- Full-Year 2006 Revenues Grew 2 Percent to $48.4 Billion, Key Products
Substantially Attained Targets, Nine Exceeded $1 Billion in Sales
- Full-Year 2006 Reported Diluted EPS Increased to $2.66, Which Included
Significant Gain From Sale of Consumer Healthcare Business; Full-Year 2006
Adjusted Diluted EPS(1) Grew 6 Percent to $2.06
- During Quarter, Pfizer Submitted U.S. Regulatory Filings for Lyrica for
Fibromyalgia and for Maraviroc, Four Product Candidates Entered Phase 3
Testing
- Company to Discuss Key Strategies and Plans at Analyst Meeting This
Afternoon
($ billions, except per-share amounts) Fourth Quarter Full Year 2006 2005
2006 2005
Revenues $12.603 $12.547 $48.371 $47.405 Reported Net Income $9.449 $2.732
$19.337 $8.085 Reported Diluted EPS $1.32 $0.37 $2.66 $1.09 Adjusted
Income(1) $3.047 $3.591 $14.982 $14.469 Adjusted Diluted EPS(1) $0.43 $0.49
$2.06 $1.95 [see end of text prior to tables for footnote]
NEW YORK, Jan. 22 /PRNewswire-FirstCall/ -- Pfizer Inc today announced
that revenues for full-year 2006 increased 2 percent, reported diluted EPS
grew 144 percent, and adjusted diluted EPS(1) grew 6 percent versus 2005.
Revenues in the fourth quarter of 2006 were substantially unchanged,
reported diluted EPS grew 257 percent, and adjusted diluted EPS(1)
decreased 12 percent versus the comparable quarter in 2005.
"In the face of many challenges in 2006, we substantially achieved a
number of financial targets that we set early in the year," said Pfizer
Chairman and Chief Executive Officer Jeffrey B. Kindler. "We took decisive
action and delivered solid performance despite challenges, including the
significant revenue impact due to the loss of exclusivity of Zithromax and
Zoloft in the U.S. We achieved revenue growth of 2 percent for the year. We
delivered adjusted diluted EPS(1) of $2.06, in line with our upwardly
revised guidance.
"While we attained nearly all of our financial targets for the year, we
continue to face a difficult operating environment, including competitive
challenges and the risks inherent in drug development. Our decision to
discontinue development of torcetrapib/atorvastatin in early December 2006
was disappointing and brought into sharper focus the need to transform
Pfizer over time to succeed in a dynamic healthcare marketplace. We are
reviewing every aspect of our business, and I look forward to discussing
our priorities when we meet with analysts in New York later today," Mr.
Kindler concluded.
"During the fourth quarter of 2006, we strengthened our commitment to
enhancing total return to shareholders," said Vice Chairman David Shedlarz.
"We completed the divestiture of the Consumer Healthcare business in the
quarter, receiving approximately $16.6 billion in proceeds. Combined with
projected strong cash flow from operations over the next several years,
these proceeds will be used to make key investments in new products and
technologies and to support a strong dividend and an active share purchase
program.
"In December 2006, Pfizer announced a 21-percent increase in its first-
quarter 2007 dividend to 29 cents per share. This significant increase
builds on a 26-percent dividend increase in 2006. Pfizer has now increased
its dividend every year for 40 consecutive years, and in the past 10 years
the company's dividend has increased on average 18 percent per year. The
company also continued its substantial share purchase program by buying
$2.5 billion of its common stock in the fourth quarter of 2006. Pfizer
purchased $7.0 billion of common stock during 2006. During the past five
years, Pfizer has purchased more than $35 billion of its common stock."
Pfizer's Pharmaceutical Operations Substantially Meet Targets
for Key In-Line Products
"Worldwide pharmaceutical 2006 revenues met our expectations," said Ian
Read, President of Worldwide Pharmaceutical Operations. "We focused on the
top-line growth of key in-line medicines, including Lipitor, Celebrex,
Lyrica, and Geodon, and we launched Sutent, Eraxis, Chantix, and Exubera in
the U.S."
Worldwide pharmaceutical revenues were $45.1 billion for full-year
2006, a 2-percent increase compared to full-year 2005. In the U.S.,
revenues increased 4 percent for the full-year 2006 compared to the same
period in 2005. A strong performance in the U.S. was driven by growth from
several of our core products, including Lipitor (up 6 percent), Celebrex
(up 24 percent), Geodon (up 31 percent), Norvasc (up 13 percent), Xalatan
(up 12 percent), Zyrtec (up 15 percent), Detrol (up 14 percent), Zyvox (up
20 percent), Vfend (up 27 percent), Aromasin (up 34 percent), and Caduet
(up 95 percent), as well as the successful launches of several new
medicines.
Worldwide pharmaceutical operations substantially met the sales targets
established at the beginning of the year for several key brands.
Notwithstanding our original sales target of more than $13 billion for
Lipitor, actual sales totaled $12.886 billion, representing 6-percent
growth -- a substantial accomplishment in the face of intense branded and
generic competition in the statin market. For Celebrex, sales of $2.039
billion exceeded our original goal of achieving sales of more than $2
billion, demonstrating that we are on our way to rebuilding physician and
patient confidence in this important medicine. Worldwide sales of $1.156
billion for Lyrica significantly exceeded both the initial target of more
than $900 million and the subsequent, raised target of more than $1
billion, a performance that establishes Lyrica as one of the most
successful pharmaceutical market entries in recent years. Geodon reached
$758 million in worldwide revenues, just short of our target of about $800
million. Nine Pfizer products surpassed $1 billion in sales in 2006, with
Detrol and Lyrica joining this list for the first time.
Pharmaceutical revenues for the fourth quarter of 2006 were $11.7
billion worldwide, comparable to those in the fourth quarter of 2005, and
were $6.1 billion in the U.S., down 3 percent, mainly reflecting the loss
of exclusivity of Zoloft in the U.S. in June 2006. Worldwide sales of
Celebrex, Geodon, and Lyrica in the fourth quarter of 2006 grew 15 percent,
32 percent, and 131 percent, respectively.
New Products Continue to Gain Momentum
2006 was an exciting year of product launches. Against an original
target of six new-product entries in the U.S., we launched four products --
Eraxis, Sutent, Exubera, and Chantix. In Europe, Sutent and Exubera entered
the marketplace, and Champix (the trade name for Chantix in Europe) was
launched beginning in December 2006. Several key medicines received
approval for new indications in 2006, including approvals of Lyrica for
central neuropathic pain and generalized anxiety disorder in the EU, and
Celebrex for juvenile rheumatoid arthritis in the U.S.
Progress Achieved in New-Product Pipeline
"We continued to advance the candidates in our pipeline during the
fourth quarter of 2006," said Dr. John LaMattina, President, Pfizer Global
Research and Development. Maraviroc, our CCR5 receptor antagonist to treat
HIV infection, was submitted for approval in the U.S. and EU in December
2006. Maraviroc has been accepted for filing and granted an accelerated
review in the EU.
A supplemental NDA filing for Lyrica in the treatment of fibromyalgia
was submitted to the FDA on December 20, 2006. Fibromyalgia is
characterized by chronic, widespread pain that affects tens of millions of
people worldwide, predominantly women. It is frequently accompanied by
disturbed sleep, anxious mood, and poor quality of life. Pfizer is excited
about Lyrica as a potential breakthrough for patients for treatment in this
area and expects approval and launch of this new indication in the U.S. in
the second half of 2007.
Four new programs advanced into Phase 3 during the quarter:
-- Axitinib, our next-generation anti-angiogenesis agent to treat thyroid
cancer,
-- CP-945,598, our cannabinoid-1 antagonist to treat obesity and its
devastating complications,
-- Sutent for the treatment of metastatic breast cancer, and
-- Zithromax/chloroquine to treat malaria, the single greatest killer of
children in Africa.
Pfizer recently provided more detail on its pipeline than ever before
with the launch of an on-line site for tracking development compounds
across Pfizer's largest-ever pipeline. This new website, launched last
month, will be updated twice a year and is available at
http://www.pfizer.com/pipeline.
Pfizer Achieves Full-Year 2006 Financial Goals
In reviewing full-year 2006 results, Alan Levin, chief financial
officer, said, "Pfizer delivered adjusted diluted EPS(1) of $2.06 for the
full year, in line with our most recent guidance and representing growth of
6 percent compared to full-year 2005 adjusted diluted EPS(1) of $1.95.
Adjusted diluted EPS(1) was well ahead of our original 2006 guidance of
about $1.93 (restated to reflect the sale of our Consumer Healthcare
business) due in part to greater savings associated with our broad-based
Adapting to Scale (AtS) productivity program (savings of approximately $2.6
billion for the full year versus our original goal of about $2 billion), a
lower effective tax rate, and fewer shares outstanding given increased
share purchases. Reported diluted EPS of $2.66 included a one-time gain of
$1.08 ($7.9 billion) associated with the recently completed divestiture of
Pfizer Consumer Healthcare (PCH), among other factors.
"For the fourth quarter of 2006, adjusted diluted EPS(1) of $.43
declined by 12 percent relative to the comparable period in 2005,
reflecting the timing of certain operating expenses in 2006. The cost of
sales pre-tax component of adjusted income(1) in the quarter increased by
11 percent, reflecting the timing of implementation of inventory management
initiatives, the impact of foreign exchange, and charges related to certain
asset writedowns. The R&D pre-tax component of adjusted income(1) in the
quarter grew by 22 percent, reflecting timing considerations associated
with the advancement of development programs for pipeline products,
expenditures associated with in- licensing of a new compound, and the
establishment of various research collaborations with third parties, among
other factors. Reported net income of $9.4 billion for the fourth quarter
included a gain of $7.9 billion on the sale of our Consumer Healthcare
business, as well as purchase-accounting- related charges, costs associated
with our expanded AtS productivity initiative, and a $320 million charge
related to the impairment of intangible assets associated with
Depo-Provera, a contraceptive product.
"We will discuss our forward-looking financial guidance during this
afternoon's analyst meeting," Mr. Levin concluded.
For additional details, please see the attached financial schedules,
product revenue tables, supplemental financial information, and Disclosure
Notice.
(1) "Adjusted income" and "adjusted diluted earnings per share (EPS)" are
defined as reported net income and reported diluted EPS excluding
purchase-accounting adjustments, acquisition-related costs,
discontinued operations, cumulative effect of a change in accounting
principles, and certain significant items. As described under
Adjusted Income in the Management's Discussion and Analysis of
Financial Condition and Results of Operations section of Pfizer's Form
10-Q for the quarterly period ended October 1, 2006, management uses
adjusted income, among other factors, to set performance goals and to
measure the performance of the overall company. We believe that
investors' understanding of our performance is enhanced by disclosing
this measure. Reconciliations of fourth-quarter and full-year 2006
and 2005 adjusted income and adjusted diluted EPS to reported net
income and reported diluted EPS, as well as a reconciliation of the
original $1.93 estimate of full-year 2006 adjusted diluted EPS to
reported diluted EPS, are provided in the materials accompanying this
report. The adjusted income and adjusted diluted EPS measures are
not, and should not be viewed as, substitutes for U.S. GAAP net income
and diluted EPS.
PFIZER INC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(millions of dollars, except per common share data)
Fourth Quarter % Incr./ Full Year % Incr./
2006 2005 (Decr.) 2006 2005 (Decr.)
Revenues $12,603 $12,547 - $48,371 $47,405 2
Costs and expenses:
Cost of sales(a) 2,217 1,982 12 7,640 7,232 6
Selling,
informational and
administrative
expenses(a) 4,562 4,356 5 15,589 15,313 2
Research and
development
expenses(a) 2,412 1,970 22 7,599 7,256 5
Amortization of
intangible assets 815 830 (2) 3,261 3,399 (4)
Acquisition-related
in-process
research and
development
charges 322 - * 835 1,652 (49)
Restructuring
charges and
acquisition-
related costs 507 573 (12) 1,323 1,356 (2)
Other
(income)/deductions
-- net 54 (306) * (904) 397 *
Income from
continuing
operations before
provision for
taxes on income,
minority interests
and cumulative
effect of a
change in
accounting
principles 1,714 3,142 (45) 13,028 10,800 21
Provision for taxes
on income 223 536 (58) 1,992 3,178 (37)
Minority interests 2 6 (65) 12 12 4
Income from
continuing
operations before
cumulative
effect of a change
in accounting
principles 1,489 2,600 (43) 11,024 7,610 45
Discontinued
operations:
Income from
discontinued
operations -- net
of tax 103 152 (32) 433 451 (4)
Gains on sales of
discontinued
operations -- net
of tax 7,857 3 M+ 7,880 47 M+
Discontinued
operations -- net
of tax 7,960 155 M+ 8,313 498 M+
Income before
cumulative effect
of a change in
accounting
principles 9,449 2,755 243 19,337 8,108 138
Cumulative effect of
a change in
accounting
principles -- net
of tax - (23) * - (23) *
Net income $9,449 $2,732 246 $19,337 $8,085 139
Earnings per common
share - Basic:
Income from
continuing
operations before
cumulative
effect of a change
in accounting
principles $0.21 $0.35 (40) $1.52 $1.03 48
Discontinued
operations -- net
of tax 1.11 0.02 M+ 1.15 0.07 M+
Income before
cumulative effect
of a change in
accounting
principles 1.32 0.37 257 2.67 1.10 143
Cumulative effect
of a change in
accounting
principles - - - - - -
Net income $1.32 $0.37 257 $2.67 $1.10 143
Earnings per common
share - Diluted:
Income from
continuing
operations before
cumulative
effect of a change
in accounting
principles $0.21 $0.35 (40) $1.52 $1.02 49
Discontinued
operations -- net
of tax 1.11 0.02 M+ 1.14 0.07 M+
Income before
cumulative effect
of a change in
accounting
principles 1.32 0.37 257 2.66 1.09 144
Cumulative effect
of a change in
accounting
principles - - - - - -
Net income $1.32 $0.37 257 $2.66 $1.09 144
Weighted-average
shares used to
calculate earnings
per common share:
Basic 7,144 7,327 7,242 7,361
Diluted 7,171 7,368 7,274 7,411
(a) Exclusive of amortization of intangible assets, except as discussed in
footnote 4 below.
* Calculation not meaningful.
M+ Change greater than one-thousand percent.
Certain amounts and percentages may reflect rounding adjustments.
1. The above financial statement presents the three-month and twelve-
month periods ended December 31 of each year. Subsidiaries operating
outside the United States are included for the three-month and twelve-
month periods ended November 30 of each year.
2. In December 2006, we sold our Consumer Healthcare business for
approximately $16.6 billion. The above financial statement reflects
this business as discontinued operations for all periods through
December 20, 2006, including our international subsidiaries.
3. As required, the estimated value of Acquisition-related in-process
research and development charges(IPR&D) is expensed at acquisition
date. In 2006, we expensed $835 million of IPR&D, of which $322
million related to our acquisition of PowderMed Ltd. in the fourth
quarter and $513 million primarily related to our acquisition of Rinat
Neurosciences Corp. in the second quarter. In 2005, we expensed $1.7
billion of IPR&D, of which $1.4 billion related to our acquisition of
Vicuron Pharmaceuticals, Inc in the third quarter and $262 million
related primarily to our acquisition of Idun Pharmaceuticals, Inc. in
the second quarter.
4. Amortization expense related to acquired intangible assets that
contribute to our ability to sell, manufacture, research, market and
distribute our products are included in Amortization of intangible
assets as they benefit multiple business functions. Amortization
expense related to acquired intangible assets that are associated with
a single function are included in Cost of sales, Selling,
informational and administrative expenses or Research and development
expenses, as appropriate.
5. Other (income)/deductions -- net for the fourth quarter and full year
2006 includes a charge of $320 million related to the impairment of
the Depo-Provera intangible asset and, for the full year 2005,
includes a charge of $1.2 billion related to the impairment of the
Bextra intangible asset.
6. Discontinued operations -- net of tax is primarily related to our
Consumer Healthcare business.
7. Provision for taxes on income in the full year 2006 includes a
downward revision ($124 million) of the estimated tax costs related to
repatriation of foreign earnings in 2005 and tax benefits associated
with the resolution of certain tax positions ($441 million). Full
year 2005 includes tax benefits associated with the resolution of
certain tax positions ($586 million) and a tax provision related to
the repatriation of foreign earnings of $1.7 billion.
PFIZER INC AND SUBSIDIARY COMPANIES
RECONCILIATION FROM REPORTED NET INCOME AND REPORTED DILUTED EARNINGS PER
SHARE TO ADJUSTED INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE
(UNAUDITED)
(millions of dollars, except per common share data)
Fourth Quarter % Incr./ Full Year % Incr./
2006 2005 (Decr.) 2006 2005 (Decr.)
Reported net income $9,449 $2,732 246 $19,337 $8,085 139
Purchase accounting
adjustments -- net of
tax 899 569 58 3,131 3,967 (21)
Acquisition-related
costs -- net of tax 5 214 (98) 14 599 (98)
Discontinued operations
-- net of tax (7,960) (155) M+ (8,313) (498) M+
Cumulative effect of a
change in accounting
principles -- net of tax - 23 * - 23 *
Certain significant
items -- net of tax 654 208 214 813 2,293 (65)
Adjusted income $3,047 $3,591 (15) $14,982 $14,469 4
Reported diluted
earnings per common
share $1.32 $0.37 257 $2.66 $1.09 144
Purchase accounting
adjustments -- net of
tax 0.13 0.08 63 0.43 0.54 (20)
Acquisition-related
costs -- net of tax - 0.03 * - 0.08 *
Discontinued operations
-- net of tax (1.11) (0.02) M+ (1.14) (0.07) M+
Cumulative effect of a
change in accounting
principles -- net of tax - - * - - *
Certain significant
items -- net of tax 0.09 0.03 200 0.11 0.31 (65)
Adjusted diluted
earnings per common
share $0.43 $0.49 (12) $2.06 $1.95 6
* Calculation not meaningful.
M+ Change greater than one thousand percent.
Certain amounts and percentages may reflect rounding adjustments.
1. The above reconciliation presents the three-month and twelve-month
periods ended December 31 of each year. Subsidiaries operating outside
the United States are included for the three-month and twelve-month
periods ended November 30 of each year.
2. Adjusted income and Adjusted diluted earnings per common share as shown
above reflect the following items:
(millions of dollars) Fourth Quarter Full Year
2006 2005 2006 2005
Purchase accounting adjustments:
In-process research and
development charges(a) $322 $- $835 $1,652
Intangible amortization and
other(b) 806 802 3,220 3,289
Total purchase accounting
adjustments, pre-tax 1,128 802 4,055 4,941
Income taxes (229) (233) (924) (974)
Total purchase accounting
adjustments -- net of tax 899 569 3,131 3,967
Acquisition-related costs:
Integration costs(c) 13 159 21 543
Restructuring charges(c) (1) 149 6 375
Total acquisition-related costs,
pre-tax 12 308 27 918
Income taxes (7) (94) (13) (319)
Total acquisition-related
costs -- net of tax 5 214 14 599
Discontinued operations:
Income from discontinued
operations(d) (150) (230) (643) (695)
Gains on sales of discontinued
operations(d) (10,206) (5) (10,243) (77)
Total discontinued operations,
pre-tax (10,356) (235) (10,886) (772)
Income taxes 2,396 80 2,573 274
Total discontinued
operations -- net of tax (7,960) (155) (8,313) (498)
Cumulative effect of a change in
accounting principles -- net of tax - 23 - 23
Certain significant items:
Asset impairment charges and
other associated costs(e) 320 24 320 1,240
Sanofi-aventis research and
development milestone(f) - - (118) -
Restructuring charges - Adapting
to Scale(c) 495 265 1,296 438
Implementation costs - Adapting
to Scale(g) 241 192 788 325
Gain on disposals of investments
and other(h) (13) (134) (173) (134)
Total certain significant items,
pre-tax 1,043 347 2,113 1,869
Income taxes (389) (104) (735) (654)
Resolution of certain tax
positions(i) - - (441) (586)
Tax impact for the repatriation
of foreign earnings(i) - (35) (124) 1,664
Total certain significant
items -- net of tax 654 208 813 2,293
Total purchase accounting
adjustments, acquisition-related
costs, discontinued operations,
cumulative effective of a change
in accounting principles and certain
significant items -- net of tax $(6,402) $859 $(4,355) $6,384
(a) Included in Acquisition-related in-process research and development
charges.
(b) Included primarily in Amortization of intangible assets.
(c) Included in Restructuring charges and acquisition-related costs.
(d) Discontinued operations -- net of tax is primarily related to our
Consumer Healthcare business.
(e) Included primarily in Other (income)/deductions -- net. For the
fourth quarter and full year 2006, includes $320 million related to
the impairment of the Depo-Provera intangible asset, and for the
full year 2005, includes $1.2 billion related to the impairment of
the Bextra intangible asset.
(f) Included in Research and development expenses.
(g) Included in Cost of sales ($114 million), Selling, informational and
administrative expenses ($83 million) and Research and development
expenses ($44 million) for the three months ended December 31, 2006
and included in Cost of sales ($392 million), Selling, informational
and administrative expenses ($243 million), Research and development
expenses ($176 million) and in Other (income)/deductions-net ($23
million income) for the full year ended December 31, 2006. Included
in Cost of sales ($87 million), Selling, informational and
administrative expenses ($75 million) and Research and development
expenses ($30 million) for the three months ended December 31, 2005
and included in Cost of sales ($124 million), Selling, informational
and administrative expenses ($151 million), Research and development
expenses ($50 million) for the full year ended December 31, 2005.
(h) Included in Other (income)/deductions -- net.
(i) Included in Provision for taxes on income.
PFIZER INC
SEGMENT/PRODUCT REVENUES
FOURTH QUARTER 2006
(millions of dollars)
WORLDWIDE U.S. INTERNATIONAL
% % %
2006 2005 Chg 2006 2005 Chg 2006 2005 Chg
TOTAL
REVENUES 12,603 12,547 - 6,404 6,609 (3) 6,199 5,938 4
PHARMA-
CEUTICAL 11,666 11,653 - 6,055 6,246 (3) 5,611 5,407 4
- CARDIOVASCULAR
AND
METABOLIC
DISEASES 5,243 5,068 3 2,865 2,787 3 2,378 2,281 4
LIPITOR 3,335 3,357 (1) 1,945 2,069 (6) 1,390 1,288 8
NORVASC 1,317 1,244 6 686 613 12 631 631 -
CARDURA 140 146 (4) 2 2 35 138 144 (4)
CADUET 115 65 77 109 63 71 6 2 333
ACCUPRIL/
ACCURETIC 68 44 56 5 (25)(122) 63 69 (9)
CHANTIX/
CHAMPIX 68 - * 68 - * - - *
- CENTRAL
NERVOUS
SYSTEM
DISORDERS 1,251 1,673 (25) 597 1,023 (42) 654 650 1
ZOLOFT 166 808 (79) 76 653 (88) 90 155 (42)
LYRICA 353 153 131 214 82 160 139 71 98
GEODON/
ZELDOX 210 159 32 176 131 34 34 28 24
NEURONTIN 120 141 (15) 18 27 (34) 102 114 (11)
ARICEPT** 98 90 9 - - * 98 90 8
XANAX/
XR 81 102 (21) 15 35 (59) 66 67 (1)
RELPAX 81 63 27 52 38 38 29 25 11
- ARTHRITIS
AND PAIN 737 650 13 477 402 19 260 248 5
CELEBREX 540 472 15 412 357 16 128 115 12
- INFECTIOUS
AND
RESPIRATORY
DISEASES 866 1,111 (22) 256 513 (50) 610 598 2
ZYVOX 223 164 36 144 118 22 79 46 70
ZITHROMAX/
ZMAX 109 402 (73) (3) 262 (101) 112 140 (20)
VFEND 148 112 31 49 40 23 99 72 36
DIFLUCAN 109 128 (15) (13) (1) M+ 122 129 (5)
- UROLOGY 754 727 4 429 410 5 325 317 3
VIAGRA 450 430 5 222 212 5 228 218 5
DETROL/
DETROL LA 290 283 2 201 193 5 89 90 (3)
- ONCOLOGY 641 497 29 273 167 64 368 330 11
CAMPTOSAR 235 237 (1) 127 124 3 108 113 (4)
ELLENCE 76 94 (20) 11 17 (33) 65 77 (17)
AROMASIN 91 71 29 30 25 23 61 46 33
SUTENT 104 - * 69 - * 35 - *
- OPHTHALMOLOGY 396 362 9 123 116 6 273 246 11
XALATAN/
XALACOM 391 361 8 123 116 6 268 245 9
- ENDOCRINE
DISORDERS 261 266 (2) 67 86 (23) 194 180 7
GENOTROPIN 209 204 3 61 60 2 148 144 3
- ALL OTHER 1,127 991 14 746 559 33 381 432 (11)
ZYRTEC/
ZYRTEC D 374 327 14 374 327 14 - - *
- ALLIANCE
REVENUE
(Aricept,
Macugen,
Mirapex,
Olmetec,
Rebif and
Spiriva) 390 308 26 222 183 21 168 125 34
ANIMAL
HEALTH 655 630 4 281 283 (1) 374 347 8
OTHER *** 282 264 7 68 80 (15) 214 184 16
* - Calculation not meaningful.
** - Represents direct sales under license agreement with Eisai Co.,
Ltd.
*** - Includes Capsugel and Pfizer CenterSource.
M+ - Change greater than one-thousand percent.
Certain amounts and percentages may reflect rounding adjustments.
Certain prior year data have been reclassified to conform to the
current year presentation.
PFIZER INC
SEGMENT/PRODUCT REVENUES
TWELVE MONTHS 2006
(millions of dollars)
WORLDWIDE U.S. INTERNATIONAL
% % %
2006 2005 Chg 2006 2005 Chg 2006 2005 Chg
TOTAL
REVENUES 48,371 47,405 2 25,822 24,751 4 22,549 22,654 -
PHARMA-
CEUTICAL 45,083 44,269 2 24,503 23,471 4 20,580 20,798 (1)
- CARDIOVASCULAR
AND
METABOLIC
DISEASES 19,871 18,732 6 11,124 10,036 11 8,747 8,696 1
LIPITOR 12,886 12,187 6 7,849 7,401 6 5,037 4,786 5
NORVASC 4,866 4,706 3 2,500 2,222 13 2,366 2,484 (5)
CARDURA 538 586 (8) 7 7 - 531 579 (8)
CADUET 370 185 99 349 179 95 21 6 241
ACCUPRIL/
ACCURETIC 266 294 (10) 29 22 37 237 272 (13)
CHANTIX/
CHAMPIX 101 - * 101 - * - - *
- CENTRAL
NERVOUS
SYSTEM
DISORDERS 6,038 6,391 (6) 3,635 3,816 (5) 2,403 2,575 (7)
ZOLOFT 2,110 3,256 (35) 1,752 2,573 (32) 358 683 (47)
LYRICA 1,156 291 297 717 111 M+ 439 180 144
GEODON/
ZELDOX 758 589 29 631 483 31 127 106 20
NEURONTIN 496 639 (22) 91 159 (43) 405 480 (16)
ARICEPT** 358 346 4 1 - * 357 346 4
XANAX/XR 316 409 (23) 70 141 (50) 246 268 (8)
RELPAX 286 233 23 185 143 30 101 90 11
- ARTHRITIS
AND PAIN 2,711 2,386 14 1,781 1,377 29 930 1,009 (8)
CELEBREX 2,039 1,730 18 1,577 1,267 24 462 463 -
- INFECTIOUS
AND
RESPIRATORY
DISEASES 3,474 4,770 (27) 1,222 2,449 (50) 2,252 2,321 (3)
ZYVOX 782 618 27 527 438 20 255 180 42
ZITHROMAX/
ZMAX 638 2,025 (69) 210 1,497 (86) 428 528 (19)
VFEND 515 397 30 178 140 27 337 257 31
DIFLUCAN 435 498 (13) (17) (17) (3) 452 515 (12)
- UROLOGY 2,809 2,684 5 1,586 1,497 6 1,223 1,187 3
VIAGRA 1,657 1,645 1 796 802 (1) 861 843 2
DETROL/
DETROL LA 1,100 988 11 769 675 14 331 313 5
- ONCOLOGY 2,191 1,996 10 887 701 26 1,304 1,295 1
CAMPTOSAR 903 910 - 491 471 4 412 439 (6)
ELLENCE 312 367 (15) 54 73 (26) 258 294 (12)
AROMASIN 320 247 30 113 85 34 207 162 27
SUTENT 219 - * 167 - * 52 - *
- OPHTHAL-
MOLOGY 1,461 1,373 6 483 432 12 978 941 4
XALATAN/
XALACOM 1,453 1,372 6 483 432 12 970 940 3
- ENDOCRINE
DISORDERS 985 1,049 (6) 258 341 (24) 727 708 3
GENOTROPIN 795 808 (2) 230 239 (4) 565 569 (1)
- ALL OTHER 4,169 3,823 9 2,711 2,205 23 1,458 1,618 (10)
ZYRTEC/
ZYRTEC D 1,569 1,362 15 1,569 1,362 15 - - *
- ALLIANCE
REVENUE
(Aricept,
Macugen,
Mirapex,
Olmetec,
Rebif and
Spiriva) 1,374 1,065 29 816 617 32 558 448 25
ANIMAL
HEALTH 2,311 2,206 5 1,032 993 4 1,279 1,213 5
OTHER *** 977 930 5 287 287 - 690 643 7
* - Calculation not meaningful.
** - Represents direct sales under license agreement with Eisai Co.,
Ltd.
*** - Includes Capsugel and Pfizer CenterSource.
M+ - Change greater than one-thousand percent.
Certain amounts and percentages may reflect rounding adjustments.
Certain prior year data have been reclassified to conform to the current
year presentation.
PFIZER INC
SUPPLEMENTAL FINANCIAL INFORMATION
1) Revenue Growth
Fourth-quarter 2006 revenues were substantially unchanged and full-year
2006 revenues increased 2% compared to the same periods in 2005, due
primarily to the solid aggregate performance of our broad portfolio of
patent-protected medicines and an aggregate year-over-year increase in
revenues from new products launched in 2004, 2005, and 2006, largely offset
by the impact of the loss of U.S. exclusivity on Zoloft in June 2006, as
well as on Zithromax in November 2005.
Revenues in the fourth quarter of 2006 were also impacted by the
weakening of the U.S. dollar relative to many foreign currencies
(especially the euro), which increased revenue by $164 million. Revenues
for the full-year of 2006 were impacted by the strengthening of the U.S.
dollar relative to many foreign currencies (especially the euro and
Japanese yen), which decreased revenue by $279 million.
2) Change in Cost of Sales
The Cost of Sales pre-tax component of adjusted income(1) increased 11%
in the fourth quarter and 3% for the full year of 2006 compared to the same
periods in 2005. Reported cost of sales increased 12% in the fourth quarter
of 2006 and increased 6% for the full year of 2006 compared to the same
periods in 2005. The increase in the fourth quarter primarily reflects the
timing of implementation of inventory management initiatives, the impact of
foreign exchange, and charges related to certain asset writedowns.
Full-year cost of sales growth reflects these same considerations,
partially offset by the impact of changes in 2006 sales mix during the
first half of the year and the realization of savings associated with our
Adapting to Scale (AtS) productivity initiatives, among other factors. In
addition, cost of sales includes charges of $114 million and $87 million
related to our AtS productivity initiative for the fourth quarter of 2006
and 2005, and $392 million and $124 million for the twelve months ended
December 31, 2006 and 2005.
3) Change in Selling, Informational & Administrative (SI&A) Expenses
and Research & Development (R&D) Expenses
SI&A expenses increased 5% and 2% in the fourth quarter and full year
of 2006, compared to the same periods in 2005.
R&D expenses, excluding acquisition-related in-process research and
development charges (IPR&D), grew 22% and 5% in the fourth quarter and full
year of 2006 compared to the same periods in 2005. The increases reflect
timing considerations associated with the advancement of development
programs for pipeline products, expenditures associated with in-licensing
of a new compound, and the establishment of various research collaborations
with third parties, among other factors. IPR&D charges of $322 million
primarily related to the acquisition of PowderMed Ltd. were recorded in the
fourth quarter of 2006. Full-year 2006 IPR&D charges were $835 million,
primarily related to the acquisition of PowderMed, Ltd. and Rinat
Neuroscience Corp. In full-year 2005, we recorded IPR&D charges of $1.4
billion for the acquisition of Vicuron Pharmaceuticals, Inc., as well as
$262 million, related primarily to our acquisition of Idun Pharmaceuticals
Inc.
SI&A and R&D expenses include charges of $83 million and $44 million
related to AtS implementation costs in the fourth quarter of 2006, and $243
million and $176 million in the full year of 2006. SI&A and R&D expenses
included charges of $75 million and $30 million related to AtS
implementation costs in the three months ended December 31, 2005, and $151
million and $50 million in the twelve months of 2005.
4) Savings and Costs Relating to Productivity Initiatives
Our Adapting to Scale (AtS) productivity initiative, launched in the
first quarter of 2005, involves a comprehensive, multi-year review of our
processes, organizations, systems, and decision making to identify and
capitalize on opportunities to make the company more effective and
efficient. Savings realized during 2006 were approximately $2.6 billion for
the full year of 2006, exceeding our original goal of about $2.0 billion
for the year.
Costs relating to the AtS productivity initiative were $736 million and
$2.1 billion for the fourth quarter and full year of 2006, compared to $457
million and $763 million in the fourth quarter and full year of 2005.
Fourth- quarter and full-year 2006 costs included a provision for
reductions in the U.S. pharmaceutical field force.
5) Other Income and Other Deductions
($ millions) Fourth Quarter Full Year
2006 2005* 2006 2005*
Net Interest (Income)/
Expense $(160) $(110) $(437) $(269)
Asset Impairment Charges 320 7 320 1,159
Royalties (117) (87) (395) (320)
Gains on Disposals of
Investments/ Product
Lines (9) (114) (233) (172)
Other, Net 20 (2) (159) (1)
Other (Income)/Deductions
-Net $54 $(306) $(904) $397
* Certain 2005 amounts were reclassified to conform to the 2006
presentation.
In the fourth quarter of 2006, we recorded a charge of $320 million
related to the impairment of our Depo-Provera intangible asset. In connection
with the decision to suspend sales of Bextra in the first quarter of 2005, we
recorded a charge of $1.1 billion relating to the impairment of our Bextra
intangible asset.
6) Effective Tax Rate
Fourth Quarter Full Year
2005 Reported(a) 17.1% 29.4%(c)
2005 Adjusted(a)(b) 21.8% 21.8%
2006 Reported(a) 13.0%(d) 15.3%(e)
2006 Adjusted(a)(b) 21.7%(f) 22.0%(f)
(a) 2005 and 2006 Reported and Adjusted are based on income from
continuing operations and therefore exclude the results of our
divested Consumer Healthcare business.
(b) Used in the calculation of Adjusted income(1).
(c) The reported tax rate in 2005 reflects tax costs associated with
our program in 2005 to repatriate foreign earnings under the
American Jobs Creation Act; the impact of a $1.4 billion charge
for acquired IPR&D, which is not deductible for tax purposes; and
the favorable resolution of certain tax positions.
(d) The reported tax rate for the fourth quarter of 2006 reflects the
retroactive reenactment of the R&D tax credit in the U.S. in
December 2006, the full amount of which was recorded in the
fourth quarter of 2006.
(e) The reported tax rate for full-year 2006 reflects the favorable
resolution of certain tax positions, a favorable tax-law change
in the first quarter, a downward revision of the estimated tax
costs related to the repatriation of foreign earnings in 2005,
the retroactive reenactment of the R&D tax credit in the U.S. in
December 2006, and the impact of the sale of our Consumer
Healthcare business, among other factors.
(f) The fourth-quarter and full-year 2006 effective tax rate on
Adjusted income(1) benefited from the retroactive reenactment of the
R&D tax credit in the U.S. in December 2006. The full amount of
this benefit was recorded in the fourth quarter of 2006.
7) Reconciliation of Original* Forecasted 2006 Adjusted Income(1) and
Adjusted Diluted EPS(1) to Original* Forecasted 2006 Reported Net Income
and Reported Diluted EPS
Full Year 2006 Original*
Forecast
($ billions, except per-share amounts) Net Income(a) Diluted EPS(a)
Income/(Expense)
Forecasted Adjusted Income/Diluted EPS(1) ~$14.5 ~$1.93
Purchase Accounting Impacts, Net of Tax (2.3) (0.31)
Adapting-to-Scale Costs, Net of Tax (1.4 - 1.7) (0.19 - 0.23)
Income From Discontinued Operations,
Net of Tax(b) 0.5 0.07
Resolution of Certain Tax Positions 0.4 0.06
Forecasted Reported Net Income/Diluted
EPS ~ $11.4 - $11.7 ~$1.52 - $1.56
* Adapted from forecast disclosed on Form 8-K, filed on February 10,
2006.
(a) Forecasts in the table exclude the effects of business-
development transactions not completed as of December 31, 2005.
Forecasts in the table do not include the potential impact from a
substantial prospective gain on the divestiture of our Consumer
Healthcare business, as well as costs related to our recently
announced sales-force restructuring.
(b) Primarily reflects the reclassification of our Consumer
Healthcare business to discontinued operations.
8) Consumer Healthcare
We completed the sale of our Consumer Healthcare business on December
20, 2006. Revenues from our Consumer Healthcare business were $1.1 billion
and $4.0 billion for the fourth quarter and full year of 2006,
respectively. Income from discontinued operations -- net of tax, was $8.3
billion for the full year of 2006, including the fourth-quarter gain on
sale of our Consumer Healthcare business of $7.9 billion.
9) Share-Purchase Program
In total, the Company purchased approximately 266 million shares at a
total cost of about $7 billion during 2006, including about 94 million
shares (about $2.5 billion) in the fourth quarter. In June 2006, the Board
of Directors increased our share-purchase authorization from $5 billion to
$18 billion.
(1) "Adjusted income" and "adjusted diluted earnings per share (EPS)"
are defined as reported net income and reported diluted EPS
excluding purchase-accounting adjustments, acquisition-related
costs, discontinued operations, cumulative effect of a change in
accounting principles and certain significant items. As
described under Adjusted Income in the Management's Discussion
and Analysis of Financial Condition and Results of Operations
section of Pfizer's Form 10-Q for the quarterly period ended
October 1, 2006, management uses adjusted income, among other
factors, to set performance goals and to measure the performance
of the overall company. We believe that investors' understanding
of our performance is enhanced by disclosing this measure.
Reconciliations of fourth-quarter and full-year 2006 and 2005
adjusted income and adjusted diluted EPS to reported net income
and reported diluted EPS as well as a reconciliation of the
original $1.93 estimate of full-year 2006 adjusted diluted EPS to
reported diluted EPS, are provided in the materials accompanying
this report. The adjusted income and adjusted diluted EPS
measures are not, and should not be viewed as, substitutes for U.S.
GAAP net income and diluted EPS.
DISCLOSURE NOTICE: The information contained in this document and the
attachments is as of January 22, 2007. The Company assumes no obligation to
update any forward-looking statements contained in this document or the
attachments as a result of new information or future events or
developments.
This document and the attachments contain forward-looking information
about the Company's financial results and estimates, business plans and
prospects, in-line products, and product candidates that involve
substantial risks and uncertainties. You can identify these statements by
the fact that they use words such as "will," "anticipate," "estimate,"
"expect," "project," "intend," "plan," "believe," "target," "forecast", and
other words and terms of similar meaning in connection with any discussion
of future operating or financial performance or business plans and
prospects. Among the factors that could cause actual results to differ
materially are the following: the success of research and development
activities; decisions by regulatory authorities regarding whether and when
to approve our drug applications as well as their decisions regarding
labeling and other matters that could affect the availability or commercial
potential of our products; the speed with which regulatory authorizations,
pricing approvals, and product launches may be achieved; the success of
external business development activities; competitive developments,
including with respect to competitor drugs and drug candidates that treat
diseases and conditions similar to those treated by our in-line drugs and
drug candidates; the ability to successfully market both new and existing
products domestically and internationally; difficulties or delays in
manufacturing; trade buying patterns; the ability to meet generic and
branded competition after the loss of patent protection for our products
and competitor products; the impact of existing and future regulatory
provisions on product exclusivity; trends toward managed care and health
care cost containment; possible U.S. legislation or regulatory action
affecting, among other things, pharmaceutical pricing and reimbursement,
including under Medicaid and Medicare, the importation of prescription
drugs that are marketed outside the U.S. and sold at prices that are
regulated by governments of various foreign countries, and the involuntary
approval of prescription medicines for over-the-counter use; the impact of
the Medicare Prescription Drug, Improvement and Modernization Act of 2003;
legislation or regulations in markets outside the U.S. affecting product
pricing, reimbursement, or access; contingencies related to actual or
alleged environmental contamination; claims and concerns that may arise
regarding the safety or efficacy of in-line products and product
candidates; legal defense costs, insurance expenses, settlement costs, and
the risk of an adverse decision or settlement related to product liability,
patent protection, governmental investigations, ongoing efforts to explore
various means for resolving asbestos litigation, and other legal
proceedings; the Company's ability to protect its patents and other
intellectual property both domestically and internationally; interest rate
and foreign currency exchange rate fluctuations; governmental laws and
regulations affecting domestic and foreign operations, including tax
obligations; changes in generally accepted accounting principles; any
changes in business, political, and economic conditions due to the threat
of future terrorist activity in the U.S. and other parts of the world, and
related U.S. military action overseas; growth in costs and expenses;
changes in our product, segment, and geographic mix; and the impact of
acquisitions, divestitures, restructurings, product withdrawals, and other
unusual items, including our ability to realize the projected benefits of
our Adapting to Scale multi-year productivity initiative, including the
projected benefits of the broadening of this initiative over the next few
years. A further list and description of these risks, uncertainties, and
other matters can be found in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2005, and in its reports on Forms 10-Q
and 8-K.
This document may include discussion of certain clinical studies
relating to various in-line products and/or product candidates. These
studies typically are part of a larger body of clinical data relating to
such products or product candidates, and the discussion herein should be
considered in the context of the larger body of data.
SOURCE Pfizer Inc
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CONTACT:
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Paul Fitzhenry, +1-212-733-4637, or Investors, Ron Aldridge,
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