Segment, Geographic and Other Revenue Information

12 Months Ended

Dec. 31, 2019

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. Prior to January 1, 2019, we managed our commercial operations through two distinct business segments: Pfizer Innovative Health (IH) and Pfizer Essential Health (EH). At the beginning of our fiscal year 2019, we reorganized our commercial operations and began to manage our commercial operations through a new global structure consisting of three distinct business segments: Pfizer Biopharmaceuticals Group (Biopharma), Upjohn and, through July 31, 2019, Pfizer’s Consumer Healthcare business (Consumer Healthcare), each led by a single manager. Each operating segment has responsibility for its commercial activities. Upjohn and through July 31, 2019, Consumer Healthcare, are responsible for their own R&D activities while Biopharma receives its R&D services from GPD and WRDM. These services include IPR&D projects for new investigational products and additional indications for in-line products. Each business has a geographic footprint across developed and emerging markets. Our chief operating decision maker uses the revenues and earnings of the operating segments, among other factors, for performance evaluation and resource allocation. Biopharma and Upjohn are the only reportable segments. We have revised prior-period information (Revenues and Earnings, as defined by management) to conform to the current management structure. As our operations were not managed under the new structure until the beginning of fiscal 2019, certain costs and expenses could not be directly attributed to one of the then new operating segments. As a result, our operating segment results for 2018 and 2017 include allocations, which management believes are reasonable. As described in Note 1A, acquisitions impacted our results of operations in 2019 and 2017, the contribution of our Consumer Healthcare business to the GSK Consumer Healthcare joint venture impacted our results of operations in 2019 and divestitures impacted our results of operations in 2017.

Operating Segments



Some additional information about our Biopharma and Upjohn business segments follows:
	Pfizer Biopharmaceuticals Group
Biopharma is a science-based medicines business that includes six business units – Oncology, Inflammation & Immunology, Rare Disease, Hospital, Vaccines and Internal Medicine. The Hospital unit commercializes our global portfolio of sterile injectable and anti-infective medicines and includes Pfizer’s contract manufacturing operation, Pfizer CentreOne. At the beginning of our 2019 fiscal year, we also incorporated our biosimilar portfolio into the Oncology and Inflammation & Immunology business units and certain legacy established products into the Internal Medicine business unit. Each business unit is committed to delivering breakthroughs that change patients’ lives.		Upjohn is a global, primarily off-patent branded and generic medicines business, which includes a portfolio of 20 globally recognized solid oral dose brands, as well as a U.S.-based generics platform, Greenstone.
Select products include: - Prevnar 13/Prevenar 13 - Ibrance - Eliquis - Xeljanz - Enbrel (outside the U.S. and Canada) - Chantix/Champix - Sutent - Xtandi - Vyndaqel/Vyndamax		Select products include: - Lyrica - Lipitor - Norvasc - Celebrex - Viagra - Certain generic medicines

On July 29, 2019, we announced that we entered into a definitive agreement to combine Upjohn with Mylan, creating a new global pharmaceutical company. For additional information, see Note 1A.

On July 31, 2019, Pfizer’s Consumer Healthcare business, an over-the-counter medicines business, was combined with GSK’s consumer healthcare business to form a new consumer healthcare joint venture. See Note 1A and Note 2C for additional information.

Other Costs and Business Activities

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

•

WRDM––the R&D and Medical expenses managed by our WRDM organization, which is generally responsible for research projects for our Biopharma portfolio until proof-of-concept is achieved and then for transitioning those projects to the GPD organization for possible clinical and commercial development. R&D spending may include upfront and milestone payments for intellectual property rights. The WRDM organization also has responsibility for certain science-based and other platform-services organizations, which provide end-to-end technical expertise and other services to the various R&D projects, as well as the Worldwide Medical and Safety group, which ensures that Pfizer provides all stakeholders––including patients, healthcare providers, pharmacists, payers and health authorities––with complete and up-to-date information on the risks and benefits associated with Pfizer products so that they can make appropriate decisions on how and when to use Pfizer’s medicines.


•	GPD––the costs associated with our GPD organization, which is generally responsible for clinical trials from WRDM in the Biopharma portfolio, including late stage portfolio spend. GPD also provides technical support and other services to Pfizer R&D projects. GPD is responsible for facilitating all regulatory submissions and interactions with regulatory agencies.


•	Other––the operating results of our Consumer Healthcare business, through July 31, 2019, and costs associated with other commercial activities not managed as part of Biopharma or Upjohn, including all strategy, business development, portfolio management and valuation capabilities, which previously had been reported in various parts of the organization.

•

Corporate and Other Unallocated––the costs associated with platform functions (such as worldwide technology, global real estate operations, legal, finance, human resources, worldwide public affairs, compliance, and worldwide procurement), patient advocacy activities and certain compensation and other corporate costs, such as interest income and expense, and gains and losses on investments, as well as overhead expenses associated with our manufacturing (which include manufacturing variances associated with production) and commercial operations that are not directly assessed to an operating segment, as business unit (segment) management does not manage these costs.

•

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 gains on the completion of joint venture transactions, restructuring charges, legal charges or net gains and losses on investments in equity securities) 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 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 $167 billion as of December 31, 2019 and approximately $159 billion as of December 31, 2018.

Selected Income Statement Information



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)	2019		2018		2017		2019			2018			2017			2019		2018		2017
Reportable Segments:
Biopharma	$	39,419	$	37,558	$	35,530	$	24,517		$	23,738		$	22,194		$	958	$	953	$	881
Upjohn	10,233		12,484		13,447		6,785			8,636			9,348			105		112		125
Total reportable segments	49,653		50,042		48,977		31,301			32,374			31,542			1,063		1,065		1,006
Other business activities	2,098		3,605		3,472		(5,723		)	(5,283		)	(5,302		)	108		146		142
Reconciling Items:
Corporate and other unallocated	—		—		97		(5,859		)	(6,383		)	(6,299		)	453		503		465
Purchase accounting adjustments	—		—		—		(4,333		)	(4,786		)	(4,758		)	4,347		4,620		4,565
Acquisition-related costs	—		—		—		(185		)	(318		)	(456		)	3		12		39
Certain significant items^(c)	—		—		—		2,481			(3,719		)	(2,423		)	36		38		52
	$	51,750	$	53,647	$	52,546	$	17,682		$	11,885		$	12,305		$	6,010	$	6,384	$	6,269


^(a)	Income from continuing operations before provision/(benefit) for taxes on income. Biopharma’s earnings include dividend income from our investment in ViiV of $220 million in 2019, $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)	Certain significant items are substantive and/or unusual, and in some cases recurring, items (as noted above) 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 2019, certain significant items includes: (i) restructuring charges and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $758 million, (ii) charges for certain legal matters of $543 million, (iii) certain asset impairment charges of $2.8 billion, (iv) charges for business and legal entity alignment of $495 million, (v) net gains of $415 million recognized during the period on equity securities, (vi) a pre-tax gain of $8.1 billion associated with the completion of the GSK Consumer Healthcare joint venture transaction, (vii) net losses on early retirement of debt of $138 million and (viii) other charges of $1.3 billion, which includes, among other things: an upfront license fee payment of $250 million to Akcea, which was recorded in Research and development expenses, charges of $112 million recorded in Other (income)/deductions––net representing our pro rata share of primarily restructuring and business combination accounting charges recorded by the GSK Consumer Healthcare joint venture, a $337 million charge in Research and development expenses related to our acquisition of Therachon, a $99 million charge in Cost of sales related to rivipansel, primarily for inventory manufactured for expected future sale and charges of $240 million, primarily in Selling, informational and administrative expenses and Other (income)/deductions––net, for external incremental costs, such as transaction costs and costs to separate our Consumer Healthcare business into a separate legal entity associated with the formation of the GSK Consumer Healthcare joint venture. For additional information, see Note 1A, Note 2A, Note 2C, Note 2D, Note 3 and Note 4.

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) certain asset impairment charges of $3.1 billion, (iv) charges for business and legal entity alignment of $63 million, (v) net gains of $586 million recognized during the period on equity securities, (vi) net losses on early retirement of debt of $3 million and (vii) other charges of $4 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 pre-clinical 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 TCJA, 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) certain asset impairment charges of $379 million, (iv) charges for business and legal entity alignment of $71 million, (v) net gains of $224 million recognized during the period on equity securities, (vi) net losses on early retirement of debt of $999 million and (vii) other charges of $756 million, which includes, among other things: a charitable contribution to the Pfizer Foundation of $200 million, which is included in Selling, informational and administrative expenses, $195 million in inventory losses, overhead costs related to the period in which our Puerto Rico plants were not operational, and incremental costs, all of which resulted from hurricanes in Puerto Rico in 2017 and are included in Cost of sales, an $81 million loss related to the sale of our former 49% equity share in Hisun Pfizer, which is included in Other (income)/deductions––net, charges of $55 million in Other (income)/deductions––net representing adjustments to amounts previously recorded to write down the HIS net assets to fair value less costs to sell and a net loss of $30 million related to the sale of our former 40% ownership investment in Teuto, including the extinguishment of a put option for the remaining 60% ownership interest, which is included in Other (income)/deductions––net. For additional information, see Note 2B, Note 2C, 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, acquisitions impacted our results of operations in 2019 and 2017, the contribution of our Consumer Healthcare business to the GSK Consumer Healthcare joint venture impacted our results of operations in 2019 and divestitures impacted our results of operations in 2017.



The following table provides revenues by geographic area:
	Year Ended December 31,
(MILLIONS OF DOLLARS)	2019		2018		2017
United States	$	23,852	$	25,329	$	26,026
Developed Europe^(a)	8,701		9,116		8,508
Developed Rest of World^(b)	6,465		6,551		6,612
Emerging Markets^(c)	12,733		12,651		11,399
Revenues	$	51,750	$	53,647	$	52,546


^(a)	Developed Europe region includes the following markets: Western Europe, Scandinavian countries and Finland. Revenues denominated in euros were $7.0 billion in 2019, $7.3 billion in 2018 and $6.8 billion in 2017.


^(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 2019, 2018 and 2017. The U.S. is the only country to contribute more than 10% of total revenue in 2019, 2018 and 2017. As a percentage of revenues, our two largest national markets outside the U.S. were China, which contributed 9% of total revenue in 2019, 8% of total revenue in 2018 and 7% of total revenues in 2017, and Japan, which contributed 8% of total revenue in each of 2019, 2018 and 2017.



The following table provides long-lived assets by geographic area:
	As of December 31,
(MILLIONS OF DOLLARS)	2019		2018		2017
Property, plant and equipment, net
United States	$	7,606	$	7,089	$	6,971
Developed Europe^(a)	4,304		4,204		4,345
Developed Rest of World^(b)	453		490		632
Emerging Markets^(c)	1,603		1,602		1,917
Property, plant and equipment, net	$	13,967	$	13,385	$	13,865


^(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 all years presented, our three largest U.S. wholesaler customers are McKesson, Inc., AmerisourceBergen Corporation and Cardinal Health, Inc. In 2019, sales to our three largest U.S. wholesaler customers represented approximately 16%, 12% and 10% of total revenues, respectively, and, collectively, represented approximately 25% of total trade accounts receivable as of December 31, 2019. 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. For all years presented, these sales and related trade accounts receivable were concentrated in our biopharmaceutical businesses.

Significant Product Revenues

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	2019		2018		2017
TOTAL REVENUES		$	51,750	$	53,647	$	52,546
PFIZER BIOPHARMACEUTICALS GROUP (BIOPHARMA)		$	39,419	$	37,558	$	35,530
Internal Medicine^(a)		$	9,119	$	8,869	$	8,229
Eliquis alliance revenues and direct sales	Nonvalvular Atrial fibrillation, deep vein thrombosis, pulmonary embolism	4,220		3,434		2,523
Chantix/Champix	An aid to smoking cessation treatment in adults 18 years of age or older	1,107		1,085		997
Premarin family	Symptoms of menopause	734		832		977
BMP2	Development of bone and cartilage	287		279		261
Toviaz	Overactive bladder	250		271		257
All other Internal Medicine	Various	2,521		2,969		3,213
Oncology^(b)		$	9,014	$	7,471	$	6,304
Ibrance	Metastatic breast cancer	4,961		4,118		3,126
Sutent	Advanced and/or metastatic RCC, adjuvant RCC, refractory GIST (after disease progression on, or intolerance to, imatinib mesylate) and advanced pancreatic neuroendocrine tumor	936		1,049		1,081
Xtandi alliance revenues	Non-metastatic and metastatic castration-resistant prostate cancer and non-metastatic castration-sensitive prostate cancer	838		699		590
Xalkori	ALK-positive and ROS1-positive advanced NSCLC	530		524		594
Inlyta	Advanced RCC	477		298		339
Bosulif	Philadelphia chromosome–positive chronic myelogenous leukemia	365		296		233
Retacrit^(c)	Anemia	225		82		67
Mektovi	In combination with Braftovi for metastatic melanoma for patients who test positive for a BRAF genetic mutation	49		—		—
Braftovi	In combination with Mektovi for metastatic melanoma for patients who test positive for a BRAF genetic mutation	48		—		—
All other Oncology	Various	585		406		274
Hospital^(d)		$	7,772	$	7,955	$	8,369
Sulperazon	Bacterial infections	684		613		471
Medrol^(e)	Anti-inflammatory glucocorticoid	469		493		540
Vfend	Fungal infections	346		392		421
Zithromax^(e)	Bacterial infections	336		326		299
EpiPen	Epinephrine injection used in treatment of life-threatening allergic reactions	303		303		290
Fragmin	Treatment/prevention of venous thromboembolism	253		293		306
Zyvox	Bacterial infections	251		236		281
Zosyn/Tazocin	Bacterial infections	200		230		195
Tygacil	Bacterial infections	197		249		260
Diflucan	Fungal infections	190		189		180
Panzyga	Primary humoral immunodeficiency	183		39		—
Pfizer CentreOne^(f)	Various	810		755		706
All other Anti-infectives	Various	1,114		1,041		1,237
All other Hospital^(d)	Various	2,436		2,797		3,182
Vaccines		$	6,504	$	6,332	$	6,001
Prevnar 13/Prevenar 13	Pneumococcal disease	5,847		5,802		5,601
Nimenrix	Meningococcal disease	230		140		86
FSME/IMMUN-TicoVac	Tick-borne encephalitis disease	220		184		134
Trumenba	Meningococcal disease	135		116		88
All other Vaccines	Various	73		90		91
Inflammation & Immunology (I&I)^(g)		$	4,733	$	4,720	$	4,386
Xeljanz	RA, PsA, UC	2,242		1,774		1,345
Enbrel (Outside the U.S. and Canada)	RA, juvenile idiopathic arthritis, PsA, plaque psoriasis, pediatric plaque psoriasis, ankylosing spondylitis and nonradiographic axial spondyloarthritis	1,699		2,112		2,452
Inflectra/Remsima^{(c), (g)}	Crohn’s Disease, Pediatric Crohn’s Disease, UC, Pediatric UC, RA in combination with methotrexate, Ankylosing Spondylitis, PsA and Plaque Psoriasis	625		642		419
Eucrisa	Mild-to-moderate atopic dermatitis (eczema) in adults and children 2 years of age and older	138		147		67
All other I&I	Various	29		45		103



(MILLIONS OF DOLLARS)		Year Ended December 31,
PRODUCT	PRIMARY INDICATION OR CLASS	2019		2018		2017
Rare Disease		$	2,278	$	2,211	$	2,240
Genotropin	Replacement of human growth hormone	498		558		532
BeneFIX	Hemophilia B	488		554		604
Vyndaqel/Vyndamax	ATTR-Cardiomyopathy and Polyneuropathy	473		148		124
Refacto AF/Xyntha	Hemophilia A	426		514		551
Somavert	Acromegaly	264		267		254
All other Rare Disease	Various	129		170		176
Upjohn^(a)		$	10,233	$	12,484	$	13,447
Lyrica	Epilepsy, post-herepetic neuralgia and diabetic peripheral neuropathy, fibromyalgia, neuropathic pain due to spinal cord injury	3,321		4,970		5,065
Lipitor	Reduction of LDL cholesterol	1,973		2,062		1,915
Norvasc	Hypertension	950		1,029		932
Celebrex	Arthritis pain and inflammation, acute pain	719		686		775
Viagra	Erectile dysfunction	497		636		1,204
Effexor	Depression and certain anxiety disorders	336		311		297
Zoloft	Depression and certain anxiety disorders	294		298		291
Xalatan/Xalacom	Glaucoma and ocular hypertension	281		318		335
Xanax	Anxiety disorders	198		223		225
Revatio	Pulmonary arterial hypertension	144		227		252
All other Upjohn	Various	1,519		1,725		2,158
Consumer Healthcare Business^(h)		$	2,098	$	3,605	$	3,472
Other⁽ⁱ⁾	Various	$	—	$	—	$	97
Total Alliance revenues	Various	$	4,648	$	3,838	$	2,927
Total Biosimilars^(c)	Various	$	911	$	769	$	531
Total Sterile Injectable Pharmaceuticals^(j)		$	5,035	$	5,214	$	5,673


^(a)	We reclassified certain products from the LEP category, including Premarin family products, and certain other products from the legacy Peri-LOE category, including Pristiq, to the Internal Medicine category and reclassified Lyrica from the Internal Medicine category to the Upjohn business to conform 2018 and 2017 product revenues to the current presentation.


^(b)	We performed certain reclassifications in the All other Oncology category to conform 2018 and 2017 product revenues to the current presentation.


^(c)	Biosimilars are highly similar versions of approved and authorized biological medicines and primarily include revenues from Inflectra/Remsima and Retacrit.

^(d)

Hospital is a business unit that commercializes our global portfolio of sterile injectable and anti-infective medicines. We performed certain reclassifications, primarily from the legacy SIP category (Sulperazon, Medrol, Fragmin, Tygacil, Zosyn/Tazocin and Precedex, among other products), the LEP category (Epipen and Zithromax), and the legacy Peri-LOE category (Vfend and Zyvox) to the Hospital category to conform 2018 and 2017 product revenues to the current presentation. Hospital also includes Pfizer CentreOne^(f). All other Hospital primarily includes revenues from legacy SIP products (that are not anti-infective products) and, to a much lesser extent, solid oral dose products (that are not anti-infective products). SIP anti-infective products that are not individually listed above are recorded in “All other Anti-infectives”.


^(e)	2018 and 2017 revenues for Medrol and Zithromax may not agree to previously disclosed revenues because revenues for those products were previously split between LEP and the legacy SIP categories. All revenues for these products are currently reported in the Hospital category.

^(f)

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 legacy All Other LEP and legacy All Other SIP, are reported in emerging markets within Pfizer CentreOne.


^(g)	We reclassified Inflectra/Remsima from the legacy Biosimilars category to the Inflammation & Immunology category to conform 2018 and 2017 product revenues to the current presentation.


^(h)	On July 31, 2019, Pfizer’s Consumer Healthcare business, an over-the-counter medicines business, was combined with GSK’s consumer healthcare business to form a new consumer healthcare joint venture. For additional information, see Note 1A and Note 2C.


⁽ⁱ⁾	Represents HIS revenues through February 2, 2017, which 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. On February 3, 2017, we completed the sale of HIS to ICU Medical. For additional information, see Note 1A and Note 2B.

^(j)

Sterile Injectable Pharmaceuticals represents the total of all branded and generic injectable products in the Hospital business, including anti-infective sterile injectable pharmaceuticals.