v3.25.4
Financial Instruments
 12 Months Ended
Dec. 31, 2025
Fair Value Disclosures [Abstract]  
Financial Instruments Financial Instruments
A. Fair Value Measurements
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis and Fair Value Hierarchy:
As of December 31, 2025As of December 31, 2024
(MILLIONS)TotalLevel 1Level 2
Level 3
TotalLevel 1Level 2
Level 3
Financial assets:
Short-term investments
Equity securities with readily determinable fair value(a)
$2,596 $— $2,596 $— $7,848 $6,456 $1,392 $— 
Available-for-sale debt securities:
Government and agency—non-U.S.4,859 — 4,859 — 6,855 — 6,855 — 
Government and agency—U.S.3,030 — 3,030 — 2,853 — 2,853 — 
Corporate and other1,294 — 1,294 — 1,173 — 1,173 — 
9,183 — 9,183 — 10,881 — 10,881 — 
Total short-term investments11,779 — 11,779 — 18,729 6,456 12,273 — 
Other current assets
Derivative assets:
Interest rate contracts— — — — — — — — 
Foreign exchange contracts416 — 416 — 1,056 — 1,056 — 
Total other current assets416 — 416 — 1,056 — 1,056 — 
Long-term investments
Equity securities with readily determinable fair values(b)
642 642 — — 1,246 1,246 — — 
Available-for-sale debt securities:
Government and agency—non-U.S.1 — 1 — — — — — 
Corporate and other— — — — — — — — 
1 — 1 — — — — — 
Total long-term investments642 642 1 — 1,246 1,246 — — 
Other noncurrent assets
Derivative assets:
Interest rate contracts52 — 52 — 13 — 13 — 
Foreign exchange contracts64 — 64 — 447 — 447 — 
Total derivative assets116 — 116 — 460 — 460 — 
Insurance contracts(c)
999 — 999 — 875 — 875 — 
Total other noncurrent assets1,115 — 1,115 — 1,335 — 1,335 — 
Total assets$13,953 $642 $13,311 $— $22,366 $7,701 $14,665 $— 
Financial liabilities:
Other current liabilities
Derivative liabilities:
Interest rate contracts$16 $— $16 $— $28 $— $28 $— 
Foreign exchange contracts412 — 412 — 217 — 217 — 
Contingent consideration liabilities(d)
95 — — 95 39 — — 39 
Total other current liabilities523 — 428 95 284 — 245 39 
Other noncurrent liabilities
Derivative liabilities:
Interest rate contracts215 — 215 — 397 — 397 — 
Foreign exchange contracts815 — 815 — 723 — 723 — 
Contingent consideration liabilities(d)
1,695 — — 1,695 477 — — 477 
Total other noncurrent liabilities2,725 — 1,030 1,695 1,598 — 1,121 477 
Total liabilities$3,248 $— $1,458 $1,790 $1,882 $— $1,366 $517 
(a)Includes money market funds primarily invested in U.S. Treasury and government debt. As of December 31, 2024, short-term equity securities included our previous investment in Haleon of $6.5 billion. In the first quarter of 2025, we sold the remaining portion of our investment in Haleon for $6.3 billion. See Note 2C.
(b)Long-term equity securities of $146 million as of December 31, 2025 and $133 million as of December 31, 2024 were held in restricted trusts for U.S. non-qualified employee benefit plans.
(c)Includes life insurance policies held in restricted trusts for U.S. non-qualified employee benefit plans. The underlying invested assets in these contracts are marketable securities, which are carried at fair value, with changes in fair value recognized in Other (income)/deductions—net (see Note 4).
(d)Includes the fair value of contingent consideration associated with the acquisition of Metsera and certain prior business combinations. Fair value is estimated by using a probability-weighted discounted cash flow approach (see Note 16D).
The following provides the changes in our contingent consideration liabilities valued using significant unobservable inputs:
Year Ended December 31,
(MILLIONS)20252024
Fair value, beginning$517 $692 
Changes in estimated fair value(a)
67 (52)
Additions
1,266 — 
Payments
(59)(123)
Transfer into/(out of) Level 3— — 
Fair value, ending$1,790 $517 
(a)Reported in Other (income)/deductions––net. See Note 4.
Financial Assets and Liabilities Not Measured at Fair Value on a Recurring Basis––The carrying value of Long-term debt, excluding the current portion, was $62 billion as of December 31, 2025 and $57 billion as of December 31, 2024. The estimated fair value of such debt, using a market approach and Level 2 inputs, was $60 billion as of December 31, 2025 and $54 billion as of December 31, 2024.
The differences between the estimated fair values and carrying values of held-to-maturity debt securities, private equity securities, long-term receivables and short-term borrowings not measured at fair value on a recurring basis were not significant as of December 31, 2025 and 2024. The fair value measurements of our held-to-maturity debt securities and short-term borrowings are based on Level 2 inputs. The fair value measurements of our long-term receivables and private equity securities are based on Level 3 inputs.
B. Investments
Total Short-Term and Long-Term Investments
The following summarizes our investments by classification type:
As of December 31,
(MILLIONS)20252024
Short-term investments
Equity securities with readily determinable fair values
$2,596 $7,848 
Available-for-sale debt securities9,183 10,881 
Held-to-maturity debt securities675 705 
Total Short-term investments$12,454 $19,434 
Long-term investments
Equity securities with readily determinable fair values(a)
$642 $1,246 
Available-for-sale debt securities1 — 
Held-to-maturity debt securities48 45 
Private equity securities at cost(a)
696 719 
Equity-method investments
235 217 
Total Long-term investments
$1,621 $2,228 
(a)Represent investments in the life sciences sector.
Debt Securities
Our investment portfolio consists of investment-grade debt securities issued across diverse governments, corporate and financial institutions:
As of December 31, 2025As of December 31, 2024
Gross UnrealizedMaturities (in Years)Gross Unrealized
(MILLIONS)Amortized CostGainsLossesFair ValueWithin 1Over 1
to 5		Over 5Amortized CostGainsLossesFair Value
Available-for-sale debt securities
Government and agency––non-U.S.
$4,890 $3 $(34)$4,859 $4,859 $1 $— $6,970 $8 $(123)$6,855 
Government and agency––U.S.
3,030 — — 3,030 3,030 — — 2,853 — — 2,853 
Corporate and other1,295 — (1)1,294 1,294 — — 1,179 — (6)1,173 
Held-to-maturity debt securities
Time deposits and other
487 — — 487 444 7 36 697 — — 697 
Government and agency––non-U.S.
236 — — 236 231 4 1 237 — — 237 
Total debt securities$9,938 $3 $(35)$9,906 $9,858 $12 $37 $11,935 $8 $(129)$11,814 
Any expected credit losses to these portfolios would be immaterial to our financial statements.
Equity Securities
The following presents the calculation of the portion of unrealized (gains)/losses that relates to equity securities, excluding equity-method investments, held at the reporting date:
Year Ended December 31,
(MILLIONS)202520242023
Net (gains)/losses recognized during the period on equity securities(a)
$67 $(1,008)$(1,590)
Less: Net (gains)/losses recognized during the period on equity securities sold during the period35 (1,122)(1,754)
Net unrealized (gains)/losses during the reporting period on equity securities still held at the reporting date
$32 $114 $165 
(a)Reported in Other (income)/deductions––net. See Note 4.
Included in net unrealized (gains)/losses are observable price changes on equity securities without readily determinable fair values. As of December 31, 2025, there were cumulative impairments and downward adjustments of $433 million and upward adjustments of $225 million. Impairments, downward and upward adjustments were not material to our operations in 2025, 2024 and 2023.
C. Short-Term Borrowings
Short-term borrowings include:
As of December 31,
(MILLIONS)20252024
Commercial paper, principal amount(a)
$— $2,453 
Current portion of long-term debt, principal amount3,000 3,750 
Other short-term borrowings, principal amount(b)
157 755 
Total short-term borrowings, principal amount
3,157 6,957 
Net unamortized discounts, premiums and debt issuance costs(3)(12)
Total Short-term borrowings, including current portion of long-term debt, carried at historical proceeds, as adjusted
$3,154 $6,946 
(a)The weighted-average effective interest rate on commercial paper outstanding was approximately 4.94% as of December 31, 2024.
(b)Primarily includes cash collateral. See Note 7F.
As of December 31, 2025, we had access to a $7.0 billion committed U.S. revolving credit facility maturing in October 2030, which may be used for general corporate purposes including to support our global commercial paper borrowings. In addition to the U.S. revolving credit facilities, our lenders have provided us an additional $237 million in lines of credit, essentially all expiring within one year. Essentially all lines of credit were unused as of December 31, 2025.
D. Long-Term Debt
The following outlines our senior unsecured long-term debt(a) and the weighted-average stated interest rate by maturity:
As of December 31,
(MILLIONS)20252024
Notes due 2026 (3.7% for 2024)(b)
$— $6,000 
Notes due 2027 (2.9% for 2025 and 2.2% for 2024)
2,081 980 
Notes due 2027 (Secured Overnight Financing Rate “SOFR” +0.500%)
500 — 
Notes due 2028 (4.6% for 2025 and 2024)
5,660 5,660 
Notes due 2029 (3.3% for 2025 and 3.5% for 2024)
2,631 1,750 
Notes due 2030 (3.7% for 2025 and 3.6% for 2024)
6,250 5,250 
Notes due 2031-2035 (4.4% for 2025 and 4.5% for 2024)
10,424 6,750 
Notes due 2036-2040 (5.3% for 2025 and 5.4% for 2024)
10,458 9,534 
Notes due 2041-2045 (4.3% for 2025 and 2024)
7,540 6,474 
Notes due 2046-2050 (3.7% for 2025 and 2024)
4,750 4,750 
Notes due 2051-2065 (5.3% for 2025 and 2024)
11,000 10,000 
Total long-term debt, principal amount61,293 57,147 
Net fair value adjustments related to hedging and purchase accounting834 701 
Net unamortized discounts, premiums and debt issuance costs(486)(444)
Total long-term debt, carried at historical proceeds, as adjusted$61,641 $57,405 
Current portion of long-term debt, carried at historical proceeds, as adjusted (not included above (3.9% for 2025 and 2024))
$2,997 $3,747 
(a)Our long-term debt is generally redeemable by us at any time at varying redemption prices plus accrued and unpaid interest.
(b)Reclassified to the current portion of long-term debt.
Issuances
In 2025, we issued the following senior unsecured notes(a) :
(MILLIONS)Principal
Coupon RateMaturity Date
Issue Currency
As of December 31, 2025
SOFR +0.500%
November 15, 2027
U.S. dollar
$500 
3.875%November 15, 2027U.S. dollar1,000 
4.200%November 15, 2030U.S. dollar1,000 
4.500%November 15, 2032U.S. dollar1,250 
4.875%November 15, 2035U.S. dollar1,250 
5.600%November 15, 2055U.S. dollar500 
5.700%November 15, 2065U.S. dollar500 
$6,000 
(b)
2.875%May 19, 2029
Euro
€750 
3.250%May 19, 2032Euro1,000 
3.875%May 19, 2037Euro750 
4.250%May 19, 2045Euro800 
€3,300 
(c)
(a)The fixed rate notes may be redeemed by us at any time, in whole, or in part, at a make-whole redemption price plus accrued and unpaid interest.
(b)The net proceeds from the sale of the notes were used for general corporate purposes, including the acquisition of Metsera and the refinancing of existing indebtedness. The weighted average effective interest rate for the notes at issuance was 4.583%.
(c)Issued through our wholly-owned finance subsidiary, PNIF, for general corporate purposes. The notes are fully and unconditionally guaranteed on a senior unsecured basis by Pfizer Inc. PNIF has no assets or operations and will have no assets or operations, other than as related to the issuance, administration and repayment of the notes and any other debt securities that it may issue in the future. The weighted average effective interest rate for the notes at issuance was 3.605%.
In May 2023, we issued, through our wholly-owned finance subsidiary, PIE, $31 billion principal amount of senior unsecured notes at an effective interest rate of 4.93% as part of the financing for our acquisition of Seagen. The notes are fully and unconditionally guaranteed on a senior unsecured basis by Pfizer Inc. PIE was formed to finance a portion of the consideration for the acquisition of Seagen and has no assets or operations, and will have no assets or operations, other than as related to the issuance, administration and repayment of the notes and any other debt securities that it may issue in the future. In December 2025, we redeemed $3 billion of the 4.45% PIE senior unsecured notes due in May 2026.
E. Derivative Financial Instruments and Hedging Activities
Foreign Exchange Risk––A significant portion of our revenues, earnings and net investments in foreign affiliates is exposed to changes in foreign exchange rates. Where foreign exchange risk is not offset by other exposures, we manage our foreign exchange risk principally through the use of derivative financial instruments and foreign currency debt. These financial instruments serve to mitigate the impact on net income as a result of remeasurement into another currency, or against the impact of translation into U.S. dollars of certain foreign exchange-denominated transactions.
The derivative financial instruments primarily hedge or offset exposures in the euro, U.K. pound, Chinese renminbi, Japanese yen, Canadian dollar, and Swedish krona, and include a portion of our forecasted foreign exchange-denominated intercompany inventory sales hedged up to two years. We may also seek to protect against possible declines in the net investments of our foreign business entities.
Changes in fair value are reported in earnings or in Other comprehensive income/(loss), depending on the nature and purpose of the financial instrument (hedge or offset relationship). For certain foreign exchange contracts, we exclude an amount from the assessment of hedge effectiveness and recognize the excluded amount through an amortization approach in earnings. The hedge relationships are as follows:
•Generally, we recognize the gains and losses on foreign exchange contracts that are designated as fair value hedges in earnings upon the recognition of the change in fair value of the hedged item. We also recognize the offsetting foreign exchange impact attributable to the hedged item in earnings.
•Generally, we record in Other comprehensive income/(loss) gains or losses on foreign exchange contracts that are designated as cash flow hedges and reclassify those amounts into earnings in the same period or periods during which the hedged transaction affects earnings.
•We record in Other comprehensive income/(loss)––Foreign currency translation adjustments, net the foreign exchange gains and losses related to foreign exchange-denominated debt and foreign exchange contracts designated as a hedge of our net investments in foreign subsidiaries and reclassify those amounts into earnings upon the sale or substantial liquidation of our net investments.
•For foreign exchange contracts not designated as hedging instruments, we recognize the gains and losses immediately into earnings along with the earnings impact of the items they generally offset. These contracts take the opposite currency position of that reflected on the balance sheet to counterbalance the effect of any currency movement.
Interest Rate Risk––Our interest-bearing investments and borrowings are subject to interest rate risk. Depending on market conditions, we may change the profile of our outstanding debt or investments by entering into derivative financial instruments like interest rate swaps, either to hedge or offset the exposure to changes in the fair value of hedged items with fixed interest rates, or to convert variable rate debt or investments to fixed rates. The derivative financial instruments primarily hedge U.S. dollar fixed-rate debt.
We recognize the change in fair value on interest rate contracts that are designated as fair value hedges in earnings, as well as the offsetting earnings impact of the hedged risk attributable to the hedged item.
The following summarizes the fair value of the derivative financial instruments and notional amounts:
(MILLIONS)
As of December 31, 2025
As of December 31, 2024
Fair ValueFair Value
NotionalAssetLiabilityNotionalAssetLiability
Derivatives designated as hedging instruments:
Foreign exchange contracts(a)
$22,984 $325 $1,066 $23,991 $1,250 $719 
Interest rate contracts
6,750 52 230 6,750 13 425 
377 1,296 1,263 1,144 
Derivatives not designated as hedging instruments:
Foreign exchange contracts
$22,777 155 162 $26,335 253 221 
Total$532 $1,458 $1,516 $1,366 
(a)The notional amount of outstanding foreign exchange contracts hedging our intercompany forecasted inventory sales was $5.0 billion as of December 31, 2025 and $5.0 billion as of December 31, 2024.
The following summarizes information about the gains/(losses) incurred to hedge or offset operational foreign exchange or interest rate risk exposures:
 
Gains/(Losses)
Recognized in OID(a)
Gains/(Losses)
Recognized in OCI(a)
Gains/(Losses)
Reclassified from
OCI into OID and COS(a)
Year Ended December 31,
(MILLIONS)202520242025202420252024
Derivative Financial Instruments in Cash Flow Hedge Relationships:
      
Interest rate contracts$— $— $— $— $— $— 
Foreign exchange contracts(b)
— — (270)466 211 124 
Amount excluded from effectiveness testing and amortized into earnings(c)
— — 58 34 57 34 
Derivative Financial Instruments in Fair Value Hedge Relationships:
Interest rate contracts221 (253)— — — — 
Hedged item (221)253 — — — — 
Derivative Financial Instruments in Net Investment Hedge Relationships:
Foreign exchange contracts— — (1,361)498 — — 
Amount excluded from effectiveness testing and amortized into earnings(c)
— — 321 119 207 154 
Non-Derivative Financial Instruments in Net Investment Hedge Relationships(d):
Foreign currency long-term debt— — (101)49 — — 
Derivative Financial Instruments Not Designated as Hedges:
Foreign exchange contracts98 50 — — — — 
$98 $50 $(1,353)$1,166 $476 $313 
(a)OID = Other (income)/deductions—net, included in Other (income)/deductions—net in the consolidated statements of operations. COS = Cost of Sales, included in Cost of sales in the consolidated statements of operations. OCI = Other comprehensive income/(loss), included in the consolidated statements of comprehensive income/(loss).
(b)The amounts reclassified from OCI into COS were a net gain of $49 million in 2025 and a net gain of $119 million in 2024. The remaining amounts were reclassified from OCI into OID. Based on year-end foreign exchange rates that are subject to change, we expect to reclassify a pre-tax loss of $16 million within the next 12 months into income. The maximum length of time over which we are hedging our exposure to the variability in future foreign exchange cash flows is approximately 17 years and relates to foreign currency debt.
(c)The amounts reclassified from OCI were reclassified into OID.
(d)Long-term debt includes foreign currency borrowings which are used in net investment hedges; the related carrying values as of December 31, 2025 and December 31, 2024 were $879 million and $777 million, respectively.
The following summarizes cumulative basis adjustments to our long-term debt in fair value hedges:
As of December 31, 2025
As of December 31, 2024
Cumulative Amount of Fair
Value Hedging Adjustment
Increase/(Decrease) to
Carrying Amount		Cumulative Amount of Fair
Value Hedging Adjustment Increase/(Decrease) to
Carrying Amount
(MILLIONS)
Carrying Amount of Hedged Assets/Liabilities(a)
Active
Hedging
Relationships		Discontinued Hedging Relationships
Carrying Amount of Hedged Assets/Liabilities(a)
Active Hedging RelationshipsDiscontinued Hedging Relationships
Long-term debt$7,110 $(163)$821 $7,154 $(384)$891 
(a)Carrying amounts exclude the cumulative amount of fair value hedging adjustments.
F. Credit Risk
On an ongoing basis, we monitor and review the credit risk of our customers, financial institutions and exposures in our investment portfolio.
With respect to our trade accounts receivable, we monitor the creditworthiness of our customers to which we grant credit in the normal course of business. In general, there is no requirement for collateral from customers. For additional information on our trade accounts receivable and allowance for credit losses, see Note 1G. A significant portion of our trade accounts receivable balances are due from wholesalers and governments. For additional information on our trade accounts receivables with significant customers, see Note 17C.
With respect to our investments, we monitor concentrations of credit risk associated with government, government agency, and corporate issuers of securities. Investments are placed in instruments that are investment grade and are primarily short in duration. Exposure limits are established to limit a concentration with any single credit counterparty. As of December 31, 2025, the largest investment exposures in our portfolio consisted primarily of U.S. government money market funds, as well as sovereign debt instruments issued by the U.S., Japan, Canada, the U.K., and Germany.
With respect to our derivative financial instrument agreements with financial institutions, we do not expect to incur a significant loss from failure of any counterparty. Derivative financial instruments are executed under International Swaps and Derivatives Association master agreements with credit-support annexes that contain zero threshold provisions requiring collateral to be exchanged daily depending on levels of exposure. As a result, there are no significant concentrations of credit risk with any individual financial institution. As of December 31, 2025, the aggregate fair value of these derivative financial instruments that are in a net payable position was $938 million, for which we have posted collateral of $944 million with a corresponding amount reported in Short-term investments. As of December 31, 2025, the aggregate fair value of our derivative financial instruments that are in a net receivable position was $128 million, for which we have received collateral of $154 million with a corresponding amount reported in Short-term borrowings, including current portion of long-term debt.