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

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(a)	Reclassified into Gain on disposal of 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 on Other Comprehensive Income/(Loss).

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(a)	In 2013, includes $2.6 billion from the issuance of senior notes by Zoetis (our former Animal Health subsidiary), net of the $1.0 billion non-cash exchange of Zoetis senior notes for the retirement of Pfizer commercial paper issued in 2012. See Note 2B. Acquisition, Divestiture, Licensing Arrangements and Equity-Method Investments: Divestiture.

(b)	See Note 2B. Acquisition, Divestiture, Licensing Arrangements and Equity-Method Investments: Divestiture.

(c)	See Note 2D. Acquisition, Divestiture, Licensing Arrangements and Equity-Method Investments: Equity-Method Investments.

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•	A new standard that clarified the accounting for cumulative translation adjustment (CTA) upon derecognition of a group of assets that is a business or an equity-method investment within a foreign entity.

•	A new standard regarding the measurement of obligations resulting from joint and several liability arrangements that may include debt agreements, other contractual obligations and settled litigation or judicial rulings.

•	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 are directly or indirectly observable (Level 2 inputs).

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

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•

Formation of Zoetis—On January 28, 2013, our then wholly owned subsidiary, Zoetis, issued $3.65 billion aggregate principal amount of senior notes. Also, on January 28, 2013, we transferred to Zoetis substantially all of the assets and liabilities of our Animal Health business in exchange for all of the Class A and Class B common stock of Zoetis, $1.0 billion of the $3.65 billion of Zoetis senior notes, and an amount of cash equal to substantially all of the cash proceeds received by Zoetis from the remaining $2.65 billion of senior notes issued. The $1.0 billion of Zoetis senior notes received by Pfizer were exchanged by Pfizer for the retirement of Pfizer commercial paper issued in 2012, and the cash proceeds received by Pfizer of approximately $2.6 billion were used for dividends and stock buybacks.

•

Initial Public Offering (19.8% Interest)—On February 6, 2013, an IPO of the Class A common stock of Zoetis was completed, pursuant to which we sold 99.015 million shares of Class A common stock of Zoetis (all of the Class A common stock, including shares sold pursuant to the underwriters' option to purchase additional shares, which was exercised in full) in exchange for the retirement of approximately $2.5 billion of Pfizer commercial paper issued in 2013. The Class A common stock sold in the IPO represented approximately 19.8% of the total outstanding Zoetis shares. The excess of the consideration received over the net book value of our divested interest was approximately $2.3 billion and was recorded in Additional paid-in capital.

•

Exchange Offer (80.2% Interest)—On June 24, 2013, we exchanged all of our remaining interest in Zoetis for Pfizer common stock and recognized a gain on sale of approximately $10.4 billion net of income taxes resulting from certain legal entity reorganizations, which was recorded in Gain on disposal of discontinued operations––net of tax in the condensed consolidated statements of income for the nine months ended September 29, 2013.

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(a)	Includes a deferred tax expense of $2 million and a deferred tax benefit of $4 million for the three months ended September 28, 2014 and September 29, 2013, respectively, and a deferred tax benefit of $23 million for the nine months ended September 29, 2013. Deferred taxes for the first nine months of 2014 were nil.

(b)	For the three months and nine months ended September 28, 2014 and for the three months ended September 29, 2013, represents post-close adjustments.

(c)	For the nine months ended September 29, 2013, reflects income taxes resulting from certain legal entity reorganizations.

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•	In the third quarter and first nine months of 2013, we recorded an estimated loss of approximately $223 million related to the net call/put option and an impairment loss of $32 million related to our equity-method investment, both of which were recorded in Other (income)/deductions––net.

•	In the third quarter and first nine months of 2014, we recorded income of approximately $90 million resulting from a decline in the estimated loss from the aforementioned option, which was recorded in Other (income)/deductions––net.

•	The January 21, 2014 European Commission approval of Tivicay (dolutegravir), a product for the treatment of HIV-1 infection, developed by ViiV. This approval triggered a reduction in our equity interest in ViiV from 12.6% to 11.7%, effective April 1, 2014. As a result, in the first nine months of 2014, we recognized a loss of approximately $30 million in Other (income)/deductions––net; and

•	The August 12, 2013 FDA approval of Tivicay (dolutegravir). This approval triggered a reduction in our interest in ViiV from 13.5% to 12.6%, effective October 1, 2013. As a result, in the third quarter and first nine months of 2013, we recognized a loss of approximately $31 million in Other (income)/deductions––net.

•

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 and optimization 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 eight sites over the next several years (down from 10 sites, previously, as two sites have been sold). In connection with these activities, during 2014-2016, we expect to incur costs of approximately $400 million associated with prior acquisition activity and costs of approximately $1.4 billion associated with new non-acquisition-related cost-reduction initiatives.

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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 $350 million.

•	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 $850 million.

(a)	In the nine months ended September 28, 2014, Employee terminations represent the expected reduction of the workforce by approximately 100 employees, mainly in manufacturing and sales.

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For the third quarter of 2014, the Global Innovative Pharmaceutical segment (GIP) ($4 million); the Global Vaccines, Oncology and Consumer Healthcare segment (VOC) ($10 million); the Global Established Pharmaceutical segment (GEP) ($4 million); Worldwide Research and Development and Medical ($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, the Global Innovative Pharmaceutical segment (GIP) ($14 million); the Global Vaccines, Oncology and Consumer Healthcare segment (VOC) ($16 million); the Global Established Pharmaceutical segment (GEP) ($34 million); Worldwide Research and Development and Medical ($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.

•	For the third quarter of 2013, total operating segments ($39 million); manufacturing operations ($112 million); and Corporate ($44 million).

•	For the first nine months of 2013, total operating segments ($106 million); Worldwide Research and Development and Medical ($15 million); manufacturing operations ($194 million); and Corporate ($125 million).

(b)	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.

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

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

(a)	Included in Other current liabilities ($1.0 billion) and Other noncurrent liabilities ($767 million).

(b)	Includes adjustments for foreign currency translation.

(c)	Included in Other current liabilities ($851 million) and Other noncurrent liabilities ($520 million).

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(a)

Interest income increased in the third quarter and first nine months of 2014 due to higher cash equivalents and investment balances. Interest expense increased in the third quarter of 2014 due to the addition of new fixed rate debt in the second quarter of 2014 and interest expense decreased in the first nine months of 2014, primarily due to the benefit of the effective conversion of some fixed-rate liabilities to floating-rate liabilities.

(b)	Royalty-related income increased in the third quarter and first nine months of 2014 primarily due to royalties earned on sales of Enbrel in the U.S. and Canada after October 31, 2013. On that date, the co-promotion term of the collaboration agreement for Enbrel in the U.S. and Canada expired, and Pfizer became entitled to royalties for a 36-month period thereafter.

(c)	In the first nine months of 2013, reflects income from a litigation settlement with Teva Pharmaceuticals Industries Ltd. (Teva) and Sun Pharmaceutical Industries Ltd. (Sun) for patent-infringement damages resulting from their “at-risk” launches of generic Protonix in the U.S. As of September 28, 2014, approximately $128 million is not yet due and is included in Other current assets.

(d)

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. In the first nine months of 2013, primarily includes an $80 million insurance recovery related to a certain litigation matter. For additional information, see Note 12A. Commitments and Contingencies: Legal Proceedings.

(e)	In the first nine months of 2013, represents the gain associated with the transfer of certain product rights to Hisun Pfizer. For additional information, see Note 2D. Acquisition, Divestiture, Licensing Arrangements and Equity-Method Investments: Equity-Method Investments.

(f)	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).

(g)

In the third quarter of 2014, includes intangible asset impairment charges of $242 million, reflecting (i) $144 million related to developed technology rights; (ii) $79 million related to an in-process research and development (IPR&D) compound for the treatment of skin fibrosis; and (iii) $18 million related to an indefinite-lived brand. The intangible asset impairment charges for the third quarter of 2014 are associated with the following: the Global Established Pharmaceutical segment (GEP) ($163 million) and Worldwide Research and Development ($79 million).

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(h)	Represents costs incurred in connection with the IPO of an approximate 19.8% ownership interest in Zoetis. Includes expenditures for banking, legal, accounting and similar services. For additional information, see Note 2B. Acquisition, Divestiture, Licensing Arrangements and Equity-Method Investments: Divestiture.

(i)

Includes the following: (i) in the third quarter and first nine months of 2014, the gain of approximately $46 million reflecting the change in the fair value of the contingent consideration associated with our acquisition of NextWave Pharmaceuticals, Inc. (NextWave) and the gain of approximately $56 million reflecting the change in the fair value of the contingent consideration associated with our acquisition of Excaliard Pharmaceuticals, Inc.; (ii) in the third quarter and first nine months of 2013, the gain of approximately $128 million and $109 million, respectively, reflecting the change in the fair value of the contingent consideration associated with our acquisition of NextWave; (iii) in the third quarter and first nine months of 2013, an estimated loss of $223 million related to an option to acquire the remaining interest in Teuto, and in the third quarter and first nine months of 2014, income of $90 million resulting from a decline in the estimated loss from the aforementioned option; and (iv) in the first nine months of 2014, a loss of $30 million due to a change in our ownership interest in ViiV and in the third quarter and first nine months of 2013, a loss of $31 million due to a change in our ownership interest in ViiV. For additional information concerning Teuto and ViiV, see Note 2D. Acquisition, Divestiture, Licensing Arrangements and Equity-Method Investments: Equity-Method Investments.

(a)	The fair value amount is presented as of the date of impairment, as this asset is not measured at fair value on a recurring basis. See also Note 1C. Basis of Presentation and Significant Accounting Policies: Fair Value.

(b)

Reflects intangible assets written down to fair value in the first nine months of 2014. 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.

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

•	a decline in the non-tax deductible estimated loss recorded in the third quarter of 2013 related to an option to acquire the remaining interest in Teuto, since we expect to retain the investment indefinitely,

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•	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 favorable impact of the resolution in the first nine months of 2014 of certain tax positions, pertaining to prior years primarily with various foreign tax authorities, and from the expiration of certain statutes of limitations;

•	the non-recurrence of the unfavorable tax impact associated with the non-deductibility of the goodwill derecognized and the jurisdictional mix of the other intangible assets divested as part of the transfer of certain product rights to Hisun Pfizer in the first nine months of 2013;

•	the non-recurrence of the unfavorable impact of the tax rate associated with the patent litigation settlement income in the first nine months of 2013;

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

•	a decline in the non-tax deductible estimated loss recorded in the third quarter of 2013 related to an option to acquire the remaining interest in Teuto, since we expect to retain the investment indefinitely,

•	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; and

•	the expiration of the U.S. R&D tax credit on December 31, 2013.

•	With respect to Pfizer Inc., tax years 2009 and 2010 are currently under audit. Tax years 2011-2014 are open, but not yet under audit. All other tax years are closed.

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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 income of $8 million attributable to noncontrolling interests for the first nine months of 2014.

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(a)	We use a market approach in valuing financial instruments on a recurring basis. For additional information, see Note 1C. Basis of Presentation and Significant Accounting Policies: Fair Value. 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)	Trading securities 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 $69 million as of September 28, 2014; and interest rate swaps with fair values of $38 million, foreign currency swaps with fair values of $30 million and foreign currency forward-exchange contracts with fair values of $66 million as of December 31, 2013.

(e)

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 28, 2014 or December 31, 2013. 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 $239 million and foreign currency forward-exchange contracts with fair values of $29 million as of September 28, 2014; and foreign currency swaps with fair values of $76 million and foreign currency forward-exchange contracts with fair values of $77 million as of December 31, 2013.

(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 values of $614 million as of September 28, 2014 and $651 million as of December 31, 2013, which are used as hedging instruments.

(j)

The fair value of our long-term debt (not including the current portion of long-term debt) is $36.4 billion as of September 28, 2014 and $35.1 billion as of December 31, 2013. 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 28, 2014, derivative instruments at fair value include interest rate swaps ($27 million), foreign currency swaps ($21 million) and foreign currency forward-exchange contracts ($226 million) and, as of December 31, 2013, include interest rate swaps ($90 million), foreign currency swaps ($24 million) and foreign currency forward-exchange contracts ($172 million).

(b)	As of September 28, 2014, derivative instruments at fair value include interest rate swaps ($441 million) and foreign currency swaps ($490 million) and foreign currency forward-exchange contracts ($1 million) and, as of December 31, 2013, include interest rate swaps ($378 million) and foreign currency swaps ($847 million).

(c)	As of September 28, 2014, derivative instruments at fair value include interest rate swaps ($2 million), foreign currency swaps ($180 million) and foreign currency forward-exchange contracts ($34 million) and, as of December 31, 2013, include foreign currency swaps ($84 million) and foreign currency forward-exchange contracts ($219 million).

(d)	As of September 28, 2014, derivative instruments at fair value include interest rate swaps ($63 million) and foreign currency swaps ($298 million) and, as of December 31, 2013, include interest rate swaps ($301 million) and foreign currency swaps ($26 million).

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(a)	Issued by governments, government agencies or supranational entities, as applicable, all of which are investment-grade.

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

(c)	Involving U.S. securities.

(d)

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. These securities are valued by third party models that use significant inputs derived from observable market data like prepayment rates, default rates, and recovery rates.

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(a)	Interest is payable semi-annually beginning November 15, 2014.

(b)

The notes are redeemable, in whole or in part, at any time at Pfizer's option, at a redemption price equal to the greater of 100% of the principal amount of the notes being redeemed on the redemption date, or the sum of the present values of the remaining scheduled payments of principal and interest discounted at the U.S. Treasury rate plus an incremental percentage, depending on the issuance; plus, in each case, accrued and unpaid interest.

(c)	Interest is payable quarterly beginning August 15, 2014.

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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 income/(loss)––Unrealized holding gains/(losses) on derivative financial instruments. 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 income/(loss)––Foreign currency translation adjustments.

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

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(a)	The amount to be allocated includes the goodwill associated with our former biopharmaceutical operating segments (see above), for which the allocation to our new reporting units, and, as a result, to the new operating segments, is pending.

(b)	Reflects the acquisition of InnoPharma. For additional information, see Note 2A. Acquisition, Divestiture, Licensing Arrangements and Equity-Method Investments: Acquisition.

(c)	Primarily reflects the impact of foreign exchange.

(a)

The decrease in identifiable intangible assets, less accumulated amortization, is primarily related to amortization and, to a much lesser extent, asset impairment charges, partially offset by assets acquired from InnoPharma and the Nexium over-the-counter milestones. For information about impairments of intangible assets, see Note 4. Other (Income)/Deductions—Net. For information about the assets acquired from InnoPharma and the Nexium over-the-counter milestones, see Note 2A. Acquisition, Divestiture, Licensing Arrangements and Equity-Method Investments: Acquisition and Note 2C. Acquisition, Divestiture, Licensing Arrangements and Equity-Method Investments: Licensing Arrangements, respectively.

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(a)

The decrease in net periodic benefit costs for the three and nine months ended September 28, 2014, compared to the three and nine months ended September 29, 2013, for our U.S. qualified pension plans was primarily driven by the decrease in the amounts amortized for actuarial losses resulting from the increase, in 2013, in the discount rate used to determine the benefit obligation (which reduced the amount of deferred actuarial losses), lower service cost resulting from cost-reduction initiatives, lower settlement activity and greater expected return on plan assets resulting from an increased plan asset base, partially offset by higher interest costs resulting from the increase, in 2013, in the discount rate used to determine the benefit obligation.

(b)

The decrease in net periodic benefit costs for the three and nine months ended September 28, 2014, compared to the three and nine months ended September 29, 2013, for our U.S. supplemental (non-qualified) pension plans was primarily driven by lower settlement activity, lower interest costs and the decrease in the amounts amortized for actuarial losses resulting from the increase, in 2013, in the discount rate used to determine the benefit obligation.

(c)

The decrease in net periodic benefit costs for the nine months ended September 28, 2014, compared to the nine months ended September 29, 2013, for our international pension plans was primarily driven by the decrease in the amounts amortized for actuarial losses resulting from increases, in 2013, in the discount rates used to determine the benefit obligations, greater expected return on plan assets resulting from an increased plan asset base, partially offset by increased curtailment losses in 2014 primarily due to a loss relating to a U.K. pension plan freeze in the current year and changes in curtailments related to restructuring initiatives. The decrease in net periodic benefit costs for the three months ended September 28, 2014, compared to the three months ended September 29, 2013, for our international pension plans was primarily driven by the greater expected return on plan assets resulting from an increased plan asset base and the change in the impact of curtailments and settlements associated with restructuring initiatives.

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(d)

The decrease in net periodic benefit costs for the three and nine months ended September 28, 2014, compared to the three and nine months ended September 29, 2013, for our postretirement plans was primarily driven by the decrease in the amounts amortized for actuarial losses resulting from the increase, in 2013, in the discount rate used to determine the benefit obligation (which reduced the amount of deferred actuarial losses), as well as an amendment to the U.S. plans at the end of 2013 resulting in increased amortization of prior service credits in the current year.

(a)	Contributions expected to be made for 2014 are inclusive of amounts contributed during the nine months ended September 28, 2014. 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 28, 2014 and September 29, 2013, but were not included in the computation of diluted EPS for those periods because their inclusion would have had an anti-dilutive effect.

•

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.

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•	Product liability and other product-related litigation, which can include personal injury, consumer, off-label promotion, securities-law, 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

•	Off-Label Promotion Actions

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•	Personal Injury Actions

•	Whistleblower Action

•	Antitrust Actions

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•	Personal Injury Actions

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•	The SI&A expenses were allocated using proportional allocation methods based on associated selling costs, revenues or product-specific costs, as applicable.

•	The R&D expenses were allocated based on product-specific R&D costs or revenue metrics, as applicable.

•	Global Innovative Pharmaceutical segment––GIP comprises medicines within several therapeutic areas that are generally expected to have market exclusivity beyond 2015. These therapeutic areas include immunology and inflammation, cardiovascular/metabolic, neuroscience and pain, rare diseases and women's/men's health.

•	Global Vaccines, Oncology and Consumer Healthcare segment––VOC focuses on the development and commercialization of vaccines and products for oncology and consumer healthcare. Each of the three businesses that comprise this segment operates with distinct specialization in terms of the science, talent and market approach necessary to deliver value to consumers and patients.

•	Global Established Pharmaceutical segment––GEP includes the brands that have lost market exclusivity and, generally, the mature, patent-protected products that are expected to lose exclusivity through 2015 in most major markets and, to a much smaller extent, generic pharmaceuticals. Additionally, GEP includes our sterile injectable products and biosimilar development portfolio.

•

Worldwide Research and Development, 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. Worldwide Research and Development 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

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•	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 combined company; and (iii) certain significant items, which include non-acquisition-related restructuring costs, as well as costs incurred for legal settlements, asset impairments and disposals of assets or businesses, including, as applicable, any associated transition activities.

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

(b)	Other business activities includes the revenues and operating results of Pfizer CentreSource, our contract manufacturing and bulk pharmaceutical chemical sales operation, and the costs managed by our Worldwide Research and Development organization and our Pfizer Medical organization.

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

(d)	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)	Developed Europe region includes the following markets: Western Europe, Finland and the Scandinavian countries. Revenues denominated in euros were $2.2 billion and $2.1 billion in the third quarter of 2014 and 2013, respectively, and $6.6 billion and $6.4 billion in the first nine months of 2014 and 2013, respectively.

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

(c)	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)	Indicates the business to which the revenues relate. GIP = the Global Innovative Pharmaceutical segment; V= the Global Vaccines

(b)	Lyrica revenues from all of Europe are included in GEP. All other Lyrica revenues are included in GIP.

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

(d)	Includes Enbrel (GIP, in the U.S. and Canada through October 31, 2013), Spiriva (GEP), Rebif (GIP), Aricept (GEP) and Eliquis (GIP).

(e)	Other 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.

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•

Overview of Our Performance, Operating Environment, Strategy and Outlook. This section, beginning on page 46, provides information about the following: our business; our performance during the third quarter and first nine months of 2014 and 2013; our operating environment; our strategy; our business development initiatives, such as acquisitions, dispositions, licensing and collaborations; and our financial guidance for 2014.

•	Analysis of the Condensed Consolidated Statements of Income. This section begins on page 57, and consists of the following sub-sections:

◦	Revenues and Product Developments. This sub-section, beginning on page 57, provides an analysis of our revenues and products for the third quarter and first nine months of 2014 and 2013, including an overview of important biopharmaceutical product developments.

◦	Costs and Expenses. This sub-section, beginning on page 69, provides a discussion about our costs and expenses.

◦	Provision for Taxes on Income. This sub-section, on page 72, provides a discussion of items impacting our tax provisions.

◦	Discontinued Operations. This sub-section, on page 72, provides an analysis of the financial statement impact of our discontinued operations.

◦	Adjusted Income. This sub-section, beginning on page 72, provides a discussion of an alternative view of performance used by management.

◦	Analysis of Operating Segment Information. This sub-section, beginning on page 79, provides a discussion of the performance of each of our operating segments.

•	Analysis of the Condensed Consolidated Statements of Comprehensive Income. This section, beginning on page 85, provides a discussion of changes in certain components of other comprehensive income.

•	Analysis of the Condensed Consolidated Balance Sheets. This section, on page 85, provides a discussion of changes in certain balance sheet accounts.

•	Analysis of the Condensed Consolidated Statements of Cash Flows. This section, beginning on page 86, provides an analysis of our cash flows for the first nine months of 2014 and 2013.

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Analysis of Financial Condition, Liquidity and Capital Resources. This section, beginning on page 88, provides an analysis of selected measures of our liquidity and of our capital resources as of September 28, 2014 and December 31, 2013, as well as a discussion of our outstanding debt and other commitments that existed as of September 28, 2014 and December 31, 2013. Included in the discussion of outstanding debt is a discussion of the amount of financial capacity available to help fund Pfizer's future activities.

•	New Accounting Standards. This section, on page 91, discusses accounting standards that we have recently adopted, as well as those that recently have been issued, but not yet adopted.

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Forward-Looking Information and Factors That May Affect Future Results. This section, beginning on page 92, provides a description of the risks and uncertainties that could cause actual results to differ materially from those discussed in forward-looking statements presented in this MD&A relating to, among other things, our anticipated operating and financial performance, business plans and prospects, in-line products and product candidates, strategic reviews, capital allocation, plans relating to share repurchases and dividends and business-development plans. Such forward-looking statements are based on management’s current expectations about future events, which are inherently susceptible to uncertainty and changes in circumstances.

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•	losses of exclusivity and declining alliance revenues which had a negative impact of approximately $750 million and which primarily consisted of:

◦	the expiration of the co-promotion term of the collaboration agreement for Enbrel in the U.S. and Canada (approximately $425 million);

◦	the loss of exclusivity and subsequent multi-source generic competition for Detrol LA in the U.S., Aricept in Canada and Viagra in most major European markets (aggregate decline of approximately $139 million);

◦	the ongoing termination of the Spiriva collaboration in certain countries (approximately $93 million); and

◦	the loss of exclusivity for certain other products (approximately $61 million),

•	the continued erosion of branded Lipitor in the U.S. and most other developed markets due to generic competition and the operational decline of certain products, including atorvastatin, Norvasc, Effexor, Metaxalone,Vfend, Genotropin and Premarin (collectively, approximately $250 million),

•	the operational growth of certain products in certain developed markets, including Lyrica, Nexium 24HR in the U.S. as a result of its May 2014 launch, Prevnar in the U.S. and developed rest of world, Eliquis, Xeljanz, Xalkori and Inlyta, among others (collectively, approximately $486 million); and

•	a 9% operational increase in revenues in emerging markets, including strong operational growth from Lipitor, primarily in China, and Prevenar 13 (collectively, approximately $266 million).

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•	the expiration of the co-promotion term of the collaboration agreement for Enbrel in the U.S. and Canada (approximately $1.2 billion);

•	the loss of exclusivity and subsequent multi-source generic competition for Detrol LA in the U.S., Viagra in most major European markets, and Lyrica and Aricept in Canada (aggregate decline of approximately $558 million);

•	the continued erosion of branded Lipitor in the U.S. and most other developed markets due to generic competition and the operational decline of certain products, including Norvasc, Metaxalone, atorvastatin, Effexor, Genotropin, Caduet, Aromasin, Dilantin, Cardura and Zoloft (approximately $713 million);

•	the ongoing termination of the Spiriva collaboration in certain countries (approximately $396 million); and

•	the loss of exclusivity for certain other products (approximately $200 million),

•	the operational growth of certain products in certain developed markets, including Lyrica, Nexium 24HR in the U.S. as a result of its May 2014 launch, Prevnar in the U.S. and developed rest of world, Eliquis, Xeljanz, Celebrex, Xalkori and Inlyta, among others, as well as the contribution from the collaboration with Mylan Inc. to market generic drugs in Japan (approximately $1.4 billion); and

•	an 8% operational increase in revenues in emerging markets (approximately $603 million).

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higher royalty-related income (up $129 million) primarily due to royalties earned on sales of Enbrel in the U.S. and Canada after October 31, 2013. On that date, the co-promotion term of the collaboration agreement for Enbrel in the U.S. and Canada expired, and Pfizer became entitled to royalties for a 36-month period thereafter (see also the “Costs and Expenses––Other (Income)/Deductions––Net” section of this MD&A and Notes to Condensed Consolidated Financial Statements––Note 4. Other (Income)/Deductions––Net);

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lower restructuring charges and certain acquisition-related costs (down $252 million) (see also the “Costs and Expenses––Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives” section of this MD&A and 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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an estimated loss recorded in the third quarter of 2013 associated with an option to acquire the remaining interest in Laboratório Teuto Brasileiro (Teuto) of approximately $223 million and income recorded in the third quarter of 2014 of approximately $90 million, reflecting a decline in the estimated loss from the aforementioned option (see also the “Costs and Expenses––Other (Income)/Deductions––Net” section of this MD&A and Notes to Condensed Consolidated Financial Statements––Note 4. Other (Income)/Deductions––Net);

•	lower purchase accounting adjustments (down $94 million); and

•	a lower effective tax rate (down 2.2 percentage points to 25.4%) (see also the “Provision for Taxes on Income” section of this MD&A and Notes to Condensed Consolidated Financial Statements––Note 5. Tax Matters),

•	higher cost of sales (up $81 million) (see also the “Costs and Expenses––Cost of Sales” section of this MD&A);

•	higher selling, informational and administrative expenses (up $161 million) (see also the “Costs and Expenses––Selling, Information and Administrative Expenses (SI&A) Expenses” section of this MD&A); and

•	higher research and development expenses (up $175 million) (see also the “Costs and Expenses––Research and Development (R&D) Expenses” section of this MD&A).

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•	the non-recurrence in the first nine months of 2014 of the patent litigation settlement income of $1.3 billion in the first nine months of 2013 (see also the “Costs and Expenses––Other (Income)/Deductions–Net” section of this MD&A and Notes to Condensed Consolidated Financial Statements––Note 4. Other (Income)/Deductions––Net);

•	higher legal charges (up $814 million), primarily due to Neurontin- and Effexor-related matters (see also the “Costs and Expenses––Other (Income)/Deductions––Net” section of this MD&A and Notes to Condensed Consolidated Financial Statements––Note 4. Other (Income)/Deductions––Net);

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the non-recurrence in the first nine months of 2014 of the gain associated with the transfer of certain product rights to our joint venture with Zhejiang Hisun Pharmaceuticals Co., Ltd. (Hisun) in China in the first nine months of 2013 ($459 million) (see also the “Our Business Development Initiatives” and “Costs and Expenses––Other (Income)/Deductions––Net” sections of this MD&A and Notes to Condensed Consolidated Financial Statements––Note 2D. Acquisition, Divestiture, Licensing Arrangements and Equity-Method Investments: Equity-Method Investments, and Note 4. Other (Income)/Deductions––Net); and

•	higher research and development expenses (up $317 million) (see also the “Costs and Expenses––Research and Development (R&D) Expenses” section of this MD&A),

•	a lower effective tax rate (down 6.0 percentage points to 24.7%) (see also the “Provision for Taxes on Income” section of this MD&A and Notes to Condensed Consolidated Financial Statements––Note 5. Tax Matters);

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lower restructuring charges and certain acquisition-related costs (down $427 million) (see also the “Costs and Expenses––Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives” section of this MD&A and Notes to Condensed Consolidated Financial Statements––Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives);

•	lower asset impairments (down $387 million) (see also the “Costs and Expenses––Other (Income)/Deductions––Net” section of this MD&A and Notes to Condensed Consolidated Financial Statements––Note 4. Other (Income)/Deductions––Net);

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higher royalty-related income (up $432 million) primarily due to royalties earned on sales of Enbrel in the U.S. and Canada after October 31, 2013. On that date, the co-promotion term of the collaboration agreement for Enbrel in the U.S. and Canada expired, and Pfizer became entitled to royalties for a 36-month period thereafter (see also the “Costs and Expenses––Other (Income)/Deductions––Net” section of this MD&A and Notes to Condensed Consolidated Financial Statements––Note 4. Other (Income)/Deductions––Net);

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an estimated loss recorded in the first nine months of 2013 associated with an option to acquire the remaining interest in Teuto of approximately $223 million and income recorded in the first nine months of 2014 of approximately $90 million, reflecting a decline in the estimated loss from the aforementioned option (see also the “Costs and Expenses––Other (Income)/Deductions––Net” section of this MD&A and Notes to Condensed Consolidated Financial Statements––Note 4. Other (Income)/Deductions––Net); and

•	higher net gains on asset disposals (up $167 million), primarily due to gains on sales/out-licensing of product and compound rights and gains on sales of investments in equity securities (see also the “Costs and Expenses––Other (Income)/Deductions––Net” section of this MD&A and Notes to Condensed Consolidated Financial Statements––Note 4. Other (Income)/Deductions––Net).

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•	$215 million in the third quarter of 2014 and $133 million in the third quarter of 2013, and $420 million in the first nine months of 2014 and $364 million in the first nine months of 2013, 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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$268 million in the third quarter of 2014 and $78 million in the third quarter of 2013, and $292 million in the first nine months of 2014 and $209 million in the first nine months of 2013, 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 third quarter and first nine months of 2014 includes 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 Internal Revenue Service (IRS). The charge in the first nine months of 2014 also reflected a favorable true-up associated with the final 2013 invoice received from the federal government, which reflected a lower share than that of the initial 2013 invoice.

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Sustainable Growth Rate Replacement—The Medicare physician payment formula known as the Sustainable Growth Rate (SGR) is routinely overridden by Congressional action because it would lead to dramatic decreases in physician payment. On April 1, 2014, the President of the U.S. signed into law another extension that will maintain physician payment through March 2015. Prior to expiration of the extension, it is likely that Congress will consider legislation to permanently repeal the SGR and replace it with a new payment model. The Congressional Budget Office has estimated that the cost to the federal government of repealing and replacing the SGR would be approximately $130 billion over 10 years. The source of those funds could include additional taxes on and/or rebate requirements applicable to the pharmaceutical industry, including Pfizer.

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Federal Debt Ceiling—After the U.S. federal debt ceiling was reached on May 19, 2013 and measures taken by the U.S. Treasury Department to enable the U.S. federal government to continue meeting its financial obligations were nearly exhausted, Congress enacted legislation on October 16, 2013 that suspended the debt ceiling through February 7, 2014 and preserved the ability of the U.S. Treasury Department to use “extraordinary measures” to avoid a default on U.S. federal government debt for a short period of time thereafter. In February 2014, Congress enacted legislation that further suspends the debt ceiling until March 15, 2015, effectively ensuring the U.S. federal government’s ability to satisfy its financial obligations until that date, including under Medicare, Medicaid and other publicly funded or subsidized health programs that have a direct impact on our results of operations. We believe it is unlikely that the debt ceiling will not be further suspended, given historical recent precedent. It is unclear how the government would prioritize its financial obligations in the case of a funding shortfall, and we cannot dismiss the potential for delayed or reduced payments to providers, including Medicare Part D plans, that could impact their ability to pay for prescription medicines.

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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 continue to experience pricing pressure in various markets around the world, including in the U.S. with highly competitive insurance markets, in developed European markets, Japan and in a number of emerging markets, with government-mandated reductions in prices for certain biopharmaceutical products and government-imposed access restrictions in certain countries. 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.

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•	We continue to monitor developments regarding government and government agency receivables in several European markets 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, Australian dollar, 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.

•	Global Innovative Pharmaceutical segment––GIP comprises medicines within several therapeutic areas that are generally expected to have market exclusivity beyond 2015. These therapeutic areas include immunology and inflammation, cardiovascular/metabolic, neuroscience and pain, rare diseases and women's/men's health.

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•	Global Vaccines, Oncology and Consumer Healthcare segment––VOC focuses on the development and commercialization of vaccines and products for oncology and consumer healthcare. Each of the three businesses that comprise this segment operates with distinct specialization in terms of the science, talent and market approach necessary to deliver value to consumers and patients.

•	Global Established Pharmaceutical segment––GEP includes the brands that have lost market exclusivity and, generally, the mature, patent-protected products that are expected to lose exclusivity through 2015 in most major markets and, to a much smaller extent, generic pharmaceuticals. Additionally, GEP includes our sterile injectable products and biosimilar development portfolio.

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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. For additional information, see Notes to Condensed Consolidated Financial Statements––Note 2A. Acquisition, Divestiture, Licensing Arrangements and Equity-Method Investments: Acquisition.

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Marketed Vaccines Business of Baxter International Inc. (Baxter)––On July 30, 2014, we entered into a definitive agreement to acquire Baxter’s portfolio of marketed vaccines for $635 million. As part of the transaction, we will also acquire a portion of Baxter’s facility in Orth, Austria, where these vaccines are manufactured. Baxter’s portfolio of marketed vaccines 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. The transaction is subject to customary closing conditions as well as regulatory approvals in several markets, including some countries in the European Union (EU), and is expected to be completed by the end of 2014. We do not expect this transaction to have an impact on our 2014 financial guidance.

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Cellectis SA (Cellectis)––On June 18, 2014, we entered into a global strategic arrangement with Cellectis to develop Chimeric Antigen Receptor T-cell (CAR-T) immunotherapies in the field of oncology directed at select cellular surface antigen targets. In August 2014, we made an upfront payment of $80 million to Cellectis, and we will also fund research and development costs associated with the 15 Pfizer-selected targets and the 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 resulted from Pfizer-selected targets. Cellectis is also eligible to receive tiered royalties on net sales of any products that are commercialized by Pfizer. For additional information, see Notes to Condensed Consolidated Financial Statements––Note 2C. Acquisition, Divestiture, Licensing Arrangements and Equity-Method Investments: Licensing Arrangements.

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ViiV Healthcare Limited (ViiV)––On January 21, 2014, the European Commission approved Tivicay (dolutegravir), a product for the treatment of HIV-1 infection, developed by ViiV, an equity method investee. This approval, in accordance with the agreement between GlaxoSmithKline plc and Pfizer, triggered a reduction in our equity interest in ViiV from 12.6% to 11.7% and an increase in GlaxoSmithKline plc’s equity interest in ViiV from 77.4% to 78.3%, effective April 1, 2014. As a result, in the first nine months of 2014, we recognized a loss of approximately $30 million in Other (income)/deductions––net. We continue to account for our investment in ViiV under the equity method due to the significant influence that we

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Zoetis––On June 24, 2013, we completed the full disposition of Zoetis. The full disposition was completed through a series of steps, including, in the first quarter of 2013, the formation of Zoetis and an initial public offering (IPO) of an approximate 19.8% interest in Zoetis and, in the second quarter of 2013, an exchange offer for the remaining 80.2% interest. For additional information, see Notes to Condensed Consolidated Financial Statements––Note 2B. Acquisition, Divestiture, Licensing Arrangements and Equity-Method Investments: Divestiture.

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Hisun Pfizer Pharmaceuticals Company Limited (Hisun Pfizer)––In connection with the September 6, 2012 formation of Hisun Pfizer in conjunction with Zhejiang Hisun Pharmaceuticals Co., Ltd. (Hisun), a leading pharmaceutical company in China, in the first quarter of 2013, we and Hisun contributed certain assets to Hisun Pfizer. Hisun Pfizer is 49% owned by Pfizer and 51% owned by Hisun. Our contributions constituted a business, as defined by U.S. GAAP, and in the first nine months of 2013, we recognized a pre-tax gain of approximately $459 million in Other (income)/deductions––net. For additional information, see Notes to Condensed Consolidated Financial Statements––Note 2D. Acquisition, Divestiture, Licensing Arrangements and Equity-Method Investments: Equity-Method Investments.

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Nexium Over-the-Counter Rights––In connection with our August 2012 agreement with AstraZeneca PLC (AstraZeneca) for the exclusive, global, over-the-counter rights for Nexium, a leading prescription drug currently approved to treat the symptoms of gastroesophageal reflux disease, (i) 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 and (ii) 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. The milestone payments for this Consumer Healthcare asset acquisition have been recorded in Identifiable intangible assets, less accumulated amortization in the condensed consolidated balance sheet and will be amortized over their estimated useful lives. AstraZeneca is eligible to receive future milestone payments of up to $300 million, based on product launches outside the U.S. and level of worldwide sales and is eligible to receive royalty payments, based on worldwide sales. For additional information, see Notes to Condensed Consolidated Financial Statements––Note 2C. Acquisition, Divestiture, Licensing Arrangements and Equity-Method Investments: Licensing Arrangements.

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(a)	The 2014 financial guidance reflects the following:

•	Does not assume the completion of any business-development transactions not completed as of September 28, 2014, 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 28, 2014.

•	Exchange rates assumed are a blend of the actual exchange rates in effect through September 28, 2014 and the mid-October 2014 exchange rates for the remainder of the year. Does not include the impact of a potential devaluation of the Venezuelan bolivar or any other currency.

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

•	Adjusted and reported diluted EPS guidance assumes diluted weighted-average shares outstanding of approximately 6.4 billion shares.

•	Revenues and cost of sales from the transitional manufacturing and supply agreements with Zoetis have been excluded from the applicable Adjusted components of the financial guidance.

(b)	As reported on October 28, 2014, certain financial guidance components have been updated to reflect our performance through September 28, 2014, recent changes in foreign exchange rates and our outlook for the remainder of the year, which continues to include the expected negative impact from anticipated multi-source generic competition for Celebrex in the U.S beginning in December 2014.

(c)	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.

(a)

Does not assume the completion of any business-development transactions not completed as of September 28, 2014, including any one-time upfront payments associated with such transactions. Also excludes the potential effects of the resolution of litigation-related matters not substantially resolved as of September 28, 2014. Exchange rates assumed are a blend of the actual exchange rates in effect through September 28, 2014 and the mid-October 2014 exchange rates for the remainder of the year. Does not include the impact of a potential devaluation of the Venezuelan bolivar or any other currency. Guidance for the effective tax rate on adjusted income does not assume renewal of the U.S. research and development (R&D) tax credit. The renewal of the R&D tax credit is not anticipated to have a material impact on the effective tax rate on adjusted income. Adjusted and reported diluted EPS guidance assumes diluted weighted-average shares outstanding of approximately 6.4 billion shares. Revenues and cost of sales from the transitional manufacturing and supply agreements with Zoetis have been excluded from the applicable Adjusted components of the financial guidance.

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

(c)	Primarily reflects the resolution of certain legal matters, primarily Neurontin-related matters, and certain asset impairments.

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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.

(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.

•	in the U.S., biopharmaceutical revenues decreased $364 million, or 8%, in the third quarter of 2014 and decreased $1.3 billion, or 9%, in the first nine months of 2014, compared to the same periods in 2013, reflecting, among other things:

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lower Alliance revenues, primarily due to Enbrel, reflecting the expiration of the co-promotion term of the collaboration agreement in October 2013 (approximately $400 million in the third quarter of 2014 and $1.2 billion in the first nine months of 2014), and Spiriva, reflecting the final-year terms, and termination on April 29, 2014, of the co-promotion collaboration, which, per the terms of the collaboration agreement, resulted in a decline of our share of Spiriva revenue (approximately $72 million in the third quarter of 2014 and $322 million in the first nine months of 2014); and

◦	lower revenues from Detrol LA due to loss of exclusivity (approximately $68 million in the third quarter of 2014 and $259 million in the first nine months of 2014), and lower revenues from Lipitor (approximately $40 million in the third quarter of 2014 and $152 million in the first nine months of 2014),

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◦	the strong performance of Lyrica (approximately $77 million in the third quarter of 2014 and $263 million in the first nine months of 2014) as well as the growth of Prevnar, Xeljanz, Eliquis, Xalkori, Celebrex and Inlyta (collectively, approximately $230 million in the third quarter of 2014 and $505 million in the first nine months of 2014).

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in our international markets, biopharmaceutical revenues increased $41 million, or 1%, in the third quarter of 2014 and decreased $447 million, or 2%, in the first nine months of 2014, compared to the same periods in 2013. Operationally, revenues increased $49 million, or 1%, in the third quarter of 2014 compared to the same period in 2013 and decreased $20 million, or relatively flat, in the first nine months of 2014 compared to the same period in 2013 reflecting, among other things:

◦	lower revenues as a result of the loss of exclusivity and subsequent multi-source generic competition for Viagra in most major European markets and Lyrica in Canada (collectively, approximately $35 million in the third quarter of 2014 and $232 million in the first nine months of 2014);

◦	the operational decline of certain products, including Norvasc, Xalabrands, Zithromax, Effexor and Chantix/Champix, in developed international markets, and for the first nine months of 2014, Sutent in China (collectively, approximately $62 million in the third quarter of 2014 and $219 million for the first nine months of 2014);

◦	the continued erosion of branded Lipitor in most international developed markets (approximately $51 million for the third quarter of 2014 and $126 million for the first nine months of 2014); and

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lower Alliance revenues (approximately $47 million in the third quarter of 2014 and $187 million in the first nine months of 2014, excluding Eliquis), primarily due to the expiration of the co-promotion term of the collaboration agreement for Enbrel in Canada, the ongoing termination of the Spiriva collaboration agreement in certain countries, the loss of exclusivity for Aricept in Canada and the termination of the co-promotion agreement for Aricept in Japan in December 2012 (primarily impacting the first nine months of 2014),

◦	the operational growth of Xeljanz, Prevnar and Celebrex as well as the contribution from the collaboration with Mylan Inc. to market generic drugs in Japan (approximately $65 million for the third quarter of 2014 and $210 million in the first nine months of 2014); and

◦	higher revenues for Enbrel outside Canada, Lyrica in developed markets, and the performance of recently launched products Xalkori, Eliquis and Inlyta (collectively, up approximately $181 million in the third quarter of 2014 and $563 million in the first nine months of 2014).

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(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 these contracts. Outside the U.S., performance-based contract rebates include rebates to wholesalers/distributors based on achievement of contracted performance for specific products or sales milestones.

(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 28, 2014, associated with the following segments: GIP ($0.9 billion); VOC ($0.3 billion); and GEP ($2.3 billion). For the three months ended September 29, 2013, associated with the following segments: GIP ($0.7 billion); VOC ($0.2 billion); and GEP ($2.2 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). For the nine months ended September 29, 2013, associated with the following segments: GIP ($2.0 billion); VOC ($0.7 billion); and GEP ($6.4 billion).

•	an increase in sales allowances primarily as a result of an increase in the distribution fees in the U.S. as the third quarter of 2013 included a contractual credit. In 2014, a similar contractual credit was recorded in the second quarter of 2014. The increase in sales allowances was also due to increases in sales allowances in certain Europe and Asia markets;

•	an increase in Medicaid and related state program rebates, primarily as a result of updated channel sales estimates; and

•	an increase in Medicare rebates due to a higher volume of sales in the Medicare patient population.

•	an increase in Medicare rebates due to a higher volume of sales in the Medicare patient population; and

•	an increase in performance-based contract rebates as a result of contract arrangements and incentives, primarily in Europe and China.

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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 29, 2013, as applicable.

(c)	Lyrica revenues from all of Europe are included in GEP. All other Lyrica revenues are included in GIP.

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

(e)	Includes Enbrel (GIP, in the U.S. and Canada through October 31, 2013), Spiriva (GEP), Rebif (GIP), Aricept (GEP) and Eliquis (GIP).

(f)	All other GIP, All other GEP and All other V/O are subsets of All other biopharmaceutical revenues.

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Lyrica (GIP/GEP) is indicated in the U.S. for three neuropathic pain conditions, fibromyalgia and adjunctive therapy for adult patients with partial onset seizures. In certain countries outside the U.S., indications include neuropathic pain (peripheral and central), fibromyalgia, adjunctive treatment of epilepsy and generalized anxiety disorder. Worldwide revenues for Lyrica increased 16% in the third quarter of 2014, and 13% in the first nine months of 2014, compared to the same periods in 2013.

•	Prevnar family of products (V) consists of Prevnar 13/Prevenar 13 and Prevnar/Prevenar (7-valent), our pneumococcal conjugate vaccines for the prevention of various syndromes of pneumococcal disease. Overall, worldwide revenues for the Prevnar family of products increased 19% in the third quarter of 2014, and 11% in the first nine months of 2014, compared to the same periods in 2013.

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Enbrel (GIP, outside of the U.S. and Canada), for the treatment of moderate-to-severe rheumatoid arthritis, polyarticular juvenile rheumatoid arthritis, psoriatic arthritis, plaque psoriasis and ankylosing spondylitis, a type of arthritis affecting the spine, recorded an increase in worldwide revenues, excluding the U.S. and Canada, of 3% in both the third quarter and first nine months of 2014, compared to the same periods in 2013. Results were favorably impacted by continued market leadership in rheumatoid arthritis. Foreign exchange had a favorable impact of 1% in the third quarter of 2014, compared to the same period in 2013 and had no impact for the first nine months of 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 an increase in worldwide revenues of 2% in the third quarter of 2014, and 1% in the first nine months of 2014, compared to the same periods in 2013, primarily due to favorable pricing in the U.S. and strong demand from the lower back pain indication in Japan, partially offset by share erosion in the U.S. and the developed markets in Europe.

•

Lipitor (GEP) is for the treatment of elevated LDL-cholesterol levels in the blood. Lipitor has lost exclusivity and faces generic competition in all major markets. Branded Lipitor recorded worldwide revenues of $490 million, or a decrease of 8% in the third quarter of 2014, compared to the same period in 2013, primarily due to continued brand erosion in the U.S. and developed markets due to generic competition, partially offset by operational increases in emerging markets, primarily in China. Revenues were $1.5 billion, or a decrease of 13%, in the first nine months of 2014, compared to the same period in 2013, due to:

◦	the impact of loss of exclusivity and brand erosion due to generic competition;

◦	the continuing impact of an intensely competitive lipid-lowering market with competition from generics and branded products worldwide; and

◦	the increased payer pressure worldwide, including the need for flexible rebate policies,

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◦	lower rebates in the U.S.

◦	in the U.S., revenues decreased 51% in the third quarter of 2014, and decreased 45% in the first nine months of 2014, compared to the same periods in 2013; and

◦	in our international markets, revenues decreased 1% in the third quarter of 2014, and 5% in the first nine months of 2014, compared to the same periods in 2013. Foreign exchange had an unfavorable impact on international revenues of 1% in the third quarter of 2014, and 2% in the first nine months of 2014, compared to the same periods in 2013.

•

Viagra (GEP/GIP) is indicated for the treatment for erectile dysfunction. Viagra worldwide revenues decreased 7% in the third quarter of 2014, and 13% in the first nine months, compared to the same periods in 2013, primarily due to a decrease in international revenues. International (GEP) revenues decreased 17% in the third quarter, and 30% in the first nine months, compared to the same periods in 2013, primarily due to the entry of generics in developed Europe. Loss of exclusivity for Viagra in major European markets occurred in late-June 2013. Foreign exchange had an unfavorable impact on international revenues of 1% in the third quarter of 2014, and 3% in the first nine months of 2014, compared to the same periods in 2013. Revenues in the U.S. (GIP) decreased 2% in the third quarter of 2014, and were relatively flat in the first nine months, compared to the same periods in 2013.

•

Zyvox (GEP) is the world’s best-selling branded agent among those used to treat serious Gram-positive pathogens, including methicillin-resistant staphylococcus-aureus. Zyvox worldwide revenues increased 6% in the third quarter of 2014, compared to the same period in 2013 due to solid growth in Latin America and Africa Middle East. Revenues in the first nine months of 2014 were essentially flat compared to the same period in 2013, primarily due to a prolonged supply interruption of Zyvox IV in China that is expected to continue through 2014. Foreign exchange had a 1% favorable impact on international revenues in the third quarter of 2014 and an unfavorable impact of 1% in the first nine months of 2014, compared to the same periods in 2013.

•

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 3% in the third quarter of 2014, primarily due to price increases in the U.S. and timing of shipments compared to the same period in 2013. Sutent revenues decreased 3% in the first nine months of 2014, compared to the same period in 2013, as a result of competitive pressure in developed markets, market challenges in China as well as timing of purchases in emerging markets and the unfavorable impact of foreign exchange of 1% in the first nine months of 2014, partially offset by price increases in the U.S. and increased market share in Japan and Latin America.

•

Norvasc (GEP) is indicated for the treatment of hypertension. Norvasc worldwide revenues decreased 11% in the third quarter of 2014, and 9% in the first nine months of 2014, compared to the same periods in 2013, and reflects, among other factors, generic erosion in Japan and the unfavorable impact of foreign exchange of 1% in the third quarter of 2014 and 2% in the first nine months of 2014, compared to the same periods in 2013.

•

Our Premarin family of products (GEP) helps women address moderate-to-severe menopausal symptoms. Premarin worldwide revenues decreased 4% in the third quarter of 2014, and 1% in the first nine months of 2014, compared to the same periods in 2013. Revenues in the U.S. were unfavorably impacted by prescription volume declines for Premarin Family Oral brands partially offset by increased marketing support, directing sales force efforts to select physicians and a cross-franchise price increase.

•

BeneFIX and ReFacto AF/Xyntha (GIP) are hemophilia products using state-of-the-art manufacturing that assist patients with their lifelong bleeding disorders. BeneFIX worldwide revenues were relatively flat in the third quarter of 2014 and increased 3% in the first nine months of 2014, compared to the same periods in 2013. The increase in the first nine months of 2014 was primarily due to increased consumption and patient demand in several EU countries. Foreign exchange had a 2% favorable impact in the third quarter of 2014 and had no impact in the first nine months of 2014, compared to the same periods in 2013.

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Pristiq (GEP) is approved for the treatment of major depressive disorder in the U.S. and in various other countries. Pristiq has also been approved 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 3% in the third quarter of 2014, and 6% in the first nine months, compared to the same periods in 2013, primarily due to prescription growth in the emerging markets, Canada and Australia, as well as a price increase and increased promotion in the U.S. Revenues in the U.S. decreased 3% in the third quarter of 2014 compared to the same periods in 2013, primarily driven by unfavorable changes in rebates. Foreign exchange had an unfavorable impact on international revenues of 1% in the third quarter of 2014 and 8% in the first nine months of 2014, compared to the same period in 2013.

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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 3% in the third quarter of 2014, and decreased 2% in the first nine months, compared to the same periods in 2013. Revenues in the U.S. increased 13% in the third quarter of 2014, and 10% in the first nine months of 2014, compared to the same periods in 2013, primarily due to price increases, partially offset by competition from OTC competitors, mainly Nicorette and a movement by smokers to e-cigarettes. International revenues decreased 10% in the third quarter of 2014, and 15% in the first nine months, compared to the same periods in 2013, primarily due to overall market decline across several key markets as a result of a challenging macro-economic environment, strong competitive pressure from aggressive Nicotine Replacement Therapy (NRT) consumer promotion and the widespread availability of e-cigarettes and use of prescription medication, as well as the lingering impact from previous negative media exposure and the unfavorable impact on international revenues of foreign exchange of 2% in the first nine months of 2014.

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Xalkori (O), for the treatment of patients with locally advanced or metastatic non-small cell lung cancer (NSCLC) that is anaplastic lymphoma kinase (ALK)-positive, is now approved in 79 countries, including the U.S., EU (conditional), Japan, South Korea, Canada, Australia and Switzerland, as well as in many emerging markets, including China, Russia, Mexico, India and Turkey. Xalkori recorded worldwide revenues of $112 million in the third quarter of 2014, an increase of 56%, and $308 million in the first nine months of 2014, an increase of 60%, compared to the same periods in 2013 as a result of (i) an increase in diagnostic rates for the ALK gene abnormality, which has led to more patients being treated, as well as an extended duration of therapy, and an increase in market share, driving the number of prescriptions up and (ii) price increases in the U.S. Foreign exchange had a 1% favorable impact in the third quarter of 2014 and had no impact in the first nine months of 2014, compared to the same periods in 2013.

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Inlyta (O), for the treatment of patients with advanced renal cell carcinoma (RCC) after failure of a prior systemic treatment, is now approved in 68 countries, including the U.S., EU, Switzerland, Japan, Canada, Australia, South Korea and some emerging markets, including Russia, Mexico and Turkey (exact indications vary by region). Inlyta recorded worldwide revenues of $102 million in the third quarter of 2014, an increase of 22%, and $291 million in the first nine months of 2014, an increase of 34%, compared to the same periods in 2013, due to recent launches and share uptake. International revenues increased 36% in the third quarter, and 53% in the first nine months, compared to the same periods in 2013, primarily due to strong growth in developed markets in Europe, where a large proportion of oncologists are prescribing Inlyta. Foreign exchange had an unfavorable impact on international revenues of 2% in the third quarter of 2014 and 4% in the first nine months of 2014.

•

Xeljanz (GIP) was approved in the U.S. in November 2012 and in various other countries in 2013 for the treatment of adult patients with moderately to severely active rheumatoid arthritis. It has experienced consistent month-to-month growth in the U.S., where total prescription volume grew 16% in the third quarter of 2014, compared to the second quarter of 2014. Xeljanz recorded worldwide revenues of $85 million in the third quarter of 2014 and $205 million in the first nine months of 2014, compared to $35 million and $68 million in the same periods in 2013, virtually all in the U.S., primarily driven by the FDA approval for a label update in February 2014 to include data on radiographic progression, which strengthens the clinical profile of Xeljanz as well as positive consumer awareness.

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•	Alliance revenues (GEP/GIP) worldwide decreased 66% in the third quarter of 2014, and 69% in the first nine months of 2014, compared to the same periods in 2013, mainly due to:

◦

the expiration of the co-promotion term of the collaboration agreement for Enbrel in the U.S. and Canada in October 2013, which resulted in a decrease in operational revenues of $425 million in the third quarter of 2014, and $1.2 billion in the first nine months of 2014, compared to the same periods in 2013. (While Enbrel alliance revenues declined $425 million in the third quarter of 2014 and $1.2 billion in the first nine months of 2014, we received royalty income from Enbrel in the U.S. and Canada of $136 million in the third quarter of 2014 and $397 million in the first nine months of 2014, which is recorded in Other (income)/deductions—net in the condensed consolidated statements on income. See Notes to Condensed Consolidated Financial Statements—Note 4. Other (Income)/Deductions—Net.);

◦

the expiration or near-term expiration of the co-promotion collaboration for Spiriva (GEP) in Japan, the U.S. (where the collaboration expired in April 2014), and certain European countries combined with the expiration of the collaboration in Australia, Canada and South Korea, which resulted in an operational decrease in Pfizer's share of Spiriva revenues of $93 million in the third quarter of 2014, and $396 million in the first nine months of 2014, compared to the same periods in 2013; and

◦

the loss of exclusivity for Aricept in Canada in December 2013, which resulted in a decrease in operational revenues of approximately $36 million in the third quarter of 2014, compared to the same period in 2013, and combined with the termination of the co-promotion agreement for Aricept (GEP) in Japan in December 2012, resulted in an operational decrease in Pfizer's share of Aricept revenues of approximately $94 million in the first nine months of 2014, compared to the same period in 2013.

•

Embeda (GIP)—In November 2013, we announced that the FDA had approved a prior approval supplement for an update to the Embeda manufacturing process. This update addressed the pre-specified stability requirement that led to the voluntary recall of Embeda from the market in March 2011. In October 2014, the FDA approved an updated label for Embeda extended release capsules, for oral use, to include abuse-deterrence study data. Embeda is indicated for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate. We expect Embeda will be available in the U.S. in early 2015.

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

(b)	The FDA approved the 0.45 mg/20 mg dose of Duavee for these indications. We received a “complete response” letter from the FDA with regard to the 0.625 mg/20 mg dose for these indications, and for an indication for the treatment of vulvar and vaginal atrophy.

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

(a)	First-line treatment of patients with ER+ and HER2- advanced breast cancer has a pending U.S. NDA, and has been granted Priority Review designation by the U.S. Food and Drug Administration (FDA).

(b)

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.

(c)

In June 2010, we received a “complete response” letter from the FDA for the Celebrex chronic pain supplemental NDA. The supplemental NDA remains pending while we await the completion of the PRECISION trial, anticipated in 2015, which will inform our next steps. The PRECISION trial is designed to assess the relative long-term cardiovascular safety of Celebrex compared to prescription doses of ibuprofen and naproxen in the treatment of arthritis pain.

(d)

In 2005, King Pharmaceuticals, Inc. (King) entered into an agreement with Pain Therapeutics, Inc. (PT) to develop and commercialize Remoxy. In August 2008, the FDA accepted the NDA for Remoxy that had been submitted by King and PT. In December 2008, the FDA issued a “complete response” letter. In March 2009, King exercised its right under the agreement with PT to assume sole control and responsibility for the development of Remoxy. In December 2010, King resubmitted the NDA for Remoxy with the FDA. In June 2011, we and PT announced that a “complete response” letter had been received from the FDA with regard to the resubmission of the NDA. Having achieved technical milestones related to manufacturing and following guidance received from the FDA earlier in 2013, we announced in October 2013 that we will proceed with the additional clinical studies and other actions required to address the “complete response” letter

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(e)

Two “approvable” letters were received by Wyeth in April and December 2007 from the FDA for Viviant (bazedoxifene), for the prevention of post-menopausal osteoporosis, that set forth the additional requirements for approval. In May 2008, Wyeth received an “approvable” letter from the FDA for the treatment of post-menopausal osteoporosis. The FDA is seeking additional data, and we have been systematically working through these requirements and seeking to address the FDA's concerns. In February 2008, the FDA advised Wyeth that it expects to convene an advisory committee to review the pending NDAs for both the treatment and prevention indications after we submit our response to the “approvable” letters. In view of the recent approval of Duavee by the FDA, we are reassessing the next steps regarding our NDAs for Viviant. In April 2009, Wyeth received approval in the EU for CONBRIZA (the EU trade name for Viviant) for the treatment of post-menopausal osteoporosis in women at increased risk of fracture.

*	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 BMS.

(b)	In October 2014, the EMA’s Committee for Medicinal Products for Human Use (CHMP) issued an opinion recommending that Duavive be granted approval for the treatment of estrogen deficiency symptoms in postmenopausal women with a uterus (with at least 12 months since the last menses) for whom treatment with progestin-containing therapy is not appropriate.

(a)	Tofacitinib QD is currently conducting pivotal Phase 1 studies with registrational intent.

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(a)	First-line treatment of patients with ER+ and HER2- advanced breast cancer has a pending U.S. NDA, and has been granted Priority Review designation by the FDA.

(b)	Remicade® is a registered trademark of Janssen Biotech, Inc.

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

(d)	Rituxan® is a registered trademark of Biogen Idec, Inc.

(e)

The tanezumab program is under a partial clinical hold by the FDA pending our submission of additional nonclinical data. We anticipate submitting that data to the FDA during the first quarter of 2015. Subject to the removal of the partial clinical hold, we are planning to continue development of tanezumab for the treatment of osteoarthritis, chronic low back pain and cancer pain. In October 2013, we entered into a collaboration agreement with Eli Lilly and Company to jointly develop and globally commercialize tanezumab for those indications.

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•	increased investments in recently launched brands as well as pre-launch marketing expenses for palbociclib and Trumenba; and

•	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 Internal Revenue Service (IRS),

•	lower expenses for field force and marketing and administrative expenses, reflecting the benefits of cost-reduction and productivity initiatives, partly in response to product losses of exclusivity.

•	upfront payments to Cellectis SA and MedGenesis Therapeutix Inc. associated with recently announced agreements; and

•	costs associated with ongoing Phase 3 programs for certain new drug candidates and investment in the palbociclib and Trumenba development programs.

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(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.

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•	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

•

senior management’s annual compensation is derived, in part, using this Adjusted income measure. Adjusted income is the performance metric utilized in the determination of bonuses under the Pfizer Inc. Executive Annual Incentive Plan that is designed to limit the bonuses payable to the Executive Leadership Team (ELT) for purposes of Internal Revenue Code Section 162(m). Subject to the Section 162(m) limitation, the bonuses are funded from a pool based on the performance measured by three financial metrics, including adjusted diluted earnings per share, which is derived from Adjusted income. This metric accounts for 40% of the bonus pool. The pool applies to the bonus plans for virtually all bonus-eligible, non-sales-force employees worldwide, including the ELT members and other members of senior management.

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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 26.8% in the third quarter of 2014, a decline of 0.8 percentage points from 27.6% in the third quarter of 2013, primarily due to a favorable 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 26.6% in the first nine months of 2014, compared with 27.4% in the first nine months of 2013. The tax rate in the first nine months of 2014 compared to the same period in 2013 was favorably impacted by the resolution in the first and second quarters of 2014 of certain tax positions, pertaining to prior years, primarily with various foreign tax authorities, and from the expiration of certain statutes of limitations, partially offset by the expiration of the U.S. R&D tax credit on December 31, 2013.

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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)

Restructuring charges include employee termination costs, asset impairments and other exit costs associated with business combinations. 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. 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).

(d)	Represents the impact of changes in estimated useful lives of assets involved in restructuring actions 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).

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(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 first nine months of 2014 also includes the favorable impact of the remeasurement of certain deferred tax liabilities resulting from plant network activities. The first nine months of 2013 also includes the unfavorable impact of the remeasurement of certain deferred tax liabilities resulting from plant network activities.

(f)

Included in Discontinued operations––net of tax. For the nine months ended September 28, 2014, represents post-close adjustments. For the nine months ended September 29, 2013, virtually all relates to our former Animal Health business, through June 24, 2013, the date of disposal (see Notes to Condensed Consolidated Financial Statements—Note 2B. Acquisition, Divestiture, Licensing Arrangements and Equity-Method Investments: Divestiture).

(g)	Represents restructuring charges primarily incurred for our cost-reduction/productivity initiatives. 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).

(h)	Amounts relate to our cost-reduction/productivity initiatives (see Notes to Condensed Consolidated Financial Statements—Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives).

(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)

In the first nine months of 2013, reflects income from a litigation settlement with Teva Pharmaceutical Industries Ltd. and Sun Pharmaceutical Industries Ltd. for patent-infringement damages resulting from their “at-risk” launches of generic Protonix in the U.S. 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).

(l)

Represents costs incurred in connection with the initial public offering of an approximate 19.8% ownership interest in Zoetis. Includes expenditures for banking, legal, accounting and similar services. For the nine months ended September 29, 2013, primarily 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).

(m)	For the three months ended September 28, 2014, included in Revenues ($65 million) and Cost of sales ($57 million). For the three months ended September 29, 2013, included in Revenues ($67 million) and Cost of sales ($57 million).

(n)

Primarily included in Other (income)/deductions––net. In the third quarter and first nine months of 2013, includes an estimated loss on an option to acquire the remaining interest in Laboratório Teuto Brasileiro S.A. (Teuto), a 40%-owned generics company in Brazil (approximately $223 million). In the third quarter and first nine months of 2014, includes income resulting from a decline in the estimated loss from the aforementioned option (approximately $90 million).

(o)

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 favorably impacted by the decline in the non-tax deductible estimated loss recorded in the third quarter of 2013 related to an option to acquire the remaining interest in Teuto, since we expect to retain the investment indefinitely, and 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. The third quarter and first nine months of 2013 were unfavorably impacted by the aforementioned non-tax deductible estimated loss related to the Teuto option, since we expect to retain the investment indefinitely. The first nine months of 2013 were unfavorably impacted by the non-deductibility of goodwill derecognized and the jurisdictional mix of the other intangible assets divested as part of the transfer of certain product rights to Hisun Pfizer and by the tax liability associated with the patent litigation settlement income (see Notes to Condensed Consolidated Financial Statements—Note 5A. Tax Matters: Taxes on Income from Continuing Operations).

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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)	Other comprises the revenues and costs included in our Adjusted income components (see footnote (c) below) that are managed outside of 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.

(ii)

WRD—the research and development expenses managed by our Worldwide Research and Development organization (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. 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.

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•	WRD/Medical––The information provided in the table above for WRD and Medical was substantially all derived from our estimates of the costs incurred in connection with the research and development projects associated with each operating segment.

•

Corporate/Other Unallocated––The information provided in the table above for Corporate and Other Unallocated was virtually all derived using proportional allocation methods based on global, regional or country revenues or global, regional or country headcount, as well as certain cost metrics, as appropriate, such as those derived from research and development and manufacturing costs. Management believes that the allocations of Corporate and Other Unallocated costs are reasonable.

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

(d)	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.

(e)

As our operations were not managed under the new structure until the beginning of the first quarter of 2014, certain costs and expenses could not be directly attributed to one of the new operating segments. As a result, our operating segment results for the third quarter and first nine months of 2013 include allocations. The amounts subject to allocation methods in the third quarter of 2013 were approximately $520 million of selling, informational and administrative expenses and approximately $230 million of research and development expenses, and the amounts subject to allocation methods in the first nine months of 2013 were approximately $1.5 billion of selling, informational and administrative expenses and approximately $650 million of research and development expenses.

•	The selling, informational and administrative expenses were allocated using proportional allocation methods based on associated selling costs, revenues or product-specific costs, as applicable.

•	The research and development expenses were allocated based on product-specific R&D costs or revenue metrics, as applicable.

•	Revenues decreased 4% to $3,490 million in the third quarter of 2014, compared to $3,640 in the same period in 2013 and decreased 5% to $10,114 million in the first nine months of 2014, compared to $10,672 in the same period in 2013, which includes a decrease in operational revenues of 4% in both the third quarter of 2014 and in the first nine months of 2014, primarily due to:

◦	the expiration of the co-promotion term of the collaboration agreement for Enbrel in the U.S. and Canada on October 31, 2013 (approximately $425 million for the third quarter of 2014 and $1.2 billion for the first nine months of 2014); for a 36-month period thereafter, we are entitled to royalty payments that have been and are expected to continue to be significantly less than

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◦	loss of exclusivity for Lyrica in Canada in February 2013 (a decline of approximately $68 million for the first nine months of 2014),

◦	strong operational growth from Lyrica, primarily in the U.S. and Japan, and Enbrel outside the U.S. and Canada, as well as the performance of recently launched products, including Eliquis, primarily in the U.S., and Xeljanz globally (a combined increase of approximately $270 million for the third quarter of 2014 and $809 million for the first nine months of 2014).

•	Cost of sales as a percentage of Revenues increased in the third quarter and first nine months of 2014, compared to the third quarter and first nine months of 2013, due to the loss of Enbrel alliance revenue after October 31, 2013 when the co-promotion term of the collaboration agreement for Enbrel in the U.S. and Canada expired as well as the change in product mix.

•	Selling, informational and administrative expenses increased 6% in the third quarter of 2014 and 9% in the first nine months, compared to the same periods in 2013, reflecting increased investment in recently launched brands and certain in-line products.

•	Research and development expenses increased 33% in the third quarter of 2014 and 34% in the first nine months of 2014, compared to the same periods in 2013, reflecting incremental investment in late-stage pipeline products.

•

The favorable change in Other (income)/deductions––net in the third quarter of 2014 and in the first nine months of 2014, compared to the same periods in 2013, primarily reflects an increase in royalty-related income, primarily due to royalties earned on sales of Enbrel in the U.S. and Canada after October 31, 2013. As noted above, on that date, the co-promotion term of the collaboration agreement for Enbrel in the U.S. and Canada expired, and Pfizer became entitled to royalties for a 36-month period thereafter.

•	Revenues increased 13% in the third quarter of 2014, and increased 9% in the first nine months of 2014, compared to the same periods in 2013, which includes an increase in operational revenues of 13% in the third quarter of 2014 and 10% in the first nine months of 2014.

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Global Vaccines Revenues increased 19% to $1,140 million in the third quarter of 2014, compared to $954 million in the same period in 2013, and revenues increased 11% to $3,161 million in the first nine months of 2014, compared to $2,847 million in the same period in 2013, reflecting an increase in operational revenues of 19% in the third quarter and 12% in the first nine months of 2014. The increases were primarily due to the performance of Prevnar 13 in the U.S., primarily reflecting the timing of government purchasing patterns, increased prices and increased demand. International revenues for the Prevenar family increased 11% operationally in the third quarter of 2014 and increased 9% operationally in the first nine months of 2014 which primarily reflects increased shipments associated with the Global Alliance for Vaccines and Immunization (GAVI) as well as the timing of government purchases in various emerging markets compared with the prior periods, partially offset by lower demand due to adverse weather conditions and decreased stockpile purchases.

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Global Oncology Revenues increased 16% to $551 million in the third quarter of 2014, compared to $473 million in the same period in 2013, and revenues increased 13% to $1,609 million in the first nine months of 2014, compared to $1,422 million in the same period in 2013, reflecting an increase in operational revenues of 17% in the third quarter of 2014 and 14% in the first nine months of 2014, due to continued strong underlying demand of recent product launches, Xalkori and Inlyta globally, as well as growth from Bosulif, primarily in the U.S., and, in the third quarter of 2014, Sutent, primarily in emerging markets.

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◦

Consumer Healthcare Revenues increased 4% to $821 million in the third quarter of 2014, compared to $788 million in the same period in 2013, and revenues increased 4% to $2,494 million in the first nine months of 2014, compared to $2,399 million in the same period in 2013, reflecting an increase in operational revenues of 4% in the third quarter of 2014 and 5% in the first nine months of 2014, primarily due to the launch of Nexium 24HR in the U.S. in late-May 2014 and growth of vitamin supplement products in emerging markets, partially offset in the first nine months of 2014 by a decrease in revenues for respiratory products in the U.S. and Canada due to a less severe cold and flu incidence, and for Advil in the U.S. due to the third quarter 2013 launch of Advil Film-Coated, which triggered increased retail purchases in the year-ago quarter.

•	Cost of sales increased 14% to $475 million in the third quarter of 2014, compared to $417 million in the same period in 2013, and Cost of sales increased 10% to $1,402 million in the first nine months of 2014, compared to $1,269 million in the same period in 2013, primarily due to increased sales volumes.

•	Selling informational and administrative expenses increased 13% in the third quarter of 2014 and 10% in the first nine months of 2014, compared to the same periods in 2013, primarily driven by Consumer Healthcare expenses incurred to support the launch of Nexium 24HR in the U.S. as well as palbociclib and Trumenba pre-launch marketing expenses.

•	Research and development expenses decreased 10% in the third quarter of 2014 and 4% in the first nine months of 2014, compared to the same periods in 2013, reflecting lower costs for certain oncology programs, partially offset by increased investment in the palbociclib and Trumenba development programs.

•	Revenues decreased 7%, to $6,239 million in the third quarter of 2014, compared to $6,675 million in the same period in 2013, and decreased 8%, to $18,742 million in the first nine months of 2014, compared to $20,458 million in the same period in 2013, including a decrease in operational revenues of 6% in the third quarter of 2014 and 7% in the first nine months of 2014, primarily due to:

◦	the loss of exclusivity and subsequent launch of multi-source generic competition for Detrol LA in the U.S. in January 2014, Viagra in most major European markets in June 2013 as well as Aricept in Canada in December 2013 (aggregate decline of approximately $139 million in the third quarter of 2014 and $490 million in the first nine months of 2014);

◦	the expiration or near-term expiration of the co-promotion collaboration for Spiriva in most countries, including the U.S. (where the collaboration expired in April 2014), which, per the terms of the agreement, has resulted in a decline in Pfizer’s share of Spiriva revenues (approximately $93 million in the third quarter of 2014 and $396 million in the first nine months of 2014);

◦	the operational decline of certain products, including Metaxalone and Effexor (approximately $24 million in the third quarter of 2014 and $134 million in the first nine months of 2014);

◦	a decline in branded Lipitor revenues in the U.S. and most other developed markets as a result of continued generic competition (approximately $91 million in the third quarter of 2014 and $278 million in the first nine months of 2014); and

◦	a decline in Aricept, not including Canada, revenues primarily due to the termination of the co-promotion agreement in Japan in December 2012 (approximately $9 million in the third quarter of 2014 and $69 million in the first nine months of 2014); and

◦	an operational decline due to loss of exclusivity for certain other products in developed markets and steeper generic erosion in Japan (approximately $94 million in the third quarter of 2014 and $217 million for the first nine months of 2014),

◦	the strong operational performance of Lyrica, primarily in Europe (growth of approximately $47 million in the third quarter of 2014 and $124 million in the first nine months of 2014);

◦	the operational growth of Lipitor in China (approximately $35 million in the third quarter of 2014 and $124 million in the first nine months of 2014);

◦	the operational performance of Celebrex worldwide (growth of approximately $14 million in the third quarter of 2014 and $58 million in the first nine months of 2014); and

◦	the contribution from the collaboration with Mylan Inc. to market generic drugs in Japan (approximately $36 million in the first nine months of 2014).

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•	Cost of sales as a percentage of Revenues increased in the third quarter and first nine months of 2014, compared to the third quarter and first nine months of 2013, due to the impact of product losses of exclusivity and unfavorable changes in product mix.

•	Selling, informational and administrative expenses decreased 15% in the third quarter of 2014 and 16% in the first nine months of 2014, compared to the same periods in 2013, due to lower expenses for field force, marketing and administrative expenses, reflecting the benefits of cost-reduction and productivity initiatives.

•	Research and development expenses decreased 7% in the third quarter of 2014 and 16% in the first nine months of 2014, compared to the same periods in 2013, due to lower clinical trial expenses and the benefits from cost-reduction and productivity initiatives, partially offset by increased spending on biosimilars development programs.

•	The favorable change in Other (income)/deductions––net in the first nine months of 2014 primarily reflects gains on sales of product rights.

•

For Foreign currency translation adjustments, for the third quarter of 2014, reflects primarily the weakening of the euro and U.K. pound, partially offset by the strengthening of the Swedish krona against the U.S. dollar; for the first nine months of 2014, reflects primarily the weakening of the euro and Canadian dollar, partially offset by the strengthening of several currencies against the U.S. dollar, primarily the Swedish krona and U.K. pound and some other currency movements. Also, for the first nine months of 2014, includes the reclassification of amounts associated with legal entity dispositions into income.

•	For Unrealized holding gains/(losses) on derivative financial instruments, 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 Unrealized holding gains/(losses) on available-for-sale securities, 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, reflects the reclassification of certain amounts related to amortization and settlements into income. For additional information, see Notes to Condensed Consolidated Financial Statements—Note 10. Pension and Postretirement Benefit Plans.

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

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•	For Inventories, the change also reflects inventory builds in advance of plant shutdowns/product transfers and new product launches, partially offset by inventory reductions.

•	For Other current assets, the change also reflects the receipt of a portion of the Protonix patent litigation settlement income recognized in 2013, a reduction in Value Added Tax (VAT) receivables and other receipts in the normal course of business.

•	For Property, plant and equipment, less accumulated depreciation, the change also reflects depreciation, partially offset by capital additions.

•	For Goodwill, the change also reflects the goodwill associated with the acquisition of InnoPharma. For additional information about the acquisition of InnoPharma, see Notes to Condensed Consolidated Financial Statements—Note 2A. Acquisition, Divestiture, Licensing Arrangements and Equity-Method Investments: Acquisition.

•

For Identifiable intangible assets, less accumulated amortization, the change also reflects amortization and, to a much lesser extent, asset impairment charges, partially offset by assets acquired from InnoPharma and the Nexium over-the-counter milestones. For additional information about our intangible assets, see Notes to Condensed Consolidated Financial Statements—Note 9B. Goodwill and Other Intangible Assets: Other Intangible Assets. For additional information about the asset impairment charges, see Notes to Condensed Consolidated Financial Statements—Note 4. Other (Income)/Deductions—Net. For additional information about the assets acquired from InnoPharma and the Nexium over-the-counter milestones, see Notes to Condensed Consolidated Financial Statements—Note 2A. Acquisition, Divestiture, Licensing Arrangements and Equity-Method Investments: Acquisition and Note 2C. Acquisition, Divestiture, Licensing Arrangements and Equity-Method Investments: Licensing Arrangements, respectively.

•	For Other noncurrent assets, the change also reflects a decrease in the receivables associated with our derivative financial instruments.

•

For Other current liabilities, the change also reflects a reduction in VAT payables, a decrease in the payables associated with our derivative financial instruments, payments of our restructuring liabilities as well as the the timing of other payments and accruals in the normal course of business, partially offset by the accrual of the additional Branded Prescription Drug Fee accruals, not yet paid. For additional information about the Branded Prescription Drug Fee accruals, see the “Our Operating Environment” section of this MD&A.

•	For Pension benefit obligations, net and Postretirement benefit obligations, net, the change also reflects, among other things, pension contributions and benefit payments made directly from company funds, partially offset by the net periodic benefit cost. For additional information, see Notes to Condensed Consolidated Financial Statements—Note 10. Pension and Postretirement Benefit Plans.

•	For Other noncurrent liabilities, the change also reflects a decrease in our deferred compensation liability, primarily due to payments made as part of the compensation plans as well as a decrease in our non-current restructuring accruals.

*	Calculation not meaningful.

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•	net purchases of investments of $3.1 billion in the first nine months of 2014, compared to $9.9 billion in the first nine months of 2013,

•	cash paid of $195 million, net of cash acquired, for the acquisition of InnoPharma in 2014 (see Notes to Condensed Consolidated Financial Statements—Note 2A. Acquisition, Divestiture, Licensing Arrangements and Equity-Method Investments: Acquisition.)

•	purchases of common stock of $3.8 billion in the first nine months of 2014, compared to $11.6 billion in the first nine months of 2013,

•	net proceeds from borrowings of $1.0 billion in the first nine months of 2014, compared to net proceeds from borrowings of $6.0 billion in the first nine months of 2013; and

•	proceeds from the exercise of stock options of $704 million in the first nine months of 2014, compared to $1.4 billion in the first nine months of 2013.

•	we sold Zoetis common stock for Pfizer common stock valued at $11.4 billion;

•	we exchanged Zoetis common stock for the retirement of Pfizer commercial paper issued in 2013 for $2.5 billion;

•	we exchanged Zoetis senior notes for the retirement of Pfizer commercial paper issued in 2012 for $1.0 billion; and

•	we transferred certain product rights, valued at $1.2 billion, to an equity-method investment (Hisun Pfizer).

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•	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.

(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 instrument holdings.

(b)	Net financial assets increased as net cash provided by operating activities and the proceeds from the exercise of stock options, among other things, more than offset capital investments, share purchases and dividend payments. For additional information, see the “Analysis of the Condensed Consolidated Statements of Cash Flows” section of this MD&A.

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

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the outcome of research and development activities including, without limitation, the ability to meet anticipated clinical trial commencement and completion dates, regulatory submission and approval dates, and launch dates for product candidates, as well as the possibility of unfavorable 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; and decisions by regulatory authorities regarding labeling, ingredients and other matters that could affect the availability or commercial potential of our products;

•	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;

•	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 of an abbreviated legal pathway to approve biosimilar products, which could subject our biologic products to competition from biosimilar products in the U.S., 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;

•	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;

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•	the impact of the U.S. Budget Control Act of 2011 (the Budget Control Act) and the deficit-reduction actions to be taken pursuant to the Budget Control Act in order to achieve the deficit-reduction targets provided for therein, and the impact of any broader deficit-reduction efforts;

•	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 in certain European and emerging market countries and Japan 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 counterparties to our foreign-exchange and interest-rate agreements of challenging global economic conditions and recent and possible future changes in global financial markets; and the related risk that our allowance for doubtful accounts may not be adequate;

•	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;

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•	growth in costs and expenses;

•	changes in our product, segment and geographic mix; and

•

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 three new global businesses.

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(a)	On June 27, 2013, we announced that the Board of Directors had authorized a $10 billion share-purchase plan (the June 2013 Stock Purchase Plan), and share purchases commenced thereunder in October 2013. On October 23, 2014, we announced that the Board of Directors had authorized an additional $11 billion share-purchase plan.

(b)

In addition to amounts purchased under the June 2013 Stock Purchase Plan, these columns reflect the following transactions during the third fiscal quarter of 2014: (i) the surrender to Pfizer of 150,228 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 28,206 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; and (iii) the surrender to Pfizer of 52 shares of common stock to satisfy tax withholding obligations in connection with the vesting of performance share awards issued to employees.

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