Pfizer 2013 Annual Report Download - page 41

Financial Review
Pfizer Inc. and Subsidiary Companies
40
2013 Financial Report
(h) Primarily represents restructuring charges related to our cost-reduction and productivity initiatives. Included in Restructuring charges and certain acquisition-
related costs (see Notes to Consolidated Financial Statements—Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-
Reduction/Productivity Initiatives).
(i) Amounts primarily relate to our cost-reduction/productivity initiatives (see Notes to Consolidated Financial Statements—Note 3. Restructuring Charges and
Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives). For 2013, included in Selling, informational and administrative expenses
($156 million), Research and development expenses ($127 million) and Cost of sales ($115 million). For 2012, included in Research and development
expenses ($521 million), Selling, informational and administrative expenses ($141 million) and Cost of sales ($30 million). For 2011, included in Cost of sales
($251 million), Selling, informational and administrative expenses ($55 million) and Research and development expenses ($655 million).
(j) In 2013, reflects income from a litigation settlement with Teva Pharmaceutical Industries Ltd. and Sun Pharmaceutical Industries Ltd. for patent-infringement
damages resulting from their "at-risk" launches of generic Protonix in the U.S. Included in Other (income)/deductions—net (see the "Other (Income)/
Deductions—Net" section of this Financial Review and Notes to Consolidated Financial Statements—Note 4. Other (Income)/Deductions—Net).
(k) Included in Other (income)/deductions—net (see the “Other (Income)/Deductions—Net” section of this Financial Review and Notes to Consolidated Financial
Statements—Note 4. Other (Income)/Deductions—Net).
(l) Substantially all included in Other (income)/deductions—net (see the “Other (Income)/Deductions—Net” section of this Financial Review and Notes to
Consolidated Financial Statements—Note 4. Other (Income)/Deductions—Net).
(m) Costs incurred in connection with the initial public offering of an approximate 19.8% ownership interest in Zoetis. Includes expenditures for banking, legal,
accounting and similar services. For 2013 and 2012, included in Other (income)/deductions—net (see the "Other (Income)/Deductions—Net" section of this
Financial Review and Notes to Consolidated Financial Statements—Note 4. Other (Income)/Deductions—Net). For 2011, substantially all included in Other
(income)/deductions—net.
(n) Included in Revenues ($132 million) and in Cost of sales ($116 million) for 2013.
(o) Included in Provision for taxes on income. Income taxes includes the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional
location of the pre-tax amounts and applying that jurisdiction’s applicable tax rate. The amount in 2013 was favorably impacted by U.S. tax benefits of
approximately $430 million, representing tax and interest, resulting from a settlement with the U.S. Internal Revenue Service (IRS) with respect to audits of the
Wyeth tax returns for the years 2006 through date of acquisition and unfavorably impacted by (i) the tax rate associated with the patent litigation settlement
income, (ii) the non-deductibility of goodwill derecognized and the jurisdictional mix of the other intangible assets divested as part of the transfer of certain
product rights to Pfizer's 49%-owned equity-method investment in China, and (iii) the non-deductibility of the loss on an option to acquire the remaining
interest in Laboratório Teuto Brasileiro S.A. (Teuto), a 40%-owned generics company in Brazil, since we expect to retain the investment indefinitely, and the
non-deductibility of an impairment charge related to our equity method investment in Teuto. The amount in 2012 was favorably impacted by U.S. tax benefits
of approximately $1.1 billion, representing tax and interest, resulting from a settlement with the IRS with respect to audits for multiple tax years (see Notes to
Consolidated Financial Statements—Note 5A. Tax Matters: Taxes on Income from Continuing Operations).
ANALYSIS OF THE CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Changes in the components of Accumulated other comprehensive loss reflect the following:
2013
For Foreign currency translation adjustments, reflects the weakening of several currencies against the U.S. dollar, primarily the Japanese yen,
the Australian dollar, the Canadian dollar and the Brazilian real, partially offset by the strengthening of several currencies against the U.S.
dollar, primarily the euro and to a lesser extent the U.K. pound, as well as the reclassification of amounts associated with dispositions into
income.
For Unrealized holding gains/(losses) on derivative financial instruments, reflects the impact of fair value remeasurements (gains) and the
reclassification of realized gains into income. For additional information, see Notes to Consolidated Financial Statements—Note 7. Financial
Instruments.
For Unrealized holding gains on available-for-sale securities, reflects the impact of fair value remeasurements and the reclassification of
realized gains into income. For additional information, see Notes to Consolidated Financial Statements—Note 7. Financial Instruments.
For Benefit plans: actuarial gains/(losses), net, reflects the impact of actuarial gains (due to an increase in the discount rate and higher than
expected returns on plan assets) and the reclassification of certain amounts related to amortization and curtailments/settlements into income.
For additional information, see Notes to Consolidated Financial Statements—Note 11. Pension and Postretirement Benefit Plans and Defined
Contribution Plans and the “Significant Accounting Policies and Application of Critical Accounting Estimates––Benefit Plans" section of this
Financial Review.
2012
For Foreign currency translation adjustments, reflects the weakening of several currencies against the U.S. dollar, primarily the euro, the
Japanese yen, the Australian dollar and the Brazilian real, and the reclassification of amounts associated with dispositions into income.
For Unrealized holding gains/(losses) on derivative financial instruments, reflects the impact of fair value remeasurements (gains) and the
reclassification of realized gains into income. See also Notes to Consolidated Financial Statements—Note 7. Financial Instruments.
For Unrealized holding gains on available-for-sale securities, reflects the impact of fair value remeasurements and the reclassification of
realized losses into income. For additional information, see Notes to Consolidated Financial Statements—Note 7. Financial Instruments.
For Benefit plans: actuarial gains/(losses), net, reflects the impact of actuarial losses (due to a decrease in the discount rate partially offset by
higher-than-expected returns on plan assets) and the reclassification of certain amounts related to amortization and curtailments/settlements
into income. See also Notes to Consolidated Financial Statements—Note 11. Pension and Postretirement Benefit Plans and Defined
Contribution Plans.