Income Taxes

9 Months Ended

Sep. 30, 2022

Income Taxes

Income Taxes

10. Income Taxes

The Company computes its year-to-date provision for income taxes by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusts the provision for discrete tax items recorded in the period. A valuation allowance has been established against the Company’s U.S. federal and state deferred tax assets, which results in an annualized effective tax rate for the Company’s U.S. operations of 0%. For the three months ended September 30, 2022, the Company recorded an income tax benefit of $0.02 million related to foreign tax activity on a pretax income of $18.7 million, resulting in an effective tax rate of 0.08%. For the three months ended September 30, 2021, the Company recorded an income tax provision of $0.01 million related to foreign tax activity on a pretax loss of $32.4 million, resulting in an effective tax rate of 0.03%. For the nine months ended September 30, 2022, the Company recorded an income tax provision of $0.04 million related to foreign tax activity on a pretax loss of $27.6 million, resulting in an effective tax rate of 0.15%. For the nine months ended September 30, 2021, the Company recorded an income tax provision of $0.04 million related to foreign tax activity on a pretax loss of $98.4 million, resulting in an effective tax rate of 0.04%. These effective tax rates differ from the U.S. federal statutory rate primarily due to the valuation allowance against the Company’s domestic deferred tax assets.