to $68.0 billion
                                              (previously $67.0 to $69.0
                                                       billion)
    Adjusted Cost of Sales(1) as a
     Percentage of Revenues                                  18.5% to 19.0%
                                             (previously 19.0% to 20.0%)
    Adjusted SI&A Expenses(1)                        $19.2 to $19.7 billion
                                              (previously $19.0 to $20.0
                                                       billion)
    Adjusted R&D Expenses(1)                           $9.1 to $9.5 billion
                                          (previously $9.1 to $9.6 billion)
    Adjusted Other (Income)/Deductions(1)     Approximately $1.0 billion
                                          (previously $1.2 to $1.4 billion)
    Effective Tax Rate on Adjusted
     Income(1)                                            Approximately 30%
    Reported Diluted EPS(2)                                  $0.84 to $0.94
    ----------------------                                   --------------
                                              (previously $0.95 to $1.10)
                                              ---------------------------
    Adjusted Diluted EPS(1)                                  $2.17 to $2.22
    ----------------------                                   --------------
                                             (previously $2.10 to $2.20)
                                             ---------------------------

The Company is reaffirming all elements of its 2012 financial targets. As previously stated, given the longer-term nature of these targets, they are subject to greater variability and less certainty as a result of potential material impacts related to foreign exchange fluctuations, macroeconomic activity including inflation, and industry-specific challenges including changes to government healthcare policy, among others.

For 2012, at current exchange rates((15)), Pfizer is targeting reported revenues between $65.2 and $67.7 billion, reported diluted EPS((2)) between $1.58 and $1.73, adjusted diluted EPS((1)) between $2.25 and $2.35, adjusted R&D expenses((1)) between $8.0 and $8.5 billion, adjusted operating margin((1)) in a range of the high 30%s to low 40%s and adjusted other (income)/deductions((1)) between $1.0 and $1.2 billion in deductions. The effective tax rate on adjusted income((1)) is targeted at approximately 30%, while operating cash flow is expected to be at least $19.0 billion.

Additionally, the Company remains on-track to achieve the cost-reduction target of approximately $4 to $5 billion, by the end of 2012, at 2008 average foreign exchange rates, in comparison with the 2008 pro-forma adjusted total costs of the legacy Pfizer and legacy Wyeth operations.

       PFIZER INC. AND SUBSIDIARY COMPANIES
        CONSOLIDATED STATEMENTS OF INCOME
                   (UNAUDITED)
     (millions, except per common share data)
                                                                 % Incr.
                                            Third Quarter                 /
                                            -------------
                                              2010          2009 (Decr.)
                                              ----          ---- -------
     Revenues                              $16,171       $11,621       39
     Costs and expenses:
       Cost of sales (a)                     3,896         1,789      118
       Selling, informational and
        administrative expenses (a)          4,633         3,282       41
       Research and development expenses
        (a)                                  2,194         1,632       34
       Amortization of intangible assets     1,156           594       95
       Acquisition-related in-process
        research and development charges         -             -        -
       Restructuring charges and certain
        acquisition-related costs              499           193      159
       Other deductions--net                 2,353           160    *
                                             -----           ---
     Income from continuing operations
      before provision
       for taxes on income                   1,440         3,971      (64)
     Provision for taxes on income             564         1,092      (48)
                                                           -----
     Income from continuing operations         876         2,879      (70)
     Discontinued operations--net of
      tax                                       (5)            2    *
                                                             ---
     Net income before allocation to
      noncontrolling interests                 871         2,881      (70)
     Less: Net income attributable to
      noncontrolling interests                   5             3       67
                                                             ---
     Net income attributable to Pfizer
      Inc.                                    $866        $2,878      (70)
                                              ====        ======
     Earnings per share - basic:
       Income from continuing operations
        attributable to
           Pfizer Inc. common shareholders   $0.11         $0.43      (74)
       Discontinued operations--net of
        tax                                      -             -       --
                                               ---           ---
       Net income attributable to Pfizer
        Inc. common shareholders             $0.11         $0.43      (74)
                                             =====         =====
     Earnings per share - diluted:
       Income from continuing operations
        attributable to
           Pfizer Inc. common shareholders   $0.11         $0.43      (74)
       Discontinued operations--net of
        tax                                      -             -       --
                                               ---           ---
       Net income attributable to Pfizer
        Inc. common shareholders             $0.11         $0.43      (74)
                                             =====         =====
     Weighted-average shares used to
      calculate earnings per
     common share:
       Basic                                 8,027         6,730
                                             =====         =====
       Diluted                               8,057         6,762
                                             =====         =====

                                                                % Incr.
                                            Nine Months                  /
                                            -----------
                                              2010         2009 (Decr.)
                                              ----         ---- -------
     Revenues                              $50,248      $33,472       50
     Costs and expenses:
       Cost of sales (a)                    11,997        4,953      142
       Selling, informational and
        administrative expenses (a)         13,876        9,508       46
       Research and development expenses
        (a)                                  6,607        5,032       31
       Amortization of intangible assets     3,972        1,755      126
       Acquisition-related in-process
        research and development charges        74           20      270
       Restructuring charges and certain
        acquisition-related costs            2,091        1,206       73
       Other deductions--net                 3,038          175    *
                                             -----          ---
     Income from continuing operations
      before provision
       for taxes on income                   8,593       10,823      (21)
     Provision for taxes on income           3,198        2,952        8
                                             -----        -----
     Income from continuing operations       5,395        7,871      (31)
     Discontinued operations--net of
      tax                                       (4)           6    *
                                               ---          ---
     Net income before allocation to
      noncontrolling interests               5,391        7,877      (32)
     Less: Net income attributable to
      noncontrolling interests                  24            9      167
                                               ---
     Net income attributable to Pfizer
      Inc.                                  $5,367       $7,868      (32)
                                            ======       ======
     Earnings per share - basic:
       Income from continuing operations
        attributable to
           Pfizer Inc. common shareholders   $0.67        $1.17      (43)
       Discontinued operations--net of
        tax                                      -            -       --
                                               ---          ---
       Net income attributable to Pfizer
        Inc. common shareholders             $0.67        $1.17      (43)
                                             =====        =====
     Earnings per share - diluted:
       Income from continuing operations
        attributable to
           Pfizer Inc. common shareholders   $0.66        $1.16      (43)
       Discontinued operations--net of
        tax                                      -            -       --
                                               ---          ---
       Net income attributable to Pfizer
        Inc. common shareholders             $0.66        $1.16      (43)
                                             =====        =====
     Weighted-average shares used to
      calculate earnings per
     common share:
       Basic                                 8,045        6,727
                                             =====        =====
       Diluted                               8,079        6,758
                                             =====        =====
    (a)  Exclusive of amortization of intangible assets, except as discussed
         in footnote 3 below.
      *  Calculation not meaningful.
      Certain amounts and percentages may reflect rounding adjustments.

     1.  The above financial statements present the three-month and nine-
         month periods ended October 3, 2010 and September 27, 2009.
         Subsidiaries
      operating outside the United States are included for the three-month
      and nine-month periods ended August 29, 2010 and August 23, 2009.
      Wyeth's results are included in our consolidated financial statements
      commencing from the acquisition date of October 15, 2009, in
      accordance
      with Pfizer's domestic and international year-ends. Therefore, our
      results of operations for the three-month and nine-month periods
      ended
      September 27, 2009 do not include Wyeth's results of operations. Cost
      of sales for 2010 includes the significant impacts of purchase
      accounting
      adjustments associated with inventory acquired from Wyeth that was
      sold in 2010 as well as a write-off of certain Wyeth-related
      inventory.
      Amortization of intangible assets for 2010 includes the amortization
      of intangible assets acquired from Wyeth. Other deductions-net
      includes
      impairment charges related to certain intangible assets acquired as
      part of our acquisition of Wyeth. See Supplemental Information that
      accompanies these materials for additional details related to the
      impairment charges and inventory write-off recorded in the third
      quarter of
      2010 that impacted Other deductions-net and Cost of sales.

     2.  The financial results for the three-month and nine-month periods
         ended October 3, 2010, are not necessarily indicative of the results
         which could
      ultimately be achieved for the current year.

     3.  Amortization expense related to acquired intangible assets that
         contribute to our ability to sell, manufacture, research, market and
         distribute our
      products is included in Amortization of intangible assets as these
      intangible assets benefit multiple business functions. Amortization
      expense
      related to acquired intangible assets that are associated with a
      single function is included in Cost of sales, Selling, informational
      and administrative
      expenses or Research and development expenses, as appropriate.

                       PFIZER INC. AND SUBSIDIARY COMPANIES
       RECONCILIATION OF REPORTED NET INCOME ATTRIBUTABLE TO PFIZER INC. AND
                                  ITS COMPONENTS
     AND REPORTED DILUTED EPS ATTRIBUTABLE TO PFIZER INC. COMMON SHAREHOLDERS
        TO ADJUSTED INCOME AND ITS COMPONENTS AND ADJUSTED DILUTED EPS (a)
                                    (UNAUDITED)
                (millions of dollars, except per common share data)


                             Quarter Ended October 3, 2010
                             -----------------------------

                                            Purchase          Acquisition-
                                           Accounting           Related
                           Reported        Adjustments            Costs(2)
                                            -----------           -------
     Revenues                $16,171    $             -    $              -
     Costs and
      expenses:
     Cost of sales (b)        3,896               (487)               (241)
     Selling,
      informational
      and
      administrative
      expenses (b)             4,633                 8                 (28)
     Research and
      development
      expenses (b)            2,194                 (8)                (26)
     Amortization of
      intangible
      assets                  1,156             (1,124)                  -
     Acquisition-
      related in-
      process research
      and development
      charges                      -                  -                   -
     Restructuring
      charges and
      certain
      acquisition-
      related costs              499                  -                (499)
     Other
      (income)/deductions-
      -net                     2,353                (14)                  -
                               -----                ---                 ---
     Income from
      continuing
      operations
      before provision
      for taxes on
      income                   1,440              1,625                  794
     Provision for
      taxes on income            564                379                  232
                                 ---                ---                    -
     Income from
      continuing
      operations                 876              1,246                  562
     Discontinued
      operations--
      net of tax                  (5)                 -                   -
     Net income before
      allocation to
      noncontrolling
      interests                  871              1,246                  562
     Less: Net income
      attributable to
      noncontrolling
      interests                    5                  -                   -
                                 ---                ---                 ---
     Net income
      attributable to
      Pfizer Inc.               $866             $1,246                 $562
                                ====             ======                 ====
     Earnings per
      common share -
      diluted:
       Income from
        continuing
        operations
        attributable to
        Pfizer Inc.             $0.11             $0.15               $0.07
       common
        shareholders
       Discontinued
        operations--
        net of tax                 -                  -                   -
                                 ---                ---                 ---
       Net income
        attributable to
        Pfizer Inc.
        Common 
        shareholders           $0.11              $0.15                $0.07
                               =====              =====                =====




                            Quarter Ended October 3, 2010
                            -----------------------------
                                                 Certain
                            Discontinued       Significant
                              Operations         Items(3)          Adjusted
                              ----------            -------         --------
     Revenues              $           -                $(5)           $16,166
     Costs and
      expenses:
     Cost of sales (b)               -               (209)             2,959
     Selling,
      informational
      and
      administrative
      expenses (b)                 -               2      4,615
     Research and
      development
      expenses (b)                     -                  -             2,160
     Amortization of
      intangible
      assets                           -                  -                32
     Acquisition-
      related in-
      process research
      and development
      charges                      -              -         -
     Restructuring
      charges and
      certain
      acquisition-
      related costs                -              -         -
     Other
      (income)/deductions-
      -net                             -             (2,208)               131
                                     ---              ------               ---
     Income from
      continuing
      operations
      before provision
      for taxes on
      income                           -               2,410             6,269
     Provision for
      taxes on income                  -                 717             1,892
                                     ---                 ---             -----
     Income from
      continuing
      operations                       -               1,693      -      4,377
     Discontinued
      operations--
      net of tax                       5                  -                -
                                                                         ---
     Net income before
      allocation to
      noncontrolling
      interests                        5               1,693             4,377
     Less: Net income
      attributable to
      noncontrolling
      interests                        -                  -                 5
                                     ---                ---               ---
     Net income
      attributable to
      Pfizer Inc.                     $5              $1,693            $4,372
                                     ===              ======            ======
     Earnings per
      common share -
      diluted:
       Income from
        continuing
        operations
        attributable to
        Pfizer Inc.        $           -               $0.21             $0.54
       common
        shareholders
       Discontinued
        operations--
        net of tax                     -                  -                  -
                                     ---                ---                ---
       Net income
        attributable to
        Pfizer Inc.
        common
        shareholders       $           -               $0.21             $0.54
                                     ===               =====             =====


                             Nine Months Ended October 3, 2010
                             ---------------------------------

                                            Purchase             Acquisition-
                                           Accounting              Related
                          Reported        Adjustments                Costs(2)
                                             -----------             -------
     Revenues                 $50,248    $             -    $              -
     Costs and
      expenses:
     Cost of sales
      (b)                      11,997             (2,564)               (367)
     Selling,
      informational
      and
      administrative
      expenses (b)             13,876                17            (190)
     Research and
      development
      expenses (b)              6,607                (23)                (46)
     Amortization of
      intangible
      assets                    3,972             (3,880)                  -
     Acquisition-
      related in-
      process
      research and
      development
      charges                     74                (74)                   -
     Restructuring
      charges and
      certain
      acquisition-
      related costs            2,091                   -              (2,091)
     Other
      (income)/deductions-
      -net                      3,038                (40)                  -
                                -----                ---                 ---
     Income from
      continuing
      operations
      before
      provision for
      taxes on                  8,593              6,564                2,694
      income
     Provision for
      taxes on
      income                    3,198              1,631                  695
                                -----              -----                  ---
     Income from
      continuing
      operations                5,395              4,933                1,999
     Discontinued
      operations--
      net of tax                   (4)                 -                   -
                                  ---                ---                 ---
     Net income
      before
      allocation to
      noncontrolling
      interests                 5,391               4,933              1,999
     Less: Net
      income
      attributable
      to
      noncontrolling
      interests                    24                  -                   -
                                  ---                ---                 ---
     Net income
      attributable
      to Pfizer Inc.           $5,367             $4,933               $1,999
                               ======             ======               ======
     Earnings per
      common share -
      diluted:
       Income from
        continuing
        operations
        attributable
        to Pfizer Inc.           $0.66             $0.61               $0.25
       common
        shareholders
       Discontinued
        operations--
        net of tax                  -                  -                   -
                                  ---                ---                 ---
       Net income
        attributable
        to Pfizer Inc.
        common
        shareholders            $0.66             $0.61                $0.25
                                =====              =====                =====



                            Nine Months Ended October 3, 2010
                            ---------------------------------
                                                   Certain
                            Discontinued        Significant
                             Operations             Items(3)       Adjusted
                               ----------          -------         --------
     Revenues           $            -                $(18)           $50,230
     Costs and
      expenses:
     Cost of sales
      (b)                            -                (221)             8,845
     Selling,
      informational
      and
      administrative
      expenses (b)                  -                   14          13,717
     Research and
      development
      expenses (b)                   -                   -             6,538
     Amortization
      of intangible
      assets                         -                   -                92
     Acquisition-
      related in-
      process
      research and
      development
      charges                       -                     -         -
     Restructuring
      charges and
      certain
      acquisition-
      related costs                 -                     -         -
     Other
      (income)/deductions-
      -net                           -              (2,500)               498
                                   ---               ------               ---
     Income from
      continuing
      operations
      before
      provision for
      taxes on                      -                 2,689     20,540
     income
     Provision for
      taxes on
      income                         -                  779             6,303
                                   ---                  ---             -----
     Income from
      continuing
      operations                     -                1,910      -     14,237
     Discontinued
      operations--
      net of tax                     4                   -                -
                                   ---                 ---              ---
     Net income
      before
      allocation to
      noncontrolling
      interests                     4               1,910     14,237
     Less: Net
      income
      attributable
      to
      noncontrolling
      interests                     -               -         24
                                   ---                 ---               ---
     Net income
      attributable
      to Pfizer
      Inc.                          $4               $1,910           $14,213
                                   ===               ======           =======
     Earnings per
      common share
      -diluted:
       Income from
        continuing
        operations
        attributable
        to Pfizer
        Inc.               $         -              $0.24      $1.76
       common
        shareholders
       Discontinued
        operations--
        net of tax                   -                   -                -
                                   ---                 ---              ---
       Net income
        attributable
        to Pfizer
        Inc. common
        shareholders       $         -               $0.24      $1.76
                                   ===                =====             =====



     (a)  Adjusted income and its components and adjusted diluted EPS are not,
          and should not be viewed as, substitutes for U.S. GAAP net income
          and its components and diluted EPS.
     (b)   Exclusive of amortization of intangible assets, except as discussed
           in note 1.

     See end of tables for notes.
     Certain amounts may reflect rounding adjustments.
                       PFIZER INC. AND SUBSIDIARY COMPANIES
       RECONCILIATION OF REPORTED NET INCOME ATTRIBUTABLE TO PFIZER INC. AND
                                  ITS COMPONENTS
     AND REPORTED DILUTED EPS ATTRIBUTABLE TO PFIZER INC. COMMON SHAREHOLDERS
        TO ADJUSTED INCOME AND ITS COMPONENTS AND ADJUSTED DILUTED EPS (a)
                                    (UNAUDITED)
                (millions of dollars, except per common share data)
                              Quarter Ended September 27, 2009
                              --------------------------------

                                               Purchase          Acquisition-
                                              Accounting           Related
                              Reported        Adjustments          Costs(2)
                                              -----------          -------
    Revenues                   $11,621    $        -         $        -
    Costs and expenses:
    Cost of sales (b)            1,789                  -                   -
    Selling, informational
     and administrative
     expenses (b)                3,282                  3                   -
    Research and
     development expenses
     (b)                         1,632                 (8)                  -
    Amortization of
     intangible assets             594               (560)                  -
    Acquisition-related
     in-process research
     and development
     charges                         -                  -                   -
    Restructuring charges
     and certain
     acquisition-related
     costs                         193                  -                (132)
    Other
     (income)/deductions-
     -net                          160                  1                   -
                                   ---                ---                 ---
    Income from continuing
     operations before
     provision for taxes
     on income                   3,971                564                 132
    Provision for taxes on
     income                      1,092                167                  45
                                 -----                ---                 ---
    Income from continuing
     operations                  2,879                397                  87
    Discontinued
     operations--net of
     tax                             2                  -                   -
                                   ---
    Net income before
     allocation to
     noncontrolling
     interests                   2,881                397                  87
    Less: Net income
     attributable to
     noncontrolling
     interests                       3                  -                   -
                                   ---                ---                 ---
    Net income
     attributable to
     Pfizer Inc.                $2,878               $397                 $87
                                ======               ====                 ===
    Earnings per common
     share -diluted:
      Income from continuing
       operations
       attributable to
       Pfizer Inc. common
       shareholders          $0.43          $0.06           $0.01
      Discontinued
       operations--net of
       tax                           -                  -                   -
                                   ---                ---                 ---
      Net income
       attributable to
       Pfizer Inc. common
       shareholders              $0.43              $0.06               $0.01
                                 =====              =====               =====

                           Quarter Ended September 27, 2009
                           --------------------------------
                                                   Certain
                              Discontinued        Significant
                               Operations           Items(3)         Adjusted
                               ----------           -------          --------
    Revenues              $         -                    $(18)        $11,603
    Costs and expenses:
    Cost of sales (b)                    -                 (2)          1,787
    Selling,
     informational and
     administrative
     expenses (b)                        -                (60)          3,225
    Research and
     development expenses
     (b)                                 -                 (5)          1,619
    Amortization of
     intangible assets                   -                  -              34
    Acquisition-related
     in-process research
     and development
     charges                             -                  -               -
    Restructuring charges
     and certain
     acquisition-related
     costs                               -                (61)              -
    Other
     (income)/deductions-
     -net                                -               (303)           (142)
                                       ---               ----            ----
    Income from
     continuing
     operations before
     provision for taxes
     on income                       -            413       5,080
    Provision for taxes
     on income                           -                312           1,616
                                       ---                ---           -----
    Income from
     continuing
     operations                          -                101    -      3,464
    Discontinued
     operations--net of
     tax                                (2)                 -               -
                                                                          ---
    Net income before
     allocation to
     noncontrolling
     interests                          (2)               101           3,464
    Less: Net income
     attributable to
     noncontrolling
     interests                           -                  -               3
                                       ---                ---             ---
    Net income
     attributable to
     Pfizer Inc.                       $(2)              $101          $3,461
                                       ===               ====          ======
    Earnings per common
     share -diluted:
      Income from
       continuing
       operations
       attributable to
       Pfizer Inc. common
       shareholders       $              -          $0.01       $0.51
      Discontinued
       operations--net of
       tax                               -                  -               -
                                       ---                ---             ---
      Net income
       attributable to
       Pfizer Inc. common
       shareholders       $              -              $0.01           $0.51
                                       ===              =====           =====


                             Nine Months Ended September 27, 2009
                             ------------------------------------

                             Reported        Purchase         Acquisition-
                                            Accounting          Related
                                            Adjustments         Costs(2)
    Revenues                  $33,472   $        -        $        -
    Costs and expenses:
    Cost of sales (b)           4,953                 -                  -
    Selling, informational
     and administrative
     expenses (b)               9,508                 9                  -
    Research and
     development expenses
     (b)                        5,032               (22)                 -
    Amortization of
     intangible assets          1,755            (1,656)                 -
    Acquisition-related
     in-process research
     and development
     charges                       20               (20)                 -
    Restructuring charges
     and certain
     acquisition-related
     costs                      1,206                 -               (814)
    Other
     (income)/deductions-
     -net                         175                (2)                 -
                                  ---               ---                ---
    Income from continuing
     operations before
     provision for taxes
     on income                 10,823             1,691                814
    Provision for taxes on
     income                     2,952               524                290
                                -----
    Income from continuing
     operations                 7,871             1,167                524
    Discontinued
     operations--net of
     tax                            6                 -                  -
                                  ---               ---                ---
    Net income before
     allocation to
     noncontrolling
     interests                  7,877             1,167                524
    Less: Net income
     attributable to
     noncontrolling
     interests                      9                 -                  -
                                  ---               ---                ---
    Net income
     attributable to
     Pfizer Inc.               $7,868            $1,167               $524
                               ======            ======               ====
    Earnings per common
     share -diluted:
      Income from continuing
       operations
       attributable to
       Pfizer Inc. common
       shareholders           $1.16          $0.17           $0.08
      Discontinued
       operations--net of
       tax                          -                 -                  -
                                  ---               ---                ---
      Net income
       attributable to
       Pfizer Inc. common
       shareholders             $1.16             $0.17              $0.08
                                =====             =====              =====






                             Nine Months Ended September 27, 2009
                             ------------------------------------
                            Discontinued        Certain          Adjusted
                             Operations        Significant
                                                 Items(3)
    Revenues                 $        -              $(58)       $33,414
    Costs and expenses:
    Cost of sales (b)                 -              (166)         4,787
    Selling, informational
     and administrative
     expenses (b)                     -              (195)         9,322
    Research and
     development expenses
     (b)                              -               (70)         4,940
    Amortization of
     intangible assets                -                 -             99
    Acquisition-related
     in-process research
     and development
     charges                          -                 -              -
    Restructuring charges
     and certain
     acquisition-related
     costs                            -              (392)             -
    Other
     (income)/deductions-
     -net                             -              (731)          (558)
                                    ---              ----           ----
    Income from continuing
     operations before
     provision for taxes
     on income                        -             1,496         14,824
    Provision for taxes on
     income                           -               672          4,438
                                                                   -----
    Income from continuing
     operations                      -               824         10,386
    Discontinued
     operations--net of
     tax                             (6)                -              -
                                    ---               ---            ---
    Net income before
     allocation to
     noncontrolling
     interests                       (6)              824         10,386
    Less: Net income
     attributable to
     noncontrolling
     interests                        -                 -              9
                                    ---               ---            ---
    Net income
     attributable to
     Pfizer Inc.                    $(6)             $824        $10,377
                                    ===              ====        =======
    Earnings per common
     share -diluted:
      Income from continuing
       operations
       attributable to
       Pfizer Inc. common
       shareholders          $        -          $0.13      $1.54
      Discontinued
       operations--net of
       tax                            -                 -              -
                                    ---               ---            ---
      Net income
       attributable to
       Pfizer Inc. common
       shareholders          $        -             $0.13          $1.54
                                    ===             =====          =====



    (a)   Adjusted income and its components and adjusted diluted EPS are not,
          and should not be viewed as, substitutes for U.S. GAAP net income
          and its components and diluted EPS.
    (b)   Exclusive of amortization of intangible assets, except as discussed
          in note 1.

    See end of tables for notes.
    Certain amounts may reflect rounding adjustments.


                       PFIZER INC. AND SUBSIDIARY COMPANIES
       RECONCILIATION OF REPORTED NET INCOME ATTRIBUTABLE TO PFIZER INC. AND
                                 ITS COMPONENTS
    AND REPORTED DILUTED EPS ATTRIBUTABLE TO PFIZER INC. COMMON SHAREHOLDERS
           TO ADJUSTED INCOME AND ITS COMPONENTS AND ADJUSTED DILUTED EPS*
                                   (UNAUDITED) 


    1)   Amortization expense related to acquired intangible assets that
         contribute to our ability to sell, manufacture, research, market and
         distribute our products is included in Amortization of intangible
         assets as these intangible assets benefit multiple business
         functions. Amortization expense related to acquired intangible assets
         that are associated with a single function is included in Cost of
         sales, Selling, informational and administrative expenses or Research
         and development expenses, as appropriate.

    2)   Acquisition-related costs includes the following:


                                      Third Quarter    Nine Months
                                      -------------    -----------
     (millions of dollars)             2010          2009     2010   2009
     ---------------------             ----          ----     ----   ----

       Transaction costs(a)              $-           $19      $13   $572
       Integration costs(a)             231           113      650    242
       Restructuring charges(a)         268             -    1,428      -
       Additional depreciation
        -asset
        restructuring(b)                295             -      603      -
                                        ---           ---      ---    ---
                  Total acquisition-
                   related costs --
                   pre-tax              794   -       132    2,694    814
       Income taxes(c)                 (232)          (45)    (695)  (290)
                                       ----           ---     ----   ----
                  Total acquisition-
                   related costs --
                   net of tax          $562           $87   $1,999   $524
                                       ====           ===   ======   ====


    (a)   Transaction costs include costs directly related to our acquisition
          of Wyeth, such as banking, legal, accounting and other similar
          costs. Integration costs represent external, incremental costs
          directly related to integrating Wyeth and primarily include
          expenditures for consulting and systems integration. Restructuring
          charges relate to our acquisition of Wyeth and include employee
          termination costs, asset impairments and exit costs.

    (b)   Represents the impact of changes in the estimated useful lives of
          assets involved in restructuring actions related to our acquisition
          of Wyeth. Included in Cost of Sales ($241 million), Selling,
          informational and administrative expenses ($28 million), and
          Research and development expenses ($26 million) for the three months
          ended October 3, 2010. Included in Cost of sales ($367 million),
          Selling, informational and administrative expenses ($190 million)
          and Research and development expenses ($46 million) for the nine
          months ended October 3, 2010.

    (c)   Included in Provision for taxes on income.


     3)  Certain significant items includes the following:


                                             Third Quarter      Nine Months
                                             -------------      -----------
     (millions of dollars)                 2010         2009     2010    2009
     ---------------------                 ----         ----     ----    ----

       Restructuring charges - Cost-
        reduction initiatives(a)             $-          $61       $-    $392
       Implementation costs - Cost-
        reduction initiatives(b)              -           80        -     410
       Certain legal matters(c)             701           40      843     170
       Net interest expense(d)                -          299        -     528
       Certain asset impairment
        charges(e)                        1,468            -    1,668      66
       Inventory write-off(f)               212            -      212       -
       Other(g)                              29          (67)     (34)    (70)
                                            ---          ---      ---     ---
             Total certain significant 
              items -- pre-tax            2,410          413    2,689   1,496
       Income taxes(h)                     (717)        (312)    (779)   (672)
             Total certain significant 
              items --net of tax         $1,693         $101   $1,910    $824
                                         ======         ====   ======    ====


    (a)   Included in Restructuring charges and certain acquisition-related
          costs.

    (b)   Included in Cost of sales ($23 million), Selling, informational and
          administrative expenses ($51 million), Research and development
          expenses ($5 million), and Other deductions -net ($1 million) for
          the three months ended September 27, 2009. Included in Cost of sales
          ($144 million), Selling, informational and administrative expenses
          ($182 million), Research and development expenses ($78 million), and
          Other deductions -net ($6 million) for the nine months ended
          September 27, 2009.

    (c)   Included in Other deductions - net.  The three-month and nine-
          month periods ended October 3, 2010 include an additional $701
          million charge for asbestos litigation related to our wholly owned
          subsidiary, Quigley Company, Inc.

    (d)   Included in Other deductions -net. Includes interest expense on the
          senior unsecured notes issued in connection with our acquisition of
          Wyeth less interest income earned on the proceeds of those notes.

    (e)   Included in Other deductions -net. Amounts in 2010 represent
          impairment charges related to certain intangible assets acquired as
          part of our acquisition of Wyeth (see Supplemental Information that
          accompanies these materials).

    (f)   Included in Cost of sales (see Supplemental Information that
          accompanies these materials).

    (g)   Primarily included in Other deductions - net.  Amounts in the nine-
          month period of 2010 include the g

Posted: November 2010


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