Financial Instruments

9 Months Ended

Sep. 28, 2025

A. Fair Value Measurements

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis and Fair Value Hierarchy, using a Market Approach:


	September 28, 2025						December 31, 2024
(MILLIONS)	Total		Level 1		Level 2		Total		Level 1		Level 2
Financial assets:
Short-term investments
Equity securities with readily determinable fair value(a)	$	2,390	$	—	$	2,390	$	7,848	$	6,456	$	1,392

Available-for-sale debt securities:
Government and agency—non-U.S.	5,905		—		5,905		6,855		—		6,855
Government and agency—U.S.	2,633		—		2,633		2,853		—		2,853
Corporate and other	1,586		—		1,586		1,173		—		1,173
	10,123		—		10,123		10,881		—		10,881
Total short-term investments	12,513		—		12,513		18,729		6,456		12,273
Other current assets
Derivative assets:
Interest rate contracts	2		—		2		—		—		—
Foreign exchange contracts	301		—		301		1,056		—		1,056
Total other current assets	302		—		302		1,056		—		1,056
Long-term investments
Equity securities with readily determinable fair values(b)	1,176		1,176		—		1,246		1,246		—

Available-for-sale debt securities:
Government and agency—non-U.S.	1		—		1		—		—		—


	1		—		1		—		—		—
Total long-term investments	1,176		1,176		1		1,246		1,246		—
Other noncurrent assets
Derivative assets:
Interest rate contracts	60		—		60		13		—		13
Foreign exchange contracts	56		—		56		447		—		447
Total derivative assets	116		—		116		460		—		460
Insurance contracts(c)	978		—		978		875		—		875
Total other noncurrent assets	1,093		—		1,093		1,335		—		1,335
Total assets	$	15,085	$	1,176	$	13,909	$	22,366	$	7,701	$	14,665

Financial liabilities:
Other current liabilities
Derivative liabilities:
Interest rate contracts	$	10	$	—	$	10	$	28	$	—	$	28
Foreign exchange contracts	387		—		387		217		—		217
Total other current liabilities	397		—		397		245		—		245
Other noncurrent liabilities
Derivative liabilities:
Interest rate contracts	216		—		216		397		—		397
Foreign exchange contracts	964		—		964		723		—		723
Total other noncurrent liabilities	1,180		—		1,180		1,121		—		1,121
Total liabilities	$	1,577	$	—	$	1,577	$	1,366	$	—	$	1,366

(a)Includes money market funds primarily invested in U.S. Treasury and government debt. As of December 31, 2024, short-term equity securities included our previous investment in Haleon of $6.5 billion. In the first quarter of 2025, we sold the remaining portion of our investment in Haleon for $6.3 billion.

(b)Long-term equity securities of $141 million as of September 28, 2025 and $133 million as of December 31, 2024 were held in restricted trusts for U.S. non-qualified employee benefit plans.

(c)Includes life insurance policies held in restricted trusts for U.S. non-qualified employee benefit plans. The underlying invested assets in these contracts are marketable securities, which are carried at fair value, with changes in fair value recognized in Other (income)/deductions—net (see Note 4).

Financial Assets and Liabilities Not Measured at Fair Value on a Recurring Basis––The carrying value of Long-term debt, excluding the current portion, was $57 billion as of September 28, 2025 and December 31, 2024. The estimated fair value of such debt, using a market approach and Level 2 inputs, was $56 billion as of September 28, 2025 and $54 billion as of December 31, 2024.

The differences between the estimated fair values and carrying values of held-to-maturity debt securities, private equity securities, long-term receivables and short-term borrowings not measured at fair value on a recurring basis were not significant

as of September 28, 2025 and December 31, 2024. The fair value measurements of our held-to-maturity debt securities and short-term borrowings are based on Level 2 inputs. The fair value measurements of our long-term receivables and private equity securities are based on Level 3 inputs.

B. Investments

Total Short-Term and Long-Term Investments


The following summarizes our investments by classification type:
(MILLIONS)	September 28, 2025		December 31, 2024
Short-term investments
Equity securities with readily determinable fair values	$	2,390	$	7,848
Available-for-sale debt securities	10,123		10,881
Held-to-maturity debt securities	1,128		705
Total Short-term investments	$	13,641	$	19,434

Long-term investments
Equity securities with readily determinable fair values(a)	$	1,176	$	1,246

Available-for-sale debt securities	1		—
Held-to-maturity debt securities	48		45
Private equity securities at cost(a)	690		719
Equity-method investments	223		217
Total Long-term investments	$	2,137	$	2,228


Held-to-maturity cash equivalents	$	235	$	184

(a)Represent investments in the life sciences sector.

Debt Securities


Our investment portfolio consists of investment-grade debt securities issued across diverse governments, corporate and financial institutions:
	September 28, 2025														December 31, 2024
			Gross Unrealized						Maturities (in Years)								Gross Unrealized
(MILLIONS)	Amortized Cost		Gains		Losses		Fair Value		Within 1		Over 1 to 5		Over 5		Amortized Cost		Gains		Losses		Fair Value
Available-for-sale debt securities
Government and agency––non-U.S.	$	5,926	$	2	$	(23)	$	5,905	$	5,905	$	1	$	—	$	6,970	$	8	$	(123)	$	6,855
Government and agency––U.S.	2,633		—		—		2,633		2,633		—		—		2,853		—		—		2,853
Corporate and other	1,586		—		—		1,586		1,586		—		—		1,179		—		(6)		1,173
Held-to-maturity debt securities
Time deposits and other	911		—		—		911		867		10		33		697		—		—		697
Government and agency––non-U.S.	501		—		—		501		496		5		—		237		—		—		237
Total debt securities	$	11,556	$	2	$	(24)	$	11,535	$	11,486	$	16	$	33	$	11,935	$	8	$	(129)	$	11,814

Any expected credit losses to these portfolios would be immaterial to our financial statements.

Equity Securities


The following presents the calculation of the portion of unrealized (gains)/losses that relates to equity securities, excluding equity-method investments, held at the reporting date:
	Three Months Ended				Nine Months Ended
(MILLIONS)	September 28, 2025		September 29, 2024		September 28, 2025		September 29, 2024
Net (gains)/losses recognized during the period on equity securities(a)	$	(201)	$	(446)	$	94	$	(129)
Less: Net (gains)/losses recognized during the period on equity securities sold during the period	(224)		(914)		(1,159)		(1,129)
Net unrealized (gains)/losses during the reporting period on equity securities still held at the reporting date(b)	$	23	$	468	$	1,253	$	1,000

(a)Reported in Other (income)/deductions––net. See Note 4.

(b)Included in net unrealized (gains)/losses are observable price changes on equity securities without readily determinable fair values. As of September 28, 2025, there were cumulative impairments and downward adjustments of $467 million and upward adjustments of $239 million. Impairments, downward and upward adjustments were not material to our operations in the third quarters and first nine months of 2025 and 2024.

C. Short-Term Borrowings


Short-term borrowings include:
(MILLIONS)	September 28, 2025		December 31, 2024
Commercial paper, principal amount	$	—	$	2,453
Current portion of long-term debt, principal amount	4,250		3,750
Other short-term borrowings, principal amount(a)	56		755
Total short-term borrowings, principal amount	4,306		6,957

Net unamortized discounts, premiums and debt issuance costs	(3)		(12)
Total Short-term borrowings, including current portion of long-term debt, carried at historical proceeds, as adjusted	$	4,303	$	6,946

(a)Primarily includes cash collateral. See Note 7F.

D. Long-Term Debt

Issuance


In May 2025, we issued in Euro, through our wholly-owned finance subsidiary, PNIF, the following senior unsecured notes for general corporate purposes(a), (b) :
(MILLIONS)		Principal
Coupon Rate	Maturity Date	September 28, 2025
2.875%	May 19, 2029	€	750
3.250%	May 19, 2032	1,000
3.875%	May 19, 2037	750
4.250%	May 19, 2045	800
Total long-term debt issued in the second quarter of 2025(c)		€	3,300

(a)The notes are fully and unconditionally guaranteed on a senior unsecured basis by Pfizer Inc. PNIF has no assets or operations and will have no assets or operations, other than as related to the issuance, administration and repayment of the notes and any other debt securities that it may issue in the future.

(b)The notes may be redeemed by us at any time, in whole, or in part, at a make-whole redemption price plus accrued and unpaid interest.

(c)The weighted average effective interest rate for the notes at issuance was 3.605%.


The following summarizes the aggregate principal amount of our senior unsecured long-term debt, and adjustments to report our aggregate long-term debt:
(MILLIONS)	September 28, 2025		December 31, 2024
Total long-term debt, principal amount	$	57,006	$	57,147
Net fair value adjustments related to hedging and purchase accounting	864		701
Net unamortized discounts, premiums and debt issuance costs	(461)		(444)

Total long-term debt, carried at historical proceeds, as adjusted	$	57,409	$	57,405

E. Derivative Financial Instruments and Hedging Activities

Foreign Exchange Risk––A significant portion of our revenues, earnings and net investments in foreign affiliates is exposed to changes in foreign exchange rates. Where foreign exchange risk is not offset by other exposures, we manage our foreign exchange risk principally through the use of derivative financial instruments and foreign currency debt. These financial instruments serve to mitigate the impact on net income as a result of remeasurement into another currency, or against the impact of translation into U.S. dollars of certain foreign exchange-denominated transactions.

The derivative financial instruments primarily hedge or offset exposures in the euro, U.K. pound, Chinese renminbi, Japanese yen, Swedish krona and Canadian dollar, and include a portion of our forecasted foreign exchange-denominated intercompany inventory sales hedged up to two years. We may also seek to protect against possible declines in the net investments of our foreign business entities.

Interest Rate Risk––Our interest-bearing investments and borrowings are subject to interest rate risk. Depending on market conditions, we may change the profile of our outstanding debt or investments by entering into derivative financial instruments

like interest rate swaps, either to hedge or offset the exposure to changes in the fair value of hedged items with fixed interest rates, or to convert variable rate debt or investments to fixed rates. The derivative financial instruments primarily hedge U.S. dollar fixed-rate debt.


The following summarizes the fair value of the derivative financial instruments and notional amounts:
	September 28, 2025						December 31, 2024
			Fair Value						Fair Value
(MILLIONS)	Notional		Asset		Liability		Notional		Asset		Liability
Derivatives designated as hedging instruments:
Foreign exchange contracts(a)	$	23,060	$	250	$	1,202	$	23,991	$	1,250	$	719
Interest rate contracts	6,750		61		226		6,750		13		425
			311		1,428				1,263		1,144
Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	22,851	107		149		$	26,335	253		221

Total			$	418	$	1,577			$	1,516	$	1,366

(a)The notional amount of outstanding foreign exchange contracts hedging our intercompany forecasted inventory sales was $5.1 billion as of September 28, 2025 and $5.0 billion as of December 31, 2024.


The following summarizes information about the gains/(losses) incurred to hedge or offset operational foreign exchange or interest rate risk exposures:
	Gains/(Losses) Recognized in OID(a)				Gains/(Losses) Recognized in OCI(a)				Gains/(Losses) Reclassified from OCI into OID and COS(a)
	Three Months Ended
(MILLIONS)	Sept. 28, 2025		Sept. 29, 2024		Sept. 28, 2025		Sept. 29, 2024		Sept. 28, 2025		Sept. 29, 2024
Derivative Financial Instruments in Cash Flow Hedge Relationships:
Interest rate contracts	$	—	$	—	$	—	$	—	$	—	$	—
Foreign exchange contracts(b)	—		—		(11)		(306)		(187)		171
Amount excluded from effectiveness testing and amortized into earnings(c)	—		—		10		3		10		3
Derivative Financial Instruments in Fair Value Hedge Relationships:
Interest rate contracts	13		332		—		—		—		—
Hedged item	(13)		(332)		—		—		—		—


Derivative Financial Instruments in Net Investment Hedge Relationships:
Foreign exchange contracts	—		—		88		(695)		—		—
Amount excluded from effectiveness testing and amortized into earnings(c)	—		—		89		93		56		40
Non-Derivative Financial Instruments in Net Investment Hedge Relationships(d):

Foreign currency long-term debt	—		—		5		(37)		—		—
Derivative Financial Instruments Not Designated as Hedges:
Foreign exchange contracts	15		64		—		—		—		—

	$	15	$	64	$	181	$	(941)	$	(120)	$	215



	Gains/(Losses) Recognized in OID(a)				Gains/(Losses) Recognized in OCI(a)				Gains/(Losses) Reclassified from OCI into OID and COS(a)
	Nine Months Ended
(MILLIONS)	Sept. 28, 2025		Sept. 29, 2024		Sept. 28, 2025		Sept. 29, 2024		Sept. 28, 2025		Sept. 29, 2024
Derivative Financial Instruments in Cash Flow Hedge Relationships:
Interest rate contracts	$	—	$	—	$	—	$	—	$	—	$	—
Foreign exchange contracts(b)	—		—		(438)		21		200		313
Amount excluded from effectiveness testing and amortized into earnings(c)	—		—		42		20		42		20
Derivative Financial Instruments in Fair Value Hedge Relationships:
Interest rate contracts	228		107		—		—		—		—
Hedged item	(228)		(107)		—		—		—		—


Derivative Financial Instruments in Net Investment Hedge Relationships:
Foreign exchange contracts	—		—		(1,273)		(380)		—		—
Amount excluded from effectiveness testing and amortized into earnings(c)	—		—		237		145		150		116
Non-Derivative Financial Instruments in Net Investment Hedge Relationships(d):

Foreign currency long-term debt	—		—		(97)		(11)		—		—
Derivative Financial Instruments Not Designated as Hedges:
Foreign exchange contracts	103		106		—		—		—		—

	$	103	$	106	$	(1,528)	$	(204)	$	392	$	450

(a)OID = Other (income)/deductions—net, included in Other (income)/deductions—net in the condensed consolidated statements of operations. COS = Cost of Sales, included in Cost of sales in the condensed consolidated statements of operations. OCI = Other comprehensive income/(loss), included in the condensed consolidated statements of comprehensive income/(loss).

(b)The amounts reclassified from OCI into COS were:

•a net loss of $23 million in the third quarter of 2025;

•a net gain of $69 million in the first nine months of 2025;

•a net gain of $37 million in the third quarter of 2024; and

•a net gain of $106 million in the first nine months of 2024.

The remaining amounts were reclassified from OCI into OID. Based on quarter-end foreign exchange rates that are subject to change, we expect to reclassify a pre-tax loss of $63 million within the next 12 months into income. The maximum length of time over which we are hedging our exposure to the variability in future foreign exchange cash flows is approximately 18 years and relates to foreign currency debt.

(d) Long-term debt includes foreign currency borrowings, which are used in net investment hedges; the related carrying values as of September 28, 2025 and December 31, 2024 were $874 million and $777 million, respectively.


The following summarizes cumulative basis adjustments to our long-term debt in fair value hedges:
	September 28, 2025						December 31, 2024
			Cumulative Amount of Fair Value Hedging Adjustment Increase/(Decrease) to Carrying Amount						Cumulative Amount of Fair Value Hedging Adjustment Increase/(Decrease) to Carrying Amount
(MILLIONS)	Carrying Amount of Hedged Assets/Liabilities(a)		Active Hedging Relationships		Discontinued Hedging Relationships		Carrying Amount of Hedged Assets/Liabilities(a)		Active Hedging Relationships		Discontinued Hedging Relationships



Long-term debt	$	7,122	$	(156)	$	839	$	7,154	$	(384)	$	891

(a)Carrying amounts exclude the cumulative amount of fair value hedging adjustments.

F. Credit Risk

A significant portion of our trade accounts receivable balances are due from wholesalers and governments. For additional information on our trade accounts receivables with significant customers, see Note 17C in our 2024 Form 10-K.

As of September 28, 2025, the largest investment exposures in our portfolio consisted primarily of U.S. government money market funds, as well as sovereign debt instruments issued by the U.S., the U.K., Germany, Sweden, and the Netherlands.

With respect to our derivative financial instrument agreements with financial institutions, we do not expect to incur a significant loss from failure of any counterparty. Derivative financial instruments are executed under International Swaps and Derivatives Association master agreements with credit-support annexes that contain zero threshold provisions requiring collateral to be exchanged daily depending on levels of exposure. As a result, there are no significant concentrations of credit risk with any individual financial institution. As of September 28, 2025, the aggregate fair value of these derivative financial instruments that are in a net payable position was $1.1 billion, for which we have posted collateral of $1.2 billion with a corresponding amount reported in Short-term investments. As of September 28, 2025, the aggregate fair value of our derivative financial instruments that are in a net receivable position was $60 million, for which we have received collateral of $56 million with a corresponding amount reported in Short-term borrowings, including current portion of long-term debt.