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INCOME TAXES
 9 Months Ended
Sep. 30, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The following table summarizes our Income tax expense (benefit):
Three Months EndedNine Months Ended
September 30,September 30,
(in millions, except percentages)2025202420252024
Income (loss) before income taxes$3,641 $956 $7,718 $(1,477)
Income tax expense (benefit)$589 $(297)$1,391 $(174)
Effective tax rate16.2 %(31.1)%18.0 %11.8 %
Our effective income tax rate of 16.2% for the three months ended September 30, 2025 differed from the U.S. federal statutory rate of 21% primarily due to a settlement with a tax authority, favorable changes in the fair value of our equity securities that are non-taxable for income tax purposes and a remeasurement of certain deferred tax liabilities related to acquired intangible assets.
Our effective income tax rate of 18.0% for the nine months ended September 30, 2025 differed from the U.S. federal statutory rate of 21% primarily due to tax benefits from stock-based compensation, a settlement with a tax authority and remeasurement of certain deferred tax liabilities related to acquired intangible assets.
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 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 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.
In July 2025, the U.S. enacted tax reform legislation through the One Big Beautiful Bill (“OBBB”) Act. Included in this legislation are provisions that restored immediate expensing of domestic R&D expenditures and certain capital expenditures and modified the U.S. taxation of profits derived from foreign operations. The OBBB Act had no material impact to our income tax expense for the three and nine months ended September 30, 2025.
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.
In October 2025, we reached a settlement with a tax authority related to a prior year legal entity restructuring. As a result, we anticipate recognizing approximately $450 million of income tax benefit and a corresponding $530 million reduction in our unrecognized tax benefits in the quarter ending December 31, 2025.