Pfizer 2011 Annual Report Download - page 46

Financial Review
Pfizer Inc. and Subsidiary Companies
In 2012, we expect to spend approximately $1.5 billion on property, plant and equipment. Planned capital spending mostly
represents investment to maintain existing facilities and capacity. We rely largely on operating cash flows to fund our capital
investment needs. Due to our significant operating cash flows, we believe we have the ability to meet our capital investment needs
and anticipate no delays to planned capital expenditures.
Off-Balance Sheet Arrangements
In the ordinary course of business and in connection with the sale of assets and businesses, we often indemnify our counterparties
against certain liabilities that may arise in connection with a transaction or that are related to activities prior to a transaction. These
indemnifications typically pertain to environmental, tax, employee and/or product-related matters, and patent-infringement claims. If
the indemnified party were to make a successful claim pursuant to the terms of the indemnification, we would be required to
reimburse the loss. These indemnifications generally are subject to threshold amounts, specified claim periods and other restrictions
and limitations. Historically, we have not paid significant amounts under these provisions and, as of December 31, 2011, recorded
amounts for the estimated fair value of these indemnifications are not significant.
Certain of our co-promotion or license agreements give our licensors or partners the rights to negotiate for, or in some cases to
obtain under certain financial conditions, co-promotion or other rights in specified countries with respect to certain of our products.
Dividends on Common Stock
We paid dividends of $6.2 billion in 2011 and $6.1 billion in 2010 on our common stock. In December 2011, our Board of Directors
declared a first-quarter 2012 dividend of $0.22 per share, payable on March 6, 2012, to shareholders of record at the close of
business on February 3, 2012. The first-quarter 2012 cash dividend will be our 293rd consecutive quarterly dividend.
Our current and projected dividends provide a return to shareholders while maintaining sufficient capital to invest in growing our
businesses and increasing shareholder value. Our dividends are not restricted by debt covenants. While the dividend level remains
a decision of Pfizer’s Board of Directors and will continue to be evaluated in the context of future business performance, we currently
believe that we can support future annual dividend increases, barring significant unforeseen events.
NEW ACCOUNTING STANDARDS
Recently Adopted Accounting Standards
See Notes to Consolidated Financial Statements—Note 1B. Significant Accounting Policies: New Accounting Standards.
Recently Issued Accounting Standard, Not Adopted as of December 31, 2011
In June 2011, the Financial Accounting Standards Board (FASB) issued an accounting standards update regarding the presentation
of comprehensive income in financial statements. The provisions of this standard provide an option to present the components of
net income and other comprehensive income either as one continuous statement of comprehensive income or as two separate but
consecutive statements. This standard was amended December 2011. The provisions of this new disclosure standard are effective
January 1, 2012 and, beginning in 2012, we will provide a separate Statement of Other Comprehensive Income.
In September 2011, the FASB issued an accounting standards update to the guidelines that address the accounting for goodwill to
permit a qualitative approach to determining the likelihood of a goodwill impairment charge. The provisions of this new standard are
permitted to be adopted early.
FORWARD-LOOKING INFORMATION AND FACTORS THAT MAY AFFECT FUTURE
RESULTS
The SEC encourages companies to disclose forward-looking information so that investors can better understand a company’s future
prospects and make informed investment decisions. This report and other written or oral statements that we make from time to time
contain such forward-looking statements that set forth anticipated results based on management’s plans and assumptions. Such
forward-looking statements involve substantial risks and uncertainties. We have tried, wherever possible, to identify such statements
by using words such as “will,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “forecast,” “goal”,
“objective” and other words and terms of similar meaning or by using future dates in connection with any discussion of future
operating or financial performance, business plans and prospects, in-line products and product candidates, strategic review, capital
allocation, and share-repurchase and dividend-rate plans. In particular, these include statements relating to future actions, business
plans and prospects, prospective products or product approvals, future performance or results of current and anticipated products,
sales efforts, expenses, interest rates, foreign exchange rates, the outcome of contingencies, such as legal proceedings, share-
repurchase and dividend-rate plans, and financial results, including, in particular, the financial guidance and anticipated cost savings
set forth in the “Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives”
and “Our Financial Guidance for 2012” sections of this Financial Review. Among the factors that could cause actual results to differ
materially from past and projected future results are the following:
•Success of research and development activities including, without limitation, the ability to meet anticipated clinical trial completion
dates, regulatory submission and approval dates, and launch dates for product candidates;
2011 Financial Report 45