Pfizer 2011 Annual Report Download - page 35

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Financial Review
Pfizer Inc. and Subsidiary Companies
The components of restructuring charges associated with all of our cost-reduction and productivity initiatives and acquisition activity
follow:
COSTS
INCURRED
ACTIVITY
THROUGH
DECEMBER 31,
ACCRUAL
AS OF
DECEMBER 31,
(MILLIONS OF DOLLARS) 2005-2011 2011(a) 2011(b)
Employee termination costs $10,602 $ 8,167 $2,434
Asset impairments 2,564 2,564 —
Other 1,022 931 92
Total $14,188 $11,662 $2,526
(a) Includes adjustments for foreign currency translation.
(b) Included in Other current liabilities ($1.6 billion) and Other noncurrent liabilities ($928 million).
Other Deductions—Net
YEAR ENDED DECEMBER 31, INCR./(DECR.)
(MILLIONS OF DOLLARS) 2011 2010 2009 11/10 10/09
Other Deductions—Net $2,479 $4,336 $285 (43)% *
* Calculation not meaningful
2011 vs. 2010
Other deductions—net changed favorably by $1.9 billion in 2011, compared to 2010, which primarily reflects:
•asset impairment charges that were approximately $1.3 billion higher in 2010 than in 2011, (see below); and
•charges for litigation-related matters that were $947 million higher in 2010 than in 2011, which reflects charges recorded in 2010 for
asbestos litigation related to our wholly owned subsidiary, Quigley Company, Inc. (see below).
2010 vs. 2009
Other deductions––net increased by $4.1 billion in 2010, compared to 2009, which primarily reflects:
•higher asset impairment charges of $1.8 billion in 2010, (see below);
•higher charges for litigation-related matters of $1.5 billion in 2010, primarily associated with the additional $1.3 billion (pre-tax) charge
for asbestos litigation related to our wholly owned subsidiary, Quigley Company, Inc. (for additional information, see Notes to
Consolidated Financial Statements—Note 17. Commitments and Contingencies);
•higher interest expense of $565 million in 2010, primarily associated with the $13.5 billion of senior unsecured notes that we issued in
March 2009 and the approximately $10.5 billion of senior unsecured notes that we issued in June 2009 to partially finance the
acquisition of Wyeth, as well as the addition of legacy Wyeth debt;
•lower interest income of $345 million in 2010, primarily due to lower interest rates coupled with lower average investment balances; and
•the non-recurrence of a $482 million gain recorded in 2009 related to ViiV (see further discussion in the “Our Business Development
Initiatives” section of this Financial Review),
partially offset primarily by:
•higher royalty-related income of $336 million in 2010, primarily due to the addition of legacy Wyeth royalties.
Asset Impairment Charges
For information about the asset impairment charges in each year, see the “Significant Accounting Policies and Application of Critical
Accounting Estimates—Asset Impairment Reviews—Long-Lived Assets” section of this Financial Review as well as Notes to
Consolidated Financial Statements Note 4. Other Deductions—Net and Note 10B. Goodwill and Other Intangible Assets: Other
Intangible Assets.
34 2011 Financial Report