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Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
86
2015 Financial Report
The restructuring charges in 2014 are associated with the following:
• GIP ($35 million); VOC ($28 million); GEP ($57 million); WRD/M ($37 million); manufacturing operations ($97 million); and Corporate ($65 million), as
well as $149 million of income related to the partial reversal of prior-period restructuring charges not directly associated with the new individual
segments, and primarily reflecting a change in estimate with respect to our sales force restructuring plans.
The restructuring charges in 2013 are associated with the following:
• Total operating segments ($496 million); WRD/M ($13 million); manufacturing operations ($356 million); and Corporate ($173 million).
At the beginning of fiscal 2014, we revised our operating segments and are unable to directly associate these prior-period restructuring charges with the
new individual segments.
In September 2015, in order to eliminate certain redundancies in our biosimilar drug products pipeline created as a result of the acquisition of Hospira, we opted
to return rights to Celltrion Inc. and Celltrion Healthcare, Co., Ltd. (collectively, Celltrion) that Hospira had previously acquired to potential biosimilars to
Rituxan® (rituximab) and Herceptin® (trastuzumab). As such, upon return of the acquired rights, in 2015 we incurred charges of $215 million, which are
comprised of (i) a write-off of the applicable IPR&D assets, totaling $170 million, which is included in Asset impairments; (ii) a write-off of amounts prepaid to
Celltrion in the amount of $25 million, which is included in Asset impairments; and (iii) a payment to Celltrion of $20 million, which is included in Exit costs. The
recorded amounts for the assets acquired from Hospira are provisional and are subject to change. See Note 2A.
(b) Transaction costs represent external costs directly related to the acquisition of Hospira and our pending combination with Allergan and primarily include
expenditures for banking, legal, accounting and other similar services.
(c) Integration costs represent external, incremental costs directly related to integrating acquired businesses, and primarily include expenditures for consulting and
the integration of systems and processes.
(d) Additional depreciation––asset restructuring represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.
(e) Implementation costs represent external, incremental costs directly related to implementing our non-acquisition-related cost-reduction/productivity initiatives.
The following table provides the components of and changes in our restructuring accruals:
(MILLIONS OF DOLLARS)
Employee
Termination
Costs
Asset
Impairment
Charges Exit Costs Accrual
Balance, January 1, 2014 $ 1,685 $—$94$
1,779
Provision 68 45 58 170
Utilization and other(a) (639)(45)(100)(783)
Balance, December 31, 2014(b) 1,114 —52
1,166
Provision 489 254 68 811
Utilization and other(a) (495)(254)(71)(820)
Balance, December 31, 2015(c) $1,109 $—$48$
1,157
(a) Includes adjustments for foreign currency translation.
(b) Included in Other current liabilities ($735 million) and Other noncurrent liabilities ($431 million).
(c) Included in Other current liabilities ($776 million) and Other noncurrent liabilities ($381 million).