Income Taxes

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

11. Income Taxes

The Company’s effective tax rate was 25.4% and 27.7% for the three months ended March 31, 2022 and 2021, respectively. The change in the effective tax rate was due primarily to a decrease of withholding tax and a change in the jurisdictional mix of earnings.  The difference between the effective tax rate and the statutory U.S. Federal income tax rate of 21.0% for the three months ended March 31, 2022 primarily relates to state income taxes and an increased expense for uncertain tax positions, partially offset by benefits related to untaxed income attributable to noncontrolling interests and federal research tax credits.  

As of March 31, 2022, the Company’s deferred tax assets were subject to a valuation allowance of $28.0 million primarily related to foreign net operating loss carryforwards, foreign tax credit carryforwards, and capital losses that the Company has determined are not more-likely-than-not to be realized. The factors used to assess the likelihood of realization include:  the past performance of the entities, forecasts of future taxable income, future reversals of existing taxable temporary differences, and available tax planning strategies that could be implemented to realize the deferred tax assets. The ability or failure to achieve the forecasted taxable income in these entities could affect the ultimate realization of deferred tax assets. 

As of March 31, 2022 and December 31, 2021, the liability for income taxes associated with uncertain tax positions was $22.5 million and $21.2 million, respectively.  It is reasonably possible that the Company may realize a decrease in our uncertain tax positions of approximately $0.5 million during the next 12 months as a result of concluding various tax audits and closing tax years.

Although the Company believes its reserves for its tax positions are reasonable, the final outcome of tax audits could be materially different, both favorably and unfavorably.  It is reasonably possible that certain audits may conclude in the next 12 months and that the unrecognized tax benefits the Company has recorded in relation to these tax years may change compared to the liabilities recorded for these periods. However, it is not currently possible to estimate the amount, if any, of such change.