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Income Taxes | 6 Months Ended
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Jun. 30, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes A reconciliation between the U.S. federal statutory tax rate and our effective tax rate is summarized as follows:
| For the Three Months Ended June 30, |  | For the Six Months Ended June 30,
| 2016 |  | 2015 |  | 2016 |  | 2015
Statutory rate | 35.0 | % |  | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State taxes | 1.0 |  |  | 0.4 |  |  | 1.0 |  |  | — |
Taxes on foreign earnings | (10.0 | ) |  | (11.1 | ) |  | (9.0 | ) |  | (9.8 | )
Credits and net operating loss utilization | (1.2 | ) |  | (0.7 | ) |  | (1.2 | ) |  | (0.7 | )
Purchased intangible assets | 1.1 |  |  | 1.1 |  |  | 1.1 |  |  | 1.0 |
Manufacturing deduction | (1.6 | ) |  | (2.1 | ) |  | (1.7 | ) |  | (1.8 | )
Other permanent items | 0.6 |  |  | 0.9 |  |  | 0.6 |  |  | 0.7 |
Other | 0.3 |  |  | 0.4 |  |  | 0.2 |  |  | 0.3 |
Effective tax rate | 25.2 | % |  | 23.9 | % |  | 26.0 | % |  | 24.7 | %
For the three and six months ended June 30, 2016, compared to the same period in 2015, our effective tax rate increased primarily due to a state tax benefit in 2015 resulting from the remeasurement of one of our uncertain positions, described below, and a higher relative percentage of our earnings being attributed to the U.S., a higher tax jurisdiction. Accounting for Uncertainty in Income Taxes We and our subsidiaries are routinely examined by various taxing authorities. We file income tax returns in the U.S. federal jurisdiction, various U.S. states and foreign jurisdictions. With few exceptions, including the proposed disallowance we discuss below, we are no longer subject to U.S. federal tax examination for years before 2013 or state, local or non-U.S. income tax examinations for years before 2004. In March 2015, we received a final assessment from the Danish Tax Authority (SKAT) for 2009 regarding withholding taxes and the treatment of certain intercompany transactions involving a Danish affiliate and another of our affiliates. In April 2016, we received final assessments for 2011 and 2013 regarding withholding taxes for similar intercompany transactions. The total amount assessed for 2009, 2011 and 2013 is estimated to be $66.9 million, including interest. For the assessments related to 2011 and 2013, we have made payments to SKAT totaling $13.0 million. We continue to dispute the assessments for all of these periods and believe that the positions we have taken in our historical filings are valid. During the six months ended June 30, 2015, the net effect of adjustments to our uncertain tax positions was a net benefit of approximately $24.0 million primarily related to the state impact of a federal uncertain tax item. It is reasonably possible that we will adjust the value of our uncertain tax positions related to our revenues from anti-CD20 therapeutic programs and certain transfer pricing issues as we receive additional information from various taxing authorities, including reaching settlements with the tax authorities. In addition, the Internal Revenue Service (IRS) and other national tax authorities routinely examine our intercompany transfer pricing with respect to intellectual property related transactions and it is possible that they may disagree with one or more positions we have taken with respect to such valuations. In October 2011, in conjunction with an examination by the IRS, the IRS proposed a disallowance of approximately $130.0 million in deductions for tax years 2007, 2008 and 2009 related to payments for services provided by our wholly owned Danish subsidiary located in Hillerød, Denmark. We initiated a mutual agreement procedure between the IRS and SKAT for the years 2001 through 2009, to reach agreement on the issue. Over the past year, we have reached agreement with the IRS and SKAT regarding the tax treatment of these items for the years up to and including 2009. We have recorded the results of these agreements, which were not significant to our results. In addition, we applied for a bilateral advance pricing agreement for the years 2010 through 2014 to resolve similar issues for those years. In June 2016, we withdrew from the bilateral advance pricing agreement process. We believe that the positions we have taken in our historical filings are valid and supportable and potential changes in these positions are not expected to have a significant impact on our financial position or results of operations.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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