Zoetis sees being subject to repatriation tax
In a regulatory filing, Zoetis noted that the Tax Act was enacted which, among other changes, reduces the federal corporate tax rate from 35% to 21% effective January 1, 2018. As a result of a preliminary review of the Tax Act, Zoetis has concluded that the company will be subject to a repatriation tax and will be required to remeasure deferred tax assets and liabilities as of the date of enactment due to the reduction in the federal corporate tax rate. The company is currently in the process of evaluating the impact of the Tax Act and based on available information at the time of this filing, has preliminarily estimated that there will be a net reduction to the company's U.S. generally accepted accounting principles net income in the fourth quarter of 2017 which is currently not expected to exceed $350M. This amount represents the undiscounted present value and is primarily due to the repatriation tax, partially offset by the remeasurement of deferred tax assets and liabilities at the lower enacted federal corporate tax rate. This charge will not impact the company's 2017 adjusted net income. Additionally, for full-year 2018, the company currently expects its non-GAAP adjusted effective tax rate to be in the range of 21% to 22%. "However, the company's actual adjusted effective tax rate may differ materially from management's current expectations...The ultimate impact of the Tax Act may differ from these preliminary estimates, possibly materially, as a result of, among other things, changes in assumptions the Company has made, actions the Company may take as a result of the Tax Act, additional guidance that may be forthcoming on its application, as well as final interpretations of the Tax Act by the Company," Zoetis added.