Pfizer Reports Second-Quarter 2008 Results

-- Pfizer Reaffirms Full-Year 2008 Revenue and Adjusted Diluted
EPS(1) Guidance; On-Track to Achieve Total Cost-Reduction
Target

-- Second-Quarter 2008 Revenues of $12.1 Billion Compared with
$11.1 Billion in the Year-Ago Quarter

-- Second-Quarter 2008 Reported Diluted EPS of $0.41 Compared
with $0.18 in the Year-Ago Quarter

-- Second-Quarter 2008 Adjusted Diluted EPS(1) of $0.55 Compared
with $0.42 in the Year-Ago Quarter

-- Second-Quarter 2008 Adjusted Total Costs(2) Decreased by $475
Million Compared with the Year-Ago Quarter Excluding Foreign
Exchange
NEW YORK--(Business Wire)--
Pfizer Inc (NYSE: PFE):

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($ in millions, except per share amounts)

Second-Quarter Year-to-Date
------------------------ ------------------------
2008 2007 Change 2008 2007 Change
-------- -------- ------ -------- -------- ------
Reported Revenues $ 12,129 $ 11,084 9% $ 23,977 $ 23,558 2%
Reported Net Income 2,776 1,267 119% 5,560 4,659 19%
Reported Diluted EPS 0.41 0.18 128% 0.82 0.66 24%
Adjusted Income(1) 3,698 2,944 26% 7,797 7,748 1%
Adjusted Diluted
EPS(1) 0.55 0.42 31% 1.15 1.10 5%

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See end of text prior to tables for notes.

Pfizer Inc (NYSE: PFE) today reported financial results for the
second-quarter 2008. The Company recorded revenues of $12.1 billion,
an increase of 9% compared with $11.1 billion in the year-ago quarter.
In the U.S., revenues were $4.8 billion, a decrease of 2%, while
international revenues were $7.4 billion, an increase of 18%. Revenues
reflect the positive impact of foreign exchange, which increased
revenues by approximately $800 million or 7%, as well as the solid
performance of many key products. These factors more than offset the
revenue declines due to the loss of U.S. exclusivity for Zyrtec, which
Pfizer ceased selling in late January 2008, and for Camptosar in
February 2008. Zyrtec and Camptosar second-quarter 2008 revenues
decreased by $377 million and $104 million, respectively, compared
with the year-ago quarter.

For the second-quarter 2008, Pfizer posted reported net income of
$2.8 billion, an increase of 119% compared with $1.3 billion in the
prior-year quarter, and reported diluted EPS of $0.41, an increase of
128% compared with $0.18 in the prior-year quarter. These increases
were primarily attributable to lower restructuring charges from
cost-reduction initiatives, as well as savings generated by those
initiatives, the positive impact of foreign exchange and favorable
income tax adjustments; these positive factors were partially offset
by increased in-process research and development expenses associated
with the acquisitions of Serenex, Inc. and Encysive Pharmaceuticals
Inc., which closed in the second-quarter 2008.

For the first-half 2008, Pfizer recorded revenues of $24.0
billion, an increase of 2% compared with $23.6 billion in the same
period in 2007, despite the loss of U.S. exclusivity of Norvasc (March
2007), Zyrtec (January 2008) and Camptosar (February 2008), which
collectively decreased revenues by $1.4 billion during the first-half
2008. The 2% increase reflects the favorable impact of foreign
exchange, which increased revenues by approximately $1.4 billion or
6%, in addition to the solid performance of many key products. In the
U.S., revenues were $10.3 billion, a decrease of 12%, while
international revenues were $13.7 billion, an increase of 15%.

For the first-half 2008, the Company posted reported net income of
$5.6 billion, an increase of 19% compared with $4.7 billion in the
prior-year period, and reported diluted EPS of $0.82, an increase of
24% compared with $0.66 in the prior-year period. These increases were
primarily attributable to the favorable impact of foreign exchange and
lower restructuring charges associated with cost-reduction
initiatives, mainly employee-related costs, as well as the savings
generated by those initiatives.

Adjusted Income(1) and Adjusted Diluted EPS(1) Results

For the second-quarter 2008, Pfizer posted adjusted income(1) of
$3.7 billion, an increase of 26% compared with $2.9 billion in the
year-ago quarter, and adjusted diluted EPS(1) of $0.55, an increase of
31% compared with $0.42 in the year-ago quarter. For the first-half
2008, Pfizer posted adjusted income(1) of $7.8 billion, an increase of
1% compared with $7.7 billion in the first-half 2007, and adjusted
diluted EPS(1) of $1.15, an increase of 5% compared with $1.10 in the
first-half 2007. In both periods, adjusted income(1) and adjusted
diluted EPS(1) reflect the positive impact of foreign exchange, the
non-recurrence of the one-time 2007 payment to Bristol-Myers Squibb
Company in connection with our collaboration to develop and
commercialize apixaban, favorable income tax adjustments as well as
the savings associated with cost-reduction initiatives.

Reported and adjusted diluted EPS(1) were also positively impacted
by the full benefit of Pfizer's purchase of $10.0 billion of the
Company's common stock in 2007.

Executive Commentary

"We are pleased with the financial results we delivered this
quarter, which were driven in part by the solid performance in our
Pharmaceutical and Animal Health businesses," stated Chairman and
Chief Executive Officer Jeff Kindler. "Many of our key products
continued to perform well both in the U.S. and international markets,
including Lyrica, Celebrex, Viagra and Geodon, as well as Lipitor in
the face of a highly competitive statin market. The benefit of our
broad-based portfolio of products, our geographic reach and our
diverse strategies for growth was evident in this quarter's financial
results, which clearly demonstrate our ability to continue to deliver
solid performance in an increasingly challenging environment."

"During the quarter, we entered into an important agreement with
Ranbaxy Laboratories Ltd. that provided substantial certainty to
patients and our shareholders regarding the availability of a generic
version of Lipitor in the U.S. after November 30, 2011. We are pleased
with the resolution of this issue with Ranbaxy, as it reaffirms the
value and importance of intellectual property for Pfizer and the
pharmaceutical industry as a whole," continued Kindler.

Frank D'Amelio, Chief Financial Officer, commented, "Based on our
year-to-date performance and outlook for the remainder of 2008, we are
reaffirming our full-year 2008 revenue and adjusted diluted EPS(1)
guidance as well as our plan to reduce absolute adjusted total
costs(2) by at least $1.5 to $2.0 billion at the end of 2008 compared
with 2006 on a constant currency basis(3). We expect the remainder of
this reduction to gain momentum throughout the second half of the
year, with much of the remaining savings to be realized in the fourth
quarter."

"Given the continued strength of our balance sheet and significant
operating cash flow, we remain confident that we have the financial
wherewithal to successfully execute our strategies and continue to
meet our financial objectives," D'Amelio continued. "During the second
quarter, we repurchased approximately $500 million, or 26.4 million
shares, of our common stock."

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Product Performance
----------------------------------------------------------------------
($ in millions, except percentages)

Second-Quarter First-Half
---------------------- ----------------------
2008 2007 Change 2008 2007 Change
------- ------- ------ ------- ------- ------
In-Line Products(4) $ 9,840 $ 8,486 16% $19,442 $18,040 8%
New Products(5) 441 351 26% 921 619 49%
------- ------- ------- -------

Total In-Line and New
Products(6) 10,281 8,837 16% 20,363 18,659 9%

Loss of Exclusivity

Products(7) 772 1,268 (39%) 1,594 3,027 (47%)
------- ------- ------- -------

Total Pharmaceutical 11,053 10,105 9% 21,957 21,686 1%

Animal Health 715 632 13% 1,334 1,218 10%
Other(8) 361 347 4% 686 654 5%
------- ------- ------- -------

Total Revenues $12,129 $11,084 9% $23,977 $23,558 2%
======= ======= ======= =======

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See end of text prior to tables for notes.

Pharmaceutical

Pharmaceutical revenues for the second-quarter 2008 were $11.1
billion, an increase of 9% compared with the prior-year quarter,
including the favorable impact of foreign exchange, which increased
revenues by approximately $730 million or 7%. Second-quarter 2008
revenues from in-line and new products(6) increased 16% compared with
the year-ago quarter; this excludes the impact of the loss of U.S.
exclusivity of Norvasc, Zyrtec and Camptosar, which collectively
resulted in a revenue decline of $496 million or 39% compared with the
year-ago quarter.

Lipitor revenues in the second-quarter 2008 were $3.0 billion, an
increase of 9% compared with the prior-year quarter, reflecting the
favorable impact of foreign exchange, which increased revenues by
approximately $170 million or 6%. In the U.S., Lipitor revenues
increased 1% compared with the prior-year quarter, while revenues from
international markets rose 18%, due to the favorable impact of foreign
exchange of 13% and operational growth of 5%. The global statin market
continues to be highly competitive, with both branded and generic
competition in an increasingly cost-sensitive environment. Pfizer
continues to respond to these market dynamics with an integrated,
multi-channel effort, emphasizing Lipitor's strong clinical profile
demonstrated in over 400 completed or ongoing clinical trials
including more than 80,000 patients and in more than 151 million
patient years of experience over 15 years.

Lyrica revenues in the second-quarter 2008 were $614 million, an
increase of 52% compared with the prior-year quarter, driven by strong
efficacy and high patient and physician satisfaction in managing nerve
pain associated with diabetes and nerve pain after shingles, the June
2007 U.S. approval for the management of fibromyalgia, a branded and
unbranded advertising strategy focused on increasing both Lyrica and
fibromyalgia awareness as well as the favorable impact of foreign
exchange. In the U.S., Lyrica revenues rose to $335 million, an
increase of 55% compared to the prior-year quarter, while
international revenues grew to $279 million, an increase of 48%.

Celebrex revenues in the second-quarter 2008 were $589 million, an
increase of 23% compared with the year-ago quarter, primarily driven
by the continued educational and promotional efforts supporting the
risk-benefit proposition of this medicine, as well as the favorable
impact of foreign exchange. In the U.S., Celebrex revenues rose to
$416 million, an increase of 22% compared with the prior-year quarter,
while international revenues grew to $173 million, an increase of 27%.

Sutent revenues in the second-quarter 2008 continued to
demonstrate strong performance and market leadership in its approved
indications, advanced renal cell carcinoma (RCC) and gastrointestinal
stromal tumor (GIST), with revenues of $211 million, an increase of
45% compared with the year-ago quarter. In the U.S., Sutent revenues
were $60 million, a decrease of 2% compared with the prior-year
quarter, while international revenues grew to $151 million, an
increase of 80%. To date, Sutent has launched in 61 countries, with
four in the second-quarter 2008 including Japan, China and Russia, and
six planned in the next 12 months. As part of Pfizer's robust life
cycle plan, clinical trials continue for potential additional
indications where Sutent shows promise and where there is a need for
additional treatments, most notably breast, colorectal and lung
cancers.

Chantix (known as Champix outside the U.S.) revenues in the
second-quarter 2008 were $207 million, an increase of 3% compared with
the second-quarter 2007. In the U.S., Chantix revenues declined to
$109 million, a decrease of 35% compared with the prior-year quarter,
while international revenues grew to $98 million, an increase of 197%.
U.S. results were negatively impacted by the recent updates to the
Chantix U.S. label to include additional safety information, as well
as certain external events relating to Chantix. Pfizer continues its
educational and promotional efforts focused on the Chantix
risk-benefit proposition, the significant health consequences of
smoking and the importance of the physician-patient dialogue to help
patients effectively use Chantix to reach their health goal of
becoming smoke free. Since its approval in the U.S. in May 2006,
Chantix/Champix has been approved in 76 countries and has been used by
more than six million patients, an increasing number of whom are
covered by third-party payers. In the second-quarter 2008, Champix
launched in Japan, which has more than 30 million smokers, as well as
Malaysia and Singapore, with nine launches planned in the next 12
months, including Russia, Turkey and China.

Animal Health

Animal Health revenues for the second-quarter 2008 were $715
million, an increase of 13% compared with $632 million in the year-ago
quarter. The increase was driven by the favorable impact of foreign
exchange, which increased revenues by approximately $50 million or 8%,
in addition to strong global livestock and companion animal product
performance.

Costs and Expenses

In the second-quarter 2008, adjusted cost of sales(1) as a
percentage of revenues was 16.9% compared with 17.0% in the
second-quarter 2007. This reflects the impact of foreign exchange on
cost of sales in addition to unfavorable changes in geographic mix,
which were slightly more than offset by the favorable effect of our
cost-reduction initiatives.

Adjusted selling, informational and administrative (SI&A)
expenses(1) were $3.7 billion in the second-quarter 2008, a decrease
of 1% compared with the prior-year quarter. The favorable impact of
our cost-reduction initiatives was partially offset by the unfavorable
impact of foreign exchange on expenses compared with the year-ago
period.

Adjusted research and development (R&D) expenses(1) were $1.9
billion in the second-quarter 2008, a decrease of 8% compared with the
year-ago quarter, due primarily to the non-recurrence of the one-time
2007 payment to Bristol-Myers Squibb Company in connection with our
collaboration to develop and commercialize apixaban in addition to the
realization of savings associated with our cost-reduction initiatives.

Overall, foreign exchange increased adjusted total costs(2) by
approximately $440 million or 6% in the second-quarter 2008 compared
with the prior-year period. Excluding the impact of foreign exchange,
our adjusted total costs(2) decreased by $475 million or 6% compared
with the year-ago quarter. The operational improvement was driven
primarily by the reduction in overall workforce level to 84,500 at the
end of second-quarter 2008, a reduction of 13,500 over the past 18
months. Manufacturing and research and development site exits have
also contributed to the operational improvement.

Pfizer continues to make progress on its target to reduce absolute
adjusted total costs(2) by at least $1.5 to $2.0 billion at the end of
2008 compared with 2006 on a constant currency basis(3). These
initiatives span essentially all divisions, functions, markets and
sites. As of the end of second-quarter 2008, Pfizer had achieved $1.2
billion of the target. The Company expects to achieve much of the
remaining reduction in the fourth-quarter 2008, which will favorably
impact fourth-quarter earnings.

Financial Guidance

For the full-year 2008, Pfizer's financial guidance, at current
exchange rates(9) is summarized below. The guidance on adjusted cost
of sales(1) as a percentage of revenue has been tightened to 15.0% -
15.5% from 14.5% - 15.5%. Additionally, guidance on the range for the
effective tax rate on adjusted income(1) has been reduced to 21.5% -
22.0% from 22.0% - 22.5%.

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-----------------------------------------
2007 Actual 2008 Guidance
----------------------------------------------------------------------
$47.0 to $49.0
Revenues $48.2 billion billion
----------------------------------------------------------------------
Adjusted Cost of Sales(1) as
a Percentage of Revenues 16.0% 15.0% to 15.5%
----------------------------------------------------------------------
$14.4 to $14.9
Adjusted SI&A Expenses(1) $15.2 billion billion
----------------------------------------------------------------------
Adjusted R&D Expenses(1) $7.5 billion $7.3 to $7.6 billion
----------------------------------------------------------------------
Effective Tax Rate on
Adjusted Income(1) 21.0% 21.5% to 22.0%
----------------------------------------------------------------------
Reported Diluted EPS(10) $1.17 $1.73 to $1.88
----------------------------------------------------------------------
Adjusted Diluted EPS(1) $2.18 $2.35 to $2.45
----------------------------------------------------------------------
$17.0 to $18.0
Cash Flows from Operations $13.4 billion billion
----------------------------------------------------------------------

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For additional details, please see the attached financial
schedules, product revenue tables, supplemental information and
disclosure notice.

(1) "Adjusted income" and its components and "adjusted diluted
earnings per share (EPS)" are defined as reported net income and its
components and reported diluted EPS excluding purchase-accounting
adjustments, acquisition-related costs, discontinued operations and
certain significant items. Adjusted Cost of Sales, Adjusted SI&A
expenses and Adjusted R&D expenses are income statement line items
prepared on the same basis, and therefore, components of the overall
Adjusted Income measure. As described under Adjusted Income in the
Management's Discussion and Analysis of Financial Condition and
Results of Operations section of Pfizer's Form 10-Q for the fiscal
quarter ended March 30, 2008, management uses adjusted income, among
other factors, to set performance goals and to measure the performance
of the overall company. We believe that investors' understanding of
our performance is enhanced by disclosing this measure.
Reconciliations of second-quarter 2008 and 2007, first-half 2008 and
2007, and full-year 2007 adjusted income and its components and
adjusted diluted EPS to reported net income and its components and
reported diluted EPS, as well as reconciliations of full-year 2008
adjusted income and adjusted diluted EPS guidance to full-year 2008
reported net income and reported diluted EPS guidance, are provided in
the materials accompanying this report. The adjusted income and its
components and adjusted diluted EPS measures are not, and should not
be viewed as, substitutes for U.S. GAAP net income and diluted EPS.

(2) Represents primarily the total of Adjusted Cost of Sales(1),
Adjusted SI&A expenses(1) and Adjusted R&D expenses(1).

(3) Constant currency basis means that the applicable projected
financial measure is based upon the actual foreign exchange rates in
effect during 2006.

(4) Represents worldwide revenues for all pharmaceutical products,
excluding revenues included in notes (5) and (7).

(5) Represents worldwide revenues for pharmaceutical products
launched since 2006: Chantix/Champix, Eraxis, Selzentry/Celsentri,
Sutent and Thelin.

(6) Total worldwide pharmaceutical revenues excluding the revenues
of major products that have lost exclusivity in the U.S. in 2007 and
2008 as described in note (7). See the table accompanying this report.

(7) Represents worldwide revenues for pharmaceutical products that
lost exclusivity in the U.S. in 2007 and 2008: Camptosar, Norvasc and
Zyrtec.

(8) Includes Consumer Healthcare business transition activity,
Capsugel and Pfizer Centersource.

(9) Current exchange rates approximate rates at the time of the
second-quarter earnings press release (July 2008).

(10) Excludes the charges associated with business development
transactions not completed as of June 29, 2008.

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PFIZER INC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)

(millions of dollars, except per common share data)

Second Quarter % Incr. Six Months % Incr.
----------------- / ----------------- /
2008 2007 (Decr.) 2008 2007 (Decr.)
-------- -------- ------- -------- -------- -------
Revenues $12,129 $11,084 9 $23,977 $23,558 2
Costs and expenses:
Cost of sales (a) 2,289 2,109 9 4,275 3,996 7
Selling,
informational and
administrative
expenses (a) 3,863 3,844 1 7,355 7,205 2
Research and
development
expenses (a) 1,966 2,165 (9) 3,757 3,830 (2)
Amortization of
intangible assets 663 783 (15) 1,442 1,598 (10)
Acquisition-
related in-
process research
and development
charges 156 - * 554 283 95
Restructuring
charges and
acquisition-
related costs 569 1,051 (46) 747 1,863 (60)
Other (income)/
deductions--net (167) (487) (66) (500) (889) (44)
-------- -------- -------- --------
Income from
continuing
operations before
provision for
taxes on income
and minority
interests 2,790 1,619 72 6,347 5,672 12
Provision for taxes
on income 25 272 (91) 788 961 (18)
Minority interests 6 2 243 12 5 149
-------- -------- -------- --------
Income from
continuing
operations 2,759 1,345 105 5,547 4,706 18
-------- -------- -------- --------
Discontinued
operations:
Income/(loss) from
discontinued
operations--net
of tax (1) - * (5) - *
Gains/(losses) on
sales of
discontinued
operations--net
of tax 18 (78) * 18 (47) *
-------- -------- -------- --------
Discontinued
operations--net of
tax 17 (78) * 13 (47) *
-------- -------- -------- --------
Net income $ 2,776 $ 1,267 119 $ 5,560 $ 4,659 19
======== ======== ======== ========
Earnings per common
share - basic:
Income from
continuing
operations $ 0.41 $ 0.19 116 $ 0.82 $ 0.67 22
Discontinued
operations--net
of tax - (0.01) * 0.01 (0.01) *
-------- -------- -------- --------
Net income $ 0.41 $ 0.18 128 $ 0.83 $ 0.66 26
======== ======== ======== ========
Earnings per common
share - diluted:
Income from
continuing
operations $ 0.41 $ 0.19 116 $ 0.82 $ 0.67 22
Discontinued
operations--net
of tax - (0.01) * - (0.01) *
-------- -------- -------- --------
Net income $ 0.41 $ 0.18 128 $ 0.82 $ 0.66 24
======== ======== ======== ========
Weighted-average
shares used to
calculate earnings
per common share:
Basic 6,732 6,966 6,736 7,009
======== ======== ======== ========
Diluted 6,748 6,990 6,754 7,033
======== ======== ======== ========

(a) Exclusive of amortization of intangible assets, except as
discussed in footnote 4 below.
* Calculation not meaningful.
Certain amounts and percentages may reflect rounding adjustments.

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1. The above financial statements present the three-month and six-
month periods ended June 29, 2008 and July 1, 2007. Subsidiaries
operating outside the United States are included for the three-
month and six-month periods ended May 25, 2008 and May 27, 2007.
2. The financial results for the three-month and six-month periods
ended June 29, 2008 are not necessarily indicative of the results
which ultimately might be achieved for the current year.
3. As required, the estimated value of Acquisition-related in-process
research and development charges (IPR&D) is expensed at
acquisition date. In the second quarter of 2008, we expensed $156
million of IPR&D, primarily related to our acquisitions of
Serenex, Inc. and Encysive Pharmaceuticals Inc. In the first
quarter of 2008, we expensed $398 million of IPR&D, primarily
related to our acquisitions of CovX, Coley Pharmaceutical Group,
Inc. and two smaller acquisitions related to Animal Health. In the
first quarter of 2007, we expensed $283 million of IPR&D,
primarily related to our acquisitions of BioRexis Pharmaceutical
Corp. and Embrex, Inc.
4. Amortization expense related to acquired intangible assets that
contribute to our ability to sell, manufacture, research, market
and distribute our products are included in Amortization of
intangible assets as they benefit multiple business functions.
Amortization expense related to acquired intangible assets that
are associated with a single function are included in Cost of
sales, Selling, informational and administrative expenses or
Research and development expenses, as appropriate.
5. Provision for taxes on income includes tax benefits in the second
quarter of 2008 of approximately $305 million related to favorable
tax settlements and of approximately $426 million related to the
sale of one of our biopharmaceutical companies (Esperion
Therapeutics Inc.).

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PFIZER INC AND SUBSIDIARY COMPANIES
RECONCILIATION OF REPORTED NET INCOME AND ITS COMPONENTS AND REPORTED
DILUTED EPS
TO ADJUSTED INCOME AND ITS COMPONENTS AND ADJUSTED DILUTED EPS
(UNAUDITED)
(millions of dollars, except per common share data)

Quarter Ended June 29, 2008
-----------------------------------------------------
Purchase Acqui- Discon- Certain
Accounting sition- tinued Signi-
Adjust- Related Oper- ficant
Reported ments Costs ations Items(2) Adjusted
-------- ---------- ------- ------- -------- --------
Revenues $12,129 $ - $ - $ - $ (54) $12,075
Costs and
expenses:
Cost of sales
(a) 2,289 - - - (253) 2,036
Selling,
informational
and
administrative
expenses (a) 3,863 3 - - (170) 3,696
Research and
development
expenses (a) 1,966 (7) - - (90) 1,869
Amortization of
intangible
assets 663 (628) - - - 35
Acquisition-
related in-
process R&D
charges 156 (156) - - - -
Restructuring
charges and
acquisition-
related costs 569 - (7) - (562) -
Other (income)/
deductions--net (167) - - - (23) (190)
------- ------- --- ---- ------ -------
Income from
continuing
operations
before provision
for taxes on
income and
minority
interests 2,790 788 7 - 1,044 4,629
Provision for
taxes on income 25 184 2 - 714 925
Minority
interests 6 - - - - 6
------- ------- --- ---- ------ -------
Income from
continuing
operations 2,759 604 5 - 330 3,698
------- ------- --- ---- ------ -------
Discontinued
operations:
Income/(loss)
from
discontinued
operations--net
of tax (1) - - 1 - -
Gains/(losses)
on sales of
discontinued
operations--net
of tax 18 - - (18) - -
------- ------- --- ---- ------ -------
Discontinued
operations--net
of tax 17 - - (17) - -
------- ------- --- ---- ------ -------
Net income $ 2,776 $ 604 $ 5 $(17) $ 330 $ 3,698
======= ======= === ==== ====== =======
Earnings per
common share -
diluted:
Income from
continuing
operations $ 0.41 $ 0.09 $ - $ - $ 0.05 $ 0.55
Discontinued
operations--net
of tax - - - - - -
------- ------- --- ---- ------ -------
Net income $ 0.41 $ 0.09 $ - $ - $ 0.05 $ 0.55
======= ======= === ==== ====== =======

Six Months Ended June 29, 2008
-----------------------------------------------------
Purchase Acqui- Discon- Certain
Accounting sition- tinued Signi-
Adjust- Related Oper- ficant
Reported ments Costs ations Items(2) Adjusted
-------- ---------- ------- ------- -------- --------
Revenues $23,977 $ - $ - $ - $ (106) $23,871
Costs and
expenses:
Cost of sales
(a) 4,275 - - - (439) 3,836
Selling,
informational
and
administrative
expenses (a) 7,355 6 - - (256) 7,105
Research and
development
expenses (a) 3,757 (14) - - (236) 3,507
Amortization of
intangible
assets 1,442 (1,380) - - - 62
Acquisition-
related in-
process R&D
charges 554 (554) - - - -
Restructuring
charges and
acquisition-
related costs 747 - (8) - (739) -
Other (income)/
deductions--net (500) (2) - - (21) (523)
------- ------- --- ---- ------ -------
Income from
continuing
operations
before provision
for taxes on
income and
minority
interests 6,347 1,944 8 - 1,585 9,884
Provision for
taxes on income 788 406 2 - 879 2,075
Minority
interests 12 - - - - 12
------- ------- --- ---- ------ -------
Income from
continuing
operations 5,547 1,538 6 - 706 7,797
------- ------- --- ---- ------ -------
Discontinued
operations:
Income/(loss)
from
discontinued
operations--net
of tax (5) - - 5 - -
Gains/(losses)
on sales of
discontinued
operations--net
of tax 18 - - (18) - -
------- ------- --- ---- ------ -------
Discontinued
operations--net
of tax 13 - - (13) - -
------- ------- --- ---- ------ -------
Net income $ 5,560 $ 1,538 $ 6 $(13) $ 706 $ 7,797
======= ======= === ==== ====== =======
Earnings per
common share -
diluted:
Income from
continuing
operations $ 0.82 $ 0.23 $ - $ - $ 0.10 $ 1.15
Discontinued
operations--net
of tax - - - - - -
------- ------- --- ---- ------ -------
Net income $ 0.82 $ 0.23 $ - $ - $ 0.10 $ 1.15
======= ======= === ==== ====== =======

(a) Exclusive of amortization of intangible assets, except as
discussed in note 1.
See end of tables for notes.
Certain amounts may reflect rounding adjustments.

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PFIZER INC AND SUBSIDIARY COMPANIES
RECONCILIATION OF REPORTED NET INCOME AND ITS COMPONENTS AND REPORTED
DILUTED EPS
TO ADJUSTED INCOME AND ITS COMPONENTS AND ADJUSTED DILUTED EPS
(UNAUDITED)
(millions of dollars, except per common share data)

Quarter Ended July 1, 2007
------------------------------------------------------
Purchase Acqui- Discon- Certain
Accounting sition- tinued Signi-
Adjust- Related Oper- ficant
Reported ments Costs ations Items(2) Adjusted
-------- ----------- ------- ------- -------- --------
Revenues $11,084 $ - $ - $ - $ (51) $11,033
Costs and
expenses:
Cost of sales
(a) 2,109 (21) - - (215) 1,873
Selling,
informational
and
administrative
expenses (a) 3,844 3 - - (110) 3,737
Research and
development
expenses (a) 2,165 (8) - - (131) 2,026
Amortization of
intangible
assets 783 (756) - - 1 28
Acquisition-
related in-
process R&D
charges - - - - - -
Restructuring
charges and
acquisition-
related costs 1,051 - (9) - (1,042) -
Other (income)/
deductions--
net (487) - - - 69 (418)
------- ---------- ------ ------ ------- -------
Income from
continuing
operations
before
provision for
taxes on income
and minority
interests 1,619 782 9 - 1,377 3,787
Provision for
taxes on income 272 185 4 - 380 841
Minority
interests 2 - - - - 2
------- ---------- ------ ------ ------- -------
Income from
continuing
operations 1,345 597 5 - 997 2,944
------- ---------- ------ ------ ------- -------
Discontinued
operations:
Income from
discontinued
operations--
net of tax - - - - - -
Gains/(losses)
on sales of
discontinued
operations--
net of tax (78) - - 78 - -
------- ---------- ------ ------ ------- -------
Discontinued
operations--net
of tax (78) - - 78 - -
------- ---------- ------ ------ ------- -------
Net income $ 1,267 $ 597 $ 5 $ 78 $ 997 $ 2,944
======= ========== ====== ====== ======= =======
Earnings per
common share -
diluted:
Income from
continuing
operations $ 0.19 $ 0.09 $ - $ - $ 0.14 $ 0.42
Discontinued
operations--
net of tax $ (0.01) - - $ 0.01 - -
------- ---------- ------ ------ ------- -------
Net income $ 0.18 $ 0.09 $ - $ 0.01 $ 0.14 $ 0.42
======= ========== ====== ====== ======= =======

Six Months Ended July 1, 2007
------------------------------------------------------
Purchase Acqui- Discon- Certain
Accounting sition- tinued Signi-
Adjust- Related Oper- ficant
Reported ments Costs ations Items(2) Adjusted
-------- ----------- ------- ------- -------- --------
Revenues $23,558 $ - $ - $ - $ (94) $23,464
Costs and
expenses:
Cost of sales
(a) 3,996 (35) - - (344) 3,617
Selling,
informational
and
administrative
expenses (a) 7,205 6 - - (161) 7,050
Research and
development
expenses (a) 3,830 (14) - - (162) 3,654
Amortization of
intangible
assets 1,598 (1,547) - - 1 52
Acquisition-
related in-
process R&D
charges 283 (283) - - - -
Restructuring
charges and
acquisition-
related costs 1,863 - (7) - (1,856) -
Other (income)/
deductions--
net (889) (17) - - 72 (834)
------- ---------- ------ ------ ------- -------
Income from
continuing
operations
before
provision for
taxes on income
and minority
interests 5,672 1,890 7 - 2,356 9,925
Provision for
taxes on income 961 446 3 - 762 2,172
Minority
interests 5 - - - - 5
------- ---------- ------ ------ ------- -------
Income from
continuing
operations 4,706 1,444 4 - 1,594 7,748
------- ---------- ------ ------ ------- -------
Discontinued
operations:
Income from
discontinued
operations--
net of tax - - - - - -
Gains/(losses)
on sales of
discontinued
operations--
net of tax (47) - - 47 - -
------- ---------- ------ ------ ------- -------
Discontinued
operations--net
of tax (47) - - 47 - -
------- ---------- ------ ------ ------- -------
Net income $ 4,659 $ 1,444 $ 4 $ 47 $ 1,594 $ 7,748
======= ========== ====== ====== ======= =======
Earnings per
common share -
diluted:
Income from
continuing
operations $ 0.67 $ 0.21 $ - $ - $ 0.22 $ 1.10
Discontinued
operations--
net of tax $ (0.01) - - $ 0.01 - -
------- ---------- ------ ------ ------- -------
Net income $ 0.66 $ 0.21 $ - $ 0.01 $ 0.22 $ 1.10
======= ========== ====== ====== ======= =======

(a) Exclusive of amortization of intangible assets, except as
discussed in note 1.
See end of tables for notes.
Certain amounts may reflect rounding adjustments.
Certain prior period amounts were reclassified to conform to the
current period presentation.

*T

-0-
*T
PFIZER INC AND SUBSIDIARY COMPANIES
NOTES TO RECONCILIATION OF REPORTED NET INCOME AND ITS COMPONENTS AND
REPORTED DILUTED EPS TO ADJUSTED INCOME AND ITS COMPONENTS AND
ADJUSTED DILUTED EPS
(UNAUDITED)

1) Amortization expense related to acquired intangible assets that
contribute to our ability to sell, manufacture, research, market
and distribute our products are included in Amortization of
intangible assets as they benefit multiple business functions.
Amortization expense related to acquired intangible assets that
are associated with a single function are included in Cost of
sales, Selling, informational and administrative expenses or
Research and development expenses, as appropriate.

2) Certain significant items includes the following:

*T

-0-
*T
Second Quarter Six Months
--------------- ---------------
(millions of dollars) 2008 2007 2008 2007
------- ------- ------- -------

Restructuring charges - Cost-
reduction initiatives(a) $ 562 $1,035 $ 739 $1,830
Implementation costs - Cost-
reduction initiatives(b) 405 317 762 491
Consumer Healthcare business
transition activity(c) (9) (7) (12) (16)
Other 86 32 96 51
------- ------- ------- -------
Total certain significant items,
pre-tax 1,044 1,377 1,585 2,356
Income taxes(d) (714) (380) (879) (762)
------- ------- ------- -------
Total certain significant items--
net of tax $ 330 $ 997 $ 706 $1,594
======= ======= ======= =======
*T

-0-
*T
(a) Included in Restructuring charges and acquisition-related costs.

(b) Included in Cost of sales ($210 million), Selling, informational
and administrative expenses ($100 million), Research and
development expenses ($94 million), and Other
(income)/deductions - net ($1 million) for the three months
ended June 29, 2008. Included in Cost of sales ($348 million),
Selling, informational and administrative expenses ($175
million), Research and development expenses ($240 million), and
Other (income)/deductions - net ($1 million income) for the six
months ended June 29, 2008. Included in Cost of sales ($170
million), Selling, informational and administrative expenses
($79 million), Research and development expenses ($131
million), and Other (income)/deductions - net ($63 million
income) for the three months ended July 1, 2007. Included in
Cost of sales ($264 million), Selling, informational and
administrative expenses ($128 million), Research and
development expenses ($162 million), and Other
(income)/deductions - net ($63 million income) for the six
months ended July 1, 2007.

(c) Included in Revenues ($54 million) and Cost of sales ($45
million) for the three months ended June 29, 2008. Included in
Revenues ($106 million), Cost of sales ($93 million) and
Selling, informational and administrative expenses ($1 million)
for the six months ended June 29, 2008. Included in Revenues
($51 million), Cost of sales ($45 million), Selling,
informational and administrative expenses ($5 million), and
Other (income)/deductions - net ($6 million income) for the
three months ended July 1, 2007. Included in Revenues ($94
million), Cost of sales ($80 million), Selling, informational
and administrative expenses ($7 million), and Other
(income)/deductions - net ($9 million income) for the six
months ended July 1, 2007.

(d) Included in Provision for taxes on income and includes
approximately $426 million in the second quarter of 2008
related to the sale of one of our biopharmaceutical companies
(Esperion Therapeutics Inc.).
*T

-0-
*T
PFIZER INC AND SUBSIDIARY COMPANIES
RECONCILIATION OF REPORTED NET INCOME AND ITS COMPONENTS AND REPORTED
DILUTED EPS
TO ADJUSTED INCOME AND ITS COMPONENTS AND ADJUSTED DILUTED EPS
(UNAUDITED)
(millions of dollars, except per common share data)

Twelve Months Ended December 31, 2007
-----------------------------------------------------

Purchase Acqui- Discon- Certain
Accounting sition- tinued- Signi-
Adjust- Related Oper- ficant
Reported ments Costs ations Items Adjusted
-------- ---------- ------- ------- -------- --------
Revenues $48,418 $ - $ - $ - $ (209) $48,209
Costs and
expenses:
Cost of sales
(a) 11,239 (49) - - (3,497) 7,693
Selling,
informational
and
administrative
expenses (a) 15,626 12 - - (418) 15,220
Research and
development
expenses (a) 8,089 (29) - - (516) 7,544
Amortization of
intangible
assets 3,128 (3,013) - - - 115
Acquisition-
related in-
process R&D
charges 283 (283) - - - -
Restructuring
charges and
acquisition-
related costs 2,534 - (11) - (2,523) -
Other (income)/
deductions--net (1,759) (22) - - 235 (1,546)
------- --------- ------ ------ ------- -------
Income from
continuing
operations
before provision
for taxes on
income and
minority
interests 9,278 3,384 11 - 6,510 19,183
Provision for
taxes on income 1,023 873 1 - 2,131 4,028
Minority
interests 42 - - - - 42
------- --------- ------ ------ ------- -------
Income from
continuing
operations 8,213 2,511 10 - 4,379 15,113
------- --------- ------ ------ ------- -------
Discontinued
operations:
Income/(loss)
from
discontinued
operations--net
of tax (3) - - 3 - -
Gains/(losses)
on sales of
discontinued
operations--net
of tax (66) - - 66 - -
------- --------- ------ ------ ------- -------
Discontinued
operations--net
of tax (69) - - 69 - -
------- --------- ------ ------ ------- -------
Net income $ 8,144 $ 2,511 $ 10 $ 69 $ 4,379 $15,113
======= ========= ====== ====== ======= =======
Earnings per
common share -
diluted:
Income from
continuing
operations $ 1.18 $ 0.37 $ - $ - $ 0.63 $ 2.18
Discontinued
operations--net
of tax (0.01) - - 0.01 - -
------- --------- ------ ------ ------- -------
Net income $ 1.17 $ 0.37 $ - $ 0.01 $ 0.63 $ 2.18
======= ========= ====== ====== ======= =======

*T

-0-
*T
(a) Amortization expense related to acquired intangible assets that
contribute to our ability to sell, manufacture, research, market
and distribute our products are included in Amortization of
intangible assets as they benefit multiple business functions.
Amortization expense related to acquired intangible assets that
are associated with a single function are included in Cost of
sales, Selling, informational and administrative expenses or
Research and development expenses, as appropriate.
Certain amounts may reflect rounding adjustments.
Certain prior period amounts were reclassified to conform to the
current period presentation.
*T

-0-
*T
PFIZER INC
SEGMENT/PRODUCT REVENUES
SECOND QUARTER 2008
(UNAUDITED)
(millions of dollars)

QUARTER-TO-DATE
----------------------------------------------------------
WORLDWIDE U.S. INTERNATIONAL
-------------------- ------------------ ------------------
% % %
2008 2007 Change 2008 2007 Change 2008 2007 Change
======================================================================
TOTAL
REVENUES 12,129 11,084 9 4,766 4,841 (2) 7,363 6,243 18
======================================================================

----------------------------------------------------------------------
PHARMA-
CEUTICAL 11,053 10,105 9 4,382 4,467 (2) 6,671 5,638 18
----------------------------------------------------------------------
- CARDIO-
VASCULAR
AND
METABOLIC
DISEASES 4,467 4,083 9 1,788 1,740 3 2,679 2,343 14
LIPITOR 2,976 2,719 9 1,397 1,384 1 1,579 1,335 18
NORVASC 627 642 (2) 42 18 132 585 624 (6)
CHANTIX /
CHAMPIX 207 200 3 109 168 (35) 98 32 197
CADUET 146 119 22 116 109 7 30 10 179
CARDURA 132 125 5 1 - 144 131 125 5
- CENTRAL
NERVOUS
SYSTEM
DISORDERS 1,484 1,174 26 669 496 35 815 678 20
LYRICA 614 405 52 335 218 55 279 187 48
GEODON /
ZELDOX 232 178 30 184 142 29 48 36 34
ZOLOFT 151 127 20 42 33 27 109 94 17
ARICEPT* 121 100 22 - - 29 121 100 22
NEURONTIN 104 105 (1) 20 13 50 84 92 (8)
XANAX /
XANAX XR 90 79 15 15 13 23 75 66 13
RELPAX 80 66 21 48 39 23 32 27 18
- ARTHRITIS
AND PAIN 756 626 21 450 373 20 306 253 21
CELEBREX 589 478 23 416 341 22 173 137 27
- INFECTIOUS
AND
RESPIRATORY
DISEASES 1,000 837 20 299 231 29 701 606 16
ZYVOX 292 202 45 170 118 43 122 84 46
VFEND 187 145 29 55 42 33 132 103 28
ZITHROMAX /
ZMAX 109 108 1 1 5 (76) 108 103 4
DIFLUCAN 98 104 (6) 1 3 (48) 97 101 (5)
- UROLOGY 765 663 15 384 323 19 381 340 12
VIAGRA 463 382 21 199 142 41 264 240 9
DETROL /
DETROL LA 290 269 8 184 178 3 106 91 18
- ONCOLOGY 650 652 - 109 239 (55) 541 413 31
SUTENT 211 146 45 60 61 (2) 151 85 80
CAMPTOSAR 137 241 (43) 6 130 (96) 131 111 19
AROMASIN 117 92 26 32 28 17 85 64 29
- OPHTHAL-
MOLOGY 444 400 11 119 123 (3) 325 277 17
XALATAN /
XALACOM 436 389 12 119 123 (3) 317 266 19
- ENDOCRINE
DISORDERS 305 253 20 67 57 19 238 196 20
GENOTROPIN 238 202 17 61 53 17 177 149 17
- ALL OTHER 619 1,025 (40) 181 665 (73) 438 360 22
ZYRTEC /
ZYRTEC D 8 385 (98) 8 385 (98) - - -
- ALLIANCE
REVENUE
(Aricept,
Exforge,
Macugen,
Mirapex,
Olmetec,
Rebif and
Spiriva) 563 392 44 316 220 44 247 172 42
----------------------------------------------------------------------
ANIMAL
HEALTH 715 632 13 269 254 6 446 378 18
----------------------------------------------------------------------
OTHER ** 361 347 4 115 120 (4) 246 227 8
----------------------------------------------------------------------
*T

-0-
*T
* - Represents direct sales under license agreement with Eisai Co.,
Ltd.

** - Includes Consumer Healthcare business transition activity,
Capsugel and Pfizer Centersource.

Certain amounts and percentages may reflect rounding adjustments.
*T

-0-
*T
PFIZER INC
SEGMENT/PRODUCT REVENUES
SIX MONTHS 2008
(UNAUDITED)
(millions of dollars)

YEAR-TO-DATE
--------------------------------------------------------------
WORLDWIDE U.S. INTERNATIONAL
-------------------- -------------------- --------------------
% % %
2008 2007 Change 2008 2007 Change 2008 2007 Change
======================================================================
TOTAL
REVE-
NUES 23,977 23,558 2 10,277 11,691 (12) 13,700 11,867 15
======================================================================

----------------------------------------------------------------------
PHARMA-
CEUTICAL21,957 21,686 1 9,523 10,935 (13) 12,434 10,751 16
----------------------------------------------------------------------
- CARD-
IOVAS-
CULAR
AND
META-
BOLIC
DISEASES 8,961 9,238 (3) 3,928 4,764 (18) 5,033 4,474 13
LIPITOR 6,113 6,077 1 3,148 3,521 (11) 2,965 2,556 16
NORVASC 1,140 1,711 (33) 37 529 (93) 1,103 1,182 (7)
CHANTIX
/
CHAMPIX 484 362 33 302 313 (3) 182 49 264
CADUET 293 265 11 236 244 (3) 57 21 169
CARDURA 253 259 (2) 3 2 39 250 257 (3)
- CEN-
TRAL
NERVOUS
SYSTEM
DIS-
ORDERS 2,870 2,419 19 1,353 1,133 19 1,517 1,286 18
LYRICA 1,196 800 50 686 459 50 510 341 49
GEODON /
ZELDOX 473 394 20 384 324 18 89 70 28
ZOLOFT 273 273 - 68 101 (33) 205 172 19
ARICEPT* 225 185 22 - - 47 225 185 22
NEUR-
ONTIN 193 215 (10) 33 36 (8) 160 179 (10)
XANAX /
XANAX XR 176 154 14 32 28 14 144 126 15
RELPAX 157 149 6 97 96 1 60 53 13
- ARTH-
RITIS
AND PAIN 1,511 1,375 10 954 896 6 557 479 16
CELEBREX 1,200 1,076 12 880 817 8 320 259 24
- INFEC-
TIOUS
AND
RESPIR-
ATORY
DISEASES 1,931 1,750 10 598 566 6 1,333 1,184 13
ZYVOX 551 460 20 334 301 11 217 159 37
VFEND 358 293 22 108 101 7 250 192 30
ZITHRO-
MAX /
ZMAX 229 239 (4) 7 18 (63) 222 221 1
DIFLUCAN 187 215 (13) 4 6 (31) 183 209 (13)
- UROL-
OGY 1,549 1,414 10 831 776 7 718 638 13
VIAGRA 923 816 13 422 366 15 501 450 11
DETROL /
DETROL
LA 603 572 5 406 401 1 197 171 16
- ONCO-
LOGY 1,287 1,247 3 306 483 (37) 981 764 28
SUTENT 401 248 62 126 114 10 275 134 106
CAMPTO-
SAR 329 470 (30) 89 260 (66) 240 210 15
AROMASIN 221 185 19 69 63 10 152 122 24
- OPHTH-
ALMO-
LOGY 857 766 12 254 249 2 603 517 17
XALATAN
/
XALACOM 841 749 12 254 249 2 587 500 17
- ENDO-
CRINE
DIS-
ORDERS 563 498 13 129 121 7 434 377 15
GENO-
TROPIN 444 403 10 116 113 3 328 290 13
- ALL
OTHER 1,377 2,189 (37) 562 1,484 (62) 815 705 16
ZYRTEC /
ZYRTEC D 125 846 (85) 125 846 (85) - - -
- ALLI-
ANCE
REVENUE
(Ari-
cept,
Exforge,
Macugen,
Mirapex,
Olmetec,
Rebif
and
Spiriva) 1,051 790 33 608 463 31 443 327 35
----------------------------------------------------------------------
ANIMAL
HEALTH 1,334 1,218 10 509 518 (2) 825 700 18
----------------------------------------------------------------------
OTHER ** 686 654 5 245 238 3 441 416 6
----------------------------------------------------------------------
*T

-0-
*T
* - Represents direct sales under license agreement with Eisai Co.,
Ltd.

** - Includes Consumer Healthcare business transition activity,
Capsugel and Pfizer Centersource.

Certain amounts and percentages may reflect rounding adjustments.
*T

-0-
*T
PFIZER INC AND SUBSIDIARY COMPANIES
RECONCILIATION FROM REPORTED PHARMACEUTICAL REVENUES TO TOTAL
IN-LINE AND NEW PRODUCTS(1) PHARMACEUTICAL REVENUES
(UNAUDITED)
(millions of dollars)

Worldwide
-------------------------------------------------
Second Quarter % Incr. Six Months % Incr.
--------------- / --------------- /
2008 2007 (Decr.) 2008 2007 (Decr.)
------- ------- -------- ------- ------- --------
Total reported
Pharmaceutical
revenues $11,053 $10,105 9 $21,957 $21,686 1
Norvasc 627 642 (2) 1,140 1,711 (33)
Camptosar 137 241 (43) 329 470 (30)
Zyrtec/Zyrtec D 8 385 (98) 125 846 (85)
------ ------ ------ ------
Total in-line
products and new
products(1)
Pharmaceutical
revenues $10,281 $ 8,837 16 $20,363 $18,659 9
====== ====== ====== ======

U.S.
-------------------------------------------------
Second Quarter % Incr. Six Months % Incr.
--------------- / --------------- /
2008 2007 (Decr.) 2008 2007 (Decr.)
------- ------- -------- ------- ------- --------
Total reported
Pharmaceutical
revenues $ 4,382 $ 4,467 (2) $ 9,523 $10,935 (13)
Norvasc 42 18 132 37 529 (93)
Camptosar 6 130 (96) 89 260 (66)
Zyrtec/Zyrtec D 8 385 (98) 125 846 (85)
------ ------ ------ ------
Total in-line
products and new
products(1)
Pharmaceutical
revenues $ 4,326 $ 3,934 10 $ 9,272 $ 9,300 -
====== ====== ====== ======

International
-------------------------------------------------
Second Quarter % Incr Six Months % Incr.
--------------- / --------------- /
2008 2007 (Decr.) 2008 2007 (Decr.)
------- ------- -------- ------- ------- --------
Total reported
Pharmaceutical
revenues $ 6,671 $ 5,638 18 $12,434 $10,751 16
Norvasc 585 624 (6) 1,103 1,182 (7)
Camptosar 131 111 19 240 210 15
Zyrtec/Zyrtec D - - - - - -
------ ------ ------ ------
Total in-line
products and new
products(1)
Pharmaceutical
revenues $ 5,955 $ 4,903 21 $11,091 $ 9,359 19
====== ====== ====== ======
*T

-0-
*T
Certain amounts and percentages may reflect rounding adjustments.

(1) Total in-line and new products Pharmaceutical revenues, which
exclude the revenues of major products that have lost exclusivity in
the U.S. since the beginning of 2007, is an alternative view of our
Pharmaceutical revenues, and we believe that investors'
understanding of Pharmaceutical revenues is enhanced by disclosing
this performance measure. Norvasc lost its U.S. exclusivity in March
2007 and Camptosar lost its U.S. exclusivity in February 2008, and
as is typical in the pharmaceutical industry, this has resulted in a
dramatic decline in revenues due to generic competition.
Zyrtec/Zyrtec D lost its U.S. exclusivity in January 2008 and we
ceased marketing the product in late January 2008. We believe that
excluding the impact of these products assists the reader in
understanding the underlying strength of the balance of our diverse
Pharmaceutical product portfolio in 2008. Because of its non-
standardized definition, this total in-line and new products
Pharmaceutical revenues measure has limitations as it may not be
comparable with the calculation of similar measures of other
companies. This additional revenue measure is not, and should not be
viewed as, a substitute for the U.S. GAAP comparison of
Pharmaceutical revenues.

(2) Total in-line and new products Pharmaceutical international
revenues reflect a favorable impact in the second quarter and first
six months of 2008 due primarily to changes in foreign exchange
rates.
*T

-0-
*T
PFIZER INC
SUPPLEMENTAL INFORMATION
*T

1) Impact of Foreign Exchange on Revenues

The weakening of the U.S. dollar relative to other currencies,
primarily the euro, Japanese yen and Canadian dollar, favorably
impacted our revenues by approximately $800 million, or 7%, in
second-quarter 2008, compared to the same period in 2007, and by
approximately $1.4 billion, or 6%, in the first six months of 2008,
compared to the same period in 2007.

2) Change in Cost of Sales

Reported cost of sales increased 9% in second-quarter 2008,
compared to the same period in 2007. The increase primarily reflects
the unfavorable impact of foreign exchange and higher implementation
costs associated with our cost-reduction initiatives, partially offset
by the savings impact of our cost-reduction initiatives.

Reported cost of sales included implementation charges related to
our cost-reduction initiatives of $210 million for the second quarter
of 2008, $348 million for the six months ended June 29, 2008, $170
million for the second quarter of 2007, and $264 million for the six
months ended July 1, 2007.

Reported cost of sales also included $45 million for the second
quarter of 2008, $93 million for the six months ended June 29, 2008,
$45 million for the second quarter of 2007, and $80 million for the
six months ended July 1, 2007, related to business-transition
activities associated with the sale of our Consumer Healthcare
business, completed in December 2006. This continuing activity is
transitional in nature and generally results from agreements that seek
to facilitate the orderly transfer of operations of our former
Consumer Healthcare business to the new owner.

Reported cost of sales as a percentage of revenues of 18.9% in
second-quarter 2008 was comparable to second-quarter 2007, reflecting
the favorable impact of our cost-reduction initiatives, offset by
higher 2008 implementation costs associated with our cost-reduction
initiatives and the impact of foreign exchange.

3) Change in Selling, Informational & Administrative (SI&A)
Expenses and Research & Development (R&D) Expenses

Reported SI&A expenses in second-quarter 2008 increased 1%, and in
the six months ended June 29, 2008, increased 2%, compared to the same
periods in 2007, reflecting the unfavorable impact of foreign
exchange, as well as the impact of higher 2008 implementation costs
associated with our cost-reduction initiatives, partially offset by
savings associated with our cost-reduction initiatives.

Reported SI&A expenses included implementation charges related to
our cost-reduction initiatives of $100 million for second-quarter
2008, $175 million for the six months ended June 29, 2008, $79 million
for second-quarter 2007, and $128 million for the six months ended
July 1, 2007.

Reported R&D expenses, excluding acquisition-related in-process
research and development charges (IPR&D), decreased 9% in
second-quarter 2008, and decreased 2% in the six months ended June 29,
2008, compared to the same periods in 2007. The decreases are
primarily due to the non-recurrence of the one-time 2007 payment to
Bristol-Myers Squibb Company in connection with our collaboration to
develop and commercialize apixaban, in addition to the realization of
savings associated with our cost-reduction initiatives, partially
offset by higher R&D spending related to our new collaboration
agreements, as well as the unfavorable impact of foreign exchange.

Reported R&D expenses included implementation charges related to
our cost-reduction initiatives of $94 million for second-quarter 2008,
$240 million for the six months ended June 29, 2008, $131 million for
second-quarter 2007, and $162 million for the six months ended July 1,
2007.

IPR&D charges in second-quarter 2008 of $156 million primarily
related to our acquisitions of Serenex, Inc. and Encysive
Pharmaceuticals, Inc., and in first-quarter 2008, $398 million
primarily related to the acquisitions of CovX, Coley Pharmaceutical
Group, Inc. and two smaller acquisitions related to Animal Health.
IPR&D charges in the first quarter 2007 of $283 million primarily
related to our acquisitions of BioRexis Pharmaceutical Corp. and
Embrex, Inc.

4) Other Income and Other Deductions

-0-
*T

($ millions) Second Quarter Six Months
--------------- ---------------
2008 2007* 2008 2007*
------- ------- ------- -------
Net Interest (Income)/Expense(a) $ (99) $ (286) $ (302) $ (534)
Royalty Income (72) (40) (135) (133)
Net Losses/(Gains) on Asset Disposals 18 (73) (5) (80)
Other, Net (14) (88) (58) (142)
------- ------- ------- -------
Other (Income)/Deductions-Net $ (167) $ (487) $ (500) $ (889)
======= ======= ======= =======

*T

*Certain prior period amounts were reclassified to conform to the
current period presentation.

(a) The decrease in net interest income in second-quarter and
first six months of 2008, compared to the same periods in 2007, was
due primarily to lower net financial assets and lower interest rates.

5) Effective Tax Rate

The effective tax rate on reported Income from continuing
operations before provision for taxes on income and minority interests
for second-quarter 2008 was 0.9% compared to 16.8% in second-quarter
2007, and in the first six months of 2008 was 12.4% compared to 16.9%
in the first six months of 2007, reflecting tax benefits in the second
quarter of 2008 of $305 million related to favorable tax settlements
for multiple tax years and $426 million related to the sale of one of
our biopharmaceutical companies (Esperion Therapeutic Inc.).

The effective tax rate on adjusted income(1) was 20.0% in
second-quarter 2008, 21.0% in the first six months of 2008, 22.2% in
second-quarter 2007, and 21.9% in the first six months of 2007. The
lower rates on adjusted income(1) in 2008 reflect the $305 million in
tax benefits related to the resolution of tax issues noted above.

6) Reconciliation of 2008 Adjusted Income(1) and Adjusted Diluted
EPS(1) Guidance to 2008 Reported Net Income and Reported Diluted EPS
Guidance

-0-
*T

Full-Year 2008 Guidance
($ billions, except per-share amounts) Net Income(a) Diluted EPS(a)
-------------- --------------
Income/(Expense)
-----------------------------------------
Adjusted Income/Diluted EPS(1) Guidance ~$15.8 - $16.6 ~$2.35 - $2.45
Purchase Accounting Impacts, Net of Tax:
Business Development Transactions
Completed as of 12/31/07 (2.1) (0.31)
Business Development Transactions
Completed from 1/1/08 through 6/29/08 (0.5) (0.08)
Costs Related to Cost-Reduction
Initiatives, Net of Tax (1.6 - 1.9) (0.24 - 0.29)
Tax Benefits Related to Sale of Esperion 0.4 0.06
-------------- --------------
Reported Net Income/Diluted EPS Guidance ~$11.7 - $12.8 ~$1.73 - $1.88
============== ==============

*T

(a) Guidance in the table above excludes the effects of business
development transactions not completed as of June 29, 2008.

While certain components of our 2008 reported guidance for net
income and diluted EPS have been revised, the reported net income and
diluted EPS expectation of $11.7 billion - $12.8 billion and $1.73 -
$1.88 remains unchanged.

Our guidance excludes the impact of pending or prospective
business development activity. During the second quarter of 2008, the
net income and diluted EPS impact associated with 2008 completed
business development transactions increased from $0.3 billion and
$0.05 to $0.5 billion and $0.08, due to the recognition of IPR&D
associated with our acquisitions of Serenex, Inc. and Encysive
Pharmaceuticals Inc. in the second quarter of 2008. During the second
quarter of 2008, the net income and diluted EPS effects of our
cost-reduction initiatives have been revised from $1.4 billion - $1.7
billion and $0.21 - $0.26 to $1.6 billion - $1.9 billion and $0.24 -
$0.29. The increase is principally driven by costs associated with
site closures that were previously forecast to be recorded in 2009
that are now forecast to be incurred in 2008. These items are offset
by tax benefits related to the sale of Esperion in the second quarter
of 2008, which favorably impact net income and diluted EPS by $0.4
billion and $0.06.

(1) "Adjusted income" and "adjusted diluted earnings per share
(EPS)" are defined as reported net income and reported diluted EPS
excluding purchase-accounting adjustments, acquisition-related costs,
discontinued operations and certain significant items. As described
under Adjusted Income in the Management's Discussion and Analysis of
Financial Condition and Results of Operations section of Pfizer's Form
10-Q for the quarterly period ended March 30, 2008, management uses
adjusted income, among other factors, to set performance goals and to
measure the performance of the overall company. We believe that
investors' understanding of our performance is enhanced by disclosing
this measure. The adjusted income and adjusted diluted EPS measures
are not, and should not be viewed as, substitutes for U.S. GAAP net
income and diluted EPS.

DISCLOSURE NOTICE: The information contained in this earnings
release and the attachments is as of July 23, 2008. The Company
assumes no obligation to update any forward-looking statements
contained in this earnings release or the attachments as a result of
new information or future events or developments.

This earnings release and the attachments contain forward-looking
information about the Company's financial results and estimates,
business plans and prospects, in-line products and product candidates
that involve substantial risks and uncertainties. You can identify
these statements by the fact that they use words such as "will,"
"anticipate," "estimate," "expect," "project," "intend," "plan,"
"believe," "target," "forecast" and other words and terms of similar
meaning in connection with any discussion of future operating or
financial performance or business plans and prospects. Among the
factors that could cause actual results to differ materially are the
following: the success of research and development activities;
decisions by regulatory authorities regarding whether and when to
approve our drug applications as well as their decisions regarding
labeling and other matters that could affect the availability or
commercial potential of our products; the speed with which regulatory
authorizations, pricing approvals and product launches may be
achieved; the success of external business development activities;
competitive developments, including with respect to competitor drugs
and drug candidates that treat diseases and conditions similar to
those treated by our in-line drugs and drug candidates; the ability to
successfully market both new and existing products domestically and
internationally; difficulties or delays in manufacturing; trade buying
patterns; the ability to meet generic and branded competition after
the loss of patent protection for our products and competitor
products; the impact of existing and future legislation and regulatory
provisions on product exclusivity; trends toward managed care and
healthcare cost containment; U.S. legislation or regulatory action
affecting, among other things, pharmaceutical product pricing,
reimbursement or access, including under Medicaid and Medicare, the
importation of prescription drugs from outside the U.S. at prices that
are regulated by governments of various foreign countries,
direct-to-consumer advertising and interactions with healthcare
professionals and the involuntary approval of prescription medicines
for over-the-counter use; the impact of the Medicare Prescription
Drug, Improvement and Modernization Act of 2003; legislation or
regulatory action in markets outside the U.S. affecting pharmaceutical
product pricing, reimbursement or access; contingencies related to
actual or alleged environmental contamination; claims and concerns
that may arise regarding the safety or efficacy of in-line products
and product candidates; significant breakdown, infiltration or
interruption of our information technology systems and infrastructure;
legal defense costs, insurance expenses, settlement costs and the risk
of an adverse decision or settlement related to product liability,
patent protection, governmental investigations, ongoing efforts to
explore various means for resolving asbestos litigation, and other
legal proceedings; the Company's ability to protect its patents and
other intellectual property both domestically and internationally;
interest rate and foreign currency exchange rate fluctuations;
governmental laws and regulations affecting domestic and foreign
operations, including tax obligations; changes in generally accepted
accounting principles; uncertainties related to general economic,
political, business, industry, regulatory and market conditions; any
changes in business, political and economic conditions due to the
threat of terrorist activity in the U.S. and other parts of the world,
and related U.S. military action overseas; growth in costs and
expenses; changes in our product, segment and geographic mix; and the
impact of acquisitions, divestitures, restructurings, product
withdrawals and other unusual items, including our ability to realize
the projected benefits of our cost-reduction initiatives. A further
list and description of risks, uncertainties, and other matters can be
found in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2007, and in its reports on Forms 10-Q and 8-K.

This earnings release may include discussion of certain clinical
studies relating to various in-line products and/or product
candidates. These studies typically are part of a larger body of
clinical data relating to such products or product candidates, and the
discussion herein should be considered in the context of the larger
body of data.

Pfizer Inc
Media
Shreya Jani, 212-733-4889
or
Investors
Suzanne Harnett, 212-733-8009
Jennifer Davis, 212-733-0717

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