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INCOME TAXES | 9 Months Ended
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Sep. 30, 2024
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The following table summarizes our Income tax (benefit) expense:
|  | Three Months Ended |  | Nine Months Ended
|  | September 30, |  | September 30,
(in millions, except percentages) |  | 2024 |  | 2023 |  | 2024 |  | 2023
Income (loss) before income taxes |  | $ | 956 |  |  | $ | 2,318 |  |  | $ | (1,477) |  |  | $ | 5,206 |
Income tax (benefit) expense |  | $ | (297) |  |  | $ | 146 |  |  | $ | (174) |  |  | $ | 1,010 |
Effective tax rate |  | (31.1) | % |  | 6.3 | % |  | 11.8 | % |  | 19.4 | %
Our effective income tax rate of (31.1)% for the three months ended September 30, 2024 differed from the U.S. federal statutory rate of 21% primarily due to a non-recurring tax benefit associated with a legal entity restructuring and a decrease in state deferred tax liabilities associated with the $1.8 billion NSCLC IPR&D intangible asset impairment charge. Our effective income tax rate of 11.8% for the nine months ended September 30, 2024 differed from the U.S. federal statutory rate of 21% primarily due to $3.9 billion of non-deductible acquired IPR&D expense recorded in connection with our acquisition of CymaBay, partially offset by a non-recurring tax benefit associated with a legal entity restructuring, a decrease in state deferred tax liabilities associated with the $4.2 billion NSCLC IPR&D intangible asset impairment charge, and settlements with tax authorities. Our effective income tax rate of 6.3% for the three months ended September 30, 2023 differed from the U.S. federal statutory rate of 21% primarily due to a decrease in unrecognized tax benefits as a result of reaching agreement with a tax authority on certain tax positions. Our effective income tax rate of 19.4% for the nine months ended September 30, 2023 differed from the U.S. federal statutory rate of 21% primarily due to the above-mentioned reason for the three months ended September 30, 2023, partially offset by remeasurement of certain deferred tax liabilities related to acquired intangible assets and non-deductible acquired IPR&D expenses recorded associated with our acquisitions of XinThera and Tmunity. Our income tax returns are subject to audit by federal, state and foreign tax authorities. We are currently under examination by the Internal Revenue Service for our 2019 to 2021 tax years. There are differing interpretations of tax laws and regulations, and as a result, significant disputes may arise with these tax authorities involving issues on the timing and amount of deductions and allocations of income among various tax jurisdictions. We periodically evaluate our exposures associated with our tax filing positions. During the nine months ended September 30, 2024, our unrecognized tax benefits balance as of December 31, 2023 increased by approximately $200 million. This net increase was primarily due to an increase of approximately $700 million for current year unrecognized tax benefits, partially offset by a decrease of approximately $500 million for reductions to prior year tax positions and settlements.

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