• | Primary Care operating segment––included revenues and earnings, as defined by management, from prescription pharmaceutical products primarily prescribed by primary-care physicians, and included products in the following therapeutic and disease areas: Alzheimer’s disease, cardiovascular (excluding pulmonary arterial hypertension), erectile dysfunction, genitourinary, major depressive disorder, pain, respiratory and smoking cessation. Examples of products in this unit in 2013 included Celebrex, Chantix/Champix, Eliquis, Lyrica, Premarin, Pristiq and Viagra (outside Canada and South Korea). All revenues and earnings for such products were allocated to the Primary Care unit, except those generated in Emerging Markets and those that were managed by the Established Products unit. |
• | Specialty Care and Oncology operating segment––comprised the Specialty Care business unit and the Oncology business unit. |
◦ | Specialty Care––included revenues and earnings, as defined by management, from prescription pharmaceutical products primarily prescribed by physicians who are specialists, and included products in the following therapeutic and disease areas: anti-infectives, endocrine disorders, hemophilia, inflammation, ophthalmology, pulmonary arterial hypertension, specialty neuroscience and vaccines. Examples of products in this unit in 2013 included BeneFIX, Enbrel, Genotropin, Geodon (outside the U.S.), the Prevnar family of products, ReFacto AF, Revatio (outside the U.S.), Tygacil, Vfend (outside the U.S. and South Korea), Vyndaqel, Xalatan (outside the U.S., Canada, South Korea, developed Europe, Australia and New Zealand), Xeljanz, Xyntha and Zyvox. All revenues and earnings for such products were allocated to the Specialty Care unit, except those generated in Emerging Markets and those that were managed by the Established Products unit. |
◦ | Oncology––included revenues and earnings, as defined by management, from prescription pharmaceutical products addressing oncology and oncology-related illnesses. The products in this unit in 2013 included Inlyta, Sutent, Torisel, Xalkori, Mylotarg (in Japan), Bosulif (in the U.S. and EU) and Aromasin (in Japan and South Korea). All revenues and earnings for such products were allocated to the Oncology unit, except those generated in Emerging Markets and those that were managed by the Established Products unit. |
• | Established Products and Emerging Markets operating segment––comprised the Established Products business unit and the Emerging Markets business unit. |
◦ | Established Products––included revenues and earnings, as defined by management, from prescription pharmaceutical products that had lost patent protection or marketing exclusivity in certain countries and/or regions. Typically, products were transferred to this unit in the beginning of the fiscal year following loss of patent protection or marketing exclusivity. However, in certain situations, products were transferred to this unit at a different point than the beginning of the fiscal year following loss of patent protection or marketing exclusivity in order to maximize their value. This unit also excluded revenues and earnings generated in Emerging Markets. Examples of products in this unit in 2013 included Arthrotec, Effexor, Geodon (in the U.S.), Lipitor, Medrol, Norvasc, Protonix, Relpax, Vfend (in the U.S. and South Korea), Xalatan (in the U.S., Canada, South Korea, developed Europe, Australia and New Zealand), Zosyn/Tazocin and Viagra (in Canada and South Korea). |
◦ | Emerging Markets––included revenues and earnings, as defined by management, from all prescription pharmaceutical products sold in Emerging Markets, including Asia (excluding Japan and South Korea), Latin America, the Middle East, Eastern Europe, Africa, Turkey and Central Europe. |
• | Consumer Healthcare operating segment–– includes worldwide revenues and earnings, as defined by management, from non-prescription products in the following therapeutic categories: dietary supplements, pain management, respiratory and personal care. Products marketed by Consumer Healthcare include Advil, Caltrate, Centrum, ChapStick, Emergen-C, Preparation H and Robitussin. |
• | Worldwide Research and Development, which is generally responsible for research projects until proof-of-concept is achieved and then for transitioning those projects to the appropriate business unit for possible clinical and commercial development. R&D spending may include upfront and milestone payments for intellectual property rights. This organization also has responsibility for certain science-based and other platform-services organizations, which provide technical expertise and other services to the various R&D projects. Worldwide Research and Development is also responsible for facilitating all regulatory submissions and interactions with regulatory agencies, including all safety-event activities. |
• | Pfizer Medical, which is responsible for the provision of medical information to healthcare providers, patients and other parties, transparency and disclosure activities, clinical trial results publication, grants for healthcare quality improvement and medical education, partnerships with global public health and medical associations, regulatory inspection readiness reviews, internal audits of Pfizer-sponsored clinical trials and internal regulatory compliance processes. |
• | Corporate, representing platform functions (such as worldwide technology, finance, global real estate operations, human resources, legal, compliance, worldwide procurement, and worldwide public affairs and policy), interest income and expense and certain compensation and other corporate costs. Other unallocated costs represent overhead expenses associated with our manufacturing and commercial operations not directly attributable to an operating segment. |
• | Certain transactions and events such as (i) purchase accounting adjustments, where we incur expenses associated with the amortization of fair value adjustments to inventory, intangible assets and property, plant and equipment; (ii) acquisition-related activities, where we incur costs for restructuring, integration, implementation and executing the transaction; and (iii) certain significant items, which include non-acquisition-related restructuring costs, as well as costs incurred for legal settlements, asset impairments and disposals of assets or businesses, including, as applicable, any associated transition activities. |
The following table provides selected income statement information by reportable segment: | ||||||||||||||||||||||||||||||||||||
Revenues | Earnings(a) | Depreciation and Amortization(b) | ||||||||||||||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | 2011(c) | 2013 | 2012 | 2011(c) | 2013 | 2012 | 2011(c) | |||||||||||||||||||||||||||
Reportable Segments: | ||||||||||||||||||||||||||||||||||||
Primary Care(d) | $ | 13,272 | $ | 15,558 | $ | 22,670 | $ | 7,981 | $ | 9,613 | $ | 15,001 | $ | 155 | $ | 244 | $ | 249 | ||||||||||||||||||
Specialty Care and Oncology | 14,934 | 15,461 | 16,568 | 10,350 | 10,499 | 10,789 | 351 | 403 | 427 | |||||||||||||||||||||||||||
Established Products and Emerging Markets(e) | 19,672 | 20,195 | 18,509 | 11,159 | 11,217 | 9,417 | 390 | 408 | 430 | |||||||||||||||||||||||||||
Total reportable segments | 47,878 | 51,214 | 57,747 | 29,490 | 31,329 | 35,207 | 896 | 1,055 | 1,106 | |||||||||||||||||||||||||||
Consumer Healthcare and other business activities(f) | 3,574 | 3,443 | 3,288 | (2,005 | ) | (2,397 | ) | (2,608 | ) | 166 | 190 | 223 | ||||||||||||||||||||||||
Reconciling Items: | ||||||||||||||||||||||||||||||||||||
Corporate | — | — | — | (5,800 | ) | (6,112 | ) | (7,317 | ) | 382 | 485 | 540 | ||||||||||||||||||||||||
Purchase accounting adjustments(g) | — | — | — | (4,344 | ) | (4,905 | ) | (6,672 | ) | 4,487 | 4,988 | 5,476 | ||||||||||||||||||||||||
Acquisition-related costs(h) | — | — | — | (376 | ) | (946 | ) | (1,913 | ) | 124 | 273 | 614 | ||||||||||||||||||||||||
Certain significant items(i) | 132 | — | — | (692 | ) | (5,039 | ) | (4,255 | ) | 167 | 300 | 614 | ||||||||||||||||||||||||
Other unallocated(j) | — | — | — | (557 | ) | (688 | ) | (961 | ) | 84 | 103 | 128 | ||||||||||||||||||||||||
$ | 51,584 | $ | 54,657 | $ | 61,035 | $ | 15,716 | $ | 11,242 | $ | 11,481 | $ | 6,306 | $ | 7,394 | $ | 8,701 | |||||||||||||||||||
(a) | Income from continuing operations before provision for taxes on income. |
(b) | Certain production facilities are shared. Depreciation is allocated based on estimates of physical production. Amounts here relate solely to the depreciation and amortization associated with continuing operations. |
(c) | For 2011, includes King commencing on the acquisition date of January 31, 2011. |
(d) | Revenues and Earnings from the Primary Care segment decreased for 2013 as compared to the prior year, and Earnings as a percentage of revenues for 2013 also declined, primarily due to the loss of exclusivity of Lipitor in developed Europe and Australia; the subsequent shift in the reporting of Lipitor in those major markets to the Established Products business unit; the losses of exclusivity of certain other products in various markets; lower Alliance revenues from Spiriva due to the ongoing expiration of the Spiriva collaboration in certain countries; and the termination of the co-promotion agreement for Aricept in Japan in December 2012. Revenues and Earnings from the Primary Care segment decreased for 2012 as compared to 2011, and Earnings as a percentage of revenues also declined, primarily due to the loss of exclusivity of Lipitor in most major markets, and the subsequent shift in the reporting of Lipitor in those major markets to the Established Products business unit. |
(e) | Revenues and Earnings from the Established Products and Emerging Markets segment decreased in 2013 as compared to the prior year, primarily due to the continued erosion of branded Lipitor in the U.S. and Japan, partially offset by the addition of products in certain markets that shifted to the Established Products unit from other business units beginning January 1, 2013 and strong volume growth in China. Revenues and Earnings from the Established Products and Emerging Markets segment increased in 2012 as compared to 2011, primarily due to additional products losing exclusivity and moving to the Established Products unit and increased operational sales in emerging markets, partially offset by unfavorable foreign exchange. Earnings as a percentage of revenue in 2012 increased due to the change in the mix of products. |
(f) | Other business activities includes the revenues and operating results of Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical sales operation, and the R&D costs managed by our Worldwide Research and Development organization and our Pfizer Medical organization. |
(g) | Purchase accounting adjustments include certain charges related to the fair value adjustments to inventory, intangible assets and property, plant and equipment. |
(h) | Acquisition-related costs can include costs associated with acquiring, integrating and restructuring newly acquired businesses, such as transaction costs, integration costs, restructuring charges and additional depreciation associated with asset restructuring. For additional information, see Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives. |
(i) | Certain significant items are substantive, unusual items that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis. |
(j) | Includes overhead expenses associated with our manufacturing and commercial operations not directly attributable to an operating segment. |
The following table provides revenues by geographic area: | ||||||||||||
Year Ended December 31, | ||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | 2011(a) | |||||||||
United States | $ | 20,274 | $ | 21,313 | $ | 25,277 | ||||||
Developed Europe(b) | 11,739 | 12,545 | 15,221 | |||||||||
Developed Rest of World(c) | 8,346 | 9,956 | 10,422 | |||||||||
Emerging Markets(d) | 11,225 | 10,843 | 10,115 | |||||||||
Revenues | $ | 51,584 | $ | 54,657 | $ | 61,035 | ||||||
(a) | For 2011, includes King commencing on the acquisition date of January 31, 2011. |
(b) | Developed Europe region includes the following markets: Western Europe, Finland and the Scandinavian countries. Revenues denominated in euros were $8.9 billion in 2013, $9.4 billion in 2012 and $11.4 billion in 2011. |
(c) | Developed Rest of World region includes the following markets: Australia, Canada, Japan, New Zealand and South Korea. |
(d) | Emerging Markets region includes, but is not limited to, the following markets: Asia (excluding Japan and South Korea), Latin America, the Middle East, Eastern Europe, Africa, Turkey and Central Europe. |
Long-lived assets by geographic region follow: | ||||||||||||
As of December 31, | ||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | 2011 | |||||||||
Property, plant and equipment, net | ||||||||||||
United States | $ | 5,885 | $ | 6,485 | $ | 7,116 | ||||||
Developed Europe(a) | 4,845 | 4,895 | 5,640 | |||||||||
Developed Rest of World(b) | 696 | 816 | 872 | |||||||||
Emerging Markets(c) | 971 | 1,017 | 1,045 | |||||||||
Property, plant and equipment, net | $ | 12,397 | $ | 13,213 | $ | 14,673 | ||||||
(a) | Developed Europe region includes the following markets: Western Europe, Finland and the Scandinavian countries. |
(b) | Developed Rest of World region includes the following markets: Australia, Canada, Japan, New Zealand, and South Korea. |
(c) | Emerging Markets region includes, but is not limited to, the following markets: Asia (excluding Japan and South Korea), Latin America, the Middle East, Eastern Europe, Africa, Turkey and Central Europe. |
The following table provides revenues by product: | ||||||||||||
Year Ended December 31, | ||||||||||||
(MILLIONS OF DOLLARS) | 2013 | 2012 | 2011(a) | |||||||||
Revenues from biopharmaceutical products: | ||||||||||||
Lyrica | $ | 4,595 | $ | 4,158 | $ | 3,693 | ||||||
Prevnar family | 3,974 | 4,117 | 4,145 | |||||||||
Enbrel (Outside the U.S. and Canada) | 3,774 | 3,737 | 3,666 | |||||||||
Celebrex | 2,918 | 2,719 | 2,523 | |||||||||
Lipitor(b) | 2,315 | 3,948 | 9,577 | |||||||||
Viagra | 1,881 | 2,051 | 1,981 | |||||||||
Zyvox | 1,353 | 1,345 | 1,283 | |||||||||
Norvasc | 1,229 | 1,349 | 1,445 | |||||||||
Sutent | 1,204 | 1,236 | 1,187 | |||||||||
Premarin family | 1,092 | 1,073 | 1,013 | |||||||||
BeneFIX | 832 | 775 | 693 | |||||||||
Vfend | 775 | 754 | 747 | |||||||||
Genotropin | 772 | 832 | 889 | |||||||||
Pristiq | 698 | 630 | 577 | |||||||||
Chantix/Champix | 648 | 670 | 720 | |||||||||
Refacto AF/Xyntha | 602 | 584 | 506 | |||||||||
Xalatan/Xalacom | 589 | 806 | 1,250 | |||||||||
Detrol/Detrol LA | 562 | 761 | 883 | |||||||||
Zoloft | 469 | 541 | 573 | |||||||||
Medrol | 464 | 523 | 510 | |||||||||
Effexor | 440 | 425 | 678 | |||||||||
Zosyn/Tazocin | 395 | 484 | 636 | |||||||||
Zithromax/Zmax | 387 | 435 | 453 | |||||||||
Fragmin | 359 | 381 | 382 | |||||||||
Relpax | 359 | 368 | 341 | |||||||||
Tygacil | 358 | 335 | 298 | |||||||||
Rapamune | 350 | 346 | 372 | |||||||||
Inlyta | 319 | 100 | — | |||||||||
Sulperazon | 309 | 262 | 218 | |||||||||
Revatio | 307 | 534 | 535 | |||||||||
Cardura | 296 | 338 | 380 | |||||||||
Xalkori | 282 | 123 | 16 | |||||||||
Xanax/Xanax XR | 276 | 274 | 306 | |||||||||
Diflucan | 242 | 259 | 265 | |||||||||
Toviaz | 236 | 207 | 187 | |||||||||
Aricept(c) | 235 | 326 | 450 | |||||||||
Inspra | 233 | 214 | 195 | |||||||||
Caduet | 223 | 258 | 538 | |||||||||
Somavert | 217 | 197 | 183 | |||||||||
Neurontin | 216 | 235 | 289 | |||||||||
Unasyn | 212 | 228 | 231 | |||||||||
BMP2 | 209 | 263 | 340 | |||||||||
Geodon | 194 | 353 | 1,022 | |||||||||
Depo-Provera | 191 | 148 | 139 | |||||||||
Aromasin | 185 | 210 | 361 | |||||||||
Xeljanz | 114 | 6 | — | |||||||||
Alliance revenues(d) | 2,628 | 3,492 | 3,630 | |||||||||
All other biopharmaceutical products | 7,360 | 7,804 | 7,441 | |||||||||
Total revenues from biopharmaceutical products | 47,878 | 51,214 | 57,747 | |||||||||
Other revenues: | ||||||||||||
Consumer Healthcare | 3,342 | 3,212 | 3,028 | |||||||||
Other(e) | 364 | 231 | 260 | |||||||||
Revenues | $ | 51,584 | $ | 54,657 | $ | 61,035 | ||||||
(a) | For 2011, includes King commencing on the acquisition date of January 31, 2011. |
(b) | Lipitor lost exclusivity in Australia in April 2012, most of developed Europe in March and May 2012, the U.S. in November 2011 and various other major markets in 2011 and 2012. This loss of exclusivity reduced branded worldwide revenues by $1.7 billion in 2013, in comparison with 2012, and reduced branded worldwide revenues by $5.6 billion in 2012, in comparison with 2011. |
(c) | Represents direct sales under license agreement with Eisai Co., Ltd. |
(d) | Includes Enbrel (in the U.S. and Canada through October 31, 2013), Spiriva, Rebif, Aricept and Eliquis. |
(e) | Other represents revenues generated from Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical sales organization, and includes, in 2013, the revenues related to our transitional manufacturing and supply agreements with Zoetis. |