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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income before income tax provision and the income tax expense

Income before income tax provision and the income tax expense consist of the following:

	For the Years Ended December 31,
(In millions)	2018				2017				2016
Income before income taxes (benefit):
Domestic	$	3,877.0			$	3,540.4			$	3,655.4
Foreign	2,022.6				1,588.4				1,277.6
Total	$	5,899.6			$	5,128.8			$	4,933.0
Income tax expense (benefit):
Current:
Federal	$	1,131.8			$	2,201.4			$	1,304.3
State	45.5				57.0				55.1
Foreign	140.0				108.6				52.9
Total	1,317.3				2,367.0				1,412.3
Deferred:
Federal	$	(62.0	)		$	241.0			$	(125.6	)
State	(7.4		)		9.9				(3.8		)
Foreign	177.7				(159.2		)		(45.6		)
Total	108.3				91.7				(175.0		)
Total income tax expense	$	1,425.6			$	2,458.7			$	1,237.3

Components of deferred tax assets and liabilities

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

	As of December 31,
(In millions)	2018				2017
Deferred tax assets:
Tax credits	$	102.8			$	60.0
Inventory, other reserves and accruals	163.9				147.8
Intangibles, net	2,298.6				378.8
Net operating loss	213.1				209.8
Share-based compensation	25.8				26.9
Other	38.9				25.1
Valuation allowance	(20.0		)		(16.6		)
Total deferred tax assets	$	2,823.1			$	831.8
Deferred tax liabilities:
Purchased intangible assets	$	(232.8	)		$	(250.7	)
GILTI	(544.6		)		—
Tax credits	(1,425.7		)		—
Depreciation, amortization and other	(102.3		)		(107.9		)
Total deferred tax liabilities	$	(2,305.4	)		$	(358.6	)

Reconciliation between the U.S. federal statutory tax rate and effective tax rate

A reconciliation between the U.S. federal statutory tax rate and our effective tax rate is summarized as follows:

	For the Years Ended December 31,
	2018			2017			2016
Statutory rate	21.0	%		35.0	%		35.0	%
State taxes	0.6			0.8			0.9
Taxes on foreign earnings	(1.9	)		(11.1	)		(9.6	)
Credits and net operating loss utilization	(0.9	)		(0.8	)		(1.4	)
Purchased intangible assets	1.2			1.4			1.2
Manufacturing deduction	—			(1.9	)		(1.9	)
Other permanent items	0.3			0.7			0.5
2017 Tax Act	2.1			22.9			—
GILTI	1.6			—			—
Impairment of ZINBRYTA related tax assets	—			0.9			—
Other	0.2			—			0.4
Effective tax rate	24.2	%		47.9	%		25.1	%

Reconciliation of beginning and ending amount of unrecognized tax benefits

A reconciliation of the beginning and ending amount of our unrecognized tax benefits is summarized as follows:

	For the Years Ended December 31,
(In millions)	2018				2017				2016
Balance at January 1,	$	66.8			$	32.4			$	67.9
Additions based on tax positions related to the current period	0.5				5.7				7.2
Additions for tax positions of prior periods	58.7				7.3				36.3
Reductions for tax positions of prior periods	(13.6		)		(21.8		)		(13.3		)
Statute expirations	(2.9		)		(1.4		)		(1.4		)
Settlement refund (payment)	4.7				44.6				(64.3		)
Balance at December 31,	$	114.2			$	66.8			$	32.4

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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 the change in unrecognized tax benefits.

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