Our Values Table of Contents Ensuring Access to Innovative Medicines

Integrity 2 Letter to Shareholders

5 Creating the World’s Fastest-Growing “Lifesaving drugs are an indispensable part yield new drugs to treat virtually every Canadian government’s top priority.
Innovation Pharmaceutical Company of modern medicine,” President Clinton disease. Heavy-handed government Frustrated with an overburdened public
8 Our Market-Leading Medicines said in his most recent State of the Union interference would stifle the discovery of health system, which now has surgery
Respect for People 12 Our Global Presence address. And he’s absolutely right. those new medicines by diminishing the waiting lists stretching for months,
16 Our Commitment to R&D That’s the main reason why Americans resources available for research. many Canadians travel to the United
Customer Focus 18 Review of Operations are spending more on pharmaceuticals. And significant resources are required. States to seek private care. While
27 Our Community Activities It has little to do with higher prices for On average, it takes $500 million to bring American health care delivery is not
28 Financial Review medicines. Pfizer’s price increases have one new drug to market. Last year alone, perfect, it is still the envy of the world.
Teamwork been less than the overall rate of inflation Pfizer invested about $2.8 billion to Nonetheless, we must continue to
37 Management’s Report
since 1994, accounting for discounts to discover new medicines. In the absence improve access. It must be adjusted to
38 Audit Committee’s Report and
Leadership federal buyers and Medicaid. What is of rigorous reinvestment, new drugs will meet the needs of those seniors who are
Independent Auditors’ Report
driving pharmaceutical spending growth be delayed or simply go undiscovered. without prescription drug coverage, but
39 Consolidated Statement of Income
Performance 40 Consolidated Balance Sheet
in the United States is a significant In Canada, the government-controlled the issue is not one fundamentally of
increase in the utilization of medicines. health care system has depressed R&D prices. For its part, Pfizer has announced
41 Consolidated Statement of Shareholders’ Equity Medicines such as Lipitor, Zoloft, and and resulted in significant delays in the that there will be no price increases for
Community 42 Consolidated Statement of Cash Flows Celebrex mark significant improvements approvals of innovative medicines from three of its pharmaceuticals sold in the
43 Notes to Consolidated Financial Statements over previous therapies, and more and the United States. When governments set U.S. market in 2000 and only a modest
61 Quarterly Consolidated Financial Data (Unaudited) more Americans are relying on these and the price of pharmaceuticals, bureaucrats 3.1% increase for our other medicines.
62 Financial Summary (1989 -1999) dozens of other breakthrough pharmaceu- often use the
63 Directors, Committees, and Officers ticals to live longer and healthier lives. approval and reim- What is driving pharmaceutical
64 Corporate and Shareholder Information The question before the nation now bursement process
65 Ensuring Access to Innovative Medicines is how best to provide access to these as a cost-savings spending growth in the United
Financial Highlights medicines for the seniors who need them.
In developing such a policy, it’s important
device by keeping
new products off
States is a significant increase in
to keep in mind that two thirds of seniors the markets. For the utilization of medicines.
Year ended December 31 already have prescription drug coverage. instance, six medi-
% Change There’s no need to revamp a system cines recently introduced in the United Our best estimate is that these price
that’s already working for most of its States, five of which have no therapeutic changes, combined with the impact of
(millions, except per share data) 1999 1998 1997 99/98 98/97
participants. But there is need to fine-tune alternative, are not available in Canada. discounts to federal buyers and the
Total revenues $16,204 $13,544 $11,055 20 23
Income from continuing operations before provision for
it so the remaining senior population — On average, Canadians wait a full year Medicaid program, will result in an
taxes on income and minority interests 4,448 2,594 2,867 71 (10) about 13 million people — can also have longer than Americans before new effective average price increase of 2.5%,
Provision for taxes on income 1,244 642 775 94 (17) access to all FDA-approved medicines. pharmaceuticals are approved and reim- which is equal to the December 1999
Discontinued operations – net of tax (20) 1,401 131 – 972 Pfizer supports a variety of approaches, bursed by the government, if they are Blue Chip Consensus forecast of the
Net income 3,179 3,351 2,213 (5) 51
including: approved at all. By delaying and denying change in the Consumer Price Index for
Research and development expenses 2,776 2,279 1,805 22 26 • Expanded Insurance Alternatives — access to innovative medicines, the the year 2000.
Property, plant and equipment additions 1,561 1,198 878 30 36
Cash dividends paid 1,148 976 881 18 11
These could be developed by private Canadian health care system has narrowed We are on the threshold of a phar-
insurers with subsidies given to low- the range of medicines available to patients. maceutical revolution in the treatment of
Diluted earnings per common share .82 .85 .57 (4) 50
income elderly. Yet, despite stringent government disease. By pursuing — in a spirit of
Cash dividends paid per common share .30 2/3 .25 1/3 .22 2/3 21 12 • Tax Code Changes — Credits or control, Canadians still pay about the compromise and pragmatism — proposals
Shareholders’ equity per common share 2.36 2.33 2.10 1 11
Weighted average shares – diluted 3,884 3,945 3,909 (2) 1 deductions could subsidize the cost of same percentage of their income as that expand access while preserving
Number of common shares outstanding 3,847 3,883 3,883 (1) – prescription drug insurance. Americans to purchase pharmaceuticals. incentives for research, the United States
(thousands) • State-based Solutions — Federal While it’s true many things cost less in can provide prescription drug coverage
Number of shareholders 147 105 87 40 21 grants to the 50 states could provide Canada — such as fast food, a quality for seniors who need it and maintain our
Number of employees 51 46 41 11 12 funds to create drug-access programs university education, and some pharma- status as the world’s leader in pharma-
Percentages may reflect rounding adjustments. for low-income residents. ceuticals — it’s also true that Canadians ceutical innovation.
All data throughout this report have been restated to reflect the 1999 three-for-one stock split in the form of a 200% stock dividend. Whatever approach is adopted, it’s earn considerably less than Americans. These issues will have tremendous
essential that it preserve the research Nor have price controls improved impact on the owners of Pfizer, not only
About Pfizer About the Cover pharmaceutical industry’s capacity to overall medical services in Canada. In a as shareholders but also as patients and
Pfizer Inc is a research-based global pharmaceutical company. We discover, In Santa Ana, California, Dale and Arlene Post enjoy an outing with discover new medicines. Not only has recent survey, most Canadians polled taxpayers. If you’d like to learn more and
develop, manufacture, and market innovative medicines for humans and their family, including daughter Jody, grandchildren Spencer and Emily,
the industry significantly extended and said their nation’s health care system was find out how you can become involved,
animals. In 1999, Pfizer celebrated its 150th anniversary. and best friend Keeler. Both Dale and Arlene suffer from atrial fibrilla-
tion, a common form of irregular heartbeat, and rely on Tikosyn to enhanced human life, it’s now poised to “in crisis.” In another survey, 93% said fill out and return either or both of the
treat it. Approved in 1999, Tikosyn is the latest addition to Pfizer’s enter a golden age of discovery that will that improving health care should be the attached response cards.
broad cardiovascular portfolio.

65
 During the 1990s, 1999
Pfizer’s revenues $16.2 billion
grew by 284%.
Our growth has outpaced the
industry every year for the past
decade, and was more than double
the average in 1999.

1989
$4.2 billion
To Our Shareholders
F
or Pfizer and our shareholders,
1999 was an exceptional year,
capping a decade of extraordinary
achievement. We ended the century
on a high note — including our share of
the sales generated by our copromotion
activities, Pfizer became the world’s
number one pharmaceutical company in
prescription sales.
Over the last decade, our prescription
pharmaceutical revenue has quintupled,
our investment in R&D has sextupled,
our reported net income has more than
quadrupled, and the price of our stock
has increased more than ten times. The
growth of our pharmaceutical revenue
exceeded that of the industry every year
throughout the last decade, and in 1999,
it more than doubled the industry rate.
In 1999, total revenues topped $16.2
billion, up 20% over 1998. Excluding the
impact of a charge taken in the third
quarter related to Trovan inventories, of
certain significant prior-year charges, and
of the 1998 divestiture of the Medical
Technology Group, net income increased
by 29% to almost $3.4 billion, and
diluted earnings per share increased by
30% to 87 cents.
2
Pfizer’s exceptional performance
has substantially benefited our shareholders.
Our stock split four times in the 1990s:
three times on a two-for-one basis —
in 1991, 1995, and 1997 — and on a
three-for-one basis in 1999. This achieve-
ment is unprecedented in Pfizer’s history
and unequaled by any company in our
peer group.
In January of 1999, we announced a
first-quarter dividend of 22 cents (7.33
cents adjusted for the three-for-one stock
split), a 16% increase over 1998. This year,
we increased the first-quarter dividend to
9 cents, up 23% (adjusted for the three-
for-one stock split) over the same quarter
the year before.
Driven by the success of our innovative
in-line and alliance products, Pfizer
Pharmaceuticals Group’s revenues
increased 22% to $14.9 billion. In 1999,
Pfizer became the only company to have
participated in all three of the industry’s
latest record-breaking launches. In 1997,
in concert with Warner-Lambert, the
company that discovered Lipitor, we
launched this innovative lipid-lowering
agent. In 1998, we introduced Pfizer’s
Viagra, the world’s leading treatment for
erectile dysfunction. In February 1999,
along with G.D. Searle & Co., the
pharmaceutical division of Monsanto
Company, we launched Celebrex, one of
the world’s leading treatments for arthritis,
which was discovered by Searle.
We set another record in 1999 when
Pfizer became the only company in our
industry to have seven medicines, including
those we copromote, each achieve annual
sales of $1 billion or more. The five medi-
cines discovered by Pfizer in this group —
Norvasc, Zoloft, Zithromax, Viagra, and
Diflucan — grew at a combined annual
rate of 18%. Norvasc, with yearly sales
exceeding $3 billion, maintained its
position as the world’s number one anti-
hypertensive. Zoloft continued to be a
leading antidepressant worldwide.
Zithromax retained its rank as the most-
prescribed branded oral antibiotic in the
United States. Viagra remained the world’s
Despite challenging market conditions,
our Animal Health Group’s sales increased
2% to $1.3 billion. These results were
fueled by the increasing popularity of
Rimadyl, a treatment for the relief of
pain and inflammation associated with
osteoarthritis in dogs; and by the launch of
Revolution, Pfizer’s new,
innovative antiparasitic We set another record in 1999
for dogs and cats —
when Pfizer became the only
hailed by many as the
most successful launch company in our industry to have
in the history of the seven medicines — including those
animal health industry.
Building on the we copromote — each achieve
strong base provided by annual sales of $1 billion or more.
our innovative pharma-
ceuticals for humans and animals, Pfizer
is forging ahead with an aggressive R&D Total Revenues (millions of dollars)

leading treatment for erectile dysfunction, program. In 1999, we invested almost

Total revenues have
and Diflucan held the lead as the world’s $2.8 billion in R&D, a 22% increase over increased at a
compound annual
largest-selling prescription antifungal. 1998. We currently have more than 200 growth rate of 19%
$16,204

Unfortunately, we also experienced a projects in discovery and development for over the past 5 years. $13,544

disappointment with Trovan. Although humans and animals, and this year, we $11,055
$9,864
this unique antibiotic has saved thousands expect to invest approximately $3.2 billion $8,684

of lives, rare cases of unanticipated severe in R&D.

liver injury associated with it resulted in To accommodate our extensive number
our relabeling Trovan in the United States of projects in discovery and development,
exclusively for use in serious infections and to provide the necessary support for 95 96 97 98 99
in institutional settings, and in its suspen- our in-line products, we have expanded
sion in Europe. our research centers in Groton, Connecticut;
In early October of 1999, the U.S. Sandwich, England; and Nagoya, Japan. R&D Expenses (millions of dollars)

Food and Drug Administration (FDA) We have also added to our field forces — Research and
approved Tikosyn, Pfizer’s new medicine which are the key link between our development expenses
have increased at a $2,776
for atrial fibrillation, and we anticipate research laboratories and the practicing compound annual
growth rate of 22%
launching it in the first quarter of this year. physician. Since 1994, we have doubled over the past 5 years.
$2,279

A few weeks later, we received an approv- the number of our sales representatives $1,805
$1,567
able letter from the FDA for Relpax, our in the United States, and in our industry’s $1,340

innovative remedy for migraines. In most prestigious survey, more than

December, Pfizer’s antidepressant Zoloft 10,000 doctors nationwide have recognized
became the first medicine approved by the the outstanding quality and training of
FDA for the treatment of posttraumatic our sales force by ranking it number one 95 96 97 98 99

stress disorder, and by midyear, we expect
to refile our application for Zeldox, our
novel antipsychotic drug.
overall for five consecutive years.
Pfizer is advancing in every area. Our
fundamentals are strong. Our pipeline is
broad and deep, and our field forces are
second to none. Our company is increasingly

3
 recognized as a world leader in the busi-
ness community. In 1999, Forbes selected
Pfizer “Company of the Year,” and Working
Mother ranked Pfizer one of the “100 Best
Companies for Working Mothers.” Just
last month, Fortune named Pfizer one of
the “100 Best Companies to Work For”
and number one in our industry, and
Business Week ranked Pfizer’s board as one
of the 25 best in the world.
Pfizer takes an active role in corporate
governance, public policy debates, and
support of the community. In the current
discussions over Medicare, we have strongly
supported prescription drug coverage for
elderly Americans who do not have access
to pharmaceuticals. The statement on
page 65 suggests the measures that we
believe would provide the necessary cover-
age and also enable our industry to carry
out the R&D that saves, protects, and
enhances lives.
Commitment to the community at
every level is one of Pfizer’s eight core
values, and I believe that it grows natu-
rally out of our humanitarian mission. This
commitment also plays an indispensable
role in promoting our outstanding perfor-
mance. It helps us hire and retain the best
people. It helps us motivate our employees.
It enhances our company’s reputation and
improves our relations with the public,
as well as with doctors, patients, and
others in the medical community. This
commitment also produces the kind of
trust and goodwill that are invaluable in
dealing with regulatory agencies and
government officials.
4
Obviously, one of the most important
events of 1999 was Pfizer’s proposal to
acquire Warner-Lambert. As you know, a
few weeks ago, we announced that Pfizer
and Warner-Lambert, the two fastest-
growing major companies in our industry,
would join forces to create what I believe
will be the best pharmaceutical company
in the world. The page following this
letter explains in greater detail how this
acquisition will benefit both you and the
shareholders of Warner-Lambert.
As we look toward a bright future,
I would like to say a word about succession
planning, which I believe is one of a
Chairman’s most important duties. For
me, this has been made easier by the
extraordinary quality of senior managers
at Pfizer. On May 27, 1999, our board
elected Dr. Henry A. McKinnell president
and chief operating officer of Pfizer Inc.
He has done a superb job of managing
our acquisition of Warner-Lambert and
of planning the integration of our two
companies. Simultaneously, the board
elected Dr. John Niblack vice chairman
of our company.
As Pfizer enters the twenty-first
century, we have never been stronger and
our prospects have never been brighter.
In 1999, we celebrated 150 years of
excellence and innovation — a proud
legacy that the outstanding people of
Pfizer are well prepared to take into the
next millennium.
William C. Steere, Jr.
Chairman of the Board and
Chief Executive Officer
February 14, 2000
Creating the World’s Fastest-Growing
Pharmaceutical Company
W
ith net income growth of 20% per
year anticipated for 2000 to 2002 as
a stand-alone company, Pfizer was
in a strong position to continue our
successes of the 1990s. However, in late 1999, a
unique opportunity arose that would allow us
to achieve even faster earnings growth. Pfizer
made a bid in November 1999, subsequently
revised in February 2000, to merge with
Warner-Lambert, the only major pharmaceutical
company growing faster than we were.
Under terms of the agreement, Pfizer
will exchange 2.75 shares of Pfizer voting
common stock for each outstanding share of
Warner-Lambert voting stock. Approved by
the boards of both companies, the merger
agreement is conditional upon the use of
pooling-of-interests
Pfizer and Warner-Lambert accounting, qualifying as a
represent a new competitive tax-free reorganization, the
approval of shareholders of
standard for our industry.
both companies, and the
usual regulatory approvals. It is expected to
close in mid-2000.
The new company will retain the name
Pfizer Inc. Up to eight independent directors
from Warner-Lambert’s board of directors will
be invited to join Pfizer’s board. Mr. Steere will
be chairman and chief executive officer, and
Dr. McKinnell will be president and chief
operating officer. Three members of the
Warner-Lambert management team will join
Pfizer’s Corporate Management Committee.
Corporate headquarters will remain in New
York. The worldwide and U.S. pharmaceutical
division headquarters will also be in New York.
The Warner-Lambert Consumer Health Care
Division, along with the other consumer
businesses and selected additional functions,
will be located at Warner-Lambert’s offices in
Morris Plains, New Jersey.
The new Pfizer will have annual revenues
in 2000 of approximately $31 billion, including
$24 billion in prescription pharmaceutical sales.
The combined pharmaceutical product lines of
the two companies represent significant depth
and breadth, including seven billion-dollar prod-
ucts. The new Pfizer will receive all revenues
from Lipitor, which is expected to achieve sales
in 2000 in excess of $5 billion. The company
will also have a significant presence in consumer
health care, confectionery products, and animal
medicines. The combined R&D operations will
have a worldwide scientific staff of more than
12,000 and $4.7 billion in anticipated annual
expenditures in 2000, the largest investment
in the industry. We expect the combined
company will have anticipated annual cost
savings and efficiencies of $1.6 billion by 2002
($200 million of these savings are expected to
be achieved in 2000, $1 billion in 2001, and
$1.6 billion in 2002). Diluted earnings per
share of the combined company over that
period are expected to accelerate from 20% for
Pfizer alone to 25% for Pfizer combined with
Warner-Lambert. These earnings projections
include the $1.6 billion of cost savings phased
in over this time period, but do not include
sales opportunities achievable by bringing
together the two organizations, anticipated
restructuring charges and transaction fees of
$1.7 billion to $2.2 billion, and the termination
fee paid by Warner-Lambert to American
Home Products Corporation.
The new Pfizer will have the industry’s
broadest range of products that treat diseases
associated with cardiovascular risks, a signifi-
cantly expanded program in treating central
nervous system disorders, a vastly expanded
portfolio of products for infectious diseases,
and important medicines in women’s health.
The Pfizer and Warner-Lambert organiza-
tions will work together in a spirit of collabora-
tion and mutual respect to capitalize on the
extraordinary opportunity now before us. The
combined talents of Pfizer and Warner-Lambert
people will make us not just bigger, but better.
5
 By 2025, the number
in the
will double to
6
 Athletes race toward the finish
line in the 200-meter dash at
the Pfizer-sponsored Senior
Games. Held in Orlando, Florida,
the 1999 event brought
of peopletogether 12,000 men and
women ranging in age from
50 to 99. Not so long ago, the
world age 65 and over
800 million.
notion of an “Olympics for older
people” would have been
unthinkable. Today, thanks in
part to pharmaceutical
companies like Pfizer, millions
of people realize that growing
old doesn’t have to mean
slowing down.
7
 G
ood health is the key to a good
life. To do the things you love to
do. To be productive at work. To
see your children have children.
Pfizer is committed to the pursuit of
medicines that help ensure good health,
and our products treat some of the world’s
most widespread diseases and conditions.
Pfizer medicines keep millio
8
For example, several of the medicines
we offer treat risk factors for heart disease,
one of the world’s leading killers. Backed
by award-winning patient and physician
education programs, these drugs are helping
millions of people “get to goal” — be it
lower blood pressure (Norvasc), lower
cholesterol (Lipitor), or controlled blood
sugar levels (Glucotrol XL). Both Norvasc
and Lipitor had 1999 revenues in
excess of $3 billion,
ranking
them among the
world’s most successful
medicines of any kind.
Zoloft is a leading treatment
for depression, which is estimated to affect
more than 10% of the world’s population
— about 600 million people. In 1999,
Zoloft was approved for posttraumatic
stress disorder (PTSD), a debilitating
What could be better than winning the World
Series? For New York Yankee second baseman
Chuck Knoblauch, it was having the chance
to share that victory with his father, Ray, a
victim of Alzheimer’s disease. “In the 1998
season, my dad came out to the stadium and
took great joy in watching me play,”
Knoblauch says. “I’m not sure he would have
been able to do that if he wasn’t taking
Aricept. That’s why I’m happy to be working
with Pfizer and Eisai on an awareness
campaign stressing the need for early
diagnosis and treatment.” Discovered
and developed by Eisai Co., Ltd.,
and copromoted by Pfizer,
Aricept is the world’s leading
Alzheimer’s medicine.
 condition triggered by exposure to an
extreme traumatic event. Approximately
half of all people will experience, witness, or
learn about such an event during their
lifetime; 10% to 20% of these people will
develop PTSD.
ons healthy
throughout their lives.
Arthritis is another common condition
that Pfizer is helping to combat. In 1999,
G.D. Searle & Co. and Pfizer introduced
Celebrex, which delivers relief from
arthritis pain, inflammation, and stiffness.
Powered by an excellent efficacy and side-
effect profile, Celebrex set a new record as
the most successful U.S. product launch
in industry history.
Building on our years of expertise in
livestock products, Pfizer has also
established leadership in the fast-growing
category of medicines for pets. The bond
between people and their pets is extremely
powerful. A Gallup poll of dog owners,
for example, showed that 92% consider
their pet to be a member of the family.
Pfizer’s newest companion animal medicine
is Revolution (marketed as Stronghold in
Europe), the first and only product that
protects dogs and cats from both internal
and external parasites, including heart-
worms and fleas, with just a single monthly
topically applied dose. This unique medi-
cine has enjoyed one of the most successful
launches in animal health industry history.
Seven of the medicines we offer generated
1999 revenues of over $1 billion. No other
pharmaceutical company has such a powerful
product portfolio.
Global statistics are difficult to come by, but the high prevalence in
the United States of many diseases — and the fact that so many
who suffer from them remain undiagnosed and untreated —
underscores the importance of the work we are doing:
• One in four has high blood pressure.
• One in three has high cholesterol.
• One in sixteen has diabetes.
• One in six will suffer from depression.
• One in six has arthritis.
• One in ten over age 65 has Alzheimer’s disease.
• Four in ten have allergies.
• Half of all men 40 to 70 years old will experience
erectile dysfunction.
Carole Gatti has owned and
operated Florida’s Winstar
Farm since 1988. She
relies on Pfizer’s animal
health products to
care for the horses
she boards, as well
as for her own pets,
including dachshunds
Odie and Samantha.
9
 By 2003,rising
global pharmaceutical
than it is today.

10
demand will create a
market one third larger
The subways of Tokyo are
bursting with energy, even as
Japan wrestles with caring for
what is the world’s most rapidly
aging population. Pfizer began
doing business in Japan more
than 40 years ago, and today it
ranks as our second-largest
market, accounting for over
$1.2 billion in annual revenues.
In December, Pfizer Japan
achieved its “Super 70” goal —
growing revenues faster than
the overall Japanese market for
70 straight months. In fact,
Pfizer now ranks as the number
one non-Japanese-owned
pharmaceutical company.
The 1999 introduction of Viagra
and the Alzheimer’s medicine
Aricept, coupled with our plans
to launch several new medi-
cines over the next few years,
should ensure continued
strong growth for Pfizer in this
important market.
11
 T
he desire to live a healthy, produc-
tive life knows no borders. Pfizer
was one of the first in the industry
to recognize the tremendous
potential for success outside our home
country, and we now do business in more
than 150 countries.
While each market is unique, we
have been working to share best practices
on a global basis. In 1997, for example,
we launched the Alzheimer’s medicine
Aricept in the United States, along with
our copromotion partner Eisai. Aricept
quickly became the country’s most widely
prescribed Alzheimer’s treatment, as we
worked to educate patients, physicians, and
advocacy groups about this effective treat-
ment for a terrible disease.
Pfizer brings good health
to every corn
12
The following year, Aricept was intro-
duced in Europe, where a similar strategy
yielded equally strong results. In 1999,
Aricept was launched in Japan, and Pfizer
and Eisai teams there met with their
counterparts from France and the United
States to learn from their success. The end
result is that well over a million people
around the world have now been helped
by this powerful medicine.
In 1998, Pfizer launched Viagra in the
United States, triggering what can only be
described as a global phenomenon. For all
In 1999, Pfizer celebrated its 150th anniver-
sary as an American company and marked a
number of international milestones as well.
Forty-five years in France, Sweden, the
Philippines, and the Netherlands. Forty years
in Finland, Norway, and Portugal. Thirty-five
years in Korea, Singapore, and Malaysia. Ten
years in China — where DanLong Feng, who
works closely with the media and govern-
ment, was Pfizer’s first employee. Today, a
decade later, she is excited about the role
Pfizer is playing in bringing better health
care to her country. “More than 1.2 billion
people live here,” she says. “And they are
just as interested in living healthy lives as
people in every other part of the world.”
 While “direct-to-consumer” advertising for
prescription pharmaceuticals is increasingly
common in the United States, it is still a new
concept in many other parts of the world.
Pfizer has pioneered the use of such ads to
raise awareness about erectile dysfunction, a
the attention, however, Viagra and erectile condition that affects an estimated 100 million
men and their partners worldwide. By show-
dysfunction (ED) are still frequently
casing the many faces of ED, Pfizer has taken
misunderstood. Pfizer has been educating this condition out of the shadows and given
men, doctors, and insurers that ED is a men the knowledge — and the courage —
common and treatable condition and one they need to seek treatment.
that can often be traced to even more serious
medical problems, such as high blood
pressure, high cholesterol, and diabetes.
This strategy, conceived and executed
globally, enabled Viagra to top the billion
dollar sales mark in 1999, its first full Italy
year on the market. More importantly, it
has helped more than six million men
and their partners in the United States
recapture an important part of their lives.

Brazil

rner of the world.

We are a truly global company,
doing business in more than
150 countries. In 1999, our
revenues exceeded $100 million
in 12 different countries outside
the United States.

United States

13
 The sequencing
will increase the number
The odds against bringing an
innovative new medicine to
market are daunting. New tech-
nologies are improving the
likelihood of success, however,
and that is good news for
pharmaceutical companies and
patients alike. Pfizer has long
14 been on the cutting edge of
drug discovery and is still there
today. By forging alliances with
leading biotech companies and
investing in new facilities of our
own, we are redefining the R&D
process. At our Discovery Tech-
nology Center in Cambridge,
Massachusetts, scientist Mark
Roth uses a state-of-the-art
machine that analyzes cells at
a rate of 10,000 per second and
sorts out only those that react to
a specific compound.This allows
us to identify promising new drug
targets roughly eight times faster
than conventional methods.
of the human genome
of drug targets
from 500 to 10,000.
15
 Our pipeline is full of exciting candidates,
including several medicines in late-stage
development with peak annual sales
potential of more than $1 billion.

Pfizer is leading the

T
remendous strides have been

way to a h
made against dozens of diseases
during the past several decades,
but much work remains to be
done. While we celebrate victories over
twentieth-century scourges like smallpox and we have assembled the strongest, most
and polio, we also watch with concern consistently productive global research and
the growing global ranks of those con- development operation in the industry to
fronting other dreaded illnesses, such do it. In the next few years alone, we expect
as diabetes and cancer. to launch as many as six new medicines
Pfizer is committed to discovering the to treat diseases and conditions affecting
wonder drugs of the twenty-first century, hundreds of millions of people.
At our research campus in
Groton, Connecticut, senior
scientist Barbara Foster is
part of a growing team of
Pfizer researchers working
to discover new cancer med-
icines. Pfizer has several
promising candidates in its
pipeline to prevent and treat
this disease. “Because we all
know colleagues and friends
whose cancer did not
respond to current therapies,
we take the challenge of
finding effective new drugs
very seriously,” Foster says.
“Every day we come to
work wanting to win. Our
scientists take great pride in
doing their best, and in
doing so, we inspire each
other to meet the challenge
before us.”

16

Relpax, for example, our new medicine
to treat migraine headaches, is currently
under regulatory review. Relpax has
demonstrated powerful pain relief in
comparative trials against the current market
leader. Because of this, we believe Relpax
will be welcome news to the world’s 240
million migraine sufferers — 85% of
whom are not treated with a prescription
medicine, despite the incapacitating nature
of these headaches.
a healthier tomorrow.
We are equally optimistic about the
prospects for a new “inhaled insulin” tech-
nology to treat diabetes that we are devel-
oping in collaboration with Aventis Pharma
and Inhale Therapeutic Systems, Inc. The
global incidence of diabetes is growing
rapidly, yet most people with the disease
are either undiagnosed or not adequately
controlling their blood sugar levels. This
new patient-friendly treatment option
provides the means by which patients may
better manage their diabetes and improve
control of this debilitating disease.
Inhaled insulin minimizes the need for
painful and inconvenient insulin injections
and thus removes the psychological barrier
to adequate administration of insulin.
Clinical trials have shown inhaled
insulin to be effective in and of itself as
well as in conjunction with oral medicines.
Phase III studies are now under way at 120
sites worldwide, and Pfizer and Aventis
Pharma are constructing a state-of-the-art
insulin plant in Frankfurt, Germany.
To further drive near-term growth, we
are exploring new uses and formulations
We have new chemical entities in early
development to treat these conditions:
Alzheimer’s Disease Head Trauma
Anxiety Infection
Arthritis Ischemic Reperfusion Injury
Asthma Lipid Modulation
Benign Prostatic Hyperplasia Migraine
Bone Restoration Nicotine Addiction
Cancer Obesity
Chronic Obstructive Pulmonary Disease Osteoporosis
Depression Pain
Dermal Scarring Sleep Disorders
Diabetes Stroke
Erectile Dysfunction Transplant Rejection
Frailty Wound Healing
for many of our currently marketed
medicines. Zithromax, for example, has
been a very successful antibiotic for many
years. Today, Pfizer scientists are also
studying whether Zithromax might be
effective in preventing cardiac events in
post-heart-attack patients.
Looking farther into the future, Pfizer
has more drug candidates in early develop-
ment than ever before. They cover a broad
range of therapeutic areas, including cancer,
post-menopausal disorders, frailty, and brain
injury caused by stroke or trauma.
Pfizer also leads the world in R&D
dedicated to animal health. Our pipeline
of product candidates, which has tripled
in number in the last three years, exploits
novel gene therapies and vaccine technolo-
gies and benefits from synergies with our
human health research. Between now and
2005, we estimate that our animal health
division will expand rapidly.
17
Review of the proposed merger with Warner-Lambert,
we expect further profit margin expansion, 16%

Operations revenue growth, and 20% earnings per share

growth in 2000.
Pfizer set records in each of the past three
years with the most successful product launches in
pharmaceutical history — Lipitor, Viagra, and
Celebrex. These three young blockbusters joined

P
fizer completed its rise to the top of the seven strong growth products — Norvasc, Zoloft,
worldwide pharmaceutical rankings in Zithromax, Diflucan, Zyrtec, Aricept, and
1999. Culminating a decade of extraordi- Glucotrol XL — to produce total company
nary growth, the company’s sales of revenue growth of 20% to $16.2 billion in 1999.
prescription drugs, including our share of the Each of these 10 products is number one or
sales of copromoted products, were the highest number two in its field, with U.S. patent protection
in the industry. until at least 2004.
Pfizer’s performance is characterized not Our pipeline of new products shows great
only by size, but also by superior growth. In 1999, promise. One new product, Tikosyn, was approved
Pfizer had 20% revenue growth, the highest by the FDA, and another, Relpax, received an
among the world’s top 10 pharmaceutical approvable letter. We intend to refile Zeldox by
companies. Our pharmaceutical revenue growth midyear, and filings of four other candidates are
exceeded that of the industry every year this expected by 2002. These seven late-stage prod-
decade, and in 1999 was more than two times ucts include four with peak annual sales potential
the industry rate. of a billion dollars or more — Relpax, Zeldox,
Our profit margins expanded in 1999, as valdecoxib, and inhaled insulin — and two others —
we leveraged substantial recent investments in Vfend and darifenacin — with sales potential
sales, marketing, and R&D. For Pfizer, excluding approaching this level. In addition, we anticipate
20 filings for supplemental indications or presenta-
tions of marketed products during this period. In
Worldwide Revenues of Therapeutic Lines and Major Products total, our pipeline of human medicines has more
% Change than 90 programs in development to treat diseases
(millions of dollars) 1999 1998 1997 99/98 98/97
such as osteoporosis, frailty, cancer, head trauma,
stroke, diabetes, asthma, and erectile dysfunction.
Worldwide Pharmaceuticals $14,859 $ 12,230 $ 9,726 + 22 + 26
Cardiovascular Diseases 4,635 4,186 3,806 + 11 + 10 Cardiovascular Diseases
Norvasc 3,030 2,575 2,217 + 18 + 16
Cardura 794 688 626 + 15 + 10
Although substantial progress has been made
Procardia XL 521 714 822 - 27 - 13 in recent decades, cardiovascular diseases (CVD)
Infectious Diseases 3,145 2,822 2,475 + 11 + 14 remain the leading cause of death in the developed
Zithromax 1,333 1,041 821 + 28 + 27 world. Of the 2.3 million American deaths
Diflucan 1,002 916 881 + 9 + 4 every year, more than 41% are primarily attribut-
Unasyn 349 327 346 + 7 - 5
Sulperazon 158 133 139 + 19 - 4
able to CVD, and more than 60% have CVD as
Central Nervous System Disorders 2,156 1,924 1,553 + 12 + 24 a contributing cause.
Zoloft 2,034 1,836 1,507 + 11 + 22 Mortality rates from coronary heart disease
Diabetes 297 273 234 + 9 + 17 and stroke have been cut in half in the past
Glucotrol XL 262 226 175 + 16 + 29 20 years, in part due to improved treatment of
Viagra 1,033 788 – + 31 –
Allergy 557 422 273 + 32 + 55
hypertension. However, improvements have
Zyrtec/Reactine 552 416 265 + 33 + 57 stopped in recent years, and many of the 50 million
Arthritis/Inflammation 222 234 271 - 5 - 14 Americans afflicted by hypertension go undiag-
Feldene 179 201 236 - 11 - 15 nosed or inadequately treated. The NHANES III
Alliance Revenue 2,071 867 316 + 139 + 175 survey, for example, concluded that fewer than
Consumer Health Care 561 526 584 + 7 - 10
70% of hypertensive patients were aware of their
Percentages may reflect rounding adjustments. condition, fewer than 55% were receiving
Certain prior year data have been reclassified to conform to the current year presentation. treatment, and fewer than 30% had their blood
pressure under control.

18
 Pfizer markets Norvasc, the world’s largest-
selling medicine for hypertension and angina.
Sales of Norvasc increased 18% to over $3.0 billion
in 1999. Since its introduction in 1990, Norvasc
has had more than 12 billion patient days of
therapy worldwide. Its success has been driven by
its outstanding efficacy, once-daily dosing, consis-
tent 24-hour control of hypertension and angina,
and excellent safety and tolerability. It is the
only drug in its class that can be safely used by
congestive heart failure patients.
The results of more than 190 clinical trials
support Norvasc’s profile. For example, in the
PREVENT clinical
trial, a three-year
study involving 825
patients with coro-
“It’s made
nary artery disease,
patients receiving a real difference Jessica Vance is a busy woman. She is a self-
employed event planner who enjoys painting,
hiking, dancing, and spending time with her
Norvasc experi-
enced significantly
fewer cardiovascular
in my life.” four grandchildren. Like millions of others, however, Jessica has high
blood pressure. Diagnosed in 1992, she tried several different antihyper-
tensives, but none worked for her until she began taking Norvasc in 1998.
procedures or events, such as angioplasties, bypass
“It’s made a real difference in my life,” Jessica says. “I can concentrate on
surgeries, and hospitalizations for severe angina or
building my business and doing the things I love without having to worry
heart failure, compared to those receiving placebo.
about my health all the time.”
Pfizer is currently undertaking a two-year,
3,000-patient study, CAMELOT, comparing
Norvasc with the ACE inhibitor enalapril in the Sales of Procardia XL for hypertension and
reduction of cardiovascular events and the angina declined 27% to $521 million, due in part
progression of atherosclerosis in patients with to doctors’ increasing emphasis on Norvasc.
coronary artery disease. Norvasc is also being Sales of Cardura, an alpha blocker offering
studied in the largest trial ever undertaken in clinicians and patients a unique, cost-effective
hypertension, the five-year, 43,000-patient option for treating hypertension and benign
ALLHAT trial begun in 1994 under the auspices prostatic hyperplasia (BPH), increased 15% to
of the National Heart, Lung, and Blood Institute. $794 million in 1999. Studies have found that
The five-year, 18,000-patient ASCOT clinical more than 40% of men diagnosed with BPH also
trial will test whether Norvasc and other newer have hypertension. Cardura can be used to treat
antihypertensive therapies can show reduced rates patients with BPH who also have hyperlipidemia,
of heart attacks compared with older therapies. insulin resistance, and diabetes. Cardura patients
ASCOT will also examine whether combination of in the PREDICT trial, a one-year, 1,089-patient
the lipid-lowering agent Lipitor with Norvasc study, experienced significantly better relief of
reduces the rates of heart attacks. BPH symptoms than patients on finasteride. An
extended-release formulation, Cardura XL, which
has been launched in some European countries,
may reduce the need for dose titration.
Blood cholesterol levels are an important and
underappreciated risk factor for heart disease.
Studies have shown that a 1% decrease in
cholesterol levels leads to a 2% decrease in the
risk of heart disease.

19
 Lipitor is the most-prescribed cholesterol-
lowering product in the United States, receiving
more than 43% of weekly new prescriptions for all
cholesterol-lowering agents. Worldwide sales of
Lipitor, discovered and developed by the Parke-
Davis Division of Warner-Lambert and copromoted
by Pfizer, totaled $3.7 billion in 1999.
In clinical studies, Lipitor, as an adjunct to
diet, has demonstrated the ability to significantly
reduce cholesterol levels. In fact, 72% of Lipitor
patients studied reached their National Cholesterol
Education Program goal for LDL cholesterol on
the 10 mg starting dose.
In the AVERT trial, Lipitor demonstrated a
36% reduction in the combined incidence of
cardiovascular events, such as death, nonfatal
heart attack, bypass surgery, revascularization,
and worsening angina, compared with patients
receiving angioplasty followed by usual care.
Pfizer and Warner-Lambert are continuing
a broad clinical program for Lipitor. The TNT
(Treating to New Targets) trial is a five-year
study enrolling 8,600 patients at 250 sites to
determine whether there are further benefits
to using higher doses of Lipitor to bring LDL
cholesterol below current guidelines.
Pfizer and Warner-Lambert have also begun
development programs for a single product that
combines the active ingredients of Lipitor and
Norvasc. In the United States, 27 million patients
suffer from both high blood pressure and high
cholesterol. With only about 15% of these
patients being treated for both conditions, a vast
number of patients may benefit from a single
combination therapy.
Pfizer will add to its cardiovascular product
line with the first-quarter 2000 launch of
Tikosyn. This product is indicated for conversion
to, and maintenance of, normal sinus rhythm in
highly symptomatic patients with atrial fibrilla-
tion (AF)/atrial flutter of greater than one week
duration. Pfizer has developed a comprehensive
program to educate institutions and health care
professionals on the required in-hospital initiation
of the drug and use of its unique dosing algorithm.
Patients with AF suffer from rapid and irregular
heartbeats in the upper chambers of the heart.
Many experience debilitating chest pain, short-
ness of breath, fatigue, and anxiety.
20
The American Stroke Association estimates
that 600,000 Americans suffer a stroke every
year, more than one quarter of whom die.
Neutrophil inhibitory factor (NIF), a biological
discovered by Corvas that is produced by the
canine hookworm, may be useful in preventing
brain damage that occurs in stroke. Pfizer is
conducting Phase II clinical trials of this com-
pound and, pending their success, may accelerate
this product’s development.
Diabetes
People with diabetes are two to four times more
likely than non-diabetics to have heart disease
or suffer a stroke. Worldwide, the incidence of
diabetes is estimated to grow from 175 million
today to 240 million people in the next decade.
Glucotrol XL, Pfizer’s oral treatment for
Type 2 diabetes, stimulates the pancreas to release
insulin, with convenient once-daily dosing, no
weight gain, and no adverse effects on blood
lipids. Sales in 1999 rose 16% to $262 million.
We are developing an inhalable form of
insulin in collaboration with Aventis Pharma and
Inhale Therapeutic Systems. Our clinical data in
Type 1 diabetics show this patient-friendly
insulin delivery system to be as effective as subcu-
taneous injections of short-acting insulin. In Type
2 diabetes, we are demonstrating that inhaled
insulin can be used as monotherapy or as an
adjunct to oral hypoglycemic agents. The prod-
uct, expected to be the first of its kind to reach
the market, is in Phase III clinical trials, with a
regulatory filing expected in 2001.
Pfizer is also pursuing an innovative approach
to treatment of Type 2 diabetes with the develop-
ment of CP-368,296. This compound inhibits the
enzyme responsible for the release of glucose into
the blood from stored glycogen in the liver.
Clinical trials indicate that CP-368,296 causes a
highly significant dose-dependent decrease in fast-
ing morning glucose levels after two weeks of
administration without the accompanying risk
of hypoglycemia.
Infectious Diseases
Pfizer’s Zithromax is the most-prescribed brand-
name oral antibiotic in the United States.
Worldwide sales grew 28% to $1.3 billion in
1999, driven by the product’s broad efficacy,
compliance advantages, favorable side-effect profile,
and a good-tasting liquid formulation for children.
Zithromax treats most respiratory infections in
adults and children with once-daily dosing for
just three to five days. It is also used for skin
infections in adults, middle ear infections and
strep pharyngitis in children, and a broad range
of other illnesses.
The 3,500-patient WIZARD study is testing
whether 600 mg of Zithromax taken once weekly
reduces cardiac events in post-heart-attack
patients with atherosclerosis who are positive for
previous Chlamydia presence. Chlamydia has been
observed in arterial plaques, where it may con-
tribute to plaque instability, rupture, and heart
attack. Zithromax’s unique long tissue half-life
and high antichlamydial potency make it the
ideal agent for this condition. A new indication
for treatment of Mycobacterium avium complex and
a three-day dosing regimen for the U.S. market
are also in advanced development.
Diflucan, the world’s best-selling prescrip-
tion antifungal product, achieved 9% growth in
sales to over $1.0 billion in 1999. This robust
growth after 12 years on the market reflects the
unique properties of Diflucan and the growing
medical need that it continues to fulfill. It treats
As a working mother at Pfizer, Nancy Knowles
understands the challenge of balancing the
demands of career and family — especially when
one of her children is sick. Seen here at the
“Pfizer Kids” child care center in New York City
with Carly and Sean, Nancy says, “Sean’s ear
infection was really slowing him down. Zithromax
has him laughing again.” Zithromax’s efficacy
and convenient once-a-day-for-five-days dosing
has helped it become the most-prescribed
branded oral antibiotic in the
United States. Family-friendly
measures like our child “Zithromax
care center contributed to
Pfizer being named one of
the “100 Best Companies
has Sean laughing
again.”
to Work For” by Fortune magazine and one of the
“100 Best Companies for Working Mothers” by
Working Mother magazine.
21

systemic fungal infections, often present in
critically ill AIDS, cancer, transplant, and other
immunocompromised patients. Such infections
are difficult to diagnose and, if not treated early,
can result in high mortality. Diflucan is also
effective as an oral treatment for vaginal candidi-
asis and other non-life-threatening infections.
Pfizer is completing clinical testing of Vfend
(voriconazole), a powerful antifungal that it
expects to file with regulatory authorities during
2000. The compound is targeted to treat a broad
range of patients for invasive infections, includ-
ing aspergillosis and candidiasis.
Sales of Trovan were $86 million in 1999.
In June 1999, based on reports of rare liver side
effects, European medical authorities suspended
the European Union licenses of Trovan for 12
months. In the rest of the world, including the
United States, the use of Trovan is limited to
serious infections in institutionalized patients.
“It was a long,
Central Nervous System Disorders
While diseases of the central nervous system can
be difficult to recognize, they have devastating
effects on people’s lives. About 18 million people
in the United States suffer from depression at any
given time, and up to 25% of women and up to
12% of men in the United States will experience
a major depression during their lives. Pfizer’s
Zoloft treats depression and panic disorder as well
as obsessive-compulsive disorder in adults and
children with strong efficacy and a favorable
safety and tolerability profile. The results of
outcomes research studies have demonstrated that
Zoloft patients have lower discontinuation rates
and better treatment compliance in comparison to
some other antidepressants.
In 1999, Zoloft became the second Pfizer-
developed product to achieve $2 billion in annual
sales. An oral liquid dosage form, which provides
more convenient dosing in children and patients
who have difficulty swallowing pills, and an indi-
cation for posttraumatic stress disorder (PTSD)
were approved by the FDA in December 1999.
Approximately 8% of the population will suffer
from PTSD at some point in their lifetimes.
Pfizer is also testing Zoloft for social phobia and
pediatric depression.

“Today I’m better, hard road,” says

Lyn Whitten,
Approximately 10% of people over 65 suffer
from Alzheimer’s disease, including 4 million
Americans. Aricept has been taken by more
a lot better.” reflecting upon
the past few years of her life. “But today
I’m better, a lot better.” Lyn is one of more
than a million patients with mild-to-moderate
Alzheimer’s disease to enhance or maintain cogni-
tion. Discovered and developed by Eisai Co.,
than a million uninsured patients who have
Ltd., and copromoted by Pfizer,
received the most advanced Pfizer
the product preserves levels of
medicines at no charge through our
a neurotransmitter in the
Sharing the Care program. Following
brain. Total worldwide sales
the loss of a good job in California’s
grew 49% to $551 million
aerospace industry and the
in 1999. Together with
death of her mother, Lyn found
our partner Eisai, we
herself battling severe depres-
recently concluded
sion and anxiety, struggling to
make ends meet, and wonder-
ing where to turn for help. She
has been taking the antide-
pressant Zoloft for about a
year, and is gradually
getting her life back on
track. “I owe thanks to
the many people who
have helped me
along the way,” she
says. “I feel truly
blessed.”

22
two landmark one-year studies that demonstrate
Aricept’s benefit in maintaining patient function
and delaying institutionalization. It is also the
subject of a three-year, 720-patient study
designed to investigate whether Aricept can delay
the onset of Alzheimer’s disease in patients with
mild cognitive impairment.
Clinical development of Zeldox, for the
manifestation of psychosis, advanced in 1999.
One psychotic disorder, schizophrenia, affects
approximately 1% of the world’s population. It is
characterized by symptoms such as hallucinations,
delusions, social withdrawal, and cognitive
impairment. Zeldox is effective in treating a
broad spectrum of symptoms, both in the short
and long term, causing little or no weight gain
and having a favorable effect on blood lipids. It
has a unique intramuscular form for initiation of
therapy for control of acute exacerbations.
Following consultation with the FDA, after
the agency issued a non-approvable letter for
Zeldox, we undertook a unique clinical trial to
characterize the modest electrocardiogram (ECG)
changes that were seen with the drug. Data from
this trial and the clinical development program
support the absence of a significant risk associated
with the ECG changes seen with Zeldox. We
anticipate refiling our new drug application for
Zeldox by midyear.
Migraine is one of the most common
medical problems, experienced by 18% of women
and 6% of men. In spite of the incapacitating
nature of migraines — symptoms of which
include severe headache pain, nausea, and sensitivity
to light or sound — the vast majority of sufferers
have never been diagnosed or treated with pre-
scription medicines.
In October 1999, Pfizer received an approvable
letter from the FDA for Relpax, our new treatment
for migraine. Clinical data show that within an
hour of taking an oral dose of Relpax, up to 40%
of patients with moderate or severe migraine
experience significant or complete headache relief,
and up to 70% of patients experience relief
within two hours. The Relpax clinical program
consisted of seven controlled clinical trials, three of
which compared Relpax to the current leading
prescription treatment for migraine.
Brain trauma from motor vehicle accidents,
sports injuries, and other causes results in about
300,000 hospitalizations and 50,000 deaths
each year in the United States. Pfizer’s Phase II
compound CP-101,606 shows promise as a
treatment for brain trauma. If pivotal trials are
successful, this candidate has the potential for
accelerated development.
Metabolic Disorders
The National Institutes of Health estimate that
10 million Americans suffer from osteoporosis,
a disease characterized by deterioration of bone
mass. The Pfizer-developed compound lasofoxifene
has shown promise in prevention and treatment
of osteoporosis, lowering of harmful blood lipids,
and prevention of breast cancer. In Phase II clinical
trials, 0.25 mg of lasofoxifene increased bone
mineral density in the lumbar spine more than
60 mg of raloxifene after six months. Lasofoxifene
also lowered LDL cholesterol by 25%.
Loss of bone and muscle mass throughout life
can lead to frailty and greatly reduced quality of
life in the elderly. CP-424,391, a Phase II Pfizer
compound, has demonstrated good efficacy, safety,
and tolerability in increasing levels of the growth
hormone that preserves bone and muscle mass.
Arthritis
About one person in six suffers from arthritis.
Rheumatoid arthritis (RA) affects about 1% of
the population and results when the immune sys-
tem attacks a person’s own joints. Osteoarthritis
(OA) results from wear and tear on the joints.
Celebrex, a new pharmaceutical copromoted
by Pfizer and the G.D. Searle division of
Monsanto Company, which discovered the drug,
relieves the pain, inflammation, and stiffness of
OA and RA. In clinical trials, Celebrex was shown
to be as effective as the maximum recommended
dose of the prescription-strength nonsteroidal
anti-inflammatory drug (NSAID) naproxen in
treating arthritis pain and inflammation. Celebrex
works by inhibiting the enzyme cyclo-oxygenase-2
(COX-2), which plays a role in arthritis pain and
inflammation, without inhibiting cyclo-oxygenase-1
(COX-1), which helps maintain the stomach lining.
NSAIDs in general inhibit both COX enzymes, so
they treat arthritis pain and inflammation, but
may damage the stomach lining, potentially leading
to ulcers in some patients.
23
 “I just love seeing Ed
be himself again.”
With sales of $1.5 billion in 1999, Celebrex
was the most successful drug launch in pharma-
ceutical industry history. In its first year, more
than 19 million prescriptions were written for
Celebrex worldwide.
Pfizer and G.D. Searle & Co. are actively
engaged in a program to broaden the clinical pro-
file of Celebrex, including potential new uses for
treatment of pain and several types of cancer.
In addition, Pfizer and Searle are testing the
second-generation compound valdecoxib for
treatment of RA, OA, and pain.
24
In New York’s Central Park, Ed and Shaila Small
enjoy an afternoon of ice skating. The Smalls have
always been extremely active people, but Ed’s
arthritic knee was beginning to slow him down.
He began taking Celebrex in February 1999 and
has been feeling better ever since. “I am the
director of a track and field center during the
week and keep busy during my days off, too,” Ed
says. “If my knee is holding me back, I can’t live
my life.” Shaila noticed the difference Celebrex
made right away. “I could see how hard it was for
him to deal with the pain,” she says. “I just love
seeing Ed be himself again.”
Cancer
Cancer is the second leading cause of death in
the United States, with 1.2 million new cases
and 600,000 deaths every year.
In December 1999, the FDA approved
Celebrex as the first COX-2 specific inhibitor
approved for treatment of familial adenomatous
polyposis (FAP), a rare and devastating genetic
disease characterized by the development of
hundreds to thousands of polyps in the colon and
rectum. Left untreated, virtually all patients with
FAP develop colorectal cancer by age 40 to 50.
Celebrex is being tested for several other cancers.
Erectile Dysfunction
The 1998 launch of Viagra for erectile dysfunction
(ED) was one of the most talked-about medical
advances of our time. The product made further
progress in 1999, with a worldwide rollout and
sales topping $1 billion. Since launch, physicians
have written more than 17 million prescriptions
for Viagra for more than 6 million patients in the
United States alone. More than 150 million
tablets have been dispensed worldwide.
Viagra allows many men with ED to achieve
erections in response to sexual stimulation. It
improves erections in up to 82% of men who take
it, is effective in a broad range of patients, and
offers the convenience of a pill. At the 1999 annual
meeting of the American Urological Association,
Pfizer reported that 93% of 401 patients who
participated in a Viagra study remained satisfied
with the drug after two years.

Allergy
Pfizer’s antihistamine Zyrtec, marketed as Reactine
in Canada, provides strong, rapid, and long-lasting
relief for seasonal and perennial allergies and hives
with once-daily dosing. Sales in the United States
and Canada grew 33% to $552 million in 1999.
In two clinical studies conducted in an artificially
controlled pollen environment, Zyrtec began
working in about one hour, compared to about
three hours for Claritin. In a survey of 623 allergy
sufferers, 93% wanted fast relief most. Zyrtec is
the only prescription antihistamine approved for
children as young as two years old. Zyrtec syrup
is the most-prescribed antihistamine syrup in the
United States. A formulation with a decongestant
is in advanced development.
Urology
More than 50 million people in the United States,
Europe, and Japan suffer from overactive bladder, a
condition characterized by increased frequency and
urgency of bladder activity and incontinent events.
Pfizer expects its compound darifenacin to provide
a therapeutic profile superior to the therapies
currently available. Darifenacin progressed into
Phrase III testing during 1999.
Consumer Health Care
Pfizer’s Consumer Health Care Group (CHC)
markets a broad range of self-medication products.
CHC sales, which are reflected in pharmaceutical
sales, increased 7% in 1999 to $561 million.
Six of CHC’s nine major brands — including
BenGay for the pain of minor arthritis and muscle
aches, and Visine eye care products, which
provide fast relief for redness, dryness, and now
allergies — are number one in their category.
Other CHC brands include Cortizone anti-itch
products, Desitin diaper rash products, Unisom
sleep aids, RID head lice treatments, Barbasol
shaving cream, and Plax pre-brushing dental rinse.
The division is also working today to plan
for future switches of prescription-only medicines
to over-the-counter (OTC) brands. With experience
gained by the successful OTC switch of Reactine
in Canada and Diflucan One in the United
Kingdom, Pfizer is well positioned to expand its
OTC portfolio in coming years.
Animal Health
Pfizer’s Animal Health Group (AHG) is a
global supplier of animal medicines unmatched
in product-line or geographic breadth. AHG
revenues grew 2% to $1.3 billion in 1999.
The $1.3 billion worldwide pet antiparasitic
market consists of medicines for external parasites
such as fleas and ticks, treatments for gastroin-
testinal worms, and heartworm preventatives.
Revolution, marketed as Stronghold in Europe, is
the first product to treat all three problems, and
its U.S. launch was one of the most successful in
the history of animal health. This once-a-month,
simple-to-administer topical liquid protects
What moves at 180 miles-per-hour and gets the red out
even faster? It’s the new Visine-sponsored race car, which
is tearing up tracks across America in 2000 as part of the
“Visine helps me stay
NASCAR Busch
Grand National
focused on the
checkered flag.”
Series. A second car,
sponsored by Viagra,
is racing on NASCAR’s Winston Cup circuit. NASCAR auto
racing is the fastest-growing spectator sport in the world.
One fan of Visine is driver Matt Kenseth, who especially
likes the brand’s newest formulation, Visine Tears. “My eyes
can get pretty dry, especially when we race in places like
Arizona and California,” he says. “Visine
helps me stay focused on the checkered flag.”
25
 provides relief from acute

“Ezra and Ivan are

Lisa Neuman owns two dogs and cares for
dozens more every day as a veterinarian at and chronic pain associated
the Miracle with osteoarthritis. A new

more than just my dogs. Mile Animal

Clinic in Ft.
chewable form provides the
pet owner with greater con-
venience of administration.

They’re my friends.”
Myers,
Florida. “I know how important it is to Other important Pfizer
keep pets healthy,” she says. “Ezra and companion animal products
Ivan are more than just my dogs. They’re my friends.” Dr. Neuman include Vanguard vaccines
protects them from harmful parasites — inside and out — with for canine enteric disease,
Revolution, a new Pfizer medicine developed specifically for dogs Leukocell vaccines for feline
and cats. “As a veterinarian, it’s great to be able to prescribe a single leukemia, Clavamox anti-
product that does so many things so effectively. It’s great as a pet infectives, and Anipryl for
owner, too. One spot of Revolution a month on the back of their Cushing’s disease and
necks, and these guys are good to go.” Cognitive Dysfunction
Syndrome in dogs.
against internal and external parasites, including AHG produces leading antiparasitics, vaccines,
heartworm, fleas, and ear mites in both dogs and and anti-infectives for cattle, swine, and poultry.
cats; American dog ticks and sarcoptic mange in Dectomax, AHG’s largest-selling product, pro-
dogs; and hookworm and roundworm in cats. tects cattle, swine, and sheep from both internal
There are nearly 53 million dogs and nearly 60 and external parasites, providing the broadest
million cats in the United States alone. More than spectrum of control available. It can be adminis-
half of all dogs and three-quarters of all cats are tered either by injection or topically. RespiSure/
not adequately protected against these parasites. Stellamune vaccines help prevent a type of
Since its introduction in 1997, nearly 5 mil- pneumonia and the related problems of slow
lion arthritic dogs worldwide have been treated weight gain, decreased feed efficiency, and lack
with Rimadyl. About 15% of all dogs suffer of uniformity in size in swine.
from osteoarthritis, a condition characterized by
worsening pain, stiffness, and lameness. Rimadyl
26
A Helping Hand

I
n country after country, through the
donations of our medicines and the
volunteer efforts of our employees, Pfizer
is bringing improved health — and
renewed hope — to those in need.
In the United States, Pfizer’s largest
philanthropic program is Sharing the
Care, through which uninsured patients
receive our innovative medicines at
no charge.
“I speak on behalf of all governors
when I say we are proud of Sharing the
Care and its commitment to helping
more than a million of the nation’s medically

“My own son is blind,

Phat Tran, left,
underserved lead healthier, more productive lives,” and Chieck
said Thomas Carper, governor Kieta work at
of Delaware and 1999 chairman
of the National Governors’
Association, which is partnering
so I understand Pfizer’s plant in Brooklyn, New York, where our
trachoma-fighting antibiotic Zithromax is manu-

how precious sight is.”

with Pfizer on the program.
Access to medicines is no less of an issue
outside the United States, a fact tragically
illustrated by trachoma, a disease that has already
claimed the sight of 6 million people — mostly
women and children — and threatens a staggering
540 million more.
In 1998, Pfizer joined with the Edna
McConnell Clark Foundation to found the
International Trachoma Initiative. One of the
cornerstones of the program is Pfizer’s donation
of the antibiotic Zithromax to five developing
countries where the disease is endemic. We have
already provided more than a million doses of this
powerful medicine, which has proven to be the
most effective way to combat trachoma.
“The donation of Zithromax will help us to
reduce significantly the number of new trachoma
cases in Morocco and save the sight of many
of our citizens,” said Dr. Abdelwahed El Fassi,
Morocco’s Minister of Public Health.
In addition to large-scale programs, Pfizer
employees continue to find hundreds of ways to
make the world a better place. Providing relief in
factured for ship-
ment around the
world. Tran is a
native of Vietnam, Kieta of Mali—two of the five devel-
the wake of natural oping nations that Pfizer is working with to eliminate
disasters in Turkey, this blinding disease. “You can tell when people have
Taiwan, Venezuela, trachoma,” says Kieta, who recently returned to Mali
and the United States.for a visit. “Their eyes are open, but they cannot see.
Aiding refugees in There’s great satisfaction in knowing you are making
war-torn Kosovo and a medicine that will help people in your homeland.”
Indonesia. Bringing Tran agrees. “My own son is blind, so I understand how
smiles to the faces ofprecious sight is,” he says. “I’m very proud to be a
sick children around part of a company that is helping to fight blindness
the world. Visiting around the world.”
classrooms to inspire
the scientists of tomorrow.
As one Pfizer employee said after a day of
volunteering with his family at a children’s
hospital in Atlanta, Georgia: “My eight-year-old
son was impressed that Pfizer does more than
just make medicines for sick people; we also
help people by being there when needed. I
think that sums up who we are better than just
about anything.”
27
Financial Review

Proposed Merger with Warner-Lambert Company inventories. Our 1998 operating results reflect:
• the sale of our Medical Technology Group (MTG)
On February 7, 2000, we announced an agreement to merge
• the recording of certain significant charges associated
with Warner-Lambert Company (Warner-Lambert). Under
with adjustments to asset values, the exiting of certain
terms of the merger agreement, which has been approved by
product lines, plant rationalizations, severance payments,
the Board of Directors of both Pfizer and Warner-Lambert,
co-promotion payments to Searle, a contribution to The
we will exchange 2.75 shares of Pfizer voting common stock
Pfizer Foundation and other miscellaneous charges
for each outstanding share of Warner-Lambert voting common
stock in a tax-free transaction valued at $98.31 per Warner- Analysis of the Consolidated Statement of Income
Lambert share, or an equity value of $90 billion based on the
closing price of our stock on February 4, 2000 of $35.75 per % Change
share. Customary and usual provisions will be made for (millions of dollars) 1999 1998 1997 99/98 98/97
outstanding options and warrants. Net sales $14,133 $12,677 $10,739 11 18
The combined company, which will be called Pfizer Inc, Alliance revenue 2,071 867 316 139 175
is expected to have (excluding any impact of anticipated
Total revenues 16,204 13,544 11,055 20 23
restructuring charges and transaction fees of $1.7 billion to Cost of sales 2,528 2,094 1,776 21 18
$2.2 billion): Selling, informational and
• compounded annual revenue growth of 13% and earnings administrative expenses 6,351 5,568 4,401 14 27
growth of 25% through 2002 % of total revenues 39.2% 41.1% 39.8%
• $4.7 billion in annual research and development expenses R&D expenses 2,776 2,279 1,805 22 26
in 2000 % of total revenues 17.1% 16.8% 16.3%
• anticipated annual cost savings and efficiencies of Other deductions — net 101 1,009 206 (90) 391
$1.6 billion by 2002 ($200 million of these savings are Income from continuing
expected to be achieved in 2000, $1 billion in 2001 and operations before taxes $ 4,448 $ 2,594 $ 2,867 71 (10)
$1.6 billion in 2002) % of total revenues 27.5% 19.2% 25.9%
• diluted earnings per share of $.98 on a pro forma basis in Taxes on income $ 1,244 $ 642 $ 775 94 (17)
Effective tax rate 28.0% 24.8% 27.0%
2000, $1.27 for 2001 and $1.56 for 2002 (these numbers
Income from continuing
include the $1.6 billion of cost savings phased in over this operations $ 3,199 $ 1,950 $ 2,082 64 (6)
time period, but do not include any increased sales from % of total revenues 19.7% 14.4% 18.8%
collaborative activities and the $1.8 billion termination Discontinued
fee paid by Warner-Lambert to American Home operations — net of tax (20) 1,401 131 — 972
Products Corporation) Net income $ 3,179 $ 3,351 $ 2,213 (5) 51
This transaction is subject to customary conditions, % of total revenues 19.6% 24.7% 20.0%
including the use of pooling-of-interests accounting, qualifying
Percentages may reflect rounding adjustments.
as a tax-free reorganization, shareholder approval at both
companies and usual regulatory approvals. The transaction is Total Revenues
expected to close in mid-2000.
The following financial review reflects the results of Total revenues increased 20% or $2,660 million in 1999 and
operations and financial condition of Pfizer and does not consider 23% or $2,489 million in 1998. Revenue increases in both
the impact of the proposed merger with Warner-Lambert. years were primarily due to sales volume growth of our in-line
products and revenue generated from product alliances
Overview of Consolidated Operating Results (alliance revenue).
Revenue growth in 1999 was not significantly impacted
In 1999, total revenues grew 20% to $16,204 million, reflecting
by foreign exchange. Total revenues grew by 26% in 1998
the strong worldwide demand for our in-line products, as well
excluding the impact of foreign exchange.
as our alliance products. Our operating results in 1999 were
impacted by the recording of a charge to write off certain Trovan

28
 Pfizer Inc and Subsidiary Companies

introduction of Viagra accounts for 12 percentage points of the

Elements of Total Revenue Growth 1998 U.S. growth. Pharmaceutical revenue growth in 1999 was
not significantly impacted by foreign exchange. In 1998,
Volume has been the major pharmaceutical revenue grew 29% excluding the impact of
24.8%
contributor to total revenue foreign exchange. The currency impact on the 1998 revenue
growth in each of the last growth reflects the strengthening of the dollar relative to the
three years. 19.6%
Japanese yen, as well as several European and other Asian
14.0% currencies.
In 1999, we had seven products, including alliance
products, with sales to third parties in excess of $1 billion each.
Volume The five Pfizer-discovered products in this group — Norvasc,
Price 1.2% 1.6% Zoloft, Zithromax, Viagra and Diflucan — grew at a combined
0.5%
Currency annual rate of 18% in 1999 and are patent-protected well into
(0.5)% this decade, or beyond.
(3.5)% (3.5)%
Net Sales — Major Pharmaceutical Products
99 98 97
% Increase
(millions of dollars) 1999 1998 1997 99/98 98/97
Percentage Change in Total Revenues
Cardiovascular Diseases: $4,635 $4,186 $3,806 11 10
Norvasc 3,030 2,575 2,217 18 16
Analysis of % Change
Total % Cardura 794 688 626 15 10
Change Volume Price Currency
Infectious Diseases: 3,145 2,822 2,475 11 14
Pharmaceutical
Zithromax 1,333 1,041 821 28 27
1999 vs. 1998 21.5 21.1 0.5 (0.1)
Diflucan 1,002 916 881 9 4
1998 vs. 1997 25.8 28.1 1.0 (3.3)
Animal Health Central Nervous System
1999 vs. 1998 2.4 4.9 1.2 (3.7) Disorders: 2,156 1,924 1,553 12 24
1998 vs. 1997 (1.1) 0.6 2.4 (4.1) Zoloft 2,034 1,836 1,507 11 22
Total
Viagra 1,033 788 — 31 —
1999 vs. 1998 19.6 19.6 0.5 (0.5)
1998 vs. 1997 22.5 24.8 1.2 (3.5) Allergy: 557 422 273 32 55
Zyrtec/Reactine 552 416 265 33 57
Certain prior year data have been reclassified to conform to the current year
presentation.
Total Revenues by Business Segment
(% of total revenue) Pharmaceutical Animal Health In June 1999, the European Union’s Committee for
8% 10% 12% Proprietary Medicinal Products suspended the European Union
(EU) licenses of the oral and intravenous formulations of our
antibiotic Trovan for 12 months. In the rest of the world,
including the U.S., the use of Trovan is limited to serious
infections in institutionalized patients. As a result of these
92% 88%
limitations, Trovan net sales declined to $86 million in 1999
90%
1999 1998 1997 from $160 million in 1998. See “Cost of sales” for a discussion
(millions of dollars)
of a charge recorded in 1999 to write off certain Trovan
inventories.
% Change % Change % Change
99/98 98/97 97/96
Alliance revenue was $2,071 million in 1999, reflecting
$14,859 22 $12,230 26 $ 9,726 13 revenue associated with the co-promotion of Lipitor, Aricept
1,345 2 1,314 (1) 1,329 9
and our new alliance product, Celebrex.
Total $16,204 20 $13,544 23 $11,055 12 In February 1999, we launched Celebrex with G.D. Searle
& Co. (Searle), the pharmaceutical division of Monsanto
Company, which discovered and developed the drug. Celebrex
Pharmaceutical revenues increased 22% to $14,859 million in is used for the relief of symptoms of adult rheumatoid arthritis
1999 and 26% to $12,230 million in 1998. In the U.S. market, and osteoarthritis. During 1999, Celebrex achieved total global
revenue growth was 21% in 1999 and 38% in 1998, while sales of approximately $1.5 billion.
international growth was 22% in 1999 and 10% in 1998. The

29
Pfizer Inc and Subsidiary Companies

Together with our alliance partner, the Parke-Davis Net sales decreased 1% in 1998 due to a weak livestock
Division of Warner-Lambert, the company that discovered and market in the U.S. and poor Asian economies.
developed Lipitor, we co-promote this product in most major
world markets. During 1999, Lipitor achieved third-party sales Total Revenues by Country
of approximately $3.7 billion.
(% of total revenue) United States Japan All Other Countries
These alliances allow us to co-promote or license these 8% 7% 9%
products for sale in certain countries. Under the co-promotion 31% 32% 36%
agreements, these products are marketed and promoted with
our alliance partners. We provide cash, staff and other resources
to sell, market, promote and further develop these products.
Revenue from co-promotion agreements is reported in the
61% 61% 55%
Statement of Income as Alliance revenue. 1999 1998 1997
Certain alliance agreements include additional provisions (millions of dollars)
that enable our product alliance partners the right to negotiate % Change % Change % Change
to co-promote certain specified Pfizer-discovered products. 99/98 98/97 97/96
$ 9,896 21 $ 8,205 35 $ 6,089 17
Rebates under Medicaid and related state programs 1,249 32 943 (1) 949 3
reduced revenues by $146 million in 1999, $150 million in 5,059 15 4,396 9 4,017 7
1998 and $99 million in 1997. The 1998 increase in rebates
Total $16,204 20 $13,544 23 $11,055 12
reflects growth of in-line products and the introduction in
1998 of two products — Trovan and Viagra. We also provided
to the federal government legislatively mandated discounts of Revenues were in excess of $100 million in each of 12
$95 million in 1999, $105 million in 1998 and $88 million countries outside the U.S. in 1999. The U.S. was the only
in 1997. Performance-based contracts also provide rebates to country to contribute more than 10% to total revenues.
several customers as a result of the increasing influence of
managed care groups on the pricing of our products. Percentage Change in Geographic Total Revenues
by Business Segment
In the fourth quarter of 1999, we sold the Bain de Soleil
sun care product line for $26 million in cash to Schering- % Change in Total Revenues
Plough HealthCare Products, Inc. Proceeds from the sale U.S. International
approximated the total of the carrying value of net assets 99/98 98/97 99/98 98/97
associated with this product line and selling costs. The sale of
Pharmaceutical 21 38 22 10
Bain de Soleil will not have a material impact on our future
Animal Health 14 3 (7) (4)
results of operations. Total 21 35 18 8
Animal Health net sales increased 2% to $1,345 million
in 1999 and decreased 1% to $1,314 million in 1998. Excluding Product Developments
the impact of foreign exchange, net sales increased 6% in 1999 We continue to invest in R&D to provide future sources
and 3% in 1998. The increase in net sales in 1999 was due to: of revenue through the development of new products, as well
• the performance of the companion animal business as through additional uses for existing in-line and alliance
partially offset by products. Certain significant regulatory actions by, and filings
• the continuing weakness in the livestock market in the pending with, the U.S. Food and Drug Administration (FDA)
U.S. and Europe follow:
• the decision of the European Commission to ban certain
antibiotic feed additives, including Stafac (virginiamycin) U.S. FDA Approvals
in the EU after June 30, 1999
Product Indication Date Approved
We do not expect the ban on sales of virginiamycin to have Zoloft Posttraumatic stress disorder (PTSD) December 1999
a material effect on our future results of operations. Zoloft Oral liquid dosage form December 1999
Sales of companion animal products increased by 30% in Celebrex Familial adenomatous polyposis December 1999
1999 primarily due to the launch of Revolution and the growth (a rare and devastating hereditary
of Rimadyl. Revolution was approved in the U.S. in July 1999 disease that, left untreated, almost
always leads to colorectal cancer)
as the first and only topically applied medication for dogs and
Tikosyn Atrial fibrillation October 1999
cats that is effective against heartworm, fleas and many other
parasites. Rimadyl is a treatment for the relief of pain and
inflammation associated with osteoarthritis in dogs.

30
 Pfizer Inc and Subsidiary Companies

Zoloft is the first and only medicine to receive FDA Ongoing or planned clinical trials for new product
approval for the treatment of PTSD. development programs include:
We have developed a comprehensive program to educate
Product Indication
institutions and health care professionals on the required in-
hospital initiation and dosing regimen for Tikosyn. We expect lasofoxifene Prevention and treatment of osteoporosis
Prevention of breast cancer
to launch Tikosyn in the U.S. in the first quarter of 2000, and Reduction of risk of coronary heart disease
it will be available to those prescribers and hospitals that have
Vfend (voriconazole) Serious systemic fungal infections
participated in this educational program.
darifenacin Overactive bladder
Pending U.S. New Drug Applications
inhaled insulin Diabetes
Product Indication Date Filed valdecoxib (under Osteoarthritis
co-development Rheumatoid arthritis
Relpax Migraine headaches October 1998
with Searle) Pain
Zeldox Psychotic disorders — December 1997
intramuscular dosage form
Zeldox Psychotic disorders — March 1997 Additional product development programs are in various
oral dosage form stages of discovery.
In 1998, we entered into worldwide agreements with
In October 1999, we received an approvable letter from the Aventis Pharma to manufacture insulin and co-develop and
FDA for Relpax for the treatment of migraines. Regulatory co-promote inhaled insulin. Under the agreements, Aventis
review is continuing in Europe. Pharma and Pfizer will contribute expertise in the development
We received a non-approvable letter from the FDA and production of insulin products, as well as selling and
for Zeldox in 1998. Analysis and interpretation of the results marketing resources. We bring to the alliance our development
of a recently completed study on the effects of Zeldox will be of inhaled insulin from our collaboration with Inhale
included in an amended New Drug Application, which Therapeutic Systems, Inc. Together with Aventis Pharma we
we expect to file by midyear 2000. are building a new insulin manufacturing plant in Frankfurt,
Ongoing or planned clinical trials for additional uses and Germany, to support the product currently in development.
dosage forms for our currently marketed products include: We have decided not to pursue further development of
ezlopitant for the treatment of chemotherapy-induced nausea
Product Indication
and vomiting in cancer patients, as well as Alond for the
Norvasc Pediatric hypertension treatment of diabetic neuropathy.
Zithromax Decrease cardiovascular risk in patients with
atherosclerosis (a process in which fatty substances are Costs and Expenses
deposited within blood vessels) caused by certain
infections In 1999, we substantially completed the actions under the
Treatment of mycobacterium avium complex restructuring plans announced in 1998.
Accelerated dosing regimen (three-day treatment)
In 1998, we recorded charges for the restructuring in
Viagra Female sexual arousal disorder addition to charges for certain asset impairments. These pre-tax
Zoloft Pediatric depression charges were recorded in the 1998 Statement of Income as
Social phobia follows:
Zyrtec Decongestant formulation
Pediatric (millions of dollars) Total COS* SI&A* R&D OD*
Lipitor Broad cardiovascular-care clinical program Restructuring charges $177 $68 $17 $1 $ 91
Aricept Oral liquid dosage form Asset impairments 213 18 — — 195
Celebrex Sporadic adenomatous polyposis * COS — Cost of sales; SI&A — Selling, informational and administrative expenses; OD —
Pain Other deductions — net.

Together with Warner-Lambert, we are jointly exploring

potential Lipitor line extensions and product combinations and
other areas of mutual interest. This includes a program to
develop a combination product that contains the cholesterol-
lowering and antihypertensive medications in Lipitor and
Norvasc — two of the world’s most widely prescribed medicines.

31
Pfizer Inc and Subsidiary Companies
The components of the 1998 restructuring charges follow:
Utilization
(millions of dollars) Charges in 1998 1998 1999 Beyond
Property, plant
and equipment $ 49 $ 49 $— $—
Write-down of intangibles 44 44 — —
Employee termination costs 40 12 28 — in the U.S. and the expansion of international sales forces
Other 44 11 17 16
Total $177 $116 $45 $16
As a result of the restructuring, our workforce was reduced
by approximately 500 manufacturing, sales and corporate
personnel. In 1998, restructuring charges of $90 million are
reflected in the pharmaceutical segment and $87 million are in
the animal health segment.
In 1998, we recorded an impairment charge of
$110 million in the pharmaceutical segment to adjust
intangible asset values, primarily goodwill and trademarks,
related to consumer health care product lines. These charges
resulted from significant changes in the marketplace and a
revision of our strategies.
As noted in our discussion of revenues, our animal health
antibiotic feed additive Stafac was banned throughout the EU,
resulting in 1998 asset impairment charges of $103 million
($85 million to adjust intangible asset values, primarily
goodwill and trademarks, and $18 million to adjust the
carrying value of machinery and equipment in the
pharmaceutical segment).
In 1999, revenues declined approximately $41 million
as a result of exiting certain product lines. In 1999, as a result
of the restructuring activities and the asset impairments,
we realized cost savings of approximately $39 million and a
reduction in amortization and depreciation expense of
approximately $12 million.
Cost of sales increased 21% in 1999 and 18% in 1998.
Based on our evaluation of the actions noted in our discussion
of revenues, we determined that it was unlikely that certain
Trovan inventories of finished goods, bulk, work-in-process
and raw materials will be used. Accordingly, in the third
quarter of 1999, we recorded a charge of $310 million in Cost of
sales to write off Trovan inventories in excess of the amount
required to support expected sales. Also included in Cost of sales
for 1999 is a benefit of $6.6 million related to the change in
accounting for the cost of inventories from the “Last-in, first-
out” method to the “First-in, first-out” method. Excluding the
Trovan inventory charge and the benefit related to the
accounting change for inventories in 1999 and the asset
impairments and restructuring charges in 1998, cost of sales
increased 11%, comparable to the increase in 1999 net sales.
Excluding the 1998 asset impairments and restructuring
charges, cost of sales increased 13% in 1998 as compared to an
increase in net sales of 18%.
32
SI&A increased 14% in 1999 and 27% in 1998. These
increases reflect support for previously introduced products and
new products. Such support included substantial global
investments, begun in 1998, in our pharmaceutical sales force,
including the creation of a new U.S. primary-care sales force
and a new U.S. specialty sales force dedicated to rheumatology.
In addition, personnel increases in other specialty sales forces
contributed to the increase in SI&A. Our past investments in
SI&A are enabling us to maximize the financial return realized
from our products.
R&D increased 22% in 1999 and 26% in 1998. These
expenditures were necessary to support the advancement of
potential drug candidates in all stages of development
(from initial discovery through final regulatory approval). In
2000, we expect total R&D spending to be about $3.2 billion.
See “Proposed Merger with Warner-Lambert Company” for the
expected R&D spending in 2000 of a combined Pfizer/Warner-
Lambert entity.
Other deductions —net decreased 90% in 1999 due to
the absence of certain significant charges recorded in 1998 of
$883 million.
Other deductions — net increased substantially in 1998
primarily due to:
• asset impairments — $195 million
• restructuring charges — $91 million
• co-promotion payments to Searle for rights to
Celebrex — $240 million
• a contribution to The Pfizer Foundation —
$300 million
• legal settlements involving the brand-name prescription
drug antitrust litigation — $57 million
partially offset by
• an increase in interest income on the investment of cash
generated from operations and the divestiture of MTG
• foreign exchange effects
Our overall effective tax rate was 28.1% in 1999 and
35.4% in 1998. This decrease was due mainly to the 1998 gain
on the disposal of MTG being recognized in jurisdictions with
higher tax rates.
The effective tax rate for continuing operations was 28.0%
in 1999 and 24.8% in 1998. Significant charges in both 1999
and 1998 were recorded in jurisdictions with higher tax rates.
However, the level of these charges was greater in 1998 than in
1999. Excluding these charges in 1999 and 1998, the effective
tax rate was 28.4% in 1999 and 28.0% in 1998. This increase
in 1999 was primarily due to the mix of income by country.
We have received and are protesting assessments from the
Belgian tax authorities. For additional details, see note 9,
“Taxes on Income,” beginning on page 49.
 Pfizer Inc and Subsidiary Companies

Discontinued Operations Financial Condition, Liquidity and

In 1999, we agreed to pay a fine of $20 million to settle Capital Resources
antitrust charges involving our former Food Science Group. Our net financial asset position as of December 31 was as
This charge is reflected in Discontinued operations — net of tax. follows:
For additional details, see note 18, “Litigation,” beginning on
page 54. (millions of dollars) 1999 1998 1997
During 1998, we exited the medical devices business with Financial assets* $6,436 $5,835 $3,034
the sale of our remaining MTG businesses: Short- and long-term debt 5,526 3,256 2,976
• Howmedica to Stryker Corporation in December for Net financial assets $ 910 $2,579 $ 58
$1.65 billion in cash
* Consists of cash and cash equivalents, short-term loans and investments, and long-
• Schneider to Boston Scientific Corporation in September term loans and investments.
for $2.1 billion in cash
• American Medical Systems to E.M. Warburg, Pincus & Selected Measures of Liquidity and
Co., LLC, in September for $130 million in cash Capital Resources
• Valleylab to U.S. Surgical Corporation in January for
$425 million in cash 1999 1998 1997
The net proceeds from these divestitures were used for Cash and cash equivalents and
general corporate purposes, including the repayment of short-term loans and
commercial paper borrowings. Net income of these businesses investments (millions of dollars)* $4,715 $4,079 $1,704
Working capital (millions of dollars) 2,006 2,739 2,448
up to the date of their divestiture and divestiture gains are
Current ratio 1.22:1 1.38:1 1.49:1
included in Discontinued operations — net of tax.
Shareholders’ equity per
common share** $ 2.36 $ 2.33 $ 2.10
Net Income
* Cash is managed jurisdictionally and is not always available to be used in every
Net income for 1999 decreased 5% from 1998. Diluted location throughout the world. When necessary, we utilize short-term borrowings for
earnings per share were $.82 and decreased by 4% from 1998. various corporate purposes.
Excluding the impact of the 1999 Trovan inventory charge and ** Represents shareholders’ equity divided by the actual number of common shares
outstanding (which excludes treasury shares and those held by the employee benefit
certain significant charges and discontinued operations in 1998, trusts).
net income increased by 29% in 1999 over 1998. On that same
basis, diluted earnings per share were $.87 in 1999 and The decrease in working capital from 1998 to 1999 was
increased by 30% over 1998. The 1998 pre-tax significant primarily due to the following:
charges related to: • Decrease in Inventories — due to the writeoff of Trovan
• asset impairments — $213 million inventory
• restructuring charges — $177 million • Increase in Short-term borrowings — primarily to fund
• co-promotion payments to Searle — $240 million common stock purchases of $2.5 billion
• contribution to The Pfizer Foundation — $300 million offset by
• other, which is primarily related to legal settlements — • Net increase in Cash and cash equivalents and Short-term
$126 million investments — mainly from profits earned overseas
• Increase in Accounts receivable — resulting from growth in
sales volume and higher alliance revenue receivables due to
sales growth of alliance products and the launch of
Celebrex in February 1999
• Decrease in Income taxes payable

33
Pfizer Inc and Subsidiary Companies

The increase in working capital from 1997 to 1998 was
primarily due to the following:
• Increase in Cash and cash equivalents and Short-term
investments — due to the receipt of cash from the MTG
divestiture
• Increase in Accounts receivable — due to the alliance revenue
receivables and growth in sales volume
• Increase in Inventories — due to higher pharmaceutical
inventory levels as a result of new products
offset by
• Decrease in Net assets of discontinued operations — due to the
sale of the MTG businesses
• Increase in Short-term borrowings — due to an increase in
funding for common stock purchases at a higher average
price net of repayments made with cash received from the
MTG divestiture
• Increase in Dividends payable — related to the first-quarter
1999 dividend declared in December 1998
• Increase in Income taxes payable — primarily due to changes
in operations and the divestiture of the MTG businesses
• Increase in Other current liabilities — primarily due to
accrued charges associated with the divestiture of the
MTG businesses and our plan to exit certain product lines
divestitures, partially offset by tax benefits associated with
charges for asset impairment, restructuring, co-promotion
payments to Searle and the contribution to The Pfizer
Foundation
• higher compensation related accruals
reduced by
• higher receivable and inventory levels related to new
products
Net cash used in investing activities in 1999 changed
primarily due to:
• the absence of proceeds from the sale of MTG which
occurred in 1998
• increased purchases of property, plant and equipment
in 1999
Net cash used in investing activities decreased in 1998
primarily due to:
• proceeds from the sale of the MTG businesses, some of
which accounts for our increase in short-term investments
reduced by
• increased long-term investments
• increased purchases of property, plant and equipment

The decline in the current ratio from 1998 to 1999 was Net cash used in financing activities decreased in 1999
primarily due to higher short-term borrowings due to an primarily due to:
increase in funding for common stock purchases. The increase • increased short-term borrowings for common stock
in shareholders’ equity per common share in 1998 was purchases
primarily due to growth in net income. reduced by
• higher dividend payments to our shareholders
Summary of Cash Flows
Net cash used in financing activities increased in 1998
(millions of dollars) 1999 1998 1997 primarily due to:
Cash provided by/(used in): • the increase in common stock purchases at a
Operating activities $ 3,076 $ 3,282 $ 1,580 higher average price
Investing activities (2,768) (335) (963) • higher dividend payments to our shareholders
Financing activities (1,127) (2,277) (981) reduced by
Discontinued operations (20) 4 118 • more cash received from employee stock option exercises
Effect of exchange-rate changes on
cash and cash equivalents 26 1 (27)
Under the current share-purchase program begun in
Net (decrease)/increase in cash September 1998, we are authorized to purchase up to
and cash equivalents $ (813) $ 675 $ (273)
$5 billion of our common stock. In 1999, we purchased
approximately 65.6 million shares of our common stock in
Net cash provided by operating activities decreased in the open market for approximately $2.5 billion. Since the
1999 primarily due to: beginning of this program, we have purchased 80.4 million
• higher receivable levels related to increased sales and shares of our common stock for approximately $3 billion. In
alliance revenue September 1998, we completed a program under which we
• higher taxes paid purchased 79.2 million shares of our common stock at a total
reduced by cost of $2 billion. Purchased shares are available for general
• higher income from continuing operations corporate purposes.
Net cash provided by operating activities increased in We have available lines of credit and revolving-credit
1998 primarily due to: agreements with a select group of banks and other financial
• higher taxes payable associated with sales growth of intermediaries. Major unused lines of credit totaled
existing and new products as well as the MTG approximately $1.5 billion at December 31, 1999.

34

Our short-term debt has been rated P1 by Moody’s
Investors Services (Moody’s) and A-1+ by Standard and Poor’s
(S&P). Also, our long-term debt has been rated Aaa by
Moody’s and AAA by S&P for the past 14 years. Moody’s and
S&P are the major corporate debt-rating organizations and
these are their highest ratings.
Cash Dividends Paid Per Common Share
The 1999 cash dividends paid
represented the 32nd consecutive
year of dividend increases.
$.25 1/3
$.22 2/3
$.20
$.17 1/3
95 96 97
Dividends on Common Stock
Our dividend payout ratio, which represents cash dividends
paid per common share divided by diluted earnings per
common share, was approximately 37% in 1999, 30% in 1998
and 40% in 1997. In 1999, excluding the effect on net income of
the Trovan inventory charge, the dividend payout ratio was
approximately 35%. In 1998, excluding the effects on net
income of discontinued operations and charges for asset
impairment, restructuring, co-promotion payments to Searle and
the contribution to The Pfizer Foundation, the dividend payout
ratio was 38%. In December 1999, the Board of Directors
declared a first-quarter 2000 dividend of $.09. The first-quarter
2000 cash dividend will mark the 33rd consecutive year of
quarterly dividend increases.
Banking Operation
Our international banking operation, Pfizer International
Bank Europe (PIBE), operates under a full banking license
from the Central Bank of Ireland. The results of its operations
are included in Other deductions — net.
PIBE extends credit to financially strong borrowers,
largely through U.S. dollar loans made primarily for short and
medium terms, with floating interest rates. Generally, loans
are made on an unsecured basis. When deemed appropriate,
guarantees and certain covenants may be obtained as a
condition to the extension of credit.
To reduce credit risk, PIBE has established credit approval
guidelines, borrowing limits and monitoring procedures.
Credit risk is further reduced through an active policy of
diversification with respect to borrower, industry and
Pfizer Inc and Subsidiary Companies
geographic location. PIBE continues to have S&P’s highest
short-term rating of A-1+.
The net income of PIBE is affected by changes in market
interest rates because of repricing and maturity mismatches
between its interest-sensitive assets and liabilities. PIBE is
currently asset sensitive (more assets than liabilities repricing
in a given period) and, therefore, we expect that in an
environment of increasing interest rates, net income would
increase. PIBE’s asset and liability management reflects its
(dollars)
liquidity, interest-rate outlook and general market conditions.
$.30 2/3 For additional details regarding our banking operation, see
note 3, “Financial Subsidiaries,” beginning on page 44.
Forward-Looking Information and
Factors That May Affect Future Results
The Securities and Exchange Commission encourages
companies to disclose forward-looking information so that
investors can better understand a company’s future prospects
and make informed investment decisions. This annual
report and other written and oral statements that we make
from time to time contain such forward-looking statements
98 99
that set out anticipated results based on management’s
plans and assumptions. We have tried, wherever possible, to
identify such statements by using words such as “anticipate,”
“estimate,” “expects,” “projects,” “intends,” “plans,” “believes”
and words and terms of similar substance in connection with
any discussion of future operating or financial performance.
We cannot guarantee that any forward-looking statement
will be realized, although we believe we have been prudent in
our plans and assumptions. Achievement of future results is
subject to risks, uncertainties and inaccurate assumptions.
Should known or unknown risks or uncertainties materialize, or
should underlying assumptions prove inaccurate, actual results
could vary materially from those anticipated, estimated or
projected. Investors should bear this in mind as they consider
forward-looking statements.
We undertake no obligation to publicly update forward-
looking statements, whether as a result of new information,
future events or otherwise.
Certain risks, uncertainties and assumptions are discussed
here and under the heading entitled “Cautionary Factors That
May Affect Future Results” in Item 1 of our annual report on
Form 10-K for the year ended December 31, 1999, which will
be filed at the end of March 2000.
Prior to the filing of Form 10-K, you should refer to the
discussion under the same heading in our quarterly report on
Form 10-Q for the quarter ended October 3, 1999, and to the
extent incorporated by reference therein, in our Form 10-K
filing for 1998. This discussion of potential risks and
uncertainties is by no means complete but is designed to
highlight important factors that may impact our outlook.
Competition and the Health Care Environment
In the U.S., many pharmaceutical products are subject to
increasing pricing pressures, which could be significantly
impacted by the current national debate over Medicare reform.
35
Pfizer Inc and Subsidiary Companies
If the Medicare program provided outpatient pharmaceutical
coverage for its beneficiaries, the federal government, through its
enormous purchasing power under the program, could demand
discounts from pharmaceutical companies that may implicitly
create price controls on prescription drugs. On the other hand,
a Medicare drug reimbursement provision may increase the
volume of pharmaceutical drug purchases, offsetting at least in
part these potential price discounts. In addition, managed care
organizations, institutions and other government agencies
continue to seek price discounts. Government efforts to reduce
Medicare and Medicaid expenses are expected to increase the use
of managed care organizations. This may result in managed care
influencing prescription decisions for a larger segment of the
population. International operations are also subject to price and
market regulations. As a result, it is expected that pressures on
pricing and operating results will continue.
Financial Risk Management
The overall objective of our financial risk management
program is to seek a reduction in the potential negative
earnings effects from changes in foreign exchange and interest
rates arising in our business activities. We manage these
financial exposures through operational means and by using
various financial instruments. These practices may change as
economic conditions change.
Foreign Exchange Risk
A significant portion of our revenues and earnings are exposed
to changes in foreign exchange rates. Where practical, we seek
to relate expected local currency revenues with local currency
costs and local currency assets with local currency liabilities.
Generally, we do not use financial instruments for trading
activities.
Foreign exchange risk is also managed through the use of
foreign currency forward-exchange contracts. These contracts
are used to offset the potential earnings effects from short-term
foreign currency assets and liabilities that arise during
operations. For additional details on foreign exchange
exposures, see note 4-D, “Derivative Financial Instruments —
Instruments Outstanding,” on page 47.
In addition, foreign currency put options are purchased to
reduce a portion of the potential negative effects on earnings
related to certain of our significant anticipated intercompany
inventory purchases for up to one year. These purchased options
hedge Japanese yen versus the U.S. dollar.
Also, under certain market conditions, we protect
against possible declines in the reported net assets of our
subsidiaries in Japan and in countries that are a member of the
European Monetary Union. We do this through currency swaps
and borrowing in Japanese yen and borrowing in euros.
Our financial instrument holdings at year-end were
analyzed to determine their sensitivity to foreign exchange rate
changes. The fair values of these instruments were determined
as follows:
• forward-exchange contracts and currency swaps — net
present values
• purchased foreign currency options — foreign exchange
option pricing model
36
• foreign receivables, payables, debt and loans — changes in
exchange rates
In our sensitivity analysis, we assumed that the change
in one currency’s rate relative to the U.S. dollar would not have
an effect on other currencies’ rates relative to the U.S. dollar.
All other factors were held constant.
If there were an adverse change in foreign exchange rates
of 10%, the expected effect on net income related to
our financial instruments would be immaterial. For additional
details, see note 4-D, “Derivative Financial Instruments —
Accounting Policies,” on page 46.
Interest Rate Risk
Our U.S. dollar interest-bearing investments, loans and
borrowings are subject to interest rate risk. We invest and
borrow primarily on a short-term or variable-rate basis. We are
also subject to interest rate risk on Japanese yen and on euro
short-term borrowings. Under certain market conditions,
interest rate swap contracts are used to adjust interest-sensitive
assets and liabilities.
Our financial instrument holdings at year-end were
analyzed to determine their sensitivity to interest rate changes.
The fair values of these instruments were determined by net
present values.
In our sensitivity analysis, we used the same change in
interest rate for all maturities. All other factors were held
constant. If interest rates increased by 10%, the expected effect
on net income related to our financial instruments would be
immaterial.
International Markets
Thirty-nine percent of our 1999 revenues arise from
international operations and we expect revenue and net income
growth in 2000 to be impacted by changes in foreign
exchange rates.
Revenues from Asia comprised approximately 11% of total
revenues in 1999, including 8% from Japan.
European Currency
A new European currency (euro) was introduced in January
1999 to replace the separate currencies of 11 individual
countries. The major changes during its first year of existence
have occurred in the banking and financial sectors. The impact
at the commercial and retail level has been limited but is
expected to increase during the next two years through
December 31, 2001, when the separate currencies will cease to
exist. We are modifying systems and commercial arrangements
to deal with the new currency, including the availability of
dual currency processes to permit transactions to be
denominated in the separate currencies, as well as the euro. The
cost of this effort is not expected to have a material effect on
our businesses or results of operations. We continue to evaluate
the economic and operational impact of the euro, including its
impact on competition, pricing and foreign currency exchange
risks. There is no guarantee, however, that all problems have
been foreseen and corrected, or that no material disruption will
occur in our businesses.

Tax Legislation
Pursuant to the Small Jobs Protection Act of 1996 (the Act),
Section 936 of the Internal Revenue Code (the U.S. possessions
corporation income tax credit) was repealed for tax years
beginning after December 31, 1995. The Act allows us to
continue using the credit against the tax arising from
manufacturing income earned in a U.S. possession for an
additional 10-year period. The amount of manufacturing
income eligible for the credit during this additional period is
subject to a cap based on income earned prior to 1996 in the
U.S. possession. This 10-year extension period does not apply
to investment income earned in a U.S. possession, the credit on
which expired as of July 1, 1996. The Act does not affect the
amendments made to Section 936 by the 1993 Omnibus
Budget Reconciliation Act, which provided for a five-year
phase-down of the U.S. possession tax credit from 100% to
40%. In addition, the Act permitted the extension of the R&D
tax credit through June 30, 1998. In 1998, this credit was
again extended to June 30, 1999, and in 1999, it was further
extended to June 30, 2004.
Recently Issued Accounting Standards
In June 1999, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards (SFAS)
No. 137, Accounting for Derivative Instruments and Hedging
Activities — Deferral of the Effective Date of FASB Statement
No. 133. This pronouncement requires us to adopt SFAS
No. 133, Accounting for Derivative Instruments and Hedging
Activities, on January 1, 2001. SFAS No. 133 requires a
company to recognize all derivative instruments as assets or
liabilities in its balance sheet and measure them at fair value.
We do not expect the adoption of SFAS No. 133 to have a
material impact on our financial position, results of operations
or cash flows.
Year 2000
We have not experienced any operational problems as a result
of Year 2000 issues, and Year 2000 had no material effect on
our revenues. Although the transition from 1999 to 2000 did
not adversely impact our company, there can be no assurances
that we will not experience any negative effects or disruptions
in our businesses in the future as a result of Year 2000 issues.
The total cost of our Year 2000 Program was
$130 million, of which we incurred $94 million in 1999,
$31 million in 1998 and $5 million in 1997. These costs were
expensed as incurred, except for capitalizable hardware of
approximately $8 million in 1999, $4 million in 1998 and
$1 million in 1997 and were funded through operating cash
flows. Such costs did not include normal system upgrades and
replacements. Immaterial costs may be incurred in 2000 to
address remaining non-critical Year 2000 issues.
Pfizer Inc and Subsidiary Companies
Litigation, Tax and Environmental Matters
Claims have been brought against us and our subsidiaries for
various legal and tax matters. In addition, our operations are
subject to international, federal, state and local environmental
laws and regulations. It is possible that our cash flows and
results of operations could be affected by the one-time impact
of the resolution of these contingencies. We believe that
the ultimate disposition of these matters to the extent not
previously provided for will not have a material impact on our
financial condition, results of operations or cash flows, except
where specifically commented on in note 18, “Litigation,”
beginning on page 54 and note 9, “Taxes on Income,”
beginning on page 49.
Management’s Report
We prepared and are responsible for the financial statements
that appear on pages 39 to 61. These financial statements are
in conformity with generally accepted accounting principles
and, therefore, include amounts based on informed judgments
and estimates. We also accept responsibility for the preparation
of other financial information that is included in this
document.
We have designed a system of internal control to:
• safeguard the Company’s assets,
• ensure that transactions are properly authorized, and
• provide reasonable assurance, at reasonable cost, of the
integrity, objectivity and reliability of the financial
information.
An effective internal control system has inherent
limitations no matter how well designed and, therefore, can
provide only reasonable assurance with respect to financial
statement preparation. The system is built on a business ethics
policy that requires all employees to maintain the highest
ethical standards in conducting Company affairs. Our system
of internal control includes:
• careful selection, training and development of financial
managers,
• an organizational structure that segregates responsibilities,
• a communications program which ensures that the
Company’s policies and procedures are well understood
throughout the organization, and
• an extensive program of internal audits, with prompt
follow-up, including reviews of separate operations and
functions around the world.
37
Pfizer Inc and Subsidiary Companies
Our independent certified public accountants,
KPMG LLP, have audited the annual financial statements in
accordance with generally accepted auditing standards. The
independent auditors’ report expresses an informed judgment
as to the fair presentation of the Company’s reported operating
results, financial position and cash flows. Their judgment is
based on the results of auditing procedures performed and
such other tests that they deemed necessary, including their
consideration of our internal control structure.
We consider and take appropriate action on recom-
mendations made by KPMG LLP and our internal auditors.
We believe that our system of internal control is effective
and adequate to accomplish the objectives discussed above.
W. C. Steere, Jr., Principal Executive Officer
D. L. Shedlarz, Principal Financial Officer
L. V. Cangialosi, Principal Accounting Officer
February 14, 2000
Audit Committee’s Report
The Audit Committee reviews the Company’s financial
reporting process on behalf of the Board of Directors.
Management has the primary responsibility for the financial
statements and the reporting process, including the system
of internal controls. In this context, the Committee has met
and held discussions with management and the independent
auditors. Management represented to the Committee that the
Company’s consolidated financial statements were prepared in
accordance with generally accepted accounting principles, and
the Committee has reviewed and discussed the consolidated
financial statements with management and the independent
auditors. The Committee discussed with the independent
auditors matters required to be discussed by Statement
of Auditing Standards No. 61 (Communication With Audit
Committees). In addition, the Committee has discussed with
the independent auditors, the auditors’ independence from the
Company and its management, including the matters in the
written disclosures required by the Independence Standards
Board Standard No. 1 (Independence Discussions with Audit
Committees). The Committee discussed with the Company’s
internal and independent auditors the overall scope and plans
for their respective audits. The Committee meets with the
internal and independent auditors, with and without
38
management present, to discuss the results of their
examinations, the evaluations of the Company’s internal
controls, and the overall quality of the Company’s financial
reporting. In reliance on the reviews and discussions referred
to above, the Committee recommended to the Board of
Directors, and the Board has approved, that the audited
financial statements be included in the Company’s Annual
Report on Form 10-K for the year ended December 31, 1999,
for filing with the Securities and Exchange Commission. The
Committee and the Board also have recommended, subject to
shareholder approval, the selection of the Company’s
independent auditors.
G. B. Harvey, Chair, Audit Committee
February 14, 2000
Independent Auditors’ Report
To the Shareholders and Board of Directors of Pfizer Inc:
We have audited the accompanying consolidated balance sheets
of Pfizer Inc and subsidiary companies as of December 31,
1999, 1998 and 1997 and the related consolidated statements
of income, shareholders’ equity and cash flows for each of the
years then ended. These consolidated financial statements are
the responsibility of the Company’s management. Our
responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are
free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An
audit also includes assessing the accounting principles
used and significant estimates made by management, as
well as evaluating the overall consolidated financial
statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, the
financial position of Pfizer Inc and subsidiary companies at
December 31, 1999, 1998 and 1997, and the results of their
operations and their cash flows for each of the years then ended,
in conformity with generally accepted accounting principles.
New York, NY
February 14, 2000
 Pfizer Inc and Subsidiary Companies

Consolidated Statement of Income

Year ended December 31

(millions, except per share data) 1999 1998 1997

Net sales $14,133 $12,677 $10,739
Alliance revenue 2,071 867 316
Total revenues 16,204 13,544 11,055
Costs and expenses:
Cost of sales 2,528 2,094 1,776
Selling, informational and administrative expenses 6,351 5,568 4,401
Research and development expenses 2,776 2,279 1,805
Other deductions Ñ net 101 1,009 206
Income from continuing operations before provision
for taxes on income and minority interests 4,448 2,594 2,867
Provision for taxes on income 1,244 642 775
Minority interests 5 2 10
Income from continuing operations 3,199 1,950 2,082
Discontinued operations Ñ net of tax (20) 1,401 131
Net income $ 3,179 $ 3,351 $ 2,213

Earnings per common share Ñ basic

Income from continuing operations $ .85 $ .51 $ .55
Discontinued operations Ñ net of tax (.01) .37 .04
Net income $ .84 $ .88 $ .59

Earnings per common share Ñ diluted

Income from continuing operations $ .82 $ .49 $ .53
Discontinued operations Ñ net of tax Ñ .36 .04
Net income $ .82 $ .85 $ .57

Weighted average shares Ñ basic 3,775 3,789 3,771

Weighted average shares Ñ diluted 3,884 3,945 3,909
See Notes to Consolidated Financial Statements which are an integral part of these statements.

39
Pfizer Inc and Subsidiary Companies

Consolidated Balance Sheet

December 31

(millions, except per share data) 1999 1998 1997

Assets
Current Assets
Cash and cash equivalents $ 739 $ 1,552 $ 877
Short-term investments 3,703 2,377 712
Accounts receivable, less allowance for doubtful accounts:
1999 Ñ $68; 1998 Ñ $67; 1997 Ñ $35 3,864 2,914 2,220
Short-term loans 273 150 115
Inventories
Finished goods 650 697 442
Work in process 711 890 808
Raw materials and supplies 293 241 211
Total inventories 1,654 1,828 1,461
Prepaid expenses and taxes 958 1,110 637
Net assets of discontinued operations Ñ Ñ 1,420
Total current assets 11,191 9,931 7,442
Long-term loans and investments 1,721 1,756 1,330
Property, plant and equipment, less accumulated depreciation 5,343 4,415 3,793
Goodwill, less accumulated amortization:
1999 Ñ $129; 1998 Ñ $109; 1997 Ñ $90 763 813 989
Other assets, deferred taxes and deferred charges 1,556 1,387 1,437
Total assets $20,574 $18,302 $14,991
Liabilities and ShareholdersÕ Equity
Current Liabilities
Short-term borrowings, including current portion of long-term debt $ 5,001 $ 2,729 $ 2,251
Accounts payable 951 971 660
Dividends payable 349 285 Ñ
Income taxes payable 869 1,162 729
Accrued compensation and related items 669 614 456
Other current liabilities 1,346 1,431 898
Total current liabilities 9,185 7,192 4,994
Long-term debt 525 527 725
Postretirement benefit obligation other than pension plans 346 359 394
Deferred taxes on income 301 197 127
Other noncurrent liabilities 1,330 1,217 818
Total liabilities 11,687 9,492 7,058
ShareholdersÕ Equity
Preferred stock, without par value; 12 shares authorized, none issued Ñ Ñ Ñ
Common stock, $.05 par value; 9,000 shares authorized;
issued: 1999 Ñ 4,260; 1998 Ñ 4,222; 1997 Ñ 4,165 213 210 207
Additional paid-in capital 5,416 5,506 3,101
Retained earnings 13,396 11,439 9,349
Accumulated other comprehensive expense (399) (234) (85)
Employee benefit trusts (2,888) (4,200) (2,646)
Treasury stock, at cost:
1999 Ñ 413; 1998 Ñ 339; 1997Ñ 283 (6,851) (3,911) (1,993)
Total shareholdersÕ equity 8,887 8,810 7,933
Total liabilities and shareholdersÕ equity $20,574 $18,302 $14,991
See Notes to Consolidated Financial Statements which are an integral part of these statements.

40
 Pfizer Inc and Subsidiary Companies

Consolidated Statement of ShareholdersÕ Equity

Accum.
Employee
Additional Other Com-
Common Stock Benefit Trusts Treasury Stock
Paid-In Retained prehensive
(millions) Shares Par Value Capital Shares Fair Value Shares Cost Earnings Inc./(Exp.) Total
Balance January 1, 1997 1,378 $ 69 $1,693 (36) $(1,488) (87) $(1,482) $ 8,017 $ 145 $6,954
Restatement for the 1999 stock split 2,756 138 (138) (72) Ñ (175) Ñ Ñ Ñ Ñ
Balance January 1, 1997, as restated 4,134 207 1,555 (108) (1,488) (262) (1,482) 8,017 145 6,954
Comprehensive income:
Net income 2,213 2,213
Other comprehensive expense Ñ
net of tax:
Currency translation adjustment (253) (253)
Net unrealized gain on available-
for-sale securities 20 20
Minimum pension liability 3 3
Total other comprehensive expense (230) (230)
Total comprehensive income 1,983
Cash dividends declared (881) (881)
Stock option transactions 29 Ñ 343 13 68 411
Purchases of common stock (34) (586) (586)
Employee benefit trusts
transactions Ñ net 1,177 1 (1,158) Ñ 7 26
Other 2 Ñ 26 26
Balance December 31, 1997 4,165 207 3,101 (107) (2,646) (283) (1,993) 9,349 (85) 7,933
Comprehensive income:
Net income 3,351 3,351
Other comprehensive expense Ñ
net of tax:
Currency translation adjustment (74) (74)
Net unrealized loss on available-
for-sale securities (2) (2)
Minimum pension liability (73) (73)
Total other comprehensive expense (149) (149)
Total comprehensive income 3,202
Cash dividends declared (1,261) (1,261)
Stock option transactions 55 3 745 Ñ (18) 730
Purchases of common stock (58) (1,912) (1,912)
Employee benefit trusts
transactions Ñ net 1,633 5 (1,554) 2 12 91
Other 2 Ñ 27 27
Balance December 31, 1998 4,222 210 5,506 (102) (4,200) (339) (3,911) 11,439 (234) 8,810
Comprehensive income:
Net income 3,179 3,179
Other comprehensive expense Ñ
net of tax:
Currency translation adjustment (222) (222)
Net unrealized gain on available-
for-sale securities 81 81
Minimum pension liability (24) (24)
Total other comprehensive expense (165) (165)
Total comprehensive income 3,014
Cash dividends declared (1,222) (1,222)
Stock option transactions 35 3 526 Ñ (16) 513
Purchases of common stock (66) (2,500) (2,500)
Employee benefit trusts
transactions Ñ net (735) 13 1,312 (8) (424) 153
Other 3 Ñ 119 119
Balance December 31, 1999 4,260 $213 $5,416 (89) $(2,888) (413) $ (6,851) $13,396 $(399) $8,887
See Notes to Consolidated Financial Statements which are an integral part of these statements.

41
Pf i z e r I n c a n d S u b s i d i a r y C o m p a n i e s

Consolidated Statement of Cash Flows

Year ended December 31

(millions of dollars) 1999 1998 1997

Operating Activities
Income from continuing operations $ 3,199 $ 1,950 $2,082
Adjustments to reconcile income from continuing operations
to net cash provided by operating activities:
Depreciation and amortization 542 489 428
Trovan inventory write-off 310 Ñ Ñ
Asset impairments and restructuring charges Ñ 323 Ñ
Deferred taxes and other 286 22 83
Changes in assets and liabilities, net of effect of businesses divested:
Accounts receivable (978) (765) (477)
Inventories (240) (439) (350)
Prepaid and other assets 68 (350) (128)
Accounts payable and accrued liabilities 61 628 (63)
Income taxes payable (179) 951 (54)
Other deferred items 7 473 59
Net cash provided by operating activities 3,076 3,282 1,580
Investing Activities
Purchases of property, plant and equipment (1,561) (1,198) (878)
Proceeds from disposals of property, plant and equipment 71 79 47
Purchases net of maturities of short-term investments (8,633) (5,845) (221)
Proceeds from redemptions of short-term investments 7,309 4,209 28
Proceeds from sales of businesses Ñ net 26 3,059 21
Purchases of long-term investments (322) (752) (74)
Other investing activities 342 113 114
Net cash used in investing activities (2,768) (335) (963)
Financing Activities
Repayments of long-term debt (4) (202) (269)
Increase in short-term debt Ñ net 2,083 402 325
Proceeds from stock issuances 62 Ñ Ñ
Purchases of common stock (2,500) (1,912) (586)
Cash dividends paid (1,148) (976) (881)
Stock option transactions and other 380 411 430
Net cash used in financing activities (1,127) (2,277) (981)
Net cash (used in)/provided by discontinued operations (20) 4 118
Effect of exchange-rate changes on cash and cash equivalents 26 1 (27)
Net (decrease)/increase in cash and cash equivalents (813) 675 (273)
Cash and cash equivalents at beginning of year 1,552 877 1,150
Cash and cash equivalents at end of year $ 739 $ 1,552 $ 877
Supplemental Cash Flow Information
Cash paid during the period for:
Income taxes $ 1,293 $ 1,073 $ 809
Interest 238 155 149
See Notes to Consolidated Financial Statements which are an integral part of these statements.

42

Notes to Consolidated Financial Statements
1 Significant Accounting Policies
A — Consolidation and Basis of Presentation
The consolidated financial statements include the parent
company and all significant subsidiaries, including those
operating outside the U.S. Balance sheet amounts for the
international operations are as of November 30 of each year and
income statement amounts are for the full-year periods ending
on the same date. Substantially all unremitted earnings of
international subsidiaries are free of legal and contractual
restrictions. All significant transactions among our businesses
have been eliminated. We made certain reclassifications to the
1998 and 1997 financial statements to conform to the 1999
presentation.
In preparing the financial statements, we must use some
estimates and assumptions that may affect reported amounts
and disclosures. Estimates are used when accounting for
depreciation, amortization, employee benefits and asset
valuation allowances. We are also subject to risks and
uncertainties that may cause actual results to differ from
estimated results, such as changes in the health care
environment, competition, foreign exchange and legislation.
“Forward-Looking Information and Factors That May Affect
Future Results,” beginning on page 35, discusses these and
other uncertainties.
B — Cash Equivalents
Cash equivalents include items almost as liquid as cash, such as
certificates of deposit and time deposits with maturity periods
of three months or less when purchased. If items meeting this
definition are part of a larger investment pool, we classify them
as Short-term investments.
C — Inventories
We value inventories at cost or fair value, if lower. Cost is
determined as follows:
• finished goods and work-in-process at average actual cost
• raw materials and supplies at average or latest actual cost
In 1999, we changed the method of determining the cost
of all of our remaining inventories previously on the “Last-in,
first-out” (LIFO) method to the “First-in, first-out” (FIFO)
method. Those inventories consisted of U.S. sourced
pharmaceuticals and part of the animal health inventories. We
believe that the change in accounting for inventories from
LIFO to FIFO is preferable because inventory costs are stable
and substantially unaffected by inflation. The change in the
method of inventory costing resulted in a pre-tax benefit of
$6.6 million included in Cost of sales for 1999.
Pfizer Inc and Subsidiary Companies
D — Long-Lived Assets
Long-lived assets include:
• property, plant and equipment — These assets are recorded
at original cost and increased by the cost of any significant
improvements after purchase. We depreciate the cost
evenly over the assets’ estimated useful lives. For tax
purposes, accelerated depreciation methods are used as
allowed by tax laws.
• goodwill — Goodwill represents the difference between the
purchase price of acquired businesses and the fair value of
their net assets when accounted for by the purchase
method. We amortize goodwill evenly over periods not
exceeding 40 years. The average amortization period is
37 years.
• other intangible assets — Other intangible assets are
included in Other assets, deferred taxes and deferred charges.
We amortize these assets evenly over their estimated
useful lives.
We review long-lived assets to assess recoverability from
future operations using undiscounted cash flows. When
necessary, we record charges for impairments of long-lived
assets for the amount by which the present value of future cash
flows exceeds the carrying value of these assets.
E — Foreign Currency Translation
For most international operations, local currencies are
considered their functional currencies. We translate assets and
liabilities to their U.S. dollar equivalents at rates in effect at
the balance sheet date and record translation adjustments in
Shareholders’ Equity. We translate Statement of Income accounts
at average rates for the period. Transaction adjustments are
recorded in Other deductions —net.
For operations in highly inflationary economies, we
translate the balance sheet items as follows:
• monetary items (that is, assets and liabilities that will
be settled for cash) at rates in effect at the balance sheet
date, with translation adjustments recorded in Other
deductions —net
• non-monetary items at historical rates (that is, those
rates in effect when the items were first recorded)
43
Pfizer Inc and Subsidiary Companies

F — Product Alliances In 1997, we sold Strato/Infusaid to Horizon Medical

We have agreements to promote pharmaceutical Products and Arrow International for $21 million in cash.
products developed by other companies. Alliance revenue
represents revenue recorded under these co-promotion The contractual net assets identified as part of the
agreements and is derived from the sale of products. The disposition of Valleylab, Schneider, AMS and Howmedica are
revenue is earned when our co-promotion partners ship the recorded as Net assets of discontinued operations at December 31,
related goods and the sale is consummated with a third party. 1997. The net cash flows of our discontinued operations are
Such revenue is based in most cases upon a percentage of our reported as Net cash (used in)/provided by discontinued operations.
co-promotion partners’ net sales. Selling, informational and Net assets of discontinued operations consisted of the
administrative expenses in most cases includes other expenses for following:
selling and marketing these products.
We have license agreements in certain foreign countries (millions of dollars) 1997
for these products. When products are sold under license Net current assets $ 397
agreements, we record Net sales instead of Alliance revenue and Property, plant and equipment — net 383
record related costs and expenses in the appropriate caption in Other net noncurrent assets
and liabilities 640
the Statement of Income.
Net assets of discontinued operations $1,420
G — Stock-Based Compensation
In accordance with Statement of Financial Accounting
Standards No. 123, Accounting for Stock-Based Compensation, we Discontinued operations —net of tax were as follows:
elected to account for our stock-based compensation under (millions of dollars) 1999 1998 1997
Accounting Principles Board Opinion No. 25, Accounting for
Net sales $ — $1,160 $1,449
Stock Issued to Employees.
The exercise price of stock options granted equals the Pre-tax income/(loss) $(20) $ 92 $ 232
market price on the date of grant. In general, there is no Provision for taxes on income — 57 93
recorded expense related to stock options. Income/(loss) from operations of
discontinued businesses — net of tax (20) 35 139
H — Advertising Expense
We record advertising expense as follows: Pre-tax gain/(loss) on disposal of
discontinued businesses — 2,504 (11)
• production costs as incurred
Provision/(benefit) for taxes on
• costs of radio time, television time and space in
gain/(loss) — 1,138 (3)
publications are deferred until the advertising first occurs
Gain/(loss) on disposal of discontinued
businesses — net of tax — 1,366 (8)
Advertising expense totaled $1,310 million in 1999,
$1,139 million in 1998, and $898 million in 1997. Discontinued operations — net of tax $(20) $1,401 $ 131

2 Discontinued Operations 3 Financial Subsidiaries

In 1999, we agreed to pay a fine of $20 million to settle Our financial subsidiaries include Pfizer International Bank
antitrust charges involving our former Food Science Group, Europe (PIBE) and a small captive insurance company. PIBE
divested in 1996. For additional details, see note 18, periodically adjusts its loan portfolio to meet its business
“Litigation.” needs. Information about these subsidiaries follows:
In 1998, we completed the sale of the Medical Technology
Group (MTG) segment. Accordingly, the consolidated financial Condensed Balance Sheet
statements and related notes reflect the results of operations (millions of dollars) 1999 1998 1997
and net assets of the MTG businesses — Valleylab, Schneider,
Cash and interest-bearing deposits $114 $103 $115
American Medical Systems (AMS), Howmedica and
Loans — net 380 433 408
Strato/Infusaid — as discontinued operations. We completed the Other assets 13 15 8
sales of:
Total assets $507 $551 $531
• Howmedica to Stryker Corporation in December for
$1.65 billion in cash Certificates of deposit and
• Schneider to Boston Scientific Corporation in September other liabilities $ 24 $ 97 $ 73
for $2.1 billion in cash Shareholders’ equity 483 454 458
• AMS to E.M. Warburg, Pincus & Co., LLC in September Total liabilities and
for $130 million in cash shareholders’ equity $507 $551 $531
• Valleylab to U.S. Surgical Corporation in January for
$425 million in cash

44
 Pfizer Inc and Subsidiary Companies

Condensed Statement of Income The contractual maturities of the held-to-maturity and

available-for-sale debt securities as of December 31, 1999, were
(millions of dollars) 1999 1998 1997
as follows:
Interest income $27 $30 $29
Interest expense (2) (2) (2) Years
Other income — net 8 1 13 Over 1 Over 5
(millions of dollars) Within 1 to 5 to 10 Over 10 Total
Net income $33 $29 $40
Held-to-maturity
debt securities:
4 Financial Instruments Corporate debt $3,590 $ 34 $ — $— $3,624
Most of our financial instruments are recorded in the Certificates of deposit 443 2 — — 445
Other — 2 8 9 19
Balance Sheet. Several “derivative” financial instruments
Available-for-sale
are “off-balance-sheet” items. debt securities:
A — Investments in Debt and Equity Securities Certificates of deposit — 370 75 — 445
Information about our investments follows: Corporate debt — 91 150 — 241
Total debt securities $4,033 $499 $233 $9 $4,774
(millions of dollars) 1999 1998 1997 Available-for-sale
Trading securities $ 113 $ 99 $ — equity securities 290
Trading securities 113
Amortized cost and fair value of
held-to-maturity debt securities:* Total investments $5,177
Corporate debt 3,624 2,306 626
Certificates of deposit 445 670 655 B — Short-Term Borrowings
Municipals — — 56 The weighted average effective interest rate on short-term
Other 19 21 104 borrowings outstanding at December 31 was 4.3% in 1999,
Total held-to-maturity debt securities 4,088 2,997 1,441 3.7% in 1998 and 2.9% in 1997. We had approximately
Cost and fair value of available-for-sale
$1.5 billion available to borrow under lines of credit at
debt securities* 686 686 686 December 31, 1999.
Cost of available-for-sale equity C — Long-Term Debt
securities 60 54 81
Gross unrealized gains 230 106 106 (millions of dollars) 1999 1998 1997
Gross unrealized losses — (8) (4) Floating-rate unsecured notes $491 $491 $686
Fair value of available-for-sale equity Other borrowings and mortgages 34 36 39
securities 290 152 183 Total long-term debt $525 $527 $725
Total investments $5,177 $3,934 $2,310 Current portion not included above $ 2 $ 4 $ 4
* Gross unrealized gains and losses are not significant.
The floating-rate unsecured notes mature on various dates
These investments are in the following captions in the from 2001 to 2005 and bear interest at a defined variable rate
Balance Sheet: based on the commercial paper borrowing rate. The weighted
(millions of dollars) 1999 1998 1997
average interest rate was 6.1% at December 31, 1999. These
notes minimize credit risk on certain available-for-sale debt
Cash and cash equivalents $ 443 $ 660 $ 636
securities that may be used to satisfy the notes at maturity. In
Short-term investments 3,703 2,377 712
September 1998, we repaid $195 million of the outstanding
Long-term loans and investments 1,031 897 962
floating-rate unsecured notes prior to their scheduled maturity
Total investments $5,177 $3,934 $2,310 by using the proceeds from the issuance of short-term
commercial paper.
Long-term debt outstanding at December 31, 1999,
matures as follows:
After
(millions of dollars) 2001 2002 2003 2004 2004
Maturities $131 $161 $— $— $233

45
Pfizer Inc and Subsidiary Companies

D — Derivative Financial Instruments Other deductions —net includes:

Purpose • changes in the fair value of foreign exchange contracts
“Forward-exchange contracts,” “currency swaps” and and changes in foreign currency assets and liabilities
“purchased currency options” are used to reduce exposure to • payments under swap contracts to offset, primarily,
foreign exchange risks. Also, “interest rate swap” contracts are interest expense or, to a lesser extent, net foreign
used to adjust interest rate exposures. exchange losses
• amortization of discounts or premiums on currencies
Accounting Policies sold under forward-exchange contracts
We consider derivative financial instruments to be “hedges”
(that is, an offset of foreign exchange and interest rate risks) Our criteria to qualify for hedge accounting are:
when certain criteria are met. Under hedge accounting Foreign currency instruments must:
for a purchased currency option, its impact on earnings is • relate to a foreign currency asset, liability or an
deferred until the recognition of the underlying hedged item anticipated transaction that is probable and whose
(inventory) in earnings. We recognize the earnings impact characteristics and terms have been identified
of the other instruments during the terms of the contracts, • involve the same currency as the hedged item
along with the earnings impact of the items they offset. • reduce the risk of foreign currency exchange
Purchased currency options are recorded at cost and movements on our operations
amortized evenly to operations through the expected inventory
delivery date. Gains at the transaction date are included in the Interest rate instruments must:
cost of the related inventory purchased. • relate to an asset or a liability
As interest rates change, we accrue the difference • change the character of the interest rate by converting
between the debt interest rates recognized in the Statement a variable rate to a fixed rate or vice versa
of Income and the amounts payable to or receivable from
counterparties under interest rate swap contracts. Likewise, The following table summarizes the exposures hedged
amounts arising from currency swap contracts are accrued as or offset by the various instruments we use:
exchange rates change.
Maximum Maturity in Years
The financial statements include the following items
related to derivative and other financial instruments serving as Instrument Exposure 1999 1998 1997
hedges or offsets: Forward-exchange Foreign currency
Prepaid expenses and taxes includes: contracts assets and liabilities .5 .5 .5
• purchased currency options Currency swaps Net investments 4 5 —
Loans .3 1 2
Other current liabilities includes: Purchased Inventory purchases
• fair value of forward-exchange contracts currency options and sales .9 1 1
• net amounts payable related to interest rate swap
Interest rate swaps Debt interest 4 5 1
contracts

Other noncurrent liabilities includes:

• net amounts payable related to currency
swap contracts

Accumulated other comprehensive expense includes changes in

the:
• foreign exchange translation of currency swaps and
foreign debt
• fair value of forward-exchange contracts for net
investment hedges

46
 Pfizer Inc and Subsidiary Companies

Instruments Outstanding The Japanese yen for U.S. dollar currency swaps require
The notional amounts of derivative financial instruments, that we make interim payments of a fixed rate of 1.1% on the
except for currency swaps, do not represent actual amounts Japanese yen payable and have interim receipts of a variable
exchanged by the parties, but instead represent the amount rate based on a commercial paper rate on the U.S. dollar
of the item on which the contracts are based. receivable. These currency swaps replaced $625 million
The notional amounts of our foreign currency and interest of Japanese yen debt, which previously served as a hedge
rate contracts follow: of our net investments in Japan, as well as related interest
rate swaps.
(millions of dollars) 1999 1998 1997
The Japanese yen and Swiss franc interest rate swaps
Foreign currency contracts: effectively fixed the interest rate on floating rate debt as
Commitments to sell foreign follows:
currencies, primarily in exchange • the Japanese yen debt at 1.4% in 1999, 1998 and 1997
for U.S. dollars:
• the Swiss franc debt at 2.1% in 1997
Euro* $1,050 $ — $ —
U.K. pounds 781 482 548
Japanese yen 412 298 224 The floating interest rates were based on “LIBOR” rates
Irish punt* 91 61 107 related to the contract currencies. In connection with the sale
Australian dollars 76 98 59 of the Schneider Swiss subsidiary in 1998, we terminated the
German marks* 39 50 158 Swiss franc interest rate swap contracts and ceased borrowing
Netherlands guilders* — 316 4 Swiss francs.
French francs* — 216 134
Other currencies 192 201 240 E — Fair Value
Commitments to purchase foreign The following methods and assumptions were used to estimate
currencies, primarily in exchange the fair value of derivative and other financial instruments at
for U.S. dollars: the balance sheet date:
Euro* 339 — — • short-term financial instruments (cash equivalents,
U.K. pounds 101 53 60 accounts receivable and payable, forward-exchange
Irish punt* 50 532 92 contracts, short-term investments and borrowings) —
German marks* 47 67 73
cost approximates fair value because of the short maturity
Netherlands guilders* — 156 4
Swiss francs — 8 187
period
Other currencies 196 144 136 • loans —cost approximates fair value because of the short
interest reset period
Total forward-exchange contracts $3,374 $2,682 $2,026
• long-term investments, long-term debt, forward-exchange
Currency swaps: contracts and purchased currency options—fair value is
Japanese yen $ 829 $ 754 $ — based on market or dealer quotes
U.K. pounds 40 40 40
• interest rate and currency swap agreements—fair value is
Total currency swaps $ 869 $ 794 $ 40 based on estimated cost to terminate the agreements
Purchased currency options, (taking into account broker quotes, current interest
primarily for U.S. dollars: rates and the counterparties’ creditworthiness)
Japanese yen $ 393 $ 364 $ 198
German marks — — 130 The differences between fair and carrying values of our
French francs — — 46
derivative and other financial instruments were not material at
Belgian francs — — 29
December 31, 1999, 1998 and 1997, except for a difference of
Other currencies 30 25 61
$230 million at December 31, 1999 for available-for-sale
Total purchased currency options $ 423 $ 389 $ 464 equity securities.
Interest rate swap contracts:
F — Credit Risk
Japanese yen $ 353 $ 321 $ 814
Swiss francs — — 405
We periodically review the creditworthiness of counterparties
to foreign exchange and interest rate agreements and do not
Total interest rate swaps $ 353 $ 321 $1,219
expect to incur a loss from failure of any counterparties
*On January 1, 1999, members of the European Monetary Union were permitted to use to perform under the agreements. In general, there is no
the new currency, the euro, or their old currency.
requirement for collateral from customers. There are
no significant concentrations of credit risk related to our
financial instruments. No individual counterparty credit
exposure exceeded 10% of our consolidated Shareholders’ Equity
at December 31, 1999.

47
Pfizer Inc and Subsidiary Companies

5 Comprehensive Income 7 Property, Plant and Equipment

Changes in accumulated other comprehensive income/ The major categories of property, plant and equipment follow:
(expense) follow:
Useful
Net Accumulated Lives
Unrealized Other Com- (millions of dollars) (years) 1999 1998 1997
Currency Gain/(Loss) on Minimum prehensive Land — $ 174 $ 151 $ 126
Translation Available-For- Pension Income/
Buildings 331⁄3 2,008 1,669 1,534
(millions of dollars) Adjustment Sale Securities Liability (Expense)*
Machinery and
Balance equipment 8–20 3,040 2,685 2,459
January 1, Furniture, fixtures
1997 $ 174 $ 40 $ (69) $ 145 and other 3–121⁄ 2 1,618 1,383 1,232
Period change (253) 20 3 (230) Construction in
Balance progress — 1,197 956 516
December 31, 8,037 6,844 5,867
1997 (79) 60 (66) (85) Less: accumulated
Period change (74) (2) (73) (149) depreciation 2,694 2,429 2,074
Balance Total property, plant
December 31, and equipment $5,343 $4,415 $3,793
1998 (153) 58 (139) (234)
Period change (222) 81 (24) (165)
8 Other Deductions — Net
Balance
December 31, The components of other deductions —net follow:
1999 $(375) $139 $(163) $(399)
(millions of dollars) 1999 1998 1997
* Income tax benefit for other comprehensive expense was $76 million in 1997,
$116 million in 1998 and $33 million in 1999. Interest income $(301) $ (185) $(156)
Interest expense 236 143 149
6 Inventories Interest expense capitalized (13) (7) (2)
Net interest income (78) (49) (9)
In June 1999, the European Union’s Committee for Proprietary
Co-promotion payments to Searle — 240 —
Medicinal Products suspended the European Union licenses of
Contribution to The
the oral and intravenous formulations of Trovan for 12 months. Pfizer Foundation — 300 —
Based on our evaluation of these events and related matters, we Legal settlements involving the
determined that it was unlikely that certain Trovan inventories brand-name prescription drug
of finished goods, bulk, work-in-process, and raw materials will antitrust litigation 2 57 —
be used. Accordingly, in the third quarter of 1999, we recorded Amortization of goodwill and other
a charge of $310 million ($205 million after-tax, or $.05 after- intangibles 43 45 48
tax per diluted share) in Cost of sales to write off Trovan Net exchange (gains)/losses (20) (16) 26
Other, net 154 432 141
inventories in excess of the amount required to support
expected sales. Other deductions — net $ 101 $1,009 $ 206

In 1999, we substantially completed the actions under the

restructuring plans announced in 1998.
In 1998, we recorded charges for the restructuring in
addition to charges for certain asset impairments. The
components of these pre-tax charges follow:

(millions of dollars) Total COS* SI&A* R&D OD*

Restructuring charges $177 $68 $17 $1 $ 91

Asset impairments 213 18 — — 195
* COS —Cost of sales; SI&A —Selling, informational and administrative expenses; OD —
Other deductions-net.

48
 Pfizer Inc and Subsidiary Companies

The components of the 1998 restructuring charges follow: In 1998, our animal health antibiotic feed additive, Stafac,
was banned, effective in mid-1999, throughout the European
Utilization
Union, resulting in asset impairment charges of $103 million
(millions of dollars) Charges in 1998 1998 1999 Beyond ($85 million was to adjust intangible asset values, primarily
Property, plant goodwill and trademarks, and $18 million was to adjust the
and equipment $ 49 $ 49 $— $— carrying value of machinery and equipment in the
Write-down of intangibles 44 44 — — pharmaceutical segment).
Employee termination costs 40 12 28 —
Other 44 11 17 16 9 Taxes on Income
Total $177 $116 $45 $16 Income from continuing operations before taxes consisted of
the following:
These charges resulted from a review of our global
operations to increase efficiencies and return on assets, thereby (millions of dollars) 1999 1998 1997
resulting in plant and product line rationalizations. In addition United States $2,557 $1,184 $1,215
to the disposition of our MTG businesses, we exited certain International 1,891 1,410 1,652
product lines including certain lines associated with our animal Total income from continuing
health business and certain of our fermentation operations. operations before taxes $4,448 $2,594 $2,867
We wrote off assets related to the product lines we exited,
including inventory, intangible assets—primarily goodwill—as The provision for taxes on income from continuing
well as certain buildings, machinery and equipment which we operations consisted of the following:
do not plan to use or sell.
As a result of the restructuring, our work force was (millions of dollars) 1999 1998 1997
reduced by approximately 500 manufacturing, sales and United States:
corporate personnel. Employee termination costs represent Taxes currently payable:
payments for severance, outplacement counseling fees, medical Federal $ 621 $ 344 $344
and other benefits and a $5 million noncash charge for the State and local 38 24 9
acceleration of nonvested employee stock options. Deferred income taxes (72) (162) (23)
Other restructuring charges consist of charges for Total U.S. tax provision 587 206 330
inventory for product lines we have exited—$12 million, International:
contract termination payments—$9 million, facility closure Taxes currently payable 606 550 462
costs—$7 million and environmental remediation costs Deferred income taxes 51 (114) (17)
associated with the disposal of certain facilities—$16 million. Total international tax provision 657 436 445
In 1998, we recorded an impairment charge of
Total provision for taxes on income $1,244 $ 642 $775
$110 million in the pharmaceutical segment to adjust
intangible asset values, primarily goodwill and trademarks,
related to consumer health care product lines. These charges Amounts are reflected in the preceding tables based on the
resulted from significant changes in the marketplace and a location of the taxing authorities. As of December 31, 1999, we
revision of our strategies, including: have not made a U.S. tax provision of approximately
• the decision to redeploy resources from personal care and $1.9 billion for approximately $8.2 billion of unremitted
minor brands to over-the-counter switches of prescription earnings of our international subsidiaries. These earnings are
products expected, for the most part, to be reinvested overseas.
• the withdrawal of one of our major over-the-counter We operate a manufacturing subsidiary in Puerto Rico
products in Italy that benefits from a Puerto Rican incentive grant in effect
• an acquired product line which experienced declines through the end of 2002. Under this grant, we are partially
in market share exempt from income, property and municipal taxes. For further
information on U.S. taxation of Puerto Rican operations, see
“Tax Legislation” on page 37.

49
Pfizer Inc and Subsidiary Companies

Reconciliation of the U.S. statutory income tax rate to our A valuation allowance is recorded because some items
effective tax rate for continuing operations follows: recorded as foreign deferred tax assets may not be deductible
or creditable. The “foreign tax credit carryforwards” were
(percentages) 1999 1998 1997 generated from dividends paid or deemed to be paid by
U.S. statutory income tax rate 35.0 35.0 35.0 subsidiaries to the parent company between 1997 and 1999. We
Effect of partially tax-exempt can carry these credits forward for five years from the year of
operations in Puerto Rico (1.5) (2.2) (1.8) actual payment and apply them to certain U.S. tax liabilities.
Effect of international operations (4.8) (5.5) (5.0)
The Internal Revenue Service (IRS) has completed and
All other — net (0.7) (2.5) (1.2)
closed its audits of our tax returns through 1992. The IRS
Effective tax rate for continuing completed its audits in January 2000 of our tax returns for
operations 28.0 24.8 27.0 1993 through 1995. We are awaiting the agent’s final report for
those years. We do not expect any material adjustments to be
Deferred taxes arise because of different treatment between proposed.
financial statement accounting and tax accounting, known as In November 1994, Belgian tax authorities notified Pfizer
“temporary differences.” We record the tax effect of these Research and Development Company N.V./S.A. (PRDCO),
temporary differences as “deferred tax assets” (generally items an indirect, wholly owned subsidiary of our company, of a
that can be used as a tax deduction or credit in future periods) proposed adjustment to the taxable income of PRDCO for
and “deferred tax liabilities” (generally items that we received fiscal year 1992. The proposed adjustment arises from an
a tax deduction for, but have not yet been recorded in the assertion by the Belgian tax authorities of jurisdiction with
Statement of Income). respect to income resulting primarily from certain transfers
The tax effects of the major items recorded as deferred tax of property by our non-Belgian subsidiaries to the Irish branch
assets and liabilities are: of PRDCO. In January 1995, PRDCO received an assessment
from the tax authorities for additional taxes and interest of
1999 1998 1997
Deferred Tax Deferred Tax Deferred Tax
approximately $432 million and $97 million, respectively,
relating to these matters. In January 1996, PRDCO received
(millions of dollars) Assets Liabs. Assets Liabs. Assets Liabs.
an assessment from the tax authorities, for fiscal year 1993, for
Prepaid/deferred items $ 361 $ 197 $ 411 $ 169 $ 252 $189 additional taxes and interest of approximately $86 million and
Inventories 471 109 322 72 218 60 $18 million, respectively. The additional assessment arises from
Property, plant and
the same assertion by the Belgian tax authorities of jurisdiction
equipment 22 514 39 433 30 350
Employee benefits 544 131 391 97 297 113
with respect to all income of the Irish branch of PRDCO.
Restructurings and Based upon the relevant facts regarding the Irish branch of
special charge* 244 — 301 — 133 — PRDCO and the provisions of the Belgian tax laws and the
Foreign tax credit written opinions of outside counsel, we believe that the
carryforwards 181 — 117 — 159 — assessments are without merit.
Other carryforwards 165 — 97 — 135 — We believe that our accrued tax liabilities are adequate for
Unremitted earnings — 335 — 335 — — all years.
All other 121 170 169 73 119 76
Subtotal 2,109 1,456 1,847 1,179 1,343 788 10 Benefit Plans
Valuation allowance (27) — (30) — (27) —
Our pension plans cover most employees worldwide. Our
Total deferred taxes $2,082 $1,456 $1,817 $1,179 $1,316 $788 postretirement plans provide medical and life insurance
Net deferred tax asset $ 626 $ 638 $ 528 benefits to retirees and their eligible dependents.
* Includes tax effect of the 1991 charge for potential future Shiley C/C heart valve
Information regarding our pension and postretirement
fracture claims. benefit obligation follows:

These amounts, netted by taxing location, are in the Pension Postretirement

following captions in the Balance Sheet: (percentages) 1999 1998 1997 1999 1998 1997

(millions of dollars) 1999 1998 1997 Weighted-average

assumptions:
Prepaid expenses and taxes $ 744 $ 809 $ 425 Discount rate:
Other assets, deferred taxes and U.S. plans 7.5 6.8 7.0 7.5 6.8 7.0
deferred charges 183 26 230 International plans 5.1 5.3 5.9
Deferred taxes on income (301) (197) (127) Rate of compensation
Net deferred tax asset $ 626 $ 638 $ 528 increase:
U.S. plans 4.5 4.5 4.5
International plans 3.7 3.4 3.9

50
 Pfizer Inc and Subsidiary Companies

The following tables present reconciliations of the benefit The components in the balance sheet consist of:
obligation of the plans; the plan assets of the pension plans and
Pension Postretirement
the funded status of the plans:
(millions of dollars) 1999 1998 1997 1999 1998 1997
Pension Postretirement
Prepaid benefit cost $ 537 $ 504 $ 499 $ — $ — $ —
(millions of dollars) 1999 1998 1997 1999 1998 1997 Accrued benefit
Change in benefit liability (655) (562) (362) (346) (359) (394)
obligation Intangible asset 79 71 53 — — —
Benefit obligation at Accumulated other
beginning of year $3,177 $2,674 $2,130 $ 286 $ 287 $ 285 comprehensive
Service cost 169 151 105 7 10 7 income 317 249 143 — — —
Interest cost 192 181 145 18 20 19 Net amount
Employee recognized $ 278 $ 262 $ 333 $(346) $(359) $(394)
contributions 9 6 6
Plan amendments 13 15 274 2 — —
Information related primarily to International plans:
Plan net (gains)/losses 87 354 240 (30) (3) (7)
Foreign exchange Pension
impact 28 36 (103)
Acquisitions — — 3 — — — (millions of dollars) 1999 1998 1997
Divestitures (42) (26) — — — — Pension plans with an accumulated benefit
Curtailments — (26) (1) — (10) — obligation in excess of plan assets:
Settlements (1) (10) (1) — — — Fair value of plan assets $400 $323 $294
Benefits paid (221) (178) (124) (20) (18) (17) Accumulated benefit obligation 752 693 553
Benefit obligation at Pension plans with a benefit obligation in
end of year $3,411 $3,177 $2,674 $ 263 $ 286 $ 287 excess of plan assets:
Fair value of plan assets $496 $435 $422
Change in Benefit obligation 949 901 774
plan assets
Fair value of plan
assets at beginning
At December 31, 1999, the major U.S. pension plan held
of year $3,194 $2,793 $2,410 approximately 6.8 million shares of our common stock with a
Actual return on plan fair value of approximately $220 million. The Plan received
assets 464 530 491 approximately $2 million in dividends on these shares in 1999.
Company The assumptions used and the annual cost related to these
contributions 76 63 50 plans follow:
Employee
contributions 9 6 6 Pension Postretirement
Foreign exchange
(percentages) 1999 1998 1997 1999 1998 1997
impact 26 3 (57)
Acquisitions — — 1 Weighted average
Divestitures (34) (23) — assumptions:
Settlements (1) (13) (1) Expected return on
Benefits paid (206) (165) (107) plan assets:
U.S. plans 10.0 10.0 10.0
Fair value of plan
International plans 7.3 8.1 7.5
assets at end of year $3,528 $3,194 $2,793
(millions of dollars)
Funded status:
Plan assets in excess Service cost $169 $ 151 $ 105 $ 7 $ 10 $ 7
of/(less than) Interest cost 192 181 145 18 20 19
benefit Expected return on
obligation $ 117 $ 17 $ 119 $(263) $(286) $(287) plan assets (275) (249) (208)
Unrecognized: Amortization of:
Net transition asset (4) (4) (10) — — — Prior service costs/
Net (gains)/ (gains) 19 24 34 (18) (24) (24)
losses (75) 1 (86) (56) (26) (24) Net transition asset (5) (6) (5) — — —
Prior service Net losses/(gains) 12 10 2 — (1) (1)
costs/(gains) 240 248 310 (27) (47) (83) Curtailments and
settlements— net* — 28 — — (22) —
Net amount
recognized $ 278 $ 262 $ 333 $(346) $(359) $(394) Net periodic benefit
cost/(gain) $112 $ 139 $ 73 $ 7 $(17) $ 1
* Includes approximately $12 million of special termination pension benefits for certain
MTG employees in 1998.

51
Pfizer Inc and Subsidiary Companies

An average increase of 6.9% in the cost of health care
benefits was assumed for 2000 and is projected to decrease over
the next five years to 5.2% and to then remain at that level.
A 1% change in the medical trend rate assumed for
postretirement benefits would have the following effects
at December 31, 1999:
(millions of dollars) 1% Increase 1% Decrease
Total of service and interest
cost components $ 1 $ (1)
Postretirement benefit obligation 13 (12)
We have savings and investment plans for most employees
in the U.S., Puerto Rico, the U.K. and Ireland. Employees may
contribute a portion of their salaries to the plans and we match
a portion of the employee contributions. Our contributions
were $50 million in 1999, $48 million in 1998 and $43 million
in 1997.
11 Lease Commitments
We lease properties for use in our operations. In addition to
rent, the leases require us to pay directly for taxes, insurance,
maintenance and other operating expenses, or to pay higher
rent when operating expenses increase. Rental expense, net
of sublease income, was $158 million in 1999, $131 million in
1998 and $127 million in 1997. This table shows future
minimum rental commitments under noncancellable leases
at December 31, 1999:
13 Preferred Stock Purchase Rights
Preferred Stock Purchase Rights have a scheduled term
through October 2007, although the term may be extended or
the Rights may be redeemed prior to expiration. One right was
issued for each share of common stock issued by our company.
These rights are not exercisable unless certain change-in-
control events transpire, such as a person acquiring or
obtaining the right to acquire beneficial ownership of 15% or
more of our outstanding common stock or an announcement of
a tender offer for at least 30% of our stock. The rights are
evidenced by corresponding common stock certificates and
automatically trade with the common stock unless an event
transpires that makes them exercisable. If the rights become
exercisable, separate certificates evidencing the rights will be
distributed and each right will entitle the holder to purchase a
new series of preferred stock at a defined price from our
company. The preferred stock, in addition to preferred
dividend and liquidation rights, will entitle the holder to vote
with the company’s common stock.
The rights are redeemable by us at a fixed price until
10 days, or longer as determined by the Board, after
certain defined events, or at any time prior to the expiration of
the rights.
We have reserved 3.0 million preferred shares to be issued
pursuant to these rights. No such shares have yet been issued.
At the present time, the rights have no dilutive effect on the
earnings per common share calculation.

After
14 Employee Benefit Trusts
(millions of dollars) 2000 2001 2002 2003 2004 2004 In 1993, we sold 120 million shares of treasury stock to the
Lease commitments $54 $45 $40 $29 $27 $286 Pfizer Inc. Grantor Trust in exchange for a $600 million note.
The Trust was established primarily to fund our employee
12 Common Stock benefit plans. In February 1999, the Trust transferred 10
million shares to us to satisfy the balance due on its note and
We effected a three-for-one stock split of our common stock in contributed its remaining 90 million shares to the newly
the form of a 200% stock dividend in 1999 and a two-for-one established Pfizer Inc. Employee Benefit Trust (EBT). The
split of our common stock in the form of a 100% stock Grantor Trust was then dissolved and the shares of the EBT
dividend in 1997. All share and per share information in this will now be used to fund employee benefit plans. The Balance
report reflects both splits. Per share data may reflect rounding Sheet reflects the fair value of the shares owned by the EBT as a
adjustments as a result of the three-for-one split. reduction of Shareholders’ Equity.
Under the current share-purchase program begun in
September 1998, we are authorized to purchase up to $5 billion
of our common stock. In 1999, we purchased approximately
65.6 million shares of our common stock in the open market at
an average price of $38 per share. Since the beginning of this
program, we have purchased 80.4 million shares of our
common stock for approximately $3 billion. In September
1998, we completed a program under which we purchased
79.2 million shares of our common stock at a total cost of
$2 billion. In 1998, we purchased approximately 57.8 million
shares of our common stock at an average price of $33 per share
under these share-purchase programs. Of the 57.8 million
shares repurchased in 1998, 14.8 million shares were
repurchased under the share-purchase program which started in
September 1998, for a total cost of $525 million.

52
 Pfizer Inc and Subsidiary Companies

15 Earnings Per Share The following table summarizes information concerning

options outstanding under the Plan at December 31, 1999:
The weighted average common shares used in the
computations of basic earnings per common share and earnings (thousands
per common share assuming dilution were as follows: of shares) Options Outstanding Options Exercisable
Weighted
(millions, except per share data) 1999 1998 1997 Average Weighted Weighted
Number Remaining Average Number Average
Earnings:
Range of Outstanding Contractual Exercise Exercisable Exercise
Income from continuing operations $3,199 $1,950 $2,082 Exercise Prices at 12/31/99 Term (years) Price at 12/31/99 Price
Discontinued operations— net of tax (20) 1,401 131
$ 0 – $10 85,308 4.0 $ 6.40 84,401 $ 6.38
Net income $3,179 $3,351 $2,213 10 – 15 36,677 6.6 12.42 34,439 12.42
Basic: 15 – 20 35,486 7.7 18.34 21,145 18.35
Weighted average number of 20 – 40 48,730 8.7 35.18 14,114 35.18
common shares outstanding 3,775 3,789 3,771 over 40 66,904 9.2 42.07 — —
Earnings per common share
Income from continuing operations $ .85 $ .51 $ .55 The following table summarizes the activity for the Plan:
Discontinued operations— net of tax (.01) .37 .04
Under Option
Net income $ .84 $ .88 $ .59
Shares Weighted
Diluted: Available for Average Exercise
Weighted average number of (thousands of shares) Grant Shares Price Per Share
common shares outstanding 3,775 3,789 3,771 Balance January 1, 1997 105,042 259,284 $ 7.21
Common share equivalents— Granted (42,612) 42,612 18.35
stock options and stock issuable Exercised — (46,983) 5.38
under employee compensation plans 109 156 138 Cancelled 1,959 (2,016) 12.89
Weighted average number of Balance December 31, 1997 64,389 252,897 9.39
common shares and common Granted (52,860) 52,860 35.21
share equivalents 3,884 3,945 3,909 Exercised — (54,888) 7.04
Earnings per common share Cancelled 1,212 (1,257) 19.91
Income from continuing operations $ .82 $ .49 $ .53 Balance December 31, 1998 12,741 249,612 15.32
Discontinued operations— net of tax — .36 .04 Authorized 165,000 — —
Net income $ .82 $ .85 $ .57 Granted (67,963) 67,963 42.07
Exercised — (41,524) 9.57
Cancelled 2,928 (2,946) 35.41
Options to purchase 115 million shares were outstanding
during 1999 but were not included in the computation of Balance December 31, 1999 112,706 273,105 22.63
diluted earnings per share because the options’ exercise prices Options granted in 1999 include options for 450 shares granted to every eligible
were greater than the average market price of the common employee worldwide in celebration of our 150th Anniversary.

shares. The tax benefits related to certain stock option transactions were $228 million in 1999,
$274 million in 1998 and $88 million in 1997.
16 Stock Option and Performance Awards
The weighted-average fair value per stock option granted
We may grant stock options to any employee, including was $13.57 for 1999 options, $11.31 for 1998 options and $5.59
officers, under our Stock and Incentive Plan. Options are for the 1997 options. We estimated the fair values using the
exercisable after five years or less, subject to continuous Black-Scholes option pricing model, modified for dividends
employment and certain other conditions and expire 10 years and using the following assumptions:
after the grant date. Once exercisable, the employee can
purchase shares of our common stock at the market price on 1999 1998 1997
the date we granted the option. Expected dividend yield 1.02% 1.02% 1.76%
The Plan also allows for stock appreciation rights, Risk-free interest rate 5.26% 5.23% 6.23%
stock awards and performance awards. In 1999, shareholders Expected stock price volatility 25.98% 26.29% 25.56%
approved amendments to increase the shares available in Expected term until exercise (years) 5.75 5.75 5.50
the Plan and to extend its term through 2008.

53
Pfizer Inc and Subsidiary Companies

The following table summarizes results as if we had 18 Litigation

recorded compensation expense for the 1999, 1998 and 1997
The Company is involved in a number of claims and
option grants:
litigations, including product liability claims and litigations
(millions of dollars, except per share data) 1999 1998 1997 considered normal in the nature of its businesses. These include
Net income:
suits involving various pharmaceutical and hospital products
As reported $3,179 $3,351 $2,213 that allege either reaction to or injury from use of the product.
Pro forma 2,750 3,149 2,087 In addition, from time to time the Company is involved in, or
Basic earnings per share: is the subject of, various governmental or agency inquiries or
As reported $ .84 $ .88 $ .59 investigations relating to its businesses.
Pro forma .73 .83 .55 In 1999, the Company pleaded guilty to one count of price
Diluted earnings per share: fixing of sodium erythorbate from July 1992 until December
As reported $ .82 $ .85 $ .57
1994, and one count of market allocation of maltol from
Pro forma .71 .80 .53
December 1989 until December 1995, and paid a total fine of
$20 million. The activities at issue involved the Company’s
The Performance-Contingent Share Award Program former Food Science Group, a division that manufactured food
was established effective in 1993 to provide executives and additives and that the Company divested in 1996. The
other key employees the right to earn common stock awards. Department of Justice has stated that no further antitrust
We determine the award payouts after the performance period charges will be brought against the Company relating to the
ends, based on specific performance criteria. Under the former Food Science Group, that no antitrust charges will be
Program, up to 120 million shares may be awarded. We brought against any current director, officer or employee of the
awarded approximately 2,276,000 shares in 1999, Company for conduct related to the products of the former
approximately 1,959,000 shares in 1998 and approximately Food Science Group, and that none of the Company’s current
1,347,000 shares in 1997. At December 31, 1999, program directors, officers or employees was aware of any aspect of the
participants had the right to earn up to 12.3 million additional activity that gave rise to the violations. Five purported class
shares. Compensation expense related to the Program was action suits involving these products have been filed against
$64 million in 1999, $202 million in 1998 and $74 million the Company; two in California State Court, and three in New
in 1997. York Federal Court. The Company does not believe that this
We entered into two forward-purchase contracts in 1998 plea and settlement, or civil litigation involving these
and on maturity they were extended. These contracts offset the products, will have a material effect on its business or results of
potential impact on net income of our liability under the operations.
Program. At settlement date we will, at the option of the On June 9, 1997, the Company received notice of the
counterparty to the contract, either receive our own stock or filing of an Abbreviated New Drug Application (ANDA) by
settle the contracts for cash. Other contract terms are as Mylan Pharmaceuticals for a sustained-release nifedipine
follows: product asserted to be bioequivalent to Procardia XL. Mylan’s
Maximum Maturity notice asserted that the proposed formulation does not infringe
in Years relevant licensed Alza and Bayer patents and thus that approval
Number of Shares (thousands) Per Share 1999 1998 of their ANDA should be granted before patent expiration. On
3,000 $33.73 — .9 July 18, 1997, the Company, together with Bayer AG and Bayer
3,017 33.75 .9 — Corporation, filed a patent-infringement suit against Mylan
Pharmaceuticals Inc. and Mylan Laboratories Inc. in the United
The financial statements include the following items States District Court for the Western District of Pennsylvania
related to these contracts: with respect to Mylan’s ANDA. Suit was filed under Bayer
Prepaid expenses and taxes includes: AG’s U.S. Patent No. 5,264,446, licensed to the Company,
• fair value of these contracts relating to nifedipine of a specified particle size range. Mylan
Other deductions—net includes: has filed its answer denying infringement and a scheduling
• changes in the fair value of these contracts order has been entered. On December 17, 1999, Mylan received
final approval from the FDA for its 30 mg. extended-release
17 Insurance nifedipine tablet. On March 16, 1999, the United States
We maintain insurance coverage adequate for our needs. Under District Court granted Mylan’s motion to file an amended
our insurance contracts, we usually accept self-insured answer and antitrust counterclaims. All discovery on the
retentions appropriate for our specific business risks. antitrust counterclaims is stayed pending resolution of the
patent misuse claims. On March 29, 1999, Mylan filed a
motion for summary judgment based on an adverse decision
against Bayer in Bayer’s litigation against Elan Pharmaceutical
Research Corp. which involved the same nifedipine particle size

54

patent. Discovery has been essentially completed and the
parties dispositive motions were filed by an extended deadline
of July 19, 1999, including Pfizer and Bayer’s summary
judgment motion seeking to dismiss Mylan’s patent misuse
defenses and counterclaims. On December 13, 1999, Mylan
filed its opposition to plaintiffs’ motion for summary judgment
dismissing Mylan’s patent misuse defense and counterclaim,
and Bayer and the Company filed their opposition to Mylan’s
motion for summary judgment of non-infringement. The
parties reply memoranda in support of their motions were filed
on December 28, 1999.
On or about February 23, 1998, Bayer AG received notice
that Biovail Laboratories Incorporated had filed an ANDA for a
sustained-release nifedipine product asserted to be
bioequivalent to one dosage strength (60 mg.) of Procardia XL.
The notice was subsequently received by the Company as well.
The notice asserts that the Biovail product does not infringe
Bayer’s U.S. Patent No. 5,264,446. On March 26, 1998, the
Company received notice of the filing of an ANDA by Biovail
Laboratories of a 30 mg. dosage formulation of nifedipine
alleged to be bioequivalent to Procardia XL. On April 2, 1998,
Bayer and Pfizer filed a patent-infringement action against
Biovail, relating to their 60 mg. nifedipine product, in the
United States District Court for the District of Puerto Rico.
On May 6, 1998, Bayer and Pfizer filed a second patent
infringement action in Puerto Rico against Biovail under the
same patent with respect to Biovail’s 30 mg. nifedipine
product. These actions have been consolidated for discovery and
trial. On April 24, 1998, Biovail Laboratories Inc. brought suit
in the United States District Court for the Western District of
Pennsylvania against the Company and Bayer seeking a
declaratory judgment of invalidity of and/or non-infringement
of the 5,264,446 nifedipine patent as well as a finding of
violation of the antitrust laws. Biovail has also moved to
transfer the patent infringement actions from Puerto Rico to
the Western District of Pennsylvania. Pfizer has opposed this
motion to transfer and on June 19, 1998, moved to dismiss
Biovail’s declaratory judgment action and antitrust action in
the Western District of Pennsylvania, or in the alternative, to
stay the action pending the outcome of the infringement
actions in Puerto Rico. On January 4, 1999, the District Court
in Pennsylvania granted Pfizer’s motion for a stay of the
antitrust action pending the outcome of the infringement
actions in Puerto Rico. On January 29, 1999, the District
Court in Puerto Rico denied Biovail’s motion to transfer the
patent infringement actions from Puerto Rico to the Western
District of Pennsylvania. On April 12, 1999, Biovail filed a
motion for summary judgment also based in part on the
summary judgment motion granted to Elan in the Bayer v.
Elan litigation in the Northern District of Georgia. Pfizer and
Bayer’s response was filed on April 26, 1999. On September 20,
1999, the United States District Court in Puerto Rico denied
Biovail’s motion for summary judgment without prejudice to
their refiling after completion of discovery in the Procardia XL
patent-infringement litigation. The court set an expedited
discovery schedule with a deadline of December 30, 1999, to
Pfizer Inc and Subsidiary Companies
complete discovery of parties and fact witnesses and February
29, 2000, to complete discovery of expert witnesses. On
December 20, 1999, the court extended the date to complete
fact discovery to January 28, 2000, and that of expert discovery
to March 15, 2000. A status conference with the court is
scheduled for March 17, 2000.
On April 2, 1998, the Company received notice from Lek
U.S.A. Inc. of its filing of an ANDA for a 60 mg. formulation
of nifedipine alleged to be bioequivalent to Procardia XL. On
May 14, 1998, Bayer and Pfizer commenced suit against Lek for
infringement of Bayer’s U.S. Patent No. 5,264,446, as well as
for infringement of a second Bayer patent, No. 4,412,986
relating to combinations of nifedipine with certain polymeric
materials. On September 14, 1998, Lek was served with the
summons and complaint. Plaintiffs amended the complaint on
November 10, 1998, limiting the action to infringement of
U.S. Patent 4,412,986. On January 19, 1999, Lek filed a motion
to dismiss the complaint alleging infringement of U.S. Patent
4,412,986. Pfizer responded to this motion and oral argument
has been held in abeyance pending a settlement conference. In
September 1999, a settlement agreement was entered into
among the parties staying this litigation until the expiration of
U.S. Patent No. 4,412,986 on November 2, 2000.
On February 10, 1999, the Company received a notice from
Lek U.S.A. of its filing of an ANDA for a 90 mg. formulation
of nifedipine alleged to be bioequivalent to Procardia XL. On
March 25, 1999, Bayer and Pfizer commenced suit against Lek
for infringement of the same two Bayer patents originally
asserted against Lek’s 60 mg. formulation. This case was also
the subject of a settlement conference. In September, 1999, a
settlement agreement was entered into among the parties
staying this litigation until the expiration of U.S. patent No.
4,412,986 on November 2, 2000.
On November 9, 1998, Pfizer received an ANDA notice
letter from Martec Pharmaceutical, Inc. for generic versions (30
mg., 60 mg., 90 mg.) of Procardia XL. On or about December
18, 1998, Pfizer received a new ANDA certification letter
stating that the ANDA had actually been filed in the name of
Martec Scientific, Inc. On December 23, 1998, Pfizer brought
an action against Martec Pharmaceutical, Inc. and Martec
Scientific, Inc. in the Western District of Missouri for
infringement of Bayer’s patent relating to nifedipine of a
specific particle size. On January 26, 1999, a second complaint
was filed against Martec Scientific in the Western District of
Missouri based on Martec’s new ANDA certification letter.
Martec filed its response to this complaint on February 26,
1999. A hearing to determine claim scope is scheduled for
June 1, 2000.
Pfizer filed suit on July 8, 1997, against the FDA in the
United States District Court for the District of Columbia,
seeking a declaratory judgment and injunctive relief enjoining
the FDA from processing Mylan’s ANDA or any other ANDA
submission referencing Procardia XL that uses a different
extended-release mechanism. Pfizer’s suit alleges that extended-
release mechanisms that are not identical to the osmotic pump
mechanism of Procardia XL constitute different dosage forms
55
Pfizer Inc and Subsidiary Companies
requiring the filing and approval of suitability petitions under
the Food Drug and Cosmetics Act before the FDA can accept
an ANDA for filing. Mylan intervened in Pfizer’s suit. On
March 31, 1998, the U.S. District Judge granted the
government’s motion for summary judgment against the
Company. On July 16, 1999, the D.C. Court of Appeals
dismissed the appeal on the ground that since the FDA had not
approved any ANDA referencing Procardia XL that uses a
different extended-release mechanism than the osmotic pump
mechanism of Procardia XL, it was premature to maintain this
action, stating that Pfizer has the right to bring such an action
if, and when, the FDA approves such an ANDA. Subsequent to
FDA’s final approval of Mylan’s ANDA, on December 18, 1999
Pfizer filed suit against FDA in the United States District
Court for the District of Delaware. The suit alleges that FDA
unlawfully approved Mylan’s 30 mg. extended release product
because FDA had not granted an ANDA suitability petition
reflecting a difference in dosage form from Procardia XL.
On March 31, 1999, the Company received notice from
TorPharm of its filing, through its U.S. agent Apotex Corp., of
an ANDA for 1 mg., 2 mg., 4 mg. and 8 mg. tablets alleged to
be bioequivalent to Cardura (doxazosin mesylate). The notice
letter alleges that Pfizer’s patent on doxazosin is invalid in view
of certain prior art references. Following a review of these
allegations, suit was filed in the United States District Court
for the Northern District of Illinois against TorPharm and
Apotex Corp. on May 14, 1999. The defendants requested a 90-
day period in which to file their answer. The request was
granted and TorPharm/Apotex’s answer was filed by August
19, 1999. Discovery is in progress. On June 2, 1999, FDA was
notified that given the patent litigation and pursuant to
provisions of the Federal Food Drug and Cosmetic Act, the
FDA may not approve the TorPharm application for thirty
months from filing or resolution of the litigation.
On May 5, 1999, the Company filed an action against Sibia
Neurosciences, Inc. in the United States District Court for the
District of Delaware seeking a declaratory judgment that two
Sibia patents claiming reporter gene drug screening assays are
invalid, not infringed by the Company, and unenforceable due
to Sibia’s misuse of its patent rights in seeking certain license
terms. On May 27, 1999, Sibia Neurosciences, Inc. filed an
answer to the Company’s declaratory judgment action in which
Sibia denies that a prior case or controversy existed, but admits
that a case or controversy does now exist regarding at least one
patent in suit, denies the invalidity, unenforceability and non-
infringement of the patents in suit, and asserts various
jurisdictional and equitable defenses, affirmative defenses, and
lack of standing by the Company to assert patent misuse. Sibia
Neurosciences also filed a counterclaim alleging willful
infringement by the Company of one of the patents in suit. A
reply to that counterclaim denying Sibia’s allegation has been
filed. The parties submitted a joint status report to the court
on December 14, 1999, in which the parties agreed to complete
fact discovery by August 21, 2000, and commence trial on
January 8, 2001.
56
On May 19, 1999, Abbott Laboratories filed an action
against the Company in the United States District Court of the
Northern District of Illinois alleging that the Company’s use,
sale or manufacture of trovafloxacin infringes Abbott’s United
States Patent No. 4,616,019 claiming naphthyriding antibiotics
and seeking a permanent injunction and damages. An answer
denying these allegations was filed on June 9, 1999. Discovery
is in progress.
On December 17, 1999, the Company received notice of
the filing of an ANDA by Zenith Goldline Pharmaceuticals
for 50 mg. and 100 mg. tablets of sertraline hydrochloride
alleged to be bioequivalent to Zoloft. Zenith has certified to
the FDA that it will not engage in the manufacture, use or sale
of sertraline hydrochloride until the expiration of Pfizer’s U.S.
Patent 4,536,518, which covers sertraline per se and expires
December 30, 2005. Zenith has also alleged in its certification
to the FDA that the manufacture, use and sale of Zenith’s
product will not infringe Pfizer’s U.S. Patent 4,962,128, which
covers methods of treating an anxiety-related disorder or
Pfizer’s U.S. Patent 5,248,699, which covers a crystalline
polymorph of sertraline hydrochloride. These patents expire in
November 2009 and August 2012, respectively. On January 28,
2000, the Company filed a patent infringement action against
Zenith Goldline and its parent Ivax Corporation in the United
States District Court for the District of New Jersey for
infringement of the ’128 and ’699 patents.
On February 1, 2000, the Company received notice of the
filing of an ANDA by Novopharm Limited for 50 mg, 100 mg,
150 mg and 200 mg tablets of fluconazole alleged to be
bioequivalent to DIFLUCAN. Novopharm has certified to the
FDA its position that the Company’s U.S. Patent 4,404,216,
which covers fluconazole, is invalid. This patent expires in
January 2004. The Company is evaluating Novopharm’s notice.
In pre-existing litigation between Pioneer Hi-Bred
International, Inc. and DeKalb Genetics Corporation in the
United States District Court for the Southern District of Iowa,
the court granted on October 8, 1999 Pioneer’s motion to add
additional parties, including Pfizer Inc. and Monsanto Co. (the
present owner of DeKalb Genetics Corporation), as codefendant
parties. The amended complaint, which claims violations of the
federal Lanham Act and Iowa state law stemming from the
codefendants’ alleged use of Pioneer’s corn seed germplasm in
the development of competitive corn seed products, was served
on the Company on October 19. The Company filed its answer
on December 15, 1999.
On September 22, 1999, the jury in a trademark-
infringement litigation brought against the Company by
Trovan Ltd. and Electronic Identification Devices, Ltd. relating
to use of the TROVAN mark for trovafloxacin issued a verdict
in favor of the plaintiffs with respect to liability, holding that
the Company had infringed Trovan Ltd.’s mark and had acted
in bad faith. Following a further damage trial, on October 12,
1999, the jury awarded Trovan Ltd. a total of $143 million in

damages, comprised of $5 million actual damages, $3 million
as a reasonable royalty and $135 million in punitive damages.
The court held a hearing on December 27, 1999, on whether to
award the plaintiffs profits based on the Company’s sales of
Trovan and, if so, the amount of same. The Company’s motion
for mistrial remains outstanding.
As previously disclosed, a number of lawsuits and claims
have been brought against the Company and Shiley
Incorporated, a wholly owned subsidiary, alleging either
personal injury from fracture of 60° or 70° Shiley Convexo
Concave (“C/C”) heart valves, or anxiety that properly
functioning implanted valves might fracture in the future, or
personal injury from a prophylactic replacement of a
functioning valve.
In an attempt to resolve all claims alleging anxiety that
properly functioning valves might fracture in the future, the
Company entered into a settlement agreement in January 1992
in Bowling v. Shiley, et al., a case brought in the United States
District Court for the Southern District of Ohio, that
established a worldwide settlement class of people with C/C
heart valves and their spouses, except those who elected to
exclude themselves. The settlement provided for a Consultation
Fund of $90 million, which was fixed by the number of claims
filed, from which valve recipients received payments that are
intended to cover their cost of consultation with cardiologists
or other health care providers with respect to their valves. The
settlement agreement established a second fund of at least $75
million to support C/C valve-related research, including the
development of techniques to identify valve recipients who may
have significant risk of fracture, and to cover the unreimbursed
medical expenses that valve recipients may incur for certain
procedures related to the valves. The Company’s obligation as
to coverage of these unreimbursed medical expenses is not
subject to any dollar limitation. Following a hearing on the
fairness of the settlement, it was approved by the court on
August 19, 1992, and all appeals have been exhausted.
Generally, the plaintiffs in all of the pending heart valve
litigations seek money damages. Based on the experience of the
Company in defending these claims to date, including
insurance proceeds and reserves, the Company is of the opinion
that these actions should not have a material adverse effect on
the financial position or the results of operations of the
Company. Litigation involving insurance coverage for the
Company’s heart valve liabilities has been resolved.
The Company’s operations are subject to federal, state,
local and foreign environmental laws and regulations. Under
the Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended (“CERCLA” or “Superfund”),
the Company has been designated as a potentially responsible
party by the United States Environmental Protection Agency
with respect to certain waste sites with which the Company
may have had direct or indirect involvement. Similar
designations have been made by some state environmental
agencies under applicable state Superfund laws. Such
designations are made regardless of the extent of the Company’s
involvement. There are also claims that the Company may be a
Pfizer Inc and Subsidiary Companies
responsible party or participant with respect to several waste
site matters in foreign jurisdictions. Such claims have been
made by the filing of a complaint, the issuance of an
administrative directive or order, or the issuance of a notice or
demand letter. These claims are in various stages of
administrative or judicial proceedings. They include demands
for recovery of past governmental costs and for future
investigative or remedial actions. In many cases, the dollar
amount of the claim is not specified. In most cases, claims have
been asserted against a number of other entities for the same
recovery or other relief as was asserted against the Company.
The Company is currently participating in remedial action at a
number of sites under federal, state, local and foreign laws.
To the extent possible with the limited amount of
information available at this time, the Company has evaluated
its responsibility for costs and related liability with respect to
the above sites and is of the opinion that the Company’s liability
with respect to these sites should not have a material adverse
effect on the financial position or the results of operations of the
Company. In arriving at this conclusion, the Company has
considered, among other things, the payments that have been
made with respect to the sites in the past; the factors, such as
volume and relative toxicity, ordinarily applied to allocate
defense and remedial costs at such sites; the probable costs to be
paid by the other potentially responsible parties; total projected
remedial costs for a site, if known; existing technology; and the
currently enacted laws and regulations. The Company
anticipates that a portion of these costs and related liability will
be covered by available insurance.
Through the early 1970s, Pfizer Inc. (Minerals Division)
and Quigley Company, Inc. (“Quigley”), a wholly owned
subsidiary, sold a minimal amount of one construction product
and several refractory products containing some asbestos. These
sales were discontinued thereafter. Although these sales
represented a minor market share, the Company has been
named as one of a number of defendants in numerous lawsuits.
These actions, and actions related to the Company’s sale of talc
products in the past, claim personal injury resulting from
exposure to asbestos-containing products, and nearly all seek
general and punitive damages. In these actions, the Company
or Quigley is typically one of a number of defendants, and both
are members of the Center for Claims Resolution (the “CCR”),
a joint defense organization of sixteen defendants that is
defending these claims. The Company and Quigley are
responsible for varying percentages of defense and liability
payments for all members of the CCR. A number of cases
alleging property damage from asbestos-containing products
installed in buildings have also been brought against the
Company, but most have been resolved.
As of January 29, 2000, there were 57,328 personal injury
claims pending against Quigley and 26,890 such claims
against the Company (excluding those that are inactive or have
been settled in principle), and 68 talc cases against the
Company.
The Company believes that its costs incurred in defending
and ultimately disposing of the asbestos personal injury claims,
57
Pfizer Inc and Subsidiary Companies
as well as the property damage and talc claims, will be largely
covered by insurance policies issued by several primary
insurance carriers and a number of excess carriers that have
agreed to provide coverage, subject to deductibles, exclusions,
retentions and policy limits. Litigation against excess insurance
carriers seeking damages and/or declaratory relief to secure
their coverage obligations has now been largely resolved,
although claims against several of such insureds do remain
pending. Based on the Company’s experience in defending the
claims to date and the amount of insurance coverage available,
the Company is of the opinion that the actions should not
ultimately have a material adverse effect on the financial
position or the results of operations of the Company.
In 1993, the Company was named, together with
numerous other manufacturers of brand-name prescription
drugs and certain companies that distribute brand-name
prescription drugs, in suits in federal and state courts brought
by various groups of retail pharmacy companies, alleging that
the manufacturers violated the Sherman Act by agreeing not to
give retailers certain discounts and that the failure to give such
discounts violated the Robinson Patman Act. A class action
was brought on the Sherman Act claim, as well as additional
actions by approximately 3,500 individual retail pharmacies
and a group of chain and supermarket pharmacies (the
“individual actions”) on both the Sherman Act and Robinson
Patman Act claims. A retailer class was certified in 1994 (the
“Federal Class Action”). In 1996, fifteen manufacturer
defendants, including the Company, settled the Federal Class
Action. The Company’s share was $31.25 million, payable in
four annual installments without interest. Trial began in
September 1998 for the class case against the non-settlers, and
the District Court also permitted the opt-out plaintiffs to add
the wholesalers as named defendants in their cases. The District
Court dismissed the case at the close of the plaintiffs’ evidence.
The plaintiffs appealed and, on July 13, 1999, the Court of
Appeals upheld most of the dismissal but remanded on one
issue, while expressing doubts that the plaintiffs could prove
any damages.
Retail pharmacy cases also have been filed in state courts
in five states, and consumer class actions were filed in state
courts in fourteen states and the District of Columbia alleging
injury to consumers from the failure to give discounts to retail
pharmacy companies.
In addition to its settlement of the retailer Federal Class
Action (see above), the Company has also settled several major
opt-out retail cases, and along with other manufacturers: (1) has
entered into an agreement to settle all outstanding consumer
class actions (except Alabama, California and North Dakota),
which settlement is going through the approval process in the
various courts in which the actions are pending; and (2) has
entered into an agreement to settle the California consumer
case, which has been approved by the Court there.
The Company believes that these brand-name prescription
drug antitrust cases, which generally seek damages and certain
injunctive relief, are without merit.
58
The Federal Trade Commission opened an investigation
focusing on the pricing practices at issue in the above
pharmacy antitrust litigation. In July 1996, the Commission
issued a subpoena for documents to the Company, among
others, to which the Company responded. A second subpoena
was issued to the Company for documents in May 1997 and the
Company again responded. We are not aware of any further
activity.
FDA administrative proceedings relating to Plax are
pending, principally an industry-wide call for data on all anti-
plaque products by the FDA. The call-for-data notice specified
that products that have been marketed for a material time and
to a material extent may remain on the market pending FDA
review of the data, provided the manufacturer has a good faith
belief that the product is generally recognized as safe and
effective and is not misbranded. The Company believes that
Plax satisfied these requirements and prepared a response to the
FDA’s request, which was filed on June 17, 1991. This filing, as
well as the filings of other manufacturers, is still under review
and is currently being considered by an FDA Advisory
Committee. The Committee has issued a draft report
recommending that plaque removal claims should not be
permitted in the absence of data establishing efficacy against
gingivitis. The process of incorporating the Advisory
Committee recommendations into a final monograph is
expected to take several years. If the draft recommendation is
ultimately accepted in the final monograph, although it would
have a negative impact on sales of Plax, it will not have a
material adverse effect on the sales, financial position or
operations of the Company.
On January 15, 1997, an action was filed in Circuit Court,
Chambers County, Alabama, purportedly on behalf of a class of
consumers, variously defined by the laws or types of laws
governing their rights and encompassing residents of up to 47
states. The complaint alleges that the Company’s claims for
Plax were untrue, entitling them to a refund of their purchase
price for purchases since 1988. A hearing on Plaintiffs’ motion
to certify the class was held on June 2, 1998. We are awaiting
the Court’s decision. The Company believes the complaint is
without merit.
Since December 1998, four actions have been filed, in state
courts in Houston, San Francisco, Chicago and New Orleans,
purportedly on behalf of statewide (California) or nationwide
(Houston, Chicago and New Orleans) classes of consumers who
allege that the Company’s and other manufacturers’ advertising
and promotional claims for Rid and other pediculicides were
untrue, entitling them to refunds, other damages and/or
injunctive relief. The Houston case has been voluntarily
dismissed and proceedings in the San Francisco, Chicago and
New Orleans cases are still in early stages of the proceedings.
The Company believes the complaints are without merit.
In December, 1999 and January, 2000, two suits were filed
in California state courts against the Company and other
manufacturers of zinc oxide-containing powders. The first suit
was filed by the Center for Environmental Health and the
second was filed by an individual plaintiff on behalf of a

purported class of purchasers of baby powder products. The
suits generally allege that the label of Desitin powder violates
California’s “Proposition 65” by failing to warn of the presence
of lead, which is alleged to be a carcinogen. In January, 2000,
the Company received a notice from a California environmental
group alleging that the labeling of Desitin ointment and
powder violates Proposition 65 by failing to warn of the
presence of cadmium, which is alleged to be a carcinogen.
Several other manufacturers of zinc oxide-containing topical
baby products have received similar notices. The Company
believes that the labeling for Desitin complies with applicable
legal requirements.
In April 1996, the Company received a Warning Letter
from the FDA relating to the timeliness and completeness of
required post-marketing reports for pharmaceutical products.
The letter did not raise any safety issue about Pfizer drugs. The
Company has been implementing remedial actions designed to
remedy the issues raised in the letter. During 1997, the
Company met with the FDA to apprise them of the scope and
status of these activities. A review of the Company’s new
procedures was undertaken by FDA in 1999. The Company and
Agency met to review the findings of this review and agreed
that commitments and remedial measures undertaken by the
Company related to the Warning Letter have been
accomplished. The Company agreed to keep the Agency
informed of its activities as it continues to modify its processes
and procedures.
During May and June, 1999, the FDA and the European
Union’s Committee for Proprietary Medicinal Products (CPMP)
reconsidered the approvals to market Trovan, a broad-spectrum
antibiotic, following post-market reports of severe adverse liver
reactions to the drug. On June 9, the Company announced
that, regarding the marketing of Trovan in the United States, it
had agreed to restrict the indications, limit product
distribution, make certain other labeling changes and to
communicate revised warnings to health care professionals in
the United States. On July 1, Pfizer received the opinion of the
CPMP recommending a one-year suspension of the licenses to
market Trovan in the European Union. The CPMP opinion has
been finalized in a Final Decision by the European
Commission. Since June, 1999, three suits and several claims
have been received by the Company alleging liver injuries due
to the ingestion of Trovan. The majority of these claims have
been resolved without litigation. In June and July, 1999, two of
the lawsuits were filed in the Circuit Court, Hampton County,
South Carolina on behalf of a purported class of all persons who
received Trovan, seeking compensatory and punitive damages
and injunctive relief. One of the suits, seeking injunctive relief,
has been dismissed. No substantitive proceedings have yet
occurred in the other suit and the Company believes that it is
not properly maintainable as a class action, and will defend
against it accordingly.
In October 1999 the Company was sued in an action
seeking unspecified damages, costs and attorney’s fees on behalf
Pfizer Inc and Subsidiary Companies
of a purported class of people whose dogs had suffered injury or
death after ingesting Rimadyl, an antiarthritic medication for
older dogs. The suit, which was filed in state court in South
Carolina, is in the early pretrial stages. The Company believes
it is without merit.
During 1998, the Company completed the sale of all of the
businesses and companies that were part of the Medical
Technology Group. As part of the sale provisions, the Company
has retained responsibility for certain items, including matters
related to the sale of MTG products sold by the Company
before the sale of the MTG businesses. A number of cases have
been brought against Howmedica Inc. (some of which also
name the Company) alleging that P.C.A. one-piece acetabular
hip prostheses sold from 1983 through 1990 were defectively
designed and manufactured and pose undisclosed risks to
implantees. These cases have now been resolved. Between 1994
and 1996, seven class actions alleging various injuries arising
from implantable penile prostheses manufactured by American
Medical Systems were filed and ultimately dismissed or
discontinued. Thereafter, between late 1996 and early 1998,
approximately 700 former members of one or more of the
purported classes, represented by some of the same lawyers who
filed the class actions, filed individual suits in Circuit Court in
Minneapolis alleging damages from their use of implantable
penile prostheses. Most of these claims, along with a number of
filed and unfiled claims from other jurisdictions, have now
been resolved. The Company believes that most if not all of
these cases are without merit.
In June 1993, the Ministry of Justice of the State of Sao
Paulo, Brazil, commenced a civil public action against the
Company’s Brazilian subsidiary, Laboratorios Pfizer Ltda.
(“Pfizer Brazil”) asserting that during a period in 1991 Pfizer
Brazil withheld sale of the pharmaceutical product Diabinese
in violation of antitrust and consumer protection laws. The
action sought the award of moral, economic and personal
damages to individuals and the payment to a public reserve
fund. In February 1996, the trial court issued a decision
holding Pfizer Brazil liable. The trial court’s opinion also
established the amount of moral damages for individuals who
might make claims later in the proceeding and set out a
formula for calculating the payment into the public reserve
fund which could have resulted in a sum of approximately $88
million. Pfizer Brazil appealed this decision. In September
1999, the appeals court issued a ruling upholding the trial
court’s decision as to liability. However, the appeals court
decision overturned the trial court’s decision concerning
damages, ruling that criteria to apply in the calculation of
damages, both as to individuals and as to payment of any
amounts to the reserve fund, should be established only in a
later stage of the proceeding. The Company believes that this
action should not have a material adverse effect on the financial
position or the results of operations of the Company.
59
Pfizer Inc and Subsidiary Companies

19 Segment Information and Geographic Data Each separately managed segment offers different products
requiring different marketing and distribution strategies.
We operate in the following two business segments:
We sell our products primarily to customers in the
• pharmaceutical — including treatments for heart diseases,
wholesale sector. In 1999, sales to our two largest wholesalers
infectious diseases, central nervous system disorders,
accounted for 14% and 12% of total revenues. These sales were
diabetes, arthritis, erectile dysfunction and allergies, as
concentrated in the pharmaceutical segment.
well as self-medications
Revenues were in excess of $100 million in each of
• animal health — products for food animals and companion
12 countries outside the U.S. in 1999. The U.S. was the only
animals, including antibiotics, vaccines and other
country to contribute more than 10% to total revenues. The
veterinary items
following tables present segment and geographic information:

Segment Information
Animal Corporate/
(millions of dollars) Pharmaceutical Health Other Consolidated

Total revenues 1999 $14,859 $1,345 $ — $16,204

1998 12,230 1,314 — 13,544
1997 9,726 1,329 — 11,055
Segment profit 1999 4,898(1) 67 (517)(2) 4,448(3)
1998 3,574 (77) (903)(2) 2,594(3)
1997 3,129 112 (374)(2) 2,867(3)
Identifiable assets(4) 1999 9,723 2,144 8,707 20,574
1998 7,987 2,109 8,206 18,302
1997 6,464 2,197 6,330(5) 14,991
Property, plant and equipment additions(4) 1999 1,387 90 84 1,561
1998 991 97 110 1,198
1997 687 69 122 878
Depreciation and amortization(4) 1999 438 74 30 542
1998 386 82 21 489
1997 337 75 16 428

Geographic Data
All
United Other
(millions of dollars) States(6) Japan Countries Consolidated

Total revenues 1999 $9,896 $1,249 $5,059 $16,204

1998 8,205 943 4,396 13,544
1997 6,089 949 4,017 11,055
Long-lived assets 1999 3,430 487 2,750 6,667
1998 2,905 369 2,499 5,773
1997 2,910 283 2,155 5,348
(1)
Includes $310 million charge to write off Trovan inventories.
(2)
Includes interest income/(expense) and corporate expenses. Corporate also includes other income/(expense) of the financial subsidiaries (see note 3,“Financial Subsidiaries”) and
certain performance-based compensation expenses not allocated to the operating segments.
(3)
Consolidated total equals income from continuing operations before provision for taxes on income and minority interests.
(4)
Certain production facilities are shared by various segments. Property, plant and equipment, as well as capital additions and depreciation, are allocated based on physical
production. Corporate assets are primarily cash, short-term investments and long-term loans and investments.
(5)
Includes net assets of discontinued operations.
(6)
Includes operations in Puerto Rico.

20 Subsequent Event Lambert share, or an equity value of $90 billion based on the
closing price of our stock on February 4, 2000 of $35.75 per
On February 7, 2000, we announced an agreement to merge
share. Customary and usual provisions will be made for
with Warner-Lambert Company (Warner-Lambert). Under
outstanding options and warrants.
terms of the merger agreement, which has been approved by
This transaction is subject to customary conditions,
the Board of Directors of both Pfizer and Warner-Lambert, we
including the use of pooling-of-interests accounting, qualifying
will exchange 2.75 shares of Pfizer voting common stock for
as a tax-free reorganization, shareholder approval at both
each outstanding share of Warner-Lambert voting common
companies and usual regulatory approvals. The transaction is
stock in a tax-free transaction valued at $98.31 per Warner-
expected to close in mid-2000.

60
 Pfizer Inc and Subsidiary
Companies

Quarterly Consolidated Financial Data (Unaudited)

Quarter
(millions of dollars, except per share data) First Second Third Fourth
1999
Net sales $3,524 $3,298 $3,423 $3,887
Alliance revenue 403 481 569 619
Total revenues 3,927 3,779 3,992 4,506
Costs and expenses 2,778 2,751 3,025 3,202
Income from continuing operations before provision
for taxes on income and minority interests 1,149 1,028 967 1,304
Provision for taxes on income 333 298 265 348
Minority interests 1 1 1 2
Income from continuing operations 815 729 701 954
Discontinued operations Ñ net of tax Ñ (20) Ñ Ñ
Net income $ 815 $ 709 $ 701 $ 954
Earnings per common share Ñ basic
Income from continuing operations $ .22 $ .19 $ .19 $ .25
Discontinued operations Ñ net of tax Ñ (.01) Ñ Ñ
Net income $ .22 $ .18 $ .19 $ .25
Earnings per common share Ñ diluted
Income from continuing operations $ .21 $ .18 $ .18 $ .25
Discontinued operations Ñ net of tax Ñ Ñ Ñ Ñ
Net income $ .21 $ .18 $ .18 $ .25
Cash dividends paid per common share $ .07 1Ú3 $ .07 1Ú3 $ .08 $ .08
Stock prices
High $ 48 11Ú64 $ 50 3Ú64 $ 40 11Ú16 $ 42 1Ú4
Low $ 36 33Ú64 $ 31 35Ú64 $ 32 $ 32 3Ú16

1998
Net sales $ 2,886 $ 3,114 $ 3,110 $ 3,567
Alliance revenue 150 198 220 299
Total revenues 3,036 3,312 3,330 3,866
Costs and expenses 2,294 2,468 2,628 3,560
Income from continuing operations before provision
for taxes on income and minority interests 742 844 702 306
Provision for taxes on income 206 249 186 1
Minority interests 1 1 1 (1)
Income from continuing operations 535 594 515 306
Discontinued operations Ñ net of tax 157 34 882 328
Net income $ 692 $ 628 $ 1,397 $ 634
Earnings per common share Ñ basic
Income from continuing operations $ .14 $ .16 $ .13 $ .08
Discontinued operations Ñ net of tax .04 .01 .24 .08
Net income $ .18 $ .17 $ .37 $ .16
Earnings per common share Ñ diluted
Income from continuing operations $ .14 $ .15 $ .13 $ .07
Discontinued operations Ñ net of tax .04 Ñ .23 .09
Net income $ .18 $ .15 $ .36 $ .16
Cash dividends paid per common share $ .06 1Ú3 $ .06 1Ú3 $ .06 1Ú3 $ .06 1Ú3
Stock prices
High $ 32 1Ú2 $ 40 37Ú64 $ 40 13Ú64 $ 42 63Ú64
Low $ 23 11Ú16 $ 32 1Ú8 $ 30 43Ú64 $ 28 43Ú64
All data reflects the 1999 three-for-one stock split.
As of January 31, 2000, there were 149,747 record holders of our common stock (symbol PFE).

61
Pfizer Inc and Subsidiary Companies

Financial Summary
Year Ended December 31
(millions, except per share data) 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
Net sales $14,133 12,677 10,739 9,864 8,684 6,825 6,080 5,816 5,352 4,757 4,220
Alliance revenue 2,071 867 316 Ñ Ñ Ñ Ñ Ñ Ñ Ñ Ñ
Total revenues 16,204 13,544 11,055 9,864 8,684 6,825 6,080 5,816 5,352 4,757 4,220
Research and development 2,776 2,279 1,805 1,567 1,340 1,036 880 776 654 545 449
Other costs and expenses 8,980 8,671 6,383 5,769 5,327 4,212 3,822 3,829 3,675 3,288 3,045
Divestitures, restructuring and unusual items Ñ net(1) Ñ Ñ Ñ Ñ Ñ Ñ 741 (141) 300 Ñ Ñ
Income from continuing operations
before taxes and minority interests $ 4,448 2,594 2,867 2,528 2,017 1,577 637 1,352 723 924 726
Provision for taxes on income $ 1,244 642 775 758 609 445 106 368 141 235 171
Income from continuing operations before
cumulative effect of accounting changes $ 3,199 1,950 2,082 1,764 1,401 1,127 529 981 579 684 551
Discontinued operations Ñ net of tax (20) 1,401 131 165 172 171 129 113 143 117 130
Cumulative effect of accounting changes Ñ Ñ Ñ Ñ Ñ Ñ Ñ (283)(2) Ñ Ñ Ñ
Net income $ 3,179 3,351 2,213 1,929 1,573 1,298 658 811 722 801 681
Effective tax rate Ñ continuing operations 28.0% 24.8% 27.0% 30.0% 30.2% 28.2% 16.6% 27.2% 19.5% 25.4% 23.6%
Depreciation $ 473 420 363 309 277 236 206 209 183 167 160
Property, plant and equipment additions 1,561 1,198 878 690 635 620 575 592 505 466 388
Cash dividends paid 1,148 976 881 771 659 594 536 487 437 397 364
As of December 31
Working capital(3) $ 2,006 2,739 2,448 1,914 1,787 1,582 1,875 2,749 1,978 1,920 2,026
Property, plant and equipment Ñ net 5,343 4,415 3,793 3,456 3,113 2,747 2,320 1,994 2,061 1,808 1,565
Total assets(3) 20,574 18,302 14,991 14,251 12,339 10,797 8,986 9,346 9,387 8,782 8,099
Long-term debt 525 527 725 681 828 604 571 571 393 189 181
Long-term capital(4) 9,738 9,551 8,819 7,907 6,518 5,150 4,643 5,453 5,725 5,643 5,034
ShareholdersÕ equity 8,887 8,810 7,933 6,954 5,506 4,324 3,866 4,719 5,026 5,092 4,536
Per common share data:
Basic:
Income from continuing operations
before effect of accounting changes $ .85 .51 .55 .47 .38 .31 .14 .25 .15 .17 .14
Discontinued operations Ñ net of tax (.01) .37 .04 .05 .05 .04 .03 (.04)(2) .03 .03 .03
Net income $ .84 .88 .59 .52 .43 .35 .17 .21 .18 .20 .17
Diluted:
Income from continuing operations
before effect of accounting changes $ .82 .49 .53 .46 .37 .30 .14 .24 .14 .17 .14
Discontinued operations Ñ net of tax Ñ .36 .04 .04 .05 .05 .03 (.04)(2) .04 .03 .03
Net income $ .82 .85 .57 .50 .42 .35 .17 .20 .18 .20 .17
Market value per share (December 31) $ 32.44 41.67 24.85 13.83 10.50 6.44 5.75 6.04 7.00 3.37 2.90
Return on shareholdersÕ equity 35.9% 40.0% 29.7% 31.0% 32.0% 31.7% 15.3% 16.6% 14.3% 16.6% 15.4%
Cash dividends paid per share $ .302Ú3 .251Ú3 .222Ú3 .20 .171Ú3 .152Ú3 .14 .121Ú3 .11 .10 .091Ú3
ShareholdersÕ equity per share $ 2.36 2.33 2.10 1.85 1.48 1.18 1.04 1.21 1.27 1.29 1.14
Current ratio 1.22:1 1.38:1 1.49:1 1.36:1 1.37:1 1.35:1 1.60:1 1.92:1 1.62:1 1.67:1 1.75:1
Weighted average shares used to calculate:
Basic earnings per share amounts 3,775 3,789 3,771 3,743 3,687 3,670 3,785 3,948 3,963 3,966 3,972
Diluted earnings per share amounts 3,884 3,945 3,909 3,864 3,777 3,729 3,845 4,038 4,072 4,046 4,073
Employees of continuing operations (thousands) 51 46 41 39 37 34 33 33 35 33 33
Total revenues per employee (thousands) $ 318 292 269 256 238 202 184 177 154 145 129
All financial information reflects the divestitures of our MTG and food science businesses as discontinued operations.
We have restated all common share and per share data for the 1999, 1997, 1995 and 1991 stock splits.
(1)
Divestitures, restructuring and unusual items Ñ net includes the following:
1993 Ñ Pre-tax charges of approximately $745 million and $56 million to cover worldwide restructuring programs, as well as unusual items and a gain of
approximately $60 million realized on the sale of our remaining interest in Minerals Technologies Inc.
1992Ñ Pre-tax gain of $259 million on the sale of a business, offset by pre-tax charges of $175 million for restructuring, consolidating and streamlining.
In addition, it includes pre-tax curtailment gains of $57 million associated with postretirement benefits other than pensions of divested operations.
1991Ñ A pre-tax charge of $300 million for potential future Shiley C/C heart valve fracture claims.
(2)
Accounting changes adopted January 1, 1992: SFAS No. 106 Ñ charge of $313 million or $.08 per share; SFAS No. 109 Ñ credit of $30 million or $.01 per share.
Per share amounts of accounting changes are included in per share amounts presented for discontinued operations.
(3)
Includes net assets of discontinued operations of our MTG businesses through 1997.
(4)
Defined as long-term debt, deferred taxes on income, minority interests and shareholdersÕ equity.

62
Directors, Committees, and Officers
Board of Directors
Michael S. Brown, M.D. (4)
Distinguished Chair – Biomedical Sciences;
Regental Professor – University of Texas
Southwestern Medical Center
M. Anthony Burns (1, 3)
Chairman and Chief Executive Officer –
Ryder System, Inc.
W. Don Cornwell (2)
Chairman and Chief Executive Officer –
Granite Broadcasting Corporation
George B. Harvey (2)
Former Chairman, President, and Chief
Executive Officer – Pitney Bowes Inc.
Constance J. Horner (1, 4)
Guest Scholar – The Brookings
Institution; Former Assistant to the
President of the United States
Stanley O. Ikenberry, Ph.D. (1, 4)
President –
American Council on Education
Harry P. Kamen (4)
Former Chairman, President, and Chief
Executive Officer – Metropolitan Life
Insurance Company
Thomas G. Labrecque (3)
Former Chairman –
The Chase Manhattan Corporation
Henry A. McKinnell, Ph.D.
President and Chief Operating Officer –
Pfizer Inc; President, Pfizer
Pharmaceuticals Group
Dana G. Mead, Ph.D. (3)
Chairman – Tenneco Automotive Inc.
and Pactiv Corporation
John F. Niblack, Ph.D.
Vice Chairman – Pfizer Inc
Franklin D. Raines (2)
Chairman and Chief Executive Officer –
Fannie Mae
Ruth J. Simmons, Ph.D. (2)
President – Smith College
Pfizer’s Board of Directors is frequently recognized as one of the best in the
United States. In 1999, for example, the Pfizer Board was named one of “Five
Champion Boards” by Corporate Board Member magazine. In 2000, Business
Week magazine named the Pfizer Board to its “Top 25 Best Boards” list.
William C. Steere, Jr. (1) Loretta V. Cangialosi
Chairman and Chief Executive Officer – Vice President and Controller
Pfizer Inc Gary N. Jortner
Jean-Paul Vallès, Ph.D. (2) Vice President; Senior Vice President,
Chairman and Chief Executive Officer – Product Development –
Minerals Technologies Inc. Pfizer Pharmaceuticals Group
J. Patrick Kelly
Vice President; Senior Vice President,
Elected Corporate Officers Worldwide Marketing –
Pfizer Pharmaceuticals Group
William C. Steere, Jr.**
Chairman of the Board and Chief Alan G. Levin
Executive Officer Vice President and Treasurer
Henry A. McKinnell, Ph.D.** Craig Saxton, M.D.
President and Chief Operating Officer; Vice President; Executive Vice President –
President – Central Research
Pfizer Pharmaceuticals Group Mohand Sidi Said
John F. Niblack, Ph.D.** Vice President; Senior Vice President –
Vice Chairman Pfizer Pharmaceuticals Group and Area
President, Asia/Africa/Middle East
C. L. Clemente**
Executive Vice President – Corporate Frederick W. Telling, Ph.D.
Affairs; Secretary and Corporate Counsel Vice President – Corporate Strategic
Planning and Policy
Karen L. Katen**
Senior Vice President; Executive Vice
President – Pfizer Pharmaceuticals (1) Executive Committee*
Group and President – (2) Audit Committee
U.S. Pharmaceuticals
(3) Executive Compensation Committee
Paul S. Miller** (4) Corporate Governance Committee
Executive Vice President;
General Counsel All directors are alternate members of the
*
George M. Milne, Jr., Ph.D.** Executive Committee
Senior Vice President; President – ** Member, Corporate Management
Central Research Committee
William J. Robison**
Executive Vice President –
Employee Resources
David L. Shedlarz**
Executive Vice President –
Chief Financial Officer
Brian W. Barrett
Vice President; President –
Animal Health Group
M. Kenneth Bowler, Ph.D.
Vice President –
Federal Government Relations 63
Corporate and Shareholder Information
Stock Listings
Our Common Stock is listed on the New
York Stock Exchange. It is also listed on the
London, Paris, Brussels, and Swiss stock
exchanges. Our Common Stock is also
traded on various United States regional
stock exchanges.
Shareholder Services and Programs
All inquiries concerning shareholder
accounts and stock transfer matters,
including direct deposit of dividends and
the elimination of duplicate mailings of
Annual Reports, should be directed to
our Transfer Agent and Registrar:
First Chicago Trust Company,
a division of EquiServe
P.O. Box 2500
Jersey City, NJ 07303-2500
Telephone: (800) PFE 9393
Internet: www.fctc.com
Direct Purchase Program
You may purchase your first shares of
Pfizer directly through our Shareholder
Investment Program. Other features of
the Program include dividend reinvest-
ment, weekly purchases of stock, and
automatic monthly investments by elec-
tronic bank debit. Contact First Chicago
at the address given on this page for a
Shareholder Investment Program
prospectus and enrollment form.
Form 10-K
Upon written request, we will provide
without charge to each shareholder a copy
of our Annual Report on Securities and
Exchange Commission Form 10-K for
the fiscal year ended December 31, 1999.
Requests should be directed to:
Secretary
Pfizer Inc
235 East 42nd Street
New York, NY 10017-5755
The report will also be available on
the Securities and Exchange
Commission’s EDGAR database at
www.sec.gov/edgarhp.htm.
64
Annual Meeting of Shareholders
Our Annual Meeting will be held on
Thursday, April 27, 2000, at 10:00 a.m.,
in The Empire State Ballroom, The
Grand Hyatt, 42nd Street at Lexington
Avenue, New York City. Detailed infor-
mation about the meeting is contained
in our Notice of Annual Meeting and
joint proxy statement/prospectus.
Political Action Committee
You can receive a copy of the report of
campaign contributions made by the
Company’s Political Action Committee
in 1999 by contacting the office of the
Secretary, Pfizer Inc.
1999 Environmental, Health and
Safety Report
Pfizer takes great pride in its environ-
mental, health and safety performance.
A new report has been published detailing
the Company’s efforts to protect the
environment and provide a safe and
healthy workplace for employees. You
can receive a copy of the report by
calling (800) PFE 4717.
Help Lines
Consumers or health care professionals
who have questions about any of our
medicines should call: (800) 438 1985.
People interested in receiving literature
about us should call: (800) PFE 4717.
The Legend of Pfizer
The Legend of Pfizer, part of a series of
corporate profiles by Jeffrey L. Rodengen,
chronicles Pfizer’s evolution from a small
fine-chemicals company founded in 1849
to its current position as a world
leader in pharmaceuticals. This 160-page
book includes a foreword by Pfizer
Chairman William C. Steere, Jr., and is
illustrated with black-and-white and
color photography. You may purchase a
copy at discount from the publisher,
Write Stuff Syndicate, Inc., by calling
(800) 900 2665, or ordering online at
www.writestuffbooks.com. Mention
Pfizer’s Annual Report to receive 15%
off the $39.95 cover price.
All trademarks in this publication are or have
been used by Pfizer Inc, with the exception of the
following: Aricept is a trademark of Eisai Co., Ltd.;
Celebrex is a trademark of G.D. Searle & Co.,
a division of Monsanto Company; Lipitor is a
trademark of Warner-Lambert Company.
Design: Conceptual Annual Reports/Hoi L. Chu, NYC.
Photography: principal, Neil Selkirk; additional,
William Vázquez; Bruce Johnson; Stone – Chad
Ehlers; PF Sports Images.
10 %
TOTAL RECOVERED FIBER
Our Values Table of Contents Ensuring Access to Innovative Medicines
Integrity 2 Letter to Shareholders
5 Creating the World’s Fastest-Growing “Lifesaving drugs are an indispensable part yield new drugs to treat virtually every Canadian government’s top priority.
Innovation Pharmaceutical Company of modern medicine,” President Clinton disease. Heavy-handed government Frustrated with an overburdened public
8 Our Market-Leading Medicines said in his most recent State of the Union interference would stifle the discovery of health system, which now has surgery
Respect for People 12 Our Global Presence address. And he’s absolutely right. those new medicines by diminishing the waiting lists stretching for months,
16 Our Commitment to R&D That’s the main reason why Americans resources available for research. many Canadians travel to the United
Customer Focus 18 Review of Operations are spending more on pharmaceuticals. And significant resources are required. States to seek private care. While
27 Our Community Activities It has little to do with higher prices for On average, it takes $500 million to bring American health care delivery is not
28 Financial Review medicines. Pfizer’s price increases have one new drug to market. Last year alone, perfect, it is still the envy of the world.
Teamwork been less than the overall rate of inflation Pfizer invested about $2.8 billion to Nonetheless, we must continue to
37 Management’s Report
since 1994, accounting for discounts to discover new medicines. In the absence improve access. It must be adjusted to
38 Audit Committee’s Report and
Leadership federal buyers and Medicaid. What is of rigorous reinvestment, new drugs will meet the needs of those seniors who are
Independent Auditors’ Report
driving pharmaceutical spending growth be delayed or simply go undiscovered. without prescription drug coverage, but
39 Consolidated Statement of Income
Performance 40 Consolidated Balance Sheet
in the United States is a significant In Canada, the government-controlled the issue is not one fundamentally of
increase in the utilization of medicines. health care system has depressed R&D prices. For its part, Pfizer has announced
41 Consolidated Statement of Shareholders’ Equity Medicines such as Lipitor, Zoloft, and and resulted in significant delays in the that there will be no price increases for
Community 42 Consolidated Statement of Cash Flows Celebrex mark significant improvements approvals of innovative medicines from three of its pharmaceuticals sold in the
43 Notes to Consolidated Financial Statements over previous therapies, and more and the United States. When governments set U.S. market in 2000 and only a modest
61 Quarterly Consolidated Financial Data (Unaudited) more Americans are relying on these and the price of pharmaceuticals, bureaucrats 3.1% increase for our other medicines.
62 Financial Summary (1989 -1999) dozens of other breakthrough pharmaceu- often use the
63 Directors, Committees, and Officers ticals to live longer and healthier lives. approval and reim- What is driving pharmaceutical
64 Corporate and Shareholder Information The question before the nation now bursement process
65 Ensuring Access to Innovative Medicines is how best to provide access to these as a cost-savings spending growth in the United
Financial Highlights medicines for the seniors who need them.
In developing such a policy, it’s important
device by keeping
new products off
States is a significant increase in
to keep in mind that two thirds of seniors the markets. For the utilization of medicines.
Year ended December 31 already have prescription drug coverage. instance, six medi-
% Change There’s no need to revamp a system cines recently introduced in the United Our best estimate is that these price
that’s already working for most of its States, five of which have no therapeutic changes, combined with the impact of
(millions, except per share data) 1999 1998 1997 99/98 98/97
participants. But there is need to fine-tune alternative, are not available in Canada. discounts to federal buyers and the
Total revenues $16,204 $13,544 $11,055 20 23
Income from continuing operations before provision for
it so the remaining senior population — On average, Canadians wait a full year Medicaid program, will result in an
taxes on income and minority interests 4,448 2,594 2,867 71 (10) about 13 million people — can also have longer than Americans before new effective average price increase of 2.5%,
Provision for taxes on income 1,244 642 775 94 (17) access to all FDA-approved medicines. pharmaceuticals are approved and reim- which is equal to the December 1999
Discontinued operations – net of tax (20) 1,401 131 – 972 Pfizer supports a variety of approaches, bursed by the government, if they are Blue Chip Consensus forecast of the
Net income 3,179 3,351 2,213 (5) 51
including: approved at all. By delaying and denying change in the Consumer Price Index for
Research and development expenses 2,776 2,279 1,805 22 26 • Expanded Insurance Alternatives — access to innovative medicines, the the year 2000.
Property, plant and equipment additions 1,561 1,198 878 30 36
Cash dividends paid 1,148 976 881 18 11
These could be developed by private Canadian health care system has narrowed We are on the threshold of a phar-
insurers with subsidies given to low- the range of medicines available to patients. maceutical revolution in the treatment of
Diluted earnings per common share .82 .85 .57 (4) 50
income elderly. Yet, despite stringent government disease. By pursuing — in a spirit of
Cash dividends paid per common share .30 2/3 .25 1/3 .22 2/3 21 12 • Tax Code Changes — Credits or control, Canadians still pay about the compromise and pragmatism — proposals
Shareholders’ equity per common share 2.36 2.33 2.10 1 11
Weighted average shares – diluted 3,884 3,945 3,909 (2) 1 deductions could subsidize the cost of same percentage of their income as that expand access while preserving
Number of common shares outstanding 3,847 3,883 3,883 (1) – prescription drug insurance. Americans to purchase pharmaceuticals. incentives for research, the United States
(thousands) • State-based Solutions — Federal While it’s true many things cost less in can provide prescription drug coverage
Number of shareholders 147 105 87 40 21 grants to the 50 states could provide Canada — such as fast food, a quality for seniors who need it and maintain our
Number of employees 51 46 41 11 12 funds to create drug-access programs university education, and some pharma- status as the world’s leader in pharma-
Percentages may reflect rounding adjustments. for low-income residents. ceuticals — it’s also true that Canadians ceutical innovation.
All data throughout this report have been restated to reflect the 1999 three-for-one stock split in the form of a 200% stock dividend. Whatever approach is adopted, it’s earn considerably less than Americans. These issues will have tremendous
essential that it preserve the research Nor have price controls improved impact on the owners of Pfizer, not only
About Pfizer About the Cover pharmaceutical industry’s capacity to overall medical services in Canada. In a as shareholders but also as patients and
Pfizer Inc is a research-based global pharmaceutical company. We discover, In Santa Ana, California, Dale and Arlene Post enjoy an outing with discover new medicines. Not only has recent survey, most Canadians polled taxpayers. If you’d like to learn more and
develop, manufacture, and market innovative medicines for humans and their family, including daughter Jody, grandchildren Spencer and Emily,
the industry significantly extended and said their nation’s health care system was find out how you can become involved,
animals. In 1999, Pfizer celebrated its 150th anniversary. and best friend Keeler. Both Dale and Arlene suffer from atrial fibrilla-
tion, a common form of irregular heartbeat, and rely on Tikosyn to enhanced human life, it’s now poised to “in crisis.” In another survey, 93% said fill out and return either or both of the
treat it. Approved in 1999, Tikosyn is the latest addition to Pfizer’s enter a golden age of discovery that will that improving health care should be the attached response cards.
broad cardiovascular portfolio.

65