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Income Taxes
9 Months Ended
Sep. 30, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
As required by Accounting Standards Codification (“ASC”) Topic 740, “Income Taxes,” the Company computes interim period income taxes by applying an estimated annual effective tax rate to our year-to-date income from operations before income taxes, except for significant unusual or infrequently occurring items. The estimated effective tax rate is adjusted each quarter in accordance with ASC 740.
The effective tax rate after discrete items was 20.6 percent and 22.8 percent for the three and nine months ended September 30, 2021, respectively, and 21.3 percent and 22.2 percent for the three and nine months ended September 30, 2020, respectively. The Company’s provision for income taxes after discrete items was $7.8 million and $38.0 million, respectively, for the three and nine months ended September 30, 2021, and $12.2 million and $26.6 million, respectively, for the three and nine months ended September 30, 2020. The provision for income taxes varied from the tax computed at the U.S. federal statutory income tax rate for the periods presented primarily due to state taxes offset by discrete tax items including research and development tax credits as well as foreign derived intangible income (FDII).
The Company reviews its deferred tax assets for realization based upon historical taxable income, prudent and feasible tax planning strategies, the expected timing of the reversals of existing temporary differences and expected future taxable income. The Company has concluded that it is more likely than not that the net deferred tax assets will be realized. Accordingly, the Company has not recorded a valuation allowance against net deferred tax assets for any of the periods presented.