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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Schedule of income (loss) before income taxes

Income (loss) before income taxes consists of the following:

						Year Ended December 31,
(in millions)						2020						2019						2018
Domestic						$	2,505					$	4,112					$	7,074
Foreign						(836)						1,048						725
Income before income taxes						$	1,669					$	5,160					$	7,799

Schedule of income tax expense (benefit)

The income tax expense (benefit) consists of the following:

						Year Ended December 31,
(in millions)						2020						2019						2018
Federal:
Current						$	1,450					$	1,646					$	1,716
Deferred						(164)						(843)						324
						1,286						803						2,040
State:
Current						198						135						162
Deferred						(97)						(42)						(17)
						101						93						145
Foreign:
Current						155						124						175
Deferred						38						(1,224)						(21)
						193						(1,100)						154
Income tax expense (benefit)						$	1,580					$	(204)					$	2,339

Schedule of difference between provision for income taxes and federal statutory income tax rate to income before provision for income taxes

The reconciliation between the federal statutory tax rate applied to income before taxes and our effective tax rate is summarized as follows:

						Year Ended December 31,
						2020						2019						2018
Federal statutory rate						21.0		%				21.0		%				21.0		%
State taxes, net of federal benefit						4.2		%				0.4		%				0.6		%
Foreign earnings at different rates						(10.0)		%				2.5		%				(0.9)		%
Research and other credits						(6.9)		%				(1.9)		%				(1.1)		%
US tax on foreign earnings						7.2		%				4.3		%				2.1		%
Deferred tax - intra-entity transfer of intangible assets						0.6		%				(24.0)		%				7.5		%
Settlement of tax examinations						(10.2)		%				(2.4)		%				(1.9)		%
Acquired IPR&D and related charges						56.2		%				—		%				—		%
Changes in valuation allowance						6.7		%				—		%				—		%
Non-taxable unrealized gain / loss on investment						23.0		%				(5.0)		%				—		%
Other						2.9		%				1.1		%				2.7		%
Effective tax rate						94.7		%				(4.0)		%				30.0		%

Schedule of deferred tax assets and liabilities

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

						December 31,
(in millions)						2020						2019
Deferred tax assets:
Net operating loss carryforwards						$	587					$	184
Stock-based compensation						113						113
Reserves and accruals not currently deductible						444						423
Excess of tax basis over book basis of intangible assets						1,177						1,232
Upfront and milestone payments						1,144						988
Research and other credit carryforwards						219						247
Equity investments						116						—
Liability related to future royalties						247						—
Other, net						311						168
Total deferred tax assets before valuation allowance						4,358						3,355
Valuation allowance						(398)						(217)
Total deferred tax assets						3,960						3,138
Deferred tax liabilities:
Property, plant and equipment						(202)						(88)
Excess of book basis over tax basis of intangible assets						(6,168)						(1,401)
Other						(202)						(93)
Total deferred tax liabilities						(6,572)						(1,582)
Net deferred tax assets (liabilities)						$	(2,612)					$	1,556

Schedule of unrecognized tax benefits roll forward

The following is a rollforward of our total gross unrecognized tax benefits:

						Year Ended December 31,
(in millions)						2020						2019						2018
Balance, beginning of period						$	2,031					$	1,595					$	2,181
Tax positions related to current year:
Additions						121						138						64
Reductions						—						—						—
Tax positions related to prior years:
Additions						398						405						125
Reductions						(481)						—						—
Settlements						(454)						(104)						(774)
Lapse of statute of limitations						(1)						(3)						(1)
Balance, end of period						$	1,614					$	2,031					$	1,595

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure of income before income tax between domestic and foreign jurisdictions.

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Tabular disclosure of the change in unrecognized tax benefits.

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