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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2019
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) | 2019 |  | 2018 |  | 2017
Income before income taxes (benefit): |  |  |  |  |
Domestic | $ | 4,725.3 |  |  | $ | 3,877.0 |  |  | $ | 3,540.4 |
Foreign | 2,400.6 |  |  | 2,022.6 |  |  | 1,588.4 |
Total | $ | 7,125.9 |  |  | $ | 5,899.6 |  |  | $ | 5,128.8 |
Income tax expense (benefit): |  |  |  |  |
Current: |  |  |  |  |
Federal | $ | 947.4 |  |  | $ | 1,131.8 |  |  | $ | 2,201.4 |
State | 59.1 |  |  | 45.5 |  |  | 57.0 |
Foreign | 84.4 |  |  | 140.0 |  |  | 108.6 |
Total | 1,090.9 |  |  | 1,317.3 |  |  | 2,367.0 |
Deferred: |  |  |  |  |
Federal | $ | 1,143.9 |  |  | $ | (62.0 | ) |  | $ | 241.0 |
State | (2.3 | ) |  | (7.4 | ) |  | 9.9 |
Foreign | (1,074.5 | ) |  | 177.7 |  |  | (159.2 | )
Total | 67.1 |  |  | 108.3 |  |  | 91.7 |
Total income tax expense | $ | 1,158.0 |  |  | $ | 1,425.6 |  |  | $ | 2,458.7 |
Components of deferred tax assets and liabilities | s Significant components of our deferred tax assets and liabilities are summarized as follows:
| As of December 31,
(In millions) | 2019 |  | 2018
Deferred tax assets: |  |  |
Tax credits | $ | 106.6 |  |  | $ | 102.8 |
Inventory, other reserves and accruals | 162.0 |  |  | 163.9 |
Intangibles, net | 3,380.0 |  |  | 2,298.6 |
Net operating loss | 130.4 |  |  | 213.1 |
Share-based compensation | 23.8 |  |  | 25.8 |
Other | 103.7 |  |  | 38.9 |
Valuation allowance | (1.1 | ) |  | (20.0 | )
Total deferred tax assets | $ | 3,905.4 |  |  | $ | 2,823.1 |
Deferred tax liabilities: |  |  |
Purchased intangible assets | $ | (350.3 | ) |  | $ | (232.8 | )
GILTI | (1,381.6 | ) |  | (544.6 | )
Tax credits | (1,617.2 | ) |  | (1,425.7 | )
Depreciation, amortization and other | (135.0 | ) |  | (102.3 | )
Total deferred tax liabilities | $ | (3,484.1 | ) |  | $ | (2,305.4 | )
Reconciliation between the U.S. federal statutory tax rate and effective tax rate | e 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,
| 2019 |  | 2018 |  | 2017
Statutory rate | 21.0 | % |  | 21.0 | % |  | 35.0 | %
State taxes | 0.8 |  |  | 0.6 |  |  | 0.8 |
Taxes on foreign earnings | (4.5 | ) |  | (1.9 | ) |  | (11.1 | )
Credits and net operating loss utilization | (1.1 | ) |  | (0.9 | ) |  | (0.8 | )
Purchased intangible assets | 0.4 |  |  | 1.2 |  |  | 1.4 |
Divestiture of Denmark manufacturing operations | 1.0 |  |  | — |  |  | — |
Internal reorganization of certain intellectual property rights | (2.1 | ) |  | — |  |  | — |
GILTI | 1.5 |  |  | 1.6 |  |  | — |
Other permanent items | 0.2 |  |  | 0.3 |  |  | 0.7 |
U.S. tax reform | — |  |  | 2.1 |  |  | 22.9 |
Swiss tax reform | (0.8 | ) |  | — |  |  | — |
Manufacturing deduction | — |  |  | — |  |  | (1.9 | )
Impairment of ZINBRYTA related tax assets | — |  |  | — |  |  | 0.9 |
Other | (0.1 | ) |  | 0.2 |  |  | — |
Effective tax rate | 16.3 | % |  | 24.2 | % |  | 47.9 | %
Reconciliation of beginning and ending amount of unrecognized tax benefits | s 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) | 2019 |  | 2018 |  | 2017
Balance at January 1, | $ | 114.2 |  |  | $ | 66.8 |  |  | $ | 32.4 |
Additions based on tax positions related to the current period | 5.3 |  |  | 0.5 |  |  | 5.7 |
Additions for tax positions of prior periods | 17.2 |  |  | 58.7 |  |  | 7.3 |
Reductions for tax positions of prior periods | (10.3 | ) |  | (13.6 | ) |  | (21.8 | )
Statute expirations | (0.1 | ) |  | (2.9 | ) |  | (1.4 | )
Settlement refund (payment) | 3.6 |  |  | 4.7 |  |  | 44.6 |
Balance at December 31, | $ | 129.9 |  |  | $ | 114.2 |  |  | $ | 66.8 |

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