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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Income before provision for income taxes for the years ended December 31, 2022, 2021, and 2020, consisted of the following (in millions):
| Years Ended December 31,
| 2022 |  | 2021 |  | 2020
U.S. | $ | 956.7 |  |  | $ | 1,298.7 |  |  | $ | 926.8 |
Foreign | 650.1 |  |  | 591.6 |  |  | 280.2 |
Total income before provision for income taxes | $ | 1,606.8 |  |  | $ | 1,890.3 |  |  | $ | 1,207.0 |
The provision for income taxes for the years ended December 31, 2022, 2021, and 2020, consisted of the following (in millions):
| Years Ended December 31,
| 2022 |  | 2021 |  | 2020
Current |  |  |  |  |
Federal | $ | 350.4 |  |  | $ | 158.8 |  |  | $ | 34.2 |
State | 49.2 |  |  | 17.3 |  |  | 21.5 |
Foreign | 48.1 |  |  | 50.1 |  |  | 26.9 |
| 447.7 |  |  | 226.2 |  |  | 82.6 |
Deferred |  |  |  |  |
Federal | (188.8) |  |  | (21.4) |  |  | 23.8 |
State | (16.4) |  |  | 0.5 |  |  | 1.6 |
Foreign | 19.9 |  |  | (43.1) |  |  | 32.2 |
| (185.3) |  |  | (64.0) |  |  | 57.6 |
Total income tax expense | $ | 262.4 |  |  | $ | 162.2 |  |  | $ | 140.2 |
The provision for income taxes for the year ended December 31, 2022, reflected the impact of a change in U.S. tax law effective January 1, 2022, which requires the capitalization and amortization of research and development expenditures incurred after December 31, 2021. On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was enacted in the United States. The IRA introduces a 15% alternative minimum tax based on the financial statement income of certain large corporations, effective for tax years beginning after December 31, 2022. The IRA also includes a 1% excise tax on the net fair market value of stock repurchases made after December 31, 2022. The Company considered the applicable tax law changes, and there is no impact to the Company’s tax provision for the twelve months ended December 31, 2022. The Company will continue to evaluate the impact of these tax law changes on future periods. The Company’s 2021 income tax expense included a one-time benefit of $66.4 million from re-measurement of its Swiss deferred tax assets resulting from the extension of the economic useful life of certain intangible assets. Income tax expense differs from amounts computed by applying the statutory federal income rate of 21% for the years ended December 31, 2022, 2021, and 2020, as a result of the following (in millions):
| Years Ended December 31,
| 2022 |  | 2021 |  | 2020
Federal tax at statutory rate | $ | 337.4 |  |  | $ | 397.0 |  |  | $ | 253.5 |
Increase (reduction) in tax resulting from: |  |  |  |  |
State taxes, net of federal benefits | 34.9 |  |  | 33.1 |  |  | 23.1 |
Foreign rate differential | (64.2) |  |  | (54.3) |  |  | (19.3) |
U.S. tax on foreign earnings | 75.4 |  |  | 40.1 |  |  | 29.3 |
Research and development credit | (41.7) |  |  | (30.7) |  |  | (37.1) |
Share-based compensation not benefited | 24.1 |  |  | 17.8 |  |  | 14.3 |
Unrecognized tax benefit related to share-based compensation | 3.3 |  |  | 13.6 |  |  | 39.3 |
Reversal of unrecognized tax benefits | (11.1) |  |  | (3.0) |  |  | (4.0) |
Excess tax benefits related to share-based compensation | (98.7) |  |  | (185.8) |  |  | (166.2) |
Deferred tax re-measurement | — |  |  | (66.4) |  |  | — |
Other | 3.0 |  |  | 0.8 |  |  | 7.3 |
Total income tax expense | $ | 262.4 |  |  | $ | 162.2 |  |  | $ | 140.2 |
Deferred income taxes reflect tax carryforwards and the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows (in millions):
| December 31,
| 2022 |  | 2021
Deferred tax assets: |  |  |
Intangible assets | $ | 342.8 |  |  | $ | 369.1 |
Capitalized research and development expenditures | 172.5 |  |  | 4.8 |
Research and development credits | 156.7 |  |  | 98.5 |
Share-based compensation expense | 121.3 |  |  | 110.9 |
Expenses deducted in later years for tax purposes | 57.5 |  |  | 38.4 |
Lease liabilities | 16.6 |  |  | 15.2 |
Net operating losses | 6.4 |  |  | 9.7 |
Net unrealized losses on available-for-sale securities and other | 45.5 |  |  | 5.3 |
Gross deferred tax assets | 919.3 |  |  | 651.9 |
Valuation allowance | (168.6) |  |  | (104.6) |
Deferred tax assets | 750.7 |  |  | 547.3 |
Deferred tax liabilities: |  |  |
Property, plant, and equipment | (64.1) |  |  | (79.4) |
Right-of-use assets | (11.8) |  |  | (12.3) |
Intangible assets | (9.3) |  |  | (9.7) |
Other | (1.0) |  |  | (5.1) |
Deferred tax liabilities | (86.2) |  |  | (106.5) |
Net deferred tax assets | $ | 664.5 |  |  | $ | 440.8 |
As of December 31, 2022, the Company had $27.4 million of U.S. and foreign federal net operating loss carryforwards, certain of which will expire starting in 2028 if not utilized. Utilization of these net operating loss carryforwards may be subject to certain limitations. The Company does not expect the limitations to result in any permanent loss of these tax benefits. As of December 31, 2022, the Company had $221.9 million in California research and development credit carryforwards, which do not expire. As of December 31, 2022, and 2021, the Company had valuation allowances of $168.6 million and $104.6 million, respectively, primarily related to California deferred tax assets, for which the Company does not believe a tax benefit is more likely than not to be realized. The Company intends to repatriate earnings from its Swiss subsidiary and joint venture in Hong Kong, as needed, and the U.S. and foreign tax implications of such repatriations are not expected to be significant. The Company will continue to indefinitely reinvest earnings from the rest of its foreign subsidiaries, which are not significant. A reconciliation of the beginning and ending amounts of gross unrecognized income tax benefits for the years ended December 31, 2022, 2021, and 2020, are as follows (in millions):
| Years Ended December 31,
| 2022 |  | 2021 |  | 2020
Beginning balance | $ | 222.5 |  |  | $ | 176.3 |  |  | $ | 96.7 |
Increases related to tax positions taken during the current year | 49.5 |  |  | 40.6 |  |  | 40.1 |
Increases related to tax positions taken during a prior year | 4.9 |  |  | 11.2 |  |  | 46.1 |
Decreases related to tax positions taken during a prior year | (16.5) |  |  | (1.3) |  |  | — |
Decreases related to settlements with tax authorities | (1.2) |  |  | (0.2) |  |  | (0.5) |
Decreases related to expiration of statute of limitations | (6.6) |  |  | (4.1) |  |  | (6.1) |
Ending balance | $ | 252.6 |  |  | $ | 222.5 |  |  | $ | 176.3 |
As of December 31, 2022, 2021, and 2020, gross interest related to unrecognized tax benefits accrued was $21.0 million, $14.9 million, and $11.0 million, respectively. The Company’s net unrecognized tax benefits and related interest are presented in other long-term liabilities and long-term deferred tax assets on the Consolidated Balance Sheets. Total gross unrecognized tax benefits as of December 31, 2022, were $252.6 million, of which $187.4 million, if recognized, would have an impact on the Company’s effective tax rate. The Company recorded an increase in the income tax provision of $39.3 million during the year ended December 31, 2020, as a result of a Ninth Circuit Court of Appeals opinion involving an independent third party related to charging foreign subsidiaries for share-based compensation. An additional charge of $13.6 million related to this matter was recorded to income tax expense in 2021, after additional IRS guidance was issued in July 2021. The Company will continue to monitor future IRS actions or other developments regarding this matter and will assess the impact of any such developments on its income tax provision in the quarter that they occur. The Company files federal, state, and foreign income tax returns in many U.S. and OUS jurisdictions. Years before 2016 are closed for the significant jurisdictions. Certain of the Company’s unrecognized tax benefits could change due to activities of various tax authorities, including potential assessment of additional tax, possible settlement of audits, or through normal expiration of various statutes of limitations, which could affect the Company’s effective tax rate in the period in which they change. Due to the uncertainty related to the timing and potential outcome of audits, the Company cannot estimate the range of reasonably possible changes in unrecognized tax benefits that may occur in the next 12 months. The Company is subject to the examination of its income tax returns by the Internal Revenue Service and other tax authorities. The outcome of these audits cannot be predicted with certainty. The Company’s management regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of the Company’s provision for income taxes. If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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