Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income before income tax provision and the income tax expense

Income before income tax provision and the income tax expense consist of the following:

	For the Years Ended December 31,
(In millions)	2019			2018			2017
Income before income taxes (benefit):
Domestic	$	4,725.3		$	3,877.0		$	3,540.4
Foreign	2,400.6			2,022.6			1,588.4
Total	$	7,125.9		$	5,899.6		$	5,128.8
Income tax expense (benefit):
Current:
Federal	$	947.4		$	1,131.8		$	2,201.4
State	59.1			45.5			57.0
Foreign	84.4			140.0			108.6
Total	1,090.9			1,317.3			2,367.0
Deferred:
Federal	$	1,143.9		$	(62.0	)	$	241.0
State	(2.3		)	(7.4		)	9.9
Foreign	(1,074.5		)	177.7			(159.2		)
Total	67.1			108.3			91.7
Total income tax expense	$	1,158.0		$	1,425.6		$	2,458.7

Components of deferred tax assets and liabilities

s

Significant components of our deferred tax assets and liabilities are summarized as follows:

	As of December 31,
(In millions)	2019			2018
Deferred tax assets:
Tax credits	$	106.6		$	102.8
Inventory, other reserves and accruals	162.0			163.9
Intangibles, net	3,380.0			2,298.6
Net operating loss	130.4			213.1
Share-based compensation	23.8			25.8
Other	103.7			38.9
Valuation allowance	(1.1		)	(20.0		)
Total deferred tax assets	$	3,905.4		$	2,823.1
Deferred tax liabilities:
Purchased intangible assets	$	(350.3	)	$	(232.8	)
GILTI	(1,381.6		)	(544.6		)
Tax credits	(1,617.2		)	(1,425.7		)
Depreciation, amortization and other	(135.0		)	(102.3		)
Total deferred tax liabilities	$	(3,484.1	)	$	(2,305.4	)

Reconciliation between the U.S. federal statutory tax rate and effective tax rate

e

A reconciliation between the U.S. federal statutory tax rate and our effective tax rate is summarized as follows:

	For the Years Ended December 31,
	2019		2018		2017
Statutory rate	21.0	%	21.0	%	35.0	%
State taxes	0.8		0.6		0.8
Taxes on foreign earnings	(4.5	)	(1.9	)	(11.1	)
Credits and net operating loss utilization	(1.1	)	(0.9	)	(0.8	)
Purchased intangible assets	0.4		1.2		1.4
Divestiture of Denmark manufacturing operations	1.0		—		—
Internal reorganization of certain intellectual property rights	(2.1	)	—		—
GILTI	1.5		1.6		—
Other permanent items	0.2		0.3		0.7
U.S. tax reform	—		2.1		22.9
Swiss tax reform	(0.8	)	—		—
Manufacturing deduction	—		—		(1.9	)
Impairment of ZINBRYTA related tax assets	—		—		0.9
Other	(0.1	)	0.2		—
Effective tax rate	16.3	%	24.2	%	47.9	%

Reconciliation of beginning and ending amount of unrecognized tax benefits

s

A reconciliation of the beginning and ending amount of our unrecognized tax benefits is summarized as follows:

	For the Years Ended December 31,
(In millions)	2019			2018			2017
Balance at January 1,	$	114.2		$	66.8		$	32.4
Additions based on tax positions related to the current period	5.3			0.5			5.7
Additions for tax positions of prior periods	17.2			58.7			7.3
Reductions for tax positions of prior periods	(10.3		)	(13.6		)	(21.8		)
Statute expirations	(0.1		)	(2.9		)	(1.4		)
Settlement refund (payment)	3.6			4.7			44.6
Balance at December 31,	$	129.9		$	114.2		$	66.8