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Acquisitions, Divestitures, Collaborative Arrangements and Equity-Method Investments (Tables)
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12 Months Ended |
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Dec. 31, 2011
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| Schedule of Discontinued Operations-Net of Tax Related to Capsugel Business |
The components of Discontinued
operations—net of tax, substantially all of which relate
to our Capsugel business, follow:
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YEAR
ENDED DECEMBER 31,
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| (MILLIONS OF DOLLARS) |
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2011 |
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2010 |
|
|
2009 |
|
|
|
|
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Revenues
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$ 507 |
|
|
$ 752 |
|
|
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$ 740 |
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|
|
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|
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Pre-tax (loss)/income from
discontinued operations
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$ 31 |
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$ 140 |
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$ 148 |
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Provision for taxes on
income(a),
(c)
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23 |
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52 |
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51 |
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Income from discontinued
operations—net of tax
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8 |
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88 |
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97 |
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Pre-tax gain/(loss) on sale of
discontinued operations
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1,688 |
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(11) |
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15 |
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Provision/(benefit) for taxes on
income(b),
(d)
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384 |
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— |
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(2) |
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Gain/(loss) on sale of discontinued
operations—net of tax
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1,304 |
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(11) |
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17 |
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Discontinued operations—net
of tax
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$1,312 |
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$ 77 |
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$ 114 |
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| (a) |
Deferred
tax amounts are not significant for 2011.
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| (b) |
Includes a deferred tax expense of $190 million for
2011.
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| (c) |
Includes
deferred tax expense of $16 million and $8 million, respectively
for 2010 and 2009.
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| (d) |
Deferred
tax amounts are not significant for 2010 and 2009.
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| Schedule of Assets of Discontinued Operations and Other Assets Held for Sale and Liabilities of Discontinued Operations Related to Capsugel Business |
| The components of Assets of discontinued operations and
other assets held for sale and Liabilities of discontinued
operations, most of which relate to our Capsugel business,
follow: |
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| (MILLIONS OF DOLLARS) |
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YEAR ENDED
DECEMBER 31,
2010 |
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Accounts receivable
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$ 186 |
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Inventories
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130 |
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Taxes and other current
assets
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47 |
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Property, plant and
equipment
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1,009 |
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Goodwill
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19 |
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Identifiable intangible
assets
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3 |
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Taxes and other noncurrent
assets
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45 |
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Assets of discontinued operations
and other assets held for sale
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$1,439 |
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Current
liabilities
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$ 124 |
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Other liabilities
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27 |
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Liabilities of discontinued
operations
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$ 151 |
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| Schedule of Amounts and Classifications in Consolidated Statement of Income of Payments Between Pfizer and Collaboration Partners |
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The amounts and
classification of payments (income/(expense)) between us and our
collaboration partners follow: |
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YEAR ENDED DECEMBER 31,
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(MILLIONS OF
DOLLARS) |
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2011 |
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2010 |
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2009 |
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Revenues—Revenues(a)
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$1,029 |
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$ 710 |
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$ 676 |
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Revenues—Alliance
revenues(b)
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3,630 |
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4,084 |
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2,925 |
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Total revenues from collaborative
arrangements
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4,659 |
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4,794 |
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3,601 |
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Cost of sales(c)
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(420) |
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(124 |
) |
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(175) |
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Selling, informational and
administrative expenses(d)
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(237) |
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(131 |
) |
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10 |
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Research and development
expenses(e)
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(299) |
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(316 |
) |
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(361) |
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Other
deductions—net
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34 |
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37 |
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37 |
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| (a) |
Represents sales to our partners of products manufactured by
us.
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| (b) |
Substantially all relate to amounts earned from our partners
under co-promotion agreements.
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| (c) |
Primarily relates to royalties earned by our partners and cost
of sales associated with inventory purchased from our
partners.
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| (d) |
Represents net reimbursements from our partners/(to our
partners) for selling, informational and administrative expenses
incurred.
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| (e) |
Primarily related to net reimbursements, as well as upfront
payments and milestone payments earned by our partners. The upfront
and milestone payments were as follows: $210 million in 2011, $147
million in 2010 and $150 million in 2009.
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Wyeth [Member]
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| Schedule of Consideration Transferred to Acquire Wyeth |
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The consideration
transferred to acquire Wyeth follows: |
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(IN MILLIONS, EXCEPT PER
SHARE AMOUNTS) |
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CONVERSION
CALCULATION
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FAIR VALUE |
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FORM OF
CONSIDERATION
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Wyeth common stock
outstanding as of the acquisition date
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1,339.6 |
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Multiplied by
Pfizer’s stock price as of the acquisition date multiplied by
the
exchange ratio of 0.985
($17.66(a)
x 0.985)
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$17.40 |
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$23,303 |
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Pfizer common
stock(a),
(b)
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Wyeth common stock
outstanding as of the acquisition date
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1,339.6 |
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Multiplied by cash
consideration per common share outstanding
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$33.00 |
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44,208 |
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Cash |
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Wyeth stock options
canceled for a cash payment(c)
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405 |
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Cash |
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Wyeth restricted
stock/restricted stock units and other equity-based
awards
canceled for a cash payment
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320 |
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Cash |
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Total fair value of
consideration transferred
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$68,236 |
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| (a) |
The fair
value of Pfizer’s common stock used in the conversion
calculation represents the closing market price of Pfizer’s
common stock on the acquisition date.
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| (b) |
Approximately 1.3 billion shares of Pfizer common stock,
previously held as Pfizer treasury stock, were issued to former
Wyeth shareholders. The excess of the average cost of Pfizer
treasury stock issued over the fair value of the stock portion of
the consideration transferred to acquire Wyeth was recorded as a
reduction to Retained earnings.
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| (c) |
Each
Wyeth stock option, whether or not vested and exercisable on the
acquisition date, was canceled for a cash payment equal to the
excess of the per share value of the merger consideration
(calculated on the basis of the volume-weighted average of the per
share price of Pfizer common stock on the New York Stock Exchange
Transaction Reporting System for the five consecutive trading days
ending two days prior to the acquisition date) over the per share
exercise price of the Wyeth stock option.
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| Schedule of Recognized Identifiable Assets Acquired and Liabilities Assumed as Part of Business Combination |
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The assets acquired and
liabilities assumed from Wyeth follow: |
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| (MILLIONS
OF DOLLARS) |
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AMOUNTS
RECOGNIZED AS OF
ACQUISITION DATE
(FINAL)
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Working capital,
excluding inventories(a)
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$ 16,366 |
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Inventories
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7,971 |
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Property, plant and
equipment
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9,838 |
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Identifiable intangible
assets, excluding in-process research and development
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36,062 |
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In-process research and
development
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13,822 |
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Other noncurrent
assets
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2,394 |
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Long-term debt
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(11,187 |
) |
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Benefit
obligations
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(3,175 |
) |
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Net tax
accounts(b)
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(23,738 |
) |
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Other noncurrent
liabilities
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(1,908 |
) |
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Total identifiable net
assets
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46,445 |
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Goodwill(c)
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22,117 |
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Net assets
acquired
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68,562 |
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Less: Amounts
attributable to noncontrolling interests
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(326 |
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Total consideration
transferred
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$ 68,236 |
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| (a) |
Includes cash and cash equivalents, short-term investments,
accounts receivable, other current assets, assets held for sale,
accounts payable and other current liabilities.
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| (b) |
As of
the acquisition date, included in Taxes and other current
assets ($1.2 billion), Taxes and other noncurrent assets
($2.8 billion), Income taxes payable ($500 million),
Other current liabilities ($11.1 billion), Noncurrent
deferred tax liabilities ($14.0 billion) and Other taxes
payable ($2.1 billion, including accrued interest of $300
million).
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| (c) |
Goodwill
recognized as of the acquisition date totaled $19.3 billion for our
three biopharmaceutical operating segments and $2.8 billion for our
Animal Health and Consumer Healthcare and our Nutrition operating
segments. (Since the acquisition of Wyeth, we have revised our
operating segments. See Note 18A. Segment, Geographic and Other
Revenue Information: Segment Information.)
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| Schedule of Revenue and Earnings of Business Acquisition Included in Consolidated Statements of Income |
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The revenue and earnings
of Wyeth included in Pfizer’s consolidated statements of
income follow: |
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| (MILLIONS
OF DOLLARS) |
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WYETH’S OPERATIONS
INCLUDED IN PFIZER’s 2009
RESULTS(a)
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Revenues
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$ 3,303 |
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Loss from continuing
operations attributable to Pfizer Inc. common
shareholders(b)
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(2,191 |
) |
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| (a) |
The
results of Wyeth are included from the acquisition date of
October 15, 2009.
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| (b) |
Includes
purchase accounting adjustments related to the fair value
adjustments for acquisition-date inventory that has been sold ($904
million pre-tax), amortization of identifiable intangible assets
acquired from Wyeth ($512 million pre-tax), and restructuring
charges and additional depreciation—asset restructuring ($2.1
billion pre-tax).
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| Schedule of Supplemental Pro Forma Information Related to the Acquisition |
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Supplemental pro forma
information follows: |
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UNAUDITED PRO
FORMA
CONSOLIDATED RESULTS(a)
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| (MILLIONS
OF DOLLARS, EXCEPT PER SHARE DATA) |
|
YEAR ENDED DECEMBER 31,2009
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Revenues
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$67,859 |
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Income from continuing
operations attributable to Pfizer Inc. common
shareholders
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11,436 |
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Diluted earnings per
common share attributable to Pfizer Inc. common
shareholders
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1.41 |
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| (a) |
The pro
forma information assumes that the acquisition of Wyeth had
occurred on January 1, 2009 for the year ended
December 31, 2009.
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King [Member]
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| Schedule of Recognized Identifiable Assets Acquired and Liabilities Assumed as Part of Business Combination |
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The assets acquired and
liabilities assumed from King follow: |
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| (MILLIONS
OF DOLLARS) |
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AMOUNTS
RECOGNIZED AS OF
ACQUISITION
DATE
(FINAL)(a)
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Working capital,
excluding inventories
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$ 155 |
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Inventories
|
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340 |
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Property, plant and
equipment
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|
412 |
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Identifiable intangible
assets, excluding in-process research and development
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1,806 |
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In-process research and
development
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303 |
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Net tax
accounts
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|
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(328 |
) |
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All other long-term
assets and liabilities, net
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102 |
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Total identifiable net
assets
|
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2,790 |
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Goodwill(b)
|
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|
765 |
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Net assets acquired/total
consideration transferred
|
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$ 3,555 |
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| (a) |
Measurement period adjustments were not significant and did not
have a significant impact on our earnings, balance sheets or cash
flows in any interim period in 2011 and, therefore, we did not
retrospectively adjust our interim financial statements.
|
| (b) |
Goodwill
recorded as of the acquisition date totaled $720 million for our
three biopharmaceutical operating segments and $45 million for our
Animal Health and Consumer Healthcare operating segment. (Since the
acquisition of King, we have revised our operating segments. See
Note 18A. Segment, Geographic and Other Revenue Information:
Segment Information.)
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| Schedule of Supplemental Pro Forma Information Related to the Acquisition |
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Supplemental pro forma
information follows: |
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UNAUDITED PRO FORMA
CONSOLIDATED RESULTS(a)
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| |
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YEAR ENDED DECEMBER 31,
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(MILLIONS OF DOLLARS,
EXCEPT PER SHARE DATA) |
|
2011 |
|
2010 |
|
Revenues
|
|
$67,534 |
|
$68,432 |
|
Net income attributable to Pfizer
Inc. common shareholders
|
|
10,228 |
|
8,013 |
|
Diluted earnings per share
attributable to Pfizer Inc. common shareholders
|
|
1.30 |
|
0.99 |
| |
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| (a) |
The
pro forma information for December 31, 2011 and 2010 assumes
that the acquisition of King occurred on January 1,
2010.
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