Segment, Geographic and Other Revenue Information

A. Segment Information

We regularly review our segments and the approach used by management to evaluate performance and allocate resources. At the

beginning of our fiscal year 2019, we reorganized our commercial operations. Prior to the reorganization effective January 1, 2019, we managed our commercial operations through two distinct business segments: Pfizer Innovative Health (IH) and Pfizer Essential Health (EH). The IH and EH operating segments were each led by a single manager. Each operating segment had responsibility for its commercial activities and for certain IPR&D projects for new investigational products and additional indications for in-line products that generally have achieved proof-of-concept. Each business had a geographic footprint across developed and emerging markets. Our chief operating decision maker used the revenues and earnings of the two operating segments, among other factors, for performance evaluation and resource allocation. As described in Note 1A, acquisitions and divestitures have impacted our results of operations in 2018, 2017 and 2016.

Some additional information about our business segments and other costs and business activities as of December 31, 2018 (prior to our new 2019 commercial organizational re-alignment) follows:

Operating Segments




IH focused on developing and commercializing novel, value-creating medicines and vaccines that significantly improve patients’ lives, as well as products for consumer healthcare. Key therapeutic areas included internal medicine, vaccines, oncology, inflammation & immunology, rare disease and consumer healthcare.		EH included legacy brands that have lost or will soon lose market exclusivity in both developed and emerging markets, branded generics, generic sterile injectable products, biosimilars and select branded products including anti-infectives. EH also included an R&D organization, as well as our contract manufacturing business. Through February 2, 2017, EH also included HIS.
Leading brands included: - Prevnar 13/Prevenar 13 - Xeljanz - Eliquis - Lyrica (U.S., Japan and certain other markets) - Enbrel (outside the U.S. and Canada) - Ibrance - Xtandi - Chantix/Champix - Several OTC consumer healthcare products (e.g., Centrum and Advil)		Leading brands included: - Lipitor - Norvasc - Lyrica (Europe, Russia, Turkey, Israel and Central Asia countries) - Celebrex - Viagra* - Inflectra/Remsima - Sulperazon - Several other sterile injectable products


*	Viagra lost exclusivity in the U.S. in December 2017. In 2018, revenues for Viagra in the U.S. and Canada, which were reported in IH through 2017, were reported in EH (which reported all other Viagra revenues excluding the U.S. and Canada through 2017). Therefore, in 2018, total Viagra worldwide revenues were reported in EH.

The following organizational change impacted our operating segments in 2018:

•

Effective in the first quarter of 2018, certain costs for Pfizer’s StratCO group, which were previously reported in the operating results of our operating segments and Corporate, are reported in Other Unallocated. StratCO costs primarily include headcount costs, vendor costs and data costs largely in support of Pfizer’s commercial operations. The majority of the StratCO costs reflect additional amounts that our operating segments would have incurred had each segment operated as a standalone company during the periods presented. The reporting change was made to streamline accountability and speed decision making. In 2017, we reclassified approximately $468 million of costs from IH, approximately $176 million of costs from EH and approximately $70 million of costs from Corporate to Other unallocated costs to conform to the current period presentation, and in 2016, we reclassified approximately $312 million of costs from IH, approximately $167 million of costs from EH and approximately $43 million of costs from Corporate to Other unallocated costs to conform to the current period presentation.

Other Costs and Business Activities

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

•

WRD, which is generally responsible for research projects for our IH business until proof-of-concept is achieved and then for transitioning those projects to the IH segment via the GPD organization for possible clinical and commercial development. R&D spending may include upfront and milestone payments for intellectual property rights. The WRD 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, including EH R&D projects. WRD is also responsible for facilitating all regulatory submissions and interactions with regulatory agencies, including all safety-event activities.


•	GPD, which is generally responsible for the operational execution of clinical trials for both early-stage assets in the WRD portfolio as well as late-stage assets in the Innovative portfolio. GPD also provides technical support and other services to Pfizer R&D projects.

•

Corporate, representing platform functions (such as worldwide technology, global real estate operations, legal, finance, human resources, worldwide public affairs, compliance and worldwide procurement), the provision of medical information to healthcare providers, patients and other parties, transparency and disclosure activities, clinical trial results publication, grants for healthcare quality improvement and medical education, and partnerships with global public health and medical associations, as well as certain compensation and other corporate costs, such as interest income and expense, and gains and losses on investments. Effective in the first quarter of 2018, certain costs for StratCO, which were previously reported in the operating results of our operating segments and Corporate, are reported in Other Unallocated. For additional information, see note below on Other unallocated costs.

•

Other unallocated costs, representing overhead expenses associated with our manufacturing and commercial operations that are not directly assessed to an operating segment, as business unit (segment) management does not manage these costs (which include manufacturing variances associated with production). In connection with the StratCO reporting change, in 2017, we reclassified approximately $468 million of costs from IH, approximately $176 million of costs from EH and approximately $70 million of costs from Corporate to Other unallocated costs to conform to the current period presentation, and in 2016, we reclassified approximately $312 million of costs from IH, approximately $167 million of costs from EH and approximately $43 million of costs from Corporate to Other unallocated costs to conform to the current period presentation.

•

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 PP&E; (ii) acquisition-related costs, where we incur costs for executing the transaction, integrating the acquired operations and restructuring the combined company; and (iii) certain significant items, representing substantive and/or unusual, and in some cases recurring, items (such as restructuring or legal charges) that are evaluated on an individual basis by management and 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. Such items can include, but are not limited to, non-acquisition-related restructuring costs, as well as costs incurred for legal settlements, asset impairments and disposals of assets or businesses, including, as applicable, any associated transition activities.

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 both 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 $159 billion as of December 31, 2018 and approximately $172 billion as of December 31, 2017.

Selected Income Statement Information

As described in Note 1A, acquisitions and divestitures have impacted our results of operations in 2018, 2017 and 2016.



The following table provides selected income statement information by reportable segment:
	Revenues						Earnings^(a)									Depreciation and Amortization^(b)
	Year Ended December 31,						Year Ended December 31,									Year Ended December 31,
(MILLIONS OF DOLLARS)	2018		2017		2016		2018			2017			2016			2018		2017		2016
Reportable Segments:
IH^(c)	$	33,426	$	31,422	$	29,197	$	20,258		$	18,809		$	16,166		$	629	$	534	$	583
EH^(c)	20,221		21,124		23,627		10,712			11,460			13,065			547		579		600
Total reportable segments	53,647		52,546		52,824		30,970			30,269			29,231			1,175		1,113		1,183
Other business activities^{(d), (e)}	—		—		—		(2,977		)	(3,137		)	(3,020		)	93		90		85
Reconciling Items:
Corporate^{(c), (e)}	—		—		—		(5,096		)	(5,452		)	(5,448		)	363		337		356
Purchase accounting adjustments^(e)	—		—		—		(4,786		)	(4,758		)	(4,185		)	4,620		4,565		3,890
Acquisition-related costs^(e)	—		—		—		(318		)	(456		)	(785		)	12		39		7
Certain significant items^(f)	—		—		—		(4,305		)	(2,647		)	(5,888		)	38		52		200
Other unallocated^(c), ^(e)	—		—		—		(1,603		)	(1,514		)	(1,554		)	82		72		35
	$	53,647	$	52,546	$	52,824	$	11,885		$	12,305		$	8,351		$	6,384	$	6,269	$	5,757


^(a)	Income from continuing operations before provision/(benefit) for taxes on income. IH’s earnings include dividend income from our investment in ViiV of $253 million in 2018 and $266 million in 2017. For additional information, see Note 4.


^(b)	Certain production facilities are shared. Depreciation is allocated based on estimates of physical production. Amounts here relate solely to the depreciation and amortization associated with continuing operations.

^(c)

In connection with the StratCO reporting change, in 2017, we reclassified approximately $468 million of costs from IH, approximately $176 million of costs from EH and approximately $70 million of costs from Corporate to Other unallocated costs, and in 2016, we reclassified approximately $312 million of costs from IH, approximately $167 million of costs from EH and approximately $43 million of costs from Corporate to Other unallocated costs to conform to the current period presentation.


^(d)	Other business activities includes the costs managed by our WRD and GPD organizations.


^(e)	For a description, see the “Other Costs and Business Activities” section above.


^(f)	Certain significant items are substantive and/or unusual, and in some cases recurring, items (such as restructuring or legal charges) 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 2018, certain significant items includes: (i) restructuring charges and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $977 million, (ii) net charges for certain legal matters of $157 million, (iii) income of $1 million, representing an adjustment to amounts previously recorded to write down the HIS net assets to fair value less costs to sell, (iv) certain asset impairment charges of $3.1 billion, (v) charges for business and legal entity alignment of $4 million, (vi) net losses on early retirement of debt of $3 million and (vii) other charges of $65 million, which includes, among other things, a non-cash $343 million pre-tax gain in Other (income)/deductions––net associated with our transaction with Bain Capital to create a new biopharmaceutical company, Cerevel, to continue development of a portfolio of clinical and preclinical stage neuroscience assets primarily targeting disorders of the central nervous system, a $119 million charge, in the aggregate, in Selling, informational and administrative expenses, for a special one-time bonus paid to virtually all Pfizer colleagues, excluding executives, which was one of several actions taken by us after evaluating the expected positive net impact of the December 2017 enactment of the legislation commonly referred to as the TCJA, $59 million of incremental costs associated with the design, planning and implementation of the new organizational structure, effective in the beginning of 2019, and primarily including consulting, legal, tax, and advisory services and a non-cash $50 million pre-tax gain in Other (income)/deductions––net as a result of the contribution of our allogeneic CAR T cell therapy development program assets in connection with our contribution agreement entered into with Allogene. For additional information, see Note 2B, Note 3 and Note 4.

For Earnings in 2017, certain significant items includes: (i) restructuring charges and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $204 million, (ii) charges for certain legal matters of $237 million, (iii) charges of $55 million, representing adjustments to amounts previously recorded to write-down the HIS net assets to fair value less costs to sell, (iv) certain asset impairment charges of $379 million, (v) charges for business and legal entity alignment of $71 million, (vi) net losses on early retirement of debt of $999 million and (vii) other charges of $700 million. For additional information, see Note 2B, Note 3 and Note 4.

For Earnings in 2016, certain significant items includes: (i) restructuring charges and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $1.4 billion, (ii) charges for certain legal matters of $494 million, (iii) an impairment charge related to the write-down of the HIS net assets to fair value less estimated costs to sell of $1.7 billion, (iv) certain asset impairment charges of $1.4 billion, (v) charges for business and legal entity alignment of $261 million, (vi) net losses on early retirement of debt of $312 million and (vii) other charges of $294 million. For additional information, see Note 3 and Note 4.

Equity in the net income of investees accounted for by the equity-method is not significant for any of our operating segments.

The operating segment information does not purport to represent the revenues, costs and Income from continuing operations before provision/(benefit) for taxes on income that each of our operating segments would have recorded had each segment operated as a standalone company during the periods presented.

B. Geographic Information

As described in Note 1A, the February 3, 2017 sale of HIS impacted our results of operations in 2018, 2017 and 2016.



The following table provides revenues by geographic area:
	Year Ended December 31,
(MILLIONS OF DOLLARS)	2018		2017		2016
United States	$	25,329	$	26,026	$	26,369
Developed Europe^(a)	9,116		8,508		9,306
Developed Rest of World^(b)	6,551		6,612		6,729
Emerging Markets ^(c)	12,651		11,399		10,420
Revenues	$	53,647	$	52,546	$	52,824


^(a)	Developed Europe region includes the following markets: Western Europe, Scandinavian countries and Finland. Revenues denominated in euros were $7.3 billion in 2018, $6.8 billion in 2017 and $7.2 billion in 2016.


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


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

Revenues exceeded $500 million in each of 11 countries outside the U.S. in 2018, 2017 and 2016. The U.S. is the only country to contribute more than 10% of total revenue in 2018, 2017 and 2016. As a percentage of revenues, our two largest national markets outside the U.S. were Japan, which contributed 8% of total revenue in each of 2018, 2017 and 2016, and China, which contributed 8% of total revenue in 2018, 7% of total revenue in 2017 and 6% of total revenues in 2016.



The following table provides long-lived assets by geographic area:
	As of December 31,
(MILLIONS OF DOLLARS)	2018		2017		2016
Property, plant and equipment, net
United States	$	7,089	$	6,971	$	6,649
Developed Europe^(a)	4,204		4,345		4,228
Developed Rest of World^(b)	490		632		643
Emerging Markets^(c)	1,602		1,917		1,797
Property, plant and equipment, net	$	13,385	$	13,865	$	13,318


^(a)	Developed Europe region includes the following markets: Western Europe, Scandinavian countries and Finland.


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


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

C. Other Revenue Information

Significant Customers

We sell our biopharmaceutical products primarily to customers in the wholesale sector. In 2018, sales to our three largest U.S. wholesaler customers represented approximately 15%, 11% and 10% of total revenues, respectively, and, collectively, represented approximately 34% of total trade accounts receivable as of December 31, 2018. In 2017, sales to our three largest U.S. wholesaler customers represented approximately 16%, 12% and 10% of total revenues, respectively, and, collectively, represented approximately 36% of total trade accounts receivable as of December 31, 2017. In 2016, sales to our three largest U.S. wholesaler customers represented approximately 16%, 12% and 10% of total revenues, respectively, and, collectively, represented approximately 29% of total trade accounts receivable as of December 31, 2016. For all years presented, these sales and related trade accounts receivable were concentrated in our biopharmaceutical businesses.

Significant Product Revenues

As described in Note 1A, acquisitions and divestitures have impacted our results of operations in 2018, 2017 and 2016.



The following table provides detailed revenue information for several of our major products:
(MILLIONS OF DOLLARS)		Year Ended December 31,
PRODUCT	PRIMARY INDICATION OR CLASS	2018		2017		2016
TOTAL REVENUES		$	53,647	$	52,546	$	52,824
PFIZER INNOVATIVE HEALTH (IH)^(a)		$	33,426	$	31,422	$	29,197
Internal Medicine		$	9,996	$	9,684	$	8,858
Lyrica IH^(b)	Epilepsy, post-herpetic neuralgia and diabetic peripheral neuropathy, fibromyalgia, neuropathic pain due to spinal cord injury	4,622		4,511		4,165
Eliquis alliance revenues and direct sales	Atrial fibrillation, deep vein thrombosis, pulmonary embolism	3,434		2,523		1,713
Chantix/Champix	An aid to smoking cessation treatment in adults 18 years of age or older	1,085		997		842
BMP2	Development of bone and cartilage	279		261		251
Toviaz	Overactive bladder	271		257		258
Viagra IH^(c)	Erectile dysfunction	—		823		1,181
All other Internal Medicine	Various	306		312		447
Vaccines		$	6,332	$	6,001	$	6,071
Prevnar 13/Prevenar 13	Vaccines for prevention of pneumococcal disease	5,802		5,601		5,718
FSME/IMMUN-TicoVac	Tick-borne encephalitis vaccine	184		134		114
Trumenba	Meningococcal Group B vaccine	116		88		84
All other Vaccines	Various	230		177		155
Oncology		$	7,202	$	6,056	$	4,563
Ibrance	Advanced breast cancer	4,118		3,126		2,135
Sutent	Advanced and/or metastatic RCC, adjuvant RCC, refractory GIST (after disease progression on, or intolerance to, imatinib mesylate) and advanced pancreatic neuroendocrine tumor	1,049		1,081		1,095
Xtandi alliance revenues	Castration-resistant prostate cancer	699		590		140
Xalkori	ALK-positive and ROS1-positive advanced NSCLC	524		594		561
Inlyta	Advanced RCC	298		339		401
Bosulif	Philadelphia chromosome–positive chronic myelogenous leukemia	296		233		167
All other Oncology	Various	219		93		63
Inflammation & Immunology (I&I)		$	4,080	$	3,968	$	3,928
Enbrel (Outside the U.S. and Canada)	RA, juvenile idiopathic arthritis, PsA, plaque psoriasis, pediatric plaque psoriasis, ankylosing spondylitis and nonradiographic axial spondyloarthritis	2,112		2,452		2,909
Xeljanz	RA, PsA, ulcerative colitis	1,774		1,345		927
Eucrisa	Mild-to-moderate atopic dermatitis (eczema)	147		67		—
All other I&I	Various	46		103		93
Rare Disease		$	2,211	$	2,240	$	2,369
Genotropin	Replacement of human growth hormone	558		532		579
BeneFIX	Hemophilia	554		604		712
Refacto AF/Xyntha	Hemophilia	514		551		554
Somavert	Acromegaly	267		254		232
All other Rare Disease	Various	318		300		292
Consumer Healthcare		$	3,605	$	3,472	$	3,407
PFIZER ESSENTIAL HEALTH (EH)^(d)		$	20,221	$	21,124	$	23,627
Legacy Established Products (LEP)^(e)		$	10,540	$	10,894	$	11,197
Lipitor	Reduction of LDL cholesterol	2,062		1,915		1,758
Norvasc	Hypertension	1,024		926		962
Premarin family	Symptoms of menopause	832		977		1,017
Xalatan/Xalacom	Glaucoma and ocular hypertension	318		335		363
Effexor	Depression and certain anxiety disorders	311		297		278
EpiPen	Epinephrine injection used in treatment of life-threatening allergic reactions	303		290		386
Zoloft	Depression and certain anxiety disorders	298		291		304
Zithromax	Bacterial infections	290		270		272
Xanax	Anxiety disorders	223		225		222
Sildenafil Citrate	Erectile dysfunction	56		56		—
All other LEP	Various	4,822		5,313		5,636



(MILLIONS OF DOLLARS)		Year Ended December 31,
PRODUCT	PRIMARY INDICATION OR CLASS	2018		2017		2016
Sterile Injectable Pharmaceuticals (SIP)^(f)		$	5,214	$	5,673	$	6,014
Sulperazon	Treatment of infections	613		471		396
Medrol	Steroid anti-inflammatory	427		483		450
Fragmin	Slows blood clotting	293		306		318
Tygacil	Tetracycline class antibiotic	249		260		274
Zosyn/Tazocin	Antibiotic	229		194		146
Precedex	Sedation agent in surgery or intensive care	213		243		264
All other SIP	Various	3,191		3,715		4,166
Peri-LOE Products^(g)		$	2,944	$	3,223	$	4,220
Celebrex	Arthritis pain and inflammation, acute pain	686		775		733
Viagra EH^(c)	Erectile dysfunction	636		382		383
Vfend	Fungal infections	392		421		590
Lyrica EH^(b)	Epilepsy, neuropathic pain and generalized anxiety disorder	347		553		801
Zyvox	Bacterial infections	236		281		421
Revatio	Pulmonary arterial hypertension	227		252		285
Pristiq	Depression	206		303		732
All other Peri-LOE Products	Various	213		257		276
Biosimilars^(h)	Various	$	769	$	531	$	319
Inflectra/Remsima	Inflammatory diseases	642		419		192
All other Biosimilars	Various	127		112		127
Pfizer CentreOne⁽ⁱ⁾		$	755	$	706	$	718
Hospira Infusion Systems (HIS)^(j)	Various	$	—	$	97	$	1,158
Total Lyrica^(b)	Epilepsy, post-herpetic neuralgia and diabetic peripheral neuropathy, fibromyalgia, neuropathic pain due to spinal cord injury	$	4,970	$	5,065	$	4,966
Total Viagra^(c)	Erectile dysfunction	$	636	$	1,204	$	1,564
Total Alliance revenues	Various	$	3,838	$	2,927	$	1,746

^(a)

The IH business encompasses Internal Medicine, Vaccines, Oncology, Inflammation & Immunology, Rare Disease and Consumer Healthcare. Through December 31, 2016, includes Duavive/Duavee and Viviant (recorded in All other Internal Medicine in 2016), which were transferred from Innovative Health to Essential Health effective January 1, 2017 (recorded in All other LEP (EH) beginning January 1, 2017), in order to align these products with our management of the women’s health portfolio within EH.


^(b)	Lyrica revenues from all of Europe, Russia, Turkey, Israel and Central Asia countries are included in Lyrica EH. All other Lyrica revenues are included in Lyrica IH. Total Lyrica revenues represent the aggregate of worldwide revenues from Lyrica IH and Lyrica EH.

^(c)

Viagra lost exclusivity in the U.S. in December 2017. In 2018, revenues for Viagra in the U.S. and Canada, which were reported in IH through 2017, were reported in EH (which reported all other Viagra revenues excluding the U.S. and Canada through 2017). Therefore, in 2018, total Viagra worldwide revenues were reported in EH. Total Viagra revenues in 2017 and 2016 represented the aggregate of worldwide revenues from Viagra IH and Viagra EH.


^(d)	The EH business encompasses Legacy Established Products, Sterile Injectable Pharmaceuticals, Peri-LOE Products, Biosimilars, Pfizer CentreOne and HIS (through February 2, 2017).

^(e)

Legacy Established Products primarily include products that have lost patent protection (excluding Sterile Injectable Pharmaceuticals and Peri-LOE Products). In the fourth quarter of 2017, we sold our equity share in Hisun Pfizer. As a result, effective in the first quarter of 2018, Hisun Pfizer-related revenues, previously reported in emerging markets within All Other LEP and All Other SIP, are reported in emerging markets within Pfizer CentreOne.

Effective January 1, 2017, All other LEP includes Duavive/Duavee and Viviant, which were transferred from Innovative Health (recorded in All other Internal Medicine (IH) in 2016), in order to align these products with our management of the women’s health portfolio within EH. See note (a) above.

^(f)

Sterile Injectable Pharmaceuticals includes branded and generic injectables (excluding Peri-LOE Products). In the fourth quarter of 2017, we sold our equity share in Hisun Pfizer. As a result, effective in the first quarter of 2018, Hisun Pfizer-related revenues, previously reported in emerging markets within All Other LEP and All Other SIP, are reported in emerging markets within Pfizer CentreOne.

^(g)

Peri-LOE Products include products that have recently lost or are anticipated to soon lose patent protection. These products primarily include: Lyrica in Europe, Russia, Turkey, Israel and Central Asia; and worldwide revenues for Celebrex, Pristiq, Zyvox, Vfend, Revatio and Inspra; and in 2018, Viagra revenues for all countries (and Viagra revenues for all countries other than the U.S. and Canada in 2017 and 2016), see note (c) above.


^(h)	Biosimilars include Inflectra/Remsima (biosimilar infliximab) in the U.S. and certain international markets, Nivestim (biosimilar filgrastim) in certain European, Asian and Africa/Middle Eastern markets and in the U.S. and Retacrit (biosimilar epoetin zeta) in the U.S. and certain European and Africa/Middle Eastern markets.

⁽ⁱ⁾

Pfizer CentreOne includes revenues from our contract manufacturing and active pharmaceutical ingredient sales operation, including sterile injectables contract manufacturing, and revenues related to our manufacturing and supply agreements, including with Zoetis Inc. In the fourth quarter of 2017, we sold our equity share in Hisun Pfizer. As a result, effective in the first quarter of 2018, Hisun Pfizer-related revenues, previously reported in emerging markets within All Other LEP and All Other SIP, are reported in emerging markets within Pfizer CentreOne.


^(j)	HIS (through February 2, 2017) includes Medication Management Systems products composed of infusion pumps and related software and services, as well as IV Infusion Products, including large volume IV solutions and their associated administration sets.