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Income Taxes
9 Months Ended
Sep. 30, 2020
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company calculates its interim income tax provision in accordance with FASB ASC Topics 270, Interim Reporting, and 740, Income Taxes. At the end of each interim period, the Company makes an estimate of the annual United States domestic and foreign jurisdictions’ expected effective tax rates and applies these rates to its respective year‑to‑date taxable income or loss. The computation of the estimated effective tax rates at each interim period requires certain estimates and assumptions including, but not limited to, the expected operating income for the fiscal year, projections of the proportion of income (or loss) earned and taxed in the United States and foreign tax jurisdictions, along with permanent differences, and the likelihood of deferred tax asset utilization. The Company’s estimates and assumptions may change as new events occur, additional information is obtained, or as the tax environment changes. Should facts and circumstances change during a period causing a material change to the estimated effective income tax rate, a cumulative adjustment will be recorded.
The income tax provisions for the three months ended September 30, 2020 and 2019 were based on the estimated annual effective income tax rates adjusted for discrete items occurring during the periods presented. During the three months ended September 30, 2020 and 2019, the Company recognized an aggregate consolidated income tax expense of $10,705 and $6,640, respectively, for U.S. domestic and foreign income taxes. During the three months ended September 30, 2020 and 2019, the Company recorded a discrete tax benefit of $3,826 and $103, respectively, associated with stock‑based compensation. The effective income tax rate of 62.5% for the three months ended September 30, 2020 was higher than the effective income tax rate of 24.5% for the same period in the prior year primarily due to officer compensation limitation provisions resulting from the Company’s IPO, which went effective during the three months ended September 30, 2020, and the non‑deductibility of expenses associated with the Company’s IPO, partially offset by increased discrete windfall tax benefits from stock‑based compensation.
The income tax provisions for the nine months ended September 30, 2020 and 2019 were based on the estimated annual effective income tax rates adjusted for discrete items occurring during the periods presented. During the nine months ended September 30, 2020 and 2019, the Company recognized an aggregate consolidated income tax expense of $22,145 and $11,759, respectively, for U.S. domestic and foreign income taxes. During the nine months ended September 30, 2020 and 2019, the Company recorded a discrete tax benefit of $10,511 and $3,861, respectively, associated with stock‑based compensation. The effective income tax rate of 22.6% for the nine months ended September 30, 2020 was higher than the effective income tax rate of 15.0% for the same period in the prior year