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Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
2015 Financial Report
93
In addition to the open audit years in the U.S., we have open audit years in other major tax jurisdictions, such as Canada (2010-2015), Japan
(2015), Europe (2007-2015, primarily reflecting Ireland, the United Kingdom, France, Italy, Spain and Germany), Latin America (1998-2015,
primarily reflecting Brazil) and Puerto Rico (2010-2015).
Any settlements or statutes of limitations expirations could result in a significant decrease in our uncertain tax positions. We estimate that it is
reasonably possible that within the next twelve months, our gross unrecognized tax benefits, exclusive of interest, could decrease by as much
as $200 million, as a result of settlements with taxing authorities or the expiration of the statutes of limitations. Our assessments are based on
estimates and assumptions that have been deemed reasonable by management, but our estimates of unrecognized tax benefits and potential
tax benefits may not be representative of actual outcomes, and variation from such estimates could materially affect our financial statements in
the period of settlement or when the statutes of limitations expire, as we treat these events as discrete items in the period of resolution.
Finalizing audits with the relevant taxing authorities can include formal administrative and legal proceedings, and, as a result, it is difficult to
estimate the timing and range of possible changes related to our uncertain tax positions, and such changes could be significant.
E. Tax Provision/(Benefit) on Other Comprehensive Income/(Loss)
The following table provides the components of the tax provision/(benefit) on Other comprehensive income/(loss):
Year Ended December 31,
(MILLIONS OF DOLLARS) 2015 2014 2013
Foreign currency translation adjustments, net(a) $90$42$
111
Unrealized holding gains on derivative financial instruments, net (173)(199)217
Reclassification adjustments for realized (gains)/losses 104 262 (63)
(69)63 154
Unrealized holding gains/(losses) on available-for-sale securities, net (104)(56)57
Reclassification adjustments for realized (gains)/losses 59 10 (57)
(45)(46)—
Benefit plans: actuarial gains/(losses), net (23)(1,416)1,422
Reclassification adjustments related to amortization 183 61 205
Reclassification adjustments related to settlements, net 237 35 2
Other 66 61 2
462 (1,258)1,631
Benefit plans: prior service credits and other, net 160 281 56
Reclassification adjustments related to amortization (59)(28)(23)
Reclassification adjustments related to curtailments, net (12)—(1)
Other —(1) —
89 253 32
Tax provision/(benefit) on other comprehensive income/(loss) $528 $(946)$ 1,928
(a) Taxes are not provided for foreign currency translation adjustments relating to investments in international subsidiaries that will be held indefinitely.
Note 6. Accumulated Other Comprehensive Loss, Excluding Noncontrolling Interests
The following table provides the changes, net of tax, in Accumulated other comprehensive income/(loss):
Net Unrealized Gain/(Losses) Benefit Plans
(MILLIONS OF DOLLARS)
Foreign
Currency
Translation
Adjustments
Derivative
Financial
Instruments
Available-
For-Sale
Securities
Actuarial
Gains/
(Losses)
Prior Service
(Costs)/
Credits and
Other
Accumulated
Other
Comprehensive
Income/(Loss)
Balance, January 1, 2013 $ (177) $ (161) $ 236 $ (6,110) $ 259 $ (5,953)
Other comprehensive income/(loss)(a) (440) 240 (86) 2,887 54 2,655
Sale of 19.8% of subsidiary through an IPO(b) 27 ——— — 27
Balance, December 31, 2013 (590) 79 150 (3,223) 313 (3,271)
Other comprehensive income/(loss)(a) (2,099) 438 (372) (2,432) 419 (4,045)
Balance, December 31, 2014 (2,689) 517 (222) (5,654) 733 (7,316)
Other comprehensive income/(loss)(a) $ (3,174) $ (96) $ (5) $ 921 $ 148 $ (2,206)
Balance, December 31, 2015 $ (5,863) $ 421 $ (227) $ (4,733) $ 880 $ (9,522)
(a) Amounts do not include foreign currency translation adjustments attributable to noncontrolling interests of $26 million loss in 2015, $3 million gain in 2014 and
$62 million loss in 2013.
(b) Relates to Zoetis (our former Animal Health subsidiary). See Note 2D.
As of December 31, 2015, we estimate that we will reclassify into 2016 income the following pre-tax amounts currently held in Accumulated
other comprehensive loss: $437 million of unrealized pre-tax losses on derivative financial instruments (expected to be offset primarily by
gains resulting from reclassification adjustments related to available-for-sale securities); $555 million of actuarial losses related to benefit plan
obligations and plan assets and other benefit plan items; and $163 million of prior service credits, primarily related to benefit plan
amendments.