Pfizer 2012 Annual Report Download - page 11

Financial Review
Pfizer Inc. and Subsidiary Companies
10
2012 Financial Report
liver transplant is the only treatment option currently available. Our acquisition of FoldRx has increased our presence in the growing rare
medical disease market, which complements our Specialty Care unit. For additional information regarding Vyndaqel (tafamidis
meglumine), see the “Product Developments—Biopharmaceutical” section of this Financial Review. The total consideration for the
acquisition was approximately $400 million. For additional information about the acquisition, see Notes to Consolidated Financial
Statements—Note 2A. Acquisitions, Divestitures, Collaborative Arrangements and Equity-Method Investments: Acquisitions.
Our Financial Guidance for 2013
We forecast 2013 revenues of $56.2 billion to $58.2 billion, Reported diluted earnings per common share (EPS) of $1.50 to $1.65 and
Adjusted diluted EPS of $2.20 to $2.30. The exchange rates assumed in connection with the 2013 financial guidance are as of mid-January
2013. For an understanding of Adjusted income and Adjusted diluted EPS (both non-GAAP financial measures), see the “Adjusted Income”
section of this Financial Review.
The 2013 financial guidance reflects the benefit of a full-year contribution from Zoetis. We plan to update this guidance in April 2013 to reflect
the impact of the recent initial public offering (IPO) of an approximate 19.8% ownership interest in Zoetis. For additional information on the
IPO, see Notes to Consolidated Financial Statements—Note 19A. Subsequent Events: Zoetis Debt Offering and Initial Public Offering.
The following table provides a reconciliation of 2013 Adjusted income and Adjusted diluted EPS guidance to 2013 Reported net income
attributable to Pfizer Inc. and Reported diluted EPS attributable to Pfizer Inc. common shareholders guidance:
Full-Year 2013 Guidance
(BILLIONS OF DOLLARS, EXCEPT PER SHARE AMOUNTS) Net Income(a) Diluted EPS(a)
Adjusted income/adjusted diluted EPS(b) guidance ~$15.4 - $16.1 ~$2.20 - $2.30
Purchase accounting impacts of transactions completed as of December 31, 2012 (3.4) (0.49)
Acquisition-related costs (0.4 - 0.5) (0.06 - 0.07)
Non-acquisition-related restructuring costs(c) (0.5 - 0.8) (0.8 - 0.12)
Costs associated with the separation of Zoetis(d) (0.2) (0.2)
Reported net income attributable to Pfizer Inc./diluted EPS guidance(d) ~$10.5 - $11.6 ~$1.50 - $1.65
(a) Does not assume the completion of any business development transactions not completed as of December 31, 2012, including any one-time upfront payments
associated with such transactions, and excludes the potential effects of the resolution of litigation-related matters not substantially resolved as of December 31,
2012.
(b) For an understanding of Adjusted income and Adjusted diluted EPS, see the “Adjusted Income” section of this Financial Review.
(c) Includes amounts related to our initiatives to reduce R&D spending, including our realigned R&D footprint, and amounts related to other cost-reduction and
productivity initiatives. In our reconciliation between Net income attributable to Pfizer Inc., as reported under principles generally accepted in the United States of
America (U.S. GAAP), and Adjusted income, and in our reconciliation between diluted EPS, as reported under U.S. GAAP, and Adjusted diluted EPS, these amounts
are categorized as Certain Significant Items (see the “Adjusted Income––Reconciliation” section of this Financial Review).
(d) Reported Diluted EPS guidance includes a $0.02 unfavorable impact for certain non-recurring costs that we expect to incur related to the separation of Zoetis,
including new branding, the creation of a standalone infrastructure, site separation and certain legal registration and patent assignment costs.
Our 2013 financial guidance is subject to a number of factors and uncertainties—as described in the “Forward-Looking Information and
Factors That May Affect Future Results”, “Our Operating Environment” and “Our Strategy” sections of this Financial Review and in Part I,
Item 1A, “Risk Factors”, of our 2012 Annual Report on Form 10-K.
SIGNIFICANT ACCOUNTING POLICIES AND APPLICATION OF CRITICAL ACCOUNTING
ESTIMATES
For a description of our significant accounting policies, see Notes to Consolidated Financial Statements––Note 1. Basis of Presentation and
Significant Accounting Policies.
Of these policies, the following are considered critical to an understanding of Pfizer’s Consolidated Financial Statements as they require the
application of the most difficult, subjective and complex judgments: (i) Acquisitions (Note 1D); (ii) Fair Value (Note 1E); (iii) Revenues (Note
1G); (iv) Asset Impairment Reviews (Note 1K); (v) Benefit Plans (Note 1P); and (vi) Contingencies, including Tax Contingencies (Note 1O) and
Legal and Environmental Contingencies (Note 1Q).
Below are some of our critical accounting estimates. See also Estimates and Assumptions (Note 1C) for a discussion about the risks
associated with estimates and assumptions.
Acquisitions and Fair Value
For a discussion about the application of Fair Value to our recent acquisitions, see Notes to Consolidated Financial Statements—Note 2A.
Acquisitions, Divestitures, Collaborative Arrangements and Equity-Method Investments: Acquisitions.
For a discussion about the application of Fair Value to our investments, see Notes to Consolidated Financial Statements—Note 7A. Financial
Instruments: Selected Financial Assets and Liabilities.