Pfizer 2011 Annual Report Download - page 45

Financial Review
Pfizer Inc. and Subsidiary Companies
We believe that our allowance for doubtful accounts is appropriate. Our assessment is based on an analysis of the following:
(i) payments received to date; (ii) the consistency of payments from customers; (iii) direct and observed interactions with the
governments (including court petitions) and with market participants (for example, the factoring industry); and (iv) various third-party
assessments of repayment risk (for example, rating agency publications and the movement of rates for credit default swap
instruments).
As of December 31, 2011, we had about $1.5 billion in aggregate gross accounts receivable from governments and/or government
agencies in Spain, Italy, Greece, Portugal and Ireland, where economic conditions remain uncertain. Such receivables in excess of
one year from the invoice date were as follows: $290 million in Spain; $139 million in Italy; $81 million in Greece; and $10 million in
Portugal.
Although certain European governments and government agencies sometimes delay payments beyond the contractual terms of
sale, we seek to appropriately balance repayment risk with the desire to maintain good relationships with our customers and to
ensure a humanitarian approach to local patient needs.
We will continue to closely monitor repayment risk and, when necessary, we will continue to adjust our allowance for doubtful
accounts and/or write-down our holdings in Greek bonds.
Our assessments about the recoverability of accounts receivables can result from a complex series of judgments about future
events and uncertainties and can rely heavily on estimates and assumptions. For information about the risks associated with
estimates and assumptions, see Notes to Consolidated Financial Statements—Note 1C. Significant Accounting Policies: Estimates
and Assumptions.
Share Purchase Plans
From June 2005 through year-end 2011, we purchased approximately 1.2 billion shares of our common stock for approximately $28
billion. On February 1, 2011, we announced that the Board of Directors authorized a new $5 billion share-purchase plan. On
December 12, 2011, we announced that the Board of Directors authorized an additional $10 billion share-purchase plan. In 2011,
we purchased approximately 459 million shares of our common stock for approximately $9.0 billion. In 2010, we purchased
approximately 61 million shares of our common stock for approximately $1.0 billion. We did not purchase any shares of our common
stock in 2009.
After giving effect to share purchases through year-end 2011, our remaining share-purchase authorization is approximately $10
billion at December 31, 2011. During 2012, we anticipate purchasing approximately $5 billion of our common stock, with the
remaining authorized amount available in 2013 and beyond.
Contractual Obligations
Payments due under contractual obligations as of December 31, 2011, mature as follows:
YEARS
(MILLIONS OF DOLLARS) TOTAL 2012 2013-2014 2015-2016 Thereafter
Long-term debt, including interest obligations(a) $54,870 $1,658 $10,936 $10,066 $32,210
Other long-term liabilities reflected on our consolidated balance sheet
under U.S. GAAP(b) 5,553 506 1,132 1,099 2,816
Lease commitments(c) 1,430 190 314 191 735
Purchase obligations and other(d) 3,835 1,291 1,561 616 367
Uncertain tax positions(e) 491 491 — — —
(a) Our long-term debt obligations include both our expected principal and interest obligations. Our calculations of expected interest payments
incorporate only current period assumptions for interest rates, foreign currency translation rates and hedging strategies (see Notes to Consolidated
Financial Statements—Note 9. Financial Instruments). Long-term debt consists of senior unsecured notes including fixed and floating rate, foreign
currency denominated, and other notes.
(b) Includes expected payments relating to our unfunded U.S. supplemental (non-qualified) pension plans, postretirement plans and deferred
compensation plans.
(c) Includes operating and capital lease obligations.
(d) Includes agreements to purchase goods and services that are enforceable and legally binding and includes amounts relating to advertising,
information technology services, employee benefit administration services, and potential milestone payments deemed reasonably likely to occur.
(e) Except for amounts reflected in Income taxes payable, we are unable to predict the timing of tax settlements, as tax audits can involve complex
issues and the resolution of those issues may span multiple years, particularly if subject to negotiation or litigation.
The above table excludes amounts for potential milestone payments under collaboration, licensing or other arrangements unless the
payments are deemed reasonably likely to occur. Payments under these agreements generally become due and payable only upon
the achievement of certain development, regulatory and/or commercialization milestones, which may span several years and which
may never occur.
44 2011 Financial Report