Pfizer 2010 Annual Report Download - page 44

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Financial Review
Pfizer Inc. and Subsidiary Companies
Credit Ratings
Two major corporate debt-rating organizations, Moody’s Investors Service (Moody’s) and Standard & Poor’s (S&P), assign ratings to
our short-term and long-term debt. The following chart reflects the current ratings assigned by these rating agencies to our
commercial paper and senior unsecured non-credit-enhanced long-term debt issued by us:
COMMERCIAL
PAPER
LONG-TERM DEBT DATE OF LAST
ACTIONNAME OF RATING AGENCY RATING OUTLOOK
Moody’s P-1 A1 Stable October 2009
S&P A1+ AA Stable October 2009
Debt Capacity
We have available lines of credit and revolving credit agreements with a group of banks and other financial intermediaries. We
maintain cash and cash equivalent balances and short-term investments in excess of our commercial paper and other short-term
borrowings. As of December 31, 2010, we had access to $9.0 billion of lines of credit, of which $1.9 billion expire within one year. Of
these lines of credit, $8.4 billion are unused, of which our lenders have committed to loan us $7.0 billion at our request. Also, $7.0
billion of our unused lines of credit, all of which expire in 2013, may be used to support our commercial paper borrowings.
Global Economic Conditions
The challenging economic environment has not had, nor do we anticipate it will have, a significant impact on our liquidity. Due to our
significant operating cash flow, financial assets, access to capital markets and available lines of credit and revolving credit
agreements, we continue to believe that we have the ability to meet our liquidity needs for the foreseeable future. As markets
change, we continue to monitor our liquidity position. There can be no assurance that the challenging economic environment or a
further economic downturn would not impact our ability to obtain financing in the future.
Selected Measures of Liquidity and Capital Resources
The following table sets forth certain relevant measures of our liquidity and capital resources:
AS OF DECEMBER 31,
(MILLIONS OF DOLLARS, EXCEPT RATIOS AND PER COMMON SHARE DATA) 2010 2009
Cash and cash equivalents and short-term investments and loans(a) $28,479 $27,164
Working capital(b) $31,859 $24,445
Ratio of current assets to current liabilities 2.11:1 1.66:1
Shareholders’ equity per common share(c) $ 10.96 $ 11.19
(a) See Notes to Consolidated Financial Statements—Note 9B. Financial Instruments: Investments in Debt and Equity Securities for a description of
investment assets held, and also see Note 9F. Financial Instruments: Credit Risk for a description of credit risk related to our financial instruments
held.
(b) Working capital includes assets held for sale of $561 million as of December 31, 2010, and $496 million as of December 31, 2009.
(c) Represents total Pfizer Inc. shareholders’ equity divided by the actual number of common shares outstanding (which excludes treasury shares and
those held by our employee benefit trust).
The increase in cash and cash equivalents and short-term investments and loans, as of December 31, 2010, compared to
December 31, 2009, was primarily due to operating cash flows, partially offset by the use of proceeds of short-term investments for
repayment of short-term borrowings and for tax payments made in 2010, associated mainly with certain business decisions
executed to finance the Wyeth acquisition. The change in working capital and the ratio of current assets to current liabilities was due
to the timing of accruals, cash receipts and payments in the ordinary course of business. We are monitoring developments regarding
government receivables in several European markets. Where necessary, we will continue to adjust our allowance for doubtful
accounts.
We funded our business-development transactions that closed in the fourth quarter of 2010 with available cash and the proceeds
from short-term investments, and we did the same in connection with the completion of our tender offer for the shares of King in
January 2011. For additional information about these transactions, see the “Our Business Development Initiatives” section of this
Financial Review.
Summary of Cash Flows
YEAR ENDED DECEMBER 31,
(MILLIONS OF DOLLARS) 2010 2009 2008
Cash provided by/(used in):
Operating activities $ 11,454 $ 16,587 $ 18,238
Investing activities (492) (31,272) (12,835)
Financing activities (11,174) 14,481 (6,560)
Effect of exchange-rate changes on cash and cash equivalents (31) 60 (127)
Net decrease in cash and cash equivalents $ (243) $ (144) $ (1,284)
42 2010 Financial Report