XML 28 R18.htm IDEA: XBRL DOCUMENT v3.22.2.2
Income Taxes
 9 Months Ended
Sep. 30, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company’s effective tax rates yielded a net expense of 15.1% and 21.5% for the three months ended September 30, 2022 and 2021, respectively, and a net expense of 16.3% and 17.2% for the nine months ended September 30, 2022 and 2021, respectively.
During the three months ended September 30, 2022, the net effect of discrete items decreased the effective tax rate by 3.3%. For the nine months ended September 30, 2022, the net effect of discrete items decreased the effective tax rate by 2.5%. The discrete items for the three months ended September 30, 2022, primarily relate to the effect of the U.S. Research and Development (“R&D”) tax credit claimed on the Company’s 2021 tax return, which was substantially completed in the third quarter of 2022. The discrete items for the nine months ended September 30, 2022, primarily relate to windfall tax benefits associated with equity-based compensation. Excluding discrete items, the Company’s effective tax rate would have been 18.4% and 18.8% for the three and nine months ended September 30, 2022, respectively.
During the three months ended September 30, 2021, the net effect of discrete items increased the effective tax rate by 1.3%. For the nine months ended September 30, 2021, the net effect of discrete items decreased the effective tax rate by 3.0%. The discrete items for the nine months ended September 30, 2021, primarily relate to windfall tax benefits associated with equity-based compensation. Excluding discrete items, the Company’s effective tax rate would have been 20.2% for the three and nine months ended September 30, 2021.
The Company has computed the provision for income taxes based on the estimated annual effective tax rate excluding a loss jurisdiction with no tax benefit and the application of discrete items, if any, in the applicable period.
During the three and nine months ended September 30, 2022 and 2021, uncertain tax positions recorded by the Company were not significant. To the extent the remaining uncertain tax positions are ultimately recognized, the Company’s effective tax rate may be impacted in future periods.
The Company recognizes interest expense and tax penalties related to unrecognized tax benefits in income tax expense in the Consolidated Statements of Operations. The Company’s accrual for interest and penalties related to unrecognized tax benefits was not significant for the three and nine months ended September 30, 2022 and 2021.
During the nine months ended September 30, 2022 and 2021, the Company paid net cash taxes of $19.5 million and $14.8 million, respectively.