Income Taxes

6 Months Ended

Jun. 30, 2011

Income Taxes

Income Taxes

4. INCOME TAXES

For the three and six months ended June 30, 2011, the effective tax rate was 29.6% and 29.2%, respectively, compared with 24.1% and 28.0% for the same periods in 2010. The increase in the effective tax rate was primarily attributable to a change in the geographic earnings mix along with the standard quarterly accruals necessary to true up the tax liability to the latest full year projected tax rate.

The Company's gross reserve for uncertain tax positions related to foreign and domestic matters, including penalties and interest, as of June 30, 2011 and December 31, 2010, was $22.6 million and $17.1 million, respectively. Pursuant to the Amended and Restated Tax Matters Agreement dated December 18, 2009, Bristol-Myers Squibb Company (BMS) maintains responsibility for all uncertain tax positions which may exist in the pre-initial public offering period or which may exist as a result of the initial public offering transaction. The Company has recorded a receivable from BMS for uncertain tax positions, including penalties and interest, of $16.3 million as of June 30, 2011. The Company believes that it has adequately provided for all uncertain tax positions. It is reasonably possible that new issues may be raised by tax authorities and that these issues may require increases in the balance of unrecognized tax benefits.