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Income Taxes | 3 Months Ended
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Mar. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Tax Rate A reconciliation between the U.S. federal statutory tax rate and our effective tax rate is summarized as follows:
| For the Three Months Ended March 31,
| 2019 |  | 2018
Statutory rate | 21.0 | % |  | 21.0 | %
State taxes | 0.4 |  |  | 0.9 |
Taxes on foreign earnings | (4.6 | ) |  | (2.0 | )
Credits and net operating loss utilization | (0.8 | ) |  | (0.8 | )
Purchased intangible assets | 0.3 |  |  | 0.6 |
Denmark assets held for sale | 4.3 |  |  | — |
Global Intangible Low-Taxed Income (GILTI) | 1.9 |  |  | 1.3 |
Other permanent items | 0.4 |  |  | 0.4 |
Other | (0.2 | ) |  | 0.2 |
Effective tax rate | 22.7 | % |  | 21.6 | %
Changes in Tax Rate For the three months ended March 31, 2019, compared to the same period in 2018, the increase in our effective tax rate was primarily due to a $59.1 million tax expense related to the proposed divestiture of our subsidiary that owns our Hillerød, Denmark manufacturing operations. Although we are recognizing a loss on the proposed divestiture of such subsidiary, the proposed divestiture requires us to write off certain deferred tax assets upon the classification of our Hillerød, Denmark manufacturing operations as held for sale and results in a taxable gain in certain jurisdictions. The effect of this increase to our 2019 effective tax rate was partially offset by a higher effective tax rate in 2018 resulting from the sale of inventory, the tax effect of which had been included within prepaid taxes at December 31, 2017, at a higher effective tax rate. For additional information on the proposed divestiture of our Hillerød, Denmark manufacturing operations, please read Note 3, Divestitures, to these condensed consolidated financial statements. Accounting for Uncertainty in Income Taxes We and our subsidiaries are routinely examined by various taxing authorities. We file income tax returns in various U.S. states and in U.S. federal and other foreign jurisdictions. With few exceptions, 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 2010. The U.S. Internal Revenue Service 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. International Uncertain Tax Positions We have made payments totaling approximately $60.0 million to the Danish Tax Authority (SKAT) for assessments received for 2009, 2011 and 2013 regarding withholding taxes on certain payments made by our subsidiary that owns our biologics manufacturing operations in Hillerød, Denmark. We continue to dispute the assessments for all of these periods and believe that the tax positions taken related to these payments are valid. Any amount refunded by SKAT associated with this withholding tax receivable will be paid to our subsidiary that owns our biologics manufacturing operations in Hillerød, Denmark. In March 2019 we entered into a share purchase agreement with FUJIFILM under which FUJIFILM will acquire all of the outstanding shares of our subsidiary that owns our biologics manufacturing operations in Hillerød, Denmark. This withholding tax receivable from SKAT will be included within the assets that will be transferred to FUJIFILM as part of the proposed transaction. Under the share purchase agreement, FUJIFILM is required to remit any future proceeds refunded by SKAT to us. We have assessed the collectability of the receivable from FUJIFILM and regard it as a contingent gain, which does not meet the probable threshold for recognition under ASC 450, Contingencies, and therefore we have recorded a pre-tax charge of $60.0 million to write the asset down to zero as a component of the loss on assets and liabilities held for sale in the first quarter of 2019. For additional information on the proposed divestiture of our Hillerød, Denmark manufacturing operations, please read Note 3, Divestitures, to these condensed consolidated financial statements. Federal and State Uncertain Tax Positions It is reasonably possible that we will adjust the value of our uncertain tax positions related to certain transfer pricing issues as we receive additional information from various taxing authorities, including reaching settlements with such authorities. Proposed Divestiture of Hillerød, Denmark Manufacturing Operations In March 2019 we entered into a share purchase agreement with FUJIFILM under which FUJIFILM will acquire all of the outstanding shares of our subsidiary that owns our biologics manufacturing operations in Hillerød, Denmark. As a result, $46.5 million of our deferred tax liability was reclassified to liabilities held for sale in our condensed consolidated balance sheets as of March 31, 2019. For additional information on the proposed divestiture of our Hillerød, Denmark manufacturing operations, please read Note 3, Divestitures, to these condensed consolidated financial statements.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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