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2006 Financial Report 51
Notes to Consolidated Financial Statements
Pfizer Inc and Subsidiary Companies
9.
Financial Instruments
A. Investments in Debt and Equity Securities
Information about our investments as of December 31 follows:
(MILLIONS OF DOLLARS) 2006 2005
Trading investments
(a)
$ 273 $ 286
Amortized cost and fair value of
available-for-sale debt securities:
(b)
Corporate debt 8,582 4,546
Western European and other
government debt 1,606 8,739
Corporate asset-backed securities 700 58
Supranational debt 460 2,227
Certificates of deposit 45 323
Western European and other
government agency debt 4 4,794
Total available-for-sale debt securities 11,397 20,687
Amortized cost and fair value of
held-to-maturity debt securities:
(b)
Certificates of deposit and other 1,304 1,401
Total held-to-maturity debt securities 1,304 1,401
Available-for-sale money market fund:
Investing in U.S. government and its
agencies’ securities, U.S. and foreign
corporate commercial paper, bank
deposits, asset-backed securities and
reverse repurchase agreements
involving virtually all of the same
investments held 12,300 —
Available-for-sale money market fund:
Investing in U.S. government and its
agencies’ or instrumentalities’
securities and reverse repurchase
agreements involving all of the same
investments held 2,885 —
Available-for-sale money market fund:
Investing in U.S. government
securities and reverse repurchase
agreements involving U.S.
government securities 1,246 —
Total available-for-sale money
market funds 16,431 —
Cost of available-for-sale equity
securities, excluding money
market funds 202 270
Gross unrealized gains 170 189
Gross unrealized losses (1) (12)
Fair value of available-for-sale equity
securities, excluding money
market funds 371 447
Total fair value of available-for-sale
equity securities 16,802 447
Total investments
(c)
$29,776 $22,821
(a)
Trading investments are held in trust for legacy Pharmacia
severance benefits.
(b)
Gross unrealized gains and losses are not significant.
(c)
Increase reflects receipt of the proceeds from the sale of our
Consumer Healthcare business.
These investments were in the following captions in the
consolidated balance sheets as of December 31:
(MILLIONS OF DOLLARS) 2006 2005
Cash and cash equivalents $ 1,118 $ 1,203
Short-term investments 25,886 19,979
Long-term investments and loans 2,772 1,639
Total investments $29,776 $22,821
The contractual maturities of the available-for-sale and held-to-
maturity debt securities as of December 31, 2006, follow:
YEARS
_______________________________________________________
OVER 1 OVER 5 OVER
(MILLIONS OF DOLLARS) WITHIN 1 TO 5 TO 10 10 TOTAL
Available-for-sale
debt securities:
Corporate debt $ 7,340 $1,189 $53 $— $ 8,582
Western European
and other
government debt 1,456 150 — — 1,606
Corporate
asset-backed
securities — 700 — — 700
Supranational debt 432 28 — — 460
Certificates of deposit 43 — 2 — 45
Western European
and other
government
agency debt 4 — — — 4
Held-to-maturity debt
securities:
Certificates of deposit
and other 1,298 1 — 5 1,304
Total debt securities $10,573 $2,068 $55 $ 5 $12,701
Trading investments 273
Available-for-sale
money market
funds 16,431
Available-for-sale
equity securities 371
Total investments $29,776
On an ongoing basis, we evaluate our investments in debt and
equity securities to determine if a decline in fair value is other-
than-temporary. When a decline in fair value is determined to be
other-than-temporary, an impairment charge is recorded and a
new cost basis in the investment is established. The aggregate cost
and related unrealized losses related to non-traded equity
investments are not significant.
B. Short-Term Borrowings
Short-term borrowings include amounts for commercial paper of
$1.6 billion and $10.6 billion as of December 31, 2006 and 2005.
The weighted average effective interest rate on short-term
borrowings outstanding was 3.0% and 3.7% as of December 31,
2006 and 2005.
As of December 31, 2006, we had access to $3.6 billion of lines of
credit, of which $1.2 billion expire within one year. Of these lines
of credit, $3.4 billion are unused, of which our lenders have
committed to loan us $2.2 billion at our request. $2 billion of the
unused lines of credit, which expire in 2011, may be used to
support our commercial paper borrowings.