Income Taxes

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 16: INCOME TAXES

For the three months ended June 30, 2022, the Company recorded income tax expense of $66.8 million compared to $38.5 million in the prior year. The income tax expense for the three months ended June 30, 2022 and 2021 primarily represent taxes at federal and local statutory rates where the Company operates, but generally exclude any tax benefit for losses in jurisdictions with historical losses. For the six months ended June 30, 2022, the Company recorded income tax expense of $121.8 million compared to $46.1 million in the prior year. The income tax expense for the six months ended June 30, 2022 and 2021 primarily represent taxes at federal and local statutory rates where the Company operates, but generally exclude any tax benefit for losses in jurisdictions with historical losses. The increase in the income tax provision in the first six months of 2022 compared to the first six months of 2021 is primarily a result of the increase in actual and forecasted earnings between the two periods as conditions have improved year-over-year.

As required by ASC 740, the Company assesses the realizability of its deferred tax assets. The Company records a valuation allowance when, based upon the evaluation of all available evidence, it is more-likely-than-not that all or a portion of the deferred tax assets will not be realized. In making this determination, we analyze, among other things, our recent history of earnings, the nature and timing of reversing book-tax temporary differences, tax planning strategies, and future income. The Company maintains a valuation allowance on certain foreign and U.S. federal deferred tax assets until such time as in management’s judgment, considering all available positive and negative evidence, the Company determines that these deferred tax assets are more likely than not realizable. The valuation allowance is reviewed quarterly and will be maintained until sufficient positive evidence exists to support the reversal of some or all of the valuation allowance. The valuation allowance was $5.0 million at both June 30, 2022 and December 31, 2021.

The Company accounts for uncertain income tax positions in accordance with ASC 740. We anticipate that certain statutes of limitation will close within the next twelve months resulting in the immaterial reduction of the reserve for uncertain tax benefits related to various intercompany transactions. No changes were recorded in the first six months of 2022, therefore, the balance of $0.8 million at December 31, 2021 remains unchanged.