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Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2018
Income Tax Disclosure [Abstract]  
Schedule of Components of Income Tax Expense (Benefit)
Following is the composition of income tax expense:
 
2018
 
2017
 
2016
Current:
 
 
 
 
 
Federal
$
(31.9
)
 
$
(66.5
)
 
$
20.0

Foreign
106.8

 
47.5

 
397.0

State
4.7

 
(5.4
)
 
(134.4
)
2017 Tax Act
201.5

 
3,247.5

 
—

Total current tax expense
281.1

 
3,223.1

 
282.6

Deferred:
 
 
 
 
 
Federal
22.5

 
732.3

 
410.0

Foreign
248.7

 
(230.9
)
 
(136.3
)
State
3.4

 
0.2

 
(4.9
)
2017 Tax Act
(26.2
)
 
(1,333.5
)
 
—

Total deferred tax (benefit) expense
248.4

 
(831.9
)
 
268.8

Income taxes
$
529.5

 
$
2,391.2

 
$
551.4
Schedule of Deferred Tax Assets and Liabilities
Significant components of our deferred tax assets and liabilities as of December 31 are as follows:
 
2018
 
2017
Deferred tax assets:
 
 
 
Purchases of intangible assets
$
2,627.7

 
$
441.9

Compensation and benefits
781.6

 
995.3

Tax credit carryforwards and carrybacks
359.4

 
467.5

Tax loss carryforwards and carrybacks
248.2

 
471.3

Product return reserves
95.3

 
83.4

Other comprehensive loss on hedging transactions
68.9

 
68.9

Debt
40.3

 
53.5

Contingent consideration
11.7

 
32.1

Other
680.1

 
524.3

Total gross deferred tax assets
4,913.2

 
3,138.2

Valuation allowances
(574.8
)
 
(681.8
)
Total deferred tax assets
4,338.4

 
2,456.4

Deferred tax liabilities:
 
 
 
Earnings of foreign subsidiaries
(1,745.3
)
 
(16.6
)
Inventories
(681.3
)
 
(649.5
)
Property and equipment
(260.9
)
 
(247.5
)
Prepaid employee benefits
(240.1
)
 
(231.5
)
Intangibles
(86.9
)
 
(120.7
)
Financial instruments
(22.8
)
 
(41.6
)
Total deferred tax liabilities
(3,037.3
)
 
(1,307.4
)
Deferred tax assets - net
$
1,301.1

 
$
1,149.0
Schedule of Additional Income Tax Disclosures
Cash payments of income taxes were as follows:
 
2018
 
2017
 
2016
Cash payments of income taxes
$
1,076.7

 
$
221.5

 
$
686.4
Schedule of Effective Income Tax Rate Reconciliation
Following is a reconciliation of the income tax expense applying the U.S. federal statutory rate to income before income taxes to reported income tax expense:
 
2018
 
2017
 
2016
Income tax at the U.S. federal statutory tax rate
$
772.8

 
$
806.7

 
$
1,146.7

Add (deduct):
 
 
 
 
 
International operations, including Puerto Rico
(627.1
)
 
(480.8
)
 
(357.2
)
General business credits
(87.4
)
 
(66.8
)
 
(57.0
)
Non-deductible acquired IPR&D(1)
309.9

 
300.1

 
—

2017 Tax Act
175.3

 
1,914.0

 
—

Other
(14.0
)
 
(82.0
)
 
(181.1
)
Income taxes
$
529.5

 
$
2,391.2

 
$
551.4


(1) Non-deductible acquired IPR&D was related to ARMO in 2018 and CoLucid in 2017. See Note 3 for additional information related to acquisitions.
Summary of Income Tax Contingencies
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:
 
2018
 
2017
 
2016
Beginning balance at January 1
$
1,000.8

 
$
843.3

 
$
1,057.2

Additions based on tax positions related to the current year
798.2

 
133.8

 
73.4

Additions for tax positions of prior years
410.9

 
93.8

 
11.0

Reductions for tax positions of prior years
(115.4
)
 
(59.3
)
 
(12.1
)
Settlements
(33.2
)
 
(2.4
)
 
(171.9
)
Lapses of statutes of limitation
(20.5
)
 
(19.3
)
 
(110.0
)
Changes related to the impact of foreign currency translation
(6.2
)
 
10.9

 
(4.3
)
Ending balance at December 31
$
2,034.6

 
$
1,000.8

 
$
843.3


We recognize both accrued interest and penalties related to unrecognized tax benefits in income tax expense. We recognized income tax (benefit) expense related to interest and penalties as follows:
 
2018
 
2017
 
2016
Income tax expense (benefit)
$
25.1

 
$
22.8

 
$
(63.8
)