Pfizer Inc. (PFE)

Pfizer Inc., Statement of Financial Position, Debt

USD $ in millions

	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
Short-term borrowings, including current portion of long-term debt	9,953	10,688	10,160	5,141	6,027
Long-term debt, excluding current portion	33,538	31,398	28,818	31,541	30,462
Total debt (carrying amount)	43,491	42,086	38,978	36,682	36,489

Source: Based on data from Pfizer Inc., Annual Reports

Item	Description	The company
Total debt (carrying amount)	Sum of the carrying values as of the balance sheet date of all debt plus capital lease obligations.	Pfizer Inc.'s total debt increased from 2015 to 2016 and from 2016 to 2017.

	Dec 31, 2017
Selected Financial Data (USD $ in millions)
Short-term borrowings, including current portion of long-term debt	9,953
Long-term debt, excluding current portion	37,253
Total debt (fair value)	47,206
Ratio
Debt, fair value to carrying amount	1.09

Source: Based on data from Pfizer Inc., Annual Reports

Weighted-average interest rate on debt: 3.31%

	Interest Rate	Debt Amount¹	Interest Rate × Debt Amount	Weighted-average Interest Rate²
	1.30%	4,848	63
	1.10%	1,528	17
	3.50%	3,550	124
	0.30%	1,199	4
	4.30%	1,592	68
	3.50%	6,259	219
	5.70%	4,886	279
	5.20%	5,606	292
	4.20%	3,315	139
	1.36%	6,100	83
Total		38,883	1,287	3.31%

Source: Based on data from Pfizer Inc., Annual Reports

¹ USD $ in millions

² Weighted-average interest rate = 100 × 1,287 ÷ 38,883 = 3.31%

Pfizer Inc.

USD $ in millions

12 months ended	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
Interest expense	1,270	1,186	1,199	1,360	1,414
Capitalized interest expense	72	61	32	41	32
Interest costs incurred	1,342	1,247	1,231	1,401	1,446

Source: Based on data from Pfizer Inc., Annual Reports

Item	Description	The company
Interest expense	Represents the portion of interest incurred in the period on debt arrangements that was charged against earnings.	Pfizer Inc.'s interest expense declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.
Capitalized interest expense	The amount of interest that was capitalized during the period.	Pfizer Inc.'s capitalized interest expense increased from 2015 to 2016 and from 2016 to 2017.
Interest costs incurred	Total interest costs incurred during the period and either capitalized or charged against earnings.	Pfizer Inc.'s interest costs incurred increased from 2015 to 2016 and from 2016 to 2017.

	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
Selected Financial Data (USD $ in millions)
Net income attributable to Pfizer Inc.	21,308	7,215	6,960	9,135	22,003
Add: Net income attributable to noncontrolling interest	47	31	26	33	69
Less: Discontinued operations, net of tax	2	17	11	49	10,662
Add: Income tax expense	(9,048)	1,122	1,990	3,121	4,306
Add: Interest expense	1,270	1,186	1,199	1,360	1,414
Earnings before interest and tax (EBIT)	13,575	9,537	10,164	13,600	17,130

Interest costs incurred	1,342	1,247	1,231	1,401	1,446
Ratio With and Without Capitalized Interest
Interest coverage ratio (excluding capitalized interest)¹	10.69	8.04	8.48	10.00	12.11
Adjusted interest coverage ratio (including capitalized interest)²	10.12	7.65	8.26	9.71	11.85

2017 Calculations

¹ Interest coverage ratio (excluding capitalized interest) = EBIT ÷ Interest expense
= 13,575 ÷ 1,270 = 10.69

² Adjusted interest coverage ratio (including capitalized interest) = EBIT ÷ Interest costs incurred
= 13,575 ÷ 1,342 = 10.12

Ratio	Description	The company
Adjusted interest coverage ratio	A solvency ratio calculated as EBIT divided by interest payments (including capitalized interest).	Pfizer Inc.'s adjusted interest coverage ratio deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.

Analysis of Debt