Pfizer 2013 Annual Report Download - page 72

Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
2013 Financial Report 71
The following table provides the components of Assets of discontinued operations and other assets held for sale and Liabilities of
discontinued operations:
As of December 31,(a)
(MILLIONS OF DOLLARS) 2013 2012
Cash and cash equivalents $—$
308
Accounts receivable, less allowance for doubtful accounts —922
Inventories —1,137
Other current assets —242
Property, plant and equipment, less accumulated depreciation 76 1,318
Goodwill —1,011
Identifiable intangible assets, less accumulated amortization —867
Other noncurrent assets —139
Assets of discontinued operations and other assets held for sale $76$5,944
Current liabilities $21$874
Other liabilities —568
Liabilities of discontinued operations $21$1,442
(a) In 2012, virtually all relates to Zoetis (our former Animal Health business).
The net cash flows of our discontinued operations for each of the categories of operating, investing and financing activities are not significant
for any period presented, except that investing activities include the cash proceeds, if any, associated with these dispositions.
C. Collaborative Arrangements
In the normal course of business, we enter into collaborative arrangements with respect to in-line medicines, as well as medicines in
development that require completion of research and regulatory approval. Collaborative arrangements are contractual agreements with third
parties that involve a joint operating activity, typically a research and/or commercialization effort, where both we and our partner are active
participants in the activity and are exposed to the significant risks and rewards of the activity. Our rights and obligations under our collaborative
arrangements vary. For example, we have agreements to co-promote pharmaceutical products discovered by us or other companies, and we
have agreements where we partner to co-develop and/or participate together in commercializing, marketing, promoting, manufacturing and/or
distributing a drug product.
The following table provides the amounts and classification of payments (income/(expense)), between us and our collaboration partners:
Year Ended December 31,
(MILLIONS OF DOLLARS) 2013 2012 2011
Revenues—Revenues(a) $1,153 $1,640 $1,426
Revenues—Alliance revenues(b) 2,628 3,492 3,630
Total revenues from collaborative arrangements 3,781 5,132 5,056
Cost of sales(c) (333)(362)(420)
Selling, informational and administrative expenses(d) (279)(290)(237)
Research and development expenses(e) (73)(74)(299)
Other (income)/deductions—net(f) 103 (15)34
(a) Represents sales to our partners of products manufactured by us.
(b) Substantially all relate to amounts earned from our partners under co-promotion agreements. The decline in 2013 reflects declines in Enbrel (as a result of the
expiration of our co-promotion agreement on October 31, 2013 in the U.S. and Canada) and Spiriva (as a result of the near-term expiration of the co-promotion
collaboration in the U.S. and certain European countries, combined with the expiration of the collaboration in Australia, Canada and certain other European
countries).
(c) Primarily relates to royalties earned by our partners and cost of sales associated with inventory purchased from our partners.
(d) Represents net reimbursements to our partners for selling, informational and administrative expenses incurred.
(e) Primarily relates to net reimbursements, as well as upfront payments and pre-approval milestone payments earned by our partners. The upfront and milestone
payments were as follows: $67 million in 2013, $44 million in 2012 and $210 million in 2011.
(f) In 2013, includes royalties earned on sales of Enbrel in the U.S. and Canada after October 31, 2013. On that date, our co-promotion agreement for Enbrel in
the U.S. and Canada expired, and we became entitled to royalties for a 36-month period.
The amounts disclosed in the above table do not include transactions with third parties other than our collaboration partners, or other costs
associated with the products under the collaborative arrangements.
Under our collaboration agreements we paid post-approval milestones to collaboration partners of $175 million in 2013, $29 million in 2012
and $61 million in 2011. These payments were recorded in Identifiable intangible assets––Developed technology rights. We also received
upfront and milestone payments from our collaboration partners of $128 million in 2013. These amounts are included on our consolidated
balance sheets in deferred revenue and will be recognized into income over a multi-year period.