XML 72 R15.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Tax Matters | 12 Months Ended
--- | ---
Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Tax Matters | Tax Matters A. Taxes on Income from Continuing Operations
The following table provides the components of Income from continuing operations before provision/(benefit) for taxes on income:
|  | Year Ended December 31,
(MILLIONS OF DOLLARS) |  | 2018 |  |  | 2017 |  |  | 2016 |
United States |  | $ | (4,403 | ) |  | $ | (6,879 | ) |  | $ | (8,534 | )
International |  | 16,288 |  |  | 19,184 |  |  | 16,886 |
Income from continuing operations before provision/(benefit) for taxes on income(a), (b) |  | $ | 11,885 |  |  | $ | 12,305 |  |  | $ | 8,351 |
(a) | 2018 v. 2017––The decrease in the domestic loss was primarily due to lower interest expense paid to certain foreign subsidiaries, lower net losses on the retirement of debt, higher net gains on investments in equity securities and increased revenue related to Eliquis, partially offset by higher certain asset impairments and lower revenue for Viagra and the SIP portfolio. The decrease in international income was primarily related to lower interest income received primarily from intercompany borrowings from Pfizer Inc. and higher charges related to certain cost reduction initiatives, partially offset by increased revenue related to Ibrance and Eliquis.
(b) | 2017 v. 2016––The decrease in the domestic loss was primarily due to lower restructuring charges and certain acquisition-related costs, the non-recurrence of the 2016 impairment on the remeasurement of HIS net assets, lower certain asset impairments and lower certain legal matters, partially offset by higher net losses on early retirement of debt, and higher amortization of intangible assets. The increase in international income was primarily due to the non-recurrence of the 2016 impairment on the remeasurement of HIS net assets, lower restructuring charges and certain acquisition-related costs, and lower certain asset impairments.
The following table provides the components of Provision/(benefit) for taxes on income based on the location of the taxing authorities:
|  | Year Ended December 31,
(MILLIONS OF DOLLARS) |  | 2018 |  |  | 2017 |  |  | 2016 |
United States |  |  |  |  |  |
Current income taxes: |  |  |  |  |  |
Federal |  | $ | 668 |  |  | $ | 1,267 |  |  | $ | 342 |
State and local |  | 9 |  |  | 45 |  |  | (52 | )
Deferred income taxes: |  |  |  |  |  |
Federal |  | (1,663 | ) |  | (2,064 | ) |  | (419 | )
State and local |  | 16 |  |  | (304 | ) |  | (106 | )
Total U.S. tax provision |  | (970 | ) |  | (1,055 | ) |  | (235 | )
TCJA(a) |  |  |  |  |  |
Current income taxes |  | (3,035 | ) |  | 13,135 |  |  | — |
Deferred Income taxes |  | 2,439 |  |  | (23,795 | ) |  | — |
Total TCJA tax provision |  | (596 | ) |  | (10,660 | ) |  | — |
International |  |  |  |  |  |
Current income taxes |  | 2,831 |  |  | 2,709 |  |  | 1,532 |
Deferred income taxes |  | (558 | ) |  | (42 | ) |  | (175 | )
Total international tax provision |  | 2,273 |  |  | 2,667 |  |  | 1,358 |
Provision/(benefit) for taxes on income |  | $ | 706 |  |  | $ | (9,049 | ) |  | $ | 1,123 |
(a) | The 2018 current tax benefit and deferred tax expense primarily relate to the utilization of tax credit carryforwards against the repatriation tax liability associated with the enactment of the TCJA. See discussion below and Note 5C.
In the fourth quarter of 2017, we recorded an estimate of certain tax effects of the TCJA, including (i) the impact on deferred tax assets and liabilities from the reduction in the U.S. Federal corporate tax rate from 35% to 21%, (ii) the impact on valuation allowances and other state income tax considerations, (iii) the $15.2 billion repatriation tax liability on accumulated post-1986 foreign earnings for which we plan to elect, with the filing of our 2018 U.S. Federal Consolidated Income Tax Return, payment over eight years through 2026 that is reported in Other taxes payable in our consolidated balance sheet as of December 31, 2017 and (iv) deferred taxes on basis differences expected to give rise to future taxes on global intangible low-taxed income. In addition, we had provided deferred tax liabilities in the past on foreign earnings that were not indefinitely reinvested. As a result of the TCJA, in the fourth quarter of 2017, we reversed an estimate of the deferred taxes that are no longer expected to be needed due to the change to the territorial tax system. In 2018, we finalized our provisional accounting for the tax effects of the TCJA, based on our best estimates of available information and data, and have reported and disclosed the impacts within the applicable measurement period, in accordance with guidance issued by the SEC, and recorded a favorable adjustment of approximately $100 million to Provision/(benefit) for taxes on income. The amounts recorded may change in the future due to uncertain tax positions. With respect to the aforementioned repatriation tax liability, our revised estimate is approximately $15 billion. The first installment, due in April 2019, is reported in Income taxes payable, and the remaining liability is reported in Other taxes payable in our consolidated balance sheet as of December 31, 2018. We believe that there may be additional interpretations, clarifications and guidance from the U.S. Department of Treasury. Any change to our calculations resulting from such additional interpretations, clarifications and guidance would be reflected in the period of issuance. In addition, our obligations may vary as a result of changes in our uncertain tax positions and/or availability of attributes such as foreign tax and other credit carryforwards. The TCJA subjects a U.S. shareholder to current tax on global intangible low-taxed income earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income, states that we are permitted to make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as global intangible low-taxed income in future years or provide for the tax expense related to such income in the year the tax is incurred. We have elected to recognize deferred taxes for temporary differences expected to reverse as global intangible low-taxed income in future years. In 2017, we provided a provisional deferred tax liability of approximately $1.0 billion based on the evaluation of certain temporary differences inside each of our foreign subsidiaries that are expected to reverse as global intangible low-taxed income. In 2018, this estimate was finalized and we have provided for an additional deferred tax liability of approximately $200 million, resulting in a deferred tax liability of approximately $1.2 billion. In 2018, the Provision/(benefit) for taxes on income was impacted by the following:
• | estimated U.S. net tax benefits of approximately $600 million associated with the enactment of the TCJA (see discussion above), primarily reflecting:
◦ | approximately $500 million of tax benefits associated primarily with certain current year tax initiatives;
◦ | approximately $100 million of tax benefits associated with adjustments to our provisional accounting for the tax effects of the TCJA, reported and disclosed within the applicable measurement period, in accordance with guidance issued by the SEC, primarily consisting of:
◦ | $160 million of tax benefits related to the repatriation tax on deemed repatriated accumulated earnings of foreign subsidiaries; and
◦ | $140 million of tax benefits associated with the remeasurement of other U.S. deferred tax liabilities,
partially offset by:
◦ | $200 million of tax expense related to future taxes on global intangible low-taxed income;
• | tax benefits of approximately $700 million representing tax and interest resulting from the resolution of certain tax positions pertaining to prior years primarily with various foreign tax authorities, and the expiration of certain statutes of limitations; and
• | tax benefits of approximately $740 million related to certain asset impairments.
In 2017, the Provision/(benefit) for taxes on income was impacted by the following:
• | estimated U.S. net tax benefits of $10.7 billion associated with the enactment of the TCJA (see discussion above), primarily reflecting:
◦ | $22.8 billion tax benefit associated with the remeasurement of U.S. deferred tax liabilities on unremitted earnings of foreign subsidiaries (see Note 5C);
◦ | $1.6 billion tax benefit associated with the remeasurement of other U.S. deferred tax liabilities, primarily associated with intangibles (see Note 5C);
◦ | $12.9 billion tax expense related to the repatriation tax on deemed repatriated accumulated pre-2017 post-1986 earnings of foreign subsidiaries;
◦ | $1.0 billion tax expense related to future taxes on global intangible low-taxed income (see Note 5C); and
◦ | approximately $100 million tax benefit primarily associated with certain tax initiatives;
• | U.S. tax expense of approximately $1.3 billion related to the repatriation tax on deemed repatriated current year earnings of foreign subsidiaries;
• | tax benefit of approximately $370 million related to net losses on early retirement of debt;
• | tax benefits of approximately $150 million representing tax and interest resulting from the resolution of certain tax positions pertaining to prior years primarily with various foreign tax authorities, and the expiration of certain statutes of limitations; and
• | the non-deductibility of a $307 million fee payable to the federal government as a result of the U.S. Healthcare Legislation.
In 2016, the Provision/(benefit) for taxes on income was impacted by the following:
• | U.S. tax expense of approximately $1.1 billion as a result of providing U.S. deferred income taxes on certain funds earned outside the U.S. that will not be indefinitely reinvested overseas, virtually all of which were earned in 2016;
• | tax benefits of approximately $460 million, representing tax and interest, resulting from the resolution of certain tax positions pertaining to prior years, primarily with various foreign tax authorities, and from the expiration of certain statutes of limitations;
• | benefits related to the final resolution of an agreement in principle reached in February 2016 and finalized in April 2016 to resolve certain claims related to Protonix, which resulted in the receipt of information that raised our initial assessment in 2015 of the likelihood of prevailing on the technical merits of our tax position;
• | net tax benefits of $89 million, related to the adoption of a new accounting standard in the fourth quarter of 2016, as of January 1, 2016, requiring excess tax benefits or deficiencies of share-based compensation to be recognized as a component of the Provision/(benefit) for taxes on income (see Notes to Consolidated Financial Statements––Note 1B. Basis of Presentation and Significant Accounting Policies: Adoption of New Accounting Standards in Pfizer’s 2016 Financial Report);
• | the non-deductibility of a $312 million fee payable to the federal government as a result of the U.S. Healthcare Legislation; and
• | the permanent extension of the U.S. R&D tax credit, which was signed into law in December 2015.
In all years, federal, state and international net tax liabilities assumed or established as part of a business acquisition are not included in Provision/(benefit) for taxes on income (see Note 2A). B. Tax Rate Reconciliation
The reconciliation of the U.S. statutory income tax rate to our effective tax rate for Income from continuing operations follows:
|  | Year Ended December 31,
|  | 2018 |  |  | 2017 |  |  | 2016 |
U.S. statutory income tax rate |  | 21.0 | % |  | 35.0 | % |  | 35.0 | %
TCJA impact(a) |  | (5.0 | ) |  | (86.6 | ) |  | — |
Taxation of non-U.S. operations (b), (c), (d) |  | (6.1 | ) |  | (17.0 | ) |  | (13.8 | )
Tax settlements and resolution of certain tax positions(e) |  | (5.8 | ) |  | (1.2 | ) |  | (5.5 | )
U.S. Healthcare Legislation(e), (f) |  | (0.4 | ) |  | 0.9 |  |  | 1.3 |
U.S. R&D tax credit and manufacturing deduction(e) |  | (0.7 | ) |  | (0.7 | ) |  | (1.0 | )
Certain legal settlements and charges(e) |  | (0.1 | ) |  | 0.1 |  |  | (2.9 | )
All other, net(g) |  | 3.1 |  |  | (3.9 | ) |  | 0.3 |
Effective tax rate for income from continuing operations |  | 5.9 | % |  | (73.5 | )% |  | 13.4 | %
(a) | For a discussion about the enactment of the TCJA, see Note 5A.
(b) | For taxation of non-U.S. operations, this rate impact reflects the income tax rates and relative earnings in the locations where we do business outside the U.S., together with the cost of repatriation decisions, which, for 2017, includes the repatriation tax on deemed repatriated 2017 earnings of foreign subsidiaries discussed in Note 5A, changes in uncertain tax positions not included in the reconciling item called “Tax settlements and resolution of certain tax positions,” as well as changes in valuation allowances. Specifically: (i) the jurisdictional location of earnings is a significant component of our effective tax rate each year, and the rate impact of this component is influenced by the specific location of non-U.S. earnings and the level of such earnings as compared to our total earnings; (ii) the cost of repatriation decisions, and other U.S. tax implications of our foreign operations, is a significant component of our effective tax rate each year and generally offsets some of the reduction to our effective tax rate each year resulting from the jurisdictional location of earnings; and (iii) the impact of changes in uncertain tax positions not included in the reconciling item called “Tax settlements and resolution of certain tax positions” is a component of our effective tax rate each year that can result in either an increase or decrease to our effective tax rate. The jurisdictional mix of earnings, which includes the impact of the location of earnings as well as repatriation costs, can vary as a result of the repatriation decisions, as a result of operating fluctuations in the normal course of business and as a result of the extent and location of other income and expense items, such as restructuring charges, asset impairments and gains and losses on strategic business decisions. See also Note 5A for the components of pre-tax income and Provision/(benefit) for taxes on income, which is based on the location of the taxing authorities, and for information about settlements and other items impacting Provision/(benefit) for taxes on income.
(c) | In all periods presented, the reduction in our effective tax rate resulting from the jurisdictional location of earnings is largely due to lower tax rates in certain jurisdictions, as well as manufacturing and other incentives associated with our subsidiaries in Puerto Rico and Singapore. 2016 also includes incentives in Costa Rica and the Dominican Republic related to the Hospira infusion systems business, which was sold to ICU Medical in February 2017. We benefit from a Puerto Rican incentive grant that expires in 2029. Under the grant, we are partially exempt from income, property and municipal taxes. In Singapore, we benefit from incentive tax rates effective through 2031 on income from manufacturing and other operations.
(d) | The favorable rate impacts in 2018 and 2017 also reflect lower repatriation costs associated with the estimated income of our foreign subsidiaries. The favorable rate impact in 2016 also includes the non-recurrence of the non-deductibility of a foreign currency loss related to Venezuela.
(e) | For a discussion about tax settlements and resolution of certain tax positions, the impact of U.S. Healthcare Legislation, the U.S. R&D tax credit and manufacturing deduction and the impact of certain legal settlements and charges, see Note 5A.
(f) | The favorable rate impact in 2018 is a result of the updated 2017 invoice received from the federal government, which reflected a lower expense than what was previously estimated for invoiced periods, as well as certain tax initiatives.
(g) | All other, net in 2018 is primarily due to routine business operations and the non-recurrence of tax benefits associated with certain tax initiatives. 2017 primarily relates to tax benefits associated with certain tax initiatives in the normal course of business.
C. Deferred Taxes Deferred taxes arise as a result of basis differentials between financial statement accounting and tax amounts.
The components of our deferred tax assets and liabilities, shown before jurisdictional netting, follow:
|  | 2018 Deferred Tax* |  | 2017 Deferred Tax*
(MILLIONS OF DOLLARS) |  | Assets |  | (Liabilities) |  | Assets |  | (Liabilities)
Prepaid/deferred items |  | $ | 1,655 |  |  | $ | (325 | ) |  | $ | 1,837 |  |  | $ | (132 | )
Inventories |  | 280 |  |  | (10 | ) |  | 405 |  |  | (3 | )
Intangible assets(a) |  | 532 |  |  | (7,620 | ) |  | 685 |  |  | (10,808 | )
Property, plant and equipment |  | 160 |  |  | (1,011 | ) |  | 124 |  |  | (755 | )
Employee benefits |  | 2,292 |  |  | (134 | ) |  | 2,346 |  |  | (109 | )
Restructurings and other charges |  | 266 |  |  | — |  |  | 240 |  |  | (8 | )
Legal and product liability reserves |  | 415 |  |  | — |  |  | 480 |  |  | — |
Net operating loss/tax credit carryforwards(b), (c) |  | 2,512 |  |  | — |  |  | 4,502 |  |  | — |
Unremitted earnings |  | — |  |  | (83 | ) |  | — |  |  | (85 | )
State and local tax adjustments |  | 264 |  |  | — |  |  | 178 |  |  | — |
All other |  | 200 |  |  | (274 | ) |  | 492 |  |  | (424 | )
|  | 8,576 |  |  | (9,456 | ) |  | 11,289 |  |  | (12,325 | )
Valuation allowances |  | (2,068 | ) |  | — |  |  | (2,203 | ) |  | — |
Total deferred taxes |  | $ | 6,508 |  |  | $ | (9,456 | ) |  | $ | 9,086 |  |  | $ | (12,325 | )
Net deferred tax liability(d) |  |  |  | $ | (2,948 | ) |  |  |  | $ | (3,238 | )
* | For 2018 and 2017, the deferred tax assets and liabilities associated with global intangible low-taxed income are included in the relevant categories above. See Note 5A. 2018 excludes deferred tax assets and liabilities associated with fully dedicated consumer healthcare subsidiaries. For additional information, see Note 2C.
(a) | The decrease in 2018 is primarily the result of amortization of intangible assets and certain impairment charges.
(b) | The decrease in 2018 is primarily a result of the utilization of tax credit carryforwards against the repatriation tax liability associated with the enactment of the TCJA. See Note 5A.
(c) | The amounts in 2018 and 2017 are reduced for unrecognized tax benefits of $3.3 billion and $3.4 billion, respectively, where we have net operating loss carryforwards, similar tax losses, and/or tax credit carryforwards that are available, under the tax law of the applicable jurisdiction, to settle any additional income taxes that would result from the disallowance of a tax position.
(d) | In 2018, Noncurrent deferred tax assets and other noncurrent tax assets ($0.8 billion), and Noncurrent deferred tax liabilities ($3.7 billion). In 2017, Noncurrent deferred tax assets and other noncurrent tax assets ($0.7 billion), and Noncurrent deferred tax liabilities ($3.9 billion).
We have carryforwards, primarily related to net operating and capital losses and charitable contributions, which are available to reduce future U.S. federal and/or state, as well as international, income taxes payable with either an indefinite life or expiring at various times from 2018 to 2038. Certain of our U.S. net operating losses are subject to limitations under IRC Section 382. Valuation allowances are provided when we believe that our deferred tax assets are not recoverable based on an assessment of estimated future taxable income that incorporates ongoing, prudent and feasible tax planning strategies, that would be implemented, if necessary, to realize the deferred tax assets. As of December 31, 2018, we have not made a U.S. tax provision on approximately $31.0 billion of unremitted earnings of our international subsidiaries. As these earnings are intended to be indefinitely reinvested overseas, the determination of a hypothetical unrecognized deferred tax liability as of December 31, 2018 is not practicable. D. Tax Contingencies We are subject to income tax in many jurisdictions, and a certain degree of estimation is required in recording the assets and liabilities related to income taxes. All of our tax positions are subject to audit by the local taxing authorities in each tax jurisdiction. These tax audits can involve complex issues, interpretations and judgments and the resolution of matters may span multiple years, particularly if subject to negotiation or litigation. 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. For a description of our accounting policies associated with accounting for income tax contingencies, see Note 1P. For a description of the risks associated with estimates and assumptions, see Note 1C. Uncertain Tax Positions As tax law is complex and often subject to varied interpretations, it is uncertain whether some of our tax positions will be sustained upon audit. As of December 31, 2018 we had approximately $5.1 billion in net unrecognized tax benefits, excluding associated interest and as of December 31, 2017 we had approximately $5.4 billion in net unrecognized tax benefits, excluding associated interest.
• | Tax assets associated with uncertain tax positions primarily represent our estimate of the potential tax benefits in one tax jurisdiction that could result from the payment of income taxes in another tax jurisdiction. These potential benefits generally result from cooperative efforts among taxing authorities, as required by tax treaties to minimize double taxation, commonly referred to as the competent authority process. The recoverability of these assets, which we believe to be more likely than not, is dependent upon the actual payment of taxes in one tax jurisdiction and, in some cases, the successful petition for recovery in another tax jurisdiction. As of December 31, 2018 we had approximately $1.1 billion in assets associated with uncertain tax positions. These amounts were included in Noncurrent deferred tax assets and other noncurrent tax assets ($1.0 billion) and Noncurrent deferred tax liabilities ($128 million). As of December 31, 2017, we had approximately $1.2 billion in assets associated with uncertain tax positions. These amounts were included in Noncurrent deferred tax assets and other noncurrent tax assets ($1.0 billion) and Noncurrent deferred tax liabilities ($118 million).
• | Tax liabilities associated with uncertain tax positions represent unrecognized tax benefits, which arise when the estimated benefit recorded in our financial statements differs from the amounts taken or expected to be taken in a tax return because of the uncertainties described above. These unrecognized tax benefits relate primarily to issues common among multinational corporations. Substantially all of these unrecognized tax benefits, if recognized, would impact our effective income tax rate.
The reconciliation of the beginning and ending amounts of gross unrecognized tax benefits follows:
(MILLIONS OF DOLLARS) |  | 2018 |  |  | 2017 |  |  | 2016 |
Balance, beginning |  | $ | (6,558 | ) |  | $ | (5,826 | ) |  | $ | (5,919 | )
Acquisitions(a) |  | — |  |  | 10 |  |  | (83 | )
Increases based on tax positions taken during a prior period(b) |  | (192 | ) |  | (49 | ) |  | (11 | )
Decreases based on tax positions taken during a prior period(b), (c) |  | 561 |  |  | 28 |  |  | 409 |
Decreases based on settlements for a prior period(d) |  | 123 |  |  | 35 |  |  | 126 |
Increases based on tax positions taken during the current period(b) |  | (370 | ) |  | (753 | ) |  | (489 | )
Impact of foreign exchange |  | 56 |  |  | (121 | ) |  | (5 | )
Other, net(b), (e) |  | 121 |  |  | 118 |  |  | 146 |
Balance, ending(f) |  | $ | (6,259 | ) |  | $ | (6,558 | ) |  | $ | (5,826 | )
(a) | For 2017 and 2016, primarily related to the acquisitions of Medivation and Anacor. See also Note 2A.
(b) | Primarily included in Provision/(benefit) for taxes on income.
(c) | Primarily related to effectively settling certain tax positions primarily with foreign tax authorities. See also Note 5A.
(d) | Primarily related to cash payments and reductions of tax attributes.
(e) | Primarily related to decreases as a result of a lapse of applicable statutes of limitations.
(f) | In 2018, included in Income taxes payable ($11 million), Current tax assets ($1 million), Noncurrent deferred tax assets and other noncurrent tax assets ($47 million), Noncurrent deferred tax liabilities ($3.2 billion) and Other taxes payable ($3.0 billion). In 2017, included in Income taxes payable ($1 million), Noncurrent deferred tax assets and other noncurrent tax assets ($123 million), Noncurrent deferred tax liabilities ($3.3 billion) and Other taxes payable ($3.2 billion).
• | Interest related to our unrecognized tax benefits is recorded in accordance with the laws of each jurisdiction and is recorded primarily in Provision/(benefit) for taxes on income in our consolidated statements of income. In 2018, we recorded a net increase in interest of $103 million. In 2017, we recorded a net increase in interest of $208 million; and in 2016, we recorded a net increase in interest of $72 million. Gross accrued interest totaled $1.1 billion as of December 31, 2018 (reflecting a decrease of approximately $16 million as a result of cash payments) and gross accrued interest totaled $975 million as of December 31, 2017 (reflecting a decrease of approximately $4 million as a result of cash payments). In 2018, this amount was included in Income taxes payable ($6 million) and Other taxes payable ($1.1 billion). In 2017, this amount was included in Other taxes payable ($975 million). Accrued penalties are not significant. See also Note 5A.
Status of Tax Audits and Potential Impact on Accruals for Uncertain Tax Positions The U.S. is one of our major tax jurisdictions, and we are regularly audited by the IRS:
• | With respect to Pfizer, the IRS has issued a Revenue Agent’s Report (RAR) for tax years 2009-2010. We are not in agreement with the RAR and are currently appealing certain disputed issues. Tax years 2011-2015 are currently under audit. Tax years 2016-2018 are open, but not under audit. All other tax years are closed.
• | With respect to Hospira, the federal income tax audit of tax year 2014 through short-year 2015 was effectively settled in the second quarter of 2018. All other tax years are closed.
• | With respect to Anacor and Medivation, the open tax years are not considered material to Pfizer.
In addition to the open audit years in the U.S., we have open audit years in other major tax jurisdictions, such as Canada (2013-2018), Japan (2017-2018), Europe (2011-2018, primarily reflecting Ireland, the United Kingdom, France, Italy, Spain and Germany), Latin America (1998-2018, primarily reflecting Brazil) and Puerto Rico (2011-2018). 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 12 months, our gross unrecognized tax benefits, exclusive of interest, could decrease by as much as $75 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) |  | 2018 |  |  | 2017 |  |  | 2016 |
Foreign currency translation adjustments, net(a) |  | $ | 94 |  |  | $ | (215 | ) |  | $ | (15 | )
Unrealized holding gains/(losses) on derivative financial instruments, net |  | 21 |  |  | 72 |  |  | (75 | )
Reclassification adjustments for (gains)/losses included in net income |  | 27 |  |  | (224 | ) |  | 158 |
Reclassification adjustments of certain tax effects from AOCI to Retained earnings(b) |  | 1 |  |  | — |  |  | — |
|  | 50 |  |  | (152 | ) |  | 83 |
Unrealized holding gains/(losses) on available-for-sale securities, net |  | (23 | ) |  | 102 |  |  | 49 |
Reclassification adjustments for (gains)/losses included in net income |  | 16 |  |  | (60 | ) |  | (15 | )
Reclassification adjustments for tax on unrealized gains from AOCI to Retained earnings(c) |  | (45 | ) |  | — |  |  | — |
|  | (53 | ) |  | 42 |  |  | 34 |
Benefit plans: actuarial losses, net |  | (141 | ) |  | (59 | ) |  | (535 | )
Reclassification adjustments related to amortization |  | 55 |  |  | 192 |  |  | 186 |
Reclassification adjustments related to settlements, net |  | 33 |  |  | 42 |  |  | 45 |
Reclassification adjustments of certain tax effects from AOCI to Retained earnings(b) |  | 637 |  |  | — |  |  | — |
Other |  | 29 |  |  | (39 | ) |  | 36 |
|  | 612 |  |  | 137 |  |  | (269 | )
Benefit plans: prior service (costs)/credits and other, net |  | 2 |  |  | — |  |  | 67 |
Reclassification adjustments related to amortization |  | (39 | ) |  | (67 | ) |  | (64 | )
Reclassification adjustments related to curtailments, net |  | (4 | ) |  | (7 | ) |  | (10 | )
Reclassification adjustments of certain tax effects from AOCI to Retained earnings(b) |  | (144 | ) |  | — |  |  | — |
Other |  | — |  |  | — |  |  | (1 | )
|  | (185 | ) |  | (74 | ) |  | (7 | )
Tax provision/(benefit) on other comprehensive income/(loss) |  | $ | 518 |  |  | $ | (262 | ) |  | $ | (174 | )
(a) | Taxes are not provided for foreign currency translation adjustments relating to investments in international subsidiaries that will be held indefinitely.
(b) | For additional information on the adoption of a new accounting standard related to reclassification of certain tax effects from AOCI, see Note 1B.
(c) | For additional information on the adoption of a new accounting standard related to financial assets and liabilities, see Note 1B.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration