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Income Taxes | 6 Months Ended
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Jun. 30, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | 11. Income Taxes In 2021 the Organization for Economic Co-operation and Development (OECD) announced an inclusive Framework on Base Erosion and Profit Shifting (BEPS) including Pillar Two Model Rules defining the global minimum tax, also known as the Global Anti-Base Erosion (GloBE), which aims to ensure that multinational enterprises (MNEs) pay a 15% minimum level of tax regardless of where the MNE operates. The OECD has released its fourth round of administrative guidance In June 2024. Many non-US tax jurisdictions have either recently enacted legislation to adopt components of the Pillar Two Model Rules beginning in 2024 and/or have announced their plans to enact legislation in future years. The Company continues to evaluate the impact of the implementation of Pillar Two on its income tax position. The Company does not expect Pillar Two to result in any material impact to the Company’s income tax provision. We are continuing to evaluate the potential impact on future periods of the Pillar Two Framework, pending enactment of legislation by individual countries. The Company’s effective tax rate was 21.7% and 21.8% for the three months ended June 30, 2024 and June 30, 2023, respectively. The decrease in the effective tax rate was due primarily to an increase in the foreign-derived intangible income (FDII) deduction, offset by an increased valuation allowance against deferred tax assets, and an increase in executive compensation subject to Section 162(m). The Company’s effective tax rate benefit was 46.3% and the effective tax rate was 22.9% for the six months ended June 30, 2024 and June 30, 2023, respectively. The change in effective tax rate was due primarily to the tax benefit resulting from the $211 million loss in partially unwinding Convertible Senior Notes during the first quarter 2024. The difference between the effective tax rate and the statutory U.S. Federal income tax rate of 21% for the three and six months ended June 30, 2024 primarily relates to a change in jurisdictional earnings partially resulting from a loss in partially unwinding Convertible Senior Notes, the FDII deduction, equity based compensation, and untaxed income attributable to noncontrolling interests, partially offset by rate impacts related to state income taxes, and foreign withholding taxes. As of June 30, 2024, the Company’s deferred tax assets were subject to a valuation allowance of $44.0 million primarily related to foreign net operating loss carryforwards, foreign tax credit carryforwards, reserves and capital losses that the Company has determined are not more-likely-than-not to be realized. The factors used to assess the likelihood of realization include: the past performance of the entities, forecasts of future taxable income, future reversals of existing taxable temporary differences, and available tax planning strategies that could be implemented to realize the deferred tax assets. The ability or failure to achieve the forecasted taxable income in these entities could affect the ultimate realization of deferred tax assets. As of June 30, 2024 and December 31, 2023, the liability for income taxes associated with uncertain tax positions was $22.1 million and $25.5 million, respectively. It is reasonably possible that the Company may realize a decrease in our uncertain tax positions of approximately $2.8 million during the next 12 months as a result of concluding various tax audits and closing tax years. Although the Company believes its reserves for its tax positions are reasonable, the final outcome of tax audits could be materially different, both favorably and unfavorably. It is reasonably possible that certain audits may conclude in the next 12 months and that the unrecognized tax benefits the Company has recorded in relation to these tax years may change compared to the liabilities recorded for these periods.

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