Reported cost of sales as a percentage of revenues decreased 1.4 percentage points to 21.1% in the fourth quarter of 2012, compared to the same period in 2011, reflecting the aforementioned factors.
2. Change in Reported Selling, Informational & Administrative (SI&A) Expenses and Reported Research & Development (R&D) Expenses
Reported SI&A expenses decreased 7% in fourth-quarter 2012 and 12% in full-year 2012, compared to the same periods in 2011. The decreases were primarily due to savings generated from a reduction in the field force and a decrease in promotional spending, both partially in response to product losses of exclusivity and more streamlined corporate support functions, as well as the favorable impact of foreign exchange of 1% in the fourth quarter of 2012 and 2% in full-year 2012, partially offset by costs associated with the potential separation of Zoetis employees, net assets and operations from Pfizer.
Reported R&D expenses decreased 17% in fourth-quarter 2012 and 13% in full-year 2012, compared to the same periods in 2011, primarily due to savings generated by the discontinuation of certain therapeutic areas and R&D programs in connection with our previously announced cost-reduction and productivity initiatives, which were partially offset in full-year 2012 by a $250 million payment to AstraZeneca in the third quarter of 2012 to obtain the exclusive global over-the-counter rights to Nexium.3. Other Deductions – Net
|($ in millions)||Fourth-Quarter||Full-Year|
Interest income (a)
|Interest expense (a)||373||396||1,524||1,681|
|Net interest expense||265||271||1,141||1,225|
Net (gain)/loss on asset disposals
|Certain legal matters, net (b)||206||165||2,220||784|
|Certain asset impairment charges (c)||366||277||927||902|
|Costs associated with the potential separation of Zoetis (d)||32||33||125||33|
|Other deductions ––net||$||748||$||697||$||4,031||$||2,499|
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts