- Full-Year 2006 Revenues Grew 2 Percent to $48.4 Billion, Key
Products Substantially Attained Targets, Nine Exceeded $1 Billion
in Sales NEW YORK, Jan. 22 /PRNewswire-FirstCall/ -- Pfizer Inc
today announced that revenues for full-year 2006 increased 2
percent, reported diluted EPS grew 144 percent, and adjusted
diluted EPS(1) grew 6 percent versus 2005. Revenues in the fourth
quarter of 2006 were substantially unchanged, reported diluted EPS
grew 257 percent, and adjusted diluted EPS(1) decreased 12 percent
versus the comparable quarter in 2005. "In the face of many
challenges in 2006, we substantially achieved a number of financial
targets that we set early in the year," said Pfizer Chairman and
Chief Executive Officer Jeffrey B. Kindler. "We took decisive
action and delivered solid performance despite challenges,
including the significant revenue impact due to the loss of
exclusivity of Zithromax and Zoloft in the U.S. We achieved revenue
growth of 2 percent for the year. We delivered adjusted diluted
EPS(1) of $2.06, in line with our upwardly revised guidance. "While
we attained nearly all of our financial targets for the year, we
continue to face a difficult operating environment, including
competitive challenges and the risks inherent in drug development.
Our decision to discontinue development of torcetrapib/atorvastatin
in early December 2006 was disappointing and brought into sharper
focus the need to transform Pfizer over time to succeed in a
dynamic healthcare marketplace. We are reviewing every aspect of
our business, and I look forward to discussing our priorities when
we meet with analysts in New York later today," Mr. Kindler
concluded. "During the fourth quarter of 2006, we strengthened our
commitment to enhancing total return to shareholders," said Vice
Chairman David Shedlarz. "We completed the divestiture of the
Consumer Healthcare business in the quarter, receiving
approximately $16.6 billion in proceeds. Combined with projected
strong cash flow from operations over the next several years, these
proceeds will be used to make key investments in new products and
technologies and to support a strong dividend and an active share
purchase program. "In December 2006, Pfizer announced a 21-percent
increase in its first- quarter 2007 dividend to 29 cents per share.
This significant increase builds on a 26-percent dividend increase
in 2006. Pfizer has now increased its dividend every year for 40
consecutive years, and in the past 10 years the company's dividend
has increased on average 18 percent per year. The company also
continued its substantial share purchase program by buying $2.5
billion of its common stock in the fourth quarter of 2006. Pfizer
purchased $7.0 billion of common stock during 2006. During the past
five years, Pfizer has purchased more than $35 billion of its
common stock." Pfizer's Pharmaceutical Operations Substantially
Meet Targets for Key In-Line Products "Worldwide pharmaceutical
2006 revenues met our expectations," said Ian Read, President of
Worldwide Pharmaceutical Operations. "We focused on the top-line
growth of key in-line medicines, including Lipitor, Celebrex,
Lyrica, and Geodon, and we launched Sutent, Eraxis, Chantix, and
Exubera in the U.S." Worldwide pharmaceutical revenues were $45.1
billion for full-year 2006, a 2-percent increase compared to
full-year 2005. In the U.S., revenues increased 4 percent for the
full-year 2006 compared to the same period in 2005. A strong
performance in the U.S. was driven by growth from several of our
core products, including Lipitor (up 6 percent), Celebrex (up 24
percent), Geodon (up 31 percent), Norvasc (up 13 percent), Xalatan
(up 12 percent), Zyrtec (up 15 percent), Detrol (up 14 percent),
Zyvox (up 20 percent), Vfend (up 27 percent), Aromasin (up 34
percent), and Caduet (up 95 percent), as well as the successful
launches of several new medicines. Worldwide pharmaceutical
operations substantially met the sales targets established at the
beginning of the year for several key brands. Notwithstanding our
original sales target of more than $13 billion for Lipitor, actual
sales totaled $12.886 billion, representing 6-percent growth -- a
substantial accomplishment in the face of intense branded and
generic competition in the statin market. For Celebrex, sales of
$2.039 billion exceeded our original goal of achieving sales of
more than $2 billion, demonstrating that we are on our way to
rebuilding physician and patient confidence in this important
medicine. Worldwide sales of $1.156 billion for Lyrica
significantly exceeded both the initial target of more than $900
million and the subsequent, raised target of more than $1 billion,
a performance that establishes Lyrica as one of the most successful
pharmaceutical market entries in recent years. Geodon reached $758
million in worldwide revenues, just short of our target of about
$800 million. Nine Pfizer products surpassed $1 billion in sales in
2006, with Detrol and Lyrica joining this list for the first time.
Pharmaceutical revenues for the fourth quarter of 2006 were $11.7
billion worldwide, comparable to those in the fourth quarter of
2005, and were $6.1 billion in the U.S., down 3 percent, mainly
reflecting the loss of exclusivity of Zoloft in the U.S. in June
2006. Worldwide sales of Celebrex, Geodon, and Lyrica in the fourth
quarter of 2006 grew 15 percent, 32 percent, and 131 percent,
respectively. New Products Continue to Gain Momentum 2006 was an
exciting year of product launches. Against an original target of
six new-product entries in the U.S., we launched four products --
Eraxis, Sutent, Exubera, and Chantix. In Europe, Sutent and Exubera
entered the marketplace, and Champix (the trade name for Chantix in
Europe) was launched beginning in December 2006. Several key
medicines received approval for new indications in 2006, including
approvals of Lyrica for central neuropathic pain and generalized
anxiety disorder in the EU, and Celebrex for juvenile rheumatoid
arthritis in the U.S. Progress Achieved in New-Product Pipeline "We
continued to advance the candidates in our pipeline during the
fourth quarter of 2006," said Dr. John LaMattina, President, Pfizer
Global Research and Development. Maraviroc, our CCR5 receptor
antagonist to treat HIV infection, was submitted for approval in
the U.S. and EU in December 2006. Maraviroc has been accepted for
filing and granted an accelerated review in the EU. A supplemental
NDA filing for Lyrica in the treatment of fibromyalgia was
submitted to the FDA on December 20, 2006. Fibromyalgia is
characterized by chronic, widespread pain that affects tens of
millions of people worldwide, predominantly women. It is frequently
accompanied by disturbed sleep, anxious mood, and poor quality of
life. Pfizer is excited about Lyrica as a potential breakthrough
for patients for treatment in this area and expects approval and
launch of this new indication in the U.S. in the second half of
2007. Four new programs advanced into Phase 3 during the quarter:
-- Axitinib, our next-generation anti-angiogenesis agent to treat
thyroid cancer, -- CP-945,598, our cannabinoid-1 antagonist to
treat obesity and its devastating complications, -- Sutent for the
treatment of metastatic breast cancer, and -- Zithromax/chloroquine
to treat malaria, the single greatest killer of children in Africa.
Pfizer recently provided more detail on its pipeline than ever
before with the launch of an on-line site for tracking development
compounds across Pfizer's largest-ever pipeline. This new website,
launched last month, will be updated twice a year and is available
at http://www.pfizer.com/pipeline. Pfizer Achieves Full-Year 2006
Financial Goals In reviewing full-year 2006 results, Alan Levin,
chief financial officer, said, "Pfizer delivered adjusted diluted
EPS(1) of $2.06 for the full year, in line with our most recent
guidance and representing growth of 6 percent compared to full-year
2005 adjusted diluted EPS(1) of $1.95. Adjusted diluted EPS(1) was
well ahead of our original 2006 guidance of about $1.93 (restated
to reflect the sale of our Consumer Healthcare business) due in
part to greater savings associated with our broad-based Adapting to
Scale (AtS) productivity program (savings of approximately $2.6
billion for the full year versus our original goal of about $2
billion), a lower effective tax rate, and fewer shares outstanding
given increased share purchases. Reported diluted EPS of $2.66
included a one-time gain of $1.08 ($7.9 billion) associated with
the recently completed divestiture of Pfizer Consumer Healthcare
(PCH), among other factors. "For the fourth quarter of 2006,
adjusted diluted EPS(1) of $.43 declined by 12 percent relative to
the comparable period in 2005, reflecting the timing of certain
operating expenses in 2006. The cost of sales pre-tax component of
adjusted income(1) in the quarter increased by 11 percent,
reflecting the timing of implementation of inventory management
initiatives, the impact of foreign exchange, and charges related to
certain asset writedowns. The R&D pre-tax component of adjusted
income(1) in the quarter grew by 22 percent, reflecting timing
considerations associated with the advancement of development
programs for pipeline products, expenditures associated with in-
licensing of a new compound, and the establishment of various
research collaborations with third parties, among other factors.
Reported net income of $9.4 billion for the fourth quarter included
a gain of $7.9 billion on the sale of our Consumer Healthcare
business, as well as purchase-accounting- related charges, costs
associated with our expanded AtS productivity initiative, and a
$320 million charge related to the impairment of intangible assets
associated with Depo-Provera, a contraceptive product. "We will
discuss our forward-looking financial guidance during this
afternoon's analyst meeting," Mr. Levin concluded. For additional
details, please see the attached financial schedules, product
revenue tables, supplemental financial information, and Disclosure
Notice. (1) "Adjusted income" and "adjusted diluted earnings per
share (EPS)" are defined as reported net income and reported
diluted EPS excluding purchase-accounting adjustments,
acquisition-related costs, discontinued operations, cumulative
effect of a change in accounting principles, and certain
significant items. As described under Adjusted Income in the
Management's Discussion and Analysis of Financial Condition and
Results of Operations section of Pfizer's Form 10-Q for the
quarterly period ended October 1, 2006, management uses adjusted
income, among other factors, to set performance goals and to
measure the performance of the overall company. We believe that
investors' understanding of our performance is enhanced by
disclosing this measure. Reconciliations of fourth-quarter and
full-year 2006 and 2005 adjusted income and adjusted diluted EPS to
reported net income and reported diluted EPS, as well as a
reconciliation of the original $1.93 estimate of full-year 2006
adjusted diluted EPS to reported diluted EPS, are provided in the
materials accompanying this report. The adjusted income and
adjusted diluted EPS measures are not, and should not be viewed as,
substitutes for U.S. GAAP net income and diluted EPS. PFIZER INC
AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED) (millions of dollars, except per common share data)
Fourth Quarter % Incr./ Full Year % Incr./ 2006 2005 (Decr.) 2006
2005 (Decr.) Revenues $12,603 $12,547 - $48,371 $47,405 2 Costs and
expenses: Cost of sales(a) 2,217 1,982 12 7,640 7,232 6 Selling,
informational and administrative expenses(a) 4,562 4,356 5 15,589
15,313 2 Research and development expenses(a) 2,412 1,970 22 7,599
7,256 5 Amortization of intangible assets 815 830 (2) 3,261 3,399
(4) Acquisition-related in-process research and development charges
322 - * 835 1,652 (49) Restructuring charges and acquisition-
related costs 507 573 (12) 1,323 1,356 (2) Other
(income)/deductions -- net 54 (306) * (904) 397 * Income from
continuing operations before provision for taxes on income,
minority interests and cumulative effect of a change in accounting
principles 1,714 3,142 (45) 13,028 10,800 21 Provision for taxes on
income 223 536 (58) 1,992 3,178 (37) Minority interests 2 6 (65) 12
12 4 Income from continuing operations before cumulative effect of
a change in accounting principles 1,489 2,600 (43) 11,024 7,610 45
Discontinued operations: Income from discontinued operations -- net
of tax 103 152 (32) 433 451 (4) Gains on sales of discontinued
operations -- net of tax 7,857 3 M+ 7,880 47 M+ Discontinued
operations -- net of tax 7,960 155 M+ 8,313 498 M+ Income before
cumulative effect of a change in accounting principles 9,449 2,755
243 19,337 8,108 138 Cumulative effect of a change in accounting
principles -- net of tax - (23) * - (23) * Net income $9,449 $2,732
246 $19,337 $8,085 139 Earnings per common share - Basic: Income
from continuing operations before cumulative effect of a change in
accounting principles $0.21 $0.35 (40) $1.52 $1.03 48 Discontinued
operations -- net of tax 1.11 0.02 M+ 1.15 0.07 M+ Income before
cumulative effect of a change in accounting principles 1.32 0.37
257 2.67 1.10 143 Cumulative effect of a change in accounting
principles - - - - - - Net income $1.32 $0.37 257 $2.67 $1.10 143
Earnings per common share - Diluted: Income from continuing
operations before cumulative effect of a change in accounting
principles $0.21 $0.35 (40) $1.52 $1.02 49 Discontinued operations
-- net of tax 1.11 0.02 M+ 1.14 0.07 M+ Income before cumulative
effect of a change in accounting principles 1.32 0.37 257 2.66 1.09
144 Cumulative effect of a change in accounting principles - - - -
- - Net income $1.32 $0.37 257 $2.66 $1.09 144 Weighted-average
shares used to calculate earnings per common share: Basic 7,144
7,327 7,242 7,361 Diluted 7,171 7,368 7,274 7,411 (a) Exclusive of
amortization of intangible assets, except as discussed in footnote
4 below. * Calculation not meaningful. M+ Change greater than
one-thousand percent. Certain amounts and percentages may reflect
rounding adjustments. 1. The above financial statement presents the
three-month and twelve- month periods ended December 31 of each
year. Subsidiaries operating outside the United States are included
for the three-month and twelve- month periods ended November 30 of
each year. 2. In December 2006, we sold our Consumer Healthcare
business for approximately $16.6 billion. The above financial
statement reflects this business as discontinued operations for all
periods through December 20, 2006, including our international
subsidiaries. 3. As required, the estimated value of
Acquisition-related in-process research and development
charges(IPR&D) is expensed at acquisition date. In 2006, we
expensed $835 million of IPR&D, of which $322 million related
to our acquisition of PowderMed Ltd. in the fourth quarter and $513
million primarily related to our acquisition of Rinat Neurosciences
Corp. in the second quarter. In 2005, we expensed $1.7 billion of
IPR&D, of which $1.4 billion related to our acquisition of
Vicuron Pharmaceuticals, Inc in the third quarter and $262 million
related primarily to our acquisition of Idun Pharmaceuticals, Inc.
in the second quarter. 4. Amortization expense related to acquired
intangible assets that contribute to our ability to sell,
manufacture, research, market and distribute our products are
included in Amortization of intangible assets as they benefit
multiple business functions. Amortization expense related to
acquired intangible assets that are associated with a single
function are included in Cost of sales, Selling, informational and
administrative expenses or Research and development expenses, as
appropriate. 5. Other (income)/deductions -- net for the fourth
quarter and full year 2006 includes a charge of $320 million
related to the impairment of the Depo-Provera intangible asset and,
for the full year 2005, includes a charge of $1.2 billion related
to the impairment of the Bextra intangible asset. 6. Discontinued
operations -- net of tax is primarily related to our Consumer
Healthcare business. 7. Provision for taxes on income in the full
year 2006 includes a downward revision ($124 million) of the
estimated tax costs related to repatriation of foreign earnings in
2005 and tax benefits associated with the resolution of certain tax
positions ($441 million). Full year 2005 includes tax benefits
associated with the resolution of certain tax positions ($586
million) and a tax provision related to the repatriation of foreign
earnings of $1.7 billion. PFIZER INC AND SUBSIDIARY COMPANIES
RECONCILIATION FROM REPORTED NET INCOME AND REPORTED DILUTED
EARNINGS PER SHARE TO ADJUSTED INCOME AND ADJUSTED DILUTED EARNINGS
PER SHARE (UNAUDITED) (millions of dollars, except per common share
data) Fourth Quarter % Incr./ Full Year % Incr./ 2006 2005 (Decr.)
2006 2005 (Decr.) Reported net income $9,449 $2,732 246 $19,337
$8,085 139 Purchase accounting adjustments -- net of tax 899 569 58
3,131 3,967 (21) Acquisition-related costs -- net of tax 5 214 (98)
14 599 (98) Discontinued operations -- net of tax (7,960) (155) M+
(8,313) (498) M+ Cumulative effect of a change in accounting
principles -- net of tax - 23 * - 23 * Certain significant items --
net of tax 654 208 214 813 2,293 (65) Adjusted income $3,047 $3,591
(15) $14,982 $14,469 4 Reported diluted earnings per common share
$1.32 $0.37 257 $2.66 $1.09 144 Purchase accounting adjustments --
net of tax 0.13 0.08 63 0.43 0.54 (20) Acquisition-related costs --
net of tax - 0.03 * - 0.08 * Discontinued operations -- net of tax
(1.11) (0.02) M+ (1.14) (0.07) M+ Cumulative effect of a change in
accounting principles -- net of tax - - * - - * Certain significant
items -- net of tax 0.09 0.03 200 0.11 0.31 (65) Adjusted diluted
earnings per common share $0.43 $0.49 (12) $2.06 $1.95 6 *
Calculation not meaningful. M+ Change greater than one thousand
percent. Certain amounts and percentages may reflect rounding
adjustments. 1. The above reconciliation presents the three-month
and twelve-month periods ended December 31 of each year.
Subsidiaries operating outside the United States are included for
the three-month and twelve-month periods ended November 30 of each
year. 2. Adjusted income and Adjusted diluted earnings per common
share as shown above reflect the following items: (millions of
dollars) Fourth Quarter Full Year 2006 2005 2006 2005 Purchase
accounting adjustments: In-process research and development
charges(a) $322 $- $835 $1,652 Intangible amortization and other(b)
806 802 3,220 3,289 Total purchase accounting adjustments, pre-tax
1,128 802 4,055 4,941 Income taxes (229) (233) (924) (974) Total
purchase accounting adjustments -- net of tax 899 569 3,131 3,967
Acquisition-related costs: Integration costs(c) 13 159 21 543
Restructuring charges(c) (1) 149 6 375 Total acquisition-related
costs, pre-tax 12 308 27 918 Income taxes (7) (94) (13) (319) Total
acquisition-related costs -- net of tax 5 214 14 599 Discontinued
operations: Income from discontinued operations(d) (150) (230)
(643) (695) Gains on sales of discontinued operations(d) (10,206)
(5) (10,243) (77) Total discontinued operations, pre-tax (10,356)
(235) (10,886) (772) Income taxes 2,396 80 2,573 274 Total
discontinued operations -- net of tax (7,960) (155) (8,313) (498)
Cumulative effect of a change in accounting principles -- net of
tax - 23 - 23 Certain significant items: Asset impairment charges
and other associated costs(e) 320 24 320 1,240 Sanofi-aventis
research and development milestone(f) - - (118) - Restructuring
charges - Adapting to Scale(c) 495 265 1,296 438 Implementation
costs - Adapting to Scale(g) 241 192 788 325 Gain on disposals of
investments and other(h) (13) (134) (173) (134) Total certain
significant items, pre-tax 1,043 347 2,113 1,869 Income taxes (389)
(104) (735) (654) Resolution of certain tax positions(i) - - (441)
(586) Tax impact for the repatriation of foreign earnings(i) - (35)
(124) 1,664 Total certain significant items -- net of tax 654 208
813 2,293 Total purchase accounting adjustments,
acquisition-related costs, discontinued operations, cumulative
effective of a change in accounting principles and certain
significant items -- net of tax $(6,402) $859 $(4,355) $6,384 (a)
Included in Acquisition-related in-process research and development
charges. (b) Included primarily in Amortization of intangible
assets. (c) Included in Restructuring charges and
acquisition-related costs. (d) Discontinued operations -- net of
tax is primarily related to our Consumer Healthcare business. (e)
Included primarily in Other (income)/deductions -- net. For the
fourth quarter and full year 2006, includes $320 million related to
the impairment of the Depo-Provera intangible asset, and for the
full year 2005, includes $1.2 billion related to the impairment of
the Bextra intangible asset. (f) Included in Research and
development expenses. (g) Included in Cost of sales ($114 million),
Selling, informational and administrative expenses ($83 million)
and Research and development expenses ($44 million) for the three
months ended December 31, 2006 and included in Cost of sales ($392
million), Selling, informational and administrative expenses ($243
million), Research and development expenses ($176 million) and in
Other (income)/deductions-net ($23 million income) for the full
year ended December 31, 2006. Included in Cost of sales ($87
million), Selling, informational and administrative expenses ($75
million) and Research and development expenses ($30 million) for
the three months ended December 31, 2005 and included in Cost of
sales ($124 million), Selling, informational and administrative
expenses ($151 million), Research and development expenses ($50
million) for the full year ended December 31, 2005. (h) Included in
Other (income)/deductions -- net. (i) Included in Provision for
taxes on income. PFIZER INC SEGMENT/PRODUCT REVENUES FOURTH QUARTER
2006 (millions of dollars) WORLDWIDE U.S. INTERNATIONAL % % % 2006
2005 Chg 2006 2005 Chg 2006 2005 Chg TOTAL REVENUES 12,603 12,547 -
6,404 6,609 (3) 6,199 5,938 4 PHARMA- CEUTICAL 11,666 11,653 -
6,055 6,246 (3) 5,611 5,407 4 - CARDIOVASCULAR AND METABOLIC
DISEASES 5,243 5,068 3 2,865 2,787 3 2,378 2,281 4 LIPITOR 3,335
3,357 (1) 1,945 2,069 (6) 1,390 1,288 8 NORVASC 1,317 1,244 6 686
613 12 631 631 - CARDURA 140 146 (4) 2 2 35 138 144 (4) CADUET 115
65 77 109 63 71 6 2 333 ACCUPRIL/ ACCURETIC 68 44 56 5 (25)(122) 63
69 (9) CHANTIX/ CHAMPIX 68 - * 68 - * - - * - CENTRAL NERVOUS
SYSTEM DISORDERS 1,251 1,673 (25) 597 1,023 (42) 654 650 1 ZOLOFT
166 808 (79) 76 653 (88) 90 155 (42) LYRICA 353 153 131 214 82 160
139 71 98 GEODON/ ZELDOX 210 159 32 176 131 34 34 28 24 NEURONTIN
120 141 (15) 18 27 (34) 102 114 (11) ARICEPT** 98 90 9 - - * 98 90
8 XANAX/ XR 81 102 (21) 15 35 (59) 66 67 (1) RELPAX 81 63 27 52 38
38 29 25 11 - ARTHRITIS AND PAIN 737 650 13 477 402 19 260 248 5
CELEBREX 540 472 15 412 357 16 128 115 12 - INFECTIOUS AND
RESPIRATORY DISEASES 866 1,111 (22) 256 513 (50) 610 598 2 ZYVOX
223 164 36 144 118 22 79 46 70 ZITHROMAX/ ZMAX 109 402 (73) (3) 262
(101) 112 140 (20) VFEND 148 112 31 49 40 23 99 72 36 DIFLUCAN 109
128 (15) (13) (1) M+ 122 129 (5) - UROLOGY 754 727 4 429 410 5 325
317 3 VIAGRA 450 430 5 222 212 5 228 218 5 DETROL/ DETROL LA 290
283 2 201 193 5 89 90 (3) - ONCOLOGY 641 497 29 273 167 64 368 330
11 CAMPTOSAR 235 237 (1) 127 124 3 108 113 (4) ELLENCE 76 94 (20)
11 17 (33) 65 77 (17) AROMASIN 91 71 29 30 25 23 61 46 33 SUTENT
104 - * 69 - * 35 - * - OPHTHALMOLOGY 396 362 9 123 116 6 273 246
11 XALATAN/ XALACOM 391 361 8 123 116 6 268 245 9 - ENDOCRINE
DISORDERS 261 266 (2) 67 86 (23) 194 180 7 GENOTROPIN 209 204 3 61
60 2 148 144 3 - ALL OTHER 1,127 991 14 746 559 33 381 432 (11)
ZYRTEC/ ZYRTEC D 374 327 14 374 327 14 - - * - ALLIANCE REVENUE
(Aricept, Macugen, Mirapex, Olmetec, Rebif and Spiriva) 390 308 26
222 183 21 168 125 34 ANIMAL HEALTH 655 630 4 281 283 (1) 374 347 8
OTHER *** 282 264 7 68 80 (15) 214 184 16 * - Calculation not
meaningful. ** - Represents direct sales under license agreement
with Eisai Co., Ltd. *** - Includes Capsugel and Pfizer
CenterSource. M+ - Change greater than one-thousand percent.
Certain amounts and percentages may reflect rounding adjustments.
Certain prior year data have been reclassified to conform to the
current year presentation. PFIZER INC SEGMENT/PRODUCT REVENUES
TWELVE MONTHS 2006 (millions of dollars) WORLDWIDE U.S.
INTERNATIONAL % % % 2006 2005 Chg 2006 2005 Chg 2006 2005 Chg TOTAL
REVENUES 48,371 47,405 2 25,822 24,751 4 22,549 22,654 - PHARMA-
CEUTICAL 45,083 44,269 2 24,503 23,471 4 20,580 20,798 (1) -
CARDIOVASCULAR AND METABOLIC DISEASES 19,871 18,732 6 11,124 10,036
11 8,747 8,696 1 LIPITOR 12,886 12,187 6 7,849 7,401 6 5,037 4,786
5 NORVASC 4,866 4,706 3 2,500 2,222 13 2,366 2,484 (5) CARDURA 538
586 (8) 7 7 - 531 579 (8) CADUET 370 185 99 349 179 95 21 6 241
ACCUPRIL/ ACCURETIC 266 294 (10) 29 22 37 237 272 (13) CHANTIX/
CHAMPIX 101 - * 101 - * - - * - CENTRAL NERVOUS SYSTEM DISORDERS
6,038 6,391 (6) 3,635 3,816 (5) 2,403 2,575 (7) ZOLOFT 2,110 3,256
(35) 1,752 2,573 (32) 358 683 (47) LYRICA 1,156 291 297 717 111 M+
439 180 144 GEODON/ ZELDOX 758 589 29 631 483 31 127 106 20
NEURONTIN 496 639 (22) 91 159 (43) 405 480 (16) ARICEPT** 358 346 4
1 - * 357 346 4 XANAX/XR 316 409 (23) 70 141 (50) 246 268 (8)
RELPAX 286 233 23 185 143 30 101 90 11 - ARTHRITIS AND PAIN 2,711
2,386 14 1,781 1,377 29 930 1,009 (8) CELEBREX 2,039 1,730 18 1,577
1,267 24 462 463 - - INFECTIOUS AND RESPIRATORY DISEASES 3,474
4,770 (27) 1,222 2,449 (50) 2,252 2,321 (3) ZYVOX 782 618 27 527
438 20 255 180 42 ZITHROMAX/ ZMAX 638 2,025 (69) 210 1,497 (86) 428
528 (19) VFEND 515 397 30 178 140 27 337 257 31 DIFLUCAN 435 498
(13) (17) (17) (3) 452 515 (12) - UROLOGY 2,809 2,684 5 1,586 1,497
6 1,223 1,187 3 VIAGRA 1,657 1,645 1 796 802 (1) 861 843 2 DETROL/
DETROL LA 1,100 988 11 769 675 14 331 313 5 - ONCOLOGY 2,191 1,996
10 887 701 26 1,304 1,295 1 CAMPTOSAR 903 910 - 491 471 4 412 439
(6) ELLENCE 312 367 (15) 54 73 (26) 258 294 (12) AROMASIN 320 247
30 113 85 34 207 162 27 SUTENT 219 - * 167 - * 52 - * - OPHTHAL-
MOLOGY 1,461 1,373 6 483 432 12 978 941 4 XALATAN/ XALACOM 1,453
1,372 6 483 432 12 970 940 3 - ENDOCRINE DISORDERS 985 1,049 (6)
258 341 (24) 727 708 3 GENOTROPIN 795 808 (2) 230 239 (4) 565 569
(1) - ALL OTHER 4,169 3,823 9 2,711 2,205 23 1,458 1,618 (10)
ZYRTEC/ ZYRTEC D 1,569 1,362 15 1,569 1,362 15 - - * - ALLIANCE
REVENUE (Aricept, Macugen, Mirapex, Olmetec, Rebif and Spiriva)
1,374 1,065 29 816 617 32 558 448 25 ANIMAL HEALTH 2,311 2,206 5
1,032 993 4 1,279 1,213 5 OTHER *** 977 930 5 287 287 - 690 643 7 *
- Calculation not meaningful. ** - Represents direct sales under
license agreement with Eisai Co., Ltd. *** - Includes Capsugel and
Pfizer CenterSource. M+ - Change greater than one-thousand percent.
Certain amounts and percentages may reflect rounding adjustments.
Certain prior year data have been reclassified to conform to the
current year presentation. PFIZER INC SUPPLEMENTAL FINANCIAL
INFORMATION 1) Revenue Growth Fourth-quarter 2006 revenues were
substantially unchanged and full-year 2006 revenues increased 2%
compared to the same periods in 2005, due primarily to the solid
aggregate performance of our broad portfolio of patent-protected
medicines and an aggregate year-over-year increase in revenues from
new products launched in 2004, 2005, and 2006, largely offset by
the impact of the loss of U.S. exclusivity on Zoloft in June 2006,
as well as on Zithromax in November 2005. Revenues in the fourth
quarter of 2006 were also impacted by the weakening of the U.S.
dollar relative to many foreign currencies (especially the euro),
which increased revenue by $164 million. Revenues for the full-year
of 2006 were impacted by the strengthening of the U.S. dollar
relative to many foreign currencies (especially the euro and
Japanese yen), which decreased revenue by $279 million. 2) Change
in Cost of Sales The Cost of Sales pre-tax component of adjusted
income(1) increased 11% in the fourth quarter and 3% for the full
year of 2006 compared to the same periods in 2005. Reported cost of
sales increased 12% in the fourth quarter of 2006 and increased 6%
for the full year of 2006 compared to the same periods in 2005. The
increase in the fourth quarter primarily reflects the timing of
implementation of inventory management initiatives, the impact of
foreign exchange, and charges related to certain asset writedowns.
Full-year cost of sales growth reflects these same considerations,
partially offset by the impact of changes in 2006 sales mix during
the first half of the year and the realization of savings
associated with our Adapting to Scale (AtS) productivity
initiatives, among other factors. In addition, cost of sales
includes charges of $114 million and $87 million related to our AtS
productivity initiative for the fourth quarter of 2006 and 2005,
and $392 million and $124 million for the twelve months ended
December 31, 2006 and 2005. 3) Change in Selling, Informational
& Administrative (SI&A) Expenses and Research &
Development (R&D) Expenses SI&A expenses increased 5% and
2% in the fourth quarter and full year of 2006, compared to the
same periods in 2005. R&D expenses, excluding
acquisition-related in-process research and development charges
(IPR&D), grew 22% and 5% in the fourth quarter and full year of
2006 compared to the same periods in 2005. The increases reflect
timing considerations associated with the advancement of
development programs for pipeline products, expenditures associated
with in-licensing of a new compound, and the establishment of
various research collaborations with third parties, among other
factors. IPR&D charges of $322 million primarily related to the
acquisition of PowderMed Ltd. were recorded in the fourth quarter
of 2006. Full-year 2006 IPR&D charges were $835 million,
primarily related to the acquisition of PowderMed, Ltd. and Rinat
Neuroscience Corp. In full-year 2005, we recorded IPR&D charges
of $1.4 billion for the acquisition of Vicuron Pharmaceuticals,
Inc., as well as $262 million, related primarily to our acquisition
of Idun Pharmaceuticals Inc. SI&A and R&D expenses include
charges of $83 million and $44 million related to AtS
implementation costs in the fourth quarter of 2006, and $243
million and $176 million in the full year of 2006. SI&A and
R&D expenses included charges of $75 million and $30 million
related to AtS implementation costs in the three months ended
December 31, 2005, and $151 million and $50 million in the twelve
months of 2005. 4) Savings and Costs Relating to Productivity
Initiatives Our Adapting to Scale (AtS) productivity initiative,
launched in the first quarter of 2005, involves a comprehensive,
multi-year review of our processes, organizations, systems, and
decision making to identify and capitalize on opportunities to make
the company more effective and efficient. Savings realized during
2006 were approximately $2.6 billion for the full year of 2006,
exceeding our original goal of about $2.0 billion for the year.
Costs relating to the AtS productivity initiative were $736 million
and $2.1 billion for the fourth quarter and full year of 2006,
compared to $457 million and $763 million in the fourth quarter and
full year of 2005. Fourth- quarter and full-year 2006 costs
included a provision for reductions in the U.S. pharmaceutical
field force. 5) Other Income and Other Deductions ($ millions)
Fourth Quarter Full Year 2006 2005* 2006 2005* Net Interest
(Income)/ Expense $(160) $(110) $(437) $(269) Asset Impairment
Charges 320 7 320 1,159 Royalties (117) (87) (395) (320) Gains on
Disposals of Investments/ Product Lines (9) (114) (233) (172)
Other, Net 20 (2) (159) (1) Other (Income)/Deductions -Net $54
$(306) $(904) $397 * Certain 2005 amounts were reclassified to
conform to the 2006 presentation. In the fourth quarter of 2006, we
recorded a charge of $320 million related to the impairment of our
Depo-Provera intangible asset. In connection with the decision to
suspend sales of Bextra in the first quarter of 2005, we recorded a
charge of $1.1 billion relating to the impairment of our Bextra
intangible asset. 6) Effective Tax Rate Fourth Quarter Full Year
2005 Reported(a) 17.1% 29.4%(c) 2005 Adjusted(a)(b) 21.8% 21.8%
2006 Reported(a) 13.0%(d) 15.3%(e) 2006 Adjusted(a)(b) 21.7%(f)
22.0%(f) (a) 2005 and 2006 Reported and Adjusted are based on
income from continuing operations and therefore exclude the results
of our divested Consumer Healthcare business. (b) Used in the
calculation of Adjusted income(1). (c) The reported tax rate in
2005 reflects tax costs associated with our program in 2005 to
repatriate foreign earnings under the American Jobs Creation Act;
the impact of a $1.4 billion charge for acquired IPR&D, which
is not deductible for tax purposes; and the favorable resolution of
certain tax positions. (d) The reported tax rate for the fourth
quarter of 2006 reflects the retroactive reenactment of the R&D
tax credit in the U.S. in December 2006, the full amount of which
was recorded in the fourth quarter of 2006. (e) The reported tax
rate for full-year 2006 reflects the favorable resolution of
certain tax positions, a favorable tax-law change in the first
quarter, a downward revision of the estimated tax costs related to
the repatriation of foreign earnings in 2005, the retroactive
reenactment of the R&D tax credit in the U.S. in December 2006,
and the impact of the sale of our Consumer Healthcare business,
among other factors. (f) The fourth-quarter and full-year 2006
effective tax rate on Adjusted income(1) benefited from the
retroactive reenactment of the R&D tax credit in the U.S. in
December 2006. The full amount of this benefit was recorded in the
fourth quarter of 2006. 7) Reconciliation of Original* Forecasted
2006 Adjusted Income(1) and Adjusted Diluted EPS(1) to Original*
Forecasted 2006 Reported Net Income and Reported Diluted EPS Full
Year 2006 Original* Forecast ($ billions, except per-share amounts)
Net Income(a) Diluted EPS(a) Income/(Expense) Forecasted Adjusted
Income/Diluted EPS(1) ~$14.5 ~$1.93 Purchase Accounting Impacts,
Net of Tax (2.3) (0.31) Adapting-to-Scale Costs, Net of Tax (1.4 -
1.7) (0.19 - 0.23) Income From Discontinued Operations, Net of
Tax(b) 0.5 0.07 Resolution of Certain Tax Positions 0.4 0.06
Forecasted Reported Net Income/Diluted EPS ~ $11.4 - $11.7 ~$1.52 -
$1.56 * Adapted from forecast disclosed on Form 8-K, filed on
February 10, 2006. (a) Forecasts in the table exclude the effects
of business- development transactions not completed as of December
31, 2005. Forecasts in the table do not include the potential
impact from a substantial prospective gain on the divestiture of
our Consumer Healthcare business, as well as costs related to our
recently announced sales-force restructuring. (b) Primarily
reflects the reclassification of our Consumer Healthcare business
to discontinued operations. 8) Consumer Healthcare We completed the
sale of our Consumer Healthcare business on December 20, 2006.
Revenues from our Consumer Healthcare business were $1.1 billion
and $4.0 billion for the fourth quarter and full year of 2006,
respectively. Income from discontinued operations -- net of tax,
was $8.3 billion for the full year of 2006, including the
fourth-quarter gain on sale of our Consumer Healthcare business of
$7.9 billion. 9) Share-Purchase Program In total, the Company
purchased approximately 266 million shares at a total cost of about
$7 billion during 2006, including about 94 million shares (about
$2.5 billion) in the fourth quarter. In June 2006, the Board of
Directors increased our share-purchase authorization from $5
billion to $18 billion. (1) "Adjusted income" and "adjusted diluted
earnings per share (EPS)" are defined as reported net income and
reported diluted EPS excluding purchase-accounting adjustments,
acquisition-related costs, discontinued operations, cumulative
effect of a change in accounting principles and certain significant
items. As described under Adjusted Income in the Management's
Discussion and Analysis of Financial Condition and Results of
Operations section of Pfizer's Form 10-Q for the quarterly period
ended October 1, 2006, management uses adjusted income, among other
factors, to set performance goals and to measure the performance of
the overall company. We believe that investors' understanding of
our performance is enhanced by disclosing this measure.
Reconciliations of fourth-quarter and full-year 2006 and 2005
adjusted income and adjusted diluted EPS to reported net income and
reported diluted EPS as well as a reconciliation of the original
$1.93 estimate of full-year 2006 adjusted diluted EPS to reported
diluted EPS, are provided in the materials accompanying this
report. The adjusted income and adjusted diluted EPS measures are
not, and should not be viewed as, substitutes for U.S. GAAP net
income and diluted EPS. DISCLOSURE NOTICE: The information
contained in this document and the attachments is as of January 22,
2007. The Company assumes no obligation to update any
forward-looking statements contained in this document or the
attachments as a result of new information or future events or
developments. This document and the attachments contain
forward-looking information about the Company's financial results
and estimates, business plans and prospects, in-line products, and
product candidates that involve substantial risks and
uncertainties. You can identify these statements by the fact that
they use words such as "will," "anticipate," "estimate," "expect,"
"project," "intend," "plan," "believe," "target," "forecast", and
other words and terms of similar meaning in connection with any
discussion of future operating or financial performance or business
plans and prospects. Among the factors that could cause actual
results to differ materially are the following: the success of
research and development activities; decisions by regulatory
authorities regarding whether and when to approve our drug
applications as well as their decisions regarding labeling and
other matters that could affect the availability or commercial
potential of our products; the speed with which regulatory
authorizations, pricing approvals, and product launches may be
achieved; the success of external business development activities;
competitive developments, including with respect to competitor
drugs and drug candidates that treat diseases and conditions
similar to those treated by our in-line drugs and drug candidates;
the ability to successfully market both new and existing products
domestically and internationally; difficulties or delays in
manufacturing; trade buying patterns; the ability to meet generic
and branded competition after the loss of patent protection for our
products and competitor products; the impact of existing and future
regulatory provisions on product exclusivity; trends toward managed
care and health care cost containment; possible U.S. legislation or
regulatory action affecting, among other things, pharmaceutical
pricing and reimbursement, including under Medicaid and Medicare,
the importation of prescription drugs that are marketed outside the
U.S. and sold at prices that are regulated by governments of
various foreign countries, and the involuntary approval of
prescription medicines for over-the-counter use; the impact of the
Medicare Prescription Drug, Improvement and Modernization Act of
2003; legislation or regulations in markets outside the U.S.
affecting product pricing, reimbursement, or access; contingencies
related to actual or alleged environmental contamination; claims
and concerns that may arise regarding the safety or efficacy of
in-line products and product candidates; legal defense costs,
insurance expenses, settlement costs, and the risk of an adverse
decision or settlement related to product liability, patent
protection, governmental investigations, ongoing efforts to explore
various means for resolving asbestos litigation, and other legal
proceedings; the Company's ability to protect its patents and other
intellectual property both domestically and internationally;
interest rate and foreign currency exchange rate fluctuations;
governmental laws and regulations affecting domestic and foreign
operations, including tax obligations; changes in generally
accepted accounting principles; any changes in business, political,
and economic conditions due to the threat of future terrorist
activity in the U.S. and other parts of the world, and related U.S.
military action overseas; growth in costs and expenses; changes in
our product, segment, and geographic mix; and the impact of
acquisitions, divestitures, restructurings, product withdrawals,
and other unusual items, including our ability to realize the
projected benefits of our Adapting to Scale multi-year productivity
initiative, including the projected benefits of the broadening of
this initiative over the next few years. A further list and
description of these risks, uncertainties, and other matters can be
found in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2005, and in its reports on Forms 10-Q and
8-K. This document may include discussion of certain clinical
studies relating to various in-line products and/or product
candidates. These studies typically are part of a larger body of
clinical data relating to such products or product candidates, and
the discussion herein should be considered in the context of the
larger body of data. DATASOURCE: Pfizer Inc CONTACT: Media, Andy
McCormick, +1-212-733-5469, or Paul Fitzhenry, +1-212-733-4637, or
Investors, Ron Aldridge, +1-212-573-3685, or Carol Schimmelpfenneg,
+1-212-573-2718, all of Pfizer Inc Web site: http://www.pfizer.com/
Company News On-Call: Pfizer's press releases are available through
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