Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

Income before income tax provision and the income tax expense

Income before income tax (benefit) expense and the income tax (benefit) expense consist of the following:


	For the Years Ended December 31,
(In millions)	2025		2024		2023
Income before income tax (benefit) expense:
Domestic	$	1,225.2	$	853.4	$	192.4
Foreign	331.3		1,052.6		1,104.4
Total income before income tax (benefit) expense	$	1,556.5	$	1,906.0	$	1,296.8
Income tax (benefit) expense:
Current:
Federal	$	10.1	$	448.9	$	377.6
State	47.3		50.5		15.1
Foreign	(155.4)		(67.5)		48.4
Total current	(98.0)		431.9		441.1
Deferred:
Federal	346.1		(154.5)		(587.4)
State	(25.1)		(17.3)		(12.7)
Foreign	40.6		13.7		294.3
Total deferred	361.6		(158.1)		(305.8)
Total income tax (benefit) expense	$	263.6	$	273.8	$	135.3

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)	2025		2024
Deferred tax assets:
Tax credits	$	286.1	$	294.0
Inventory, other reserves and accruals	246.9		219.2
Intangibles, net	886.5		989.6

Capitalized research and development	457.2		733.9
Net operating loss	1,082.8		1,357.2
Share-based compensation	36.1		34.4
Other	141.7		318.4
Valuation allowance	(832.2)		(1,013.7)
Total deferred tax assets	$	2,305.1	$	2,933.0
Deferred tax liabilities:
Purchased inventory valuation step-up and intangible assets	$	(1,456.1)	$	(1,529.6)

GILTI	(891.3)		(1,054.8)

Depreciation, amortization and other	(172.8)		(214.9)
Total deferred tax liabilities	$	(2,520.2)	$	(2,799.3)

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

The following table is a reconciliation of the U.S. federal statutory rate of 21.0% to our effective tax rate for the year ended December 31, 2025, in accordance with the guidance in ASU 2023-09.


	For the Year Ended December 31, 2025
(In millions, except percentages)	Amount		Rate
Statutory rate	$	326.9	21.0	%
State and local income taxes, net of federal income tax effect(1)	8.5		0.5
Foreign tax effects:
Italy
Withholding tax	(20.4)		(1.3)
Other	1.8		0.1
Switzerland
Statutory tax rate difference	(22.1)		(1.4)
Cantonal tax impact	11.9		0.8
Pillar Two taxes	(17.2)		(1.1)
Changes in valuation allowances	(190.2)		(12.2)
Taxable intercompany dividend	22.8		1.5
Other	(6.1)		(0.4)
U.K.
Litigation matter	21.0		1.3
Other	0.7		—
Other foreign jurisdictions	9.5		0.6
Effects of changes in tax laws or rates	(11.5)		(0.7)
Effects of cross-border tax laws
GILTI, net of foreign tax credits	88.0		5.7
Other, net of foreign tax credits	18.5		1.2
Tax Credits
Orphan drug credits	(31.3)		(2.0)
Other credits	(4.5)		(0.3)
Nontaxable or nondeductible items
Equity compensation	18.9		1.2
Other permanent differences	16.9		1.1
Changes in unrecognized tax benefits	9.6		0.6
Other adjustments	11.9		0.7
Income tax expense and effective tax rate	$	263.6	16.9	%

(1) State taxes in Tennessee, Massachusetts, Kentucky and North Carolina made up the majority (greater than 50.0%) of the tax effect in this category.

The following table is a reconciliation of the U.S. federal statutory tax rate of 21.0% to our effective tax rate for the years ended December 31, 2024 and 2023, in accordance with the guidance prior to the adoption of ASU 2023-09:


	For the Years Ended December 31,
	2024		2023
Statutory rate	21.0	%	21.0	%
State taxes	1.8		1.1
Taxes on foreign earnings, including valuation allowances	(7.6)		(5.9)
Tax credits	(2.2)		(7.3)
Purchased inventory valuation step-up and intangible assets	2.1		0.7

GILTI	(1.6)		(0.6)


Internal reorganization	—		(0.1)
Other, including permanent items	0.9		1.5
Effective tax rate	14.4	%	10.4	%

Supplemental cash flow information

The following table presents income taxes paid (net of refunds received) for the year ended December 31, 2025.


(In millions)	For the Year Ended December 31, 2025
Federal	$	721.0
State	48.4
Foreign	94.6
Total	$	864.0

Supplemental disclosure of cash flow information is summarized as follows:


	For the Years Ended December 31,
(In millions)	2025		2024		2023
Cash paid during the year for:
Interest	$	264.1	$	245.4	$	252.2
Income taxes	864.0		355.1		740.7

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:


	For the Years Ended December 31,
(In millions)	2025		2024		2023
Beginning balance	$	186.3	$	173.4	$	606.4
Additions based on tax positions related to the current period	3.6		1.2		5.2
Additions for tax positions of prior periods	12.4		31.5		60.2
Reductions for tax positions of prior periods	(3.9)		(3.1)		(485.0)
Statute expirations	(6.6)		(12.7)		(2.1)
Settlement refund (payment)	(11.8)		(4.0)		(11.3)
Ending balance	$	180.0	$	186.3	$	173.4