PFIZER INC — Annual Report 2001

Jun 28, 2001

11-K 1 k11-00pfe_us.htm 11-K Pfizer S&I Plan

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549

FORM 11-K

FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS AND SIMILAR PLANS PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

X	ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2000
	or
	TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to
	Commission file number 1-3619
A.	Full title of the Plan and the address of the Plan, if different from that of the issuer named below:
	PFIZER SAVINGS AND INVESTMENT PLAN
B.	Name of issuer of the securities held pursuant to the Plan and the address of its principal executive offices:
	PFIZER INC. 235 EAST 42ND STREET NEW YORK, NEW YORK 10017

INDEPENDENT AUDITORS' REPORT

To the Savings and Investment Plan Committee Pfizer Savings and Investment Plan:

We have audited the accompanying statements of net assets available for plan benefits of the Pfizer Savings and Investment Plan (the Plan) as of December 31, 2000 and 1999, and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan as of December 31, 2000 and 1999, and the changes in net assets available for plan benefits for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of (1) assets held for investment purposes and (2) reportable transactions, as of and for the year ended December 31, 2000 are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/s/ KPMG LLP

KPMG LLP

New York, New York June 28, 2001

PFIZER SAVINGS AND INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS December 31, 2000 (thousands of dollars)

	Total	Nonparticipant Directed	Participant Directed
Investments, at fair value:
Pfizer Inc. common stock:
Nonparticipant directed, 45,012,891 shares, cost $161,524; Participant directed, 48,015,117 shares, cost $327,022	$4,279,288	$2,070,593	$2,208,695
The Northern Trust Company, Collective Stock Index Fund*, 8,040,687 shares, cost $264,793	268,237	--	268,237
Other investments**, cost $307,729	298,584	--	298,584
Investments, at cost which approximates fair value:
Loans to participants	48,397	--	48,397
Short-term securities	59,971	4	59,967
Total investments	4,954,477	2,070,597	2,883,880
Contributions receivable from employer, including amounts collected from employees	13,205	3,802	9,403
Receivable for securities sold	2,704	--	2,704
Interest receivable	2,925	--	2,925
Payable for securities purchased	(3,144)	--	(3,144)
Investment management fees payable- Note 4	(42 )	--	(42 )
Net assets available for plan benefits- Note 7	$4,970,125 ==========	$2,074,399 ==========	$2,895,726 ==========

• Investments represent 5% or more of the Plan's net assets available for plan benefits.

** Individual investments are less than 5% of the Plan's net assets available for plan benefits.

See Notes to Financial Statements which are an integral part of these financial statements.

PFIZER SAVINGS AND INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS December 31, 1999 (thousands of dollars)

	Total	Nonparticipant Directed	Participant Directed
Investments, at fair value:
Pfizer Inc. common stock:
Nonparticipant directed, 48,743,725 shares, cost $155,672; Participant directed, 52,493,946 shares, cost $329,172	$3,283,896	$1,581,124	$1,702,772
The Northern Trust Company, Collective Stock Index Fund*, 7,789,884 shares,cost $255,344	286,200	--	286,200
Other investments**, cost $237,275	239,623	--	239,623
Investments, at cost which approximates fair value:
Loans to participants	47,182	--	47,182
Short-term securities	43,700	1	43,699
Total investments	3,900,601	1,581,125	2,319,476
Contributions receivable from employer, including amounts collected from employees	13,064	3,774	9,290
Receivable for securities sold	3,668	--	3,668
Interest receivable	2,858	--	2,858
Payable for securities purchased	(3,700)	--	(3,700)
Investment management fees payable- Note 4	(71 )	--	(71 )
Net assets available for plan benefits- Note 7	$3,916,420 ==========	$1,584,899 ==========	$2,331,521 ==========

• Investments represent 5% or more of the Plan's net assets available for plan benefits.

** Individual investments are less than 5% of the Plan's net assets available for plan benefits.

See Notes to Financial Statements which are an integral part of these financial statements.

PFIZER SAVINGS AND INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS Year Ended December 31, 2000 (thousands of dollars )

	Total	Nonparticipant Directed	Participant Directed
Net investment income
Cash dividends:
Pfizer Inc. common stock	$ 34,886	$ 16,831	$ 18,055
Other marketable securities	351	--	351
Interest on investments	13,175	4	13,171
Interest on participant loans	4,218	578	3,640
	52,630	17,413	35,217
Investment management fees-Note 4	(189 )	--	(189 )
	52,441	17,413	35,028
Realized gains on investments, net-Note 5:
Pfizer Inc. common stock	347,150	162,553	184,597
Other securities	3,102	--	3,102
	350,252	162,553	187,699
Unrealized appreciation of investments, net-Note 6	952,785	483,616	469,169
	1,355,478	663,582	691,896
Contributions:
Employees	134,756	--	134,756
Employer	52,224	52,224	--
Withdrawals-Note 7	(488,753)	(226,823)	(261,930)
Loan transaction transfers, net	--	517	(517 )
	(301,773 )	(174,082 )	(127,691 )
Net increase	1,053,705	489,500	564,205
Net assets available for plan benefits-Note 7:
Beginning of year	3,916,420	1,584,899	2,331,521
End of year	$4,970,125 ==========	$2,074,399 ==========	$2,895,726 ==========

See Notes to Financial Statements which are an integral part of these financial statements.

PFIZER SAVINGS AND INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS Year Ended December 31, 1999 (thousands of dollars)

	Total	Nonparticipant Directed	Participant Directed
Net investment income
Cash dividends:
Pfizer Inc. common stock	$ 31,989	$ 15,431	$ 16,558
Other marketable securities	937	--	937
Interest on investments	13,570	94	13,476
Interest on participant loans	4,016	625	3,391
	50,512	16,150	34,362
Investment management fees-Note 4	(129 )	--	(129 )
	50,383	16,150	34,233
Realized gains on investments, net-Note 5:
Pfizer Inc. common stock	312,906	155,694	157,212
Other securities	178,205	--	178,205
	491,111	155,694	335,417
Unrealized depreciation of investments, net-Note 6	(1,392,592 )	(610,785 )	(781,807 )
	(851,098 )	(438,941 )	(412,157 )
Contributions:
Employees	131,994	--	131,994
Employer	48,332	48,332	--
Withdrawals-Note 7	(458,592)	(213,313)	(245,279)
Loan transaction transfers, net	--	275	(275 )
	(278,266 )	(164,706 )	(113,560 )
Net decrease	(1,129,364)	(603,647)	(525,717)
Net assets available for plan benefits-Note 7:
Beginning of year	5,045,784	2,188,546	2,857,238
End of year	$3,916,420 ==========	$1,584,899 ==========	$2,331,521 ==========

See Notes to Financial Statements which are an integral part of these financial statements.

PFIZER SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS December 31, 2000 and 1999

Note 1 - Summary Plan Description

General - The Pfizer Savings and Investment Plan (the "Plan") is a defined contribution plan which was originally adopted by Pfizer Inc. (the "Company") in 1965 as the Pfizer Savings Plan and has been amended from time to time since that date. Participation in the Plan is open to all eligible employees of the Company and any corporation which, with the consent of the Company, adopts the Plan ("Associate Companies"). The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974.

The Plan accepts rollover contributions by participants in certain instances (as described in the Plan) and values a participant's account as of the valuation date subsequent to the receipt of the distribution election. Participants are permitted to roll over into the Plan eligible distributions from other qualified employer sponsored savings plans and conduit IRAs.

The following is a general description of certain provisions of the Plan. Refer to the Plan document for a complete description.

Contributions - Each participant may make contributions on an after-tax basis and/or on a before-tax basis (that is, choose to reduce his or her compensation and have the Company contribute on his or her behalf). Contributions are subject to certain restrictions under the Internal Revenue Code of 1986, as amended. Contributions of up to 2% of compensation are matched 100% by the Company and the next 4% is matched 50%. Employee contributions in excess of 6% are not matched.

Investment Options Nonparticipant Directed Fund

Fund P - This fund invests employer contributions in common stock of the Company

Participant Directed Funds - Each participant in the Plan elects to have his or her contributions invested in any one or any combination of seven investment funds. These funds are:

Fund A	-	Intermediate U.S. Treasury notes and bonds
Fund B	-	A collective index fund of corporate common stocks that seeks to mirror the performance of the S&P 500 index
Fund C	-	Common stock of the Company
Fund D	-	U.S. Treasury and government agency money market investments with maturities of less than one year
Fund E	-	An index mutual fund of common stocks of companies with market capitalization averaging approximately $500 million
Fund F	-	A collective index fund of common stocks of large, well-established companies whose price-to-book ratios are, as a whole, typically below the average for the S&P 500 index and whose
dividends are typically higher than the average for the S&P 500 index
Fund G	-	A collective index fund of common stocks of large, well-established companies whose price-to-book ratios are, as a whole, typically above the average for the S&P 500 index and whose
dividends are typically lower than the average for the S&P 500 index

Note 1 - Summary Plan Description

The trustee of the Plan, The Northern Trust Company, manages investments in each of the funds and therefore, is deemed a related party. The Plan's trust agreement provides that any portion of any of the investment funds may, pending its permanent investment or distribution, be invested in short-term investments.

Eligibility and Vesting - Generally, the domestic employees of the Company, except any covered by a collective bargaining agreement, are eligible to enroll in the Plan on their date of hire. A participant is immediately vested in the full value of his or her account (i.e., participant's and employer's contributions).

Payment of Benefits - Upon separation from service, retirement or disability, a participant may elect to receive a lump sum distribution currently or at any time up to the later of 13 months from separation or age 65, subject to the provisions of the Plan. In the event of a participant's death, a spouse beneficiary may elect payment currently or defer payments until the later of when the participant would have reached age 65 or 13 months from date of death. A nonspouse beneficiary may defer payment up until 13 months from the date of death.

Withdrawals - A participant in the Plan may withdraw all or part of his or her account balance subject to the provisions of the Plan.

Loans - Plan participants are permitted to borrow against their vested balance. The minimum amount a participant may borrow is $1,000 and the maximum amount is the lesser of 50% of the vested account balance reduced by any current outstanding loan balance or $50,000 reduced by the highest outstanding loan balance in the preceding 12 months.

Under the terms of the Plan, loans must be repaid within five years, unless the funds are used to purchase a primary residence. Primary residence loans must be repaid over 6 to 15 years at the participant's option. The interest rate on all loans is based on the prime rate plus 1%. Interest paid by the participant is credited to the participant's account.

Termination - The Company expects to continue the Plan indefinitely, but reserves the right to amend, suspend or discontinue it in whole or in part at any time by action of the Company's Board of Directors. In the event of termination of the Plan, each participant shall receive the full value of his or her account balance as though he or she had retired as of the date of such termination. No part of the invested assets established pursuant to the Plan will at any time revert to the Company.

Note 2 - Summary of Significant Accounting Policies

Basis of Accounting - The financial statements of the Plan are prepared on the accrual basis of accounting. For treatment of benefits payable, refer to Note 7.

Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of increases and decreases to net assets during the reporting period. Actual results could differ from those estimates.

Investment Valuation - Pfizer Inc. common stock is valued at the closing market price on the last business day of the year. U.S. Government securities are recorded at fair value based on market or dealer quotes on the last business day of the year. Collective index funds and the mutual fund are recorded at fair value based on the closing market prices of the underlying investments of the respective fund as of the last business day of the year. Loans to participants and short-term securities are recorded at cost which approximates fair value.

Security Transactions - Purchases and sales of securities are reflected on a trade-date basis. Realized gains and losses on sales of investments represent the difference between the net proceeds and the cost of the investments (average cost if less than the entire investment is sold).

Unrealized Appreciation (Depreciation) of Investments - Unrealized appreciation (depreciation) of investments for the year represents the difference between the cost of the investments and their fair value at the end of the year. Additionally, it reflects the reversal of the unrealized appreciation (depreciation) as of the end of the prior year.

Net Investment Income - Dividend income is recorded on the ex-dividend date. Interest income is recorded as earned.

Note 3 - Income Taxes

The Internal Revenue Service has determined and informed the Company that the Plan and related trust as of May 26, 1994 were designed in accordance with the applicable sections of the Internal Revenue Code. The Plan has been amended since receiving the determination letter. The Plan administrator and the Plan's legal and tax counsel believe that the Plan is designed and is currently being operated in compliance with all the applicable requirements. Therefore, no provision has been made for Federal income taxes.

Contributions made to the Plan by the Company, including before-tax contributions made on the employees' behalf by the Company and the appreciation on all funds in the employees' account, are not taxable to the employees under Federal income tax law while these amounts remain in the Plan.

Note 4 - Administrative Costs

Except for certain member transfer costs and the investment management fees, all costs and expenses of administering the Plan are assumed by the Company.

Note 5 - Realized Gains (Losses) on Investments

The aggregate net proceeds and carrying value used in the calculation of the realized gains (losses) on investments were as follows:

(thousands of dollars)	December 31, 2000 — Net Proceeds	Cost	Realized Gains (Losses)
Pfizer Inc. common stock	$395,031	$ 47,881	$347,150
Collective funds	8,285	7,481	804
U.S. Government securities	95,748	97,409	(1,661)
Index Mutual fund	3,980	21	3,959
	$503,044 ============	$152,792 ========	$350,252 ==============
	December 31, 1999
(thousands of dollars)	Net Proceeds	Cost	Realized Gains (Losses)
Pfizer Inc. common stock	$349,414	$ 36,508	$312,906
Collective funds	508,703	330,762	177,941
U.S. Government securities	109,149	110,344	(1,195)
Index Mutual fund	1,964	505	1,459
	$969,230 ============	$478,119 ========	$491,111 ==============

Realized gains from the disposal of Pfizer Inc. common stock include $209,209 thousand in 2000 and $214,984 thousand in 1999 related to shares distributed in kind to participants who withdrew from the Plan on retirement or termination.

Note 6 - Unrealized Appreciation (Depreciation) of Investments

The change in the amount of unrealized appreciation (depreciation) was as follows:

(thousands of dollars)	Aggregate Unrealized — December 31, 2000	December 31, 1999	Change During 2000
Pfizer Inc. common stock	$3,790,742	$2,799,052	$991,690
Collective funds	(3,475)	37,484	(40,959)
U.S. Government securities	3,920	(3,934)	7,854
Index Mutual fund	(6,146 )	(346)	(5,800 )
	$3,785,041 ==========	$2,832,256 ==========	$952,785 ========

(thousands of dollars)	Aggregate Unrealized — December 31, 1999	December 31, 1998	Change During 1999
Pfizer Inc. common stock	$2,799,052	$4,059,755	$(1,260,703)
Collective funds	37,484	160,482	(122,998)
U.S. Government securities	(3,934)	5,588	(9,522)
Index Mutual fund	(346 )	(977 )	631
	$2,832,256 ==========	$4,224,848 ==========	$(1,392,592) ===========

Note 7 - Withdrawals and Reconciliation with Form 5500

For financial statement purposes, participant withdrawals and distributions are recorded when paid rather than when processed and approved for payment. Therefore, the net assets available for plan benefits as of December 31, 2000 and 1999 do not reflect a reduction for the following benefits payable to participants who had requested withdrawals as of December 31, but were not distributed until the subsequent year:

(thousands of dollars)	2000	1999
Nonparticipant directed fund	$14,200	$ 8,292
Participant directed funds	16,557	12,116
	$30,757 =======	$20,408 =======

For the purposes of Form 5500, such withdrawals and distributions are recorded when processed and approved for payment. Therefore, benefits payable to participants who have requested withdrawals are reported as benefit expense on Form 5500 for those years.

SCHEDULE 1 PFIZER SAVINGS AND INVESTMENT PLAN SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES December 31, 2000 (thousands of dollars)

	Interest Rate	Maturity Date	Number of Shares or Units	Cost	Fair Value
Nonparticipant Directed
Pfizer Inc.* Common Stock	--	--	45,012,891	$161,524	$2,070,593
The Northern Trust Company*, Collective Short-Term Investment Fund	--	--	4,241	4	4
Total nonparticipant directed investments				$161,528 ========	$2,070,597 ==========
Participant Directed
Pfizer Inc.* Common Stock	--	--	48,015,117	$327,022	$2,208,695
U.S. Government securities:
U.S. Treasury Note	5.75%	10-31-2002	13,000,000	$ 12,960	$ 13,116
U.S. Treasury Note	6.625%	05-15-2007	12,000,000	12,631	12,934
U.S. Treasury Note	4.75%	11-15-2008	11,300,000	10,642	10,987
U.S. Treasury Note	7.25%	05-15-2004	10,800,000	11,310	11,490
U.S. Treasury Note	6.50%	08-15-2005	10,700,000	10,816	11,314
U.S. Treasury Note	5.75%	08-15-2003	9,600,000	9,356	9,739
U.S. Treasury Note	6.50%	03-31-2002	9,500,000	9,516	9,619
U.S. Treasury Note	5.50%	01-31-2003	9,000,000	9,182	9,055
U.S. Treasury Note	6.25%	02-28-2002	8,500,000	8,520	8,574
U.S. Treasury Note	5.50%	05-31-2003	8,000,000	7,742	8,062
U.S. Treasury Note	6.375%	08-15-2002	8,000,000	8,065	8,134
U.S. Treasury Note	6.875%	05-15-2006	7,500,000	7,652	8,113
U.S. Treasury Note	4.25%	11-15-2003	7,000,000	6,495	6,836
U.S. Treasury Note	6.00%	08-15-2004	5,500,000	5,473	5,656
U.S. Treasury Note	5.875%	11-15-2004	5,000,000	4,952	5,130
U.S. Treasury Note	6.625%	05-31-2002	5,000,000	4,994	5,081
U.S. Treasury Note	7.50%	02-15-2005	4,850,000	5,469	5,274
U.S. Treasury Note	6.375%	01-31-2002	4,000,000	3,983	4,036
U.S. Treasury Note	6.50%	02-15-2010	4,000,000	4,179	4,376
U.S. Treasury Note	5.50%	02-15-2008	3,600,000	3,464	3,665
U.S. Treasury Note	6.25%	07-31-2002	3,500,000	3,499	3,549
U.S. Treasury Note	6.75%	05-15-2005	3,500,000	3,626	3,729
U.S. Treasury Bond	8.375%	08-15-2008	3,200,000	3,382	3,425
U.S. Treasury Note	5.75%	08-15-2010	3,000,000	3,144	3,144
U.S. Treasury Note	6.00%	08-15-2009	1,800,000	1,771	1,899
U.S. Treasury Bond	12.375%	05-15-2004	1,500,000	2,021	1,827
Total U.S. Government securities				$174,844	$ 178,764

• Party-in-interest

SCHEDULE 1 PFIZER SAVINGS AND INVESTMENT PLAN SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES December 31, 2000 (thousands of dollars)

	Interest Rate	Maturity Date	Number of Shares or Units	Cost	Fair Value
Participant Directed (continued)
Collective funds:
The Northern Trust Company*, Stock Index Fund	--	--	8,040,687	$ 264,793	$ 268,237
The Northern Trust Company*, Government Short-Term Investment Fund	--	--	59,401,324	59,401	59,401
The Northern Trust Company*, Growth Equity Index Fund	--	--	6,226,012	68,604	58,338
The Northern Trust Company*, Value Index Fund	--	--	1,467,581	27,076	30,423
The Northern Trust Company*, Short-Term Investment Fund	--	--	566,464	566	566
Total collective funds				$ 420,440	$ 416,965
The Northern Trust Company*, Small Company Index Mutual Fund	--	--	2,924,563	$ 37,205	$ 31,059
Loans to participants*	Various	Various	--	$ 48,397	$ 48,397
Total participant directed investments				$1,007,908 ==========	$2,883,880 ==========

• Party-in-interest

SCHEDULE 2 PFIZER SAVINGS AND INVESTMENT PLAN SCHEDULE OF REPORTABLE TRANSACTIONS Year Ended December 31, 2000 (thousands of dollars)

Securities Purchased	Number of Transactions	Number of Shares	Cost
Pfizer Inc.* common stock	20	1,348,637	$51,583
Securities Disposed**	Number of Transactions	Number of Shares	Cost	Fair Value of Disposed Shares	Realized Gains
Pfizer Inc.* common stock	1,085	9,558,300	$47,881	$395,031	$347,150

---

• Party-in-interest ** Dispositions represent sales of stock and shares distributed in kind to members who withdrew from the Plan on retirement or termination.

SIGNATURES

The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the members of the Savings and Investment Plan Committee have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized.

PFIZER SAVINGS AND INVESTMENT PLAN
By: /s/ David L. Shedlarz
David L. Shedlarz Executive Vice President and Chief Financial Officer Chair, Savings and Investment Plan Committee

Date: June 28, 2001

EXHIBIT 23

CONSENT OF INDEPENDENT AUDITORS

To the Savings and Investment Plan Committee Pfizer Savings and Investment Plan:

We consent to incorporation by reference in the Registration Statement on Form S-8 dated October 5, 1994 (File No. 33-55771) of our report dated June 28, 2001, relating to the statements of net assets available for plan benefits of the Pfizer Savings and Investment Plan as of December 31, 2000 and 1999, and the related statements of changes in net assets available for plan benefits for the years then ended, which report appears in the December 31, 2000 annual report on Form 11-K of the Pfizer Savings and Investment Plan.

/s/ KPMG LLP

KPMG LLP

New York, New York June 28, 2001