PFIZER INCPFE

PFIZER INC Leases Disclosure

10-KFiled Feb 26, 20263 min read
Leases
We lease real estate, fleet, and equipment for use in our operations. Our leases generally have lease terms of 1 to 30 years, some of which include options to terminate or extend leases for up to 5 to 10 years or on a month-to-month basis. We include options that are reasonably certain to be exercised as part of the determination of lease terms. We may negotiate termination clauses in anticipation of any changes in market conditions, but generally these termination options have not been exercised. Residual value guarantees are generally not included within our operating leases with the exception of some fleet leases. In addition to base rent payments, the leases may require us to pay directly for taxes and other non-lease components, such as insurance, maintenance and other operating expenses, which may be dependent on usage or vary month-to-month. Variable lease payments amounted to $453 million in 2025, $517 million in 2024 and $444 million in 2023. We elected the practical expedient to not separate non-lease components from lease components in calculating the amounts of ROU assets and lease liabilities for all underlying asset classes.
We determine if an arrangement is a lease at inception of the contract and we perform the lease classification test as of the lease commencement date. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date
based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate based on the information available at commencement date in determining the present value of future payments.
For operating leases, the ROU assets and liabilities in our consolidated balance sheets follows:
As of December 31,
(MILLIONS)Balance Sheet Classification20252024
ROU assetsOther noncurrent assets$2,213 $2,289 
Lease liabilities (short-term)Other current liabilities330 356 
Lease liabilities (long-term)Other noncurrent liabilities2,291 2,286 
Components of total lease cost includes:
Year Ended December 31,
(MILLIONS)202520242023
Operating lease cost$498 $683 $863 
Variable lease cost453 517 444 
Sublease income(26)(23)(24)
Total lease cost$924 $1,177 $1,283 
Other supplemental information follows:
As of December 31,
(MILLIONS)20252024
Operating leases
Weighted-Average Remaining Contractual Lease Term (Years)10.510.2
Weighted-Average Discount Rate3.8 %3.7 %
Year Ended December 31,
(MILLIONS)202520242023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$471 $601 $744 
(Gains)/losses on sale and leaseback transactions, net(53)29 (49)
The following reconciles the undiscounted cash flows for the first five years and total of the remaining years to the operating lease liabilities recorded in the consolidated balance sheet as of December 31, 2025:
(MILLIONS)
PeriodOperating Lease Liabilities
Next one year(a)
$417 
1-2 years408 
2-3 years334 
3-4 years282 
4-5 years234 
Thereafter1,524 
Total undiscounted lease payments3,199 
Less: Imputed interest
579 
Present value of minimum lease payments2,620 
Less: Current portion
330 
Noncurrent portion$2,291 
(a)Reflects lease payments due within 12 months subsequent to the balance sheet date.

Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2024Feb 27, 2025
2023Feb 22, 2024
2022Feb 23, 2023
2021Feb 24, 2022
2020Feb 25, 2021
2016Feb 23, 2017
2015Feb 29, 2016

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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