Pfizer 2010 Annual Report Download - page 85

Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
If the associated research and development effort is abandoned, the related IPR&D assets will likely be written-off, and we will
record an impairment loss in our consolidated statements of income.
For IPR&D assets, the risk of failure is significant and there can be no certainty that these assets ultimately will yield a successful
product. The nature of the biopharmaceutical business is high-risk and requires that we invest in a large number of projects with a
goal of achieving a successful portfolio of approved products. As such, it is likely that many of these IPR&D assets will become
impaired and be written-off at some time in the future.
The majority of these IPR&D assets were acquired in connection with our acquisition of Wyeth. The more significant components of
IPR&D are Prevnar/Prevenar 13 Adult and, to a lesser extent, projects for the treatment of transthyretin amyloid polyneuropathy
(ATTR-PN) and Rheumatoid Arthritis, among others.
Amortization
The weighted-average life of both our total finite-lived intangible assets and our developed technology rights is approximately 11
years. Total amortization expense for finite-lived intangible assets was $5.5 billion in 2010, $3.0 billion in 2009 and $2.8 billion in
2008.
The annual amortization expense expected for the years 2011 through 2015 is as follows:
(MILLIONS OF DOLLARS) 2011 2012 2013 2014 2015
Amortization expense $5,504 $5,320 $4,889 $4,025 $3,572
13. Pension and Postretirement Benefit Plans and Defined Contribution Plans
We provide defined benefit pension plans and defined contribution plans for the majority of our employees worldwide. In the U.S.,
we have both qualified and supplemental (non-qualified) defined benefit plans. A qualified plan meets the requirements of certain
sections of the Internal Revenue Code, and, generally, contributions to qualified plans are tax deductible. A qualified plan typically
provides benefits to a broad group of employees with restrictions on discriminating in favor of highly compensated employees with
regard to coverage, benefits and contributions. A supplemental (non-qualified) plan provides additional benefits to certain
employees. In addition, we provide medical and life insurance benefits to certain retirees and their eligible dependents through our
postretirement plans. In 2009, we assumed all of Wyeth’s defined benefit obligations and related plan assets for qualified and
non-qualified pension plans and postretirement plans in connection with our acquisition of Wyeth (see Note 2. Acquisition of Wyeth).
Beginning on January 1, 2011, for employees hired in the U.S. and Puerto Rico after December 31, 2010, we no longer offer a
defined benefit plan and, instead, offer an enhanced benefit under our defined contribution plan. In addition to the standard matching
contribution by the Company, the enhanced benefit provides an automatic Company contribution for such employees based on age
and years of service.
2010 Financial Report 83