REGENERON PHARMACEUTICALS, INC.REGN
REGENERON PHARMACEUTICALS, INC. Income Taxes Disclosure
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) | 2025 | 2024 | 2023 | |||||||||||||||||
| United States | $ | (476.3) | $ | (411.3) | $ | (362.3) | ||||||||||||||
| Foreign | 5,707.0 | 5,191.2 | 4,561.6 | |||||||||||||||||
| $ | 5,230.7 | $ | 4,779.9 | $ | 4,199.3 | |||||||||||||||
Components of income tax expense consist of the following:
| Year Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Current: | ||||||||||||||||||||
| Federal | $ | 1,012.3 | $ | 1,092.6 | $ | 667.9 | ||||||||||||||
| State | 19.8 | (11.1) | 7.7 | |||||||||||||||||
| Foreign | 479.1 | 43.1 | 407.9 | |||||||||||||||||
| Total current tax expense | 1,511.2 | 1,124.6 | 1,083.5 | |||||||||||||||||
| Deferred: | ||||||||||||||||||||
| Federal | (845.2) | (935.5) | (834.5) | |||||||||||||||||
| State | (15.5) | (4.9) | (6.5) | |||||||||||||||||
| Foreign | 75.3 | 183.1 | 3.2 | |||||||||||||||||
Total deferred tax benefit | (785.4) | (757.3) | (837.8) | |||||||||||||||||
| $ | 725.8 | $ | 367.3 | $ | 245.7 | |||||||||||||||
Cash paid for income taxes, net of refunds received, by jurisdiction for the year ended December 31, 2025 is as follows:
| (In millions) | 2025 | |||||||
Federal | $ | 576.5 | ||||||
State | 5.3 | |||||||
Foreign: | ||||||||
Ireland | 645.2 | |||||||
Other | 26.0 | |||||||
| $ | 1,253.0 | |||||||
Cash paid for income taxes, net of refunds received, were $743.0 million and $870.3 million for the years ended December 31, 2024 and 2023, respectively.
On July 4, 2025, bill H.R. 1, commonly referred to as the "One Big Beautiful Bill Act" or "OBBBA," was signed into law, with certain provisions effective in 2025 and others in 2026. The OBBBA significantly revises U.S. corporate income tax laws by, among other things, restoring the option for immediate expense recognition for U.S.-based research and development expenditures and making permanent the ability to claim first-year bonus depreciation on qualified property. The OBBBA also modifies U.S. taxation on foreign earnings by, among other things, changing the tax rates for Net CFC Tested Income (formerly known as global intangible low-taxed income ("GILTI")) and foreign-derived intangible income (now known as foreign-derived deduction eligible income), modifying the allocation of expenses in calculating foreign tax credits, as well as changing foreign tax credit limitations. As a result of the OBBBA being signed into law, the Company recognized a charge of $44.5 million in 2025 related to the re-measurement of the Company's U.S. net deferred tax assets.
A reconciliation of the U.S. federal statutory tax rate to the Company's effective tax rate for the year ended December 31, 2025 is as follows:
| 2025 | ||||||||||||||
(In millions, except percent) | Amount | Percent | ||||||||||||
U.S. federal statutory tax rate | $ | 1,098.4 | 21.0 | % | ||||||||||
Foreign tax effects: | ||||||||||||||
Ireland: | ||||||||||||||
Statutory tax rate difference between Ireland and United States | (480.3) | (9.2) | ||||||||||||
Domestic top-up tax | 120.0 | 2.3 | ||||||||||||
Other | (5.8) | (0.1) | ||||||||||||
| Other foreign jurisdictions | 7.7 | 0.1 | ||||||||||||
Tax credits: | ||||||||||||||
| Research and development and orphan drug tax credits | (133.3) | (2.5) | ||||||||||||
Effect of cross-border tax laws: | ||||||||||||||
Foreign-derived deduction eligible income | (20.6) | (0.4) | ||||||||||||
Net CFC tested income ("NCTI"), net of foreign tax credit ("FTC") | (82.7) | (1.6) | ||||||||||||
Subpart F income, net of FTC | 8.3 | 0.1 | ||||||||||||
Changes in unrecognized tax benefits(a) | 124.2 | 2.4 | ||||||||||||
| Effect of changes in tax laws or rates enacted in the current period | 44.5 | 0.9 | ||||||||||||
Nontaxable or nondeductible items: | ||||||||||||||
Stock-based compensation | 14.1 | 0.3 | ||||||||||||
Other permanent differences | 27.0 | 0.5 | ||||||||||||
Other adjustments | 4.3 | 0.1 | ||||||||||||
Effective tax rate | $ | 725.8 | 13.9 | % | ||||||||||
(a) Changes in unrecognized tax benefits for all jurisdictions are aggregated within this category | ||||||||||||||
A reconciliation of the U.S. federal statutory tax rate to the Company's effective tax rate for the years ended December 31, 2024 and 2023 is as follows:
| 2024 | 2023 | |||||||||||||
| U.S. federal statutory tax rate | 21.0 | % | 21.0 | % | ||||||||||
Stock-based compensation | (4.9) | (4.6) | ||||||||||||
Taxation of non-U.S. operations | (4.0) | (6.6) | ||||||||||||
Tax credits | (3.5) | (3.2) | ||||||||||||
Foreign-derived deduction eligible income | (0.8) | (0.3) | ||||||||||||
| Other permanent differences | (0.1) | (0.4) | ||||||||||||
| Effective tax rate | 7.7 | % | 5.9 | % | ||||||||||
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) | 2025 | 2024 | ||||||||||||
| Deferred tax assets: | ||||||||||||||
| Capitalized research and development expenses | $ | 3,146.2 | $ | 2,530.2 | ||||||||||
| Deferred compensation | 452.0 | 419.7 | ||||||||||||
| Fixed assets and intangible assets | 192.6 | 145.1 | ||||||||||||
| Accrued expenses | 158.8 | 185.0 | ||||||||||||
| Tax attribute carryforwards | 79.6 | 84.1 | ||||||||||||
| Other | 49.9 | 43.0 | ||||||||||||
| Total deferred tax assets | 4,079.1 | 3,407.1 | ||||||||||||
| Deferred tax liabilities: | ||||||||||||||
| Unrealized gains on investments | (1.9) | (93.0) | ||||||||||||
| Net deferred tax assets | $ | 4,077.2 | $ | 3,314.1 | ||||||||||
The Company's federal income tax returns for 2019 through 2024 remain open to examination by the IRS. The Company's 2019 and 2020 federal income tax returns are currently under audit by the IRS. In general, the Company's state income tax returns from 2017 to 2024 remain open to examination. The Company's income tax returns outside the United States remain open to examination from 2020 to 2024. 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) | 2025 | 2024 | 2023 | |||||||||||||||||
| Balance as of January 1 | $ | 1,313.7 | $ | 696.4 | $ | 542.8 | ||||||||||||||
| Gross increases related to current year tax positions | 401.9 | 353.5 | 153.4 | |||||||||||||||||
Gross (decreases) increases related to prior year tax positions | (43.1) | 264.8 | 3.2 | |||||||||||||||||
| Gross decreases due to settlements and lapse of statutes of limitations | (94.6) | (1.0) | (3.0) | |||||||||||||||||
| Balance as of December 31 | $ | 1,577.9 | $ | 1,313.7 | $ | 696.4 | ||||||||||||||
In 2025, 2024, and 2023, 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 2025, the Company released liabilities for uncertain tax positions in connection with the settlement of the IRS audit of the Company's 2017 and 2018 federal income tax returns. Interest expense related to unrecognized tax benefits was $201.7 million, $165.4 million, and $77.2 million in 2025, 2024, and 2023, respectively.
The amount of net unrecognized tax benefits that, if settled, would impact the effective tax rate is $520.9 million, $635.4 million, and $442.5 million as of December 31, 2025, 2024, and 2023, respectively.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 4, 2026 | Showing above |
| 2024 | Feb 5, 2025 | |
| 2023 | Feb 5, 2024 | |
| 2022 | Feb 6, 2023 | |
| 2021 | Feb 7, 2022 | |
| 2020 | Feb 8, 2021 | |
| 2019 | Feb 7, 2020 | |
| 2018 | Feb 7, 2019 | |
| 2017 | Feb 8, 2018 | |
| 2016 | Feb 9, 2017 | |
| 2015 | Feb 11, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.