1. How can tax on Pfizer's income be negative? Does it mean Pfizer saved that much money or they received that much amount from government in Cash? (Min 150 words) 2. What is the effective rate of tax for Pfizer? Can it be negative? Why? (Min 100 words) 3. Give us brief details of what sort of tax benefits and tax expenses impacted FY 2017's Provision/(benefit) for taxes on income? (min 100 words)

In November 2015, CEO lan Read was watching how the young accountant sitting in front of him was getting a little nervous. It was getting dark on a cold day in New York City. Mr. Read himself was a chartered accountant and he had been on the other side of the table, therefore he could very well gauge the nervousness of this young accountant. His right hand man Albert Bourla, serving as COO was a little skeptical of the proposal, he expressed his concerns and asked tough questions, that's why the young accountant was sweating. Mr. Read got up from his soft leather chair and went to pour himself a hot cup of matcha latte, looking at the NYC Skyline from his corner office on 126th floor. He had seen a couple of big shifts in politics and tax laws in his career. After all he had been working for Pfizer for more than 36 years now. His colleague Mr. Bourla's concerns were legitimate though. "Will he get the enough votes? Do you think, if he succeeds he will deliver on the tax cuts?" Mr. Bourla asked. The young accountant had put up a scenario where Republican nominee Donald J. Trump wins the 2016 US Elections and delivers on the promise of granting tax cuts to big corporates. A signature policy of almost all Republicans, 'Trickle Down Economics', as they called it. Trump had just disclosed details of his tax cuts and all the things he was willing to do for corporates. Mr. Bourla was unable to trust this scenario, but if it became a reality it'd mean they will have to act fast and get as much tax cuts as they can. Taking a sip of his matcha latte, a new fascination of Mr. Read from his latest visit to Osaka Castle in Japan, he looked at Mr. Bourla. Now 54 years old Greek veterinary doctor had stepped the corporate ladder fast and reached up to the position of COO. Mr. Read liked Bourla, he eventually wanted Bourla to take over after he retires from his post of CEO having served for 6 years now. Pfizer Inc. had always donated millions of dollars to SuperPACs of Republicans and Democrats alike; politics after all is a business and no business this big can function in a vacuum. It's a symbiotic environment and all players play the game. Mr. Read knew this and he also knew one more thing which most people forget when it comes to US Presidential Election. It's not the popularity vote that counts, it's the Electoral College's vote that decides the next president. He knew this from the year 2000 election of George W. Bush vs Al Gore. Trump had been hinting at running for presidency for so many times that nobody took him seriously except for hardcore republicans and FOX News. Mr. Read had seen how the NY City resident and self proclaimed millionaire Trump rose to fame from his TV Show 'Apprentice. He had also seen how Trumps wealth had suddenly increased ever since he got the nomination from the Republican party. Mr. Read spoke, while still finalizing his thought in head, "Maybe...just maybe if Trump wins, he will have to deliver on the Tax Cuts because his Super PAC keeps getting bigger and we all know who's donating all this money... Wall Street. Trump must deliver" Having heard that after a tense pause, the young accountant relaxed his shoulders a little and took a sigh of relief. His scenario was going to be analyzed more seriously and he might very well have saved billions of dollars for Pfizer. If everything went well, he might even get a promotion and a big bonus. Not to mention a chauffeur with Lexus, a privilege only senior personnel get in Pfizer. But it was all sandcastles in the air, Trump hadn't won yet and neither the Tax Cuts was a reality. All that had happened was this: His big boss and CEO had agreed to entertain the possibility of one scenario this young accountant had listed out, in some corner of the Pfizer headquarter most likely while drinking sixth can of a monster energy drink, and crunching data using Excel and Tableau with millions of Chrome tabs open on his laptop, eating away the precious RAM. The main tasks lied ahead! How much would be the financial impact and what should Pfizer do to prepare for all situations that might crop up. What can be done to make sure that Pfizer has made all arrangements so that in any situation, Pfizer will get the maximum possible tax benefits and save as much money as they can. Act II On a fine morning of January 2018, CFO Frank A. D'Amelio was getting inside an elevator after a security check in the lobby of Pfizer Headquarter. He waited for the capsule to come down. Others stood back, not wanting to go in the with the CFO of world's largest pharmaceutical company. Frank never really liked such vague show of respect. He believed true sign of respect for seniors is through quality of work and dedication, and not waiting out an elevator ride. Just when the doors were closing, suddenly a hand appeared which forced the doors to reopen again. Frank was little surprised, who would it be. His face seemed eerily familiar to Frank. He had definitely seen this guy around somewhere. Wearing a blue jeans with New Balance shoes, young accountant realized he hasn't showered for last 3 days and now he had jumped in the same elevator ride as the CFO of his company. Frank was his ultimate boss. Feeling little anxious, young accountant looked at Frank and smiled awkwardly trying to stand a little a far. Frank couldn't hesitate, "Have I met you before young man?" he asked. "Yes indeed Mr. D'Amelio. My name is Arnold Young, I am an accountant. I work for you in the accounting department." young accountant replied. Frank realized who he was talking to. Frank never had to interact with Mr. Young directly but he had heard of a accounting genius who saved billions of dollars of the company and had become a legend around the accounting section. Frank was amused and wanted to talk to this young fellow. He knew what Mr. Young had done, but he wanted to hear from him directly. A sign of a good boss is to always spot the new talent and create a platoon of next level leaders within the organization. "Cancel whatever you're doing and come to my office. You're going to work with me today. We are going to finalize the financial statements. I need to know everything there is to know about Trump's new Tax Cuts and Jobs Act of 2017, how much it affects us and what have you done so far." Frank ordered the young accountant. The doors opened and just as Frank was leaving, he turned around to say "and one more thing, get a change of clothes. Here, use my corporate credit card and buy yourself a new pair of shirts", Frank didn't hesitate to add. Shying away Mr. Young nodded and replied, "Thank you, I will be in your office soon." The words sort of just came out but inside, Mr. Young couldn't process what just happened with him. But first he had to go buy himself a new shirt, he took the same elevator down and rushed to Macy's. Act III Mr. Young knocked on the door as Frank's secretary paved the way for him. Frank was sitting with Mr. Bourla and Mr. Read on a couch in his big office. On the table was an unaudited copy of Consolidated Statement of Income for Pfizer Inc. for the year ended 2017 as shown below. Consolidated Statements of Income Pfizer Inc. and Subsidiary Companies (MILLIONS, EXCEPT PER COMMON SHARE DATA) Year Ended December 31, 2017 2016 52,546 $ 52,824 $ 2015 48,851 $ 12.329 9,648 14,837 Revenues Costs and expenses: Cost of sales (a) Selling, informational and administrative expenses (a) Research and development expenses (a) Amortization of intangible assets Restructuring charges and certain acquisition-related costs Other (income) deductionsnet Income from continuing operations before provision/(benefit) for taxes on income Provision/(benefit) for taxes on income Income from continuing operations 11,240 14,784 7,657 4,758 7,872 4,056 487 14,809 7,690 3.728 1,152 2.860 8,965 1.990 6,975 1,724 3,655 8,351 1,123 7.229 1,315 12,305 (9,049) 21,353 "Yes Mr. Young, Come on in. Join us" Frank invited pointing at the couch. Young had anticipated this day and it had finally come true. Mr. Bourla poured him a glass of 18 year old bourbon whiskey aged in oak barrel. "Wait, it's just llam" Young was little startled by this, "I thought we were going to work." Frank chuckled, "Of course we are going to work young man. Have a drink. You are sitting at a big boys table now. Work can be fun too. You need know how to enjoy it." After taking a sip which went down so smoothly, Young regretted his hesitation. He wanted more because the oak and vanilla just hit the right notes for him and he loosened up a little. "Mr. Young I have two questions for you" Frank said. "How did you manage to save $9billion for our company? and How many zeros | should put on your bonus cheque?" XXX Assume you are the Young Accountant in this case and answer the following questions in respect of Pfizer Inc's FY2017 Financial Statements. We encourage you to find Pfizer's 10-K filing for FY2017 from Investor Relations section of their website to base your answers