|
PFIZER INC.
(Exact name of registrant as specified in its charter)
|
|
|
DELAWARE
(State of Incorporation)
|
13-5315170
(I.R.S. Employer Identification No.)
|
| Large Accelerated filer x | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
|
Page
|
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
4
|
|
|
|
|
|
5
|
|
|
|
|
|
6
|
|
|
|
|
|
20
|
|
|
|
|
|
21
|
|
|
|
|
|
48
|
|
|
|
|
|
48
|
|
|
|
|
|
|
|
|
48
|
|
|
|
|
|
51
|
|
|
|
|
|
51
|
|
|
|
|
|
52
|
|
|
|
|
|
52
|
|
|
|
|
|
52
|
|
|
|
|
|
53
|
|
Three Months Ended
|
||||||||
|
(millions, except per common share data)
|
April 4,
2010
|
Mar. 29,
2009
|
||||||
|
Revenues
|
$ | 16,750 | $ | 10,867 | ||||
|
Costs and expenses:
|
||||||||
|
Cost of sales(a)
|
4,306 | 1,408 | ||||||
|
Selling, informational and administrative expenses(a)
|
4,436 | 2,876 | ||||||
|
Research and development expenses(a)
|
2,226 | 1,705 | ||||||
|
Amortization of intangible assets
|
1,409 | 578 | ||||||
|
Acquisition-related in-process research and development charges
|
74 | – | ||||||
|
Restructuring charges and certain acquisition-related costs
|
706 | 554 | ||||||
|
Other (income)/deductions––net
|
414 | (57 | ) | |||||
|
Income from continuing operations before provision for taxes on income
|
3,179 | 3,803 | ||||||
|
Provision for taxes on income
|
1,146 | 1,074 | ||||||
|
Income from continuing operations
|
2,033 | 2,729 | ||||||
|
Discontinued operations – net of tax
|
2 | 1 | ||||||
|
Net income before allocation to noncontrolling interests
|
2,035 | 2,730 | ||||||
|
Less: Net income attributable to noncontrolling interests
|
9 | 1 | ||||||
|
Net income attributable to Pfizer Inc.
|
$ | 2,026 | $ | 2,729 | ||||
|
Earnings per common share––basic:
|
||||||||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders
|
$ | 0.25 | $ | 0.41 | ||||
|
Discontinued operations––net of tax
|
–– | –– | ||||||
|
Net income attributable to Pfizer Inc. common shareholders
|
$ | 0.25 | $ | 0.41 | ||||
|
Earnings per common share––diluted:
|
||||||||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders
|
$ | 0.25 | $ | 0.40 | ||||
|
Discontinued operations––net of tax
|
–– | –– | ||||||
|
Net income attributable to Pfizer Inc. common shareholders
|
$ | 0.25 | $ | 0.40 | ||||
|
Weighted-average shares used to calculate earnings per common share:
|
||||||||
|
Basic
|
8,061 | 6,723 | ||||||
|
Diluted
|
8,101 | 6,753 | ||||||
|
Cash dividends paid per common share
|
$ | 0.18 | $ | 0.32 | ||||
|
(a)
|
Exclusive of amortization of intangible assets, except as disclosed in Note 8B. Goodwill and Other Intangible Assets: Other Intangible Assets.
|
|
(millions of dollars)
|
April 4,
2010*
|
Dec. 31,
2009**
|
||||||
|
Assets
|
||||||||
|
Cash and cash equivalents
|
$ | 1,759 | $ | 1,978 | ||||
|
Short-term investments
|
15,503 | 23,991 | ||||||
|
Accounts receivable, less allowance for doubtful accounts
|
13,611 | 14,645 | ||||||
|
Short-term loans
|
919 | 1,195 | ||||||
|
Inventories
|
10,132 | 12,403 | ||||||
|
Current deferred tax assets and other current assets
|
7,502 | 6,962 | ||||||
|
Assets held for sale
|
490 | 496 | ||||||
|
Total current assets
|
49,916 | 61,670 | ||||||
|
Long-term investments and loans
|
12,081 | 13,122 | ||||||
|
Property, plant and equipment, less accumulated depreciation
|
21,651 | 22,780 | ||||||
|
Goodwill
|
42,648 | 42,376 | ||||||
|
Identifiable intangible assets, less accumulated amortization
|
64,480 | 68,015 | ||||||
|
Noncurrent deferred tax assets and other noncurrent assets
|
4,337 | 4,986 | ||||||
|
Total assets
|
$ | 195,113 | $ | 212,949 | ||||
|
Liabilities and Shareholders’ Equity
|
||||||||
|
Short-term borrowings, including current portion of long-term debt
|
$ | 7,769 | $ | 5,469 | ||||
|
Accounts payable
|
3,028 | 4,370 | ||||||
|
Dividends payable
|
1 | 1,454 | ||||||
|
Income taxes payable
|
765 | 10,107 | ||||||
|
Accrued compensation and related items
|
2,060 | 2,242 | ||||||
|
Current deferred tax liabilities and other current liabilities
|
12,301 | 13,583 | ||||||
|
Total current liabilities
|
25,924 | 37,225 | ||||||
|
Long-term debt
|
38,281 | 43,193 | ||||||
|
Pension benefit obligations
|
6,119 | 6,392 | ||||||
|
Postretirement benefit obligations
|
3,239 | 3,243 | ||||||
|
Noncurrent deferred tax liabilities
|
17,460 | 17,839 | ||||||
|
Other taxes payable
|
8,338 | 9,000 | ||||||
|
Other noncurrent liabilities
|
5,670 | 5,611 | ||||||
|
Total liabilities
|
105,031 | 122,503 | ||||||
|
Preferred stock
|
58 | 61 | ||||||
|
Common stock
|
443 | 443 | ||||||
|
Additional paid-in capital
|
70,456 | 70,497 | ||||||
|
Employee benefit trusts
|
(89 | ) | (333 | ) | ||||
|
Treasury stock
|
(21,697 | ) | (21,632 | ) | ||||
|
Retained earnings
|
42,429 | 40,426 | ||||||
|
Accumulated other comprehensive income/(loss)
|
(1,941 | ) | 552 | |||||
|
Total Pfizer Inc. shareholders’ equity
|
89,659 | 90,014 | ||||||
|
Equity attributable to noncontrolling interests
|
423 | 432 | ||||||
|
Total shareholders’ equity
|
90,082 | 90,446 | ||||||
|
Total liabilities and shareholders’ equity
|
$ | 195,113 | $ | 212,949 | ||||
|
*
|
Unaudited.
|
|
**
|
Condensed from audited financial statements.
|
|
Three Months Ended
|
||||||||
|
(millions of dollars)
|
April 4,
2010
|
Mar. 29,
2009
|
||||||
|
Operating Activities:
|
||||||||
|
Net income before allocation to noncontrolling interests
|
$ | 2,035 | $ | 2,730 | ||||
|
Adjustments to reconcile net income before allocation to noncontrolling interests to net
cash (used in)/provided by operating activities:
|
||||||||
|
Depreciation and amortization
|
2,051 | 1,008 | ||||||
|
Share-based compensation expense
|
138 | 71 | ||||||
|
Acquisition-related in-process research and development charges
|
74 | –– | ||||||
|
Deferred taxes from continuing operations
|
840 | 533 | ||||||
|
Other non-cash adjustments
|
319 | (296 | ) | |||||
|
Changes in assets and liabilities, net of acquisitions and divestitures
|
(11,817 | ) | (899 | ) | ||||
|
Net cash (used in)/provided by operating activities
|
(6,360 | ) | 3,147 | |||||
|
Investing Activities:
|
||||||||
|
Purchases of property, plant and equipment
|
(305 | ) | (253 | ) | ||||
|
Purchases of short-term investments
|
(2,178 | ) | (17,724 | ) | ||||
|
Proceeds from redemptions and sales of short-term investments
|
11,388 | 6,711 | ||||||
|
Purchases of long-term investments
|
(858 | ) | (3,442 | ) | ||||
|
Proceeds from redemptions and sales of long-term investments
|
1,127 | 889 | ||||||
|
Other investing activities
|
220 | 185 | ||||||
|
Net cash provided by/(used in) investing activities
|
9,394 | (13,634 | ) | |||||
|
Financing Activities:
|
||||||||
|
Increase in short-term borrowings
|
1,892 | 10,774 | ||||||
|
Principal payments on short-term borrowings
|
(3,663 | ) | (12,100 | ) | ||||
|
Proceeds from issuances of long-term debt
|
2 | 13,392 | ||||||
|
Principal payments on long-term debt
|
(9 | ) | (303 | ) | ||||
|
Cash dividends paid
|
(1,441 | ) | (2,133 | ) | ||||
|
Other financing activities
|
8 | 5 | ||||||
|
Net cash (used in)/provided by financing activities
|
(3,211 | ) | 9,635 | |||||
|
Effect of exchange-rate changes on cash and cash equivalents
|
(42 | ) | (23 | ) | ||||
|
Net decrease in cash and cash equivalents
|
(219 | ) | (875 | ) | ||||
|
Cash and cash equivalents at beginning of period
|
1,978 | 2,122 | ||||||
|
Cash and cash equivalents at end of period
|
$ | 1,759 | $ | 1,247 | ||||
|
Supplemental Cash Flow Information:
|
||||||||
|
Cash paid during the period for:
|
||||||||
|
Income taxes
|
$ | 10,547 | $ | 454 | ||||
|
Interest
|
792 | 84 | ||||||
|
·
|
An amendment to the recognition and measurement guidance for the transfers of financial assets.
|
|
·
|
An amendment to the guidelines for determining the primary beneficiary in a variable interest entity.
|
|
(millions of dollars)
|
Amounts Recognized
as of Acquisition Date
(as previously reported)
|
Measurement
Period
Adjustments
|
Amounts Recognized
as of Acquisition Date
(as adjusted)
|
|||||||||
|
Working capital, excluding inventories
|
$ | 16,342 | $ | –– | $ | 16,342 | ||||||
|
Inventories
|
8,388 | (167 | ) | 8,221 | ||||||||
|
Property, plant and equipment
|
10,054 | (171 | ) | 9,883 | ||||||||
|
Identifiable intangible assets, excluding
in-process research and development (a)
|
37,595 | (452 | ) | 37,143 | ||||||||
|
In-process research and development (a)
|
14,918 | (956 | ) | 13,962 | ||||||||
|
Other noncurrent assets
|
2,394 | –– | 2,394 | |||||||||
|
Long-term debt
|
(11,187 | ) | –– | (11,187 | ) | |||||||
|
Benefit obligations
|
(3,211 | ) | –– | (3,211 | ) | |||||||
|
Net tax accounts
|
(24,773 | ) | 761 | (24,012 | ) | |||||||
|
Other noncurrent liabilities
|
(1,908 | ) | –– | (1,908 | ) | |||||||
|
Total identifiable net assets
|
48,612 | (985 | ) | 47,627 | ||||||||
|
Goodwill
|
19,954 | 985 | 20,939 | |||||||||
|
Net assets acquired
|
68,566 | –– | 68,566 | |||||||||
|
Less: Amounts attributable to
noncontrolling interests
|
(330 | ) | –– | (330 | ) | |||||||
|
Total consideration transferred
|
$ | 68,236 | $ | –– | $ | 68,236 | ||||||
|
(a)
|
The measurement period adjustments for Identifiable intangible assets reflect changes in the estimated fair value of certain acquired intangibles, principally in-process research and development assets, primarily to better reflect market participant assumptions about facts and circumstances existing as of the acquisition date. The measurement period adjustments did not result from intervening events subsequent to the acquisition date.
|
|
·
|
Amounts for intangibles and inventory, pending finalization of valuation efforts.
|
|
·
|
Amounts for legal contingencies, pending the finalization of our examination and evaluation of the portfolio of filed cases.
|
|
·
|
Amounts for income tax assets, receivables and liabilities pending the filing of Wyeth pre-acquisition tax returns, including all required disclosures and documentation, as well as the receipt of information from taxing authorities which may change certain estimates and assumptions used.
|
|
·
|
The allocation of goodwill among reporting units.
|
|
Three Months Ended
|
||||||||
|
(millions of dollars)
|
April 4,
2010
|
Mar. 29,
2009
|
||||||
|
Transaction costs(a)
|
$ | 9 | $ | 369 | ||||
|
Integration costs(b)
|
208 | 28 | ||||||
|
Restructuring charges(c)
|
489 | 157 | ||||||
|
Restructuring charges and certain acquisition-related costs
|
706 | 554 | ||||||
|
Additional depreciation––asset restructuring(d)
|
93 | 90 | ||||||
|
Implementation costs(e)
|
–– | 84 | ||||||
|
Total
|
$ | 799 | $ | 728 | ||||
|
(a)
|
Transaction costs represent external costs directly related to effecting the acquisition of Wyeth and primarily include expenditures for banking, legal, accounting and other similar services. Substantially all of the costs incurred in the first quarter of 2009 were fees related to a $22.5 billion bridge term loan credit agreement entered into with certain financial institutions on March 12, 2009 to partially fund our acquisition of Wyeth. The bridge term loan credit agreement was terminated in June 2009 as a result of our issuance of approximately $24.0 billion of senior unsecured notes in the first half of 2009.
|
|
(b)
|
Integration costs represent external, incremental costs directly related to integrating Wyeth and primarily include expenditures for consulting and systems integration.
|
|
(c)
|
Restructuring charges include the following:
|
|
Costs Incurred
|
||||||||||||||||||||
|
Three Months Ended
|
Activity
|
Accrual
|
||||||||||||||||||
|
(millions of dollars)
|
April 4,
2010
|
Mar. 29,
2009
|
2005-2010 |
Through
April 4,
2010(1)
|
As of
April 4,
2010(2)
|
|||||||||||||||
|
Employee termination costs
|
$ | 458 | $ | 135 | $ | 8,179 | $ | 5,276 | $ | 2,903 | ||||||||||
|
Asset impairments
|
6 | 18 | 1,458 | 1,458 | –– | |||||||||||||||
|
Other
|
25 | 4 | 735 | 631 | 104 | |||||||||||||||
|
Total restructuring charges
|
$ | 489 | $ | 157 | $ | 10,372 | $ | 7,365 | $ | 3,007 | ||||||||||
|
(1)
|
Includes adjustments for foreign currency translation.
|
|
(2)
|
Included in Current deferred tax liabilities and other current liabilities ($2.0 billion) and Other noncurrent liabilities ($1.0 billion).
|
|
(d)
|
Additional depreciation – asset restructuring represents the impact of changes in the estimated useful lives of assets involved in restructuring actions and are included in our condensed consolidated statements of income as follows:
|
|
Three Months Ended
|
||||||||
|
(millions of dollars)
|
April 4,
2010
|
Mar. 29,
2009
|
||||||
|
Cost of sales
|
$ | 13 | $ | 63 | ||||
|
Selling, informational and administrative expenses
|
60 | 6 | ||||||
|
Research and development expenses
|
20 | 21 | ||||||
|
Total
|
$ | 93 | $ | 90 | ||||
|
(e)
|
Implementation costs in the first quarter of 2009 represent external, incremental costs directly related to implementing cost-reduction initiatives prior to our acquisition of Wyeth, and primarily include expenditures related to system and process standardization and the expansion of shared services. For the three months ended March 29, 2009, implementation costs are included in Cost of sales ($13 million), Selling, informational and administrative expenses ($40 million), Research and development expenses ($20 million) and Other (income)/deductions––net ($11 million).
|
|
(millions of dollars)
|
April 4,
2010
|
Dec. 31,
2009
|
||||||
|
Selected financial assets measured at fair value on a recurring basis (a) :
|
||||||||
|
Trading securities (b)
|
$ | 168 | $ | 184 | ||||
|
Available-for-sale debt securities(c)
|
23,787 | 32,338 | ||||||
|
Available-for-sale money market funds(d)
|
1,484 | 2,569 | ||||||
|
Available-for-sale equity securities, excluding money market funds(c)
|
243 | 281 | ||||||
|
Derivative financial instruments in receivable positions(e):
|
||||||||
|
Foreign currency swaps
|
400 | 798 | ||||||
|
Interest rate swaps
|
315 | 276 | ||||||
|
Foreign currency forward-exchange contracts
|
284 | 502 | ||||||
|
Total
|
26,681 | 36,948 | ||||||
|
Other selected financial assets(f):
|
||||||||
|
Short-term loans, carried at cost (g)
|
919 | 1,195 | ||||||
|
Held-to-maturity debt securities, carried at amortized cost(c)
|
642 | 812 | ||||||
|
Private equity securities, carried at cost or equity method (h)
|
858 | 811 | ||||||
|
Long-term loans, carried at cost(g)
|
782 | 784 | ||||||
|
Total
|
3,201 | 3,602 | ||||||
|
Total selected financial assets (i)
|
$ | 29,882 | $ | 40,550 | ||||
|
Financial liabilities measured at fair value on a recurring basis(a):
|
||||||||
|
Derivative financial instruments in a liability position(j):
|
||||||||
|
Foreign currency forward-exchange contracts
|
$ | 351 | $ | 237 | ||||
|
Foreign currency swaps
|
221 | 528 | ||||||
|
Interest rate swaps
|
73 | 25 | ||||||
|
Total
|
645 | 790 | ||||||
|
Other financial liabilities (k):
|
||||||||
|
Short-term borrowings, carried at historical proceeds, as adjusted(f), (l)
|
7,769 | 5,469 | ||||||
|
Long-term debt, carried at historical proceeds, as adjusted(m), (n)
|
38,281 | 43,193 | ||||||
|
Total
|
46,050 | 48,662 | ||||||
|
Total selected financial liabilities
|
$ | 46,695 | $ | 49,452 | ||||
|
(a)
|
Fair values are determined based on valuation techniques categorized as follows: Level 1 means the use of quoted prices for identical instruments in active markets; Level 2 means the use of quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active or are directly or indirectly observable; Level 3 means the use of unobservable inputs. Virtually all of our financial assets and liabilities measured at fair value on a recurring basis use Level 2 inputs in the calculation of fair value, except that included in available-for-sale equity securities, excluding money market funds, are $93 million as of April 4, 2010 and $77 million as of December 31, 2009 of investments that use Level 1 inputs in the calculation of fair value. None of our financial assets and liabilities measured at fair value on a recurring basis are valued using Level 3 inputs as of April 4, 2010 or December 31, 2009.
|
|
(b)
|
Trading securities are held in trust for legacy Pharmacia severance benefits.
|
|
(c)
|
Gross unrealized gains and losses are not significant.
|
|
(d)
|
Includes approximately $1.2 billion of money market funds held in escrow to secure certain of Wyeth’s payment obligations under its 1999 Nationwide Class Action Settlement Agreement, which relates to litigation against Wyeth concerning its former weight-loss products, Redux and Pondimin (see Note 5G. Financial Instruments: Guarantee).
|
|
(e)
|
Designated as hedging instruments, except for certain foreign currency contracts used as offsets; namely, foreign currency forward-exchange contracts with fair values of $150 million and foreign currency swaps with fair values of $36 million as of April 4, 2010; and foreign currency swaps with fair values of $106 million and foreign currency forward-exchange contracts with fair values of $100 million at December 31, 2009.
|
|
(f)
|
The differences between the estimated fair values and carrying values of our financial assets and liabilities not measured at fair value on a recurring basis were not significant as of April 4, 2010 or December 31, 2009.
|
|
(g)
|
Our short-term and long-term loans are due from companies with highly rated securities (Standard & Poor’s (S&P) ratings of mostly AA or better).
|
|
(h)
|
Our private equity securities represent investments in the life sciences sector.
|
|
(i)
|
The decrease in selected financial assets is primarily due to the use of proceeds of short-term investments for tax payments made in the first quarter of 2010, associated with certain business decisions executed to finance the Wyeth acquisition.
|
|
(j)
|
Designated as hedging instruments, except for certain foreign currency contracts used as offsets; namely, foreign currency forward exchange contracts with fair values of $157 million and foreign currency swaps with fair values of $72 million as of April 4, 2010; and foreign currency forward-exchange contracts with fair values of $122 million and foreign currency swaps with fair values of $3 million as of December 31, 2009.
|
|
(k)
|
The carrying amounts may include adjustments for discount or premium amortization or for the effect of interest rate swaps designated as hedges.
|
|
(l)
|
Includes foreign currency borrowings with fair values of $2.3 billion at April 4, 2010 and $1.1 billion as of December 31, 2009, which are used as hedging instruments.
|
|
(m)
|
Includes foreign currency debt with fair value of $754 million as of April 4, 2010 and $2.1 billion as of December 31, 2009, which is used as a hedging instrument.
|
|
(n)
|
The fair value of our long-term debt is $41.7 billion as of April 4, 2010 and $46.2 billion as of December 31, 2009.
|
|
·
|
Trading equity securities––quoted market prices.
|
|
·
|
Trading debt securities––observable market interest rates.
|
|
·
|
Available-for-sale debt securities––third-party matrix-pricing model that uses significant inputs derived from or corroborated by observable market data and credit-adjusted interest rate curves.
|
|
·
|
Available-for-sale money market funds––observable prices.
|
|
·
|
Available-for-sale equity securities, excluding money market funds––third-party pricing services that principally use a composite of observable prices.
|
|
·
|
Derivative financial instruments (assets and liabilities)–– third-party matrix-pricing model that uses significant inputs derived from or corroborated by observable market data. Where applicable, these models discount future cash flow amounts using market-based observable inputs including interest rate curves, foreign exchange rates, and forward and spot prices for currencies. The credit risk impact to our derivative financial instruments was not significant.
|
|
·
|
Held-to-maturity debt securities–– third-party matrix-pricing model that uses significant inputs derived from or corroborated by observable market data and credit-adjusted interest rate curves.
|
|
·
|
Short-term and long-term loans–– third-party model that discounts future cash flows using current interest rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.
|
|
·
|
Private equity securities––application of the implied volatility associated with an observable biotech index to the carrying amount of our portfolio and, to a lesser extent, performance multiples of comparable securities adjusted for company-specific information.
|
|
·
|
Short-term borrowings and long-term debt–– third-party matrix-pricing model that uses significant inputs derived from or collaborated by observable market data and our own credit rating.
|
|
(millions of dollars)
|
April 4,
2010
|
Dec. 31,
2009
|
||||||
|
Assets
|
||||||||
|
Cash and cash equivalents
|
$ | 380 | $ | 666 | ||||
|
Short-term investments
|
15,503 | 23,991 | ||||||
|
Short-term loans
|
919 | 1,195 | ||||||
|
Long-term investments and loans
|
12,081 | 13,122 | ||||||
|
Current deferred tax assets and other current assets(a)
|
313 | 526 | ||||||
|
Noncurrent deferred tax assets and other noncurrent assets(b)
|
686 | 1,050 | ||||||
|
Total
|
$ | 29,882 | $ | 40,550 | ||||
|
Liabilities
|
||||||||
|
Short-term borrowings, including current portion of long-term debt
|
$ | 7,769 | $ | 5,469 | ||||
|
Current deferred tax liabilities and other current liabilities(c)
|
414 | 369 | ||||||
|
Long-term debt
|
38,281 | 43,193 | ||||||
|
Other noncurrent liabilities(d)
|
231 | 421 | ||||||
|
Total
|
$ | 46,695 | $ | 49,452 | ||||
|
(a)
|
As of April 4, 2010, derivative instruments at fair value include foreign currency forward-exchange contracts ($284 million) and foreign currency swaps ($29 million) and as of December 31, 2009, include foreign currency forward-exchange contracts ($503 million) and foreign currency swaps ($23 million).
|
|
(b)
|
As of April 4, 2010, derivative instruments at fair value include foreign currency swaps ($371 million) and interest rate swaps ($315 million) and as of December 31, 2009, include foreign currency swaps ($774 million) and interest rate swaps ($276 million).
|
|
(c)
|
As of April 4, 2010, derivative instruments at fair value include foreign currency forward-exchange contracts ($351 million) and foreign currency swaps ($63 million) and as of December 31, 2009, include foreign currency forward-exchange contracts ($237 million) and foreign currency swaps ($132 million).
|
|
(d)
|
As of April 4, 2010, derivative instruments at fair value include foreign currency swaps ($158 million) and interest rate swaps ($73 million) and as of December 31, 2009, include foreign currency swaps ($396 million) and interest rate swaps ($25 million).
|
|
Years
|
||||||||||||
|
(millions of dollars)
|
Within 1
|
Over 1
to 5
|
Total as of
April 4,
2010
|
|||||||||
|
Available-for-sale debt securities:
|
||||||||||||
|
Western European and other government debt
|
$ | 9,157 | $ | 2,576 | $ | 11,733 | ||||||
|
Western European and other government agency debt
|
2,678 | 266 | 2,944 | |||||||||
|
Corporate debt(a)
|
996 | 1,885 | 2,881 | |||||||||
|
Federal Home Loan Mortgage Corporation and Federal National Mortgage
Association asset-backed securities
|
102 | 2,531 | 2,633 | |||||||||
|
Reverse repurchase agreements(b)
|
1,263 | –– | 1,263 | |||||||||
|
U.S. government Federal Deposit Insurance Corporation guaranteed debt
|
–– | 1,101 | 1,101 | |||||||||
|
Supranational debt
|
636 | 386 | 1,022 | |||||||||
|
Other asset-backed securities
|
33 | 125 | 158 | |||||||||
|
Certificates of deposit
|
52 | –– | 52 | |||||||||
|
Held-to-maturity debt securities:
|
||||||||||||
|
Certificates of deposit and other
|
636 | 6 | 642 | |||||||||
|
Total debt securities
|
$ | 15,553 | $ | 8,876 | $ | 24,429 | ||||||
|
Trading securities
|
168 | |||||||||||
|
Available-for-sale money market funds(c)
|
1,484 | |||||||||||
|
Available-for-sale equity securities, excluding money market funds
|
243 | |||||||||||
|
Total
|
$ | 26,324 | ||||||||||
|
(a)
|
Largely issued by above-investment-grade institutions in the financial services sector.
|
|
(b)
|
Very short-term agreements involving U.S. government securities.
|
|
(c)
|
Consisting of securities issued by the U.S. government and its agencies or instrumentalities and reverse repurchase agreements involving the same investments held.
|
|
Gains/(Losses)
|
||||||||
|
Three Months Ended
|
||||||||
|
(millions of dollars)
|
April 4, 2010
|
Mar. 29, 2009
|
||||||
|
Derivative Financial Instruments in Fair Value Hedge Relationships
|
||||||||
|
Interest rate swaps
|
||||||||
|
Recognized in OID(a)
|
$ | –– | $ | (284 | ) | |||
|
Foreign currency swaps
|
||||||||
|
Recognized in OID(a)
|
–– | (1 | ) | |||||
|
Derivative Financial Instruments in Cash Flow Hedge Relationships
|
||||||||
|
U.S. Treasury interest rate locks
|
||||||||
|
Recognized in OID(a)
|
$ | –– | $ | (11 | ) | |||
|
Recognized in OCI(a), (b)
|
–– | (15 | ) | |||||
|
Reclassified from OCI to OID(a), (b)
|
–– | –– | ||||||
|
Foreign currency swaps
|
||||||||
|
Recognized in OID(a)
|
–– | –– | ||||||
|
Recognized in OCI(a), (b)
|
(438 | ) | (19 | ) | ||||
|
Reclassified from OCI to OID(a), (b)
|
(628 | ) | –– | |||||
|
Foreign currency forward exchange contracts
|
||||||||
|
Recognized in OID(a)
|
–– | –– | ||||||
|
Recognized in OCI(a), (b)
|
–– | 2 | ||||||
|
Reclassified from OCI to OID(a), (b)
|
1 | 10 | ||||||
|
Derivative Financial Instruments in Net Investment Hedge Relationships
|
||||||||
|
Foreign currency swaps
|
||||||||
|
Recognized in OID(a)
|
$ | 1 | $ | (2 | ) | |||
|
Recognized in OCI(a), (b)
|
11 | 53 | ||||||
|
Derivative Financial Instruments Not Designated as Hedges
|
||||||||
|
Foreign currency swaps
|
||||||||
|
Recognized in OID(a)
|
$ | 4 | $ | (5 | ) | |||
|
Foreign currency forward-exchange contracts
|
||||||||
|
Recognized in OID(a)
|
(890 | ) | (255 | ) | ||||
|
Non-Derivative Financial Instruments in Net Investment Hedge Relationships
|
||||||||
|
Foreign currency short-term borrowings
|
||||||||
|
Recognized in OID(a)
|
$ | –– | $ | –– | ||||
|
Recognized in OCI(a), (b)
|
31 | 110 | ||||||
|
Foreign currency long-term debt
|
||||||||
|
Recognized in OID(a)
|
–– | –– | ||||||
|
Recognized in OCI(a), (b)
|
16 | 158 | ||||||
|
(a)
|
OID = Other (income)/deductions––net. OCI = Other comprehensive income/(expense), a balance sheet account.
|
|
(b)
|
Amounts presented represent the effective portion of the gain or loss. For derivative financial instruments in cash flow hedge relationships, the effective portion is included in Other comprehensive income/(expense) – Net unrealized gains/(losses) on derivative financial instruments. For derivative financial instruments in net investment hedge relationships and for foreign currency debt designated as hedging instruments, the effective portion is included in Other comprehensive income/(expense)––Currency translation adjustment.
|
|
Three Months Ended
|
||||||||
|
(millions of dollars)
|
April 4,
2010
|
Mar. 29,
2009
|
||||||
|
Net income before allocation to noncontrolling interests
|
$ | 2,035 | $ | 2,730 | ||||
|
Other comprehensive income/(loss):
|
||||||||
|
Currency translation adjustment and other
|
(2,747 | ) | (384 | ) | ||||
|
Net unrealized gains/(losses) on derivative financial instruments
|
134 | (23 | ) | |||||
|
Net unrealized gains/(losses) on available-for-sale securities
|
(15 | ) | 145 | |||||
|
Benefit plan adjustments
|
117 | 159 | ||||||
|
Total other comprehensive loss
|
(2,511 | ) | (103 | ) | ||||
|
Total comprehensive (loss)/income before allocation to noncontrolling interests
|
(476 | ) | 2,627 | |||||
|
Less: Comprehensive (loss)/income attributable to noncontrolling interests
|
(9 | ) | 2 | |||||
|
Comprehensive (loss)/income attributable to Pfizer Inc.
|
$ | (467 | ) | $ | 2,625 | |||
|
(millions of dollars)
|
April 4,
2010
|
Dec. 31,
2009
|
||||||
|
Finished goods
|
$ | 4,535 | $ | 5,249 | ||||
|
Work-in-process
|
4,233 | 5,776 | ||||||
|
Raw materials and supplies
|
1,364 | 1,378 | ||||||
|
Total inventories(a)
|
$ | 10,132 | $ | 12,403 | ||||
|
(a)
|
The decrease in total inventories is primarily due to the inventory sold during the first quarter of 2010 that was acquired from Wyeth and had been recorded at fair value, as well as operational reductions and the impact of foreign exchange. Certain amounts of inventories are in excess of one year’s supply. These excess amounts are primarily attributable to biologics inventory acquired from Wyeth and recorded at fair value and the quantities are generally consistent with the normal operating cycle of such inventory. There are no recoverability issues associated with these quantities.
|
|
(millions of dollars)
|
Biopharmaceutical
|
Diversified
|
Other
|
Total
|
||||||||||||
|
Balance, December 31, 2009(a)
|
$ | 22,165 | $ | 173 | $ | 20,038 | $ | 42,376 | ||||||||
|
Additions
|
–– | 18 | 985 | (b) | 1,003 | |||||||||||
|
Other(c)
|
(570 | ) | (3 | ) | (158 | ) | (731 | ) | ||||||||
|
Balance, April 4, 2010
|
$ | 21,595 | $ | 188 | $ | 20,865 | $ | 42,648 | ||||||||
|
(a)
|
The Other goodwill relates to our acquisition of Wyeth and is subject to change until we complete the recording of the assets acquired and liabilities assumed from Wyeth (see Note 3. Acquisition of Wyeth). The allocation of Wyeth goodwill among the Biopharmaceutical and Diversified segments has not yet been completed, but will be completed within one year of the acquisition date.
|
|
(b)
|
Reflects the impact of measurement period adjustments (see Note 3. Acquisition of Wyeth).
|
|
(c)
|
Primarily reflects the impact of foreign exchange.
|
|
April 4, 2010
|
December 31, 2009
|
|||||||||||||||||||||||
|
(millions of dollars)
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Identifiable
Intangible
Assets, less
Accumulated
Amortization
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Identifiable
Intangible
Assets, less Accumulated
Amortization
|
||||||||||||||||||
|
Finite-lived intangible assets:
|
||||||||||||||||||||||||
|
Developed technology rights
|
$ | 68,416 | $ | (22,417 | ) | $ | 45,999 | $ | 68,870 | $ | (21,223 | ) | $ | 47,647 | ||||||||||
|
Brands
|
1,627 | (563 | ) | 1,064 | 1,637 | (535 | ) | 1,102 | ||||||||||||||||
|
License agreements
|
620 | (148 | ) | 472 | 622 | (119 | ) | 503 | ||||||||||||||||
|
Trademarks
|
107 | (69 | ) | 38 | 113 | (73 | ) | 40 | ||||||||||||||||
|
Other
|
425 | (228 | ) | 197 | 488 | (231 | ) | 257 | ||||||||||||||||
|
Total amortized finite-lived
|
||||||||||||||||||||||||
|
intangible assets
|
71,195 | (23,425 | ) | 47,770 | 71,730 | (22,181 | ) | 49,549 | ||||||||||||||||
|
Indefinite-lived intangible assets:
|
||||||||||||||||||||||||
|
Brands
|
12,462 | –– | 12,462 | 12,562 | –– | 12,562 | ||||||||||||||||||
|
In-process research and development (a)
|
4,178 | –– | 4,178 | 5,834 | –– | 5,834 | ||||||||||||||||||
|
Trademarks
|
70 | –– | 70 | 70 | –– | 70 | ||||||||||||||||||
|
Total indefinite-lived
|
||||||||||||||||||||||||
|
intangible assets
|
16,710 | –– | 16,710 | 18,466 | –– | 18,466 | ||||||||||||||||||
|
Total identifiable intangible assets(b)
|
$ | 87,905 | $ | (23,425 | ) | $ | 64,480 | $ | 90,196 | $ | (22,181 | ) | $ | 68,015 | ||||||||||
|
(a)
|
Decrease is primarily related to the impact of measurement period adjustments (see Note 3. Acquisition of Wyeth).
|
|
(b)
|
Decrease is primarily related to amortization of finite-lived intangible assets, the impact of measurement period adjustments (see Note 3. Acquisition of Wyeth) and the impact of foreign exchange.
|
|
Pension Plans
|
||||||||||||||||||||||||||||||||
|
U.S.
Qualified
|
U.S.
Supplemental
(Non-Qualified)
|
International
|
Postretirement
Plans
|
|||||||||||||||||||||||||||||
|
(millions of dollars)
|
April 4,
2010
|
Mar. 29,
2009
|
April 4,
2010
|
Mar. 29,
2009
|
April 4,
2010
|
Mar. 29,
2009
|
April 4,
2010
|
Mar. 29,
2009
|
||||||||||||||||||||||||
|
Three Months Ended:
|
||||||||||||||||||||||||||||||||
|
Service cost
|
$ | 94 | $ | 59 | $ | 8 | $ | 5 | $ | 60 | $ | 45 | $ | 22 | $ | 8 | ||||||||||||||||
|
Interest cost
|
191 | 119 | 19 | 13 | 111 | 78 | 54 | 30 | ||||||||||||||||||||||||
|
Expected return on plan assets
|
(202 | ) | (118 | ) | –– | –– | (112 | ) | (86 | ) | (8 | ) | (6 | ) | ||||||||||||||||||
|
Amortization of:
|
||||||||||||||||||||||||||||||||
|
Actuarial losses
|
38 | 57 | 7 | 8 | 17 | 6 | –– | 4 | ||||||||||||||||||||||||
|
Prior service costs/(credits)
|
–– | 1 | (1 | ) | (1 | ) | (1 | ) | (1 | ) | (4 | ) | (1 | ) | ||||||||||||||||||
|
Curtailments and settlements––net
|
(33 | ) | 24 | (1 | ) | 7 | 1 | 2 | –– | 5 | ||||||||||||||||||||||
|
Special termination benefits
|
14 | 13 | 90 | –– | 1 | 1 | 6 | 12 | ||||||||||||||||||||||||
|
Net periodic benefit costs
|
$ | 102 | $ | 155 | $ | 122 | $ | 32 | $ | 77 | $ | 45 | $ | 70 | $ | 52 | ||||||||||||||||
|
Three Months Ended
|
||||||||
|
(millions)
|
April 4,
2010
|
Mar. 29,
2009
|
||||||
|
EPS Numerator––Basic:
|
||||||||
|
Income from continuing operations attributable to Pfizer Inc.
|
$ | 2,024 | $ | 2,728 | ||||
|
Less: Preferred stock dividends––net of tax
|
1 | –– | ||||||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders
|
2,023 | 2,728 | ||||||
|
Discontinued operations––net of tax
|
2 | 1 | ||||||
|
Net income attributable to Pfizer Inc. common shareholders
|
$ | 2,025 | $ | 2,729 | ||||
|
EPS Denominator––Basic:
|
||||||||
|
Weighted-average number of common shares outstanding
|
8,061 | 6,723 | ||||||
|
EPS Numerator––Diluted:
|
||||||||
|
Income from continuing operations attributable to Pfizer Inc. common shareholders
|
$ | 2,024 | $ | 2,728 | ||||
|
Discontinued operations––net of tax
|
2 | 1 | ||||||
|
Net income attributable to Pfizer Inc. common shareholders
|
$ | 2,026 | $ | 2,729 | ||||
|
EPS Denominator––Diluted:
|
||||||||
|
Weighted-average number of common shares outstanding
|
8,061 | 6,723 | ||||||
|
Common-share equivalents: stock options, stock issuable under employee compensation
plans and convertible preferred stock
|
40 | 30 | ||||||
|
Weighted-average number of common shares outstanding and common-share equivalents
|
8,101 | 6,753 | ||||||
|
Stock options that had exercise prices greater than the average market price of our common
stock issuable under employee compensation plans(a)
|
366 | 475 | ||||||
|
(a)
|
These common stock equivalents were outstanding during the first quarters of 2010 and 2009, but were not included in the computation of diluted EPS for those periods because their inclusion would have had an anti-dilutive effect.
|
|
·
|
Biopharmaceutical consists of the Primary Care, Specialty Care, Oncology, Established Products and Emerging Markets customer-focused units and includes products that prevent and treat cardiovascular and metabolic diseases, central nervous system disorders, arthritis and pain, infectious and respiratory diseases, urogenital conditions, cancer, eye diseases and endocrine disorders, among others. Biopharmaceutical’s segment profit includes costs related to research and development, manufacturing, and sales and marketing activities that are associated with the products in our Biopharmaceutical segment.
|
|
·
|
Diversified includes Animal Health products that prevent and treat diseases in livestock and companion animals, including vaccines, parasiticides and anti-infectives; Consumer Healthcare products that include over-the-counter healthcare products such as pain management therapies (analgesics and heat wraps), cough/cold/allergy remedies, dietary supplements, hemorrhoidal care and personal care items; Nutrition products such as infant and toddler nutritional products; and Capsugel, which represents our capsule products and services business. Diversified’s segment profit includes costs related to research and development, manufacturing, and sales and marketing activities that are associated with the products in our Diversified segment.
|
|
Three Months Ended(a)
|
||||||||
|
(millions of dollars)
|
April 4,
2010
|
Mar. 29,
2009
|
||||||
|
Revenues
|
||||||||
|
Biopharmaceutical
|
$ | 14,506 | $ | 10,102 | ||||
|
Diversified
|
2,141 | 691 | ||||||
|
Corporate/Other(b)
|
103 | 74 | ||||||
|
Total revenues
|
$ | 16,750 | $ | 10,867 | ||||
|
Segment profit/(loss)(c)
|
||||||||
|
Biopharmaceutical
|
$ | 7,912 | $ | 5,407 | ||||
|
Diversified
|
510 | 163 | ||||||
|
Corporate/Other(b), (d)
|
(5,243 | ) | (1,767 | ) | ||||
|
Total profit/(loss)
|
$ | 3,179 | $ | 3,803 | ||||
|
(a)
|
Includes revenues and profit/(loss) from legacy Wyeth products and operations for the three months ended April 4, 2010. Revenues and profit/(loss) from legacy Wyeth products and operations are not included in the three months ended March 29, 2009. Prior-period amounts for Capsugel, which were previously classified in Corporate/Other, are now classified in Diversified.
|
|
(b)
|
Corporate/Other includes Pfizer Centersource, which includes contract manufacturing and bulk pharmaceutical chemical sales. Corporate/Other under Segment profit/(loss) also includes interest income/(expense), corporate expenses (e.g., corporate administration costs), other income/(expense) (e.g., realized gains and losses attributable to our investments in debt and equity securities), certain performance-based and all share-based compensation expenses, significant impacts of purchase accounting for acquisitions, acquisition-related costs, intangible asset impairments and costs related to our cost-reduction initiatives.
|
|
(c)
|
Segment profit/(loss) equals Income from continuing operations before provision for taxes on income. Certain costs, such as significant impacts of purchase accounting for acquisitions, acquisition-related costs and costs related to our cost-reduction initiatives are included in Corporate/Other only. This methodology is utilized by management to evaluate our businesses.
|
|
(d)
|
For the first quarter of 2010, Corporate/Other includes: (i) significant impacts of purchase accounting for acquisitions of $2.8 billion, including intangible asset amortization related to our acquisitions of Wyeth in 2009 and Pharmacia in 2003 and charges related to fair value adjustments of inventory acquired from Wyeth and sold during the period; (ii) restructuring and acquisition-related costs of $799 million, primarily related to our acquisition of Wyeth; (iii) all share-based compensation expense; and (iv) net interest expense of $410 million. For the first quarter of 2009, Corporate/Other includes: (i) significant impacts of purchase accounting for acquisitions of $546 million, including intangible asset amortization and other charges, primarily related to our acquisition of Pharmacia in 2003; (ii) acquisition-related costs of $397 million, primarily related to our acquisition of Wyeth; (iii) restructuring charges and implementation costs associated with our cost-reduction initiatives of $331 million; (iv) all share-based compensation expense; and (v) net interest income of $116.
|
|
Three Months Ended
|
||||||||
|
(millions of dollars)
|
April 4,
2010
|
Mar. 29,
2009
|
||||||
|
Biopharmaceutical products:
|
||||||||
|
Lipitor
|
$ | 2,757 | $ | 2,721 | ||||
|
Enbrel(a), (c)
|
802 | –– | ||||||
|
Lyrica
|
723 | 684 | ||||||
|
Effexor(a)
|
716 | –– | ||||||
|
Celebrex
|
570 | 564 | ||||||
|
Prevnar/Prevenar 7(a)
|
520 | –– | ||||||
|
Viagra
|
479 | 454 | ||||||
|
Xalatan/Xalacom
|
422 | 407 | ||||||
|
Norvasc
|
368 | 481 | ||||||
|
Zyvox
|
292 | 283 | ||||||
|
Prevnar/Prevenar 13(a)
|
286 | –– | ||||||
|
Zosyn/Tazocin(a)
|
264 | –– | ||||||
|
Detrol/Detrol LA
|
261 | 289 | ||||||
|
Sutent
|
259 | 202 | ||||||
|
Premarin family(a)
|
256 | –– | ||||||
|
Geodon/Zeldox
|
254 | 230 | ||||||
|
Genotropin
|
206 | 197 | ||||||
|
Chantix/Champix
|
189 | 177 | ||||||
|
Vfend
|
188 | 179 | ||||||
|
BeneFIX(a)
|
154 | –– | ||||||
|
Caduet
|
135 | 134 | ||||||
|
Aromasin
|
128 | 110 | ||||||
|
Zoloft
|
120 | 115 | ||||||
|
Revatio
|
114 | 113 | ||||||
|
Medrol
|
109 | 118 | ||||||
|
Cardura
|
107 | 107 | ||||||
|
Aricept(b)
|
107 | 95 | ||||||
|
Zithromax/Zmax
|
103 | 114 | ||||||
|
ReFacto/Xyntha(a)
|
90 | –– | ||||||
|
All other(d)
|
2,523 | 1,746 | ||||||
|
Alliance revenues (Enbrel (in the U.S. and Canada)(a), Aricept, Exforge, Rebif and Spiriva)
|
1,004 | 582 | ||||||
|
Total Biopharmaceutical products
|
14,506 | 10,102 | ||||||
|
Diversified products:
|
||||||||
|
Animal Health products(d)
|
846 | 537 | ||||||
|
Consumer Healthcare products(a)
|
663 | –– | ||||||
|
Nutrition products(a)
|
458 | –– | ||||||
|
Capsugel(e)
|
174 | 154 | ||||||
|
Total Diversified products
|
2,141 | 691 | ||||||
|
Corporate/Other
|
103 | 74 | ||||||
|
Total revenues
|
$ | 16,750 | $ | 10,867 | ||||
|
(a)
|
Represents legacy Wyeth products for the three months ended April 4, 2010. Legacy Wyeth products are not included in the three months ended March 29, 2009.
|
|
(b)
|
Represents direct sales under license agreement with Eisai. Co. Ltd.
|
|
(c)
|
Outside the U.S. and Canada.
|
|
(d)
|
Includes legacy Pfizer and legacy Wyeth products for the three months ended April 4, 2010 and includes only legacy Pfizer products in the three months ended March 29, 2009.
|
|
(e)
|
Prior-period amounts for Capsugel, which were previously classified in Corporate/Other, are now classified in Diversified.
|
|
Three Months Ended(a)
|
||||||||||||
|
(millions of dollars)
|
April 4,
2010
|
Mar. 29,
2009
|
% Change
|
|||||||||
|
Revenues
|
||||||||||||
|
United States
|
$ | 7,314 | $ | 4,969 | 47 | |||||||
|
Europe
|
4,785 | 3,005 | 59 | |||||||||
|
Japan/Other Asia
|
2,659 | 1,738 | 53 | |||||||||
|
Canada/Latin America/Africa/Middle East
|
1,992 | 1,155 | 72 | |||||||||
|
Total Revenues
|
$ | 16,750 | $ | 10,867 | 54 | |||||||
|
(a)
|
Includes revenues from legacy Wyeth products for the three months ended April 4, 2010. Revenues from legacy Wyeth products are not included in the three months ended March 29, 2009.
|
|
·
|
higher amortization charges, primarily related to intangible assets acquired in connection with the acquisition of Wyeth, and the mix of jurisdictions in which those charges were incurred;
|
|
·
|
the write-off of the deferred tax asset of approximately $270 million related to the Medicare Part D subsidy for retiree prescription drug coverage, resulting from changes in the U.S. healthcare legislation enacted in March 2010 concerning the tax treatment of that subsidy effective for tax years beginning after December 31, 2012;
|
|
·
|
the expiration of the U.S. research tax credit; and
|
|
·
|
the increase in non-deductible in-process research and development charges.
|
|
·
|
Overview of Our Performance and Operating Environment. This section, beginning on page 23, provides information about the following: our business; our performance during the first quarter of 2010; the anticipated impacts of the recently enacted healthcare legislation in the U.S.; our operating environment; and our strategic initiatives.
|
|
·
|
Acquisition of Wyeth. This section, beginning on page 26, discusses our 2009 acquisition of Wyeth and adjustments made in the first quarter of 2010 to the provisional allocation of the purchase price. For additional information see Notes to Condensed Consolidated Financial Statements––Note 3. Acquisition of Wyeth.
|
|
·
|
Revenues. This section, beginning on page 27, provides an analysis of our products and revenues for the first quarters of 2010 and 2009, as well as an overview of important product developments.
|
|
·
|
Costs and Expenses. This section, beginning on page 36, provides a discussion about our costs and expenses.
|
|
·
|
Provision for Taxes on Income. This section, on page 39, provides a discussion of items impacting our tax provision for the periods presented.
|
|
·
|
Adjusted Income. This section, beginning on page 39, provides a discussion of an alternative view of performance used by management.
|
|
·
|
Financial Condition, Liquidity and Capital Resources. This section, beginning on page 43, provides an analysis of our balance sheets as of April 4, 2010 and December 31, 2009 and cash flows for the first quarters of 2010 and 2009, as well as a discussion of our outstanding debt and commitments that existed as of April 4, 2010, and December 31, 2009. Included in the discussion of outstanding debt is a discussion of the amount of financial capacity available to help fund Pfizer’s future activities.
|
|
·
|
Our Financial Guidance for 2010 and Our Financial Targets for 2012. These sections, beginning on page 45, provide a discussion of our financial guidance for full-year 2010 and our financial targets for full-year 2012.
|
|
·
|
Forward-Looking Information and Factors That May Affect Future Results. This section, beginning on page 46, provides a description of the risks and uncertainties that could cause actual results to differ materially from those discussed in forward-looking statements set forth in this MD&A relating to our financial results, operations and business plans and prospects. Such forward-looking statements are based on management’s current expectations about future events, which are inherently susceptible to uncertainty and changes in circumstances. Also included in this section is a discussion of legal proceedings and contingencies.
|
|
Three Months Ended
|
||||||||||||
|
(millions of dollars, except per common share data)
|
April 4,
2010
|
Mar. 29,
2009
|
% Change
|
|||||||||
|
Revenues
|
$ | 16,750 | $ | 10,867 | 54 | |||||||
|
Cost of sales
|
4,306 | 1,408 | 206 | |||||||||
|
% of revenues
|
25.7 | % | 13.0 | % | ||||||||
|
Selling, informational and administrative expenses
|
4,436 | 2,876 | 54 | |||||||||
|
% of revenues
|
26.5 | % | 26.5 | % | ||||||||
|
Research and development expenses
|
2,226 | 1,705 | 31 | |||||||||
|
% of revenues
|
13.3 | % | 15.7 | % | ||||||||
|
Amortization of intangible assets
|
1,409 | 578 | 144 | |||||||||
|
% of revenues
|
8.4 | % | 5.3 | % | ||||||||
|
Acquisition-related in-process research and development charges
|
74 | –– | * | |||||||||
|
% of revenues
|
0.4 | % | –– | % | ||||||||
|
Restructuring charges and certain acquisition-related costs
|
706 | 554 | 27 | |||||||||
|
% of revenues
|
4.2 | % | 5.1 | % | ||||||||
|
Other (income)/deductions––net
|
414 | (57 | ) | * | ||||||||
|
Income from continuing operations before provision for taxes on income
|
3,179 | 3,803 | (16 | ) | ||||||||
|
% of revenues
|
19.0 | % | 35.0 | % | ||||||||
|
Provision for taxes on income
|
1,146 | 1,074 | 7 | |||||||||
|
Effective tax rate
|
36.0 | % | 28.2 | % | ||||||||
|
Income from continuing operations
|
||||||||||||