XML 38 R19.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 estimated effective annual tax rate as of September 30, 2022 and 2021 for the years ended December 31, 2022 and 2021, excluding the impact of discrete adjustments, was 3% and 24%, respectively. The decrease in the estimated effective annual tax rate is primarily due to decreased profitability, the impact of certain permanent adjustments, and a valuation allowance charge. The Company recorded discrete tax benefits of $10.9 million and $10.3 million for the three and nine months ended September 30, 2022, respectively, and $1.7 million and $7.2 million, for the three and nine months ended September 30, 2021, respectively. The discrete tax benefit in 2022 was primarily due to return to provision adjustments and the benefit of the release of an indemnified uncertain tax position offset by share-based compensation activity. The net discrete benefits in 2021 were primarily due to share-based compensation activity.
The Company establishes valuation allowances for deferred income tax assets in accordance with U.S. GAAP, which provides that such valuation allowances shall be established unless realization of the income tax benefits is more likely than not. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. At each reporting period, the Company considers the scheduled reversal of deferred tax liabilities and assets, available taxes in carryback periods, tax planning strategies and projected future taxable income in making this assessment.
As of September 30, 2022, the Company determined that it was more likely than not that deferred tax assets in the U.S. would not be realized due to reductions in estimates of future profitability in the U.S. Accordingly, the Company recorded a provision of $19.2 million associated with the establishment of a valuation allowance on those deferred tax assets.