What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-02-22 compared with 2023-02-23 · 846 added, 710 removed, 2155 unchanged (42% of the section changed)

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We identified the evaluation of certain of the Company’s gross unrecognized tax benefits as a critical audit matter because a high degree of audit effort, including specialized skills and knowledge, and complex auditor judgment was required in evaluating the Company’s interpretation of tax law and its estimate of the ultimate resolution of its tax positions.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of an internal control over the Company’s liability for unrecognized tax position process related to (1) interpretation of tax law, (2) evaluation of which of the Company’s tax positions may not be sustained upon audit, and (3) estimation and recording of the gross

2023 Form 10-K

Report of Independent Registered Public Accounting Firm

The following are the primary procedures we performed to address this critical audit matter.

unrecognized tax benefits.

We involved tax and valuation professionals with specialized skills and knowledge who assisted in evaluating the Company’s interpretation of tax laws, including the assessment of transfer pricing practices in accordance with applicable tax laws and regulations.

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Evaluation of product liability and other product-related litigation

As discussed in Notes 1 S .

and 16 to the consolidated financial statements, the Company is involved in product liability and other product-related litigation, which can include personal injury, consumer, off-label promotion, securities, antitrust and breach of contract claims, among others.

As discussed in Notes 1S and 16 to the consolidated financial statements, the Company is involved in product liability and other product-related litigation, which can include personal injury, consumer, off-label promotion, securities, antitrust and breach of contract claims, among others.

Certain of these pending product and other product-related legal proceedings could result in losses that could be substantial.

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We analyzed relevant publicly available information about the Company, its competitors, and the industry.

Evaluation of the fair value measurement of the developed technology rights and in-process research and development intangible assets acquired in the Seagen business combination

As discussed in Note 2A to the consolidated financial statements, on December 14, 2023, the Company acquired Seagen Inc.

and its subsidiaries (Seagen).

The total fair value of consideration transferred was $44.2 billion.

Of that, the Company provisionally recorded $7.5 billion of developed technology rights with an estimated weighted-average life of approximately 18 years and $20.8 billion of in-process research and development (IPR&D).

We identified the evaluation of the fair value measurement of the acquired developed technology rights and IPR&D as a critical audit matter.

A high degree of subjective auditor judgment was required to evaluate certain key assumptions used to estimate the acquisition-date fair value of the acquired developed technology rights and IPR&D.

Specifically, the key assumptions for certain IPR&D assets, including revenue growth rates, probability of technical and regulatory success (PTRS) rates, and the discount rate, and the key assumptions for certain developed technology rights, including revenue growth rates and the discount rate, represented subjective determinations of future market and economic conditions.

Changes to those assumptions could have had a significant effect on the determination of the fair value measurements.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s acquisition-date valuation process, including controls related to the development of the key assumptions for certain IPR&D assets and developed technology rights.

We performed sensitivity analyses over the key assumptions for certain IPR&D assets and developed technology rights to assess the impact of changes in those key assumptions on the Company’s determination of the fair value of the IPR&D and developed technology rights, respectively.

We evaluated the reasonableness of the Company’s forecasted revenue growth rates by comparing them to historical results for comparable products and peer companies, analyst expectations, and industry related third-party data.

Further, we evaluated the PTRS rates for certain IPR&D assets by considering the phase of development of the clinical projects and the Company's history of obtaining regulatory approval and comparing them to PTRS rates derived from analyst reports and other industry related third-party data.

We evaluated the data sources used by management in determining the key assumptions for certain IPR&D assets and developed technology rights by comparing to industry standards and evidence obtained in other areas of the audit.

In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:

(1) evaluating the discount rates used by the Company for certain IPR&D and developed technology rights by comparing them against discount rate ranges that were independently developed using publicly available market data for comparable entities

(2) testing the source information underlying the determination of the discount rates.

We have not been able to determine the specific year that we or our predecessor firms began serving as the Company’s auditor, however, we are aware that we or our predecessor firms have served as the Company’s auditor since at least 1942.

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(MILLIONS, EXCEPT PER SHARE DATA) 2023 2022 2021

Revenues $ 100,330 $ 81,288 $ 41,651

Product revenues (a)

$ 50,914 $ 91,793 $ 73,636

Alliance revenues (a)

7,582 8,537 7,652

Total revenues

58,496 100,330 81,288

Costs and expenses:

Cost of sales (a)

Cost of sales (b), (c)

24,954 34,344 30,821

Selling, informational and administrative expenses (a)

Selling, informational and administrative expenses (b)

14,771 13,677 12,703

Research and development expenses (a)

Research and development expenses (b)

10,679 11,428 10,360

Acquired in-process research and development expenses (b)

Acquired in-process research and development expenses

194 953 3,469

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Weighted-average shares––diluted 5,709 5,733 5,708

(a) Exclusive of amortization of intangible assets.

(b) See Note 1L .

(a) See Note 1G .

(b) Exclusive of amortization of intangible assets.

See Accompanying Notes.

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Foreign currency translation adjustments, net 452 ( 2,328 ) ( 682 )

Reclassification adjustments — — ( 17 )

( 2,328 ) ( 682 ) 755

Unrealized holding gains/(losses) on derivative financial instruments, net 626 1,444 526

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27 shares authorized;

no shares issued or outstanding at December 31, 2022 and December 31, 2021

no shares issued or outstanding as of December 31, 2023 and December 31, 2022

Common stock, $ 0.05 par value;

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and Subsidiary Companies

Preferred Stock Common Stock Treasury Stock

(MILLIONS, EXCEPT PREFERRED SHARES AND PER SHARE AMOUNTS) Shares Stated Value Shares Par Value Add’l

Common Stock Treasury Stock

(MILLIONS, EXCEPT PER SHARE DATA)

Shares Par Value Add’l

Capital Shares Cost Retained Earnings Accum.

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( 8,816 ) ( 8,816 ) ( 8,816 )

Preferred stock

Noncontrolling interests — ( 8 ) ( 8 )

— ( 91 ) ( 91 )

Share-based payment transactions 64 3 1,917 ( 11 ) ( 373 ) ( 77 ) 1,470 1,470

Preferred stock conversions and redemptions (a)

( 431 ) ( 17 ) ( 15 ) 1 31 ( 1 ) ( 1 )

Distribution of Upjohn Business (b)

( 1,592 ) ( 423 ) ( 2,015 ) ( 3 ) ( 2,018 )

Other — — — — — ( 85 ) ( 85 ) ( 7 ) ( 92 )

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48 2 1,192 ( 13 ) ( 608 ) ( 73 ) 513 513

Purchases of common stock

( 39 ) ( 2,000 ) ( 2,000 ) ( 2,000 )

Other — — 19 — — — 19 ( 13 ) 6

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43 2 829 ( 12 ) ( 518 ) ( 106 ) 208 208

Purchases of common stock ( 39 ) ( 2,000 ) ( 2,000 ) ( 2,000 )

Other — — — — — — —

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9,562 $ 478 $ 92,631 ( 3,916 ) $ ( 114,487 ) $ 118,353 $ ( 7,961 ) $ 89,014 $ 274 $ 89,288

(a) See Note 12 .

(b) See Note 2B .

See Accompanying Notes.

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Net income from continuing operations before allocation to noncontrolling interests 2,172 31,401 22,459

Adjustments to reconcile net income before allocation to noncontrolling interests to net cash provided by operating activities:

Adjustments to reconcile net income before allocation to noncontrolling interests to net cash

provided by/(used in) operating activities:

Depreciation and amortization 6,290 5,064 5,191

Asset write-offs and impairments 3,408 550 276

Deferred taxes from continuing operations ( 3,764 ) ( 4,293 ) ( 1,575 )

Deferred taxes

( 3,442 ) ( 3,764 ) ( 4,293 )

Share-based compensation expense 525 872 1,182

Benefit plan contributions in excess of expense/income ( 787 ) ( 1,158 ) ( 3,123 )

Inventory write-offs and related charges associated with COVID-19 products (a)

6,199 1,183 —

Other adjustments, net ( 3,492 ) 758 ( 1,573 )

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Trade accounts receivable 347 261 ( 3,811 )

Inventories 592 ( 1,125 ) ( 778 )

Other assets (a)

Inventories (a)

( 1,169 ) ( 591 ) ( 1,125 )

Other assets (b)

( 663 ) ( 4,506 ) ( 1,057 )

Trade accounts payable ( 300 ) 1,191 1,242

Other liabilities ( 1,449 ) 18,721 2,768

Other liabilities (c)

595 ( 1,449 ) 18,721

Other tax accounts, net ( 982 ) ( 545 ) ( 1,166 )

Net cash provided by operating activities from continuing operations 29,267 32,922 10,540

Net cash provided by/(used in) operating activities from continuing operations

8,700 29,267 32,922

Net cash provided by/(used in) operating activities from discontinued operations — — ( 343 )

Net cash provided by operating activities 29,267 32,580 14,403

Net cash provided by/(used in) operating activities

8,700 29,267 32,580

Investing Activities

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Acquisitions of businesses, net of cash acquired ( 43,430 ) ( 22,997 ) —

Dividend received from the Consumer Healthcare JV (b)

Dividend received from the Consumer Healthcare JV (d)

Other investing activities, net ( 179 ) ( 192 ) ( 305 )

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( 631 ) ( 335 ) 16

Net cash provided by/(used in) financing activities from continuing operations ( 14,834 ) ( 9,816 ) ( 21,640 )

Net cash provided by/(used in) financing activities from discontinued operations — — 11,991

Net cash provided by/(used in) financing activities 26,066 ( 14,834 ) ( 9,816 )

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Right-of-use assets obtained in exchange for lease liabilities $ 614 $ 752 $ 1,943

(a) See Note 8A .

(b) See Note 2C .

(a) See Notes 8A and 1 7 A .

(b) See Note 8A .

(d) See Note 2C .

See Accompanying Notes.

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subsidiaries is as of and for the year ended December 31 for each year presented.

Substantially all unremitted earnings of international subsidiaries are free of legal and contractual restrictions.

All significant transactions among our subsidiaries have been eliminated.

Beginning in the fourth quarter of 2021, we reorganized our commercial operations and began to manage our commercial operations through a global structure consisting of two operating segments, each led by a single manager:

Biopharma, our innovative science-based biopharmaceutical business, and PC1, our global contract development and manufacturing organization and a leading supplier of specialty active pharmaceutical ingredients.

Beginning in the third quarter of 2022, we made several additional 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.

These changes include establishing a new commercial structure within Biopharma, optimizing our end-to-end R&D operations and further prioritizing our internal R&D portfolio, as well as realigning certain enabling and platform functions across the organization to ensure alignment with this new operating structure.

In 2023, we managed our commercial operations through two operating segments, each led by a single manager:

Biopharma and Business Innovation.

Biopharma is the only reportable segment.

See Note 17 .

On December 14, 2023, we completed the acquisition of Seagen.

On December 31, 2021, we completed the sale of our Meridian subsidiary, the manufacturer of EpiPen and other auto-injector products.

Prior to its sale, Meridian was managed within the former Hospital product portfolio.

Beginning in the fourth quarter of 2021, the financial results of Meridian were reflected as discontinued operations for all periods presented.

On December 21, 2020, Pfizer and Viatris completed the termination of a pre-existing strategic collaboration between Pfizer and Mylan for generic drugs in Japan (the Mylan-Japan collaboration) pursuant to an agreement dated November 13, 2020, and we transferred related inventories and operations that were part of the Mylan-Japan collaboration to Viatris.

On November 16, 2020, we completed the spin-off and the combination of our Upjohn Business with Mylan to form Viatris.

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.

Upon completion of the spin-off of the Upjohn Business on November 16, 2020, the Upjohn assets and liabilities were derecognized from our consolidated balance sheet and are reflected in Retained Earnings – Distribution of Upjohn Business in the consolidated statement of equity.

Prior to the spin-off of the Upjohn Business in November 2020, the Upjohn Business, the Mylan-Japan collaboration and Meridian were managed as part of our former Upjohn operating segment.

With the separation of the Upjohn Business, the Mylan-Japan collaboration and Meridian, as well as the formation of the Consumer Healthcare JV in 2019, Pfizer transformed into a more focused, global leader in science-based innovative medicines and vaccines.

In addition, other acquisitions and business development activities completed in 2023, 2022 and 2021 impacted financial results in the periods presented.

We have made certain reclassification adjustments to conform prior-period amounts to the current presentation, mainly for acquired IPR&D expenses (see Note 1L ).

We have made certain reclassification adjustments to conform prior-period amounts to the current presentation.

Certain amounts in the consolidated financial statements and associated notes may not add due to rounding.

All percentages have been calculated using unrounded amounts.

New Accounting Standard Adopted in 2022

On January 1, 2022, we early adopted a new accounting standard for contract assets and contract liabilities acquired in a business combination.

Under the new standard, acquired contract assets and contract liabilities are required to be recognized and measured by the acquirer on the acquisition date in accordance with Accounting Standards Codification 606.

This new guidance generally results 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.

We adopted this new standard on a prospective basis and there was no impact to our consolidated financial statements.

New Accounting Standards Adopted in 2023

On January 1, 2023, we adopted a new accounting standard for supplier finance programs which requires increased disclosures in the notes to our financial statements.

See Note 8C .

In the second quarter of 2023, we adopted new accounting standards on reference rate reform that provide temporary optional expedients and exceptions to the guidance for contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate that were discontinued after June 30, 2023.

We applied certain of the optional expedients related to hedge accounting relationships.

The main purpose of the expedients is to allow hedge accounting to continue uninterrupted and make it easier to apply the requirements to maintain hedge accounting during the transition period through December 31, 2024.

Estimates and Assumptions

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We adjust our estimates and assumptions when facts and circumstances indicate the need for change.

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Notes to Consolidated Financial Statements

and Subsidiary Companies

Our consolidated financial statements include the operations of acquired businesses after the completion of the acquisitions.

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We estimate fair value using an exit price approach, which requires, among other things, that we determine the price that would be received to sell an asset or paid to transfer a liability in an orderly market.

The determination of an exit price is considered from the perspective of market participants, considering the highest and best use of non-financial assets and, for liabilities, assuming that the risk of non-performance will be the same before and after the transfer.

The determination of an exit price is considered from the perspective of market participants,

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

considering the highest and best use of non-financial assets and, for liabilities, assuming that the risk of non-performance will be the same before and after the transfer.

When estimating fair value, depending on the nature and complexity of the asset or liability, we may use one or all of the following techniques:

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and we do not have the ability to use the product or direct it to another customer.

In determining when the customer obtains control of the product, we consider certain indicators, including whether we have a present right to payment from

2022 Form 10-K 54

Notes to Consolidated Financial Statements

and Subsidiary Companies

the customer, whether title and/or significant risks and rewards of ownership have transferred to the customer and whether customer acceptance has been received.

In bill-and-hold arrangements which are part of the U.S.

Government Strategic National Stockpile, we recognize revenue for the product sale when the product is initially placed into the Stockpile and we provide a rotation service to maintain an agreed upon level of shelf life for product in the stockpile.

In determining when the customer obtains control of the product, we consider certain indicators, including whether we have a present right to payment from the customer, whether title and/or significant risks and rewards of ownership have transferred to the customer and whether customer acceptance has been received.

In the fourth quarter of 2023, we began reporting Product revenues and Alliance revenues as separate line items in our consolidated statements of income.

Prior-period amounts have been reclassified to conform to the current presentation.

Our Sales Contracts ––Sales on credit are typically under short-term contracts.

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Sales are adjusted for sales allowances, chargebacks, rebates and sales returns and cash discounts.

Sales returns occur due to LOE, product recalls or a changing competitive environment.

Sales returns may occur due to LOE, product recalls or a changing competitive environment.

Deductions from Revenues ––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.

Such variable consideration represents chargebacks, rebates, sales allowances and sales returns.

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

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

Provisions for pharmaceutical sales returns–– Provisions are based on a calculation for each market that incorporates the following, as appropriate:

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an estimate of the amount of time between shipment and return or lag time;

and any other factors that could impact the estimate of future returns, such as LOE, product recalls or a changing competitive environment.

and any other factors that could

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

impact the estimate of future returns, such as LOE, product recalls or a changing competitive environment.

Generally, returned products are destroyed, and customers are refunded the sales price in the form of a credit.

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The following outlines our common sales arrangements:

• Customers ––Our prescription biopharmaceutical products, with the exception of Paxlovid, are sold principally to wholesalers, but we also sell directly to retailers, hospitals, clinics, government agencies and pharmacies.

In 2022, we principally sold Paxlovid to government agencies.

In the U.S., we primarily sell our vaccines directly to the federal government, CDC, wholesalers, individual provider offices, retail pharmacies and integrated delivery systems.

Outside the U.S., we primarily sell our vaccines to government and non-government institutions.

• Customers ––Our prescription biopharmaceutical products, with the exception of Paxlovid in 2022 and 2023, are sold principally to wholesalers, but we also sell directly to retailers, hospitals, clinics, government agencies and pharmacies.

In 2022 and 2023, we principally sold Paxlovid globally to government agencies.

Our vaccines in the U.S.

are primarily sold directly to the federal government (including the CDC), wholesalers, individual provider offices, retail pharmacies and integrated delivery systems.

Our vaccines outside the U.S.

are primarily sold to government and non-government institutions.

Prescription pharmaceutical products that ultimately are used by patients are generally covered under governmental programs, managed care programs and insurance programs, including those managed through PBMs, and are subject to sales allowances and/or rebates payable directly to those programs.

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wholesalers for honoring contracted prices and legislated discounts to third parties) closely approximate actual amounts incurred, as we settle these deductions generally within two to five weeks of incurring the liability.

We recorded direct product sales and/or Alliance revenues of more than $ 1 billion for each of ten products in 2022, for each of nine products in 2021 and for each of seven products in 2020.

In the aggregate, these direct product sales and/or alliance product revenues represented 82 % of our revenues in 2022, 75 % of our revenues in 2021 and 54 % of our revenues in 2020.

See Note 17 C for additional information.

We recorded direct product sales and/or Alliance revenues of more than $ 1 billion for each of nine products in 2023, for each of ten products in 2022 and for each of nine products in 2021.

In the aggregate, these direct product sales and/or Alliance revenues represented 64 %, 82 % and 75 % of our Total revenues in 2023, 2022 and 2021, respectively.

See Note 17C .

The loss or expiration of intellectual property rights can have a significant adverse effect on our revenues as our contracts with customers will generally be at lower selling prices and lower volumes due to added generic competition.

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Total accrued rebates and other sales-related accruals $ 9,014 $ 6,722

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Notes to Consolidated Financial Statements

and Subsidiary Companies

Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from Revenues .

Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from Product revenues .

Trade Accounts Receivable —Trade accounts receivable are stated at their net realizable value.

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These credit risk indicators are monitored on a quarterly basis to determine whether there have been any changes in the economic environment that would indicate the established reserve percentages should be adjusted, and are considered on a regional basis to reflect more geographic-specific metrics.

Additionally, write-offs and recoveries of customer receivables are tracked against collections on a quarterly basis to determine whether the reserve percentages remain appropriate.

Additionally, write-offs and recoveries of customer receivables are tracked against collections

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

on a quarterly basis to determine whether the reserve percentages remain appropriate.

When management becomes aware of certain customer-specific factors that impact credit risk, specific allowances for these known troubled accounts are recorded.

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Payments to and from our collaboration partners are presented in our consolidated statements of income based on the nature of the arrangement (including its contractual terms), the nature of the payments and applicable accounting guidance.

Under co-promotion agreements, we record the amounts received for our share of gross profits from our collaboration partners as Alliance revenues, a component of Revenues, when our collaboration partners are the principal in the transaction and we receive a share of their net sales or profits.

Under co-commercialization agreements, we record the amounts received for our share of gross profits from our collaboration partners as Alliance revenues, when our collaboration partners are the principal in the transaction and we receive a share of their net sales or profits.

Alliance revenues are recorded as we perform co-promotion activities for the collaboration and the collaboration partners sell the products to their customers.

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Selling, informational and administrative costs are expensed as incurred.

Among other things, these expenses include the internal and external costs of marketing, advertising, shipping and handling, IT and legal defense.

Among other things, these expenses include the internal and external costs of marketing, advertising, shipping and handling, digital and legal defense.

Advertising expenses totaled approximately $ 3.7 billion in 2023, $ 2.8 billion in 2022 and $ 2.0 billion in 2021.

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Once a compound receives regulatory approval, we record any milestone payments in Identifiable intangible assets, less accumulated amortization and, unless the asset is determined to have an indefinite life, we typically amortize the payments on a straight-line basis over the remaining agreement term or the expected product life cycle, whichever is shorter.

In the first quarter of 2022, we began reporting acquired IPR&D expense as a separate line item in our consolidated statements of income.

Acquired in-process research and development expenses includes costs incurred in connection with (a) all upfront and milestone payments on

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Notes to Consolidated Financial Statements

and Subsidiary Companies

collaboration and in-license agreements, including premiums on equity securities and (b) asset acquisitions of acquired IPR&D.

These costs were previously recorded in Research and development expenses .

Acquired in-process research and development expenses includes costs incurred in connection with (a) all upfront and milestone payments on collaboration and in-license agreements, including premiums on equity securities and (b) asset acquisitions of acquired IPR&D.

Amortization of Intangible Assets, Depreciation and Certain Long-Lived Assets

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Intangible assets with indefinite lives are not amortized until a useful life can be determined.

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and Subsidiary Companies

• Goodwill —Goodwill represents the excess of the consideration transferred for an acquired business over the assigned values of its net assets.

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

We may incur restructuring charges in connection with acquisitions when we implement plans to restructure and integrate the acquired operations or in connection with our cost-reduction and productivity initiatives.

We incur restructuring charges in connection with acquisitions when we implement plans to restructure and integrate the acquired operations or in connection with our cost-reduction and productivity initiatives.

• In connection with acquisition activity, we typically incur costs associated with executing the transactions, integrating the acquired operations (which may include expenditures for consulting and the integration of systems and processes), and restructuring the combined company (which may include charges related to employees, assets and activities that will not continue in the combined company);

• In connection with our cost-reduction/productivity initiatives, we typically incur costs and charges for site closings and other facility rationalization actions, workforce reductions and the expansion of shared services, including the development of global systems.

Included in Restructuring charges and certain acquisition-related costs are all restructuring charges, as well as certain other costs associated with acquiring and integrating an acquired business.

Included in Restructuring charges and certain acquisition-related costs are all restructuring charges, as well as certain other costs associated with acquiring and integrating an acquired company.

If the restructuring action results in a change in the estimated useful life of an asset, that incremental impact is classified in Cost of sales, Selling, informational and administrative expenses and/or Research and development expenses , as appropriate.

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Transaction costs, such as banking, legal, accounting and other similar costs incurred in connection with a business acquisition are expensed as incurred .

Our business and platform functions may be impacted by these actions, including sales and marketing, manufacturing and R&D, as well as our corporate enabling functions (such as digital, global real estate operations, legal, finance, human resources, worldwide public affairs, compliance and worldwide procurement).

Our business and platform functions may be impacted by these actions, including sales and marketing, manufacturing and R&D, as well as our corporate enabling functions.

Cash Equivalents and Statement of Cash Flows

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Cash flows for financial instruments that do not qualify for hedge accounting treatment are classified according to their purpose and accounting nature.

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and Subsidiary Companies

Investments and Derivative Financial Instruments

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Under the equity-method, we record our share of the investee’s income and expenses in Other (income)/deductions—net .

The excess of the cost of the investment over our share of the underlying equity in the net assets of the investee as of the acquisition date is allocated to the identifiable assets and liabilities of the investee, with any remaining excess amount allocated to goodwill.

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and Subsidiary Companies

excess amount allocated to goodwill.

Such investments are initially recorded at cost, which is the fair value of consideration paid and typically does not include contingent consideration.

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Other taxes payable as of December 31, 2023 and 2022 include liabilities for uncertain tax positions and the noncurrent portion of the repatriation tax liability for which we elected payment over eight years through 2026.

For additional information, see Note 5D for uncertain tax positions and Note 5A for the repatriation tax liability and other estimates and assumptions in connection with the TCJA.

See Note 5D for uncertain tax positions and Note 5A for the repatriation tax liability and other estimates and assumptions in connection with the TCJA.

Income Tax Contingencies ––We account for income tax contingencies using a benefit recognition model.

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Interest and penalties, if any, are recorded in Provision/(benefit) for taxes on income and are classified on our consolidated balance sheet with the related tax liability.

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and Subsidiary Companies

materially affect our financial statements in the period of settlement or when the statutes of limitations expire, as we treat these events as discrete items in the period of resolution.

Our assessments are based on estimates and assumptions that have been deemed reasonable by management, but our estimates of unrecognized tax benefits and potential tax benefits may not be representative of actual outcomes, and variation from such estimates could materially affect our financial statements in the period of settlement or when the statutes of limitations expire, as we treat these events as discrete items in the period of resolution.

Pension and Postretirement Benefit Plans

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Net periodic pension and postretirement benefit costs other than the service costs are recognized in Other (income)/deductions—net .

We immediately recognize actuarial gains and losses arising from the remeasurement of our pension and postretirement plans (MTM Accounting).

We immediately recognize actuarial gains and losses arising from the remeasurement of our pension and postretirement plans (mark-to-market accounting).

Each time a pension or postretirement plan is remeasured, the actuarial gain or loss is recognized immediately and classified as Other (income)/deductions––net .

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Plan assets are measured at fair value.

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Notes to Consolidated Financial Statements

and Subsidiary Companies

Legal and Environmental Contingencies

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Generally, grants under share-based payment programs are accounted for at fair value and these fair values are generally amortized on a straight-line basis or on an accelerated attribution approach over the vesting terms with the related costs recorded in Cost of sales, Selling, informational and administrative expenses and/or Research and development expenses , as appropriate.

Acquisitions, Divestitures, Equity-Method Investments, Licensing Arrangements and Collaborative Arrangements

GBT–– On October 5, 2022, we acquired GBT, a biopharmaceutical company dedicated to the discovery, development and delivery of life-changing treatments that provide hope to underserved patient communities, starting with sickle cell disease, for $ 68.50 per share in cash.

Acquisitions, Divestitures, Equity-Method Investments, Licensing Arrangement, Collaborative Arrangements and Research and Development Arrangement

Seagen–– On December 14, 2023 (the acquisition date), we acquired Seagen, a global biotechnology company that discovers, develops and commercializes transformative cancer medicines, for $ 229 per share in cash.

The total fair value of the consideration transferred was $ 44.2 billion ($ 43.4 billion, net of cash acquired).

In addition, in connection with the acquisition $ 476 million in post-closing compensation expense for Seagen employee incentive awards was recorded in Restructuring charges and certain acquisition-related costs (see Note 3 ).

The combination of local Pfizer and Seagen entities may be pending in various jurisdictions and integration is subject to completion of various local legal and regulatory steps.

Seagen’s principal business was the development, manufacture, marketing and distribution of targeted cancer therapeutics, primarily using antibody-drug conjugate technology.

Seagen’s portfolio includes four approved medicines as well as a pipeline of product candidates.

Clinical development programs are ongoing for each of these approved medicines for potential new or expanded indications and for several product candidates.

We believe our acquisition of Seagen will strengthen our oncology capabilities by allowing us to combine Seagen’s antibody-drug conjugate technology with the resources and scale of the Pfizer enterprise and to advance more potential breakthroughs to patients with cancer.

The following table summarizes the provisional amounts recognized for assets acquired and liabilities assumed as of the acquisition date.

The estimated values are not yet finalized (see below) and are subject to change, which could be significant.

We will finalize the amounts recognized as we obtain the information necessary to complete the analyses.

We expect to finalize these amounts as soon as possible but no later than one year from the acquisition date.

Amounts Recognized

as of Acquisition Date

(Provisional)

Working capital, excluding inventories (a)

Inventories (b)

Property, plant and equipment

Identifiable intangible assets, excluding in-process research and development (c)

In-process research and development

Other noncurrent assets

Net income tax accounts (d)

Other noncurrent liabilities ( 167 )

Total identifiable net assets 28,108

Goodwill 16,126

Net assets acquired/total consideration transferred $ 44,234

(a) Includes cash and cash equivalents, accounts receivable, other current assets, accounts payable, accrued compensation and other current liabilities.

(b) Comprised of $ 1.0 billion current inventories and $ 3.1 billion noncurrent inventories.

(c) Comprised mainly of $ 7.5 billion of finite-lived developed technology rights with an estimated weighted-average life of approximately 18 years.

(d) As of the acquisition date, included primarily in Noncurrent deferred tax liabilities .

The following items are subject to change:

• Amounts for certain balances included in working capital (excluding inventories), and certain legal contingencies, pending receipt of certain information that could affect provisional amounts recorded.

We do not believe any adjustments for legal contingencies will have a material impact on our consolidated financial statements.

• Amounts for identifiable intangible assets, inventories, contractual commitments, PP&E, and operating lease ROU assets and liabilities, pending finalization of valuation efforts, the completion of certain physical inventory counts and the confirmation of the physical existence and condition of certain PP&E assets.

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

• Amounts for income tax assets, receivables and liabilities, pending the filing of Seagen’s pre-acquisition tax returns and the receipt of information, including but not limited to that from taxing authorities, which may change certain estimates and assumptions used.

As of the acquisition date, the fair value of accounts receivable approximated the book value acquired.

The gross contractual amount receivable was $ 597 million.

In the ordinary course of business, Seagen may incur liabilities for environmental, legal and tax matters, as well as guarantees and indemnifications.

These matters may include contingencies.

Except as specifically excluded by the relevant accounting standard, contingencies are required to be measured at fair value as of the acquisition date if the acquisition-date fair value of the asset or liability arising from a contingency can be determined.

If the acquisition-date fair value of the asset or liability cannot be determined, the asset or liability would be recognized at the acquisition date if both of the following criteria are met:

(i) it is probable that an asset existed or that a liability had been incurred at the acquisition date, and (ii) the amount of the asset or liability can be reasonably estimated.

• Environmental Matters —In the ordinary course of business, Seagen may incur liabilities for environmental matters such as remediation work, asset retirement obligations and environmental guarantees and indemnifications.

• Legal Matters —Seagen is involved in various legal proceedings, including patent, intellectual property, and product liability matters of a nature considered normal to its business.

The contingencies arising from legal matters are not significant to our consolidated financial statements.

• Tax Matters —In the ordinary course of business, Seagen incurs liabilities for income taxes.

Income taxes are exceptions to both the recognition and fair value measurement principles associated with the accounting for business combinations.

Reserves for income tax contingencies continue to be measured under the benefit recognition model previously used by Seagen (see Note 1Q ).

Net liabilities for income taxes as of the acquisition date were $ 6.1 billion, including $ 56 million for uncertain tax positions.

The net tax liability includes $ 7.5 billion for the tax impact of fair value adjustments, partially offset by $ 1.4 billion for deferred tax assets on which Seagen had recognized a valuation allowance.

Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized.

Specifically, the goodwill recorded as part of the acquisition of Seagen includes the following:

• the expected specific synergies and other benefits that we believe will result from combining the operations of Seagen with the operations of Pfizer;

• any intangible assets that do not qualify for separate recognition, as well as future, as yet unidentified projects and products;

• the value of the going-concern element of Seagen’s existing businesses (the higher rate of return on the assembled collection of net assets versus if Pfizer had acquired all of the net assets separately).

Goodwill is not amortized and is not deductible for tax purposes.

All of the goodwill related to the acquisition of Seagen is related to our Biopharma segment (see Note 10 ).

Actual and Pro Forma Impact of Acquisition — The following table presents information for Seagen’s operations that are included in Pfizer’s consolidated statements of income beginning from the acquisition date, December 14, 2023, through Pfizer’s year-end in 2023:

Revenues $ 120

Net loss attributable to Pfizer Inc.

common shareholders (a)

(a) Includes restructuring, integration and acquisition-related costs ($ 614 million pre-tax) and purchase accounting charges related to (i) the preliminary fair value adjustment for acquisition-date inventory estimated to have been sold ($ 109 million pre-tax);

(ii) amortization expense related to the preliminary fair value of identifiable intangible assets acquired from Seagen ($ 25 million pre-tax);

as well as (iii) depreciation expense related to the preliminary fair value adjustment of fixed assets acquired from Seagen ($ 2 million pre-tax).

The following table provides unaudited U.S.

GAAP supplemental pro forma information as if the acquisition of Seagen had occurred on January 1, 2022:

Unaudited Supplemental Pro Forma Consolidated Results

Year Ended December 31,

(MILLIONS, EXCEPT PER SHARE DATA)

$ 60,632 $ 102,127

Net income/(loss) attributable to Pfizer Inc.

common shareholders

( 1,474 ) 27,938

Diluted earnings/(loss) per share attributable to Pfizer Inc.

common shareholders

( 0.26 ) 4.87

The unaudited supplemental pro forma consolidated results do not purport to reflect what the combined company’s results of operations would have been had the acquisition occurred on January 1, 2022, nor do they project the future results of operations of the combined company or reflect the expected realization of any cost savings associated with the acquisition.

The actual results of operations of the combined company may differ significantly from the pro forma adjustments reflected here due to many factors.

The unaudited supplemental pro forma financial information includes various assumptions, including those related to the preliminary purchase price allocation of the assets acquired and the liabilities assumed from Seagen.

The historical U.S.

GAAP financial information of Pfizer and Seagen was adjusted, primarily for the following pre-tax adjustments:

• Additional amortization expense (approximately $ 503 million in 2023 and $ 526 million in 2022) related to the preliminary estimate of the fair value of identifiable intangible assets acquired.

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

• Additional expense related to the preliminary estimate of the fair value adjustment to acquisition-date inventory estimated to have been sold (approximately $ 796 million in 2023 and $ 887 million in 2022).

• Additional interest expense (approximately $ 984 million in 2023 and $ 2.0 billion in 2022) related to the estimated debt issued by Pfizer and the commercial paper borrowings to partially finance the acquisition.

• Elimination of interest income (approximately $ 1.2 billion in 2023 and $ 267 million in 2022) related to the debt issuance proceeds that were invested prior to the acquisition date and associated with money market funds under the assumption that a portion of these funds would have been liquidated to partially fund the acquisition.

• Adjustment to move Seagen royalty income received from collaboration partners (approximately $ 203 million in 2023 and $ 165 million in 2022) from total revenues to other (income)/deductions, which is consistent with Pfizer’s presentation in 2023.

The above adjustments were then adjusted for the applicable tax impact using an estimated weighted-average statutory tax rate applied to the applicable pro forma adjustments.

The acquisition of Seagen had no impact on Pfizer’s weighted-average shares as no shares were issued.

GBT–– On October 5, 2022, we acquired GBT, a biopharmaceutical company dedicated to the discovery, development and delivery of life-changing treatments for underserved patient communities, starting with sickle cell disease, for $ 68.50 per share in cash.

The total fair value of the consideration transferred was $ 5.7 billion ($ 5.2 billion, net of cash acquired).

In addition, $ 136 million in payments to GBT employees for the fair value of previously unvested long-term incentive awards was recognized as post-closing compensation expense and recorded in Restructuring charges and certain acquisition-related costs (see Note 3 ).

In connection with this business combination, we provisionally recorded:

The final allocation of the consideration transferred to the assets acquired and the liabilities assumed was completed in 2023.

In connection with this business combination, we recorded:

(i) $ 4.4 billion in Identifiable intangible assets , consisting of $ 3.0 billion of IPR&D and $ 1.4 billion of developed technology rights with a useful life of six years , (ii) $ 1.1 billion of Goodwill, (iii) $ 644 million of inventories to be sold over approximately three years , (iv) $ 516 million of net deferred tax liabilities and (v) $ 331 million of assumed long-term debt that was paid in full in the fourth quarter of 2022.

The allocation of the consideration transferred to the assets acquired and liabilities assumed has not yet been finalized.

Biohaven–– On October 3, 2022, we acquired Biohaven, the maker of Nurtec ODT/Vydura (rimegepant), an innovative therapy approved for both acute treatment of migraine and prevention of episodic migraine in adults.

The transaction includes the acquisition of Biohaven’s CGRP programs, including rimegepant, zavegepant and a portfolio of five pre-clinical CGRP assets.

The transaction included the acquisition of Biohaven’s CGRP programs, including rimegepant, zavegepant and a portfolio of five pre-clinical CGRP assets.

Under the terms of the agreement, we acquired all outstanding common shares of Biohaven not already owned by us for $ 148.50 per share, in cash, for payments of approximately $ 11.5 billion, plus repayment of third-party debt of $ 863 million and redemption of Biohaven’s redeemable preferred stock for $ 495 million.

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Biohaven Ltd.

is a new publicly traded company that retained Biohaven’s non-CGRP development stage pipeline compounds.

became a new publicly traded company that retained Biohaven’s non-CGRP development stage pipeline compounds.

Pfizer, a Biohaven shareholder, received a pro rata portion of Biohaven Ltd.’s shares in the distribution and owns approximately 1.3 % of Biohaven Ltd.

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Biohaven Ltd.

will also have the right to receive tiered royalties from Pfizer on any annual net sales of rimegepant and zavegepant in the U.S.

also has the right to receive tiered royalties from Pfizer on any annual net sales of rimegepant and zavegepant in the U.S.

in excess of $ 5.25 billion.

This contingent consideration was determined to have no fair value as of the acquisition date.

After the acquisition, we remain responsible for payment of high single digit to mid-teen percentage tiered royalties on world-wide net sales excluding China and low to high single digit royalties on net sales in China of rimegepant and zavegepant as well as certain regulatory approval and commercial milestone payments associated with rimegepant and zavegepant of up to $ 1.1 billion under pre-existing third-party license and other agreements.

2022 Form 10-K 59

Notes to Consolidated Financial Statements

and Subsidiary Companies

Pfizer also acquired Biohaven’s commitments for payment of high single digit to mid-teen percentage tiered royalties on world-wide net sales excluding China and low to high single digit royalties on net sales in China of rimegepant and zavegepant as well as certain regulatory approval and commercial milestone payments associated with rimegepant and zavegepant of up to $ 1.1 billion under pre-existing third-party license and other agreements.

These milestone amounts have been reduced by $ 608 million since the acquisition due to payments made and renegotiation of certain of the applicable agreements.

The total fair value of the consideration transferred was $ 11.8 billion, which includes the fair value of Pfizer’s previous investment in Biohaven on the acquisition date of approximately $ 300 million.

In connection with this business combination, we provisionally recorded:

(i) $ 12.1 billion in Identifiable intangible assets , consisting of $ 11.6 billion of developed technology rights with a useful life of 11 years and $ 450 million of IPR&D, (ii) $ 817 million of inventories to be sold over approximately two years , (iii) $ 797 million of Goodwill , (iv) $ 398 million of trade accounts receivable, (v) $ 1.4 billion of assumed long-term debt that was paid in full in the fourth quarter of 2022, (vi) $ 566 million of net deferred tax liabilities and (vii) $ 477 million of Other current liabilities .

The allocation of the consideration transferred to the assets acquired and liabilities assumed has not yet been finalized.

ReViral–– On June 9, 2022, we acquired ReViral, a privately held, clinical-stage biopharmaceutical company focused on discovering, developing and commercializing novel antiviral therapeutics that target respiratory syncytial virus, for a total consideration of up to $ 536 million, including upfront payments of $ 436 million upon closing (including a base payment of $ 425 million plus working capital adjustments) and an additional $ 100 million contingent upon a future development milestone.

It was subsequently determined the applicable milestone was not achieved.

We accounted for the transaction as an asset acquisition since the lead asset, sisunatovir, represented substantially all of the fair value of the gross assets acquired.

At the acquisition date, we recorded a $ 426 million charge representing an acquired IPR&D asset with no alternative use in Acquired in-process research and development expenses , which is presented as a cash outflow from operating activities.

Other assets acquired and liabilities assumed were not significant.

Arena–– On March 11, 2022, we acquired Arena, a clinical stage company, for $ 100 per share in cash.

The final allocation of the consideration transferred to the assets acquired and the liabilities assumed was completed in 2023.

In connection with this business combination, we recorded:

(i) $ 12.1 billion in Identifiable intangible assets , consisting of $ 11.6 billion of developed technology rights with a useful life of 11 years and $ 450 million of IPR&D, (ii) $ 823 million of Goodwill , (iii) $ 813 million of inventories to be sold over approximately two years , (iv) $ 398 million of trade accounts receivable, (v) $ 1.4 billion of assumed long-term debt that was paid in full in the fourth quarter of 2022, (vi) $ 544 million of net deferred tax liabilities and (vii) $ 526 million of Other current liabilities .

Arena–– On March 11, 2022, we acquired Arena, a clinical stage company with development-stage therapeutic candidates in gastroenterology, dermatology and cardiology, for $ 100 per share in cash.

The total fair value of the consideration transferred was $ 6.6 billion ($ 6.2 billion, net of cash acquired).

In addition, $ 138 million in payments to Arena employees for the fair value of previously unvested long-term incentive awards was recognized as post-closing compensation expense and recorded in Restructuring charges and certain acquisition-related costs (see Note 3 ).

Arena’s portfolio includes development-stage therapeutic candidates in gastroenterology, dermatology, and cardiology, including etrasimod, an oral, selective sphingosine 1-phosphate (S1P) receptor modulator currently in development for a range of immuno-inflammatory diseases including UC, Crohn’s disease, atopic dermatitis, eosinophilic esophagitis, and alopecia areata.

In connection with this business combination, we provisionally recorded:

The final allocation of the consideration transferred to the assets acquired and the liabilities assumed was completed in 2023.

In connection with this business combination, we recorded:

(i) $ 5.5 billion in Identifiable intangible assets , consisting of $ 5.0 billion of IPR&D and $ 460 million of indefinite-lived licensing agreements and other, (ii) $ 1.0 billion of Goodwill and (iii) $ 490 million of net deferred tax liabilities.

The allocation of the consideration transferred to the assets acquired and the liabilities assumed has not yet been finalized.

It was subsequently determined the applicable milestone was not achieved.

We accounted for the transaction as an asset acquisition since the lead asset, sisunatovir, represented substantially all of the fair value of the gross assets acquired.

At the acquisition date, we recorded a $ 426 million charge representing an acquired IPR&D asset with no alternative

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

use in Acquired in-process research and development expenses , which is presented as a cash outflow from operating activities.

Other assets acquired and liabilities assumed were not significant.

Trillium–– On November 17, 2021, we acquired all of the issued and outstanding common stock not already owned by Pfizer of Trillium, a clinical stage immuno-oncology company developing therapies targeting cancer immune evasion pathways and specific cell targeting approaches, for $ 18.50 per share in cash, for total consideration of $ 2.0 billion, net of cash acquired.

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Liabilities assumed were approximately $ 81 million.

Array–– On July 30, 2019, we acquired Array, a commercial stage biopharmaceutical company focused on the discovery, development and commercialization of targeted small molecule medicines to treat cancer and other diseases of high unmet need, for $ 48 per share in cash.

The total fair value of the consideration transferred was $ 11.2 billion ($ 10.9 billion, net of cash acquired).

In addition, $ 157 million in payments to Array employees for the fair value of previously unvested stock options was recognized as post-closing compensation expense and recorded in Restructuring charges and certain acquisition-related costs (see Note 3 ).

We financed the majority of the transaction with debt and the balance with existing cash.

Array’s portfolio includes Braftovi (encorafenib) and Mektovi (binimetinib), a broad pipeline of targeted cancer medicines in different stages of R&D, as well as a portfolio of out-licensed medicines, which may generate milestones and royalties over time.

The final allocation of the consideration transferred to the assets acquired and the liabilities assumed was completed in 2020.

In connection with this business combination, we recorded:

(i) $ 6.3 billion in Identifiable intangible assets , consisting of $ 2.0 billion of developed technology rights with a useful life of 16 years , $ 2.8 billion of IPR&D and $ 1.5 billion of licensing agreements and other ($ 1.2 billion for technology in development –– indefinite-lived licensing agreements and $ 360 million for developed technology –– finite-lived licensing agreements with a useful life of 10 years), (ii) $ 6.1 billion of Goodwill , (iii) $ 1.1 billion of net deferred tax liabilities and (iv) $ 451 million of assumed long-term debt, which was paid in full in 2019.

In 2020, we recorded measurement period adjustments to the estimated fair values initially recorded in 2019, which resulted in a reduction in Identifiable intangible assets of approximately $ 900 million with a corresponding change to Goodwill and net deferred tax liabilities.

The measurement period adjustments were recorded to better reflect market participant assumptions about facts and circumstances existing as of the acquisition date and did not have a material impact on our consolidated statement of income for the year ended December 31, 2020.

Pro forma information for the aforementioned acquisitions has not been presented because these acquisitions were not material to our consolidated financial statements.

Pro forma information for the aforementioned acquisitions (except for Seagen) has not been presented because these acquisitions were not material to our consolidated financial statements.

Divestiture of Early-Stage Rare Disease Gene Therapy Portfolio– –On September 19, 2023, we completed an agreement with Alexion, under which Alexion purchased and licensed the assets of our early-stage rare disease gene therapy portfolio.

This agreement is consistent with our previously announced strategy to pivot from viral capsid-based gene therapy approaches to harnessing new platform technologies that we believe can have a transformative impact on patients, such as mRNA or in vivo gene editing.

Under the terms of the agreement, Alexion will pay us total consideration of up to $ 1 billion, consisting of an upfront payment of $ 300 million which was paid at closing and future contingent milestone payments, plus tiered royalties based on annual net sales of the assets.

In connection with the closing of the transaction, Pfizer recognized a $ 222 million pre-tax gain in Other (income)/deductions––net (see Note 4 ).

Discontinued Operations

Meridian–– On December 31, 2021, we completed the sale of our Meridian subsidiary for approximately $ 51 million in cash and recognized a loss of approximately $ 167 million, net of tax, in Discontinued operations––net of tax .

In connection with the sale, Pfizer and the purchaser of Meridian entered into various agreements to provide a framework for our relationship after the sale, including interim TSAs and an MSA.

The TSAs primarily involve Pfizer providing services related to IT, among other activities, and are generally expected to be for terms of no more

2022 Form 10-K 60

Notes to Consolidated Financial Statements

and Subsidiary Companies

than 12 to 18 months post sale.

Services under the TSAs are completed as of December 31, 2023.

The MSA is for a term of three years post sale with a two year extension period.

In 2022, the amounts recorded under the interim TSAs and MSA were not material to our consolidated results of operations.

Amounts recorded under the interim TSAs and MSA in 2023 and 2022 were not material to our operations.

No amounts were recorded under these arrangements in 2021.

Upjohn Separation and Combination with Mylan–– On November 16, 2020, we completed the spin-off and the combination of the Upjohn Business with Mylan (the Transactions) to form Viatris.

The Transactions were structured as an all-stock, Reverse Morris Trust transaction.

Specifically, (i) we contributed the Upjohn Business to a wholly owned subsidiary, which was renamed Viatris, so that the Upjohn Business was separated from the remainder of our business (the Separation), (ii) following the Separation, we distributed, on a pro rata basis, all of the shares of Viatris common stock held by Pfizer to Pfizer stockholders as of the November 13, 2020 record date, such that each Pfizer stockholder as of the record date received approximately 0.124079 shares of Viatris common stock per share of Pfizer common stock (the Distribution);

and (iii) immediately after the Distribution, the Upjohn Business combined with Mylan in a series of transactions in which Mylan shareholders received one share of Viatris common stock for each Mylan ordinary share held by such shareholder, subject to any applicable withholding taxes (the Combination).

Prior to the Distribution, Viatris made a cash payment to Pfizer equal to $ 12.0 billion as partial consideration for the contribution of the Upjohn Business to Viatris.

As of the closing of the Combination, Pfizer stockholders owned approximately 57 % of the outstanding shares of Viatris common stock, and Mylan shareholders owned approximately 43 % of the outstanding shares of Viatris common stock, in each case on a fully diluted, as-converted and as-exercised basis.

The Transactions are generally expected to be tax free to Pfizer and Pfizer stockholders for U.S.

tax purposes.

Beginning November 16, 2020, Viatris operates both the Upjohn Business and Mylan as an independent publicly traded company, which is traded under the symbol “VTRS” on the NASDAQ.

In connection with the Transactions, in June 2020, Upjohn Inc.

and Upjohn Finance B.V.

completed privately placed debt offerings of $ 7.45 billion and € 3.60 billion aggregate principal amounts, respectively, (approximately $ 11.4 billion) of senior unsecured notes and entered into other financing arrangements, including a $ 600 million delayed draw term loan agreement and a revolving credit facility agreement for up to $ 4.0 billion.

Proceeds from the debt offerings and other financing arrangements were used to fund the $ 12.0 billion cash distribution Viatris made to Pfizer prior to the Distribution.

We used the cash distribution proceeds to pay down commercial paper borrowings and redeem the $ 1.15 billion aggregate principal amount outstanding of our 1.95 % senior unsecured notes that were due in June 2021 and $ 342 million aggregate principal amount outstanding of our 5.80 % senior unsecured notes that were due in August 2023, before the maturity date.

Interest expense for the $ 11.4 billion in debt securities incurred during 2020 is included in Discontinued operations––net of tax .

Following the Separation and Combination of the Upjohn Business with Mylan, we are no longer the obligor or guarantor of any Upjohn debt or Upjohn financing arrangements.

As a result of the spin-off of the Upjohn Business, we distributed net assets of $ 1.6 billion as of November 16, 2020, which was reflected as a reduction to Retained earnings and reflects the 2021 MTM change in accounting principle .

Of this amount, $ 412 million represents cash transferred to the Upjohn Business, with the remainder considered a non-cash activity in the consolidated statement of cash flows for the year ended December 31, 2020.

The spin-off also resulted in a net increase to Accumulated other comprehensive loss of $ 423 million for the derecognition of net gains on foreign currency translation adjustments of $ 397 million and prior service net credits associated with benefit plans of $ 26 million, which were reclassified to Retained earnings .

As a result of the separation of Upjohn, we incurred separation-related costs of $ 434 million in 2020, which are included in Discontinued operations––net of tax .

These costs primarily relate to professional fees for regulatory filings and separation activities within finance, tax, legal and information system functions as well as investment banking fees.

In connection with the Transactions, Pfizer and Viatris entered into various agreements to effect the Separation and Combination and to provide a framework for our relationship after the Combination, including a separation and distribution agreement, interim operating models, including agency arrangements, MSAs, TSAs, a tax matters agreement, and an employee matters agreement, among others.

Upjohn Separation and Combination with Mylan–– In connection with the 2020 spin-off and the combination of the Upjohn Business with Mylan to form Viatris, Pfizer and Viatris entered into various agreements, including a separation and distribution agreement, interim operating models, including agency arrangements, MSAs, TSAs, a tax matters agreement, and an employee matters agreement, among others.

The interim agency operating model arrangements primarily include billings, collections and remittance of rebates that we are performing on a transitional basis on behalf of Viatris.

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The terms of the MSAs range in initial duration from four to seven years post-separation.

The TSAs primarily involve Pfizer providing services to Viatris related to finance, IT and human resource infrastructure and are generally expected to be for terms of no more than three years post-Separation.

The amounts recorded under the above agreements were not material to our consolidated results of operations in 2022, 2021 and 2020.

Net amounts due to Viatris under the above agreements were $ 94 million as of December 31, 2022 and net amounts due from Viatris under the above arrangements were $ 53 million as of December 31, 2021.

Services under the TSAs were largely completed as of December 31, 2023.

Amounts recorded under the above agreements in 2023, 2022 and 2021 were not material to our operations.

Net amounts due to Viatris under the above agreements were $ 33 million as of December 31, 2023 and $ 94 million as of December 31, 2022.

The cash flows associated with the above agreements are included in Net cash provided by operating activities from continuing operations, except for a $ 277 million payment to Viatris made in 2021 pursuant to terms of the separation agreement, which is reported in Other financing activities, net .

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(MILLIONS) 2023 2022 2021

Revenues $ — $ 277 $ 7,572

Total revenues

$ — $ — $ 277

Costs and expenses:

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Discontinued operations––net of tax $ ( 15 ) $ 6 $ ( 434 )

(a) In 2022, Discontinued operations—net of tax relates to post-close adjustments.

In 2021, Discontinued operations—net of tax primarily includes (i) the operations of Meridian prior to its sale on December 31, 2021 recognized in Income/(loss) from discontinued operations—net of tax, which includes a pre-tax amount to resolve a MDL relating to EpiPen against the Company in the U.S.

(a) In 2023 and 2022, Discontinued operations—net of tax relates to post-close adjustments.

In 2021, Discontinued operations—net of tax primarily includes (i) the operations of Meridian prior to its sale on December 31, 2021 recognized in Income/(loss) from discontinued operations—net of tax, which includes a pre-tax expense to resolve an MDL relating to EpiPen against the Company in the U.S.

District Court for the District of Kansas for $ 345 million;

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To a much lesser extent, Discontinued operations—net of tax in 2021 also includes the operations of the Mylan-Japan collaboration prior to its termination on December 21, 2020 and post-close adjustments directly related to our former Upjohn and Nutrition discontinued businesses, including adjustments for tax, benefits and legal-related matters recognized in Income/(loss) from discontinued operations—net of tax.

In 2020, Discontinued operations—net of tax relates to the operations of the Upjohn Business, Meridian and the Mylan-Japan collaboration and includes the impact of the 2021 MTM change in accounting principle, pre-tax interest expense of $ 116 million associated with the U.S.

dollar and Euro denominated senior unsecured notes issued by Upjohn Inc.

and Upjohn Finance B.V.

in the second quarter of 2020 and pre-tax charges of $ 223 million related to the remeasurement of Euro debt issued by Upjohn Finance B.V.

in the second quarter of 2020.

Equity-Method Investments

Haleon/Consumer Healthcare JV–– On July 31, 2019, we completed a transaction in which we and GSK combined our respective consumer healthcare businesses into a new JV that operated globally under the GSK Consumer Healthcare name.

In exchange for the contribution of our consumer healthcare business to the JV, we received a 32 % equity stake in the new company and GSK owned the remaining 68 %.

On July 18, 2022, GSK completed a demerger of the Consumer Healthcare JV which became Haleon, an independent, publicly traded company listed on the London Stock Exchange that holds the joint Consumer Healthcare business of GSK and Pfizer following the demerger.

We continue to own 32 % of the ordinary shares of Haleon after the demerger, and we account for our interest in Haleon/the Consumer Healthcare JV as an equity-method investment.

The carrying value of our investment in Haleon as of December 31, 2022 and in the Consumer Healthcare JV as of December 31, 2021 is $ 10.8 billion and $ 16.3 billion, respectively, and is reported in Equity-method investments .

Haleon/Consumer Healthcare JV–– On July 18, 2022, GSK completed a demerger of the Consumer Healthcare JV which became Haleon, an independent, publicly traded company listed on the London Stock Exchange that holds the joint historical consumer healthcare business of GSK and Pfizer following the demerger.

We continue to own 32 % of Haleon as of December 31, 2023.

The carrying value of our investment in Haleon as of December 31, 2023 and December 31, 2022 was $ 11.5 billion and $ 10.8 billion, respectively, and is reported in Equity-method investments .

The fair value of our investment in Haleon as of December 31, 2023, based on quoted market prices of Haleon stock, was $ 12.1 billion.

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dollars and recognize the impact of foreign currency translation adjustments in the carrying value of our investment and in other comprehensive income.

The decrease in the value of our investment from December 31, 2021 to December 31, 2022 is primarily due to dividends totaling approximately $ 4.5 billion, of which cash flows of $ 4.0 billion are included in Net cash provided by/(used in) investing activities and $ 584 million are included in Net cash provided by operating activities, as well as $ 1.4 billion in pre-tax foreign currency translation adjustments (see Note 6 ), partially offset by our share of Haleon/the Consumer Healthcare JV’s earnings.

The increase in the value of our investment from December 31, 2022 to December 31, 2023 is primarily due to our share of Haleon’s earnings of $ 489 million as well as $ 280 million in pre-tax foreign currency translation adjustments (see Note 6 ), partially offset by $ 153 million in dividends.

We record our share of earnings from Haleon/the Consumer Healthcare JV on a quarterly basis on a one-quarter lag in Other (income)/deductions––net .

Our total share of Haleon’s earnings generated in the fourth quarter of 2022 and the first nine months of 2023, which we recorded in our operating results in 2023, was $ 489 million.

Our total share of Haleon/the Consumer Healthcare JV’s earnings generated in the fourth quarter of 2021 and the first nine months of 2022, which we recorded in our operating results in 2022, was $ 536 million.

Our total share of the JV’s earnings generated in the fourth quarter of 2020 and the first nine months of 2021, which we recorded in our operating results in 2021, was $ 495 million.

Our total share of the JV’s earnings generated in the fourth quarter of 2019 and the first nine months of 2020, which we recorded in our operating results in 2020, was $ 417 million.

As part of the initial accounting for our investment in the Consumer Healthcare JV in 2019, we determined that the difference between the initial fair value of our investment less our underlying equity in the carrying value of the net assets of the JV resulted in an initial excess basis difference of $ 4.8 billion.

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Basis differences on definite-lived intangible assets and related deferred tax liabilities are being amortized over the lives of the underlying assets, which range from 8 to 20 years.

In 2022, our equity-method income included in Other (income)/ deductions––net also includes charges of $ 100 million, primarily for adjustments to our equity-method basis differences related to the separation of Haleon/the Consumer Healthcare JV from GSK.

The total amortization and adjustment of basis differences was not material to our results of operations in 2021 and 2020.

In 2022, our equity-method income included in Other (income)/ deductions––net also included charges of $ 100 million, primarily for adjustments to our equity-method basis differences related to the separation of Haleon/the Consumer Healthcare JV from GSK.

The total amortization and adjustment of basis differences resulting from the excess of the initial fair value of our investment over the underlying equity in the carrying value of the net assets of Haleon/the Consumer Healthcare JV was not material to our results of operations in 2023 and 2021.

2023 Form 10-K

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Following its issuance of the notes in March 2022, which fell in our international second quarter of 2022, the Consumer Healthcare JV loaned to us and GSK the net proceeds received from the notes on a pro rata equity ownership basis, for which we received a loan of £ 2.9 billion ($ 3.7 billion as of the end of our second quarter of 2022), at an interest rate of 1.365 % per annum payable semi-annually in arrears.

In conjunction with the demerger, we received £ 3.5 billion ($ 4.2 billion) in dividends from the JV in July 2022, of which $ 4.0 billion related to a one-time pre-separation dividend, which decreased the carrying value of our investment (as discussed above).

Simultaneous with the receipt of the dividends, we repaid the £ 2.9 billion loan from the JV.

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Income attributable to shareholders 3,090 3,108 2,040

Licensing Arrangements

Agreement with Valneva–– On April 30, 2020, we signed an agreement to co-develop and commercialize Valneva’s Lyme disease vaccine candidate, VLA15, which covers six serotypes that are prevalent in North America and Europe.

Valneva and Pfizer will work closely together throughout the development of VLA15.

Valneva is eligible to receive a total of up to $ 308 million in cash payments from us consisting of a $ 130 million upfront payment, which was paid and recorded in Acquired in-process research and development expenses in our second quarter of 2020, as well as $ 35 million in development milestones which were paid and recorded in Acquired in-process research and development expenses in 2021 and 2022, and $ 143 million in early commercialization milestones which remain unpaid.

Under the terms of the agreement, Valneva was to fund 30 % of all development costs through completion of the development program, and in return we were to pay Valneva tiered royalties.

We will lead late-stage development and have sole control over commercialization.

In June 2022, we entered into an Equity Subscription Agreement, under which we invested € 90.5 million ($ 95 million) in Valneva to further support our strategic Lyme arrangement.

In addition, we updated the terms of our existing agreement for VLA15.

Licensing Arrangement

Agreement with Valneva–– In June 2022, we entered into an Equity Subscription Agreement, under which we invested € 90.5 million ($ 95 million) in Valneva to further support our arrangement to co-develop and commercialize Lyme disease vaccine candidate, VLA15, which we originally entered into with Valneva in 2020.

In addition, we updated the terms of our existing co-development and commercialization agreement for VLA15.

Valneva will now fund 40 % of the remaining shared development costs, and we will pay Valneva tiered royalties ranging from 14 % to 22 %, compared to royalties starting at 19 % in the initial agreement.

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Our rights and obligations under our collaborative arrangements vary.

For example, we have agreements to co-promote pharmaceutical products discovered by us or other companies, and we have agreements where we partner to co-develop and/or participate together in commercializing, marketing, promoting, manufacturing and/or distributing a drug product.

Collaboration with Biohaven–– In November 2021, we entered into a collaboration and license agreement and related sublicense agreement with Biohaven and certain of its subsidiaries to commercialize rimegepant and zavegepant for the treatment and prevention of migraines outside of the U.S., subject to regulatory approval.

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We and BioNTech will share gross profits from commercialization of any product.

As of December 31, 2023, we held an equity stake of 2.7 % of BioNTech.

On April 9, 2020, we signed a global agreement with BioNTech to co-develop a mRNA-based coronavirus vaccine program aimed at preventing COVID-19 infection, which resulted in the development of Comirnaty.

In connection with the April 2020 agreement, we made an upfront cash payment of $ 72 million and an equity investment in the common stock of BioNTech of $ 113 million.

We recognized $ 98 million for the upfront payment and a premium paid on the equity investment in Acquired in-process research and development expenses in our second quarter of 2020.

BioNTech became eligible to receive potential milestone payments of up to $ 563 million for a total consideration of $ 748 million.

Under the terms of this agreement, we and BioNTech share gross profits and development costs equally after approval and successful commercialization of the vaccine, and we were responsible for all of the development costs until commercialization of the vaccine.

Thereafter, BioNTech was to repay us its 50 percent share of these development costs through reductions in gross profit sharing and milestone payments to BioNTech over time.

On January 29, 2021, we and BioNTech signed an amended version of the April 2020 agreement.

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We have commercialization rights to the vaccine worldwide, excluding Germany and Turkey where BioNTech markets and distributes the vaccine under the agreement with us, and excluding China, Hong Kong, Macau and Taiwan, which are subject to a separate collaboration between BioNTech and Shanghai Fosun Pharmaceutical (Group) Co., Ltd.

2022 Form 10-K 64

Notes to Consolidated Financial Statements

and Subsidiary Companies

Revenues and Cost of sales on a gross basis in markets where we are commercializing the vaccine and we record our share of gross profits related to sales of the vaccine by BioNTech in Germany and Turkey in Alliance revenues.

We made an additional investment of $ 50 million in common stock of BioNTech as part of an underwritten equity offering by BioNTech, which closed in July 2020.

As of December 31, 2022, we held an equity stake of 2.7 % of BioNTech.

We recognize revenues and cost of sales on a gross basis in markets where we are commercializing the vaccine and we record our share of gross profits related to sales of the vaccine by BioNTech in Germany and Turkey in Alliance revenues .

Collaboration with Beam–– On December 24, 2021, we entered into a multi-year research collaboration with Beam to utilize Beam’s in vivo base editing programs, which use mRNA and lipid nanoparticles, for three targets for rare genetic diseases of the liver, muscle and central nervous system.

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Beam is also eligible to receive royalties on global net sales for each licensed program.

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

Collaboration with Arvinas–– On July 21, 2021, we entered into a global collaboration with Arvinas to develop and commercialize ARV-471, an investigational oral PROTAC ® (PROteolysis TArgeting Chimera) estrogen receptor protein degrader.

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Arvinas is also eligible to receive up to $ 400 million in approval milestones and up to $ 1 billion in commercial milestones.

The companies will equally share worldwide development costs, commercialization expenses and profits.

The companies equally share worldwide development costs, commercialization expenses and profits.

As of December 31, 2023, we held a 5.1 % equity stake of Arvinas.

Collaboration with Myovant–– On December 26, 2020, we entered into a collaboration with Myovant to jointly develop and commercialize Orgovyx (relugolix) in advanced prostate cancer and Myfembree (relugolix 40 mg, estradiol 1.0 mg, and norethindrone acetate 0.5 mg) in women’s health in the U.S.

We also received an exclusive option to commercialize relugolix in oncology outside the U.S.

and Canada, excluding certain Asian countries, which we declined to exercise.

Under the terms of the agreement, the companies equally share profits and allowable expenses in the U.S.

for Orgovyx, and in the U.S.

and Canada for Myfembree, with Myovant bearing our share of allowable expenses up to a maximum of $ 100 million in 2021 and up to a maximum of $ 50 million in 2022.

Pfizer does not have rights outside of these markets.

We record our share of gross profits as Alliance revenue.

Myovant remains responsible for regulatory interactions and drug supply and continues to lead clinical development for Myfembree.

Myovant is entitled to receive up to $ 4.35 billion, including an upfront payment of $ 650 million, which was made in December 2020, $ 200 million in potential regulatory milestones for FDA approvals for Myfembree in women’s health, all of which has been paid to Myovant as of December 31, 2022 and recognized as Identifiable intangible assets—Developed technology rights, and tiered sales milestones of up to $ 3.5 billion in total for prostate cancer and for the combined women’s health indications for which commercial sales have commenced.

In connection with this transaction, in 2020 we recognized $ 499 million in Identifiable intangible assets––Developed technology rights and $ 151 million in Acquired in-process research and development expenses representing the relative fair value of the portion of the upfront payment allocated to the approved indication and unapproved indications of the product, respectively.

Collaboration with CStone–– On September 29, 2020, we entered into a strategic collaboration with CStone to address oncological needs in China.

The collaboration encompasses our $ 200 million upfront equity investment in CStone, the development and commercialization of CStone’s sugemalimab (CS1001, PD-L1 antibody) in mainland China, and a framework between the companies to bring additional oncology assets to the Greater China market.

The transaction closed on October 9, 2020.

As of December 31, 2022, we held a 9.7 % equity stake of CStone.

Summarized Financial Information for Collaborative Arrangements

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(MILLIONS) 2023 2022 2021

Revenues —Revenues (a)

Product revenues (a)

$ 212 $ 437 $ 590

Revenue s—Alliance revenues (b)

Alliance revenues (b)

7,582 8,537 7,652

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Research and development expenses (e)

272 314 ( 14 )

Acquired in-process research and development expenses (f)

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(b) Substantially all relates to amounts earned from our partners under co-promotion agreements.

The increase in 2022 reflects increases in Alliance revenues from Eliquis, Comirnaty and Bavencio, while the increase in 2021 reflects increases in Alliance revenues from Comirnaty, Eliquis and Xtandi.

The decrease in 2023 was primarily driven by a decline in Alliance revenues from Comirnaty, partially offset by an increase in Alliance revenues from Eliquis.

The increase in 2022 was primarily driven by increases in Alliance revenues from Eliquis, Comirnaty and Bavencio.

(c) Primarily relates to amounts paid to collaboration partners for their share of net sales or profits earned in collaboration arrangements where we are the principal in the transaction, and cost of sales for inventory purchased from our partners.

The decrease in 2022, as well as the increase in 2021, primarily relate to Comirnaty.

The decreases in 2023 and in 2022 primarily relate to Comirnaty.

(d) Represents net reimbursements to our partners for selling, informational and administrative expenses incurred.

(e) Represents net reimbursements (to)/from our partners for research and development expenses incurred.

2022 Form 10-K 65

Notes to Consolidated Financial Statements

and Subsidiary Companies

(e) Represents net reimbursements from our partners for research and development expenses incurred.

(f) Primarily relates to upfront payments to our partners as well as premiums paid on our equity investments in the common stock of our partners.

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The amounts outlined in the above table do not include transactions with third parties other than our collaboration partners, or other costs for the products under the collaborative arrangements.

Research and Development Arrangement

Research and Development Funding Arrangement with Blackstone–– In April 2023, we entered into an arrangement with Blackstone under which we will receive up to a total of $ 550 million in 2023 through 2026 to co-fund our quarterly development costs for specified treatments.

As there is substantive transfer of risk to the financial partner, the development funding is recognized by us as an obligation to perform contractual services.

We are recognizing the funding as a reduction of Research and development expenses using an attribution model over the period of the related expenses.

The reduction to Research and development expenses in 2023 was $ 175 million.

If successful, upon regulatory approval in the U.S.

or certain major markets in the EU for the indications based on the applicable clinical trials, Blackstone will be eligible to receive approval-based fixed milestone payments of up to $ 468 million contingent upon the successful results of the clinical trials.

Fixed milestone payments due upon approval will be recorded as intangible assets and amortized to Amortization of intangible assets over the shorter of the term of the agreement or estimated commercial life of the product.

Following potential regulatory approval, Blackstone will be eligible to receive a combination of fixed milestone payments of up to $ 550 million in total based on achievement of certain levels of cumulative applicable net sales, as well as royalties based on a mid-to-high single digit percentage of the applicable net sales.

Fixed sales-based milestone payments will be recorded as intangible assets and amortized to Amortization of intangible assets over the shorter of the term of the agreement or estimated commercial life of the product, and royalties on net sales will be recorded as Cost of sales when incurred.

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

Transforming to a More Focused Company Program

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.

We took efforts to ensure our cost base and support model aligned appropriately with our operating structure.

While certain direct costs transferred to the Consumer Healthcare JV in 2019, and to the Upjohn Business in connection with the spin-off, there are indirect costs which did not transfer.

This program is primarily composed of the following initiatives:

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

Actions included, among others, changes in location of certain activities, expanded use and co-location of centers of excellence and shared services, and increased use of digital technologies.

The associated actions and the specific costs primarily included severance and benefit plan impacts, exit costs as well as associated implementation costs.

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

We also made several organizational changes in the third quarter of 2022 to further transform our operations to better leverage our expertise in certain areas and in anticipation of potential future new product or indication launches (see Note 1A ).

Actions included, among others, centralization of certain activities and enhanced use of digital technologies.

The costs for this effort primarily included severance and associated implementation costs.

• We also optimized our manufacturing network under this program and incurred one-time costs for cost-reduction initiatives related to our manufacturing operations.

The costs for this effort included, among other things, severance costs, implementation costs, product transfer costs, site exit costs, as well as accelerated depreciation.

• 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.

Actions include leveraging automation and digital capabilities, novel clinical development approaches and capabilities, and externalization of select assets and R&D units.

We expect costs for this effort of $ 500 million to be incurred primarily through 2023, with costs to primarily represent cash expenditures.

The costs for this effort primarily include severance costs and associated implementation costs.

From the start of this program in the fourth quarter of 2019 through December 31, 2022, we incurred costs of $ 3.5 billion, of which $ 1.4 billion ($ 1.0 billion of restructuring charges) is associated with Biopharma.

We have incurred approximately 85 % of total expected costs to date, and we expect the remaining costs to be substantially incurred through 2023.

Restructuring Programs

Transforming to a More Focused Company Program–– In 2019, we announced that we would be incurring costs associated with our Transforming to a More Focused Company Program, a multi-year effort to ensure our cost base aligned appropriately with our operating structure following Pfizer’s transformation into a more focused, innovative science-based global biopharmaceutical business.

This program included activities to (i) restructure our corporate enabling functions to appropriately support our operating structure;

(ii) transform our commercial go-to-market model;

and (iii) optimize our manufacturing network and R&D operations.

The costs to restructure our corporate enabling functions, and to optimize our R&D operations and reduce cycle times, as well as to further prioritize our internal R&D portfolio, primarily included severance and implementation costs.

The costs to optimize our manufacturing network largely included severance, implementation costs, product transfer costs, site exit costs, and accelerated depreciation.

From the start of this program in the fourth quarter of 2019 through December 31, 2023, we incurred costs of $ 4.0 billion, of which $ 1.5 billion ($ 1.0 billion of restructuring charges) was associated with our Biopharma segment and have substantially completed this program.

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

Realigning our Cost Base Program–– In the fourth quarter of 2023, we announced that we launched a multi-year, enterprise-wide cost realignment program that aims to realign our costs with our longer-term revenue expectations.

We expect costs associated with this multi-year effort to continue through 2024 and to total approximately $ 3.0 billion, primarily representing cash expenditures for severance and implementation costs, of which $ 1.1 billion is associated with our Biopharma segment.

In 2023, we incurred costs under this program of $ 1.7 billion, of which $ 674 million (including $ 665 million of restructuring charges) is associated with our Biopharma segment.

Key Activities

The following summarizes acquisitions and cost-reduction/productivity initiatives costs and credits:

The following summarizes costs and credits for acquisitions and cost-reduction/productivity initiatives:

Year Ended December 31,

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Restructuring charges/(credits) (a)

1,968 882 741

Transaction costs (b)

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Selling, informational and administrative expenses 1 2 23

Research and development expenses — — ( 3 )

Total additional depreciation––asset restructuring

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Total costs associated with acquisitions and cost-reduction/productivity initiatives $ 3,426 $ 2,018 $ 1,298

2022 Form 10-K 66

Notes to Consolidated Financial Statements

and Subsidiary Companies

(a) Primarily represents cost-reduction initiatives.

Restructuring charges/(credits) associated with Biopharma:

($ 354 million charge in 2022, $ 610 million charge in 2021, and $ 71 million charge in 2020).

Amounts associated with our Biopharma segment:

$ 672 million for 2023 (including charges of $ 665 million for Realigning our Cost Base Program and credits of $ 20 million for Transforming to a More Focused Company program), $ 354 million for 2022 (including charges of $ 291 million for Transforming to a More Focused Company program) and $ 610 million for 2021 (including charges of $ 612 million for Transforming to a More Focused Company program).

(b) Represents external costs for banking, legal, accounting and other similar services.

(c) Represents external, incremental costs directly related to integrating acquired businesses, such as expenditures for consulting and the integration of systems and processes, and certain other qualifying costs.

2023 costs mostly relate to our acquisition of Seagen, including $ 476 million that was recognized as a post-closing compensation expense for payments to Seagen employees in the fourth quarter of 2023 for the fair value of long-term incentive awards that vested upon closing and the expense for employee incentive awards issued in contemplation of the merger.

2022 costs mostly related to our acquisitions of Arena and GBT, including $ 138 million in payments to Arena employees in the first quarter of 2022 and $ 136 million in payments to GBT employees in the fourth quarter of 2022 for the fair value of previously unvested long-term incentive awards that was recognized as post-closing compensation expense.

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2021 costs primarily related to our acquisition of Trillium.

2020 costs primarily related to our acquisition of Array.

(d) Represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.

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$ 1,978 $ — $ 11 $ 1,988

(a) Includes adjustments for foreign currency translation.

(a) Other activity includes adjustments for foreign currency translation that are not material to our consolidated financial statements.

(b) Included in Other current liabilities ($ 991 million) and Other noncurrent liabilities ($ 213 million).

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

Other (Income)/Deductions—Net

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2,209 1,238 1,291

Net interest expense

Net interest expense (b)

585 987 1,255

Royalty-related income ( 1,058 ) ( 845 ) ( 857 )

Net (gains)/losses on asset disposals — ( 99 ) 237

Net (gains)/losses recognized during the period on equity securities (b)

Net (gains)/losses recognized during the period on equity securities (c)

( 1,590 ) 1,273 ( 1,344 )

Income from collaborations, out-licensing arrangements and sales of compound/product rights (c)

Income from collaborations, out-licensing arrangements and sales of compound/product rights (d)

( 154 ) ( 188 ) ( 396 )

Net periodic benefit costs/(credits) other than service costs ( 610 ) ( 849 ) ( 2,547 )

Certain legal matters, net (d)

Certain asset impairments (e)

Haleon/Consumer Healthcare JV equity method (income)/loss (f)

Certain legal matters, net (e)

Certain asset impairments (f)

Haleon/Consumer Healthcare JV equity method (income)/loss (g)

( 505 ) ( 436 ) ( 471 )

Other, net (g)

Other, net (h)

( 1,002 ) ( 378 ) ( 786 )

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(a) Capitalized interest totaled $ 160 million in 2023, $ 124 million in 2022 and $ 108 million in 2021.

(b) 2022 losses include, among other things, unrealized losses of $ 986 million related to investments in BioNTech, Allogene Therapeutics, Inc.

2021 gains included, among other things, unrealized gains of $ 1.6 billion related to investments in BioNTech and Cerevel Therapeutics Holdings, Inc.

2020 gains included, among other things, unrealized gains of $ 405 million related to investments in BioNTech and SpringWorks Therapeutics, Inc.

2021 included, among other things, $ 188 million of net collaboration income from BioNTech related to Comirnaty and $ 97 million of milestone income from multiple licensees.

2020 included, among other things, (i) $ 178 million in milestone income from multiple licensees and (ii) a $ 75 million upfront payment received from our sale of our CK1 assets to Biogen Inc.

(d) 2022 primarily includes certain product liability and other expenses related to products discontinued and/or divested by Pfizer.

2021 primarily includes certain product liability expenses related to products discontinued and/or divested by Pfizer, and to a lesser extent, legal obligations related to pre-acquisition commitments.

(e) 2022 primarily includes intangible asset impairment charges of:

(i) $ 200 million associated with our Biopharma segment, representing an IPR&D asset for the unapproved indication of symptomatic dilated cardiomyopathy due to a mutation of the gene encoding the lamin A/C protein, acquired in our Array acquisition, and was a result of the Phase 3 trial reaching futility at a pre-planned interim analysis, (ii) $ 171 million associated with our Biopharma segment, related to developed technology rights acquired in our Hospira acquisition, and reflect updated commercial forecasts mainly reflecting competitive pressures, and (iii) $ 50 million associated with PC1, related to finite-lived licensing agreements acquired in our Hospira acquisition, and reflects updated contract manufacturing forecasts reflecting changes to market dynamics.

2020 included intangible asset impairment charges associated with our Biopharma segment that reflected, among other things, updated commercial forecasts mainly reflecting competitive pressures:

(i) $ 900 million related to IPR&D assets for unapproved indications of certain cancer medicines, acquired in our Array acquisition;

(ii) $ 528 million related to Eucrisa, a finite-lived developed technology right acquired in our Anacor Pharmaceuticals, LLC acquisition;

and (iii) $ 263 million related to finite-lived developed technology rights for certain generic sterile injectables acquired in our Hospira acquisition.

2022 Form 10-K 67

Notes to Consolidated Financial Statements

and Subsidiary Companies

(f) See Note 2C .

(g) 2022 includes, among other things, (i) dividend income of $ 314 million from our investment in ViiV, (ii) income net of costs associated with TSAs of $ 142 million and (iii) charges of $ 77 million, reflecting the change in the fair value of contingent consideration.

2021 included, among other things, (i) income net of costs associated with TSAs of $ 288 million, (ii) dividend income of $ 166 million from our investment in ViiV and (iii) charges of $ 142 million, reflecting the change in the fair value of contingent consideration.

(b) The decrease in net interest expense in 2023 reflects higher interest expense driven by our $ 31 billion aggregate principal amount of senior unsecured notes issued in May 2023 as part of the financing for our acquisition of Seagen, which was more than offset by higher interest income on the investment of the net proceeds from the debt issuance.

and unrealized gains of $ 297 million related to our investment in Cerevel Therapeutics Holdings, Inc (Cerevel), partially offset by unrealized losses of $ 292 million related to our investment in BioNTech.

2022 net losses included, among other things, unrealized losses of $ 986 million related to investments in BioNTech, Allogene Therapeutics, Inc.

2021 net gains included, among other things, unrealized gains of $ 1.6 billion related to investments in BioNTech and Cerevel.

(d) 2021 included, among other things, $ 188 million of net collaboration income from BioNTech related to Comirnaty.

(e) 2023 primarily includes certain product liability and other legal expenses related to products discontinued and/or divested by Pfizer and legal obligations related to pre-acquisition matters.

2022 primarily included certain product liability and other legal expenses related to products discontinued and/or divested by Pfizer.

2021 primarily included certain product liability expenses related to products discontinued and/or divested by Pfizer, and to a lesser extent, legal obligations related to pre-acquisition matters.

(f) 2023 primarily represents intangible asset impairment charges of $ 3.0 billion, of which $ 2.9 billion is associated with our Biopharma segment ($ 2.8 billion recorded in the fourth quarter), including:

$ 1.4 billion for etrasimod (Velsipity) IPR&D, based on a change in development plans for additional indications and overall revenue expectations, $ 964 million for Prevnar 13 developed technology rights ($ 834 million for pediatric and $ 130 million for adult), due to updated commercial forecasts mainly reflecting a transition to higher serotype coverage, and $ 486 million for various other IPR&D assets and developed technology rights, due to updated commercial forecasts mainly reflecting competitive pressures and/or prioritization decisions.

2023 also includes $ 128 million associated with Other business activities, related to IPR&D and developed technology rights for acquired software assets and reflects unfavorable pivotal trial results and updated commercial forecasts.

2022 represented intangible asset impairment charges associated with our Biopharma segment of:

$ 200 million for an IPR&D asset for the unapproved indication of symptomatic dilated cardiomyopathy due to a mutation of the gene encoding the lamin A/C protein that resulted from the Phase 3 trial reaching futility at a pre-planned interim analysis and $ 171 million for developed technology rights due to updated commercial forecasts mainly reflecting competitive pressures.

2022 also included intangible asset impairment charges of $ 50 million associated with PC1, related to finite-lived licensing agreements and reflected updated contract manufacturing forecasts reflecting changes to market dynamics.

(g) See Note 2C .

(h) 2023 includes, among other things, (i) dividend income of $ 265 million from our investment in ViiV and $ 211 million from our investment in Nimbus resulting from Takeda’s acquisition of Nimbus’s oral, selective allosteric tyrosine kinase 2 (TYK2) inhibitor program subsidiary and (ii) a $ 222 million gain on the divestiture of our early-stage rare disease gene therapy portfolio to Alexion.

2022 included, among other things, (i) dividend income of $ 314 million from our investment in ViiV, (ii) income net of costs associated with TSAs of $ 142 million and (iii) charges of $ 77 million, reflecting the change in the fair value of contingent consideration.

The asset impairment charges included in Other (income)/deductions––net are based on estimates of fair value.

Additional information about the intangible assets that were impaired during 2022 (impairment recorded in Other (income)/deductions–net ) follows:

Additional information about the intangible assets that were impaired during 2023 follows:

Fair Value (a)

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Total $ 5,802 $ — $ — $ 5,802 $ 3,008

(a) The fair value amount is presented as of the date of impairment, as this asset is not measured at fair value on a recurring basis.

(a) The fair value amounts are presented as of the date of impairment, as these assets are not measured at fair value on a recurring basis.

See also Note 1E .

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

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

Taxes on Income from Continuing Operations

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$ 1,058 $ 34,729 $ 24,311

2022 –– The domestic loss in 2023 versus domestic income in 2022 and the decrease in international income in 2023 was primarily attributable to lower revenues, higher intangible asset impairment charges, and increases in Restructuring charges and certain acquisition-related costs , Amortization of intangible assets , and Selling, informational and administrative expenses , partially offset by a decrease in Cost of sales and net gains on equity securities in 2023 versus net losses on equity securities in 2022 .

2021 –– The decrease in domestic income is primarily related to net losses on equity securities in 2022 versus net gains on equity securities in 2021, lower net periodic benefit credits and higher restructuring charges and certain acquisition-related costs, partially offset by Paxlovid income and lower acquired IPR&D expenses.

The increase in the international income is primarily related to Paxlovid and Comirnaty income partially offset by lower net periodic benefit credits.

2020 –– The domestic income in 2021 versus domestic loss in 2020 was mainly related to Comirnaty income, lower asset impairment charges, net periodic benefit credits in 2021 versus net periodic benefit costs in 2020 and higher net gains from equity securities, partially offset by higher R&D expenses.

The increase in the international income was primarily related to Comirnaty income, net periodic benefit credits in 2021 versus net periodic benefit costs in 2020 and lower asset impairment charges.

The increase in international income is primarily related to Paxlovid and Comirnaty income partially offset by lower net periodic benefit credits.

Components of Provision/(benefit) for taxes on income based on the location of the taxing authorities include:

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State and local

( 135 ) ( 20 ) 34

Deferred income taxes:

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$ ( 1,115 ) $ 3,328 $ 1,852

2022 Form 10-K 68

Notes to Consolidated Financial Statements

and Subsidiary Companies

The changes in Provision/(benefit) for taxes on income impacting the effective tax rate year-over-year are summarized below:

The tax benefit of $ 1.1 billion for 2023 compared to the tax provision of $ 3.3 billion for 2022 was primarily a result of changes in the jurisdictional mix of earnings and the resolution of uncertain tax positions in various markets.

The 2023 pre-tax income included a greater percentage of expenses taxed at higher rates as compared to the 2022 pre-tax income, resulting in a 2023 tax benefit compared to the 2022 tax provision.

These expenses included amortization expense, acquisition-related costs, restructuring charges and intangible asset impairment charges.

The tax benefit for 2023 and the tax provision for 2022 included tax benefits related to global income tax resolutions in multiple tax jurisdictions spanning multiple tax years.

The tax provision for 2022 also included the closing of U.S.

IRS audits covering five tax years.

The higher effective tax rate in 2022 was mainly the result of:

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IRS audits covering five tax years.

The higher effective tax rate in 2021 was mainly the result of:

• the change in the jurisdictional mix of earnings primarily related to Comirnaty;

• lower tax benefits related to the impairment of intangible assets,

partially offset by:

• certain initiatives executed in the third quarter of 2021 associated with our investment in the Consumer Healthcare JV with GSK based on estimates and assumptions that we believe to be reasonable.

In all years, federal, state and international net tax liabilities assumed or established as part of a business acquisition are not included in Provision/(benefit) for taxes on income (see Note 2A ).

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Federal Consolidated Income Tax Return, to pay our initial estimated $ 15 billion repatriation tax liability on accumulated post-1986 foreign earnings over eight years through 2026.

The fourth annual installment of this liability was paid by its April 18, 2022 due date.

The fifth annual installment is due April 18, 2023 and is reported in current Income taxes payable as of December 31, 2022.

The fifth annual installment of this liability was paid by its April 18, 2023 due date.

The sixth annual installment is due April 15, 2024 and is reported in current Income taxes payable as of December 31, 2023.

The remaining liability is reported in noncurrent Other taxes payable.

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.

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

Tax Rate Reconciliation

2 unchanged sentences

Year Ended December 31,

2022 2021 2020

statutory income tax rate 21.0 % 21.0 % 21.0 %

6 unchanged sentences

( 33.1 ) ( 1.9 ) ( 0.6 )

State & local taxes (e)

( 22.4 ) — ( 0.5 )

Charitable contributions

( 7.3 ) ( 0.5 ) ( 0.6 )

Certain Consumer Healthcare JV initiatives (c)

R&D tax credit ( 15.8 ) ( 0.6 ) ( 0.5 )

All other, net (f)

All other, net (g)

0.2 ( 0.6 ) ( 0.7 )

1 unchanged sentence

( 105.4 ) % 9.6 % 7.6 %

* The higher rate percentages for the 2023 reconciling items are significantly impacted by the lower domestic and international Income from continuing operations before provision/(benefit) for taxes on income (see Note 5A ) .

(a) For taxation of non-U.S.

17 unchanged sentences

(d) The higher rate benefit from the Foreign-Derived Intangible Income deduction in 2022 is mainly the result of the TCJA requirement to capitalize R&D costs for tax years beginning after December 31, 2021.

(e) Includes changes in interest related to our uncertain tax positions not included in the reconciling item called “Tax settlements and resolution of certain tax positions”.

(f) All other, net is primarily due to routine business operations.

(e) Includes the impact of U.S.

state and local taxes and changes in the state valuation allowances including those related to the acquisition of Seagen.

(f) Includes changes in interest related to our uncertain tax positions not included in the reconciling item called “Tax settlements and resolution of certain tax positions”.

(g) All other, net is primarily due to routine business operations.

2023 Form 10-K

5 unchanged sentences

(MILLIONS) Assets (Liabilities) Assets (Liabilities)

Prepaid/deferred items $ 1,768 $ ( 533 ) $ 1,889 $ ( 456 )

Prepaid/deferred items (a)

$ 2,658 $ ( 654 ) $ 1,673 $ ( 533 )

Accrued/deferred royalties 1,655 — 2,127 —

Inventories 672 ( 262 ) 408 ( 56 )

Intangible assets (a)

Deferred revenues (b)

Inventories (c)

1,210 ( 1,060 ) 672 ( 262 )

Intangible assets (d)

1,526 ( 11,605 ) 1,445 ( 6,288 )

Property, plant and equipment 168 ( 2,039 ) 112 ( 1,845 )

Employee benefits (b)

Employee benefits (e)

1,085 ( 287 ) 1,314 ( 276 )

1 unchanged sentence

Legal and product liability reserves 430 — 385 —

Research and development (c)

Research and development (f)

6,275 — 4,137 —

Net operating loss/tax credit carryforwards (d), (e)

Net operating loss/tax credit carryforwards (g), (h)

2,708 — 2,224 —

1 unchanged sentence

State and local tax adjustments 119 — 151 —

Investments (f)

Investments (i)

133 ( 395 ) 91 ( 208 )

3 unchanged sentences

Total deferred taxes $ 17,299 $ ( 16,172 ) $ 13,265 $ ( 9,519 )

Net deferred tax asset/(liability) (g)

Net deferred tax asset/(liability) (j), (k)

$ 1,128 $ 3,746

1 unchanged sentence

See Note 1Q .

(a) The increase in net deferred tax liabilities in 2022 is primarily due to the acquisition of intangible assets related to GBT, Arena and Biohaven, partially offset by the amortization of intangible assets and certain impairment charges.

(b) The decrease in net deferred tax assets in 2022 is primarily due to changes in pension and postretirement benefit obligations, as well as the performance of plan assets reported in the period.

(a) The increase in net deferred tax assets in 2023 is primarily related to temporary differences associated with the timing of cash tax payments made and accruals recorded in the ordinary course of business.

(b) The increase in deferred tax assets in 2023 is primarily related to temporary differences associated with the non-cash revenue reversal for Paxlovid recorded in the fourth quarter of 2023.

See Note 17C .

(c) The decrease in net deferred tax assets in 2023 is primarily due to the acquisition of inventories related to Seagen, partially offset by the temporary differences associated with the non-cash charges for inventory write-offs for Paxlovid and Comirnaty.

(d) The increase in net deferred tax liabilities in 2023 is primarily due to the acquisition of intangible assets related to Seagen, partially offset by the amortization of intangible assets and certain impairment charges.

(e) The decrease in net deferred tax assets in 2023 is primarily due to changes in pension and postretirement benefit obligations, as well as the performance of plan assets reported in the period.

See Note 11 .

(c) The increase in deferred tax assets in 2022 is related to the TCJA requirement to capitalize R&D costs for tax years beginning after December 31,2021.

(d) The increase in deferred tax assets in 2022 is primarily due to the acquisition of net operating loss carryforwards and credit carryforwards related to Arena, GBT and Biohaven.

(f) The increase in deferred tax assets in 2023 is primarily related to the acquisition of capitalized R&D costs related to Seagen and the TCJA requirement to capitalize R&D costs for tax years beginning after December 31, 2021.

(g) The increase in deferred tax assets in 2023 is primarily due to the acquisition of net operating loss carryforwards and credit carryforwards related to Seagen.

See Note 2A .

(e) The amounts in 2022 and 2021 are reduced for unrecognized tax benefits of $ 1.2 billion and $ 3.0 billion, respectively, where we have net operating loss carryforwards, similar tax losses, and/or tax credit carryforwards that are available, under the tax law of the applicable jurisdiction, to settle any additional income taxes that would result from the disallowance of a tax position.

(f) The decrease in net deferred tax liabilities in 2022 is primarily due to the impact of foreign currency translation adjustments related to our equity-method investment in Haleon/the Consumer Healthcare JV.

(h) The amounts in 2023 and 2022 are reduced for unrecognized tax benefits of $ 1.3 billion and $ 1.2 billion, respectively, where we have net operating loss carryforwards, similar tax losses, and/or tax credit carryforwards that are available, under the tax law of the applicable jurisdiction, to settle any additional income taxes that would result from the disallowance of a tax position.

(i) The increase in net deferred tax liabilities in 2023 is primarily due to the impact of foreign currency translation adjustments related to our equity-method investment in Haleon/the Consumer Healthcare JV.

See Note 2C .

(g) In 2022, Noncurrent deferred tax assets and other noncurrent tax assets ($ 4.8 billion), and Noncurrent deferred tax liabilities ($ 1.0 billion).

(j) In 2023, Noncurrent deferred tax assets and other noncurrent tax assets ($ 1.8 billion), and Noncurrent deferred tax liabilities ($ 0.6 billion).

In 2022, Noncurrent deferred tax assets and other noncurrent tax assets ($ 4.8 billion), and Noncurrent deferred tax liabilities ($ 1.0 billion).

(k) Excludes indefinite- and definite-lived deferred tax assets for certain non-U.S.

tax losses and interest carryforwards and U.S.

state general business credits, totaling $ 11.1 billion, given that management has determined based on applicable accounting rules that it is remote that these tax attributes will be utilized.

We have carryforwards, primarily related to net operating and capital losses, general business credits, foreign tax credits and charitable contributions, which are available to reduce future U.S.

9 unchanged sentences

For a description of our accounting policies associated with accounting for income tax contingencies, see Note 1Q .

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

Uncertain Tax Positions

6 unchanged sentences

These amounts were included in Noncurrent deferred tax assets and other noncurrent tax assets ($ 1.6 billion) and Other taxes payable ($ 45 million).

As of December 31, 2021, we had $ 1.5 billion in assets associated with uncertain

2022 Form 10-K 70

Notes to Consolidated Financial Statements

and Subsidiary Companies

tax positions.

As of December 31, 2022, we had $ 1.5 billion in assets associated with uncertain tax positions.

These amounts were included in Noncurrent deferred tax assets and other noncurrent tax assets ($ 1.5 billion) and Other taxes payable ($ 45 million).

3 unchanged sentences

Balance, beginning $ ( 4,494 ) $ ( 6,068 ) $ ( 5,595 )

Acquisitions ( 52 ) — 37

Divestitures (a)

Increases based on tax positions taken during a prior period (b)

( 46 ) ( 52 ) —

Decreases based on tax positions taken during a prior period (b), (c)

Decreases based on settlements for a prior period (c) , (d)

Increases based on tax positions taken during the current period (b)

Increases based on tax positions taken during a prior period (a)

( 158 ) ( 67 ) ( 111 )

Decreases based on tax positions taken during a prior period (a), (b)

310 1,339 103

Decreases based on settlements for a prior period (b), (c)

Increases based on tax positions taken during the current period (a)

( 515 ) ( 701 ) ( 550 )

Impact of foreign exchange ( 44 ) 90 22

Other, net (b), (e)

Balance, ending (f)

Other, net (a), (d)

Balance, ending (e)

$ ( 4,802 ) $ ( 4,494 ) $ ( 6,068 )

(a) For 2020, related to the separation of Upjohn.

See Note 2B .

(b) Primarily included in Provision/(benefit) for taxes on income.

(a) Primarily included in Provision/(benefit) for taxes on income.

(b) Primarily related to effectively settling certain issues with the U.S.

and foreign tax authorities.

See Not e 5A .

(d) Primarily related to cash payments and reductions of tax attributes.

(e) Primarily related to decreases as a result of a lapse of applicable statutes of limitations.

(f) In 2022, included in Income taxes payable ($ 40 million), Other current assets ($ 3 million), Noncurrent deferred tax assets and other noncurrent tax assets ($ 1.2 billion), Noncurrent deferred tax liabilities ($ 5 million) and Other taxes payable ($ 3.2 billion).

(d) Primarily related to decreases as a result of a lapse of applicable statutes of limitations.

(e) In 2023, included in Income taxes payable ($ 94 million), Other current assets ($ 1 million), Noncurrent deferred tax assets and other noncurrent tax assets ($ 1.3 billion), Noncurrent deferred tax liabilities ($ 4 million) and Other taxes payable ($ 3.4 billion).

In 2022, included in Income taxes payable ($ 40 million), Other current assets ($ 3 million), Noncurrent deferred tax assets and other noncurrent tax assets ($ 1.2 billion), Noncurrent deferred tax liabilities ($ 5 million) and Other taxes payable ($ 3.2 billion).

• Interest related to our unrecognized tax benefits is recorded in accordance with the laws of each jurisdiction and is recorded primarily in Provision/(benefit) for taxes on income .

In 2023, we recorded a net increase in interest of $ 64 million.

In 2022, we recorded a net decrease in interest of $ 17 million.

In 2021 and 2020, we recorded net increases in interest of $ 108 million and $ 89 million respectively.

In 2021, we recorded a net increase in interest of $ 108 million.

Gross accrued interest totaled $ 605 million as of December 31, 2023 (reflecting a decrease of $ 11 million as a result of cash payments) and gross accrued interest totaled $ 552 million as of December 31, 2022 (reflecting a decrease of $ 31 million as a result of cash payments).

4 unchanged sentences

is one of our major tax jurisdictions, and we are regularly audited by the IRS.

During the third quarter of 2022, Pfizer reached resolution of disputed issues at the IRS Independent Office of Appeals, thereby settling all issues related to U.S.

tax returns of Pfizer for the years 2011-2015.

With respect to Pfizer, tax years 2016-2018 are under audit.

1 unchanged sentence

All other tax years are closed.

In addition to the open audit years in the U.S., we have open audit years and certain related audits, appeals and investigations in certain major international tax jurisdictions such as Canada (2017-2022), Europe (2012-2022, primarily in Ireland, the U.K., France, Italy, Spain and Germany), Asia Pacific (2012-2022, primarily in China, Japan and Singapore) and Latin America (1998-2022, primarily in Brazil).

In addition to the open audit years in the U.S., we have open audit years and certain related audits, appeals and investigations in certain major international tax jurisdictions such as Canada (2017-2023), Europe (2012-2023, primarily in Ireland, the U.K., France, Italy, Spain and Germany), Asia Pacific (2013-2023, primarily in Australia, China, Japan and Singapore) and Latin America (1998-2023, primarily in Brazil).

Any settlements or statutes of limitations expirations could result in a significant decrease in our uncertain tax positions.

16 unchanged sentences

Reclassification adjustments for (gains)/losses included in net income ( 18 ) 226 ( 4 )

( 33 ) 62 ( 48 )

Benefit plans:

9 unchanged sentences

(MILLIONS) Foreign Currency Translation Adjustments (a)

Derivative Financial Instruments Available-For-Sale Securities Prior Service (Costs)/ Credits and Other Accumulated Other Comprehensive Income/(Loss)

Derivative Financial Instruments Available-For-Sale Securities Prior Service (Costs)/Credits and Other

Accumulated Other Comprehensive Income/(Loss)

Balance, January 1, 2021

Other comprehensive income/(loss) 883 ( 448 ) 151 ( 106 ) 480

Distribution of Upjohn Business (b)

$ ( 5,450 ) $ ( 428 ) $ 116 $ 452 $ ( 5,310 )

Other comprehensive income/(loss) (b)

( 722 ) 547 ( 336 ) ( 75 ) ( 587 )

Balance, December 31, 2021

Other comprehensive income/(loss) ( 722 ) 547 ( 336 ) ( 75 ) ( 587 )

( 6,172 ) 119 ( 220 ) 377 ( 5,897 )

Other comprehensive income/(loss) (b)

( 2,188 ) ( 531 ) 440 ( 129 ) ( 2,407 )

Balance, December 31, 2022

Other comprehensive income/(loss) ( 2,188 ) ( 531 ) 440 ( 129 ) ( 2,407 )

( 8,360 ) ( 412 ) 220 248 ( 8,304 )

Other comprehensive income/(loss) (b)

497 195 ( 229 ) ( 120 ) 343

Balance, December 31, 2023

$ ( 7,863 ) $ ( 217 ) $ ( 9 ) $ 128 $ ( 7,961 )

(a) Amounts do not include foreign currency translation adjustments attributable to noncontrolling interests.

Foreign currency translation adjustments include net losses in 2022 and 2021 and net gains in 2020 related to our equity-method investment in Haleon/the Consumer Healthcare JV (see Note 2C ) , and the impact of our net investment hedging program.

(b) For more information, see Note 2B .

(b) Foreign currency translation adjustments include net losses in 2023, 2022 and 2021 related to the impact of our net investment hedging program and our equity-method investment in Haleon/the Consumer Healthcare JV (see Note 2C ).

2023 Form 10-K

20 unchanged sentences

Derivative assets:

Interest rate contracts — — — 4 — 4

Foreign exchange contracts 298 — 298 714 — 714

6 unchanged sentences

124 — 124 280 — 280

Government and agency—U.S.

Corporate and other 26 — 26 72 — 72

29 unchanged sentences

The estimated fair value of such debt, using a market approach and Level 2 inputs, was $ 61 billion as of December 31, 2023 and $ 30 billion as of December 31, 2022.

2022 Form 10-K 73

Notes to Consolidated Financial Statements

and Subsidiary Companies

The differences between the estimated fair values and carrying values of held-to-maturity debt securities, private equity securities, long-term receivables and short-term borrowings not measured at fair value on a recurring basis were not significant as of December 31, 2023 and 2022.

1 unchanged sentence

The fair value measurements of our long-term receivables and private equity securities are based on Level 3 inputs.

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

Total Short-Term, Long-Term and Equity-Method Investments

20 unchanged sentences

Held-to-maturity cash equivalents $ 207 $ 679

(a) Includes money market funds primarily invested in U.S.

(a) Represent money market funds primarily invested in U.S.

Treasury and government debt.

1 unchanged sentence

Debt Securities

At December 31, 2022, our investment portfolio consisted of debt securities issued across diverse governments, corporate and financial institutions, which are investment-grade.

The contractual or estimated maturities, are as follows:

Our investment portfolio consists of investment-grade debt securities issued across diverse governments, corporate and financial institutions:

As of December 31, 2023 As of December 31, 2022

27 unchanged sentences

As of December 31, 2023, there were cumulative impairments and downward adjustments of $ 259 million and upward adjustments of $ 213 million.

Impairments, downward and upward adjustments were not significant in 2022, 2021 and 2020 .

Impairments, downward and upward adjustments were not material to our operations in 2023, 2022 and 2021 .

2023 Form 10-K

5 unchanged sentences

(MILLIONS) 2023 2022

Commercial paper, principal amount (a)

Current portion of long-term debt, principal amount 2,250 2,550

Other short-term borrowings, principal amount (a)

Other short-term borrowings, principal amount (b)

Total short-term borrowings, principal amount

Net fair value adjustments 10 —

Net fair value adjustments related to hedging and purchase accounting

Net unamortized discounts, premiums and debt issuance costs ( 121 ) ( 1 )

Total Short-term borrowings, including current portion of long-term debt , carried at historical proceeds, as adjusted

$ 10,350 $ 2,945

(a) Primarily includes cash collateral.

(a) Issued in the fourth quarter of 2023 as part of the financing for our acquisition of Seagen (see Note 2A ).

The weighted-average effective interest rate on commercial paper outstanding was approximately 5.37 % as of December 31, 2023.

(b) Primarily includes cash collateral.

See Note 7F .

As of December 31, 2022, we had access to a $ 7 billion committed U.S.

revolving credit facility, which may be used for general corporate purposes including to support our commercial paper borrowings.

Lenders under this facility have approximately $ 700 million of commitments maturing in November 2026 and $ 6.3 billion of commitments maturing in November 2027.

As of December 31, 2023, we had access to a total of $ 15 billion in committed U.S.

revolving credit facilities, consisting of an $ 8 billion facility maturing in October 2024 and a $ 7 billion facility maturing in October 2028, which may be used for general corporate purposes including to support our global commercial paper borrowings.

In addition to the U.S.

revolving credit facility, our lenders have provided us an additional $ 321 million in lines of credit, of which $ 292 million expire within one year.

revolving credit facilities, our lenders have provided us an additional $ 305 million in lines of credit, of which $ 274 million expire within one year.

Essentially all lines of credit were unused as of December 31, 2023.

4 unchanged sentences

Notes due 2024 ( 3.9 % for 2022) (a)

Notes due 2024 ( 3.9 % for 2022 and 2021)

Notes due 2025 ( 0.8 % for 2022 and 2021)

Notes due 2026 ( 2.9 % for 2022 and 2021)

Notes due 2027 ( 2.1 % for 2022 and 2021)

Notes due 2028 ( 4.8 % for 2022 and 2021)

Notes due 2025 ( 3.9 % for 2023 and 0.8 % for 2022)

Notes due 2026 ( 3.7 % for 2023 and 2.9 % for 2022)

Notes due 2027 ( 2.1 % for 2023 and 2022)

Notes due 2028 ( 4.6 % for 2023 and 4.8 % for 2022)

Notes due 2029 ( 3.5 % for 2023 and 2022)

1 unchanged sentence

Notes due 2035-2039 ( 5.8 % for 2023 and 2022)

Notes due 2040-2044 ( 4.1 % for 2023 and 3.6 % for 2022)

Notes due 2045-2049 ( 4.1 % for 2023 and 2022)

Notes due 2050-2063 ( 5.0 % for 2023 and 2.7 % for 2022)

Total long-term debt, principal amount 60,982 32,080

7 unchanged sentences

(a) Reclassified to the current portion of long-term debt.

Issuances— In August 2021, we completed a public offering of $ 1.0 billion principal amount of senior unsecured notes due 2031 at an effective interest rate of 1.79 %.

In May 2020, we completed a public offering of $ 4.0 billion aggregate principal amount of senior unsecured notes with a weighted-average effective interest rate of 2.11 % and in March 2020, we completed a public offering of $ 1.25 billion aggregate principal amount of senior unsecured notes with a weighted-average effective interest rate of 2.67 %.

Retirements— In November 2020, we repurchased all $ 1.15 billion and $ 342 million principal amount outstanding of the 1.95 % senior unsecured notes that were due in June 2021 and 5.80 % senior unsecured notes that were due in August 2023 and recorded a total net loss of $ 36 million in Other (income)/deductions––net .

See Note 2 B .

In March 2020, we repurchased at par all $ 1.065 billion principal amount outstanding of our senior unsecured notes due in 2047.

In May 2023, we issued, through our wholly-owned finance subsidiary, PIE, the following senior unsecured notes as part of the financing for our acquisition of Seagen (a), (b) :

(MILLIONS) Principal

Interest Rate Maturity Date December 31, 2023

May 19, 2025 $ 3,000

May 19, 2026 3,000

May 19, 2028 4,000

May 19, 2030 3,000

May 19, 2033 5,000

May 19, 2043 3,000

May 19, 2053 6,000

May 19, 2063 4,000

Total long-term debt issued in 2023 (c)

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

(a) The notes are fully and unconditionally guaranteed on a senior unsecured basis by Pfizer Inc.

PIE was formed to finance a portion of the consideration for the acquisition of Seagen and has no assets or operations, and will have no assets or operations, other than as related to the issuance, administration and repayment of the notes and any other debt securities that it may issue in the future.

(b) The notes may be redeemed by us at any time, in whole, or in part, at a make-whole redemption price plus accrued and unpaid interest.

In August 2021, we completed a public offering of $ 1.0 billion principal amount of senior unsecured notes due 2031 at an effective interest rate of 1.79 %.

Derivative Financial Instruments and Hedging Activities

4 unchanged sentences

The derivative financial instruments primarily hedge or offset exposures in the euro, U.K.

pound, Japanese yen, and Canadian dollar, and include a portion of our forecasted foreign exchange-denominated intercompany inventory sales hedged up to two years .

pound, Japanese yen, Canadian dollar, and Chinese renminbi, and include a portion of our forecasted foreign exchange-denominated intercompany inventory sales hedged up to two years .

We may seek to protect against possible declines in the reported net investments of our foreign business entities.

2022 Form 10-K 75

Notes to Consolidated Financial Statements

and Subsidiary Companies

Changes in fair value are reported in earnings or in Other comprehensive income/(loss) , depending on the nature and purpose of the financial instrument (hedge or offset relationship).

42 unchanged sentences

Derivative Financial Instruments in Cash Flow Hedge Relationships:

Interest rate contracts

$ — $ — $ 68 $ — $ 1 $ —

Foreign exchange contracts (b)

10 unchanged sentences

— — 137 73 136 129

Non-Derivative Financial Instruments in Net Investment Hedge Relationships:

Non-Derivative Financial Instruments in Net Investment Hedge Relationships (d) :

Foreign currency short-term borrowings — — — 26 — —

2 unchanged sentences

Foreign exchange contracts 164 ( 1,153 ) — — — —

All other net (c)

$ 164 $ ( 1,153 ) $ 341 $ 2,409 $ 549 $ 2,190

2 unchanged sentences

OCI = Other comprehensive income/(loss), included in the consolidated statements of comprehensive income .

(b) The amounts reclassified from OCI into COS were a net gain of $ 375 million in 2022 and a net loss of $ 89 million in 2021.

(b) The amounts reclassified from OCI into COS were a net gain of $ 253 million in 2023 and a net gain of $ 375 million in 2022.

The remaining amounts were reclassified from OCI into OID.

Based on year-end foreign exchange rates that are subject to change, we expect to reclassify a pre-tax loss of $ 107 million within the next 12 months into income .

Based on year-end foreign exchange rates that are subject to change, we expect to reclassify a pre-tax gain of $ 11 million within the next 12 months into income .

The maximum length of time over which we are hedging our exposure to the variability in future foreign exchange cash flows is approximately 19 years and relates to foreign currency debt.

(d) Short-term borrowings and long-term debt include foreign currency borrowings which are used as net investment hedges.

The short-term borrowings’ carrying value as of December 31, 2021 was $ 1.1 billion.

The long-term debt carrying values as of December 31, 2022 and December 31, 2021 were $ 795 million and $ 844 million, respectively.

(d) Long-term debt includes foreign currency borrowings which are used as net investment hedges;

the related carrying values as of December 31, 2023 and December 31, 2022 were $ 824 million and $ 795 million, respectively.

The following summarizes cumulative basis adjustments to our long-term debt in fair value hedges:

16 unchanged sentences

In general, there is no requirement for collateral from customers.

For additional information on our trade accounts receivable and

For additional information on our trade accounts receivable and allowance for credit losses, see Note 1 G .

A significant portion of our trade accounts receivable balances are due from wholesalers and governments.

For additional information on our trade accounts receivables with significant customers, see Note 17C .

2023 Form 10-K

1 unchanged sentence

and Subsidiary Companies

allowance for credit losses, see Note 1 G .

A significant portion of our trade accounts receivable balances are due from wholesalers and governments.

For additional information on our trade accounts receivables with significant customers, see Note 17C .

With respect to our investments, we monitor concentrations of credit risk associated with government, government agency, and corporate issuers of securities.

1 unchanged sentence

Exposure limits are established to limit a concentration with any single credit counterparty.

As of December 31, 2022, the largest investment exposures in our portfolio represent primarily sovereign debt instruments issued by the Netherlands, Canada, Germany, Japan, the U.K., the U.S., and France.

As of December 31, 2023, the largest investment exposures in our portfolio consisted primarily of U.S.

government money market funds, as well as sovereign debt instruments issued by the U.S.

With respect to our derivative financial instrument agreements with financial institutions, we do not expect to incur a significant loss from failure of any counterparty.

14 unchanged sentences

$ 4,568 $ 5,827

(a) The decrease from December 31, 2021 reflects lower levels of Comirnaty, partially offset by new products acquired through recent acquisitions and higher Paxlovid inventory levels.

(a) The increase from December 31, 2022 of $ 1.2 billion reflects an increase of approximately $ 1.0 billion representing acquired Seagen inventory, inclusive of the fair value step-up (see Note 2A ), and increases for certain products due to new product launches, supply recovery and changes in net market demand.

These increases were offset to a large extent by $ 1.0 billion in inventory write-offs for Paxlovid and Comirnaty.

(b) Included in Other noncurrent assets .

The increase from December 31, 2021 is primarily due to strategic inventory build related to Paxlovid.

Based on our current estimates and assumptions, there are no recoverability issues for these amounts.

The decrease from December 31, 2022 of $ 1.3 billion is primarily driven by inventory write-offs for Paxlovid of $ 4.2 billion and, to a lesser extent, inventory write-offs for Comirnaty of $ 0.7 billion, offset to a large extent by an increase of approximately $ 3.1 billion representing acquired Seagen inventory, inclusive of the fair value step-up (see Note 2A ).

The charges and corresponding inventory write-offs were based on our analysis of Paxlovid and Comirnaty inventory levels as of December 31, 2023 in relation to our commercial outlook for both products.

Based on current estimates and assumptions, there are no recoverability issues for these amounts.

Other Current Liabilities

Other current liabilities includes, among other things, amounts payable to BioNTech for the gross profit split for Comirnaty, which totaled $ 2.0 billion as of December 31, 2023 and $ 5.2 billion as of December 31, 2022.

Property, Plant and Equipment (PP&E)

Supplier Finance Program Obligation

We maintain voluntary supply chain finance agreements with several participating financial institutions.

Under these agreements, participating suppliers may voluntarily elect to sell their accounts receivable with Pfizer to these financial institutions.

Our suppliers negotiate their financing agreements directly with the respective financial institutions and we are not a party to these agreements.

We have no economic interest in our suppliers’ decision to participate and we pay the financial institutions the stated amount of confirmed invoices on the original maturity dates, which is generally within 90 to 120 days of the invoice date.

The agreements with the financial institutions do not require Pfizer to provide assets pledged as security or other forms of guarantees for the supplier finance program.

All outstanding amounts related to suppliers participating in such financing arrangements are recorded within trade payables in our consolidated balance sheet.

As of December 31, 2023 and December 31, 2022, respectively, $ 791 million and $ 849 million of our trade payables to suppliers who participate in these financing arrangements were outstanding.

Property, Plant and Equipment

The following summarizes the components of Property, plant and equipment :

10 unchanged sentences

Property, plant and equipment $ 18,940 $ 16,274

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

The following provides long-lived assets by geographic area:

6 unchanged sentences

Property, plant and equipment $ 18,940 $ 16,274

2022 Form 10-K 78

Notes to Consolidated Financial Statements

and Subsidiary Companies

Identifiable Intangible Assets and Goodwill

12 unchanged sentences

Brands 922 ( 877 ) 45 922 ( 844 ) 78

Licensing agreements and other 2,237 ( 1,397 ) 841 2,284 ( 1,299 ) 985

Licensing agreements and other (b)

2,756 ( 1,458 ) 1,297 2,237 ( 1,397 ) 841

102,944 ( 62,828 ) 40,116 88,763 ( 58,548 ) 30,215

Indefinite-lived intangible assets

1 unchanged sentence

23,193 23,193 11,357 11,357

Licensing agreements and other (b)

Licensing agreements and other

763 763 971 971

24,784 24,784 13,155 13,155

Identifiable intangible assets (c)

Identifiable intangible assets (d)

$ 127,728 $ ( 62,828 ) $ 64,900 $ 101,919 $ ( 58,548 ) $ 43,370

(a) The increase in the gross carrying amounts mainly reflect the impact of the acquisitions of Biohaven and GBT (see Note 2A ).

(b) The increase in the gross carrying amounts mainly reflect the impact of the acquisitions of Arena, GBT and Biohaven (see Note 2A ) , and for IPR&D, is partially offset by an impairment (see Note 4 ).

(a) The increase in the gross carrying amount primarily includes, among other things:

(i) $ 7.5 billion for the acquisition of Seagen (see Note 2A );

(ii) the transfer of IPR&D to developed technology rights of $ 3.6 billion for etrasimod (Velsipity), $ 2.1 billion for Padcev, $ 1.1 billion for Braftovi/Mektovi, and $ 450 million as a result of the approval in the U.S.

for Zavzpret nasal spray;

and (iii) $ 495 million of capitalized milestones as a result of the approval in the U.S.

for Zavzpret nasal spray, partially offset by (iv) impairments of $ 964 million for Prevnar 13 (see Note 4 ).

(b) The increase in the gross carrying amount primarily reflects $ 450 million for the acquisition of Seagen (see Note 2A ).

(c) The increase in the gross carrying amount mainly reflects $ 20.8 billion for the acquisition of Seagen (see Note 2A ), partially offset by the transfer from IPR&D to developed technology rights as mentioned in note (a) above, and impairments of $ 1.4 billion for etrasimod (Velsipity).

(d) The increase is primarily due to $ 28.8 billion for the acquisition of Seagen (see Note 2A ) and the $ 495 million of capitalized milestones described in note (a) above, partially offset by amortization expense of $ 4.7 billion and impairments of $ 3.0 billion (see Note 4 ).

Developed Technology Rights–– Developed technology rights represent the cost for developed technology acquired from third parties and can include the right to develop, use, market, sell and/or offer for sale the product, compounds and intellectual property that we have acquired with respect to products, compounds and/or processes that have been completed.

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The significant components of developed technology rights are the following:

Nurtec ODT/Vydura, Xtandi, Prevnar family, Braftovi/Mektovi, Oxbryta, Premarin, Eucrisa, Orgovyx, Zavicefta, Bavencio and Merrem/Meronem.

Nurtec ODT/Vydura, Adcetris, Xtandi, etrasimod (Velsipity), Padcev, Braftovi/Mektovi, Prevnar 13 family and Oxbryta.

Also included in this category are the post-approval milestone payments made under our alliance agreements for certain prescription pharmaceutical products.

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Indefinite-lived brands include Medrol and Depo-Medrol, while finite-lived brands include Zavedos and Depo-Provera.

IPR&D–– IPR&D assets represent R&D assets acquired through business combinations that have not yet received regulatory approval in a major market.

The significant components of IPR&D are etrasimod, GBT601, talazoparib, Braftovi/Mektovi and zavegepant.

IPR&D–– IPR&D assets represent the acquisition date fair value (less impairments) of R&D assets acquired through business combinations that have not yet received regulatory approval in a major market which could include both new investigational products and additional indications for in-line products.

The significant components of IPR&D are SGN-B6A, Disitamab vedotin, GBT601, Tukysa, Padcev and talazoparib.

IPR&D assets are required to be classified as indefinite-lived assets until the successful completion or the abandonment of the associated R&D effort.

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Accordingly, IPR&D assets may become impaired and/or be written-off in the future.

Licensing Agreements–– Licensing agreements for developed technology and for technology in development primarily relate to out-licensing arrangements acquired from third parties, including the Array and Arena acquisition.

These assets represent the cost for the license, where we acquired the right to future royalties and/or milestones upon development or commercialization by the licensing partner.

A significant component of the licensing arrangements are for out-licensing arrangements with a number of partners for oncology technology in varying stages of development that have not yet received regulatory approval in a major market.

These assets represent the cost for the license, where we acquired the right to future royalties and/or milestones upon development or commercialization by the licensing partners.

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

significant component of the licensing arrangements are for out-licensing arrangements with a number of partners.

Accordingly, during the development period after the date of acquisition, each of these assets is classified as indefinite-lived intangible assets and will not be amortized until approval is obtained in a major market.

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Amortization–– The weighted-average life for each of our total finite-lived intangible assets is approximately 11 years, and for the largest component, developed technology rights, is approximately 11 years.

Total amortization expense for finite-lived intangible assets was $ 3.6 billion in 2022, $ 3.7 billion in 2021 and $ 3.4 billion in 2020.

The following provides the expected annual amortization expense:

1 unchanged sentence

Amortization expense $ 5,079 $ 4,763 $ 4,639 $ 4,054 $ 3,702

2022 Form 10-K 79

Notes to Consolidated Financial Statements

and Subsidiary Companies

The following summarizes the changes in the carrying amount of Goodwill :

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Balance, January 1, 2022

Additions (b)

Impact of foreign exchange ( 750 )

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Additions (b)

Impact of foreign exchange ( 750 )

Impact of foreign exchange and other

Balance, December 31, 2023

(a) As a result of the organizational changes to the commercial structure within the Biopharma operating segment effective in the third quarter of 2022 (see Note 1A ), our goodwill was required to be reallocated amongst impacted reporting units.

The allocation of goodwill is a complex process that requires, among other things, that we determine the fair value of each reporting unit under our old and new organizational structure and the portions being transferred.

We completed this re-allocation during the fourth quarter 2022 and concluded that none of our goodwill was impaired.

Our goodwill balance continues to be assigned within the Biopharma reportable segment.

(b) Additions relate to our acquisitions of GBT, Arena and Biohaven.

(a) Our goodwill balance continues to be assigned within the Biopharma reportable segment.

(b) Additions in 2022 relate to our acquisitions of GBT, Arena and Biohaven, and in 2023 primarily related to our acquisition of Seagen.

See Note 2A .

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Components of Net Periodic Benefit Costs and Changes in Other Comprehensive Income/(Loss)

The following summarizes the components of net periodic benefit cost/(credit), including those reported as part of discontinued operations for 2020, and the changes in Other comprehensive income/(loss) for our benefit plans:

The following summarizes the components of net periodic benefit cost/(credit) and the changes in Other comprehensive income/(loss) for our benefit plans:

Pension Plans Postretirement Plans

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(a) Reflects:

(i) actuarial remeasurement net gains in 2022, primarily due to increases in discount rates, partially offset by unfavorable plan asset performance, (ii) actuarial remeasurement gains in 2021, primarily due to favorable plan asset performance and increases in discount rates, and (iii) actuarial remeasurement net losses in 2020, primarily due to decreases in discount rates partially offset by favorable plan asset performance.

The components of net periodic benefit cost/(credit) other than the service cost component are primarily included in Other (income)/deductions––net (see Note 4 ).

(i) actuarial remeasurement net gains in 2023, primarily due to favorable asset performance in the U.S.

and increases in discount rates for the international plans, partially offset by unfavorable asset performance for certain international plans, (ii) actuarial remeasurement net gains in 2022, primarily due to increases in discount rates, partially offset by unfavorable plan asset performance, and (iii) actuarial remeasurement gains in 2021, primarily due to favorable plan asset performance and increases in discount rates.

2023 Form 10-K

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and Subsidiary Companies

The components of net periodic benefit cost/(credit) other than the service cost component are primarily included in Other (income)/deductions––net (see Note 4 ).

Actuarial Assumptions

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These rate determinations are made consistent with local requirements.

Overall, the yield curves used to measure the benefit obligations at year-end 2022 resulted in substantially higher discount rates as compared to the prior year.

Overall, the yield curves used to measure the benefit obligations at year-end 2023 resulted in broadly unchanged discount rates for the U.S.

pension and postretirement plans and higher discount rates for the international pension plans as compared to the prior year.

The following provides the healthcare cost trend rate assumptions for our U.S.

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Foreign exchange impact — ( 1 ) 280 ( 1,065 ) ( 1 ) ( 5 )

Upjohn spin-off (c)

Upjohn spin-off

Acquisitions/divestitures, net — 61 13 ( 50 ) — —

Curtailments and special termination benefits 6 18 — ( 10 ) ( 3 ) ( 3 )

Settlements (d)

Settlements (c)

( 675 ) ( 1,698 ) ( 56 ) ( 64 ) — ( 39 )

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Foreign exchange impact — — 214 ( 1,037 ) — —

Upjohn spin-off (c)

Upjohn spin-off

Acquisitions/divestitures, net — 1 13 9 — —

Settlements (d)

Settlements (c)

( 675 ) ( 1,698 ) ( 56 ) ( 64 ) — ( 39 )

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Prior service (costs)/credits $ ( 2 ) $ ( 4 ) $ ( 65 ) $ ( 34 ) $ 285 $ 413

Information related to the funded status of pension plans with an ABO in excess of plan assets (e) :

Information related to the funded status of pension plans with an ABO in excess of plan assets (d) :

Fair value of plan assets

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ABO 831 981 1,834 1,600

Information related to the funded status of pension plans with a PBO in excess of plan assets (e) :

Information related to the funded status of pension plans with a PBO in excess of plan assets (d) :

Fair value of plan assets $ — $ 86 $ 964 $ 1,081

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For the postretirement plans, the benefit obligation is the ABO.

(b) For both 2022 and 2021, primarily includes actuarial gains resulting from increases in discount rates, offset by increases in inflation assumptions for the international plan.

(d) As a result of a group annuity contract entered into between Pfizer and a third party insurance company in July 2022, the third party insurance company assumed future benefit obligations and responsibility for the annuity payments of certain retirees in the Pfizer Consolidated Pension Plan.

As of December 31, 2022, $ 586 million of benefit obligations and $ 588 million of plan assets are associated with this contract.

We expect to finalize the remaining regulatory approvals for this transaction in due course.

(e) Our main U.S.

(b) For 2023, primarily includes actuarial gains resulting from increases in discount rates for the international pension plans.

For 2022, primarily includes actuarial gains resulting from increases in discount rates, offset by increases in inflation assumptions for the international plan.

(c) As a result of a group annuity contract entered into between Pfizer and a third-party insurance company in July 2022, the third party insurance company assumed future benefit obligations and responsibility for the annuity payments of certain retirees in the Pfizer Consolidated Pension Plan.

Benefit obligations of $ 586 million and plan assets of $ 588 million were associated with this contract.

In February 2024, regulatory approval was received for this contract.

(d) Our main U.S.

qualified plan, U.S.

postretirement plan and many of our international plans were overfunded as of December 31, 2022.

postretirement plan and many of our larger funded international plans were overfunded as of December 31, 2023.

2023 Form 10-K

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(b) Government and agency obligations are inclusive of repurchase agreements .

(c) Mainly includes investments in private equity, private debt, public equity limited partnerships, and, to a lesser extent, real estate and venture capital.

(d) Mostly includes investments in hedge funds and real estate.

(e) Reflects postretirement plan assets, which support a portion of our U.S.

(e) Reflects postretirement plan assets, which support our U.S.

retiree medical plans.

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Purchases, sales, and settlements, net

( 155 ) ( 129 )

Transfer into/(out of) Level 3 81 241

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4,004 2,073 218

2028–2032 4,218 2,069 192

(a) For the U.S.

postretirement plan, the IRC 401(h) and voluntary employees’ beneficiary association reimbursements totaling $ 95 million are expected to exceed expected employer contributions.

The above table reflects the total U.S.

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defined contribution plans, employees may contribute a portion of their salaries and bonuses to the plans, and we match, in cash, a portion of the employee contributions.

We also offer a Retirement Savings Contribution (RSC) which is an annual non-contributory employer contribution in the U.S.

We also offer a Retirement Savings Contribution which is an annual non-contributory employer contribution in the U.S.

and Puerto Rico.

We recorded charges related to the employer contributions to global defined contribution plans of $ 843 million in 2023, $ 770 million in 2022 and $ 732 million in 2021.

2022 Form 10-K 84

Notes to Consolidated Financial Statements

and Subsidiary Companies

Common Stock Purchases

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Purchased shares under a share-purchase plan, which is authorized by our BOD, are available for general corporate purposes.

In December 2018, the BOD authorized a $ 10 billion share repurchase program to be utilized over time and share repurchases commenced thereunder in the first quarter of 2019.

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

2018, the BOD authorized a $ 10 billion share repurchase program to be utilized over time and share repurchases commenced thereunder in the first quarter of 2019.

In the first quarter of 2022, we purchased 39 million shares of our common stock at a cost of $ 2 billion under our publicly announced share-purchase plan.

Our remaining share-purchase authorization was approximately $ 3.3 billion at December 31, 2022.

Preferred Stock and Employee Stock Ownership Plans

Prior to May 4, 2020, we had outstanding Series A convertible perpetual preferred stock (the Series A Preferred Stock) that was held by an ESOP trust (the Trust).

All outstanding shares of Series A Preferred Stock were converted, at the direction of the independent fiduciary under the Trust and in accordance with the certificate of designations for the Series A Preferred Stock, into shares of our common stock on May 4, 2020.

The Trust received an aggregate of 1,070,369 shares of our common stock upon conversion, with zero shares of Series A Preferred Stock remaining outstanding as a result of the conversion.

In December 2020, we filed a certificate of elimination to our restated certificate of incorporation, as amended and a restated certificate of incorporation with the Delaware Secretary of State, which eliminated the Series A Preferred Stock.

Our remaining share-purchase authorization was approximately $ 3.3 billion as of December 31, 2023.

Employee Stock Ownership Plans

We have one ESOP that holds common stock of the Company (Common ESOP).

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defined contribution plan participants.

The compensation cost related to the Common ESOP was $ 19 million for each of 2022, 2021 and 2020.

The compensation cost related to the Common ESOP was $ 20 million for 2023 and $ 19 million for each of 2022 and 2021.

Share-Based Payments

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Our share-based awards are designed based on competitive survey data or industry peer groups used for compensation purposes, and are allocated between different long-term incentive awards, generally in the form of Total Shareholder Return Units (TSRUs), Restricted Stock Units (RSUs), Portfolio Performance Shares (PPSs), Performance Share Awards (PSAs), Breakthrough Performance Awards (BPAs) and stock options, as determined by the Compensation Committee of our BOD.

The 2019 Stock Plan (2019 Plan) replaced and superseded the 2014 Plan.

It provides for 400 million shares, in addition to shares remaining under the 2014 Plan, to be authorized for grants.

As of December 31, 2022, no shares remain under the 2014 Plan.

The 2019 Plan provides that the number of stock options, TSRUs, RSUs, or performance-based awards that may be granted to any one individual during any 36-month period is limited to 20 million shares, and that RSUs count as three shares, PPSs, PSAs and BPAs count as three shares times the maximum potential payout, while TSRUs and stock options count as one share, toward the maximum shares available under the 2019 Plan.

As of December 31, 2022, 270 million shares were available for award, including 27 million shares that we assumed from the remaining shares available from the stock plans of GBT, Arena and Biohaven which can be issued to legacy employees of the acquired companies and newly hired employees after the dates of the respective acquisitions.

No BPAs were granted in 2023 and no BPAs were outstanding as of December 31, 2023.

The 2019 Stock Plan (2019 Plan) provides for 400 million shares to be authorized for grants.

The number of stock options, TSRUs, RSUs, or performance-based awards that may be granted to any one individual during any 36-month period is limited to 20 million shares.

RSUs count as three shares, and PPSs, PSAs and BPAs count as three shares times the maximum potential payout, while TSRUs and stock options count as one share, toward the maximum shares available under the 2019 Plan.

As of December 31, 2023, 248 million shares were available for award, including 68 million shares that we assumed from the remaining shares available from the stock plan of Seagen which can be issued to legacy employees of Seagen and newly hired employees after the date of acquisition once such shares are registered on Form S-8.

Although not required to do so, we have used authorized and unissued shares and, to a lesser extent, treasury stock to satisfy our obligations under these programs.

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Awarded to Terms Valuation Recognition and Presentation

Total Shareholder Return Units (TSRUs) (a), (b)

Total Shareholder Return Units (TSRUs)

Senior and other key management and select employees • Entitle the holder to receive shares of our common stock with a value equal to the difference between the defined settlement price and the grant price, plus the dividend equivalents accumulated during the five or seven -year term, if and to the extent the total value is positive.

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• Automatically settle on the fifth or seventh anniversary of the grant but vest on the third anniversary of the grant.

• Retirement-eligible holders can convert their TSRUs, when vested, into Profit Units (PTUs) with a conversion ratio based on a calculation used to determine the shares at TSRU settlement.

The PTUs are entitled to earn Dividend Equivalent Units (DEUs), and the PTUs and DEUs will be settled in our common stock on the TSRUs’ original settlement date and will be subject to the terms and conditions of the original grant including forfeiture provisions.

As of the grant date using a Monte Carlo simulation model Amortized on a straight-line basis over the vesting term into Cost of sales , Selling, informational and administrative expenses , and/or Research and development expenses , as appropriate.

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Beginning in 2022, generally in all instances, the units vest and distribute one-third per year for three years on each of the three annual anniversaries from the date of grant assuming continuous service from the grant date.

As of the grant date using the closing price of our common stock Amortized on a straight-line basis for RSUs granted before 2022, and on an accelerated attribution approach for RSUs granted in 2022, over the vesting term into Cost of sales , Selling, informational and administrative expenses , and/or Research and development expenses , as appropriate.

As of the grant date using the closing price of our common stock Amortized on a straight-line basis for RSUs granted before 2022, and on an accelerated attribution approach for RSUs granted beginning in 2022, over the vesting term into Cost of sales , Selling, informational and administrative expenses , and/or Research and development expenses , as appropriate.

Portfolio Performance Shares (PPSs)

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As of the grant date using the Black-Scholes-Merton option-pricing model Amortized on a straight-line basis over the vesting term into Cost of sales , Selling, informational and administrative expenses , and/or Research and development expenses , as appropriate.

(a) Retirement-eligible holders, as defined in the grant terms, can convert their TSRUs, when vested, into Profit Units (PTUs) with a conversion ratio based on a calculation used to determine the shares at TSRU settlement.

(b) In 2017, Performance Total Shareholder Return Units (PTSRUs) were awarded to the Former Chairman and Chief Executive Officer ( 1,444,395 PTSRUs) and 361,099 PTSRUs were awarded to the Group President, Chief Business Officer (former role Group President Pfizer Innovative Health) at a grant price of $ 30.31 and at a GDFV of $ 5.54 per PTSRU.

In addition to having the same characteristics and valuation methodology of TSRUs, PTSRU grants require special service and performance conditions.

These awards were settled in December 2022 in accordance with the grant provisions.

The following provides data related to all TSRU, RSU, PPS, PSA and stock option activity:

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Tax benefits realized from exercise $ 20 $ 46 $ 106

Compensation cost recognized, pre-tax (b)

Compensation cost recognized/(reduced), pre-tax

$ 244 $ 255 $ 259 $ 437 $ 402 $ 281 $( 138 ) $ 144 $ 535 $( 5 ) $ 73 $ 76 $ 4 $ 4 $ 5

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(a) Weighted-average GDFV per TSRUs and stock options.

(b) In 2020, TSRU includes expense for PTSRUs, which is not significant .

Total share-based payment expense was $ 872 million, $ 1.2 billion and $ 780 million in 2022, 2021 and 2020, respectively, which includes pre-tax share-based payment expense included in Discontinued operations –– net of tax of $ 0 million , $ 2 million and $ 25 million in 2022, 2021 and 2020, respectively.

Total share-based payment expense was $ 525 million, $ 872 million and $ 1.2 billion in 2023, 2022 and 2021, respectively.

Tax benefit for share-based compensation expense was $ 93 million, $ 160 million and $ 227 million in 2023, 2022 and 2021, respectively.

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5.15 5.17 5.15 6.50 6.50 6.75

2022 Form 10-K 87

Notes to Consolidated Financial Statements

and Subsidiary Companies

Summary of all TSRU, RSU, PPS, PSA and BPA activity during 2022 (with the shares granted representing the maximum award that could be achieved for PPSs, PSAs and BPAs):

Summary of all TSRU, RSU, PPS and PSA activity during 2023 (with the shares granted representing the maximum award that could be achieved for PPSs and PSAs):

TSRUs RSUs PPSs (a)

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Intrinsic Value per share Shares Weighted Avg.

Intrinsic Value per share

(Thousands) GDFV Grant Price (Thousands) (Thousands) (Thousands) (Thousands)

December 31, 2021

(Thousands) GDFV Grant Price (Thousands) (Thousands) (Thousands)

Nonvested, December 31, 2022

101,693 $ 7.58 $ 35.26 27,826 $ 38.26 22,322 $ 51.24 5,018 $ 51.24

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(a) Vested and non-vested shares outstanding, but not paid as of December 31, 2023 were 35.8 million.

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

Summary of TSRU and PTU information as of December 31, 2023 (a), (b) :

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Remaining Contractual Term (Years)

Aggregate Intrinsic Value (Millions)

Aggregate Intrinsic Value (c) (Millions)

TSRUs Outstanding 163,572 $ 36.83 2.0 $ 131

TSRUs Vested 85,899 34.05 0.8 131

TSRUs Expected to vest (c)

TSRUs Expected to vest (d)

75,276 $ 39.82 3.2 —

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(b) In 2023, 1,827,019 TSRUs with a weighted-average grant price of $ 31.73 per unit were converted into 679,742 PTUs.

(d) The number of TSRUs expected to vest takes into account an estimate of expected forfeitures .

Summary of all stock option activity during 2023:

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(b) The number of options expected to vest takes into account an estimate of expected forfeitures.

2022 Form 10-K 88

Notes to Consolidated Financial Statements

and Subsidiary Companies

Earnings Per Common Share Attributable to Pfizer Inc.

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(IN MILLIONS) 2023 2022 2021

EPS Numerator––Basic

EPS Numerator

Income from continuing operations attributable to Pfizer Inc.

common shareholders $ 2,134 $ 31,366 $ 22,414

$ 31,366 $ 22,414 $ 6,630

Discontinued operations––net of tax ( 15 ) 6 ( 434 )

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common shareholders $ 2,119 $ 31,372 $ 21,979

$ 31,372 $ 21,979 $ 9,159

EPS Numerator––Diluted

Income from continuing operations attributable to Pfizer Inc.

common shareholders and assumed conversions

$ 31,366 $ 22,414 $ 6,630

Discontinued operations––net of tax, attributable to Pfizer Inc.

common shareholders and assumed conversions 6 ( 434 ) 2,529

Net income attributable to Pfizer Inc.

common shareholders and assumed conversions

$ 31,372 $ 21,979 $ 9,159

EPS Denominator

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Common-share equivalents 66 125 107

stock options and stock issuable under employee compensation plans 125 107 77

Weighted-average number of common shares outstanding––Diluted 5,709 5,733 5,708

5,733 5,708 5,632

Anti-dilutive common stock equivalents (a)

(a) These common stock equivalents were outstanding for the periods presented, but were not included in the computation of diluted EPS for those periods because their inclusion would have had an anti-dilutive effect.

Allocated shares held by the Common ESOP, including reinvested dividends, are considered outstanding for EPS calculations and the eventual conversion of allocated preferred shares held by the Preferred ESOP was assumed in the diluted EPS calculation until the conversion date, which occurred in May 2020.

See Note 12 .

We lease real estate, fleet, and equipment for use in our operations.

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ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

Operating lease ROU assets and liabilities are recognized at commencement date

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

based on the present value of lease payments over the lease term.

As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate based on the information available at commencement date in determining the present value of future payments.

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Total lease cost $ 1,283 $ 1,218 $ 888

2022 Form 10-K 89

Notes to Consolidated Financial Statements

and Subsidiary Companies

Other supplemental information follows:

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We are the plaintiff in the majority of these actions.

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

• Product liability and other product-related litigation related to current or former products, which can include personal injury, consumer, off-label promotion, securities, antitrust and breach of contract claims, among others, and often involves highly complex issues relating to medical causation, label warnings and reliance on those warnings, scientific evidence and findings, actual, provable injury and other matters.

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Consequently, we are unable to estimate the range of reasonably possible loss in excess of amounts accrued.

Our assessments, which result from a complex series of judgments about future events and uncertainties, are based on estimates and assumptions that have been deemed reasonable by

2022 Form 10-K 90

Notes to Consolidated Financial Statements

and Subsidiary Companies

management, but that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions.

Our assessments, which result from a complex series of judgments about future events and uncertainties, are based on estimates and assumptions that have been deemed reasonable by management, but that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions.

Amounts recorded for legal and environmental contingencies can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions.

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High Court issued a judgment finding invalid a BMS patent related to Eliquis due to expire in 2026.

In November 2022, BMS received permission to appeal the High Court’s decision.

In May 2023, the Court of Appeal dismissed BMS’s appeal and in October 2023, the Supreme Court refused BMS’s permission to appeal.

Additional challenges are pending in other jurisdictions.

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Adverse decisions in these matters could have a material adverse effect on our results of operations.

We are also party to patent damages suits in various jurisdictions pursuant to which generic drug manufacturers, payers, governments or other parties are seeking damages from us for allegedly causing delay of generic entry.

We are also party to patent damages suits in various jurisdictions pursuant to which generic drug manufacturers, payors, governments or other parties are seeking damages from us for allegedly causing delay of generic entry.

We also are often involved in other proceedings, such as inter partes review, post-grant review, re-examination or opposition proceedings, before the U.S.

Patent and Trademark Office, the European Patent Office, or other foreign counterparts relating to our intellectual property or the intellectual property rights of others.

Also, if one of our patents (or one of our collaboration/licensing partners patents) is found to be invalid by such proceedings, generic or competitive products could be introduced into the market resulting in the erosion of sales of our existing products.

Patent and Trademark Office, the European Patent Office, or other foreign counterparts, as well as court proceedings relating to our intellectual property or the intellectual property rights of others, including challenges to such rights initiated by us.

Also, if one of our patents (or one of our collaboration/licensing partner’s patents) is found to be invalid by such proceedings, generic or competitive products could be introduced into the market resulting in the erosion of sales of our existing products.

For example, several of the patents in our pneumococcal vaccine portfolio have been challenged in inter partes review and post-grant review proceedings in the U.S.

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We are also subject to patent litigation pursuant to which one or more third parties seek damages and/or injunctive relief to compensate for alleged infringement of its patents by our commercial or other activities.

If one of our marketed products (or a product of our collaboration/licensing partners) is found to infringe valid patent rights of a third party, such third party may be awarded significant damages or royalty payments, or we may be prevented from further sales of that product.

If one of our marketed products (or a product of our collaboration/

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

licensing partners to which we have licenses or co-promotion rights) is found to infringe valid patent rights of a third party, such third party may be awarded significant damages or royalty payments, or we may be prevented from further sales of that product.

Such damages may be enhanced as much as three-fold if we or one of our subsidiaries is found to have willfully infringed valid patent rights of a third party.

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To date, we have settled actions with several manufacturers on terms not material to us.

The remaining action continues in the U.S.

The remaining actions continue in the U.S.

District Court for the District of Delaware as described below.

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In November 2022, we filed an additional patent-infringement action against Sinotherapeutics relating to its challenge of our extended release formulation and method of treatment patents in its ANDA seeking approval to market a generic version of tofacitinib 22 mg extended release tablets.

In November 2022, we brought a separate patent-infringement action against Sun Pharmaceutical Industries Limited and Sun Pharmaceutical Industries, Inc.

(collectively, Sun) asserting the infringement and validity of our compound patent covering the active ingredient that was challenged by Sun in its ANDAs seeking approval to market generic versions of tofacitinib extended release (11 mg, 22 mg) tablets.

In January 2023, we settled our action against Sun on terms not material to us.

2022 Form 10-K 91

Notes to Consolidated Financial Statements

and Subsidiary Companies

Inlyta (axitinib)

In 2019, Glenmark Pharmaceuticals Ltd.

(Glenmark) notified us that it had filed an ANDA with the FDA seeking approval to market a generic version of Inlyta.

Glenmark asserts the invalidity and non-infringement of the crystalline form patent for Inlyta that expires in 2030.

In 2019, we filed suit against Glenmark in the U.S.

District Court for the District of Delaware, asserting the validity and infringement of the crystalline form patent for Inlyta.

In November 2022, we settled our action against Glenmark on terms not material to us.

In June 2023, we brought a patent-infringement action against Aurobindo Pharma Limited and Aurobindo Pharma USA, Inc.

(collectively Aurobindo) asserting the infringement and validity of our basic compound patent, in connection with Aurobindo’s ANDA seeking approval to market a generic version of tofacitinib 11 mg extended release tablets.

In December 2023, we reached a settlement agreement with Aurobindo on terms not material to the Company.

Ibrance (palbociclib)

Beginning in January 2021, several generic companies notified us that they had filed ANDAs with the FDA seeking approval to market generic versions of Ibrance tablets.

The generic companies are challenging some or all of the following patents:

(i) the composition of matter patent expiring in 2027;

(ii) the composition of matter patent expiring in 2023;

(iii) the method of use patent expiring in 2023;

(iv) the crystalline form patent expiring in 2034;

and (v) a tablet formulation patent expiring in 2036.

We brought patent infringement actions against each of the generic filers in various U.S.

federal courts, asserting the validity and infringement of the patents challenged by the generic companies.

We have settled with one of these generic companies on terms not material to us, and we dismissed the patent infringement actions relating to the crystalline form of patent, the composition of matter patent expiring in 2023, the method of use patent, and the tablet formulation patent against the generic companies that had challenged these patents.

The composition of matter patent expiring in 2027 remains in suit.

Beginning in September 2021, several generic companies notified us that they had filed ANDAs with the FDA seeking approval to market generic versions of Eucrisa.

The companies assert the invalidity and non-infringement of a composition of matter patent expiring in 2026, two method of use patents expiring in 2027, and one other method of use patent expiring in 2030.

In September 2021, we brought patent infringement actions against the generic filers in the U.S.

District Court for the District of Delaware, asserting the validity and infringement of the patents challenged by the generic companies.

Braftovi (encorafenib)

In August 2022, a generic company notified us that it had filed an ANDA with the FDA seeking approval to market a generic version of Braftovi.

The company asserted the invalidity and non-infringement of, among others, a method of use patent expiring in 2033.

In September 2022, we brought a patent infringement action against the generic company in the U.S.

District Court for the District of Delaware, asserting the validity and infringement of the method of use patent expiring in 2033.

In January 2023, the case was dismissed.

We have settled with one of these generic companies on terms not material to us, and have dismissed the patent infringement actions against all other generic companies except for the action against Synthon Pharmaceuticals Inc.

and its affiliated entities (collectively, Synthon), in which we have asserted the infringement and validity of the composition of matter patent, expiring in 2027.

In December 2023, we reached a settlement agreement with Synthon on terms not material to the Company.

Mektovi (binimetinib)

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District Court for the District of Delaware, asserting the validity and infringement of all six patents.

In August 2022 we received notice from Teva Pharmaceuticals, Inc.

(Teva) that it had filed an ANDA seeking approval to market a generic version of Mektovi.

Teva asserts the invalidity and non-infringement of two method of use patents expiring in 2033 and a product by process patent expiring in 2033.

In June 2023, we brought a patent infringement action against Teva in the U.S.

District Court for the District of Delaware, asserting the validity and infringement of the three patents.

Vyndaqel-Vyndamax(tafamidis/tafamidis meglumine)

Beginning in June 2023, several generic companies notified us that they had filed ANDAs with the FDA seeking approval to market generic versions of tafamidis capsules (61 mg) or tafamidis meglumine capsules (20 mg), challenging some or all of the patents listed in the FDA’s Orange Book for Vyndamax (tafamidis) and Vyndaqel (tafamidis meglumine).

Scripps Research Institute (Scripps) owns the composition of matter patent and the method of treatment patents covering the products, and Pfizer is the exclusive licensee.

Pfizer separately owns the crystalline form patent.

Beginning in August 2023, we and Scripps brought patent infringement actions against the generic filers in the U.S.

District Court for the District of Delaware, asserting the validity and infringement of the patents in suit.

Pfizer is the sole plaintiff in actions that assert only the infringement and validity of the crystalline form patent.

Actions in Which We are the Defendant

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(Alnylam) filed a complaint in the U.S.

District Court for the District of Delaware against Pfizer and Pharmacia & Upjohn Co.

LLC, our wholly owned subsidiary, alleging that Comirnaty infringes U.S.

11,246,933, which was issued in February 2022, and seeking unspecified monetary damages.

District Court for the District of Delaware against Pfizer and Pharmacia & Upjohn Company LLC, our wholly owned subsidiary, alleging that Comirnaty infringes a U.S.

patent issued in February 2022, and seeking unspecified monetary damages.

In July 2022, Alnylam filed a second complaint in the U.S.

District Court for the District of Delaware against Pfizer, Pharmacia & Upjohn Co.

LLC, BioNTech and BioNTech Manufacturing GmbH, alleging that Comirnaty infringes U.S.

11,382,979, which was issued in July 2022, and seeking unspecified monetary damages.

District Court for the District of Delaware against Pfizer, Pharmacia & Upjohn Company LLC, BioNTech and BioNTech Manufacturing GmbH, alleging that Comirnaty infringes a U.S.

patent issued in July 2022, and seeking unspecified monetary damages.

In May 2023, Alnylam filed a separate complaint in the U.S.

District Court for the District of Delaware against Pfizer and Pharmacia & Upjohn Company LLC alleging that Comirnaty infringes four additional U.S.

patents issued on various dates in 2023 and seeking unspecified monetary damages.

In August 2022, ModernaTX, Inc.

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In August 2022, ModernaTX filed a patent infringement action in Germany against Pfizer and certain subsidiary companies, as well as BioNTech and certain subsidiary companies, alleging that Comirnaty infringes two European patents.

In September 2022, ModernaTX filed patent infringement actions in the U.K and in the Netherlands against Pfizer and certain subsidiary companies, as well as BioNTech and certain subsidiary companies, on the same two patents.

The German infringement action was stayed in December 2023 pending further action from the European Patent Office on the patents at issue.

In September 2022, ModernaTX filed patent infringement actions in the U.K.

and in the Netherlands against Pfizer and certain subsidiary companies, as well as BioNTech and certain subsidiary companies, on the same two European patents.

In its complaints, ModernaTX stated that it is seeking damages for alleged infringement occurring after March 7, 2022.

In the U.K., Pfizer and BioNTech have brought an action against ModernaTX seeking to revoke these European patents, which was consolidated with the September 2022 action filed by ModernaTX.

In the U.K., Pfizer and BioNTech brought an action against ModernaTX seeking to revoke these two European patents, which was consolidated with the September 2022 action filed by ModernaTX.

In November 2023, one of the European patents was revoked by the European Patent Office.

In December 2023, the other European patent was declared invalid by a court in the

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Netherlands (the invalidity decision is limited to the Netherlands).

ModernaTX has also filed additional patent infringement actions against Pfizer and BioNTech in certain other ex-U.S.

jurisdictions.

In April 2023, Arbutus Biopharma Corporation (Arbutus) and Genevant Sciences GmbH (Genevant) filed a complaint in the U.S.

District Court for the District of New Jersey against Pfizer and BioNTech alleging that Comirnaty and its manufacture infringe five U.S.

patents, and seeking unspecified monetary damages.

In June 2022, Enanta Pharmaceuticals, Inc.

filed a complaint in the U.S.

District Court for the District of Massachusetts against Pfizer alleging that the active ingredient in Paxlovid, nirmatrelvir, infringes U.S.

11,358,953, which was issued in June 2022, and seeking unspecified monetary damages.

District Court for the District of Massachusetts against Pfizer alleging that the active ingredient in Paxlovid, nirmatrelvir, infringes a U.S.

patent issued in June 2022, and seeking unspecified monetary damages.

In August 2023, GlaxoSmithKline Biologics SA and GlaxoSmithKline LLC (collectively, GSK Group) filed a complaint in the U.S.

District Court for the District of Delaware against Pfizer alleging that the active ingredient in Abrysvo infringes four U.S.

The complaint seeks unspecified monetary damages and a permanent injunction against sales of Abrysvo for use in adults over 60 years of age.

In November 2023, GSK Group amended its complaint to assert infringement of two additional patents.

In addition, we have challenged certain of GSK’s RSV vaccine patents in certain ex-U.S.

jurisdictions, including the U.K., the Netherlands and Belgium, and GSK has asserted that Abrysvo infringes these patents.

Matters Involving Pfizer and its Collaboration/Licensing Partners

In July 2022, Pfizer, BioNTech and BioNTech Manufacturing GmbH filed a declaratory judgment complaint against CureVac in the U.S.

District Court for the District of Massachusetts seeking a judgment of non-infringement for the following three patents relating to Comirnaty:

11,135,312, 11,149,278, and 11,241,493.

Outside of the U.S., in the U.K., Pfizer and BioNTech have sued CureVac seeking a judgment of invalidity of several patents and CureVac has made certain infringement counterclaims.

Xtandi (enzalutamide)

In July 2022, Medivation and Medivation Prostate Therapeutics, Inc.;

Astellas Pharma Inc., Astellas US LLC and Astellas Pharma US, Inc.;

and The Regents of the University of California filed a patent-infringement suit in the U.S.

District Court for the District of New Jersey against Zydus Pharmaceuticals (USA) Inc.

and Zydus Lifesciences Ltd.;

and in December 2022, the same entities filed a patent-infringement suit in the U.S.

District Court for the District of New Jersey against Sun in connection with those companies’ respective ANDAs seeking approval to market

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generic versions of enzalutamide.

The generic manufacturers are challenging the composition of matter patent, which expires in 2027, covering enzalutamide and pharmaceutical compositions thereof, for treating prostate cancer.

District Court for the District of Massachusetts seeking a judgment of non-infringement for three U.S.

patents relating to Comirnaty.

In May 2023, the case was transferred to the U.S.

District Court for the Eastern District of Virginia.

Also in May 2023, CureVac asserted that Comirnaty infringes the three patents that were the subject of our declaratory judgment complaint, and in May and July 2023, CureVac asserted that Comirnaty infringes a number of additional U.S.

In the U.K., Pfizer and BioNTech have sued CureVac seeking a judgment of invalidity of several patents and CureVac has made certain infringement counterclaims.

Legal Proceedings––Product Litigation

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In 2014, the District Court dismissed the direct purchaser plaintiffs’ claims based on the litigation settlement agreement, but declined to dismiss the other direct purchaser plaintiff claims.

In 2015, the District Court entered partial final judgments as to all settlement agreement claims, including those asserted by direct purchasers and end-payer plaintiffs, which plaintiffs appealed to the U.S.

In 2015, the District Court entered partial final judgments as to all settlement agreement claims, including those asserted by direct purchasers and end-payor plaintiffs, which plaintiffs appealed to the U.S.

Court of Appeals for the Third Circuit.

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Court of Appeals for the Third Circuit reversed the District Court’s decisions and remanded the claims to the District Court.

Beginning in 2011, purported class actions relating to Lipitor were filed in various federal courts against, among others, Pfizer, certain Pfizer affiliates, and, in most of the actions, Ranbaxy Laboratories Ltd.

(Ranbaxy) and certain Ranbaxy affiliates.

The plaintiffs in these various actions seek to represent nationwide, multi-state or statewide classes consisting of persons or entities who directly purchased, indirectly purchased or reimbursed patients for the purchase of Lipitor (or, in certain of the actions, generic Lipitor) from any of the defendants from March 2010 until the cessation of the defendants’ allegedly unlawful conduct (the Class Period).

The plaintiffs allege delay in the launch of generic Lipitor, in violation of federal antitrust laws and/or state antitrust, consumer protection and various other laws, resulting from (i) the 2008 agreement pursuant to which Pfizer and Ranbaxy settled certain patent litigation involving Lipitor and Pfizer granted Ranbaxy a license to sell a generic version of Lipitor in various markets beginning on varying dates, and (ii) in certain of the actions, the procurement and/or enforcement of certain patents for Lipitor.

The plaintiffs allege delay in the launch of generic Lipitor, in violation of federal antitrust laws and/or state antitrust, consumer protection and various other laws, resulting from (i) the

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2008 agreement pursuant to which Pfizer and Ranbaxy settled certain patent litigation involving Lipitor and Pfizer granted Ranbaxy a license to sell a generic version of Lipitor in various markets beginning on varying dates, and (ii) in certain of the actions, the procurement and/or enforcement of certain patents for Lipitor.

Each of the actions seeks, among other things, treble damages on behalf of the putative class for alleged price overcharges for Lipitor (or, in certain of the actions, generic Lipitor) during the Class Period.

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In September 2021, plaintiffs filed an amended complaint.

In August 2022, the District Court granted Pfizer’s motion to dismiss the complaint, and plaintiffs have appealed to the U.S.

In August 2022, the District Court granted Pfizer’s motion to dismiss the complaint, and plaintiffs appealed to the U.S.

Court of Appeals for the Tenth Circuit.

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Nexium 24HR and Protonix

A number of individual and multi-plaintiff lawsuits have been filed against Pfizer, certain of its subsidiaries and/or other pharmaceutical manufacturers in various federal and state courts alleging that the plaintiffs developed kidney-related injuries purportedly as a result of the ingestion of certain proton pump inhibitors.

The cases against Pfizer involve Protonix and/or Nexium 24HR and seek compensatory and punitive damages and, in some cases, treble damages, restitution or disgorgement.

In 2017, the federal actions were ordered transferred for coordinated pre-trial proceedings to a MDL in the U.S.

District Court for the District of New Jersey.

As part of the combination of our and GSK’s consumer healthcare businesses to form Haleon, Haleon assumed, and agreed to indemnify Pfizer for, liabilities arising out of such litigation to the extent related to Nexium 24HR.

In October 2023, the parties reached an agreement to settle the litigation on terms not material to Pfizer.

The settlement is subject to court approval.

• Personal Injury Actions

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District Court for the Southern District of Florida (the Federal MDL Court).

Plaintiffs in the MDL have filed against Pfizer and many other defendants a master personal injury complaint, asserting a consolidated consumer class action alleging, among other things, claims under consumer protection statutes of all 50 states, and a medical monitoring complaint seeking to certify medical monitoring classes under the laws of 13 states.

Plaintiffs in the MDL filed against Pfizer and many other defendants a master personal injury complaint, a consolidated consumer class action complaint alleging, among other things, claims under consumer protection statutes of all 50 states, and a medical monitoring complaint seeking to certify medical monitoring classes under the laws of 13 states.

In December 2022, the Federal MDL Court granted defendants’ Daubert motions to exclude plaintiffs’ expert testimony and motion for summary judgment on general causation, which has resulted in the dismissal of all complaints in the litigation.

Plaintiffs have appealed the Federal MDL Court’s rulings.

In addition, (i) Pfizer has received service of Canadian class action complaints naming Pfizer and other defendants, and seeking compensatory and punitive damages for personal injury and economic loss, allegedly arising from the defendants’ sale of Zantac in Canada;

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Coordinated proceedings have also been created in other state courts.

In December 2022, the Federal MDL Court granted defendants’ Daubert motions to exclude plaintiffs’ expert testimony and motion for summary judgment on general causation, and dismissed the litigation.

The large majority of the state court cases have been filed in the Superior Court of Delaware in New Castle County.

Many of these Zantac-related cases have been outstanding for a number of years and could take many more years to resolve.

From time to time, Pfizer has explored and will continue to explore opportunistic settlements of these matters.

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Beginning in August 2021, a number of putative class actions have been filed against Pfizer in various U.S.

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In addition, in connection with its spin-off that was completed in 2002, New Monsanto assumed, and agreed to indemnify Pharmacia for, any liabilities primarily related to Former Monsanto’s chemical businesses, including, but not limited to, any such liabilities that Solutia assumed.

Solutia’s and New Monsanto’s

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assumption of, and agreement to indemnify Pharmacia for, these liabilities apply to pending actions and any future actions related to Former Monsanto’s chemical businesses in which Pharmacia is named as a defendant, including, without limitation, actions asserting environmental claims, including alleged exposure to polychlorinated biphenyls.

Solutia’s and New Monsanto’s assumption of, and agreement to indemnify Pharmacia for, these liabilities apply to pending actions and any future actions related to Former Monsanto’s chemical businesses in which Pharmacia is named as a defendant, including, without limitation, actions asserting environmental claims, including alleged exposure to polychlorinated biphenyls.

Solutia and/or New Monsanto are defending Pharmacia in connection with various claims and litigation arising out of, or related to, Former Monsanto’s chemical businesses, and have been indemnifying Pharmacia when liability has been imposed or settlement has been reached regarding such claims and litigation.

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Since that time, we have executed or have become a party to a number of administrative settlement agreements, orders on consent, and/or judicial consent decrees, with the U.S.

Environmental Protection Agency and/or New Jersey Department of Environmental Protection to perform remedial design, removal and remedial actions, and related environmental remediation activities at the Bound Brook facility.

Environmental Protection Agency, the New Jersey Department of Environmental Protection and/or federal and state natural resource trustees to perform remedial design, removal and remedial actions, and related environmental remediation activities, and to resolve alleged damages to natural resources, at the Bound Brook facility.

We have accrued for the currently estimated costs of these activities.

We are a party to a number of other proceedings brought under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, and other state, local or foreign laws in which the primary relief sought is the cost of past and/or future remediation.

We are also party to a number of other proceedings brought under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, and other state, local or foreign laws in which the primary relief sought is the cost of past and/or future remediation.

Contracts with Iraqi Ministry of Health

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Plaintiff seeks damages, costs and expenses and other equitable and injunctive relief.

In November 2023, the parties reached an agreement to settle the litigation on terms not material to Pfizer.

The settlement is subject to court approval.

Breach of Contract – Comirnaty

In 2023, Pfizer and BioNTech Manufacturing GmbH initiated separate formal proceedings against the Republic of Poland, the Republic of Romania and Hungary in Belgium’s Court of First Instance of Brussels.

Pfizer and BioNTech are seeking an order from the Court holding those countries to their commitments for COVID-19 vaccine orders, which were placed as part of their contracts signed in 2021.

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Legal Proceedings––Government Investigations

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We responded to that subpoena in full and have had no communication with the SDNY in connection with the subpoena since June 2019.

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Additionally, in September 2020, we received a Civil Investigative Demand (CID) from the Texas Attorney General’s office seeking records of a similar nature to those requested by the SDNY.

We are producing records in response to this request.

We produced records in response to this request.

In November 2023, the investigation culminated in a qui tam litigation brought by the State of Texas.

The investigation is now closed.

Government Inquiries relating to Meridian Medical Technologies

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Attorney’s Office for the Eastern District of Missouri, in coordination with the Department of Justice’s Consumer Protection Branch, seeking similar records and information.

We are producing records in response to these and subsequent requests.

We have produced records in response to these and subsequent requests.

Department of Justice/SEC Inquiry relating to Russian Operations

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Docetaxel –– Mississippi Attorney General Government Investigation

See Legal Proceedings –– Product Litigation –– Docetaxel –– Mississippi Attorney General Government Investigation above for information regarding a government investigation related to Docetaxel marketing practices.

See Legal Proceedings –– Product Litigation –– Docetaxel –– Mississippi Attorney General Government Action above for information regarding a government investigation related to Docetaxel marketing practices.

Department of Justice Inquiries relating to India Operations

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Attorney’s Office for the Western District of New York issued a CID relating to Biohaven.

The CID seeks records and information related to, among other things, engagements with health care professionals and co-pay coupons cards.

The CID seeks records and information related to, among other things, engagements with healthcare professionals and co-pay coupons cards.

In March 2023, the California Department of Insurance issued a subpoena seeking records similar to those requested by the CID.

Biohaven is a wholly-owned subsidiary that we acquired in October 2022.

We are producing records in response to these requests.

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Department of Justice Inquiry relating to Mexico Operations

In March 2023, we received an informal request from the U.S.

Department of Justice’s FCPA Unit seeking documents relating to our operations in Mexico.

We are producing records pursuant to this request.

Government Inquiries relating to Xeljanz

In April 2023, we received a HIPAA subpoena issued by the U.S.

Attorney’s Office for the Western District of Virginia, in coordination with the Department of Justice’s Commercial Litigation Branch, seeking records and information related to programs Pfizer sponsored in retail pharmacies relating to Xeljanz.

We are producing records pursuant to this request.

Guarantees and Indemnifications

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In addition, in connection with our entry into certain agreements and other transactions, our counterparties may be obligated to indemnify us.

For example, in November 2020, we and Mylan completed the transaction to spin-off our Upjohn Business and combine it with Mylan to form Viatris.

As part of the transaction and as previously disclosed, each of Viatris and Pfizer has agreed to assume, and to indemnify the other for, liabilities arising out of certain matters.

Also, our global agreement with BioNTech to co-develop a mRNA-based coronavirus vaccine program aimed at preventing COVID-19 infection, includes certain indemnity provisions pursuant to which each of BioNTech and Pfizer has agreed to indemnify the other for certain liabilities that may arise in connection with certain third-party claims relating to Comirnaty.

For example, our global agreement with BioNTech to co-develop a mRNA-based coronavirus vaccine program aimed at preventing COVID-19 infection, includes certain indemnity provisions pursuant to which each of BioNTech and Pfizer has agreed to indemnify the other for certain liabilities that may arise in connection with certain third-party claims relating to Comirnaty.

See Note 7D for information on Pfizer Inc.’s guarantee of the debt issued by PIE in May 2023.

We have also guaranteed the long-term debt of certain companies that we acquired and that now are subsidiaries of Pfizer.

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We may be required to make payments to sellers for certain prior business combinations that are contingent upon future events or outcomes.

See Note 1 D .

See No te 1D .

The estimated fair value of contingent consideration as of December 31, 2023 is $ 692 million, of which $ 179 million is recorded in Other current liabilities and $ 512 million in Other noncurrent liabilities, and as of December 31, 2022 was $ 645 million, of which $ 42 million was recorded in Other current liabilities and $ 603 million in Other noncurrent liabilities .

The decrease in the contingent consideration balance

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from December 31, 2021 is primarily due to payments made upon the achievement of certain sales-based milestones partially offset by fair value adjustments.

The increase in the contingent consideration balance from December 31, 2022 is primarily due to fair value adjustments, partially offset by payments made upon the achievement of certain sales-based milestones.

Our insurance coverage reflects market conditions (including cost and availability) existing at the time it is written, and our decision to obtain insurance coverage or to self-insure varies accordingly.

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We regularly review our operating segments and the approach used by management to evaluate performance and allocate resources.

We manage our commercial operations through two operating segments, Biopharma and PC1, which are each led by a single manager.

In 2023, we managed our commercial operations through two operating segments, each led by a single manager:

Biopharma, our innovative science-based biopharmaceutical business, and Business Innovation, an operating segment established in the first quarter of 2023 that includes PC1, our contract development and manufacturing organization and a leading supplier of specialty active pharmaceutical ingredients, and Pfizer Ignite, an offering that provides strategic guidance and end-to-end R&D services to select innovative biotech companies that align with Pfizer’s R&D focus areas.

Biopharma is the only reportable segment.

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Regional commercial organizations market, distribute and sell our products and are supported by global platform functions that are responsible for the research, development, manufacturing and supply of our products and global corporate enabling functions.

Biopharma receives its R&D services from WRDM and GPD.

These services include IPR&D projects for new investigational products and additional indications for in-line products.

Each operating segment has a geographic footprint across developed and emerging markets.

Our chief operating decision maker uses the revenues and earnings of the operating segments, among other factors, for performance evaluation and resource allocation.

After the organizational changes in the third quarter of 2022 (see Note 1A ), the new commercial structure within Biopharma is designed to better support and optimize performance across three broad customer groups:

• Primary Care consists of the former Internal Medicine and Vaccines product portfolios, products for COVID-19 prevention and treatment, and potential future mRNA and antiviral products.

• Specialty Care consists of the former Inflammation & Immunology, Rare Disease and Hospital (excluding Paxlovid) product portfolios.

• Oncology consists of the former Oncology product portfolio.

Other Business Activities–– Includes the operating results of PC1 as well as certain pre-tax costs not allocated to our operating segment results, such as costs associated with:

• WRDM––the R&D and Medical expenses managed by our WRDM organization, which is generally responsible for research projects for our Biopharma portfolio until proof-of-concept is achieved and then for transitioning those projects to the GPD organization for possible clinical and commercial development.

R&D spending may include upfront and milestone payments for intellectual property rights.

The WRDM organization also has responsibility for certain science-based and other platform-services organizations, which provide end-to-end technical expertise and other services to the various R&D projects, as well as the Worldwide Medical and Safety group, which ensures that Pfizer provides all stakeholders––including patients, healthcare providers, pharmacists, payers and health authorities––with complete and up-to-date information on the risks and benefits associated with Pfizer products so that they can make appropriate decisions on how and when to use Pfizer’s medicines.

• GPD––the costs associated with our GPD organization, which is generally responsible for clinical trials from WRDM in the Biopharma portfolio, including both early- and late-stage portfolio spend.

GPD also provides technical support and other services to Pfizer R&D projects.

GPD is responsible for facilitating all regulatory submissions and interactions with regulatory agencies.

• Corporate and other unallocated––the costs associated with (i) corporate enabling functions (such as digital, global real estate operations, legal, finance, human resources, worldwide public affairs, compliance and worldwide procurement, among others) and other corporate costs, including, but not limited to, all strategy, business development, portfolio management and valuation capabilities and certain compensation, as well as interest income and expense, and gains and losses on investments;

Beginning in July 2023, in consideration of planned future investments in oncology, including the December 2023 acquisition of Seagen, we reorganized our R&D platform operations.

Discovery to late-phase clinical development for oncology is performed by a new end-to-end ORD organization and discovery to late-phase clinical development for all remaining therapeutic areas is consolidated into the end-to-end PRD organization.

ORD and PRD replace our former WRDM and GPD organizations, where, prior to July 2023, research units within WRDM were generally responsible for research and early-stage development assets and, prior to July 2023, GPD was generally responsible for the clinical development strategy and operational execution of clinical trials for both early- and late-stage clinical assets in Pfizer’s pipeline.

In 2023, Biopharma received R&D services from

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ORD, PRD and the predecessor WRDM and GPD organizations.

These services included IPR&D projects for new investigational products and additional indications for in-line products.

Other Business Activities–– Other business activities include the operating results of Business Innovation as well as certain pre-tax costs not allocated to our operating segment results, such as costs associated with:

• ORD––the R&D expenses managed by our ORD organization, which is responsible for discovery to late-phase clinical development for oncology research projects for our global Biopharma portfolio along with facilitating regulatory submissions and interactions with regulatory agencies for these projects.

R&D spending may include upfront and milestone payments for intellectual property rights for oncology projects.

• PRD––the R&D expenses managed by our PRD organization, which is responsible for discovery to late-phase clinical development research projects for all therapeutic areas other than oncology for our global Biopharma portfolio, along with facilitating regulatory submissions and interactions with regulatory agencies for these projects.

R&D spending may include upfront and milestone payments for intellectual property rights related to non-oncology projects.

The PRD organization also has responsibility for certain science-based and other platform-services organizations, which provide end-to-end technical expertise and other services to both ORD and PRD R&D projects, as well as the Worldwide Medical and Safety group, which helps ensure that Pfizer provides all stakeholders––including patients, healthcare providers, pharmacists, payors and health authorities––with complete and up-to-date information on the risks and benefits associated with Pfizer products so that they can make appropriate decisions on how and when to use Pfizer’s medicines.

• Corporate and other unallocated––the costs associated with (i) corporate enabling functions (such as digital, global real estate operations, legal, finance, human resources, worldwide public affairs, compliance and worldwide procurement, among others) and other corporate costs, including, but not limited to, all strategy, business development and portfolio management capabilities and certain compensation, as well as interest income and expense, and gains and losses on investments;

(ii) overhead costs primarily associated with our manufacturing operations (which include manufacturing variances associated with production) that are not directly assessed to an operating segment, as business unit (segment) management does not manage these costs;

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(i) all amortization of intangible assets;

(ii) acquisition-related items, where we incur costs for executing the transaction, integrating the acquired operations and restructuring the combined company;

(ii) acquisition-related items, where we incur costs for executing the transaction, integrating the acquired operations and restructuring the combined company, and which may also include purchase accounting impacts, such as the incremental charge to cost of sales from the sale of acquired inventory that was written up to fair value, depreciation related to the increase/decrease in fair value of acquired fixed assets, amortization related to the increase in fair value of acquired debt, and the fair value changes for contingent consideration;

and (iii) certain significant items, representing substantive and/or unusual, and in some cases recurring, items that are evaluated on an individual basis by management and that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis.

Such certain significant items can include, but are not limited to, pension and postretirement actuarial remeasurement gains and losses, non-acquisition-related restructuring costs, net gains and losses on investments in equity securities, as well as costs incurred for legal settlements, asset impairments and disposals of assets or businesses, including, as applicable, any associated transition activities.

Beginning in the first quarter of 2022, acquisition-related items may now include purchase accounting impacts that previously were included as part of a reconciling item entitled “Purchase accounting adjustments” that we no longer separately present, such as the incremental charge to cost of sales from the sale of acquired inventory that was written up to fair value, depreciation related to the increase/decrease in fair value of acquired fixed assets, amortization related to the increase in fair value of acquired debt, and the fair value changes for contingent consideration.

Segment Assets–– We manage our assets on a total company basis, not by operating segment, as our operating assets are shared or commingled.

1 unchanged sentence

Total assets were $ 227 billion as of December 31, 2023 and $ 197 billion as of December 31, 2022.

2022 Form 10-K 97

Notes to Consolidated Financial Statements

and Subsidiary Companies

Selected Income Statement Information

The following table provides selected income statement information by reportable segment:

Revenues Earnings (a)

Total Revenues (a)

Depreciation and Amortization (b)

Year Ended December 31, Year Ended December 31, Year Ended December 31,

(MILLIONS OF DOLLARS) 2022 2021 2020 2022 2021 2020 2022 2021 2020

2023 2022 2021 2023 2022 2021 2023 2022 2021

Reportable Segment:

8 unchanged sentences

$ 58,496 $ 100,330 $ 81,288 $ 1,058 $ 34,729 $ 24,311 $ 6,290 $ 5,064 $ 5,191

(a) Income from continuing operations before provision/(benefit) for taxes on income.

Biopharma’s earnings include dividend income from our investment in ViiV of $ 314 million in 2022, $ 166 million in 2021 and $ 278 million in 2020.

In connection with the organizational changes effective in the third quarter of 2022, certain functions transferred between Biopharma and corporate enabling functions and certain activities were realigned within the GPD organization.

We have reclassified $ 231 million of costs in 2021 and $ 222 million of costs in 2020 from corporate enabling functions, which are included in Other business activities, to Biopharma to conform to the current period presentation.

Amortization of intangible assets is not allocated to our operating segments for all periods presented.

(a) Earnings = Income from continuing operations before provision/(benefit) for taxes on income.

Biopharma’s revenues and earnings in 2023 reflect a non-cash revenue reversal of $ 3.5 billion (see Note 17C ).

Biopharma’s earnings also include dividend income from our investment in ViiV of $ 265 million in 2023, $ 314 million in 2022 and $ 166 million in 2021.

(b) Certain production facilities are shared.

Depreciation is allocated based on estimates of physical production.

(c) Other business activities include revenues and costs associated with PC1 and costs that we do not allocate to our operating segments, per above, including acquired IPR&D expenses in the periods presented (see Notes 2A , 2D and 2E ) .

In 2022, earnings include (i) write-offs of $ 1.3 billion to Cost of sales of inventory related to COVID-19 products that have exceeded or are expected to exceed their approved shelf-lives prior to being used and (ii) charges to Cost of sales of approximately $ 430 million related to excess raw materials for Paxlovid.

(c) Other business activities include revenues and costs associated with Business Innovation and costs that we do not allocate to our operating segments, per above, including acquired IPR&D expenses in the periods presented (see Notes 2A and 2E ) .

In 2023, earnings include approximately $ 6.2 billion of inventory write-offs and related charges to Cost of sales mainly due to lower-than-expected demand for our COVID-19 products.

In 2022, earnings included COVID-19-related charges of approximately $ 1.7 billion to Cost of sales , composed of (i) inventory write-offs of approximately $ 1.2 billion related to COVID-19 products that exceeded or were expected to exceed their approved shelf-lives prior to being used and (ii) charges of approximately $ 0.5 billion, primarily related to excess raw materials for Paxlovid.

(d) Certain significant items are substantive and/or unusual, and in some cases recurring, items (as noted above).

Earnings in 2022 includes, among other items:

(i) restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring of $ 1.4 billion ($ 562 million recorded in Selling, informational and administrative expenses and the remaining amount primarily recorded in Restructuring charges and certain acquisition-related co sts) and (ii) net losses on equity securities of $ 1.3 billion recorded in Other (income)/deductions––net .

Earnings in 2023 include, among other items:

(i) intangible asset impairment charges of $ 3.0 billion recorded in Other (income)/deductions––net and (ii) restructuring charges/(credits) and implementation costs

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

and additional depreciation—asset restructuring of $ 2.2 billion ($ 290 million recorded in Selling, informational and administrative expenses and the remaining amount primarily recorded in Restructuring charges and certain acquisition-related co sts), partially offset by (iii) net gains on equity securities of $ 1.6 billion recorded in Other (income)/deductions––net .

Earnings in 2022 included, among other items:

(i) actuarial valuation and other pension and postretirement plan gains of $ 1.6 billion recorded in Other (income)/deductions––net and (ii) net gains on equity securities of $ 1.3 billion recorded in Other (income)/deductions––net , partially offset by (iii) restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring of $ 1.3 billion ($ 450 million recorded in Selling, informational and administrative expenses and the remaining amount primarily recorded in Restructuring charges and certain acquisition-related co sts).

Earnings in 2021 included, among other items:

(i) charges of $ 1.7 billion related to certain asset impairments recorded in Other (income)/deductions––net , (ii) actuarial valuation and other pension and postretirement plan losses of $ 1.1 billion recorded in Other (income)/deductions––net and (iii) restructuring charges/(credits) and implementation costs and additional depreciation—asset restructuring of $ 791 million ($ 197 million recorded in Selling, informational and administrative expenses and the remaining amount primarily recorded in Restructuring charges and certain acquisition-related costs ).

For additional information, see Notes 3 and 4 .

See Notes 3 and 4 .

Geographic Information

6 unchanged sentences

Emerging Markets 11,996 20,097 20,701

Total revenues

$ 58,496 $ 100,330 $ 81,288

4 unchanged sentences

was Japan, which contributed 6 % of total revenue in 2023, 8 % of total revenue in 2022 and 9 % of total revenue in 2021.

We and our collaboration partner, BioNTech, have entered into agreements to supply pre-specified doses of Comirnaty and we have entered into agreements to supply pre-specified treatment courses of Paxlovid with multiple developed and emerging nations around the world and are continuing to deliver doses of Comirnaty and treatment courses of Paxlovid under such agreements.

In 2021 and 2022, we principally sold the Comirnaty vaccine and the Paxlovid product directly to government and government sponsored customers.

This includes supply agreements entered into in November 2020 and February and May 2021 with the EC for Comirnaty on behalf of the different EU member states and certain other countries.

Each EU member state submits its own Comirnaty vaccine order to us and is responsible for payment pursuant to terms of the supply agreements negotiated by the EC.

2022 Form 10-K 98

Notes to Consolidated Financial Statements

and Subsidiary Companies

Other Revenue Information

Significant Customers

We and our collaboration partner, BioNTech, have entered into agreements to supply pre-specified doses of Comirnaty with multiple developed and emerging nations around the world and are continuing to deliver doses of Comirnaty under such agreements.

This includes supply agreements entered into in November 2020 and February and May 2021 with the EC for Comirnaty on behalf of the different EU member states and certain other countries.

Each EU member state submits its own Comirnaty vaccine order to us and is responsible for payment pursuant to terms of the supply agreements negotiated by the EC.

In May 2023, we and BioNTech amended our contract with the EC to deliver COVID-19 vaccines to the EU.

The amended agreement includes rephasing of delivery of doses annually through 2026 and an aggregate volume reduction, providing additional flexibility for those EU member states who agreed to the amended agreement.

The EC will maintain access to future adapted COVID-19 vaccines and the ability to donate doses, in alignment with the original agreement.

In 2022 and 2023, we had entered into agreements to supply pre-specified treatment courses of Paxlovid with government and government sponsored customers in multiple developed and emerging nations around the world, which represented most Paxlovid revenues in 2022 and 2023, while commercialization began in some markets in 2023.

In October 2023, we announced an amended agreement with the U.S.

government, which facilitated the transition of Paxlovid to traditional commercial markets starting in November 2023, with prices negotiated with commercial payors and a copay assistance program for eligible privately insured patients, as the U.S.

government began to discontinue the distribution of EUA-labeled Paxlovid.

We ensured commercial readiness by providing NDA-labeled commercial supply by the end of 2023.

However, EUA-labeled Paxlovid remained available free-of-charge to all eligible patients until the end of 2023, and therefore, there was only minimal uptake of NDA-labeled commercial product before January 1, 2024.

In connection with this agreement, we recorded a non-cash revenue reversal of $ 3.5 billion in the fourth quarter of 2023, of which a portion was associated with sales recorded in 2022, related to the expected return of an estimated 6.5 million treatment courses of EUA-labeled U.S.

government inventory.

We will convert these treatment courses previously purchased by the U.S.

government to a volume-based credit, based on the actual number of treatment courses that are returned by the U.S.

government, which will support continued access to Paxlovid through a U.S.

government patient assistance program operated by Pfizer.

Therefore, we expect the patient assistance program will provide an estimated 6.5 million treatment courses of FDA-approved, NDA-labeled Paxlovid free of charge to all eligible uninsured, Medicare and Medicaid patients through 2024, and to eligible uninsured and underinsured patients through 2028.

We also agreed to create, in 2024, a U.S.

Strategic National Stockpile of 1.0 million treatment courses to enable future pandemic preparedness through 2028, which will be managed and supplied by Pfizer at no cost to the U.S.

government or taxpayers.

While we will recognize revenue as the estimated 7.5 million treatment courses are delivered, there is no remaining cash consideration for these treatment courses.

The following summarizes revenue, as a percentage of Total revenues , for our three largest U.S.

wholesaler customers:

wholesaler customers and the U.S.

government, which was concentrated in our Biopharma operating segment:

Year Ended December 31,

1 unchanged sentence

McKesson, Inc.

AmerisourceBergen Corporation

Cencora, Inc.

(formerly AmerisourceBergen Corporation)

Cardinal Health, Inc.

government (a)

(a) The decrease in revenues from the U.S.

government as a percentage of Total revenues for 2023 compared to 2022 was primarily due to the transition of Comirnaty and Paxlovid to commercial market sales in the second half of 2023 as well as the revenue reversal for Paxlovid in the fourth quarter of 2023.

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

Collectively, our three largest U.S.

wholesaler customers represented 32 %, 24 % and 30 % of total trade accounts receivable as of December 31, 2022, 2021 and 2020.

Additionally, revenues from the U.S.

government represented 23 % and 13 % of total revenues for 2022 and 2021, respectively, and was not significant for 2020.

wholesaler customers represented 44 % and 32 % of total trade accounts receivable as of December 31, 2023 and December 31, 2022, respectively.

Accounts receivable from the U.S.

government represented 4 % and 12 % of total trade accounts receivable as of December 31, 2022 and December 31, 2021, respectively.

Revenues and accounts receivable from the U.S.

government primarily represent sales of Paxlovid and Comirnaty in 2022, and sales of Comirnaty in 2021.

Significant Product Revenues

government as of December 31, 2023 and December 31, 2022 were not material to our consolidated financial statements.

Significant Revenues by Product

The following provides detailed revenue information for several of our major products:

2 unchanged sentences

TOTAL REVENUES $ 58,496 $ 100,330 $ 81,288

GLOBAL BIOPHARMACEUTICALS BUSINESS (BIOPHARMA) (a)

GLOBAL BIOPHARMACEUTICALS BUSINESS (BIOPHARMA)

$ 57,186 $ 98,988 $ 79,557

Primary Care $ 30,589 $ 73,023 $ 52,029

Comirnaty direct sales and alliance revenues (b)

Comirnaty direct sales and alliance revenues (a)

Active immunization to prevent COVID-19

11,220 37,806 36,781

Paxlovid COVID-19 in certain high-risk patients

Eliquis alliance revenues and direct sales

Nonvalvular atrial fibrillation, deep vein thrombosis, pulmonary embolism 6,747 6,480 5,970

Prevnar family Active immunization to prevent invasive disease caused by Streptococcus pneumoniae serotypes 6,337 5,272 5,850

Prevnar family Active immunization to prevent pneumonia, invasive disease and otitis media caused by Streptococcus pneumoniae 6,440 6,337 5,272

COVID-19 in certain high-risk patients

1,279 18,933 76

Nurtec ODT/Vydura Acute treatment of migraine and prevention of episodic migraine 928 213 —

Active immunization to prevent RSV infection

Premarin family

Symptoms of menopause 397 455 563

Development of bone and cartilage 277 266 274

Active immunization against invasive meningococcal ACWY disease 268 193 221

Nurtec ODT/Vydura Acute treatment of migraine and prevention of episodic migraine 213 — —

Bone graft for spinal fusion

FSME-IMMUN/TicoVac Active immunization to prevent tick-borne encephalitis disease 268 200 185

Overactive bladder 146 238 252

Active immunization against invasive meningococcal ACWY disease 179 268 193

Trumenba Active immunization to prevent invasive disease caused by Neisseria meningitidis group B 126 123 118

Chantix/Champix

An aid to smoking cessation treatment in adults 18 years of age or older

All other Primary Care Various 1,777 1,932 2,604

6 unchanged sentences

Bacterial infections 757 786 683

Inflectra/Remsima Crohn’s disease, pediatric Crohn’s disease, UC, pediatric UC, RA in combination with methotrexate, ankylosing spondylitis, PsA and plaque psoriasis

Ig Portfolio (c)

Various 584 491 430

BeneFIX Hemophilia B 425 438 454

Zavicefta Bacterial infections 412 413 212

Replacement of human growth hormone 539 360 389

Zavicefta Bacterial infections 511 412 413

Inflectra Crohn’s disease, pediatric Crohn’s disease, UC, pediatric UC, RA in combination with methotrexate, ankylosing spondylitis, PsA and plaque psoriasis

BeneFIX Hemophilia B 424 425 438

Zithromax Bacterial infections 406 331 278

Medrol Anti-inflammatory glucocorticoid 339 328 432

Treatment/prevention of venous thromboembolism 269 305 252

Oxbryta Sickle cell disease 328 73 —

Acromegaly 267 268 277

Treatment/prevention of venous thromboembolism 238 269 305

ReFacto AF/Xyntha

1 unchanged sentence

Fungal infections

Oxbryta Sickle cell disease 73 — —

2022 Form 10-K 99

Notes to Consolidated Financial Statements

and Subsidiary Companies

(MILLIONS) Year Ended December 31,

PRODUCT PRIMARY INDICATION OR CLASS 2022 2021 2020

Fungal infections 187 225 267

Bacterial infections

Atopic dermatitis

All other Anti-infectives

3 unchanged sentences

Ibrance HR-positive/HER2-negative metastatic breast cancer 4,753 5,120 5,437

Xtandi alliance revenues mCRPC, nmCRPC, mCSPC 1,198 1,185 1,024

Xtandi alliance revenues mCRPC, nmCRPC, mCSPC, nmCSPC

1,191 1,198 1,185

Advanced RCC 1,036 1,003 1,002

Philadelphia chromosome–positive chronic myelogenous leukemia 645 575 540

Lorbrena ALK-positive metastatic NSCLC

Zirabev Treatment of mCRC;

3 unchanged sentences

and persistent, recurrent or metastatic cervical cancer 424 562 444

ALK-positive and Proto-Oncogene 1, Receptor Tyrosine Kinase-positive advanced NSCLC 465 493 544

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

(MILLIONS) Year Ended December 31,

PRODUCT PRIMARY INDICATION OR CLASS 2023 2022 2021

Ruxience Non-hodgkin’s lymphoma, chronic lymphocytic leukemia, granulomatosis with polyangiitis (Wegener’s Granulomatosis) and microscopic polyangiitis 390 458 491

ALK-positive and Proto-Oncogene 1, Receptor Tyrosine Kinase-positive advanced NSCLC 374 465 493

Retacrit Anemia 340 394 444

Advanced and/or metastatic RCC, adjuvant RCC, refractory gastrointestinal stromal tumors (after disease progression on, or intolerance to, imatinib mesylate) and advanced pancreatic neuroendocrine tumor

Lorbrena ALK-positive metastatic NSCLC

Bavencio alliance revenues Locally advanced or metastatic urothelial carcinoma;

metastatic Merkel cell carcinoma;

immunotherapy and tyrosine kinase inhibitor combination for patients with advanced RCC 271 178 80

Aromasin Post-menopausal early and advanced breast cancer 301 248 211

Besponsa Relapsed or refractory B-cell acute lymphoblastic leukemia 236 219 192

In combination with Mektovi for metastatic melanoma in patients with a BRAF V600E/K mutation and for metastatic NSCLC in patients with a BRAF V600E mutation;

In combination with Erbitux (cetuximab) (d) for the treatment of BRAF V600E -mutant mCRC after prior therapy

Bavencio alliance revenues (e)

Locally advanced or metastatic urothelial carcinoma;

metastatic Merkel cell carcinoma;

immunotherapy and tyrosine kinase inhibitor combination for patients with advanced RCC 190 271 178

In combination with Braftovi for metastatic melanoma in patients with a BRAF V600E/K mutation and for metastatic NSCLC in patients with a BRAF V600E mutation

Trazimera HER2-positive breast cancer and metastatic stomach cancers

In combination with Mektovi for metastatic melanoma in patients with a BRAF V600E/K mutation and, in combination with Erbitux ® (cetuximab) (d) , for the treatment of BRAF V600E -mutant mCRC after prior therapy

In combination with Braftovi for metastatic melanoma in patients with a BRAF V600E/K mutation

Locally advanced or metastatic urothelial cancer

Hodgkin lymphoma and certain T-cell lymphomas

Unresectable or metastatic HER2-positive breast cancer;

RAS wild-type, HER2-positive unresectable or metastatic colorectal cancer 17 — —

Recurrent or metastatic cervical cancer

All other Oncology Various 433 357 238

PFIZER CENTREONE (a)

BUSINESS INNOVATION (g)

$ 1,310 $ 1,342 $ 1,731

Pfizer CentreOne (h)

1,265 1,335 1,731

Pfizer Ignite Various 44 7 —

Total Alliance revenues included above $ 7,582 $ 8,537 $ 7,652

(a) See Note 1A for information about our recent organizational changes.

PC1 includes revenues from our contract manufacturing, including certain Comirnaty-related manufacturing activities performed on behalf of BioNTech ($ 188 million for 2022, $ 320 million for 2021, and $ 0 million for 2020), and revenues from our active pharmaceutical ingredient sales operation, as well as revenues related to our manufacturing and supply agreements with former legacy Pfizer businesses/partnerships, including but not limited to, transitional manufacturing and supply agreements with Viatris following the spin-off of the Upjohn Business.

(b) Excludes revenues for certain Comirnaty-related manufacturing activities performed on behalf of BioNTech, which are included in the PC1 contract development and manufacturing organization.

(a) Excludes revenues for certain Comirnaty-related manufacturing activities performed on behalf of BioNTech, which are included in the PC1 contract development and manufacturing organization.

See footnote (h) below.

(b) Includes a non-cash revenue reversal of $ 3.5 billion recorded in the fourth quarter of 2023, of which a portion was associated with sales recorded in 2022, related to the expected return of an estimated 6.5 million treatment courses of EUA-labeled U.S.

government inventory.

(d) Erbitux is a registered trademark of ImClone LLC.

Remaining Performance Obligations–– Contracted revenue expected to be recognized from remaining performance obligations for firm orders in long-term contracts to supply Comirnaty to our customers totaled approximately $ 15 billion as of December 31, 2022, which includes amounts received in advance and deferred, as well as amounts that will be invoiced as we deliver these products to our customers in future periods.

Of this amount, current contract terms provide for expected delivery of product with contracted revenue in 2023 and 2024, the timing and terms of which may be renegotiated.

(e) In March 2023, it was announced that our alliance with Merck KGaA to co-develop and co-commercialize Bavencio (avelumab) would terminate.

Effective June 30, 2023, Merck KGaA took full control of the global commercialization of Bavencio.

Beginning in the third quarter of 2023, the related profit share was replaced by a 15 % royalty to Pfizer on net sales of Bavencio, which was recorded in Other (income)/deductions––net .

We and Merck KGaA continue to operationalize our respective ongoing clinical trials for Bavencio;

and Merck KGaA controls all future R&D activities.

Bavencio is a registered trademark of Merck KGaA.

(f) Represents revenues from legacy Seagen products subsequent to the acquisition on December 14, 2023.

See Note 2 A .

(g) See Note 1 7A above for information about Business Innovation.

Prior-period financial information has been revised to reflect the current period presentation.

(h) PC1 includes revenues from our contract manufacturing, including certain Comirnaty-related manufacturing activities performed on behalf of BioNTech ($ 33 million for 2023, $ 188 million for 2022, and $ 320 million for 2021), and revenues from our active pharmaceutical ingredient sales operation, as well as revenues related to our manufacturing and supply agreements with former legacy Pfizer businesses/partnerships.

Remaining Performance Obligations–– Contracted revenue expected to be recognized from remaining performance obligations for firm orders in long-term contracts to supply Comirnaty and Paxlovid to our customers totaled approximately $ 6 billion and $ 3.4 billion, respectively, as of December 31, 2023, which includes amounts received in advance and deferred, as well as amounts that will be invoiced as we deliver these products to our customers in future periods.

Of these amounts, current contract terms provide for expected delivery of product with contracted revenue from 2024 through 2028, the timing of which may be renegotiated.

Remaining performance obligations are based on foreign exchange rates as of the end of our fiscal fourth quarter of 2023 and exclude arrangements with an original expected contract duration of less than one year.

Deferred Revenues–– Our deferred revenues primarily relate to advance payments received or receivable from various government or government sponsored customers in international markets for supply of Comirnaty.

The deferred revenues related to Comirnaty total $ 2.5 billion as of December 31, 2022, with $ 2.4 billion and $ 77 million recorded in current liabilities and noncurrent liabilities, respectively.

Remaining performance obligations associated with contracts for other products and services were not significant as of December 31, 2023 or 2022.

Deferred Revenues–– Our deferred revenues primarily relate to advance payments received or receivable from various government or government sponsored customers for supply of Paxlovid and Comirnaty.

The deferred revenues related to Paxlovid totaled $ 3.4 billion as of December 31, 2023, with $ 1.5 billion and $ 1.9 billion recorded in current liabilities and noncurrent liabilities, respectively, while deferred revenues related to Paxlovid were not material as of December 31, 2022.

The increase in Paxlovid deferred revenues during 2023 was primarily driven by the reversal of Paxlovid revenues and conversion of previously purchased EUA-labeled Paxlovid treatment courses into a volume-based credit under our October 2023 amended agreement with the U.S.

2023 Form 10-K

Notes to Consolidated Financial Statements

and Subsidiary Companies

The deferred revenues related to Comirnaty totaled $ 1.7 billion as of December 31, 2023, with $ 1.1 billion and $ 552 million recorded in current liabilities and noncurrent liabilities, respectively.

The decrease in Comirnaty deferred revenues during 2022 was primarily the result of amounts recognized in Revenues as we delivered the product to our customers and the impact of foreign exchange, partially offset by additional advance payments received as we entered into new or amended contracts.

During 2022, we recognized revenue of $ 3.1 billion that was included in the balance of Comirnaty deferred revenues as of December 31, 2021.

The Comirnaty deferred revenues as of December 31, 2022 will be recognized in Revenues proportionately as we transfer control of the product to our customers and satisfy our performance obligation under the contracts, with the amounts included in current liabilities expected to be recognized in Revenues within the next 12 months, and the amounts included in noncurrent liabilities expected to be recognized in Revenues in 2024.

The deferred revenues related to Comirnaty totaled $ 2.5 billion as of December 31, 2022, with $ 2.4 billion and $ 77 million recorded in current liabilities and noncurrent liabilities, respectively.

The decrease in Comirnaty deferred revenues during 2023 was primarily the result of amounts recognized in Product revenues as we delivered the products to our customers, partially offset by additional advance payments received as we entered into amended contracts, as well as the impact of foreign exchange.

During 2023, we recognized revenue of approximately $ 2.2 billion that was included in the balance of Comirnaty deferred revenues as of December 31, 2022.

The Paxlovid and Comirnaty deferred revenues as of December 31, 2023 will be recognized in Product revenues proportionately as we transfer control of the products to our customers and satisfy our performance obligations under the contracts, with the amounts included in current liabilities expected to be recognized in Product revenues within the next 12 months, and the amounts included in noncurrent liabilities expected to be recognized in Product revenues from December 2024 (which falls in our international first quarter of 2025) through 2028.

Deferred revenues associated with contracts for other products were not significant as of December 31, 2023 or 2022.

2022 Form 10-K 100

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data