Pfizer 2013 Annual Report Download - page 116

Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
2013 Financial Report 115
acquisition-related restructuring costs, as well as costs incurred for legal settlements, asset impairments and disposals of assets or
businesses, including, as applicable, any associated transition activities.
Segment Assets
We manage our assets on a total company basis, not by operating segment, as many of our operating assets are shared (such as our plant
network assets) or commingled (such as accounts receivable, as many of our customers are served by multiple operating segments).
Therefore, our chief operating decision maker does not regularly review any asset information by operating segment and, accordingly, we do
not report asset information by operating segment. Total assets were approximately $172 billion as of December 31, 2013 and approximately
$186 billion as of December 31, 2012.
Selected income statement information
The following table provides selected income statement information by reportable segment:
Revenues Earnings(a) Depreciation and
Amortization(b)
Year Ended December 31, Year Ended December 31, Year Ended December 31,
(MILLIONS OF DOLLARS) 2013 2012 2011(c) 2013 2012 2011(c) 2013 2012 2011(c)
Reportable Segments:
Primary Care(d) $13,272 $15,558 $22,670 $ 7,981 $ 9,613 $15,001 $ 155 $ 244 $ 249
Specialty Care and Oncology 14,934 15,461 16,568 10,350 10,499 10,789 351 403 427
Established Products and Emerging Markets(e) 19,672 20,195 18,509 11,159 11,217 9,417 390 408 430
Total reportable segments 47,878 51,214 57,747 29,490 31,329 35,207 896 1,055 1,106
Consumer Healthcare and other business activities(f) 3,574 3,443 3,288 (2,005) (2,397) (2,608) 166 190 223
Reconciling Items:
Corporate ———(5,800) (6,112) (7,317) 382 485 540
Purchase accounting adjustments(g) ———(4,344) (4,905) (6,672) 4,487 4,988 5,476
Acquisition-related costs(h) ———(376) (946) (1,913) 124 273 614
Certain significant items(i) 132 ——(692) (5,039) (4,255) 167 300 614
Other unallocated(j) ———(557) (688) (961) 84 103 128
$51,584 $54,657 $61,035 $15,716 $11,242 $11,481 $ 6,306 $ 7,394 $ 8,701
(a) Income from continuing operations before provision for taxes on income.
(b) Certain production facilities are shared. Depreciation is allocated based on estimates of physical production. Amounts here relate solely to the depreciation and
amortization associated with continuing operations.
(c) For 2011, includes King commencing on the acquisition date of January 31, 2011.
(d) Revenues and Earnings from the Primary Care segment decreased for 2013 as compared to the prior year, and Earnings as a percentage of revenues for 2013
also declined, primarily due to the loss of exclusivity of Lipitor in developed Europe and Australia; the subsequent shift in the reporting of Lipitor in those major
markets to the Established Products business unit; the losses of exclusivity of certain other products in various markets; lower Alliance revenues from Spiriva
due to the ongoing expiration of the Spiriva collaboration in certain countries; and the termination of the co-promotion agreement for Aricept in Japan in
December 2012. Revenues and Earnings from the Primary Care segment decreased for 2012 as compared to 2011, and Earnings as a percentage of revenues
also declined, primarily due to the loss of exclusivity of Lipitor in most major markets, and the subsequent shift in the reporting of Lipitor in those major markets
to the Established Products business unit.
(e) Revenues and Earnings from the Established Products and Emerging Markets segment decreased in 2013 as compared to the prior year, primarily due to the
continued erosion of branded Lipitor in the U.S. and Japan, partially offset by the addition of products in certain markets that shifted to the Established Products
unit from other business units beginning January 1, 2013 and strong volume growth in China. Revenues and Earnings from the Established Products and
Emerging Markets segment increased in 2012 as compared to 2011, primarily due to additional products losing exclusivity and moving to the Established
Products unit and increased operational sales in emerging markets, partially offset by unfavorable foreign exchange. Earnings as a percentage of revenue in
2012 increased due to the change in the mix of products.
(f) Other business activities includes the revenues and operating results of Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical
sales operation, and the R&D costs managed by our Worldwide Research and Development organization and our Pfizer Medical organization.
(g) Purchase accounting adjustments include certain charges related to the fair value adjustments to inventory, intangible assets and property, plant and
equipment.
(h) Acquisition-related costs can include costs associated with acquiring, integrating and restructuring newly acquired businesses, such as transaction costs,
integration costs, restructuring charges and additional depreciation associated with asset restructuring. For additional information, see Note 3. Restructuring
Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives.
(i) Certain significant items are substantive, unusual items that, either as a result of their nature or size, would not be expected to occur as part of our normal
business on a regular basis.
For Revenues in 2013, certain significant items represent revenues related to our transitional manufacturing and supply agreements with Zoetis. For
additional information, see Note 2B. Acquisitions, Divestitures, Collaborative Arrangements and Equity-Method Investments: Divestitures.
For Earnings in 2013, certain significant items includes: (i) patent litigation settlement income of $1.3 billion, (ii) the gain associated with the transfer of
certain product rights to our equity-method investment in China of $459 million, (iii) income related to our transitional manufacturing and supply agreements
with Zoetis of $16 million, (iv) restructuring charges and implementation costs associated with our cost-reduction initiatives that are not associated with an
acquisition of $1.3 billion, (v) certain asset impairments and related charges of $1.1 billion, (vi) other charges of $83 million, (vii) net charges for certain legal
matters of $21 million and (viii) costs associated with the separation of Zoetis of $18 million. For additional information, see Note 2D. Acquisitions,
Divestitures, Collaborative Arrangements and Equity-Method Investments: Equity-Method Investments, Note 3. Restructuring Charges and Other Costs
Associated with Acquisitions and Cost-Reduction/Productivity Initiatives and Note 4. Other (Income)/Deductions––Net.