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50 2005 Financial Report
Notes to Consolidated Financial Statements
Pfizer Inc and Subsidiary Companies
9. Financial Instruments
A. Investments in Debt and Equity Securities
Information about our investments as of December 31 follows:
(MILLIONS OF DOLLARS) 2005 2004
Trading investments(a) $286 $395
Amortized cost and fair value of
available-for-sale debt securities:(b)
Western European and other
government debt 8,739 4,270
Western European and other
government agency debt 4,794 4,358
Corporate debt 4,546 7,947
Supranational debt 2,227 1,230
Certificates of deposit 323 613
Corporate asset-backed securities 58 1,712
Total available-for-sale debt securities 20,687 20,130
Amortized cost and fair value of
held-to-maturity debt securities:(b)
Certificates of deposit and other 1,401 967
Total held-to-maturity debt securities 1,401 967
Cost of available-for-sale equity securities 270 176
Gross unrealized gains 189 441
Gross unrealized losses (12) (8)
Fair value of available-for-sale equity
securities 447 609
Total investments $22,821 $22,101
(a) Trading investments are held in trust for legacy Pharmacia
severance benefits.
(b) Gross unrealized gains and losses are not significant.
These investments were in the following captions in the
consolidated balance sheet as of December 31:
(MILLIONS OF DOLLARS) 2005 2004
Cash and cash equivalents $1,203 $881
Short-term investments 19,979 18,085
Long-term investments and loans 1,639 3,135
Total investments $22,821 $22,101
The contractual maturities of the available-for-sale and held-to-
maturity debt securities as of December 31, 2005 follow:
YEARS
_______________________________________________________
OVER 1 OVER 5 OVER
(MILLIONS OF DOLLARS) WITHIN 1 TO 5 TO 10 10 TOTAL
Available-for-sale
debt securities:
Western European
and other
government debt $ 8,739 $ — $ — $— $ 8,739
Western European
and other
government
agency debt 4,619 50 125 — 4,794
Corporate
debt 4,014 218 314 — 4,546
Supranational debt 2,100 127 — — 2,227
Certificates of
deposit 320 — 3 — 323
Corporate
asset-backed
securities — — 58 — 58
Held-to-maturity
debt securities:
Certificates of
deposit and other 1,390 4 — 7 1,401
Total debt securities $21,182 $399 $500 $ 7 $22,088
Trading investments 286
Available-for-sale
equity securities 447
Total investments $22,821
On an ongoing basis, we evaluate our investments in debt and
equity securities to determine if a decline in fair value is other-
than-temporary. When a decline in fair value is determined to be
other-than-temporary, an impairment charge is recorded and a
new cost basis in the investment is established. The aggregate cost
and related unrealized losses related to non-traded equity
investments are not significant.
B. Short-Term Borrowings
Short-term borrowings include amounts for commercial paper of
$10.6 billion and $9.1 billion at December 31, 2005 and 2004. Our
commercial paper borrowings were made by international
subsidiaries and they are guaranteed as to principal and interest
by Pfizer Inc. through the maturity date of the borrowings. The
weighted average effective interest rate on short-term borrowings
outstanding was 3.7% and 2.5% at December 31, 2005 and 2004.