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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
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(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1993
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ............ to ..............
Commission file number 1-3619
PFIZER INC.
(Exact name of registrant as specified in its charter)
Delaware 13-5315170
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
235 East 42nd Street
New York, New York 10017
(Address of principal executive offices) (Zip Code)
(212) 573-2323
(Registrant's telephone number including area code)
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class Name of each exchange
on which registered
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Common Stock, $.10 par value New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
4% Convertible Subordinated Debentures Due 1997 New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
None
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes __X__ No ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in the definitive proxy or information statement
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /_/
The aggregate market value of the voting stock held by non-affiliates
of the registrant computed by reference to the closing price at which the stock
was sold as of February 28, 1994 was approximately $18.5 billion.
The number of shares outstanding of each of the registrant's classes of
common stock as of February 28, 1994 was: 319,964,571 shares of common stock,
all of one class.
DOCUMENTS INCORPORATED BY REFERENCE
Report to Shareholders for the
fiscal year ended December 31, 1993 Parts I, II and IV
Proxy Statement dated March 18, 1994 Part III
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TABLE OF CONTENTS
PART I
Item Page
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1. Business.................................................. 2
General................................................. 2
Comparative Segment and
Geographic Data...................................... 2
Health Care............................................. 2
Consumer Health Care.................................... 4
Animal Health........................................... 4
Food Science............................................ 5
Financial Subsidiaries.................................. 5
International Operations................................ 5
Tax Matters............................................. 5
Patents and Research.................................... 6
Employees............................................... 6
Regulation.............................................. 6
Raw Materials and Energy................................ 7
Environment............................................. 8
2. Properties................................................ 8
3. Legal Proceedings......................................... 9
4. Submission of Matters to
a Vote of Security Holders............................. 12
PART II
5. Market for the Registrant's
Common Equity and Related
Stockholder Matters.................................... 12
6. Selected Financial Data................................... 13
7. Management's Discussion and
Analysis of Financial Condition
and Results of Operations.............................. 13
8. Financial Statements and
Supplementary Data..................................... 13
9. Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure................................... 14
PART III
10. Directors and Executive Officers
of the Registrant...................................... 14
11. Executive Compensation.................................... 19
12. Security Ownership of Certain
Beneficial Owners and Management....................... 19
13. Certain Relationships and
Related Transactions................................... 19
PART IV
14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K................................ 19
Signatures..................................................... 21
Financial Statement Schedules.................................. 23
Exhibit 11
Exhibit 12
Exhibit 23
1
PART I
Item 1. Business
General
Pfizer Inc. (the "Company") is a diversified, research-based health care
company with global operations. The Company discovers, develops, manufactures
and sells technology-intensive products in four business segments: Health Care,
which includes a broad range of prescription pharmaceuticals, orthopedic
implants, medical devices and surgical equipment; Consumer Health Care, which
includes a variety of nonprescription drugs and personal care products; Animal
Health, which includes animal health products and feed supplements; and Food
Science, which includes ingredients for the food and beverage industries.
Additionally, the Company's Financial Subsidiaries include a banking operation
in Europe and a small captive insurance operation.
Comparative Segment and Geographic Data
Comparative segment and geographic data for the three years ended December
31, 1993 are set forth on pages 35 and 36, and in the Note "Financial
Subsidiaries" on pages 41 and 42, of the Company's Annual Report to Shareholders
for the fiscal year ended December 31, 1993 and are incorporated herein by
reference.
Health Care
The Company's Health Care business is comprised of pharmaceuticals and
hospital products. The Company competes with numerous other health care
companies in the discovery and development of new, technologically advanced
pharmaceutical and hospital products; in seeking use of its products by the
medical profession; and in the sale of its product lines to wholesale and retail
outlets, public and private hospitals, managed care organizations, government
and the medical profession.
Methods of competition in health care vary with the product category. There
are a significant number of innovative companies in the field. A critical factor
in most markets in which the Company competes is the ability to offer
technological advances over competitive products. The productivity of scientific
discovery and clinical development efforts is central to long-term operational
success since there are many companies that specialize in marketing products
that no longer have patent or regulatory protection. Other important factors in
these markets include the ability to transfer knowledge of technological
advances to the medical community, product quality, prompt delivery and price.
The United States pharmaceutical marketplace has in recent years
experienced intensified price competition, brought about by a range of market
forces, including: increased generic competition, growth of managed care
organizations, and legislation requiring pharmaceutical companies to provide
rebates and discounts to government purchasers. Similar competitive forces, in
varying degrees, have also been present in various other countries in which the
Company operates.
Prescription pharmaceutical and hospital products, both in the United
States and abroad, are promoted directly to the medical profession.
Pharmaceutical products are distributed in large part to wholesale and retail
outlets, hospitals, clinics, and managed care organizations. Hospital products
are generally sold directly to medical institutions and, in some cases, through
distributors and surgical supply dealers.
Pharmaceuticals
The Company's worldwide pharmaceutical products are comprised primarily of
drugs which fall into the following major therapeutic classes: cardiovascular
agents, anti-infectives, anti-inflammatories, central nervous system agents and
anti-diabetes agents. In 1993, pharmaceuticals made up 69% of the Company's
consolidated net sales, an increase from 63% in 1992 and 54% in 1991. Increases
in both United States and international pharmaceutical revenues in 1993 were
principally the result of strong sales of recently introduced products,
including Procardia XL (nifedipine GITS), Norvasc (amlodipine besylate), Cardura
(doxazosin), Diflucan (fluconazole), Zithromax (azithromycin), and Zoloft
(sertraline).
2
Cardiovascular products are the Company's largest therapeutic product line
accounting for 27% of the Company's consolidated 1993 net sales, an increase
from 23% in 1992 and 18% in 1991. These products realized sales growth of 22% in
1993, including an 11% increase in sales of Procardia XL, a once-a-day calcium
channel blocker for hypertension and angina, as well as the continuing rollout
of Norvasc, an intrinsically once-a-day calcium channel blocker for hypertension
and angina and Cardura, an alpha blocker for hypertension. U.S. cardiovascular
sales grew 18% in 1993 and international sales of cardiovascular agents rose
34%.
Diflucan, an antifungal agent indicated for use in a variety of fungal
infections including certain types which afflict AIDS and immunosuppressed
cancer patients, and Zithromax, an oral antibiotic, were the largest products in
the anti-infective class in terms of 1993 growth in net sales. Total
anti-infective sales accounted for 22% of the Company's consolidated 1993 net
sales, an increase from 20% and 18% in 1992 and 1991, respectively.
Worldwide sales of anti-inflammatories decreased to 5% of the Company's
consolidated 1993 net sales. This compares to 9% in 1992 and 10% in 1991. This
decline resulted primarily from the availability of generic versions of Feldene
(piroxicam) in the United States since August 1992 and new competitive brand
name products.
The Company's central nervous system agents include Zoloft, an
anti-depressant introduced in the U.S. in 1992. Central nervous system agents
accounted for less than 10% of the Company's consolidated 1993 net sales.
The Company's anti-diabetes agents, including Glucotrol (glipizide),
accounted for less than 10% of the Company's consolidated 1993 net sales.
The Company's new product portfolio continues to undergo review by various
regulatory agencies. The Company's products listed below are undergoing
regulatory review by the United States Food and Drug Administration ("FDA") for
the indications listed.
Product Indication(s)
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Cardura Benign prostatic hyperplasia
Cetirizine (launched in Canada in
1991 under the name Reactine) Low-sedating antihistamine; Pediatric
Diflucan Vaginal candidiasis; Pediatric
Enable (tenidap) (known as Enablex
outside the United States) Osteo- and rheumatoid arthritis
Glucotrol XL (glipizide GITS) Sustained-release antidiabetic
Unasyn Injectable antibiotic-pediatric
Zithromax Oral antibiotic-pediatric
Zoloft Obsessive-compulsive disorder
In addition, the Company has marketing rights in the United States and
Japan to XOMA Corporation, Inc.'s E5, a monoclonal antibody for the treatment of
gram negative sepsis, which is undergoing FDA regulatory review.
To date, Diflucan has been launched in 60 countries and regulatory
approvals have been obtained in 18 additional countries. Norvasc has been
launched in 55 countries and approvals have been obtained in 25 additional
countries. Cardura has been launched in 21 countries and approvals have been
obtained in 35 additional countries. Zithromax has been launched in 19 countries
and approvals have been obtained in 17 additional countries. Zoloft has been
launched in 14 countries and approvals have been obtained in 9 additional
countries.
Hospital Products
Hospital Products Group consists of two divisions - Howmedica and Medical
Devices. Howmedica manufactures and markets orthopedic implants. Medical Devices
consists of three core businesses - Valleylab, Schneider, and American Medical
Systems, and two smaller businesses - Infusaid/Strato and Biomedical Sensors.
Howmedica's reconstructive hip, knee and bone cement products are used to
replace joints which have deteriorated as a result of disease or injury. Major
product lines are P.C.A. Hips, ABG Hips, Duracon Knee, and Simplex Bone Cement.
Howmedica's trauma products are used by orthopedic surgeons to aid in trauma
surgery and in setting fractures, and include the Gamma Nail, Luhr System and
Alta System.
Schneider, an international leader in angioplasty catheters, also markets a
peripheral stent product line. Schneider, which is active in the United States
and Europe, acquired a distribution company in Japan with 1993 being the first
full year of Schneider's direct operation in that country. Valleylab is a
worldwide leader in electrosurgical devices.
3
Valleylab's continued investment in product lines for minimally invasive surgery
represents a significant opportunity for future growth. American Medical Systems
is a leader in impotence and incontinence devices. Its major product development
activities in 1993 were focused on trends towards minimally invasive surgery.
Plans are being implemented to take advantage of manufacturing, marketing
and distribution synergies between Strato Medical Corporation, a supplier of
implantable vascular access ports, and Infusaid, an innovator in implantable
infusion pumps. The combined operation will focus on advanced drug delivery
systems. In 1993, Biomedical Sensors launched the Paratrend 7 intravascular
continuous blood gas monitoring system, incorporating both electrochemical and
fiber-optic technology. The continuous monitoring offered by the Paratrend 7
reduces the time to receive vital information, allowing pro-active diagnosis and
therapy.
Consumer Health Care
The Company's Consumer Health Care products include proprietary health
items, baby care products and toiletries, Plax pre-brushing dental rinse, and a
number of products sold only in selected international markets, including Vanart
hair care products in Mexico and the TCP line of antiseptic and germicidal
products marketed primarily in the United Kingdom.
Among the better-known brands manufactured and marketed by Consumer Health
Care are Visine (tetrahydrozoline HCl) eyedrops, Ben-Gay analgesic creams,
Desitin diaper rash ointments, Unisom (doxylamine succinate) sleep aids, Plax
pre-brushing dental rinse, Rid anti-lice products and Barbasol shave creams and
gels. In 1993, Consumer Health Care introduced Unisom Sleep Gels, soft
liquid-filled gels with a maximum-strength sleep aid formula, Daily Care Desitin
for the prevention of diaper rash, and a new formulation of Rid. Advanced
Formula Plax was introduced in early 1994.
Many other companies, large and small, manufacture and sell one or more
similar consumer products. The Company is a significant competitor in this
extensive market, and its principal methods of competition include product
innovation and quality, customer satisfaction, broad distribution capabilities,
advertising and promotion, and price. In general, the winning and retention of
consumer acceptance of the Company's consumer products involve heavy expenditure
for advertising, promotion, and marketing.
Animal Health
The Company's Animal Health operations include the discovery, development,
manufacture and sale of animal health products and feed supplements. Major
products include: veterinary products such as Terramycin LA-200
(oxytetracycline) (marketed as TM/LA outside of North America), a broad-spectrum
injectable antibiotic; the Banminth (pyrantel tartrate), Nemex (pyrantel
pamoate) and Paratect (morantel tartrate) anthelmintics; Mecadox (carbadox), an
antibacterial for pigs; and Terramycin (oxytetracycline), a broad-spectrum
antibiotic used for a variety of animal diseases. The Company's animal health
business functions on a worldwide basis giving the segment a global approach to
marketing and enabling it to effectively coordinate the launches of three animal
health products: Advocin (danofloxacin), Dectomax (doramectin), and Aviax
(semduramicin). Advocin, a broad-spectrum, third generation quinolone
antibacterial used to control respiratory and other diseases in cattle, swine,
and poultry has been launched in many Latin American, Asian, and African
countries. Dectomax, a novel, second-generation avermectin with broad-spectrum
activity against internal and external parasites in a number of animal species
has been launched in Brazil, Argentina, and South Africa. Aviax, a potent,
broad-spectrum ionophore anticoccidial, used to prevent coccidiosis in poultry
is under regulatory review in many countries, with approvals already received in
a number of markets.
Animal health and nutrition products are sold through drug wholesalers,
distributors, retail outlets and directly to users, including feed
manufacturers, animal producers and veterinarians.
A substantial number of other companies manufacture and sell one or more
similar products for animal health use. There are hundreds of producers of
animal health products throughout the world. The Company is a significant
manufacturer of some of the products, such as injectable antibiotics,
anthelmintics and anticoccidial products for the food animal market segments.
With respect to the smaller pet segment, and other products for the food animal
segments, the Company has a less significant market position.
Methods of competition with respect to animal health and feed supplement
products vary somewhat but include product innovation, service, price, quality
and effective transfer of technological advances to the market through
advertising and promotion.
4
Food Science
The Food Science Group serves the global food processing industry with
innovative food ingredients. Food Science continues to develop a strategic
position of global leadership within the food ingredients business through the
discovery and introduction of innovative food ingredients, linked with the added
features of service and know-how for growth into value-added food ingredients
systems. This strategic focus seeks to enable Food Science customers to provide
an appealing array of healthy and tasteful foods, and, where possible, to
provide a linkage to the Company's healthcare business. The specialty
ingredients growth has been led by lite ingredients, including Litesse
(polydextrose); dairy ingredients, featuring Chy-Max (chymosin); brewery
ingredients; and food protectants. Appeal, taste, freshness and nutritional
balance are quality parameters served by Food Science's ingredients and
technology. Internal research and development remain key strengths and
differentiate Food Science from many of its competitors. Products currently
under development include fat extenders, intense sweeteners, flavors, food
protectants and high temperature fat substitutes.
The Food Science business competes with other organizations for sales of
most of their ingredients as well as substitute products. Some of these
organizations produce and sell products that are either identical to, or serve
the same function as, ingredients marketed by Food Science. The number of
competitors varies with each particular ingredient. Methods of competition vary
by ingredient but include innovation and quality, prompt delivery, ability to
meet exacting specifications, technical service and cost.
Financial Subsidiaries
In 1992, the Company completed the transfer of its international banking
operations from Puerto Rico to the Republic of Ireland. This subsidiary, Pfizer
International Bank Europe (PIBE), operates under a full banking license from the
Central Bank of Ireland. This reorganization and transfer was made in
anticipation of the integration and unification of the European Union's
financial markets. PIBE makes loans and accepts deposits in U.S. dollars in
international markets and is an active Euromarket lender with a portfolio of
loans, floating rate notes and Euronotes of high quality corporates and
sovereigns. Loans are made primarily on a short-and medium-term basis, with
floating interest rates.
The Company's insurance operation, The Kodiak Company Limited, reinsures
certain assets, inland transport and marine cargo of Pfizer subsidiaries.
International Operations
The Company has significant operations outside the United States that, in
general, parallel its United States businesses either through direct operations
or through distributors. The Company's international businesses are subject, in
varying degrees, to a number of risks inherent in carrying on business in
certain countries outside the United States, including possible nationalization,
expropriation and other restrictive government actions such as capital
regulations. In addition, changes in the values of currencies take place from
time to time and can be either favorable or unfavorable to the net income and
net assets of subsidiaries operating outside the United States. It is impossible
to predict future changes in foreign exchange values or the effect they will
have on the Company. The Company actively engages in hedging its current
transactional exposures against the impact of unfavorable foreign exchange rate
movements. These hedging programs are routinely implemented by the Company's
foreign operating units. In addition, from time to time, hedging programs
designed to protect selected balance sheet positions and future cash flow
exposures are conducted, generally by the Company's headquarters personnel.
Tax Matters
For tax years beginning after December 31, 1993, the Omnibus Budget
Reconciliation Act of 1993 reduced by 40% the benefits accruing to the Company
under Section 936 of the Internal Revenue Code (the "Puerto Rico tax credit").
Such tax benefits will decline an additional 5% per year through 1998. For tax
years beginning after December 31, 1997, the Puerto Rico tax credit benefit will
be fixed at 40% of the current level.
In 1989, the Internal Revenue Service issued Notice 89-21 which deals, in
part, with the tax accounting treatment of lump sum payments and assignments
with respect to certain financial transactions which are similar to transactions
entered into by the Company, and reported for tax purposes prior to the date of
the Notice. If the Internal Revenue Service were to be successful in applying
the Notice to these prior Company transactions, certain amounts which the
Company believes are taxable only when and if repatriated to the United States
would be required to be included in U.S. taxable income for the years 1988
through 1992. At this time, the Company continues to believe that its tax
accounting treatment for the transactions in question was proper.
5
The Company has satisfactorily resolved all issues with the Internal
Revenue Service for the years through 1986. The years 1987 through 1989 are
currently under audit by the Internal Revenue Service. The Company believes that
its accrued tax liabilities are adequate to cover its U.S. and foreign tax
contingencies for all open years.
Patents and Research
The Company owns or is licensed under a number of patents relating to its
products and manufacturing processes which, in the aggregate, are believed to be
of material importance in its business. Based on current product sales, and in
view of the vigorous competition with products sold by others, the Company does
not consider any single patent or related group of patents to be significant in
relation to the enterprise as a whole, except for the Procardia XL, Diflucan,
Zoloft and Norvasc patents. Procardia XL is a once-a-day formulation of the
Company's calcium channel blocker, Procardia (nifedipine), which is administered
for the treatment of angina and hypertension. Procardia XL employs a novel drug
delivery system developed and patented by Alza Corporation. The Company holds an
exclusive license to use this delivery system with nifedipine until 2003. The
Company holds patents relating to Diflucan, Zoloft, and Norvasc.
The Company spent approximately $974 million in 1993, $863 million in 1992,
and $757 million in 1991 on Company-sponsored research and development
throughout the world. In 1994, the Company plans to spend in excess of $1.1
billion on research and development. In 1992, the Company also established
Pfizer Research and Development Company (PRDCO) in Ireland with an initial
capitalization of approximately $1 billion to engage in research and development
through a cost-sharing arrangement with Pfizer Ltd. (a Pfizer U.K. subsidiary)
in exchange for a portion of property rights relating to the development of
specific products.
Competition in research, involving the development of new products and
processes and the improvement of existing products and processes, is
particularly significant and results from time to time in product and process
obsolescence. The development of new and improved products is important to the
Company's success in all areas of its business.
Employees
Approximately 40,500 persons are employed by the Company throughout the
world as follows: United States, 15,600; Europe, 10,800; Asia, 7,800;
Canada/Latin America, 4,300; and Africa/Middle East, 2,000. The Company has a
good relationship with its employees.
Regulation
Most of the Company's businesses are subject to varying degrees of
governmental regulation in the countries in which operations are conducted. Such
regulation in the United States involves a more complex approval process than in
many other countries and therefore, often results in later marketing clearances
and a corresponding increase in the expense of introducing new products in the
United States. In many international markets, prices of pharmaceuticals are
controlled by the government.
In 1990, Congress passed the Safe Medical Devices Act. The law contains
numerous provisions obligating medical device firms to submit additional
information to the U.S. FDA and increased the FDA's powers to investigate and
sanction companies for violative practices. To date, the impact of this
legislation has been manifested most visibly in delays in processing marketing
licenses known as 510 (k) premarket notifications and product marketing
applications ("PMAs") and in utilization of the new civil monetary penalties
provision. The Company's Hospital Products Group is actively implementing
strategies to maintain compliance with the requirements and the burdens that
arise due to these provisions.
The 1990 Omnibus Budget Reconciliation Act requires pharmaceutical
companies to extend rebates to state Medicaid agencies based on each state's
reimbursement of pharmaceutical products under the Medicaid program. The
Veterans Health Care Act, passed in 1992, requires manufacturers to provide
discounts on purchases of pharmaceutical products by the Department of Veterans
Affairs (DVA) and by certain entities funded by the Public Health Service. The
Company's net sales in 1993 were reduced by Medicaid rebates and rebates under
related state programs which amounted to $70 million. In addition, in 1993,
Pfizer provided $51 million in discounts to the federal government, primarily to
the DVA and the Department of Defense, for drugs purchased in accordance with
the Veterans Health Care Act.
6
In 1990, the FDA announced a call for data for ingredients contained in
products bearing anti-plaque and related claims. The call for data is part of
the FDA's ongoing review, begun in 1972, of over-the-counter drug products. The
FDA is taking this administrative approach to evaluate the safety and efficacy
of anti-plaque products and has not proceeded further with regard to 1989
regulatory letters it issued to the Company and several other manufacturers of
products bearing anti-plaque claims. The Company submitted its response to the
call for data relating to Plax, its pre-brushing dental rinse, on June 17, 1991.
This filing, as well as filings of other manufacturers, is still under review,
and is currently being considered by an FDA Advisory Panel.
In June 1992, the Generic Drug Enforcement Act was passed into law. The
legislation provides for mandatory and permissive debarment of companies
convicted of crimes related to abbreviated new drug applications and of
individuals convicted of crimes related to development or approval of any drug
product. Debarment is a prohibition against the company or individual from
submitting, assisting in the submission or providing services for someone who
has an approved or pending drug application. The law is reflective of a
continuing trend in Congress to enhance FDA's enforcement powers over the entire
regulated industry and stiffen penalties for violations of the Food, Drug and
Cosmetic Act. To date, the FDA has utilized the provision to debar more than a
dozen individuals.
In 1992, the Prescription Drug User Fee Act was also signed into law. It
imposes fees for: a) certain human drug and biologic product applications, b)
certain products listed under provisions of the Food, Drug and Cosmetic Act, and
c) establishments in which prescription drugs in final dosage form are
manufactured. The fees, which will increase over a five year period and
additionally are subject to inflation adjustments, are intended to be dedicated
to the review process for human drug applications. The legislative goals,
expressed in companion correspondence, are to reduce the backlog of original and
supplemental product applications and expedite the review of new applications.
User fees were collected on specified applications filed after September 1,
1992. The financial impact of these fees on the Company was not material in
1993, while the Company expects to benefit from expedited review of its
applications.
In Western Europe, the 12 countries currently comprising the European Union
(formerly known as the European Community), are continuing the process of
implementing directives, standards and regulatory control mechanisms designed to
further harmonize requirements for the Union-wide approval and marketing of
drugs and medical devices. These changes, which are not expected to be in full
operation before the mid-1990s, are likely to have positive effects upon the
Company's businesses. However, until the common requirements are implemented and
the Company has some experience with them in practice, it will be impossible to
determine the net impact on the Company. Also, by that time, the scope of these
measures may have extended to other European countries whose applications to
join the European Union are currently pending.
During 1993, Congress began debate on reform of the U.S. health care
system. Numerous health care reform bills have been introduced, including the
Administration's "Health Security Act". The Health Security Act includes
provisions that would form an Advisory Council on Breakthrough Drugs, require
rebates on pharmaceuticals reimbursed under the Medicare program, and authorize
the Secretary of Health and Human Services to exclude from coverage under
Medicare, or require prior authorization for, drugs the Secretary considers to
be excessively priced. While these provisions could have an adverse impact on
the Company's pharmaceutical business in the United States, other bills that
have been introduced do not contain such provisions. It is uncertain whether
legislation will be enacted in 1994 or, if legislation is enacted, whether it
will have a significant adverse effect on the Company.
Raw Materials and Energy
Raw materials essential to the business of the Company and its subsidiaries
are generally obtainable from multiple sources. The Company did not experience
any significant restrictions on availability of raw materials or supplies during
the last year, and none is expected in 1994. Energy was available to the Company
in sufficient quantities to meet Company requirements and this condition is
expected to continue in 1994.
7
Environment
Certain of the Company's operations are affected by Federal, State and
local laws and regulations relating to environmental quality. The Company has
made and intends to continue to make the necessary expenditures for
environmental protection. Compliance with such laws and regulations is not
expected to have a material adverse effect on the financial position, earnings
or competitive position of the Company and its subsidiaries.
United States All Other Total
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(Millions of dollars)
Environment-related capital expenditures:
1993 Actual ................... $13.2 $17.8 $31.0
1994 Estimated ................ 76.1 16.2 92.3
1995 Estimated ................ 45.6 16.4 62.0
Other environmental-related expenses:
1993 Actual ................... 26.5 10.3 36.8
1994 Estimated ................ 30.4 12.1 42.5
Item 2. Properties
Following is a summary description of the Company's principal plants and
properties:
Groton Plant and Research Laboratories -- These facilities are located in
Groton, Connecticut, and surrounding towns, on approximately 649 acres, and
include a number of buildings of one to eight stories, containing approximately
3,250,000 square feet of floor space either existing or under construction.
Principal products produced at Groton are bulk pharmaceuticals, specialty
chemicals and food ingredients. Since acquiring the plant in 1946, the Company
has made major improvements, including construction of production facilities, a
powerhouse and generating equipment, and a large research complex adjacent to
the plant. In 1992, major improvements to plant facilities were initiated,
including a process effluent and waste water treatment facility, and a major
pharmaceutical capacity replacement project. Both projects are expected to be
completed by 1996. Construction was completed in 1993 on several research
expansions including a 156,000 square foot drug safety building addition, a
30,000 square foot central utilities building, and a 442,000 square foot parking
facility. In 1993, enlargement of the pharmaceutical research and development
facilities was initiated.
Brooklyn Plant -- The Company's site in Brooklyn, New York, is on
approximately 17 acres, including a number of buildings containing approximately
1,172,000 square feet of floor space. The primary operations, pharmaceutical
dosage form manufacturing and packaging, are housed in an eight story production
facility containing 545,000 square feet.
Vigo Plant and Research Facility -- These facilities, located in Vigo
County near Terre Haute, Indiana, are on a site of approximately 2,100 acres
owned in fee and consist of a number of buildings of one to five stories
containing approximately 706,000 square feet of floor space. Principal products
produced at this plant are pharmaceutical products, bulk antibiotics,
polydextrose and chymosin. Animal health research is also performed on this
site.
Barceloneta Plant -- Pfizer Pharmaceuticals Inc. is located on an 89-acre
property owned by the Company at Barceloneta, Puerto Rico. An additional 151
acres of land adjacent to this property were purchased in 1991 for future
utilization. The facilities contain four major manufacturing buildings (of two
to four floors) and twelve support buildings with a total approximate area of
397,600 square feet of floor space; and ten additional facilities (tank farms,
electrical substations, cooling towers, incinerator, etc.) with an approximate
area of 70,400 square feet, for a total plant facilities area of approximately
468,000 square feet. It houses organic synthesis manufacturing, pharmaceutical
dosage form manufacturing and packaging facilities, and the required service
areas, such as bulk and drum liquid storage, laboratories, utilities,
engineering shops, employee services and administration.
Other U.S. Locations -- The Company also operates 12 other production
facilities in the United States and has five regional sales and distribution
centers in various parts of the country which are owned in fee.
The Company's world headquarters is located at 235 East 42nd Street, New
York, NY. The Company owns this 33-story office building which contains
approximately 650,000 square feet. The building stands on slightly less than one
acre of land which is leased under an agreement expiring in 2057. In 1983, the
Company purchased a ten-
8
story office building located at 219 East 42nd Street, containing approximately
263,400 square feet which is immediately adjacent to the Company's headquarters.
The Company also leases additional office space in New York City consisting of
approximately 155,550 square feet.
Outside the United States -- The Company's major manufacturing facilities
outside the United States are located in Australia, Brazil, France, Germany,
Great Britain, India, Ireland, Italy, Japan, Mexico and Spain. The plants in
these eleven countries have an aggregate of over two million square feet of
floor space. Additional plants are located in over 20 additional countries
located in various parts of the world. A large medicinal and animal health
research unit is located in Sandwich, England where an 82,000 square foot
clinical sciences building became operational in 1993 and a 99,000 square foot
animal sciences building became operational in early 1994. Construction is in
progress on a 97,000 square foot pharmaceutical sciences building due for
occupancy in 1996 and also on a 120,000 square foot administration and services
building which is scheduled for completion in 1994. Additional research
laboratories exist in France, Japan and Germany.
The Company's major manufacturing facilities in the U.S. and the other
locations referred to above manufacture various products for all of the
Company's businesses. These properties are maintained in good operating
condition and the manufacturing facilities have capacities considered adequate
to meet the Company's needs.
Item 3. Legal Proceedings
The Company is involved in a number of claims and litigations, including
product liability claims and litigations considered normal in the nature of its
businesses. These include suits involving various pharmaceutical and hospital
products that allege either reaction to or injury from use of the product.
As previously disclosed, numerous claims have been brought against the
Company and Shiley Incorporated, a wholly owned subsidiary, alleging either
personal injury from fracture of 60(degree) or 70(degree) Shiley Convexo-Concave
(C/C) heart valves, or anxiety that properly functioning implanted valves might
fracture in the future, or, in a few cases, personal injury from a prophylactic
replacement of a functioning valve.
The Company believes that claims based on properly functioning implanted
valves seeking recovery for alleged anxiety that the valves might fracture in
the future do not state a cause of action and, accordingly, the Company has
vigorously defended these cases. As of January 21, 1994, 59 cases have either
been dismissed on motions to dismiss or for summary judgment, or have been
voluntarily withdrawn by the plaintiffs. In the case of Kahn v. Shiley
Incorporated and Pfizer Inc., however, the California Court of Appeal in 1990
held invalid all of the plaintiff's product liability claims relating to
concerns with respect to plaintiff's properly functioning C/C heart valve, but
permitted plaintiff to pursue claims based on deceit, which the trial court has
held includes negligent and fraudulent misrepresentations.
Cases involving approximately 200 implantees (and spouses of some of them)
were consolidated for certain pretrial purposes under the caption of the Kahn
case pending in the Superior Court, Orange County, California. More than 100 of
these were settled in early 1993. Trial of the first of the remaining cases, of
six selected for trial, began July 29, 1993. After trial, but before verdict,
most of the remaining cases as well as several unfiled claims, involving
approximately 250 implantees, were settled.
In an attempt to resolve all claims alleging anxiety that properly
functioning valves might fracture in the future, the Company entered into a
settlement agreement in January 1992 in Bowling v. Shiley et al., a case brought
in the United States District Court for the Southern District of Ohio that
establishes a worldwide settlement class of people with C/C heart valves and
their spouses, except those who elect to exclude themselves. The settlement
provides for a Consultation Fund of $90 to $140 million (depending on the number
of claims filed) from which valve recipients who make claims will receive
payments that are intended to cover their cost of consultation with
cardiologists or other health care providers with respect to their valves. The
settlement agreement establishes a second fund of at least $75 million to
support C/C valve-related research, including the development of techniques to
identify valve recipients who may have significant risk of fracture, and to
cover the unreimbursed medical expenses that valve recipients may incur for
certain procedures related to the valves. The Company's obligation as to
coverage of these unreimbursed medical expenses is not subject to any dollar
limitation. Following a hearing on the fairness of the settlement, it was
approved by the court on August 19, 1992. An appeal of the court's approval of
the settlement was dismissed on December 20, 1993 by the United States Court of
Appeals for the Sixth Circuit. A motion for rehearing en banc was denied on
March 8, 1994. It is expected that most of the costs arising from the Bowling
class
9
settlement will be covered by insurance and the proceeds of the sale of certain
product lines of the Shiley businesses in 1992.
Of approximately 900 implantees (and spouses of some of them) who opted out
of the Bowling settlement class, 12 currently have cases or claims pending in
the Kahn consolidation in California; 4 have cases or claims pending outside of
California; approximately 675 whose claims were included in the Kahn
consolidation have been settled; approximately 100 have never filed a case or
claim; and approximately 10 have working valve cases pending.
Several claims relating to elective reoperations of valve recipients are
currently pending. Some of these claims relate to elective reoperations covered
by the Bowling class settlement described above, and, therefore, the claimants
are entitled to certain benefits in accordance with the settlement. Such
claimants, if they irrevocably waive all of the benefits of the settlement, may
pursue separate litigation to recover damages in spite of the class settlement.
The Company is defending these claims.
Generally, the plaintiffs in all of the pending heart valve litigations
discussed above seek money damages. Based on the experience of the Company in
defending these claims to date, including available insurance and reserves, the
Company is of the opinion that these actions should not have a material adverse
effect on the financial position or the results of operations of the Company.
On September 30, 1993, Dairyland Insurance Co., a carrier providing excess
liability coverage ("excess carrier") in the early 1980s, commenced an action in
the California Superior Court in Orange County, seeking a declaratory judgment
that it was not obligated to provide insurance coverage for Shiley heart valve
liability claims. On October 8, 1993, Pfizer filed cross-complaints against
Dairyland and filed third-party complaints against 73 other excess carriers who
sold excess liability policies covering periods from 1978 to 1985, seeking
damages and declaratory judgments that they are obligated to pay for defense and
indemnity to the extent not paid by other carriers.
The Company's operations are subject to federal, state, and local
environmental laws and regulations. Under the Comprehensive Environmental
Response Compensation and Liability Act of 1980, as amended ("CERCLA" or
Superfund"), the Company has been designated as a potentially responsible party
by the United States Environmental Protection Agency with respect to certain
waste sites with which the Company may have had direct or indirect involvement.
Similar designations have been made by some state environmental agencies under
applicable state superfund laws. Such designations are made regardless of the
extent of the Company's involvement. There are also claims that the Company is a
potentially responsible party or participant with respect to several waste sites
in Canada. Such claims have been made by the filing of a complaint, the issuance
of an administrative directive or order, or the issuance of a notice or demand
letter. These claims are in various stages of administrative or judicial
proceedings. They include demands for recovery of past governmental costs and
for future investigative or remedial actions. In many cases, the dollar amount
of the claim is not specified. In most cases, claims have been asserted against
a number of other entities for the same recovery or other relief as was asserted
against the Company. The Company is currently participating in remedial action
at a number of sites under federal, state and local laws.
To the extent possible with the limited amount of information available at
this time, the Company has evaluated its responsibility for costs and related
liability with respect to the above sites and is of the opinion that the
Company's liability with respect to these sites should not have a material
adverse effect on the financial position or the results of operations of the
Company. In arriving at this conclusion, the Company has considered, among other
things, the payments that have been made with respect to the sites in the past;
the factors, such as volume and relative toxicity, ordinarily applied to
allocate defense and remedial costs at such sites; the probable costs to be paid
by the other potentially responsible parties; total projected remedial costs for
a site, if known; existing technology; and the currently enacted laws and
regulations. The Company anticipates that a portion of these costs and related
liability will be covered by available insurance.
The Company agreed to a consent order issued by the State of Connecticut's
Department of Environmental Protection on January 28, 1994 in connection with
the Company's operation of its pharmaceutical research and production facilities
in Groton, Connecticut. The consent order, pursuant to which the Company agreed
to pay a civil penalty of $150,000, resolves all matters raised in an
administrative action brought by the agency against the Company. The action had
alleged certain violations of state environmental regulations which incorporate
provisions of the federal Resource Conservation and Recovery Act.
Through the early 1970s, Pfizer (Minerals Division) and Quigley Company,
Inc., a wholly owned subsidiary, sold a minimal amount of one construction
product and several refractory products containing some asbestos. These
10
sales were discontinued thereafter. Although these sales represented a minor
market share, the Company has been named as one of a number of defendants in
numerous lawsuits. These actions, and actions related to the Company's sale of
talc products in the past, claim personal injury resulting from exposure to
asbestos-containing products, and nearly all seek general and punitive damages.
In these actions, the Company or Quigley is typically one of a number of
defendants, and both are members of the Center for Claims Resolution (the
"CCR"), a joint defense organization that is defending these claims. The Company
and Quigley are responsible for varying percentages of defense and liability
payments for all members of the CCR. Prior to September 1990, the cases
involving talc products were defended by the CCR, but the Company is now
overseeing its own defense of these actions. A number of cases alleging property
damage from asbestos-containing products installed in buildings have also been
brought against Pfizer.
On January 15, 1993, a class action complaint and settlement agreement were
filed in the United States District Court for the Eastern District of
Pennsylvania involving all personal injury claims by persons who have been
exposed to asbestos-containing products but who have not yet filed a personal
injury action against the twenty members of the CCR. The settlement agreement
establishes a claims-processing mechanism that will provide historic settlement
values upon proof of impaired medical condition as well as claims-processing
rates over ten years. In addition, the shares allocated to the CCR members
eliminate joint and several liability. The settlement is subject to the court's
determination that the settlement is fair and reasonable.
Concurrently with the filing of the future claims class action, the CCR
settled approximately 16,360 personal injury cases on behalf of Pfizer and
Quigley, leaving approximately 22,900 cases pending (15,400 against Quigley and
7,500 against Pfizer). It is the CCR's intention to settle remaining and opt-out
cases and claims on a similar basis to past settlements.
Costs incurred by the Company in defending the asbestos personal injury
claims and the property damage claims, as well as settlements and damage awards
in connection therewith, are largely insured against under policies issued by
several primary insurance carriers and a number of excess carriers. The Company
believes that its costs incurred in defending and ultimately disposing of the
asbestos personal injury claims, as well as the property damage claims, will be
largely covered by insurance policies issued by carriers that have agreed to
provide coverage, subject to deductibles, exclusions, retentions and policy
limits. In connection with the future claims settlement, the defendants have
commenced a third-party action against their respective excess insurance
carriers that have not agreed to provide coverage seeking a declaratory judgment
that (a) the future claims settlement is fair and reasonable as to the carriers;
(b) the carriers had adequate notice of the future claims class settlement; and
(c) the carriers are obligated to provide coverage for asbestos personal injury
claims. Based on the Company's experience in defending the claims to date and
the amount of insurance coverage available, the Company is of the opinion that
these actions should not ultimately have a material adverse effect on the
financial position or the results of operations of the Company.
In connection with the divestiture of Minerals Technologies Inc. (MTI), to
which the net assets of the Pfizer Minerals and the Quigley businesses were
transferred, Pfizer and Quigley agreed to indemnify MTI against any liability
with respect to products manufactured and sold prior to October 30, 1992, as
well as against liability for certain environmental matters.
The Company has been named, together with numerous other manufacturers of
prescription drugs and certain companies which distribute prescription
pharmaceuticals, in at least fifty-one lawsuits (the majority of which are
purported to be class actions) in the United States District Courts in Illinois,
Pennsylvania, California, Texas, Minnesota and New York, as well as six lawsuits
in California state courts, all brought by certain retail pharmacy companies.
These cases allege, in essence, that the defendant drug manufacturers have
violated the Sherman Act in that they have unlawfully agreed with each other
(and, as alleged in some cases, with wholesalers) not to extend to retail
pharmacy companies the same discounts which they allege were extended to managed
care companies, mail order pharmacies and other institutional purchasers.
Certain of the cases also allege violations of the Robinson-Patman Act in that
the manufacturers allegedly have unlawfully discriminated against retail
pharmacy companies by not extending to them such discounts. It is anticipated
that additional cases may be filed. On February 4, 1994, 46 federal suits were
transferred to the United States District Court for the Northern District of
Illinois for coordinated pretrial preceedings. The remaining federal suits are
expected to be transferred there as well. The Company believes these cases are
without merit and will vigorously defend them.
11
FDA administrative proceedings relating to Plax are pending, principally an
industry-wide call for data on all anti-plaque products by the FDA. The call for
data notice specified that products that have been marketed for a material time
and to a material extent may remain on the market pending FDA review of the
data, provided the manufacturer has a good faith belief that the product is
generally recognized as safe and effective and is not misbranded. The Company
believes that Plax satisfied these requirements and prepared a response to the
FDA's request, which was filed on June 17, 1991. This filing, as well as the
filings of other manufacturers, is still under review and is currently being
considered by an FDA Advisory Committee.
A consolidated class action on behalf of persons who allegedly purchased
Pfizer common stock during the March 24, 1989 through February 26, 1990 period
is pending in the United States District Court for the Southern District of New
York. This lawsuit, which commenced on July 13, 1990, alleges that the Company
and certain officers and former directors and officers violated federal
securities law by failing to disclose potential liability arising out of
personal injury suits involving Shiley heart valves and seeks damages in an
unspecified amount. The defendants in this action believe that the suit is
without merit and are vigorously defending it. A derivative action commenced on
April 2, 1990 against certain directors and officers and former directors and
officers alleging breaches of fiduciary duty and other common law violations in
connection with the manufacture and distribution of Shiley heart valves is
pending in the Superior Court, Orange County, California. The complaint seeks,
among other forms of relief, damages in an unspecified amount. The defendants in
the action believe that the suit is without merit and are vigorously defending
it.
On January 28, 1993, a purported class action entitled Kearse v. Pfizer
Inc. and Howmedica Inc. was commenced in the United States District Court for
the Northern District of Ohio. Howmedica Inc. ("Howmedica") is a wholly owned
subsidiary of the Company. The action sought monetary and injunctive relief,
including medical monitoring, on behalf of patients implanted with the Howmedica
P.C.A. one-piece acetabular hip component, which was manufactured by Howmedica
from 1983 to 1990. The complaint alleged that the prostheses were defectively
designed and manufactured and posed undisclosed risks to implantees. On August
3, 1993, a virtually identical purported class action, Bradshaw/Davids v. Pfizer
Inc. and Howmedica Inc., was brought and the Kearse case was subsequently
voluntarily dismissed. The Company believes that the suit is without merit and
is vigorously defending it.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
Information required by this item is incorporated by reference to the notes
entitled, "Long-Term Debt", "Earnings per Common Share", "Common Stock",
"Preferred Stock Purchase Rights", "Employee Benefit Trust", "Cash Dividends",
"Stock Option Plan" and "Quarterly Data (unaudited)" found on pages 43, 46, 47,
50 and 51 of the Annual Report to Shareholders for the fiscal year ended
December 31, 1993.
12
Item 6. Selected Financial Data
Selected Consolidated Statement of Income Data
Year Ended December 31,
----------------------------------------------------------------
1993 1992 1991 1990 1989
-------- -------- -------- -------- --------
(Millions of dollars, except per share data)
Net sales ............................. $7,477.7 $7,230.2 $6,950.0 $6,406.0 $5,671.5
======== ======== ======== ======== ========
Income before cumulative effect
of accounting changes ............... $ 657.5(a) $1,093.5(b) $ 722.1(d) $ 801.2 $ 681.1(e)
Cumulative effect of accounting changes -- (282.6)(c) -- -- --
-------- -------- -------- -------- --------
Net income ............................ $ 657.5(a) $ 810.9(b) $ 722.1(d) $ 801.2 $ 681.1(e)
======== ======== ======== ======== ========
Earnings per common share (f):
Income before cumulative effect
of accounting changes ............. $ 2.05 $ 3.25 $ 2.13 $ 2.38 $ 2.02
Cumulative effect of accounting
changes ........................... -- (.84)(c) -- -- --
-------- -------- -------- -------- --------
Net income .......................... $ 2.05 $ 2.41 $ 2.13 $ 2.38 $ 2.02
======== ======== ======== ======== ========
Cash dividends paid per common
share (f) ........................... $ 1.68 $ 1.48 $ 1.32 $ 1.20 $ 1.10
======== ======== ======== ======== ========
December 31,
----------------------------------------------------------------
1993 1992 1991 1990 1989
-------- -------- -------- -------- --------
(Millions of dollars)
Total assets .......................... $9,330.9 $9,590.1 $9,634.6 $9,052.0 $8,324.8
======== ======== ======== ======== ========
Long-term debt ........................ $ 570.5 $ 571.3 $ 396.6 $ 193.3 $ 190.6
======== ======== ======== ======== ========
- --------------
(a) Includes a pre-tax charge of $750.0 million ($525.0 million after-tax) for
restructuring and unusual items and a pre-tax gain of $60.0 million on the
sale of a business offset by restructuring charges of $62.0 million.
(b) Includes a pre-tax credit of $54.0 million representing the gain on the
sale of certain businesses offset by charges for restructuring,
consolidating and streamlining. In addition, it includes pre-tax
curtailment gains of $56.5 million associated with postretirement benefits
of divested operations.
(c) Represents a pre-tax charge of $520.5 million ($312.6 million after-tax or
$.93 per share) for the cumulative effect of adopting Statement of
Financial Accounting Standards ("SFAS") No. 106, Employers' Accounting for
Postretirement Benefits Other Than Pensions and a credit of $30.0 million
($.09 per share) for the cumulative effect of adopting SFAS No. 109,
Accounting for Income Taxes.
(d) Includes an after-tax special charge of $195.0 million for potential future
Shiley C/C heart valve fracture claims.
(e) Includes an after-tax provision of approximately $46.0 million for the loss
on the sale of the Pigments business.
(f) In 1991, the Company effected a two-for-one stock split of its common
stock. Prior years have been restated to reflect this stock split.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Information required by this item is incorporated by reference to the
"Financial Review" on pages 26 through 33 of the Annual Report to Shareholders
for the fiscal year ended December 31, 1993.
Item 8. Financial Statements and Supplementary Data
Information required by this item is incorporated by reference to the
"Independent Auditors' Report" found on page 34 and to pages 35 through 51 of
the Annual Report to Shareholders for the fiscal year ended December 31, 1993.
13
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant
Information with regard to the Directors of the Company, including those of
the following Executive Officers who are Directors, is incorporated by reference
to pages 3 through 7 of the Company's Proxy Statement dated March 18, 1994.
The Board of Directors elects officers at its first meeting after each
annual meeting of shareholders. The Board may also elect officers from time to
time throughout the year. Elected officers of the Company hold office until
their successors are chosen or until their earlier death, resignation or
removal.
Age as of
the date of the
Company's
Annual Meeting Positions and Offices With
Name April 28, 1994 Company Presently Held
----- ------------ -----------------------
Brian W. Barrett............................... 54 Vice President; President, Northern Asia, Australasia and
Canada--International Pharmaceuticals Group
Edward C. Bessey............................... 59 Vice Chairman; President--U.S. Pharmaceuticals Group; Director;
Member of the Corporate Management Committee
M. Kenneth Bowler.............................. 51 Vice President--Federal Government Relations
C. L. Clemente................................. 56 Senior Vice President--Corporate Affairs; Secretary and Corporate
Counsel; Member of the Corporate Management Committee
Bruce R. Ellig................................. 57 Vice President--Personnel
Donald F. Farley .............................. 51 Vice President; President--Food Science Group
David Fitzgerald............................... 60 Vice President; Executive Vice President--Hospital Products Group,
and President, Howmedica Division
George A. Forcier ............................. 55 Vice President--Quality Control
William E. Harvey.............................. 63 Vice President; Treasurer
Gary N. Jortner................................ 48 Vice President; Group Vice President, Disease Management--U.S.
Pharmaceuticals Group
Karen L. Katen................................. 45 Vice President; Executive Vice President--U.S. Pharmaceuticals
Group
Henry A. McKinnell............................. 51 Executive Vice President and Chief Financial Officer;
President--Hospital Products Group; Member of the Corporate
Management Committee
Brower A. Merriam.............................. 59 Vice President; President--Animal Health Group
John C. Mesloh................................. 59 Vice President--Corporate Purchasing
Victor P. Micati............................... 54 Vice President; President, Europe--International Pharmaceuticals
Group
Paul S. Miller................................. 55 Senior Vice President; General Counsel; Member of the Corporate
Management Committee
George M. Milne, Jr. .......................... 50 Vice President; President--Central Research
Robert Neimeth................................. 58 Executive Vice President; President--International Pharmaceuticals
Group; Member of the Corporate Management Committee
John F. Niblack................................ 55 Executive Vice President--Research and Development; Member of the
Corporate Management Committee
14
Age as of
the date of the
Company's
Annual Meeting Positions and Offices With
Name April 28, 1994 Company Presently Held
----- ------------ -----------------------
William J. Robison............................. 58 Vice President; President--Consumer Health Care Group
Herbert V. Ryan................................ 57 Controller
Craig Saxton .................................. 51 Vice President; Executive Vice President--Central Research
Gerald H. Schulze.............................. 46 Vice President--Corporate Strategic Planning
Robert L. Shafer............................... 61 Vice President--Public Affairs
David L. Shedlarz.............................. 46 Vice President--Finance
William C. Steere, Jr.......................... 57 Chairman of the Board and Chief Executive Officer; Director; Member
of the Corporate Management Committee
Peter G. Tombros............................... 51 Vice President--Investor Relations
BUSINESS EXPERIENCE OF NON-DIRECTOR OFFICERS
Brian W. Barrett
Mr. Barrett joined Pfizer Canada in 1966, where he served in various
financial positions, including Chief Financial Officer of the Canadian
subsidiary. In 1971, he was appointed Assistant Controller of Pfizer
International in New York; in 1973, Director of International Planning and in
1976, Director of Planning. In 1980, Mr. Barrett was appointed Vice President --
Corporate Strategic Planning; in 1983, he became Vice President -- Finance for
Pfizer International; in 1985, President -- Africa/Middle East and in 1991,
President -- Asia/Canada. In 1992, Mr. Barrett was elected Vice President of the
Company. He assumed the responsibilities of his present position, President,
Northern Asia, Australasia and Canada -- International Pharmaceuticals Group, in
1993.
M. Kenneth Bowler
Mr. Bowler joined the Company in 1989, and has been Vice President --
Federal Government Relations since 1990. He formerly served as Staff Director
for the House Ways and Means Committee.
C. L. Clemente
Mr. Clemente joined the Company in 1964 and has served as Vice President;
General Counsel and Secretary, Pfizer International, Inc. He has also held the
position of Vice President of Coty, formerly Pfizer's fragrance and cosmetic
division. In 1983, he was named Associate General Counsel of Pfizer Inc. In
1986, he was elected Vice President; General Counsel and Secretary of the
Company. He became a member of the Corporate Management Committee of the Company
in 1991. In 1992, he was elected Senior Vice President --Corporate Affairs;
Secretary and Corporate Counsel.
Bruce R. Ellig
Mr. Ellig joined the Company in 1960. He progressed through a number of
positions of increasing responsibility in the Corporate Personnel Division
including Vice President -- Compensation and Benefits in 1978 and Vice
President-Employee Relations in 1983. In 1985, he was elected Vice President --
Personnel of the Company.
Donald F. Farley
Mr. Farley joined the Company in 1965 as Production Engineer for the
Chemical Division. After serving in a number of positions of increasing
responsibility within the Chemical Division, he was named its Vice President,
Operations in 1982. In 1986 he became Senior Vice President of the Division, and
in 1988, Executive Vice President - Specialty Chemicals. In 1992, Mr. Farley was
named President of the Food Science Group, and in February 1993 was elected a
Vice President of the Company.
15
David Fitzgerald
Mr. Fitzgerald joined the Company's Howmedica division in 1970 as
Controller. In 1974, he was promoted to Corporate Controller of Howmedica. He
served as Assistant General Manager and Vice President -- General Manager, and
in 1980 he assumed responsibility for Howmedica's worldwide orthopedics
operations. In 1982, he was appointed Senior Vice President of Howmedica. In
1984, he became President of Howmedica and Senior Vice President of Hospital
Products. In 1988, he became Executive Vice President of the Hospital Products
Group. In 1992, Mr. Fitzgerald was elected Vice President of the Company.
George A. Forcier
Dr. Forcier joined the Company in 1966 as Analytical Research Chemist for
the Company's Medical Research Laboratories. In 1970, he was named Project
Leader, in 1979 Manager, and in 1981, Assistant Director, of the Analytical
Research Department. In 1986, he was named Director of the Analytical Research
and Development Department and in 1991, he became Group Director. Dr. Forcier
was elected Vice President -- Quality Control of the Company, effective January
1, 1994.
William E. Harvey
Mr. Harvey joined the Company in 1966 as Assistant to the Treasurer of
Pfizer International. In 1969, he was appointed Assistant Treasurer,
International, and in 1981, he became Assistant Treasurer of the Company. In
1990, Mr. Harvey was elected Vice President; Treasurer of the Company.
Gary N. Jortner
Mr. Jortner joined the Company in 1973 as a Systems Analyst for Pfizer
Pharmaceuticals. In 1974, he transferred to product management and progressed
through a series of promotions that resulted in his being named Group Product
Manager for Pfizer Labs in 1978. In 1981, he became Vice President of Marketing
for Pfizer Labs. In 1986, he was promoted to Vice President of Operations for
Labs. In 1991, he was named Vice President and General Manager, Pfizer Labs
Division. In 1992, Mr. Jortner was elected Vice President of the Company. In
1993, he was named Vice President; Group Vice President, Disease Management --
U.S. Pharmaceuticals Group.
Karen L. Katen
Ms. Katen joined the Company in 1974 as a Marketing Associate for Pfizer
Pharmaceuticals. Beginning in 1975, she progressed through a number of positions
of increasing responsibility in the Roerig product management group which
resulted in her being named Group Product Manager in 1978. In 1980, she
transferred to Pfizer Labs as a Group Product Manager and later became Director,
Product Management. In 1983, she returned to Roerig as Vice President
- -Marketing. In 1986, she was named Vice President and General Manager --Roerig
Division. In 1992, she was elected Vice President of the Company. In May 1993,
Ms. Katen became Executive Vice President of the U.S. Pharmaceuticals Group, in
addition to remaining General Manager of the Company's Roerig Division.
Henry A. McKinnell
Dr. McKinnell joined the Company in 1971. In 1977, he became Vice President
- --Area Manager for Pfizer Asia. In 1979, he became Executive Vice President and
in 1981, President of Pfizer Asia. In 1984, Dr. McKinnell was named Vice
President -- Corporate Strategic Planning, and in 1986, he was elected a Vice
President of the Company. In 1990, Dr. McKinnell became the Company's Chief
Financial Officer and was named Vice President -- Finance of the Company. In
1992, he became a member of the Corporate Management Committee of the Company.
In that same year, he became Executive Vice President of the Company, and
President of the Company's Hospital Products Group, in addition to remaining the
Company's Chief Financial Officer.
Brower A. Merriam
Mr. Merriam joined the Company in 1969 as Country Manager for Peru, and in
1971, he was appointed Country Manager for Argentina. In 1973, he was appointed
President of Pfizer Latin America. He was appointed Director of Pfizer
International in 1984, and in 1988 assumed the position of President for Latin
America, Southeast Asia, Indo-Pacific and Canada. In 1990, he was appointed
Executive Vice President of Pfizer International. In 1991, he
16
became Executive Vice President of the Animal Health Group and in 1992 was
appointed its President. Mr. Merriam was elected a Vice President of the Company
in 1992.
John C. Mesloh
Mr. Mesloh joined Howmedica, Inc. as Controller in 1973. In 1974, he was
appointed Vice President -- Finance and Treasurer of Howmedica, and in 1980 he
was elected Corporate Controller of the Company. In 1989, Mr. Mesloh was elected
Vice President of the Company. Mr. Mesloh was elected Vice President, Corporate
Purchasing, effective January 1993.
Victor P. Micati
Mr. Micati joined the Company in 1965 as a Management Candidate for Pfizer
Labs. Beginning in 1966, he progressed through a number of positions of
increasing responsibility in the Pfizer Labs division, which resulted in his
being named Vice President --Marketing in 1971. In 1972 he became Vice President
of Pharmaceutical Development for International Pharmaceuticals. In 1980, he was
named Executive Vice President of the European Management Center. He returned to
the International Pharmaceutical Division in 1984 as Senior Vice President, and
in 1990 was named President, Europe. In 1992, Mr. Micati was elected Vice
President of the Company.
Paul S. Miller
Mr. Miller joined the Company in 1971 and was appointed an Assistant
Secretary and Assistant General Counsel in 1975. In 1983, he was named Associate
General Counsel. In 1986, he became Secretary of the Corporate Management
Committee and in that same year he was elected Vice President; General Counsel
of the Company. He became a member of the Corporate Management Committee of the
Company in 1991. In 1992, Mr. Miller was elected Senior Vice President --
General Counsel of the Company.
George M. Milne
Dr. Milne joined the Company in 1970 as a Research Scientist. In 1973, he
was named Senior Research Scientist and progressed through a number of positions
of increasing responsibility which resulted in his being named Vice President,
Research and Development Operations in 1985. In 1988, Dr. Milne became Senior
Vice President, Research and Development, and in September 1993, he was elected
Vice President of the Company and President, Central Research.
Robert Neimeth
Mr. Neimeth joined the Company in 1962 as a management trainee,
subsequently serving as Country Manager, Nigeria, as Vice President,
Pharmaceutical Development in Asia, and then as President of Pfizer Asia from
1972 to 1977. He then served as Vice President and Director of Operations for
Pfizer Labs. In 1980 he became President Pfizer Europe and, in 1983, Mr. Neimeth
became Vice President of the Company. In 1984, he was also elected Executive
Vice President of Pfizer International Subsidiaries. In 1990, he was named Vice
President; President, Pfizer International Subsidiaries. In 1991, he became
Chairman, President and Chief Executive Officer of Pfizer International. He also
became a member of the Corporate Management Committee of the Company in 1991. In
1992, he was elected Executive Vice President of the Company, and President,
International Pharmaceuticals Group. In this capacity, Mr. Neimeth supervises
the Company's International Pharmaceutical and worldwide Animal Health
operations.
John F. Niblack
Dr. Niblack joined the Company in 1967 and held various management
positions in new drug discovery operations before being appointed in 1984 as
Vice President, Medicinal Products Research and in 1986 as Executive Vice
President, Central Research. In 1990, Dr. Niblack was named President-Central
Research and elected a Vice President of the Company. In September 1993, Dr.
Niblack was elected Executive Vice President - Research and Development, and
became a member of the Corporate Management Committee of the Company.
17
William J. Robison
Mr. Robison joined the Company in 1961 as a Sales Representative for Pfizer
Labs. After serving in a number of positions of increasing responsibility in the
Labs division, he was appointed Vice President of Sales in 1980, and Senior Vice
President Pfizer Labs in 1986. In 1990 he was appointed Vice President and
General Manager of Pratt Pharmaceuticals, and in 1992 assumed his present
position as President of the Consumer Health Care Group. In 1992, Mr. Robison
was also elected Vice President of the Company.
Herbert V. Ryan
Mr. Ryan joined the Company in 1962 as Supervisor, Capital Assets. In 1964
he was named Supervisor, Corporate Ledger, and in 1966 became Director,
Corporate Accounting. In 1981 he was appointed Assistant Controller, Corporate
Accounting. Effective January 1993, Mr. Ryan was elected Corporate Controller.
Craig Saxton
Dr. Saxton joined the Company in 1976 as Clinical Projects Director for the
Central Research Division of Pfizer Limited in Sandwich, England. In 1981, he
was named Senior Associate Medical Director for the International Division of
Pfizer Inc., and in 1982 became the Division's Vice President, Medical Director.
Dr. Saxton became Senior Vice President, Clinical Research and Development for
the Central Research Division in 1988. In September 1993, he was named Executive
Vice President - Central Research and was elected a Vice President of the
Company.
Gerald H. Schulze
Mr. Schulze joined the Company in 1971 as a Medical Service Representative
for Roerig. He served in a number of positions of increasing responsibility in
the Pharmaceuticals and International divisions before being named Vice
President -- Business Development for the Consumer Products division in 1985. In
1987, he was named Vice President -- Business Development for Hospital Products,
and in 1988, became that division's Senior Vice President. In 1992, he was
elected a Vice President of the Company and was named Executive Vice President
for the Hospital Products Group and President of the Medical Devices Division.
In November 1993, Mr. Schulze was elected Vice President, Corporate Strategic
Planning of the Company.
Robert L. Shafer
Mr. Shafer joined the Company in 1966 as Assistant to the Director of
Government Relations. In 1967, he became Associate Director of Government
Relations and in 1968, Director of Government Relations. In 1973, Mr. Shafer was
elected a Vice President of the Company. In 1982, he was elected Vice
President-Public Affairs.
David L. Shedlarz
Mr. Shedlarz joined the Company in 1976 as Senior Financial Analyst for the
Pharmaceuticals Division. After serving in a number of positions of increasing
responsibility, he was named Production Controller in 1979 and Assistant Group
Controller in 1981. In 1984, he became Group Controller and in 1989 was named
Vice President of Finance for the Pharmaceuticals Group. In 1992, Mr. Shedlarz
was elected Vice President -- Finance of the Company.
Peter G. Tombros
Mr. Tombros joined the Company as a Marketing Assistant with Pfizer
Laboratories in 1968. After serving in a number of different marketing and sales
positions, he was appointed to the position of Vice President, Marketing in
1975. In 1980, he was appointed Vice President, Pfizer Pharmaceuticals and
General Manager for the Roerig Division. In 1984 he became Senior Vice President
of Pfizer Pharmaceuticals and General Manager for the Roerig Division. In 1986,
Mr. Tombros was elected Vice President of Pfizer Inc. and Executive Vice
President of Pfizer Pharmaceuticals. In 1990 he was named Vice President --
Corporate Strategic Planning of the Company. In December 1993, Mr. Tombros was
elected Vice President -- Investor Relations. In 1994, Mr. Tombros announced
that he would be leaving the Company on March 22, 1994.
18
Item 11. Executive Compensation
Information with regard to executive compensation is incorporated by
reference to pages 9 through 17 of the Company's Proxy Statement dated March 18,
1994.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information with regard to security ownership of certain beneficial owners
and management is incorporated by reference to pages 2 through 7 of the
Company's Proxy Statement dated March 18, 1994.
Item 13. Certain Relationships and Related Transactions
Information with regard to certain relationships and related transactions
is incorporated by reference to page 19 of the Company's Proxy Statement dated
March 18, 1994.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
The following is a list of all Financial Statement Schedules and Exhibits
filed as a part of this Annual Report.
(a)(1) Financial Statements
See Part II
(a)(2) Financial Statement Schedules
Page
----
Schedule V -- Property, Plant and Equipment 23
Schedule VI -- Accumulated Depreciation, Depletion
and Amortization of Property, Plant
and Equipment 24
Schedule VIII -- Valuation and Qualifying Accounts 25
Schedule IX -- Short-Term Borrowings 26
Schedule X -- Supplementary Income Statement Information 27
Schedules not listed above have been omitted for the reason that they are
inapplicable or not required or the information is given elsewhere in the
financial statements. The financial statements of unconsolidated subsidiaries
are omitted on the basis that these subsidiaries, considered in the aggregate,
would not constitute a significant subsidiary.
(a)(3) Exhibits
3(a) --Restated Certificate of Incorporation of the Company, as of April 1991
(incorporated by reference to Exhibit 4(a) of Form S-8, Registration No.
33-44053).
3(b) --By-laws of the Company, as amended January 1992 (incorporated by
reference to Exhibit 3 of the Company's Form 8-K Current Report dated
January 24, 1992).
10 --Executive Compensation Plans and Arrangements:
10.1 --Form of Severance Agreement for Certain Executive Officers of the Company
(incorporated by reference to Exhibit 10.1 of the Company's Annual Report
on Form 10-K for the year ended December 31, 1992).
10.2 --Pfizer Inc. Performance-Contingent Share Award Program (incorporated by
reference to Exhibit A of the Company's Proxy Statement dated March 18,
1994).
11 --Computation of Earnings Per Common Share and Fully Diluted Earnings Per
Common Share.
12 --Computation of Ratio of Earnings to Fixed Charges.
13(a)--Portions of the Annual Report of the Company for the fiscal year ended
December 31, 1993 which are expressly incorporated by reference herein.
13(b)--Copy of the Annual Report of the Pfizer Savings and Investment Plan on
Form 11-K for the fiscal year ended December 31, 1993.
13(c)--Copy of the Annual Report of the Pfizer Savings and Investment Plan for
Employees Resident in Puerto Rico on Form 11-K for the fiscal year ended
December 31, 1993.
19
21 --Subsidiaries of the Registrant.
23 --Report and consent of KPMG Peat Marwick, independent certified public
accountants.
(b) The Company filed a report on Form 8-K dated October 20, 1993.
Exhibits to the Form 10-K are available upon request at the charges set out
below. Requests should be directed to C. L. Clemente, Secretary, Pfizer Inc, 235
East 42nd Street, New York, N.Y. 10017.
Exhibit 13(b) ... $1.20
Exhibit 13(c) ... 1.10
Exhibit 21 ...... .50
20
The following trademarks, found in this report, are among those used by
Pfizer Inc.
Cardura (doxazosin) Advocin (danofloxacin)
Diflucan (fluconazole) Aviax (semduramicin)
Enable (tenidap) Banminth (pyrantel tartrate)
Enablex (tenidap) Dectomax (doramectin)
E5 (anti-endotoxin antibody) Mecadox (carbadox)
Feldene (piroxicam) Nemex (pyrantel pamoate)
Glucotrol (glipizide) Terramycin LA-200 (oxytetracycline)
Glucotrol XL (glipizide GITS) TM/LA (oxytetracycline)
Norvasc (amlodipine besylate) Paratect (morantel tartrate)
Procardia (nifedipine)
Procardia XL (nifedipine GITS)
Reactine (cetirizine)
Unasyn IM/IV (sulbactam/ampicillin)
Unasyn Oral (sultamicillin)
Zithromax (azithromycin)
Zoloft (sertraline)
Barbasol
ABG Ben-Gay
Alta Daily Care Desitin
Duracon Desitin
Gamma Plax
Luhr Rid
Paratrend Unisom (doxylamine succinate)
P.C.A. Unisom Sleep Gels
Simplex Visine (tetrahydrozoline HC1)
Chy-Max (chymosin)
Litesse (polydextrose)
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Pfizer Inc.
(Registrant)
By /s/ C. L. Clemente
---------------------
C. L. Clemente
(Secretary)
Dated: March 24, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ William C. Steere, Jr. Chairman of the Board, March 24, 1994
---------------------------------------------- Director (Principal
(William C. Steere, Jr.) Executive Officer)
/s/ Henry A. McKinnell Executive Vice President March 24, 1994
---------------------------------------------- (Principal Financial Officer)
(Henry A. McKinnell)
/s/ Herbert V. Ryan Controller March 25, 1994
---------------------------------------------- (Principal Accounting Officer)
(Herbert V. Ryan)
/s/ Edward C. Bessey Director March 24, 1994
----------------------------------------------
(Edward C. Bessey)
/s/ M. Anthony Burns Director March 24, 1994
----------------------------------------------
(M. Anthony Burns)
/s/ William J. Crowe, Jr. Director March 24, 1994
----------------------------------------------
(William J. Crowe, Jr.)
/s/ Grace J. Fippinger Director March 24, 1994
----------------------------------------------
(Grace J. Fippinger)
/s/ Constance J. Horner Director March 24, 1994
----------------------------------------------
(Constance J. Horner)
Director March , 1994
----------------------------------------------
(Stanley O. Ikenberry)
/s/ Thomas G. Labrecque Director March 24, 1994
----------------------------------------------
(Thomas G. Labrecque)
21
Signature Title Date
--------- ----- ----
/s/ James T. Lynn Director March 24, 1994
----------------------------------------------
(James T. Lynn)
/s/ Paul A. Marks Director March 24, 1994
----------------------------------------------
(Paul A. Marks)
/s/ John R. Opel Director March 24, 1994
----------------------------------------------
(John R. Opel)
/s/ Edmund T. Pratt, Jr. Director March 24, 1994
----------------------------------------------
(Edmund T. Pratt, Jr.)
/s/ Franklin D. Raines Director March 24, 1994
----------------------------------------------
(Franklin D. Raines)
/s/ Felix G. Rohatyn Director March 24, 1994
----------------------------------------------
(Felix G. Rohatyn)
/s/ Jean-Paul Valles Director March 24, 1994
----------------------------------------------
(Jean-Paul Valles)
22
PFIZER INC. AND SUBSIDIARY COMPANIES
SCHEDULE V-PROPERTY, PLANT AND EQUIPMENT (a)
Balance at Other Balance at
Beginning Additions Translation Changes Add End of
Classification of Period at Cost Retirements Adjustments (Deduct)(c) Period
-------------- ---------- --------- ----------- ----------- ----------- ----------
(Millions of Dollars)
Year ended December 31, 1993
Land ........................ $ 71.7 $ 10.4 $ .7 $ .4 $ -- $ 81.8
Buildings ................... 953.9 158.0 4.1 (14.0) -- 1,093.8
Machinery and equipment ..... 1,706.9 248.5 37.5 (20.1) -- 1,897.8
Furniture, fixtures and other 698.3 175.6 50.3 (10.8) -- 812.8
Construction in progress .... 385.6 41.7(b) 5.4 (7.4) -- 414.5
-------- ------ ----- ------ -------- --------
$3,816.4 $634.2 $98.0 $(51.9) $ -- $4,300.7
======== ====== ===== ====== ======== ========
Year ended December 31, 1992
Land, including quarries and
mining properties ......... $ 85.3 $ 15.4 $ .7 $ 1.4 $ (29.7) $ 71.7
Buildings ................... 959.7 118.9 3.2 (10.2) (111.3) 953.9
Machinery and equipment ..... 1,876.4 339.5 43.4 (25.3) (440.3) 1,706.9
Furniture, fixtures and other 663.5 180.7 50.5 (13.6) (81.8) 698.3
Construction in progress .... 422.6 19.7(b) 1.0 (19.9) (35.8) 385.6
-------- ------ ----- ------ -------- --------
$4,007.5 $674.2 $98.8 $(67.6) $ (698.9) $3,816.4
======== ====== ===== ====== ======== ========
Year ended December 31, 1991
Land, including quarries and
mining properties ......... $ 83.3 $ 4.7 $ .4 $ (1.0) $ (1.3) $ 85.3
Buildings ................... 863.5 137.0 3.6 (23.3) (13.9) 959.7
Machinery and equipment ..... 1,670.6 288.6 27.4 (38.0) (17.4) 1,876.4
Furniture, fixtures and other 599.9 126.0 39.7 (16.2) (6.5) 663.5
Construction in progress .... 399.0 37.5(b) 2.2 (11.7) -- 422.6
-------- ------ ----- ------ -------- --------
$3,616.3 $593.8 $73.3 $(90.2) $ (39.1) $4,007.5
======== ====== ===== ====== ======== ========
- ------------
(a) Generally, the straight line method of depreciation is used for financial
reporting purposes. The rates used in computing the annual amounts of
financial depreciation are, in general, as follows:
Buildings ................ 3-4%
Machinery and equipment... 5-20%
Other .................... 3-25%
(b) Includes reclassification of Construction in progress to appropriate
classifications.
(c) Adjustments arising from businesses divested and primarily attributable to
the sale of the Company's Coty line of fragrances and cosmetics, a majority
interest in the common stock of MTI and certain product lines of Shiley
Incorporated in 1992 and the Plax international pre-brushing dental rinse
business, Deknatel and Pfizer Laser Systems in 1991.
23
PFIZER INC. AND SUBSIDIARY COMPANIES
SCHEDULE VI -- ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
Additions
Balance at Charged to Other Balance at
Beginning Costs and Translation Changes Add End of
Description of Period Expenses Retirements Adjustments (Deduct)(a) Period
----------- ----------- --------- ----------- ----------- ----------- ---------
(Millions of Dollars)
Year ended December 31, 1993
Buildings ...................... $ 334.0 $ 31.1 $ 4.7 $ (1.5) $ -- $ 358.9
Machinery and equipment ........ 883.1 126.4 29.5 (8.1) -- 971.9
Furniture, fixtures and other .. 294.2 83.6 34.5 (5.9) -- 337.4
-------- ------ ----- ------ -------- --------
$1,511.3 $241.1 $68.7 $(15.5) $ -- $1,668.2
======== ====== ===== ====== ======== ========
Year ended December 31, 1992
Quarries and mining
properties ................... $ 2.9 $ .2 $ -- $ .1 $ (3.2) $ --
Buildings ...................... 327.1 37.4 2.6 (.4) (27.5) 334.0
Machinery and equipment ........ 1,001.7 126.7 45.9 (8.3) (191.1) 883.1
Furniture, fixtures and other .. 294.8 78.3 35.4 (6.4) (37.1) 294.2
-------- ------ ----- ------ -------- --------
$1,626.5 $242.6 $83.9 $(15.0) $ (258.9) $1,511.3
======== ====== ===== ====== ======== ========
Year ended December 31, 1991
Quarries and mining
properties ................... $ 2.9 $ -- $ -- $ -- $ -- $ 2.9
Buildings ...................... 304.6 34.2 1.7 (7.2) (2.8) 327.1
Machinery and equipment ........ 932.6 115.7 20.1 (19.0) (7.5) 1,001.7
Furniture, fixtures and other .. 266.4 67.8 29.4 (7.3) (2.7) 294.8
-------- ------ ----- ------ -------- --------
$1,506.5 $217.7 $51.2 $(33.5) $ (13.0) $1,626.5
======== ====== ===== ====== ======== ========
- ------------
(a) Adjustments arising from businesses divested and primarily attributable to
the sale of the Company's Coty line of fragrances and cosmetics, a majority
interest in the common stock of MTI and certain product lines of Shiley
Incorporated in 1992 and the Plax international pre-brushing dental rinse
business, Deknatel and Pfizer Laser Systems in 1991.
24
PFIZER INC. AND SUBSIDIARY COMPANIES
SCHEDULE VIII -- VALUATION AND QUALIFYING ACCOUNTS
Additions
-------------------------
Balance at Charged to Charged to
Beginning Costs and Other Deductions Balance at
Description of Period Expenses Accounts (b) (a) (c) End of Period
----------- ---------- ---------- ------------ ---------- -------------
(Millions of Dollars)
Year ended December 31, 1993
Valuation and qualifying accounts
deducted from assets to which they apply
Allowance for doubtful accounts .... $36.2 $12.1 $ .4 $ 8.1 $40.6
===== ===== ===== ===== =====
Allowance for credit losses ........ $14.5 $ -- $-- $ 1.0(d) $13.5
===== ===== ===== ===== =====
Year ended December 31, 1992
Valuation and qualifying accounts
deducted from assets to which they apply
Allowance for doubtful accounts .... $38.8 $11.5 $ .5 $14.6(e) $36.2
===== ===== ===== ===== =====
Allowances for credit losses ....... $11.5 $ 3.0 $-- $-- $14.5
===== ===== ===== ===== =====
Year ended December 31, 1991
Valuation and qualifying accounts
deducted from assets to which they apply
Allowance for doubtful accounts .... $42.5 $ 3.1 $-- $ 6.8 $38.8
===== ===== ===== ===== =====
Allowance for credit losses ........ $11.5 $ -- $-- $-- $11.5
===== ===== ===== ===== =====
- ------------
(a) Includes impact of translation of foreign currencies.
(b) Recoveries of accounts previously written off.
(c) Uncollectible accounts charged against allowance accounts.
(d) Decrease in allowance arising from lower loan loss exposure.
(e) Includes $6.4 million of adjustments arising from businesses divested.
25
PFIZER INC. AND SUBSIDIARY COMPANIES
SCHEDULE IX -- SHORT-TERM BORROWINGS
Average
Maximum Amount Weighted
Weighted Amount Outstanding Average
Balance at Average Outstanding During Interest Rate
End of Interest During the the During the
Category of Aggregate Short-term Borrowings Period Rate Period Period(a) Period(b)
- ------------------------------------------- ------- ------ -------- -------- -------------
(Millions of Dollars)
Year ended December 31, 1993
Bank Borrowings .................... $ 186.2 9.2% $ 219.5 $ 186.7 11.0%
Certificates of deposit ............ 160.8 3.2% 161.9 127.2 3.6%
Commercial paper ................... 814.5 3.2% 1,850.2 1,390.9 3.2%
Other .............................. 13.7 7.7% 17.8 15.2 10.0%
Current portion long-term debt ..... 3.6
--------
$1,178.8
========
Year ended December 31, 1992
Bank Borrowings .................... $ 158.8 13.4% $ 235.6 $ 191.6 12.9%
Certificates of deposit ............ 164.1 3.4% 308.5 148.8 3.7%
Commercial paper ................... 905.1 3.7% 982.6 833.7 4.0%
Other .............................. 19.7 13.8% 22.2 13.4 12.8%
Current portion long-term debt ..... 4.6
--------
$1,252.3
========
Year ended December 31, 1991
Bank Borrowings .................... $ 159.1 15.7% $ 412.0 $ 253.9 13.2%
Certificates of deposit ............ 234.4 5.2% 234.4 80.3 6.7%
Commercial paper ................... 1,280.0 4.7% 1,366.0 1,059.8 5.8%
Other .............................. 3.8 18.9% 45.9 23.8 13.1%
Current portion long-term debt ..... 13.8
--------
$1,691.1
========
- --------------
(a) Represents the arithmetic mean of the end of the month balances by category
for the previous twelve months.
(b) Actual interest expense by category over the average amount outstanding
during the period.
26
PFIZER INC. AND SUBSIDIARY COMPANIES
SCHEDULE X-SUPPLEMENTARY INCOME STATEMENT INFORMATION
Charged to Costs and Expenses
--------------------------------
Year Ended December 31,
--------------------------------
Item 1993 1992 1991
---- ------ ------ ------
(Millions of Dollars)
Maintenance and repairs .............. $ 98.0(a) $121.4 $122.3
Media advertising costs .............. 254.9 243.2 279.9
Royalties ............................ 225.9 205.0 243.7
- ------------
Taxes, other than payroll and income taxes and amortization of intangible
assets, are omitted as each item does not exceed 1% of Net sales as reported in
the Consolidated Statement of Income.
(a) Decrease due to divsetiture of MTI in 1992.
27
EXHIBIT INDEX
3(a) --Restated Certificate of Incorporation of the Company, as of April 1991
(incorporated by reference to Exhibit 4(a) of Form S-8, Registration No.
33-44053).
3(b) --By-laws of the Company, as amended January 1992 (incorporated by
reference to Exhibit 3 of the Company's Form 8-K Current Report dated
January 24, 1992).
10 --Executive Compensation Plans and Arrangements:
10.1 --Form of Severance Agreement for Certain Executive Officers of the Company
(incorporated by reference to Exhibit 10.1 of the Company's Annual Report
on Form 10-K for the year ended December 31, 1992).
10.2 --Pfizer Inc. Performance-Contingent Share Award Program (incorporated by
reference to Exhibit A of the Company's Proxy Statement dated March 18,
1994).
11 --Computation of Earnings Per Common Share and Fully Diluted Earnings Per
Common Share.
12 --Computation of Ratio of Earnings to Fixed Charges.
13(a)--Portions of the Annual Report of the Company for the fiscal year ended
December 31, 1993 which are expressly incorporated by reference herein.
13(b)--Copy of the Annual Report of the Pfizer Savings and Investment Plan on
Form 11-K for the fiscal year ended December 31, 1993.
13(c)--Copy of the Annual Report of the Pfizer Savings and Investment Plan for
Employees Resident in Puerto Rico on Form 11-K for the fiscal year ended
December 31, 1993.
21 --Subsidiaries of the Registrant.
23 --Report and consent of KPMG Peat Marwick, independent certified public
accountants.