UNITED THERAPEUTICS CorpUTHR
UNITED THERAPEUTICS Corp Income Taxes Disclosure
Income Taxes
Components of income from continuing operations before income taxes include (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
United States | $ | 1,708.4 | $ | 1,540.5 | $ | 1,270.4 | |||||||||||
Foreign | 5.5 | (1.5) | 3.9 | ||||||||||||||
Income before income taxes | $ | 1,713.9 | $ | 1,539.0 | $ | 1,274.3 | |||||||||||
Components of income tax expense consist of the following (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | 208.8 | $ | 326.4 | $ | 287.2 | |||||||||||
| State | 71.5 | 80.8 | 66.6 | ||||||||||||||
Foreign | 1.2 | 0.8 | 0.1 | ||||||||||||||
| Total current | 281.5 | 408.0 | 353.9 | ||||||||||||||
| Deferred | |||||||||||||||||
| Federal | 85.7 | (56.7) | (43.8) | ||||||||||||||
| State | 12.5 | (7.4) | (20.1) | ||||||||||||||
Foreign | (0.5) | — | (0.5) | ||||||||||||||
| Total deferred | 97.7 | (64.1) | (64.4) | ||||||||||||||
| Total income tax expense | $ | 379.2 | $ | 343.9 | $ | 289.5 | |||||||||||
Presented below is a reconciliation of income tax expense computed at the statutory federal tax rate of 21 percent in 2025, 2024, and 2023 to income tax expense as reported (in millions):
| Year Ended December 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||||
U.S. Federal statutory tax rate | $ | 359.9 | 21.0 | % | $ | 323.2 | 21.0 | % | $ | 267.6 | 21.0 | % | ||||||||||||||
State and local income taxes, net of federal income tax effect(1) | 58.7 | 3.4 | % | 47.6 | 3.1 | % | 37.4 | 2.9 | % | |||||||||||||||||
Excess tax benefits from share-based compensation | (41.6) | (2.4) | % | (27.1) | (1.8) | % | (17.7) | (1.4) | % | |||||||||||||||||
Tax credits: | ||||||||||||||||||||||||||
Research and development tax credits | (26.6) | (1.6) | % | (27.2) | (1.8) | % | (19.0) | (1.5) | % | |||||||||||||||||
Other tax credits | — | — | % | (0.5) | — | % | (1.6) | (0.1) | % | |||||||||||||||||
Nontaxable or nondeductible items: | ||||||||||||||||||||||||||
Nondeductible compensation | 19.4 | 1.1 | % | 17.0 | 1.1 | % | 3.9 | 0.3 | % | |||||||||||||||||
Other nontaxable or nondeductible items | 6.3 | 0.4 | % | 4.1 | 0.3 | % | 14.0 | 1.1 | % | |||||||||||||||||
Changes in unrecognized tax benefits | 6.6 | 0.4 | % | 12.0 | 0.8 | % | 9.0 | 0.7 | % | |||||||||||||||||
Effect of cross-border tax laws | (2.3) | (0.1) | % | (6.6) | (0.4) | % | (5.2) | (0.4) | % | |||||||||||||||||
Foreign tax effects | (0.5) | — | % | 1.0 | 0.1 | % | (1.3) | (0.1) | % | |||||||||||||||||
| Changes in valuation allowances | (0.1) | — | % | 0.5 | — | % | 2.4 | 0.2 | % | |||||||||||||||||
| Other | (0.6) | (0.1) | % | (0.1) | (0.1) | % | — | — | % | |||||||||||||||||
Income tax expense and effective tax rate | $ | 379.2 | 22.1 | % | $ | 343.9 | 22.3 | % | $ | 289.5 | 22.7 | % | ||||||||||||||
(1)State taxes in Illinois and Tennessee for 2025 and Illinois for 2023 and 2024 made up the majority (greater than 50 percent) of the tax effect in this category.
Components of income taxes paid, net of refunds, consist of the following (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
United States Federal | $ | 230.5 | $ | 339.6 | $ | 267.5 | |||||||||||
U.S. States: | |||||||||||||||||
| Illinois | 35.1 | 30.3 | 41.7 | ||||||||||||||
Tennessee(1) | 33.5 | — | — | ||||||||||||||
| Other U.S. States | 13.7 | 30.6 | 23.2 | ||||||||||||||
Foreign | 0.5 | 0.1 | 0.1 | ||||||||||||||
| Total Income Taxes Paid | $ | 313.3 | $ | 400.6 | $ | 332.5 | |||||||||||
(1)The amount of income taxes paid during the years ended December 31, 2024 and 2023 does not meet the 5 percent disaggregation threshold.
Components of the net deferred tax assets are as follows (in millions):
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Capitalized research and development | $ | 176.9 | $ | 266.1 | |||||||
| Intangible assets | 142.2 | 144.0 | |||||||||
| Share-based compensation | 45.0 | 46.6 | |||||||||
| Reserves and accrued liabilities | 64.2 | 45.3 | |||||||||
Net operating loss carryforwards | 22.2 | 19.8 | |||||||||
| Basis differences in investments | — | 9.6 | |||||||||
| SERP | 7.7 | 8.9 | |||||||||
| Other | 24.2 | 22.6 | |||||||||
| Total deferred tax assets | 482.4 | 562.9 | |||||||||
| Less: Valuation allowance | (35.6) | (30.1) | |||||||||
| Total net deferred tax assets | 446.8 | 532.8 | |||||||||
| Deferred tax liabilities: | |||||||||||
Property, plant, and equipment | (74.9) | (64.1) | |||||||||
Right-of-use assets | (7.2) | (7.3) | |||||||||
| Other | (7.0) | (3.0) | |||||||||
| Total deferred tax liabilities | (89.1) | (74.4) | |||||||||
| Total deferred tax assets, net | $ | 357.7 | $ | 458.4 | |||||||
As of December 31, 2025, we had gross federal, foreign, and state net operating loss carryforwards of $38.9 million, $7.5 million, and $205.8 million, respectively, which either expire at various dates beginning in 2026 or have no expiration date. As of December 31, 2025, we had federal and state research credit carryforwards, of $5.3 million and $5.4 million, respectively, which expire at various dates beginning in 2028. We expect that certain of these carryforwards will expire unused, so we have established valuation allowances for that portion of the related deferred tax assets.
The One Big Beautiful Bill Act of 2025 reinstated the option to deduct research and development expenditures in the period incurred beginning in 2025, to deduct unamortized domestic costs from 2024 and prior, and to expense 100 percent of certain qualifying assets in the year placed in service. These changes decreased our cash paid for income taxes for 2025 and our deferred tax assets as of December 31, 2025.
We are subject to federal and state taxation in the United States and various foreign jurisdictions. We are no longer subject to income tax examinations by the Internal Revenue Service and all other major jurisdictions for tax years prior to 2022.
As of December 31, 2025 and 2024, we had $22.8 million and $16.7 million of unrecognized tax benefits, excluding interest and penalties, that would impact our effective tax rate if recognized. The following table represents a reconciliation of the total unrecognized tax benefit liability, excluding interest and penalties, for the years ended December 31, 2025, 2024, and 2023 (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Unrecognized tax benefits, beginning of the period | $ | 19.6 | $ | 24.1 | $ | 15.2 | |||||||||||
| Gross decreases related to prior period tax positions | — | — | — | ||||||||||||||
| Gross increases related to prior period tax positions | — | 8.8 | 9.3 | ||||||||||||||
| Gross increases related to current period tax positions | 9.2 | 8.7 | 1.5 | ||||||||||||||
| Gross decreases as a result of settlements during the current period | — | (21.1) | — | ||||||||||||||
Reductions due to lapse of applicable statute of limitations | (1.8) | (0.9) | (1.9) | ||||||||||||||
| Unrecognized tax benefits, end of the period | $ | 27.0 | $ | 19.6 | $ | 24.1 | |||||||||||
We record interest and penalties related to uncertain tax positions as a component of income tax expense. As of December 31, 2025 and 2024, our liability for unrecognized tax benefits included approximately $1.7 million and $1.0 million, respectively, for the accrual of interest and penalties. For the years ended December 31, 2025, 2024, and 2023, we recorded an approximately $0.7 million expense, $0.6 million benefit, and $0.9 million expense, respectively, for the accrual of interest and penalties in our consolidated statements of operations.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 21, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 26, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Feb 21, 2018 | |
| 2016 | Feb 22, 2017 | |
| 2015 | Feb 25, 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.