TAXES

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

TAXES

TAXES

Our tax provision or benefit from income taxes for interim periods is determined using an estimate of our global annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.

Our quarterly tax provision, and our quarterly estimate of our annual effective tax rate, is subject to change resulting from several factors, including variability in forecasting our pre-tax and taxable income and loss due to external changes in market conditions, changes in statutes, regulations and administrative practices, principles, and interpretations related to tax. Our effective tax rate can be more or less volatile based on the amount of pre-tax income or loss. For example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower.

Our income tax (expense) benefit for the three months ended June 30, 2022 and 2021, was $2.7 million and $5.2 million, respectively. For the six months ended June 30, 2022 and 2021, our income tax (expense) benefit was $3.4 million and $6.2 million, respectively. For the six months ended June 30, 2022, our effective tax rate of 35.3%, before discrete items, was above the U.S. statutory rate of 21.0% primarily due to foreign and state taxes net of the federal benefit, disallowed wage expense and fringe benefits, and non-deductible compensation for covered employees. These unfavorable items were offset by tax credits. Additionally, for the six months ended June 30, 2022, we recorded discrete tax expense associated with non-deductible compensation for covered employees and nondeductible mergers and acquisitions related costs, offset by a discrete tax benefit associated with a change in our state tax rate. For the six months ended June 30, 2021, our effective tax rate of 27.3% was above the U.S. statutory rate of 21.0% primarily due to state taxes, tax on Global Intangible Low-Taxed Income, disallowed wage expense and fringe benefits, and certain other non-deductible items. These items were primarily offset by tax credits. We did not have any unrecognized tax benefits as a result of tax positions taken during a prior period or during the current period. No interest or penalties were recorded as a result of tax uncertainties.