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Segment, Geographic and Other Revenue Information | 9 Months Ended
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Oct. 01, 2017
Segment Reporting [Abstract] |
Segment, Geographic and Other Revenue Information | Segment, Geographic and Other Revenue Information A. Segment Information We manage our commercial operations through two distinct business segments: Pfizer Innovative Health (IH) and Pfizer Essential Health (EH). The IH and EH segments are each led by a single manager. Each operating segment has responsibility for its commercial activities and for certain IPR&D projects for new investigational products and additional indications for in-line products that generally have achieved proof-of-concept. Each business has a geographic footprint across developed and emerging markets. Our chief operating decision maker uses the revenues and earnings of the two operating segments, among other factors, for performance evaluation and resource allocation. We regularly review our segments and the approach used by management for performance evaluation and resource allocation. As described in Note 1A, acquisitions and divestitures have impacted our results of operations in 2017 and 2016. Operating Segments
Some additional information about our business segments follows:
IH Segment |  | EH Segment
IH focuses on developing and commercializing novel, value-creating medicines and vaccines that significantly improve patients’ lives, as well as products for consumer healthcare. Key therapeutic areas include internal medicine, vaccines, oncology, inflammation & immunology, rare diseases and consumer healthcare. |  | EH includes legacy brands that have lost or will soon lose market exclusivity in both developed and emerging markets, branded generics, generic sterile injectable products, biosimilars, select branded products including anti-infectives and, through February 2, 2017, HIS. EH also includes an R&D organization, as well as our contract manufacturing business.
Leading brands include: - Prevnar 13/Prevenar 13 - Xeljanz - Eliquis - Lyrica (U.S., Japan and certain other markets) - Enbrel (outside the U.S. and Canada) - Viagra (U.S. and Canada) - Ibrance - Xtandi - Several OTC consumer healthcare products (e.g., Advil and Centrum) |  | Leading brands include: - Lipitor - Premarin family - Norvasc - Lyrica (Europe, Russia, Turkey, Israel and Central Asia countries) - Celebrex - Inflectra/Remsima - Several sterile injectable products
Other Costs and Business Activities Certain pre-tax costs are not allocated to our operating segment results, such as costs associated with the following:
• | WRD, which is generally responsible for research projects for our IH business until proof-of-concept is achieved and then for transitioning those projects to the IH segment via the GPD organization for possible clinical and commercial development. R&D spending may include upfront and milestone payments for intellectual property rights. The WRD organization also has responsibility for certain science-based and other platform-services organizations, which provide technical expertise and other services to the various R&D projects, including EH R&D projects. WRD is also responsible for facilitating all regulatory submissions and interactions with regulatory agencies, including all safety-event activities.
• | GPD, which is generally responsible for the clinical development of assets that are in clinical trials for our WRD and Innovative portfolios. GPD also provides technical support and other services to Pfizer R&D projects.
• | Corporate, representing platform functions (such as worldwide technology, global real estate operations, legal, finance, human resources, worldwide public affairs, compliance and worldwide procurement) and certain compensation and other corporate costs, such as interest income and expense, and gains and losses on investments. Effective in the first quarter of 2017, Corporate also includes the costs associated with our Pfizer Medical organization (Medical), previously reported as part of Other Business Activities. Medical is responsible for the provision of medical information to healthcare providers, patients and other parties, transparency and disclosure activities, clinical trial results publication, grants for healthcare quality improvement and medical education, and partnerships with global public health and medical associations.
• | Other unallocated costs, representing overhead expenses associated with our manufacturing and commercial operations that are not directly assessed to an operating segment, as business unit (segment) management does not manage these costs (which include manufacturing variances associated with production).
• | Certain transactions and events such as (i) purchase accounting adjustments, where we incur expenses associated with the amortization of fair value adjustments to inventory, intangible assets and PP&E; (ii) acquisition-related costs, where we incur costs for executing the transaction, integrating the acquired operations and restructuring the combined company; and (iii) certain significant items, representing substantive and/or unusual, and in some cases recurring, items (such as restructuring or legal charges) that are evaluated on an individual basis by management and that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis. Such items can include, but are not limited to, non-acquisition-related restructuring costs, as well as costs incurred for legal settlements, asset impairments and disposals of assets or businesses, including, as applicable, any associated transition activities.
Segment Assets We manage our assets on a total company basis, not by operating segment, as many of our operating assets are shared (such as our plant network assets) or commingled (such as accounts receivable, as many of our customers are served by both operating segments). Therefore, our chief operating decision maker does not regularly review any asset information by operating segment and, accordingly, we do not report asset information by operating segment. Total assets were approximately $172 billion as of October 1, 2017 and December 31, 2016. Selected Income Statement Information
The following table provides selected income statement information by reportable segment:
|  | Three Months Ended
|  | Revenues |  | Earnings(a)
(MILLIONS OF DOLLARS) |  | October 1, 2017 |  |  | October 2, 2016 |  |  | October 1, 2017 |  |  | October 2, 2016 |
Reportable Segments: |  |  |  |  |  |  |  |
IH |  | $ | 8,118 |  |  | $ | 7,332 |  |  | $ | 4,875 |  |  | $ | 4,187 |
EH |  | 5,050 |  |  | 5,712 |  |  | 2,765 |  |  | 3,128 |
Total reportable segments |  | 13,168 |  |  | 13,045 |  |  | 7,640 |  |  | 7,315 |
Other business activities(b), (c) |  | — |  |  | — |  |  | (759 | ) |  | (753 | )
Reconciling Items: |  |  |  |  |  |  |  |  |  |
Corporate(c) |  | — |  |  | — |  |  | (1,382 | ) |  | (1,537 | )
Purchase accounting adjustments(c) |  | — |  |  | — |  |  | (1,154 | ) |  | (966 | )
Acquisition-related costs(c) |  | — |  |  | — |  |  | (155 | ) |  | (280 | )
Certain significant items(d) |  | — |  |  | — |  |  | (449 | ) |  | (1,969 | )
Other unallocated |  | — |  |  | — |  |  | (156 | ) |  | (206 | )
|  | $ | 13,168 |  |  | $ | 13,045 |  |  | $ | 3,585 |  |  | $ | 1,604 |
|  | Nine Months Ended
|  | Revenues |  | Earnings(a)
(MILLIONS OF DOLLARS) |  | October 1, 2017 |  |  | October 2, 2016 |  |  | October 1, 2017 |  |  | October 2, 2016 |
Reportable Segments: |  |  |  |  |  |  |  |
IH |  | $ | 23,204 |  |  | $ | 21,471 |  |  | $ | 14,190 |  |  | $ | 12,470 |
EH |  | 15,639 |  |  | 17,725 |  |  | 8,558 |  |  | 9,985 |
Total reportable segments |  | 38,843 |  |  | 39,196 |  |  | 22,748 |  |  | 22,454 |
Other business activities(b), (c) |  | — |  |  | — |  |  | (2,205 | ) |  | (2,096 | )
Reconciling Items: |  |  |  |  |  |  |  |
Corporate(c) |  | — |  |  | — |  |  | (3,948 | ) |  | (4,217 | )
Purchase accounting adjustments(c) |  | — |  |  | — |  |  | (3,527 | ) |  | (3,103 | )
Acquisition-related costs(c) |  | — |  |  | — |  |  | (347 | ) |  | (598 | )
Certain significant items(d) |  | — |  |  | — |  |  | (797 | ) |  | (4,112 | )
Other unallocated |  | — |  |  | — |  |  | (573 | ) |  | (753 | )
|  | $ | 38,843 |  |  | $ | 39,196 |  |  | $ | 11,351 |  |  | $ | 7,575 |
(a) | Income from continuing operations before provision for taxes on income. IH’s earnings in the third quarter and first nine months of 2017 include d ividend income of $54 million and $211 million, respectively, from our investment in ViiV. For additional information, see Note 4.
(b) | Other business activities includes the costs managed by our WRD and GPD organizations. Effective in the first quarter of 2017, Medical, previously reported as part of Other Business Activities, was reclassified to Corporate. We have reclassified approximately $33 million and $94 million of costs from Other Business Activities to Corporate in the third quarter and first nine months of 2016, respectively, to conform to the current period presentation.
(c) | For a description, see the “Other Costs and Business Activities” section above.
(d) | Certain significant items are substantive and/or unusual, and in some cases recurring, items (such as restructuring or legal charges) that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis.
For Earnings in the third quarter of 2017, certain significant items includes: (i) restructuring charges and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $90 million, (ii) charges for certain legal matters of $183 million, (iii) income of $12 million, representing an adjustment to amounts previously recorded to write down the HIS net assets to fair value less costs to sell, (iv) certain asset impairment charges of $127 million, (v) charges for business and legal entity alignment of $16 million and (vi) other charges of $45 million. For additional information, see Note 2B, Note 3 and Note 4. For Earnings in the third quarter of 2016, certain significant items includes: (i) restructuring charges and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $375 million, (ii) income for certain legal matters of $40 million, (iii) an impairment charge related to the write-down of the HIS net assets to fair value less estimated costs to sell of $1.4 billion, (iv) certain asset impairment charges of $126 million, (v) charges for business and legal entity alignment of $69 million and (vi) other charges of $17 million. For additional information, see Note 3 and Note 4. For Earnings in the first nine months of 2017, certain significant items includes: (i) restructuring charges and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $253 million, (ii) charges for certain legal matters of $191 million, (iii) incremental charges to amounts previously recorded to write down the HIS net assets to fair value less costs to sell of $52 million, (iv) certain asset impairment charges of $127 million, (v) charges for business and legal entity alignment of $54 million and (vi) other charges of $119 million. For additional information, see Note 2B, Note 3 and Note 4. For Earnings in the first nine months of 2016, certain significant items includes: (i) restructuring charges and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $743 million, (ii) charges for certain legal matters of $506 million, (iii) an impairment charge related to the write-down of the HIS net assets to fair value less estimated costs to sell of $1.4 billion, (iv) certain asset impairment charges of $1.1 billion, (v) charges for business and legal entity alignment of $180 million and (vi) other charges of $189 million. For additional information, see Note 3 and Note 4. Equity in the net income of investees accounted for by the equity method is not significant for any of our operating segments. The operating segment information does not purport to represent the revenues, costs and income from continuing operations before provision for taxes on income that each of our operating segments would have recorded had each segment operated as a standalone company during the periods presented. B. Geographic Information As described in Note 1A, acquisitions and divestitures have impacted our results of operations in 2017 and 2016.
The following table provides revenues by geographic area:
|  | Three Months Ended |  | Nine Months Ended
(MILLIONS OF DOLLARS) |  | October 1, 2017 |  |  | October 2, 2016 |  |  | % Change |  |  | October 1, 2017 |  |  | October 2, 2016 |  |  | % Change |
U.S. |  | $ | 6,534 |  |  | $ | 6,530 |  |  | — |  |  | $ | 19,516 |  |  | $ | 19,561 |  |  | — |
Developed Europe(a) |  | 2,163 |  |  | 2,218 |  |  | (2 | ) |  | 6,309 |  |  | 6,982 |  |  | (10 | )
Developed Rest of World(b) |  | 1,632 |  |  | 1,711 |  |  | (5 | ) |  | 4,797 |  |  | 4,940 |  |  | (3 | )
Emerging Markets(c) |  | 2,839 |  |  | 2,586 |  |  | 10 |  |  | 8,222 |  |  | 7,714 |  |  | 7 |
Revenues |  | $ | 13,168 |  |  | $ | 13,045 |  |  | 1 |  |  | $ | 38,843 |  |  | $ | 39,196 |  |  | (1 | )
(a) | Developed Europe region includes the following markets: Western Europe, Scandinavian countries and Finland. Revenues denominated in euros were $1.7 billion in both the third quarter of 2017 and 2016, and $5.0 billion and $5.3 billion in the first nine months of 2017 and 2016, respectively.
(b) | Developed Rest of World region includes the following markets: Japan, Canada, Australia, South Korea and New Zealand.
(c) | Emerging Markets region includes, but is not limited to, the following markets: Asia (excluding Japan and South Korea), Latin America, Africa, Eastern Europe, Central Europe, the Middle East and Turkey.
C. Other Revenue Information Significant Product Revenues As described in Note 1A, acquisitions and divestitures have impacted our results of operations in 2017 and 2016.
The following table provides detailed revenue information:
|  | Three Months Ended |  | Nine Months Ended
(MILLIONS OF DOLLARS) |  | October 1, 2017 |  |  | October 2, 2016 |  |  | October 1, 2017 |  |  | October 2, 2016 |
PFIZER INNOVATIVE HEALTH (IH)(a) |  | $ | 8,118 |  |  | $ | 7,332 |  |  | $ | 23,204 |  |  | $ | 21,471 |
Internal Medicine |  | $ | 2,455 |  |  | $ | 2,243 |  |  | $ | 7,245 |  |  | $ | 6,557 |
Lyrica IH(b) |  | 1,150 |  |  | 1,049 |  |  | 3,382 |  |  | 3,107 |
Eliquis alliance revenues and direct sales |  | 644 |  |  | 449 |  |  | 1,813 |  |  | 1,225 |
Chantix/Champix |  | 240 |  |  | 198 |  |  | 727 |  |  | 631 |
Viagra IH(c) |  | 206 |  |  | 297 |  |  | 711 |  |  | 897 |
BMP2 |  | 79 |  |  | 63 |  |  | 198 |  |  | 175 |
Toviaz |  | 62 |  |  | 60 |  |  | 187 |  |  | 191 |
All other Internal Medicine |  | 75 |  |  | 128 |  |  | 228 |  |  | 330 |
Vaccines |  | $ | 1,649 |  |  | $ | 1,641 |  |  | $ | 4,385 |  |  | $ | 4,576 |
Prevnar 13/Prevenar 13 |  | 1,522 |  |  | 1,536 |  |  | 4,069 |  |  | 4,302 |
FSME/IMMUN-TicoVac |  | 43 |  |  | 33 |  |  | 119 |  |  | 102 |
All other Vaccines |  | 85 |  |  | 72 |  |  | 197 |  |  | 172 |
Oncology |  | $ | 1,616 |  |  | $ | 1,104 |  |  | $ | 4,551 |  |  | $ | 3,206 |
Ibrance |  | 878 |  |  | 550 |  |  | 2,410 |  |  | 1,492 |
Sutent |  | 276 |  |  | 260 |  |  | 805 |  |  | 823 |
Xalkori |  | 146 |  |  | 140 |  |  | 442 |  |  | 415 |
Xtandi alliance revenues |  | 150 |  |  | 2 |  |  | 422 |  |  | 2 |
Inlyta |  | 84 |  |  | 95 |  |  | 256 |  |  | 304 |
Bosulif |  | 57 |  |  | 43 |  |  | 163 |  |  | 121 |
All other Oncology |  | 26 |  |  | 15 |  |  | 54 |  |  | 49 |
Inflammation & Immunology (I&I) |  | $ | 1,000 |  |  | $ | 960 |  |  | $ | 2,863 |  |  | $ | 2,907 |
Enbrel (Outside the U.S. and Canada) |  | 613 |  |  | 701 |  |  | 1,818 |  |  | 2,201 |
Xeljanz |  | 348 |  |  | 235 |  |  | 935 |  |  | 649 |
Eucrisa |  | 15 |  |  | — |  |  | 33 |  |  | — |
All other I&I |  | 23 |  |  | 24 |  |  | 78 |  |  | 57 |
Rare Disease |  | $ | 569 |  |  | $ | 585 |  |  | $ | 1,637 |  |  | $ | 1,768 |
BeneFIX |  | 151 |  |  | 176 |  |  | 453 |  |  | 543 |
Refacto AF/Xyntha |  | 140 |  |  | 140 |  |  | 409 |  |  | 408 |
Genotropin |  | 136 |  |  | 147 |  |  | 375 |  |  | 425 |
Somavert |  | 65 |  |  | 59 |  |  | 182 |  |  | 173 |
All other Rare Disease |  | 77 |  |  | 64 |  |  | 218 |  |  | 219 |
Consumer Healthcare |  | $ | 829 |  |  | $ | 798 |  |  | $ | 2,522 |  |  | $ | 2,457 |
PFIZER ESSENTIAL HEALTH (EH)(d) |  | $ | 5,050 |  |  | $ | 5,712 |  |  | $ | 15,639 |  |  | $ | 17,725 |
Legacy Established Products (LEP)(e) |  | $ | 2,681 |  |  | $ | 2,708 |  |  | $ | 7,995 |  |  | $ | 8,373 |
Lipitor |  | 491 |  |  | 422 |  |  | 1,341 |  |  | 1,294 |
Premarin family |  | 238 |  |  | 244 |  |  | 711 |  |  | 751 |
Norvasc |  | 226 |  |  | 238 |  |  | 684 |  |  | 714 |
EpiPen |  | 82 |  |  | 110 |  |  | 253 |  |  | 300 |
Xalatan/Xalacom |  | 83 |  |  | 91 |  |  | 241 |  |  | 273 |
Effexor |  | 76 |  |  | 70 |  |  | 215 |  |  | 207 |
Zoloft |  | 78 |  |  | 72 |  |  | 215 |  |  | 228 |
Zithromax |  | 61 |  |  | 56 |  |  | 202 |  |  | 203 |
Relpax |  | 50 |  |  | 83 |  |  | 193 |  |  | 248 |
Xanax |  | 58 |  |  | 55 |  |  | 164 |  |  | 163 |
All other LEP |  | 1,237 |  |  | 1,268 |  |  | 3,776 |  |  | 3,992 |
Sterile Injectable Pharmaceuticals (SIP)(f) |  | $ | 1,273 |  |  | $ | 1,461 |  |  | $ | 4,270 |  |  | $ | 4,481 |
Medrol |  | 109 |  |  | 102 |  |  | 352 |  |  | 330 |
Sulperazon |  | 114 |  |  | 102 |  |  | 345 |  |  | 304 |
Fragmin |  | 79 |  |  | 80 |  |  | 221 |  |  | 240 |
Tygacil |  | 60 |  |  | 69 |  |  | 192 |  |  | 203 |
Precedex |  | 51 |  |  | 64 |  |  | 182 |  |  | 199 |
All other SIP |  | 860 |  |  | 1,044 |  |  | 2,977 |  |  | 3,206 |
|  | Three Months Ended |  | Nine Months Ended
(MILLIONS OF DOLLARS) |  | October 1, 2017 |  |  | October 2, 2016 |  |  | October 1, 2017 |  |  | October 2, 2016 |
Peri-LOE Products(g) |  | $ | 794 |  |  | $ | 1,023 |  |  | $ | 2,398 |  |  | $ | 3,224 |
Celebrex |  | 212 |  |  | 194 |  |  | 564 |  |  | 550 |
Lyrica EH(b) |  | 134 |  |  | 191 |  |  | 428 |  |  | 623 |
Vfend |  | 97 |  |  | 140 |  |  | 305 |  |  | 459 |
Viagra EH(c) |  | 102 |  |  | 89 |  |  | 285 |  |  | 286 |
Pristiq |  | 69 |  |  | 174 |  |  | 230 |  |  | 546 |
Zyvox |  | 68 |  |  | 94 |  |  | 220 |  |  | 334 |
Revatio |  | 58 |  |  | 73 |  |  | 189 |  |  | 213 |
All other Peri-LOE Products |  | 55 |  |  | 68 |  |  | 176 |  |  | 214 |
Biosimilars(h) |  | $ | 141 |  |  | $ | 83 |  |  | $ | 367 |  |  | $ | 228 |
Inflectra/Remsima |  | 112 |  |  | 49 |  |  | 284 |  |  | 130 |
All other Biosimilars |  | 28 |  |  | 34 |  |  | 82 |  |  | 97 |
Pfizer CentreOne(i) |  | $ | 161 |  |  | $ | 156 |  |  | $ | 514 |  |  | $ | 540 |
Hospira Infusion Systems (HIS)(j) |  | $ | — |  |  | $ | 281 |  |  | $ | 97 |  |  | $ | 879 |
Revenues |  | $ | 13,168 |  |  | $ | 13,045 |  |  | $ | 38,843 |  |  | $ | 39,196 |
Total Lyrica(b) |  | $ | 1,285 |  |  | $ | 1,240 |  |  | $ | 3,810 |  |  | $ | 3,730 |
Total Viagra(c) |  | $ | 308 |  |  | $ | 387 |  |  | $ | 996 |  |  | $ | 1,183 |
Total Alliance revenues |  | $ | 741 |  |  | $ | 419 |  |  | $ | 2,112 |  |  | $ | 1,155 |
(a) | The IH business encompasses Internal Medicine, Vaccines, Oncology, Inflammation & Immunology, Rare Disease and Consumer Healthcare. Through December 31, 2016, includes Duavive/Duavee and Viviant (recorded in All other Internal Medicine in 2016), which were transferred from Innovative Health to Essential Health effective January 1, 2017 (recorded in All other LEP (EH) beginning January 1, 2017), in order to align these products with our management of the women’s health portfolio within EH.
(b) | Lyrica revenues from all of Europe, Russia, Turkey, Israel and Central Asia countries are included in Lyrica EH. All other Lyrica revenues are included in Lyrica IH. Total Lyrica revenues represent the aggregate of worldwide revenues from Lyrica IH and Lyrica EH.
(c) | Viagra revenues from the U.S. and Canada are included in Viagra IH. All other Viagra revenues are included in Viagra EH. Total Viagra revenues represent the aggregate of worldwide revenues from Viagra IH and Viagra EH.
(d) | The EH business encompasses Legacy Established Products, Sterile Injectable Pharmaceuticals, Peri-LOE Products, Biosimilars, Pfizer CentreOne and HIS (through February 2, 2017) and includes all legacy Hospira commercial operations.
(e) | Legacy Established Products primarily include products that have lost patent protection (excluding Sterile Injectable Pharmaceuticals and Peri-LOE Products). Effective January 1, 2017, All other LEP includes Duavive/Duavee and Viviant, which were transferred from Innovative Health (recorded in All other Internal Medicine (IH) in 2016), in order to align these products with our management of the women’s health portfolio within EH. See note (a) above.
(f) | Sterile Injectable Pharmaceuticals include generic injectables and proprietary specialty injectables (excluding Peri-LOE Products).
(g) | Peri-LOE Products include products that have recently lost or are anticipated to soon lose patent protection. These products include: Lyrica in Europe, Russia, Turkey, Israel and Central Asia; Viagra in all countries (excluding the U.S. and Canada); and worldwide revenues for Celebrex, Pristiq, Zyvox, Vfend, Revatio and Inspra.
(h) | Biosimilars include Inflectra/Remsima (biosimilar infliximab) in the U.S. and certain international markets, Nivestim (biosimilar filgrastim) in certain European, Asian and Africa/Middle Eastern markets and Retacrit (biosimilar epoetin zeta) in certain European and Africa/Middle Eastern markets.
(i) | Pfizer CentreOne includes revenues from our contract manufacturing and active pharmaceutical ingredient sales operation, including sterile injectables contract manufacturing, and revenues related to our manufacturing and supply agreements, including with Zoetis.
(j) HIS (through February 2, 2017) includes Medication Management Systems products composed of infusion pumps and related software and services, as well as IV Infusion Products, including large volume IV solutions and their associated administration sets.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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