Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income before income tax provision and the income tax expense

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

	For the Years Ended December 31,
(In millions)	2021		2020		2019
Income before income taxes (benefit):
Domestic	$	448.3	$	3,290.0	$	4,725.3
Foreign	1,296.9		1,757.5		2,400.6
Total	$	1,745.2	$	5,047.5	$	7,125.9
Income tax expense (benefit):
Current:
Federal	$	319.1	$	647.0	$	947.4
State	23.1		41.2		59.1
Foreign	137.1		155.1		84.4
Total	479.3		843.3		1,090.9
Deferred:
Federal	$	(242.5)	$	(1,749.9)	$	1,143.9
State	(11.9)		(6.8)		(2.3)
Foreign	(172.4)		1,905.7		(1,074.5)
Total	(426.8)		149.0		67.1
Total income tax expense	$	52.5	$	992.3	$	1,158.0

Components of deferred tax assets and liabilities

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

	As of December 31,
(In millions)	2021		2020
Deferred tax assets:
Tax credits	$	121.0	$	113.4
Inventory, other reserves and accruals	199.4		165.9
Intangibles, net	1,477.5		1,546.0
Neurimmune's tax basis in ADUHELM	475.8		—
Net operating loss	1,973.0		2,080.3
Share-based compensation	31.7		23.3
Other	208.8		103.1
Valuation allowance	(1,961.3)		(1,753.9)
Total deferred tax assets	$	2,525.9	$	2,278.1
Deferred tax liabilities:
Purchased intangible assets	$	(256.6)	$	(396.2)
GILTI	(1,037.6)		(1,143.7)
Tax credits	(260.2)		(174.6)
Depreciation, amortization and other	(250.9)		(227.0)
Total deferred tax liabilities	$	(1,805.3)	$	(1,941.5)

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

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,
	2021		2020		2019
Statutory rate	21.0	%	21.0	%	21.0	%
State taxes	0.8		0.7		0.8
Taxes on foreign earnings	(10.5)		(3.3)		(4.5)
Tax credits	(3.8)		(1.2)		(1.1)
Purchased intangible assets	(1.6)		0.7		0.4
Divestiture of Denmark manufacturing operations	—		(0.4)		1.0
Internal reorganization of certain intellectual property rights	—		—		(2.1)
TECFIDERA impairment	—		1.8		—
GILTI	1.3		1.3		1.5
Swiss tax reform	—		—		(0.8)
Neurimmune tax impacts	(5.3)		(0.1)		—
Other	1.1		(0.8)		0.1
Effective tax rate	3.0	%	19.7	%	16.3	%

Reconciliation of beginning and ending amount of unrecognized tax benefits

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

(In millions)	2021		2020		2019
Beginning balance	$	75.7	$	129.9	$	114.2
Additions based on tax positions related to the current period	4.2		1.5		5.3
Additions for tax positions of prior periods	509.9		51.7		17.2
Reductions for tax positions of prior periods	(18.8)		(63.6)		(10.3)
Statute expirations	(3.2)		(7.9)		(0.1)
Settlement refund (payment)	(4.4)		(35.9)		3.6
Ending balance	$	563.4	$	75.7	$	129.9