Income Tax

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Tax

10. Income Tax

The effective tax rate for the three months ended March 31, 2022 was (64.2)% compared to (7.5)% for the same period in 2021. The change in the effective tax rate between the periods resulted primarily from changes in income earned in foreign jurisdictions,, changes in valuation allowances in the United States, foreign inclusions, changes in nondeductible compensation and other expenses, and the mix of earnings in jurisdictions with differing tax rates.

We have historically considered the majority of undistributed earnings of our foreign subsidiaries and equity investees to be indefinitely reinvested, and, accordingly, no deferred taxes had been provided on the indefinitely reinvested earnings. As of June 30, 2020, the Company reversed its indefinite reinvestment assertion. As a result, we recorded a deferred foreign tax liability, which had a balance of $3.3 million as of March 31, 2022, and is primarily related to estimated foreign withholding tax associated with repatriating all non-U.S. earnings back to the United States.

The Company is subject to ongoing tax authority examinations in various jurisdictions in which it operates. The Company reviews its accrual for uncertain tax positions at each reporting period and updates positions based on available information.