Pfizer Inc. (PFE)

Analysis of Income Taxes

Income Tax Accounting Policy

Deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates and laws. Pfizer provides a valuation allowance when Pfizer believes that deferred tax assets are not recoverable based on an assessment of estimated future taxable income that incorporates ongoing, prudent and feasible tax-planning strategies, that would be implemented, if necessary, to realize the deferred tax assets. All current deferred tax assets and liabilities within the same tax jurisdiction are presented as a net amount and all noncurrent deferred tax assets and liabilities within the same tax jurisdiction are presented as a net amount.

Pfizer accounts for income tax contingencies using a benefit recognition model. If Pfizer considers that a tax position is more likely than not to be sustained upon audit, based solely on the technical merits of the position, Pfizer recognizes the benefit. Pfizer measures the benefit by determining the amount that is greater than 50% likely of being realized upon settlement, presuming that the tax position is examined by the appropriate taxing authority that has full knowledge of all relevant information.

Under the benefit recognition model, if initial assessment fails to result in the recognition of a tax benefit, Pfizer regularly monitors position and subsequently recognize the tax benefit: (i) if there are changes in tax law, analogous case law or there is new information that sufficiently raise the likelihood of prevailing on the technical merits of the position to more-likely-than-not; (ii) if the statute of limitations expires; or (iii) if there is a completion of an audit resulting in a favorable settlement of that tax year with the appropriate agency. Pfizer regularly re-evaluates tax positions based on the results of audits of federal, state and foreign income tax filings, statute of limitations expirations, changes in tax law or receipt of new information that would either increase or decrease the technical merits of a position relative to the more-likely-than-not standard. Liabilities associated with uncertain tax positions are classified as current only when Pfizer expects to pay cash within the next 12 months. Interest and penalties, if any, are recorded in Provision for taxes on income and are classified on Pfizer's consolidated balance sheet with the related tax liability.

Amounts recorded for valuation allowances and income tax contingencies can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions.

Source: Pfizer Inc., Annual Report

Income Tax Expense (Benefit)

Pfizer Inc., income tax expense (benefit), continuing operations

USD $ in millions

 
  12 months ended Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Federal 142  (752) 1,349  (2,774) 10,169 
State and local (106) (44) 208  (313) 71 
International 2,544  2,619  2,202  2,258  1,539 
Current income taxes 2,580  1,823  3,759  (829) 11,779 
Federal 2,124  851  349  2,033  (10,002)
State and local (33) (328) (242) (6) (93)
International (365) 216  157  (74) 513 
Deferred income taxes 1,726  739  264  1,953  (9,582)
Provision for taxes on income 4,306  2,562  4,023  1,124  2,197 

Source: Based on data from Pfizer Inc. Annual Reports

Item Description The company
Current income taxes The component of income tax expense for the period representing amounts of income taxes paid or payable (or refundable) for the period for all income tax obligations as determined by applying the provisions of relevant enacted tax laws to relevant amounts of taxable income (loss) from continuing operations. Pfizer Inc.'s current income taxes declined from 2011 to 2012 but then slightly increased from 2012 to 2013.
Deferred income taxes The component of income tax expense for the period representing the net change in the entity's deferred tax assets and liabilities pertaining to continuing operations. Pfizer Inc.'s deferred income taxes increased from 2011 to 2012 and from 2012 to 2013.
Provision for taxes on income The sum of the current income tax expense (benefit) and the deferred income tax expense (benefit) pertaining to pretax income (loss) from continuing operations; income tax expense (benefit) may include interest and penalties on tax uncertainties based on the entity's accounting policy. Pfizer Inc.'s provision for taxes on income declined from 2011 to 2012 but then increased from 2012 to 2013 exceeding 2011 level.

Effective Income Tax Rate (EITR)

Pfizer Inc., effective income tax rate (EITR) reconciliation

 
    Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
U.S. statutory income tax rate 35.00% 35.00% 35.00% 35.00% 35.00%
Taxation of non-U.S. operations -2.50% -3.00% -3.30% 2.50% -9.30%
Tax settlements and resolution of certain tax positions -5.70% -12.00% -2.70% -26.40% –%
U.S. Healthcare Legislation 0.60% 1.00% 0.70% 2.80% –%
U.S. R&D tax credit and manufacturing deduction -0.80% -0.30% -0.90% -2.30% -1.30%
Certain legal settlements and charges -0.20% 1.40% –% 0.40% -1.60%
Acquired IPR&D –% –% –% 0.50% 0.20%
Wyeth acquisition-related costs –% –% –% 0.50% 2.40%
Sales of biopharmaceutical companies –% –% 0.20% –% -5.10%
All other, net 1.00% -0.90% 2.50% -1.10% –%
Effective tax rate for income from continuing operations 27.40% 21.20% 31.50% 11.90% 20.30%

Source: Based on data from Pfizer Inc. Annual Reports

Item Description The company
Effective tax rate for income from continuing operations A ratio calculated by dividing the reported amount of income tax expense attributable to continuing operations for the period by GAAP-basis pretax income from continuing operations. Pfizer Inc.'s effective tax rate for income from continuing operations declined from 2011 to 2012 but then increased from 2012 to 2013 not reaching 2011 level.

Components of Deferred Tax Assets and Liabilities

Pfizer Inc., components of deferred tax assets and liabilities

USD $ in millions

 
    Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Prepaid/deferred items 1,668  1,817  1,611  1,321  1,330 
Inventories 277  330  324  132  437 
Intangible assets 1,137  1,649  1,713  1,165  949 
Property, plant and equipment 376  508  226  420  715 
Employee benefits 3,154  5,042  4,285  4,479  4,786 
Restructurings and other charges 453  784  554  1,359  884 
Legal and product liability reserves 904  1,888  1,812  1,411  1,010 
Net operating loss/credit carryforwards 2,043  3,439  4,414  4,575  4,658 
State and local tax adjustments 297  385  476  452  747 
All other 249  1,259  1,197  607  744 
Gross deferred tax assets 10,558  17,101  16,612  15,921  16,260 
Valuation allowances (1,288) (1,102) (1,201) (894) (353)
Deferred tax assets 9,270  15,999  15,411  15,027  15,907 
Prepaid/deferred items (134) (119) (211) (112) (60)
Inventories (216) (198) (52) (59) (859)
Intangible assets (9,647) (14,187) (16,014) (17,104) (19,802)
Property, plant and equipment (1,916) (1,485) (1,326) (2,146) (2,014)
Employee benefits (77) (391) (524) (56) (66)
Restructurings and other charges (396) (334) (95) (70) (8)
Unremitted earnings (19,399) (16,042) (11,699) (9,524) (7,057)
All other (448) (504) (125) (575) (187)
Deferred tax liabilities (32,233) (33,260) (30,046) (29,646) (30,053)
Net deferred tax asset (liability) (22,963) (17,261) (14,635) (14,619) (14,146)

Source: Based on data from Pfizer Inc. Annual Reports

Item Description The company
Gross deferred tax assets The sum of the tax effects as of the balance sheet date of the amounts of all future tax deductions arising from temporary differences between tax basis and generally accepted accounting principles basis recognition of assets, liabilities, revenues and expenses, which can only be deducted for tax purposes when permitted under enacted tax laws (before the valuation allowance, if any, to reduce such sum amount to net realizable value). Includes any tax benefit realized in deferred tax assets for significant impacts of tax planning strategies. Pfizer Inc.'s gross deferred tax assets increased from 2011 to 2012 but then declined significantly from 2012 to 2013.
Deferred tax assets The aggregate tax effects as of the balance sheet date of all future tax deductions arising from temporary differences between tax basis and generally accepted accounting principles basis recognition of assets, liabilities, revenues and expenses, which can only be deducted for tax purposes when permitted under enacted tax laws; net of deducting the allocated valuation allowance, if any, to reduce such amount to net realizable value. Pfizer Inc.'s deferred tax assets increased from 2011 to 2012 but then declined significantly from 2012 to 2013.
Net deferred tax asset (liability) For entities that net deferred tax assets and tax liabilities, represents the unclassified net amount of deferred tax assets and liabilities as of the balance sheet date, which result from applying the applicable enacted tax rate to net temporary differences and carryforwards pertaining to assets or liabilities. A temporary difference is a difference between the tax basis of an asset or liability and its carrying amount in the financial statements prepared in accordance with generally accepted accounting principles that will reverse in ensuing periods. Pfizer Inc.'s net deferred tax asset (liability) declined from 2011 to 2012 and from 2012 to 2013.

Deferred Tax Assets and Liabilities, Classification

Pfizer Inc., deferred tax assets and liabilities, classification

USD $ in millions

 
    Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Current deferred tax assets (included in current deferred tax assets and other current tax assets) 2,110  3,600  4,000  2,951  2,591 
Noncurrent deferred tax assets (included in noncurrent deferred tax assets and other noncurrent tax assets) 569  700  1,200  1,189  1,328 
Current deferred tax liabilities (included in other current liabilities) 52  11  291  111  226 
Noncurrent deferred tax liabilities 25,590  21,593  19,597  18,648  17,839 

Source: Based on data from Pfizer Inc. Annual Reports

Item Description The company
Current deferred tax assets (included in current deferred tax assets and other current tax assets) The current portion of the aggregate tax effects as of the balance sheet date of all future tax deductions arising from temporary differences between tax basis and generally accepted accounting principles basis recognition of assets, liabilities, revenues and expenses, which can only be deducted for tax purposes when permitted under enacted tax laws; after deducting the allocated valuation allowance, if any, to reduce such amount to net realizable value. Deferred tax liabilities and assets shall be classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. A deferred tax liability or asset that is not related to an asset or liability for financial reporting, including deferred tax assets related to carryforwards, shall be classified according to the expected reversal date of the temporary difference. An unrecognized tax benefit that is directly related to a position taken in a tax year that results in a net operating loss carryforward should be presented as a reduction of the related deferred tax asset. Pfizer Inc.'s current deferred tax assets (included in current deferred tax assets and other current tax assets) declined from 2011 to 2012 and from 2012 to 2013.
Noncurrent deferred tax assets (included in noncurrent deferred tax assets and other noncurrent tax assets) The noncurrent portion as of the balance sheet date of the aggregate carrying amount of all future tax deductions arising from temporary differences between tax basis and generally accepted accounting principles basis recognition of assets, liabilities, revenues and expenses, which can only be deducted for tax purposes when permitted under enacted tax laws; after the valuation allowance, if any, to reduce such amount to net realizable value. Deferred tax liabilities and assets shall be classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. A deferred tax liability or asset that is not related to an asset or liability for financial reporting, including deferred tax assets related to carryforwards, shall be classified according to the expected reversal date of the temporary difference. Pfizer Inc.'s noncurrent deferred tax assets (included in noncurrent deferred tax assets and other noncurrent tax assets) declined from 2011 to 2012 and from 2012 to 2013.
Current deferred tax liabilities (included in other current liabilities) Represents the current portion of deferred tax liabilities, which result from applying the applicable tax rate to net taxable temporary differences pertaining to each jurisdiction to which the entity is obligated to pay income tax. A current taxable temporary difference is a difference between the tax basis and the carrying amount of a current asset or liability in the financial statements prepared in accordance with generally accepted accounting principles. In a classified statement of financial position, an enterprise shall separate deferred tax liabilities and assets into a current amount and a noncurrent amount. Deferred tax liabilities and assets shall be classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. A deferred tax liability or asset that is not related to an asset or liability for financial reporting, including deferred tax assets related to carryforwards, shall be classified according to the expected reversal date of the temporary difference. Pfizer Inc.'s current deferred tax liabilities (included in other current liabilities) declined from 2011 to 2012 but then slightly increased from 2012 to 2013.
Noncurrent deferred tax liabilities Represents the noncurrent portion of deferred tax liabilities, which result from applying the applicable tax rate to net taxable temporary differences pertaining to each jurisdiction to which the entity is obligated to pay income tax. A noncurrent taxable temporary difference is a difference between the tax basis and the carrying amount of a noncurrent asset or liability in the financial statements prepared in accordance with generally accepted accounting principles. In a classified statement of financial position, an enterprise shall separate deferred tax liabilities and assets into a current amount and a noncurrent amount. Deferred tax liabilities and assets shall be classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. A deferred tax liability or asset that is not related to an asset or liability for financial reporting, including deferred tax assets related to carryforwards, shall be classified according to the expected reversal date of the temporary difference. Pfizer Inc.'s noncurrent deferred tax liabilities increased from 2011 to 2012 and from 2012 to 2013.

Analyst Adjustments: Removal of Deferred Taxes

Pfizer Inc., adjustments to financial data

USD $ in millions

 
    Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
  Adjustment to Current Assets
Current assets (as reported) 56,244  61,415  57,728  60,468  61,670 
Less: Current deferred tax assets, net 2,110  3,600  4,000  2,951  2,591 
Current assets (adjusted) 54,134  57,815  53,728  57,517  59,079 
  Adjustment to Total Assets
Total assets (as reported) 172,101  185,798  188,002  195,014  212,949 
Less: Current deferred tax assets, net 2,110  3,600  4,000  2,951  2,591 
Less: Noncurrent deferred tax assets, net 569  700  1,200  1,189  1,328 
Total assets (adjusted) 169,422  181,498  182,802  190,874  209,030 
  Adjustment to Current Liabilities
Current liabilities (as reported) 23,366  28,619  28,069  28,609  37,225 
Less: Current deferred tax liabilities, net 52  11  291  111  226 
Current liabilities (adjusted) 23,314  28,608  27,778  28,498  36,999 
  Adjustment to Total Liabilities
Total liabilities (as reported) 95,481  104,120  105,381  106,749  122,503 
Less: Current deferred tax liabilities, net 52  11  291  111  226 
Less: Noncurrent deferred tax liabilities, net 25,590  21,593  19,597  18,648  17,839 
Total liabilities (adjusted) 69,839  82,516  85,493  87,990  104,438 
  Adjustment to Total Pfizer Inc. Shareholders' Equity
Total Pfizer Inc. shareholders' equity (as reported) 76,307  81,260  82,190  87,813  90,014 
Less: Current deferred tax assets, net 2,110  3,600  4,000  2,951  2,591 
Less: Noncurrent deferred tax assets, net 569  700  1,200  1,189  1,328 
Add: Current deferred tax liabilities, net 52  11  291  111  226 
Add: Noncurrent deferred tax liabilities, net 25,590  21,593  19,597  18,648  17,839 
Total Pfizer Inc. shareholders' equity (adjusted) 99,270  98,564  96,878  102,432  104,160 
  Adjustment to Net Income Attributable To Pfizer Inc.
Net income attributable to Pfizer Inc. (as reported) 22,003  14,570  10,009  8,257  8,635 
Add: Deferred income tax expense (benefit) 1,726  739  264  1,953  (9,582)
Net income attributable to Pfizer Inc. (adjusted) 23,729  15,309  10,273  10,210  (947)

Adjusted Ratios: Removal of Deferred Taxes (Summary)

Pfizer Inc., adjusted ratios

 
    Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
  Current Ratio
Reported current ratio 2.41 2.15 2.06 2.11 1.66
Adjusted current ratio 2.32 2.02 1.93 2.02 1.60
  Net Profit Margin
Reported net profit margin 42.65% 24.70% 14.84% 12.18% 17.27%
Adjusted net profit margin 46.00% 25.95% 15.24% 15.06% -1.89%
  Total Asset Turnover
Reported total asset turnover 0.30 0.32 0.36 0.35 0.23
Adjusted total asset turnover 0.30 0.32 0.37 0.36 0.24
  Financial Leverage
Reported financial leverage 2.26 2.29 2.29 2.22 2.37
Adjusted financial leverage 1.71 1.84 1.89 1.86 2.01
  Return on Equity (ROE)
Reported ROE 28.83% 17.93% 12.18% 9.40% 9.59%
Adjusted ROE 23.90% 15.53% 10.60% 9.97% -0.91%
  Return on Assets (ROA)
Reported ROA 12.78% 7.84% 5.32% 4.23% 4.05%
Adjusted ROA 14.01% 8.43% 5.62% 5.35% -0.45%
Ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Pfizer Inc.'s adjusted current ratio improved from 2011 to 2012 and from 2012 to 2013.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Pfizer Inc.'s adjusted net profit margin improved from 2011 to 2012 and from 2012 to 2013.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Pfizer Inc.'s adjusted total asset turnover deteriorated from 2011 to 2012 and from 2012 to 2013.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Pfizer Inc.'s adjusted financial leverage declined from 2011 to 2012 and from 2012 to 2013.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity. Pfizer Inc.'s adjusted ROE improved from 2011 to 2012 and from 2012 to 2013.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Pfizer Inc.'s adjusted ROA improved from 2011 to 2012 and from 2012 to 2013.

Adjusted Current Ratio

 
    Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
  As Reported
Current assets (USD $ in millions) 56,244  61,415  57,728  60,468  61,670 
Current liabilities (USD $ in millions) 23,366  28,619  28,069  28,609  37,225 
   
Current ratio1 2.41 2.15 2.06 2.11 1.66
  Adjusted for Deferred Taxes
Adjusted current assets (USD $ in millions) 54,134  57,815  53,728  57,517  59,079 
Adjusted current liabilities (USD $ in millions) 23,314  28,608  27,778  28,498  36,999 
   
Adjusted current ratio2 2.32 2.02 1.93 2.02 1.60

2013 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= 56,244 ÷ 23,366 = 2.41

2 Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= 54,134 ÷ 23,314 = 2.32

Ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Pfizer Inc.'s adjusted current ratio improved from 2011 to 2012 and from 2012 to 2013.

Adjusted Net Profit Margin

 
    Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
  As Reported
Net income attributable to Pfizer Inc. (USD $ in millions) 22,003  14,570  10,009  8,257  8,635 
Revenues (USD $ in millions) 51,584  58,986  67,425  67,809  50,009 
   
Net profit margin1 42.65% 24.70% 14.84% 12.18% 17.27%
  Adjusted for Deferred Taxes
Adjusted net income attributable to Pfizer Inc. (USD $ in millions) 23,729  15,309  10,273  10,210  (947)
Revenues (USD $ in millions) 51,584  58,986  67,425  67,809  50,009 
   
Adjusted net profit margin2 46.00% 25.95% 15.24% 15.06% -1.89%

2013 Calculations

1 Net profit margin = 100 × Net income attributable to Pfizer Inc. ÷ Revenues
= 100 × 22,003 ÷ 51,584 = 42.65%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to Pfizer Inc. ÷ Revenues
= 100 × 23,729 ÷ 51,584 = 46.00%

Ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Pfizer Inc.'s adjusted net profit margin improved from 2011 to 2012 and from 2012 to 2013.

Adjusted Total Asset Turnover

 
    Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
  As Reported
Revenues (USD $ in millions) 51,584  58,986  67,425  67,809  50,009 
Total assets (USD $ in millions) 172,101  185,798  188,002  195,014  212,949 
   
Total asset turnover1 0.30 0.32 0.36 0.35 0.23
  Adjusted for Deferred Taxes
Revenues (USD $ in millions) 51,584  58,986  67,425  67,809  50,009 
Adjusted total assets (USD $ in millions) 169,422  181,498  182,802  190,874  209,030 
   
Adjusted total asset turnover2 0.30 0.32 0.37 0.36 0.24

2013 Calculations

1 Total asset turnover = Revenues ÷ Total assets
= 51,584 ÷ 172,101 = 0.30

2 Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 51,584 ÷ 169,422 = 0.30

Ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Pfizer Inc.'s adjusted total asset turnover deteriorated from 2011 to 2012 and from 2012 to 2013.

Adjusted Financial Leverage

 
    Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
  As Reported
Total assets (USD $ in millions) 172,101  185,798  188,002  195,014  212,949 
Total Pfizer Inc. shareholders' equity (USD $ in millions) 76,307  81,260  82,190  87,813  90,014 
   
Financial leverage1 2.26 2.29 2.29 2.22 2.37
  Adjusted for Deferred Taxes
Adjusted total assets (USD $ in millions) 169,422  181,498  182,802  190,874  209,030 
Adjusted total Pfizer Inc. shareholders' equity (USD $ in millions) 99,270  98,564  96,878  102,432  104,160 
   
Adjusted financial leverage2 1.71 1.84 1.89 1.86 2.01

2013 Calculations

1 Financial leverage = Total assets ÷ Total Pfizer Inc. shareholders' equity
= 172,101 ÷ 76,307 = 2.26

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Pfizer Inc. shareholders' equity
= 169,422 ÷ 99,270 = 1.71

Ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Pfizer Inc.'s adjusted financial leverage declined from 2011 to 2012 and from 2012 to 2013.

Adjusted Return On Equity (ROE)

 
    Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
  As Reported
Net income attributable to Pfizer Inc. (USD $ in millions) 22,003  14,570  10,009  8,257  8,635 
Total Pfizer Inc. shareholders' equity (USD $ in millions) 76,307  81,260  82,190  87,813  90,014 
   
ROE1 28.83% 17.93% 12.18% 9.40% 9.59%
  Adjusted for Deferred Taxes
Adjusted net income attributable to Pfizer Inc. (USD $ in millions) 23,729  15,309  10,273  10,210  (947)
Adjusted total Pfizer Inc. shareholders' equity (USD $ in millions) 99,270  98,564  96,878  102,432  104,160 
   
Adjusted ROE2 23.90% 15.53% 10.60% 9.97% -0.91%

2013 Calculations

1 ROE = 100 × Net income attributable to Pfizer Inc. ÷ Total Pfizer Inc. shareholders' equity
= 100 × 22,003 ÷ 76,307 = 28.83%

2 Adjusted ROE = 100 × Adjusted net income attributable to Pfizer Inc. ÷ Adjusted total Pfizer Inc. shareholders' equity
= 100 × 23,729 ÷ 99,270 = 23.90%

Ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity. Pfizer Inc.'s adjusted ROE improved from 2011 to 2012 and from 2012 to 2013.

Adjusted Return On Assets (ROA)

 
    Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
  As Reported
Net income attributable to Pfizer Inc. (USD $ in millions) 22,003  14,570  10,009  8,257  8,635 
Total assets (USD $ in millions) 172,101  185,798  188,002  195,014  212,949 
   
ROA1 12.78% 7.84% 5.32% 4.23% 4.05%
  Adjusted for Deferred Taxes
Adjusted net income attributable to Pfizer Inc. (USD $ in millions) 23,729  15,309  10,273  10,210  (947)
Adjusted total assets (USD $ in millions) 169,422  181,498  182,802  190,874  209,030 
   
Adjusted ROA2 14.01% 8.43% 5.62% 5.35% -0.45%

2013 Calculations

1 ROA = 100 × Net income attributable to Pfizer Inc. ÷ Total assets
= 100 × 22,003 ÷ 172,101 = 12.78%

2 Adjusted ROA = 100 × Adjusted net income attributable to Pfizer Inc. ÷ Adjusted total assets
= 100 × 23,729 ÷ 169,422 = 14.01%

Ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Pfizer Inc.'s adjusted ROA improved from 2011 to 2012 and from 2012 to 2013.