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Income Taxes | 9 Months Ended
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Sep. 30, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | 8. Income Taxes Our income tax provision and the respective effective income tax rates are as follows (in millions, except for income tax rates):
|  | For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
|  | 2023 |  | 2022 |  | 2023 |  | 2022
Provision for income taxes |  | $ | 10.8 |  |  | $ | 18.9 |  |  | $ | 24.8 |  |  | $ | 22.7 |
Effective income tax rate |  | 23.4 | % |  | 30.1 | % |  | 21.9 | % |  | 19.3 | %
Our provision for income taxes for the three months ended September 30, 2023 includes a net discrete income tax benefit of $2.7 million, of which $3.2 million relates to the reversal of a valuation allowance previously recorded against the deferred tax assets of certain foreign subsidiaries and states, partially offset by a net tax expense of $0.5 million related to other worldwide adjustments. For the three months ended September 30, 2022, the provision included a net discrete income tax benefit of $1.5 million, of which $3.1 million related to the reversal of a valuation allowance previously recorded against the deferred tax assets of one of our foreign subsidiaries, reduced by a net tax expense of $1.5 million related to other worldwide adjustments. Our provision for income taxes for the nine months ended September 30, 2023 includes a net discrete income tax benefit of $8.2 million, which includes a benefit of $8.2 million related to the reversal of valuation allowances previously recorded against deferred tax assets of certain foreign subsidiaries and states, as well as other offsetting worldwide adjustments. For the nine months ended September 30, 2022, the provision included a net discrete income tax benefit of $13.3 million, of which a benefit of $9.4 million related to the reversal of valuation allowances previously recorded against the deferred tax assets of two of our foreign subsidiaries and $7.3 million related to the remeasurement of an uncertain tax position and expiration of statute of limitation periods for one of our foreign subsidiaries, reduced by a net tax expense of $3.4 million related to other worldwide tax adjustments. Our income tax provisions for the three months ended September 30, 2023 and 2022 were calculated based on the estimated annual effective income tax rates for the 2023 and 2022 years, respectively. The actual effective income tax rate for the 2023 year may be materially different for several reasons including differences between estimated versus actual results and the geographic tax jurisdictions in which the results are earned. We have tax returns under examination in various U.S. state and foreign jurisdictions. The most material of these is in Denmark for the 2013 to 2019 tax years, where one of our subsidiaries has been under audit since 2018. Through September 30, 2023, we have received final tax assessments for the 2013 and 2014 tax years that were immaterial, a proposed tax assessment for the 2015 tax year of approximately $13.6 million (DKK 96.1 million), and proposed tax assessments for the 2016 and 2017 tax years of approximately $19.0 million (DKK 133.8 million) and $22.0 million (DKK 155.5 million), respectively. We believe these assessments are without merit and are vigorously defending against the actions. We have not yet received any proposed assessments related to the 2018 or 2019 tax years, which could be materially larger than the previous assessments if a similar methodology is applied. In April 2023, we received notification that the U.S. examinations of our 2017 and 2018 tax years are closed as expected. An unfavorable resolution of one or more of the above matters could have a material adverse effect on our operating results or cash flows in the quarter or year in which the adjustments are recorded, or the tax is due or paid. As examinations are still in process or have not yet reached the final stages of the appeals process, the timing of the ultimate resolution or payments that may be required cannot be determined at this time.

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