Pfizer Provides Recast Historical Financial Information

April 11, 2019

2017 and 2018 Product Revenues Presented to Reflect New Commercial Operating Structure

2018 Adjusted(1) Financial Results Presented Excluding the Impact of Gains and Losses on Equity Investments

NEW YORK, N.Y., April 11, 2019 - Pfizer Inc. (NYSE: PFE) announced today the company is providing recast historical financial information on its investor website (http://www.pfizer.com/investors) to conform 2017 and 2018 product revenues to Pfizer's current commercial operating structure beginning in first-quarter 2019, and to present 2018 Adjusted(1) financial results consistent with the 2019 presentation.

The following recast historical financial statements were provided:

  • 2017 and 2018 quarterly and full-year product revenues (XLS, PDF), presented to reflect Pfizer’s new commercial operating structure. At the start of the 2019 fiscal year(2), Pfizer reorganized commercial operations into three businesses:
    • Pfizer Biopharmaceuticals Group, a science-based innovative medicines business, which includes all of the previous Innovative Health business units (except Consumer Healthcare) as well as a new Hospital business unit that commercializes Pfizer’s global portfolio of sterile injectable and anti-infective medicines and Pfizer CentreOne. Pfizer also incorporated its biosimilar portfolio into its Oncology and Inflammation & Immunology business units and certain legacy established products into the Internal Medicine business unit.
    • Upjohn, a global, off-patent branded and generic established medicines business, which includes 20 off-patent solid oral dose legacy brands including Lyrica, Lipitor, Norvasc, Viagra and Celebrex, as well as certain generic medicines.
    • Consumer Healthcare, which includes Pfizer’s over-the-counter medicines(3).
  • 2018 quarterly and full-year Adjusted(1) Income Statement reconciliation (XLSPDF), presented to exclude from Adjusted(1) results the net impact of realized and unrealized gains and losses on investments in equity securities.
    • In 2018, Pfizer’s Adjusted(1) results included net gains on investments in equity securities, which favorably impacted full-year 2018 Adjusted Other (Income)/Deductions(1) by $586 million and Adjusted Diluted EPS(2) by $0.08. Effective January 1, 2018, Pfizer adopted Accounting Standards Update (ASU) 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which required equity investments to be measured at fair value with changes in fair value recognized in net income. Prior to the adoption of ASU 2016-01, Pfizer recorded changes in fair value of virtually all of its equity investments in Other comprehensive income/(loss).
    • Beginning in 2019, Pfizer will exclude realized and unrealized gains and losses from investments in equity securities from Adjusted(1) results because of their inherent volatility, which is outside of Pfizer management’s control and cannot be predicted with any level of certainty. Additionally, Pfizer management does not believe that including these gains and losses assists investors in understanding Pfizer's business or is reflective of its core operations.
    • There were no changes to Pfizer’s Reported Income Statements for any of the periods presented.

Timing of Pfizer’s First-Quarter 2019 Earnings Announcement:

Pfizer's First-Quarter 2019 Earnings conference call with investment analysts is scheduled for Tuesday, April 30, 2019 at 10 a.m. EDT. For instructions on how to join the conference call or the webcast, please refer to the previously-issued press release (link).

 

For additional details, see the financial schedules and product revenue tables hyperlinked above as well as the attached disclosure notice.

  • Adjusted income and its components and Adjusted diluted EPS are defined as reported U.S. generally accepted accounting principles (GAAP) net income and its components and reported diluted EPS excluding purchase accounting adjustments, acquisition-related costs, discontinued operations and certain significant items (some of which may recur, such as restructuring or legal charges, but which management does not believe are reflective of ongoing core operations). Adjusted cost of sales, Adjusted selling, informational and administrative (SI&A) expenses, Adjusted research and development (R&D) expenses and Adjusted other (income)/deductions are income statement line items prepared on the same basis as, and therefore components of, the overall Adjusted income measure. As described in the Financial Review––Non-GAAP Financial Measure (Adjusted Income) section of Pfizer’s 2018 Financial Report, which was filed as Exhibit 13 to Pfizer’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, management uses Adjusted income, among other factors, to set performance goals and to measure the performance of the overall company. Because Adjusted income is an important internal measurement for Pfizer, management believes that investors’ understanding of our performance is enhanced by disclosing this performance measure. Pfizer reports Adjusted income, certain components of Adjusted income, and Adjusted diluted EPS in order to portray the results of the company’s major operations––the discovery, development, manufacture, marketing and sale of prescription medicines, vaccines and consumer healthcare products––prior to considering certain income statement elements. See the accompanying reconciliations of certain GAAP Reported to Non-GAAP Adjusted information for the periods presented in the hyperlink above. The Adjusted income and its components and Adjusted diluted EPS measures are not, and should not be viewed as, substitutes for U.S. GAAP net income and its components and diluted EPS.
  • Pfizer’s fiscal year-end for international subsidiaries is November 30 while Pfizer’s fiscal year-end for U.S. subsidiaries is December 31. Therefore, the following are the quarter-close dates for all periods presented in the recast financial statements:
  • In December 2018, Pfizer entered into a definitive agreement with GlaxoSmithKline plc (GSK) under which the two companies agreed to combine their respective consumer healthcare businesses into a new consumer healthcare joint venture that will operate globally under the GSK Consumer Healthcare name.  In exchange for contributing its Consumer Healthcare business, Pfizer will receive a 32% equity stake in the new company and GSK will own the remaining 68%. Upon the closing of the transaction, which is expected to occur in the second half of 2019, subject to customary closing conditions including GSK shareholder approval and required regulatory approvals, Pfizer anticipates deconsolidating its Consumer Healthcare business and will begin to receive its pro rata share of the joint venture’s earnings and dividends, which will be paid on a quarterly basis. For additional information regarding the proposed transaction, please see the press release announcing this transaction (link).

DISCLOSURE NOTICE:  The information contained in this release is as of April 11, 2019. Pfizer assumes no obligation to update forward-looking statements contained in this release as the result of new information or future events or developments.

This press statement contains forward-looking information related to Pfizer’s proposed transaction with GSK to combine Pfizer’s and GSK’s respective consumer healthcare businesses into a new consumer healthcare joint venture that involves substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Related risks and uncertainties include, among other things, risks related to the satisfaction of the conditions to closing the transaction (including the failure to obtain necessary regulatory and GSK shareholder approvals) in the anticipated timeframe or at all and the possibility that the transaction does not close.

A further description of risks and uncertainties related to Pfizer's business can be found in Pfizer’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, including in the sections thereof captioned “Risk Factors” and “Forward-Looking Information and Factors That May Affect Future Results”, as well as in its subsequent reports on Form 8-K, all of which are filed with the U.S. Securities and Exchange Commission and available at www.sec.gov and www.pfizer.com.

Media Contact:
Patricia Kelly
M: +1 212-733-3810
E: patricia.kelly@pfizer.com

Investor Contact:
Ryan Crowe
O: +1 212-733-8160
ryan.crowe@pfizer.com