Pfizer 2015 Annual Report Download - page 115

Download and view the complete annual report

Please find page 115 of the 2015 Pfizer annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 134

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134

Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
114
2015 Financial Report
The following table summarizes all TSRU activity during 2015:
Share Units
(Thousands)
Weighted-Average
Grant-Date
Fair Value
Per Share Unit
Weighted-Average
Grant Price
Per Share Unit
Nonvested, December 31, 2014 20,935 $5.29 $26.40
Granted 6,394 6.66 34.54
Vested (8,050) 4.51 21.22
Forfeited (1,212) 6.22 31.44
Nonvested, December 31, 2015 18,067 $6.07 $31.27
The following table summarizes all outstanding TSRU activity as of December 31, 2015(a):
Share Units
(Thousands)
Weighted-Average
Grant Price
Per Share Unit
Weighted-Average
Remaining
Contractual Term
(Years)
Aggregate
Intrinsic Value
(Millions)
Outstanding 35,757 $25.82 2.9 $ 347
Vested 17,690 20.26 1.7 286
Expected to vest 18,067 31.27 4.2 61
(a) In 2015, we settled 4,247,428 share units with a weighted-average grant price of $17.69 per share unit.
The following table provides data related to all TSRU activity:
Year Ended December 31,
(MILLIONS OF DOLLARS, EXCEPT PER TSRU AMOUNTS) 2015 2014 2013
Weighted-average grant-date fair value per TSRU $6.66 $6.51 $5.14
Total compensation cost related to nonvested TSRU grants not yet recognized, pre-tax $29$30$31
Weighted-average period over which TSRU cost is expected to be recognized (years) 1.8 1.8 1.6
F. Performance Share Awards (PSAs)
PSAs are awarded to senior and other key management. PSAs vest after three years of continuous service from the grant date. The number of
shares paid, if any, including shares resulting from dividend equivalents, for awards granted in 2015, depends upon the achievement of
predetermined goals related to two measures: (i) operating income over three one-year periods; and (ii) Total Shareholder Return (TSR) as
compared to the NYSE ARCA Pharmaceutical Index (DRG Index) over the three-year performance period. The number of shares paid from
awards granted in 2014 and prior depends upon the achievement of predetermined goals related to Pfizer's TSR as compared to an industry
peer group, for the three-year performance period from the year of the grant date. The target number of shares is determined by reference to
the value of share-based awards to similar employees in the industry peer group. The number of shares that are earned over the performance
period ranges from 0% to 200% of the initial award.
We measure the value of PSA grants as of the grant date using the intrinsic value method, for which we use the closing price of Pfizer common
stock. The values are amortized on a straight-line basis over the probable vesting term into Cost of sales, Selling, informational and
administrative expenses, and/or Research and development expenses, as appropriate, and adjusted each reporting period, as necessary, to
reflect changes in the price of Pfizer’s common stock, changes in the number of shares that are probable of being earned and changes in
management’s assessment of the probability that the specified performance criteria will be achieved.
The following table summarizes all PSA activity during 2015, with the shares granted representing the maximum award that could be
achieved:
Shares
(Thousands)
Weighted-Average
Intrinsic Value
Per Share
Nonvested, December 31, 2014 4,090 $31.15
Granted 1,648 34.59
Vested (417)34.65
Forfeited (1,450)34.55
Nonvested, December 31, 2015 3,871 $32.28