Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company is subject to U.S. federal, state, and foreign income taxes. Components of income before income taxes consist of the following:

	Year Ended December 31,
(In millions)	2023		2022		2021
United States	$	(362.3)	$	839.9	$	5,944.7
Foreign	4,561.6		4,018.9		3,381.1
	$	4,199.3	$	4,858.8	$	9,325.8

Components of income tax expense consist of the following:

	Year Ended December 31,
(In millions)	2023		2022		2021
Current:
Federal	$	667.9	$	968.5	$	1,429.8
State	7.7		7.4		6.2
Foreign	407.9		290.9		(38.4)
Total current tax expense	1,083.5		1,266.8		1,397.6
Deferred:
Federal	(834.5)		(797.7)		(423.2)
State	(6.5)		(2.7)		(0.6)
Foreign	3.2		54.0		276.7
Total deferred tax benefit	(837.8)		(746.4)		(147.1)
	$	245.7	$	520.4	$	1,250.5

A reconciliation of the U.S. statutory income tax rate to the Company's effective income tax rate is as follows:

	Year Ended December 31,
	2023		2022		2021
U.S. federal statutory tax rate	21.0	%	21.0	%	21.0	%
Taxation of non-U.S. operations	(6.6)		(5.5)		(2.8)
Stock-based compensation	(4.6)		(2.9)		(2.4)
Income tax credits	(3.2)		(2.0)		(1.0)
Foreign-derived intangible income deduction	(0.3)		(1.0)		(1.4)
Other permanent differences	(0.4)		1.1		—
Effective income tax rate	5.9	%	10.7	%	13.4	%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows:

	As of December 31,
(In millions)	2023		2022
Deferred tax assets:
Capitalized research and development expenses	$	1,728.2	$	845.3
Deferred compensation	413.6		416.2
Accrued expenses	214.1		235.6
Fixed assets and intangible assets	154.8		227.6
Tax attribute carryforwards	88.7		41.3
Other	26.4		15.9
Total deferred tax assets	2,625.8		1,781.9
Deferred tax liabilities:
Unrealized gains on investments	(50.4)		(58.2)
Net deferred tax assets	$	2,575.4	$	1,723.7

The Company's federal income tax returns for 2017 through 2022 remain open to examination by the IRS. The Company's 2017 and 2018 federal income tax returns are currently under audit by the IRS. In general, the Company's state income tax returns from 2018 to 2022 remain open to examination. The Company's income tax returns outside the United States remain open to examination from 2018 to 2022. The United States and many states generally have statutes of limitation ranging from 3 to 5 years; however, those statutes could be extended due to the Company's tax credit carryforward position. In general, tax authorities have the ability to review income tax returns in which the statute of limitation has previously expired to adjust the tax credits generated in those years.

The following table reconciles the beginning and ending amounts of unrecognized tax benefits:

(In millions)	2023		2022		2021
Balance as of January 1	$	542.8	$	410.9	$	267.0
Gross increases related to current year tax positions	153.4		136.9		182.3
Gross increases (decreases) related to prior year tax positions	3.2		(5.0)		2.9
Gross decreases due to settlements and lapse of statutes of limitations	(3.0)		—		(41.3)
Balance as of December 31	$	696.4	$	542.8	$	410.9

In 2023, 2022, and 2021, the increases in unrecognized tax benefits primarily related to the Company's calculation of certain tax credits and other items related to the Company's international operations. In 2021, the decrease in unrecognized tax benefits due to settlements and lapse of statutes of limitations was related to the closing of audits for the Company's federal income tax returns for 2015 and 2016. Interest expense related to unrecognized tax benefits was not material in 2023, 2022, and 2021. The Company does not believe that it is reasonably possible that the resolution of tax exposures within the next twelve months would have a material impact on the consolidated financial statements as of December 31, 2023.

The amount of net unrecognized tax benefits that, if settled, would impact the effective tax rate is $442.5 million, $373.7 million, and $321.1 million as of December 31, 2023, 2022, and 2021, respectively.

In August 2022, the Inflation Reduction Act of 2022 ("IRA") was signed into law in the United States. The IRA created a new corporate alternative minimum tax of 15% on adjusted financial statement income and an excise tax of 1% of the value of certain stock repurchases. The provisions of the IRA became effective for periods beginning after December 31, 2022. The IRA did not have a material impact on the Company's financial statements as of and for the periods ended December 31, 2023 and 2022.