John Henriques

Presentation Outline Snapshot Current Position Profile Current News Financial Statements Industry Comparison Stock Comparison Trend Analysis Common Size Analysis Stock Valuation Model EVA & MVA Model Free Cash Flow Model ValuePro Valuation Summary of Models Analyst Recommendation Risk Effects on SMIP Portfolio Investment Thesis

Snapshot Market Cap: $ Billion Industry: Pharmaceutical Sector: Healthcare Recent Stock Price: $ Week High: $ Week Low: $27.02 Beta: 0.82 Ticker Symbol: PFE

Current Position 100 Shares (2.94% of SMIP Portfolio) Purchased November 13, 2000 Purchased at $42.23 for a value of $4,223 Current Position at $27.50= $2,750 Incurred Loss (w/out dividends)=($1,473) Incurred Loss (w/ dividends)= ($1,257)

Profile Pfizer, incorporated in 1942, is a global, research based pharmaceutical company. The Company discovers, develops, manufactures, and markets prescription medicines for humans and animals, as well as consumer healthcare products. Pfizer’s 2003 acquisition of Pharmacia allowed the Company to becomes the worlds largest pharmaceutical company. The acquisition improved depth, global marketing strength and financial resources. The Company currently operates in three business segments: Pharmaceuticals, Consumer Healthcare, and Animal Healthcare. Competitors: Merck & Co.(MRK), Bayer Aktien(BAY), Novartis(NVS),

Current News November 8, 2004 It is anticipated that Pfizer will add a “black box” warning (strongest possible) to its pain killer, Bextra. November 4, 2004 Pfizer shares dropped to a new 52-week low when a Canadian newspaper article linked the Company’s arthritis drug, Celebrex, to 14 deaths. November 3, 2004 Following the presidential election of George W. Bush the pharmaceutical industry surged after months of uncertainty.

Current News (Continued) October 28, 2004 Pfizer announced a program to buy back $5 billion of the Company’s common stock by the end of Hank McKinnel, CEO stated “The program capitalizes on Pfizer’s financial and operational strength to increase shareholder value”. October 7, 2004 Pfizer shares fell up to 7% after it was expected that a federal judge would refuse the Company’s motion to block a generic version of Pfizer’s $2 billion epilepsy drug, Neurontin.

Financial Statements Please refer to Handout

Industry Comparison

Industry Comparison Continued

Stock Comparison (1 Year)

Stock Comparison (5 years)

Trend Analysis

Trend Analysis (Continued)

Common Size Analysis

Basic Stock Valuation (Inputs)

Basic Stock Valuation

EVA/MVA ( Inputs)

EVA/MVA Model

Free Cash Flow Inputs

Free Cash Flow Model

ValuePro.net

Summary of Valuations Basic Stock Valuation: Average (w/out zero growth model): $35.42 EPS: $1.19 EVA: Destroying S.H. Wealth MVA: Creating S.H. Wealth Free Cash Flow: NPV of FCF (minues debt)= $319, 012 Per Share Value = $42.25 Value Pro: Intrinsic value= $27.71

Analysts’ Recommendation

Risk PFE currently constitutes 2% of SMIP’s portfolio risk. Risk Grade:111 6 month: Min=69; Max=114; Avg=89

Risk Continued

Risks to Pfizer Patent Challenges/ Expirations Pricing Regulations Increasing Competition FDA Warnings (ex: Bextra) Foreign Importation (ex: Canada)

Investment Thesis Pfizer adds diversification to the SMIP portfolio Industry Leader (14 category leading products) Management is focused on the future Constantly expanding product portfolio Acquisitions, Mergers, R&D Industry Leader Short-term risks are currently built into stock price leading shares to be undervalued Increasing Dividends Company for the 2nd consecutive year is implementing a $5 billion buyback plan.

Recommendation Hold All PFE Shares Suggested Floor $23.38 (15%) Suggested Ceiling $42.23