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 recognizes 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

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Income Tax Expense (Benefit)

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

USD $ in millions

 
12 months ended Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Federal 393  142  (752) 1,349  (2,774)
State and local 85  (106) (44) 208  (313)
International 2,321  2,544  2,619  2,202  2,258 
Current income taxes 2,799  2,580  1,823  3,759  (829)
Federal 725  2,124  851  349  2,033 
State and local (256) (33) (328) (242) (6)
International (148) (365) 216  157  (74)
Deferred income taxes 321  1,726  739  264  1,953 
Provision for taxes on income 3,120  4,306  2,562  4,023  1,124 

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 increased from 2012 to 2013 and from 2013 to 2014.
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 2012 to 2013 but then declined significantly from 2013 to 2014.
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 increased from 2012 to 2013 but then slightly declined from 2013 to 2014 not reaching 2012 level.

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Effective Income Tax Rate (EITR)

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

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
U.S. statutory income tax rate 35.00% 35.00% 35.00% 35.00% 35.00%
Taxation of non-U.S. operations -7.40% -2.50% -3.00% -3.30% 2.50%
Tax settlements and resolution of certain tax positions -2.90% -5.70% -12.00% -2.70% -26.40%
U.S. Healthcare Legislation 1.00% 0.60% 1.00% 0.70% 2.80%
U.S. R&D tax credit and manufacturing deduction -0.90% -0.80% -0.30% -0.90% -2.30%
Certain legal settlements and charges –% -0.20% 1.40% –% 0.40%
Acquired IPR&D –% –% –% –% 0.50%
Wyeth acquisition-related costs –% –% –% –% 0.50%
Sales of biopharmaceutical companies –% –% –% 0.20% –%
All other, net 0.70% 1.00% -0.90% 2.50% -1.10%
Effective tax rate for income from continuing operations 25.50% 27.40% 21.20% 31.50% 11.90%

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 increased from 2012 to 2013 but then slightly declined from 2013 to 2014.

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Components of Deferred Tax Assets and Liabilities

Pfizer Inc., components of deferred tax assets and liabilities

USD $ in millions

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Prepaid/deferred items 1,995  1,668  1,817  1,611  1,321 
Inventories 219  277  330  324  132 
Intangible assets 969  1,137  1,649  1,713  1,165 
Property, plant and equipment 174  376  508  226  420 
Employee benefits 3,950  3,154  5,042  4,285  4,479 
Restructurings and other charges 114  453  784  554  1,359 
Legal and product liability reserves 1,010  904  1,888  1,812  1,411 
Net operating loss/tax credit carryforwards 2,918  2,043  3,439  4,414  4,575 
State and local tax adjustments 295  297  385  476  452 
All other 283  249  1,259  1,197  607 
Gross deferred tax assets 11,927  10,558  17,101  16,612  15,921 
Valuation allowances (1,615) (1,288) (1,102) (1,201) (894)
Deferred tax assets 10,312  9,270  15,999  15,411  15,027 
Prepaid/deferred items (53) (134) (119) (211) (112)
Inventories (56) (216) (198) (52) (59)
Intangible assets (9,224) (9,647) (14,187) (16,014) (17,104)
Property, plant and equipment (1,242) (1,916) (1,485) (1,326) (2,146)
Employee benefits (154) (77) (391) (524) (56)
Restructurings and other charges (28) (396) (334) (95) (70)
Unremitted earnings (21,174) (19,399) (16,042) (11,699) (9,524)
All other (783) (448) (504) (125) (575)
Deferred tax liabilities (32,714) (32,233) (33,260) (30,046) (29,646)
Net deferred tax asset (liability) (22,402) (22,963) (17,261) (14,635) (14,619)

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 declined from 2012 to 2013 but then slightly increased from 2013 to 2014.
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 declined from 2012 to 2013 but then slightly increased from 2013 to 2014.
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 2012 to 2013 but then slightly increased from 2013 to 2014.

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Deferred Tax Assets and Liabilities, Classification

Pfizer Inc., deferred tax assets and liabilities, classification

USD $ in millions

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Current deferred tax assets (included in Current deferred tax assets and other current tax assets) 2,107  2,110  3,600  4,000  2,951 
Noncurrent deferred tax assets (included in Noncurrent deferred tax assets and other noncurrent tax assets) 515  569  700  1,200  1,189 
Current deferred tax liabilities (included in Other current liabilities) 43  52  11  291  111 
Noncurrent deferred tax liabilities 24,981  25,590  21,593  19,597  18,648 

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 2012 to 2013 and from 2013 to 2014.
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 2012 to 2013 and from 2013 to 2014.
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) increased from 2012 to 2013 but then slightly declined from 2013 to 2014.
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 2012 to 2013 but then slightly declined from 2013 to 2014.

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Analyst Adjustments: Removal of Deferred Taxes

Pfizer Inc., adjustments to financial data

USD $ in millions

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Adjustment to Current Assets
Current assets (as reported) 57,702  56,244  61,415  57,728  60,468 
Less: Current deferred tax assets, net 2,107  2,110  3,600  4,000  2,951 
Current assets (adjusted) 55,595  54,134  57,815  53,728  57,517 
Adjustment to Total Assets
Total assets (as reported) 169,274  172,101  185,798  188,002  195,014 
Less: Current deferred tax assets, net 2,107  2,110  3,600  4,000  2,951 
Less: Noncurrent deferred tax assets, net 515  569  700  1,200  1,189 
Total assets (adjusted) 166,652  169,422  181,498  182,802  190,874 
Adjustment to Current Liabilities
Current liabilities (as reported) 21,631  23,366  28,619  28,069  28,609 
Less: Current deferred tax liabilities, net 43  52  11  291  111 
Current liabilities (adjusted) 21,588  23,314  28,608  27,778  28,498 
Adjustment to Total Liabilities
Total liabilities (as reported) 97,652  95,481  104,120  105,381  106,749 
Less: Current deferred tax liabilities, net 43  52  11  291  111 
Less: Noncurrent deferred tax liabilities, net 24,981  25,590  21,593  19,597  18,648 
Total liabilities (adjusted) 72,628  69,839  82,516  85,493  87,990 
Adjustment to Total Pfizer Inc. Shareholders' Equity
Total Pfizer Inc. shareholders' equity (as reported) 71,301  76,307  81,260  82,190  87,813 
Less: Net deferred tax assets (liabilities) (22,402) (22,963) (17,261) (14,635) (14,619)
Total Pfizer Inc. shareholders' equity (adjusted) 93,703  99,270  98,521  96,825  102,432 
Adjustment to Net Income Attributable To Pfizer Inc.
Net income attributable to Pfizer Inc. (as reported) 9,135  22,003  14,570  10,009  8,257 
Add: Deferred income tax expense (benefit) 321  1,726  739  264  1,953 
Net income attributable to Pfizer Inc. (adjusted) 9,456  23,729  15,309  10,273  10,210 

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Adjusted Ratios: Removal of Deferred Taxes (Summary)

Pfizer Inc., adjusted ratios

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Current Ratio
Reported current ratio 2.67 2.41 2.15 2.06 2.11
Adjusted current ratio 2.58 2.32 2.02 1.93 2.02
Net Profit Margin
Reported net profit margin 18.42% 42.65% 24.70% 14.84% 12.18%
Adjusted net profit margin 19.06% 46.00% 25.95% 15.24% 15.06%
Total Asset Turnover
Reported total asset turnover 0.29 0.30 0.32 0.36 0.35
Adjusted total asset turnover 0.30 0.30 0.32 0.37 0.36
Financial Leverage
Reported financial leverage 2.37 2.26 2.29 2.29 2.22
Adjusted financial leverage 1.78 1.71 1.84 1.89 1.86
Return on Equity (ROE)
Reported ROE 12.81% 28.83% 17.93% 12.18% 9.40%
Adjusted ROE 10.09% 23.90% 15.54% 10.61% 9.97%
Return on Assets (ROA)
Reported ROA 5.40% 12.78% 7.84% 5.32% 4.23%
Adjusted ROA 5.67% 14.01% 8.43% 5.62% 5.35%
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 2012 to 2013 and from 2013 to 2014.
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 2012 to 2013 but then deteriorated significantly from 2013 to 2014.
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 2012 to 2013 and from 2013 to 2014.
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 2012 to 2013 but then increased from 2013 to 2014 not reaching 2012 level.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity. Pfizer Inc.'s adjusted ROE improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Pfizer Inc.'s adjusted ROA improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.

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Adjusted Current Ratio

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
As Reported
Current assets (USD $ in millions) 57,702  56,244  61,415  57,728  60,468 
Current liabilities (USD $ in millions) 21,631  23,366  28,619  28,069  28,609 
Current ratio1 2.67 2.41 2.15 2.06 2.11
Adjusted for Deferred Taxes
Adjusted current assets (USD $ in millions) 55,595  54,134  57,815  53,728  57,517 
Adjusted current liabilities (USD $ in millions) 21,588  23,314  28,608  27,778  28,498 
Adjusted current ratio2 2.58 2.32 2.02 1.93 2.02

2014 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= 57,702 ÷ 21,631 = 2.67

2 Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= 55,595 ÷ 21,588 = 2.58

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 2012 to 2013 and from 2013 to 2014.

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Adjusted Net Profit Margin

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
As Reported
Net income attributable to Pfizer Inc. (USD $ in millions) 9,135  22,003  14,570  10,009  8,257 
Revenues (USD $ in millions) 49,605  51,584  58,986  67,425  67,809 
Net profit margin1 18.42% 42.65% 24.70% 14.84% 12.18%
Adjusted for Deferred Taxes
Adjusted net income attributable to Pfizer Inc. (USD $ in millions) 9,456  23,729  15,309  10,273  10,210 
Adjusted net profit margin2 19.06% 46.00% 25.95% 15.24% 15.06%

2014 Calculations

1 Net profit margin = 100 × Net income attributable to Pfizer Inc. ÷ Revenues
= 100 × 9,135 ÷ 49,605 = 18.42%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to Pfizer Inc. ÷ Revenues
= 100 × 9,456 ÷ 49,605 = 19.06%

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 2012 to 2013 but then deteriorated significantly from 2013 to 2014.

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Adjusted Total Asset Turnover

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
As Reported
Revenues (USD $ in millions) 49,605  51,584  58,986  67,425  67,809 
Total assets (USD $ in millions) 169,274  172,101  185,798  188,002  195,014 
Total asset turnover1 0.29 0.30 0.32 0.36 0.35
Adjusted for Deferred Taxes
Adjusted total assets (USD $ in millions) 166,652  169,422  181,498  182,802  190,874 
Adjusted total asset turnover2 0.30 0.30 0.32 0.37 0.36

2014 Calculations

1 Total asset turnover = Revenues ÷ Total assets
= 49,605 ÷ 169,274 = 0.29

2 Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 49,605 ÷ 166,652 = 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 2012 to 2013 and from 2013 to 2014.

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Adjusted Financial Leverage

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
As Reported
Total assets (USD $ in millions) 169,274  172,101  185,798  188,002  195,014 
Total Pfizer Inc. shareholders' equity (USD $ in millions) 71,301  76,307  81,260  82,190  87,813 
Financial leverage1 2.37 2.26 2.29 2.29 2.22
Adjusted for Deferred Taxes
Adjusted total assets (USD $ in millions) 166,652  169,422  181,498  182,802  190,874 
Adjusted total Pfizer Inc. shareholders' equity (USD $ in millions) 93,703  99,270  98,521  96,825  102,432 
Adjusted financial leverage2 1.78 1.71 1.84 1.89 1.86

2014 Calculations

1 Financial leverage = Total assets ÷ Total Pfizer Inc. shareholders' equity
= 169,274 ÷ 71,301 = 2.37

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Pfizer Inc. shareholders' equity
= 166,652 ÷ 93,703 = 1.78

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 2012 to 2013 but then increased from 2013 to 2014 not reaching 2012 level.

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Adjusted Return On Equity (ROE)

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
As Reported
Net income attributable to Pfizer Inc. (USD $ in millions) 9,135  22,003  14,570  10,009  8,257 
Total Pfizer Inc. shareholders' equity (USD $ in millions) 71,301  76,307  81,260  82,190  87,813 
ROE1 12.81% 28.83% 17.93% 12.18% 9.40%
Adjusted for Deferred Taxes
Adjusted net income attributable to Pfizer Inc. (USD $ in millions) 9,456  23,729  15,309  10,273  10,210 
Adjusted total Pfizer Inc. shareholders' equity (USD $ in millions) 93,703  99,270  98,521  96,825  102,432 
Adjusted ROE2 10.09% 23.90% 15.54% 10.61% 9.97%

2014 Calculations

1 ROE = 100 × Net income attributable to Pfizer Inc. ÷ Total Pfizer Inc. shareholders' equity
= 100 × 9,135 ÷ 71,301 = 12.81%

2 Adjusted ROE = 100 × Adjusted net income attributable to Pfizer Inc. ÷ Adjusted total Pfizer Inc. shareholders' equity
= 100 × 9,456 ÷ 93,703 = 10.09%

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 2012 to 2013 but then deteriorated significantly from 2013 to 2014.

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Adjusted Return On Assets (ROA)

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
As Reported
Net income attributable to Pfizer Inc. (USD $ in millions) 9,135  22,003  14,570  10,009  8,257 
Total assets (USD $ in millions) 169,274  172,101  185,798  188,002  195,014 
ROA1 5.40% 12.78% 7.84% 5.32% 4.23%
Adjusted for Deferred Taxes
Adjusted net income attributable to Pfizer Inc. (USD $ in millions) 9,456  23,729  15,309  10,273  10,210 
Adjusted total assets (USD $ in millions) 166,652  169,422  181,498  182,802  190,874 
Adjusted ROA2 5.67% 14.01% 8.43% 5.62% 5.35%

2014 Calculations

1 ROA = 100 × Net income attributable to Pfizer Inc. ÷ Total assets
= 100 × 9,135 ÷ 169,274 = 5.40%

2 Adjusted ROA = 100 × Adjusted net income attributable to Pfizer Inc. ÷ Adjusted total assets
= 100 × 9,456 ÷ 166,652 = 5.67%

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 2012 to 2013 but then deteriorated significantly from 2013 to 2014.

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