Pfizer 2015 Annual Report Download - page 125

Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
124
2015 Financial Report
Other Costs and Business Activities
Certain costs are not allocated to our operating segment results, such as costs associated with the following:
• WRD, which is generally responsible for research projects until proof-of-concept is achieved and then for transitioning those projects to the
appropriate operating segment for possible clinical and commercial development. R&D spending may include upfront and milestone
payments for intellectual property rights. This organization also has responsibility for certain science-based and other platform-services
organizations, which provide technical expertise and other services to the various R&D projects. WRD is also responsible for facilitating all
regulatory submissions and interactions with regulatory agencies, including all safety-event activities.
• Pfizer Medical, which, during the years 2013 through 2015, was responsible for the provision of medical information to healthcare
providers, patients and other parties, transparency and disclosure activities, clinical trial results publication, grants for healthcare quality
improvement and medical education, partnerships with global public health and medical associations, regulatory inspection readiness
reviews, internal audits of Pfizer-sponsored clinical trials and internal regulatory compliance processes.
• Corporate, representing platform functions (such as worldwide technology, global real estate operations, legal, finance, human resources,
worldwide public affairs, compliance and worldwide procurement) and certain compensation and other corporate costs, such as interest
income and expense, and gains and losses on investments.
• Other unallocated costs, representing overhead expenses associated with our manufacturing and commercial operations not directly
attributable to an operating segment.
• Certain transactions and events such as (i) purchase accounting adjustments, where we incur expenses associated with the amortization
of fair value adjustments to inventory, intangible assets and property, plant and equipment; (ii) acquisition-related costs, where we incur
costs for executing the transaction, integrating the acquired operations and restructuring the combined company; and (iii) certain
significant items, which include non-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 $167 billion as of December 31, 2015 and approximately
$168 billion as of December 31, 2014.
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) 2015 2014 2013 2015 2014 2013 2015 2014 2013
Reportable Segments:
GIP $ 13,954 $ 13,861 $ 14,317 $ 7,757 $ 7,780 $ 8,549 $248$ 255 $ 238
VOC 12,803 10,144 9,285 6,507 4,692 4,216 306 263 231
GEP(c) 21,587 25,149 27,619 12,885 16,199 17,552 422 475 478
Total reportable segments 48,345 49,154 51,221 27,149 28,671 30,318 976 993 947
Other business activities(d) 506 253 232 (2,950) (3,092) (2,828) 98 91 105
Reconciling Items:
Corporate(e) ———(5,430) (5,200) (5,689) 354 384 432
Purchase accounting adjustments(e) ———(3,953) (3,641) (4,344) 3,573 3,782 4,487
Acquisition-related costs(e) ———(894) (183) (376) 75 53 124
Certain significant items(f) —198 132 (4,321) (3,749) (692) 48 207 167
Other unallocated ———(636) (567) (671) 33 27 44
$ 48,851 $ 49,605 $ 51,584 $ 8,965 $12,240 $15,716 $ 5,157 $ 5,537 $ 6,306
(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) On September 3, 2015, we acquired Hospira. Commencing from the acquisition date, and in accordance with our domestic and international reporting periods,
our consolidated statement of income for the year ended December 31, 2015 reflects four months of legacy Hospira U.S. operations and three months of legacy
Hospira international operations. See Note 2A for additional information.
(d) Other business activities includes the revenues and operating results of Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical
sales operation, which in 2015 includes the revenues and expenses related to our manufacturing and supply agreements with Zoetis. Other business activities
also includes the costs managed by our WRD organization and our Pfizer Medical organization.
(e) For a description, see the “Other Costs and Business Activities” section above.
(f) 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 2014 and 2013, certain significant items primarily represent revenues related to our manufacturing and supply agreements with Zoetis. For
additional information, see Note 2D.