SEC Investigates Pfizer Inc. Over Odd Results

The US Securities and Exchange Commission is trying to solve an accounting riddle – how is that Pfizer was able to record big overseas profits but losses in the US when 40 perfcent of its sales are generated in foreign countries? Over the past few months, the agency and Pfizer have engaged in correspondence over the issue, which ultimately may determine whether Pfizer has a bigger tax bill to pay. In a May 9 letter filed late last week, the SEC asked the drugmaker to explain why earnings before taxes outside the US 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, writes Bloomberg News, which first reported the SEC inquiry.