Pfizer 2010 Annual Report Download - page 45

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Financial Review
Pfizer Inc. and Subsidiary Companies
Operating Activities
2010 vs. 2009
Our net cash provided by continuing operating activities was $11.5 billion in 2010, compared to $16.6 billion in 2009. The decrease
in net cash provided by operating activities was primarily attributable to:
•income tax payments in 2010 of approximately $11.8 billion, primarily associated with certain business decisions executed to finance
the Wyeth acquisition;
partially offset by:
•the inclusion of operating cash flows from legacy Wyeth operations for a full year in 2010;
•the non-recurrence of payments in 2009 in connection with the resolution of certain legal matters related to Bextra and certain other
products and our NSAID pain medicines of approximately $3.2 billion (see Notes to Consolidated Financial Statements––Note 3C.
Other Significant Transactions and Events: Legal Matters); and
•the timing of receipts and payments in the ordinary course of business.
2009 vs. 2008
Our net cash provided by continuing operating activities was $16.6 billion in 2009 compared to $18.2 billion in 2008. The decrease in
net cash provided by operating activities was primarily attributable to:
•the payments made in connection with the resolution of certain legal matters related to Bextra and certain other products and our
NSAID pain medicines of approximately $3.2 billion (see Notes to Consolidated Financial Statements––Note 3C. Other Significant
Transactions and Events: Legal Matters); and
•the timing of other receipts and payments in the ordinary course of business.
In 2010, the cash flow line item called Inventories reflects the significant fair value adjustments for inventory acquired from Wyeth
that was sold in 2010; and the cash flow line item called Other tax accounts, net reflects the tax payments made in connection with
the increased tax costs associated with certain business decisions executed to finance the Wyeth acquisition.
In 2009, the cash flow line item called Inventories reflects the significant fair value adjustments for inventory acquired from Wyeth
that was sold since the acquisition date of October 15, 2009; the cash flow line item called Accounts payable and other liabilities
reflects $3.2 billion in payments associated with the resolution of certain legal matters related to Bextra and various other products
and our NSAID pain medicines more than offset by the timing of accruals, receipts and payments in the ordinary course of business;
and the cash flow line item called Other tax accounts, net reflects current taxes provided but not yet paid as of December 31, 2009
due to the increased tax costs associated with certain business decisions executed to finance the Wyeth acquisition.
In 2008, the cash flow line item called Accounts payable and other liabilities primarily reflects the $3.2 billion accrued in 2008 for the
resolution of certain legal matters related to Bextra and various other products and our NSAID pain medicines but not yet paid as of
December 31, 2008.
Investing Activities
2010 vs. 2009
Our net cash used in investing activities was $492 million in 2010, compared to $31.3 billion in 2009. The decease in net cash used
in investing activities was primarily attributable to:
•net cash paid for acquisitions of $198 million in 2010 compared to $43.1 billion in 2009 for the acquisition of Wyeth, and
•net proceeds from redemption and sales of investments of $23 million in 2010, which were used for repayment of short-term
borrowings and for tax payments in 2010, compared to net proceeds from redemptions and sales of investments of $12.4 billion in
2009.
2009 vs. 2008
Our net cash used in investing activities was $31.3 billion in 2009 compared to $12.8 billion in 2008. The increase in net cash used
in investing activities was primarily attributable to:
•net cash paid for the acquisition of Wyeth,
partially offset by:
•net proceeds from redemptions and sales of investments of $12.4 billion in 2009 compared to net purchases of investments of $8.3
billion in 2008.
In 2008, the cash flow line item called Other investing activities primarily reflects a $1.2 billion payment by us upon the redemption of
a Swedish krona currency swap. In a related transaction, this payment was offset by the receipt of cash in our operating activities.
2010 Financial Report 43