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Income Taxes
 9 Months Ended
Sep. 30, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income TaxesWe compute and apply to ordinary income an estimated annual effective tax rate on a quarterly basis based on current and forecasted business levels and activities, including the mix of domestic and foreign results and enacted tax laws. The estimated annual effective tax rate is updated quarterly based on actual results and updated operating forecasts. Ordinary
income refers to income before the provision for income taxes excluding significant, unusual or infrequently occurring items. The tax effect of an unusual or infrequently occurring item is recorded in the interim period in which it occurs as a discrete item of tax.

The following table summarizes the provision for income taxes:
Three Months Ended September 30,Nine Months
Ended September 30,
2022202120222021
(Dollars in thousands)
Provision for income taxes$15,041 $21,920 $56,260 $45,942 
Pre-tax income108,492 141,806 388,891 292,792 
Effective tax rate13.9 %15.5 %14.5 %15.7 %
The effective tax rate for the three months ended September 30, 2022 and 2021 was 13.9% and 15.5%, respectively, and 14.5% and 15.7% for the nine months ended September 30, 2022 and 2021, respectively. The effective rate for each period was lower than the U.S. statutory tax rate of 21% primarily due to worldwide earnings from various countries taxed at different rates, which is partially offset by the net combined impact related to the U.S. taxation of global intangible low taxed income ("GILTI") and Foreign Tax Credits ("FTCs").
The provision for income taxes was $15.0 million for the three months ended September 30, 2022 compared to $21.9 million in the three months ended September 30, 2021. The decrease was primarily due to a reduction in pre-tax income and the decrease in the effective tax rate. In the first nine months of 2022, the provision for income taxes was $56.3 million compared to $45.9 million in the first nine months of 2021. The increase was primarily due to an increase in pre-tax income, partially offset by a decrease in the effective tax rate.
On August 16, 2022, the U.S. Inflation Reduction Act containing a new 15% Corporate Alternative Minimum Tax on adjusted financial statement income was enacted. We assessed the applicability of this minimum tax to GrafTech and determined that the Company will not be subject to the minimum tax.
We file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. All U.S. federal tax years prior to 2018 are generally closed by statute or have been audited and settled with the applicable domestic tax authorities. Other jurisdictions are generally closed for years prior to 2016.
We continue to assess the realization of our deferred tax assets based on determinations of whether it is more likely than not that deferred tax benefits will be realized through the generation of future taxable income. Appropriate consideration is given to all available evidence, both positive and negative, in assessing the need for a valuation allowance. Examples of positive evidence would include a strong earnings history, an event or events that would increase our taxable income through a continued reduction of expenses, and tax planning strategies that would indicate an ability to realize deferred tax assets. In circumstances where the significant positive evidence does not outweigh the negative evidence in regards to whether or not a valuation allowance is required, we have established and maintained valuation allowances on those net deferred tax assets.