What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-02-23 compared with 2022-02-24 · 461 added, 577 removed, 450 unchanged (70% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following MD&A is intended to assist the reader in understanding our financial condition and results of operations, including an evaluation of the amounts and certainty of cash flows from operations and from outside sources, and is provided as a supplement to and should be read in conjunction with the consolidated financial statements and related notes in Item 8.

Financial Statements and Supplementary Data in this Form 10-K.

Discussions of 2020 items and year-to-year comparisons between 2021 and 2020 that are not included in this Form 10-K can be found within MD&A in our 2021 Form 10-K.

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OVERVIEW OF OUR PERFORMANCE, OPERATING ENVIRONMENT, STRATEGY AND OUTLOOK

Financial Highlights

The following is a summary of certain financial performance metrics (in billions, except per share data):

Financial Highlights –– The following is a summary of certain financial performance metrics (in billions, except per share data):

2022 Total Revenues––$100.3 billion 2022 Net Cash Flow from Operations––$29.3 billion

An increase of 95% compared to 2020 An increase of 126% compared to 2020

An increase of 23% compared to 2021 A decrease of 10% compared to 2021

2022 Reported Diluted EPS––$5.47 2022 Adjusted Diluted EPS (Non-GAAP)––$6.58*

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Although foreign exchange rate changes are part of our business, they are not within our control and since they can mask positive or negative trends in the business, we believe presenting operational variances excluding these foreign exchange changes provides useful information to evaluate our results.

Our Business and Strategy

Our Business and Strategy –– Pfizer Inc.

is a research-based, global biopharmaceutical company.

We apply science and our global resources to bring therapies to people that extend and significantly improve their lives.

See the Item 1 .

Business –– About Pfizer section in this Form 10-K.

Pfizer is committed to working towards equitable and affordable access to our medicines and vaccines for people around the world.

As a science-driven global biopharmaceutical company, we remain focused on advancing our pipeline, supporting our marketed brands and deploying capital responsibly, with a focus on initiatives that can help contribute to our long-term revenue and future growth.

Our ability to fulfill our purpose, Breakthroughs that change patients’ lives , remains a core focus and underscores our commitment to addressing the needs of society to help sustain long-term value creation for all stakeholders.

Most of our revenues come from the manufacture and sale of biopharmaceutical products.

With the formation of the Consumer Healthcare JV in 2019 and the spin-off of our former Upjohn Business in the fourth quarter of 2020, Pfizer transformed into a more focused, global leader in science-based innovative medicines and vaccines and beginning in the fourth quarter of 2020 operated as a single operating segment engaged in the discovery, development, manufacturing, marketing, sale and distribution of biopharmaceutical products worldwide.

At the beginning of our fiscal fourth quarter of 2021, we reorganized our commercial operations and began to manage our commercial operations through a new global structure consisting of two operating segments:

We believe that our medicines and vaccines provide significant value for healthcare providers and patients and seek to enhance their value by continuously evaluating how we can best collaborate with patients, physicians and payers to support and expand patient access to reliable, affordable healthcare around the world.

In addition, we continually seek to expand and broaden our product portfolio offerings through prioritized development of our pipeline and acquisitions targeted at critical unmet patient needs.

As a result, our commercial organizational structure and R&D operations are critical to the successful execution of our business strategy.

In 2023, we are making additional investments in both R&D and SI&A to support Pfizer’s near- and longer-term growth plans, including to support anticipated new launches, commercial launch of COVID-19 products, potential high-value pipeline programs and recently acquired assets.

With the formation of the Consumer Healthcare JV in 2019, the spin-off of our former Upjohn Business in the fourth quarter of 2020 and the sale of our Meridian subsidiary in the fourth quarter of 2021, Pfizer transformed into a more focused, global leader in science-based innovative medicines and vaccines engaged in the discovery, development, manufacture, marketing, sale and distribution of biopharmaceutical products worldwide.

In the fourth quarter of 2021, we began managing our commercial operations through a global structure consisting of two operating segments:

Biopharma and PC1.

Biopharma is the only reportable segment.

On December 31, 2021, we completed the sale of our Meridian subsidiary, and beginning in the fourth quarter of 2021, the financial results of Meridian are reflected as discontinued operations for all periods presented.

Beginning in the fourth quarter of 2020, the financial results of the Upjohn Business and the Mylan-Japan collaboration were reflected as discontinued operations for all periods presented.

Prior-period information has been restated to reflect our current organizational structure.

See Note 1A and Item 1.

Business––Commercial Operations of this Form 10-K for additional information.

Business––Commercial Operations in this Form 10-K for additional information.

We expect to incur costs of approximately $700 million in connection with separating Upjohn, of which approximately 85% has been incurred since inception and through December 31, 2022.

These charges include costs and expenses related to separation of legal entities and transaction costs.

Transforming to a More Focused Company:

We have undertaken efforts to ensure our cost base and support model align appropriately with our new operating structure.

While certain direct costs transferred to the Consumer Healthcare JV and to the Upjohn Business in connection with the spin-off, there are indirect costs which did not transfer.

We are taking steps to restructure our corporate enabling functions to appropriately support our business, R&D and PGS platform functions.

In addition, we are transforming our commercial go-to market model in the way we engage patients and physicians.

See the Costs and Expenses––Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives section of this MD&A .

Beginning in 2019, we took action through our Transforming to a More Focused Company restructuring program to ensure our cost base and support model aligned appropriately with our operating structure.

In the third quarter of 2022, we made several organizational changes to further transform our operations to better leverage our expertise in certain areas and in anticipation of potential future new product or indication launches, and in the fourth quarter of 2022, we began taking steps to optimize our end-to-end R&D operations to reduce costs and cycle times as well as to further prioritize our internal R&D portfolio in areas where our capabilities are differentiated while increasing external innovation efforts to leverage an expanding and productive biotech sector.

See Note 3 for additional information.

For a description of savings related to this

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program, see the Costs and Expenses––Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives section of this MD&A .

We believe we have a strong pipeline and are well-positioned for future growth.

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Innovation, drug discovery and development are critical to our success.

In addition to discovering and developing new

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products, our R&D efforts seek to add value to our existing products by improving their effectiveness and ease of dosing and by discovering potential new indications.

In addition to discovering and developing new products, our R&D efforts seek to add value to our existing products by improving their effectiveness and ease of dosing and by discovering potential new indications.

See the Item 1.

Business — Research and Development section of this Form 10-K for our R&D priorities and strategy.

Business — Research and Development section in this Form 10-K for our R&D priorities and strategy.

We seek to leverage a strong pipeline, organize around expected operational growth drivers and capitalize on trends creating long-term growth opportunities, including:

• an aging global population that is generating increased demand for innovative medicines and vaccines that address patients’ unmet needs;

• advances in both biological science and digital technology that are enhancing the delivery of breakthrough new medicines and vaccines;

• the increasingly significant role of hospitals in healthcare systems.

Our Business Development Initiatives

We are committed to strategically capitalizing on growth opportunities, primarily by advancing our own product pipeline and maximizing the value of our existing products, but also through various business development activities.

• advances in both biological science and platform technologies that are enhancing the delivery of breakthrough new medicines and vaccines.

Our Business Development Initiatives –– We are committed to strategically capitalizing on growth opportunities, primarily by advancing our own product pipeline and maximizing the value of our existing products, but also through various business development activities.

We view our business development activity as an enabler of our strategies and seek to generate growth by pursuing opportunities and transactions that have the potential to strengthen our business and our capabilities.

We assess our business, assets and scientific capabilities/portfolio as part of our regular, ongoing portfolio review process and also continue to consider business development activities that will help advance our business strategy.

Our significant recent business development activities that closed or are targeted to close in 2022 include:

Acquisition of Arena

In December 2021, we and Arena announced that the companies entered into a definitive agreement under which we will acquire Arena, a clinical stage company developing innovative potential therapies for the treatment of several immuno-inflammatory diseases.

Under the terms of the agreement, we will acquire all outstanding shares of Arena for $100 per share in an all-cash transaction for a total equity value of approximately $6.7 billion.

On February 2, 2022, Arena shareholders voted to approve the proposed acquisition, which is targeted to close in the first half of 2022, subject to review under antitrust laws and other customary closing conditions.

Collaboration with Biohaven

In November 2021, we entered into a collaboration and license agreement and related sublicense agreement with Biohaven Pharmaceutical Holding Company Ltd., Biohaven Pharmaceutical Ireland DAC and BioShin Limited (collectively, Biohaven) pursuant to which we acquired rights to commercialize rimegepant and zavegepant for the treatment and prevention of migraines outside of the U.S., subject to regulatory approval.

Rimegepant is currently commercialized in the U.S., Israel, and the U.A.E.

under the brand name Nurtec ® ODT, with certain additional applications pending outside of the U.S.

Biohaven will continue to lead R&D globally and we have the exclusive right to commercialization globally, outside of the U.S.

Upon the closing of the transaction, which occurred on January 4, 2022, we paid Biohaven $500 million, including an upfront payment of $150 million and an equity investment of $350 million.

Biohaven is also eligible to receive up to $740 million in non-U.S.

commercialization milestone payments, in addition to tiered double-digit royalties on net sales outside of the U.S.

In addition to the milestone payments and royalties above, we will also reimburse Biohaven for the portion of certain additional milestone payments and royalties due to third parties in accordance with preexisting Biohaven agreements, which are attributed to ex-U.S.

For additional information, including discussion of recent significant business development activities, see Note 2 .

Our 2022 Performance

Revenues increased $39.6 billion, or 95%, to $81.3 billion in 2021 from $41.7 billion in 2020, reflecting an operational increase of $38.4 billion, or 92%, as well as a favorable impact of foreign exchange of $1.2 billion, or 3%.

Excluding direct sales and alliance revenues of Comirnaty and sales of Paxlovid, revenues increased 6% operationally, reflecting strong growth in Eliquis, Biosimilars, PC1, Vyndaqel/Vyndamax, the Hospital therapeutic area, Inlyta and Xtandi, partially offset by declines in the Prevnar family, Chantix/Champix, Enbrel and Sutent.

Revenues ––Revenues increased $19.0 billion, or 23%, to $100.3 billion in 2022 from $81.3 billion in 2021, reflecting an operational increase of $24.6 billion, or 30%, as well as an unfavorable impact of foreign exchange of $5.5 billion, or 7%.

The operational increase was primarily driven by growth from Paxlovid and Comirnaty.

Excluding the impact of Paxlovid and Comirnaty, revenues increased 2% operationally, reflecting strong growth in the Prevnar family, Eliquis and the Vyndaqel family, as well as revenue from recently acquired products, Nurtec ODT/Vydura and Oxbryta, partially offset by declines in Xeljanz, Chantix/Champix, Sutent, certain Comirnaty-related manufacturing activities performed on behalf of BioNTech (which are included in the PC1 contract development and manufacturing organization) and Ibrance.

The following outlines the components of the net change in revenues:

See the Analysis of the Consolidated Statements of Income––Revenues by Geography and Revenues––Selected Product Discussion sections within MD&A for more information, including a discussion of key drivers of our revenue performance.

As of January 31, 2023, on a total company basis, we forecasted revenues in 2023 of $67 billion to $71 billion, reflecting an operational decline of 31% at the midpoint from 2022 results, which we expect will also have an unfavorable impact on Income from continuing operations before provision/(benefit) for taxes on income .

The total company expected revenue declines in 2023 are driven by an expected reduction in sales of our COVID-19 products, partially offset by expected operational growth from our non-COVID-19 in-line portfolio, anticipated new product launches, and recently acquired products.

See the Revenues by Geography and Revenues –– Selected Product Discussion sections within MD&A for more information, including a discussion of key drivers of our revenue performance.

See also The Global Economic Environment––COVID-19 section below for information about our COVID-19 products, including expectations for 2023.

For information regarding the primary indications or class of certain products, see Note 17 C .

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Income from Continuing Operations Before Provision/(Benefit) for Taxes on Income

The increase in Income from continuing operations before provision/(benefit) for taxes on income of $17.3 billion in 2021, compared to 2020, was primarily attributable to:

(i) higher revenues, (ii) net periodic benefit credits in 2021 versus net periodic benefit costs in 2020, (iii) lower asset impairment charges, and (iv) higher net gains on equity securities, partially offset by (v) increases in:

Cost of sales, Research and development expenses and Selling, informational and administrative expenses.

Income from Continuing Operations Before Provision/(Benefit) for Taxes on Income –– The increase in Income from continuing operations before provision/(benefit) for taxes on income of $10.4 billion, to $34.7 billion in 2022 from $24.3 billion in 2021, was primarily attributable to higher revenues and lower Acquired in-process research and development expenses , partially offset by (i) an increase in Cost of sales, (ii) net losses on equity securities in 2022 versus net gains on equity securities in 2021, (iii) lower net periodic benefit credits associated with pension and other postretirement plans, and (iv) increases in Research and development expenses, Selling, informational and administrative expenses, and Restructuring charges and certain acquisition-related costs.

See the Analysis of the Consolidated Statements of Income within MD&A and Note 4 for additional information.

See also The Global Economic Environment––COVID-19 section below for information about our COVID-19 products, including expectations for 2023.

For information on our tax provision and effective tax rate, see the Provision/(Benefit) for Taxes on Income section within MD&A and Note 5 .

Our Operating Environment

We, like other businesses in our industry, are subject to certain industry-specific challenges.

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Our Operating Environment ––We, like other businesses in our industry, are subject to certain industry-specific challenges.

These include, among others, the topics listed below.

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Business––Government Regulation and Price Constraints and Item 1A.

Risk Factors sections of this Form 10-K.

Regulatory Environment––Pipeline Productivity

Our product lines must be replenished to offset revenue losses when products lose exclusivity or market share or to respond to healthcare and innovation trends, as well as to provide for earnings growth.

Risk Factors sections in this Form 10-K.

Regulatory Environment––Pipeline Productivity –– Our product lines must be replenished over time to offset revenue losses when products lose exclusivity or market share or to respond to healthcare and innovation trends, as well as to provide for earnings growth.

As a result, we devote considerable resources to our R&D activities which, while essential to our growth, incorporate a high degree of risk and cost, including whether a particular product candidate or new indication for an in-line product will achieve the desired clinical endpoint or safety profile, will be approved by regulators or will be successful commercially.

We conduct clinical trials to provide data on safety and efficacy to support the evaluation of a product’s overall benefit-risk profile for a particular patient population.

In addition, after a product has been approved or authorized and launched, we continue to monitor its safety as long as it is available to patients.

This includes postmarketing trials that may be conducted voluntarily or pursuant to a regulatory request to gain additional medical knowledge.

For the entire life of the product, we collect safety data and report safety information to the FDA and other regulatory authorities.

Regulatory authorities may evaluate potential safety concerns and take regulatory actions in response, such as updating a product’s labeling, restricting its use, communicating new safety information to the public, or, in rare cases, requiring us to suspend or remove a product from the market.

The commercial potential of in-line products may be negatively impacted by post-marketing developments.

Intellectual Property Rights and Collaboration/Licensing Rights

The loss, expiration or invalidation of intellectual property rights, patent litigation settlements with manufacturers and the expiration of co-promotion and licensing rights can have a material adverse effect on our revenues.

Clinical trials are conducted to determine, among other things, whether an investigational drug or device is safe and effective for a particular patient population.

After a product has been approved or authorized and launched, we continue to monitor its safety as long as it is available to patients, including conducting postmarketing trials, voluntarily or pursuant to a regulatory request.

For the entire life of the product, we collect safety data and report safety information to the FDA and other regulators.

Regulatory authorities evaluate potential safety concerns and take any regulatory action deemed necessary and appropriate.

Such action(s) may include:

updating a product’s labeling, restricting its use, communicating new safety information or, in rare cases, seeking to suspend or remove a product from the market.

Intellectual Property Rights and Collaboration/Licensing Rights –– The loss, expiration or invalidation of intellectual property rights, patent litigation settlements and the expiration of co-promotion and licensing rights can have a material adverse effect on our revenues.

Certain of our products have experienced patent-based expirations or loss of regulatory exclusivity in certain markets in the last few years, and we expect certain products to face increased generic competition over the next few years.

While additional patent expiries will continue, we expect a moderate impact of reduced revenues due to patent expiries from 2023 through 2025.

We anticipate a more significant impact of reduced revenues from patent expiries in 2026 through 2030 as several of our in-line products experience patent-based expirations.

We continue to vigorously defend our patent rights against infringement, and we will continue to support efforts that strengthen worldwide recognition of patent rights while taking necessary steps to help ensure appropriate patient access.

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For a discussion of recent developments with respect to patent litigation, see Note 16 A1 .

Regulatory Environment/Pricing and Access––Government and Other Payer Group Pressures

The pricing of medicines by pharmaceutical manufacturers and the cost of healthcare, which includes medicines, medical services and hospital services, continues to be important to payers, governments, patients, and other stakeholders.

Regulatory Environment/Pricing and Access––Government and Other Payer Group Pressures –– The pricing of medicines and vaccines by pharmaceutical manufacturers and the cost of healthcare, which includes medicines, vaccines, medical services and hospital services, continues to be important to payers, governments, patients, and other stakeholders.

Federal and state governments and private third-party payers in the U.S.

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for prescribed medicines and vaccines is ultimately set by healthcare providers and insurers.

Governments globally may use a variety of measures to control costs, including proposing pricing reform or legislation, cross country collaboration and procurement, price cuts, mandatory rebates, health technology assessments, forced localization as a condition of market access, “international reference pricing” (i.e., the practice of a country linking its regulated medicine prices to those of other countries), QCE processes and VBP.

In the U.S., we expect to see continued focus by Congress and the Biden Administration on regulating pricing which could result in legislative and regulatory changes designed to control costs.

For example, there is proposed legislation that, if enacted, would allow Medicare to negotiate prices for certain prescription drugs, as well as require that penalties be paid by manufacturers who raise drug prices faster than inflation.

Also, certain changes proposed by the CMS in December 2020 to the Medicaid program and 340B drug pricing program, which imposes ceilings on prices that drug manufacturers can charge for medications sold to certain health care facilities, could increase our Medicaid rebate obligations and increase the discounts we extend to 340B covered entities if they go into effect.

Additional changes to the 340B program are undergoing review and their status is unclear.

We anticipate that these and similar initiatives will continue to increase pricing pressures globally.

Governments globally, as well as private third-party payers in the U.S., may use a variety of measures to control costs, including, among others, proposing pricing reform or legislation, employing formularies to control costs, cross country collaboration and procurement, price cuts, mandatory rebates, health technology assessments, forced localization as a condition of market access, “international reference pricing” (i.e., the practice of a country linking its regulated medicine prices to those of other countries), QCE processes and VBP.

We anticipate that these and similar initiatives will continue to increase pricing and access pressures globally.

In the U.S., we expect to see continued focus by Congress and the Biden Administration on regulating pricing, which could result in legislative and regulatory changes designed to control costs, such as the IRA that was signed into law in August 2022.

We continue to evaluate the impact of the IRA on our business, operations and financial condition and results as the full effect of the IRA on our business and the pharmaceutical industry remains uncertain.

In addition, changes to the Medicaid program or the federal 340B drug pricing program, including legal or legislative developments at the federal or state level with respect to the 340B program, could have a material impact on our business.

For additional information, see the Item 1.

Business –– Pricing Pressures and Managed Care Organizations and –– Government Regulation and Price Constraints sections in this Form 10-K.

Product Supply

We periodically encounter supply delays, disruptions or shortages, including due to voluntary product recalls such as our recent Chantix recall.

For information on our recent Chantix recall and risks related to product manufacturing, see the Item 1A.

Business –– Pricing Pressures and Managed Care Organizations and ––Government Regulation and Price Constraints and the Item 1A.

Risk Factors –– Pricing and Reimbursement sections in this Form 10-K.

Product Supply –– We periodically encounter supply delays, disruptions and shortages, including due to voluntary product recalls.

In response to requests from various regulatory authorities, manufacturers across the pharmaceutical industry, including Pfizer, are evaluating their product portfolios for the potential presence or formation of nitrosamines.

This has led to recalls, including our voluntary recall of Chantix in 2021 and additional voluntary recalls initiated for other products in 2022 due to the presence of nitrosamines above the FDA interim acceptable intake limit, and may lead to additional recalls or other market actions for Pfizer products.

Regarding our supply chain generally, in 2022 and to date, we have not seen a significant disruption, and all of our manufacturing sites globally have continued to operate at or near normal levels;

however, we are seeing an increase in overall demand in the industry for certain components and raw materials, which could potentially result in constraining available supply leading to a possible future impact on our business.

We are continuing to monitor and implement mitigation strategies in an effort to reduce any potential risk or impact including active supplier management, qualification of additional suppliers and advanced purchasing to the extent possible.

For information on risks related to product manufacturing, see the Item 1A.

Risk Factors––Product Manufacturing, Sales and Marketing Risks section in this Form 10-K.

The Global Economic Environment

In addition to the industry-specific factors discussed above, we, like other businesses of our size and global extent of activities, are exposed to economic cycles.

Certain factors in the global economic environment that may impact our global operations include, among other things, currency fluctuations, capital and exchange controls, global economic conditions including inflation, restrictive government actions, changes in intellectual property, legal protections and remedies, trade regulations, tax laws and regulations and procedures and actions affecting approval,

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production, pricing, and marketing of, reimbursement for and access to our products, as well as impacts of political or civil unrest or military action, including the current conflict between Russia and Ukraine, terrorist activity, unstable governments and legal systems, inter-governmental disputes, public health outbreaks, epidemics, pandemics, natural disasters or disruptions related to climate change.

The Global Economic Environment ––In addition to the industry-specific factors discussed above, we, like other businesses of our size and global extent of activities, are exposed to economic cycles.

Certain factors in the global economic environment that may impact our global operations include, among other things, currency fluctuations, capital and exchange controls, local and global economic conditions including inflation, recession, volatility and/or lack of liquidity in capital markets, expropriation and other restrictive government actions, changes in intellectual property, legal protections and remedies, trade regulations, tax laws and regulations and procedures and actions affecting approval, production, pricing, and marketing of, reimbursement for and access to our products, as well as impacts of political or civil unrest or military action, including the ongoing conflict between Russia and Ukraine and its economic consequences, geopolitical instability, terrorist activity, unstable governments and legal systems, inter-governmental disputes, public health outbreaks, epidemics, pandemics, natural disasters or disruptions related to climate change.

Government pressures can lead to negative pricing pressure in various markets where governments take an active role in setting prices, access criteria or other means of cost control.

COVID-19 Pandemic

The COVID-19 pandemic has impacted our business, operations and financial condition and results.

Our Response to COVID-19

Pfizer has helped lead the global effort to confront the COVID-19 pandemic by advancing a vision for industry-wide collaboration while making significant investments in breakthrough science and global manufacturing.

• Comirnaty/BNT162b2 :

◦ We have collaborated with BioNTech to jointly develop Comirnaty/BNT162b2, a mRNA-based coronavirus vaccine to help prevent COVID-19.

The FDA has approved Comirnaty in the U.S.

to prevent COVID-19 in individuals 16 years of age and older as a two-dose primary series (30 µg per dose).

Comirnaty is the first COVID-19 vaccine to be granted approval by the FDA and had previously been available to this patient population in the U.S.

under an EUA since December 2020.

The vaccine is also available to individuals 5 to 15 years old under an EUA granted by the FDA in 2021 (10 µg per dose for children 5 through 11 years of age (October 2021) and 30 µg per dose for individuals 12 years of age and older (May 2021)).

The FDA has also authorized for emergency use:

(i) a third dose of Comirnaty/BNT162b2 in certain immunocompromised individuals 5 years of age and older and (ii) Comirnaty/BNT162b2 as a booster dose in individuals 12 years of age and older.

Comirnaty/BNT162b2 has also been granted an approval or an authorization in many other countries around the world in populations varying by country.

We continue to evaluate our vaccine, including for additional pediatric indications, and the short- and long-term efficacy of Comirnaty.

We are also studying vaccine candidates to potentially prevent COVID-19 caused by new and emerging variants, such as the Omicron variant, or an updated vaccine as needed.

◦ In 2021, we manufactured more than three billion doses and, in fiscal 2021, delivered 2.2 billion doses around the world.

Pfizer and BioNTech expect we can manufacture up to four billion doses in total by the end of 2022.

The companies have entered into agreements to supply pre-specified doses of Comirnaty in 2022 with multiple developed and emerging countries around the world and are continuing to deliver doses of Comirnaty to governments under such agreements.

We also signed agreements with multiple countries to supply Comirnaty doses in 2023 and are currently negotiating similar potential agreements with multiple other countries.

We anticipate delivering at least two billion doses to low- and middle-income countries by the end of 2022—one billion that was delivered in 2021 and one billion expected to be delivered in 2022, with the possibility to increase those deliveries if more orders are placed by these countries for 2022.

One billion of the aforementioned doses to low- and middle-income countries are being supplied to the U.S.

government at a not-for-profit price to be donated to the world’s poorest nations at no charge to those countries.

◦ As of February 8, 2022, we forecasted approximately $32 billion in revenues for Comirnaty in 2022, with gross profit to be split evenly with BioNTech, which includes doses expected to be delivered in fiscal 2022 under contracts signed as of late-January 2022.

◦ In December 2021, the FDA authorized the emergency use of Paxlovid, a novel oral COVID-19 treatment, which is a SARS-CoV2-3CL protease inhibitor and is co-administered with a low dose of ritonavir, for the treatment of mild-to-moderate COVID-19 in adults and pediatric patients (12 years of age and older weighing at least 40 kg [88 lbs]) with positive results of direct SARS-CoV-2 viral testing, and who are at high risk for progression to severe COVID-19, including hospitalization or death.

The FDA based its decision on clinical data from the Phase 2/3 EPIC-HR (Evaluation of Protease Inhibition for COVID-19 in High-Risk Patients), which enrolled non-hospitalized adults aged 18 and older with confirmed COVID-19 who are at increased risk of progressing to severe illness.

Paxlovid has been granted an authorization or approval in many other countries.

◦ We continue to evaluate Paxlovid in other populations, including in patients with a confirmed diagnosis of SARS-CoV-2 infection who are at standard risk (i.e., low risk of hospitalization or death) (Phase 2/3 EPIC-SR (Evaluation of Protease Inhibition for COVID-19 in Standard Risk Patients)) and in adults living in the same household as someone with a confirmed COVID-19 infection (Phase 2/3 EPIC-PEP (Evaluation of Protease Inhibition for COVID-19 in Post-Exposure Prophylaxis)).

◦ We have entered into agreements with multiple countries to supply pre-specified courses of Paxlovid, such as the U.S.

and U.K., and have initiated bilateral outreach to approximately 100 countries around the world.

Additionally, we have signed a voluntary non-exclusive license agreement with the Medicines Patent Pool (MPP) for Paxlovid.

Under the terms of the agreement, MPP can grant sublicenses to qualified generic medicine manufacturers worldwide to manufacture and supply Paxlovid to 95 low- and middle-income countries, covering up to approximately 53% of the world’s population.

◦ Pfizer plans to manufacture up to 120 million treatment courses by the end of 2022, depending on the global need, which will be driven by advance purchase agreements, with 30 million courses expected to be produced in the first half of 2022 and the remaining 90 million courses expected to be produced in the second half of 2022.

◦ As of February 8, 2022, we forecasted approximately $22 billion of revenues for Paxlovid in 2022, which includes treatment courses expected to be delivered in fiscal 2022, primarily relating to supply contracts signed or committed as of late-January 2022.

• IV Protease Inhibitor:

◦ In February 2022, we discontinued the global clinical development program for PF-07304814, an intravenously administered SARS-CoV-2 main protease inhibitor being evaluated in adults hospitalized with severe COVID-19.

This decision was made based on a totality of information, including a careful review of early data and a thorough assessment of the candidate’s potential to successfully fulfill patient needs.

Dosing of PF-07304814 in the National Institutes of Health’s ongoing Accelerating COVID-19 Therapeutic Interventions and Vaccines (ACTIV)-3 study has ceased.

Impact of COVID-19 on Our Business and Operations

As part of our on-going monitoring and assessment, we have made certain assumptions regarding the pandemic for purposes of our operational planning and financial projections, including assumptions regarding the duration, severity and the global macroeconomic impact of the pandemic,

For additional information on risks related to our global operations, see the Item 1A.

Risk Factors — Global Operations section in this Form 10-K.

COVID-19 ––In response to COVID-19, we have developed Paxlovid and collaborated with BioNTech to jointly develop Comirnaty, including booster doses of an Omicron-adapted bivalent vaccine.

As part of our strategy for COVID-19, we are continuing to make significant additional

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as well as COVID-19 vaccine and oral COVID-19 treatment supply and contracts, which remain dynamic.

Despite careful tracking and planning, we are unable to accurately predict the extent of the impact of the pandemic on our business, operations and financial condition and results due to the uncertainty of future developments.

We are focused on all aspects of our business and are implementing measures aimed at mitigating issues where possible, including by using digital technology to assist in operations for our commercial, manufacturing, R&D and corporate enabling functions globally.

Apart from our introduction of Comirnaty/BNT162b2 and Paxlovid, our business and operations have been impacted by the pandemic in various ways.

Our portfolio of products experienced varying impacts from the pandemic in 2021.

For example, certain of our vaccines such as the Prevnar family were impacted by disruptions to healthcare activity related to COVID-19, including the prioritization of primary and booster vaccination campaigns for COVID-19.

For some products such as Vyndaqel/Vyndamax, we continued to see postponement of elective and diagnostic procedures in 2021 due to COVID-19, which may subside in 2022 as COVID-19 vaccination and booster rates continue to increase and/or if COVID-19 cases subside.

On the other hand, some products such as Ibrance saw accelerating demand in 2021 as the delays in diagnosis and treatment initiations caused by the COVID-19 pandemic show signs of recovery across several international markets.

For detail on the impact of the COVID-19 pandemic on certain of our products, see the Analysis of the Consolidated Statements of Income—Revenues by Geography and Revenues—Selected Product Discussion sections within this MD&A.

In 2021, engagement with healthcare professionals started to return to pre-pandemic levels and we continue to review and assess epidemiological data to inform in-person engagements with healthcare professionals and to help ensure the safety of our colleagues, customers and communities.

As part of our commitment to engaging our customers in the manner they prefer, we are also taking a hybrid approach of virtual and in person engagements and saw customer response to both approaches.

During the pandemic, we adapted our promotional platform by amplifying our digital capabilities to reach healthcare professionals and customers to provide critical education and information, including increasing the scale of our remote engagement.

Most of our colleagues who are able to perform their job functions outside of our facilities continue to temporarily work remotely, while certain colleagues in the PGS and WRDM organizations continue to work onsite and are subject to strict protocols intended to reduce the risk of transmission.

As of December 31, 2021, more than 96% of our U.S.

employee population had been fully vaccinated or received an approved exception.

Also, in 2021 and to date, we have not seen a significant disruption to our supply chain, and all of our manufacturing sites globally have continued to operate at or near normal levels.

However, we are seeing an increase in overall demand in the industry for certain components and raw materials potentially constraining available supply, which could have a future impact on our business.

Certain of our clinical trials were impacted by the COVID-19 pandemic in 2021, which included, in some cases, challenges related to recruiting clinical trial participants and accruing cases in certain studies.

Our clinical trials also progressed in this challenging environment through innovation, such as decentralized visits (e.g., telemedicine and home visits) to accommodate participants’ ability to maintain scheduled visits, as well as working with suppliers to manage the shortage of certain clinical supplies.

We will continue to pursue efforts to maintain the continuity of our operations while monitoring for new developments related to the pandemic.

investments in breakthrough science and global manufacturing.

This includes continuing to evaluate Comirnaty and Paxlovid, including against new variants of concern, developing monovalent, bivalent and variant adapted vaccine candidates and booster doses and developing potential combination respiratory vaccines and potential next generation vaccines and therapies.

We are also evaluating Paxlovid for additional populations.

For additional information, including our continuing late-stage development efforts for Paxlovid, see the Product Developments section within MD&A.

In 2022 and to date, we principally sold Comirnaty and Paxlovid globally under government contracts.

We expect sales of Comirnaty in the U.S.

will transition to traditional commercial market sales in the second half of 2023, triggered by the expiration of current contracts and the vaccines purchased through them becoming either depleted or not usable against new variants.

Internationally, we expect sales of Comirnaty in international developed markets to generally be under government contracts in 2023, and in emerging markets, under a combination of private channels and government contracts;

in both cases, we expect to generally transition to commercial markets starting in 2024.

For Paxlovid, we expect 2023 to be a transitional year as we expect to start selling Paxlovid through the commercial channels in the second half of 2023 rather than significant government purchases.

We also remain committed to helping ensure broad and equitable access to our COVID-19 products to eligible patients around the world.

Revenues from our COVID-19 products are expected to go from their peak in 2022 to their low point in 2023 before potentially returning to growth in 2024.

While patient demand for our COVID-19 products is expected to remain strong throughout 2023, much of that demand is expected to be fulfilled by existing supply of products that were delivered to governments and recorded as revenues in 2022.

As of January 31, 2023, we forecasted Comirnaty revenues of approximately $13.5 billion in 2023, down 64% from actual 2022 results, with gross profit to be split evenly with BioNTech, and Paxlovid revenues of approximately $8 billion in 2023, down 58% from actual 2022 results.

Guidance for both products includes, among other things, anticipated sales through traditional commercial markets in the U.S.

in the second half of 2023 and assumes prior absorption of existing government supply from advanced purchase agreements from 2022.

These forecasts are based on estimates and assumptions that are subject to significant uncertainties, including, among others, patient demand which could be significantly impacted by the infectiousness and severity of the predominant strains of the SAR-CoV-2 virus during 2023, proportion of the population that receives a vaccine or is treated with an oral antiviral treatment, the number of doses per vaccinated person per year, number of symptomatic infections, market share of Comirnaty and Paxlovid, timing and terms for delivery of the contracted doses of Comirnaty to the EC, Paxlovid sales to China and the timing for transitioning Comirnaty and Paxlovid sales to the commercial market in the U.S.

In addition to our introduction of Comirnaty and Paxlovid, COVID-19 has impacted our business, operations and financial condition and results.

For example, COVID-19 had varying impacts on patient visits, vaccinations, elective surgeries, cancer screenings and routine testing, which affected prescriptions or refills of existing prescriptions and demand for products used in procedures.

As part of our on-going monitoring and assessment, we have made certain assumptions regarding COVID-19 for purposes of our operational planning and financial projections, including assumptions regarding the global macroeconomic impact of COVID-19, as well as the demand, revenues, supply, contracts and commercial markets for our COVID-19 products, which remain dynamic.

Despite careful tracking and planning, we are unable to accurately predict the extent of the impact of COVID-19 on our business, operations and financial condition and results due to the uncertainty of future developments.

We will continue to pursue efforts to maintain the continuity of our operations while monitoring for new developments related to COVID-19.

Future developments could result in additional favorable or unfavorable impacts on our business, operations or financial condition and results.

If we experience significant disruption in our manufacturing or supply chains or significant disruptions in clinical trials or other operations, or if demand for our products is significantly reduced as a result of the COVID-19 pandemic, we could experience a material adverse impact on our business, operations and financial condition and results.

For additional information, please see the Item 1A.

Risk Factors—COVID-19 Pandemic section of this Form 10-K.

For information on risks associated with COVID-19 and our COVID-19 products, as well as COVID-19 intellectual property disputes, see the Item 1A.

Risk Factors — COVID-19 , — I ntellectual Property Protection and –– Third-Party Intellectual Property Claims sections in this Form 10-K and Note 16A1 .

Russia/Ukraine Conflict ––Our global operations may be impacted by the armed conflict between Russia and Ukraine.

Consistent with our commitment to putting patients first, we are maintaining the supply of medicines to Russia, including the provision of needed medicines to patients already enrolled in clinical trials.

Effective March 14, 2022, Pfizer began donating profits of our Russian subsidiary to causes that provide direct humanitarian support to the people of Ukraine, in addition to our ongoing efforts to support the humanitarian response in the region.

In 2022, we have donated approximately $25 million to support humanitarian relief and response efforts.

We will continue to support Ukrainian relief efforts through this method until peace is achieved.

Additionally, we are not initiating new clinical trials in Russia, have stopped recruiting new patients in our ongoing clinical trials in the country, and halted all new investments with local suppliers intended to build manufacturing capacity in Russia.

For the years ended December 31, 2022 and 2021, the business of our Russia and Ukraine subsidiaries represented less than 1% of our consolidated revenues and assets, and while we are monitoring the effects of the armed conflict between Russia and Ukraine, the situation continues to evolve and the long-term implications, including the broader economic consequences of the conflict, are difficult to predict at this time.

While as of now, we do not anticipate any significant negative impacts on our business from this conflict, continued regional instability, geopolitical shifts, potential additional sanctions and other restrictive measures against Russia, neighboring countries or allies of Russia, any retaliatory measures taken by Russia, neighboring countries or allies of Russia, and actions by our customers or suppliers in response to such measures could adversely affect the global macroeconomic environment, our operations, currency exchange rates and financial markets, which could in turn adversely impact our business and results of operations.

SIGNIFICANT ACCOUNTING POLICIES AND APPLICATION OF CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

Following is a discussion about the critical accounting estimates and assumptions impacting our consolidated financial statements.

Also, see Note 1D .

Also, see Note 1C .

For a description of our significant accounting policies, see Note 1 .

Of these policies, the following are considered critical to an understanding of our consolidated financial statements as they require the application of the most subjective and the most complex judgments:

Acquisitions ( Note 1E );

Fair Value ( Note 1F );

Revenues ( Note 1H );

Acquisitions ( Note 1 D );

Fair Value ( Note 1 E );

Revenues ( Note 1 G );

Asset Impairments ( Note 1 M );

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and Legal and Environmental Contingencies ( Note 1 S ).

For a discussion of a recently adopted accounting standard and a change in accounting principle related to our pension and postretirement plans, see Notes 1B and 1C.

For a discussion of a recently adopted accounting standard, see Note 1B .

We account for acquired businesses using the acquisition method of accounting, which requires, among other things, that most assets acquired and liabilities assumed be recognized at their estimated fair value as of the acquisition date.

For further detail on acquisition accounting, see Note 1E .

To estimate fair value, we utilize an exit price approach from the perspective of a market participant.

For further detail on acquisition accounting, see Note 1 D .

For further detail on the techniques and methodologies that we use to estimate fair value, see Note 1 E .

Historically, intangible assets have been the most significant fair values within our business combinations.

We utilize an income approach to estimate the acquisition date fair value of intangible assets.

2022 Form 10-K 29

the more significant estimates and assumptions inherent in this approach include the amount and timing of projected net cash flows, the discount rate and the tax rate.

For further information on our process to estimate the fair value of intangible assets, see Asset Impairments below.

We estimate the fair value of acquired inventory, including finished goods and work in process, by determining the estimated selling price when completed, less an estimate of costs to be incurred to complete and sell the inventory, and an estimate of a reasonable profit allowance for those manufacturing and selling efforts.

The fair value of inventory is recognized in our results of operations as the inventory is sold.

Some of the more significant estimates and assumptions inherent in the estimate of the fair value of inventory include stage of completion, costs to complete, costs to dispose and selling price.

Our gross product revenues are subject to a variety of deductions, which generally are estimated and recorded in the same period that the revenues are recognized.

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However, estimates associated with U.S.

Medicare, Medicaid and performance-based contract rebates are most at risk for material adjustment because of the extensive time delay

2021 Form 10-K 30

between the recording of the accrual and its ultimate settlement, an interval that can generally range up to one year.

Medicare, Medicaid and performance-based contract rebates are most at risk for material adjustment because of the extensive time delay between the recording of the accrual and its ultimate settlement, an interval that can generally range up to one year.

Because of this lag, our recording of adjustments to reflect actual amounts can incorporate revisions of several prior quarters.

Rebate accruals are product specific and, therefore for any period, are impacted by the mix of products sold as well as the forecasted channel mix for each individual product.

For further information, see the Analysis of the Consolidated Statements of Income––Revenue Deductions section within MD&A and Note 1H .

For further information, see the Revenue Deductions section within MD&A and Note 1 G .

Asset Impairments

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For IPR&D projects, this could result from, among other things, a change in outlook based on clinical trial data, a delay in the projected launch date or additional expenditures to commercialize the product.

Identifiable Intangible Assets

We use an income approach, specifically the discounted cash flow method to determine the fair value of intangible assets, other than goodwill.

Identifiable Intangible Assets ––We use an income approach, specifically the discounted cash flow method to determine the fair value of intangible assets, other than goodwill.

We start with a forecast of all the expected net cash flows associated with the asset, which incorporates the consideration of a terminal value for indefinite-lived assets, and then we apply an asset-specific discount rate to arrive at a net present value amount.

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the discount rate, which seeks to reflect the various risks inherent in the projected cash flows;

and the tax rate, which seeks to incorporate the geographic origin of the projected cash flows.

and the tax rate, which seeks to incorporate the jurisdictional mix of the projected cash flows.

While all intangible assets other than goodwill can face events and circumstances that can lead to impairment, those that are most at risk of impairment include IPR&D assets (approximately $11.4 billion as of December 31, 2022) and newly acquired or recently impaired indefinite-lived brand assets.

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As such, immediately after acquisition or impairment, even small declines in the outlook for these assets can negatively impact our ability to recover the carrying value and can result in an impairment charge.

Our goodwill impairment review work as of December 31, 2021 concluded that none of our goodwill was impaired and we do not believe the risk of impairment is significant at this time.

Goodwill ––Our goodwill impairment review work as of December 31, 2022 concluded that none of our goodwill was impaired and we do not believe the risk of impairment is significant at this time, as the fair value of each of our reporting units is significantly higher than their respective net book values.

In our review, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

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and the tax rate, which seeks to incorporate the geographic diversity of the projected cash flows.

2022 Form 10-K 30

For all of our reporting units, there are a number of future events and factors that may impact future results and that could potentially have an impact on the outcome of subsequent goodwill impairment testing.

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The judgments made in determining the costs of our benefit plans can materially impact our results of operations.

2021 Form 10-K 31

The following provides (i) at the end of each year, the expected annual rate of return on plan assets for the following year, (ii) the actual annual rate of return on plan assets achieved in each year, and (iii) the weighted-average discount rate used to measure the benefit obligations at the end of each year for our U.S.

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(a) For detailed assumptions associated with our benefit plans, see Note 11B .

Expected Annual Rate of Return on Plan Assets

The assumptions for the expected annual rate of return on all of our plan assets reflect our actual historical return experience and our long-term assessment of forward-looking return expectations by asset classes, which is used to develop a weighted-average expected return based on the implementation of our targeted asset allocation in our respective plans.

Expected Annual Rate of Return on Plan Assets ––The assumptions for the expected annual rate of return on all of our plan assets reflect our actual historical return experience and our long-term assessment of forward-looking return expectations by asset classes, which is used to develop a weighted-average expected return based on the implementation of our targeted asset allocation in our respective plans.

The expected annual rate of return on plan assets for our U.S.

plans and the majority of our international plans is applied to the fair value of plan assets at each year-end and the resulting amount is reflected in our net periodic benefit costs in the following year.

plans and international plans is applied to the fair value of plan assets at each year-end and the resulting amount is reflected in our net periodic benefit costs in the following year.

The following illustrates the sensitivity of net periodic benefit costs to a 50 basis point decline in our assumption for the expected annual rate of return on plan assets, holding all other assumptions constant (in millions, pre-tax):

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Expected annual rate of return on plan assets 50 basis point decline $92

The actual return on plan assets was approximately $2.6 billion during 2021 .

Discount Rate Used to Measure Plan Obligations

The weighted-average discount rate used to measure the plan obligations for our U.S.

The actual return on plan assets resulted in a net loss on our plan assets of approximately $6.3 billion during 2022 .

Discount Rate Used to Measure Plan Obligations ––The weighted-average discount rate used to measure the plan obligations for our U.S.

defined benefit plans is determined at least annually and evaluated and modified, as required, to reflect the prevailing market rate of a portfolio of high-quality fixed income investments, rated AA/Aa or better, that reflect the rates at which the pension benefits could be effectively settled.

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Discount rate 10 basis point decline $6 $248

The change in the discount rates used in measuring our plan obligations as of December 31, 2021 resulted in a decrease in the measurement of our aggregate plan obligations by approximately $786 million.

The change in the discount rates used in measuring our plan obligations as of December 31, 2022 resulted in a decrease in the measurement of our aggregate plan obligations by approximately $6.6 billion.

Income Tax Assets and Liabilities

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Pfizer CentreOne 1,342 1,731 926 390 524 400 952 1,206 526 (22) 87 (26) 31 (21) 129

Consumer Healthcare

— — 2,082 — — 988 — — 1,094 — (100) — (100) — (100)

Total revenues $ 100,330 $ 81,288 $ 41,651 $ 42,473 $ 29,746 $ 21,455 $ 57,857 $ 51,542 $ 20,196 23 95 43 39 12 155

The following provides an analysis of the change in worldwide revenues by geographic areas in 2021:

The following provides an analysis of the change in worldwide revenues by geographic areas from 2021 to 2022 (a) :

(MILLIONS) Worldwide U.S.

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Operational growth/(decline):

Growth from Comirnaty, Eliquis, Biosimilars, Vyndaqel/Vyndamax, the Hospital therapeutic area, Inlyta and Xtandi, partially offset by a decline from the Prevnar family, while Xeljanz and Ibrance were flat.

See the Analysis of the Consolidated Statements of Income––Revenues––Selected Product Discussion within MD&A for additional analysis

Worldwide growth from Paxlovid, Comirnaty, the Prevnar family, Eliquis, the Vyndaqel family, Inlyta and Xtandi, partially offset by worldwide declines from Xeljanz and Ibrance (b)

$ 25,435 $ 13,197 $ 12,238

Growth from PC1 primarily reflecting manufacturing of legacy Upjohn products for Viatris under manufacturing and supply agreements and certain Comirnaty-related manufacturing activities performed on behalf of BioNTech.

See the Analysis of the Consolidated Statements of Income––Revenues––Selected Product Discussion within MD&A for additional analysis

Lower revenues for Chantix/Champix, Enbrel and Sutent:

• The decrease for Chantix/Champix was driven by the voluntary recall across multiple markets in the second half of 2021 and the ongoing global pause in shipments of Chantix due to the presence of N-nitroso-varenicline above an acceptable level of intake set by various global regulators, the ultimate timing for resolution of which may vary by country, and the negative impact of the COVID-19 pandemic resulting in a decline in patient visits to doctors for preventive health purposes

• The decrease for Enbrel internationally primarily reflects continued biosimilar competition, which is expected to continue

• The decrease for Sutent primarily reflects lower volume demand in the U.S.

resulting from its loss of exclusivity in August 2021, as well as continued erosion as a result of increased competition in certain international developed markets

Revenues from recently acquired products:

Nurtec ODT/Vydura and Oxbryta 285 283 2

Decline from PC1 (b)

(329) (135) (195)

Other operational factors, net (27) (134) 106

Operational growth, net 38,429 8,291 30,137

Favorable impact of foreign exchange 1,208 — 1,208

Revenues increase/(decrease)

Lower revenues for Chantix/Champix and Sutent:

• The decrease in Chantix/Champix was driven by the ongoing global pause in shipments of Chantix due to the presence of N-nitroso-varenicline above an acceptable level of intake set by various global regulators, the ultimate timing for resolution of which may vary by country

• The decrease for Sutent primarily reflects lower volume demand in Europe and the U.S.

following its loss of exclusivity in January 2022 and August 2021, respectively

(690) (396) (293)

Emerging markets revenues increased $12.3 billion, or 147%, in 2021 to $20.7 billion from $8.4 billion in 2020, reflecting an operational increase of $12.2 billion, or 145%, and a favorable impact from foreign exchange of approximately 2%.

The operational increase in emerging markets was primarily driven by revenues from Comirnaty and growth from certain products in the Hospital therapeutic area, Eliquis and PC1, partially offset by a decline from the Prevnar family.

2021 Form 10-K 33

The following provides an analysis of the change in worldwide revenues by geographic areas in 2020:

(MILLIONS) Worldwide U.S.

International

Operational growth/(decline):

Growth from Vyndaqel/Vyndamax, Eliquis, Biosimilars, Ibrance, Inlyta, Xeljanz, Xtandi, the Hospital therapeutic area and the Prevnar family $ 3,560 $ 2,132 $ 1,428

Growth from PC1 in international markets driven by growth of certain key accounts as well new contract manufacturing activities

Impact of completion of the Consumer Healthcare JV transaction.

Revenues in 2019 reflect seven months of Consumer Healthcare business domestic operations and eight months of international operations, and none in 2020 (2,082) (988) (1,094)

Lower revenues for Enbrel internationally, primarily reflecting continued biosimilar competition in most developed Europe markets, as well as in Japan and Brazil, all of which is expected to continue (320) — (320)

Decline from Chantix/Champix reflecting the negative impact of the COVID-19 pandemic resulting in a decline in patient visits to doctors for preventive health purposes as well as the loss of patent protection in the U.S.

in November 2020 (185) (183) (2)

Other operational factors, net (132) (222) 90

Operational growth/(decline), net 1,078 1,129 (50)

Operational growth, net 24,569 12,727 11,842

Unfavorable impact of foreign exchange (5,527) — (5,527)

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$ 19,042 $ 12,727 $ 6,315

Revenues for 2020 included an estimated unfavorable impact of approximately $700 million, or 2%, due to COVID-19, primarily reflecting lower demand for certain products in China and unfavorable disruptions to wellness visits for patients in the U.S., which negatively impacted prescribing patterns for certain products, partially offset by increased U.S.

demand for certain sterile injectable products and increased adult uptake for the Prevnar family in certain international markets, resulting from greater vaccine awareness for respiratory illnesses, and U.S.

revenues for Comirnaty.

Emerging markets revenues decreased $456 million, or 5%, in 2020 to $8.4 billion, from $8.8 billion in 2019, and were relatively flat operationally, reflecting an unfavorable impact of foreign exchange of 5% on emerging markets revenues.

The relatively flat operational performance was primarily driven by growth from Eliquis, the Prevnar family, Ibrance and Zavicefta, offset by lower revenues for Consumer Healthcare, reflecting the July 31, 2019 completion of the Consumer Healthcare JV transaction.

Revenue Deductions

Our gross product revenues are subject to a variety of deductions, which generally are estimated and recorded in the same period that the revenues are recognized.

These deductions represent estimates of related obligations and, as such, knowledge and judgment are required when estimating the impact of these revenue deductions on gross sales for a reporting period.

(a) For an analysis of the change in worldwide revenues by geographic area from 2020 to 2021, see the Revenues by Geography section within MD&A in our 2021 Form 10-K.

(b) See the Revenues––Selected Product Discussion within MD&A for additional analysis.

Emerging markets revenues decreased $604 million, or 3%, in 2022 to $20.1 billion from $20.7 billion in 2021, reflecting an operational increase of $366 million, or 2%, and an unfavorable impact from foreign exchange of approximately 5%.

The operational increase in emerging markets revenues was primarily driven by growth from Paxlovid, Sulperazon and Nimenrix, partially offset by declines in Comirnaty and certain Comirnaty-related manufacturing activities performed on behalf of BioNTech.

For an analysis of the change in emerging market revenues from 2020 to 2021, see the Revenues by Geography section within MD&A in our 2021 Form 10-K.

Revenue Deductions –– Our gross product revenues are subject to a variety of deductions, which generally are estimated and recorded in the same period that the revenues are recognized.

These deductions represent estimates of the related obligations and, as such, knowledge and judgment are required when estimating the impact of these revenue deductions on gross sales for a reporting period.

Historically, adjustments to these estimates to reflect actual results or updated expectations, have not been material to our overall business and generally have been less than 1% of revenues.

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Revenue deductions are primarily a function of product sales volume, mix of products sold, contractual or legislative discounts and rebates.

For information on our accruals for revenue deductions, including the balance sheet classification of these accruals, see Note 1H .

For information on our accruals for revenue deductions, including the balance sheet classification of these accruals, see Note 1G .

2022 Form 10-K 32

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Comirnaty (a)

$ 7,809 $ 154 * Driven by global uptake, following a growing number of regulatory approvals and temporary authorizations.

Worldwide $ 36,781 $ 154 * *

Eliquis $5,970

(operationally)

$ 3,160 $ 2,688 18 Global growth driven primarily by continued increased adoption in non-valvular atrial fibrillation and oral anti-coagulant market share gains, as well as a favorable adjustment related to the Medicare “coverage gap” provision resulting from lower than previously expected discounts in prior periods.

$ 8,775 $ 7,809 12 Performance was largely driven by:

• operational growth in international markets, led by deliveries to certain international developed markets, as well as government purchasing of bivalent boosters in the fourth quarter of 2022 in support of fall vaccination campaigns;

• growth in the U.S.

primarily driven by favorable pricing, partially offset by government purchasing patterns.

This growth was partially offset by lower demand in emerging markets.

29,032 28,972 — 9

Worldwide $ 37,806 $ 36,781 3 10

Ibrance $5,437

Paxlovid $18,933

$ 10,514 $ 76 * Driven by the U.S.

launch under EUA in December 2021 and international launches in late 2021 and early 2022 following regulatory approvals or EUAs.

Worldwide $ 18,933 $ 76 * *

Eliquis $6,480

(operationally)

$ 3,418 $ 3,634 (6) Flat performance driven primarily by accelerating demand internationally as the delays in diagnosis and treatment initiations caused by the COVID-19 pandemic show signs of recovery across several international markets, offset by a decline in the U.S., primarily driven by an increase in the proportion of patients accessing Ibrance through our Patient Assistance Program.

$ 3,822 $ 3,160 21 Growth driven primarily by continued oral anti-coagulant adoption and market share gains in non-valvular atrial fibrillation in the U.S.

and certain markets in Europe, as well as favorable changes in channel mix in the U.S., partially offset by the non-recurrence of an $80 million favorable adjustment related to the Medicare “coverage gap” provision recorded in the first quarter of 2021 in the U.S., as well as declines in certain emerging markets.

2,658 2,810 (5) 5

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(operationally)

$ 2,701 $ 2,930 (8) Decline primarily resulting from:

• the normalization of demand in Germany and certain other developed markets following significantly increased adult demand in 2020 resulting from greater vaccine awareness for respiratory illnesses due to the COVID-19 pandemic;

• the adult indication due to disruptions to healthcare activity related to COVID-19, including the prioritization of primary and booster vaccination campaigns for COVID-19 in the U.S.;

• the continued impact of the lower remaining unvaccinated eligible adult population in the U.S.

and the June 2019 change to the ACIP recommendation for the Prevnar 13 adult indication to shared clinical decision-making;

• a decline in the pediatric indication internationally due to disruptions to healthcare activity related to COVID-19.

This decline was partially offset by:

growth in the pediatric indication, driven by government purchasing patterns, which was partially offset by disruptions to healthcare activity related to COVID-19.

$ 4,032 $ 2,701 49 Growth primarily driven by the adult indications in the U.S.

due to strong patient demand following the launch of Prevnar 20 for the eligible adult population, partially offset by a reduction in revenues due to a one-time CDC inventory return program for the pediatric indication, the revenue impact of which is expected to be reversed in 2023 upon replenishment, as well as unfavorable timing of purchases for the adult indication internationally.

2,305 2,571 (10) (4)

Worldwide $ 6,337 $ 5,272 20 23

Xeljanz $2,455

(operationally)

$ 1,647 $ 1,706 (3) Flat performance as a decline in the U.S.

was offset by operational growth internationally.

The decline in the U.S.

was primarily driven by:

• the negative impact of data from a long-term safety study, which resulted in JAK class labeling issued by the FDA in December 2021;

• an unfavorable change in channel mix toward lower-priced channels, despite a 2% increase in underlying demand, driven by growth in our UC and PsA indications;

• continued investments to improve formulary positioning and unlock access to additional patient lives.

The decline in the U.S.

was offset by:

• operational growth internationally mainly driven by continued uptake in the UC indication in certain developed markets.

Worldwide $ 2,455 $ 2,437 1 —

Vyndamax $2,015

Ibrance $5,120

(operationally)

$ 909 $ 613 48 Growth primarily driven by continued strong uptake of the ATTR-CM indication in the U.S., developed Europe and Japan.

$ 3,370 $ 3,418 (1) Global declines primarily driven by prior-year clinical trial purchases internationally, planned price decreases that recently went into effect in international developed markets, and continued increase in the proportion of patients accessing Ibrance through the U.S.

Patient Assistance Program, partially offset by higher volumes across multiple regions.

1,751 2,019 (13) (4)

Worldwide $ 5,120 $ 5,437 (6) (2)

Xtandi $1,185

Vyndaqel family $2,447

(operationally)

$ 1,185 $ 1,024 16 Growth primarily driven by strong demand across the mCRPC, nmCRPC and mCSPC indications.

$ 1,245 $ 909 37 Growth largely driven by continued strong uptake of the ATTR-CM indication, primarily in developed Europe and the U.S., partially offset by a planned price decrease that went into effect in Japan in the second quarter of 2022.

1,202 1,106 9 22

Worldwide $ 2,447 $ 2,015 21 29

Inlyta $1,002

Xeljanz $1,796

(operationally)

$ 599 $ 523 15 Growth primarily reflects continued adoption in developed Europe and the U.S.

of combinations of certain immune checkpoint inhibitors and Inlyta for the first-line treatment of patients with advanced RCC.

$ 1,129 $ 1,647 (31) Global declines driven primarily by decreased prescription volumes globally resulting from ongoing shifts in prescribing patterns related to label changes, as well as declines in net price due to unfavorable changes in channel mix in the U.S.

668 808 (17) (8)

Worldwide $ 1,796 $ 2,455 (27) (24)

2021 Form 10-K 35

(MILLIONS) Year Ended Dec.

Product Global

Revenues Region 2021 2020 Total Oper.

Operational Results Commentary

Biosimilars $2,343

Xtandi $1,198

(operationally)

$ 1,561 $ 899 74 Growth primarily driven by recent oncology monoclonal antibody biosimilar launches and growth from Retacrit in the U.S.

782 628 25 19

$ 1,198 $ 1,185 1 Performance largely due to steady demand growth across the mCRPC, nmCRPC, and mCSPC indications, slightly offset by unfavorable changes in channel mix and fluctuating enrollment rates in the Xtandi Patient Assistance Program.

Worldwide $ 1,198 $ 1,185 1 1

Hospital $7,301

Inlyta $1,003

(operationally)

$ 2,688 $ 2,705 (1) Growth primarily driven by the anti-infectives portfolio in international markets, primarily as a result of recent launches of Zavicefta and Cresemba.

$ 618 $ 599 3 Growth primarily reflects continued strong performance in emerging markets and the U.S.

driven by the adoption of combinations of certain immune checkpoint inhibitors and Inlyta for the first-line treatment of patients with advanced RCC.

385 403 (5) 5

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(operationally)

$ 524 $ 400 31 Growth primarily reflects manufacturing of legacy Upjohn products for Viatris under manufacturing and supply agreements and certain Comirnaty-related manufacturing activities performed on behalf of BioNTech.

$ 390 $ 524 (26) Declines primarily driven by lower COVID-19 manufacturing activities performed on behalf of customers, including Comirnaty supply to BioNTech, and lower manufacturing of divested products under manufacturing and supply agreements.

952 1,206 (21) (16)

Worldwide $ 1,342 $ 1,731 (22) (19)

(a) Comirnaty includes direct sales and alliance revenues related to sales of the Pfizer-BioNTech COVID-19 vaccine, which are recorded within our Vaccines therapeutic area.

It does not include revenues for certain Comirnaty-related manufacturing activities performed on behalf of BioNTech, which are included in the PC1 contract development and manufacturing organization.

Revenues related to these manufacturing activities totaled $320 million for 2021 and $0 million in 2020.

* Calculation is not meaningful or results are equal to or greater than 100%.

2022 Form 10-K 33

(a) Comirnaty includes direct sales and Alliance revenues related to sales of the Pfizer-BioNTech COVID-19 vaccine, which are recorded within our Primary Care customer group.

It does not include revenues for certain Comirnaty-related manufacturing activities performed on behalf of BioNTech, which are included in PC1.

See Note 17C .

* Indicates calculation not meaningful.

See the Item 1.

4 unchanged sentences

(MILLIONS) 2022 2021 2020 22/21 21/20

Cost of sales $ 30,821 $ 8,484 $ 8,054 * 5

Cost of sales (a)

$ 34,344 $ 30,821 $ 8,484 11 *

Percentage of Revenues

34.2 % 37.9 % 20.4 %

Selling, informational and administrative expenses 12,703 11,597 12,726 10 (9)

Selling, informational and administrative expenses (a)

13,677 12,703 11,597 8 10

Research and development expenses 11,428 10,360 8,709 10 19

Amortization of intangible assets 3,700 3,348 4,429 11 (24)

Acquired in-process research and development expenses 953 3,469 684 (73) *

Amortization of intangible assets (a)

3,609 3,700 3,348 (2) 11

Restructuring charges and certain acquisition-related

1,375 802 579 71 38

Other (income)/deductions—net (4,878) 1,219 3,497 * (65)

* Calculation is not meaningful or results are equal to or greater than 100%.

Other (income)/deductions—net (a)

217 (4,878) 1,213 * *

* Indicates calculation not meaningful.

(a) For a discussion of the drivers of change for 2021 v.

2020, see the Costs and Expenses section within MD&A in our 2021 Form 10-K.

Cost of Sales

Cost of sales increased $3.5 billion, primarily due to:

• the impact of Comirnaty, which includes a charge for the 50% gross profit split with BioNTech and applicable royalty expenses;

• increased sales volumes of other products, driven mostly by PC1;

• the unfavorable impact of foreign exchange and hedging activity on intercompany inventory.

The increase in Cost of sales as a percentage of revenues was primarily due to all of the factors discussed above, partially offset by an increase in alliance revenues, which have no associated cost of sales.

Cost of sales increased $431 million, primarily due to:

• increased sales volumes;

• an increase in royalty expenses, due to an increase in sales of related products;

• an unfavorable impact of incremental costs incurred in response to the COVID-19 pandemic;

2021 Form 10-K 36

• an unfavorable impact of foreign exchange and hedging activity on intercompany inventory,

partially offset by:

• the favorable impact of the July 31, 2019 completion of the Consumer Healthcare JV transaction.

Selling, Informational and Administrative (SI&A) Expenses

SI&A expenses increased $1.1 billion, mostly due to:

• increased product-related spending across multiple therapeutic areas;

• costs related to Comirnaty, driven by a higher provision for healthcare reform fees based on sales;

• an increase in costs related to implementing our cost-reduction/productivity initiatives,

• an unfavorable impact of $4.0 billion due to increased sales of Comirnaty, which includes a charge for the 50% gross profit split with BioNTech and applicable royalty expenses;

• inventory write-offs and other charges related to Paxlovid and Comirnaty of $1.1 billion and $600 million, respectively;

• an increase of $1.3 billion due to increased sales of Paxlovid,

partially offset by:

• lower spending on Chantix following the loss of patent protection in the U.S.

in November 2020.

SI&A expenses decreased $1.1 billion, mostly due to:

• the favorable impact of the July 31, 2019 completion of the Consumer Healthcare JV transaction;

• lower spending for corporate enabling functions;

• lower spending on sales and marketing activities due to the impact of the COVID-19 pandemic;

• lower investments across the Internal Medicine and Inflammation & Immunology portfolios,

• a $3.3 billion favorable impact of foreign exchange and hedging activity.

The decrease in Cost of sales as a percentage of revenues was primarily due to the favorable impacts of Paxlovid, foreign exchange and higher Alliance revenues, partially offset by higher sales of Comirnaty, as well as the inventory write-offs and other charges related to Paxlovid and Comirnaty, respectively, discussed above.

Selling, Informational and Administrative Expenses

Selling, informational and administrative expenses increased $974 million, mostly due to:

• an increase of $1.3 billion for Paxlovid and Comirnaty marketing and promotional expenses and a higher provision for U.S.

healthcare reform fees based on sales of Paxlovid;

• an increase of $540 million for marketing and promotional expenses for recently acquired and launched products,

partially offset by:

• an increase in costs related to implementing our cost-reduction/productivity initiatives;

• an increase in business and legal entity alignment costs.

Research and Development (R&D) Expenses

R&D expenses increased $4.4 billion, primarily due to:

• a charge for acquired IPR&D related to our acquisition of Trillium;

• a net increase in charges for upfront and milestone payments on collaboration and licensing arrangements, driven by payments to Arvinas and Beam;

• increased investments across multiple therapeutic areas, including additional spending related to the development of the oral COVID-19 treatment program.

R&D expenses increased $1.0 billion, mainly due to:

• costs related to our collaboration agreement with BioNTech to co-develop a COVID-19 vaccine, including an upfront payment to BioNTech and a premium paid on our equity investment in BioNTech;

• a net increase in upfront payments, mainly related to Myovant and Valneva;

• increased investments towards building new capabilities and driving automation,

• a $414 million favorable impact of foreign exchange;

• a $320 million decrease in spending across multiple customer groups;

• a decrease of $270 million in our liability to be paid to participants of our supplemental savings plan.

Research and Development Expenses

Research and development expenses increased $1.1 billion, primarily due to:

• increased investments of $1.3 billion for certain vaccine and oncology programs as well as costs to develop recently acquired assets, partially offset by lower spending of $480 million for various late-stage clinical programs and programs to treat COVID-19.

Research and development expenses increased $1.7 billion, mainly due to increased investments of $1.2 billion across multiple therapeutic areas, including additional spending related to the development of the oral COVID-19 treatment program.

2022 Form 10-K 34

Acquired In-Process Research and Development Expenses

Acquired in-process research and development expenses decreased $2.5 billion largely due to:

• a charge of $2.1 billion related to our asset acquisition of Trillium in 2021;

• an upfront payment to Arvinas and a premium paid on our equity investment in Arvinas totaling $706 million in 2021,

partially offset by:

• a net reduction of upfront and milestone payments associated with the acquisition of Therachon and Akcea in 2019.

• acquired IPR&D incurred in 2022, including $426 million related to our asset acquisition of ReViral in 2022.

Acquired in-process research and development expenses increased $2.8 billion mainly due to:

• a $2.1 billion charge related to our asset acquisition of Trillium;

• a net increase in charges of $602 million for upfront and milestone payments on collaboration and licensing arrangements, driven by payments to Arvinas and Beam.

See Note s 2A , 2D and 2 E for additional information.

Amortization of Intangible Assets

Amortization of intangible assets increased $353 million, primarily due to amortization of capitalized Comirnaty sales milestones to BioNTech.

Amortization of intangible assets decreased $1.1 billion, mainly due the non-recurrence of amortization of fully amortized assets and the impairment of Eucrisa in the fourth quarter of 2019, partially offset by the increase in amortization of intangible assets from our acquisition of Array.

For additional information, see Notes 2A and 10A .

Amortization of intangible assets decreased $91 million, primarily due to lower amortization of Comirnaty sales milestones to BioNTech, as well as lower amortization of intangible assets related to Prevnar and fully amortized assets, partially offset by amortization of intangible assets from our acquisitions of Biohaven and GBT.

See Notes 2A and 10A for additional information.

Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives

Transforming to a More Focused Company Program

For a description of our program, as well as the anticipated and actual costs, see Note 3.

Transforming to a More Focused Company Program –– For a description of our program and actual costs, see Note 3 .

The program savings discussed below may be rounded and represent approximations.

In connection with restructuring our corporate enabling functions, we expect gross cost savings of $1.0 billion, or net cost savings, excluding merit and inflation growth and certain real estate cost increases, of $700 million, to be achieved primarily from 2021 through 2022.

In connection with transforming our marketing strategy, we expect net cost savings of $1.3 billion, to be achieved primarily from

2021 Form 10-K 37

2022 through 2024.

In connection with restructuring our corporate enabling functions, we achieved gross cost savings of $1.0 billion, or net cost savings, excluding merit and inflation growth and certain real estate cost increases, of $700 million, in the two year period from 2021 through 2022.

In connection with transforming our commercial go-to market strategy, we expect net cost savings of $1.4 billion, to be achieved primarily from 2022 through 2024.

In connection with manufacturing network optimization, we expect net cost savings of $550 million to be achieved primarily from 2020 through 2023.

Certain qualifying costs for this program were recorded in 2021 and 2020, and in the fourth quarter of 2019, and are reflected as Certain Significant Items and excluded from our non-GAAP measure of Adjusted Income.

In connection with optimizing our end-to-end R&D operations, we expect net cost savings of $2.3 billion to be achieved primarily from 2023 through 2025.

Certain qualifying costs for this program were recorded in 2022, 2021 and 2020, and are reflected as Certain Significant Items and excluded from our non-GAAP measure of Adjusted Income.

See the Non-GAAP Financial Measure:

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Other (Income)/Deductions––Net

Other income—net increased $6.1 billion, mainly due to:

• net periodic benefit credits recorded in 2021 versus net periodic benefit costs recorded in 2020;

• lower asset impairment charges;

• higher net gains on equity securities;

• net gains on asset disposals in 2021 versus net losses in 2020.

Other deductions—net decreased $2.3 billion, mainly due to:

• lower asset impairment charges;

• lower business and legal entity alignment costs;

• higher Consumer Healthcare JV equity method income;

• lower charges for certain legal matters;

• higher income from collaborations, out-licensing arrangements and sales of compound/product rights,

partially offset by:

• higher net losses on asset disposals.

The period-over-period change of $5.1 billion resulting in net other deductions in 2022 compared to net other income in 2021 was primarily driven by net losses recognized on equity securities in 2022 versus net gains recognized in 2021, lower net periodic benefit credits, and higher asset impairment charges.

See Note 4 for additional information .

5 unchanged sentences

9.6 % 7.6 % 5.3 %

* Indicates calculation not meaningful or result is equal to or greater than 100%.

* Indicates calculation not meaningful.

For information about our effective tax rate and the events and circumstances contributing to the changes between periods, as well as details about discrete elements that impacted our tax provisions, see Note 5 .

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PRODUCT DEVELOPMENTS

A comprehensive update of Pfizer’s development pipeline was published as of February 8, 2022 and is available at www.pfizer.com/science/drug-product-pipeline.

A comprehensive update of Pfizer’s development pipeline was published as of January 31, 2023 and is available at www.pfizer.com/science/drug-product-pipeline.

It includes an overview of our research and a list of compounds in development with targeted indication and phase of development, as well as mechanism of action for some candidates in Phase 1 and all candidates from Phase 2 through registration.

The following provides information about significant marketing application-related regulatory actions by, and filings pending with, the FDA and regulatory authorities in the EU and Japan.

The table below includes only approvals for products that have occurred in the last twelve months and does not include approvals that may have occurred prior to that time.

The table includes filings with regulatory decisions pending (even if the filing occurred outside of the last twelve-month period).

2022 Form 10-K 35

PRODUCT DISEASE AREA APPROVED/FILED*

Comirnaty/BNT162b2

(PF-07302048) (a)

Immunization to prevent COVID-19 (16 years of age and older) BLA

Immunization to prevent COVID-19 (12-15 years of age)

Immunization to prevent COVID-19 (booster)

Immunization to prevent COVID-19 (5-11 years of age) EUA

(avelumab) (b)

First-line maintenance urothelial cancer

(enzalutamide) (c)

(abrocitinib) Atopic dermatitis Approved

(tofacitinib) Ankylosing spondylitis Approved

(relugolix fixed dose combination) (d)

Uterine fibroids (combination with estradiol and norethindrone acetate)

Endometriosis (combination with estradiol and norethindrone acetate)

Lorbrena/Lorviqua

First-line ALK-positive NSCLC

(somatrogon) (e)

The tables below include filing and approval milestones for products that have occurred in the last twelve months and generally do not include approvals that may have occurred prior to that time.

The tables include filings with regulatory decisions pending (even if the filing occurred outside of the last twelve-month period).

COVID-19 Vaccine Products

PATIENT POPULATION AND DATE OF APPROVAL/FILING (a)

COVID-19 VACCINE PRODUCT (b)

PRIMARY SERIES

OR BOOSTER 16 Years of age and older 12-15 Years of age 5-11 Years of age 6 Months through 4 Years of age

EU JAPAN U.S.

30-µg 2-dose primary (c)

10-µg 2-dose primary (d)

3-µg 3-dose primary

Primary Approved

30-µg booster dose (e)

10-µg booster dose

Booster EUA (f)

Comirnaty Original/Omicron BA.4/BA.5 Vaccine (g)

Booster 30-µg booster dose 10-µg booster dose 3-µg booster dose

Comirnaty Original/Omicron BA.1 Vaccine Booster 30-µg booster dose

(a) All EU approvals prior to October 10, 2022 were under the CMA, and later converted to full Marketing Authorization as of October 10, 2022.

Dates shown in table reflect original CMA date.

(b) All COVID-19 vaccine products listed in this table are being developed in collaboration with BioNTech.

(c) FDA has authorized a third 30-µg primary series dose to individuals 12 years of age and older with certain kinds of immunocompromise.

(d) FDA has authorized a third 10-µg primary series dose to individuals 5-11 years of age with certain kinds of immunocompromise.

(e) FDA has authorized a second booster dose in adults ages 50 years and older who have previously received a first booster of any authorized COVID-19 vaccine.

The FDA also has authorized a second booster dose for individuals 12 years of age and older who have been determined to have certain kinds of immunocompromise and who have received a first booster dose of any authorized COVID-19 vaccine.

(f) Comirnaty wild-type booster in these populations has been replaced by the booster of the Pfizer-BioNTech COVID-19 Vaccine, Bivalent (Original and Omicron BA.4/BA.5).

(g) Refers to the Pfizer-BioNTech COVID-19 Vaccine, Bivalent (Original and Omicron BA.4/BA.5) and Comirnaty Original/Omicron BA.4/BA.5 Vaccine.

(h) The third dose of the primary series 6 months through 4 years of age in the U.S.

has been replaced by the 3-µg booster of the Pfizer-BioNTech COVID-19 Vaccine, Bivalent (Original and Omicron BA.4/BA.5).

2022 Form 10-K 36

Other Products

PRODUCT INDICATION OR PROPOSED INDICATION APPROVED/FILED*

(relugolix, estradiol, and norethindrone acetate) (a)

Heavy menstrual bleeding associated with uterine fibroids

Moderate to severe pain associated with endometriosis

(somatrogon) (b)

Pediatric growth hormone deficiency

Prevnar 20/Apexxnar

(Vaccine) (f)

Immunization to prevent invasive and non-invasive pneumococcal infections (adults)

(Vaccine) Immunization to prevent tick-borne encephalitis Approved

Paxlovid (g) (nirmatrelvir [PF-07321332];

COVID-19 infection (high risk population) EUA

Rimegepant (h)

Acute migraine Filed

Migraine prevention Filed

(Vaccine) (c)

Active immunization to prevent invasive disease caused by Streptococcus pneumoniae serotypes (adults)

(Vaccine) Active immunization to prevent tick-borne encephalitis disease Approved

Paxlovid (d) (nirmatrelvir [PF-07321332];

COVID-19 in high-risk adults and children (12-18 years of age;

Nurtec ODT/Vydura

Acute treatment of migraine with or without aura (adults) Approved Feb.

Prevention of episodic migraine (adults) Approved May

ritlecitinib (PF-06651600) Alopecia areata Filed

(intranasal) Acute treatment of migraine Filed

(Vaccine) Active immunization to prevent serogroups ABCWY meningococcal infections (adolescent and young adults) Filed

(Vaccine) Active immunization to prevent respiratory syncytial virus infection (maternal) Filed

Active immunization to prevent respiratory syncytial virus infection (older adults) Filed

etrasimod Ulcerative colitis (moderately to severely active) Filed

(Vaccine) Active immunization to prevent invasive and non-invasive pneumococcal infections (pediatric) Filed

elranatamab (PF-06863135) Multiple myeloma triple-class refractory

* For the U.S., the filing date is the date on which the FDA accepted our submission.

For the EU, the filing date is the date on which the EMA validated our submission.

(a) Being developed in collaboration with BioNTech.

Prior to BLA, Comirnaty/BNT162b2 for ages 16 and up was available in the U.S.

pursuant to an EUA from the FDA on December 11, 2020.

In December 2021, a supplemental BLA was submitted to the FDA requesting to expand the approval of Comirnaty to include individuals ages 12 through 15 years.

In February 2022, following a request from the FDA, a rolling submission seeking to amend the EUA to include children 6 months through 4 years of age (6 months to <5 years of age) was initiated as we wait for data evaluating a third 3 µg dose given at least two months after the second dose of the two-dose series in this age group.

A booster dose received EUA from the FDA on September 22, 2021 for individuals 65 years of age and older, individuals 18 through 64 years of age at high risk of severe COVID-19, and individuals 18 through 64 years of age with frequent institutional or occupational exposure to SARS-CoV-2.

In addition, in October 2021, the FDA authorized for emergency use a booster dose to eligible individuals who have completed primary vaccination with a different authorized COVID-19 vaccine.

Subsequently, the FDA expanded the booster EUA:

(i) in November 2021 to include individuals 18 years of age and older, (ii) in December 2021 to include individuals 16 years of age and older and (iii) in January 2022 to include individuals 12 years of age and older as well as individuals 5 through 11 years of age who have been determined to have certain kinds of immunocompromise.

A booster dose received conditional marketing authorization from the EMA in October 2021 for individuals 18 years of age and older and may be given to individuals 5 years and older with a severely weakened immune system, at least 28 days after their second dose.

A booster dose received approval in Japan in November 2021 for 18 years of age and older.

(b) Being developed in collaboration with Merck KGaA, Germany.

(d) Being developed in collaboration with Myovant.

(e) Being developed in collaboration with OPKO.

In January 2022, Pfizer and OPKO received a Complete Response Letter (CRL) from the FDA for the BLA for somatrogon.

Pfizer is evaluating the CRL and will work with the FDA to determine an appropriate path forward in the U.S.

(f) In October 2021, the CDC’s ACIP voted to recommend Prevnar 20 for routine use in adults.

Specifically, the ACIP voted to recommend the following:

(i) adults 65 years of age or older who have not previously received a pneumococcal conjugate vaccine or whose previous vaccination history is unknown should receive a pneumococcal conjugate vaccine (either pneumococcal 20-valent conjugate vaccine (PCV20) or pneumococcal 15-valent conjugate vaccine (PCV15)).

If PCV15 is used, this should be followed by a dose of pneumococcal polysaccharide vaccine (PPSV23);

and (ii) adults aged 19 years of age or older with certain underlying medical conditions or other risk factors who have not previously received a pneumococcal conjugate vaccine or whose previous vaccination history is unknown should receive a pneumococcal conjugate vaccine (either PCV20 or PCV15).

If PCV15 is used, this should be followed by a dose of PPSV23.

2021 Form 10-K 39

recommendations were published in the Morbidity and Mortality Weekly Report on January 28, 2022.

The publication also notes “for adults who have received pneumococcal conjugate vaccine (PCV13) but have not completed their recommended pneumococcal vaccine series with PPSV23, one dose of Prevnar 20 may be used if PPSV23 is not available.”

(g) In December 2021, the FDA authorized the emergency use of Paxlovid for the treatment of mild-to-moderate COVID-19 in adults and pediatric patients (12 years of age and older weighing at least 40 kg [88 lbs]) with positive results of direct SARS-CoV-2 viral testing, and who are at high risk for progression to severe COVID-19, including hospitalization or death.

In January 2022, the EMA approved the CMA of Paxlovid for treating COVID-19 in adults who do not require supplemental oxygen and who are at increased risk of the disease becoming severe.

(h) Under a commercialization arrangement with Biohaven.

In September 2021, the FDA issued a Drug Safety Communication (DSC) related to Xeljanz/Xeljanz XR and two competitors’ arthritis medicines in the same drug class, based on its completed review of the ORAL Surveillance trial.

The DSC stated that the FDA will require revisions to the Boxed Warnings for each of these medicines to include information about the risks of serious heart-related events, cancer, blood clots, and death.

In addition, the DSC indicated the FDA’s intention to limit approved uses of these products to certain patients who have not responded or cannot tolerate one or more tumor necrosis factor (TNF) blockers.

(a) Being developed in collaboration with Myovant.

In January 2023, the FDA approved the sNDA to include data from the Randomized Withdrawal Study into section 14 of the label.

(b) Being developed in collaboration with OPKO.

(c) In October 2022, the CDC’s ACIP voted to recommend a single dose of Prevnar 20 to help protect adults previously vaccinated with Prevnar 13 or both Prevnar 13 and PPSV23 against invasive disease and pneumonia caused by the 20 Streptococcus pneumoniae serotypes in Prevnar 20.

(d) In June 2022, we announced the submission of an NDA to the FDA for approval of Paxlovid for the treatment of COVID-19 in both vaccinated and unvaccinated individuals who are at high risk for progression to severe illness from COVID-19.

In December 2022, Pfizer announced the FDA has extended the review period for the NDA for Paxlovid.

At the request of the FDA, Pfizer recently submitted additional analyses of efficacy and safety data from the pivotal Evaluation of Protease Inhibition for COVID-19 in High-Risk Patients and supportive Evaluation of Protease Inhibition for COVID-19 in Standard-Risk Patients trials to be considered as part of its NDA for Paxlovid.

Results from these analyses are consistent with previously disclosed efficacy and safety data for the trials.

In order to allow time for a full review of the application, including the additional data analyses submitted, the FDA has extended the Prescription Drug User Fee Act goal date by three months to May 2023.

In December 2021, in light of the results from the completed required postmarketing safety study of Xeljanz, ORAL Surveillance (A3921133), the U.S.

label for Xeljanz was revised.

In addition, at the request of the EC, the PRAC of the EMA has adopted a referral procedure under Article 20 of Regulation (EC) No 726/2004 to assess safety information relating to oral JAK inhibitors authorized for inflammatory diseases, including Xeljanz and Cibinqo, which is ongoing.

In addition, in November 2022, the EMA concluded their assessment of JAK inhibitors authorized for inflammatory diseases in the EU, including Xeljanz and Cibinqo, and recommended that risk minimization measures, including special warnings and precautions for use, should be revised and harmonized for all such JAK inhibitors.

The resulting label changes are expected to be finalized in the first quarter of 2023.

We continue to work with regulatory agencies worldwide to review the full results and analyses of ORAL Surveillance and their impact on product labeling.

For additional information, see Item 1A.

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In China, the following products received regulatory approvals in the last twelve months:

Cresemba for fungal infection and Besponsa for second line acute lymphoblastic leukemia, both in December 2021.

Paxlovid for COVID-19 infection in February 2022;

Cibinqo for atopic dermatitis in April 2022;

Lorbrena for non-small cell lung cancer (first line and second line therapy) in April 2022;

Xeljanz for ankylosing spondylitis in April 2022;

Cresemba (IV formulation) for the treatment of adult patients with invasive aspergillosis and invasive mucormycosis in June 2022;

and Xeljanz for the treatment of adult patients with active psoriatic arthritis in October 2022.

2022 Form 10-K 37

The following provides information about additional indications and new drug candidates in late-stage development:

PRODUCT/CANDIDATE PROPOSED DISEASE AREA

PRODUCT/CANDIDATE PROPOSED INDICATION

LATE-STAGE CLINICAL PROGRAMS FOR ADDITIONAL USES AND DOSAGE FORMS FOR IN-LINE AND IN-REGISTRATION PRODUCTS

10 unchanged sentences

First-line BRAF V600E -mutant mCRC

(relugolix fixed dose combination) (e)

Combination with estradiol and norethindrone acetate for contraceptive efficacy

Braftovi (encorafenib) and Mektovi (binimetinib) and Keytruda ® (pembrolizumab) (f)

BRAF v600E -mutant metastatic or unresectable locally advanced melanoma

Comirnaty / BNT162b2

(PF-07302048) (g)

Immunization to prevent COVID-19 (children 2 to <5 years of age)

Immunization to prevent COVID-19 (infants 6 months to <24 months)

Braftovi (encorafenib) and Mektovi (binimetinib) and Keytruda ® (pembrolizumab) (e)

BRAF V600E/K -mutant metastatic or unresectable locally advanced melanoma

Braftovi (encorafenib) and Mektovi (binimetinib) BRAF V600E -mutant non-small cell lung cancer

Paxlovid (nirmatrelvir [PF-07321332];

COVID-19 Infection (standard risk population)

COVID-19 Infection ( post exposure prophylaxis)

ritonavir) COVID-19 in high-risk children (6-11 years of age;

zavegepant (oral) Prevention of acute migraine (adults)

ritlecitinib (PF-06651600) Vitiligo

elranatamab (PF-06863135) Multiple myeloma double-class exposed

Newly diagnosed multiple myeloma post-transplant maintenance

Eliquis (apixaban) Venous thromboembolism (pediatric)

NEW DRUG CANDIDATES IN LATE-STAGE DEVELOPMENT aztreonam-avibactam

(PF-06947387) Treatment of infections caused by Gram-negative bacteria

fidanacogene elaparvovec (PF-06838435) (h)

(PF-06947387) Treatment of infections caused by Gram-negative bacteria with limited or no treatment options

fidanacogene elaparvovec (PF-06838435) (f)

giroctocogene fitelparvovec

(PF-07055480) (i)

(PF-07055480) (g)

PF-06425090 (Vaccine) Immunization to prevent primary clostridioides difficile infection

PF-06886992 (Vaccine) Immunization to prevent serogroups meningococcal infection (adolescent and young adults)

PF-06928316 (Vaccine) Immunization to prevent respiratory syncytial virus infection (maternal)

Immunization to prevent respiratory syncytial virus infection (older adults)

PF-07265803 Dilated cardiomyopathy due to Lamin A/C gene mutation

ritlecitinib (PF-06651600) Alopecia areata

sasanlimab (PF-06801591) Combination with Bacillus Calmette-Guerin for non-muscle-invasive bladder cancer

fordadistrogene movaparvovec (PF-06939926) Duchenne muscular dystrophy

fordadistrogene movaparvovec (PF-06939926) Duchenne muscular dystrophy (ambulatory)

marstacimab (PF-06741086) Hemophilia

elranatamab (PF-06863135) Multiple myeloma, double-class exposed

Omicron-based mRNA vaccine (g)

Omicron-based mRNA vaccine (h)

Immunization to prevent COVID-19 (adults)

VLA15 (PF-07307405) vaccine (i)

Immunization to prevent Lyme Disease

PF-07252220 (quadrivalent mRNA-based vaccine) Immunization to prevent influenza

inclacumab (PF-07940370) Sickle Cell Disease

(a) Being developed in collaboration with The Alliance Foundation Trials, LLC.

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In the EU, we are developing in collaboration with the Pierre Fabre Group.

In Japan, we are developing in collaboration with Ono Pharmaceutical Co., Ltd.

(e) Being developed in collaboration with Myovant.

(f) Keytruda ® is a registered trademark of Merck Sharp & Dohme Corp.

(g) Being developed in collaboration with BioNTech.

2021 Form 10-K 40

(h) Being developed in collaboration with Spark Therapeutics, Inc.

(i) Being developed in collaboration with Sangamo Therapeutics, Inc.

In February 2022, Pfizer and Merck KGaA, Darmstadt, Germany (Merck KGaA) provided an update on the Phase 3 JAVELIN Lung 100 trial, which assessed the safety and efficacy of two dosing regimens of avelumab monotherapy compared with platinum-based doublet chemotherapy as first-line treatment in patients with metastatic NSCLC whose tumors express PD-L1.

While avelumab showed clinical activity in this population, the study did not meet the primary endpoints of overall survival and progression-free survival in the high PD-L1+population for either of the avelumab dosing regimens evaluated.

The safety profile for avelumab in this trial was consistent with that observed in the overall JAVELIN clinical development program.

Avelumab is not approved for the treatment of any patients with NSCLC.

The outcome of the JAVELIN Lung 100 trial has no bearing on any of avelumab’s currently-approved indications.

Full results of the study will be shared at a future date.

In the fourth quarter of 2021, enrollment was stopped in C4591015 Study (a Phase 2/3 placebo controlled randomized observer-blind study to evaluate the safety, tolerability, and immunogenicity of BNT162b2 against COVID-19 in healthy pregnant women 18 years of age and older).

This study was developed prior to availability or recommendation for COVID-19 vaccination in pregnant women.

The environment changed during 2021 and by September 2021, COVID-19 vaccines were recommended by applicable recommending bodies (e.g., ACIP in the U.S.) for pregnant women in all participating/planned countries, and as a result the enrollment rate declined significantly.

With the declining enrollment, the study had insufficient sample size to assess the primary immunogenicity objective and continuation of this placebo controlled study could no longer be justified due to global recommendations.

This proposal was shared with and agreed to by FDA and EMA.

In Japan, we are developing in collaboration with Ono.

(e) Keytruda ® is a registered trademark of Merck Sharp & Dohme Corp.

In the EU, we are developing in collaboration with the Pierre Fabre Group.

In Japan, we are developing in collaboration with Ono.

(f) Being developed in collaboration with Spark Therapeutics, Inc.

(g) Being developed in collaboration with Sangamo Therapeutics, Inc.

(h) Being developed in collaboration with BioNTech.

(i) Being developed in collaboration with Valneva.

For additional information about our R&D organization, see the Item 1.

Business — Research and Development section of this Form 10-K.

Business — Research and Development section in this Form 10-K.

2022 Form 10-K 38

NON-GAAP FINANCIAL MEASURE:

ADJUSTED INCOME

Adjusted income is an alternative measure of performance used by management to evaluate our overall performance in conjunction with other performance measures.

Adjusted income is an alternative measure of performance used by management to evaluate our overall performance as a supplement to our GAAP Reported performance measures.

As such, we believe that investors’ understanding of our performance is enhanced by disclosing this measure.

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common shareholders (a)

before the impact of purchase accounting for acquisitions, acquisition-related items, discontinued operations and certain significant items

before the impact of amortization of intangible assets, certain acquisition-related items, discontinued operations and certain significant items

• Provides investors useful information to:

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• Provides investors insight into the way we manage our budgeting and forecasting, how we evaluate and manage our recurring operations and how we reward and compensate our senior management (b)

Adjusted cost of sales, Adjusted selling, informational and administrative expenses, Adjusted research and development expenses, Adjusted amortization of intangible assets and Adjusted other (income)/deductions –– net

Cost of sales, Selling, informational and administrative expenses, Research and development expenses, Amortization of intangible assets an d Other (income)/deductions––net (a) , each before the impact of purchase accounting for acquisitions, acquisition-related items, discontinued operations and certain significant items, which are components of the Adjusted income measure

Adjusted cost of sales, Adjusted selling, informational and administrative expenses, Adjusted research and development expenses and Adjusted other (income)/deductions –– net

Cost of sales, Selling, informational and administrative expenses, Research and development expenses and Other (income)/deductions––net (a) , each before the impact of amortization of intangible assets, certain acquisition-related items, discontinued operations and certain significant items, which are components of the Adjusted income measure

Adjusted diluted EPS EPS attributable to Pfizer Inc.

common shareholders––diluted (a) before the impact of purchase accounting for acquisitions, acquisition-related items, discontinued operations and certain significant items

common shareholders––diluted (a) before the impact of amortization of intangible assets, certain acquisition-related items, discontinued operations and certain significant items

(a) Most directly comparable GAAP measure.

(b) The short-term incentive plans for substantially all non-sales-force employees worldwide are funded from a pool based on our performance, measured in significant part by three metrics, one of which is Adjusted diluted EPS, which is derived from Adjusted income and accounts for 40% of the bonus pool funding tied to financial performance.

(b) The short-term incentive plans for substantially all non-sales-force employees worldwide are funded from a pool based on our performance, measured in significant part versus three budgeted metrics, one of which is Adjusted diluted EPS (as defined for annual incentive compensation purposes), which is derived from Adjusted income and accounts for 40% of the bonus pool funding tied to financial performance.

Additionally, the payout for performance share awards is determined in part by Adjusted net income, which is derived from Adjusted income.

The bonus pool funding, which is largely based on financial performance, may be modified by our R&D performance as measured by four metrics relating to our pipeline and may be further modified by our Compensation Committee’s assessment of other factors.

Beginning in the first quarter of 2022, we no longer exclude any expenses for acquired IPR&D from our non-GAAP Adjusted results but we continue to exclude certain of these expenses for our financial results for annual incentive compensation purposes.

The bonus pool funding, which is largely based on financial performance, is adjusted by our R&D pipeline performance, as measured by four metrics, and performance against certain of our ESG metrics, and may be further modified by our Compensation Committee’s assessment of other factors.

Adjusted income and its components and Adjusted diluted EPS are non-GAAP financial measures that have no standardized meaning prescribed by GAAP and, therefore, are limited in their usefulness to investors.

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A limitation of these measures is that they provide a view of our operations without including all events during a period, and do not provide a comparable view of our performance to peers.

These measures are not, and should not be viewed as, substitutes for their directly comparable GAAP measures of Net income attributable to Pfizer Inc.

These measures are not, and should not be viewed as, substitutes for their most directly comparable GAAP measures of Net income attributable to Pfizer Inc.

common shareholders , components of Net income attributable to Pfizer Inc.

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common shareholders—diluted , respectively.

See the accompanying reconciliations of certain GAAP reported to non-GAAP adjusted information—certain line items for 2021, 2020 and 2019 below.

We also recognize that, as internal measures of performance, these measures have limitations, and we do not restrict our performance-management process solely to these measures.

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In addition, total shareholder return, both on an absolute basis and relative to a publicly traded pharmaceutical index, plays a significant role in determining payouts under certain of our incentive compensation plans.

Beginning in the first quarter of 2022, our reconciliation of certain GAAP Reported to non-GAAP Adjusted information is updated to reflect the following, and prior-period information has been revised to conform to the current period presentation:

Adjusted Income and Adjusted Diluted EPS

Acquired IPR&D —Non-GAAP Adjusted financial measures include expenses for all acquired IPR&D costs incurred in connection with upfront and milestone payments on collaboration and in-license agreements, including premiums on equity securities, as well as asset acquisitions of acquired IPR&D.

Previously, certain of these items were excluded from our non-GAAP Adjusted results.

Acquired IPR&D expenses that previously would have been excluded from non-GAAP Adjusted income but are now included in both GAAP Reported income and non-GAAP Adjusted income were approximately:

(i) $765 million pre-tax ($665 million, net of tax), or $0.12 per share, in 2022;

(ii) $3.3 billion pre-tax ($2.6 billion, net of tax), or $0.45 per share, in 2021;

and (iii) $504 million pre-tax ($397 million, net of tax), or $0.07 per share, in 2020.

Amortization of Intangible Assets —We began excluding all amortization of intangibles from non-GAAP Adjusted income, compared to excluding only amortization of intangibles related to large mergers or acquisitions under the prior methodology, and presenting it as a separate reconciling line.

Previously, the adjustment under the prior methodology was included as part of a reconciling line entitled “Purchase accounting adjustments” that we no longer separately present.

The impact of this policy change resulted in benefits on Adjusted diluted EPS of $0.06 in 2022, $0.09 in 2021 and $0.05 in 2020.

Acquisition-Related Items –– Adjusted income continues to exclude certain acquisition-related items, which are comprised of transaction, integration, restructuring charges and additional depreciation costs for business combinations because these costs are unique to each

2022 Form 10-K 39

Purchase Accounting Adjustments

Adjusted income excludes certain significant purchase accounting impacts resulting from business combinations and net asset acquisitions.

These impacts can include the incremental charge to cost of sales from the sale of acquired inventory that was written up to fair value, amortization related to the increase in fair value of the acquired finite-lived intangible assets, and to a much lesser extent, depreciation related to the increase/decrease in fair value of the acquired fixed assets, amortization related to the increase in fair value of acquired debt, and the fair value changes for contingent consideration.

Therefore, the Adjusted income measure includes the revenues earned upon the sale of the acquired products without considering the acquisition cost of those products.

The exclusion of amortization attributable to acquired intangible assets provides management and investors an alternative view of our results by providing a degree of parity to internally developed intangible assets for which R&D costs have been expensed.

However, we have not factored in the impacts of any other differences that might have occurred if we had discovered and developed those intangible assets on our own, such as different R&D costs, timelines or resulting sales;

accordingly, this approach does not intend to be representative of the results that would have occurred if we had discovered and developed the acquired intangible assets internally.

Acquisition-Related Items

Adjusted income excludes acquisition-related items, which are comprised of transaction, integration, restructuring charges and additional depreciation costs for business combinations because these costs are unique to each transaction and represent costs that were incurred to restructure and integrate businesses as a result of an acquisition.

transaction and represent costs that were incurred to restructure and integrate businesses as a result of an acquisition.

We have made no adjustments for resulting synergies.

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Because of the need for certain external approvals for some actions, the span of time needed to achieve certain restructuring and integration activities can be lengthy.

Discontinued Operations

Adjusted income excludes the results of discontinued operations, as well as any related gains or losses on the disposal of such operations.

We believe that this presentation is meaningful to investors because, while we review our therapeutic areas and product lines for strategic fit with our operations, we do not build or run our business with the intent to discontinue parts of our business.

Acquisition-related items may now include purchase accounting impacts that previously would have been included as part of a reconciling line entitled “Purchase accounting adjustments” that we no longer separately present, such as:

(i) the incremental charge to cost of sales from the sale of acquired inventory that was written up to fair value;

(ii) depreciation related to the increase/decrease in fair value of acquired fixed assets;

(iii) amortization related to the increase in fair value of acquired debt and (iv) the fair value changes for contingent consideration.

Discontinued Operations –– Adjusted income continues to exclude the results of discontinued operations, as well as any related gains or losses on the disposal of such operations.

We believe that this presentation is meaningful to investors because, while we review our product portfolio for strategic fit with our operations, we do not build or run our business with the intent to discontinue parts of our business.

Restatements due to discontinued operations do not impact compensation or change the Adjusted income measure for the compensation in respect of the restated periods, but are presented for consistency across all periods.

Certain Significant Items

Adjusted income excludes certain significant items representing substantive and/or unusual items that are evaluated individually on a quantitative and qualitative basis.

Certain Significant Items –– Adjusted income continues to exclude certain significant items representing substantive and/or unusual items that are evaluated individually on a quantitative and qualitative basis.

Certain significant items may be highly variable and difficult to predict.

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For example, although major non-acquisition-related cost-reduction programs are specific to an event or goal with a defined term, we may have subsequent programs based on reorganizations of the business, cost productivity or in response to LOE or economic conditions.

Legal charges to resolve litigation are also related to specific cases, which are facts and circumstances specific and, in some cases, may also be the result of litigation matters at acquired companies that were inestimable, not probable or unresolved at the date of acquisition.

Gains and losses on equity securities have a very high degree of inherent market volatility, which we do not control and cannot predict with any level of certainty and because we do not believe including these gains and losses assists investors in understanding our business or is reflective of our core operations and business.

Gains and losses on equity securities, and pension and postretirement actuarial remeasurement gains and losses have a very high degree of inherent market volatility, which we do not control and cannot predict with any level of certainty and because we do not believe including these gains and losses assists investors in understanding our business or is reflective of our core operations and business.

Unusual items represent items that are not part of our ongoing business;

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See the Reconciliations of GAAP Reported to Non-GAAP Adjusted Information––Certain Line Items below for a non-inclusive list of certain significant items.

Beginning in 2021, we exclude pension and postretirement actuarial remeasurement gains and losses from our measure of Adjusted income because of their inherent market volatility, which we do not control and cannot predict with any level of certainty and because we do not believe including these gains and losses assists investors in understanding our business or is reflective of our core operations and business.

2021 Form 10-K 42

Reconciliations of GAAP Reported to Non-GAAP Adjusted Information––Certain Line Items

Year Ended December 31, 2022

Data presented will not (in all cases) aggregate to totals.

IN MILLIONS, EXCEPT PER COMMON SHARE DATA

Cost of sales Selling, informational and administrative expenses Research and development expenses Amortization of intangible assets Other (income)/deductions––net Net income attributable to Pfizer Inc.

common shareholders (a)

MILLIONS, EXCEPT PER SHARE DATA

Cost of sales (a)

Selling, informational and administrative expenses (a)

Other (income)/deductions––net (a)

Net income attributable to Pfizer Inc.

common shareholders (a), (b), (c)

Earnings per common share attributable to Pfizer Inc.

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GAAP Reported $ 34,344 $ 13,677 $ 217 $ 31,372 $ 5.47

Purchase accounting adjustments (b)

25 (3) 6 (3,088) (114) 3,175

Amortization of intangible assets — — — 3,609

Acquisition-related items (119) (7) (74) 832

Discontinued operations (c)

— — — — — 585

Discontinued operations (d)

Certain significant items:

Restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring (d)

(108) (450) (1) — — 1,309

Certain asset impairments (e)

— — — — (86) 86

Upfront and milestone payments on collaborative and licensing arrangements (f)

— — (1,056) — — 1,056

(Gains)/losses on equity securities (g)

Restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring (e)

(88) (562) — 1,396

Actuarial valuation and other pension and postretirement plan (gains)/losses (g)

Certain asset impairments (f)

— — (421) 421

Asset acquisitions of IPR&D (h)

(Gains)/losses on equity securities (f)

— — (1,270) 1,270

Other (52) (141) (15) — (334) (i)

Actuarial valuation and other pension and postretirement plan (gains)/losses — — 230 (230)

Other (40) (59) (636) (g)

Income tax provision—Non-GAAP items (1,683)

Non-GAAP Adjusted $ 34,096 $ 13,049 $ (1,954) $ 37,717 $ 6.58

2022 Form 10-K 40

Year Ended December 31, 2021

Data presented will not (in all cases) aggregate to totals.

IN MILLIONS, EXCEPT PER COMMON SHARE DATA

common shareholders (a)

MILLIONS, EXCEPT PER SHARE DATA

Cost of sales (a)

Selling, informational and administrative expenses (a)

Other (income)/deductions––net (a)

Net income attributable to Pfizer Inc.

common shareholders (a), (b)

Earnings per common share attributable to Pfizer Inc.

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GAAP Reported $ 30,821 $ 12,703 $ (4,878) $ 21,979 $ 3.85

Purchase accounting adjustments (b)

18 (2) 5 (3,064) (75) 3,117

Amortization of intangible assets — (38) (2) 3,746

Acquisition-related items 25 (3) (114) 139

Discontinued operations (c)

— — — — — (2,879)

Discontinued operations (d)

Certain significant items:

Restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring (d)

(61) (197) 2 — — 791

Certain asset impairments (e)

— — — — (1,691) 1,691

Upfront and milestone payments on collaborative and licensing arrangements (f)

— — (454) — — 454

(Gains)/losses on equity securities (g)

— — — — 557 (557)

Actuarial valuation and other pension and postretirement plan (gains)/losses (g)

Restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring (e)

(108) (450) — 1,309

Asset acquisitions of IPR&D (h)

Certain asset impairments — — (86) 86

(Gains)/losses on equity securities (f)

— — 1,338 (1,338)

Other (56) (292) (j)

(24) — (697) (i)

Actuarial valuation and other pension and postretirement plan (gains)/losses — — 1,601 (1,601)

Other (52) (141) (h)

Income tax provision—Non-GAAP items (2,250)

Non-GAAP Adjusted $ 30,685 $ 12,071 $ (2,475) $ 23,196 $ 4.06

2021 Form 10-K 43

Year Ended December 31, 2020

Data presented will not (in all cases) aggregate to totals.

IN MILLIONS, EXCEPT PER COMMON SHARE DATA

common shareholders (a)

MILLIONS, EXCEPT PER SHARE DATA

Cost of sales (a)

Selling, informational and administrative expenses (a)

Other (income)/deductions––net (a)

Net income attributable to Pfizer Inc.

common shareholders (a), (b)

Earnings per common share attributable to Pfizer Inc.

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GAAP Reported $ 8,484 $ 11,597 $ 1,213 $ 9,159 $ 1.63

Purchase accounting adjustments (b)

19 2 4 (4,158) (21) 4,153

Amortization of intangible assets — (38) (3) 3,395

Acquisition-related items 18 (1) (75) 98

Discontinued operations (c)

Discontinued operations (d)

— — — (2,879)

Certain significant items:

Restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring (d)

(89) (73) (30) — — 611

Certain asset impairments (e)

— — — — (2,757) 2,757

Upfront and milestone payments on collaborative and licensing arrangements (f)

— — (279) — — 279

(Gains)/losses on equity securities (g)

Restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring (e)

(61) (197) — 791

Actuarial valuation and other pension and postretirement plan (gains)/losses (g)

Certain asset impairments (f)

— — (1,691) 1,691

(Gain) on completion of Consumer Healthcare JV transaction — — — — — (8,107)

Asset acquisitions of IPR&D (h)

(Gains)/losses on equity securities (f)

— — 557 (557)

Other (118) (190) (18) — (1,007) (i)

Actuarial valuation and other pension and postretirement plan (gains)/losses — — (1,092) 1,092

Other (56) (292) (h)

Income tax provision—Non-GAAP items (1,251)

Non-GAAP Adjusted $ 8,386 $ 11,068 $ (1,781) $ 12,601 $ 2.24

(a) Items that reconcile GAAP Reported to Non-GAAP Adjusted balances are shown pre-tax and include discontinued operations.

(a) Items that reconcile GAAP Reported to non-GAAP Adjusted balances are shown pre-tax.

Our effective tax rates for GAAP Reported income from continuing operations were:

9.6% in 2022, 7.6% in 2021 and 5.3% in 2020.

Our effective tax rates on Non-GAAP adjusted income were:

Our effective tax rates for non-GAAP Adjusted income were:

11.7% in 2022, 14.5% in 2021 and 13.5% in 2020.

(b) Purchase accounting adjustments include items such as the incremental charge to cost of sales from the sale of acquired inventory that was written up to fair value, amortization related to the increase in fair value of the acquired finite-lived intangible assets, depreciation related to the increase/decrease in fair value of the acquired fixed assets, amortization related to the increase in fair value of acquired debt, and the fair value changes for contingent consideration.

For all years presented, primarily consists of amortization of intangible assets.

(d) Includes employee termination costs, asset impairments and other exit costs related to our cost-reduction and productivity initiatives not associated with acquisitions.

(e) Primarily includes intangible asset impairment charges.

For 2020, $900 million is related to IPR&D assets acquired from Array and $528 million is related to Eucrisa.

For 2019, $2.6 billion is related to Eucrisa.

(f) Primarily includes the following charges:

(i) for 2021, an upfront payment to Arvinas and a premium paid on our equity investment in Arvinas totaling $706 million, a $300 million upfront payment to Beam and a $50 million net upfront payment to BioNTech;

(ii) for 2020, a payment of $151 million representing the expense portion of an upfront payment to Myovant, an upfront payment to Valneva of $130 million, an upfront payment to BioNTech and a premium paid on our equity investment in BioNTech totaling $98 million, as well as a $75 million milestone payment to Akcea;

and (iii) for 2019, an upfront license fee payment of $250 million to Akcea.

(g) (Gains)/losses on equity securities, and actuarial valuation and other pension and postretirement plan (gains)/losses are removed from adjusted earnings due to their inherent market volatility.

(h) Primarily includes payments for acquired IPR&D.

For 2021, includes a $2.1 billion charge related to our acquisition of Trillium, which was accounted for as an asset acquisition, and a $177 million charge related to an asset acquisition completed in the second quarter of 2021.

For 2019, included a $337 million charge related to our acquisition of Therachon, which was accounted for as an asset acquisition.

(i) For 2021, the total of $334 million primarily includes:

(i) charges representing our equity-method accounting pro rata share of restructuring charges and costs of preparing for separation from GSK of $185 million recorded by the Consumer Healthcare JV and (ii) charges for certain legal matters of $162 million.

For 2020, the total of $697 million primarily included:

(i) charges of $367 million, which represent our equity-method accounting pro rata share of transaction-specific restructuring and business combination accounting charges recorded by the Consumer Healthcare JV, and (ii) losses on asset disposals of $238 million.

For 2019, the total of $1.0 billion primarily included:

(i) $300 million of business and legal entity alignment costs for consulting, legal, tax and advisory services associated with the design, planning and implementation of our then new business structure, effective in the beginning of 2019, (ii) charges for certain legal matters of $291 million, (iii) charges of $152 million for external incremental costs, such as transaction costs and costs to separate our Consumer Healthcare business into a separate legal entity associated with the formation of the Consumer Healthcare JV, (iv) net losses on early retirement of debt of $138 million and (v) charges of $112 million representing our equity-method accounting pro rata share of restructuring and business combination accounting charges recorded by the Consumer Healthcare JV.

(j) For 2020, amounts in Selling, informational and administrative expenses of $292 million primarily include costs for consulting, legal, tax and advisory services associated with a non-recurring internal reorganization of legal entities.

(b) Includes reconciling amounts for Research and development expenses that are not material.

(c) For 2022, the total acquisition-related items of $832 million include reconciling amounts for Restructuring charges and certain acquisition-related costs of $631 million , composed of $348 million of integration costs and other charges, $144 million of transaction costs and $138 million of employee termination-related charges.

(d) For information about discontinued operations, see Note 2B .

(e) Includes employee termination costs, asset impairments and other exit costs related to our cost-reduction and productivity initiatives not associated with acquisitions.

(f) See Note 4 .

(g) For 2022, the total of $636 million primarily includes (i) charges of $307 million mostly representing our equity-method accounting pro rata share of restructuring charges and costs of preparing for separation from GSK recorded by Haleon/the Consumer Healthcare JV, and adjustments to our equity-method basis differences which are also related to the separation of Haleon/the Consumer Healthcare JV from GSK, and (ii) charges of $230 million for certain legal matters, primarily for c ertain product liability and other expenses related to products discontinued and/or divested by Pfizer .

For 2021, the total of $334 million primarily included (i) charges of $185 million mostly representing our equity-method accounting pro rata share of restructuring charges and costs of preparing for separation from GSK recorded by the Consumer Healthcare JV, and (ii) charges of $162 million for certain legal matters, primarily for c ertain product liability expenses related to products discontinued and/or divested by Pfizer, and to a lesser extent, legal obligations related to pre-acquisition commitments .

For 2020, the total of $691 million primarily included (i) charges of $367 million mostly representing our equity-method accounting pro rata share of transaction-specific restructuring and business combination accounting charges recorded by the Consumer Healthcare JV, and (ii) losses on asset disposals of $238 million.

(h) For 2021 and 2020, the totals of $141 million and $292 million, respectively, primarily included costs for consulting, legal, tax and advisory services associated with a non-recurring internal reorganization of legal entities.

2022 Form 10-K 41

ANALYSIS OF THE CONSOLIDATED STATEMENTS OF CASH FLOWS

For a discussion of the drivers of change for 2021 versus 2020 as well as cash flows from discontinued operations in 2020, see the Analysis of the Consolidated Statements of Cash Flows section within MD&A in our 2021 Form 10-K.

Cash Flows from Continuing Operations

Year Ended December 31,

(MILLIONS) 2021 2020 2019 Drivers of change

(MILLIONS) 2022 2021 2020 Drivers of change 2022 v.

Cash provided by/(used in):

Operating activities from continuing operations $ 32,922 $ 10,540 $ 7,015 2021 v.

The change was driven primarily by higher net income adjusted for non-cash items, the payment for the acquisition of Trillium, a decrease in contributions to pension plans, and the impact of timing of receipts and payments in the ordinary course of business, mostly from an increase in cash flows from Other current liabilities driven by:

(i) a $9.7 billion accrual for the gross profit split due to BioNTech, (ii) an increase in royalties payable, as well as (iii) an increase in deferred revenues for advance payments in 2021 for Comirnaty.

The change in Other Adjustments, net , is mostly due to an increase in unrealized gains on equity securities.

The change was driven mainly by higher net income adjusted for non-cash items, advanced payments in 2020 for Comirnaty recorded in deferred revenue, the upfront cash payment associated with our acquisition of Therachon in 2019, and the upfront cash payment associated with our licensing agreement with Akcea in 2019, partially offset by an increase in benefit plan contributions.

The change also reflects the impact of timing of receipts and payments in the ordinary course of business.

The change in Other adjustments, net was driven primarily by an increase in equity method dividends received, partially offset by an increase in equity income and increases in net unrealized gains on equity securities.

Investing activities from continuing operations $ (22,534) $ (4,162) $ (3,825) 2021 v.

The change was driven mainly by a $24.7 billion increase in purchases of short-term investments with original maturities of greater than three months and a $9.0 billion increase in net purchases of short-term investments with original maturities of three months or less, partially offset by a $16.4 billion increase in redemptions of short-term investments with original maturities of greater than three months.

The change was driven mostly by a $6.0 billion decrease in net proceeds from short-term investments with original maturities of three months or less and $2.7 billion in net purchases of short-term investments with original maturities of greater than three months in 2020 (compared to $2.3 billion net proceeds from short-term investments with original maturities of greater than three months in 2019), partially offset by the cash used to acquire Array, net of cash acquired, of $10.9 billion in 2019.

Financing activities from continuing operations $ (9,816) $ (21,640) $ (8,485) 2021 v.

The change was driven mostly by a $9.8 billion net reduction in repayments of short-term borrowings with maturities of greater than three months, a $4.0 billion decrease in net payments on short-term borrowings with maturities of three months or less and a $2.0 billion reduction in repayments of long-term debt, partially offset by a $4.2 billion decrease in proceeds from issuances of long-term debt.

The change was driven mostly by $14.0 billion net payments of short-term borrowings in 2020 (compared to $10.6 billion net proceeds raised from short-term borrowings in 2019) and an increase in cash dividends paid of $397 million, partially offset by a decrease in purchases of common stock of $8.9 billion, lower repayments on long-term debt of $2.8 billion, and an increase in issuances of long-term debt of $280 million.

Cash Flows from Discontinued Operations

Cash flows from discontinued operations primarily relate to our former Meridian subsidiary, Upjohn Business and the Mylan-Japan collaboration (see Note 2B ).

In 2020, net cash provided by financing activities from discontinued operations primarily reflects issuances of long-term debt .

Operating activities from continuing operations $ 29,267 $ 32,922 $ 10,540 The change was driven primarily by a net increase in payments to BioNTech for the gross profit split for Comirnaty (see Note 8B ) and an increase in noncurrent inventories primarily driven by a strategic build for Paxlovid (see Note 8A ), partially offset by higher net income adjusted for non-cash items and the timing of receipts and payments in the ordinary course of business.

Investing activities from continuing operations $ (15,783) $ (22,534) $ (4,162) The change was driven mainly by a $17.4 billion increase in proceeds from redemptions of short-term investments with original maturities of greater than three months, a $7.6 billion decrease in net purchases of short-term investments with original maturities of three months or less and a $4.0 billion dividend received from the Consumer Healthcare JV in 2022 that was allocated to investing activities (see Note 2C ), partially offset by cash paid for acquisitions in 2022 of $23.0 billion (Biohaven, $11.5 billion, Arena, $6.2 billion and GBT, $5.2 billion), net of cash acquired (see Note 2A ).

Financing activities from continuing operations $ (14,834) $ (9,816) $ (21,640) The change was driven mostly by $2.0 billion of purchases of the Company’s common stock in 2022, a $1.3 billion increase in repayments of long-term debt, and a $997 million decrease in proceeds from the issuance of long-term debt.

Cash Flows from Discontinued Operations –– In 2021, cash flows from discontinued operations primarily relate to our former Meridian subsidiary, Upjohn Business and the Mylan-Japan collaboration (see Note 2B ).

ANALYSIS OF FINANCIAL CONDITION, LIQUIDITY, CAPITAL RESOURCES AND MARKET RISK

Due to our significant operating cash flows, which is a key strength of our liquidity and capital resources and our primary funding source, as well as our financial assets, access to capital markets, revolving credit agreements, and available lines of credit, we believe that we have, and will maintain, the ability to meet our liquidity needs to support ongoing operations, our capital allocation objectives, and our contractual and other obligations for the foreseeable future.

2021 Form 10-K 45

We focus efforts to optimize operating cash flows through achieving working capital efficiencies that target accounts receivable, inventories, accounts payable, and other working capital.

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For additional information about the sources and uses of our funds and capital resources for the years ended December 31, 2022 and 2021, see the Analysis of the Consolidated Statements of Cash Flows in this MD&A.

In August 2021, we completed a public offering of $1 billion aggregate principal amount of senior unsecured sustainability notes.

We are using the net proceeds to finance or refinance, in whole or in part as follows:

R&D expenses related to our COVID-19 vaccines, capital expenditures in connection with the manufacture and distribution of COVID-19 vaccines and our other projects that have environmental and/or social benefits.

For additional information, see Note 7D .

Credit Ratings

The cost and availability of financing are influenced by credit ratings, and increases or decreases in our credit rating could have a beneficial or adverse effect on financing.

2022 Form 10-K 42

Credit Ratings ––The cost and availability of financing are influenced by credit ratings, and an increase or decrease in our credit rating could have a beneficial or adverse effect on financing.

Our long-term debt is rated high-quality by both S&P and Moody’s.

In November 2020, upon the completion of the Upjohn separation, both Moody’s and S&P lowered our long-term debt rating one notch to ‘A2’ and ‘A+’, respectively, and our short-term rating remained unchanged.

S&P continues to rate our long-term debt rating outlook as Stable since November 2020, while Moody’s recently upgraded our long-term debt rating outlook to Positive in December 2021.

In November 2022, Moody’s increased the rating on our long-term debt from A2 to A1 as well as the outlook on our long-term debt to Stable;

S&P continues to rate the outlook of our long-term debt as Stable since November 2020.

The current ratings assigned to our commercial paper and senior unsecured long-term debt:

NAME OF RATING AGENCY Pfizer Short-Term Rating Pfizer Long-Term Rating Outlook/Watch

Moody’s P-1 A2 Positive

Moody’s P-1 A1 Stable

S&P A-1+ A+ Stable

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Each rating should be evaluated independently of any other rating.

Capital Allocation Framework

Our capital allocation framework is devised to facilitate (i) the achievement of medical breakthroughs through R&D investments and business development activities and (ii) returning capital to shareholders through dividends and share repurchases.

Capital Allocation Framework ––Our capital allocation framework is primarily devised to facilitate (i) the achievement of medical breakthroughs through R&D investments and business development activities and (ii) returning capital to shareholders through dividends and share repurchases.

See the Overview of Our Performance, Operating Environment, Strategy and Outlook — Our Business and Strategy section of this MD&A.

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In December 2022, our BOD declared a first-quarter dividend of $0.41 per share, payable on March 3, 2023, to shareholders of record at the close of business on January 27, 2023.

The first-quarter 2022 cash dividend will be our 333rd consecutive quarterly dividend.

See Note 12 for information on the shares of our common stock purchased and the cost of purchases under our publicly announced share-purchase plans, including our accelerated share repurchase agreements.

The first-quarter 2023 cash dividend will be our 337th consecutive quarterly dividend.

In the first quarter of 2022, we purchased 39 million shares of our common stock at a cost of $2.0 billion under our publicly announced share purchase plan.

See Note 12 for more information.

At December 31, 2022, our remaining share-purchase authorization was approximately $3.3 billion.

Off-Balance Sheet Arrangements, Contractual, and Other Obligations

In the ordinary course of business, (i) we enter into off-balance sheet arrangements that may result in contractual and other obligations and (ii) in connection with the sale of assets and businesses and other transactions, we often indemnify our counterparties against certain liabilities that

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may arise in connection with the transaction or that are related to events and activities.

Off-Balance Sheet Arrangements, Contractual, and Other Obligations ––In the ordinary course of business, (i) we enter into off-balance sheet arrangements that may result in contractual and other obligations and (ii) in connection with the sale of assets and businesses and other transactions, we often indemnify our counterparties against certain liabilities that may arise in connection with the transaction or that are related to events and activities.

For more information on guarantees and indemnifications, see Note 16B .

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Our significant contractual and other obligations as of December 31, 2022 consisted of:

• Long-term debt, including current portion (see Note 7 ) and related interest payments;

• Long-term debt, including current portion (see Note 7D ) and related interest payments;

• Estimated cash payments related to the TCJA repatriation estimated tax liability (see Note 5 ).

Estimated future payments related to the TCJA repatriation tax liability that will occur after December 31, 2021 total $8.3 billion, of which an estimated $750 million is to be paid in the next twelve months and an estimated $7.6 billion is to be paid in periods thereafter;

Estimated future payments related to the TCJA repatriation tax liability that will occur after December 31, 2022 total $7.0 billion, of which an estimated $1.0 billion is to be paid in the next twelve months and an estimated $6.0 billion is to be paid in periods thereafter.

Our obligations may vary as a result of changes in our uncertain tax positions and/or availability of attributes such as foreign tax and other credit carryforwards;

• Certain commitments totaling $4.4 billion, of which an estimated $1.4 billion is to be paid in the next twelve months, and $3.0 billion in periods thereafter (see Note 16C );

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• Future minimum rental commitments under non-cancelable operating leases (see Note 15 ).

Gl o bal Economic Conditions

Our Venezuela and Argentina operations function in hyperinflationary economies.

In March 2022, in connection with GSK’s previously announced planned demerger, the Consumer Healthcare JV issued notes of $8.75 billion, €2.35 billion and £700 million with various maturities.

GSK guaranteed the notes and we agreed to indemnify GSK for 32% of any amount payable by GSK.

In conjunction with the completion of GSK’s demerger transactions in July 2022, GSK’s guarantee and our related indemnification of GSK’s guarantee were terminated.

See Note 2C .

Global Economic Conditions ––Venezuela and Argentina operations, and beginning in our second quarter of 2022, our operations in Turkey function in a hyperinflationary economy.

The impact to Pfizer is not considered material.

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Risk Factors––Global Operations section in this Form 10-K.

We are subject to foreign exchange risk, interest rate risk, and equity price risk.

Market Risk ––We are subject to foreign exchange risk, interest rate risk, and equity price risk.

The objective of our financial risk management program is to minimize the impact of foreign exchange rate and interest rate movements on our earnings.

We address such exposures through a combination of operational means and financial instruments.

For more information on how we manage our foreign exchange and interest rate risks, see Notes 1G and 7E , as well as the Item 1A.

For more information on how we manage our foreign exchange and interest rate risks, see Notes 1 F and 7E , as well as the Item 1A.

Risk Factors—Global Operations section in this Form 10-K for key currencies in which we operate.

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In this analysis, holding all other assumptions constant and assuming a parallel shift in the interest rate curve for all maturities and for all instruments, if there were a one hundred basis point decrease in interest rates as of December 31, 2022, the expected adverse impact on our net income would not be significant.

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Equity Price Risk ––We hold equity securities with readily determinable fair values in life science companies as a result of certain business development transactions.

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In this sensitivity analysis, the expected adverse impact on our net income would not be significant.

For information on interest rate risk and LIBOR, see the Item 1A.

Risk Factors––Global Operations section in this Form 10-K.

We do not expect the transition to an alternative rate to have a material impact on our liquidity or financial resources.

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LIBOR ––From time to time, we issued variable rate debt or entered into interest rate derivatives based on LIBOR.

The most commonly used U.S.

dollar LIBOR rates will cease publication after June 30, 2023, and all other LIBOR rates ceased publication as of December 31, 2021.

Federal Reserve has selected the Secured Overnight Funding Rate (SOFR) as the preferred alternative reference rate.

We have been updating our systems and all of our LIBOR-based contracts as of December 31, 2022 contain fallback language to accommodate an alternative reference rate.

We do not expect the transition to have a significant impact on our business or financial condition.

NEW ACCOUNTING STANDARDS

Recently Adopted Accounting Standard

See Note 1B .

Recently Issued Accounting Standards, Not Adopted as of December 31, 2022

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Elections can be adopted prospectively at any time through December 31, 2024.

We are assessing the impact, but currently, we do not expect this new guidance to have a material impact on our consolidated financial statements.

Accounting for contract assets and contract liabilities from contracts with customers requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606.

This new guidance will generally result in the acquirer recognizing contract assets and contract liabilities at the same amounts that were recorded by the acquiree.

Previously, these amounts were recognized by the acquirer at fair value as of the acquisition date.

January 1, 2023.

Early adoption is permitted.

We will apply certain of the optional expedients on hedge accounting relationships and related contracts, if necessary.

We do not expect this new guidance to have a material impact on our consolidated financial statements.

In June 2022, the FASB issued final guidance to clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered when measuring fair value.

Recognizing a contractual sale restriction as a separate unit of account is not permitted.

January 1, 2024, with early adoption permitted.

We are assessing the impact, but currently do not expect this new guidance to have a material impact on our consolidated financial statements.

In September 2022, the FASB issued final guidance to enhance transparency about an entity’s use of supplier finance programs .

Under the final guidance, the buyer in a supplier finance program is required to disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented.

January 1, 2023, except for the amendment on rollforward information, which is effective January 1, 2024.

Early adoption is permitted.

This new guidance will result in increased disclosures in the notes to our financial statements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis