Welcome to the 3 rd Session on Business Combinations & Consolidated Financial Statements.

1. Welcometo the 3rd Session on BusinessCombinations & Consolidated Financial Statements. Thanks for joining us. Please be seated…. We will be starting the session shortly.

2. 3rd Session 2-5= 180min. Recap of First Session Recording & Reporting Accounting Practices of US Companies: • ‘Pfizer’, and • ‘ExxonMobil’

3. Pfizer Inc. and Subsidiary CompaniesReferences for Study Significant Accounting Policies • Consolidation & Basis of Presentation (P35). • New Accounting Standards (P35). • Acquisitions (P35). • Amortization of Intangible Assets (P36). Acquisitions (P37)

4. Pfizer Inc. and Subsidiary CompaniesNotes to the Consolidated Financial Statements (P35)Significant Accounting Policies Consolidation and Basis of Presentation: • The consolidated financial statements include our parent company and all subsidiaries, including those operating outside U.S. and are prepared in accordance with accounting principles generally accepted in the U.S.A (GAAP). • For subsidiaries operating outside U.S., the financial information is included as of and for the year ended November 30 for each year. All significant transactions among our businesses have been eliminated.

5. Pfizer Inc. and Subsidiary CompaniesNotes to the Consolidated Financial Statements (P35)Significant Accounting Policies Contd. from previous slide Consolidation and Basis of Presentation: • On 16 April 2003 we completed our acquisition of Pharmacia Corporation (Pharmacia) in a stock-for-stock transaction accounted for under the purchase method of accounting (See Note 2A, Acquisitions: Pharmacia Corporation). • Starting at the date of acquisition, the assets acquired and liabilities assumed were recorded at their respective fair values and our results of operations included Pharmacia’s product sales and expenses from the acquisition date.

6. Pfizer Inc. and Subsidiary CompaniesNotes to the Consolidated Financial Statements (P35)Significant Accounting Policies New Accounting Standards: • As of 1 January 2002, we adopted the provisions of SFAS 142, Goodwill and Other Intangible Assets. SFAS 142 discontinued the practice of amortizing goodwill and, instead, instituted an annual impairment review. • As a result of adopting SFAS 142, we recorded a write-down of $536 million for the impairment provisions related to goodwill in our animal health business. The fair value of the animal health business was determined using discounted cash flows.

7. Pfizer Inc. and Subsidiary CompaniesNotes to the Consolidated Financial Statements (P36)Significant Accounting Policies Amortization of Intangible Assets: Long-lived assets include: • Goodwill – Goodwill represents the difference between the purchase price of a business acquisition and the fair value of its net assets. Goodwill is not amortized. • We review all of our long-lived assets, including goodwill and other intangible assets, for impairment at least annually and whenever events or circumstances present an indication of impairment. • When necessary, we record charges for impairments of long-lived assets for the amount by which the present value of future cash flows, or some other fair value measure, is less than the carrying value of these assets.

8. Pfizer Inc. and Subsidiary CompaniesNotes to the Consolidated Financial Statements (P35) Acquisitions: • We accounted for acquired businesses using the purchase method of accounting which requires that the assets acquired and liabilities assumed be recorded a the date of acquisitions at their respective fair values. • Our consolidated financial statements and results of operations reflect an acquired business after the completion of acquisition and are not restated. Contd.

9. Pfizer Inc. and Subsidiary CompaniesNotes to the Consolidated Financial Statements (P36) Contd…Acquisitions: • The cost to acquire a business, including transaction costs, is allocated to the underlying net assets of the acquired business in proportion to their respective fair values. • Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.

10. Pfizer Inc. and Subsidiary CompaniesNotes to the Consolidated Financial Statements (P36) 2. Acquisitions: • Pharmacia Corporation: Description of Acquisition • On 16 April 2003, Pfizer acquired Pharmacia for a price of approximately $56 billion. The fair value of Pfizer equity items was derived using an average market price per share of Pfizer common stock of $ 29.81, which was based on Pfizer’s average stock price for the period four days (two before and two days after the terms of the acquisition were agreed to and announced on 15 July 2002). • Under the terms of the merger agreement, each outstanding share of Pharmacia common stock was exchanged for 1.4 shares of Pfizer common stock in a tax-free transaction.

11. Pfizer Inc. and Subsidiary CompaniesNotes to the Consolidated Financial Statements (P36) 2. Acquisitions: The following table summarizes the components of the purchase price: Fair Value (Million of $) Pfizer common stock 54,177 Pfizer Series A convertible perpetual preferred stock 462 Pfizer stock options 1,102 Pharmacia vested share awards 130 Other transaction costs 101 Total estimated purchase price 55,972

12. ExxonMobiland Subsidiary CompaniesReferences for Study Summary of Accounting Policies • Principles of Consolidation (P-A30). • Consolidated Statement of Income (P-A26) • Equity Company Information (P-A34)

13. ExxonMobil CorporationNotes to Consolidated Financial Statements (P-A30)Summary of Accounting Policies Principles of Consolidation: • The consolidated financial statements include the accounts of those significant subsidiaries owned directly or indirectly with more than 50 percent of the voting rights held by the Corporation, and for which other shareholders do not possess the right to participate in significant management decisions. They also include the Corporation’s share of the undivided interest in upstream assets and liabilities. • Additionally, the Corporation consolidates certain affiliates identified as variable-interest entities in which it has less than a majority ownership, because of guarantees or other arrangements that create majority economic interests in those affiliates that are greater than the Corporation’s voting interests.

14. ExxonMobil CorporationNotes to Consolidated Financial Statements (P-A30)Summary of Accounting Policies Contd. Principles of Consolidation: • Amounts representing the Corporation’s percentage interest in the underlying net assets of the other significant subsidiaries and less-than-majority-owned companies in which a significant equity ownership interst is held, are included in ‘Investments and Advances’; the Corporation’s share of the net income of these companies is included in the consolidated statement of income caption ‘Income from equity affiliates’. • The Corporation’s share of the cumulative foreign exchange translation adjustment for equity method investments is reported in consolidated shareholder’s equity.

15. ExxonMobil CorporationNotes to Consolidated Financial Statements (P-A30)Summary of Accounting Policies Contd. Principles of Consolidation: • Evidence of loss in value that might indicate impairment of investments in companies accounted for on the equity method is assessed to determine if such evidence represents a loss in value of the Corporation’s investment that is other than temporary. • Examples of key indicators include a history of operating losses, a negative earnings and cash flow outlook, significant downward revisions to oil and gas reserves, and the financial condition and prospects for the investee’s business segment or geographic region.

16. ExxonMobil CorporationNotes to Consolidated Financial Statements (P-A30)Summary of Accounting Policies Contd. Principles of Consolidation: • If evidence of an other than temporary loss in fair value below carrying amount is determined, an impairment is recognized. • In the absence of market prices for the investment, discounted cash flows are used to assess fair value.

17. ExxonMobil CorporationNote 7 to Consolidated Financial Statements (P-A30)Equity Company Information • The summarized financial information below includes amounts related to certain less-than-majority-owned subsidiaries where minority shareholders possess the right to participate in significant management decisions. • These companies are primarily engaged in crude production, natural gas marketing and refining operations in North America; natural gas production, natural gas distribution and down stream operations in Europe; crude production in Kazakhstan and Abu Dhabi; and liquefied natural gas operations in Qatar. • Also included are several power generation, petrochemicals/lubes manufacturing and chemical ventures.

18. ExxonMobil Corporation Consolidated Statement of Income (P-A26) (Million of Dollars) 2004 Revenues and other income Sales & other operating revenues 291,252 Income from equity affiliates 4,961 Other income 1,822 Total revenues and other income 298,035

19. ExxonMobil CorporationNote 7 to Consolidated Financial Statements (P-A34)Contd. Equity Company Financial Information (Million of Dollars) Total ExxonMobil Share Total Revenues 72,872 26,359 Income before income taxes 15,278 6,141 Income taxes (3,257) (1,180) Net Income 12,021 4,961 Further disclosure of financial position and name of companies and percentage ownership interest at 31-12-2004.

20. ExxonMobil CorporationNote 8 to Consolidated Financial Statements (P-A35)Investments and Advances (Million of Dollars) 2004 Companies carried at equity in underlying assets Investments (Note 7) 11,742 Advances 3,799 Companies carried at cost or less and stock investments carried at fair value 1,931 Long-term receivables 932 Total 18,404 This figure is appearing as an asset in balance sheet.

21. Thank You.