Pfizer Reports First-Quarter 2010 Results; Reaffirms 2010 Financial Guidance

($ in millions, except per share amounts) 

First-Quarter

2010

2009

Change

Reported Revenues

$ 16,750

$ 10,867

54%

Reported Net Income(1)

2,026

2,729

(26%)

Reported Diluted EPS(1)

0.25

0.40

(38%)

Adjusted Income(2)

4,882

3,667

33%

Adjusted Diluted EPS(2)

0.60

0.54

11%

See end of text prior to tables for notes.

First-Quarter

Operational

($ in millions)

2010

2009

Change

Foreign Exchange

Total

Legacy Pfizer

Primary Care(3)

$ 5,866

$ 5,322

10%

4%

6%

(1%)

Specialty Care(4)

3,521

1,463

141%

10%

131%

(2%)

Established Products(5)

2,786

1,615

73%

6%

67%

(9%)

Emerging Markets(6)

1,972

1,352

46%

9%

37%

1%

Oncology(7)

361

350

3%

5%

(2%)

(13%)

Biopharmaceutical

14,506

10,102

44%

6%

38%

(3%)

Animal Health(8)

846

537

58%

10%

48%

17%

Consumer Healthcare(9)

663

--

N/A

N/A

N/A

N/A

Nutrition(10)

458

--

N/A

N/A

N/A

N/A

Capsugel(11)

174

154

13%

5%

8%

8%

Diversified

2,141

691

210%

16%

194%

15%

Other(12)

103

74

39%

3%

36%

36%

  Total

$ 16,750

$10,867

54%

7%

47%

(1%)

See end of text prior to tables for notes.

N/A – Not applicable

2010 Guidance(15)

Reported Revenues

$67.0 to $69.0 billion

Adjusted Cost of Sales(2) as a Percentage of Revenues

19.0% to 20.0%

Adjusted SI&A Expenses(2)

$19.0 to $20.0 billion

Adjusted R&D Expenses(2)

$9.1 to $9.6 billion

Adjusted Other (Income)/Deductions(2)

$1.2 to $1.4 billion

Effective Tax Rate on Adjusted Income(2)

Approximately 30%

Reported Diluted EPS(1)

$0.95 to $1.10

Adjusted Diluted EPS(2)  

$2.10 to $2.20

(1)

"Reported Net Income" is defined as net income attributable to Pfizer Inc. in accordance with U.S. generally accepted accounting principles.  "Reported Diluted EPS" is defined as reported diluted EPS attributable to Pfizer Inc. common shareholders in accordance with U.S. generally accepted accounting principles.

(2)

"Adjusted Income" and its components and "Adjusted Diluted Earnings Per Share (EPS)" are defined as reported net income(1) and its components and reported diluted EPS(1) excluding purchase accounting adjustments, acquisition-related costs, discontinued operations and certain significant items.  Adjusted Cost of Sales, Adjusted SI&A expenses, Adjusted R&D expenses and Adjusted Other (Income)/Deductions are income statement line items prepared on the same basis, and therefore, components of the overall adjusted income measure.  As described under Adjusted Income in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of Pfizer's Form 10-K for the year ended December 31, 2009, management uses adjusted income, among other factors, to set performance goals and to measure the performance of the overall company.  We believe that investors' understanding of our performance is enhanced by disclosing this measure. Reconciliations of first-quarter 2010 and 2009 adjusted income and its components and adjusted diluted EPS to reported net income(1) and its components and reported diluted EPS(1), as well as reconciliations of full-year 2010 guidance and 2012 targets for adjusted income and adjusted diluted EPS to full-year 2010 guidance and 2012 targets for reported net income(1) and reported diluted EPS(1), are provided in the materials accompanying this report. The adjusted income and its components and adjusted diluted EPS measures are not, and should not be viewed as, substitutes for U.S. GAAP net income and its components and diluted EPS.

(3)

The Primary Care unit includes revenues from human pharmaceutical products primarily prescribed by primary-care physicians, and may include, but are not limited to, products in the following therapeutic and disease areas: Alzheimer's disease, anxiety, cardiovascular (excluding pulmonary arterial hypertension), diabetes, pain, genitourinary, obesity, osteoporosis and respiratory.  Examples of products in this unit include, but are not limited to, Celebrex, Lipitor, Lyrica, Premarin, Pristiq and Viagra.  All revenues for such products are allocated to the Primary Care unit, except those generated in emerging markets(6) and those that are managed by the Established Products(5) unit.

(4)

The Specialty Care unit includes revenues from human pharmaceutical products primarily prescribed by physicians who are specialists, and may include, but are not limited to, products in the following therapeutic and disease areas: antibacterials, antifungals, antivirals, bone, inflammation, gastrointestinal, growth hormones, multiple sclerosis, ophthalmology, pulmonary arterial hypertension and psychosis.  Examples of products in this unit include, but are not limited to, Enbrel, Genotropin, Geodon, the Prevnar/Prevenar franchise, Xalatan and Zyvox.  All revenues for such products are allocated to the Specialty Care unit, except those generated in emerging markets(6) and those that are managed by the Established Products(5) unit.

(5)

The Established Products unit generally includes revenues from human prescription pharmaceutical products that have lost patent protection or marketing exclusivity in certain countries and/or regions. In certain situations, products may be transferred to this unit before losing patent protection or marketing exclusivity in order to maximize their value.  This unit also excludes revenues generated in emerging markets(6).  Examples of products in this unit include, but are not limited to, Arthrotec, Effexor, Medrol, Norvasc and Relpax.

(6)

The Emerging Markets unit includes revenues from all human prescription pharmaceutical products sold in emerging markets, including, but not limited to, Asia (excluding Japan), Latin America, Middle East, Africa, Central and Eastern Europe, Russia and Turkey.  Additionally, revenues from South Korea were included in the Emerging Markets unit in 2009, but are included in the developed market units (Primary Care(3), Specialty Care(4), Established Products(5) and Oncology(7) units), as appropriate, beginning in first-quarter 2010.

(7)

The Oncology unit includes revenues from human oncology and oncology-related products.  Examples of products in this unit include, but are not limited to, Aromasin, Sutent and Torisel.  All revenues for such products are allocated to the Oncology unit, except those generated in emerging markets(6) and those that are managed by the Established Products(5) unit.

(8)

Animal Health includes worldwide revenues from products to prevent and treat disease in livestock and companion animals, including vaccines, paraciticides and anti-infectives.

(9)

Consumer Healthcare generally includes worldwide revenues from non-prescription medicines and vitamins and may include, but are not limited to, products in the following therapeutic categories: pain management, nutritionals, respiratory and GI-topicals.  Examples of products in Consumer Healthcare include, but are not limited to, Advil, Centrum, Caltrate, ChapStick and Robitussin.

(10)

Nutrition generally includes revenues from a full line of infant and toddler nutritional products sold outside of North America.  Examples of products in Nutrition include, but are not limited to, the S-26 and SMA product lines as well as formula for infants with special nutritional needs.

(11)

Capsugel generally includes worldwide revenues from capsule products and services for the pharmaceutical and associated healthcare industries.  

(12)

Includes revenues generated from business-transition activity in connection with the sale of Pfizer's former Consumer Healthcare business in December 2006, as well as from Pfizer Centersource.

(13)

Represents the total of Adjusted Cost of Sales(2), Adjusted SI&A expenses(2) and Adjusted R&D expenses(2).

(14)

Current exchange rates approximate rates in effect at about the time of the first-quarter 2010 earnings press release (average April 2010 exchange rates).

(15)

This guidance does not assume the completion of any business-development transactions not completed as of April 4, 2010.  This guidance also excludes the potential effects of the resolution of litigation-related matters not substantially resolved as of April 4, 2010.

PFIZER INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(millions, except per common share data)

First Quarter

% Incr. /

2010

2009

(Decr.)

Revenues

$

16,750

$

10,867

54

Costs and expenses:

Cost of sales (a)

4,306

1,408

206

Selling, informational and administrative expenses (a)

4,436

2,876

54

Research and development expenses (a)

2,226

1,705

31

Amortization of intangible assets

1,409

578

144

Acquisition-related in-process research and development charges

74

-

*

Restructuring charges and certain acquisition-related costs

706

554

27

Other (income)/deductions--net

414

(57)

*

Income from continuing operations before provision

for taxes on income

3,179

3,803

(16)

Provision for taxes on income

1,146

1,074

7

Income from continuing operations

2,033

2,729

(26)

Discontinued operations--net of tax

2

1

35

Net income before allocation to noncontrolling interests

2,035

2,730

(26)

Less:   Net income attributable to noncontrolling interests

9

1

*

Net income attributable to Pfizer Inc.

$

2,026

$

2,729

(26)

Earnings per share - basic:

Income from continuing operations attributable to Pfizer Inc. common shareholders

$

0.25

$

0.41

(39)

Discontinued operations--net of tax

-

-

--

Net income attributable to Pfizer Inc. common shareholders

$

0.25

$

0.41

(39)

Earnings per share - diluted:

Income from continuing operations attributable to Pfizer Inc. common shareholders

$

0.25

$

0.40

(38)

Discontinued operations--net of tax

-

-

--

Net income attributable to Pfizer Inc. common shareholders

$

0.25

$

0.40

(38)

Weighted-average shares used to calculate earnings per common share:

Basic

8,061

6,723

Diluted

8,101

6,753

(a)

Exclusive of amortization of intangible assets, except as discussed in footnote 5 below.

*       Calculation not meaningful.

     Certain amounts and percentages may reflect rounding adjustments.

1.

The above financial statements present the three-month periods ended April 4, 2010 and March 29, 2009. Subsidiaries operating outside the United States are included for the three-month periods ended February 28, 2010 and February 22, 2009. Wyeth's results are included in our consolidated financial statements commencing from the acquisition date of October 15, 2009, in accordance with Pfizer's domestic and international year-ends. Therefore, our first-quarter 2009 results of operations do not include Wyeth's results of operations.  Cost of sales for 2010 includes the significant impacts of purchase accounting adjustments associated with inventory acquired from Wyeth that was sold in 2010. Amortization of intangible assets for 2010 includes the amortization of intangible assets acquired from Wyeth.  

2.

The financial results for the three-month period ended April 4, 2010, are not necessarily indicative of the results which could ultimately be achieved for the current year.

3.

Included in Restructuring charges and certain acquisition-related costs for first-quarter 2009 are $369 million of transaction costs, such as banking, legal, accounting and other similar costs, directly related to our acquisition of Wyeth.

4.

In the first quarter of 2010, we recorded $74 million of Acquisition-related in-process research and development charges due to the resolution of contingencies associated with our 2008 acquisition of CovX.

5.

Amortization expense related to acquired intangible assets that contribute to our ability to sell, manufacture, research, market and distribute our products is included in Amortization of intangible assets as these intangible assets benefit multiple business functions. Amortization expense related to acquired intangible assets that are associated with a single function is included in Cost of sales, Selling, informational and administrative expenses or Research and development expenses, as appropriate.

PFIZER INC. AND SUBSIDIARY COMPANIES 

RECONCILIATION OF REPORTED NET INCOME ATTRIBUTABLE TO PFIZER INC. AND ITS COMPONENTS

AND REPORTED DILUTED EPS ATTRIBUTABLE TO PFIZER INC. COMMON SHAREHOLDERS

TO ADJUSTED INCOME AND ITS COMPONENTS AND ADJUSTED DILUTED EPS (a)

(UNAUDITED)

(millions of dollars, except per common share data)

Three Months Ended April 4, 2010

Purchase

Acquisition-

Certain

Accounting

Related

Discontinued

Significant

Reported

Adjustments

Costs(2)

Operations

Items(3)

Adjusted

Revenues

$

16,750

$

-

$

-

$

-

$

(7)

$

16,743

Costs and expenses:

Cost of sales (b)

4,306

(1,350)

(13)

-

(8)

2,935

Selling, informational and administrative expenses (b)

4,436

(1)

(60)

-

-

4,375

Research and development expenses (b)

2,226

(10)

(20)

-

-

2,196

Amortization of intangible assets

1,409

(1,383)

-

-

-

26

Acquisition-related in-process research and development charges

74

(74)

-

-

-

-

Restructuring charges and certain acquisition-related costs

706

-

(706)

-

-

-

Other (income)/deductions--net

414

(23)

-

-

(181)

210

Income from continuing operations before provision

for taxes on income

3,179

2,841

799

-

182

7,001

Provision for taxes on income

1,146

712

226

-

26

2,110

Income from continuing operations

2,033

2,129

573

-

156

4,891

Discontinued operations--net of tax

2

-

-

(2)

-

-

Net income before allocation to noncontrolling interests

2,035

2,129

573

(2)

156

4,891

Less:  Net income attributable to noncontrolling interests

9

-

-

-

-

9

Net income attributable to Pfizer Inc.

$

2,026

$

2,129

$

573

$

(2)

$

156

$

4,882

Earnings per common share - diluted:

Income from continuing operations attributable to Pfizer Inc.

common shareholders

$

0.25

$

0.26

$

0.07

$

-

$

0.02

$

0.60

Discontinued operations--net of tax

-

-

-

-

-

-

Net income attributable to Pfizer Inc. common shareholders

$

0.25

$

0.26

$

0.07

$

-

$

0.02

$

0.60

(a)

Adjusted income and its components and adjusted diluted EPS are not, and should not be viewed as, substitutes for U.S. GAAP net income and its components and diluted EPS.

(b)

Exclusive of amortization of intangible assets, except as discussed in note 1.

See end of tables for notes.

Certain amounts may reflect rounding adjustments.

PFIZER INC. AND SUBSIDIARY COMPANIES 

RECONCILIATION OF REPORTED NET INCOME ATTRIBUTABLE TO PFIZER INC. AND ITS COMPONENTS

AND REPORTED DILUTED EPS ATTRIBUTABLE TO PFIZER INC. COMMON SHAREHOLDERS

TO ADJUSTED INCOME AND ITS COMPONENTS AND ADJUSTED DILUTED EPS (a)

(UNAUDITED)

(millions of dollars, except per common share data)

Three Months Ended March 29, 2009

Purchase

Acquisition-

Certain

Accounting

Related

Discontinued

Significant

Reported

Adjustments

Costs(2)

Operations

Items(3)

Adjusted

Revenues

$

10,867

$

-

$

-

$

-

$

(22)

$

10,845

Costs and expenses:

Cost of sales (b)

1,408

-

-

-

(94)

1,314

Selling, informational and administrative expenses (b)

2,876

3

-

-

(46)

2,833

Research and development expenses (b)

1,705

(7)

-

-

(33)

1,665

Amortization of intangible assets

578

(540)

-

-

-

38

Acquisition-related in-process research and development charges

-

-

-

-

-

-

Restructuring charges and certain acquisition-related costs

554

-

(397)

-

(157)

-

Other (income)/deductions--net

(57)

(2)

-

-

(165)

(224)

Income from continuing operations before provision

for taxes on income

3,803

546

397

-

473

5,219

Provision for taxes on income

1,074

192

145

-

140

1,551

Income from continuing operations

2,729

354

252

-

333

3,668

Discontinued operations--net of tax

1

-

-

(1)

-

-

Net income before allocation to noncontrolling interests

2,730

354

252

(1)

333

3,668

Less:  Net income attributable to noncontrolling interests

1

-

-

-

-

1

Net income attributable to Pfizer Inc.

$

2,729

$

354

$

252

$

(1)

$

333

$

3,667

Earnings per common share - diluted:

Income from continuing operations attributable to Pfizer Inc.

common shareholders

$

0.40

$

0.05

$

0.04

$

-

$

0.05

$

0.54

Discontinued operations--net of tax

-

-

-

-

-

-

Net income attributable to Pfizer Inc. common shareholders

$

0.40

$

0.05

$

0.04

$

-

$

0.05

$

0.54

(a)

Adjusted income and its components and adjusted diluted EPS are not, and should not be viewed as, substitutes for U.S. GAAP net income and

its components and diluted EPS.

(b)

Exclusive of amortization of intangible assets, except as discussed in note 1.

See end of tables for notes.

Certain amounts may reflect rounding adjustments.

PFIZER INC. AND SUBSIDIARY COMPANIES

RECONCILIATION OF REPORTED NET INCOME ATTRIBUTABLE TO PFIZER INC. AND ITS COMPONENTS

AND REPORTED DILUTED EPS ATTRIBUTABLE TO PFIZER INC. COMMON SHAREHOLDERS

TO ADJUSTED INCOME AND ITS COMPONENTS AND ADJUSTED DILUTED EPS

(UNAUDITED)

1)

Amortization expense related to acquired intangible assets that contribute to our ability to sell, manufacture, research, market and distribute our products is included in Amortization of intangible assets as these intangible assets benefit multiple business functions. Amortization expense related to acquired intangible assets that are associated with a single function is included in Cost of sales, Selling, informational and administrative expenses or Research and development expenses, as appropriate.

2)

Acquisition-related costs includes the following:

First Quarter

(millions of dollars) 

2010

2009

Transaction costs(a)

$                    9

$              369

Integration costs(a)

208

28

Restructuring charges(a)

489

-

Additional depreciation - asset restructuring(b)

93

-

    Total acquisition-related costs -- pre-tax

799

397

Income taxes(c)

(226)

(145)

    Total acquisition-related costs -- net of tax

$                573

$              252

(a)

Transaction costs include costs directly related to our acquisition of Wyeth, such as banking, legal, accounting and other similar costs.  Integration costs represent external, incremental costs directly related to integrating Wyeth and primarily include expenditures for consulting and systems integration. Restructuring charges relate to our acquisition of Wyeth and include employee termination costs, asset impairments and exit costs.

(b)

Represents the impact of changes in the estimated useful lives of assets involved in restructuring actions. Included in Cost of Sales ($13 million), Selling, informational and administrative expenses ($60 million) and Research and development expenses ($20 million) for the three months ended April 4, 2010.

(c)

Included in Provision for taxes on income.

3)

Certain significant items includes the following:

First Quarter

(millions of dollars)

2010

2009

Restructuring charges - Cost-reduction initiatives(a)

$         -

$              157

Implementation costs - Cost-reduction initiatives(b)

-

174

Certain legal matters(c)

142

132

Other

40

10

    Total certain significant items -- pre-tax

182

473

Income taxes(d)

(26)

(140)

    Total certain significant items -- net of tax

$                156

$              333

(a)

Restructuring costs for 2009 are included in the Restructuring charges and certain acquisition-related costs line item caption in our consolidated statements of income.  

(b)

Included in Cost of sales ($76 million), Selling, informational and administrative expenses ($46 million), Research and development expenses ($41 million), and Other (income)/deductions - net ($11 million) for the three months ended March 29, 2009.

(c)

Included in Other (income)/deductions - net.

(d)

Included in Provision for taxes on income.

PFIZER INC.

REVENUES

FIRST QUARTER 2010

(UNAUDITED)

(millions of dollars)

WORLDWIDE

U.S.

INTERNATIONAL

%

%

%

2010

2009

Change

2010

2009

Change

2010

2009

Change

TOTAL REVENUES

$ 16,750

$ 10,867

54

$ 7,314

$ 4,969

47

$ 9,436

$ 5,898

60

TOTAL BIOPHARMACEUTICAL:

14,506

10,102

44

6,607

4,709

40

7,899

5,393

46

LIPITOR

2,757

2,721

1

1,310

1,452

(10)

1,447

1,269

14

ENBREL (Outside the U.S. and Canada)***

802

-

*

-

-

*

802

-

*

LYRICA

723

684

6

352

418

(16)

371

266

40

EFFEXOR***

716

-

*

592

-

*

124

-

*

CELEBREX

570

564

1

388

419

(7)

182

145

24

PREVNAR/PREVENAR - 7***

520

-

*

181

-

*

339

-

*

VIAGRA

479

454

5

253

258

(2)

226

196

16

XALATAN / XALACOM

422

407

4

145

153

(5)

277

254

9

NORVASC

368

481

(23)

13

19

(35)

355

462

(23)

ZYVOX

292

283

3

161

175

(8)

131

108

21

PREVNAR/PREVENAR - 13***

286

-

*

208

-

*

78

-

*

ZOSYN / TAZOCIN***

264

-

*

178

-

*

86

-

*

DETROL/DETROL LA

261

289

(10)

176

211

(17)

85

78

9

SUTENT

259

202

28

69

67

3

190

135

40

PREMARIN FAMILY***

256

-

*

234

-

*

22

-

*

GEODON / ZELDOX

254

230

10

213

195

9

41

35

19

GENOTROPIN

206

197

4

45

54

(17)

161

143

12

CHANTIX / CHAMPIX

189

177

7

106

112

(5)

83

65

27

VFEND

188

179

5

60

62

(3)

128

117

9

BENEFIX***

154

-

*

67

-

*

87

-

*

CADUET

135

134

-

86

104

(17)

49

30

62

AROMASIN

128

110

16

42

42

-

86

68

26

ZOLOFT

120

115

5

17

21

(19)

103

94

10

REVATIO

114

113

-

69

82

(16)

45

31

43

MEDROL

109

118

(8)

25

41

(39)

84

77

8

CARDURA

107

107

-

8

1

*

99

106

(7)

ARICEPT**

107

95

12

-

-

*

107

95

12

ZITHROMAX / ZMAX

103

114

(10)

4

4

(17)

99

110

(10)

REFACTO/XYNTHA***

90

-

*

21

-

*

69

-

*

ALL OTHER (legacy Pfizer and legacy Wyeth)

2,523

1,746

45

864

460

88

1,659

1,286

29

ALLIANCE REVENUE (Enbrel (in the U.S. and Canada)***, Aricept, Spiriva, Rebif and Exforge)

1,004

582

73

720

359

100

284

223

28

TOTAL DIVERSIFIED:

2,141

691

210

663

238

179

1,478

453

227

 ANIMAL HEALTH***

846

537

58

299

194

54

547

343

59

 CONSUMER HEALTHCARE***

663

-

*

315

-

*

348

-

*

 NUTRITION***

458

-

*

-

-

*

458

-

*

 CAPSUGEL  

174

154

13

49

44

10

125

110

14

OTHER **** 

103

74

39

44

22

100

59

52

13

*

-

Calculation not meaningful.

**    

-

Represents direct sales under license agreement with Eisai Co., Ltd.

***    

-

Legacy Wyeth products and operations. First quarter 2010 Animal Health results also reflect the addition of legacy Wyeth products. Wyeth's results are included in our financial statements commencing from the acquisition date of October 15, 2009, in accordance with Pfizer's domestic and international year-ends.  Therefore, our first quarter 2009 results do not include Wyeth's results of operations.

****    

-

Includes transition activity from Pfizer's former consumer healthcare business, which was sold in 2006, and Pfizer Centersource.

Certain amounts and percentages may reflect rounding adjustments.

PFIZER INC.

BIOPHARMACEUTICAL REVENUES

DEVELOPED AND EMERGING MARKETS

(UNAUDITED)

(millions of dollars)

FIRST QUARTER +

TOTAL

DEVELOPED MARKETS++

EMERGING MARKETS+++

% Growth

% Growth

% Growth

2010

2009

Total

Operational

2010

2009

Total

Operational

2010

2009

Total

Operational

TOTAL BIOPHARMACEUTICAL

$ 14,506

$ 10,102

44

38

$ 12,534

$ 8,750

43

38

$ 1,972

$ 1,352

46

37

LIPITOR

2,757

2,721

1

(4)

2,542

2,526

1

(5)

215

195

10

1

LYRICA

723

684

6

1

666

636

5

-

57

48

19

11

CELEBREX

570

564

1

(2)

510

504

1

(1)

60

60

1

(6)

VIAGRA

479

454

5

1

408

382

7

3

71

72

(1)

(8)

NORVASC

368

481

(23)

(26)

258

365

(29)

(32)

110

116

(6)

(8)

ALL OTHER

9,609

5,198

85

77

8,150

4,337

88

83

1,459

861

69

59

+

-

Revenues from South Korea are included in the table under emerging markets in first-quarter 2009. Commencing in the first quarter of 2010, revenues from South Korea are included under developed markets.

++

-

Includes U.S. biopharmaceutical revenues, which represent 46% of total first-quarter 2010 biopharmaceutical revenues and 47% of total first-quarter 2009 biopharmaceutical revenues.  First-quarter 2010 includes revenues from Wyeth's developed markets; however, first-quarter 2009 does not include Wyeth's revenues.

+++

-

Amounts include all human prescription pharmaceutical products sold in emerging markets, including, but not limited to, Asia (excluding Japan, and excluding South Korea in 2010), Latin America, Middle East, Africa, Central and Eastern Europe, Russia and Turkey. First-quarter 2010 includes revenues from Wyeth's emerging markets; however, first-quarter 2009 does not include Wyeth's revenues. If revenues from South Korea had not been included in emerging markets in first-quarter 2009, operational growth in emerging markets would be as follows: Total: 43%; Lipitor: 7%; Lyrica: 22%; Celebrex: 2%; Viagra: 0%; Norvasc: 1%; and all other: 63%.

Certain amounts and percentages may reflect rounding adjustments.

($ in millions)

First-Quarter

2010

 2009

Interest income

(112)

(245)

Interest expense

522

129

Net interest (income)/expense(a)

410

(116)

Royalty-related income

(142)

(57)

Net (gain)/loss on asset disposals

(45)

(12)

Legal matters, net

137

95

Other, net

54

33

Other (income)/deductions-net

$

414

$

(57)

(a)

Net interest expense was $410 million in first-quarter 2010 compared to net interest income of $116 million in the same period in 2009. Interest expense increased in 2010 due to our issuance of $13.5 billion of senior unsecured notes on March 24, 2009 and $10.5 billion of senior unsecured notes on June 3, 2009, primarily related to the acquisition of Wyeth. Interest income decreased in 2010 due to lower interest rates coupled with lower average cash balances.  

Full-Year 2010 Guidance

($ billions, except per-share amounts)

Net Income(b)

Diluted EPS(b)

Income/(Expense)

Adjusted Income/Diluted EPS(1) Guidance

~$17.0 - $17.8

~$2.10 - $2.20

Purchase Accounting Impacts of Transactions Completed as of 4/4/10

(6.4)

(0.79)

Acquisition-Related Costs

(2.5 – 2.9)

(0.31-0.36)

Reported Net Income Attributable to Pfizer Inc/Diluted EPS Guidance

~$7.7 - $8.9

~$0.95 - $1.10

(a)

At exchange rates in effect at about the time of the first-quarter 2010 earnings press release (average April 2010 exchange rates).