item 14 exhibits financial statement schedules reports form 8k following documents filed part report a1 financial statements following consolidated financial statements related notes independent auditors report included pages 39 59 annual report shareholders year ended december 31 1995 previously incorporated reference item 8 part ii report a2 financial statement schedule schedules listed omitted reason applicable required information given elsewhere financial statements financial statements unconsolidated subsidiaries omitted basis subsidiaries considered aggregate would constitute significant subsidiary a3 exhibits b reports form 8k company filed report form 8k dated november 29 1995 exhibits form 10k available upon request charge ten cents per page requests directed c l clemente secretary pfizer inc 235 east 42nd street new york ny 10017 signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized pfizer inc registrant cl clemente cl clemente secretary dated march 28 1996 pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicated pfizer inc subsidiary companies schedule ii valuation qualifying accounts recoveries accounts previously written b primarily consists uncollectible accounts charged allowance accounts deductions also include impact translation foreign currencies c amount includes approximately 22 million allowances related food science business classified net assets held sale december 31 1995 following trademarks found report among used pfizer inc cardura doxazosin mesylate diflucan fluconazole enable tenidap enablex tenidap e5 antiendotoxin antibody glucotrol xl glipizide gits norvasc amlodipine besylate procardia xl nifedipine gits reactine cetirizine hcl unasyn sulbactamampicillin zithromax azithromycin zoloft sertraline zyrtec cetirizine hcl advocin danofloxacin aviax semduramicin banminth pyrantel tartrate bovishield coxistac salinomycin dectomax doramectin leukocell mecadox carbadox nemex pyrantel pamoate respisure stafac virginiamycin terramycin oxytetracycline terramycin la200 oxytetracycline tmla oxytetracycline paratect morantel tartrate posistac salinomycin valbazen albendazole vanguard bain de soleil barbasol pure silk bengay daily care desitin diflucan one gynecure juscoat migraleve plax rid tcp trosyd af unisom sleepgels vanart visineitem 14 exhibits financial statement schedules reports form 8k 14 a1 financial statements following consolidated financial statements related notes independent auditors report 1996 annual report shareholders incorporated herein reference item 8 part ii report page 1996 annual report shareholders independent auditors report 38 segment information 39 geographic data 40 consolidated statement income 41 consolidated statement shareholders equity 42 consolidated balance sheet 43 consolidated statement cash flows 44 notes consolidated financial statements 4558 quarterly consolidated statement income 59 14a2 financial statement schedules omitted required information given elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 14a3 exhibits 3i restated certificate incorporation company april 28 1995 incorporated herein reference companys quarterly report form 10q period ended april 2 1995 certificate correction thereto filed secretary state delaware may 12 1995 filed herewith 3ii bylaws company amended june 23 1994 incorporated herein reference exhibit 3ii companys form 8k current report dated june 23 1994 4i rights agreement dated september 24 1987 company chase manhattan bank na first amendment thereto dated may 25 1989 filed herewith 10i stock incentive plan filed herewith 10ii pfizer retirement annuity plan filed herewith 10iii form severance agreement companys named executive officers disclosed proxy statement 1997 annual meeting shareholders incorporated herein reference exhibit 101 companys report form 10k 1994 fiscal year 10iv nonfunded deferred compensation supplemental savings plan filed herewith 10v executive annual incentive plan proposed incorporated herein reference exhibit companys proxy statement 1997 annual meeting shareholders 10vi performancecontingent share award program incorporated herein reference exhibit 103 companys report form 10q period ended september 29 1996 10vii nonfunded supplemental retirement plan filed herewith 10viii form indemnification agreement directors filed herewith 10ix form indemnification agreement named executive officers filed herewith 10x nonemployee directors retirement plan frozen october 1996 filed herewith 10xi annual retainer unit award plan nonemployee directors incorporated herein reference exhibit 101 companys report form 10q period ended september 29 1996 10xii pfizer inc nonfunded deferred compensation unit award plan nonemployee directors incorporated herein reference exhibit 102 companys report form 10q period ended september 29 1996 10xiii restricted stock plan nonemployee directors filed herewith 11 computation earnings per common share fully diluted earnings per common share 12 computation ratio earnings fixed charges 13a 1996 annual report shareholders except portions expressly incorporated herein reference furnished solely information commission deemed filed 13b annual report pfizer savings investment plan form 11k fiscal year ended december 31 1996 13c annual report pfizer savings investment plan employees resident puerto rico form 11k fiscal year ended december 31 1996 21 subsidiaries registrant 23 consent kpmg peat marwick llp independent certified public accountants 27 financial data schedule b reports form 8k company filed report form 8k last quarter 1996 exhibits form 10k available upon request charge ten cents per page requests directed c l clemente secretary pfizer inc 235 east 42nd street new york ny 10017 signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized pfizer inc cl clemente dated march 27 1997 cl clemente senior vice president secretary corporate counsel pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities dates indicateditem 14 exhibits financial statement schedules reports form 8k 14 a1 financial statements following consolidated financial statements related notes independent auditors’ report supplementary data 2000 annual report shareholders incorporated reference item 8 part ii report 14a2 financial statement schedules omitted required information given elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 14a3 exhibits available upon request requests directed cl clemente secretary pfizer inc 235 east 42nd street new york ny 100175755 31 restated certificate incorporation april 27 2000 incorporated reference 10q report period ended april 2 2000 32 bylaws amended april 27 2000 incorporated reference 10q report period ended april 2 2000 41 rights agreement dated october 6 1997 chasemellon shareholders services llc incorporated reference report form 8k dated october 6 1997 42 indenture dated january 30 2001 us chase manhattan bank incorporated reference 8k report filed january 30 2001 43 except set forth exhibit 41 42 instruments defining rights holders longterm debt securities company subsidiaries omitted agree furnish commission upon request copy instrument respect issuances longterm debt company subsidiaries 101 stock incentive plan amended july 1 1999 incorporated reference 1999 10k report 102 pfizer retirement annuity plan amended november 6 1997 incorporated reference 1997 10k report 103 form severance agreement named executive officers identified proxy statement 2001 annual meeting shareholders incorporated reference 1994 10k report 104 nonfunded deferred compensation supplemental savings plan incorporated reference 1996 10k report 105 executive annual incentive plan incorporated reference proxy statement 1997 annual meeting shareholders 106 performancecontingent share award program incorporated reference 10q report period ended september 29 1996 107 nonfunded supplemental retirement plan incorporated reference 1996 10k report 108 form indemnification agreement directors incorporated reference 1996 10k report 109 form indemnification agreement named executive officers incorporated reference 1997 10k report 1010 nonemployee directors’ retirement plan frozen october 1996 incorporated reference 1996 10k report 1011 annual retainer unit award plan nonemployee directors incorporated reference 10q report period ended september 29 1996 1012 nonfunded deferred compensation unit award plan nonemployee directors incorporated reference 10q report period ended september 29 1996 1013 restricted stock plan nonemployee directors incorporated reference 1996 10k report 1014 deferred compensation plan incorporated reference 1997 10k report 1015 warnerlambert company 1996 stock plan amended incorporated reference warnerlambert’s 1999 10k report 1016 warnerlambert company incentive compensation plan amended incorporated reference warnerlambert’s 1999 10k report 1017 warnerlambert company supplemental pension income plan amended incorporated reference warnerlambert’s 1999 10k report 1018 warnerlambert excess savings plan formerly warnerlambert supplemental savings plan amended incorporated reference warnerlambert’s 1999 10k report 1019 warnerlambert company executive severance plan amended incorporated reference warnerlambert’s 10q report quarter ended march 31 1999 1020 summary annual incentive plan 1021 postretirement consulting agreement dated april 20 2000 us william c steere jr incorporated reference 10q report period ended april 2 2000 1022 employment agreement dated january 1 2001 us henry mckinnell incorporated reference 8k report filed february 2 2000 1023 employment agreement dated march 1 2001 us peter b corr computation ratio earnings fixed charges 13a 2000 annual report shareholders except portions incorporated reference furnished solely information commission deemed “filed” subsidiaries company 231 consent kpmg llp independent certified public accountants 232 consent opinion pricewaterhousecoopers llp independent certified public accountants power attorney included part signature page 14b reports form 8k company filed reports form 8k last quarter 2000 signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named undersigned directors executive officers pfizer inc hereby severally constitute c l clemente margaret foran singly true lawful attorneys full power sign us names capacities indicated amendments annual report form 10k filed securities exchange commission hereby ratifying confirming signatures may signed attorneys amendments annual report form 10k requirements securities exchange act 1934 report signed following persons behalf registrant capacities dates indicated signatures title date william c steere jr william c steere jr chairman board director principal executive officermarch 27 2001 henry mckinnell henry mckinnell chief executive officer president director principal executive officermarch 27 2001 david l shedlarz david l shedlarz executive vice president chief financial officer principal financial officermarch 27 2001 loretta v cangialosi loretta v cangialosi vice president controller principal accounting officermarch 27 2001 signatures title date michael brown director march 27 2001 michael brown anthony burns director march 27 2001 anthony burns robert n burt director march 27 2001 robert n burt w cornwell director march 27 2001 w cornwell william h gray iii director march 27 2001 william h gray iii george b harvey director march 27 2001 george b harvey constance j horner director march 27 2001 constance j horner william r howell director march 27 2001 william r howell stanley ikenberry director march 27 2001 stanley ikenberry harry p kamen director march 27 2001 harry p kamen signatures title date george lorch director march 27 2001 george lorch alex j mandl directormarch 27 2001 alex j mandl dana g mead directormarch 27 2001 dana g mead john f niblack vice chairman directormarch 27 2001 john f niblack franklin raines directormarch 27 2001 franklin raines ruth j simmons directormarch 27 2001 ruth j simmons michael sovern directormarch 27 2001 michael sovern jeanpaul vallès directormarch 27 2001 jeanpaul vallèsitem 14 exhibits financial statement schedules reports form 8k 14a1 financial statements following consolidated financial statements related notes independent auditors’ report supplementary data 2001 annual report shareholders incorporated reference item 8 part ii 10k report 14a2 financial statement schedules omitted required information given elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 14a3 exhibits available upon request requests directed margaret foran vice presidentcorporate governance assistant secretary pfizer inc 235 east 42nd street new york ny 100175755 exhibit numbers preceded asterisk indicate exhibits physically filed 10k report exhibit numbers indicate exhibits filed incorporation reference exhibit numbers 101 1024 management contracts compensatory plans arrangements 31 restated certificate incorporation april 27 2000 incorporated reference 10q report period ended april 2 2000 32 bylaws amended april 27 2000 incorporated reference 10q report period ended april 2 2000 41 rights agreement dated october 6 1997 chasemellon shareholders services llc incorporated reference report form 8k dated october 6 1997 42 indenture dated january 30 2001 us chase manhattan bank incorporated reference 8k report filed january 30 2001 43 except set forth exhibits 41 42 instruments defining rights holders longterm debt securities company subsidiaries omitted agree furnish commission upon request copy instrument respect issuances 14b reports form 8k filed form 8k october 24 2001 attached incorporated reference company’s press release dated october 17 2001 reporting financial results third quarter first nine months 2001 signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named pfizer inc dated march 27 2002 cl clemente cl clemente executive vice president corporate affairs secretary corporate counsel undersigned directors officers pfizer inc hereby severally constitute c l clemente margaret foran singly true lawful attorneys full power sign us names capacities indicated amendments annual report form 10k filed securities exchange commission requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicateditem 14 principal accountant fees services information fees 2004 2003 professional services rendered independent auditors incorporated reference discussion heading audit nonaudit fees item 2 2005 proxy statement audit committee’s policy preapproval audit permissible nonaudit services independent auditors incorporated reference section captioned policy audit committee preapproval audit permissible nonaudit services independent auditor item 2 2005 proxy statement part iv item 15item 14 principal accountant fees services information fees professional services rendered independent auditors 2005 2004 incorporated reference discussion heading audit nonaudit fees item 2 2006 proxy statement audit committee’s policy preapproval audit permissible nonaudit services independent auditors incorporated reference section captioned policy audit committee preapproval audit permissible nonaudit services independent registered public accounting firm item 2 2006 proxy statement part iv item 15item 14 principal accountant fees services information fees professional services rendered independent auditors 2006 2005 incorporated reference discussion heading audit nonaudit fees item 2 2007 proxy statement audit committee’s policy preapproval audit permissible nonaudit services independent auditors incorporated reference section captioned policy audit committee preapproval audit permissible nonaudit services independent registered public accounting firm item 2 2007 proxy statement part iv item 15item 14 principal accountant fees services information fees professional services rendered independent auditors 2007 2006 incorporated reference discussion heading audit nonaudit fees item 2 2008 proxy statement audit committee’s policy preapproval audit permissible nonaudit services independent auditors incorporated reference section captioned policy audit committee preapproval audit permissible nonaudit services independent registered public accounting firm item 2 2008 proxy statement part iv item 15item 14 principal accountant fees services information fees professional services rendered independent auditors 2008 2007 incorporated reference discussion heading audit nonaudit fees item 2 2009 proxy statement audit committee’s policy preapproval audit permissible nonaudit services independent auditors incorporated reference section captioned policy audit committee preapproval audit permissible nonaudit services independent registered public accounting firm item 2 2009 proxy statement part iv item 15item 14 principal accounting fees services information fees professional services rendered independent auditors 2009 2008 incorporated reference discussion heading audit nonaudit fees item 2 2010 proxy statement audit committee’s policy preapproval audit permissible nonaudit services independent auditors incorporated reference section captioned policy audit committee preapproval audit permissible nonaudit services independent registered public accounting firm item 2 2010 proxy statement part iv item 15item 14 principal accounting fees services information fees professional services rendered independent auditors 2010 2009 incorporated reference discussion heading audit nonaudit fees item 2 2011 proxy statement audit committee’s policy preapproval audit permissible nonaudit services independent auditors incorporated reference section captioned policy audit committee preapproval audit permissible nonaudit services independent registered public accounting firm item 2 2011 proxy statement part iv item 15item 14 principal accounting fees services information fees professional services rendered independent auditors 2011 2010 incorporated reference discussion heading proposals requiring vote item 2 ratification independent registered public accounting firm audit nonaudit fees 2012 proxy statement audit committee’s policy preapproval audit permissible nonaudit services independent auditors incorporated reference discussion heading proposals requiring vote item 2 ratification independent registered public accounting firm policy audit committee preapproval audit permissible nonaudit services independent registered public accounting firm 2012 proxy statement part iv item 15nannannannannannannannanitem 14principal accounting fees services information fees professional services rendered independent registered public accounting firm 2020 2019 incorporated reference discussion heading item 2 ratification selection independent registered public accounting firmaudit nonaudit fees proxy statement audit committee’s policy preapproval audit permissible nonaudit services independent registered public accounting firm incorporated reference discussion heading item 2 ratification selection independent registered public accounting firmpolicy audit committee preapproval audit permissible nonaudit services independent registered public accounting firm proxy statement part iv item 15item 14 exhibits financial statement schedules reports form 8k following list financial statement schedules exhibits filed part annual report a1 financial statements see part ii a2 financial statement schedule schedules listed omitted reason inapplicable required information given elsewhere financial statements financial statements unconsolidated subsidiaries omitted basis subsidiaries considered aggregate would constitute significant subsidiary a3 exhibits b company filed report form 8k dated december 13 1994 exhibits form 10k available upon request charges set requests directed c l clemente secretary pfizer inc 235 east 42nd street new york ny 10017 signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized pfizer inc registrant cl clemente cl clemente secretary dated march 23 1995 pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicated pfizer inc subsidiary companies schedule ii valuation qualifying accounts following trademarks found report among used pfizer inc cardura doxazosin mesylate diflucan fluconazole enable tenidap enablex tenidap e5 antiendotoxin antibody feldene piroxicam glucotrol glipizide glucotrol xl glipizide gits norvasc amlodipine besylate procardia nifedipine procardia xl nifedipine gits reactine cetirizine unasyn sulbactamampicillin zithromax azithromycin zoloft sertraline abg alta duracon gamma luhr paratrend pca simplex litesse polydextrose advocin danofloxacin aviax semduramicin banminth pyrantel tartrate bovishield coxistac salinomycin dectomax doramectin filaribits diethylcarbamazine citrate leukocell mecadox carbadox nemex pyrantel pamoate respisure stafac virginiamycin terramycin la200 oxytetracycline tmla oxytetracycline paratect morantel tartrate posistac salinomycin valbazen albendazole vanguard barbasol bengay daily care desitin plax rid unisom doxylamine succinate unisom sleepgels visine tetrahydrozoline hci exhibit indexitem 14 exhibits financial statement schedules reports form 8k 14 a1 financial statements following consolidated financial statements related notes independent auditors report 1997 annual report shareholders incorporated reference item 8 part ii report 14a2 financial statement schedules omitted required information given elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 14a3 exhibits available upon request charge ten cents per page requests directed cl clemente secretary pfizer inc 235 east 42nd street new york ny 10017 3i restated certificate incorporation october 29 1997 incorporated reference 10q report period ended september 28 1997 3ii bylaws amended june 23 1994 incorporated reference exhibit 3ii report form 8k dated june 23 1994 4i rights agreement dated october 6 1997 chasemellon shareholders services llc incorporated reference report form 8k dated october 6 1997 10i stock incentive plan amended december 15 1997 10ii pfizer retirement annuity plan amended november 6 1997 10iii form severance agreement named executive officers identified proxy statement 1998 annual meeting shareholders incorporated reference exhibit 101 1994 10k report 10iv nonfunded deferred compensation supplemental savings plan incorporated reference 1996 10k report 10v executive annual incentive plan incorporated reference exhibit proxy statement 1997 annual meeting shareholders 10vi performancecontingent share award program incorporated reference exhibit 103 10q report period ended september 29 1996 10vii nonfunded supplemental retirement plan incorporated reference 1996 10k report 10viii form indemnification agreement directors incorporated reference 1996 10k report 10ix form indemnification agreement named executive officers 10x nonemployee directors retirement plan frozen october 1996 incorporated reference 1996 10k report 10xi annual retainer unit award plan nonemployee directors incorporated reference exhibit 101 10q report period ended september 29 1996 10xii nonfunded deferred compensation unit award plan nonemployee directors incorporated reference exhibit 102 10q report period ended september 29 1996 10xiii restricted stock plan nonemployee directors incorporated reference 1996 10k report 10xiv deferred compensation plan 10xv summary annual incentive plan 12 computation ratio earnings fixed charges 13a 1997 annual report shareholders except portions expressly incorporated herein reference furnished solely information commission deemed filed 21 subsidiaries company 23 consent kpmg peat marwick llp independent certified public accountants 271 financial data schedule period ended december 31 1997 272 financial data schedule restated period ended december 31 1996 273 financial data schedule amended restated period ended december 31 1995 b reports form 8k company filed reports form 8k last quarter 1997 dated october 6 december 10 1997 signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized pfizer inc cl clemente cl clemente senior vice president secretary corporate counsel dated march 26 1998 pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities dates indicated signatures title date william c steere jr chairman march 26 1998 board director william c steere jr principal executive officer david l shedlarz senior vice march 26 1998 president chief david l shedlarz financial officer principal financial officer herbert v ryan vice president march 26 1998 controller herbert v ryan principal accounting officer michael brown director march 26 1998 michael brown anthony burns director march 26 1998 anthony burns w cornwell director march 26 1998 w cornwell george b harvey director march 26 1998 george b harvey constance j horner director march 26 1998 constance j horner stanley ikenberry director march 26 1998 stanley ikenberry signatures title date harry p kamen director march 26 1998 harry p kamen director thomas g labrecque director dana g mead henry mckinnell executive vice march 26 1998 president henry mckinnell director john f niblack executive vice march 26 1998 president john f niblack director ruth j simmons director march 26 1998 ruth j simmons jeanpaul valles director march 26 1998 jeanpaul vallesitem 14 exhibits financial statement schedules reports form 8k 14 a1 financial statements following consolidated financial statements related notes independent auditors report 1998 annual report shareholders incorporated reference item 8 part ii report pages 1998 annual report shareholders independent auditors report 39 segment information 60 geographic data 60 consolidated statement income 40 consolidated balance sheet 41 consolidated statement shareholders equity 42 consolidated statement cash flows 43 notes consolidated financial statements 44 60 quarterly consolidated financial data 61 14a2 financial statement schedules omitted required information given elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 14a3 exhibits available upon request requests directed cl clemente secretary pfizer inc 235 east 42nd street new york ny 10017 3i restated certificate incorporation october 29 1997 incorporated reference 10q report period ended september 28 1997 3ii bylaws amended june 23 1994 incorporated reference exhibit 3ii report form 8k dated june 23 1994 4i rights agreement dated october 6 1997 chasemellon shareholders services llc incorporated reference report form 8k dated october 6 1997 10i stock incentive plan amended january 28 1999 10ii pfizer retirement annuity plan amended november 6 1997 incorporated reference 1997 10k report 10iii form severance agreement named executive officers identified proxy statement 1999 annual meeting shareholders incorporated reference 1994 10k report 10iv nonfunded deferred compensation supplemental savings plan incorporated reference 1996 10k report 10v executive annual incentive plan incorporated reference exhibit proxy statement 1997 annual meeting shareholders 10vi performancecontingent share award program incorporated reference exhibit 103 10q report period ended september 29 1996 10vii nonfunded supplemental retirement plan incorporated reference 1996 10k report 10viii form indemnification agreement directors incorporated reference 1996 10k report 10ix form indemnification agreement named executive officers incorporated reference 1997 10k report 10x nonemployee directors retirement plan frozen october 1996 incorporated reference 1996 10k report 10xi annual retainer unit award plan nonemployee directors incorporated reference exhibit 101 10q report period ended september 29 1996 10xii nonfunded deferred compensation unit award plan nonemployee directors incorporated reference exhibit 102 10q report period ended september 29 1996 10xiii restricted stock plan nonemployee directors incorporated reference 1996 10k report 10xiv deferred compensation plan incorporated reference 1997 10k report 10xv summary annual incentive plan 10xvi amendment august 13 1998 stock asset purchase agreement pfizer inc stryker corporation dated october 22 1998 12 computation ratio earnings fixed charges 13a 1998 annual report shareholders except portions incorporated reference furnished solely information commission deemed filed 21 subsidiaries company 23 consent kpmg llp independent certified public accountants 271 financial data schedule period ended december 31 1998 272 financial data schedule period ended december 31 1997 273 financial data schedule period ended december 31 1996 b reports form 8k company filed reports form 8k last quarter 1998 dated october 2 december 8 1998 signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named pfizer inc scl clemente dated march 25 1999 cl clemente senior vice president secretary corporate counsel requirements securities exchange act 1934 report signed following persons behalf registrant capacities dates indicated index exhibitsitem 14 controls procedures within 90 days prior filing date 2002 form 10k carried evaluation supervision participation principal executive officer principal financial officer effectiveness design operation disclosure controls procedures based evaluation principal executive officer principal financial officer concluded disclosure controls procedures effective alerting timely manner material information required disclosed periodic reports filed sec noted design system controls based part upon certain assumptions likelihood future events assurance design succeed achieving stated goals potential future conditions regardless remote addition reviewed internal controls significant changes internal controls factors could significantly affect controls subsequent date recent evaluation item 15item 14 principal accountant fees services information fees 2003 2002 professional services rendered independent auditors incorporated reference discussion heading audit nonaudit fees item 2 proxy statement 2004 annual meeting shareholders audit committee’s policy preapproval audit permissible nonaudit services independent auditors incorporated reference section captioned policy audit committee preapproval audit permissible nonaudit services independent auditor item 2 proxy statement 2004 annual meeting shareholders part iv item 15item 14 exhibits financial statement schedules reports form 8k following list financial statement schedules exhibits filed part annual report a1 financial statements see part ii a2 financial statement schedules page schedule v property plant equipment 23 schedule vi accumulated depreciation depletion amortization property plant equipment 24 schedule viii valuation qualifying accounts 25 schedule ix shortterm borrowings 26 schedule x supplementary income statement information 27 schedules listed omitted reason inapplicable required information given elsewhere financial statements financial statements unconsolidated subsidiaries omitted basis subsidiaries considered aggregate would constitute significant subsidiary a3 exhibits 3a restated certificate incorporation company april 1991 incorporated reference exhibit 4a form s8 registration 3344053 3b bylaws company amended january 1992 incorporated reference exhibit 3 companys form 8k current report dated january 24 1992 10 executive compensation plans arrangements 101 form severance agreement certain executive officers company incorporated reference exhibit 101 companys annual report form 10k year ended december 31 1992 102 pfizer inc performancecontingent share award program incorporated reference exhibit companys proxy statement dated march 18 1994 11 computation earnings per common share fully diluted earnings per common share 12 computation ratio earnings fixed charges 13aportions annual report company fiscal year ended december 31 1993 expressly incorporated reference herein 13bcopy annual report pfizer savings investment plan form 11k fiscal year ended december 31 1993 13ccopy annual report pfizer savings investment plan employees resident puerto rico form 11k fiscal year ended december 31 1993 21 subsidiaries registrant 23 report consent kpmg peat marwick independent certified public accountants b company filed report form 8k dated october 20 1993 exhibits form 10k available upon request charges set requests directed c l clemente secretary pfizer inc 235 east 42nd street new york ny 10017 exhibit 13b 120 exhibit 13c 110 exhibit 21 50 following trademarks found report among used pfizer inc cardura doxazosin advocin danofloxacin diflucan fluconazole aviax semduramicin enable tenidap banminth pyrantel tartrate enablex tenidap dectomax doramectin e5 antiendotoxin antibody mecadox carbadox feldene piroxicam nemex pyrantel pamoate glucotrol glipizide terramycin la200 oxytetracycline glucotrol xl glipizide gits tmla oxytetracycline norvasc amlodipine besylate paratect morantel tartrate procardia nifedipine procardia xl nifedipine gits reactine cetirizine unasyn imiv sulbactamampicillin unasyn oral sultamicillin zithromax azithromycin zoloft sertraline barbasol abg bengay alta daily care desitin duracon desitin gamma plax luhr rid paratrend unisom doxylamine succinate pca unisom sleep gels simplex visine tetrahydrozoline hc1 chymax chymosin litesse polydextrose signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized pfizer inc registrant c l clemente c l clemente secretary dated march 24 1994 pursuant requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicated pfizer inc subsidiary companies schedule vproperty plant equipment pfizer inc subsidiary companies schedule vi accumulated depreciation depletion amortization property plant equipment pfizer inc subsidiary companies schedule viii valuation qualifying accounts pfizer inc subsidiary companies schedule ix shortterm borrowings pfizer inc subsidiary companies schedule xsupplementary income statement information charged costs expenses year ended december 31 item 1993 1992 1991 millions dollars maintenance repairs 980a 1214 1223 media advertising costs 2549 2432 2799 royalties 2259 2050 2437 taxes payroll income taxes amortization intangible assets omitted item exceed 1 net sales reported consolidated statement income decrease due divsetiture mti 1992 exhibit index 3a restated certificate incorporation company april 1991 incorporated reference exhibit 4a form s8 registration 3344053 3b bylaws company amended january 1992 incorporated reference exhibit 3 companys form 8k current report dated january 24 1992 10 executive compensation plans arrangements 101 form severance agreement certain executive officers company incorporated reference exhibit 101 companys annual report form 10k year ended december 31 1992 102 pfizer inc performancecontingent share award program incorporated reference exhibit companys proxy statement dated march 18 1994 11 computation earnings per common share fully diluted earnings per common share 12 computation ratio earnings fixed charges 13aportions annual report company fiscal year ended december 31 1993 expressly incorporated reference herein 13bcopy annual report pfizer savings investment plan form 11k fiscal year ended december 31 1993 13ccopy annual report pfizer savings investment plan employees resident puerto rico form 11k fiscal year ended december 31 1993 21 subsidiaries registrant 23 report consent kpmg peat marwick independent certified public accountantsitem 14 exhibits financial statement schedules reports form 8k 14 a1 financial statements following consolidated financial statements related notes independent auditors report 1999 annual report shareholders incorporated reference item 8 part ii report pages 1999 annual report independent auditors report 38 segment information 60 geographic data 60 consolidated statement income 39 consolidated balance sheet 40 consolidated statement shareholders equity 41 consolidated statement cash flows 42 notes consolidated financial statements 4360 quarterly consolidated financial data unaudited 61 14a2 financial statement schedules omitted required information given elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 14a3 exhibits available upon request requests directed cl clemente secretary pfizer inc 235 east 42nd street new york ny 100175755 3i restated certificate incorporation april 22 1999 incorporated reference 10q report period ended april 4 1999 3ii bylaws amended june 24 1999 incorporated reference exhibit 3ii 10q report period ended july 4 1999 4i rights agreement dated october 6 1997 chasemellon shareholders services llc incorporated reference report form 8k dated october 6 1997 10i stock incentive plan amended july 1 1999 10ii pfizer retirement annuity plan amended november 6 1997 incorporated reference 1997 10k report 10iii form severance agreement named executive officers identified proxy statement 2000 annual meeting shareholders incorporated reference 1994 10k report 10iv nonfunded deferred compensation supplemental savings plan incorporated reference 1996 10k report 10v executive annual incentive plan incorporated reference exhibit proxy statement 1997 annual meeting shareholders 10vi performancecontingent share award program incorporated reference exhibit 103 10q report period ended september 29 1996 10vii nonfunded supplemental retirement plan incorporated reference 1996 10k report 10viii form indemnification agreement directors incorporated reference 1996 10k report 10ix form indemnification agreement named executive officers incorporated reference 1997 10k report 10x nonemployee directors retirement plan frozen october 1996 incorporated reference 1996 10k report 10xi annual retainer unit award plan nonemployee directors incorporated reference exhibit 101 10q report period ended september 29 1996 10xii nonfunded deferred compensation unit award plan nonemployee directors incorporated reference exhibit 102 10q report period ended september 29 1996 10xiii restricted stock plan nonemployee directors incorporated reference 1996 10k report 10xiv deferred compensation plan incorporated reference 1997 10k report 10xv summary annual incentive plan 12 computation ratio earnings fixed charges 13a 1999 annual report shareholders except portions incorporated reference furnished solely information commission deemed filed 21 subsidiaries company 23 consent kpmg llp independent certified public accountants 271 financial data schedule period ended december 31 1999 272 financial data schedule period ended december 31 1998 273 financial data schedule period ended december 31 1997 14b reports form 8k company filed reports form 8k last quarter 1999 dated november 8 1999 november 12 1999 november 16 1999 december 1 1999 december 8 1999 december 14 1999 december 15 1999 reports include information reportable item 5 form 8k related proposed merger warnerlambert signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named pfizer inc cl clemente dated march 2000 cl clemente executive vice president secretary corporate counsel requirements securities exchange act 1934 report signed following persons behalf registrant capacities dates indicated signatures title date william c steere jr chairman board director march 24 2000 william c steere jr principal executive officer david l shedlarz executive vice president march 24 2000 chief financial officer david l shedlarz principal financial officer loretta v cangialosi vice president controller march 24 2000 principal accounting officer loretta v cangialosi michael brown director march 24 2000 michael brown director march 24 2000 anthony burns w cornwell director march 24 2000 w cornwell signatures title date director march 24 2000 george b harvey constance j horner director march 24 2000 constance j horner stanley ikenberry director march 24 2000 stanley ikenberry harry p kamen director march 24 2000 harry p kamen thomas g labrecque director march 24 2000 thomas g labrecque dana g mead director march 24 2000 dana g mead henry mckinnell president chief operating march 24 2000 officer director henry mckinnell john f niblack vice chairman director march 24 2000 john f niblack franklin raines director march 24 2000 franklin raines signatures title date ruth j simmons director march 24 2000 ruth j simmons jean paul valles director march 24 2000 jeanpaul valles item 7 managements discussion analysis financial condition results operations information required item incorporated reference financial review pages 30 37 annual report shareholders fiscal year ended december 31 1995 item 8item 7 managements discussion analysis financial condition results operations information required item incorporated reference financial review pages 30 37 1996 annual report shareholders item 8item 7 management’s discussion analysis financial condition results operations information required item incorporated reference financial review pages 30 40 2000 annual report item 7aitem 7 management’s discussion analysis financial condition results operations information required item incorporated reference financial review pages 24 37 2001 annual report item 7aitem 7 management’s discussion analysis financial condition results operations information required item incorporated reference financial review section 2004 financial report item 7aitem 7 management’s discussion analysis financial condition results operations information required item incorporated reference financial review section 2005 financial report item 7aitem 7 management’s discussion analysis financial condition results operations information required item incorporated reference financial review section 2006 financial report item 7aitem 7 management’s discussion analysis financial condition results operations information required item incorporated reference financial review section 2007 financial report item 7aitem 7 management’s discussion analysis financial condition results operations information required item incorporated reference financial review section 2008 financial report item 7aitem 7 management’s discussion analysis financial condition results operations information required item incorporated reference financial review section 2009 financial report item 7aitem 7 management’s discussion analysis financial condition results operations information required item incorporated reference financial review section 2010 financial report item 7aitem 7 management’s discussion analysis financial condition results operations information required item incorporated reference discussion heading financial review 2011 financial report item 7anannannannannannannannanitem 7management’s discussion analysis financial condition results operations overview performance operating environment strategy outlook financial highlights following summary certain financial performance metrics billions except per share data additional information regarding adjusted diluted eps nongaap financial measure including reconciliations certain gaap reported nongaap adjusted information see nongaap financial measure adjusted income section within mda references operational variances pertain periodoverperiod changes exclude impact foreign exchange rates although foreign exchange rate changes part business within control since mask positive negative trends business believe presenting operational variances excluding foreign exchange changes provides useful information evaluate results business strategy revenues come manufacture sale biopharmaceutical products formation consumer healthcare jv 2019 completion spinoff combination upjohn business mylan november 2020 pfizer transformed focused global leader sciencebased innovative medicines vaccines operate single operating segment engaged discovery development manufacturing marketing sales distribution biopharmaceutical products worldwide beginning fourth quarter 2020 financial results upjohn business mylanjapan collaboration reflected discontinued operations periods presented priorperiod information restated reflect current organizational structure following separation upjohn business see note 1a item 1 businesscommercial operations form 10k additional information expect incur costs approximately 700 million connection separating upjohn approximately 70 incurred since inception december 31 2020 charges include costs expenses related separation legal entities transaction costs transforming focused company undertaken efforts ensure cost base aligns appropriately revenue base certain direct costs transferred consumer healthcare jv upjohn business connection spinoff indirect costs transfer addition taking steps restructure corporate enabling functions appropriately support drive purpose focused innovative biopharmaceutical products business rd pgs platform functions see costs expensesrestructuring charges costs associated acquisitions costreductionproductivity initiatives section mda rd believe strong pipeline wellpositioned future growth rd heart fulfilling purpose deliver breakthroughs change patients’ lives work translate advanced science technologies therapies may impactful patients innovation drug discovery development critical success addition discovering developing new products rd efforts seek add value existing products improving effectiveness ease dosing discovering potential new indications see item 1 businessresearch development section form 10k rd priorities strategy seek leverage strong pipeline organize around expected operational growth drivers capitalize trends creating longterm growth opportunities including •an aging global population generating increased demand innovative medicines vaccines address patients’ unmet needs •advances biological science digital technology enhancing delivery breakthrough new medicines vaccines •the increasingly significant role hospitals healthcare systems committed strategically capitalizing growth opportunities advancing product pipeline maximizing value existing products well various business development activities view business development activity enabler strategies seek generate growth pursuing opportunities transactions potential strengthen business capabilities assess business assets scientific capabilitiesportfolio part regular ongoing portfolio review process also continue consider business development activities advance business additional information including discussion recent significant business development activities see note 2 2020 performance revenues increased 736 million 2 419 billion 2020 412 billion 2019 reflecting operational increase 11 billion 3 unfavorable impact foreign exchange 331 million 1 excluding impact consumer healthcare transaction revenues increased 8 operationally reflecting strong growth vyndaqelvyndamax eliquis ibrance outside developed europe inlyta xeljanz xtandi prevenar 13 outside us oncology biosimilars certain products hospital therapeutic area us partially offset enbrel internationally prevnar 13 chantix us revenues 2020 included estimated unfavorable impact approximately 700 million 2 due covid19 primarily reflecting lower demand certain products china unfavorable disruptions wellness visits patients us negatively impacted prescribing patterns certain products partially offset increased us demand certain sterile injectable products increased adult uptake prevenar 13 certain international markets resulting greater vaccine awareness respiratory illnesses us revenues bnt162b2 following outlines components net change revenues worldwide revenues including discussion key drivers revenue performance revenues geography see discussion analysis consolidated statements incomerevenuesselected product discussion revenues geography sections within mda additional information regarding primary indications class certain products see note 17b income continuing operations provisionbenefit taxes income following provides analysis change income continuing operations provisionbenefit taxes income 2020 asee costs expenses section within mda bsee note 4 information tax provision effective tax rate see provisionbenefit taxes income section within mda note 5a operating environment like businesses industry subject certain industryspecific challenges include among others topics listed see also item 1 businessgovernment regulation price constraints section form 10k regulatory environmentpipeline productivity product lines must replenished offset revenue losses products lose market exclusivity respond healthcare innovation trends provide earnings growth result devote considerable resources rd activities essential growth incorporate high degree risk cost including whether particular product candidate new indication inline product achieve desired clinical endpoint safety profile approved regulators successful commercially conduct clinical trials provide data safety efficacy support evaluation drug’s overall benefitrisk profile particular patient population addition product approved launched continue monitor safety long available patients includes postmarketing trials may conducted voluntarily pursuant regulatory request gain additional medical knowledge entire life product collect safety data report safety information fda regulatory authorities regulatory authorities may evaluate potential safety concerns take regulatory actions response updating product’s labeling restricting use communicating new safety information public rare cases requiring us suspend remove product market commercial potential inline products may negatively impacted postmarketing developments intellectual property rights collaborationlicensing rights loss expiration invalidation intellectual property rights patent litigation settlements manufacturers expiration copromotion licensing rights material adverse effect revenues certain products experienced patentbased expirations loss regulatory exclusivity certain markets last years expect certain products face significantly increased generic competition next years example basic product patent chantix us expired november 2020 also basic product patent sutent us expire august 2021 additional patent expiries continue expect moderate impact reduced revenues due patent expiries 2021 2025 continue vigorously defend patent rights infringement continue support efforts strengthen worldwide recognition patent rights taking necessary steps ensure appropriate patient access additional information patent rights consider significant business whole see item 1 businesspatents intellectual property rights section form 10k discussion recent developments respect patent litigation see note 16a1 regulatory environmentpricing accessus healthcare legislation regulatory environmentpricing accessgovernment payer group pressures pricing medicines pharmaceutical manufacturers cost healthcare includes medicines medical services hospital services continues important payers governments patients stakeholders federal state governments private thirdparty payers us continue take action manage utilization drugs cost drugs including increasingly employing formularies control costs taking account discounts connection decisions formulary inclusion favorable formulary placement consider number factors impacting pricing medicines within us often engage patients doctors healthcare plans also often provide significant discounts list price insurers including pbms mcos price patients pay us prescribed medicines ultimately set healthcare providers insurers average insurers impose higher outofpocket burden patients prescription medicines comparably priced medical services certain governments outside us provide healthcare lowtozero direct cost consumers point care significant power large single payers effectively regulate prices patient reimbursement levels control costs governmentsponsored healthcare system governments may use variety measures including proposing pricing reform legislation cross country collaboration procurement price cuts mandatory rebates health technology assessments forced localization condition market access “international reference pricing” ie practice country linking regulated medicine prices countries qce processes vbp additional information see item 1 businessgovernment regulation price constraints section form 10k global economic environment addition industryspecific factors discussed like businesses size global extent activities exposed economic cycle certain factors global economic environment may impact global operations include among things currency fluctuations capital exchange controls global economic conditions restrictive government actions changes intellectual property legal protections remedies trade regulations procedures actions affecting approval production pricing marketing reimbursement access products well impacts political civil unrest terrorist activity unstable governments legal systems intergovernmental disputes public health outbreaks epidemics pandemics government pressures lead negative pricing pressure various markets governments take active role setting prices access criteria means cost control covid19 pandemic continuation covid19 pandemic impacted business operations financial condition results additional information impact covid19 revenues please see overview performance operating environment strategy outlookour 2020 performance section mda response covid19 committed confronting public health challenge posed pandemic collaborating industry partners academic institutions develop potential approaches prevent treat covid19 march 2020 issued fivepoint plan calling biopharmaceutical industry join us committing unprecedented collaboration combat covid19 subsequently made important advances including among others •entry global agreement except china hong kong macau taiwan biontech development manufacture commercialization mrnabased coronavirus vaccine bnt162 help prevent covid19 november 2020 companies announced conducting final efficacy analysis phase 3 study bnt162b2 met study’s primary efficacy endpoints analysis data indicated vaccine efficacy rate covid19 95 participants without prior sarscov2 infection first primary objective also participants without prior sarscov2 infection second primary objective case measured seven days second dose fda authorized distribution use bnt162b2 us help prevent covid19 individuals 16 years age older eua issued december 2020 bnt162b2 approved licensed fda eua authorizes distribution use product subject conditions set forth eua duration declaration department health human services circumstances exist justifying authorization emergency use drugs biological products bnt162b2 covid19 pandemic section 564 ffdca declaration revocation eua fda issued euas certain companies products intended prevention treatment covid19 may continue duration declaration fda expects eua holders work towards submission bla soon possible bnt162b2 granted cma eua temporary authorization 50 countries worldwide companies continue study bnt162b2 including studies evaluating additional populations booster doses emerging variants based updated 6dose labeling subject continuous process improvements expansion current facilities adding new suppliers contract manufacturers companies believe potentially manufacture least 2 billion doses total end 2021 companies entered agreements supply prespecified doses bnt162b2 multiple developed emerging nations around world continuing deliver doses bnt162b2 governments agreements february 2 2021 based doses delivered 2021 primarily agreements entered february 2 2021 including among others agreements us government supply 200 million doses european commission supply 300 million doses japanese government supply 144 million doses covid19 vaccines global access covax 40 million doses 2021 subject negotiation execution additional agreements covax facility structure forecasted approximately 15 billion revenues 2021 bnt162b2 gross margin split evenly biontech forecast based doses mostly covered agreements entered february 2 2021 include doses potentially deliver end 2021 companies continue enter agreements governments additional doses including among others exercise us government option additional 100 million doses agreement european commission additional 200 million doses delivered 2021 accordingly forecast may change based part future additional agreements may signed circumstances warrant additional information covid19 vaccine development program see note 2 item 1a risk factorscovid19 pandemic section form 10k •initiation september 2020 phase 1b clinical trial hospitalized participants covid19 evaluate safety tolerability pharmacokinetics novel investigational protease inhibitor covid19 pf07304814 phosphate prodrug 3clike 3cl protease inhibitor pf00835231 despite significant investments efforts ongoing development programs related covid19 may successful risk failure significant certainty efforts yield successful product costs ultimately recouped impact covid19 business operations following discussion summarizes current views key business operational areas impacted pandemic effects business operations financial condition results part ongoing monitoring assessment made certain assumptions regarding covid19 pandemic purposes operational planning financial projections including assumptions regarding duration severity global macroeconomic impact pandemic well covid19 vaccine supply contracts remain dynamic despite careful tracking planning unable accurately predict extent impact pandemic business operations financial condition results due uncertainty future developments particular believe ultimate impact business operations financial condition results affected speed extent continued spread coronavirus globally emergence additional virus variants duration pandemic new information regarding severity incidence covid19 safety efficacy availability vaccines treatments covid19 rate population becomes vaccinated covid19 global macroeconomic impact pandemic governmental regulatory actions contain virus control supply medicines focused aspects business implementing measures aimed mitigating issues possible including using digital technology assist operations commercial manufacturing rd enabling functions globally business operations impacted pandemic various ways example •at time colleagues able perform job functions outside facilities continue work remotely certain colleagues pgs wrdm organizations continue work onsite subject strict protocols intended reduce risk transmission •while engagement healthcare professionals started return prepandemic levels due virtual engagement capabilities sales force colleagues continue encounter mixed access result ongoing restrictions inperson meetings actively reviewing assessing epidemiological data colleagues remain ready resume inperson engagements healthcare professionals locationbylocation basis soon safe pandemic adapted promotional platform amplifying existing digital capabilities reach healthcare professionals customers provide critical education information including increasing scale remote engagement •we seen significant disruption supply chain date manufacturing sites globally continued operate near normal levels •after brief pause recruitment portion certain ongoing clinical studies delay new study starts restarted recruitment across development portfolio including new study starts lateapril 2020 •our portfolio products experienced varying impacts pandemic products medically necessary also reliant maintenance therapy continuing patients addition new patients products reliant new patient starts typically require doctor visits including wellness visits products identified medically necessary treatment pandemic large proportion portfolio comprises oral selfinjected medicines require visit infusion center physician’s office administration vaccines physicianadministered medicines require office visits impacted 2020 covid19related mobility restrictions limitations decline patient visits doctors addition certain vaccines prevnar 13prevenar 13 may impacted recommendations certain health officials coadminister vaccines alongside covid19 vaccines additional detail impact covid19 pandemic products see analysis consolidated statements incomerevenuesselected product discussion section within mda notwithstanding foregoing impact pandemic given significant operating cash flows well financial assets access capital markets revolving credit agreements believe expect maintain ability meet liquidity needs foreseeable future continue pursue efforts maintain continuity operations monitoring new developments related pandemic future developments could result additional favorable unfavorable impacts business operations financial condition results experience significant disruption manufacturing supply chains significant disruptions clinical trials operations demand products significantly reduced result covid19 pandemic could experience material adverse impact business operations financial condition results see item 1a risk factorscovid19 pandemic section form 10k significant accounting policies application critical accounting estimates assumptions following discussion critical accounting estimates assumptions impacting consolidated financial statements also see note 1c description significant accounting policies see note 1 policies following considered critical understanding consolidated financial statements require application subjective complex judgments acquisitions note 1d fair value note 1e revenues note 1g asset impairments note 1l tax assets liabilities income tax contingencies note 1p pension postretirement benefit plans note 1q legal environmental contingencies note 1r acquisitions fair value discussions application fair value see following recent acquisitions note 2a investments note 7a benefit plan assets note 11d asset impairments revenues gross product revenues subject variety deductions generally estimated recorded period revenues recognized variable consideration represents chargebacks rebates sales allowances sales returns deductions represent estimates related obligations knowledge judgment required estimating impact revenue deductions gross sales reporting period historically adjustments estimates reflect actual results updated expectations material overall business generally less 1 revenues productspecific rebates however significant impact yearoveryear individual product revenue growth trends ratios factors assessments experiences judgments indicative accurate estimates future experience results could materially affected potential estimates vary sensitivity differs program product type customer geographic location however estimates associated us medicare medicaid performancebased contract rebates risk material adjustment extensive time delay recording accrual ultimate settlement interval generally range one year lag recording adjustments reflect actual amounts incorporate revisions several prior quarters asset impairments review longlived assets impairment indicators throughout year perform impairment testing indefinitelived intangible assets goodwill least annually longlived assets whenever impairment indicators present necessary record charges impairments longlived assets amount fair value less carrying value assets impairment review processes described note 1l examples events circumstances may indicative impairment include •a significant adverse change legal factors business climate could affect value asset example successful challenge patent rights would likely result generic competition earlier expected •a significant adverse change extent manner asset used restriction imposed fda regulatory authorities could affect ability manufacture sell product •an expectation losses reduced profits associated asset could result example change government reimbursement program results inability sustain projected product revenues profitability also could result introduction competitor’s product impacts projected revenue growth well lack acceptance product patients physicians payers iprd projects could result among things change outlook based clinical trial data delay projected launch date additional expenditures commercialize product identifiable intangible assets use income approach specifically discounted cash flow method determine fair value intangible assets goodwill start forecast expected net cash flows associated asset incorporates consideration terminal value indefinitelived assets apply assetspecific discount rate arrive net present value amount significant estimates assumptions impact fair value estimates include amount timing projected net cash flows includes expected impact competitive legal andor regulatory forces projections impact technological advancements risk associated iprd assets well selection longterm growth rate discount rate seeks reflect various risks inherent projected cash flows tax rate seeks incorporate geographic origin projected cash flows intangible assets goodwill face events circumstances lead impairment risk impairment include iprd assets approximately 32 billion december 31 2020 newly acquired recently impaired indefinitelived brand assets iprd assets highrisk assets given uncertain nature rd newly acquired recently impaired indefinitelived assets vulnerable impairment assets recorded fair value subsequently measured lower fair value carrying value end reporting period immediately acquisition impairment even small declines outlook assets negatively impact ability recover carrying value result impairment charge goodwill impairment review work december 31 2020 concluded none goodwill impaired believe risk impairment significant time review first assess qualitative factors determine whether likely fair value reporting unit less carrying amount qualitative factors consider include example macroeconomic industry conditions overall financial performance relevant entityspecific events conclude likely fair value reporting unit less carrying value perform quantitative fair value test required determine fair value reporting unit mainly use income approach may also use market approach weightedaverage combination approaches •the income approach forwardlooking approach estimating fair value relies primarily internal forecasts within income approach use discounted cash flow method start forecast expected net cash flows reporting unit includes application terminal value apply reporting unitspecific discount rate arrive net present value amount significant estimates assumptions inherent approach include amount timing projected net cash flows includes expected impact technological risk competitive legal andor regulatory forces projections well selection longterm growth rate discount rate seeks reflect various risks inherent projected cash flows tax rate seeks incorporate geographic diversity projected cash flows •the market approach historical approach estimating fair value relies primarily external information may use two alternative methods within market approach ◦guideline public company methodthis method employs market multiples derived market prices stocks companies engaged similar lines business actively traded free open market application identified multiples corresponding measure reporting unit’s financial performance ◦guideline transaction methodthis method relies pricing multiples derived transactions significant interests companies engaged similar lines business application identified multiples corresponding measure reporting unit’s financial performance market approach appropriate available external information robust deemed reliable proxy specific reporting unit valued however assessments may prove incomplete inaccurate significant estimates assumptions inherent approach include selection appropriate guideline companies transactions determination applicable premiums discounts based differences ownership percentages ownership rights business ownership forms marketability reporting unit guideline companies transactions reporting units number future events factors may impact future results could potentially impact outcome subsequent goodwill impairment testing list factors see forwardlooking information factors may affect future results item 1a risk factors sections form 10k benefit plans description different benefit plans see note 11 effective january 1 2018 accruals future benefits pcpp largest us defined benefit plan defined benefit section pfizer group pension scheme largest pension plan uk frozen resulted elimination future service costs plans pfizer defined contribution savings plan provides additional annual contributions previously accruing benefits pcpp active members pfizer group pension scheme started accruing benefits defined contribution section plan assumptions reflect historical experiences judgment regarding future expectations deemed reasonable management judgments made determining costs benefit plans materially impact results operations afor detailed assumptions associated benefit plans see note 11b expected annual rate return plan assets assumptions expected annual rate return plan assets reflect actual historical return experience longterm assessment forwardlooking return expectations asset classes used develop weightedaverage expected return based implementation targeted asset allocation respective plans expected annual rate return plan assets us plans majority international plans applied fair value plan assets yearend resulting amount reflected net periodic benefit costs following year following illustrates sensitivity net periodic benefit costs 50 basis point decline assumption expected annual rate return plan assets holding assumptions constant millions pretax assumptionchangeincrease 2021 net periodic benefit costs expected annual rate return plan assets50 basis point decline116 actual return plan assets approximately 29 billion 2020 discount rate used measure plan obligations weightedaverage discount rate used measure plan obligations us defined benefit plans determined least annually evaluated modified required reflect prevailing market rate portfolio highquality fixed income investments rated aaaa better reflect rates pension benefits could effectively settled discount rate used measure plan obligations international plans determined least annually reference investment grade corporate bonds rated aaaa better including sufficient data yieldcurve approach discount rate determinations made consideration local requirements measurement plan obligations end year affect amount service cost interest cost amortization expense reflected net periodic benefit costs following year following illustrates sensitivity net periodic benefit costs benefit obligations 10 basis point decline assumption discount rate holding assumptions constant millions pretax assumptionchangeincrease 2021 net periodic benefit costs 2020 benefit obligations increaseincrease discount rate10 basis point decline2483 change discount rates used measuring plan obligations december 31 2020 resulted increase measurement aggregate plan obligations approximately 19 billion anticipated change accounting policy anticipate making change pension accounting policy would begin recognizing actuarial gains losses immediately income statement compared current accounting policy recognizes gains losses stockholders’ equity amortizes component net periodic benefit costcredit future periods anticipated change expected go effect first quarter 2021 adopted require recasting prior period amounts conform new accounting policy income tax assets liabilities income tax assets liabilities include income tax valuation allowances accruals uncertain tax positions additional information see notes 1p 5 well analysis financial condition liquidity capital resources market riskselected measures liquidity capital resources section within mda contingencies certain subsidiaries subject numerous contingencies arising ordinary course business including tax legal contingencies guarantees indemnifications additional information see notes 1p 1r 5d 16 analysis consolidated statements income revenues geography 2020 v 2019 revenues 2020 included estimated unfavorable impact approximately 700 million 2 due covid19 primarily reflecting lower demand certain products china unfavorable disruptions wellness visits patients us negatively impacted prescribing patterns certain products partially offset increased us demand certain sterile injectable products increased adult uptake prevenar 13 certain international markets resulting greater vaccine awareness respiratory illnesses us revenues bnt162b2 emerging markets revenues decreased 456 million 5 2020 84 billion 88 billion 2019 relatively flat operationally reflecting unfavorable impact foreign exchange 5 emerging markets revenues relatively flat operational performance primarily driven growth eliquis prevenar 13 ibrance zavicefta offset lower revenues consumer healthcare reflecting july 31 2019 completion consumer healthcare jv transaction 2019 v 2018 emerging markets revenues increased 210 million 2 2019 88 billion 86 billion 2018 reflecting operational increase 820 million 10 foreign exchange unfavorable impact 7 emerging markets revenues operational increase emerging markets primarily driven prevenar 13 ibrance eliquis revenue deductions gross product revenues subject variety deductions generally estimated recorded period revenues recognized deductions represent estimates related obligations knowledge judgment required estimating impact revenue deductions gross sales reporting period historically adjustments estimates reflect actual results updated expectations material overall business generally less 1 revenues productspecific rebates however significant impact yearoveryear individual product revenue growth trends revenue deductions primarily function product sales volume mix products sold contractual legislative discounts rebates information accruals revenue deductions including balance sheet classification accruals see note 1g revenuesselected product discussion calculation meaningful results equal greater 100 see item 1 businesspatents intellectual property rights section form 10k information regarding expiration various patent rights see note 16 discussion recent developments concerning patent product litigation relating certain products discussed see note 17b additional information regarding primary indications class selected products discussed product developments comprehensive update pfizer’s development pipeline published february 2 2021 available wwwpfizercomsciencedrugproductpipeline includes overview research list compounds development targeted indication phase development well mechanism action candidates phase 1 candidates phase 2 registration following provides information significant marketing applicationrelated regulatory actions filings pending fda regulatory authorities eu japan table includes approvals products occurred last twelve months include approvals may occurred prior time table includes filings regulatory decisions pending even filing occurred outside last twelvemonth period us filing date fda accepted submission eu filing date ema validated submission apf07302048 bnt162b2 pfizerbiontech covid19 vaccine received eua fda cma ema bbeing developed collaboration merck kgaa germany cerbitux® registered trademark imclone llc eu developing collaboration pierre fabre group japan developing collaboration ono pharmaceutical co ltd dbeing developed collaboration astellas ewe working make abrilada available us patients soon feasible based terms agreement abbvie current plans launch abrilada 2023 currently plan commercialize amsparity eu due unfavorable market conditions fbeing developed collaboration lilly gbeing developed collaboration myovant hbeing developed collaboration opko health inc china following products received regulatory approvals last twelve months eucrisa atopic dermatitis july 2020 vyndaqel cardiac amyloidosis september 2020 following provides information additional indications new drug candidates latestage development abeing developed collaboration merck kgaa germany bbeing developed collaboration alliance foundation trial cbeing developed collaboration astellas dbeing developed collaboration opko health inc ebeing developed collaboration lilly ferbitux® registered trademark imclone llc eu developing collaboration pierre fabre group japan developing collaboration ono pharmaceutical co ltd gbeing developed collaboration myovant additional information rd organization see item 1 businessresearch development section form 10k costs expenses changes costs expenses reflect among things decline expenses resulting july 31 2019 completion consumer healthcare jv transaction see note 2c addition covid19 pandemic impacted certain operating expenses 2020 cost sales 2020 v 2019 cost sales increased 441 million primarily due •increased sales volumes •the increase royalty expenses due increase sales related products •the unfavorable impact incremental costs incurred response covid19 pandemic •the unfavorable impact foreign exchange hedging activity intercompany inventory partially offset •the favorable impact july 31 2019 completion consumer healthcare jv transaction increase cost sales percentage revenues 2020 compared 2019 primarily due factors discussed partially offset increase alliance revenues associated cost sales 2019 v 2018 cost sales decreased 736 million primarily due •the favorable impact july 31 2019 completion consumer healthcare jv transaction •the favorable impact foreign exchange •the favorable impact hedging activity intercompany inventory partially offset •the unfavorable change product mix •the increase royalty expenses due increase sales related products decrease cost sales percentage revenues 2019 compared 2018 primarily due factors discussed well increase alliance revenues associated cost sales selling informational administrative sia expenses 2020 v 2019 sia expenses decreased 11 billion mostly due •the favorable impact july 31 2019 completion consumer healthcare jv transaction •lower spending corporate enabling functions •lower spending sales marketing activities due impact covid19 pandemic •lower investments across internal medicine inflammation immunology portfolios partially offset •the increase external incremental costs directly related implementing costreductionproductivity initiatives •the increase business legal entity alignment costs 2019 v 2018 sia expenses increased 138 million primarily due •additional investment emerging markets •additional investment oncology portfolio developed markets •increased employee deferred compensation result savings plan gains •the increase due timing expenses ie insurance recoveries product donations •marketing promotional expenses us launches vyndaqel may 2019 vyndamax september 2019 •increased business legal entity alignment costs •costs separate consumer healthcare •increased healthcare reform expenses partially offset •the favorable impact july 31 2019 completion consumer healthcare jv •the favorable impact foreign exchange research development rd expenses 2020 v 2019 rd expenses increased 10 billion mainly due •costs related collaboration agreement biontech codevelop covid19 vaccine including upfront payment biontech •a net increase upfront payments mainly related myovant valneva •increased investments towards building new capabilities driving automation partially offset •the net reduction upfront milestone payments associated acquisition therachon july 2019 akcea october 2019 v 2018 rd expenses increased 635 million mainly due •upfront payments therachon akcea •increased investments towards building new capabilities driving automation •increased spending inflammation immunology rare disease portfolios due several phase 3 programs investment gene therapy •increased spending related assets acquired acquisition array •increased medical spend new growing products partially offset •decreased spending across oncology vaccines internal medicine portfolios select programs reached completion •the decrease value portfolio performance share grants reflecting changes price pfizer’s common stock well management’s assessment probability specified performance criteria achieved •the discontinuation staphylococcus aureus vaccine trial •the favorable impact july 31 2019 completion consumer healthcare jv •the favorable impact foreign exchange amortization intangible assets 2020 v 2019 amortization intangible assets decreased 10 billion primarily due •the nonrecurrence amortization fully amortized assets impairment eucrisa fourth quarter 2019 partially offset •the increase amortization intangible assets acquisition array 2019 v 2018 amortization intangible assets decreased 274 million mainly due •the nonrecurrence amortization result impairment sterile injectable products fourth quarter 2018 •fully amortized assets •the contribution consumer healthcare business consumer healthcare jv partially offset •the increase amortization related assets recorded result approval xtandi us treatment nmcrpc july 2018 •amortization intangible assets acquisition array additional information see notes 2a 2c 10a restructuring charges costs associated acquisitions costreductionproductivity initiatives transforming focused company program description program well anticipated actual costs see note 3 program savings discussed may rounded represent approximations connection costs primarily related corporate enabling functions initiatives expect gross cost savings 10 billion net cost savings excluding merit inflation growth certain real estate cost increases 700 million achieved primarily twoyear period 20212022 connection manufacturing network optimization including legacy cost reduction initiatives expect targeted net cost savings 300 million achieved primarily 2020 2022 certain qualifying costs program recorded 2020 fourth quarter 2019 reflected certain significant items excluded nongaap measure adjusted income see nongaap financial measure adjusted income section mda addition program continuously monitor operations cost reduction andor productivity opportunities especially light losses exclusivity expiration collaborative arrangements various products incomedeductionsnet 2020 v 2019 deductionsnet decreased 26 billion mainly due •lower asset impairment charges •higher net periodic benefit credits service costs •lower business legal entity alignment costs •higher consumer healthcare jv equity method income •lower charges certain legal matters partially offset •higher net losses asset disposals 2019 v 2018 deductionsnet increased 12 billion mainly due •higher net periodic benefits costs service costs •lower income collaborations outlicensing arrangements sales compoundproduct rights •higher interest expense mainly result increased commercial paper balance due acquisition array well retirement lowercoupon debt issuance new debt higher coupon debt outstanding comparative prior year period •higher business legal entity alignment costs partially offset •lower asset impairment charges see note 4 additional information provisionbenefit taxes income indicates calculation meaningful result equal greater 100 information effective tax rate events circumstances contributing changes periods well details discrete elements impacted tax provisions see note 5 discontinued operations information discontinued operations see note 2b nongaap financial measure adjusted income adjusted income alternative measure performance used management evaluate overall performance conjunction performance measures believe investors’ understanding performance enhanced disclosing measure use adjusted income certain components adjusted income adjusted diluted eps present results major operationsthe discovery development manufacture marketing sales distribution biopharmaceutical products worldwideprior considering certain income statement elements follows measuredefinitionillustrative use adjusted incomenet income attributable pfizer inc common shareholdersa impact purchase accounting acquisitions acquisitionrelated costs discontinued operations certain significant items •monthly managerial analysis operating results annual budgets prepared using nongaap measures •senior management’s compensation determined part using nongaap measuresb adjusted cost sales adjusted selling informational administrative expenses adjusted research development expenses adjusted incomedeductionsnet cost sales selling informational administrative expenses research development expenses amortization intangible assets incomedeductionsnet impact purchase accounting acquisitions acquisitionrelated costs discontinued operations certain significant items components adjusted income measure adjusted diluted epseps attributable pfizer inc common shareholdersdiluted impact purchase accounting acquisitions acquisitionrelated costs discontinued operations certain significant items amost directly comparable gaap measure bthe shortterm incentive plans substantially nonsalesforce employees worldwide funded pool based performance measured significant part three metrics one adjusted diluted eps derived adjusted income accounts 40 bonus pool funding additionally payout performance share awards determined part adjusted net income derived adjusted income effective 2020 performance year consistent shareholder feedback received 2019 compensation committee bod approved adding rd pipeline achievement factor existing shortterm incentive financial metrics adjusted income components adjusted diluted eps nongaap financial measures standardized meaning prescribed gaap therefore limited usefulness investors nonstandardized definitions may comparable calculation similar measures companies presented solely permit investors fully understand management assesses performance limitation measures provide view operations without including events period provide comparable view performance peers measures viewed substitutes directly comparable gaap measures net income attributable pfizer inc common shareholders components net income attributable pfizer inc common shareholders eps attributable pfizer inc common shareholdersdiluted respectively see accompanying reconciliations certain gaap reported nongaap adjusted information 2020 2019 2018 also recognize internal measures performance measures limitations restrict performancemanagement process solely measures also use tools designed achieve highest levels performance example rd organization productivity targets upon effectiveness measured addition total shareholder return absolute basis relative publicly traded pharmaceutical index plays significant role determining payouts certain incentive compensation plans purchase accounting adjustments adjusted income excludes certain significant purchase accounting impacts resulting business combinations net asset acquisitions impacts include incremental charge cost sales sale acquired inventory written fair value amortization related increase fair value acquired finitelived intangible assets much lesser extent depreciation related increasedecrease fair value acquired fixed assets amortization related increase fair value acquired debt fair value changes contingent consideration therefore adjusted income measure includes revenues earned upon sale acquired products without considering acquisition cost products exclusion amortization attributable acquired intangible assets provides management investors alternative view results providing degree parity internally developed intangible assets rd costs expensed however factored impacts differences might occurred discovered developed intangible assets different rd costs timelines resulting sales accordingly approach intend representative results would occurred discovered developed acquired intangible assets internally acquisitionrelated costs adjusted income excludes acquisitionrelated costs comprised transaction integration restructuring charges additional depreciation costs business combinations costs unique transaction represent costs incurred restructure integrate businesses result acquisition made adjustments resulting synergies significant costs incurred connection business combination result primarily need eliminate duplicate assets activities employeesa natural result acquiring fully integrated set activities reason believe costs incurred viewed differently context acquisition costs incurred normal business contexts integration restructuring costs business combination may occur several years significant impacts typically ending within three years relevant transaction need certain external approvals actions span time needed achieve certain restructuring integration activities lengthy discontinued operations adjusted income excludes results discontinued operations well related gains losses disposal operations believe presentation meaningful investors review therapeutic areas product lines strategic fit operations build run business intent discontinue parts business restatements due discontinued operations impact compensation change adjusted income measure compensation respect restated periods presented consistency across periods certain significant items adjusted income excludes certain significant items representing substantive andor unusual items evaluated individually quantitative qualitative basis certain significant items may highly variable difficult predict furthermore cases reasonably possible could reoccur future periods example although major nonacquisitionrelated costreduction programs specific event goal defined term may subsequent programs based reorganizations business cost productivity response loe economic conditions legal charges resolve litigation also related specific cases facts circumstances specific cases may also result litigation matters acquired companies inestimable probable unresolved date acquisition unusual items represent items part ongoing business items either result nature size would expect occur part normal business regular basis items would nonrecurring items relate products longer sell noninclusive list certain significant items see details income statement items included gaap reported excluded nongaap adjusted income reconciliation gaap reported nongaap adjusted informationcertain line items afor details adjustments see details income statement items included gaap reported excluded nongaap adjusted income bthe effective tax rate nongaap adjusted income 135 2020 158 2019 180 2018 decrease 2020 compared 2019 primarily due favorable change jurisdictional mix earnings result operating fluctuations normal course business decrease 2019 compared 2018 primarily due favorable change jurisdictional mix earnings result operating fluctuations normal course business partially offset decrease tax benefits resolution certain tax positions principally nonus pertaining prior years details income statement items included gaap reported excluded nongaap adjusted income aincluded primarily amortization intangible assets bincluded provisionbenefit taxes income includes tax effect associated pretax amounts calculated determining jurisdictional location pretax amounts applying applicable tax rate cincluded restructuring charges certain acquisitionrelated costs see note 3 dincluded incomedeductionsnet see note 4 ein 2019 primarily included selling informational administrative expenses 2018 primarily included cost sales represents impact changes estimated useful lives assets involved restructuring actions related acquisitions fincluded provisionbenefit taxes income taxes includes tax effect associated pretax amounts calculated determining jurisdictional location pretax amounts applying applicable tax rate 2019 includes impact nontaxable reversal certain accruals related acquisition wyeth upon effective favorable settlement us irs audit multiple tax years gincluded income discontinued operationsnet tax relates november 16 2020 spinoff combination upjohn business mylan see note 2b hamounts relate employee termination costs asset impairments exit costs associated acquisitions included restructuring charges certain acquisitionrelated costs see note 3 iamounts relate costreductionproductivity initiatives related acquisitions see note 3 2020 primarily included cost sales 62 million selling informational administrative expenses 197 million 2019 included cost sales 89 million selling informational administrative expenses 73 million research development expenses 30 million 2018 included cost sales 101 million selling informational administrative expenses 71 million research development expenses 39 million jin 2020 included cost sales 51 million selling informational administrative expenses 206 million research development expenses 13 million primarily represents costs consulting legal tax advisory services associated internal reorganization legal entities 2019 primarily included cost sales 15 million selling informational administrative expenses 96 million incomedeductionsnet 300 million 2018 included incomedeductionsnet represents costs consulting legal tax advisory services associated design planning implementation new business structure effective beginning 2019 kincluded gain completion consumer healthcare jv transaction see note 2c lfor 2020 primarily included selling informational administrative expenses 86 million research development expenses 515 million incomedeductionsnet 672 million 2019 included cost sales 104 million selling informational administrative expenses 94 million research development expenses 632 million incomedeductionsnet 589 million 2018 primarily included selling informational administrative expenses 120 million incomedeductionsnet 142 million income 2020 includes following charges recorded research development expenses 151 million representing expense portion upfront payment myovant ii upfront payment 130 million valneva iii 75 million milestone payment akcea iv 72 million upfront payment biontech v 50 million milestone payment therachon 2020 also includes among things following charges recorded incomedeductionsnet charges 367 million primarily representing pro rata share restructuring business combination accounting charges recorded consumer healthcare jv partially offset gains divestiture certain jv’s brands recorded consumer healthcare jv writeoff amortization equity method basis differences primarily related brand divestitures inventory ii 198 million settlement losses within us pcpp 2019 included among things 337 million charge research development expenses related acquisition therachon ii upfront license fee payment 250 million akcea recorded research development expenses iii charges 240 million primarily selling informational administrative expenses 87 million incomedeductionsnet 152 million external incremental costs transaction costs separate consumer healthcare business separate legal entity associated formation consumer healthcare jv iv net losses early retirement debt 138 million incomedeductionsnet v charges 112 million recorded incomedeductionsnet representing pro rata share primarily restructuring business combination accounting charges recorded consumer healthcare jv vi 99 million charge cost sales related rivipansel primarily inventory manufactured expected future sale 2018 included among things noncash 343 million pretax gain incomedeductionsnet associated transaction bain capital create new biopharmaceutical company cerevel continue development portfolio clinical preclinical stage neuroscience assets primarily targeting disorders central nervous system ii 88 million charge aggregate selling informational administrative expenses special onetime bonus paid virtually pfizer colleagues excluding executives one several actions taken us evaluating expected positive net impact december 2017 enactment tcja iii noncash 50 million pretax gain incomedeductionsnet result contribution allogeneic car therapy development program assets connection contribution agreement entered allogene see note 2b mincluded provisionbenefit taxes income taxes includes tax effect associated pretax amounts calculated determining jurisdictional location pretax amounts applying applicable tax rate amount 2020 favorably impacted tax benefits associated intangible asset impairment charges see note 4 amount 2019 favorably impacted benefit 14 billion representing tax interest resulting favorable settlement us irs audit multiple tax years benefits related certain tax initiatives implementation new business structure well tax benefit recorded result additional guidance issued us department treasury related tcja unfavorably impacted tax expense approximately 27 billion associated gain related completion consumer healthcare jv transaction amount 2018 favorably impacted primarily tax benefits related tcja including certain 2018 tax initiatives well adjustments provisional estimate legislation reported disclosed within applicable measurement period accordance guidance issued sec analysis consolidated statements cash flows cash flows continuing operations cash flows discontinued operations cash flows discontinued operations relate upjohn business see note 2b 2020 net cash provided financing activities discontinued operations primarily reflects issuances longterm debt analysis financial condition liquidity capital resources market risk rely largely operating cash flows shortterm investments commercial paper borrowings longterm debt provide liquidity requirements continue efforts improve cash inflows working capital efficiencies target specific areas focus including accounts receivable inventories accounts payable working capital allows us optimize operating cash flows due significant operating cash flows well financial assets access capital markets available lines credit revolving credit agreements believe maintain ability meet liquidity needs foreseeable future include among others •the working capital requirements operations including rd activities •investments business •dividend payments potential increases dividend rate •share repurchases •the cash requirements costreductionproductivity initiatives •paying outstanding debt •contributions pension postretirement plans •business development activities longterm debt rated highquality sp moody’s see credit ratings section taken continue take conservative approach financial investments monitoring liquidity position response market changes debt investments consist primarily highquality highly liquid welldiversified availableforsale debt securities debt capacitylines credit available lines credit revolving credit agreements group banks financial intermediaries typically maintain cash equivalent balances shortterm investments together available revolving credit facilities excess commercial paper shortterm borrowings see note 7c selected measures liquidity capital resources asee note 7 description certain assets held description credit risk related financial instruments held bthe increase working capital primarily driven use upjohn cash distribution proceeds pay shortterm commercial paper borrowings see note 2b november 16 2020 received 120 billion partial consideration contribution upjohn business viatris see note 2b november 2020 used cash proceeds pay commercial paper redeem maturity date 115 billion aggregate principal amount outstanding 195 senior unsecured notes due june 2021 342 million aggregate principal amount 580 senior unsecured notes due august 2023 may 2020 completed public offering 40 billion aggregate principal amount senior unsecured notes march 2020 •completed public offering 125 billion aggregate principal amount senior unsecured sustainability notes proceeds initially used repay outstanding commercial paper subsequently used help manage environmental impact support increased patient access medicines vaccines especially among underserved populations strengthen healthcare systems •repurchased par 1065 billion principal amount outstanding senior unsecured notes due 2047 maturity date additional information issuances retirements see note 7d additional information sources uses funds see analysis consolidated statements cash flows within mda credit ratings two major corporate debtrating organizations moody’s sp assign ratings shortterm longterm debt security rating recommendation buy sell hold securities rating subject revision withdrawal time rating organization rating evaluated independently rating current ratings assigned commercial paper senior unsecured longterm debt name rating agencypfizer shortterm pfizer longtermoutlookwatchdate last rating change ratingrating moody’sp1a2stablenovember 2020 spa1astablenovember 2020 moody’s sp lowered pfizer’s longterm debt rating one notch ‘a2’ ‘a’ respectively upon completion upjohn separation november 2020 pfizer’s shortterm rating remained unchanged additionally rating agencies removed pfizer’s longterm debt rating “under review” assigned stable outlook libor information interest rate risk libor see item 1a risk factorsglobal operations section form 10k expect transition alternative rate material impact liquidity financial resources global economic conditions venezuela argentina operations function hyperinflationary economies impact pfizer considered material additional information global economic environment see item 1a risk factorsglobal operations section form 10k market risk objective financial risk management program minimize impact foreign exchange rate interest rate movements earnings address exposures combination operational means financial instruments adapt practices periodically economic conditions change information see notes 1f 7e well item 1a risk factorsglobal operations section form 10k key currencies operate foreign exchange riskwe subject foreign exchange risk commercial operations assets liabilities denominated foreign currencies net investments foreign subsidiaries commercial side significant portion revenues earnings exposed changes exchange rates foreign exchange risk offset exposures may use foreign currency forwardexchange contracts andor foreign currency swaps manage risk respect financial assets liabilities primary foreign exchange exposure arises intercompany receivables payables lesser extent investments debt denominated currencies functional currency business entity addition certain market conditions may seek protect possible declines reported net investments foreign business entities cases may use foreign exchange contracts andor foreign currency debt fair values financial instrument holdings analyzed yearend determine sensitivity foreign exchange rate changes analysis holding assumptions constant assuming change one currency’s rate relative us dollar would effect another currency’s rates relative us dollar appreciate currencies 10 december 31 2020 expected adverse impact net income would significant interest rate riskour interestbearing investments borrowings subject interest rate risk may impact net income depending market conditions may change profile outstanding debt investments entering derivative financial instruments like interest rate swaps either hedge offset exposure changes fair value hedged items fixed interest rates convert variable rate debt investments fixed rates fair values financial instrument holdings analyzed yearend determine sensitivity interest rate changes analysis holding assumptions constant assuming parallel shift interest rate curve maturities instruments one hundred basis point decrease interest rates december 31 2020 expected adverse impact net income would significant equity price riskwe hold equity securities readily determinable fair values life science companies result certain business development transactions holding securities subject equity price risk may increase volatility income future periods due changes fair value equity investments time sell equity securities based business considerations may include limiting price risk equity securities readily determinable fair values analyzed yearend determine sensitivity equity price rate changes sensitivity analysis expected adverse impact net income would significant contractual obligations payments due contractual obligations december 31 2020 mature follows asee note 7 bsee notes 3 7a11e and16 csee note 15 dalso includes obligations make guaranteed fixed annual payments next six years connection us eu approvals besponsa 401 million obligation make guaranteed fixed annual payments next seven years bosulif 195 million associated rd arrangements esee note 5 table includes amounts potential milestone payments collaboration licensing arrangements payments deemed reasonably likely occur payments agreements generally become due payable upon achievement certain development regulatory andor commercialization milestones may span several years may never occur 2021 expect spend approximately 30 billion property plant equipment rely largely operating cash flows fund capital investment needs offbalance sheet arrangements ordinary course business connection sale assets businesses transactions often indemnify counterparties certain liabilities may arise connection transaction related events activities information guarantees indemnifications see note 16b additionally certain copromotion license agreements give licensors partners rights negotiate cases obtain certain financial conditions copromotion rights specified countries respect certain products sharepurchase plans accelerated share repurchase agreements see note 12 information shares common stock purchased cost purchases publicly announced sharepurchase plans including accelerated share repurchase agreements december 31 2020 remaining sharepurchase authorization approximately 53 billion dividends common stock december 2020 bod declared firstquarter dividend 039 per share payable march 5 2021 shareholders record close business january 29 2021 firstquarter 2021 cash dividend 329th consecutive quarterly dividend current projected dividends provide return shareholders maintaining sufficient capital invest growing business dividends restricted debt covenants dividend level remains decision pfizer’s bod continue evaluated context future business performance currently believe support future annual dividend increases barring significant unforeseen events viatris expected begin paying quarterly dividend second quarter 2021 time pfizer’s quarterly dividend expected reduced combined dividend dollar amount received pfizer shareholders based upon combination continued pfizer ownership approximately 0124079 shares viatris common stock granted pfizer share spinoff equate pfizer’s dividend amount effect immediately prior initiation viatris dividend new accounting standards recently adopted accounting standards see note 1b recently issued accounting standards adopted december 31 2020 standarddescriptioneffective dateeffect financial statements accounting income taxes eliminates certain exceptions guidance related approach intraperiod tax allocation methodology calculating income taxes interim period recognition deferred tax liabilities outside basis differences new guidance also simplifies aspects accounting franchise taxes enacted changes tax laws rates clarifies accounting transactions result stepup tax basis goodwill january 1 2021 expect guidance material impact consolidated financial statements reference rate reform provides temporary optional expedients exceptions guidance contracts hedging relationships transactions reference libor another reference rate expected discontinued 2021 reference rate reform new guidance provides following optional expedients 1simplify accounting analyses current us gaap contract modifications 2simplify assessment hedge effectiveness allow hedging relationships affected reference rate reform continue 3allow onetime election sell transfer debt securities classified held maturity reference rate affected reference rate reform elections adopted prospectively time first quarter 2020 december 31 2022 assessing impact provisions new guidance consolidated financial statements item 7aitem 7 managements discussion analysis financial condition results operations information required item incorporated reference financial review pages 26 33 annual report shareholders fiscal year ended december 31 1994 item 8item 7 managements discussion analysis financial condition results operations information required item incorporated reference financial review pages 29 39 1997 annual report shareholders item 7aitem 7 managements discussion analysis financial condition results operations information required item incorporated reference financial review pages 28 38 1998 annual report shareholders item 7aitem 7 management’s discussion analysis financial condition results operations information required item incorporated reference financial review pages 28 41 2002 annual report item 7aitem 7 management’s discussion analysis financial condition results operations information required item incorporated reference financial review pages 2 20 2003 financial report item 7aitem 7 managements discussion analysis financial condition results operations information required item incorporated reference financial review pages 26 33 annual report shareholders fiscal year ended december 31 1993 item 8item 7 managements discussion analysis financial condition results operations information required item incorporated reference financial review pages 28 37 1999 annual report item 7a nannanitem 7a quantitative qualitative disclosures market risk information required item incorporated reference discussion heading financial risk management page 39 2000 annual report item 8item 7a quantitative qualitative disclosures market risk information required item incorporated reference discussion heading financial risk management page 35 2001 annual report item 8item 7a quantitative qualitative disclosures market risk information required item incorporated reference discussion heading financial risk management 2004 financial report item 8item 7a quantitative qualitative disclosures market risk information required item incorporated reference discussion heading financial risk management 2005 financial report item 8item 7a quantitative qualitative disclosures market risk information required item incorporated reference discussion heading financial risk management 2006 financial report item 8item 7a quantitative qualitative disclosures market risk information required item incorporated reference discussion heading financial risk management 2007 financial report item 8item 7a quantitative qualitative disclosures market risk information required item incorporated reference discussion heading financial risk management 2008 financial report item 8item 7a quantitative qualitative disclosures market risk information required item incorporated reference discussion heading financial risk management 2009 financial report item 8item 7a quantitative qualitative disclosures market risk information required item incorporated reference discussion heading financial risk management 2010 financial report item 8item 7a quantitative qualitative disclosures market risk information required item incorporated reference discussion financial risk management section mda 2011 financial report item 8nannannannannannannannanitem 7aquantitative qualitative disclosures market risk information required item incorporated reference discussion analysis financial condition liquidity capital resources market riskselected measures liquidity capital resources section within mda item 8nanitem 7a quantitative qualitative disclosures market risk information required item incorporated reference discussion heading financial risk management pages 37 38 1997 annual report shareholders item 8item 7a quantitative qualitative disclosures market risk information required item incorporated reference discussion heading financial risk management pages 36 37 1998 annual report shareholders item 8item 7a quantitative qualitative disclosures market risk information required item incorporated reference discussion heading financial risk management pages 40 41 2002 annual report item 8item 7a quantitative qualitative disclosures market risk information required item incorporated reference discussion heading financial risk management pages 19 20 2003 financial report item 8nanitem 7a quantitative qualitative disclosures market risk information required item incorporated reference discussion heading financial risk management page 36 1999 annual report item 8 item 8 financial statements supplementary data information required item incorporated reference independent auditors report found page 39 consolidated financial statements supplementary data found pages 40 59 annual report shareholders fiscal year ended december 31 1995 item 9item 8 financial statements supplementary data information required item incorporated reference independent auditors report found page 38 consolidated financial statements supplementary data found pages 39 58 1996 annual report shareholders item 9item 8 financial statements supplementary data information required item incorporated reference independent auditors’ report found page 41 2000 annual report consolidated financial statements related notes supplementary data pages 42 68 2000 annual report item 9item 8 financial statements supplementary data information required item incorporated reference independent auditors’ report page 39 2001 annual report consolidated financial statements related notes supplementary data pages 40 60 2001 annual report item 9item 8 financial statements supplementary data information required item incorporated reference report independent registered public accounting firm consolidated financial statements 2004 financial report consolidated financial statements related notes supplementary data 2004 financial report item 9item 8 financial statements supplementary data information required item incorporated reference report independent registered public accounting firm consolidated financial statements 2005 financial report consolidated financial statements related notes supplementary data 2005 financial report item 9item 8 financial statements supplementary data information required item incorporated reference report independent registered public accounting firm consolidated financial statements 2006 financial report consolidated financial statements related notes supplementary data 2006 financial report item 9item 8 financial statements supplementary data information required item incorporated reference report independent registered public accounting firm consolidated financial statements 2007 financial report consolidated financial statements related notes supplementary data 2007 financial report item 9item 8 financial statements supplementary data information required item incorporated reference report independent registered public accounting firm consolidated financial statements 2008 financial report consolidated financial statements related notes supplementary data 2008 financial report item 9item 8 financial statements supplementary data information required item incorporated reference report independent registered public accounting firm consolidated financial statements 2009 financial report consolidated financial statements related notes supplementary data 2009 financial report item 9item 8 financial statements supplementary data information required item incorporated reference report independent registered public accounting firm consolidated financial statements 2010 financial report consolidated financial statements related notes supplementary data 2010 financial report item 9item 8 financial statements supplementary data information required item incorporated reference report independent registered public accounting firm consolidated financial statements 2011 financial report consolidated financial statements related notes supplementary data 2011 financial report item 9nannannannannannannannanitem 8financial statements supplementary data report independent registered public accounting firm board directors shareholders pfizer inc opinion consolidated financial statements audited accompanying consolidated balance sheets pfizer inc subsidiary companies company december 31 2020 2019 related consolidated statements income comprehensive income equity cash flows years threeyear period ended december 31 2020 related notes collectively consolidated financial statements opinion consolidated financial statements present fairly material respects financial position company december 31 2020 2019 results operations cash flows years threeyear period ended december 31 2020 conformity us generally accepted accounting principles also audited accordance standards public company accounting oversight board united states pcaob company’s internal control financial reporting december 31 2020 based criteria established internal control integrated framework 2013 issued committee sponsoring organizations treadway commission report dated february 25 2021 expressed unqualified opinion effectiveness company’s internal control financial reporting basis opinion consolidated financial statements responsibility company’s management responsibility express opinion consolidated financial statements based audits public accounting firm registered pcaob required independent respect company accordance us federal securities laws applicable rules regulations securities exchange commission pcaob conducted audits accordance standards pcaob standards require plan perform audit obtain reasonable assurance whether consolidated financial statements free material misstatement whether due error fraud audits included performing procedures assess risks material misstatement consolidated financial statements whether due error fraud performing procedures respond risks procedures included examining test basis evidence regarding amounts disclosures consolidated financial statements audits also included evaluating accounting principles used significant estimates made management well evaluating overall presentation consolidated financial statements believe audits provide reasonable basis opinion critical audit matters critical audit matters communicated matters arising current period audit consolidated financial statements communicated required communicated audit committee 1 relate accounts disclosures material consolidated financial statements 2 involved especially challenging subjective complex judgments communication critical audit matters alter way opinion consolidated financial statements taken whole communicating critical audit matters providing separate opinions critical audit matters accounts disclosures relate evaluation us medicare medicaid performancebased contract rebates accrual discussed note 1g consolidated financial statements company records estimated deductions medicare medicaid performancebased contract rebates collectively us rebates reduction gross product revenues accrual us rebates recorded period corresponding revenues recognized length time sale made us rebate paid company long one year increases need significant management judgment knowledge market conditions practices estimating accrual identified evaluation us rebates accrual critical audit matter evaluation productspecific experience ratio assumption involved especially challenging auditor judgment productspecific experience ratio assumption relates estimating company’s revenue transactions ultimately subject related rebate following primary procedures performed address critical audit matter evaluated design tested operating effectiveness certain internal controls company’s us rebates accrual process related development productspecific experience ratio assumptions estimated us rebates accrual using internal information historical data compared result company’s estimated us rebates accrual evaluated company’s ability accurately estimate accrual us rebates comparing historically recorded accruals actual amount ultimately paid company evaluation gross unrecognized tax benefits discussed notes 5d 1p company’s tax positions subject audit local taxing authorities respective tax jurisdiction resolution audits may span multiple years since tax law complex often subject varied interpretations judgments uncertain whether company’s tax positions sustained upon audit december 31 2020 company recorded gross unrecognized tax benefits excluding associated interest 56 billion identified evaluation company’s gross unrecognized tax benefits critical audit matter high degree audit effort including specialized skills knowledge complex auditor judgment required evaluating company’s interpretation tax law estimate ultimate resolution tax positions following primary procedures performed address critical audit matter evaluated design tested operating effectiveness internal control company’s liability unrecognized tax position process related 1 interpretation report independent registered public accounting firm tax law 2 evaluation company’s tax positions may sustained upon audit 3 estimation recording gross unrecognized tax benefits involved tax valuation professionals specialized skills knowledge assisted evaluating company’s interpretation tax laws including assessment transfer pricing practices accordance applicable tax laws regulations inspected settlements applicable taxing authorities including assessing expiration statutes limitations tested calculation liability uncertain tax positions including evaluation company’s assessment technical merits tax positions estimates amount tax benefits expected sustained evaluation product productrelated litigation discussed notes 1r 16 consolidated financial statements company involved product liability productrelated litigation include personal injury consumer offlabel promotion securities antitrust breach contract claims among others certain pending product productrelated legal proceedings could result losses could substantial accrued liability andor disclosure pending product productrelated legal proceedings requires complex series judgments company future events involves number uncertainties identified evaluation product productrelated litigation critical audit matter challenging auditor judgment required evaluate company’s judgments future events uncertainties following primary procedures performed address critical audit matter evaluated design tested operating effectiveness certain internal controls company’s product liability productrelated litigation processes including controls related 1 evaluation information external internal legal counsel 2 forwardlooking expectations 3 new legal proceedings legal proceedings currently reserved disclosed read letters received directly company’s external internal legal counsel described company’s probable reasonably possible legal contingency pending product productrelated legal proceedings inspected company’s minutes meetings audit committee included status key litigation matters evaluated company’s ability estimate monetary exposure pending product productrelated legal proceedings comparing historically recorded liabilities actual monetary amounts incurred upon resolution prior legal matters analyzed relevant publicly available information company competitors industry kpmg llp able determine specific year kpmg predecessor firms began serving company’s auditor however aware kpmg predecessor firms served company’s auditor since least 1942 new york new york february 25 2021 consolidated statements income pfizer inc subsidiary companies aexclusive amortization intangible assets except disclosed note 1l see accompanying notes consolidated statements comprehensive income pfizer inc subsidiary companies areclassified incomedeductionsnet cost sales see note 7e breclassified incomedeductionsnet csee note 1b 2018 financial report dsee note 5e see accompanying notes consolidated balance sheets pfizer inc subsidiary companies see accompanying notes consolidated statements equity pfizer inc subsidiary companies aprimarily represents cumulative effect adoption new accounting standards 2018 revenues financial assets liabilities income tax accounting reclassification certain tax effects see note 1b 2018 financial report bsee note 12 csee note 2b see accompanying notes consolidated statements cash flows pfizer inc subsidiary companies consolidated statements cash flows pfizer inc subsidiary companies athe 82 billion gain completion consumer healthcare jv transaction net cash conveyed reflects receipt 32 equitymethod investment new company initially valued 157 billion exchange net assets contributed 76 billion presented operating activities net 146 million cash conveyed reflected investing activities net see note 2c see accompanying notes consolidated financial statements pfizer inc subsidiary companies note 1 basis presentation significant accounting policies basis presentation consolidated financial statements include accounts parent company subsidiaries prepared accordance us gaap decision whether consolidate entity financial reporting purposes requires consideration majority voting interests well effective economic control entity typically seek control means voting interests subsidiaries operating outside us financial information included year ended november 30 year presented pfizers fiscal yearend us subsidiaries year ended december 31 year presented substantially unremitted earnings international subsidiaries free legal contractual restrictions significant transactions among subsidiaries eliminated november 16 2020 completed spinoff combination upjohn business mylan prior separation upjohn business beginning 2020 upjohn business meridian manufacturer epipen autoinjector products preexisting strategic collaboration pfizer mylan generic drugs japan mylanjapan collaboration managed part former upjohn operating segment revenues expenses associated meridian mylanjapan collaboration included upjohn operating segment results along results operations upjohn business pfizer’s historical consolidated financial statements meridian remains pfizer supplies epipen autoinjectors viatris supply agreement expiring december 31 2024 option viatris extend additional oneyear term december 21 2020 falls pfizer’s international 2021 fiscal year pfizer viatris completed termination previously disclosed agreement dated november 13 2020 mylanjapan collaboration transferred related inventories operations part mylanjapan collaboration viatris beginning fourth quarter 2020 financial results upjohn business mylanjapan collaboration reflected discontinued operations periods presented financial results meridian included hospital therapeutic area periods presented upon completion spinoff upjohn business november 16 2020 upjohn assets liabilities derecognized consolidated balance sheet reflected retained earningsdistribution upjohn business consolidated statement equity assets liabilities associated upjohn business mylanjapan collaboration classified assets liabilities discontinued operations certain prior year amounts reclassified conform current year presentation addition acquisitions business development activities completed 2020 2019 2018 including acquisitions array therachon contribution consumer healthcare business consumer healthcare jv impacted financial results periods presented see note 2 prior separation upjohn business managed commercial operations three distinct business segments innovative sciencebased biopharmaceutical products business biopharma ii global primarily offpatent branded generics business upjohn iii july 31 2019 pfizer’s consumer healthcare business formation consumer healthcare jv 2019 completion spinoff upjohn business fourth quarter 2020 pfizer transformed focused global leader sciencebased innovative medicines vaccines operate single operating segment engaged discovery development manufacturing marketing sales distribution biopharmaceutical products worldwide regional commercial organizations market distribute sell products commercial organization supported global platform functions responsible research development manufacturing supply products business also supported global corporate enabling functions determination operate single segment consistent financial information regularly reviewed chief operating decision maker purposes evaluating performance allocating resources setting incentive compensation targets planning forecasting future periods chief operating decision maker allocates resources assesses financial performance consolidated basis priorperiod information restated reflect current organizational structure following separation upjohn business information product geographic revenues see note 17 certain amounts consolidated financial statements associated notes may add due rounding percentages calculated using unrounded amounts b new accounting standards adopted 2020 january 1 2020 adopted following accounting standards credit losses financial instrumentswe adopted new accounting standard credit losses financial instruments replaces probable initial recognition threshold incurred loss estimates prior guidance methodology reflects expected credit loss estimates standard generally impacts financial assets contractual right receive cash accounted fair value net income accounts receivable heldtomaturity debt securities new guidance requires us identify analyze document support new methodologies quantifying expected credit loss estimates certain financial instruments using information historical experience current economic conditions information use reasonable supportable forecasted information standard also amends existing impairment guidance availableforsale debt securities incorporate credit loss allowance allows reversals credit impairments event issuer’s credit improves adopted new accounting standard utilizing modified retrospective method therefore adjustments made prior period financial statements cumulative effect adopting standard adjustment opening balance retained earnings material adoption standard material impact consolidated statement income consolidated statement cash flows year ended december 31 2020 consolidated balance sheet december 31 2020 additional information see note 1g goodwill impairment testingwe prospectively adopted new standard eliminates requirement perform hypothetical purchase price allocation measure goodwill impairment new guidance goodwill impairment test performed comparing fair value reporting unit carrying amount recognizing impairment charge amount carrying amount notes consolidated financial statements pfizer inc subsidiary companies reporting unit exceeds fair value impact consolidated financial statements adoption new standard implementation costs cloud computing arrangementwe prospectively adopted new standard related customers’ accounting implementation costs incurred cloud computing arrangement considered service contract new guidance aligns requirements capitalizing implementation costs arrangements requirements capitalizing implementation costs incurred develop obtain internaluse software adoption guidance material impact consolidated financial statements collaboration agreementswe prospectively adopted new standard provides guidance clarifying interaction accounting collaborative arrangements revenue contracts customers impact consolidated financial statements adoption new standard c estimates assumptions preparing financial statements use certain estimates assumptions affect reported amounts disclosures estimates assumptions impact elements financial statements example consolidated statements income estimates used accounting deductions revenues determining cost inventory sold allocating cost form depreciation amortization estimating restructuring charges impact contingencies well determining provisions taxes income consolidated balance sheets estimates used determining valuation recoverability assets determining reported amounts liabilities also impact consolidated statements income certain estimates fair value amounts recorded connection acquisitions revenue deductions impairment reviews restructuringassociated charges investments financial instruments valuation allowances pension postretirement benefit plans contingencies sharebased compensation calculations result complex series judgments future events uncertainties rely heavily estimates assumptions estimates often based complex judgments assumptions believe reasonable inherently uncertain unpredictable estimates assumptions representative actual outcomes results could materially impacted future events effects cannot determined precision estimates assumptions may prove incomplete inaccurate unanticipated events circumstances may occur might cause us change estimates assumptions subject risks uncertainties may cause actual results differ estimated amounts changes healthcare environment competition litigation legislation regulations regularly evaluate estimates assumptions using historical experience expectations future adjust estimates assumptions facts circumstances indicate need change acquisitions consolidated financial statements include operations acquired businesses completion acquisitions account acquired businesses using acquisition method accounting requires among things assets acquired liabilities assumed recognized estimated fair values acquisition date fair value acquired iprd recorded balance sheet transaction costs expensed incurred excess consideration transferred assigned values net assets acquired recorded goodwill acquire net assets constitute business defined us gaap goodwill recognized acquired iprd expensed contingent consideration business combination included part acquisition cost recognized fair value acquisition date fair value generally estimated using probabilityweighted discounted cash flow approach see note 16d liability resulting contingent consideration remeasured fair value reporting date contingency resolved changes fair value recognized earnings incomedeductionsnet e fair value measure certain assets liabilities fair value either upon initial recognition subsequent accounting reporting estimate fair value using exit price approach requires among things determine price would received sell asset paid transfer liability orderly market determination exit price considered perspective market participants considering highest best use nonfinancial assets liabilities assuming risk nonperformance transfer estimating fair value depending nature complexity asset liability may use one following techniques •income approach based present value future stream net cash flows •market approach based market prices information market transactions involving identical comparable assets liabilities •cost approach based cost acquire construct comparable assets less allowance functional andor economic obsolescence fair value methodologies depend following types inputs •quoted prices identical assets liabilities active markets level 1 inputs •quoted prices similar assets liabilities active markets quoted prices identical similar assets liabilities markets active inputs quoted prices directly indirectly observable inputs derived principally corroborated observable market data correlation means level 2 inputs •unobservable inputs reflect estimates assumptions level 3 inputs notes consolidated financial statements pfizer inc subsidiary companies following inputs valuation techniques used estimate fair value financial assets liabilities •availableforsale debt securitiesthirdparty matrixpricing model uses significant inputs derived corroborated observable market data creditadjusted yield curves •equity securities readily determinable fair valuesquoted market prices observable nav prices •derivative assets liabilitiesthirdparty matrixpricing model uses inputs derived corroborated observable market data applicable models use marketbased observable inputs including interest rate yield curves discount future cash flow amounts forward spot prices currencies credit risk impact derivative financial instruments significant •money market fundsobservable nav prices periodically review methodologies inputs outputs thirdparty pricing services reasonableness procedures include example referencing thirdparty pricing models monitoring key observable inputs like benchmark interest rates selectively performing testcomparisons values actual sales financial instruments f foreign currency translation international operations local currencies determined functional currencies translate functional currency assets liabilities us dollar equivalents exchange rates effect balance sheet date income expense amounts average exchange rates period us dollar effects arise changing translation rates recorded comprehensive incomeloss effects converting nonfunctional currency monetary assets liabilities functional currency recorded incomedeductionsnet operations highly inflationary economies translate monetary items rates effect balance sheet date translation adjustments recorded incomedeductionsnet translate nonmonetary items historical rates g revenues trade accounts receivable revenue recognitionwe record revenues product sales transfer control product us customer determine transfer control based product shipped delivered title passes customer sales contractssales credit typically shortterm contracts collections based market payment cycles common various markets shorter cycles us sales adjusted sales allowances chargebacks rebates sales returns cash discounts sales returns occur due loe product recalls changing competitive environment deductions revenuesour gross product revenues subject variety deductions generally estimated recorded period revenues recognized variable consideration represents chargebacks rebates sales allowances sales returns deductions represent estimates related obligations knowledge judgment required estimating impact revenue deductions gross sales reporting period provisions pharmaceutical sales returnsprovisions based calculation market incorporates following appropriate local returns policies practices historical returns percentage sales understanding reasons past returns estimated shelf life product estimate amount time shipment return lag time factors could impact estimate future returns loe product recalls changing competitive environment generally returned products destroyed customers refunded sales price form credit record sales incentives reduction revenues time related revenues recorded incentive offered whichever later estimate cost sales incentives based historical experience similar incentives programs predict customer behavior following outlines common sales arrangements •customersour biopharmaceutical products sold principally wholesalers also sell directly retailers hospitals clinics government agencies pharmacies us primarily sell vaccines products directly federal government cdc wholesalers individual provider offices retail pharmacies integrated delivery networks outside us primarily sell vaccines government nongovernment institutions customers consumer healthcare business part business combined gsk’s consumer healthcare business included retailers lesser extent wholesalers distributors biopharmaceutical products ultimately used patients generally covered governmental programs managed care programs insurance programs including managed pbms subject sales allowances andor rebates payable directly programs sales allowances rebates generally negotiated government programs may legislated amounts type product eg patented unpatented specifically •in us sell products principally distributors hospitals also contracts managed care programs pbms legislatively mandated contracts federal state governments provide rebates based medicines utilized lives cover record provisions medicare medicaid performancebased contract pharmaceutical rebates based upon experience ratio rebates paid actual prescriptions written prior periods apply experience ratio respective period’s sales determine rebate accrual related expense experience ratio evaluated regularly ensure historical trends current practicable estimate discounts branded prescription drug sales medicare part participants medicare “coverage gap” also known “doughnut hole” based historical experience beneficiary prescriptions consideration utilization expected result discount coverage gap evaluate estimate regularly ensure historical trends future expectations current practicable performancebased contract rebates also consider current contract terms changes formulary status rebate rates •outside us majority pharmaceutical sales allowances contractual legislatively mandated estimates based actual invoiced sales within period reduces risk variations estimation process certain european countries notes consolidated financial statements pfizer inc subsidiary companies rebates calculated government’s total unbudgeted pharmaceutical spending specific product sales thresholds apply estimated allocation factor actual invoiced sales project expected level reimbursement obtain thirdparty information helps us monitor adequacy accruals •provisions pharmaceutical chargebacks primarily reimbursements us wholesalers honoring contracted prices third parties closely approximate actual amounts incurred settle deductions generally within two five weeks incurring liability recorded direct product sales andor alliance revenues 1 billion seven products 2020 six products 2019 seven products 2018 aggregate direct products sales andor alliance product revenues represent 53 revenues 2020 49 revenues 2019 47 revenues 2018 see note 17b additional information loss expiration intellectual property rights significant adverse effect revenues contracts customers generally lower selling prices due added competition generally provide higher sales returns period individual markets begin near loss expiration intellectual property rights taxes collected customers relating product sales remitted governmental authorities excluded revenues trade accounts receivabletrade accounts receivable stated net realizable value allowance credit losses reflects best estimate expected credit losses receivables portfolio determined basis historical experience current information forecasts future economic conditions developing estimate expected credit losses trade accounts receivables segmented pools assets depending market us versus international delinquency status customer type high risk versus low risk government versus nongovernment fixed reserve percentages established pool trade accounts receivables determining reserve percentages pool trade accounts receivables considered historical experience certain customers customer types regulatory legal environments country political risk relevant current future forecasted macroeconomic factors credit risk indicators monitored quarterly basis determine whether changes economic environment would indicate established reserve percentages adjusted considered regional basis reflect geographicspecific metrics additionally writeoffs recoveries customer receivables tracked collections quarterly basis determine whether reserve percentages remain appropriate management becomes aware certain customerspecific factors impact credit risk specific allowances known troubled accounts recorded trade accounts receivable written reasonable means collect full amount including litigation appropriate exhausted 2020 additions allowance credit losses writeoffs recoveries customer receivables material consolidated financial statements h collaborative arrangements payments collaboration partners presented consolidated statements income based nature arrangement including contractual terms nature payments applicable accounting guidance copromotion agreements record amounts received share gross profits collaboration partners alliance revenues component revenues collaboration partners principal transaction receive share net sales profits alliance revenues recorded perform copromotion activities collaboration partners sell products customers related expenses selling marketing products including reimbursements collaboration partners costs included selling informational administrative expenses collaborative arrangements manufacture product collaboration partners record revenues transfer control product collaboration partners collaboration arrangements principal transaction record amounts paid collaboration partners share net sales profits earned royalty payments collaboration partners cost sales royalty payments received collaboration partners included incomedeductionsnet reimbursements collaboration partners development costs recorded research development expenses upfront payments preapproval milestone payments due us collaboration partners development stage collaborations recorded research development expenses milestone payments due us collaboration partners regulatory approval attained medicine recorded identifiable intangible assetsdeveloped technology rights upfront preapproval milestone payments earned collaboration partners us recognized incomedeductionsnet development period products performance obligations include providing rd services collaboration partners upfront preapproval postapproval milestone payments earned us may recognized incomedeductionsnet immediately earned periods depending upon nature performance obligations applicable collaboration milestone event regulatory approval medicine generally recognize milestone payments due us transaction price regulatory approval applicable jurisdiction attained may recognize milestone payments due us transaction price earlier milestone event certain circumstances recognition income would probable significant reversal notes consolidated financial statements pfizer inc subsidiary companies cost sales inventories recorded lower cost net realizable value cost finished goods work process raw materials determined using average actual cost regularly review inventories impairment reserves established necessary j selling informational administrative expenses selling informational administrative costs expensed incurred among things expenses include internal external costs marketing advertising shipping handling information technology legal defense advertising expenses totaled approximately 18 billion 2020 24 billion 2019 27 billion 2018 production costs expensed incurred costs tv radio electronic media publications expensed related advertising occurs k research development expenses rd costs expensed incurred expenses include costs proprietary rd efforts well costs incurred connection certain licensing arrangements compound receives regulatory approval record upfront milestone payments make third parties licensing arrangements expense upfront payments recorded incurred milestone payments recorded specific milestone achieved compound receives regulatory approval record milestone payments identifiable intangible assets less accumulated amortization unless asset determined indefinite life amortize payments straightline basis remaining agreement term expected product life cycle whichever shorter l amortization intangible assets depreciation certain longlived assets longlived assets include •property plant equipment less accumulated depreciationthese assets recorded cost including significant improvements purchase less accumulated depreciation property plant equipment assets land construction progress depreciated straightline basis estimated useful life individual assets depreciation begins asset ready intended use tax purposes accelerated depreciation methods used allowed tax laws •identifiable intangible assets less accumulated amortizationthese assets recorded fair value acquisition intangible assets finite lives amortized straightline basis estimated useful lives intangible assets indefinite lives amortized useful life determined •goodwillgoodwill represents excess consideration transferred acquired business assigned values net assets goodwill amortized amortization finitelived acquired intangible assets contribute ability sell manufacture research market distribute products compounds intellectual property included amortization intangible assets intangible assets benefit multiple business functions amortization intangible assets single function depreciation property plant equipment included cost sales selling informational administrative expenses andor research development expenses appropriate review longlived assets impairment indicators throughout year perform impairment testing indefinitelived intangible assets goodwill least annually longlived assets whenever impairment indicators present necessary record impairments longlived assets amount fair value less carrying value assets specifically •for finitelived intangible assets developed technology rights longlived assets property plant equipment whenever impairment indicators present calculate undiscounted value projected cash flows asset group compare estimated amount carrying amount carrying amount greater record impairment loss excess book value fair value addition cases impairment review reevaluate remaining useful lives assets modify appropriate •for indefinitelived intangible assets brands iprd assets necessary determine fair value asset record impairment loss excess book value fair value addition cases impairment review iprd assets reevaluate whether continuing characterize asset indefinitelived appropriate •for goodwill necessary determine fair value reporting unit record impairment loss excess book value reporting unit implied fair value restructuring charges costs associated acquisitions costreductionproductivity initiatives may incur restructuring charges connection acquisitions implement plans restructure integrate acquired operations connection costreduction productivity initiatives •in connection acquisition activity typically incur costs associated executing transactions integrating acquired operations may include expenditures consulting integration systems processes restructuring combined company may include charges related employees assets activities continue combined company •in connection costreductionproductivity initiatives typically incur costs charges site closings facility rationalization actions workforce reductions expansion shared services including development global systems included restructuring charges certain acquisitionrelated costs restructuring charges well certain costs associated acquiring integrating acquired business restructuring action results change estimated useful life asset incremental impact classified cost sales selling informational administrative expenses andor research development notes consolidated financial statements pfizer inc subsidiary companies expenses appropriate employee termination costs generally recorded actions probable estimable include accrued severance benefits pension postretirement benefits many may paid periods termination transaction costs banking legal accounting similar costs incurred connection business acquisition expensed incurred business platform functions may impacted actions including sales marketing manufacturing rd well corporate enabling functions digital global real estate operations legal finance human resources worldwide public affairs compliance worldwide procurement n cash equivalents statement cash flows cash equivalents include items almost liquid cash certificates deposit time deposits maturity periods three months less purchased items meeting definition part larger investment pool classify shortterm investments cash flows financial instruments designated fair value cash flow hedges may included operating investing financing activities depending classification items hedged cash flows financial instruments designated net investment hedges classified according nature hedge instrument cash flows financial instruments qualify hedge accounting treatment classified according purpose accounting nature investments derivative financial instruments classification investment depends nature investment intent ability hold investment degree may exercise influence investments primarily comprised following •public equity securities readily determinable fair values carried fair value changes fair value reported incomedeductionsnet •availableforsale debt securities carried fair value changes fair value reported comprehensive incomeloss realized •heldtomaturity debt securities carried amortized cost •private equity securities without readily determinable fair values significant influence measured cost minus impairment plus minus changes resulting observable price changes orderly transactions identical similar investment issuer •for equity investments common stock insubstance common stock significant influence financial operating policies investee use equitymethod accounting equitymethod record share investee’s income expenses incomedeductionsnet excess cost investment share underlying equity net assets investee acquisition date allocated identifiable assets liabilities investee remaining excess amount allocated goodwill investments initially recorded cost fair value consideration paid typically include contingent consideration realized gains losses sales investments determined using specific identification cost method regularly evaluate financial assets impairment investments debt equity decline fair value determined impairment charge recorded new cost basis investment established derivative financial instruments carried fair value various balance sheet categories see note 7a changes fair value reported net income derivative financial instruments certain qualifying hedging relationships comprehensive incomeloss see note 7e p tax assets liabilities income tax contingencies tax assets liabilities current tax assets primarily includes tax effects intercompany transfers inventory within combined group recognized consolidated statements income inventory sold third party ii income tax receivables expected recovered either via refunds taxing authorities reductions future tax obligations deferred tax assets liabilities recognized expected future tax consequences differences financial reporting tax bases assets liabilities using enacted tax rates laws provide valuation allowance believe deferred tax assets recoverable based assessment estimated future taxable income incorporates ongoing prudent feasible taxplanning strategies would implemented necessary realize deferred tax assets amounts recorded valuation allowances requires judgments future income depend heavily estimates assumptions deferred tax assets liabilities within tax jurisdiction presented net amount noncurrent section consolidated balance sheet noncurrent tax assets primarily represent estimate potential tax benefits one tax jurisdiction could result payment income taxes another tax jurisdiction potential benefits generally result cooperative efforts among taxing authorities required tax treaties minimize double taxation commonly referred competent authority process recoverability assets believe likely dependent upon actual payment taxes one tax jurisdiction cases successful petition recovery another tax jurisdiction notes consolidated financial statements pfizer inc subsidiary companies taxes payable december 31 2020 2019 include liabilities uncertain tax positions noncurrent portion repatriation tax liability elected payment eight years 2026 additional information see note 5d uncertain tax positions note 5a repatriation tax liability estimates assumptions connection tcja income tax contingencies account income tax contingencies using benefit recognition model consider tax position likely sustained upon audit based solely technical merits position recognize portion benefit measure benefit determining amount greater 50 likely realized upon settlement presuming tax position examined taxing authority full knowledge relevant information regularly monitor position subsequently recognize unrecognized tax benefit changes tax law analogous case law new information sufficiently raise likelihood prevailing technical merits position “more likely not” ii statute limitations expires iii completion audit resulting favorable settlement tax year appropriate agency liabilities uncertain tax positions classified current expect pay cash within next 12 months interest penalties recorded provisionbenefit taxes income classified consolidated balance sheet related tax liability assessments based estimates assumptions deemed reasonable management estimates unrecognized tax benefits potential tax benefits may representative actual outcomes variation estimates could materially affect financial statements period settlement statutes limitations expire treat events discrete items period resolution q pension postretirement benefit plans majority employees worldwide covered defined benefit pension plans defined contribution plans us ircqualified supplemental nonqualified defined benefit plans defined contribution plans well postretirement benefit plans consisting primarily medical insurance retirees eligible dependents recognize overfunded underfunded status defined benefit plans asset liability obligations generally measured actuarial present value benefits attributable employee service rendered provided applicable benefit formula pension postretirement obligations may determined using assumptions discount rate expected annual rate return plan assets expected employee turnover participant mortality pension plans obligation may also include assumptions future compensation levels postretirement benefit plans obligation may include assumptions expected cost providing medical insurance benefits well extent costs shared employee others governmental programs plan assets measured fair value net periodic pension postretirement benefit costs service costs recognized incomedeductionsnet r legal environmental contingencies certain subsidiaries subject numerous contingencies arising ordinary course business patent litigation product liability productrelated litigation commercial litigation environmental claims proceedings government investigations guarantees indemnifications record accruals contingencies extent conclude loss probable reasonably estimable amount within range loss appears better estimate amount within range accrue amount alternatively amount within range loss appears better estimate amount accrue lowest amount range record anticipated recoveries existing insurance contracts recovery assured sharebased payments compensation programs include sharebased payments generally grants sharebased payment programs accounted fair value fair values generally amortized straightline basis vesting terms related costs recorded cost sales selling informational administrative expenses andor research development expenses appropriate note 2 acquisitions divestitures equitymethod investments licensing arrangements collaborative arrangements acquisitions array july 30 2019 acquired array commercial stage biopharmaceutical company focused discovery development commercialization targeted small molecule medicines treat cancer diseases high unmet need 48 per share cash total fair value consideration transferred 112 billion 109 billion net cash acquired addition 157 million payments array employees fair value previously unvested stock options recognized postclosing compensation expense recorded restructuring charges certain acquisitionrelated costs see note 3 financed majority transaction debt balance existing cash array’s portfolio includes braftovi encorafenib mektovi binimetinib broad pipeline targeted cancer medicines different stages rd well portfolio outlicensed medicines may generate milestones royalties time final allocation consideration transferred assets acquired liabilities assumed completed 2020 connection acquisition recorded 63 billion identifiable intangible assets consisting 20 billion developed technology rights notes consolidated financial statements pfizer inc subsidiary companies useful life 16 years 28 billion iprd 15 billion licensing agreements 12 billion technology developmentindefinitelived licensing agreements 360 million developed technologyfinitelived licensing agreements useful life 10 years ii 61 billion goodwill iii 11 billion net deferred tax liabilities iv 451 million assumed longterm debt paid full 2019 2020 recorded measurement period adjustments estimated fair values initially recorded 2019 resulted reduction identifiable intangible assets approximately 900 million corresponding change goodwill net deferred tax liabilities measurement period adjustments recorded better reflect market participant assumptions facts circumstances existing acquisition date material impact consolidated statement income year ended december 31 2020 therachon july 1 2019 acquired remaining shares therachon privatelyheld clinicalstage biotechnology company focused rare diseases assets development treatment achondroplasia genetic condition common form shortlimb dwarfism 340 million upfront plus potential milestone payments 470 million contingent achievement key milestones development commercialization lead asset 2018 acquired approximately 3 therachon’s outstanding shares 5 million accounted transaction asset acquisition since lead asset represented substantially fair value gross assets acquired total fair value consideration transferred therachon 322 million consisted 317 million cash previous 5 million investment therachon connection asset acquisition recorded charge 337 million research development expenses b divestitures upjohn separation combination mylan november 16 2020 completed spinoff combination upjohn business mylan transactions form viatris transactions structured allstock reverse morris trust transaction specifically contributed upjohn business wholly owned subsidiary renamed viatris upjohn business separated remainder business separation ii following separation distributed pro rata basis shares viatris common stock held pfizer stockholders november 13 2020 record date pfizer stockholder record date received approximately 0124079 shares viatris common stock per share pfizer common stock distribution iii immediately distribution upjohn business combined mylan series transactions mylan shareholders received one share viatris common stock mylan ordinary share held shareholder subject applicable withholding taxes combination prior distribution viatris made cash payment pfizer equal 120 billion partial consideration contribution upjohn business viatris closing combination pfizer stockholders owned approximately 57 outstanding shares viatris common stock mylan shareholders owned approximately 43 outstanding shares viatris common stock case fully diluted asconverted asexercised basis transactions generally expected tax free pfizer stockholders us tax purposes beginning november 16 2020 viatris operates upjohn business mylan independent publicly traded company traded symbol “vtrs” nasdaq connection transactions june 2020 upjohn inc upjohn finance bv completed privately placed debt offerings 745 billion €360 billion aggregate principal amounts respectively approximately 114 billion senior unsecured notes entered financing arrangements including 600 million delayed draw term loan agreement revolving credit facility agreement 40 billion proceeds debt offerings financing arrangements used fund 120 billion cash distribution viatris made pfizer prior distribution used cash distribution proceeds pay commercial paper borrowings redeem 115 billion aggregate principal amount outstanding 195 senior unsecured notes due june 2021 342 million aggregate principal amount outstanding 580 senior unsecured notes due august 2023 maturity date interest expense 114 billion debt securities incurred 2020 included income discontinued operationsnet tax following separation combination upjohn business mylan longer obligor guarantor upjohn debt upjohn financing arrangements result separation upjohn incurred separationrelated costs 434 million 2020 83 million 2019 included income discontinued operationsnet tax costs primarily relate professional fees regulatory filings separation activities within finance tax legal information system functions well investment banking fees connection transactions pfizer viatris entered various agreements effect separation combination provide framework relationship combination including separation distribution agreement manufacturing supply agreements msas transition service agreements tsas tax matters agreement employee matters agreement among others msas pfizer viatris case may manufactures labels packages products party terms msas range initial duration 4 7 years postseparation tsas primarily involve pfizer providing services viatris related finance information technology human resource infrastructure generally expected terms 3 years postseparation addition also party various commercial agreements viatris amounts billed net manufacturing supply transition services provided agreements well sales purchases viatris material results continuing operations 2020 included consolidated balance sheet december 31 2020 net amounts due viatris primarily related various interim agency operating models transitional services partially offset net amounts due viatris unsettled intercompany balances closing date spinoff transactionrelated indemnifications contractual cash payment pursuant terms separation distribution agreement totaling approximately 401 million interim agency operating model primarily includes billings collections remittance rebates performing transitional basis behalf viatris operating results upjohn business reported income discontinued operationsnet tax november 16 2020 date spinoff combination mylan addition december 31 2019 assets liabilities associated business classified assets liabilities discontinued operations priorperiod financial information restated appropriate notes consolidated financial statements pfizer inc subsidiary companies virtually income discontinued operationsnet tax relates upjohn business mylanjapan collaboration periods presented amounts relate discontinued operations upjohn business mylanjapan collaboration except amounts assets held sale represent unrelated property plant equipment held sale b included noncurrent liabilities result spinoff upjohn business distributed net assets 19 billion november 16 2020 reflected reduction retained earnings amount 412 million represents cash transferred upjohn business remainder considered noncash activity consolidated statement cash flows year ended december 31 2020 spinoff also resulted net increase accumulated comprehensive loss 71 million derecognition net gains foreign currency translation adjustments 397 million actuarial losses net prior service credits associated benefit plans 326 million reclassified retained earnings contribution agreement pfizer allogene april 2018 pfizer allogene announced two companies entered contribution agreement pfizer’s portfolio assets related allogeneic car therapy investigational immune cell therapy approach treating cancer agreement received equity investment allogene received rights preclinical clinical car assets previously licensed us french cell therapy company cellectis beginning 2014 french pharmaceutical company servier beginning 2015 allogene assumed responsibility potential financial obligations cellectis servier connection allogene transaction recognized noncash 50 million pretax gain incomedeductionsnet second quarter 2018 representing difference 127 million fair value equity investment received book value assets transferred including allocation goodwill see note 4 notes consolidated financial statements pfizer inc subsidiary companies december 31 2020 held 157 equity stake allogene investment allogene measured fair value changes fair value recognized net income sale phase 2b ready ampa receptor potentiator cias biogen april 2018 sold phase 2b ready ampa receptor potentiator cias biogen received 75 million upfront recognized incomedeductionsnet see note 4 may receive 515 million total development commercialization milestones well tiered royalties lowtomidteen percentages divestiture neuroscience assets september 2018 bain capital entered transaction create new biopharmaceutical company cerevel formerly known cerevel therapeutics llc continue development portfolio clinical preclinical stage neuroscience assets primarily targeting disorders central nervous system including parkinson’s disease epilepsy alzheimer’s disease schizophrenia addiction connection transaction outlicensed portfolio cerevel exchange 25 ownership stake cerevel’s parent company cerevel therapeutics inc potential future regulatory commercial milestone payments royalties connection transaction recognized noncash 343 million pretax gain incomedeductionsnet third quarter 2018 representing fair value equity investment received assets transferred book value 0 see note 4 october 27 2020 cerevel therapeutics inc completed merger arya sciences acquisition corp ii publiclytraded special purpose acquisition corporation concurrent private investment public equity “pipe” transaction form cerevel therapeutics holdings inc existing shares cerevel therapeutics inc converted common shares cerevel therapeutics holdings inc part merger transaction purchased additional 12 million common shares part pipe transaction common shares cerevel therapeutics holdings inc trade publicly nasdaq stock market ticker symbol cere december 31 2020 continue hold 215 equity stake cerevel therapeutics holdings inc elected fair value option measure fair value changes fair value recognized net income fourth quarter 2020 remeasured investment based market price cerevel therapeutics holdings inc common shares december 31 2020 less discount lack marketability recognized gain 20 million incomedeductionsnet c equitymethod investments formation consumer healthcare jv july 31 2019 completed transaction gsk combined respective consumer healthcare businesses new jv operates globally gsk consumer healthcare name exchange received 32 equity stake new company gsk owns remaining 68 upon closing deconsolidated consumer healthcare business recognized pretax gain 81 billion 54 billion net tax third quarter 2019 gain completion consumer healthcare jv transaction difference fair value 32 equity stake carrying value consumer healthcare business financial results consumer healthcare segment’s operating results 2019 reflect seven months consumer healthcare segment domestic operations eight months consumer healthcare segment international operations financial results 2020 reflect contribution consumer healthcare business valuing investment consumer healthcare jv used discounted cash flow techniques significant estimates assumptions inherent approach include amount timing projected net cash flows include expected impact competitive legal regulatory forces products longterm growth rate seeks project sustainable growth rate long term discount rate seeks reflect best estimate various risks inherent projected cash flows tax rate seeks incorporate geographic diversity projected cash flows accounting interest consumer healthcare jv equitymethod investment carrying value investment consumer healthcare jv 167 billion december 31 2020 170 billion december 31 2019 reported private equity investment equitymethod investments december 31 2020 2019 consumer healthcare jv foreign investee whose reporting currency uk pound therefore translate financial statements us dollars recognize impact foreign currency translation adjustments carrying value investment comprehensive income decrease value investment december 31 2019 december 31 2020 primarily due dividends 932 million received consumer healthcare jv june september november 2020 largely offset share jv’s earnings 417 million 345 million pretax foreign currency translation adjustments see note 6 record share earnings consumer healthcare jv quarterly basis onequarter lag incomedeductionsnet commencing august 1 2019 total share jv’s earnings generated fourth quarter 2019 first nine months 2020 recorded operating results 2020 417 million total share two months jv’s earnings generated third quarter 2019 recorded operating results fourth quarter 2019 47 million july 31 2019 closing date estimated fair value investment consumer healthcare jv 157 billion 32 underlying equity carrying value net assets consumer healthcare jv 112 billion resulting initial basis difference approximately 45 billion fourth quarter 2019 preliminarily completed allocation basis difference resulted excess initial fair value investment underlying equity carrying value net assets jv primarily inventory definitelived intangible assets indefinitelived intangible assets related deferred tax liabilities equity method goodwill within investment account fourth quarter 2019 consumer healthcare jv revised initial carrying value net assets jv 32 share underlying equity carrying value net assets consumer healthcare jv reduced 110 billion initial basis difference increased 48 billion adjustment allocated equity method goodwill within investment account began recording amortization basis differences allocated inventory definitelived intangible assets related deferred tax liabilities incomedeductionsnet commencing august 1 2019 third fourth quarters 2020 recognized writeoffs portion basis differences allocated indefinitelived definitelived intangible assets related deferred tax liabilities divestiture certain brands consumer healthcare jv second quarter 2020 total amortization writeoff basis differences fourth quarter 2019 first nine months 2020 included incomedeductions notes consolidated financial statements pfizer inc subsidiary companies net 2020 119 million expense amortization basis differences two months third quarter 2019 totaling approximately 31 million included operating results fourth quarter 2019 see note 4 amortization basis differences inventory related deferred tax liabilities completely recognized second quarter 2020 basis differences definitelived intangible assets related deferred tax liabilities amortized lives underlying assets range 8 20 years received full 32 interest consumer healthcare jv july 31 2019 closing transferred control consumer healthcare business consumer healthcare jv contribution business completed certain nonus jurisdictions due temporary regulatory operational constraints jurisdictions continued operate business net economic benefit consumer healthcare jv indemnified risks associated operations interim period subject obligations definitive transaction agreements expect contribution jurisdictions completed second half 2021 treated jurisdictions sold accounting purposes connection contribution entered certain transitional agreements designed facilitate orderly transition business consumer healthcare jv agreements primarily relate administrative services generally provided period 24 months closing also manufacture supply certain consumer products consumer healthcare jv consumer healthcare jv manufacture supply certain retained pfizer products us closing generally term six years agreements material pfizer part pfizer pretax income management basis consumer healthcare business 654 million july 31 2019 977 million 2018 investment viiv 2009 gsk created viiv focused research development commercialization human immunodeficiency virus hiv medicines approximately 117 viiv prior 2016 accounted investment equity method due significant influence operations viiv board representation minority veto rights suspended application equity method investment viiv 2016 carrying value investment reduced zero due recognition cumulative equity method losses dividends since 2016 recognized dividends viiv income incomedeductionsnet earned including dividends 278 million 2020 220 million 2019 253 million 2018 see note 4 notes consolidated financial statements pfizer inc subsidiary companies licensing arrangements agreement valneva 2on april 30 2020 signed agreement codevelop commercialize valneva’s lyme disease vaccine candidate vla15 covers six serotypes prevalent north america europe valneva pfizer work closely together throughout development vla15 valneva eligible receive total 308 million cash payments us consisting 130 million upfront payment paid recorded research development expenses second quarter 2020 well 35 million development milestones 143 million early commercialization milestones terms agreement valneva fund 30 development costs completion development program return pay valneva tiered royalties lead latestage development sole control commercialization agreement biontech august 2018 multiyear rd arrangement went effect biontech pfizer develop mrnabased vaccines prevention influenza flu relation rd arrangement september 2018 made upfront payment 50 million biontech recorded research development expenses biontech became eligible receive 325 million development salesbased milestones royalty payments associated worldwide sales part transaction also purchased 169670 newlyissued ordinary shares biontech 50 million third quarter 2018 akcea october 4 2019 entered worldwide exclusive licensing agreement akceaangptl3lrx investigational antisense therapy developed treat patients certain cardiovascular metabolic diseases akcea whollyowned subsidiary ionis transaction closed november 2019 made upfront payment 250 million akcea recorded research development expenses fourth quarter 2019 may required make development regulatory sales milestone payments 13 billion pay tiered doubledigit royalties annual worldwide net sales upon marketing approval akceaangptl3lrx e collaborative arrangements normal course business enter collaborative arrangements respect inline medicines well medicines development require completion research regulatory approval collaborative arrangements contractual agreements third parties involve joint operating activity typically research andor commercialization effort partner active participants activity exposed significant risks rewards activity rights obligations collaborative arrangements vary example agreements copromote pharmaceutical products discovered us companies agreements partner codevelop andor participate together commercializing marketing promoting manufacturing andor distributing drug product agreement myovant december 26 2020 entered collaboration jointly develop commercialize orgovyx™ relugolix advanced prostate cancer approved relugolix combination tablet relugolix 40 mg estradiol 10 mg norethindrone acetate 05 mg women’s health us canada also receive exclusive option commercialize relugolix oncology outside us canada excluding certain asian countries terms agreement companies equally share profits allowable expenses orgovyx relugolix combination tablet us canada myovant bearing share allowable expenses maximum notes consolidated financial statements pfizer inc subsidiary companies 100 million 2021 maximum 50 million 2022 record share gross profits alliance revenue myovant remain responsible regulatory interactions drug supply continue lead clinical development relugolix combination tablet myovant entitled receive 435 billion including upfront payment 650 million made december 2020 200 million potential regulatory milestones fda approvals relugolix combination tablet women’s health tiered sales milestones 35 billion prostate cancer also combined women’s health indications exercise option commercialize relugolix oncology outside us canada excluding certain asian countries myovant receive 50 million entitled receive doubledigit royalties sales connection transaction recognized 499 million identifiable intangible assetsdeveloped technology rights 151 million research development expenses representing relative fair value portion upfront payment allocated approved indication unapproved indications product respectively agreement cstone september 29 2020 entered strategic collaboration cstone address oncological needs china collaboration encompasses 200 million upfront equity investment cstone collaboration companies development commercialization cstone’s sugemalimab cs1001 pdl1 antibody mainland china framework companies bring additional oncology assets greater china market transaction closed october 9 2020 december 31 2020 held 99 stake cstone agreement biontech april 9 2020 signed global agreement biontech codevelop mrnabased coronavirus vaccine program bnt162b2 aimed preventing covid19 disease collaboration rapidly advanced covid19 vaccine candidate human clinical testing based biontech’s proprietary mrna vaccine platforms vaccine granted eua us eu uk among countries working biontech manufacture help ensure rapid worldwide access vaccine collaboration leverages broad expertise vaccine rd regulatory capabilities global manufacturing distribution network connection april 2020 agreement paid biontech upfront cash payment 72 million recorded research development expenses second quarter 2020 made additional equity investment 113 million common stock biontech became eligible receive potential milestone payments 563 million total consideration 748 million terms agreement biontech share gross profits development costs equally vaccine approved successfully commercialized responsible development costs commercialization vaccine thereafter biontech repay us 50 percent share development costs reductions gross profit sharing milestone payments biontech time january 29 2021 biontech signed amended version april 2020 agreement january 2021 agreement biontech pay us 50 percent share prior development costs lump sum payment first quarter 2021 rd costs shared equally commercialization rights vaccine worldwide excluding germany turkey biontech market distribute vaccine agreement us excluding china hong kong macau taiwan subject separate collaboration biontech shanghai fosun pharmaceutical group co ltd recognize revenues cost sales gross basis markets commercializing vaccine record share gross profits related sales vaccine biontech germany turkey alliance revenues made additional investment 50 million common stock biontech part underwritten equity offering biontech closed july 2020 december 31 2020 held equity stake 25 biontech summarized financial information collaborative arrangements arepresents sales partners products manufactured us bsubstantially relates amounts earned partners copromotion agreements increases periods presented reflect increases alliance revenues eliquis xtandi cprimarily relates amounts paid collaboration partners share net sales profits earned collaboration arrangements principal transaction cost sales inventory purchased partners drepresents net reimbursements partners selling informational administrative expenses incurred eprimarily relates upfront payments preapproval milestone payments earned partners well net reimbursements fprimarily relates royalties collaboration partners amounts outlined table include transactions third parties collaboration partners costs products collaborative arrangements notes consolidated financial statements pfizer inc subsidiary companies note 3 restructuring charges costs associated acquisitions costreductionproductivity initiatives 2019 substantially completed several multiyear initiatives focused positioning us future growth creating simpler efficient operating structure within business transforming focused company program formation consumer healthcare jv 2019 spinoff upjohn business fourth quarter 2020 pfizer transformed focused global leader sciencebased innovative medicines vaccines undertaken efforts ensure cost base aligns appropriately revenue base certain direct costs transferred consumer healthcare jv upjohn business connection spinoff indirect costs transfer addition taking steps restructure corporate enabling functions appropriately support drive purpose focused innovative biopharmaceutical products business rd pgs platform functions program costs discussed may rounded represent approximations expect costs program primarily related corporate enabling functions incurred 2020 2022 total 16 billion pretax basis substantially costs cash expenditures actions include among others changes location certain activities expanded use colocation centers excellence shared services increased use digital technologies associated actions specific costs primarily include severance benefit plan impacts exit costs well associated implementation costs also part program expect incur costs related manufacturing network optimization including certain legacy costreduction initiatives 500 million approximately 20 costs noncash costs effort expected incurred primarily 2020 2022 include among things implementation costs product transfer costs site exit costs well accelerated depreciation start program fourth quarter 2019 december 31 2020 incurred costs 900 million key activities 2020 incurred costs 896 million composed primarily transforming focused company program 2019 incurred costs 820 million composed 548 million 20172019 organizing growth initiatives 288 million integration array 94 million integration hospira 87 million transforming focused company program partially offset income 197 million primarily due reversal certain accruals upon effective favorable settlement irs audit multiple tax years acquisitionrelated initiatives a2018 charges largely costreduction initiatives associated acquisitions brepresents acquisitionrelated costs 192 million credit 2019 37 million charge 2018 cost reduction initiatives 556 million charge 2020 418 million charge 2019 759 million charge 2018 2020 charges mainly represent employee termination costs transforming focused company costreduction program 2019 restructuring charges mainly represent employee termination costs costreduction productivity initiatives partially offset reversal certain accruals related acquisition wyeth upon effective favorable settlement irs audit multiple tax years see note 5b 2018 charges primarily related employee termination costs asset write downs employee termination costs notes consolidated financial statements pfizer inc subsidiary companies 2019 2018 primarily improvements operational effectiveness part realignment business structure 2019 also includes employee termination costs transforming focused company costreduction program crepresents external costs banking legal accounting similar services drepresents external incremental costs directly related integrating acquired businesses expenditures consulting integration systems processes certain qualifying costs 2020 costs primarily related acquisition array 2019 costs mainly related acquisitions array including 157 million payments array employees fair value previously unvested stock options recognized postclosing compensation expense see note 2a hospira 2018 costs mostly related acquisition hospira erepresents impact changes estimated useful lives assets involved restructuring actions frepresents external incremental costs directly related implementing nonacquisitionrelated costreductionproductivity initiatives aincludes reversal certain accruals related acquisition wyeth upon favorable settlement irs audit multiple tax years see note 5d bincludes adjustments foreign currency translation cincluded current liabilities 641 million noncurrent liabilities 175 million dincluded current liabilities 628 million noncurrent liabilities 169 million note 4 incomedeductionsnet acapitalized interest totaled 96 million 2020 88 million 2019 73 million 2018 b2020 gains include among things unrealized gains 405 million related investments biontech springworks therapeutics inc springworks 2019 gains included among things unrealized gains 295 million related investments cortexyme inc springworks 2018 gains included unrealized gains equity securities 477 million reflecting adoption new accounting standard 2018 primarily driven unrealized gains 466 million related investment allogene see notes 2b 7b c2018 primarily included gross realized losses sales availableforsale debt securities 402 million net loss 18 million derivative financial instruments used hedge foreign exchange component matured availableforsale debt securities partially offset gross realized gains sales availableforsale debt securities 280 million proceeds sale availableforsale debt securities 57 billion 2018 d2020 includes among things upfront payment us 75 million sale ck1 assets biogen ii 40 million milestone income puma biotechnology inc related neratinib regulatory approvals eu iii 30 million milestone income lilly related first commercial sale us loxo292 treatment ret fusionpositive nsclc iv 108 million milestone income multiple licensees 2019 includes among things 78 million milestone income mylan pharmaceuticals inc related fda’s approval launch wixela inhub® generic advair diskus®fluticasone propionate salmeterol inhalation powder 52 million milestone income multiple licensees 2018 includes among things 118 million milestone income multiple licensees ii 110 million milestone payments received shire 75 million related first dosing patient phase 3 clinical trial treatment uc 35 million related first dosing patient phase 3 clinical trial notes consolidated financial statements pfizer inc subsidiary companies treatment crohn’s disease iii upfront payment us recognized milestone totaling 85 million sale ampa receptor potentiator cias biogen iv 50 million gains related sales compoundproduct rights v 40 million milestone payment merck co inc conjunction approval ertugliflozin eu e see note 11 2019 nonservice cost components’ activity related consumer healthcare jv transaction gain settlements recorded gain completion consumer healthcare jv transaction f2019 mostly included legal reserves certain pending legal matters 2018 primarily included legal reserves certain pending legal matters partially offset reversal legal accrual loss longer deemed probable g2020 primarily includes intangible asset impairment charges 17 billion mainly composed 900 million related iprd assets unapproved indications certain cancer medicines acquired array acquisition reflect among things updated commercial forecasts ii 528 million related eucrisa finitelived developed technology right acquired anacor acquisition reflects updated commercial forecasts mainly reflecting competitive pressures iii 263 million related finitelived developed technology rights certain generic sterile injectables acquired hospira acquisition reflects updated commercial forecasts mainly reflecting competitive pressures 2019 primarily included intangible asset impairment charges 28 billion mainly composed 26 billion related eucrisa reflects updated commercial forecasts mainly reflecting competitive pressures 2018 primarily included intangible asset impairment charges 31 billion mainly composed 26 billion related developed technology rights 242 million related licensing agreements 80 million related iprd acquired hospira acquisition generic sterile injectable products associated various indications ii 117 million related multiantigen vaccine iprd program adults undergoing elective spinal fusion surgery intangible asset impairment charges generic sterile injectable products reflect among things updated commercial forecasts reflecting increased competitive environment well higher manufacturing costs largely stemming manufacturing supply issues intangible asset impairment charge multiantigen vaccine iprd program result phase 2b trial reaching futility preplanned interim analysis hmainly represents incremental costs design planning implementation new business structure effective beginning 2019 primarily includes consulting legal tax advisory services isee note 2c j2020 includes among things dividend income 278 million investment viiv ii charges 105 million reflecting change fair value contingent consideration 2019 included among things dividend income 220 million investment viiv ii charges 152 million external incremental costs transaction costs separate consumer healthcare business separate legal entity associated formation consumer healthcare jv iii net losses early retirement debt 138 million 2018 included among things noncash 343 million pretax gain associated transaction bain capital create new biopharmaceutical company cerevel continue development portfolio clinical preclinical stage neuroscience assets primarily targeting disorders central nervous system ii dividend income 253 million investment viiv iii noncash 50 million pretax gain related contribution agreement entered allogene see note 2b iv charges 207 million reflecting change fair value contingent consideration vi charges 112 million external incremental costs transaction costs separate consumer healthcare business separate legal entity associated formation consumer healthcare jv asset impairment charges included incomedeductionsnet based estimates fair value athe fair value amount presented date impairment assets measured fair value recurring basis see also note 1e breflects intangible assets written fair value 2020 fair value determined using income approach specifically multiperiod excess earnings method also known discounted cash flow method started forecast expected net cash flows asset applied assetspecific discount rate arrive net present value amount significant estimates assumptions inherent approach include amount timing projected net cash flows includes expected impact competitive legal andor regulatory forces product discount rate seeks reflect various risks inherent projected cash flows tax rate seeks incorporate geographic diversity projected cash flows note 5 tax matters taxes income continuing operations a2020 v 2019the domestic loss 2020 versus domestic income 2019 mainly related nonrecurrence gain completion consumer healthcare jv transaction well higher certain asset impairments higher rd expenses increase international income primarily related nonrecurrence write assets contributed consumer healthcare jv well lower certain asset impairments lower amortization intangible assets notes consolidated financial statements pfizer inc subsidiary companies b2019 v 2018the domestic income 2019 versus domestic loss 2018 mainly related completion consumer healthcare jv transaction well lower certain asset impairments partially offset higher business legal entity alignment costs well increased costs related certain legal matters decrease international income primarily related higher certain asset impairments well write assets contributed consumer healthcare jv athe 2018 current tax benefit deferred tax expense primarily relate utilization tax credit carryforwards repatriation tax liability associated enactment tcja see discussion amounts discussed rounded nearest hundred million represent approximations 2018 finalized provisional accounting tax effects tcja based best estimates available information data reported disclosed impacts within applicable measurement period accordance sec guidance recorded favorable adjustment 100 million provisionbenefit taxes income elected filing 2018 us federal consolidated income tax return pay initial estimated 15 billion repatriation tax liability accumulated post1986 foreign earnings eight years 2026 third annual installment liability due paid april 2021 reported current income taxes payable remaining liability reported noncurrent taxes payable december 31 2020 obligations may vary result changes uncertain tax positions andor availability attributes foreign tax credit carryforwards tcja subjects us shareholder current tax global intangible lowtaxed income earned certain foreign subsidiaries fasb staff qa topic 740 5 accounting global intangible lowtaxed income states permitted make accounting policy election either recognize deferred taxes temporary basis differences expected reverse global intangible lowtaxed income future years provide tax expense related income year tax incurred elected recognize deferred taxes temporary differences expected reverse global intangible lowtaxed income future years march 27 2020 coronavirus aid relief economic security act cares act signed law us provide certain relief result covid19 pandemic addition governments around world enacted implemented various forms tax relief measures response economic conditions wake covid19 december 31 2020 neither cares act changes income tax laws regulations jurisdictions significant impact effective tax rate changes provisionbenefit taxes income impacting effective tax rate yearoveryear summarized 2020 v 2019 higher effective tax rate 2020 mainly result •the nonrecurrence 14 billion tax benefits representing taxes interest recorded 2019 due favorable settlement irs audit multiple tax years •the nonrecurrence tax benefits related certain tax initiatives associated implementation new business structure •the nonrecurrence tax benefits recorded 2019 result additional guidance issued us department treasury related tcja well •lower tax benefits related impairment intangible assets partially offset •the nonrecurrence tax expense 27 billion recorded third quarter 2019 associated gain related completion consumer healthcare jv transaction •the favorable change jurisdictional mix earnings result operating fluctuations normal course business notes consolidated financial statements pfizer inc subsidiary companies 2019 v 2018 higher effective tax rate primarily result •the tax expense 27 billion associated gain related completion consumer healthcare jv transaction •the nonrecurrence certain tax initiatives favorable adjustments provisional estimate tcja partially offset •an increase tax benefits associated resolution certain tax positions pertaining prior years primarily due benefit 14 billion representing tax interest resulting favorable settlement irs audit •benefits related certain tax initiatives associated implementation new business structure •the tax benefits recorded result additional guidance issued us department treasury related enactment tcja •the favorable change jurisdictional mix earnings result operating fluctuations normal course business years federal state international net tax liabilities assumed established part business acquisition included provisionbenefit taxes income see note 2a b tax rate reconciliation asee note 5a bfor taxation nonus operations rate impact reflects income tax rates relative earnings locations business outside us together us tax cost international operations changes uncertain tax positions included reconciling item called “tax settlements resolution certain tax positions” well changes valuation allowances specifically jurisdictional location earnings significant component effective tax rate year rate impact component influenced specific location nonus earnings level earnings compared total earnings ii us tax implications foreign operations significant component effective tax rate year generally offsets reduction effective tax rate year resulting jurisdictional location earnings iii impact certain tax initiatives iv impact changes uncertain tax positions included reconciling item called “tax settlements resolution certain tax positions” component effective tax rate year result either increase decrease effective tax rate jurisdictional mix earnings includes impact location earnings well us tax cost international operations vary result operating fluctuations normal course business result extent location income expense items restructuring charges asset impairments gains losses strategic business decisions see also note 5a components pretax income provisionbenefit taxes income based location taxing authorities information settlements items impacting provisionbenefit taxes income cin years impact effective tax rate result jurisdictional location earnings 2020 2019 reduction effective tax rate resulting jurisdictional location earnings largely due lower tax rates certain jurisdictions well manufacturing incentives subsidiaries singapore lesser extent puerto rico benefit puerto rican tax incentives pursuant grant expires 2029 grant partially exempt income property municipal taxes singapore benefit incentive tax rates effective 2045 income manufacturing operations dfor discussion tax settlements resolution certain tax positions impact gain completion consumer healthcare jv transaction see note 5a ethe favorable rate impact 2018 result updated 2017 invoice received federal government reflected lower expense previously estimated invoiced periods well certain tax initiatives fincludes changes interest related uncertain tax positions included reconciling item called “tax settlements resolution certain tax positions” gall net primarily due routine business operations notes consolidated financial statements pfizer inc subsidiary companies c deferred taxes deferred tax assets liabilities associated global intangible lowtaxed income included relevant categories see note 5a athe increase 2020 primarily related capitalization certain rdrelated expenses bthe decrease 2020 primarily result amortization intangible assets certain impairment charges cthe amounts 2020 2019 reduced unrecognized tax benefits 30 billion 29 billion respectively net operating loss carryforwards similar tax losses andor tax credit carryforwards available tax law applicable jurisdiction settle additional income taxes would result disallowance tax position dthe amounts 2020 2019 primarily related consumer healthcare jv see note 2c ein 2020 noncurrent deferred tax assets noncurrent tax assets 09 billion noncurrent deferred tax liabilities 41 billion 2019 noncurrent deferred tax assets noncurrent tax assets 07 billion noncurrent deferred tax liabilities 57 billion carryforwards primarily related net operating capital losses general business credits foreign tax credits charitable contributions available reduce future us federal andor state well international income taxes payable either indefinite life expiring various times 2021 2040 certain us net operating losses general business credits subject limitations irc section 382 december 31 2020 made us tax provision 550 billion unremitted earnings international subsidiaries earnings intended indefinitely reinvested overseas determination hypothetical unrecognized deferred tax liability december 31 2020 practicable amount indefinitely reinvested earnings based estimates assumptions subject management evaluation subject change normal course business based operational cash flow completion local statutory financial statements finalization tax returns audits among things accordingly regularly update earnings profits analysis events tax contingencies description accounting policies associated accounting income tax contingencies see note 1p uncertain tax positions tax law complex often subject varied interpretations uncertain whether tax positions sustained upon audit december 31 2020 43 billion december 31 2019 42 billion net unrecognized tax benefits excluding associated interest •tax assets uncertain tax positions primarily represent estimate potential tax benefits one tax jurisdiction could result payment income taxes another tax jurisdiction potential benefits generally result cooperative efforts among taxing authorities required tax treaties minimize double taxation commonly referred competent authority process recoverability assets believe likely dependent upon actual payment taxes one tax jurisdiction cases successful petition recovery another tax jurisdiction december 31 2020 13 billion assets associated uncertain tax positions amounts included noncurrent deferred tax assets noncurrent tax assets 11 billion noncurrent deferred tax liabilities 122 million taxes payable 46 million december 31 2019 12 billion assets associated uncertain tax positions amounts included noncurrent deferred tax assets noncurrent tax assets 10 billion noncurrent deferred tax liabilities 109 million •substantially unrecognized tax benefits recognized would impact effective income tax rate notes consolidated financial statements pfizer inc subsidiary companies afor 2020 2019 primarily related acquisition array goodwill adjustment made within measurement period see note 2a bfor 2020 related separation upjohn see note 2b cprimarily included provisionbenefit taxes income dprimarily related effectively settling certain issues us foreign tax authorities see note 5a eprimarily related cash payments reductions tax attributes fprimarily related decreases result lapse applicable statutes limitations gin 2020 included income taxes payable 34 million noncurrent deferred tax assets noncurrent tax assets 18 million noncurrent deferred tax liabilities 30 billion taxes payable 25 billion 2019 included income taxes payable 108 million current tax assets 2 million noncurrent deferred tax assets noncurrent tax assets 51 million noncurrent deferred tax liabilities 28 billion taxes payable 24 billion •interest related unrecognized tax benefits recorded accordance laws jurisdiction recorded primarily provisionbenefit taxes income 2020 recorded net increase interest 89 million 2019 recorded net decrease interest 564 million resulting primarily settlement irs 2018 recorded net increase interest 103 million gross accrued interest totaled 493 million december 31 2020 reflecting decrease 5 million result cash payments decrease 75 million relating separation upjohn gross accrued interest totaled 485 million december 31 2019 reflecting decrease 13 million result cash payments 2020 amount included income taxes payable 7 million taxes payable 486 million 2019 amount included income taxes payable 20 million taxes payable 465 million accrued penalties significant see also note 5a status tax audits potential impact accruals uncertain tax positions us one major tax jurisdictions regularly audited irs respect pfizer irs issued revenue agent’s report rar tax years 20112013 agreement rar currently appealing certain disputed issues tax years 20142015 currently audit tax years 20162020 open audit tax years closed addition open audit years us open audit years major tax jurisdictions canada 20132020 japan 20172020 europe 20112020 primarily reflecting ireland uk france italy spain germany latin america 19982020 primarily reflecting brazil puerto rico 20162020 settlements statutes limitations expirations could result significant decrease uncertain tax positions estimate reasonably possible within next 12 months gross unrecognized tax benefits exclusive interest could decrease much 50 million result settlements taxing authorities expiration statutes limitations assessments based estimates assumptions deemed reasonable management estimates unrecognized tax benefits potential tax benefits may representative actual outcomes variation estimates could materially affect financial statements period settlement statutes limitations expire treat events discrete items period resolution finalizing audits relevant taxing authorities include formal administrative legal proceedings result difficult estimate timing range possible changes related uncertain tax positions changes could significant notes consolidated financial statements pfizer inc subsidiary companies e tax provisionbenefit comprehensive incomeloss ataxes provided foreign currency translation adjustments relating investments international subsidiaries expected held indefinitely bfor additional information adoption new accounting standard related reclassification certain tax effects aoci see note 1b 2018 financial report cfor additional information adoption new accounting standard related financial assets liabilities see note 1b 2018 financial report note 6 accumulated comprehensive loss excluding noncontrolling interests arepresent cumulative effect adjustments january 1 2018 adoption accounting standards related financial assets liabilities ii reclassification certain tax effects aoci see note 1b 2018 financial report bamounts include foreign currency translation adjustments attributable noncontrolling interests 9 million loss 2020 11 million loss 2019 20 million loss 2018 foreign currency translation adjustments 2020 primarily include gains strengthening euro japanese yen australian dollar uk pound us dollar net gains related foreign currency translation adjustments related equity method investment consumer healthcare jv see note 2c partially offset impact net investment hedging program foreign currency translation adjustments 2019 primarily include gain approximately 13 billion pretax 978 million aftertax related foreign currency translation adjustments attributable equity method investment consumer healthcare jv see note 2c partially offset strengthening us dollar euro australian dollar results net investment hedging program amounts 2018 primarily reflect strengthening us dollar euro uk pound chinese renminbi cfor information see note 2b notes consolidated financial statements pfizer inc subsidiary companies note 7 financial instruments fair value measurements financial assets liabilities measured fair value recurring basis fair value hierarchy using market approach alongterm equity securities 190 million december 31 2020 176 million december 31 2019 held restricted trusts employee benefit plans bincludes life insurance policies held restricted trusts us nonqualified employee benefit plans underlying invested assets contracts marketable securities carried fair value changes fair value recognized incomedeductionsnet see note 4 notes consolidated financial statements pfizer inc subsidiary companies financial assets liabilities measured fair value recurring basis differences estimated fair values carrying values heldtomaturity debt securities private equity securities longterm receivables shortterm borrowings measured fair value recurring basis significant december 31 2020 2019 fair value measurements heldtomaturity debt securities shortterm borrowings based level 2 inputs fair value measurements longterm receivables private equity securities based level 3 inputs using market approach b investments total shortterm longterm investments equitymethod investments aas december 31 2020 2019 includes money market funds primarily invested us treasury government debt brepresent investments life sciences sector debt securities aprimarily issued diverse group corporations portfolio availableforsale heldtomaturity debt securities expected credit losses would immaterial financial statements notes consolidated financial statements pfizer inc subsidiary companies equity securities areported incomedeductionsnet see note 4 bincluded net unrealized gains observable price changes equity securities without readily determinable fair values since january 1 2018 cumulative impairments downward adjustments 81 million upward adjustments 61 million impairments downward upward adjustments significant 2020 2019 2018 c shortterm borrowings asee note 2b bsee note 7d cprimarily includes cash collateral see note 7f weightedaverage effective interest rate commercial paper outstanding approximately 013 december 31 2020 192 december 31 2019 december 31 2020 access total 11 billion us revolving credit facilities consisting 7 billion facility expiring 2025 4 billion facility expiring september 2021 may used support commercial paper borrowings january 2021 4 billion facility terminated request addition us revolving credit facilities lenders provided us additional 332 million lines credit 300 million expire within one year total lines credit 113 billion unused december 31 2020 longterm debt notes consolidated financial statements pfizer inc subsidiary companies reclassified current portion longterm debt longterm debt outlined table generally redeemable us time varying redemption prices plus accrued unpaid interest issuances amay redeemed us time whole part varying redemption prices plus accrued unpaid interest weightedaverage effective interest rate notes issuance 211 bmay redeemed us time whole part redemption price plus accrued unpaid interest weighted average effective interest rate notes issuance 267 march 2019 completed public offering 50 billion aggregate principal amount senior unsecured notes weightedaverage effective interest rate 357 september 2018 completed public offering 50 billion aggregate principal amount senior unsecured notes weightedaverage effective interest rate 356 retirements november 2020 repurchased 115 billion 342 million principal amount outstanding 195 senior unsecured notes due june 2021 580 senior unsecured notes due august 2023 recorded total net loss 36 million incomedeductionsnet see note 2b march 2020 repurchased par 1065 billion principal amount outstanding senior unsecured notes due 2047 january 2019 repurchased €11 billion 13 billion principal amount outstanding 575 eurodenominated debt due june 2021 redemption value €13 billion 15 billion recorded net loss 138 million incomedeductionsnet included related termination cross currency swaps e derivative financial instruments hedging activities foreign exchange risk significant portion revenues earnings net investments foreign affiliates exposed changes foreign exchange rates manage foreign exchange risk predominately use derivative financial instruments foreign currency debt financial instruments serve mitigate impact net income result remeasurement another currency impact translation us dollars certain foreign exchangedenominated transactions derivative financial instruments primarily hedge offset exposures euro uk pound japanese yen swedish krona canadian dollar additionally hedge portion forecasted intercompany inventory sales denominated euro japanese yen chinese renminbi canadian dollar uk pound australian dollar two years changes fair value reported earnings comprehensive incomeloss depending nature purpose financial instrument hedge offset relationship certain foreign exchange contracts exclude amount assessment hedge effectiveness recognize excluded amount amortization approach earnings hedge relationships follows generally recognize gains losses foreign exchange contracts designated fair value hedges earnings upon recognition change fair value hedged item also recognize offsetting foreign exchange impact attributable hedged item earnings •generally record comprehensive incomeloss gains losses foreign exchange contracts designated cash flow hedges reclassify amounts earnings period periods hedged transaction affects earnings •we record comprehensive incomeloss foreign currency translation adjustments net foreign exchange gains losses related foreign exchangedenominated debt foreign exchange contracts designated hedge net investments foreign subsidiaries reclassify amounts earnings upon sale substantial liquidation net investments •for certain foreign exchange contracts designated hedging instruments recognize gains losses contracts used offset foreign currency assets liabilities immediately earnings along earnings impact items generally offset contracts essentially take opposite currency position reflected monthend balance sheet counterbalance effect currency movement notes consolidated financial statements pfizer inc subsidiary companies interest rate risk interestbearing investments borrowings subject interest rate risk depending market conditions may change profile outstanding debt investments entering derivative financial instruments like interest rate swaps either hedge offset exposure changes fair value hedged items fixed interest rates convert variable rate debt investments fixed rates derivative financial instruments primarily hedge us dollar fixedrate debt recognize gains losses interest rate contracts designated fair value hedges earnings upon recognition change fair value hedged risk also recognize offsetting earnings impact attributable hedged item athe notional amount outstanding foreign exchange contracts hedging intercompany forecasted inventory sales 50 billion december 31 2020 59 billion december 31 2019 aoid incomedeductionsnet included incomedeductionsnet consolidated statements income cos cost sales included cost sales consolidated statements income oci comprehensive incomeloss included consolidated statements comprehensive income notes consolidated financial statements pfizer inc subsidiary companies bthe amounts reclassified oci cos •a net gain 172 million 2020 including gain 22 million reported income discontinued operationsnet tax •a net gain 247 million 2019 including gain 46 million reported income discontinued operationsnet tax remaining amounts reclassified oci oid based yearend foreign exchange rates subject change expect reclassify pretax loss 341 million within next 12 months income maximum length time hedging future foreign exchange cash flow relates 18 billion uk pound debt maturing 2043 cthe amounts reclassified oci reclassified oid dlongterm debt includes foreign currency borrowings carrying values 21 billion december 31 2020 used hedging instruments net investment hedge relationships acarrying amounts exclude cumulative amount fair value hedging adjustments f credit risk ongoing basis monitor review credit risk customers financial institutions exposures investment portfolio respect trade accounts receivable monitor creditworthiness customers grant credit normal course business general requirement collateral customers additional information trade accounts receivable allowance credit losses see note 1g significant portion trade accounts receivable balances due drug wholesalers additional information trade accounts receivables significant customers see note 17b respect investments monitor concentrations credit risk associated government agency corporate issuers securities investments placed instruments investment grade primarily short duration exposure limits established limit concentration single credit counterparty december 31 2020 largest investment exposures portfolio represent primarily sovereign debt instruments issued us france canada japan sweden germany respect derivative financial instrument agreements financial institutions expect incur significant loss failure counterparty derivative financial instruments executed international swaps derivatives association isda master agreements creditsupport annexes contain zero threshold provisions requiring collateral exchanged daily depending levels exposure result significant concentrations credit risk individual financial institution december 31 2020 aggregate fair value derivative financial instruments net payable position 946 million posted collateral 821 million corresponding amount reported shortterm investments december 31 2020 aggregate fair value derivative financial instruments net receivable position 137 million received collateral 142 million corresponding amount reported shortterm borrowings including current portion longterm debt note 8 inventories athe change december 31 2019 reflects increases certain products including inventory build new product launches supply recovery market demand network strategy increase due foreign exchange bincluded noncurrent assets recoverability issues amounts notes consolidated financial statements pfizer inc subsidiary companies note 9 property plant equipment note 10 identifiable intangible assets goodwill identifiable intangible assets athe increase gross carrying amount primarily reflects transfer 600 million iprd developed technology rights reflect approval braftovi combination erbitux® cetuximab treatment brafv600emutant mcrc prior therapy well 499 million capitalized portion upfront payment myovant see note 2e increase 200 million measurement period adjustment related acquisition array see note 2a partially offset 528 million impairment eucrisa see note 4 263 million impairment certain generic sterile injectables acquired connection acquisition hospira see note 4 bthe changes gross carrying amounts primarily reflect transfer 600 million indefinitelived licensing agreements finitelived licensing agreements reflect approval us several products subject outlicensing arrangements acquired array well measurement period adjustments related acquisition array cthe decrease gross carrying amount primarily reflects decrease 12 billion measurement period adjustment related acquisition array 900 million impairment iprd see note 4 transfer 600 million iprd developed technology rights reflect approval braftovi combination erbitux® cetuximab treatment brafv600emutant mcrc prior therapy dthe decrease primarily due amortization impairments measurement period adjustments related acquisition array partially offset capitalization upfront payment myovant see note 2e nearly identifiable intangible assets managed commercial organization 9 total cost iprd managed rd organization notes consolidated financial statements pfizer inc subsidiary companies developed technology rights developed technology rights represent cost developed technology acquired third parties include right develop use market sell andor offer sale product compounds intellectual property acquired respect products compounds andor processes completed possess welldiversified portfolio hundreds developed technology rights across therapeutic categories representing commercialized products significant components developed technology rights following xtandi prevnar 13prevenar 13 infant braftovimektovi premarin prevnar 13prevenar 13 adult eucrisa orgovyx lesser extent zavicefta tygacil merremmeronem refacto afxyntha pristiq bosulif also included category postapproval milestone payments made alliance agreements certain biopharmaceutical products brands represent cost tradenames knowhow products receive patent protection indefinitelived brands include medrol depomedrol finitelived brands include depoprovera zavedos iprd assets represent rd assets yet received regulatory approval major market significant components iprd following program oral poly adp ribose polymerase inhibitor treatment patients germline brcamutated advanced breast cancer acquired part medivation acquisition assets acquired connection array acquisition iprd assets required classified indefinitelived assets successful completion abandonment associated rd effort accordingly development period date acquisition assets amortized approval obtained major market typically either us eu series countries subject certain specified conditions management judgment time determine useful life asset reclassify iprd begin amortization associated rd effort abandoned related iprd assets likely writtenoff record impairment charge iprd assets highrisk assets given uncertain nature rd accordingly expect many iprd assets become impaired writtenoff time future licensing agreements licensing agreements developed technology development primarily relate outlicensing arrangements acquired third parties including array acquisition assets represent cost license acquired right future royalties andor milestones upon development commercialization licensing partner significant component licensing arrangements outlicensing arrangements number partners oncology technology varying stages development yet received regulatory approval major market accordingly development period date acquisition assets classified indefinitelived intangible assets amortized approval obtained major market time determine useful life asset reclassify respective licensing arrangement asset finitelived intangible asset begin amortization development effort abandoned related licensing asset likely writtenoff record impairment charge amortization weightedaverage life total finitelived intangible assets largest component developed technology rights approximately 9 years total amortization expense finitelived intangible assets 35 billion 2020 45 billion 2019 48 billion 2018 b goodwill beginning 2019 reorganized commercial operations began manage businesses three different operating segmentsbiopharma upjohn consumer healthcare result reorganization commercial operations remaining goodwill required reallocated amongst new biopharma upjohn operating segments determining fair value reporting unit old new management structure portions transferred completed reallocation based relative fair value second quarter 2019 retrospectively presented goodwill according operating structure consumer healthcare business classified held sale december 31 2018 upon closing transaction gsk third quarter 2019 deconsolidated consumer healthcare business derecognized consumer healthcare goodwill additional information see note 2c november 16 2020 completed spinoff combination upjohn business mylan upon closing deconsolidated upjohn business derecognized 106 billion upjohn goodwill addition december 31 2019 goodwill associated upjohn business classified noncurrent assets discontinued operations additional information see note 2b notes consolidated financial statements pfizer inc subsidiary companies aadditions relate acquisition array see note 2a bother represents impact foreign exchange cadditions primarily represent impact measurement period adjustments related array acquisition see note 2a note 11 pension postretirement benefit plans defined contribution plans majority employees worldwide eligible retirement benefits provided defined benefit pension plans defined contribution plans us sponsor ircqualified supplemental nonqualified defined benefit plans defined contribution plans qualified plan meets requirements certain sections irc generally contributions qualified plans tax deductible qualified plan typically provides benefits broad group employees restrictions discriminating favor highly compensated employees regard coverage benefits contributions supplemental nonqualified plan provides additional benefits certain employees addition provide medical insurance benefits certain retirees eligible dependents postretirement plans components net periodic benefit costs changes comprehensive incomeloss notes consolidated financial statements pfizer inc subsidiary companies b actuarial assumptions aeffective january 1 2018 froze defined benefit plans future benefit accruals us members’ accrued benefits date longer increase line future compensation increases rate compensation increase therefore longer assumption used determine benefit obligation net periodic benefit cost us qualified nonqualified pension plans assumptions used develop benefit obligations fiscal yearend assumptions reviewed least annual basis revise assumptions based annual evaluation longterm trends well market conditions may impact cost providing retirement benefits weightedaverage discount rate us defined benefit plans determined annually evaluated modified reflect yearend prevailing market rate portfolio highquality fixed income investments rated aaaa better reflect rates pension benefits could effectively settled international plans discount rates set benchmarking investment grade corporate bonds rated aaaa better including sufficient data yield curve approach rate determinations made consistent local requirements overall yield curves used measure benefit obligations yearend 2020 resulted lower discount rates compared prior year notes consolidated financial statements pfizer inc subsidiary companies c obligations funded status athe pbo represents present value benefit obligation earned end year factors future compensation increases abo similar pbo factor future compensation increases us qualified supplemental nonqualified pension plans benefit obligation pbo also equal abo international pension plans benefit obligation pbo abo international pension plans 115 billion 2020 106 billion 2019 postretirement plans benefit obligation abo bprimarily includes actuarial losses resulting decreases discount rates 2020 2019 cfor information see note 2b aincluded noncurrent assets bincluded accrued compensation related items cincluded pension benefit obligations postretirement benefit obligations noncurrent liabilities appropriate notes consolidated financial statements pfizer inc subsidiary companies aprimarily represent impact changes discount rates assumptions result cumulative changes pbo well cumulative difference expected return actual return plan assets accumulated actuarial losses recognized accumulated comprehensive loss amortized net periodic benefit costs primarily average remaining service period active participants plans frozen average life expectancy plan participants frozen plans primarily using corridor approach bthe change december 31 2019 includes derecognition 388 million pretax actuarial losses net prior service credits associated benefit plans distributed result spinoff combination upjohn business mylan november 16 2020 us plans many international plans underfunded december 31 2020 notes consolidated financial statements pfizer inc subsidiary companies plan assets acertain investments measured nav per share equivalent classified fair value hierarchy nav amounts presented table intended permit reconciliation fair value hierarchy amounts presented total pension benefits plan assets bgovernment agency obligations inclusive repurchase agreements cmainly includes investments private equity private debt public equity limited partnerships lesser extent real estate venture capital dmostly includes investments hedge funds real estate ereflects postretirement plan assets support portion us retiree medical plans notes consolidated financial statements pfizer inc subsidiary companies equity securities fixed income securities investments may combined commingled funds commingled funds valued reflect interest fund based reported yearend nav partnership investments valued based yearend reported nav equivalent adjustments appropriate lagged reporting three months following methods assumptions used estimate fair value pension postretirement plans’ assets •cash equivalents level 1 investments may include cash equivalents foreign currency valued using exchange rates level 2 investments may include shortterm investment funds commingled funds priced stable nav administrator funds •equity securities level 1 investments may include individual securities valued closing price last trade reported major market traded level 1 level 2 investments may include commingled funds readily determinable fair value based quoted prices exchange published nav derived quoted prices active markets underlying securities level 3 investments may include individual securities unlisted delisted suspended illiquid typically valued using last available price •fixed income securities level 1 investments may include individual securities valued closing price last trade reported major market traded level 2 investments may include commingled funds readily determinable fair value based observable prices underlying securities level 2 investments may include corporate bonds government agency obligations fixed income securities valued using bid evaluation pricing models quoted prices securities similar characteristics level 3 investments may include securities valued using alternative pricing sources investment managers brokers use proprietary pricing models incorporate unobservable inputs •other investments level 1 investments may include individual securities valued closing price last trade reported major market traded level 2 investments may include insurance contracts invest interest bearing cash us government securities corporate debt instruments certain investments authorized include derivatives equity bond futures swaps options currency futures forwards managing risks exposures global plan assets managed objective generating returns enable plans meet future obligations seeking manage net periodic benefit costs cash contributions longterm utilize longterm asset allocation ranges management plans’ invested assets longterm return expectations developed based diversified global investment strategy takes account historical experience well impact portfolio diversification active portfolio management view current future economic financial market conditions market conditions factors change may adjust targets accordingly asset allocations may vary target allocations longterm asset allocation ranges reflect asset class return expectations tolerance investment risk within context respective plans’ longterm benefit obligations ranges supported analysis incorporates historical expected returns asset class well volatilities correlations across asset classes liability profile pension plan overseen local committee board responsible overall investment pension plan assets determining investment policies associated target allocations committee board considers wide variety factors target asset allocation international pension plans set standalone basis relevant board committee target notes consolidated financial statements pfizer inc subsidiary companies asset allocation ranges shown international pension plans seek reflect combined target allocations across plans also showing range within target allocations plan typically falls investment managers certain separately managed accounts commingled funds private equity funds may permitted use repurchase agreements derivative securities including us treasury equity futures contracts described respective investment management subscription partnership governing agreement e cash flows practice fund amounts qualified pension plans least sufficient meet minimum requirements set forth applicable employee benefit laws local tax laws table reflects total us international plan benefits projected paid plans general assets current actuarial assumptions used calculation benefit obligation therefore actual benefit payments may differ projected benefit payments f defined contribution plans defined contribution plans us several countries majority us defined contribution plans employees may contribute portion salaries bonuses plans match cash portion employee contributions beginning january 1 2011 newly hired nonunion employees rehires transfers us puerto rico longer offer defined benefit pension plan instead offer retirement savings contribution rsc defined contribution plan rsc annual noncontributory employer contribution dependent upon participant making contribution determined based employee’s eligible compensation age years service beginning january 1 2018 nonunion employees us puerto rico defined benefit plans transitioned rsc defined contribution plans recorded charges related employer contributions global defined contribution plans 685 million 2020 659 million 2019 622 million 2018 note 12 equity common stock purchases purchase common stock privately negotiated transactions open market circumstances prices warrant purchased shares sharepurchase plans authorized bod available general corporate purposes december 2015 bod authorized 11 billion share repurchase program exhausted third quarter 2018 december 2017 bod authorized additional 10 billion share repurchase program exhausted first quarter 2019 december 2018 bod authorized another 10 billion share repurchase program utilized time share repurchases commenced thereunder first quarter 2019 march 2018 entered accelerated share repurchase agreement asr citibank na repurchase 4 billion common stock pursuant previously announced share repurchase authorization paid 4 billion received initial delivery 87 million shares stock price 3661 per share represented approximately 80 notional amount asr september 2018 asr completed resulting citibank owing us additional 21 million shares common stock average price paid shares delivered asr 3686 per share common stock received included treasury stock february 2019 entered asr goldman sachs co llc repurchase 68 billion common stock pursuant previously announced share repurchase authorization paid 68 billion received initial delivery 130 million shares common stock represented approximately 80 notional amount asr august 2019 asr goldman sachs co llc completed resulting goldman sachs co llc owing us additional 335 million shares common stock average price paid shares delivered asr 4142 per share common stock received included treasury stock notes consolidated financial statements pfizer inc subsidiary companies arepresents shares purchased pursuant asr goldman sachs co llc entered february 2019 well open market share repurchases 21 billion brepresents shares purchased pursuant asr citibank entered march 2018 well open market share repurchases 82 billion remaining sharepurchase authorization approximately 53 billion december 31 2020 b preferred stock employee stock ownership plans prior may 4 2020 series convertible perpetual preferred stock series preferred stock held esop trust outstanding shares series preferred stock converted direction independent fiduciary trust accordance certificate designations series preferred stock shares common stock may 4 2020 trust received aggregate 1070369 shares common stock upon conversion zero shares series preferred stock remaining outstanding result conversion december 2020 filed certificate elimination restated certificate incorporation delaware secretary state eliminated series preferred stock since may 4 2020 one esop holds common stock company common esop prior also esop held series preferred stock december 31 2020 shares common stock held common esop allocated pfizer us defined contribution plan participants compensation cost related common esop 19 million 2020 20 million 2019 19 million 2018 note 13 sharebased payments compensation programs include sharebased payment awards value determined reference fair value shares provide grant shares options acquire shares similar arrangements sharebased awards designed based competitive survey data industry peer groups used compensation purposes allocated different longterm incentive awards generally form total shareholder return units tsrus restricted stock units rsus portfolio performance shares ppss performance share awards psas stock options determined compensation committee 2019 stock plan 2019 plan replaced superseded 2014 plan provides 400 million shares addition shares remaining 2014 plan authorized grants 2019 plan provides number stock options tsrus rsus performancebased awards may granted one individual 36month period limited 20 million shares rsus ppss psas count three shares tsrus stock options count one share toward maximum shares available 2019 plan december 31 2020 411 million shares available award although required used authorized unissued shares lesser extent treasury stock satisfy obligations programs summary awards valuation details notes consolidated financial statements pfizer inc subsidiary companies aretirementeligible holders defined grant terms convert tsrus vested profit units ptus conversion ratio based calculation used determine shares tsru settlement ptus entitled earn dividend equivalent units deus ptus deus settled common stock tsrus’ original settlement date subject terms conditions original grant including forfeiture provisions b 2017 performance total shareholder return units ptsrus awarded former chairman chief executive officer 1444395 ptsrus 361099 ptsrus awarded group president chief business officer former role group president pfizer innovative health grant price 3031 gdfv 554 per ptsru amounts adjusted upjohn spinoff discussed note 2b addition characteristics valuation methodology tsrus ptsru grants require special service performance conditions aweightedaverage gdfv per tsrus stock options btsru includes expense ptsrus significant years presented notes consolidated financial statements pfizer inc subsidiary companies total sharebased payment expense 780 million 718 million 949 million 2020 2019 2018 respectively includes pretax sharebased payment expense included income discontinued operationsnet tax 23 million 30 million 27 million 2020 2019 2018 respectively tax benefit sharebased compensation expense 141 million 137 million 180 million 2020 2019 2018 respectively table excludes total expense due modification sharebased awards connection cost reductionproductivity initiatives significant years presented recorded restructuring charges certain acquisitionrelated costs see note 3 amounts capitalized part inventory cost significant period presented avested nonvested shares outstanding paid december 31 2020 339 million bactivity prior upjohn business spinoff adjusted cin connection upjohn business spinoff company made adjustments preserve intrinsic value awards immediately spinoff terms outstanding awards remain continue vest original vesting periods certain outstanding awards time spinoff held employees upjohn prorated services performed remaining portion forfeited time separation sharebased awards held november 16 2020 adjusted follows •the number outstanding tsrus increased grant price decreased •the number shares common stock subject outstanding rsus ppss psas increased adjustments stockbased compensation awards result additional compensation cost 2020 settled 5478547 tsrus weightedaverage grant price 3093 per unit bin 2020 2217044 tsrus weightedaverage grant price 2926 per unit converted 757285 ptus cthe number tsrus expected vest takes account estimate expected forfeitures notes consolidated financial statements pfizer inc subsidiary companies amarket price underlying common stock less exercise price bactivity prior upjohn business spinoff adjusted cin connection upjohn business spinoff discussed number shares common stock subject outstanding stock option increased exercise price decreased adjustments result additional compensation cost dthe number options expected vest takes account estimate expected forfeitures note 14 earnings per common share attributable pfizer inc common shareholders athese common stock equivalents outstanding periods presented included computation diluted eps periods inclusion would antidilutive effect allocated shares held common esop including reinvested dividends considered outstanding eps calculations eventual conversion allocated preferred shares held preferred esop assumed diluted eps calculation conversion date occurred may 2020 see note 12 note 15 leases lease real estate fleet equipment use operations leases generally lease terms 1 30 years include options terminate extend leases 5 10 years monthtomonth basis include options reasonably certain exercised part determination lease terms may negotiate termination clauses anticipation changes market conditions generally termination options exercised residual value guarantees generally included within operating leases exception fleet leases addition base rent payments leases may require us pay directly taxes nonlease components insurance maintenance operating expenses may dependent usage vary monthtomonth variable lease payments amounted 380 million 2020 327 million 2019 elected practical expedient new standard separate nonlease components lease components calculating amounts rou assets lease liabilities underlying asset classes determine arrangement lease inception contract perform lease classification test lease commencement date rou assets represent right use underlying asset lease term lease liabilities represent obligation make lease payments arising lease operating lease rou assets liabilities recognized commencement date notes consolidated financial statements pfizer inc subsidiary companies based present value lease payments lease term leases provide implicit rate use estimated incremental borrowing rate based information available commencement date determining present value future payments areflects lease payments due within 12 months subsequent balance sheet date notes consolidated financial statements pfizer inc subsidiary companies april 2018 entered agreement lease space office building new york city expect take control property 2021 relocate global headquarters new office building 2022 future minimum rental commitment 20year lease approximately 16 billion prior adoption new lease standard rental expense net sublease income 301 million 2018 note 16 contingencies certain commitments certain subsidiaries subject numerous contingencies arising ordinary course business including tax legal contingencies following outlines legal contingencies discussion tax contingencies see note 5b legal proceedings legal contingencies include limited following •patent litigation typically involves challenges coverage andor validity patents various products processes dosage forms plaintiff majority actions adverse outcome actions plaintiff could result loss patent protection drug significant loss revenues drug impairment value associated assets •product liability productrelated litigation include personal injury consumer offlabel promotion securities antitrust breach contract claims among others often involves highly complex issues relating medical causation label warnings reliance warnings scientific evidence findings actual provable injury matters •commercial matters include acquisition licensing collaboration copromotionrelated productpricing claims environmental claims proceedings involve complexities vary matter •government investigations often related extensive regulation pharmaceutical companies national state local government agencies us jurisdictions certain contingencies could result losses including damages fines andor civil penalties could substantial andor criminal charges believe claims defenses matters defendant substantial litigation inherently unpredictable excessive verdicts occur believe matters material adverse effect financial position however could incur judgments enter settlements revise expectations regarding outcome matters could material adverse effect results operations andor cash flows period amounts accrued paid accrued losses probable reasonably estimable substantially contingencies subject significant uncertainties therefore determining likelihood loss andor measurement loss complex consequently unable estimate range reasonably possible loss excess amounts accrued assessments result complex series judgments future events uncertainties based estimates assumptions deemed reasonable management may prove incomplete inaccurate unanticipated events circumstances may occur might cause us change estimates assumptions amounts recorded legal environmental contingencies result complex series judgments future events uncertainties rely heavily estimates assumptions august 2020 sec amended disclosure rules regarding threshold disclosure proceedings environmental laws governmental authority party accordance amended rule adopted disclosure threshold proceedings 1 million potential actual governmental monetary sanctions principal pending matters party discussed determining whether pending matter principal matter consider quantitative qualitative factors assess materiality among others amount damages nature relief sought specified view merits claims strength defenses whether action purports class action certified view likelihood class certified court jurisdiction proceeding pending whether related actions transferred multidistrict litigation experience knowledge companies similar proceedings whether disclosure action would important reader financial statements including whether disclosure might change reader’s judgment financial statements light information available reader potential impact proceeding reputation extent public interest matter addition respect patent matters plaintiff consider among things financial significance product protected patents issue matters discussed include management believes likelihood possible loss excess amounts accrued remote a1 legal proceedingspatent litigation involved suits relating patents including limited discussed involve claims generic drug manufacturers patents covering products processes dosage forms invalid andor cover product generic drug manufacturer also counterclaims well various independent actions filed alleging assertions attempts enforce patent rights respect certain products constitute unfair competition andor violations antitrust laws addition challenges us patents discussed patent rights certain products challenged various jurisdictions also party patent damages suits various jurisdictions pursuant generic drug manufacturers payers governments parties seeking damages us allegedly causing delay generic entry additionally licensing collaboration partners face challenges generic drug manufacturers patents covering products licenses copromotion rights notes consolidated financial statements pfizer inc subsidiary companies also often involved proceedings inter partes review postgrant review reexamination opposition proceedings us patent trademark office european patent office foreign counterparts relating intellectual property intellectual property rights others also one patents found invalid proceedings generic competitive products could introduced market resulting erosion sales existing products example several patents pneumococcal vaccine portfolio challenged inter partes review postgrant review proceedings us 2017 patent trial appeal board ptab initiated proceedings remain pending respect two pneumococcal vaccine patents however ptab declined initiate proceedings two pneumococcal vaccine patents various legal challenges pneumococcal vaccine patents remain pending jurisdictions outside us invalidation patents pneumococcal portfolio could potentially allow competitor’s pneumococcal vaccine marketplace event patents found valid infringed competitor’s pneumococcal vaccine might prohibited entering market competitor might required pay us royalty also subject patent litigation pursuant one third parties seek damages andor injunctive relief compensate alleged infringement patents commercial activities example hospira subsidiaries involved patent disputes attempts bring generic pharmaceutical biosimilar products market one marketed products found infringe valid patent rights third party third party may awarded significant damages may prevented sales product damages may enhanced much threefold one subsidiaries found willfully infringed valid patent rights third party actions plaintiff epipen 2010 king acquired 2011 whollyowned subsidiary brought patentinfringement action sandoz us district court district new jersey connection sandoz’s abbreviated new drug application anda filed fda seeking approval market epinephrine injectable product sandoz challenging patents expire 2025 covering nextgeneration autoinjector use epinephrine sold epipen brand name xeljanz tofacitinib beginning 2017 brought patentinfringement actions several generic manufacturers filed separate andas fda seeking approval market generic versions tofacitinib tablets one 5 mg 10 mg dosage strengths immediate extended release forms date settled actions several generic manufacturers terms material pfizer remaining actions continue us district court district delaware described 2017 brought patentinfringement action zydus pharmaceuticals usa inc cadila healthcare ltd collectively zydus asserting infringement validity three patents patent covering active ingredient expiring december 2025 patent covering enantiomer tofacitinib expiring 2022 patent covering polymorphic form tofacitinib expiring 2023 patent zydus challenged anda seeking approval market generic version tofacitinib 5 mg tablets november 2020 settled case zydus terms material pfizer february 2021 brought separate patentinfringement action zydus asserting infringement validity composition matter crystalline form patents challenged zydus anda seeking approval market generic version tofacitinib 22 mg extended release tablets 2018 brought separate patent infringement action teva pharmaceuticals usa inc teva asserting infringement validity patent covering extended release formulations tofacitinib challenged teva anda seeking approval market generic version tofacitinib 11 mg extended release tablets january 2021 brought separate patentinfringement action aurobindo pharma limited aurobindo asserting infringement validity 2025 patent 2023 patent aurobindo challenged anda seeking approval market generic version tofacitinib 5 mg 10 mg tablets inlyta axitinib 2019 glenmark pharmaceuticals limited glenmark notified us filed anda fda seeking approval market generic version inlyta glenmark asserts invalidity noninfringement crystalline form patent inlyta expires 2030 june 2019 filed suit glenmark us district court district delaware asserting validity infringement crystalline form patent inlyta ibrance palbociclib march 2019 several generic companies notified us filed andas fda seeking approval market generic versions ibrance generic companies assert invalidity noninfringement two composition matter patents one expires 2023 one expires 2027 result us patent term extension certificate issued january 2021 method use patent covering palbociclib expires 2023 april 2019 brought patent infringement actions generic filers various federal courts asserting validity infringement patents challenged generic companies beginning september 2020 received correspondence several generic companies notifying us would seek approval market generic versions ibrance generic companies assert invalidity noninfringement crystalline form patent expires 2034 beginning october 2020 brought patent infringement actions generic companies various federal courts asserting validity infringement crystalline form patent lyrica pregabalin •uk june 2014 generics uk ltd trading mylan filed invalidity action lyrica pain use patent high court justice london subsequently actavis group ptc ehf filed invalidity action court pfizer sued actavis group ptc ehf actavis uk ltd caduceus pharma ltd together actavis infringement requested preliminary relief request preliminary relief denied january 2015 hearing denial subsequently confirmed appeal notes consolidated financial statements pfizer inc subsidiary companies february 2015 national health service nhs england ordered high court intermediary issue guidance prescribers pharmacists directing prescription dispensing lyrica brand pregabalin prescribed treatment neuropathic pain nhs wales nhs northern ireland also issued prescribing guidance prescribe dispense lyrica neuropathic pain withdrawn upon patent expiration july 2017 also filed infringement actions teva uk ltd ii dr reddy’s laboratories uk ltd caduceus pharma ltd together dr reddy’s february 2015 seeking relief action actavis dr reddy’s filed invalidity counterclaim actions stayed pending outcome mylan actavis cases mylan actavis invalidity actions heard high court time actavis infringement action high court ruled us holding asserted claims either infringed invalid appeals followed november 2018 uk supreme court ruled relevant claims directed neuropathic pain invalid october 2015 sandoz gmbh sandoz ltd together sandoz launched full label generic pregabalin product obtained high court preliminary injunction enjoining sandoz sales product ordering sandoz identify parties holding product sandoz identified wholesaler aah pharmaceuticals ltd pharmacy chain lloyds pharmacy ltd supplied aah requested parties cease sales withdraw sandoz full label product october 2015 lloyds added sandoz action obtained preliminary order high court requiring lloyds advise pharmacists sandoz full label product dispensed november 2015 high court confirmed preliminary injunction sandoz lloyds sandoz filed invalidity counterclaim upon agreement parties december 2015 proceedings lloyds discontinued proceedings sandoz stayed pending outcome mylan actavis cases preliminary injunction sandoz remained place patent expiration july 2017 may 2020 dr reddy’s filed claim damages connection abovereferenced legal actions july 2020 scottish ministers fourteen scottish health boards together nhs scotland filed claim damages connection abovereferenced legal action concerning sandoz september 2020 teva sandoz ranbaxy inc ranbaxy actavis secretary state health social care together 32 national health service entities together nhs england wales northern ireland filed claims damages abovereferenced legal actions november 2020 mylan completed transaction spinoff upjohn business combine mylan form viatris part transaction viatris agreed assume indemnify pfizer liabilities arising matter ◦japan january 2017 sawai pharmaceutical company limited japanese generic company sawai filed invalidation action lyrica pain use patent japanese patent office jpo hexal ag filed separate invalidation action stayed pending result sawai action multiple parties allowed intervene sawai case july 2020 jpo recognized validity certain amended claims patent covering lyrica appealing decision august 2020 japanese regulatory authority granted regulatory approval multiple generic companies filed legal actions generic companies seeking preliminary permanent injunctions prevent infringement patent november 2020 mylan completed transaction spinoff upjohn business combine mylan form viatris part transaction viatris agreed assume indemnify pfizer liabilities arising matter involving collaborationlicensing partners eliquis february march april 2017 twentyfive generic companies sent bms paragraphiv certification letters informing bms filed andas seeking approval generic versions eliquis challenging validity infringement one three patents listed orange book eliquis one patents expired december 2019 remaining patents currently set expire 2026 2031 eliquis jointly developed commercialized bms pfizer april 2017 bms pfizer filed patentinfringement actions generic filers us district court district delaware us district court district west virginia asserting generic companies’ proposed products would infringe patents generic filer challenged generic filers challenged 2031 patent challenged 2031 2026 patent one generic company challenged three patents august 2020 us district court district delaware ruled 2026 patent 2031 patent valid infringed proposed generic products august september 2020 generic filers appealed district court’s decision us court appeals federal circuit prior august 2020 ruling bms settled certain generic companies terms material pfizer bms may settle generic companies future a2 legal proceedingsproduct litigation defendants numerous cases including limited discussed related pharmaceutical products plaintiffs cases seek damages relief various grounds alleged personal injury economic loss asbestos 1967 1982 warnerlambert owned american optical corporation american optical manufactured sold respiratory protective devices asbestos safety clothing connection sale american optical 1982 warnerlambert agreed indemnify purchaser certain liabilities including certain asbestosrelated claims warnerlambert acquired pfizer 2000 wholly owned subsidiary pfizer warnerlambert actively engaged defense continue explore various means resolving claims numerous lawsuits american optical pfizer certain previously owned subsidiaries pending various federal state courts seeking damages alleged personal injury exposure products allegedly containing asbestos allegedly hazardous materials sold pfizer certain previously owned subsidiaries also small number lawsuits pending various federal state courts seeking damages alleged exposure asbestos facilities owned formerly owned pfizer subsidiaries notes consolidated financial statements pfizer inc subsidiary companies effexor beginning may 2011 actions including purported class actions filed various federal courts wyeth certain actions affiliates wyeth certain defendants relating effexor xr extendedrelease formulation effexor plaintiffs class actions seek represent class consisting persons us territories directly purchased indirectly purchased reimbursed patients purchase effexor xr generic effexor xr defendants june 14 2008 time defendants’ allegedly unlawful conduct ceased plaintiffs actions allege delay launch generic effexor xr us territories violation federal antitrust laws certain actions antitrust consumer protection various laws certain states result wyeth fraudulently obtaining improperly listing certain patents effexor xr orange book enforcing certain patents effexor xr entering litigation settlement agreement generic drug manufacturer respect effexor xr plaintiffs seeks treble damages individual actions behalf putative class purported class actions alleged price overcharges effexor xr generic effexor xr us territories since june 14 2008 actions consolidated us district court district new jersey october 2014 district court dismissed direct purchaser plaintiffs’ claims based litigation settlement agreement declined dismiss direct purchaser plaintiff claims january 2015 district court entered partial final judgments settlement agreement claims including asserted direct purchasers endpayer plaintiffs appealed us court appeals third circuit august 2017 us court appeals third circuit reversed district court’s decisions remanded claims district court lipitor •antitrust actions beginning november 2011 purported class actions relating lipitor filed various federal courts among others pfizer certain pfizer affiliates actions ranbaxy certain ranbaxy affiliates plaintiffs various actions seek represent nationwide multistate statewide classes consisting persons entities directly purchased indirectly purchased reimbursed patients purchase lipitor certain actions generic lipitor defendants march 2010 cessation defendants’ allegedly unlawful conduct class period plaintiffs allege delay launch generic lipitor violation federal antitrust laws andor state antitrust consumer protection various laws resulting 2008 agreement pursuant pfizer ranbaxy settled certain patent litigation involving lipitor pfizer granted ranbaxy license sell generic version lipitor various markets beginning varying dates ii certain actions procurement andor enforcement certain patents lipitor actions seeks among things treble damages behalf putative class alleged price overcharges lipitor certain actions generic lipitor class period addition individual actions filed pfizer ranbaxy certain affiliates among others assert claims seek relief plaintiffs substantially similar claims asserted relief sought purported class actions described various actions consolidated pretrial proceedings multidistrict litigation lipitor antitrust litigation mdl2332 us district court district new jersey september 2013 2014 district court dismissed prejudice claims direct purchasers october november 2014 district court dismissed prejudice claims multidistrict litigation plaintiffs appealed district court’s orders dismissing claims prejudice us court appeals third circuit addition direct purchaser class plaintiffs appealed order denying motion amend judgment leave amend complaint court appeals august 2017 court appeals reversed district court’s decisions remanded claims district court also january 2013 state west virginia filed action west virginia state court pfizer ranbaxy among others asserts claims seeks relief behalf state west virginia residents state substantially similar claims asserted relief sought purported class actions described •personal injury actions number individual multiplaintiff lawsuits filed pfizer various federal state courts alleging plaintiffs developed type 2 diabetes purportedly result ingestion lipitor plaintiffs seek compensatory punitive damages february 2014 federal actions transferred consolidated pretrial proceedings multidistrict litigation lipitor atorvastatin calcium marketing sales practices products liability litigation ii mdl2502 us district court district south carolina since 2016 certain cases multidistrict litigation remanded certain state courts january 2017 district court granted motion summary judgment dismissing substantially remaining cases pending multidistrict litigation january 2017 plaintiffs appealed district court’s decision us court appeals fourth circuit june 2018 court appeals affirmed district court’s decision november 2020 mylan completed transaction spinoff upjohn business combine mylan form viatris part transaction viatris agreed assume indemnify pfizer liabilities arising matter viagra since april 2016 multidistrict litigation pending us district court northern district california viagra sildenafil citrate products liability litigation mdl2691 plaintiffs allege developed melanoma andor exacerbation melanoma purportedly result ingestion viagra additional cases filed lilly respect cialis also consolidated multidistrict litigation viagra sildenafil citrate cialis tadalafil products liability litigation mdl2691 january 2020 district court granted lilly’s motion exclude plaintiffs’ general causation opinions result april 2020 district court entered summary judgment favor defendants dismissed plaintiffs’ claims april 2020 plaintiffs filed notice appeal us court appeals ninth circuit november 2020 mylan completed transaction spinoff upjohn business combine mylan form viatris part transaction viatris agreed assume indemnify pfizer liabilities arising matter notes consolidated financial statements pfizer inc subsidiary companies epipen beginning february 2017 purported class actions filed various federal courts indirect purchasers epipen pfizer andor affiliates king meridian andor various entities affiliated mylan chief executive officer heather bresch plaintiffs actions seek represent us nationwide classes comprising persons entities paid portion enduser purchase price epipen 2009 cessation defendants’ allegedly unlawful conduct february 2020 similar lawsuit filed us district court district kansas pfizer king meridian mylan entities behalf purported us nationwide class direct purchaser plaintiffs purchased epipen devices directly defendants 2020 lawsuit pfizer andor affiliates plaintiffs actions generally allege pfizer’s andor affiliates’ settlement patent litigation regarding epipen delayed market entry generic epipen violation federal antitrust laws various state antitrust laws least one lawsuit also alleges pfizer andor mylan violated federal racketeer influenced corrupt organizations act rico plaintiffs also filed various federal antitrust state consumer protection unjust enrichment claims relating conduct attributable solely mylan andor affiliates regarding epipen plaintiffs seek treble damages alleged overcharges epipen since 2011 august 2017 actions except 2020 lawsuit consolidated coordinated pretrial proceedings multidistrict litigation epipen epinephrine injection usp marketing sales practices antitrust litigation mdl2785 us district court district kansas epipenrelated actions mylan andor affiliates pfizer king meridian parties july 2020 new lawsuit filed us district court district colorado behalf indirect purchasers plaintiff represents putative us nationwide class persons entities paid portion enduser purchase price certain refill replacement epipens since 2010 plaintiff alleges pfizer meridian misrepresented shelflife expiration date epipen violation federal rico statute plaintiff seeks treble damages alleged unnecessary replacement refill purchases epipens members putative class nexium 24hr protonix number individual multiplaintiff lawsuits filed pfizer certain subsidiaries andor pharmaceutical manufacturers various federal state courts alleging plaintiffs developed kidneyrelated injuries purportedly result ingestion certain proton pump inhibitors cases pfizer involve protonix andor nexium 24hr seek compensatory punitive damages cases treble damages restitution disgorgement august 2017 federal actions ordered transferred coordinated pretrial proceedings multidistrict litigation protonpump inhibitor products liability litigation ii us district court district new jersey 2019 gsk combined respective consumer healthcare businesses new consumer healthcare jv operates globally gsk consumer healthcare name part jv transaction jv agreed assume indemnify pfizer liabilities arising litigation extent related nexium 24hr docetaxel •personal injury actions number lawsuits filed hospira pfizer various federal state courts alleging plaintiffs treated docetaxel developed permanent hair loss significant majority cases also name defendants including manufacturer branded product taxotere plaintiffs seek compensatory punitive damages october 2016 federal cases transferred coordinated pretrial proceedings multidistrict litigation taxotere docetaxel products liability litigation mdl2740 us district court eastern district louisiana •mississippi attorney general government action october 2018 attorney general mississippi filed complaint mississippi state court manufacturer branded product eight manufacturers including pfizer hospira alleging respect pfizer hospira failure warn risk permanent hair loss violation mississippi consumer protection act action seeks civil penalties injunctive relief array securities litigation november 2017 two purported class actions filed us district court district colorado alleging array acquired july 2019 wholly owned subsidiary certain former officers violated federal securities laws connection certain disclosures made omitted array regarding nrasmutant melanoma program march 2018 actions consolidated single proceeding zantac number lawsuits filed pfizer various federal state courts alleging plaintiffs developed various types cancer face increased risk developing cancer purportedly result ingestion zantac significant majority cases also name defendants historically manufactured andor sold zantac pfizer sold zantac since 2006 sold otc version product plaintiffs seek compensatory punitive damages cases treble damages restitution disgorgement february 2020 federal actions transferred coordinated pretrial proceedings multidistrict litigation zantacranitidine ndma litigation mdl2924 us district court southern district florida june december 2020 plaintiffs multidistrict litigation filed pfizer many defendants consolidated consumer class action complaint alleging among things violations rico statute consumer protection statutes 50 states consolidated thirdparty payor class action complaint alleging violation rico statute seeking reimbursement payments made prescription version zantac ii pfizer received service two canadian class action complaints naming pfizer defendants seeking compensatory punitive damages personal injury economic loss allegedly arising defendants’ sale zantac canada iii state new mexico filed civil action pfizer many defendants alleging various state statutory common law claims connection defendants’ alleged sale zantac new mexico iv pfizer received service suit filed mayor city council baltimore naming pfizer defendants alleging various claims maryland law notes consolidated financial statements pfizer inc subsidiary companies a3 legal proceedingscommercial matters monsantorelated matters 1997 monsanto company former monsanto contributed certain chemical manufacturing operations facilities newly formed corporation solutia inc solutia spun shares solutia 2000 former monsanto merged pharmacia upjohn company form pharmacia transferred agricultural operations newly created subsidiary named monsanto company new monsanto spun twostage process completed 2002 pharmacia acquired pfizer 2003 wholly owned subsidiary pfizer connection spinoff completed 2002 new monsanto assumed agreed indemnify pharmacia liabilities related pharmacia’s former agricultural business new monsanto defended andor defending pharmacia connection various claims litigation arising related agricultural business indemnifying pharmacia liability imposed settlement reached regarding claims litigation connection spinoff 1997 solutia assumed agreed indemnify pharmacia liabilities related former monsanto’s chemical businesses result reorganization chapter 11 us bankruptcy code solutia’s indemnification obligations relating former monsanto’s chemical businesses primarily limited sites solutia owned operated addition connection spinoff completed 2002 new monsanto assumed agreed indemnify pharmacia liabilities primarily related former monsanto’s chemical businesses including limited liabilities solutia assumed solutia’s new monsanto’s assumption agreement indemnify pharmacia liabilities apply pending actions future actions related former monsanto’s chemical businesses pharmacia named defendant including without limitation actions asserting environmental claims including alleged exposure polychlorinated biphenyls solutia andor new monsanto defending pharmacia connection various claims litigation arising related former monsanto’s chemical businesses indemnifying pharmacia liability imposed settlement reached regarding claims litigation environmental matters 2009 submitted us environmental protection agency epa corrective measures study report regard pharmacia’s discontinued industrial chemical facility north connecticut september 2010 corrective measures study report approved epa commenced construction site remedy late 2011 updated administrative order consent epa september 2019 epa acknowledged construction site remedy completed also 2009 submitted revised sitewide feasibility study regard wyeth holdings corporation’s formerly american cyanamid company discontinued industrial chemical facility bound brook new jersey july 2011 wyeth holdings corporation executed administrative settlement agreement order consent removal action 2011 administrative settlement agreement epa regard bound brook facility accordance 2011 administrative settlement agreement completed construction interim remedy address discharge impacted groundwater facility raritan river september 2012 epa issued final remediation plan bound brook facility’s main plant area generally accordance one remedies evaluated revised sitewide feasibility study march 2013 wyeth holdings corporation wyeth holdings llc entered administrative settlement agreement order consent epa allow us undertake detailed engineering design remedy main plant area perform focused feasibility study two adjacent lagoons september 2015 us behalf epa filed complaint consent decree federal district court district new jersey allows wyeth holdings llc complete design implement remedy main plant area consent decree supersedes 2011 administrative settlement agreement entered district court december 2015 september 2018 epa issued final remediation plan two adjacent lagoons generally accordance one remedies evaluated focused feasibility study september 2019 wyeth holdings llc entered administrative settlement agreement order consent epa allow us undertake detailed engineering design remedy lagoons accrued estimated costs site remedies north bound brook facilities party number proceedings brought comprehensive environmental response compensation liability act 1980 amended state local foreign laws primary relief sought cost past andor future remediation contracts iraqi ministry health october 2017 number us service members civilians families brought complaint us district court district columbia number pharmaceutical medical devices companies including pfizer certain subsidiaries alleging defendants violated us antiterrorism act complaint alleges defendants provided funding terrorist organizations sales practices pursuant pharmaceutical medical device contracts iraqi ministry health seeks monetary relief july 2020 district court granted defendants’ motions dismiss dismissed plaintiffs’ claims plaintiffs appealing district court’s decision allergan complaint indemnity august 2018 pfizer named defendant thirdparty complaint indemnity along king filed allergan finance llc allergan multidistrict litigation national prescription opiate litigation mdl 2804 us district court northern district ohio lawsuit asserted claims indemnity related kadian owned short period king 2008 prior pfizers acquisition king 2010 december 2018 district court dismissed lawsuit february 2019 allergan filed similar complaint supreme court state new york asserting claims indemnity related kadian suit voluntarily discontinued without prejudice january 2021 breach contractxalkorilorbrena defendant breach contract action brought new york university nyu supreme court state new york supreme court nyu alleges entitled royalties pfizer’s sales xalkori terms research license agreement nyu sugen inc sugen inc acquired pharmacia august 1999 pharmacia acquired pfizer 2003 wholly owned subsidiary pfizer action originally filed 2013 december 2015 supreme court dismissed action notes consolidated financial statements pfizer inc subsidiary companies may 2017 new york state appellate division reversed decision remanded proceedings supreme court january 2020 supreme court denied parties’ summary judgment motions october 2020 nyu filed separate breach contract action pfizer alleging entitled royalties sales lorbrena terms nyusugen inc research licensing agreement a4 legal proceedingsgovernment investigations subject extensive regulation government agencies us developed markets multiple emerging markets operate criminal charges substantial fines andor civil penalties limitations ability conduct business applicable jurisdictions corporate integrity deferred prosecution agreements well reputational harm increased public interest matter could result government investigations us jurisdictions business addition qui tam lawsuit government declines intervene relator may still pursue suit recovery civil damages penalties behalf government among investigations government agencies matters discussed greenstone investigations •us department justice antitrust division investigation since july 2017 us department justices antitrust division investigating former greenstone generics business believe related ongoing broader antitrust investigation generic pharmaceutical industry government obtaining information greenstone relating investigation •state attorneys general generics antitrust litigation april 2018 greenstone received requests information antitrust department connecticut office attorney general may 2019 attorneys general 40 states plus district columbia puerto rico filed complaint number pharmaceutical companies including greenstone pfizer matter consolidated multidistrict litigation generic pharmaceuticals pricing antitrust litigation mdl 2724 eastern district pennsylvania greenstone pfizer complaint alleges anticompetitive conduct violation federal state antitrust laws state consumer protection laws june 2020 state attorneys general filed new complaint large number companies including greenstone pfizer making similar allegations concerning new set drugs complaint transferred multidistrict litigation july 2020 subpoena relating manufacturing quillivant xr october 2018 received subpoena us attorney’s office southern district new york sdny seeking records relating relationship another drug manufacturer production manufacturing drugs including limited quillivant xr produced records pursuant subpoena government inquiries relating meridian medical technologies february 2019 received civil investigative demand us attorney’s office sdny civil investigative demand seeks records information related alleged quality issues involving manufacture autoinjectors meridian site august 2019 received hipaa subpoena us attorney’s office eastern district missouri seeking similar records information producing records response requests us department justicesec inquiry relating russian operations june 2019 received informal request us department justice’s foreign corrupt practices act fcpa unit seeking documents relating operations russia september 2019 received similar request sec’s fcpa unit produced records pursuant requests docetaxelmississippi attorney general government investigation see note 16a2 contingencies certain commitments legal proceedingsproduct litigationdocetaxelmississippi attorney general government investigation information regarding government investigation related docetaxel marketing practices us department justice inquiries relating india operations march 2020 received informal request us department justices consumer protection branch seeking documents relating manufacturing operations india including former facility located irrungattukottai india april 2020 received similar request us attorney’s office sdny regarding civil investigation concerning operations facilities india producing records pursuant requests us department justicesec inquiry relating china operations june 2020 received informal request us department justices fcpa unit seeking documents relating operations china august 2020 received similar request sec’s fcpa unit producing records pursuant requests zantacstate new mexico civil action see note 16a2 contingencies certain commitments legal proceedingsproduct litigationzantac information regarding civil action filed state new mexico alleging various state statutory common law claims connection defendants’ alleged sale zantac new mexico a5 legal proceedingsmatters resolved 2020 fullyear 2020 certain matters including matter discussed resolved became subject definitive settlement agreements settlement agreementsinprinciple notes consolidated financial statements pfizer inc subsidiary companies hormone therapy consumer class action certified consumer class action pending wyeth us district court southern district california based alleged offlabel marketing hormone therapy products case originally filed december 2003 class consisted california consumers purchased wyeth’s hormonereplacement products january 1995 january 2003 seek personal injury damages therefrom class sought compensatory punitive damages including full refund purchase price march 2020 parties reached agreement obtained preliminary court approval resolve matter 200 million paid full second quarter 2020 b guarantees indemnifications ordinary course business connection sale assets businesses transactions often indemnify counterparties certain liabilities may arise connection transaction related events activities prior following transaction indemnified party make successful claim pursuant terms indemnification may required reimburse loss indemnifications generally subject various restrictions limitations historically paid significant amounts provisions december 31 2020 estimated fair value indemnification obligations significant addition connection entry certain agreements transactions counterparties may agree indemnify us example collaboration agreement emd serono inc copromote rebif us expired end 2015 included certain indemnity provisions patent litigation brought biogen idec inc emd serono inc pfizer pending us district court district new jersey united states court appeals federal circuit emd serono inc acknowledged obligated satisfy award damages also guaranteed longterm debt certain companies acquired subsidiaries pfizer see note 7d c certain commitments •as december 31 2020 agreements totaling 38 billion purchase goods services enforceable legally binding include amounts relating advertising information technology services employee benefit administration services potential milestone payments deemed reasonably likely occur •see note 5a information tcja repatriation tax liability contingent consideration acquisitions may required make payments sellers certain prior business combinations contingent upon future events outcomes see note 1d estimated fair value contingent consideration december 31 2020 689 million 123 million recorded current liabilities 566 million noncurrent liabilities 711 million 160 million recorded current liabilities 551 million noncurrent liabilities december 31 2019 decrease contingent consideration balance december 31 2019 primarily due payments made upon achievement certain salesbased milestones partially offset fair value adjustments e insurance coverage reflects market conditions including cost availability existing time written decision obtain insurance coverage selfinsure varies accordingly depending upon cost availability insurance nature risk involved amount selfinsurance may significant cost availability coverage resulted selfinsuring certain exposures including product liability incur substantial liabilities covered insurance substantially exceed insurance coverage excess existing accruals could material adverse effect cash flows results operations period amounts paid andor accrued note 17 product geographic revenue information geographic information revenues exceeded 500 million 8 10 countries outside us 2020 2019 2018 respectively us country contribute 10 total revenue 2020 2019 2018 percentage revenues two largest national markets outside us china contributed 6 total revenue 2020 2019 2018 japan contributed 6 total revenue 2020 5 2019 2018 notes consolidated financial statements pfizer inc subsidiary companies b revenue information significant customers sell biopharmaceutical products primarily customers wholesale sector collectively three largest us wholesaler customers represented 30 25 29 total trade accounts receivable december 31 2020 2019 2018 significant product revenues following provides detailed revenue information several major products notes consolidated financial statements pfizer inc subsidiary companies aon november 16 2020 completed spinoff combination upjohn business mylan form viatris december 21 2020 pfizer viatris completed termination preexisting strategic collaboration pfizer mylan generic drugs japan mylanjapan transferred operations part mylanjapan collaboration viatris beginning fourth quarter 2020 financial results upjohn business mylanjapan collaboration reported income discontinued operationsnet tax periods presented priorperiod financial information restated appropriate prior separation upjohn business beginning 2020 upjohn began managing meridian subsidiary manufacturer epipen autoinjector products mylanjapan collaboration result revenues associated meridian subsidiary except product revenues epipen sold canada mylanjapan reported upjohn beginning first quarter 2020 beginning fourth quarter 2020 results meridian subsidiary reported hospital therapeutic area periods presented consolidated financial statements bbiosimilars highly similar versions approved authorized biological medicines primarily include revenues inflectraremsima retacrit ruxience zirabev chospital therapeutic area commercializes global portfolio sterile injectable antiinfective medicines hospital also includes pfizer centreoned hospital primarily includes revenues legacy sterile injectable pharmaceuticals sip products antiinfective products much lesser extent solid oral dose products antiinfective products sip antiinfective products individually listed recorded “all antiinfectives” dpfizer centreone includes revenues contract manufacturing active pharmaceutical ingredient sales operation including sterile injectables contract manufacturing revenues related manufacturing supply agreements eon july 31 2019 consumer healthcare business otc medicines business combined gsk’s consumer healthcare business form new consumer healthcare jv see note 2c ftotal sterile injectable pharmaceuticals represents total branded generic injectable products hospital therapeutic area including antiinfective sterile injectable pharmaceuticals contract liabilities contract liabilities primarily relate advance payments received receivable connection contracts entered 2020 various government sponsored customers international markets supply bnt162b2 deferred revenue associated advance payments totals approximately 957 million december 31 2020 recorded current liabilities deferred revenue recognized revenues proportionately deliver doses vaccine customers satisfy performance obligation contracts expect fully occur 2021 contract liabilities associated customer contracts significant december 31 2020 2019 selected quarterly financial data unaudited pfizer inc subsidiary companies abusiness development activities impacted results operations 2020 see note 1a bthe fourth quarter historically reflects higher costs cost sales selling informational administrative expenses research development expenses certain asset impairments totaled 900 million third quarter 2020 791 million fourth quarter 2020 recorded incomedeductionsnet see note 4 coperating results upjohn business mylanjapan collaboration presented discontinued operations periods presented following november 16 2020 spinoff combination upjohn business mylan december 21 2020 termination mylanjapan collaboration see note 2b basic diluted eps computed independently periods presented accordingly sum quarterly eps amounts may agree total year selected quarterly financial data unaudited pfizer inc subsidiary companies abusiness development activities impacted results operations 2019 see note 1a bthe fourth quarter historically reflects higher costs cost sales selling informational administrative expenses research development expenses fourth quarter 2019 includes 26 billion certain asset impairments recorded incomedeductionsnet see note 4 cthe second quarter 2019 includes reversal certain accruals related acquisition wyeth upon effective favorable settlement irs audit multiple tax years see note 5b third quarter 2019 includes 217 million integration costs primarily including 157 million payments array employees fair value previously unvested stock options recognized postclosing compensation expense see note 2a fourth quarter 2019 primarily includes employee termination costs asset impairments exit costs associated cost reduction initiatives employee termination costs mostly associated improvements operational effectiveness part realignment organizational structure transforming focused company program see note 3 dsee note 2c eduring second quarter 2019 pfizer reached settlement disputed issues irs office appeals thereby settling issues related us tax returns pfizer years 20092010 result settling years second quarter 2019 recorded benefit approximately 14 billion representing tax interest third quarter 2019 reflects tax expense approximately 27 billion associated gain related completion consumer healthcare jv foperating results upjohn business mylanjapan collaboration presented discontinued operations periods presented following november 16 2020 spinoff combination upjohn business mylan december 21 2020 termination mylanjapan collaboration see note 2b basic diluted eps computed independently periods presented accordingly sum quarterly eps amounts may agree total year item 9item 8 financial statements supplementary data information required item incorporated reference independent auditors report found page 34 pages 35 53 annual report shareholders fiscal year ended december 31 1994 item 9item 8 financial statements supplementary data information required item incorporated reference independent auditors report found page 40 consolidated financial statements supplementary data pages 41 60 1997 annual report shareholders item 9item 8 financial statements supplementary data information required item incorporated reference independent auditors report found page 39 consolidated financial statements supplementary data pages 40 61 1998 annual report shareholders item 9item 8 financial statements supplementary data information required item incorporated reference independent auditors’ report page 43 2002 annual report consolidated financial statements related notes supplementary data pages 44 68 2002 annual report item 9item 8 financial statements supplementary data information required item incorporated reference independent auditors’ report page 22 2003 financial report consolidated financial statements related notes supplementary data pages 23 55 2003 financial report item 9item 8 financial statements supplementary data information required item incorporated reference independent auditors report found page 34 pages 35 51 annual report shareholders fiscal year ended december 31 1993 item 9item 8 financial statements supplementary data information required item incorporated reference independent auditors report found page 38 consolidated financial statements related notes supplementary data pages 39 61 1999 annual report item 9 nannannannanitem 15 exhibits financial statement schedules 15a1 financial statements following consolidated financial statements related notes independent auditors’ report supplementary data 2004 financial report incorporated reference item 8 part ii 2004 form 10k • report independent registered public accounting firm consolidated financial statements • consolidated statement income • consolidated balance sheet • consolidated statement shareholders’ equity • consolidated statement cash flows • notes consolidated financial statements • quarterly consolidated financial data unaudited 15a2 financial statement schedules omitted required information provided elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 15a3 exhibits available upon request requests directed margaret foran vice presidentcorporate governance secretary pfizer inc 235 east 42nd street new york ny 100175755 exhibit numbers preceded asterisk indicate exhibits physically filed 2004 form 10k exhibit numbers indicate exhibits filed incorporation reference exhibit numbers 101 1027 management contracts compensatory plans arrangements agreement plan merger dated july 13 2002 among pfizer inc pilsner acquisition sub corp pharmacia corporation incorporated reference amendment 2 registration statement form s4 filed sec october 17 20021 31 restated certificate incorporation dated april 11 2003 incorporated reference 10q report period ended march 30 2003 32 bylaws amended february 24 2005 agree furnish sec upon request copy exhibit agreement plan merger 41 indenture dated january 30 2001 us chase manhattan bank incorporated reference 8k report filed january 30 2001 42 except set forth exhibit 41 instruments defining rights holders longterm debt securities company subsidiaries omitted2 101 2001 stock incentive plan incorporated reference proxy statement 2001 annual meeting shareholders 102 pfizer inc 2004 stock plan incorporated reference proxy statement 2004 annual meeting shareholders 103 form stock option grant notice summary key terms incorporated reference 10q report period ended september 26 2004 104 form restricted stock grant notice incorporated reference 10q report period ended september 26 2004 105 form performancecontingent share award grant notice incorporated reference 10q report period ended september 26 2004 106 stock incentive plan amended july 1 1999 incorporated reference 1999 10k report 107 pfizer retirement annuity plan amended november 6 1997 incorporated reference 1997 10k report 108 nonfunded supplemental retirement plan incorporated reference 1996 10k report 109 nonfunded deferred compensation supplemental savings plan amended restated february 1 2002 incorporated reference 2002 10k report 1010 executive annual incentive plan incorporated reference proxy statement 1997 annual meeting shareholders 1011 summary annual incentive plan incorporated reference 2000 10k report 1012 2001 performancecontingent share award plan incorporated reference proxy statement 2001 annual meeting shareholders 1013 performancecontingent share award program incorporated reference 10q report period ended september 29 1996 1014 deferred compensation plan incorporated reference 1997 10k report 1015 nonemployee directors’ retirement plan frozen october 1996 incorporated reference 1996 10k report 1016 annual retainer unit award plan nonemployee directors incorporated reference 10q report period ended september 29 1996 1017 nonfunded deferred compensation unit award plan nonemployee directors incorporated reference 10q report period ended september 29 1996 1018 restricted stock plan nonemployee directors incorporated reference 1996 10k report 1019 warnerlambert company 1996 stock plan amended incorporated reference warnerlambert’s 1999 10k report 1020 warnerlambert company incentive compensation plan amended incorporated reference warnerlambert’s 1999 10k report agree furnish sec upon request copy instrument respect issuances longterm debt company subsidiaries 1021 warnerlambert company supplemental pension income plan amended incorporated reference warnerlambert’s 1999 10k report 1022 pharmacia corporation 2001 longterm incentive plan incorporated reference pharmacia’s 10q report period ended march 31 2001 1023 form changeofcontrolseverance agreement named executive officers identified 2005 proxy statement incorporated reference 1994 10k report 1024 form indemnification agreement nonemployee directors incorporated reference 1996 10k report 1025 form indemnification agreement named executive officers identified 2005 proxy statement incorporated reference 1997 10k report 1026 postretirement consulting agreement dated april 20 2000 us william c steere jr incorporated reference 10q report period ended april 2 2000 1027 employment agreement dated january 1 2001 us henry mckinnell incorporated reference 8k report filed february 2 2001 12 computation ratio earnings fixed charges 13 portions 2004 financial report except sections incorporated reference furnished solely information sec deemed “filed” 21 subsidiaries company 23 consent kpmg llp independent certified public accountants 24 power attorney included part signature page 311 certification chief executive officer pursuant section 302 sarbanesoxley act 2002 312 certification chief financial officer pursuant section 302 sarbanesoxley act 2002 321 certification chief executive officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 322 certification chief financial officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named undersigned directors officers pfizer inc hereby severally constitute margaret foran jeffrey b kindler singly true lawful attorneys full power sign us names capacities indicated amendments annual report form 10k filed securities exchange commission requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicateditem 15 exhibits financial statement schedules 15a1 financial statements following consolidated financial statements related notes report independent registered public accounting firm supplementary data 2005 financial report incorporated reference item 8 part ii 2005 form 10k report independent registered public accounting firm consolidated financial statements consolidated statements income consolidated balance sheets consolidated statements shareholders’ equity consolidated statements cash flows notes consolidated financial statements quarterly consolidated financial data unaudited 15a2 financial statement schedules omitted required information provided elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 15a3 exhibits available upon request requests directed margaret foran senior vice presidentcorporate governance associate general counsel corporate secretary pfizer inc 235 east 42nd street new york ny 100175755 exhibit numbers preceded asterisk indicate exhibits physically filed 2005 form 10k exhibit numbers indicate exhibits filed incorporation reference exhibit numbers 101 1024 management contracts compensatory plans arrangements 1 agree furnish sec upon request copy exhibit agreement plan merger 2 agree furnish sec upon request copy instrument respect issuances longterm debt company subsidiaries signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named undersigned directors officers pfizer inc hereby severally constitute margaret foran jeffrey b kindler singly true lawful attorneys full power sign us names capacities indicated amendments annual report form 10k filed securities exchange commission requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicateditem 15 exhibits financial statement schedules 15a1 financial statements following consolidated financial statements related notes report independent registered public accounting fim supplementary data 2006 financial report incorporated reference item 8 part ii 2006 form 10k report independent registered public accounting firm consolidated financial statements consolidated statements income consolidated balance sheets consolidated statements shareholders’ equity consolidated statements cash flows notes consolidated financial statements quarterly consolidated financial data unaudited 15a2 financial statement schedules omitted required information provided elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 15a3 exhibits available upon request requests directed margaret foran senior vice presidentcorporate governance associate general counsel corporate secretary pfizer inc 235 east 42nd street new york ny 100175755 exhibit numbers preceded asterisk indicate exhibits physically filed 2006 form 10k exhibit numbers indicate exhibits filed incorporation reference exhibit numbers 101 1027 management contracts compensatory plans arrangements agree furnish sec upon request copy exhibit agreement plan merger agree furnish sec upon request copy instrument respect issuances longterm debt company subsidiaries signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named undersigned directors officers pfizer inc hereby severally constitute margaret foran allen p waxman singly true lawful attorneys full power sign us names capacities indicated amendments annual report form 10k filed securities exchange commission requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicateditem 15 exhibits financial statement schedules 15a1 financial statements following consolidated financial statements related notes report independent registered public accounting firm supplementary data 2007 financial report incorporated reference item 8 part ii 2007 form 10k report independent registered public accounting firm consolidated financial statements consolidated statements income consolidated balance sheets consolidated statements shareholders’ equity consolidated statements cash flows notes consolidated financial statements quarterly consolidated financial data unaudited 15a2 financial statement schedules omitted required information provided elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 15a3 exhibits available upon request requests directed margaret foran senior vice presidentcorporate governance associate general counsel corporate secretary pfizer inc 235 east 42nd street new york ny 100175755 exhibit numbers preceded asterisk indicate exhibits physically filed 2007 form 10k exhibit numbers indicate exhibits filed incorporation reference exhibit numbers 101 1030 management contracts compensatory plans arrangements agree furnish sec upon request copy exhibit agreement plan merger agree furnish sec upon request copy instrument respect issuances longterm debt company subsidiaries signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named undersigned directors officers pfizer inc hereby severally constitute margaret foran allen p waxman singly true lawful attorneys full power sign us names capacities indicated amendments annual report form 10k filed securities exchange commission requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicateditem 15 exhibits financial statement schedules 15a1 financial statements following consolidated financial statements related notes report independent registered public accounting firm supplementary data 2008 financial report incorporated reference item 8 part ii 2008 form 10k • report independent registered public accounting firm consolidated financial statements • consolidated statements income • consolidated balance sheets • consolidated statements shareholders’ equity • consolidated statements cash flows • notes consolidated financial statements • quarterly consolidated financial data unaudited 15a2 financial statement schedules omitted required information provided elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 15a3 exhibits available upon request requests directed matthew lepore vice president chief counselcorporate governance assistant general counsel pfizer inc 235 east 42nd street new york ny 100175755 exhibit numbers preceded asterisk indicate exhibits physically filed 2008 form 10k exhibit numbers indicate exhibits filed incorporation reference exhibit numbers 101 1023 management contracts compensatory plans arrangements agree furnish sec upon request copy exhibit agreement plan merger agree furnish sec upon request copy instrument respect issuances longterm debt company subsidiaries signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named undersigned directors officers pfizer inc hereby severally constitute amy w schulman matthew lepore singly true lawful attorneys full power sign us names capacities indicated amendments annual report form 10k filed securities exchange commission requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicateditem 15 exhibits financial statement schedules 15a1 financial statements following consolidated financial statements related notes report independent registered public accounting firm supplementary data 2009 financial report incorporated reference item 8 part ii 2009 form 10k • report independent registered public accounting firm consolidated financial statements • consolidated statements income • consolidated balance sheets • consolidated statements shareholders’ equity • consolidated statements cash flows • notes consolidated financial statements • quarterly consolidated financial data unaudited 15a2 financial statement schedules omitted required information provided elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 15a3 exhibits available upon request requests directed matthew lepore vice president chief counselcorporate governance pfizer inc 235 east 42nd street new york ny 100175755 exhibit numbers preceded asterisk indicate exhibits filed 2009 form 10k exhibit numbers indicate exhibits filed incorporation reference exhibit numbers 101 1026 management contracts compensatory plans arrangements agree furnish sec upon request copy instrument respect issuances longterm debt company subsidiaries signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named undersigned directors officers pfizer inc hereby severally constitute amy w schulman matthew lepore singly true lawful attorneys full power sign us names capacities indicated amendments annual report form 10k filed securities exchange commission power attorney may revoked written document executed signed expressly revokes power referring date subject hereof requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicateditem 15 exhibits financial statement schedules 15a1 financial statements following consolidated financial statements related notes report independent registered public accounting firm supplementary data 2010 financial report incorporated reference item 8 part ii 2010 form 10k • report independent registered public accounting firm consolidated financial statements • consolidated statements income • consolidated balance sheets • consolidated statements shareholders’ equity • consolidated statements cash flows • notes consolidated financial statements • quarterly consolidated financial data unaudited 15a2 financial statement schedules omitted required information provided elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 15a3 exhibits available upon request requests directed matthew lepore vice president corporate secretary chief counselcorporate governance pfizer inc 235 east 42nd street new york ny 100175755 exhibit numbers preceded asterisk indicate exhibits filed 2010 form 10k exhibit numbers indicate exhibits filed incorporation reference exhibit numbers 101 1021 management contracts compensatory plans arrangements agree furnish sec upon request copy instrument respect issuances longterm debt company subsidiaries signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named pfizer inc dated february 24 2011 matthew lepore matthew lepore vice president corporate secretary chief counsel corporate governance undersigned directors officers pfizer inc hereby severally constitute amy w schulman matthew lepore singly true lawful attorneys full power sign us names capacities indicated amendments annual report form 10k filed securities exchange commission requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicateditem 15 exhibits financial statement schedules 15a1 financial statements following consolidated financial statements related notes report independent registered public accounting firm supplementary data 2011 financial report incorporated reference item 8 part ii 2011 form 10k • report independent registered public accounting firm consolidated financial statements • consolidated statements income • consolidated balance sheets • consolidated statements shareholders’ equity • consolidated statements cash flows • notes consolidated financial statements • quarterly consolidated financial data unaudited 15a2 financial statement schedules omitted required information provided elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 15a3 exhibits available upon request requests directed matthew lepore vice president corporate secretary chief counselcorporate governance pfizer inc 235 east 42nd street new york ny 100175755 exhibit numbers preceded asterisk indicate exhibits filed 2011 form 10k exhibit numbers indicate exhibits filed incorporation reference exhibit numbers 101 1024 management contracts compensatory plans arrangements agree furnish sec upon request copy instrument respect issuances longterm debt company subsidiaries signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named pfizer inc dated february 28 2012 matthew lepore matthew lepore vice president corporate secretary chief counsel corporate governance undersigned directors officers pfizer inc hereby severally constitute amy w schulman matthew lepore singly true lawful attorneys full power sign us names capacities indicated amendments annual report form 10k filed securities exchange commission requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicateditem 15 exhibits financial statement schedules 15a1 financial statements following consolidated financial statements related notes report independent registered public accounting firm supplementary data 2012 financial report incorporated reference item 8 part ii 2012 form 10k • report independent registered public accounting firm consolidated financial statements • consolidated statements income • consolidated statements comprehensive income • consolidated balance sheets • consolidated statements equity • consolidated statements cash flows • notes consolidated financial statements • quarterly consolidated financial data unaudited 15a2 financial statement schedules omitted required information provided elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 15a3 exhibits available upon request requests directed corporate secretary pfizer inc 235 east 42nd street new york ny 100175755 exhibit numbers preceded asterisk indicate exhibits filed 2012 form 10k exhibit numbers indicate exhibits filed incorporation reference exhibit numbers 101 1024 management contracts compensatory plans arrangements 1 agree furnish sec upon request copy instrument respect issuances longterm debt company subsidiaries signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named pfizer inc dated february 28 2013 matthew lepore matthew lepore vice president corporate secretary chief counsel corporate governance undersigned directors officers pfizer inc hereby severally constitute amy w schulman matthew lepore singly true lawful attorneys full power sign us names capacities indicated amendments annual report form 10k filed securities exchange commission requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicateditem 15 exhibits financial statement schedules 15a1 financial statements following consolidated financial statements related notes report independent registered public accounting firm supplementary data 2013 financial report incorporated reference item 8 part ii 2013 annual report form 10k • report independent registered public accounting firm consolidated financial statements • consolidated statements income • consolidated statements comprehensive income • consolidated balance sheets • consolidated statements equity • consolidated statements cash flows • notes consolidated financial statements • quarterly consolidated financial data unaudited 15a2 financial statement schedules omitted required information provided elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 15a3 exhibits available upon request requests directed corporate secretary pfizer inc 235 east 42nd street new york ny 100175755 exhibit numbers preceded asterisk indicate exhibits filed 2013 annual report form 10k exhibit numbers indicate exhibits filed incorporation reference exhibit numbers 101 1030 management contracts compensatory plans arrangements signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named undersigned directors officers pfizer inc hereby severally constitute douglas lankler atiba adams singly true lawful attorneys full power sign us names capacities indicated amendments annual report form 10k filed securities exchange commission requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicateditem 15 exhibits financial statement schedules 15a1 financial statements following consolidated financial statements related notes report independent registered public accounting firm supplementary data 2014 financial report incorporated reference item 8 part ii 2014 annual report form 10k • report independent registered public accounting firm consolidated financial statements • consolidated statements income • consolidated statements comprehensive income • consolidated balance sheets • consolidated statements equity • consolidated statements cash flows • notes consolidated financial statements • quarterly consolidated financial data unaudited 15a2 financial statement schedules omitted required information provided elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 15a3 exhibits available upon request requests directed corporate secretary pfizer inc 235 east 42nd street new york new york 100175755 exhibit numbers preceded asterisk indicate exhibits filed 2014 annual report form 10k exhibit numbers indicate exhibits filed incorporation reference exhibit numbers 101 1032 management contracts compensatory plans arrangements signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named pfizer inc dated february 27 2015 margaret madden margaret madden vice president corporate secretary chief counsel corporate governance undersigned directors officers pfizer inc hereby severally constitute douglas lankler margaret madden singly true lawful attorneys full power sign us names capacities indicated amendments annual report form 10k filed securities exchange commission requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicateditem 15 exhibits financial statement schedules 15a1 financial statements following consolidated financial statements related notes report independent registered public accounting firm supplementary data 2015 financial report incorporated reference item 8 part ii 2015 annual report form 10k • report independent registered public accounting firm consolidated financial statements • consolidated statements income • consolidated statements comprehensive income • consolidated balance sheets • consolidated statements equity • consolidated statements cash flows • notes consolidated financial statements • quarterly consolidated financial data unaudited 15a2 financial statement schedules omitted required information provided elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 15a3 exhibits available upon request requests directed corporate secretary pfizer inc 235 east 42nd street new york new york 100175755 exhibit numbers preceded asterisk indicate exhibits filed 2015 annual report form 10k exhibit numbers indicate exhibits filed incorporation reference exhibit numbers 101 1026 management contracts compensatory plans arrangements pfizer inc 2015 form 10k 39 pfizer inc 2015 form 10k 40 pfizer inc 2015 form 10k 41 pfizer inc 2015 form 10k 42 signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named pfizer inc dated february 29 2016 margaret madden margaret madden vice president corporate secretary chief governance counsel undersigned directors officers pfizer inc hereby severally constitute douglas lankler margaret madden singly true lawful attorneys full power sign us names capacities indicated amendments annual report form 10k filed securities exchange commission requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicateditem 15 exhibits financial statement schedules 15a1 financial statements following consolidated financial statements related notes report independent registered public accounting firm supplementary data 2016 financial report incorporated reference item 8 part ii 2016 form 10k • report independent registered public accounting firm consolidated financial statements • consolidated statements income • consolidated statements comprehensive income • consolidated balance sheets • consolidated statements equity • consolidated statements cash flows • notes consolidated financial statements • quarterly consolidated financial data unaudited 15a2 financial statement schedules omitted required information provided elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 15a3 exhibits available upon request requests directed corporate secretary pfizer inc 235 east 42nd street new york new york 100175755 exhibit numbers preceded asterisk indicate exhibits filed 2016 form 10k exhibit numbers indicate exhibits filed incorporation reference exhibit numbers 101 1024 management contracts compensatory plans arrangements form 10k summary provided beginning 2016 form 10k hyperlinked crossreferences allows users easily locate corresponding items 2016 form 10k disclosure fully presented summary include certain part iii information incorporated reference 2017 proxy statement signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named pfizer inc dated february 23 2017 margaret madden margaret madden senior vice president corporate secretary chief governance counsel undersigned directors officers pfizer inc hereby severally constitute douglas lankler margaret madden singly true lawful attorneys full power sign us names capacities indicated amendments annual report form 10k filed securities exchange commission requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicateditem 15 exhibits financial statement schedules 15a1 financial statements following consolidated financial statements related notes report independent registered public accounting firm supplementary data 2017 financial report incorporated reference item 8 part ii 2017 form 10k • report independent registered public accounting firm consolidated financial statements • consolidated statements income • consolidated statements comprehensive income • consolidated balance sheets • consolidated statements equity • consolidated statements cash flows • notes consolidated financial statements • quarterly consolidated financial data unaudited 15a2 financial statement schedules omitted required information provided elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 15a3 exhibits available upon request requests directed corporate secretary pfizer inc 235 east 42nd street new york new york 10017 exhibit numbers preceded asterisk indicate exhibits filed 2017 form 10k exhibit numbers indicate exhibits filed incorporation reference exhibit numbers 101 1027 management contracts compensatory plans arrangements form 10k summary provided beginning 2017 form 10k hyperlinked crossreferences allows users easily locate corresponding items 2017 form 10k disclosure fully presented summary include certain part iii information incorporated reference 2018 proxy statement signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named pfizer inc dated february 22 2018 margaret madden margaret madden senior vice president corporate secretary chief governance counsel undersigned directors officers pfizer inc hereby severally constitute douglas lankler margaret madden singly true lawful attorneys full power sign us names capacities indicated amendments annual report form 10k filed securities exchange commission requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicateditem 15 exhibits financial statement schedules 15a1 financial statements following consolidated financial statements related notes report independent registered public accounting firm supplementary data 2018 financial report incorporated reference item 8 part ii 2018 form 10k • report independent registered public accounting firm consolidated financial statements • consolidated statements income • consolidated statements comprehensive income • consolidated balance sheets • consolidated statements equity • consolidated statements cash flows • notes consolidated financial statements • selected quarterly financial data unaudited 15a2 financial statement schedules omitted required information provided elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 15a3 exhibits available upon request requests directed corporate secretary pfizer inc 235 east 42nd street new york new york 10017 exhibit numbers preceded asterisk indicate exhibits filed 2018 form 10k exhibit numbers indicate exhibits filed incorporation reference exhibit numbers 101 1033 management contracts compensatory plans arrangements form 10k summary provided beginning 2018 form 10k hyperlinked crossreferences allows users easily locate corresponding items 2018 form 10k disclosure fully presented summary include certain part iii information incorporated reference 2019 proxy statement signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named pfizer inc dated february 28 2019 margaret madden margaret madden senior vice president corporate secretary chief governance counsel undersigned directors officers pfizer inc hereby severally constitute douglas lankler margaret madden singly true lawful attorneys full power sign us names capacities indicated amendments annual report form 10k filed securities exchange commission requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicateditem 15 exhibits financial statement schedules 15a1 financial statements following consolidated financial statements related notes report independent registered public accounting firm supplementary data 2019 financial report incorporated reference item 8 part ii 2019 form 10k • report independent registered public accounting firm consolidated financial statements • consolidated statements income • consolidated statements comprehensive income • consolidated balance sheets • consolidated statements equity • consolidated statements cash flows • notes consolidated financial statements • selected quarterly financial data unaudited 15a2 financial statement schedules omitted required information provided elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 15a3 exhibits available upon request requests directed corporate secretary pfizer inc 235 east 42nd street new york new york 10017 exhibit numbers preceded asterisk indicate exhibits filed 2019 form 10k exhibit numbers indicate exhibits filed incorporation reference exhibit numbers 101 1038 management contracts compensatory plans arrangements 101lab inline xbrl taxonomy extension label linkbase 101pre inline xbrl taxonomy extension presentation linkbase 101def inline xbrl taxonomy extension definition document cover page interactive data file cover page interactive data file appear interactive data file xbrl tags embedded within inline xbrl document form 10k summary provided beginning 2019 form 10k hyperlinked crossreferences allows users easily locate corresponding items 2019 form 10k disclosure fully presented summary include certain part iii information incorporated reference 2020 proxy statement signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named pfizer inc dated february 27 2020 margaret madden margaret madden senior vice president corporate secretary chief governance counsel undersigned directors officers pfizer inc hereby severally constitute douglas lankler margaret madden singly true lawful attorneys full power sign us names capacities indicated amendments annual report form 10k filed securities exchange commission requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicateditem 15exhibits financial statement schedules 15a1 financial statements following consolidated financial statements related notes report independent registered public accounting firm supplementary data set forth item 8 financial statements supplementary data form 10k •report independent registered public accounting firm consolidated financial statements •consolidated statements income •consolidated statements comprehensive income •consolidated balance sheets •consolidated statements equity •consolidated statements cash flows •notes consolidated financial statements •selected quarterly financial data unaudited 15a2 financial statement schedules omitted required information provided elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 15a3 exhibits available upon request requests directed corporate secretary pfizer inc 235 east 42nd street new york new york 10017 exhibit numbers preceded asterisk indicate exhibits filed form 10k exhibit numbers indicate exhibits filed incorporation reference exhibit numbers 101 1044 management contracts compensatory plans arrangements none signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named pfizer inc dated february 25 2021bys margaret madden margaret madden senior vice president corporate secretary chief governance counsel undersigned directors officers pfizer inc hereby severally constitute douglas lankler margaret madden singly true lawful attorneys full power sign us names capacities indicated amendments annual report form 10k filed securities exchange commission requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicatednannannanitem 15 intentionally left blank intentionally left blank item 16 principal accountant fees services information fees 2002 2001 professional services rendered independent auditors incorporated reference discussion heading audit nonaudit fees item 2 proxy statement 2003 annual meeting shareholders audit committee’s policy preapproval audit permissible nonaudit services independent auditors incorporated reference section captioned policy audit committee preapproval audit permissible nonaudit services independent auditor item 2 proxy statement 2003 annual meeting shareholders part iv item 17 exhibits financial statement schedules reports form 8k 17a1 financial statements following consolidated financial statements related notes independent auditors’ report supplementary data 2002 annual report shareholders incorporated reference item 8 part ii 2002 form 10k 17a2 financial statement schedules omitted required information given elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 17a3 exhibits available upon request requests directed margaret foran vice presidentcorporate governance secretary pfizer inc 235 east 42nd street new york ny 100175755 exhibit numbers preceded asterisk indicate exhibits physically filed 2002 form 10k exhibit numbers indicate exhibits filed incorporation reference exhibit numbers 101 1025 management contracts compensatory plans arrangements agreement plan merger dated july 13 2002 among pfizer inc pilsner acquisition sub corp pharmacia corporation incorporated reference amendment 2 registration statement form s4 filed sec october 17 2002 agree furnish sec upon request copy exhibit agreement plan merger 31 restated certificate incorporation april 27 2000 incorporated reference 10q report period ended april 2 2000 32 bylaws amended april 27 2000 incorporated reference 10q report period ended april 2 2000 41 rights agreement dated october 6 1997 chasemellon shareholder services llc incorporated reference 8k report dated october 6 1997 42 indenture dated january 30 2001 us chase manhattan bank incorporated reference 8k report filed january 30 2001 43 except set forth exhibits 41 42 instruments defining rights holders longterm debt securities company subsidiaries omitted agree furnish sec upon request copy instrument respect issuances longterm debt company subsidiaries 101 2001 stock incentive plan incorporated reference proxy statement 2001 annual meeting shareholders 102 stock incentive plan amended july 1 1999 incorporated reference 1999 10k report 103 pfizer retirement annuity plan amended november 6 1997 incorporated reference 1997 10k report 104 nonfunded supplemental retirement plan incorporated reference 1996 10k report 105 nonfunded deferred compensation supplemental savings plan amended restated february 1 2002 106 executive annual incentive plan incorporated reference proxy statement 1997 annual meeting shareholders 107 2001 performancecontingent share award plan incorporated reference proxy statement 2001 annual meeting shareholders 108 performancecontingent share award program incorporated reference 10q report period ended september 29 1996 109 nonemployee directors’ retirement plan frozen october 1996 incorporated reference 1996 10k report 1010 annual retainer unit award plan nonemployee directors incorporated reference 10q report period ended september 29 1996 1011 nonfunded deferred compensation unit award plan nonemployee directors incorporated reference 10q report period ended september 29 1996 1012 restricted stock plan nonemployee directors incorporated reference 1996 10k report 1013 deferred compensation plan incorporated reference 1997 10k report 1014 warnerlambert company 1996 stock plan amended incorporated reference warnerlambert’s 1999 10k report 1015 warnerlambert company incentive compensation plan amended incorporated reference warnerlambert’s 1999 10k report 1016 warnerlambert company supplemental pension income plan amended incorporated reference warnerlambert’s 1999 10k report 1017 warnerlambert company executive severance plan amended incorporated reference warnerlambert’s 10q report quarter ended march 31 1999 1018 summary annual incentive plan incorporated reference 2000 10k report 1019 form severance agreement named executive officers identified proxy statement 2003 annual meeting shareholders incorporated reference 1994 10k report 1020 form indemnification agreement nonemployee directors incorporated reference 1996 10k report 1021 form indemnification agreement named executive officers identified proxy statement 2003 annual meeting shareholders incorporated reference 1997 10k report 1022 postretirement consulting agreement dated april 20 2000 us william c steere jr incorporated reference 10q report period ended april 2 2000 1023 employment agreement dated january 1 2001 us henry mckinnell incorporated reference 8k report filed february 2 2001 1024 severance agreement dated january 1 2002 us jeffrey b kindler incorporated reference 2001 10k report 1025 employment agreement dated march 1 2001 us peter b corr incorporated reference 2000 10k report 12 computation ratio earnings fixed charges 13 portions 2002 annual report shareholders except sections incorporated reference furnished solely information sec deemed “filed” 21 subsidiaries company 23 consent kpmg llp independent certified public accountants 24 power attorney included part signature page 991 certification chief executive officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 992 certification chief financial officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 17b reports form 8k filed form 8k december 17 2002 attached incorporated reference company’s press release dated december 17 2002 announcing agreement sell adams confectionery business signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named undersigned directors officers pfizer inc hereby severally constitute margaret foran jeffrey b kindler singly true lawful attorneys full power sign us names capacities indicated amendments annual report form 10k filed securities exchange commission requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicated certifications pursuant section 302 sarbanesoxley act 2002 certification chief executive officer henry mckinnell certify 1 reviewed annual report form 10k pfizer inc 2 based knowledge annual report contain untrue statement material fact omit state material fact necessary make statements made light circumstances statements made misleading respect period covered annual report 3 based knowledge financial statements financial information included annual report fairly present material respects financial condition results operations cash flows registrant periods presented annual report 4 registrant’s certifying officers responsible establishing maintaining disclosure controls procedures defined exchange act rules 13a14 15d14 registrant designed disclosure controls procedures ensure material information relating registrant including consolidated subsidiaries made known us others within entities particularly period annual report prepared b evaluated effectiveness registrant’s disclosure controls procedures date within 90 days prior filing date annual report “evaluation date” c presented annual report conclusions effectiveness disclosure controls procedures based evaluation date 5 registrant’s certifying officers disclosed based recent evaluation registrant’s auditors audit committee registrant’s board directors persons performing equivalent functions significant deficiencies design operation internal controls could adversely affect registrant’s ability record process summarize report financial data identified registrant’s auditors material weaknesses internal controls b fraud whether material involves management employees significant role registrant’s internal controls 6 registrant’s certifying officers indicated annual report whether significant changes internal controls factors could significantly affect internal controls subsequent date recent evaluation including corrective actions regard significant deficiencies material weaknesses date march 27 2003 henry mckinnell henry mckinnell chairman board chief executive officer certification chief financial officer david l shedlarz certify 1 reviewed annual report form 10k pfizer inc 2 based knowledge annual report contain untrue statement material fact omit state material fact necessary make statements made light circumstances statements made misleading respect period covered annual report 3 based knowledge financial statements financial information included annual report fairly present material respects financial condition results operations cash flows registrant periods presented annual report 4 registrant’s certifying officers responsible establishing maintaining disclosure controls procedures defined exchange act rules 13a14 15d14 registrant designed disclosure controls procedures ensure material information relating registrant including consolidated subsidiaries made known us others within entities particularly period annual report prepared b evaluated effectiveness registrant’s disclosure controls procedures date within 90 days prior filing date annual report “evaluation date” c presented annual report conclusions effectiveness disclosure controls procedures based evaluation date 5 registrant’s certifying officers disclosed based recent evaluation registrant’s auditors audit committee registrant’s board directors persons performing equivalent functions significant deficiencies design operation internal controls could adversely affect registrant’s ability record process summarize report financial data identified registrant’s auditors material weaknesses internal controls b fraud whether material involves management employees significant role registrant’s internal controls 6 registrant’s certifying officers indicated annual report whether significant changes internal controls factors could significantly affect internal controls subsequent date recent evaluation including corrective actions regard significant deficiencies material weaknesses date march 27 2003 david l shedlarz david l shedlarz executive vice president chief financial officeritem 15 exhibits financial statement schedules reports form 8k 15a1 financial statements following consolidated financial statements related notes independent auditors’ report supplementary data 2003 financial report incorporated reference item 8 part ii 2003 form 10k 15a2 financial statement schedules omitted required information provided elsewhere financial statements financial statements unconsolidated subsidiaries omitted considered aggregate would constitute significant subsidiary 15a3 exhibits available upon request requests directed margaret foran vice presidentcorporate governance secretary pfizer inc 235 east 42nd street new york ny 100175755 exhibit numbers preceded asterisk indicate exhibits physically filed 2003 form 10k exhibit numbers indicate exhibits filed incorporation reference exhibit numbers 101 1026 management contracts compensatory plans arrangements agreement plan merger dated july 13 2002 among pfizer inc pilsner acquisition sub corp pharmacia corporation incorporated reference amendment 2 registration statement form s4 filed sec october 17 2002 agree furnish sec upon request copy exhibit agreement plan merger 31 restated certificate incorporation dated april 11 2003 incorporated reference 10q report period ended march 30 2003 32 bylaws amended april 27 2000 incorporated reference 10q report period ended april 2 2000 41 indenture dated january 30 2001 us chase manhattan bank incorporated reference 8k report filed january 30 2001 42 except set forth exhibit 41 instruments defining rights holders longterm debt securities company subsidiaries omitted agree furnish sec upon request copy instrument respect issuances longterm debt company subsidiaries 101 2001 stock incentive plan incorporated reference proxy statement 2001 annual meeting shareholders 102 stock incentive plan amended july 1 1999 incorporated reference 1999 10k report 103 pfizer retirement annuity plan amended november 6 1997 incorporated reference 1997 10k report 104 nonfunded supplemental retirement plan incorporated reference 1996 10k report 105 nonfunded deferred compensation supplemental savings plan amended restated february 1 2002 incorporated reference 2002 10k report 106 executive annual incentive plan incorporated reference proxy statement 1997 annual meeting shareholders 107 summary annual incentive plan incorporated reference 2000 10k report 108 2001 performancecontingent share award plan incorporated reference proxy statement 2001 annual meeting shareholders 109 performancecontingent share award program incorporated reference 10q report period ended september 29 1996 1010 deferred compensation plan incorporated reference 1997 10k report 1011 nonemployee directors’ retirement plan frozen october 1996 incorporated reference 1996 10k report 1012 annual retainer unit award plan nonemployee directors incorporated reference 10q report period ended september 29 1996 1013 nonfunded deferred compensation unit award plan nonemployee directors incorporated reference 10q report period ended september 29 1996 1014 restricted stock plan nonemployee directors incorporated reference 1996 10k report 1015 warnerlambert company 1996 stock plan amended incorporated reference warnerlambert’s 1999 10k report 1016 warnerlambert company incentive compensation plan amended incorporated reference warnerlambert’s 1999 10k report 1017 warnerlambert company supplemental pension income plan amended incorporated reference warnerlambert’s 1999 10k report 1018 pharmacia corporation management incentive plan amended restated incorporated reference pharmacia’s 10q report period ended september 30 2000 1019 pharmacia corporation 2001 longterm incentive plan incorporated reference pharmacia’s 10q report period ended march 31 2001 1020 pharmacia corporation 1996 longterm incentive plan amended restated incorporated reference pharmacia’s 10q report period ended september 30 2000 1021 form severance agreement named executive officers identified proxy statement 2004 annual meeting shareholders incorporated reference 1994 10k report 1022 form indemnification agreement nonemployee directors incorporated reference 1996 10k report 1023 form indemnification agreement named executive officers identified proxy statement 2004 annual meeting shareholders incorporated reference 1997 10k report 1024 postretirement consulting agreement dated april 20 2000 us william c steere jr incorporated reference 10q report period ended april 2 2000 1025 employment agreement dated january 1 2001 us henry mckinnell incorporated reference 8k report filed february 2 2001 1026 severance agreement dated january 1 2002 us jeffrey b kindler incorporated reference 2001 10k report 12 computation ratio earnings fixed charges 13 portions 2003 financial report except sections incorporated reference furnished solely information sec deemed “filed” 21 subsidiaries company 231 consent kpmg llp independent certified public accountants 232 consent pricewaterhousecoopers llp independent certified public accountants 233 consent deloitte touche llp independent certified public accountants 24 power attorney included part signature page 311 certification chief executive officer pursuant section 302 sarbanesoxley act 2002 312 certification chief financial officer pursuant section 302 sarbanesoxley act 2002 321 certification chief executive officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 322 certification chief financial officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 15b reports form 8k filed reports form 8k fourth quarter 2003 following dates purposes specified october 14 2003 file reconciliations certain nongaap financial measures included pfizer’s pharmacia’s annual reports form 10k 2002 comparable gaap financial measures file certain historical financial statements pharmacia certain unaudited pro forma financial information six months ended june 29 2003 connection acquisition pharmacia ii october 22 2003 report financial results third quarter 2003 iii november 14 2003 file certain unaudited pro forma financial information nine months ended september 28 2003 connection acquisition pharmacia iv december 2 2003 report amendment rights agreement changing expiration date december 31 2003 v december 23 2003 report agreement acquire esperion therapeutics inc signatures requirements section 13 15d securities exchange act 1934 report signed behalf registrant authorized person named undersigned directors officers pfizer inc hereby severally constitute margaret foran jeffrey b kindler singly true lawful attorneys full power sign us names capacities indicated amendments annual report form 10k filed securities exchange commission requirements securities exchange act 1934 report signed following persons behalf registrant capacities date indicatednannan