Pfizer (PFE) Boosts FY15 Outlook Following Completion of Hospira Acquisition

Pfizer (NYSE: PFE) announced updates to certain components of its 2015 financial guidance⁽¹⁾ solely to reflect the impact of the recently completed acquisition of Hospira, Inc. (Hospira).

On September 3, 2015, Pfizer completed the acquisition of Hospira. Pfizer's fiscal year-end for international subsidiaries is November 30, 2015, and Pfizer's fiscal year-end for U.S. subsidiaries is December 31, 2015. Consequently, Pfizer's 2015 financial results will include approximately three months of legacy Hospira international operations and approximately four months of legacy Hospira U.S. operations.

Financial results for Pfizer's third-quarter 2015 and nine-months ended September 27, 2015 will reflect approximately one month of legacy Hospira U.S. operations but will not include financial results from legacy Hospira international operations.

2015 FINANCIAL GUIDANCE⁽¹⁾

The ranges for certain components of Pfizer's 2015 financial guidance⁽¹⁾ were updated solely to reflect the inclusion of legacy Hospira operations in Pfizer's financial results from September 3, 2015 through fiscal year-end 2015. These updates do not reflect any recent changes in foreign exchange rates since mid-July 2015 or any operational factors other than the inclusion of legacy Hospira operations.

Pfizer intends to provide a comprehensive update to all of its 2015 financial guidance⁽¹⁾ components, including to reflect the impact of legacy Hospira operations on other financial guidance⁽¹⁾ components, when Pfizer's third-quarter 2015 financial results are announced on October 27, 2015.

The ranges for certain components of Pfizer's 2015 financial guidance⁽¹⁾ have been updated as set forth below:

*** The Street sees FY15 revenue of $47.6 billion and EPS of $2.09.

A reconciliation of certain components of Pfizer's 2015 financial guidance⁽¹⁾ provided on July 28, 2015 to Pfizer's current 2015 financial guidance⁽¹⁾ is below.

For additional details, see footnotes below and the attached disclosure notice.

(1) The 2015 financial guidance reflects the following:

• Does not assume the completion of any business development transactions not completed as of June 28, 2015, including any one-time upfront payments associated with such transactions, except for the completion of the Hospira acquisition on September 3, 2015.
• Excludes the potential effects of the resolution of litigation-related matters not substantially resolved as of June 28, 2015.
• Exchange rates assumed for legacy Pfizer financial guidance updated on July 28, 2015 are a blend of the actual exchange rates in effect through second-quarter 2015 and the mid-July 2015 exchange rates for the remainder of the year. Exchange rates assumed for projected legacy Hospira operations are from mid-September 2015. Excludes the impact of a potential devaluation of the Venezuelan bolivar.
• Guidance for legacy Pfizer reported revenues⁽²⁾ reflects the anticipated negative impact of $3.4 billion due to recent and expected generic competition for certain products that have recently lost or are anticipated to soon lose patent protection.
• Guidance for legacy Pfizer reported revenues⁽²⁾ also reflects the anticipated negative impact of $3.3 billion as a result of unfavorable changes in essentially all foreign exchange rates relative to the U.S. dollar through mid-July 2015 compared to foreign exchange rates from 2014. The anticipated negative impact on legacy Pfizer reported⁽²⁾ and adjusted⁽³⁾ diluted EPS resulting from unfavorable changes in foreign exchange rates through mid-July 2015 compared to foreign exchange rates from 2014 is approximately $0.19.
• Guidance for reported⁽²⁾ and adjusted⁽³⁾ diluted EPS assumes diluted weighted-average shares outstanding of approximately 6.25 billion shares.
• Reconciliation of the 2015 Adjusted income⁽³⁾ and Adjusted diluted EPS⁽³⁾ guidance to the 2015 Reported net income⁽²⁾ attributable to Pfizer Inc. and Reported diluted EPS⁽²⁾ attributable to Pfizer Inc. common shareholders guidance. Some amounts below may not add due to rounding:

(2) Reported revenues is defined as revenues in accordance with U.S. generally accepted accounting principles (GAAP). Reported net income is defined as net income attributable to Pfizer Inc. in accordance with U.S. GAAP. Reported diluted earnings per share (EPS) is defined as reported diluted EPS attributable to Pfizer Inc. common shareholders in accordance with U.S. GAAP.

(3) Adjusted income and its components and Adjusted diluted EPS are defined as reported U.S. GAAP net income⁽²⁾ and its components and reported diluted EPS⁽²⁾ excluding purchase accounting adjustments, acquisition-related costs, discontinued operations and certain significant items. Adjusted revenues, Adjusted cost of sales, Adjusted selling, informational and administrative (SI&A) expenses, Adjusted research and development (R&D) expenses and Adjusted other (income)/deductions are income statement line items prepared on the same basis as, 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 Quarterly Report on Form 10-Q for the fiscal quarter ended June 28, 2015, 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. 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.

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