. Segment, Geographic and Other Revenue Information

A. Segment Information

We manage our operations through five operating segments––Primary Care, Specialty Care and Oncology, Established Products and Emerging Markets, Animal Health (Zoetis) and Consumer Healthcare. Each pharmaceutical operating segment and Consumer Healthcare have responsibility for their commercial activities and for certain research and development activities related to in-line products and IPR&D projects that generally have achieved proof-of-concept. Our Animal Health operating segment is managed within the framework of a standalone public company, Zoetis.

We have made certain reclassification adjustments to to conform prior-period amounts to the current measurement basis for our operating segments as a result of the formation of Zoetis. For additional information, see Note 2B. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Divestitures.

We regularly review our segments and the approach used by management to evaluate performance and allocate resources. Generally, products are transferred to the Established Products unit in the beginning of the fiscal year following loss of patent protection or marketing exclusivity.

Operating Segments

A description of each of our five operating segments follows:

•

Primary Care operating segment––includes revenues and earnings, as defined by management, from human prescription pharmaceutical products primarily prescribed by primary-care physicians, and may include products in the following therapeutic and disease areas: Alzheimer’s disease, cardiovascular (excluding pulmonary arterial hypertension), erectile dysfunction, genitourinary, major depressive disorder, pain, respiratory and smoking cessation. Examples of products in this unit in the first quarter of 2013 include Celebrex, Chantix/Champix, Eliquis, Lyrica, Premarin, Pristiq and Viagra (outside Canada and South Korea). All revenues and earnings for such products are allocated to the Primary Care unit, except those generated in Emerging Markets and those that are managed by the Established Products unit.


•	Specialty Care and Oncology operating segment––comprises the Specialty Care business unit and the Oncology business unit.

◦

Specialty Care––includes revenues and earnings, as defined by management, from human prescription pharmaceutical products primarily prescribed by physicians who are specialists, and may include products in the following therapeutic and disease areas: anti-infectives, endocrine disorders, hemophilia, inflammation, ophthalmology, pulmonary arterial hypertension, specialty neuroscience and vaccines. Examples of products in this unit in the first quarter of 2013 include BeneFIX, Enbrel, Genotropin, Geodon (outside the U.S.), the Prevnar/Prevenar family, ReFacto AF, Revatio (outside the U.S.), Tygacil, Vfend (outside the U.S. and South Korea), Vyndaqel (outside the U.S.), Xalatan (outside the U.S., Canada, South Korea, developed Europe, Australia and New Zealand), Xeljanz, Xyntha and Zyvox. All revenues and earnings for such products are allocated to the Specialty Care unit, except those generated in Emerging Markets and those that are managed by the Established Products unit.

◦

Oncology––includes revenues and earnings, as defined by management, from human prescription pharmaceutical products addressing oncology and oncology-related illnesses. The products in this unit in the first quarter of 2013 include Inlyta, Sutent, Torisel, Xalkori, Mylotarg (in Japan), Bosulif (in the U.S. and European Union (EU)) and Aromasin (in Japan and South Korea). All revenues and earnings for such products are allocated to the Oncology unit, except those generated in Emerging Markets and those that are managed by the Established Products unit.


•	Established Products and Emerging Markets operating segment––comprises the Established Products business unit and the Emerging Markets business unit.

◦

Established Products––includes revenues and earnings, as defined by management, from human prescription pharmaceutical products that have lost patent protection or marketing exclusivity in certain countries and/or regions. Typically, products are transferred to this unit in the beginning of the fiscal year following loss of patent protection or marketing exclusivity. However, in certain situations, products may be transferred to this unit at a different point than the beginning of the fiscal year following loss of patent protection or marketing exclusivity in order to maximize their value. This unit also excludes revenues and earnings generated in Emerging Markets. Examples of products in this unit in the first quarter of 2013 include Arthrotec, Effexor, Geodon (in the U.S.), Lipitor, Medrol, Norvasc, Protonix, Relpax, Vfend (in the U.S. and South Korea), Xalatan (in the U.S., Canada, South Korea, developed Europe, Australia and New Zealand), Zosyn/Tazocin and Viagra (in Canada and South Korea).


◦	Emerging Markets––includes revenues and earnings, as defined by management, from all human prescription pharmaceutical products sold in Emerging Markets, including Asia (excluding Japan and South Korea), Latin America, the Middle East, Eastern Europe, Africa, Turkey and Central Europe.

•

Animal Health operating segment (Zoetis)––includes worldwide revenues and earnings, as defined by management and within the framework of a standalone public company, from products and services to prevent and treat disease in livestock and companion animals, including anti-infectives, vaccines, parasiticides, medicinal feed additives, other pharmaceutical products and other non-pharmaceutical products.


•	Consumer Healthcare operating segment––includes worldwide revenues and earnings, as defined by management, from non-prescription products in the following therapeutic categories: dietary supplements, pain management, respiratory and personal care. Products marketed by Consumer Healthcare include Advil, Caltrate, Centrum, ChapStick, Emergen-C, Preparation H and Robitussin.

Our chief operating decision maker uses the revenues and earnings of the five operating segments, among other factors, for performance evaluation and resource allocation. For the operating segments that comprise more than one business unit, a single segment manager has responsibility for those business units.

Other Costs and Business Activities

Certain costs are not allocated to our operating segment results, such as costs associated with the following:

•

Worldwide Research and Development, which is generally responsible for human health research projects until proof-of-concept is achieved and then for transitioning those projects to the appropriate business unit for possible clinical and commercial development. R&D spending may include upfront and milestone payments for intellectual property rights. This organization also has responsibility for certain science-based and other platform-services organizations, which provide technical expertise and other services to the various R&D projects. Worldwide Research and Development is also responsible for facilitating all human-health-related regulatory submissions and interactions with regulatory agencies, including all safety-event activities.


•	Pfizer Medical is responsible for external affairs relating to all therapeutic areas, providing Pfizer-related medical information to healthcare providers, patients and other parties, and quality assurance and regulatory compliance activities, which include conducting clinical trial audits and readiness reviews.

•

Corporate, which is responsible for platform functions such as finance, global real estate operations, human resources, legal, compliance, science and technology, worldwide procurement, worldwide public affairs and policy and worldwide technology. These costs also include compensation costs and other miscellaneous operating expenses not charged to our operating segments, as well as interest income and expense.

•

Certain transactions and events such as (i) purchase accounting adjustments, where we incur expenses associated with the amortization of fair value adjustments to inventory, intangible assets and property, plant and equipment; (ii) acquisition-related activities, where we incur costs for restructuring, integration, implementation and executing the transaction; and (iii) certain significant items, which include non-acquisition-related restructuring costs, as well as costs incurred for legal settlements, asset impairments and disposals of assets or businesses.

Segment Assets

We manage our assets on a total company basis, not by operating segment, as many of our operating assets are shared (such as our plant network assets) or commingled (such as accounts receivable, as many of our customers are served by multiple operating segments). Therefore, our chief operating decision maker does not regularly review any asset information by operating segment and, accordingly, we do not report asset information by operating segment. Total assets were approximately $187 billion as of March 31, 2013 and approximately $186 billion as of December 31, 2012.

Selected income statement information

The following table provides selected income statement information by reportable segment:



	Revenues				R&D Expenses						Earnings^(a)
(MILLIONS OF DOLLARS)	March 31, 2013		April 1, 2012		March 31, 2013			April 1, 2012			March 31, 2013			April 1, 2012
Three Months Ended
Reportable Segments:
Primary Care^(b)	$	3,238	$	4,097	$	223		$	241		$	2,014		$	2,670
Specialty Care and Oncology	3,536		3,868		404			373			2,314			2,596
Established Products and Emerging Markets^(c)	4,772		5,100		64			73			2,810			3,177
Total reportable segments	11,546		13,065		691			687			7,138			8,443
Other operating segments^(d)	1,901		1,767		111			112			448			353
Other business activities^(e)	53		53		654			674			(658		)	(681		)
Reconciling Items:
Corporate^(f)	—		—		240			276			(1,361		)	(1,705		)
Purchase accounting adjustments^(g)	—		—		(1		)	(1		)	(1,232		)	(1,446		)
Acquisition-related costs^(h)	—		—		—			5			(95		)	(183		)
Certain significant items⁽ⁱ⁾	—		—		93			302			(128		)	(2,067		)
Other unallocated^(j)	—		—		12			7			(191		)	(279		)
	$	13,500	$	14,885	$	1,800		$	2,062		$	3,921		$	2,435


^(a)	Income from continuing operations before provision for taxes on income.

^(b)

Revenues and Earnings from the Primary Care segment decreased in the three months ended March 31, 2013 as compared to the three months ended April 1, 2012, and earnings as a percentage of revenues also declined, primarily due to the loss of exclusivity for Lipitor in developed Europe and Australia and the subsequent shift in the reporting of Lipitor in those markets to the Established Products business unit.

^(c)

Revenues and Earnings from the Established Products and Emerging Markets segment decreased in the three months ended March 31, 2013 as compared to the three months ended April 1, 2012, driven by, among other things, the expiration of the 180-day exclusivity period in the U.S. for atorvastatin and the loss of exclusivity in the U.S. for branded Lipitor, partially offset by the addition of products in certain markets that shifted to the Established Products unit from other business units beginning January 1, 2013. Earnings as a percentage of revenue decreased due to the change in the mix of products.


^(d)	Includes our Animal Health (Zoetis) operating segment and the Consumer Healthcare operating segment. The Animal Health earnings reflect the income before taxes of Zoetis on a management-reporting basis and generally include higher operating costs associated with being a standalone public company.


^(e)	Other business activities includes the revenues and operating results of Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical sales operation, and the R&D costs managed by our Worldwide Research and Development organization and our Pfizer Medical organization.


^(f)	Corporate for R&D expenses includes, among other things, administration expenses and compensation expenses associated with our research and development activities, and for Earnings includes, among other things, administration expenses, interest income/(expense), certain compensation and other costs not charged to our operating segments.


^(g)	Purchase accounting adjustments include certain charges related to the fair value adjustments to inventory, intangible assets and property, plant and equipment.

^(h)

Acquisition-related costs can include costs associated with acquiring, integrating and restructuring newly acquired businesses, such as transaction costs, integration costs, restructuring charges and additional depreciation associated with asset restructuring (see Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives for additional information).


⁽ⁱ⁾	Certain significant items are substantive, unusual items that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis.

For Earnings in the first quarter of 2013, certain significant items includes: (i) restructuring charges and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $217 million, (ii) net credits for certain legal matters of $87 million, (iii) certain asset impairment charges of $396 million, (iv) gain associated with the transfer of certain product rights to our equity-method investment in China of $490 million, (v) costs associated with the separation of Zoetis of $76 million and (vi) other charges of $16 million. For additional information, see Note 2D. Acquisitions, Divestitures, Collaborative Arrangement and Equity-Method Investment: Equity-Method Investment, Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives and Note 4. Other Deductions––Net.

For Earnings in the first quarter of 2012, certain significant items includes: (i) restructuring charges and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $817 million, (ii) charges for certain legal matters of $775 million, (iii) certain asset impairment charges of $412 million, (iv) costs associated with the separation of Zoetis of $38 million and (v) other charges of $25 million. For additional information, see Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives and Note 4. Other Deductions––Net.

For R&D in all periods presented, certain significant items primarily reflect additional depreciation––asset restructuring and implementation costs.


^(j)	Includes overhead expenses associated with our manufacturing and commercial operations not directly attributable to an operating segment.

B. Geographic Information

The following table provides revenues by geographic area:



	Three Months Ended
(MILLIONS OF DOLLARS)	March 31, 2013		April 1, 2012		% Change
Revenues
United States	$	5,368	$	5,952	(10	)
Developed Europe^(a)	3,029		3,537		(14	)
Developed Rest of World^(b)	2,172		2,612		(17	)
Emerging Markets^(c)	2,931		2,784		5
Revenues	$	13,500	$	14,885	(9	)


^(a)	Developed Europe region includes the following markets: Western Europe, Finland and the Scandinavian countries. Revenues denominated in euros were $2.3 billion in the first quarter of 2013 and $2.6 billion in the first quarter of 2012.


^(b)	Developed Rest of World region includes the following markets: Australia, Canada, Japan, New Zealand and South Korea.


^(c)	Emerging Markets region includes, but is not limited to, the following markets: Asia (excluding Japan and South Korea), Latin America, the Middle East, Eastern Europe, Africa, Turkey and Central Europe.

C. Other Revenue Information

Significant Product Revenues



The following table provides revenues by product:
	Three Months Ended
(MILLIONS OF DOLLARS)	March 31, 2013		April 1, 2012
Revenues from biopharmaceutical products:
Lyrica	$	1,066	$	955
Enbrel (Outside the U.S. and Canada)	877		899
Prevnar 13/Prevenar 13	846		945
Celebrex	653		634
Lipitor^(a)	626		1,395
Viagra	461		496
Zyvox	342		325
Sutent	302		300
Norvasc	301		334
Premarin family	244		261
Genotropin	189		195
BeneFIX	189		183
Vfend	187		178
Chantix/Champix	166		178
Pristiq	166		151
Detrol/Detrol LA	151		195
Xalatan/Xalacom	147		227
Refacto AF/Xyntha	139		132
Zithromax/Zmax	116		123
Zoloft	116		130
Medrol	113		134
Effexor	105		129
Zosyn/Tazocin	87		128
Tygacil	87		81
Relpax	86		85
Fragmin	86		91
Rapamune	84		82
Prevnar/Prevenar (7-valent)	81		138
Cardura	76		84
EpiPen	72		58
Revatio	72		136
Sulperazon	71		58
Xanax XR	70		68
Inlyta	63		7
Aricept^(b)	62		94
Unasyn	56		54
Caduet	56		65
Xalkori	53		17
Neurontin	52		58
Inspra	52		49
Toviaz	52		46
Aromasin	51		56
Dalacin/Cleocin	50		49
Alliance revenues^(c)	747		836



All other biopharmaceutical products^(d)	1,878		2,226
	11,546		13,065
Other revenues:
Animal Health (Zoetis)	1,090		1,040
Consumer Healthcare	811		727
Other^(e)	53		53
	$	13,500	$	14,885


^(a)	Lipitor lost exclusivity in the U.S. in November 2011 and various other major markets in 2011 and 2012. This loss of exclusivity reduced branded worldwide revenues by $792 million in the first quarter of 2013, in comparison with the first quarter of 2012.


^(b)	Represents direct sales under license agreement with Eisai Co., Ltd.


^(c)	Includes Enbrel (in the U.S. and Canada), Spiriva, Rebif, Aricept and Eliquis.


^(d)	Includes sales of generic atorvastatin.


^(e)	Represents revenues generated from Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical sales organization.