NEW YORK, July 17 /PRNewswire-FirstCall/ -- In advance of the release
of its Second Quarter 2006 Business Performance Report on July 20, Pfizer
Inc will hold a conference call at 4 p.m. EDT today to review reclassified
historical financial information reflecting Pfizer's Consumer Healthcare
business as a Discontinued Operation. Pfizer invites investors and the
general public to listen to a webcast of the conference call.
During today's conference call, led by Pfizer's financial leadership,
analysts will have the opportunity to discuss the attached financial
statements and schedules: 1) quarterly 2005 and First Quarter 2006
Consolidated Statements of Income and 2) quarterly 2005 and First Quarter
2006 Reconciliations from Reported Net Income and Reported Diluted Earnings
Per Share to Adjusted Income(1) and Adjusted Diluted Earnings Per Share(1)
for Pfizer Inc, both reflecting the reclassification of Pfizer's Consumer
Healthcare (PCH) business as a Discontinued Operation.
On June 26, 2006, Pfizer announced that it had reached an agreement to
sell its Consumer Healthcare business to Johnson & Johnson for
approximately $16.6 billion. The transaction is expected to close by the
end of 2006. The Company is now required to reflect its Consumer Healthcare
business as a discontinued operation under generally accepted accounting
principles. The reclassified financial statements and schedules reflect no
change in Reported Net Income and Reported Diluted Earnings Per Share
compared to previous disclosures. Rather, the financial results of PCH
previously required to be reflected in various line items on the
Consolidated Statement of Income (adjusted to reflect the business as
defined by the sale agreement) are now captured on a single line --
Discontinued Operations. The conference call is intended solely to assist
analysts in modeling Pfizer's financial performance on this new basis in
advance of the Company's release of its second quarter 2006 earnings on
July 20. Pfizer management will host a conference call on July 20 at 10:30
a.m. EDT to respond to investor queries with respect to its financial
results for the second quarter.
To listen to today's webcast, analysts, investors, and the general
public should visit the Pfizer web site homepage at http://www.pfizer.com
and click on the "Pfizer Consumer Healthcare P&L Reclassification Webcast"
link.
Information about accessing, and pre-registering for, the webcast will
be available at http://www.pfizer.com later today. Participants are advised
to pre-register in advance of the conference call.
Visitors to http://www.pfizer.com will be able to listen to an archived
copy of the webcast of the conference call through 12 Noon, Monday, July
24.
(1) "Adjusted income" and "adjusted diluted earnings per share (EPS)" are
defined as reported net income and reported diluted EPS excluding
purchase-accounting adjustments, merger-related costs, discontinued
operations, 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 April 2, 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 first quarter 2006 and quarterly
2005 adjusted income and adjusted diluted EPS to reported net income
and 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
QUARTERLY CONSOLIDATED STATEMENT OF INCOME
RECLASSIFICATION OF CONSUMER HEALTHCARE BUSINESS TO DISCONTINUED OPERATIONS
(UNAUDITED)
(millions of dollars, except per common share data)
First Quarter
2006
Revenues $11,747
Costs and expenses:
Cost of sales 1,671
Selling, informational and
administrative expenses 3,395
Research and development expenses 1,543
Amortization of intangible assets 825
Merger-related in-process research
and development charges -
Restructuring charges and merger-related costs 299
Other (income)/deductions--net (256)
Income from continuing operations
before provision for taxes
on income and minority interests 4,270
Provision for taxes on income 262
Minority interests 2
Income from continuing operations 4,006
Discontinued operations:
Income from discontinued
operations--net of tax 102
Gains on sales of discontinued
operations--net of tax 3
Discontinued operations--net of tax 105
Net income $4,111
Earnings per common share - Basic:
Income from continuing operations $0.55
Discontinued operations--net of tax 0.01
Net income $0.56
Earnings per common share - Diluted:
Income from continuing operations $0.55
Discontinued operations--net of tax 0.01
Net income $0.56
Weighted-average shares used to
calculate earnings per common share:
Basic 7,314
Diluted 7,324
Certain amounts may reflect rounding adjustments.
PFIZER INC AND SUBSIDIARY COMPANIES
QUARTERLY CONSOLIDATED STATEMENT OF INCOME
RECLASSIFICATION OF CONSUMER HEALTHCARE BUSINESS TO DISCONTINUED OPERATIONS
(UNAUDITED)
(millions of dollars, except per common share data)
2005 Quarters
First Second Third Fourth Total
Revenues $12,143 $11,452 $11,263 $12,547 $47,405
Costs and expenses:
Cost of sales 1,877 1,762 1,611 1,982 7,232
Selling, informational and
administrative expenses 3,665 3,766 3,526 4,356 15,313
Research and development
expenses 1,717 1,830 1,739 1,970 7,256
Amortization of intangible
assets 880 856 833 830 3,399
Merger-related in-process
research and development
charges 2 260 1,390 - 1,652
Restructuring charges and
merger-related costs 216 264 303 573 1,356
Other (income)/deductions
--net 1,052 (198) (151) (306) 397
Income from continuing
operations before provision
for taxes on income, minority
interests and cumulative
effect of a change in
accounting principles 2,734 2,912 2,012 3,142 10,800
Provision for taxes on
income 2,576 (464) 530 536 3,178
Minority interests 2 1 3 6 12
Income from continuing
operations 156 3,375 1,479 2,600 7,610
Discontinued operations:
Income from discontinued
operations--net of tax 104 88 107 152 451
Gains on sales of
discontinued operations--
net of tax 41 - 3 3 47
Discontinued operations--net
of tax 145 88 110 155 498
Income before cumulative
effect of a change in
accounting principles 301 3,463 1,589 2,755 8,108
Cumulative effect of a
change in accounting
principles--net of tax - - - (23) (23)
Net income $301 $3,463 $1,589 $2,732 $8,085
Earnings per common share -
Basic:
Income from continuing
operations before
cumulative effect of a
change in accounting
principles $0.02 $0.46 $0.20 $0.35 $1.03
Discontinued operations--
net of tax 0.02 0.01 0.02 0.02 0.07
Income before cumulative
effect of a change in
accounting principles 0.04 0.47 0.22 0.37 1.10
Cumulative effect of a
change in accounting
principles--net of tax - - - - -
Net income $0.04 $0.47 $0.22 $0.37 $1.10
Earnings per common share -
Diluted:
Income from continuing
operations before
cumulative effect of a
change in accounting
principles $0.02 $0.46 $0.20 $0.35 $1.02
Discontinued operations--
net of tax 0.02 0.01 0.02 0.02 0.07
Income before cumulative
effect of a change in
accounting principles 0.04 0.47 0.22 0.37 1.09
Cumulative effect of a
change in accounting
principles--net of tax - - - - -
Net income $0.04 $0.47 $0.22 $0.37 $1.09
Weighted-average shares used
to calculate earnings per
common share:
Basic 7,416 7,366 7,333 7,327 7,361
Diluted 7,474 7,418 7,382 7,368 7,411
Certain amounts may reflect rounding adjustments.
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
RECLASSIFICATION OF CONSUMER HEALTHCARE BUSINESS TO DISCONTINUED
OPERATIONS
(UNAUDITED)
(millions of dollars, except per common share data)
First Quarter
2006
Reported net income $4,111
Purchase accounting adjustments--net of tax 581
Merger-related costs--net of tax 3
Discontinued operations--net of tax (105)
Certain significant items--net of tax (240)
Adjusted income $4,350
Reported diluted earnings per common share $0.56
Purchase accounting adjustments--net of tax 0.07
Merger-related costs--net of tax -
Discontinued operations--net of tax (0.01)
Certain significant items--net of tax (0.03)
Adjusted diluted earnings per common share $0.59
Certain amounts may reflect rounding adjustments.
1. Adjusted Income and Adjusted diluted earnings per common share as
shown above reflect the following items:
(millions of dollars) First Quarter
2006
Purchase accounting adjustments,
pre-tax:
Intangible amortization and other (a) $810
Total purchase accounting tax adjustments, pre-tax 810
Income taxes (229)
Total purchase accounting adjustments--net of tax 581
Merger-related costs, pre-tax:
Integration costs (b) 2
Restructuring costs (b) 3
Total merger-related costs, pre-tax 5
Income taxes (2)
Total merger-related costs--net of tax 3
Discontinued operations, pre-tax:
Loss/(income) from discontinued operations (c) (155)
Gains on sales of discontinued businesses and
product lines (c) (5)
Total discontinued operations, pre-tax (160)
Income taxes 55
Total discontinued operations--net of tax (105)
Certain significant items, pre-tax
Sanofi-aventis research and development milestone (g) (118)
Restructuring charges - Adapting to Scale (b) 295
Implementation costs - Adapting to Scale (d) 185
Gain on disposals of investments (e) (51)
Total certain significant items, pre-tax 311
Income taxes (110)
Resolution of certain tax positions (f) (441)
Tax impact for the repatriation of foreign earnings (f) -
Total certain significant items--net of tax (240)
Total purchase accounting adjustments, merger-related costs,
discontinued operations, and certain significant items--net
of tax $239
(a) Included primarily in Amortization of intangible assets.
(b) Included in Restructuring charges and merger-related costs.
(c) Included in Discontinued operations--net of tax is $102 million
related to the Consumer Healthcare business.
(d) Included in Cost of sales ($124 million), Selling, informational
and administrative expenses ($39 million), and Research and
development expenses ($22 million).
(e) Included in Other (income)/deductions-net.
(f) Included in Provision for taxes on income.
(g) Included in Research and development expenses.
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
RECLASSIFICATION OF CONSUMER HEALTHCARE BUSINESS TO DISCONTINUED
OPERATIONS
(UNAUDITED)
(millions of dollars, except per common share data)
2005 Quarters
First Second Third Fourth Total
Reported net income $301 $3,463 $1,589 $2,732 $8,085
Purchase accounting
adjustments--net of tax 621 815 1,962 569 3,967
Merger-related costs--net of
tax 148 172 65 214 599
Discontinued operations--net
of tax (145) (88) (110) (155) (498)
Cumulative effect of a change
in accounting principle - - - 23 23
Certain significant items--net
of tax 2,955 (1,042) 172 208 2,293
Adjusted income $3,880 $3,320 $3,678 $3,591 $14,469
Reported diluted earnings per
common share $0.04 $0.47 $0.22 $0.37 $1.09
Purchase accounting
adjustments--net of tax 0.08 0.11 0.26 0.08 0.54
Merger-related costs--net of
tax 0.02 0.02 0.01 0.03 0.08
Discontinued operations--net
of tax (0.02) (0.01) (0.02) (0.02) (0.07)
Cumulative effect of a change
in accounting principle - - - - -
Certain significant items--
net of tax 0.40 (0.14) 0.02 0.03 0.31
Adjusted diluted earnings per
common share $0.52 $0.45 $0.49 $0.49 $1.95
Certain amounts may reflect rounding adjustments.
1. Adjusted Income and Adjusted diluted earnings per common share as
shown above reflect the following items:
(millions of dollars) 2005 Quarters
First Second Third Fourth Total
Purchase accounting
adjustments, pre-tax:
In-process research and
development charges (a) $2 $260 $1,390 $- $1,652
Intangible amortization and
other (b) 849 826 808 802 3,285
Sale of acquired inventory
written up to fair value (c) 4 - - - 4
Total purchase accounting
adjustments, pre-tax 855 1,086 2,198 802 4,941
Income taxes (234) (271) (236) (233) (974)
Total purchase
accounting
adjustments--net
of tax 621 815 1,962 569 3,967
Merger-related costs, pre-tax:
Integration costs (d) 106 191 93 160 550
Restructuring costs (d) 109 50 59 141 359
Total merger-related costs,
pre-tax 215 241 152 301 909
Income taxes (67) (69) (87) (87) (310)
Total merger-related
costs--net of tax 148 172 65 214 599
Discontinued operations, pre-tax:
Loss/(income) from
discontinued operations (e) (157) (134) (174) (232) (697)
Gains on sales of
discontinued businesses and
product lines (e) (65) - (7) (5) (77)
Total discontinued
operations, pre-tax (222) (134) (181) (237) (774)
Income taxes 77 46 71 82 276
Total discontinued
operations--net of
tax (145) (88) (110) (155) (498)
Cumulative effect of a change
in accounting principles--net
of tax - - - 23 23
Certain significant items, pre-
tax
Asset impairment charges (f) 1,213 - 3 24 1,240
Restructuring charges -
Adapting to Scale (d) - 21 145 266 432
Implementation costs -
Adapting to Scale (g) - 33 100 192 325
Gain on disposals of
investments (h) - - - (134) (134)
Total certain significant
items, pre-tax 1,213 54 248 348 1,863
Income taxes (447) (20) (76) (105) (648)
Resolution of certain tax
positions (i) - (586) - - (586)
Tax impact for the
repatriation of foreign
earnings (i) 2,189 (490) - (35) 1,664
Total certain
significant items--
net of tax 2,955 (1,042) 172 208 2,293
Total purchase accounting
adjustments, merger-related
costs, discontinued
operations, and certain
significant items--
net of tax $3,579 $(143) $2,089 $859 $6,384
(a) Included in Merger-related in-process research and development
charges.
(b) Included primarily in Amortization of intangible assets.
(c) Included in Cost of sales.
(d) Included in Restructuring charges and merger-related costs.
(e) Included in Discontinued operations--net of tax is $116 million for
the first quarter, $97 million for the second quarter, $123 million
for the third quarter and $146 million for the fourth quarter
related to the Consumer Healthcare business .
(f) Included primarily in Cost of Sales ($73 million), Selling,
informational and administrative expenses ($8 million) and Other
(income)/deductions-net ($1.2 billion) related to the suspension of
sales of Bextra.
(g) Included in Cost of sales ($124 million), Selling, informational and
administrative expenses ($151 million), and Research and development
expenses ($50 million) for the full year 2005.
(h) Included in Other (income)/deductions-net.
(i) Included in Provision for taxes on income.
SOURCE Pfizer Inc
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