Please refer to Pfizer's 2018 Annual Report on Form 10-K, including the sections captioned Risk Factors and Forward Looking Information and Factors That May Affect Future Results, for a description of the
substantial risks and uncertainties related to the forward-looking statements, including our 2019 Financial Guidance, included in this Annual Review.
Our 2018 financial guidance reflected the following:
Pfizer does not provide guidance for GAAP Reported financial measures (other than revenues) or a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP Reported financial
measures on a forward-looking basis because it is unable to predict with reasonable certainty the ultimate outcome of pending litigation, unusual gains and losses, acquisition-related expenses and potential
future asset impairments without unreasonable effort. These items are uncertain, depend on various factors, and could have a material impact on GAAP Reported results for the guidance period.
Did not assume the completion of any business development transactions not completed as of September 30, 2018, including any one-time upfront payments associated with such transactions.
Guidance for Adjusted other (income)/deductions(4) did not attempt to forecast unrealized net gains or losses on equity securities. Pfizer is unable to predict with reasonable certainty unrealized gains
or losses on equity securities in a given period. Net unrealized gains and losses on equity securities were recorded in Adjusted other (income)/deductions during each quarter of 2018, reflecting the adoption
of a new accounting standard in the first quarter of 2018. Prior to the adoption of the new standard, net unrealized gains and losses on virtually all equity securities with readily determinable fair values
were reported in Accumulated other comprehensive income. Beginning in the first quarter of 2019, gains and losses on equity securities will be excluded from Adjusted(4) results.
Exchange rates assumed were a blend of the actual exchange rates in effect through third-quarter 2018 and mid- October 2018 exchange rates for the remainder of the year.
Reflects the previously anticipated negative revenue impact of $1.8 billion due to recent and expected generic and biosimilar competition for certain products that have recently lost patent protection. Assumed no
generic competition for Lyrica in the U.S. until June 2019, which was contingent at the time on a six-month patent-term extension for pediatric exclusivity, which was granted by the FDA in November 2018.
Reflected a full year contribution from Consumer Healthcare.
Reflected the previously anticipated favorable impact of approximately $350 million on Revenues and approximately $0.02 on Adjusted Diluted EPS(4) as a result of favorable changes in foreign exchange rates
relative to the U.S. dollar compared to foreign exchange rates from 2017.
Adjusted Diluted EPS(4) guidance assumed diluted weighted-average shares outstanding of approximately 6.0 billion shares, which reflected previously anticipated share repurchases totaling approximately
$12 billion in 2018.
The 2019 financial guidance (1) is as of January 29, 2019; (2) is not being updated or reaffirmed in connection with this Annual Review; and (3) reflects the following:
Pfizer does not provide guidance for GAAP Reported financial measures (other than revenues) or a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP Reported financial
measures on a forward-looking basis because it is unable to predict with reasonable certainty the ultimate outcome of pending litigation, unusual gains and losses, acquisition-related expenses, net gains or
losses on equity securities and potential future asset impairments without unreasonable effort. These items are uncertain, depend on various factors, and could have a material impact on GAAP Reported results
for the guidance period.
Does not assume the completion of any business development transactions not completed as of December 31, 2018, including any one-time upfront payments associated with such transactions.
Reflects a full year of revenue and expense contributions from Consumer Healthcare.
Financial guidance for Adjusted other (income)/deductions and Adjusted diluted EPS excludes the impact of gains and losses on investments in equity securities.
Reflects an anticipated negative revenue impact of $2.6 billion due to recent and expected generic and biosimilar competition for certain products that have recently lost or are anticipated to soon lose patent protection.
Exchange rates assumed are as of mid-January 2019. Reflects the anticipated unfavorable impact of approximately $0.9 billion on Revenues and approximately $0.06 on Adjusted Diluted EPS as a result of changes in
foreign exchange rates relative to the U.S. dollar compared to foreign exchange rates from 2018.
Adjusted Diluted EPS guidance assumes diluted weighted-average shares outstanding of approximately 5.7 billion shares, which reflects share repurchases totaling $12.2 billion in 2018 and the weighted-average impact
of an anticipated approximately $9 billion of share repurchases in 2019. Dilution related to share-based employee compensation programs is currently expected to offset the reduction in shares associated with
these share repurchases by approximately half.
Adjusted income and its components and Adjusted diluted EPS are defined as reported U.S. generally accepted accounting principles (U.S. GAAP) net income(5) and its components and reported diluted EPS(5) excluding
purchase accounting adjustments, acquisition-related costs, discontinued operations and certain significant items (some of which may recur, such as restructuring or legal charges, but which management does not believe
are reflective of ongoing core operations). Adjusted cost of sales, Adjusted selling, informational and administrative (SI&A) expenses, Adjusted research and development (R&D) expenses and Adjusted other (income)/deductions
are income statement line items prepared on the same basis as, and therefore components of, the overall Adjusted income measure. As described in the Financial Review—Non-GAAP Financial Measure (Adjusted Income) section
of our 2018 Financial Report, which was filed as Exhibit 13 to our Annual Report on Form 10-K for the year ended December 31, 2018, management uses Adjusted income, among other factors, to set performance goals and
to measure the performance of the overall company. Because Adjusted income is an important internal measurement for Pfizer, management believes that investors' understanding of our performance is enhanced by disclosing
this performance measure. Pfizer reports Adjusted income, certain components of Adjusted income, and Adjusted diluted EPS in order to portray the results of the company's major operations—the discovery, development,
manufacture, marketing and sale of prescription medicines, vaccines and consumer healthcare (over-the-counter) products—prior to considering certain income statement elements. Reconciliations of certain U.S. GAAP
Reported to Non-GAAP Adjusted information for 2018 are provided in the Financial Review—Non-GAAP Financial Measure (Adjusted Income) section of our 2018 Financial Report, which was filed as Exhibit 13 to
our Annual Report on Form 10-K for the year ended December 31, 2018. The Adjusted income and its components and Adjusted diluted EPS measures are not, and should not be viewed as, substitutes for U.S. GAAP net income
and its components and diluted EPS. Non-GAAP Adjusted income and its components and Non-GAAP Adjusted diluted EPS are Non-GAAP financial measures that have no standardized meaning prescribed by U.S. GAAP and, therefore,
are limited in their usefulness to investors. Because of their non-standardized definitions, Non-GAAP Adjusted income and its components (unlike U.S.GAAP net income and its components) and Non-GAAP Adjusted diluted
EPS (unlike U.S. GAAP diluted EPS) may not be comparable to the calculation of similar measures of other companies. Non- GAAP Adjusted income and its components and Non-GAAP Adjusted diluted EPS are presented solely
to permit investors to more fully understand how management assesses performance.
Reported net income is defined as net income attributable to Pfizer Inc., in accordance with U.S. GAAP and reported diluted EPS is defined as reported diluted EPS attributable to Pfizer Inc. common shareholders in accordance
with U.S. GAAP.
Patients at Our Center
Pfizer 2018 Annual Review
Ian Read: Contributions to Improving Human Health
Albert Bourla: Breakthroughs that Change Patients' Lives
Ushering in a New Era of Pfizer R&D Productivity
Advancing Our Leading JAK Science
Overcoming Therapy-Resistant Disease
Tackling Respiratory Syncytial Virus (RSV) Through Breakthrough Science and Technology
Catalyzing Innovations in Global Health
Contributing to the UN Sustainable Development Goals
Supporting Digital Health Start-Ups
Improving the Health of Women and Their Families