Pfizer 2005 Annual Report Download - page 69

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68 2005 Financial Report
Notes to Consolidated Financial Statements
Pfizer Inc and Subsidiary Companies
For our reportable operating segments (i.e., Human Health,
Consumer Healthcare, Animal Health), segment profit/(loss) is
measured based on income from continuing operations before
provision for taxes on income, minority interests and the
cumulative effect of a change in accounting principles and before
certain costs, such as significant impacts of purchase accounting
for acquisitions and merger-related costs. This methodology is
utilized by management to evaluate each business.
Certain income/(expense) items that are excluded from the
operating segments’ profit/(loss) are considered corporate items
and are included in Corporate/Other. These items include interest
income/(expense), corporate expenses (e.g., corporate
administration costs), other income/(expense) items (e.g., realized
gains and losses attributable to our investments in debt and
equity securities), certain performance-based compensation
expenses not allocated to the business segments, significant
impacts of purchase accounting for acquisitions, certain milestone
payments, merger-related costs, intangible asset impairments
and costs related to our new productivity initiative.
Each segment is managed separately and offers different products
requiring different marketing and distribution strategies.
We sell our products primarily to customers in the wholesale
sector. In 2005, sales to our three largest U.S. wholesaler customers
represented approximately 18%, 13% and 10% of total revenues
and, collectively, represented approximately 25% of accounts
receivable at December 31, 2005. In 2004, sales to the three
largest U.S. wholesalers represented approximately 18%, 14% and
13% of total revenues and, collectively, represented approximately
25% of accounts receivable at December 31, 2004. These sales and
related accounts receivable were concentrated in the Human
Health segment.
Revenues exceeded $500 million in each of 12 countries outside
the U.S. in 2005 and each of ten countries outside the U.S. in 2004.
The U.S. was the only country to contribute more than 10% of
total revenues in each year.
The 2005, 2004 and 2003 financial statement elements highlighted
below reflect the impact of our acquisition of Pharmacia on
April 16, 2003.