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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Summary of Income Before Income Taxes

Income before income taxes consists of the following:

						Year Ended December 31,
(in millions)						2024						2023						2022
Domestic						$	(876)					$	5,467					$	4,439
Foreign						1,566						1,392						1,375
Income before income taxes						$	690					$	6,859					$	5,814

Summary of Income Tax Expense

Income tax expense consists of the following:

						Year Ended December 31,
(in millions)						2024						2023						2022
Federal:
Current						$	1,495					$	1,781					$	2,539
Deferred						(1,562)						(1,126)						(1,502)
						(67)						655						1,037
State:
Current						39						80						32
Deferred						(386)						170						(154)
						(347)						250						(122)
Foreign:
Current						519						381						232
Deferred						106						(39)						101
						625						342						333
Income tax expense						$	211					$	1,247					$	1,248

Summary 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 income taxes and our effective tax rate is summarized as follows(1):

						Year Ended December 31,
						2024						2023						2022
Federal statutory rate						21.0		%				21.0		%				21.0		%
State taxes, net of federal benefit						(43.6)		%				2.3		%				(2.0)		%
Foreign earnings at different rates						10.9		%				(0.2)		%				(0.6)		%
Research and other credits						(31.6)		%				(4.3)		%				(2.7)		%
US tax on foreign earnings						12.1		%				1.0		%				2.7		%
Foreign-derived intangible income deduction						(19.3)		%				(2.1)		%				(3.8)		%
Tax examinations						(33.7)		%				(4.7)		%				(0.2)		%
Acquired IPR&D & related charges						117.3		%				1.3		%				1.4		%
Changes in valuation allowance						15.6		%				0.9		%				1.2		%
Non-taxable unrealized loss on investment						6.8		%				0.2		%				0.7		%
Legal entity restructuring						(52.6)		%				—		%				—		%
Other						27.6		%				2.8		%				3.8		%
Effective tax rate						30.5		%				18.2		%				21.5		%

_______________________________

(1)     Recurring items in this rate reconciliation table for 2024 are significantly impacted by the lower Income before income taxes for that year.

Summary of Deferred Tax Assets and Liabilities

Significant components of our deferred tax4 assets and liabilities are as follows:

						December 31,
(in millions)						2024						2023
Deferred tax assets:
Net operating loss carryforwards						$	288					$	417
Stock-based compensation						84						94
Reserves and accruals not currently deductible						685						644
Excess of tax basis over book basis of intangible assets						910						1,041
Upfront and milestone payments						1,312						1,271
Research and other credit carryforwards						428						283
Equity investments						237						221
Liability related to future royalties						287						296
Capitalized R&D expenditures						2,173						1,623
Capital losses						590						17
Other, net						213						303
Total deferred tax assets before valuation allowance						7,207						6,210
Valuation allowance						(1,217)						(663)
Total deferred tax assets						5,990						5,547
Deferred tax liabilities:
Property, plant and equipment						(276)						(274)
Excess of book basis over tax basis of intangible assets						(3,836)						(5,481)
Other						(224)						(184)
Total deferred tax liabilities						(4,336)						(5,939)
Net deferred tax assets (liabilities)						$	1,654					$	(392)

Summary of Unrecognized Tax Benefits Roll Forward

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

						Year Ended December 31,
(in millions)						2024						2023						2022
Beginning balance						$	1,962					$	1,959					$	1,713
Tax positions related to current year:
Additions						743						265						129
Reductions						—						—						—
Tax positions related to prior years:
Additions						190						109						225
Reductions						(298)						(315)						(31)
Settlements						(270)						(42)						(10)
Lapse of statute of limitations						(2)						(13)						(68)
Ending balance						$	2,325					$	1,962					$	1,959

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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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