GAAP comparison of Pharmaceutical revenues

Because of its non-standardized definition, thistotal 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. GAAP comparison of Pharmaceutical revenues.(3) Total in-line and new products Pharmaceutical international revenues reflect a unfavorable impact in the fourth quarter ended December 31, 2008, and a favorable impact for the full year ended December 31, 2008, dueprimarily to changes in foreign exchange rates.PFIZER INCSUPPLEMENTAL INFORMATION1) Change in RevenuesThe strengthening of the U.S dollar relative to other currencies, primarily theeuro, U.K. pound, and Canadian dollar, unfavorably impacted our revenues byapproximately $380 million, or 3, in fourth-quarter 2008, compared to the sameperiod in 2007 The weakening of the U.S. dollar relative to other currencies,primarily the euro, Japanese yen and Canadian dollar, favorably impacted ourrevenues by approximately $1.6 billion, or 3, in full-year 2008, compared tofull-year 2007.

Reported revenues in full-year 2008 include a reduction of $217 million, toadjust our prior years liabilities for product returns. In third-quarter 2008,after a detailed review of our returns experience, we determined that ourprevious methodology needed to be revised, as the lag time between product saleand return was actually much longer than we had previously assumed. We have also reviewed our expense calculations for the prioryears and determined that the expense recorded in those years was not materiallydifferent from what would have been recorded under our revised approach. 2) Change in Cost of SalesReported cost of sales decreased 35 in fourth-quarter 2008, compared to thesame period in 2007, and decreased 28 in full-year 2008, compared to full-year2007. The decrease for fourth-quarter 2008 primarily reflects a favorable impactfrom foreign exchange and the savings impact of our cost-reduction initiatives.The decrease for full-year 2008 primarily reflects a $2.6 billion charge inthird-quarter 2007 related to our decision to exit Exubera, the savings impactof our cost-reduction initiatives and a favorable impact from foreign exchange,partially offset by higher implementation costs associated with ourcost-reduction initiatives.

Reported cost of sales also included $31 million for fourth-quarter 2008, $162million for full-year 2008, $73 million for fourth-quarter 2007 and $194 millionfor full-year 2007, related to business-transition activities associated withthe sale of our Consumer Healthcare business, completed in December 2006. Thiscontinuing activity is transitional in nature and generally results fromagreements that seek to facilitate the orderly transfer of operations of ourformer Consumer Healthcare business to the new owner. Reported cost of sales as a percentage of revenues decreased 6.5 percentagepoints to 13.9 in fourth quarter 2008, compared to the same period in 2007,reflecting the favorable impact of our cost-reduction initiatives and the impactof foreign exchange, as well as lower implementation costs associated with ourcost-reduction initiatives. Reported cost of sales as a percentage of revenuesdecreased 6.4 percentage points to 16.8 in full-year 2008, compared tofull-year 2007, reflecting a $2.6 billion charge in third-quarter 2007 relatedto our decision to exit Exubera, the favorable impact of our cost-reductioninitiatives and the impact of foreign exchange, partially offset by higherimplementation costs associated with our cost-reduction initiatives.

3) Change in Selling, Informational & Administrative (SI&A) Expenses andResearch & Development (R&D) ExpensesReported SI&A expenses decreased 21 in fourth-quarter 2008, reflecting thesavings associated with our cost-reduction initiatives and a favorable impactfrom foreign exchange. Reported SI&A expenses decreased 7 in full-year 2008,compared to the same periods in 2007, reflecting the savings associated with ourcost-reduction initiatives and a $85 million charge in 2007 related to ourdecision to exit Exubera, partially offset by an unfavorable impact from foreignexchange and the impact of higher implementation costs associated with ourcost-reduction initiatives. Reported SI&A expenses included implementation charges related to ourcost-reduction initiatives of $143 million for fourth-quarter 2008, $413 millionfor full-year 2008, $136 million for fourth-quarter 2007 and $334 million forfull-year 2007. Reported R&D expenses, excluding acquisition-related in-process research anddevelopment charges (IPR&D), increased 2 in fourth-quarter 2008, and decreased2 in full-year 2008, compared to the same periods in 2007. The increase forfourth-quarter 2008 was primarily due to an up-front payment to Medivation, Inc.in connection with our collaboration agreement to develop and commercializeDimebon, partially offset by a favorable impact from foreign exchange and therealization of savings associated with our cost-reduction initiatives.