statements of income for all periods presented, and the assets and liabilities associated with this business are classified as Assets of discontinued operations and other assets held for sale and Liabilities of discontinued operations, as appropriate, in our consolidated balance sheets as of December 31, 2010. (See “Our Business Development Initiatives” and “Discontinued Operations” sections of this Financial Review for more information.)

On July 7, 2011, we announced our decision to explore strategic alternatives for our Animal Health and Nutrition businesses, which may include, among other things, a full or partial separation of each of these businesses from Pfizer through a spin-off, sale or other transaction. We expect to announce our strategic decision for each business in 2012. (For further information, see the “Our Business Development Initiatives” section of this Financial Review.)

Our 2011 Performance

Revenues increased 1% in 2011 to $67.4 billion, compared to $67.1 billion in 2010, due to the favorable impact of foreign exchange, which increased revenues by approximately $1.9 billion, or 3%, and the inclusion of revenues of $1.3 billion or 2% from our acquisition of King, partially offset by a net operational decline of $2.9 billion, or 4%, primarily due to the loss of exclusivity of certain products.

The significant impacts on revenues for 2011, compared to 2010, are as follows:

Income from continuing operations was $8.7 billion in 2011 compared to $8.2 billion in 2010, primarily reflecting:

• higher impairment charges of $1.3 billion (pre-tax) in 2010 compared to 2011, (see further discussion in the “Costs and Expenses–– Other (Income)/Deductions––Net” section of this Financial Review and Notes to Consolidated Financial Statements—Note 4. Other Deductions––net);

• lower purchase accounting impacts of $1.5 billion (pre-tax) in 2011 compared to 2010, primarily related to inventory sold that had been recorded at fair value;

• lower merger restructuring and transaction costs of $2.0 billion (pre-tax) in 2011 compared to 2010; and

• the non-recurrence of a charge of $1.3 billion (pre-tax) in 2010 for asbestos litigation related to our wholly owned subsidiary Quigley

Company, Inc. (see Notes to Consolidated Financial Statements––Note 17. Commitments and Contingencies),

partially offset by:

• higher charges of $2.5 billion (pre-tax) in 2011 compared to 2010 related to our non-acquisition related cost-reduction and productivity initiatives; and

• the non-recurrence of a favorable settlement with the U.S. Internal Revenue Service in 2010.

Our Operating Environment U.S. Healthcare Legislation Principal Provisions Affecting Us

In March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (together, the U.S. Healthcare Legislation), was enacted in the U.S. This legislation has resulted in both current and longer-term impacts on us, as discussed below.

Certain provisions of the U.S. Healthcare Legislation became effective in 2010 or on January 1, 2011, while other provisions will become effective on various dates. The principal provisions affecting us provide for