Pfizer Inc., the world's biggest drugmaker, was asked by U.S. regulators how it recorded high profit overseas and losses at home when 40 percent of its sales were inside the U.S.
In a May 9 letter filed today, Securities and Exchange Commission staff asked New York-based Pfizer to explain why earnings before taxes outside the U.S. were $15 billion in 2011 while losses within the country were $2.2 billion. By piling up profit in low-tax jurisdictions overseas, Pfizer has been able to cut its tax rate reported to investors and boost results.
"These operating results appear to be inconsistent with your domestic and international revenues, which in 2011 were $26.9 billion and $40.5 billion, respectively," wrote Jim Rosenberg, the commission's senior assistant chief accountant.
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