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(a)	Excludes amortization of intangible assets, except as disclosed in Note 9A. Identifiable Intangible Assets and Goodwill:Identifiable Intangible Assets.

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(a)	Reclassified into Discontinued operations—net of tax in the condensed consolidated statements of income.

(b)	Reclassified into Other (income)/deductions—net in the condensed consolidated statements of income.

(c)	Generally reclassified, as part of net periodic pension cost, into Cost of sales, Selling, informational and administrative expenses, and/or Research and development expenses, as appropriate, in the condensed consolidated statements of income. For additional information, see Note 10. Pension and Postretirement Benefit Plans.

(d)	See Note 5C. Tax Matters: Tax Provision/(Benefit) on Other Comprehensive Loss.

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•	Quoted prices for identical assets or liabilities in active markets (Level 1 inputs).

•	Quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are directly or indirectly observable, or inputs that are derived principally from, or corroborated by, observable market data by correlation or other means (Level 2 inputs).

•	Unobservable inputs that reflect estimates and assumptions (Level 3 inputs).

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(a)	Includes cash and cash equivalents, short-term investments, accounts receivable, other current assets, assets held for sale, accounts payable and other current liabilities.

(b)	Comprised of finite-lived developed technology rights with a weighted-average life of approximately 13 years ($9.4 billion) and other finite-lived identifiable intangible assets with a weighted-average life of approximately 18 years ($590 million).

(c)	As of the acquisition date, included in Current deferred tax assets and other current tax assets ($218 million), Noncurrent deferred tax liabilities ($3.8 billion) and Other taxes payable ($114 million, including accrued interest of $5 million).

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•	Environmental Matters—In the ordinary course of business, Hospira incurs liabilities for environmental matters such as remediation work, asset retirement obligations and environmental guarantees and indemnifications. See below for items pending finalization.

•	Legal Matters—Hospira is involved in various legal proceedings, including product liability, patent, commercial, antitrust and environmental matters and government investigations, of a nature considered normal to its business. The contingencies arising from legal matters are not significant to Pfizer’s financial statements.

•

Tax Matters—In the ordinary course of business, Hospira incurs liabilities for income taxes. Income taxes are exceptions to both the recognition and fair value measurement principles associated with the accounting for business combinations. Reserves for income tax contingencies continue to be measured under the benefit recognition model as previously used by Hospira (see Notes to Consolidated Financial Statements—Note 1O. Basis of Presentation and Significant Accounting Policies: Deferred Tax Assets and Liabilities and Income Tax Contingencies in our 2014 Financial Report). Net liabilities for income taxes approximate $3.6 billion as of the acquisition date, which includes $112 million for uncertain tax positions. The net tax liability includes the recording of additional adjustments of approximately $3.5 billion for the tax impact of fair value adjustments and approximately $790 million for income tax matters that we intend to resolve in a manner different from what Hospira had planned or intended. For example, because we plan to repatriate certain overseas funds, we provided deferred taxes on Hospira’s unremitted earnings for which no taxes have been previously provided by Hospira as it was Hospira’s intention to indefinitely reinvest those earnings.

•	the expected specific synergies and other benefits that we believe will result from combining the operations of Hospira with the operations of Pfizer;

•	any intangible assets that do not qualify for separate recognition, as well as future, as yet unidentified projects and products; and

•	the value of the going-concern element of Hospira’s existing businesses (the higher rate of return on the assembled collection of net assets versus if Pfizer had acquired all of the net assets separately).

(a)

Includes purchase accounting charges related to (i) the preliminary fair value adjustment for acquisition-date inventory estimated to have been sold ($77 million pre-tax in both the third quarter and first nine months of 2015); (ii) amortization expense related to the preliminary fair value of identifiable intangible assets acquired from Hospira ($57 million pre-tax in both the third quarter and first nine months of 2015); (iii) depreciation expense related to the preliminary fair value adjustment of fixed assets acquired from Hospira ($8 million pre-tax both in the third quarter and first nine months of 2015); and (iv) amortization expense related to the fair value adjustment of long-term debt acquired from Hospira ($3 million income pre-tax both in the third quarter and first nine months of 2015), as well as restructuring and integration costs ($413 million pre-tax in both the third quarter and first nine months of 2015).

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•	Elimination of Hospira’s historical intangible asset amortization expense (approximately $9 million in the third quarter of 2015, $17 million in the third quarter of 2014, $33 million in the first nine months of 2015 and $61 million in the first nine months of 2014).

•	Additional amortization expense (approximately $143 million in the third quarter of 2015, $199 million in the third quarter of 2014, $541 million in the first nine months of 2015 and $579 million in the first nine months of 2014) related to the preliminary estimate of the fair value of identifiable intangible assets acquired.

•	Additional depreciation expense (approximately $19 million in the third quarter of 2015, $28 million in the third quarter of 2014, $72 million in the first nine months of 2015 and $83 million in the first nine months of 2014) related to the preliminary estimate of the fair value adjustment to property, plant and equipment (PP&E) acquired.

•

Adjustment related to the preliminary estimate of the non-recurring fair value adjustment to acquisition-date inventory estimated to have been sold (the elimination of $66 million of charges in the third quarter of 2015, the addition of $17 million of charges in the third quarter of 2014, the elimination of $42 million of charges in the first nine months of 2015 and the addition of $514 million of charges in the first nine months of 2014).

•	Adjustment to decrease interest expense (approximately $3 million in the third quarter of 2015, $10 million in the third quarter of 2014, $23 million in the first nine months of 2015 and $29 million in the first nine months of 2014) related to the fair value adjustment of Hospira debt.

•	Adjustment for non-recurring acquisition-related costs directly attributable to the acquisition (the elimination of $682 million of charges in the third quarter of 2015 and $724 million of charges in the first nine months of 2015, and the addition of $724 million of charges in the first nine months of 2014, reflecting non-recurring charges incurred by both Hospira and Pfizer).

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•

In connection with acquisition activity, we typically incur costs associated with executing the transactions, integrating the acquired operations (which may include expenditures for consulting and the integration of systems and processes), and restructuring the combined company (which may include charges related to employees, assets and activities that will not continue in the combined company); and

•	In connection with our cost-reduction/productivity initiatives, we typically incur costs and charges associated with site closings and other facility rationalization actions, workforce reductions and the expansion of shared services, including the development of global systems.

•

Manufacturing plant network rationalization and optimization, where execution timelines are necessarily long. Our plant network strategy is expected to result in the exit of four sites over the next several years. In connection with these activities, during 2014-2016, we expect to incur costs of approximately $300 million associated with prior acquisition activity and costs of approximately $1.2 billion associated with new non-acquisition-related cost-reduction initiatives. Through September 27, 2015, we incurred approximately $289 million and $380 million, respectively, associated with these initiatives.

•

New global commercial structure reorganization, which primarily includes the streamlining of certain functions, the realignment of regional locations and colleagues to support the businesses, as well as implementing the necessary system changes to support future reporting requirements. In connection with this reorganization, during 2014-2016, we expect to incur costs of approximately $300 million. Through September 27, 2015, we incurred approximately $213 million associated with this reorganization.

•	Other new cost-reduction/productivity initiatives, primarily related to commercial property rationalization and consolidation. In connection with these cost-reduction activities, during 2014-2016, we expect to incur costs of approximately $900 million. Through September 27, 2015, we incurred approximately $303 million associated with these initiatives.

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(a)

In the nine months ended September 27, 2015, Employee terminations represent the expected reduction of the workforce by approximately 2,500 employees, mainly in sales, corporate and research. Employee termination costs are generally recorded when the actions are probable and estimable and include accrued severance benefits, pension and postretirement benefits, many of which may be paid out during periods after termination.

•	For the third quarter of 2015, the Global Innovative Pharmaceutical segment (GIP) ($16 million); the Global Vaccines, Oncology and Consumer Healthcare segment (VOC) ($7 million income); the Global Established Pharmaceutical segment (GEP) ($280 million); Worldwide Research and Development and Medical (WRD/M) ($50 million); manufacturing operations ($26 million); and Corporate ($104 million).

•	For the first nine months of 2015, GIP ($35 million); VOC ($20 million); GEP ($288 million); WRD/M ($66 million); manufacturing operations ($18 million); and Corporate ($127 million).

•

For the third quarter of 2014, GIP ($4 million); VOC ($10 million); GEP ($4 million); WRD/M ($2 million); manufacturing operations ($21 million); and Corporate ($14 million), as well as $92 million of income related to the partial reversal of prior-period restructuring charges not directly associated with the new individual segments, and reflecting a change in estimate with respect to our sales force restructuring plans.

•

For the first nine months of 2014, GIP ($14 million); VOC ($16 million); GEP ($34 million); WRD/M ($11 million); manufacturing operations ($59 million); and Corporate ($25 million), as well as $92 million of income related to the partial reversal of prior-period restructuring charges not directly associated with the new individual segments, and reflecting a change in estimate with respect to our sales force restructuring plans.

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(b)	Transaction costs represent external costs directly related to the acquisition of Hospira and primarily include expenditures for banking, legal, accounting and other similar services.

(c)	Integration costs represent external, incremental costs directly related to integrating acquired businesses, and primarily include expenditures for consulting and the integration of systems and processes.

(d)	Additional depreciation––asset restructuring represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.

(e)	Implementation costs represent external, incremental costs directly related to implementing our non-acquisition-related cost-reduction/productivity initiatives.

(a)	Included in Other current liabilities ($735 million) and Other noncurrent liabilities ($431 million).

(b)	Includes adjustments for foreign currency translation.

(c)	Included in Other current liabilities ($723 million) and Other noncurrent liabilities ($442 million).

(a)	Interest income increased in the third quarter and first nine months of 2015, primarily due to higher investment returns. Interest expense decreased in the third quarter and first nine months of 2015, primarily due to the repayment of a portion of long-term debt in the first quarter of 2015 and the benefit of the effective conversion of some fixed-rate liabilities to floating-rate liabilities.

(b)	In the first nine months of 2014, primarily includes approximately $610 million for Neurontin-related matters (including off-label promotion actions and antitrust actions) and approximately $55 million for an Effexor-related matter.

(c)

In the first nine months of 2015, primarily includes gains on sales/out-licensing of product and compound rights (approximately $76 million) and gains on sales of investments in equity securities (approximately $160 million). In the first nine months of 2014, primarily includes gains on sales/out-licensing of product and compound rights (approximately $128 million) and gains on sales of investments in equity securities (approximately $114 million).

(d)

In the third quarter and first nine months of 2015, primarily includes an impairment loss of $470 million related to Pfizer's 49%-owned equity-method investment with Zhejiang Hisun Pharmaceuticals Co., Ltd. (Hisun) in China, Hisun Pfizer, (for additional information concerning Hisun Pfizer, see Note 2D) and impairment charges for intangible assets of $163 million, reflecting (i) $115 million related to developed technology rights for the treatment of attention deficit hyperactivity disorder; (ii) $28 million related to an IPR&D project for the treatment of attention deficit hyperactivity disorder; and (iii) $20 million related to an indefinite-lived brand. The intangible asset impairment charges for the third quarter and first nine months of 2015 are associated with the following: Consumer Healthcare ($20 million) and GEP ($143 million).

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(e)	In the third quarter and first nine months of 2015 and 2014, represents expenses for planning and implementing changes to our infrastructure to align our operations and reporting for our business segments established in 2014.

(f)

Includes the following for 2014: (i) in the third quarter and first nine months of 2014, gains of approximately $102 million, reflecting the changes in the fair value of contingent consideration associated with prior acquisitions; (ii) in the third quarter and first nine months of 2014, income of $90 million resulting from a decline in the estimated loss from an option to acquire the remaining interest in Laboratório Teuto Brasileiro S.A.; and (iii) in the first nine months of 2014, a loss of $30 million due to a change in our ownership interest in ViiV. For additional information concerning ViiV, see Note 2D.

(a)	The fair value amount is presented as of the date of impairment, as these assets are not measured at fair value on a recurring basis. See also Note 1C.

(b)

Reflects intangible assets written down to fair value in the first nine months of 2015. Fair value was determined using the income approach, specifically the multi-period excess earnings method, also known as the discounted cash flow method. We started with a forecast of all the expected net cash flows associated with the asset and then we applied an asset-specific discount rate to arrive at a net present value amount. Some of the more significant estimates and assumptions inherent in this approach include: the amount and timing of the projected net cash flows, which includes the expected impact of competitive, legal and/or regulatory forces on the product and the impact of technological risk associated with IPR&D assets; the discount rate, which seeks to reflect the various risks inherent in the projected cash flows; and the tax rate, which seeks to incorporate the geographic diversity of the projected cash flows.

•	an increase in tax benefits associated with the resolution of certain tax positions pertaining to prior years with various foreign tax authorities, and the expiration of certain statutes of limitations; as well as

•	the non-recurrence of the non-tax deductible charge to account for an additional year of the Branded Prescription Drug Fee in accordance with final regulations issued in the third quarter of 2014 by the U.S. Internal Revenue Service (IRS),

•	the unfavorable change in the jurisdictional mix of earnings as a result of operating fluctuations in the normal course of business.

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•	the favorable change in the jurisdictional mix of earnings as a result of operating fluctuations in the normal course of business; and

•	the non-recurrence of the non-tax deductible charge to account for an additional year of the Branded Prescription Drug Fee in accordance with final regulations issued in the third quarter of 2014 by the IRS,

•	a decline in tax benefits associated with the resolution of certain tax positions pertaining to prior years, primarily with various foreign tax authorities, and the expiration of certain statutes of limitations.

•	With respect to Pfizer Inc., the IRS has issued a Revenue Agent’s Report (RAR) for tax years 2009-2010. We are not in agreement with the RAR and are currently appealing certain disputed issues. Tax years 2011-2013 are currently under audit. Tax years 2014 and 2015 are open, but not under audit. All other tax years are closed.

•	With respect to Hospira, Inc., the IRS is auditing 2010-2011 and 2012-2013. Tax years 2014-2015 are open but not under audit. All other tax years are closed. The open tax years and audits for Hospira, Inc. and its subsidiaries are not considered material to Pfizer.

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(a)	Taxes are not provided for foreign currency translation adjustments relating to investments in international subsidiaries that will be held indefinitely.

(a)	Amounts do not include foreign currency translation adjustments attributable to noncontrolling interests of $24 million loss for the first nine months of 2015.

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(a)	We use a market approach in valuing financial instruments on a recurring basis. For additional information, see Note 1C. All of our financial assets and liabilities measured at fair value on a recurring basis use Level 2 inputs in the calculation of fair value, except less than 1% that use Level 1 inputs.

(b)

As of September 27, 2015, trading funds and securities are composed of $91 million of trading equity funds, $102 million of trading debt funds, and $80 million of trading equity securities. As of December 31, 2014, trading securities of $105 million is composed of debt and equity securities. The trading equity securities as of September 27, 2015 and the trading debt and equity securities as of December 31, 2014 are held in trust for benefits attributable to the former Pharmacia Savings Plus Plan.

(c)	Gross unrealized gains and losses are not significant.

(d)	Designated as hedging instruments, except for certain contracts used as offsets; namely, foreign currency forward-exchange contracts with fair values of $111 million as of September 27, 2015; and foreign currency forward-exchange contracts with fair values of $159 million as of December 31, 2014.

(e)

Short-term borrowings include foreign currency short-term borrowings with fair values of $545 million as of September 27, 2015, which are used as hedging instruments. The differences between the estimated fair values and carrying values of held-to-maturity debt securities, private equity securities at cost and short-term borrowings not measured at fair value on a recurring basis were not significant as of September 27, 2015 or December 31, 2014. The fair value measurements of our held-to-maturity debt securities and our short-term borrowings are based on Level 2 inputs, using a market approach. The fair value measurements of our private equity securities carried at cost are based on Level 3 inputs.

(f)	Our private equity securities represent investments in the life sciences sector.

(g)

Designated as hedging instruments, except for certain contracts used as offsets; namely, foreign currency swaps with fair values of $209 million and foreign currency forward-exchange contracts with fair values of $65 million as of September 27, 2015; and foreign currency swaps with fair values of $121 million and foreign currency forward-exchange contracts with fair values of $54 million as of December 31, 2014.

(h)	Some carrying amounts may include adjustments for discount or premium amortization or for the effect of hedging the interest rate fair value risk associated with certain financial liabilities by interest rate swaps.

(i)	Includes foreign currency debt with fair value of $560 million as of December 31, 2014, which are used as hedging instruments.

(j)

The fair value of our long-term debt (not including the current portion of long-term debt) was $33.0 billion as of September 27, 2015 and $36.6 billion as of December 31, 2014. The fair value measurements for our long-term debt are based on Level 2 inputs, using a market approach. Generally, the difference between the fair value of our long-term debt and the amount reported on the condensed consolidated balance sheet is due to a decline in relative market interest rates since the debt issuance.

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(a)	As of September 27, 2015, derivative instruments at fair value include interest rate swaps ($1 million), foreign currency swaps ($518 million) and foreign currency forward-exchange contracts ($195 million) and, as of December 31, 2014, include interest rate swaps ($34 million), foreign currency swaps ($494 million) and foreign currency forward-exchange contracts ($531 million).

(b)	As of September 27, 2015, derivative instruments at fair value include interest rate swaps ($897 million), foreign currency swaps ($81 million) and foreign currency forward-exchange contracts ($16 million) and, as of December 31, 2014, include interest rate swaps ($767 million), foreign currency swaps ($99 million) and foreign currency forward-exchange contracts ($15 million).

(c)	As of September 27, 2015, derivative instruments at fair value include interest rate swaps ($13 million), foreign currency swaps ($565 million) and foreign currency forward-exchange contracts ($194 million) and, as of December 31, 2014, include interest rate swaps ($1 million), foreign currency swaps ($13 million) and foreign currency forward-exchange contracts ($78 million).

(d)	As of September 27, 2015, derivative instruments at fair value include interest rate swaps ($144 million), foreign currency swaps ($776 million) and foreign currency forward-exchange contracts ($9 million) and, as of December 31, 2014, include interest rate swaps ($16 million) and foreign currency swaps ($581 million).

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(a)	Issued by governments, government agencies or supranational entities, as applicable, all of which are investment-grade, except for $213 million worth of Brazilian government bonds.

(b)	Issued by a diverse group of corporations, largely consisting of financial institutions, virtually all of which are investment-grade.

(c)

Includes loan-backed, receivable-backed, and mortgage-backed securities, all of which are investment-grade and in senior positions in the capital structure of the security. Loan-backed securities are collateralized by senior secured obligations of a diverse pool of companies or student loans, and receivable-backed securities are collateralized by credit cards receivables. Mortgage-backed securities are collateralized by diversified pools of residential and commercial mortgages.

(d)	Involving U.S. securities.

(a)	Interest is payable semi-annually beginning March 30, 2016.

(b)	Interest is payable semi-annually beginning February 12, 2016.

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(c)	Interest is payable semi-annually beginning March 15, 2016.

(d)

The notes are redeemable in whole or in part, at any time at our option, at a redemption price equal to the greater of 100% of the principal amount of the notes to be redeemed, and the sum of the present values of the remaining scheduled payments of principal and interest discounted to the date of optional redemption at a rate equal to the U.S. Treasury rate, plus an incremental percentage of 25 basis points in the case of the 2017 Notes, 50 basis points in the case of the 2020 Notes and the 2023 Notes, and 30 basis points in case of the 2040 Notes; plus, in each case, accrued and unpaid interest.

(e)	If the 2040 Notes are redeemed on or after March 15, 2040 (six months prior to the maturity date of the 2040 Notes), the optional redemption price for the 2040 Notes will equal 100% of the principal amount of the 2040 Notes to be redeemed.

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

(b)	Also, includes gains and losses attributable to derivative instruments designated and qualifying as fair value hedges, as well as the offsetting gains and losses attributable to the hedged items in such hedging relationships.

(c)	There was no significant ineffectiveness for any period presented.

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(d)

For derivative financial instruments in cash flow hedge relationships, the effective portion is included in Other comprehensive loss––Unrealized holding losses on derivative financial instruments, net. For derivative financial instruments in net investment hedge relationships and for foreign currency debt designated as hedging instruments, the effective portion is included in Other comprehensive loss––Foreign currency translation adjustments, net.

(a)	Increase is primarily due to the acquisition of Hospira inventories, which were recorded at fair value. See Note 2A.

(b)	Included in Other noncurrent assets. There are no recoverability issues associated with these amounts.

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(a)

The increase in identifiable intangible assets, less accumulated amortization, is primarily related to the assets acquired as part of the acquisition of Hospira and Baxter’s portfolio of marketed vaccines, partially offset by amortization, impairments and the impact of foreign exchange. For information about the assets acquired as part of the acquisition of Hospira and Baxter’s portfolio of marketed vaccines, see Note 2A.

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(a)	GEP additions relate to our acquisition of Hospira and are subject to change until we complete the recording of the assets acquired and liabilities assumed from Hospira (see Note 2A).

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(a)

The increase in net periodic benefit costs for the three and nine months ended September 27, 2015, compared to the three and nine months ended September 28, 2014, for our U.S. qualified pension plans was primarily driven by (i) the increase in the amounts amortized for actuarial losses resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation (which increased the amount of deferred actuarial losses) and, to a lesser extent, a 2014 change in mortality assumptions (reflecting a longer life expectancy for plan participants), and (ii) higher settlement activity. The aforementioned increases were partially offset by (i) a greater expected return on plan assets resulting from an increased plan asset base due to a voluntary contribution of $1.0 billion made at the beginning of January 2015, which in turn was partially offset by a decrease in the expected rate of return on plan assets from 8.50% to 8.25%, and (ii) lower interest costs resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation.

(b)

The decrease in net periodic benefit costs for the nine months ended September 27, 2015, compared to the nine months ended September 28, 2014, for our international pension plans was primarily driven by (i) the decrease in interest cost resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation, and (ii) a decrease in service cost related to changes in actuarial assumptions (lower inflation and lower rate of wage increases) and the U.K. pension plan freeze in 2014, which offset the impact of the decrease, in 2014, in the discount rate used to determine the benefit obligation (the effect of which is an increase in service costs). The aforementioned decrease in net periodic benefit costs was partially offset by (i) a decrease in the expected return on plan assets due to a lower expected rate of return on plan assets and (ii) an increase in the amounts amortized for actuarial losses resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation. The increase in net periodic benefit costs for the three months ended September 27, 2015, compared to the three months ended September 28, 2014, for our international pension plans was driven by (i) the net impact of a decrease in 2014 in the discount rate used to determine the benefit obligation, and (ii) a decrease in the expected return on plan assets due to a lower expected rate of return on plan assets, which was offset by a decrease in curtailment gains related to restructuring activities in 2014.

(c)

The decrease in net periodic benefit costs for the three and nine months ended September 27, 2015, compared to the three and nine months ended September 28, 2014, for our postretirement plans was primarily driven by (i) the increase in the amounts amortized for prior service credits and (ii) an increase in curtailment gain resulting from the implementation of changes to certain retiree medical benefits to adopt

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(a)	Contributions to the postretirement plans reflect reimbursements of approximately $133 million received for eligible 2014 prescription drug expenses for certain retirees.

(b)

Contributions expected to be made for 2015 are inclusive of amounts contributed during the nine months ended September 27, 2015, including the $1.0 billion voluntary contribution that was made in January 2015 for the U.S. qualified plan. The U.S. supplemental (non-qualified) pension plan, international pension plan and the postretirement plan contributions from our general assets include direct employer benefit payments.

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(a)	These common stock equivalents were outstanding for the nine months ended September 27, 2015 and September 28, 2014, but were not included in the computation of diluted EPS for those periods because their inclusion would have had an anti-dilutive effect.

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•

Patent litigation, which typically involves challenges to the coverage and/or validity of our patents on various products, processes or dosage forms. We are the plaintiff in the vast majority of these actions. An adverse outcome in actions in which we are the plaintiff could result in a loss of patent protection for the drug at issue, a significant loss of revenues from that drug and impairments of any associated assets.

•	Product liability and other product-related litigation, which can include personal injury, consumer, off-label promotion, securities, antitrust and breach of contract claims, among others, often involves highly complex issues relating to medical causation, label warnings and reliance on those warnings, scientific evidence and findings, actual, provable injury and other matters.

•	Commercial and other matters, which can include merger-related and product-pricing claims and environmental claims and proceedings, can involve complexities that will vary from matter to matter.

•	Government investigations, which often are related to the extensive regulation of pharmaceutical companies by national, state and local government agencies in the U.S. and in other countries.

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•	Personal Injury Actions

•	Antitrust Actions

•	Whistleblower Action

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•	Antitrust Actions

•	Personal Injury Actions

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•	GIP is focused on developing and commercializing novel, value-creating medicines that significantly improve patients’ lives. Key therapeutic areas include inflammation/immunology, cardiovascular/metabolic, neuroscience/pain and rare diseases and include leading brands, such as Xeljanz, Eliquis and Lyrica (U.S., Japan).

•	VOC focuses on the development and commercialization of vaccines and products for oncology and consumer healthcare. Consumer Healthcare manufactures and markets several well known, OTC products. Each of the three businesses in VOC operates as a separate, global business with distinct specialization in terms of the science and market approach necessary to deliver value to consumers and patients.

•

GEP includes the legacy brands that have lost or will lose exclusivity, branded generics, generic sterile injectable products, biosimilars and medical devices. Additionally, GEP has the knowledge and resources within R&D to develop small molecules, injectables and biosimilars. On September 3, 2015, we acquired Hospira, and its commercial operations are now included within GEP. Commencing from the acquisition date, and in accordance with our domestic and international reporting periods, our consolidated statements of income, primarily GEP’s operating results, for the three and nine months ended September 27, 2015 reflect one month of legacy Hospira U.S. operations but do not include any financial results from legacy Hospira international operations. See Note 2A for additional information.

•

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

•

Pfizer Medical, which 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, partnerships with global public health and medical associations, regulatory inspection readiness reviews, internal audits of Pfizer-sponsored clinical trials and internal regulatory compliance processes.

•	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.

•	Other unallocated costs, representing overhead expenses associated with our manufacturing and commercial operations not directly attributable to an operating segment.

•	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 property, plant and equipment; (ii) acquisition-related costs, where we incur costs for executing the transaction, integrating the acquired operations and restructuring the

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(a)	Income from continuing operations before provision for taxes on income.

(b)

On September 3, 2015, we acquired Hospira. Commencing from the acquisition date, and in accordance with our domestic and international reporting periods, our consolidated statements of income for the three and nine months ended September 27, 2015 reflect one month of legacy Hospira U.S. operations but do not include any financial results from legacy Hospira international operations. See Note 2A for additional information.

(c)

Other business activities includes the revenues and operating results of Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical sales operation, which in 2015 includes the revenues and expenses related to our transitional manufacturing and supply agreements with Zoetis Inc. (Zoetis). Other business activities also includes the costs managed by our WRD organization and our Pfizer Medical organization.

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

(e)	Certain significant items are substantive, unusual items 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.

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(a)

On September 3, 2015, we acquired Hospira. Commencing from the acquisition date, and in accordance with our domestic and international reporting periods, our consolidated statements of income for the three and nine months ended September 27, 2015 reflect one month of legacy Hospira U.S. operations but do not include any financial results from legacy Hospira international operations. See Note 2A for additional information.

(b)	Developed Europe region includes the following markets: Western Europe, Finland and the Scandinavian countries. Revenues denominated in euros were $1.8 billion and $2.2 billion in the third quarter of 2015 and 2014, respectively, and $5.4 billion and $6.6 billion in the first nine months of 2015 and 2014, respectively.

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

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

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(a)	The Innovative Products business is composed of two operating segments: GIP and VOC.

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

(c)	Viagra revenues from the U.S. and Canada are included in Viagra-GIP. All other Viagra revenues are included in Viagra-GEP. Total Viagra revenues represent the aggregate of worldwide revenues from Viagra-GIP and Viagra-GEP.

(d)	Includes Eliquis and Rebif.

(e)	All other GIP, All other V/O and All other GEP are subsets of GIP, VOC and Established Products, respectively.

(f)	In the third quarter and the first nine months of 2015, all revenues were composed of Prevnar 13/Prevenar 13. In the third quarter and the first nine months of 2014, revenues were composed of the Prevnar family of products, which included Prevnar 13/Prevenar 13 and, to a much lesser extent, Prevenar (7-valent).

(g)

The Established Products business consists of GEP, which includes all legacy Hospira commercial operations. Commencing from the acquisition date, September 3, 2015, and in accordance with our domestic and international reporting periods, our consolidated statements of income, primarily GEP’s operating results, for the three and nine months ended September 27, 2015 reflect one month of legacy Hospira U.S. operations but do not include any financial results from legacy Hospira international operations.

(h)	Includes Spiriva and Aricept.

(i)	Pfizer-Standalone (excluding legacy Hospira) GEP and Legacy Hospira are subsets of All other GEP.

(j)	Other includes revenues generated from Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical sales organization, and revenues related to our transitional manufacturing and supply agreements with Zoetis.

(k)	Total Alliance revenues represent the aggregate of worldwide revenues from Alliance revenues GIP and Alliance revenues GEP.

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•	the performance of several key products in developed markets, including the continued strong uptake of Prevnar 13 among adults (largely in the U.S.), Ibrance (in the U.S.) and Eliquis, all products that are early in their life cycles, as well as from Lyrica (the Global Innovative Pharmaceutical segment (GIP)) (primarily in the U.S.) (collectively, up approximately $980 million);

•	inclusion of one month of legacy Hospira U.S. operations of $330 million; and

•	a 5% operational increase in revenues in emerging markets, reflecting continued strong operational growth primarily from the Innovative Products business (up approximately $140 million),

•	the loss of exclusivity and associated multi-source generic competition for Celebrex in the U.S. in December 2014 (down approximately $470 million); and

•	the loss of exclusivity for Zyvox in the U.S. and Lyrica (Global Established Pharmaceutical segment (GEP)) in certain developed Europe markets (collectively, down approximately $290 million).

•	the performance of several key products in developed markets, including the continued strong uptake of Prevnar 13 among adults (largely in the U.S.), Eliquis, Ibrance (in the U.S.), Lyrica (GIP) (primarily in the U.S. and Japan), Xeljanz (primarily in the U.S.) and Viagra (GIP) (collectively, up approximately $2.7 billion);

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•	a 7% operational increase in revenues in emerging markets, reflecting continued strong operational growth, primarily from Prevenar 13 and Lipitor (up approximately $620 million); and

•	inclusion of one month of legacy Hospira U.S. operations of $330 million,

•	the loss of exclusivity and immediate multi-source generic competition for Celebrex in the U.S. in December 2014 (down approximately $1.3 billion);

•	the loss of exclusivity for Zyvox in the U.S., Lyrica (GEP) in certain developed Europe markets, Celebrex in Canada, developed Europe and Australia, Rapamune in the U.S. and Inspra in developed Europe (collectively, down approximately $840 million), and the loss of exclusivity for certain other products (collectively, down approximately $190 million);

•	the performance of certain other products in developed markets and BeneFIX in the U.S. (collectively, down approximately $250 million); and

•	the termination of the Spiriva co-promotion collaboration in certain countries (down approximately $100 million).

•	higher restructuring charges (up $600 million) (see also the Notes to Condensed Consolidated Financial Statements––Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives);

•	higher asset impairments (up $391 million) (see also the Notes to Condensed Consolidated Financial Statements––Note 4. Other (Income)/Deductions––Net); and

•	higher Other, net (up $205 million) (see also the Notes to Condensed Consolidated Financial Statements––Note 4. Other (Income)/Deductions––Net),

•	a lower effective tax rate (down 4.4 percentage points to 21.0%) (see also the “Provision for Taxes on Income” section of this MD&A and Notes to Condensed Consolidated Financial Statements––Note 5. Tax Matters);

•	lower selling, informational and administrative expenses (down $286 million) (see also the “Costs and Expenses––Selling, Informational and Administrative Expenses (SI&A) Expenses” section of this MD&A);

•	lower cost of sales (down $149 million) (see also the “Costs and Expenses––Cost of Sales” section of this MD&A);

•	lower research and development expenses (down $80 million) (see also the “Costs and Expenses––Research and Development (R&D) Expenses” section of this MD&A);

•	lower net interest expense (down $78 million) (see also the Notes to Condensed Consolidated Financial Statements––Note 4. Other (Income)/Deductions––Net); and

•	lower amortization of intangible assets (down $36 million) (see also the “Costs and Expenses––Amortization of Intangible Assets ” section of this MD&A).

•	higher restructuring charges (up $607 million) (see also the Notes to Condensed Consolidated Financial Statements––Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives);

•	higher asset impairments (up $300 million) (see also the Notes to Condensed Consolidated Financial Statements––Note 4. Other (Income)/Deductions––Net);

•	higher Other, net (up $296 million) (see also the Notes to Condensed Consolidated Financial Statements––Note 4. Other (Income)/Deductions––Net);

•	higher research and development expenses (up $158 million) (see also the “Costs and Expenses––Research and Development (R&D) Expenses” section of this MD&A); and

•	higher charges for business and legal entity alignment activities (up $110 million) (see also the Notes to Condensed Consolidated Financial Statements––Note 4. Other (Income)/Deductions––Net),

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•	lower cost of sales (down $638 million) (see also the “Costs and Expenses––Cost of Sales” section of this MD&A);

•	lower legal charges (down $621 million) (see also the Notes to Condensed Consolidated Financial Statements––Note 4. Other (Income)/Deductions––Net);

•	a lower effective tax rate (down 1.3% percentage points to 23.4%) (see also the “Provision for Taxes on Income” section of this MD&A and Notes to Condensed Consolidated Financial Statements––Note 5. Tax Matters);

•	lower selling, informational and administrative expenses (down $355 million) (see also the “Costs and Expenses––Selling, Informational and Administrative Expenses (SI&A) Expenses” section of this MD&A);

•	lower amortization of intangible assets (down $342 million) (see also the “Costs and Expenses––Amortization of Intangible Assets” section of this MD&A); and

•	lower net interest expense (down $171 million) (see also the Notes to Condensed Consolidated Financial Statements––Note 4. Other (Income)/Deductions––Net).

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•	$270 million in the third quarter of 2015 and $215 million in the third quarter of 2014, and $706 million in the first nine months of 2015 and $420 million in the first nine months of 2014, recorded as a reduction to Revenues, related to the higher, extended and expanded rebate provisions and the Medicare “coverage gap” discount provision; and

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$81 million in the third quarter of 2015 and $268 million in the third quarter of 2014, and $170 million in the first nine months of 2015 and $292 million in the first nine months of 2014, recorded in Selling, informational and administrative expenses, related to the fee payable to the federal government (which is not deductible for U.S. income tax purposes) based on our prior-calendar-year share relative to other companies of branded prescription drug sales to specified government programs. The decreases in the third quarter and first nine months of 2015 were primarily a result of the non-recurrence of a $215 million charge to account for an additional year of the non-tax deductible Branded Prescription Drug Fee in accordance with final regulations issued in the third quarter of 2014 by the U.S. Internal Revenue Service (IRS). The decrease for the first nine months of 2015 also reflects a decrease in the favorable true-up in the first nine months of 2015, compared to the favorable true-up in the first nine months of 2014, associated with the final invoice for the respective prior-calendar year received from the federal government, which reflected a lower share than that of the initial invoice.

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We believe that patients, who are experiencing increases in co-pays and restrictions on access to medicines as payers seek to control costs, sometimes switch to generic products, delay treatments, skip doses or use less effective treatments. We are exposed to negative pricing pressure in various markets around the world. The U.S. has highly competitive insurance markets, and Europe, Japan, China, Canada, South Korea and a number of other international markets have government-mandated reductions in prices and access restrictions for certain biopharmaceutical products to control costs for the government-sponsored healthcare system, particularly under recent global pressures. Furthermore, some government agencies and third-party payers use health technology assessments in ways that, at times, lead to restricted access to and lower prices for new medicines.

•	We continue to monitor developments regarding government and government agency receivables in several European markets, including Greece, where economic conditions remain challenging and uncertain. For further information about our Accounts Receivable, see the “Analysis of Financial Condition, Liquidity and Capital Resources” section of this MD&A.

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Significant portions of our revenues and earnings, as well as our substantial international assets, are exposed to changes in foreign exchange rates. We seek to manage our foreign exchange risk in part through operational means, including managing same-currency revenues in relation to same-currency costs and same-currency assets in relation to same-currency liabilities. Depending on market conditions, foreign exchange risk also is managed through the use of derivative financial instruments and foreign currency debt. As we operate in multiple foreign currencies, including the euro, the Japanese yen, the Chinese renminbi, the U.K. pound, the Canadian dollar and approximately 100 other currencies, changes in those currencies relative to the U.S. dollar will impact our revenues and expenses. If the U.S. dollar were to weaken against another currency, assuming all other variables remained constant, our revenues would increase, having a positive impact on earnings, and our overall expenses would increase, having a negative impact on earnings. Conversely, if the U.S. dollar were to strengthen against another currency, assuming all other variables remained constant, our revenues would decrease, having a negative impact on earnings, and our overall expenses would decrease, having a positive impact on earnings. Therefore, significant changes in foreign exchange rates can impact our results and our financial guidance.

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•	GIP is focused on developing and commercializing novel, value-creating medicines that significantly improve patients’ lives. Key therapeutic areas include inflammation/immunology, cardiovascular/metabolic, neuroscience/pain, and rare diseases and include leading brands, such as Xeljanz, Eliquis and Lyrica (U.S. and Japan).

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VOC focuses on the development and commercialization of vaccines and products for oncology and consumer health. Consumer Healthcare manufactures and markets several well known, over-the-counter (OTC) products. Each of the three businesses in VOC operates as a separate, global business with distinct specialization in terms of the science and market approach necessary to deliver value to consumers and patients.

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GEP includes legacy brands that have lost or will soon lose exclusivity, branded generics, generic sterile injectable products, biosimilars and medical devices. Additionally, GEP has the knowledge and resources within R&D to develop small molecules, injectables and biosimilars. On September 3, 2015, we acquired Hospira, which is now part of GEP. Commencing from the acquisition date, and in accordance with our domestic and international reporting periods, our consolidated financial statements and GEP’s operating results for the three and nine months ended September 27, 2015 reflect one month of legacy Hospira U.S. operations but do not include any financial results from legacy Hospira international operations. See Notes to Condensed Consolidated Financial Statements––Note 2A. Acquisitions, Licensing Agreements, Collaborative Arrangements, Equity-Method Investments and Cost-Method Investment: Acquisitions for additional information.

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•	Finished goods—Estimated selling price, less an estimate of costs to be incurred to sell the inventory, and an estimate of a reasonable profit allowance for that selling effort.

•	Work in process—Estimated selling price of an equivalent finished good, less an estimate of costs to be incurred to complete the work-in-process inventory, an estimate of costs to be incurred to sell the inventory and an estimate of a reasonable profit allowance for those manufacturing and selling efforts.

•	Raw materials and supplies—Estimated cost to replace the raw materials and supplies.

•	Land––Market, a sales comparison approach that measures value of an asset through an analysis of sales and offerings of comparable property.

•	Buildings, Machinery and Equipment and Furniture and Fixtures—Replacement cost, an approach that measures the value of an asset by estimating the cost to acquire or construct comparable assets. For buildings that are not highly specialized or that could be income producing if leased to a third party, we also considered market and income factors.

•	Construction in Progress—Replacement cost, generally assumed to equal historical book value.

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•	Revenue—We estimate sales volume, selling prices, market penetration, market share and year-over-year growth rates over the product’s life cycle.

•	Cost of sales, Sales and marketing expenses, General and administrative expenses—We estimate the costs associated with the identifiable intangible asset over the product’s life cycle.

•	R&D expenses—In the case of approved products, we estimate the appropriate level of ongoing R&D support, and for unapproved compounds, we estimate the amount and timing of costs to develop the R&D into viable products.

•	Estimated life of the asset—We assess the asset’s life cycle and the competitive trends impacting the asset, including consideration of any technical, legal, regulatory or economic barriers to entry.

•	Inherent risk—We use a discount rate that is primarily based on the weighted-average cost of capital with an additional premium to reflect the risks associated with the specific intangible asset. In addition, for unapproved assets, an additional risk factor is added for the risk of technical and regulatory success, called the probability of technical and regulatory success.

•	For IPR&D assets, the risk of failure has been factored into the fair value measure and there can be no certainty that these assets ultimately will yield a successful product.

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Acquisition of Nimenrix and Mencevax Vaccines from GlaxoSmithKline plc (GSK)––On September 30, 2015 (which falls in the fourth fiscal quarter of 2015), we acquired GSK’s quadrivalent meningococcal ACWY vaccines, Nimenrix and Mencevax, for €75 million (approximately $85 million) paid on the closing date and two additional installments of €15 million and €25 million to be paid in November 2017 and November 2018, respectively. This transaction adds two high-quality and complementary vaccines to our portfolio, allowing us to reach a broader global population. We do not expect this transaction to have any significant impact on our 2015 financial performance.

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Acquisition of a Minority Interest in AM-Pharma B.V. (AM-Pharma)––On April 9, 2015, we acquired a minority equity interest in AM-Pharma, a privately held Dutch biopharmaceutical company focused on the development of recombinant human Alkaline Phosphatase (recAP) for inflammatory diseases, and secured an exclusive option to acquire the remaining equity in the company. The option becomes exercisable upon delivery of the clinical trial report after completion of a Phase II trial of recAP in the treatment of Acute Kidney Injury related to sepsis. Results from the current Phase II trial for recAP are expected in the second half of 2016. Under the terms of the agreement, we paid $87.5 million for both the exclusive option and the minority equity interest, which was recorded as a cost-method investment in Long-term investments, and we may make additional payments of up to $512.5 million upon exercise of the option and potential launch of any product that may result from this investment.

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Collaboration with OPKO Health, Inc. (OPKO)––On December 13, 2014, we entered into a collaborative agreement with OPKO to develop and commercialize OPKO’s long-acting human growth hormone (hGH-CTP) for the treatment of growth hormone deficiency (GHD) in adults and children, as well as for the treatment of growth failure in children born small for gestational age (SGA) who fail to show catch-up growth by two years of age. hGH-CTP has the potential to reduce the required dosing frequency of human growth hormone to a single weekly injection from the current standard of one injection per day. We have received the exclusive license to commercialize hGH-CTP worldwide. OPKO will lead the clinical activities and will be responsible for funding the development programs for the key indications, which include Adult and Pediatric GHD and Pediatric SGA. We will be responsible for all development costs for additional indications, all postmarketing studies, manufacturing and commercialization activities for all indications, and we will lead the manufacturing activities related to product development. The transaction closed on January 28, 2015, upon termination of the waiting period under the Hart-Scott-Rodino Act. In February 2015, we made an upfront payment of $295 million to OPKO, which was recorded in Research and development expenses, and OPKO is eligible to receive up to an additional $275 million upon the achievement of certain regulatory milestones. OPKO is also eligible to receive royalty payments associated with the commercialization of hGH-CTP for Adult GHD, which is subject to regulatory approval. Upon the launch of hGH-CTP for Pediatric GHD, which is subject to regulatory approval, the royalties will transition to tiered gross profit sharing for both hGH-CTP and our product, Genotropin.

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Acquisition of Marketed Vaccines Business of Baxter International Inc. (Baxter)––On December 1, 2014 (which falls in the first fiscal quarter of 2015 for our international operations), we acquired Baxter’s portfolio of marketed vaccines for a final purchase price of $648 million. The portfolio that was acquired consists of NeisVac-C and FSME-IMMUN/TicoVac. NeisVac-C is a vaccine that helps protect against meningitis caused by group C meningococcal meningitis and FSME-IMMUN/TicoVac is a vaccine that helps protect against tick-borne encephalitis.

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Collaboration with Merck KGaA––On November 17, 2014, we entered into a collaborative agreement with Merck KGaA, to jointly develop and commercialize avelumab, an investigational anti-PD-L1 antibody currently in development as a potential treatment for multiple types of cancer. We and Merck KGaA are exploring the therapeutic potential of this novel anti-PD-L1 antibody as a single agent as well as in various combinations with our and Merck KGaA’s broad portfolio of approved and investigational oncology therapies. The companies will collaborate on up to 20 high priority immuno-oncology clinical development programs, including combination trials, in 2015. These clinical development programs include up to six trials (Phase 1B/2 or Phase 3) that could be pivotal for potential product registrations. We and Merck KGaA are also combining resources and expertise to advance Pfizer’s anti-PD-1 antibody into Phase 1 trials. Under the terms of the agreement, in the fourth quarter of 2014, we made an upfront payment of $850 million to Merck KGaA and Merck KGaA is eligible to receive regulatory and commercial milestone payments of up to approximately $2.0 billion. Both companies will jointly fund all development and commercialization costs, and split equally any profits generated from selling any anti-PD-L1 or anti-PD-1 products from this collaboration. Also, as part of the agreement, we gave Merck KGaA certain co-promotion rights for Xalkori in the U.S. and several other key markets.

•	Acquisition of InnoPharma, Inc. (InnoPharma)––On September 24, 2014, we completed our acquisition of InnoPharma, a privately held pharmaceutical development company, for an upfront cash payment of $225 million and contingent milestone payments of up to $135 million.

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License from Cellectis SA (Cellectis)––On June 18, 2014, we entered into a global arrangement with Cellectis to develop Chimeric Antigen Receptor T-cell immunotherapies in the field of oncology directed at select cellular surface antigen targets. In August 2014, in connection with this licensing agreement, we made an upfront payment of $80 million to Cellectis, which was recorded in Research and development expenses. We will also fund R&D costs associated with 15 Pfizer-selected targets and, for the benefit of Cellectis, a portion of the R&D costs associated with four Cellectis-selected targets within the arrangement. Cellectis is eligible to receive development, regulatory and commercial milestone payments of up to $185 million per product that results from the Pfizer-selected targets. Cellectis is also eligible to receive tiered royalties on net sales of any products that are commercialized by Pfizer.

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Collaboration with Eli Lilly & Company (Lilly)––In October 2013, we entered into a collaboration agreement with Lilly to jointly develop and globally commercialize Pfizer’s tanezumab, which provides that Pfizer and Lilly will equally share product-development expenses as well as potential revenues and certain product-related costs. Following the decision by the U.S. Food and Drug Administration (FDA) in March 2015 to lift the partial clinical hold on the tanezumab development program, we received a $200 million upfront payment from Lilly in accordance with the collaboration agreement between Pfizer and Lilly, which is recorded as deferred income in our condensed consolidated balance sheet and is being recognized into Other (income)/deductions––net over a multi-year period beginning in the second quarter of 2015. Pfizer and Lilly resumed the Phase 3 chronic pain program for tanezumab in July 2015, which will consist of 6 studies in approximately 7,000 patients across osteoarthritis, chronic low back pain and cancer pain. Under the collaboration agreement with Lilly, we

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License of Nexium OTC Rights––In August 2012, we entered into an agreement with AstraZeneca PLC (AstraZeneca) for the exclusive, global, OTC rights for Nexium, a leading prescription drug approved to treat the symptoms of gastroesophageal reflux disease. In connection with this Consumer Healthcare licensing agreement, we made an upfront payment of $250 million to AstraZeneca, which was recorded in Research and development expenses when incurred. On May 27, 2014, we launched Nexium 24HR in the U.S., and on July 11, 2014, we paid AstraZeneca a related $200 million product launch milestone payment. On August 1, 2014, we launched Nexium Control in Europe, and on September 15, 2014, we paid AstraZeneca a related $50 million product launch milestone payment. These post-approval milestone payments were recorded in Identifiable intangible assets, less accumulated amortization in the consolidated balance sheet and are being amortized over the estimated useful life of the Nexium brand. AstraZeneca is eligible to receive additional milestone payments of up to $300 million, based on the level of worldwide sales as well as royalty payments, based on worldwide sales.

•	operational factors impacting Pfizer-standalone (excluding legacy Hospira) operations, including strong performance to date coupled with an improved business outlook for the remainder of the year;

▪	the anticipated impact of legacy Hospira operations from September 3, 2015 through fiscal year-end 2015 on financial guidance components other than reported revenues and adjusted diluted EPS; and

▪	a minimal favorable impact from foreign exchange rates since mid-July 2015.

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(a)	The 2015 financial guidance reflects the following:

•	Does not assume the completion of any business development transactions not completed as of September 27, 2015, including any one-time upfront payments associated with such transactions.

•	Excludes the potential effects of the resolution of litigation-related matters not substantially resolved as of September 27, 2015.

•	Exchange rates assumed are a blend of the actual exchange rates in effect through the third quarter of 2015 and the mid-October 2015 exchange rates for the remainder of the year. Excludes the impact of a potential devaluation of the Venezuelan bolivar.

•	Guidance for reported revenues reflects the anticipated negative impact of $3.3 billion due to recent and expected generic competition for certain Pfizer-standalone (excluding legacy Hospira) products that have recently lost or are anticipated to soon lose patent protection.

•	Guidance for Pfizer-standalone (excluding legacy Hospira) reported revenues also reflects the anticipated negative impact of $3.1 billion as a result of unfavorable changes in essentially all foreign exchange rates relative to the U.S. dollar compared to foreign exchange rates from 2014.

•	Guidance for the effective tax rate on Adjusted income does not assume the renewal of the U.S. research and development (R&D) tax credit. The renewal of the U.S. R&D tax credit is not anticipated to have a material impact on the effective tax rate on Adjusted income.

•	Guidance for reported and adjusted diluted EPS assumes diluted weighted-average shares outstanding of approximately 6.25 billion shares, inclusive of share repurchases in 2015.

(b)	For an understanding of Adjusted income and its components and Adjusted diluted EPS (all of which are non-GAAP financial measures), see the “Adjusted Income” section of this MD&A.

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(a)

GIP = the Global Innovative Pharmaceutical segment; VOC = the Global Vaccines, Oncology and Consumer Healthcare segment; and GEP = the Global Established Pharmaceutical segment. On September 3, 2015, we acquired Hospira, and its commercial operations are now included within GEP. Commencing from the acquisition date, and in accordance with our domestic and international reporting periods, our consolidated statements of income, primarily GEP's operating results, for the three and nine months ended September 27, 2015 reflect one month of legacy Hospira U.S. operations but do not include any financial results from legacy Hospira international operations.

(b)	Includes revenues generated from Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical sales organization, and also includes the revenues related to our transitional manufacturing and supply agreements with Zoetis Inc. (Zoetis).

•	in the U.S., revenues increased $723 million, or 15%, in the third quarter of 2015, and increased $970 million, or 7%, in the first nine months of 2015, compared to the same periods in 2014, reflecting, among other things:

◦	the performance of several key products, including Prevnar 13 primarily in adults, Ibrance (which was launched in the U.S. in February 2015), Lyrica (GIP), Eliquis, Viagra (GIP) and Xeljanz (collectively, up approximately $940 million in the third quarter of 2015 and $2.4 billion in the first nine months of 2015), and

◦	the inclusion of one month of legacy Hospira U.S. operations of $330 million in the third quarter of 2015,

◦	losses of exclusivity and associated multi-source generic competition for Celebrex in the U.S. in December 2014 (down approximately $470 million in the third quarter of 2015 and $1.3 billion in the first nine months of 2015);

◦	the loss of exclusivity for Zyvox and Rapamune, as well as the termination of our Spiriva co-promotion collaboration (collectively, down approximately $200 million in the third quarter of 2015 and $480 million in the first nine months of 2015); and

◦	the performance of certain other products such as BeneFIX for the three and nine months ended 2015 and Lipitor for the nine months ended 2015 (collectively, down approximately $10 million in the third quarter of 2015 and $120 million in the first nine months of 2015).

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in our international markets, revenues decreased $1.0 billion, or 13%, in the third quarter of 2015, and decreased $2.7 billion, or 12%, in the first nine months of 2015, compared to the same periods in 2014. Foreign exchange unfavorably impacted international revenues by approximately $1.1 billion, or 14%, in the third quarter of 2015 and unfavorably impacted international revenues by approximately $2.9 billion, or 13%, in the first nine months of 2015. Operationally, revenues increased $72 million, or 1%, in the third quarter of 2015, and increased $201 million, or 1%, in the first nine months of 2015, compared to the same periods in 2014 reflecting, among other things:

◦	higher revenues in developed markets for Eliquis and Lyrica (GIP), as well as from vaccines acquired in December 2014 from Baxter (in Europe) (collectively, up approximately $150 million in the third quarter of 2015 and $430 million in the first nine months of 2015); and

◦	the operational increase in revenues in emerging markets, reflecting continued strong operational growth primarily from the Innovative Products business in the third quarter of 2015 and primarily from the Innovative Products business and Lipitor in the first nine months of 2015 (up approximately $140 million in the third quarter of 2015 and $620 million in the first nine months of 2015),

◦	lower revenues in developed markets for Lyrica (GEP), Celebrex, Inspra and Viagra (GEP) as a result of the loss of exclusivity, as well as the performance of Lipitor and Norvasc (collectively, down approximately $260 million in the third quarter of 2015 and $640 million in the first nine months of 2015).

(a)	Rebates are product-specific and, therefore, for any given year are impacted by the mix of products sold.

(b)	Performance-based contract rebates include contract rebates with managed care customers within the U.S., including health maintenance organizations and pharmacy benefit managers, who receive rebates based on the achievement of contracted performance terms and claims under

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(c)	Chargebacks primarily represent reimbursements to U.S. wholesalers for honoring contracted prices to third parties.

(d)	Sales allowances primarily represent price reductions that are contractual or legislatively mandated outside the U.S., discounts and distribution fees.

(e)

For the three months ended September 27, 2015, associated with the following segments: GIP ($1.2 billion); VOC ($0.4 billion); and GEP ($2.3 billion). For the three months ended September 28, 2014, associated with the following segments: GIP ($0.9 billion); VOC ($0.3 billion); and GEP ($2.3 billion). For the nine months ended September 27, 2015, associated with the following segments: GIP ($3.1 billion); VOC ($1.1 billion); and GEP ($6.5 billion). For the nine months ended September 28, 2014, associated with the following segments: GIP ($2.4 billion); VOC ($0.8 billion); and GEP ($6.4 billion).

•	an increase in chargebacks primarily due to products that have lost exclusivity in the U.S. and increasing competitive pressures, as well as increases for certain U.S. branded products and Hospira sterile injectables; and

•	an increase in Medicaid and related state program rebates, primarily as a result of updated estimates of sales related to these programs, and, for the first nine months of 2015, a decrease in Managed Medicaid estimated rebates in the second quarter of 2014.

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(a)	Indicates the business to which the revenues relate. GIP = the Global Innovative Pharmaceutical segment; V = the Global Vaccines business; O = the Global Oncology business; and GEP = the Global Established Pharmaceutical segment.

(b)	As compared to the three and nine months ended September 28, 2014, as applicable.

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(c)	In the third quarter and the first nine months of 2015, all revenues were composed of Prevnar 13/Prevenar 13. In the third quarter and first nine months of 2014, revenues were composed of the Prevnar family of products, which included Prevnar 13/Prevenar 13 and, to a much lesser extent, Prevenar (7-valent).

(d)	Lyrica revenues from all of Europe, Russia, Turkey, Israel and Central Asia countries are included in GEP. All other Lyrica revenues are included in GIP.

(e)	Viagra revenues from the U.S. and Canada are included in GIP. All other Viagra revenues are included in GEP.

(f)	Includes Eliquis (GIP), Rebif (GIP), Spiriva (GEP) and Aricept (GEP).

(g)	All other GIP, All other V/O and All other GEP are subsets of GIP, VOC and GEP, respectively.

*	Calculation not meaningful.

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Prevnar/Prevenar 13 (V), is our pneumococcal conjugate vaccine for the prevention of pneumococcal disease. Overall, worldwide revenues for Prevnar/Prevenar 13 increased 44% operationally in the third quarter of 2015, and 45% operationally in the first nine months of 2015, compared to the same periods in 2014. Foreign exchange had an unfavorable impact on worldwide revenues of 6% in both the third quarter and the first nine months of 2015, compared to the same periods in 2014.

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Lyrica (GEP (revenues from all of Europe, Russia, Turkey, Israel and Central Asia)/GIP (all other revenues)) is indicated in the U.S. for three neuropathic pain conditions, fibromyalgia and adjunctive therapy for adult patients with partial onset seizures. In certain markets outside the U.S., indications include neuropathic pain (peripheral and central), fibromyalgia, adjunctive treatment of epilepsy and generalized anxiety disorder. Worldwide revenues for Lyrica were relatively flat operationally in the third quarter of 2015, and increased 3% operationally in the first nine months of 2015, compared to the same periods in 2014. Foreign exchange had an unfavorable impact on worldwide revenues of 7% in both the third quarter and in the first nine months of 2015, compared to the same periods in 2014.

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•

Enbrel (GIP, outside the U.S. and Canada), indicated for the treatment of moderate-to-severe rheumatoid arthritis, polyarticular juvenile rheumatoid arthritis, psoriatic arthritis, plaque psoriasis, ankylosing spondylitis (a type of arthritis affecting the spine), and nonradiographic axial spondyloarthritis, recorded an increase in worldwide revenues, excluding the U.S. and Canada, of 5% operationally in the third quarter of 2015, and was relatively flat operationally in the first nine months of 2015, compared to the same periods in 2014. Results for the third quarter of 2015 were favorably impacted by demand in certain markets in Europe and by the timing of government purchases in Latin America and Africa Middle East. Results for the first nine months of 2015 were favorably impacted by the timing of government purchases in Africa Middle East and demand in certain markets in Europe offset primarily by the change in the distribution channel in the U.K. Foreign exchange had an unfavorable impact of 17% in the third quarter of 2015, and 15% in the first nine months of 2015, compared to the same periods in 2014.

•

Lipitor (GEP) is indicated for the treatment of elevated LDL-cholesterol levels in the blood. Lipitor faces generic competition in all major developed markets. Branded Lipitor recorded worldwide revenues of $454 million, or a decrease of 1% operationally in the third quarter of 2015, and $1.4 billion, or relatively flat operationally in the first nine months of 2015, compared to the same periods in 2014. Foreign exchange had an unfavorable impact of 6% in both the third quarter and in the first nine months of 2015, compared to the same periods in 2014.

•

Viagra (GIP (U.S. and Canada revenues)/GEP (all other revenues excluding U.S. and Canada)) is indicated for the treatment of erectile dysfunction. Viagra worldwide revenues increased 5% operationally in the third quarter of 2015, and 7% operationally in the first nine months of 2015, compared to the same periods in 2014, primarily due to operational growth in the U.S. with respect to the third quarter of 2015 and operational growth in the U.S. and emerging markets with respect to the first nine months of 2015. International revenues decreased 11% operationally in the third quarter of 2015, and 6% operationally in the first nine months of 2015, compared to the same periods in 2014, primarily due to the impact of generic competition in developed markets outside of North America. In the first nine months of 2015, this decline was partially offset by operational growth in China. Foreign exchange had an unfavorable impact on international revenues of 12% in the third quarter of 2015, and 10% in the first nine months of 2015, compared to the same periods in 2014. Revenues in the U.S. increased 12% in the third quarter of 2015, and 14% in the first nine months of 2015, compared to the same periods in 2014, primarily driven by increased pill quantity per prescription, higher purchases from the U.S. Department of Veterans Affairs/Department of Defense, and price increases, partially offset by lower patient demand.

•

Sutent (O) is indicated for the treatment of advanced renal cell carcinoma, including metastatic renal cell carcinoma (mRCC); gastrointestinal stromal tumors after disease progression on, or intolerance to, imatinib mesylate; and advanced pancreatic neuroendocrine tumor. Sutent worldwide revenues increased 10% operationally in the third quarter of 2015, and increased 6% operationally in the first nine months of 2015, compared to the same periods in 2014, primarily due to price increases in the U.S., as well as strong demand in certain European and emerging markets. Foreign exchange had an unfavorable impact of 13% in the third quarter of 2015, and 12% in the first nine months of 2015, compared to the same periods in 2014.

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•

Our Premarin family of products (GEP) helps women address moderate-to-severe menopausal symptoms. Premarin worldwide revenues were relatively flat operationally in the third quarter of 2015, and decreased 3% operationally in the first nine months of 2015, compared to the same periods in 2014. Revenues in the U.S. in the first nine months of 2015 were unfavorably impacted by prescription volume declines for Premarin Family Oral brands and lower market growth, partially offset by price increases. Foreign exchange had an unfavorable impact of 1% in both the third quarter and in the first nine months of 2015, compared to the same periods in 2014.

•

Norvasc (GEP) is indicated for the treatment of hypertension. Norvasc worldwide revenues decreased 2% operationally in the third quarter of 2015, and 3% operationally in the first nine months of 2015, compared to the same periods in 2014, due to generic erosion, primarily in Japan, partially offset by volume growth in emerging markets, primarily in China. Foreign exchange had an unfavorable impact of 9% in the third quarter of 2015, and 7% in the first nine months of 2015, compared to the same periods in 2014.

•

Zyvox (GEP) is among the world’s best-selling branded agents used to treat serious Gram-positive pathogens, including methicillin-resistant staphylococcus-aureus. Zyvox worldwide revenues decreased 43% operationally in the third quarter of 2015, and 23% operationally in the first nine months of 2015, compared to the same periods in 2014, due to generic competition in the U.S., beginning in the first half of 2015, and pricing pressures. Foreign exchange had an unfavorable impact of 8% in both the third quarter and in the first nine months of 2015, compared to the same periods in 2014.

•

Celebrex (GEP), indicated for the treatment of the signs and symptoms of osteoarthritis and rheumatoid arthritis worldwide and for the management of acute pain in adults in the U.S., Japan and certain other markets, recorded a decrease in worldwide revenues of 69% operationally in the third quarter of 2015, and 67% operationally in the first nine months of 2015, compared to the same periods in 2014, primarily driven by the loss of exclusivity and associated launch of multi-source generic competition in the U.S. in December 2014 and in most other developed markets. Foreign exchange had an unfavorable impact of 3% in both the third quarter and the first nine months of 2015, compared to the same periods in 2014.

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BeneFIX and ReFacto AF/Xyntha (GIP) are hemophilia products using state-of-the-art manufacturing that assist patients with their lifelong hemophilia bleeding disorders. BeneFIX worldwide revenues increased 1% operationally in the third quarter of 2015, compared to the same period in 2014 primarily as a result of strong performance across Europe, driven by increase of market share in key countries such as Germany, Italy, Belgium and Turkey and an extension of the Factor IX contract period in the U.K. and Ireland. This was partially offset by the erosion of market share in the U.S. due to the launch of competing new extended half-life treatment options. BeneFIX worldwide revenues decreased 4% operationally in the first nine months of 2015, compared to the same period in 2014, primarily as a result of the erosion of market share in the U.S. due to the launch of competing new extended half-life treatment options. Foreign exchange had an unfavorable impact on revenues of 9% in the third quarter of 2015, and 8% in the first nine months of 2015, compared to the same periods in 2014.

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Chantix/Champix (GIP) is an aid to smoking-cessation treatment in adults 18 years of age and older. Worldwide revenues increased 7% operationally in the third quarter of 2015, and 9% operationally in the first nine months of 2015, compared to the same periods in 2014. Foreign exchange had an unfavorable impact on revenues of 6% in both the third quarter and in the first nine months of 2015, compared to the same periods in 2014.

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•

Pristiq (GEP) is indicated for the treatment of major depressive disorder in the U.S. and in various other countries. Pristiq has also been indicated for treatment of moderate-to-severe vasomotor symptoms (VMS) associated with menopause in Thailand, Mexico, the Philippines and Ecuador. Pristiq recorded an increase in worldwide revenues of 9% operationally in the third quarter of 2015, compared to the same period in 2014, primarily due to price increases in the U.S. partially offset by decreased U.S. market share and the loss of exclusivity and launch of generic competition in Australia. Pristiq recorded a decrease in worldwide revenues of 1% operationally in the first nine months of 2015, compared to the same period in 2014, primarily due to decreased market share, partially offset by market price increases in the U.S. Foreign exchange had an unfavorable impact on revenues of 5% in the third quarter of 2015, and 3% the first nine months of 2015, compared to the same periods in 2014.

•	Ibrance (O), indicated as a first-line treatment for certain forms of advanced breast cancer, was approved and launched in the U.S. in February 2015. Ibrance recorded worldwide revenues of $230 million in the third quarter of 2015 and $408 million in the first nine months of 2015.

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Xalkori (O) is indicated for the treatment of patients with locally advanced or metastatic non-small cell lung cancer (NSCLC) that is anaplastic lymphoma kinase (ALK)-positive. Xalkori worldwide revenues increased 18% operationally in the third quarter of 2015, and 23% operationally in the first nine months of 2015, compared to the same periods in 2014, as a result of an increase in diagnostic rates for the ALK gene mutation, which has led to more patients being treated, and price increases in the U.S. Foreign exchange had a 9% unfavorable impact in both the third quarter and the first nine months of 2015, compared to the same periods in 2014.

•

Xeljanz (GIP) is approved for use as a second-line therapy for the treatment of adult patients with moderate to severe active rheumatoid arthritis (after traditional disease-modifying antirheumatic drugs) in more than 40 markets including the U.S., Japan, Australia, Canada, Switzerland and Brazil. Xeljanz recorded an increase in worldwide revenues of 53% operationally in the third quarter of 2015, and 74% operationally in the first nine months of 2015, compared to the same periods in 2014, primarily in the U.S., driven by continued growth through rheumatologist acceptance and consumer awareness. Foreign exchange had a 3% unfavorable impact in both the third quarter and in the first nine months of 2015, compared to the same periods in 2014.

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Inlyta (O) is indicated for the treatment of patients with advanced renal cell carcinoma (RCC) after failure of a prior systemic treatment. Worldwide revenues increased 13% operationally in the third quarter of 2015, and 17% operationally in the first nine months of 2015, compared to the same periods in 2014, primarily due to increased demand. Revenues in the U.S. increased 5% in the third quarter of 2015, and 12% in the first nine months of 2015, compared to the same periods in 2014, primarily due to increased demand and price increases. International revenues increased 19% operationally in the third quarter of 2015, and 21% operationally in the first nine months of 2015, compared to the same periods in 2014, primarily due to strong growth in developed and emerging markets in Europe, where a large proportion of oncologists are prescribing Inlyta. Foreign exchange had an unfavorable impact on international revenues of 19% in the third quarter of 2015, and 18% in the first nine months of 2015, compared to the same periods in 2014.

•	Alliance revenues (GEP/GIP) increased 59% operationally worldwide in the third quarter of 2015, and 37% operationally in the first nine months of 2015, compared to the same periods in 2014, mainly due to:

◦	an increase in Eliquis alliance revenues through increased market share,

◦	the termination of the co-promotion collaboration for Spiriva (GEP) in most developed markets, which resulted in an elimination of Pfizer’s share of Spiriva revenues. This resulted in a decrease of approximately $19 million operationally in the third quarter of 2015, and $131 million operationally in the first nine months of 2015, compared to the same periods in 2014.

•

Eliquis (apixaban) (GIP) is being jointly developed and commercialized by Pfizer and Bristol-Myers Squibb (BMS). The two companies share commercialization expenses and profit/losses equally on a global basis. In April 2015, we signed an agreement with BMS to transfer full commercialization rights in certain smaller markets to us, beginning in the third quarter of 2015. BMS will supply the product to us at cost plus a percentage of the net sales to end-customers in these markets. Eliquis is part of the Novel Oral Anticoagulant (NOAC) market; the agents in this class were developed as

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◦	to reduce the risk of stroke and systemic embolism in patients with nonvalvular atrial fibrillation (NVAF);

◦	for the treatment of deep vein thrombosis (DVT) and pulmonary embolism (PE), and for the reduction in the risk of recurrent DVT and PE following initial therapy; and

◦	for the prophylaxis of DVT, which may lead to PE, in patients who have undergone hip or knee replacement surgery.

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*	The dates set forth in this column are the dates on which the FDA accepted our submissions.

(a)

Epogen® is a registered U.S. trademark of Amgen Inc.; Procrit® is a registered U.S. trademark of Johnson & Johnson. In October 2015, we received a “complete response” letter from the FDA with respect to our biologics license application for Retacrit, our proposed biosimilar to epoetin alfa, which was submitted for all indications of the reference product. We will work with the FDA to determine an appropriate path forward.

(b)

In October 2015, we received a “complete response” letter from the FDA with respect to our supplemental NDA for Xeljanz for the treatment of adult patients with moderate to severe chronic plaque psoriasis. While we have yet to meet with the FDA to discuss their concerns, we recognize that overcoming the issues raised may be difficult, especially in light of the evolving marketplace. We will consider our investment in the psoriasis indication for Xeljanz following this discussion with the FDA.

(c)

In May 2012, the FDA’s Peripheral and Central Nervous System Drugs Advisory Committee voted that the tafamidis meglumine data provide substantial evidence of efficacy for a surrogate endpoint that is reasonably likely to predict a clinical benefit. In June 2012, the FDA issued a “complete response” letter with respect to the tafamidis NDA. The FDA has requested the completion of a second efficacy study, and also has asked for additional information on the data within the current tafamidis NDA. We continue to work with the FDA to define a path forward.

(d)

NDAs for Viviant (bazedoxifene) for treatment and prevention of post-menopausal osteoporosis remain pending before the FDA. In February 2008, the FDA advised it expected to convene an advisory committee pending responses to the “approvable letters” received in December 2007 and May 2008 with respect to the NDAs. In view of the approval of Duavee (conjugated estrogens/bazedoxifene), we continue to assess next steps for Viviant.

*	For applications in the EU, the dates set forth in this column are the dates on which the European Medicines Agency (EMA) validated our submissions.

(a)	This indication for Eliquis (apixaban) was developed and is being commercialized in collaboration with Bristol-Myers Squibb (BMS).

(b)	In October 2015, the EMA’s Committee for Medicinal Products for Human Use (CHMP) issued an opinion recommending that Xalkori be granted approval for the first-line treatment of adults with anaplastic lymphoma kinase (ALK) positive advanced non-small cell lung cancer.

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(a)	Remicade® is a registered trademark of Janssen Biotech, Inc. As a condition of approving the Hospira transaction, the European Commission is requiring divestiture of Pfizer’s infliximab development program and certain European Economic Area (EEA) rights. Pfizer will retain certain rights to the product outside of the EEA.

(b)	Herceptin® is a registered trademark of Genentech, Inc.

(c)	Rituxan® is a registered trademark of Biogen MA Inc.

(d)	Avastin® is a registered trademark of Genentech, Inc.

(e)	Humira® is a registered trademark of AbbVie Biotechnology Ltd.

(f)	In July 2015, we and our alliance partner, Eli Lilly & Company, resumed the Phase 3 clinical program for tanezumab, following a decision by the FDA to lift the partial clinical hold on the development program after a review of nonclinical data characterizing the sympathetic nervous system response to tanezumab.

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•	favorable foreign exchange of 15% in the third quarter of 2015 and 13% in the first nine months of 2015; and, to a lesser extent

•	a decrease in royalty expense; and

•	manufacturing efficiencies,

•	an increase in sales volumes due to (i) the inclusion of one month of legacy Hospira U.S. operations and the vaccine portfolio operations acquired from Baxter in 2015, both of which are comprised of inventory measured at fair value on the acquisition date; and (ii) the net increase in sales volume of Pfizer legacy products.

•	favorable foreign exchange; and, to a lesser extent

•	a decrease in royalty expenses; and

•	manufacturing efficiencies,

•	an unfavorable change in product mix due to (i) the inclusion of one month of legacy Hospira U.S. operations and the vaccine portfolio operations acquired from Baxter in 2015, both of which are comprised of inventory measured at fair value on the acquisition date; and (ii) the impact of losses of exclusivity.

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•	the favorable impact of foreign exchange of 6% for both the third quarter of 2015 and the first nine months of 2015;

•	lower expenses associated with certain products that have recently lost marketing exclusivity;

•	lower field force, advertising and promotional expenses, reflecting the benefits of cost-reduction and productivity initiatives; and

•	the non-recurrence of a $215 million charge to account for an additional year of the non-tax deductible Branded Prescription Drug Fee in accordance with final regulations issued in the third quarter of 2014 by the U.S. Internal Revenue Service (IRS),

•	increased investments to support recently launched products and certain other in-line products; and to a much lesser extent

•	the inclusion of one month of legacy Hospira U.S. operations.

•	the favorable impact of foreign exchange of 2%;

•	the non-recurrence of upfront payments associated with certain licensing agreements entered into during the third quarter of 2014; and

•	lower clinical trial expenses for various studies for certain previously approved products, including as a result of the completion of postmarketing commitments,

•	higher clinical trial expenses for pipeline programs, mainly for certain oncology and GIP pipeline programs; and to a lesser extent

•	the inclusion of one month of legacy Hospira U.S. operations.

•	the $295 million upfront payment to OPKO in the first quarter of 2015 associated with a worldwide development and commercialization agreement; and

•	increased investment in certain late-stage pipeline programs, primarily bococizumab,

•	lower clinical trial expenses for various studies for certain previously approved products, including as a result of the completion of postmarketing commitments;

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•	the non-recurrence of upfront payments associated with certain licensing agreements entered into during the first nine months of 2014; and

•	the favorable impact of foreign exchange of 2%.

(a)	Comprises Restructuring charges and certain acquisition-related costs as well as costs associated with our cost-reduction/productivity initiatives included in Cost of sales, Research and development expenses and/or Selling, informational and administrative expenses, as appropriate.

*	Calculation not meaningful.

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*	Calculation not meaningful.

•	senior management receives a monthly analysis of our operating results that is prepared on an Adjusted income basis;

•	our annual budgets are prepared on an Adjusted income basis; and

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•	senior management’s annual compensation is derived, in part, using this Adjusted income measure. See the “Adjusted Income––General Description of Adjusted Income Measure” section of our 2014 Financial Report for additional information.

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(a)	For details of adjustments, see “Details of Income Statement Items Excluded from Adjusted Income” below.

(b)

The effective tax rate on Non-GAAP Adjusted income was 25.8% in the third quarter of 2015, compared with 26.8% in the third quarter of 2014. This decline was primarily due to an increase in tax benefits associated with the resolution of certain tax positions pertaining to prior years with various foreign tax authorities and the expiration of certain statutes of limitations, partially offset by an unfavorable change in the jurisdictional mix of earnings as a result of operating fluctuations in the normal course of business. The effective tax rate on Non-GAAP Adjusted income was 25.3% in the first nine months of 2015, compared with 26.6% in the first nine months of 2014. This decline was primarily due to a favorable change in the jurisdictional mix of earnings as a result of operating fluctuations in the normal course of business, partially offset by a decline in tax benefits associated with the resolution of certain tax positions pertaining to prior years, primarily with various foreign tax authorities, and the expiration of certain statutes of limitations.

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(a)	Included primarily in Amortization of intangible assets.

(b)	Included in Provision for taxes on income. Income taxes includes the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pre-tax amounts and applying that jurisdiction’s applicable tax rate.

(c)

Included in Restructuring charges and certain acquisition-related costs (see Notes to Condensed Consolidated Financial Statements—Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives). Restructuring charges include employee termination costs, asset impairments and other exit costs associated with business combinations. Transaction costs represent external costs directly related to the acquisition of Hospira and primarily include expenditures for banking, legal, accounting and other similar services. Integration costs represent external, incremental costs directly related to integrating acquired businesses, and primarily include expenditures for consulting and the integration of systems and processes. In 2015, restructuring charges, transaction costs and integration costs primarily relate to our acquisition of Hospira on September 3, 2015. All of these costs and charges are included in Restructuring charges and certain acquisition-related costs.

(d)	Represents the impact of changes in estimated useful lives of assets involved in restructuring actions related to acquisitions. Included in Cost of sales for both the three months and nine months ended September 27, 2015 and September 28, 2014.

(e)

Included in Provision for taxes on income. Income taxes includes the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pre-tax amounts and applying that jurisdiction’s applicable tax rate. The nine months ended September 28, 2014 also includes the favorable impact of the remeasurement of certain deferred tax liabilities resulting from plant network restructuring activities.

(f)	Included in Discontinued operations––net of tax. For the nine months ended September 28, 2014, represents post-close adjustments.

(g)	Amounts relate to our cost-reduction/productivity initiatives not related to acquisitions. Included in Restructuring charges and certain acquisition-related costs (see Notes to Condensed Consolidated Financial Statements—Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives).

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(h)	Amounts relate to our cost-reduction/productivity initiatives not related to acquisitions (see Notes to Condensed Consolidated Financial Statements—Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives).

(i)	Included in Selling, informational and administrative expenses. Represents a charge to account for an additional year of the non-tax deductible Branded Prescription Drug Fee in accordance with final regulations issued in the third quarter of 2014 by the U.S. Internal Revenue Service (IRS).

(j)	Included in Other (income)/deductions—net (see the “Other (Income)/Deductions—Net” section of this MD&A and Notes to Condensed Consolidated Financial Statements—Note 4. Other (Income)/Deductions—Net).

(k)	Included in Other (income)/deductions––net. Represents expenses for planning and implementing changes to align our operations and reporting for our business segments established in 2014.

(l)

For the three months ended September 27, 2015, included in Cost of sales ($21 million income), Selling, informational and administrative expenses ($22 million income), Research and development expenses ($4 million income) and Other (income)/deductions––net ($84 million). For the nine months ended September 27, 2015, included in Cost of sales ($21 million income), Selling, informational and administrative expenses ($19 million income), Research and development expenses ($4 million income) and Other (income)/deductions––net ($161 million). For 2014, includes, among other things, income associated with the transitional manufacturing and supply agreements with Zoetis Inc. that are included in Revenues ($65 million) and Cost of sales ($57 million) for the three months ended September 28, 2014 and primarily in Revenues ($193 million) and Cost of sales ($167 million) for the nine months ended September 28, 2014. Virtually all other items are included in Other (income)/deductions––net for the three months and nine months ended September 28, 2014.

(m)

Included in Provision for taxes on income. Income taxes includes the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pre-tax amounts and applying that jurisdiction’s applicable tax rate. The third quarter and first nine months of 2014 were unfavorably impacted by a non-tax deductible charge to account for an additional year of the Branded Prescription Drug Fee in accordance with final regulations issued in the third quarter of 2014 by the IRS.

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(a)	Amounts represent the revenues and costs managed by each of our operating segments. The expenses generally include only those costs directly attributable to the operating segment.

(b)	Total Innovative Products represents the sum of the GIP and VOC segments.

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(c)	Other comprises the revenues and costs included in our Adjusted income components (see footnote (d) below) that are managed outside our three operating segments and includes the following:

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(i)	PCS—the revenues and costs of Pfizer CentreSource (PCS), our contract manufacturing and bulk pharmaceutical chemical sales operation. In the third quarter and first nine months of 2015, PCS also includes revenues and expenses related to our transitional manufacturing and supply agreements with Zoetis Inc.

(ii)

WRD—the research and development expenses managed by our Worldwide Research and Development (WRD) organization , which is generally responsible for research projects until proof-of-concept is achieved and then for transitioning those projects to the appropriate operating segment for possible clinical and commercial development. This 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. WRD is also responsible for facilitating all regulatory submissions and interactions with regulatory agencies, including all safety-event activities.

(iii)

Medical—the costs associated with our Pfizer Medical organization (Medical), which 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, partnerships with global public health and medical associations, regulatory inspection readiness reviews, internal audits of Pfizer-sponsored clinical trials and internal regulatory compliance processes.

(iv)	Corporate—the costs associated with 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.

(v)	Other Unallocated—other unallocated costs, representing overhead expenses associated with our manufacturing and commercial operations not directly attributable to an operating segment.

(vi)	See the “Analysis of Operating Segment Information” section of Pfizer’s 2014 Financial Report for certain qualitative information about our Other costs. This information will be provided on an annual basis.

(d)	See the “Adjusted Income” section of this MD&A for a definition of these “Adjusted Income” components.

(e)	Includes costs associated with (i) purchase accounting adjustments; (ii) acquisition-related costs; and (iii) certain significant items, which are substantive, unusual items that are evaluated on an individual basis by management. For additional information about these reconciling items and/or our Non-GAAP Adjusted measure of performance, see the “Adjusted Income” section of this MD&A.

•

Revenues increased 1% in the third quarter of 2015 and were relatively flat in the first nine months of 2015, compared to the same periods in 2014. Foreign exchange had an unfavorable impact of 10% on GIP revenues in the third quarter of 2015, and 9% on GIP revenues in the first nine months of 2015, compared to the same periods in 2014. Revenues increased by 10% operationally in the third quarter of 2015 and increased by 8% operationally in the first nine months of 2015, compared to the same periods in 2014, primarily due to the following operational factors:

◦	strong operational performance of Eliquis globally, Lyrica, primarily in the U.S. and Japan, as well as Xeljanz and Viagra, both primarily in the U.S., and Enbrel in international markets (with respect to the third quarter of 2015) (collectively, up approximately $430 million for the third quarter of 2015 and $1.1 billion for the first nine months of 2015),

◦	a decline in Rapamune revenues in the U.S. due to generic competition which began in October 2014 (down approximately $50 million for the third quarter of 2015 and $110 million for the first nine months of 2015).

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•

Cost of sales as a percentage of Revenues decreased 3.1 percentage points in the third quarter of 2015, compared to the same period in 2014, primarily driven by a decrease in royalty expense, favorable foreign exchange, and an increase in alliance revenues, which have no associated cost of sales. Cost of sales as a percentage of Revenues decreased 2.6 percentage points in the first nine months of 2015, compared to the same period in 2014, primarily driven by favorable foreign exchange, a decrease in royalty expense and an increase in alliance revenues, which have no associated cost of sales. The decrease in Cost of sales of 22% in the third quarter of 2015, and 20% in the first nine months of 2015, compared to the same periods in 2014, was primarily driven by favorable foreign exchange and, to a lesser extent, a decrease in royalty expense.

•

The decrease in Selling, informational and administrative expenses of 2% in the third quarter of 2015, compared to the same period in 2014, reflects favorable foreign exchange and reduced investment in certain in-line products, largely offset by additional investment in recently launched products and certain other in-line products. The slight increase in Selling, informational and administrative expenses of less than 1% in the first nine months of 2015, compared to the same period in 2014, reflects additional investment in recently launched products and certain in-line products, largely offset by favorable foreign exchange and reduced investment in certain other in-line products.

•

The increase in Research and development expenses of 5% in the third quarter of 2015, compared to the same period in 2014, primarily reflects increased investment in certain late-stage pipeline programs, primarily bococizumab and tanezumab, partially offset by lower clinical trial expenses for various studies for certain previously approved products. The increase in Research and development expenses of 28% in the first nine months of 2015, compared to the same period in 2014, primarily reflects the $295 million upfront payment to OPKO Health, Inc. made in the first quarter of 2015 and increased investment in certain late-stage pipeline programs, primarily bococizumab, partially offset by lower clinical trial expenses for various studies for certain previously approved products.

•	The unfavorable change in Other (income)/deductions––net in both the third quarter of 2015 and in the first nine months of 2015, compared to the same periods in 2014, primarily reflects a decrease in royalty-related income, partially offset by an increase in our equity income from certain equity-method investments.

•	Revenues increased 29% in the third quarter of 2015, and increased 24% in the first nine months of 2015, compared to the same periods in 2014, which includes an increase in revenues of 37% operationally in the third quarter of 2015 and 32% operationally in the first nine months of 2015.

◦

Global Vaccines Revenues increased 43% to $1.6 billion in the third quarter of 2015, compared to $1.1 billion in the same period in 2014, and increased 43% to $4.5 billion in the first nine months of 2015, compared to $3.2 billion in the same period in 2014, reflecting an operational increase in revenues of 50% in the third quarter of 2015 and 51% in the first nine months of 2015. The increases were primarily due to an increase of 77% in the third quarter of 2015 and 81% in the first nine months of 2015 in Prevnar family revenue in the U.S., primarily driven by continued strong uptake of Prevnar 13 among adults following the positive recommendation from ACIP for use in adults aged 65 and older in the third quarter of 2014, as well as the success of commercial programs and increased demand in preparation for the upcoming flu season. International revenues increased 19% operationally in the third quarter of 2015 and 22% operationally in the first nine months of 2015, driven by the Prevenar family, which grew 10% operationally in the third quarter of 2015 and 11% operationally in the first nine months of 2015, compared to the same periods in 2014, primarily reflecting increased volume in emerging markets. In the first nine months of 2015, compared to the same period in 2014, volume was favorably impacted by Prevenar’s inclusion in additional national immunization programs in certain emerging markets and increased shipments associated with Gavi, the Vaccine Alliance, as well as the inclusion in the

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◦

Global Oncology Revenues increased 43% to $786 million in the third quarter of 2015, compared to $551 million in the same period in 2014, and increased 26% to $2.0 billion in the first nine months of 2015, compared to $1.6 billion in the same period in 2014, reflecting an operational increase in revenues of 54% in the third quarter of 2015 and 36% in the first nine months of 2015, primarily driven by continued strong momentum following the February 2015 U.S. launch of Ibrance for advanced breast cancer and, to a lesser extent, stronger demand for Sutent, Xalkori and Inlyta in most markets.

◦

Consumer Healthcare Revenues were relatively flat at $817 million in the third quarter of 2015, compared to $821 million in the same period in 2014, reflecting an operational increase in revenues of 7% in the third quarter of 2015, primarily due to performance of Nexium 24HR in the U.S. driven by increased demand and lower revenues in the third quarter of 2014 as retailers reduced initial stocking levels following the May 2014 launch. Revenues decreased 1% to $2.5 billion in the first nine months of 2015, compared to the same period in 2014, reflecting an operational increase in revenues of 5% in the first nine months of 2015, primarily due to the launch of Nexium 24HR in the U.S. in late-May 2014, as well as increased demand for key brands such as Advil, and growth in certain emerging markets.

•

Cost of sales as a percentage of Revenues decreased 3.5 percentage points in the third quarter of 2015, compared to the same period in 2014, primarily driven by manufacturing efficiencies, a favorable change in product mix and favorable foreign exchange. Cost of sales as a percentage of Revenues decreased 3.0 percentage points in the first nine months of 2015, compared to the same period in 2014, primarily driven by favorable foreign exchange, manufacturing efficiencies and a favorable change in product mix. The increase in Cost of sales of 5% in both the third quarter of 2015 and in the first nine months of 2015, compared to the same periods in 2014, was primarily due to an increase in sales volumes, driven primarily by continued strong uptake of Prevnar 13 among adults, largely offset by favorable foreign exchange and manufacturing efficiencies.

•	Selling, informational and administrative expenses increased 17% in the third quarter of 2015, and increased 12% in the first nine months of 2015, compared to the same periods in 2014, primarily due to higher promotional expenses in the U.S., primarily for Prevnar 13 in adults, Ibrance and newly launched Consumer Healthcare product line extensions, partially offset by favorable foreign exchange.

•

Research and development expenses increased 15% in the third quarter of 2015, compared to the same period in 2014, primarily reflecting increased costs associated with our oncology programs, primarily our anti-PD-L1 alliance with Merck KGaA, partially offset by lower clinical trial spend for certain vaccine programs. Research and development expenses decreased 1% in the first nine months of 2015, compared to the same period in 2014, primarily reflecting lower clinical trial spend for Trumenba, Prevnar 13 adult and certain oncology products, largely offset by increased costs associated with our oncology programs, primarily our anti-PD-L1 alliance with Merck KGaA.

•	Revenues decreased 16%, to $5.2 billion in the third quarter of 2015, compared to $6.2 billion in the same period in 2014, and decreased 18% to $15.3 billion in the first nine months of 2015, compared to $18.7 billion in the same period in 2014,

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the loss of exclusivity and associated launch of multi-source generic competition for Celebrex in the U.S. in December 2014, for Zyvox in the U.S. beginning in the first half of 2015 and for Lyrica in certain developed Europe markets beginning in the first quarter of 2015 (collectively, down by approximately $750 million for the third quarter of 2015 and $1.8 billion for the first nine months of 2015);

◦	a decline in Lipitor revenues in developed markets as a result of continued generic competition (down approximately $10 million for the third quarter of 2015 and $140 million for the first nine months of 2015); and

◦	the termination in most countries of the co-promotion collaboration for Spiriva, including in the U.S. (where the collaboration expired in April 2014), which has resulted in a decline in Pfizer’s share of Spiriva revenues (down approximately $10 million for the third quarter of 2015 and $110 million for the first nine months of 2015),

◦	the inclusion of one month of legacy Hospira U.S. operations, which contributed $330 million; and

◦	growth in emerging markets, where revenues increased 1% operationally for the third quarter of 2015 and 4% operationally for the first nine months of 2015 (up by approximately $20 million for the third quarter of 2015 and $240 million for the first nine months of 2015).

•

Cost of sales as a percentage of Revenues increased 2.1 percentage points in the third quarter of 2015, compared to the same period in 2014, primarily due to the impact of losses of exclusivity and the inclusion of one month of legacy Hospira U.S. operations, resulting in an unfavorable change in product mix, partially offset by the favorable impact of foreign exchange. Cost of sales as a percentage of Revenues increased 1.3 percentage points in the first nine months of 2015, compared to the same period in 2014, primarily due to the impact of losses of exclusivity and, to a lesser extent, the inclusion of one month of legacy Hospira U.S. operations, resulting in an unfavorable change in product mix, partially offset by the favorable impact of foreign exchange. The decrease in Cost of sales of 7% in the third quarter of 2015 and 12% in the first nine months of 2015, compared to the same periods in 2014, was primarily driven by favorable foreign exchange and lower volumes as a result of products losing exclusivity, partially offset by the inclusion of one month of legacy Hospira U.S. operations.

•

Selling, informational and administrative expenses decreased 19% in the third quarter of 2015, compared to the same period in 2014, primarily due to lower field force, advertising and promotional expenses associated with certain products that have recently lost exclusivity and the benefits of cost-reduction and productivity initiatives, as well as favorable foreign exchange, partially offset by the inclusion of one month of legacy Hospira U.S. operations. The decrease in Selling, informational and administrative expenses of 18% in the first nine months of 2015, compared to the same period in 2014, was primarily due to lower field force, advertising and promotional expenses associated with certain products that have recently lost exclusivity and the benefits of cost-reduction and productivity initiatives, as well as favorable foreign exchange, partially offset by a higher cost for the U.S. Branded Prescription Drug Fee compared to the prior year and the inclusion of one month of legacy Hospira U.S. operations.

•

Research and development expenses increased 5% in the third quarter of 2015, compared to the same period in 2014, reflecting increased investment in biosimilar development programs and the inclusion of one month of legacy Hospira U.S. operations, largely offset by lower clinical trial expenses related to postmarketing commitments, primarily for Celebrex and Pristiq. The slight increase in Research and development expenses for the first nine months of 2015, compared to the same period in 2014, reflects increased investment in biosimilar development programs, and sterile injectable development programs acquired as part of our acquisition of InnoPharma, Inc., as well as the inclusion of one month of legacy Hospira U.S. operations, largely offset by lower clinical trial expenses related to postmarketing commitments, primarily for Celebrex and Pristiq.

•	The unfavorable change in Other (income)/deductions––net in the first nine months of 2015, compared to the same period in 2014, primarily reflects the non-recurrence of prior year gains on the sale of product rights as well as a decrease in our equity income from our equity-method investment in China.

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For Foreign currency translation adjustments, net, for the third quarter of 2015, reflects primarily the strengthening of the U.S. dollar against the Canadian dollar, Australian dollar and Brazilian real, partially offset by the strengthening of the Euro against the U.S. dollar; for the nine months of 2015, reflects primarily the strengthening of the U.S. dollar against the euro, Brazilian real, Canadian dollar, Australian dollar, Mexican peso and Japanese yen. Also, for the first nine months of 2014, includes the reclassification, into income, of amounts associated with legal entity dispositions.

•	For Unrealized holding losses on derivative financial instruments, net and Unrealized holding gains/(losses) on available-for-sale securities, net, reflects the impact of fair value remeasurements and the reclassification of realized amounts into income. For additional information, see Notes to Condensed Consolidated Financial Statements—Note 7. Financial Instruments.

•

For Benefit plans: actuarial gains/(losses), net, primarily reflects the reclassification into income of amounts related to (i) the amortization of changes in the pension benefit obligation previously recognized in Other comprehensive income and (ii) settlement activity, as well as the impact of foreign exchange. For additional information, see Notes to Condensed Consolidated Financial Statements—Note 10. Pension and Postretirement Benefit Plans.

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For Benefit plans: prior service credits and other, net, for the first nine months of 2015, reflects a $507 million reduction in our U.S. Postretirement Plan obligation due to a plan amendment approved in June 2015 that introduced a cap on costs for certain groups within the plan, partially offset by the reclassification into income of amounts related to (i) amortization of changes in prior service costs and credits previously recognized in Other comprehensive income and (ii) curtailment activity. For additional information, see Notes to Condensed Consolidated Financial Statements—Note 10. Pension and Postretirement Benefit Plans.

•	For Trade accounts receivable, less allowance for doubtful accounts, the change also reflects the timing of sales and collections in the normal course of business.

•	For Inventories, the change reflects inventory acquired as part of the acquisition of Baxter’s portfolio of marketed vaccines, recorded at acquisition date fair value as well as inventory builds in the normal course of business, partially offset by planned inventory reductions.

•	For Other current assets, the change also reflects the decrease in the receivables associated with our derivative financial instruments as well as the timing of receipts and payments in the normal course of business.

•	For Property, plant and equipment, less accumulated depreciation (PP&E), the change reflects depreciation during the period offset by capital additions in the normal course of business.

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For Identifiable intangible assets, less accumulated amortization, the change reflects amortization and to a lesser extent impairments, partially offset by identifiable intangible assets acquired as part of the acquisition of Baxter’s portfolio of marketed vaccines. For additional information about our intangible assets, see Notes to Condensed Consolidated Financial Statements—Note 9A. Identifiable Intangible Assets and Goodwill: Identifiable Intangible Assets.

•	For Trade accounts payable, the change reflects the timing of purchases and payments in the normal course of business.

•	For Other current liabilities, the change reflects payments of certain legal claims, as well as the timing of other payments and accruals in the normal course of business, partially offset by an increase in the payables associated with our derivative financial instruments.

•

For Pension benefit obligations, net and Postretirement benefit obligations, net, the change reflects, among other things, a $1.0 billion voluntary pension contribution in January 2015 and a $507 million reduction in our U.S. Postretirement Plan obligation due to a plan amendment approved in June 2015 that introduced a cap on costs for certain groups within the plan, partially offset by a re-measurement of obligations acquired as part of the acquisition of Hospira. For additional information about the net periodic pension cost, see Notes to Condensed Consolidated Financial Statements—Note 10. Pension and Postretirement Benefit Plans.

•	For Other noncurrent liabilities, the change reflects an increase in the payables associated with our derivative financial instruments and, to a lesser extent, the deferral of an upfront payment received from Eli Lilly & Company as part of a collaborative arrangement, partially offset by other payments and changes in accruals in the normal course of business.

•	For Accumulated other comprehensive loss, the change primarily reflects foreign currency translation adjustments for the first nine months of 2015. For additional information see the “Analysis of the Condensed Consolidated Statements of Comprehensive Income” section of this MD&A.

*	Calculation not meaningful.

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•	net redemptions of investments of $16.1 billion in the first nine months of 2015, compared to net purchases of investments of $3.1 billion in the first nine months of 2014,

•	cash paid of $15.6 billion, net of cash acquired, for the acquisition of Hospira (see Notes to Condensed Consolidated Financial Statements—Note 2A. Acquisitions, Licensing Agreements, Collaborative Arrangements, Equity-Method Investments and Cost-Method Investment: Acquisitions); and

•	cash paid of $679 million, net of cash acquired, primarily for the acquisition of Baxter’s portfolio of marketed vaccines in the first nine months of 2015 (see Notes to Condensed Consolidated Financial Statements—Note 2A. Acquisitions, Licensing Agreements, Collaborative Arrangements, Equity-Method Investments and Cost-Method Investment: Acquisitions).

•	purchases of common stock of $6.2 billion in the first nine months of 2015, compared to $3.8 billion in the first nine months of 2014,

•	proceeds from the exercise of stock options of $1.2 billion in the first nine months of 2015, compared to $704 million in the first nine months of 2014.

•	the working capital requirements of our operations, including our research and development activities;

•	investments in our business;

•	dividend payments and potential increases in the dividend rate;

•	share repurchases;

•	the cash requirements associated with our cost-reduction/productivity initiatives;

•	paying down outstanding debt;

•	contributions to our pension and postretirement plans; and

•	business-development activities.

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(a)	See Notes to Condensed Consolidated Financial Statements––Note 7. Financial Instruments for a description of certain assets held and for a description of the credit risk related to our financial instruments held.

(b)

Net financial assets decreased as net cash provided by operating activities decreased, and cash paid for the Hospira acquisition, dividend payments and share purchases, among other things, more than offset the redemptions/sales net of purchases of investments and proceeds from the exercise of stock options. For additional information, see the “Analysis of the Condensed Consolidated Statements of Cash Flows” section of this MD&A.

(c)

The decrease in working capital is due to the acquisition of Hospira, as well as the timing of accruals, cash receipts and payments in the ordinary course of business. For additional information on the acquisition of Hospira, see Notes to Condensed Consolidated Financial Statements––Note 2A. Acquisitions, Licensing Agreements, Collaborative Arrangements, Equity-Method Investments and Cost-Method Investment: Acquisitions.

(d)	Represents total Pfizer Inc. shareholders’ equity divided by the actual number of common shares outstanding (which excludes treasury stock).

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(a)	Represents $160 million paid to GS&Co. in July 2015 to settle the accelerated share repurchase agreement pursuant to the agreement's settlement terms.

(b)	Includes approximately 151 million shares purchased for $5.2 billion pursuant to the accelerated share repurchase agreement.

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the outcome of research and development activities including, without limitation, the ability to meet anticipated pre-clinical and clinical trial commencement and completion dates, regulatory submission and approval dates, and launch dates for product candidates, as well as the possibility of unfavorable pre-clinical and clinical trial results, including unfavorable new clinical data and additional analyses of existing clinical data;

•

decisions by regulatory authorities regarding whether and when to approve our drug applications, which will depend on the assessment by such regulatory authorities of the benefit-risk profile suggested by the totality of the efficacy and safety information submitted; decisions by regulatory authorities regarding labeling, ingredients and other matters that could affect the availability or commercial potential of our products; and uncertainties regarding our ability to address the comments in complete response letters received by us with respect to certain of our drug applications to the satisfaction of the FDA;

•	the speed with which regulatory authorizations, pricing approvals and product launches may be achieved;

•	the outcome of post-approval clinical trials, which could result in the loss of marketing approval for a product or changes in the labeling for, and/or increased or new concerns about the safety or efficacy of, a product that could affect its availability or commercial potential;

•	risks associated with interim data, including the risk that final results of studies for which interim data have been provided and/or additional clinical trials may be different from (including less favorable than) the interim data results and may not support further clinical development of the applicable product candidate or indication;

•	the success of external business-development activities, including the ability to satisfy the conditions to closing of announced transactions in the anticipated timeframe or at all;

•	competitive developments, including the impact on our competitive position of new product entrants, in-line branded products, generic products, private label products and product candidates that treat diseases and conditions similar to those treated by our in-line drugs and drug candidates;

•	the implementation by the FDA and regulatory authorities in certain other countries of an abbreviated legal pathway to approve biosimilar products, which could subject our biologic products to competition from biosimilar products, with attendant competitive pressures, after the expiration of any applicable exclusivity period and patent rights;

•	the ability to meet generic and branded competition after the loss of patent protection for our products or competitor products;

•	the ability to successfully market both new and existing products domestically and internationally;

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•	difficulties or delays in manufacturing;

•	trade buying patterns;

•	the impact of existing and future legislation and regulatory provisions on product exclusivity;

•	trends toward managed care and healthcare cost containment;

•	the impact of any significant spending reductions affecting Medicare, Medicaid or other publicly funded or subsidized health programs or changes in the tax treatment of employer-sponsored health insurance that may be implemented, and/or any significant additional taxes or fees that may be imposed on the pharmaceutical industry as part of any broad deficit-reduction effort;

•	the impact of U.S. healthcare legislation enacted in 2010—the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act––and of any modification or repeal of any of the provisions thereof;

•

U.S. federal or state legislation or regulatory action affecting, among other things, pharmaceutical product pricing, reimbursement or access, including under Medicaid, Medicare and other publicly funded or subsidized health programs; the importation of prescription drugs from outside the U.S. at prices that are regulated by governments of various foreign countries; direct-to-consumer advertising and interactions with healthcare professionals; and the use of comparative effectiveness methodologies that could be implemented in a manner that focuses primarily on the cost differences and minimizes the therapeutic differences among pharmaceutical products and restricts access to innovative medicines; as well as pricing pressures as a result of highly competitive insurance markets;

•	legislation or regulatory action in markets outside the U.S. affecting pharmaceutical product pricing, reimbursement or access, including, in particular, continued government-mandated price reductions for certain biopharmaceutical products and government-imposed access restrictions in certain countries;

•	the exposure of our operations outside the U.S. to possible capital and exchange controls, expropriation and other restrictive government actions, changes in intellectual property legal protections and remedies, as well as political unrest and unstable governments and legal systems;

•	contingencies related to actual or alleged environmental contamination;

•	claims and concerns that may arise regarding the safety or efficacy of in-line products and product candidates;

•	any significant breakdown, infiltration or interruption of our information technology systems and infrastructure;

•	legal defense costs, insurance expenses, settlement costs, the risk of an adverse decision or settlement and the adequacy of reserves related to product liability, patent protection, government investigations, consumer, commercial, securities, antitrust, environmental and tax issues, ongoing efforts to explore various means for resolving asbestos litigation, and other legal proceedings;

•	our ability to protect our patents and other intellectual property, both domestically and internationally;

•	interest rate and foreign currency exchange rate fluctuations, including the impact of possible currency devaluations in countries experiencing high inflation rates;

•	governmental laws and regulations affecting domestic and foreign operations, including, without limitation, tax obligations and changes affecting the tax treatment by the U.S. of income earned outside the U.S. that may result from pending and possible future proposals;

•	any significant issues involving our largest wholesaler customers, which account for a substantial portion of our revenues;

•	the possible impact of the increased presence of counterfeit medicines in the pharmaceutical supply chain on our revenues and on patient confidence in the integrity of our medicines;

•	any significant issues that may arise related to the outsourcing of certain operational and staff functions to third parties, including with regard to quality, timeliness and compliance with applicable legal requirements and industry standards;

•	any significant issues that may arise related to our joint ventures and other third-party business arrangements;

•	changes in U.S. generally accepted accounting principles;

•	uncertainties related to general economic, political, business, industry, regulatory and market conditions including, without limitation, uncertainties related to the impact on us, our customers, suppliers and lenders and

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•	any changes in business, political and economic conditions due to actual or threatened terrorist activity in the U.S. and other parts of the world, and related U.S. military action overseas;

•	growth in costs and expenses;

•	changes in our product, segment and geographic mix;

•	the impact of purchase accounting adjustments, acquisition-related costs, discontinued operations and certain significant items;

•

the impact of acquisitions, divestitures, restructurings, internal reorganizations, product recalls and withdrawals and other unusual items, including our ability to realize the projected benefits of our cost-reduction and productivity initiatives, including those related to our research and development organization, and of the internal separation of our commercial operations into our new operating structure;

•

risks and uncertainties related to our recent acquisition of Hospira, including, among other things, the ability to realize the anticipated benefits of the acquisition of Hospira, including the possibility that expected synergies and accretion will not be realized or will not be realized within the expected time frame; the risk that the businesses will not be integrated successfully; disruption from the transaction making it more difficult to maintain business and operational relationships; significant transaction costs; and unknown liabilities; and

•

risks and uncertainties related to a potential transaction between Pfizer and Allergan plc, including, without limitation, the possibility that a transaction will not be pursued or that a transaction will not be agreed to, adverse effects on the market price of Pfizer's common stock and on Pfizer's operating results because of a failure to pursue or to complete a potential transaction, if a transaction is agreed to, the failure to obtain necessary regulatory approvals or to satisfy any of the other conditions to a potential transaction, failure to realize the expected benefits of a potential transaction, negative effects of the announcement or the consummation of an agreed transaction, if any, on the market price of Pfizer’s common stock, significant transaction costs and/or unknown liabilities, general economic and business conditions that affect the companies following a potential transaction, changes in global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax laws, regulations, rates and policies, future business combinations or disposals and competitive developments.

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(a)

On June 27, 2013, we announced that the Board of Directors had authorized a $10 billion share-purchase plan, which was exhausted in the first quarter of 2015 (the June 2013 Stock Purchase Plan). On October 23, 2014, we announced that the Board of Directors had authorized an additional $11 billion share-purchase plan, and share purchases commenced thereunder in January 2015 (the October 2014 Stock Purchase Plan). On February 9, 2015, we entered into an accelerated share repurchase agreement with Goldman, Sachs & Co. (GS&Co.) to repurchase shares of our common stock. This agreement was entered into under our previously announced share repurchase authorization. Pursuant to the terms of the agreement, on February 11, 2015, we paid $5 billion to GS&Co. and received approximately 151 million shares of our common stock from GS&Co. On July 2, 2015, the accelerated share repurchase agreement with GS&Co. was completed, which, per the terms of the agreement, resulted in us owing GS&Co. a certain number of shares of Pfizer common stock or its equivalent dollar value. Pursuant to the agreement’s settlement terms, we elected to settle this amount in cash and paid an additional $160 million to GS&Co. on July 13, 2015, resulting in a total of approximately $5.2 billion paid to GS&Co. The final average price paid for the shares delivered under the accelerated share repurchase agreement was $34.13 per share. After giving effect to this accelerated share repurchase agreement, as well as other share repurchases to date in 2015, our remaining share-purchase authorization is approximately $5.4 billion. We do not currently expect to repurchase additional shares this year.

(b)

These columns reflect the following transactions during the third fiscal quarter of 2015: (i) the surrender to Pfizer of 51,518 shares of common stock to satisfy tax withholding obligations in connection with the vesting of restricted stock units issued to employees; (ii) the open market purchase by the trustee of 20,828 shares of common stock in connection with the reinvestment of dividends paid on common stock held in trust for employees who were granted performance share awards and who deferred receipt of such awards; (iii) the surrender to Pfizer of 117 shares of common stock to satisfy tax withholding obligations in connection with the vesting of performance share awards issued to employees; and(iv) the surrender to Pfizer of 12,529 shares of common stock to pay the exercise price and to satisfy tax withholding obligations in connection with the exercise of employee stock options. These columns do not include the $160 million paid to GS&Co. in July 2015 to settle the accelerated share repurchase agreement pursuant to the agreement's settlement terms.

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