Pfizer 2005 Annual Report Download - page 11

10 2005 Financial Report
Financial Review
Pfizer Inc and Subsidiary Companies
Dispositions
We evaluate our businesses and product lines periodically for
strategic fit within our operations. As a result of our evaluation,
we decided to sell a number of businesses and product lines and
we recorded certain of these results in Discontinued operations
for 2005, 2004 and 2003, as appropriate. All of these sales were
completed as of December 31, 2005. The more significant disposals
include:
•In the third quarter of 2005, we sold the last of three European
generic pharmaceutical businesses which we had included in our
Human Health segment and had become a part of Pfizer in April
2003 in connection with our acquisition of Pharmacia, for 4.7
million euro (approximately $5.6 million) and recorded a loss
of $3 million ($2 million, net of tax) in Gains on sales of
discontinued operations—net of tax in the consolidated
statement of income for 2005.
•In the first quarter of 2005, we sold the second of three
European generic pharmaceutical businesses which we had
included in our Human Health segment and had become a part
of Pfizer in April 2003 in connection with our acquisition of
Pharmacia, for 70 million euro (approximately $93 million)
and recorded a gain of $57 million ($36 million, net of tax) in
Gains on sales of discontinued operations—net of tax in the
consolidated statement of income for 2005. In addition, we
recorded an impairment charge of $9 million ($6 million, net
of tax) related to the third European generic business in
(Loss)/income from discontinued operations—net of tax in the
consolidated statement of income for 2005.
•In the fourth quarter of 2004, we sold the first of three
European generic pharmaceutical businesses which we had
included in our Human Health segment and had become a part
of Pfizer in April 2003 in connection with our acquisition of
Pharmacia, for 53 million euro (approximately $65 million). In
addition, we recorded an impairment charge of $61 million ($37
million, net of tax), relating to a European generic business
which was later sold in 2005, and is included in (Loss)/income
from discontinued operations—net of tax in the consolidated
statement of income for 2004.
•In the third quarter of 2004, we sold certain non-core consumer
product lines marketed in Europe by our Consumer Healthcare
segment for 135 million euro (approximately $163 million) in
cash. We recorded a gain of $58 million ($41 million, net of tax)
in Gains on sales of discontinued operations—net of tax in
the consolidated statement of income for 2004. The majority
of these products were small brands sold in single markets
only and included certain products that became a part of Pfizer
in April 2003 in connection with our acquisition of Pharmacia.
•In the second quarter of 2004, we sold our surgical ophthalmic
business for $450 million in cash. The surgical ophthalmic business
was included in our Human Health segment and became a part
of Pfizer in April 2003 in connection with our acquisition of
Pharmacia. The results of this business were included in
(Loss)/income from discontinued operations—net of tax.
•In the second quarter of 2004, we sold our in-vitro allergy and
autoimmune diagnostics testing (Diagnostics) business, formerly
included in the “Corporate/Other” category of our segment
information, for $575 million in cash. The Diagnostics business
was acquired in April 2003 in connection with our acquisition
of Pharmacia. The results of this business were included in
(Loss)/income from discontinued operations—net of tax.
•In the second quarter of 2003, we completed the sale of the
hormone replacement therapy femhrt, formerly part of our
Human Health segment, for $160 million in cash with a right
to receive up to $63.8 million contingent on femhrt retaining
market exclusivity until the expiration of its patent. We recorded
a gain on the sale of this product of $139 million ($83 million,
net of tax) in Gains on sales of discontinued operations—net
of tax in the consolidated statement of income for 2003.
•In the first quarter of 2003, we sold the oral contraceptives
Estrostep and Loestrin, formerly part of our Human Health
segment, for $197 million in cash with a right to receive up to
$47.3 million contingent on Estrostep retaining market
exclusivity until the expiration of its patent. We recorded a gain
on the sale of these two products of $193 million ($116 million,
net of tax) in Gains on sales of discontinued operations—net
of tax in the consolidated statement of income for 2003.
•In the first quarter of 2003, we sold the Adams confectionery
products business, formerly part of our Consumer Healthcare
segment, for $4.2 billion in cash. We recorded a gain on the sale
of this business of $3.1 billion ($1.8 billion, net of tax) in Gains
on sales of discontinued operations—net of tax in the
consolidated statement of income for 2003.
•In the first quarter of 2003, we sold the Schick-Wilkinson Sword
shaving products business, formerly part of our Consumer
Healthcare segment, for $930 million in cash. We recorded a
gain on the sale of this business of $462 million ($262 million,
net of tax) in Gains on sales of discontinued operations—net
of tax in the consolidated statement of income for 2003.
In 2005, we earned $29 million of income ($18 million, net of tax)
and in 2004, we earned $17 million of income ($10 million, net
of tax), both amounts relating to the 2003 sale of the femhrt,
Estrostep and Loestrin product lines, which was recorded in Gains
on sales of discontinued operations—net of tax in the consolidated
statement of income for the applicable year.
Net cash flows of our discontinued operations from each of the
categories of operating, investing and financing activities were
not significant for 2005, 2004 and 2003.