PFIZER INC

Note 1. Basis of Presentation and Significant Accounting Policies

A. Basis of Presentation

We prepared these condensed consolidated financial statements in conformity with U.S. GAAP, consistent in all material respects with those applied in our 2024 Form 10-K. As permitted under the SEC requirements for interim reporting, certain footnotes or other financial information have been condensed or omitted.

These financial statements include all normal and recurring adjustments that are considered necessary for the fair statement of results for the interim periods presented. The information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our 2024 Form 10-K. 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 representative of those for the full year.

Pfizer’s fiscal quarter-end for subsidiaries operating outside the U.S. is as of and for the three and six months ended May 25, 2025 and May 26, 2024, and for U.S. subsidiaries is as of and for the three and six months ended June 29, 2025 and June 30, 2024.

We manage our commercial operations through three operating segments, each led by a single manager: Biopharma, PC1 and Pfizer Ignite. Biopharma is the only reportable segment. See Note 13A.

B. Revenues and Trade Accounts Receivable

Trade Accounts Receivable––Trade accounts receivable are stated at their net realizable value. The allowance for credit losses reflects our best estimate of expected credit losses of the receivables portfolio determined on the basis of historical experience, current information, and forecasts of future economic conditions. In developing the estimate for expected credit losses, trade accounts receivables are segmented into pools of assets depending on market (U.S. versus international), delinquency status, and customer type (high risk versus low risk and government versus non-government), and fixed reserve percentages are established for each pool of trade accounts receivables.

In determining the reserve percentages for each pool of trade accounts receivables, we considered our historical experience with certain customers and customer types, regulatory and legal environments, country and political risk, and other relevant current and future forecasted macroeconomic factors. When management becomes aware of certain customer-specific factors that impact credit risk, specific allowances for these known troubled accounts are recorded.

During the three and six months ended June 29, 2025 and June 30, 2024, additions to the allowance for credit losses, write-offs and recoveries of customer receivables were not material to our condensed consolidated financial statements. For additional information on our trade accounts receivable, see Note 1G in our 2024 Form 10-K.

Note 2. Research and Development Arrangement

Research and Development Funding Arrangement with Blackstone––In March 2025, we entered into an arrangement with Blackstone under which we will receive up to a total of $326 million in 2025 through 2028 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. 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 $277 million contingent upon the successful results of the clinical trials and payable to Blackstone over a period ofone tothree years. Following potential regulatory approval, Blackstone will be eligible to receive a combination of fixed milestone payments of up to $897 million in total based on achievement of certain levels of cumulative applicable net sales and payable to Blackstone over a period offive toseven years. The net present value of the approval-based milestone payments and 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. Accretion of interest on the liabilities to pay Blackstone will be recognized as interest expense in Other (income)/deductions––net.

Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives

A. 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 initial part of the program to continue primarily through 2025 and to total approximately $3.1 billion, primarily representing cash expenditures for severance, exit and implementation costs as well as non-cash asset write downs of which $2.4 billion is associated with our Biopharma segment.

•In the second quarter of 2025, we identified additional productivity opportunities to further reduce costs primarily in SI&A, driven in large part by enhanced digital enablement, including automation and AI, and simplification of business processes. We expect costs associated with the additional productivity opportunities to be incurred through 2027 and to total approximately $1.6 billion, primarily representing cash expenditures for severance, digital enablement and implementation, of which $700 million is associated with our Biopharma segment.

•In connection with our efforts to simplify the structure and sharpen the focus of our R&D organization, in the first quarter of 2025, we expanded this program after having identified additional opportunities to drive improvements in productivity and operational efficiencies through enhanced digital enablement, including automation and AI, and simplification of business processes. We expect costs to implement these initiatives to be incurred through 2026 and to total approximately $600 million, primarily representing cash expenditures for severance, digital enablement and implementation, all of which is associated with our Biopharma segment. The majority of these costs were recorded in the first quarter of 2025, with cash outlays expected primarily in 2025 and 2026.

We expect costs associated with all three components of this program to total approximately $5.3 billion of which $3.7 billion is associated with the Biopharma segment.

From the start of this program through June 29, 2025, we incurred total costs under this program of $3.5 billion, of which $2.7 billion is associated with our Biopharma segment (including $2.5 billion of restructuring charges).

B. Manufacturing Optimization Program

In the second quarter of 2024, we announced that we launched a multi-year, multi-phased program to reduce our costs of goods sold, which is expected to include operational efficiencies, network structure changes, and product portfolio enhancements. The first phase of this program is focused on operational efficiencies, and we expect costs for this first phase to total approximately $1.4 billion, primarily representing cash expenditures for severance and implementation costs, all of which is associated with our Biopharma segment. From the start of this program through June 29, 2025, we incurred costs under this program of $850 million, substantially all of which is restructuring costs for our Biopharma segment. These costs were recorded primarily in 2024, with cash outlays expected primarily in 2025 and 2026.

C. Key Activities

(a)Primarily represents cost-reduction initiatives. Amounts associated with our Biopharma segment: (i) credits of $406 million for the three months ended June 29, 2025 (including credits of $408 million for our Manufacturing Optimization Program and $25 million for our Realigning our Cost Base Program), (ii) charges of $211 million for the six months ended June 29, 2025 (including charges of $562 million for our Realigning our Cost Base Program and credits of $412 million for our Manufacturing Optimization Program) and (iii) charges of $1.1 billion for both the three and six months ended June 30, 2024 (including charges of $1.3 billion for our Manufacturing Optimization Program for both periods presented and credits of $113 million for the three months and $199 million for the six months ended June 30, 2024 for our Realigning our Cost Base Program). For all periods presented, Employee terminations include revisions of estimates of previously recorded accruals for severance benefits, driven in large part by higher-than-expected voluntary attrition.

(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.

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

(e)Represents incremental costs directly related to implementing our non-acquisition-related cost-reduction/productivity initiatives.

(a)Included in Other current liabilities ($1.7 billion) and Other noncurrent liabilities ($437 million).

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

(c)Included in Other current liabilities($1.3 billion) and Other noncurrent liabilities($685 million).

Note 4. Other (Income)/Deductions—Net

(a)The decrease in net interest expense in the second quarter and first six months of 2025 reflects (i) a decrease in interest expense primarily driven by a reduction in commercial paper outstanding and (ii) an increase in interest income due to higher total average investment asset balance compared to 2024.

(b)The net losses in the first six months of 2025 include, among other things, a net loss of $144 million related to our investment in Haleon, composed of unrealized losses of $1.0 billion, partially offset by $900 million in realized gains on the sales of our remaining investment.

(c)The amounts for the second quarter and first six months of 2025 primarily include certain product liability and other legal expenses. The amounts for the second quarter and first six months of 2024 primarily included certain product liability expenses related to products discontinued and/or divested by Pfizer.

(d)The first six months of 2025 primarily includes an intangible asset impairment charge associated with our Biopharma segment of $210 million for KRAS G12D, a Phase 2 indefinite-lived out-licensed asset that was discontinued by our out-licensing partner. The amounts for the second quarter and first six months of 2024 included a $240 million intangible asset impairment charge, associated with our Biopharma segment that represented IPR&D related to a Phase 3 study for the treatment of DMD, which reflected unfavorable clinical trial results.

(e)The first six months of 2025 primarily include dividend income of $111 million from our investment in ViiV. The first six months of 2024 included, among other things, a $150 million realized gain on the partial sale of our investment in Haleon and dividend income of $135 million from our investment in ViiV.

(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. See Note 1Ein our 2024 Form 10-K.

(b)Reflects intangible assets written down to fair value in 2025. Fair value was determined using the income approach, specifically the multi-period excess earnings method, also known as the discounted cash flow method. We started with a forecast of all the expected net cash flows for the asset and then applied an asset-specific discount rate to arrive at a net present value amount. Some of the more significant estimates and assumptions inherent in this approach include: the amount and timing of the projected net cash flows, which includes the expected impact of competitive, legal and/or regulatory forces on the product; and assumptions about the probability of technical and regulatory success (PTRS) of ongoing clinical trials, the discount rate, which seeks to reflect the various risks inherent in the projected cash flows; and the tax rate, which seeks to incorporate the geographic diversity of the projected cash flows.

(c)See Note 9.

Note 5. Tax Matters

A. Taxes on Income/(Loss) from Continuing Operations

Our effective tax rate for continuing operations was 4.6% for the second quarter of 2025, compared to 130.2% for the second quarter of 2024, and was (0.8)% for the first six months of 2025, compared to 4.8% for the first six months of 2024. The lower effective tax rate for the second quarter of 2025, compared to the second quarter of 2024, was primarily due to a favorable change in the jurisdictional mix of earnings. The negative and lower effective tax rate for the first six months of 2025, compared to the first six months of 2024, was primarily due to tax benefits related to global income tax resolutions in multiple tax jurisdictions spanning multiple tax years.

We elected, with the filing of our 2018 U.S. Federal Consolidated Income Tax Return, to pay our initial estimated $15 billion repatriation tax liability on accumulated post-1986 foreign earnings (Transition Tax liability) over eight years through 2026. The seventh annual installment was paid by its April 15, 2025 due date. The eighth and final annual installment is due April 15, 2026 and is reported in current Income taxes payable as of June 29, 2025. Our obligations may vary due to the availability of attributes such as foreign tax and other credit carryforwards or carrybacks.

See Note 5Ain our 2024 Form 10-K for information on our cash paid for income taxes, net of refunds.

B. Tax Contingencies

We are subject to income tax in many jurisdictions, and a certain degree of estimation is required in recording the assets and liabilities related to income taxes. All of our tax positions are subject to audit by the local taxing authorities in each tax jurisdiction. These tax audits can involve complex issues, interpretations and judgments and the resolution of matters may span multiple years, particularly if subject to negotiation or litigation.

The U.S. is one of our major tax jurisdictions, and we are regularly audited by the IRS. Tax years 2019-2022 are under audit. Tax years 2023-2025 are open but not under audit. 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 dating back to 2014.

See Note 5Din our 2024 Form 10-K.

C. Tax Provision/(Benefit) on Other Comprehensive Income/(Loss)

(a)Taxes are not provided for foreign currency translation adjustments relating to investments in international subsidiaries that are expected to be held indefinitely.

Note 6. Accumulated Other Comprehensive Loss, Excluding Noncontrolling Interests

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

(b)Foreign currency translation adjustments include net gains/(losses) related to the impact of our net investment hedging program.

Note 7. Financial Instruments

A. Fair Value Measurements

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis and Fair Value Hierarchy, using a Market Approach:

(a)Includes money market funds primarily invested in U.S. Treasury and government debt. As of December 31, 2024, short-term equity securities included our investment in Haleon of $6.5 billion. In the first quarter of 2025, we sold the remaining portion of our investment in Haleon for $6.3 billion.

(b)Long-term equity securities of $131 million as of June 29, 2025 and $133 million as of December 31, 2024 were held in restricted trusts for U.S. non-qualified employee benefit plans.

(c)Includes life insurance policies held in restricted trusts for U.S. non-qualified employee benefit plans. The underlying invested assets in these contracts are marketable securities, which are carried at fair value, with changes in fair value recognized in Other (income)/deductions—net(see Note 4).

Financial Assets and Liabilities Not Measured at Fair Value on a Recurring Basis––The carrying value of Long-term debt, excluding the current portion, was $58 billion as of June 29, 2025 and $57 billion as of December 31, 2024. The estimated fair value of such debt, using a market approach and Level 2 inputs, was $55 billion as of June 29, 2025 and $54 billion as of December 31, 2024.

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 June 29, 2025 and December 31, 2024. The fair value measurements of our held-to-maturity debt securities and short-term borrowings are based on Level 2 inputs. The fair value measurements of our long-term receivables and private equity securities are based on Level 3 inputs.

B. Investments

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

(a)Represent investments in the life sciences sector.

Debt Securities

Any expected credit losses to these portfolios would be immaterial to our financial statements.

Equity Securities

(a)Reported in Other (income)/deductions––net. See Note 4.

(b)Included in net unrealized (gains)/losses are observable price changes on equity securities without readily determinable fair values. As of June 29, 2025, there were cumulative impairments and downward adjustments of $435 million and upward adjustments of $239 million. Impairments, downward and upward adjustments were not material to our operations in the second quarters and first six months of 2025 and 2024.

C. Short-Term Borrowings

(a)Primarily includes cash collateral. See Note 7F.

D. Long-Term Debt

Issuance

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

(c)The weighted average effective interest rate for the notes at issuance was 3.605%.

E. Derivative Financial Instruments and Hedging Activities

Foreign Exchange Risk––A significant portion of our revenues, earnings and net investments in foreign affiliates is exposed to changes in foreign exchange rates. Where foreign exchange risk is not offset by other exposures, we manage our foreign exchange risk principally through the use of derivative financial instruments and foreign currency debt. These financial instruments serve to mitigate the impact on net income as a result of remeasurement into another currency, or against the impact of translation into U.S. dollars of certain foreign exchange-denominated transactions.

The derivative financial instruments primarily hedge or offset exposures in the euro, U.K. pound, Chinese renminbi, Japanese yen, Canadian dollar and Swedish krona, and include a portion of our forecasted foreign exchange-denominated intercompany inventory sales hedged up totwo years. We may also seek to protect against possible declines in the net investments of our foreign business entities.

Interest Rate Risk––Our interest-bearing investments and borrowings are subject to interest rate risk. Depending on market conditions, we may change the profile of our outstanding debt or investments by entering into derivative financial instruments like interest rate swaps, either to hedge or offset the exposure to changes in the fair value of hedged items with fixed interest rates, or to convert variable rate debt or investments to fixed rates. The derivative financial instruments primarily hedge U.S. dollar fixed-rate debt.

(a)The notional amount of outstanding foreign exchange contracts hedging our intercompany forecasted inventory sales was $5.0 billion as of June 29, 2025 and $5.0 billion as of December 31, 2024.

(a)OID = Other (income)/deductions—net, included in Other (income)/deductions—net in the condensed consolidated statements of operations. COS = Cost of Sales, included in Cost of sales in the condensed consolidated statements of operations. OCI = Other comprehensive income/(loss), included in the condensed consolidated statements of comprehensive income/(loss).

(b)The amounts reclassified from OCI into COS were:

•a net gain of $30 million in the second quarter of 2025;

•a net gain of $93 million in the first six months of 2025;

•a net gain of $38 million in the second quarter of 2024; and

•a net gain of $70 million in the first six months of 2024.

The remaining amounts were reclassified from OCI into OID. Based on quarter-end foreign exchange rates that are subject to change, we expect to reclassify a pre-tax loss of $230 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 18 years and relates to foreign currency debt.

(c)The amounts reclassified from OCI were reclassified into OID.

(d) Long-term debt includes foreign currency borrowings, which are used in net investment hedges; the related carrying values as of June 29, 2025 and December 31, 2024 were $878 million and $777 million, respectively.

(a)Carrying amounts exclude the cumulative amount of fair value hedging adjustments.

F. Credit Risk

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 17Cin our 2024 Form 10-K.

As of June 29, 2025, 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., Germany, Canada, Japan and the U.K.

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. Derivative financial instruments are executed under International Swaps and Derivatives Association master agreements with credit-support annexes that contain zero threshold provisions requiring collateral to be exchanged daily depending on levels of exposure. As a result, there are no significant concentrations of credit risk with any individual financial institution. As of June 29, 2025, the aggregate fair value of these derivative financial instruments that are in a net payable position was $1.1 billion, for which we have posted collateral of $1.1 billion with a corresponding amount reported in Short-term investments. As of June 29, 2025, the aggregate fair value of our derivative financial instruments that are in a net receivable position was $42 million, for which we have received collateral of $43 million with a corresponding amount reported in Short-term borrowings, including current portion of long-term debt.

Note 8. Other Financial Information

A. Inventories

(a)Included in Other noncurrent assets. Based on our current estimates and assumptions, there are no recoverability issues for these amounts.

B. Other Current Liabilities

Other current liabilities include, among other things, amounts payable to BioNTech for the gross profit split for Comirnaty, which totaled $94 million as of June 29, 2025 and $1.3 billion as of December 31, 2024.

C. 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. As of June 29, 2025 and December 31, 2024, respectively, $501 million and $688 million of our trade payables to suppliers who participate in these financing arrangements were outstanding.