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Income Taxes
 9 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

16. INCOME TAXES

 

The Company recognizes income taxes under the asset and liability method. Deferred income taxes are recognized for differences between the financial reporting and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. In determining future taxable income, the Company is responsible for assumptions that it utilizes, including the amount of Irish and non-Irish pre-tax operating income, the reversal of temporary differences and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates that the Company uses to manage the underlying business.

 

The Company recorded income tax provisions of $17.4 million and $47.5 million during the three and nine months ended September 30, 2024, respectively, and income tax provisions of $1.2 million and $4.6 million during the three and nine months ended September 30, 2023, respectively. The income tax provisions during the three and nine months ended September 30, 2024 were primarily due to taxes on income earned in Ireland. The income tax provisions during the three and nine months ended September 30, 2023 were primarily due to U.S. federal and state taxes on income earned in the U.S. As of September 30, 2023, the Company maintained a valuation allowance against its Irish deferred tax assets and did not record an income tax provision in connection with the utilization of its net operating losses to offset the income earned in Ireland during the three and nine months ended September 30, 2023.

 

The Company’s effective tax rate during the nine months ended September 30, 2024 was 17.3%, which exceeds the Irish statutory tax rate of 12.5%, primarily due to non-deductible expenses and income that was taxable at rates higher than the Irish statutory tax rate. The income tax provision recorded as of September 30, 2024 took into account the estimated impact of the global minimum tax rate component, known as Pillar Two, of the Organization for Economic Co-operation and Development’s two-pillar plan on global tax reform, which became effective in Ireland as of January 1, 2024 for multinational companies with consolidated annual revenue of at least €750.0 million. The Company does not expect Pillar Two to have a material impact for the current year.