<PAGE> 1
Exhibit 99.2
PFIZER INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
-----------------------
April 2, April 4,
(millions, except per share data) 2000 1999
-------- --------
<S> <C> <C>
Revenues .................................................................. $ 7,222 $ 6,580
Costs and expenses:
Cost of sales ............................................................ 1,207 1,262
Selling, informational and
administrative expenses ................................................. 2,794 2,641
Research and development expenses ........................................ 1,061 929
Merger-related costs ..................................................... 1,838 --
Other (income)/deductions-net ............................................ (88) 38
------- --------
Income before provision for taxes on income and minority interests ........ 410 1,710
Provision for taxes on income ............................................. 613 495
Minority interests ........................................................ 1 1
------- --------
Net income/(loss) ......................................................... $ (204) $ 1,214
======= ========
Income/(loss) per common share:
Basic ................................................................... $ (.03) $ .20
======= ========
Diluted ................................................................. $ (.03) $ .19
======= ========
Weighted average shares used to calculate income/(loss) per common share
amounts:
Basic ................................................................... 6,152 6,123
======= ========
Diluted ................................................................. 6,152 6,360
======= ========
Cash dividends per common share*........................................... $ .09 $.07 1/3
======= ========
</TABLE>
We have restated all periods presented to reflect the merger with Warner-Lambert
Company on June 19, 2000, which was accounted for as a pooling of interests.
* Cash dividends per common share are those of pre-merger Pfizer.
See accompanying Notes to Condensed Consolidated Financial Statements.
-1-
<PAGE> 2
PFIZER INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
April 2, Dec. 31,
(millions of dollars) 2000** 1999*
<S> <C> <C>
-------- --------
ASSETS
------
Current Assets
Cash and cash equivalents .......................................................... $ 1,360 $ 2,358
Short-term investments ............................................................. 4,886 4,028
Accounts receivable, less allowance for doubtful accounts: $238 and $230 ........... 5,079 5,368
Short-term loans ................................................................... 155 273
Inventories
Finished goods .................................................................... 1,053 1,147
Work in process ................................................................... 955 977
Raw materials and supplies ........................................................ 475 464
-------- --------
Total inventories ................................................................ 2,483 2,588
Prepaid expenses and taxes ......................................................... 1,758 1,696
-------- --------
Total current assets ............................................................. 15,721 16,311
Long-term loans and investments ..................................................... 1,956 1,764
Property, plant and equipment, less accumulated depreciation: $4,591 and $4,506 ..... 8,820 8,685
Goodwill, less accumulated amortization:
$274 and $256 ...................................................................... 1,844 1,870
Other assets, deferred taxes and deferred charges ................................... 3,235 2,742
-------- --------
Total assets ..................................................................... $ 31,576 $ 31,372
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current Liabilities
Short-term borrowings, including current portion of long-term debt: $23 and $24 .... $ 3,980 $ 5,299
Accounts payable ................................................................... 1,677 1,889
Dividends payable .................................................................. -- 349
Income taxes payable ............................................................... 1,268 1,079
Accrued compensation and related items ............................................. 791 905
Other current liabilities .......................................................... 2,676 2,706
-------- --------
Total current liabilities ........................................................ 10,392 12,227
Long-term debt ...................................................................... 3,336 1,774
Postretirement benefit obligation other than pension plans .......................... 512 515
Deferred taxes on income ............................................................ 577 485
Other noncurrent liabilities ........................................................ 2,444 2,421
-------- --------
Total liabilities ................................................................ 17,261 17,422
Shareholders' Equity
Preferred stock .................................................................... -- --
Common stock ....................................................................... 334 332
Additional paid-in capital ......................................................... 6,836 5,943
Retained earnings .................................................................. 18,048 18,459
Accumulated other comprehensive expense ............................................ (1,108) (1,045)
Employee benefit trusts ............................................................ (2,975) (2,888)
Treasury stock, at cost ............................................................ (6,820) (6,851)
-------- --------
Total shareholders' equity ....................................................... 14,315 13,950
-------- --------
Total liabilities and shareholders' equity ....................................... $ 31,576 $ 31,372
======== ========
</TABLE>
We have restated all periods presented to reflect the merger with Warner-Lambert
Company on June 19, 2000, which was accounted for as a pooling of interests.
* Condensed from restated audited financial statements.
** Unaudited.
See accompanying Notes to Condensed Consolidated Financial Statements.
-2-
<PAGE> 3
PFIZER INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
(millions of dollars) Three Months Ended
-----------------------
April 2, April 4,
2000 1999
-------- --------
<S> <C> <C>
Operating Activities
--------------------
Net income/(loss) ........................................................................... $ (204) $ 1,214
Adjustments to reconcile net income (loss) to net cash provided by operating activities:....
Depreciation and amortization ............................................................ 244 214
Gain on sale equity investments .......................................................... (135) --
Other .................................................................................... 120 5
Changes in assets and liabilities ........................................................ 110 (831)
------- -------
Net cash provided by operating activities ................................................... 135 602
------- -------
Investing Activities
--------------------
Purchases of property, plant and equipment ................................................. (454) (551)
Purchases of short-term investments,
net of maturities ......................................................................... (2,783) (2,477)
Proceeds from redemptions of
short-term investments .................................................................... 1,942 1,250
Purchases of long-term investments ......................................................... (70) (47)
Proceeds from sale of equity investments ................................................... 161 5
Other investing activities ................................................................. 40 38
------- -------
Net cash used in investing activities ....................................................... (1,164) (1,782)
------- -------
Financing Activities
--------------------
Increase in short-term debt ................................................................ 6,508 1,598
Repayments of short-term debt............................................................... (6,256) (30)
Proceeds from long-term debt ............................................................... 2 2,722
Repayments of long-term debt ............................................................... (1) (2,707)
Proceeds from common stock issuances ....................................................... 18 --
Purchases of common stock .................................................................. -- (727)
Cash dividends paid ........................................................................ (541) (449)
Stock option transactions and other ........................................................ 302 183
------- -------
Net cash provided by financing activities ................................................... 32 590
------- -------
Effect of exchange-rate changes on cash and cash equivalents ................................ (1) (70)
------- -------
Net decrease in cash and cash equivalents ................................................... (998) (660)
------- -------
Cash and cash equivalents at beginning of period ............................................ 2,358 2,407
------- -------
Cash and cash equivalents at end of period .................................................. $ 1,360 $ 1,747
======= =======
</TABLE>
We have restated all periods presented to reflect the merger with Warner-Lambert
Company on June 19, 2000, which was accounted for as a pooling of interests.
See accompanying Notes to Condensed Consolidated Financial Statements.
-3-
<PAGE> 4
PFIZER INC. AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1: Basis of Presentation
We prepared the condensed consolidated financial statements following the
requirements of the Securities and Exchange Commission (SEC) for interim
reporting. As permitted under those rules, certain footnotes or other financial
information that are normally required by GAAP (generally accepted accounting
principles) can be condensed or omitted. We made certain reclassifications to
the 1999 condensed consolidated financial statements to conform to the 2000
presentation.
The financial statements include the assets and liabilities and the operating
results of subsidiaries operating outside the U.S. Balance sheet amounts and
operating results for certain subsidiaries operating outside of the U.S., are as
of and for the three-month periods ending February 27, 2000 and February 28,
1999.
On June 19, 2000 we completed our merger with Warner-Lambert Company
(Warner-Lambert) by issuing approximately 2,440 million shares of our common
stock for all the outstanding common stock of Warner-Lambert. As a result of
this merger, each share of Warner-Lambert common stock issued and outstanding,
other than shares owned directly or indirectly by Warner-Lambert, was converted
into the right to receive 2.75 shares of Pfizer common stock. Warner-Lambert
develops, manufactures and markets a diversified line of health care and
consumer products.
The merger qualified as a tax-free reorganization and was accounted for as a
pooling of interests. We restated all prior period consolidated financial
statements presented to reflect the combined results of operations, financial
position and cash flows of both companies as if they had always been merged.
Prior to the merger, the only significant transactions between Pfizer and
Warner-Lambert occurred under the Lipitor marketing agreements. We have
eliminated these transactions from the restated financial statements. Certain
reclassifications were made to conform the presentation of the restated
financial statements.
Note 2: Responsibility for Interim Financial Statements
We are responsible for the unaudited financial statements included in this
document. The financial statements include all normal and recurring adjustments
that are considered necessary for the fair presentation of our financial
position and operating results. As these are condensed financial statements, one
should also read the restated 1999 financial statements and notes included as
Exhibit 99.1 to our Current Report on Form 8-K dated September 1, 2000.
Revenues, expenses, assets and liabilities can vary during each quarter of the
year. Therefore, the results and trends in these interim financial statements
may not be the same as those for the full year.
-4-
<PAGE> 5
Note 3: Comprehensive Income
<TABLE>
<CAPTION>
(millions of dollars) Three Months Ended
-----------------------
April 2, April 4,
2000 1999
-------- --------
<S> <C> <C>
Net income/(loss) $ (204) $ 1,214
Other comprehensive expense:
Currency translation adjustment and hedges (116) (315)
Holding gain/(loss) arising during period, net
of tax 146 (24)
Reclassification adjustment, net of tax (93) --
------- -------
Net gain/(loss) on investment securities 53 (24)
------- -------
Total other comprehensive expense (63) (339)
------- -------
$ (267) $ 875
Total comprehensive income/(loss) ======= =======
</TABLE>
The change in currency translation adjustment and hedges included in
"Accumulated other comprehensive expense" for the first quarter of 2000 was:
<TABLE>
<CAPTION>
(millions of dollars) 2000
----
<S> <C>
Opening balance $(1,028)
Translation adjustments and hedges (116)
-------
Ending balance $(1,144)
=======
</TABLE>
Note 4: Earnings Per Share
Basic earnings per common share and diluted earnings per common share were
computed as follows:
<TABLE>
<CAPTION>
Three Months Ended
------------------------
April 2, April 4,
(millions, except per share data) 2000 1999
-------- --------
<S> <C> <C>
Net income/(loss) $ (204) $ 1,214
======= =======
Basic:
Weighted average number of common shares outstanding 6,152 6,123
======= =======
Income/(loss) per common share $ (.03) $ .20
======= =======
Diluted:
Weighted average number of common shares outstanding 6,152 6,123
Common share equivalents--stock options and stock
issuable under employee compensation plans -- 237
------- -------
Weighted average number of common shares outstanding
and common share equivalents 6,152 6,360
======= =======
Income/(loss) per common share $ (.03) $ .19
======= =======
</TABLE>
Stock options and contingent shares equivalents of 170 million shares of common
stock were outstanding during the first quarter of 2000. These potential common
shares were excluded from the computation of diluted earnings per share because
their inclusion would have had an antidilutive effect.
-5-
<PAGE> 6
Note 5: Segment Information
For the three months ended April 2, 2000 and April 4, 1999:
<TABLE>
<CAPTION>
Pharma- Consumer Corporate/
(millions of dollars) ceuticals Products Other Consolidated
--------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Total revenues 2000 $ 5,837 $ 1,385 $ -- $ 7,222
1999 5,239 1,341 -- 6,580
Segment profit 2000 $ 2,141 $ 220 $(1,951)(1) $ 410(2)
1999 1,787 199 (276)(1) 1,710(2)
</TABLE>
(1) Includes interest income/(expense) and corporate expenses. Corporate
includes other income/(expense) of our financial subsidiaries, certain
performance-based compensation expenses not allocated to the operating segments
and merger-related costs.
(2) Consolidated total equals income from continuing operations before
provision for taxes on income and minority interests.
Note 6: Certain Significant Items
In the first quarter of 2000, "Merger-related costs" consisted of $1,838 million
of transaction costs related to the termination of the proposed
Warner-Lambert/American Home Products Corporation merger.
In the first quarter of 2000, we sold certain research-related equity
investments for proceeds of $161 million, resulting in a pre-tax gain of $135
million which is included in "Other (income)/deductions-net". The investments
had specific identification cost bases and were classified as
available-for-sale.
In the first quarter of 2000, we announced that we were discontinuing the sale
of Rezulin. We recorded one-time pre-tax costs of $103 million associated with
the withdrawal of Rezulin that consisted primarily of product returns and
inventory write-offs. These costs are recorded in "Other
(income)/deductions-net".
In the first quarter of 2000, we sold the Omnicef brand resulting in a pre-tax
gain of $39 million which is included in "Other (income)/deductions-net".
Note 7: Subsequent Events
On April 27, 2000, our board of directors:
- voted to continue the current share-purchase program begun in September
1998 up to limits of the remaining $1.9 billion in cost with a maximum of
140 million additional shares
- declared a $.09 per share second-quarter 2000 cash dividend on our common
stock, payable on June 8, 2000 to all shareholders who owned shares on
May 11, 2000
Prior to the merger, Warner-Lambert's Board of Directors declared a $.24 per
share dividend in both the first and second quarters of 2000.
-6-
<PAGE> 7
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To the Shareholders and Board of Directors of Pfizer Inc.:
We have reviewed the condensed consolidated balance sheet of Pfizer Inc. and
Subsidiary Companies as of April 2, 2000 and the related condensed consolidated
statements of income and cash flows for the three-month periods ended April 2,
2000 and April 4, 1999. These condensed consolidated financial statements are
the responsibility of the Company's management. The condensed consolidated
financial statements give retroactive effect to the merger effective June 19,
2000 of Pfizer Inc. and Subsidiary Companies and Warner-Lambert Company and its
subsidiaries, which has been accounted for as a pooling of interests as
described in Note 1 to the condensed consolidated financial statements.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review we are not aware of any material modifications that should
be made to the condensed consolidated financial statements referred to above for
them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Pfizer Inc. and Subsidiary
Companies as of December 31, 1999 and the related consolidated statements of
income, shareholders' equity and cash flows for the year then ended (not
presented herein), prior to restatement for the pooling of interests referred to
above; and in our report dated February 14, 2000, we expressed an unqualified
opinion on those consolidated financial statements. The financial statements of
Warner-Lambert Company and its subsidiaries for the year ended December 31,
1999, were audited by other auditors whose report, dated January 24, 2000,
except for Note 6 to those financial statements as to which the date is February
7, 2000, expressed an unqualified opinion on those financial statements (not
presented herein). We have also audited the adjustments that were applied to
restate the December 31, 1999 consolidated financial statement of Pfizer Inc.
and Subsidiary Companies for the pooling of interests referred to above (not
presented herein). In our opinion such adjustments are appropriate and have been
properly applied and the information set forth in the accompanying condensed
consolidated balance sheet as of December 31, 1999, is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which it
has been derived.
KPMG LLP
New York, New York
May 17, 2000, except as to pooling of interests of Pfizer Inc.
and Warner-Lambert Company which is as of June 19, 2000.
-7-
