Income Taxes

6 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision for income taxes for the three months ended June 30, 2021 and 2020 was an expense of $108.0 million and $3.9 million, respectively. The provision for income taxes for the six months ended June 30, 2021 and 2020 was an expense of $158.6 million and $25.6 million, respectively.

The effective income tax rate was 28.5% and 6.6% for the three months ended June 30, 2021 and 2020, respectively. The effective income tax rate was 26.7% and 16.5% for the six months ended June 30, 2021 and 2020, respectively. In 2020, the Company completed intercompany sales of certain intellectual property. Approximately $28.3 million of tax benefits were recognized as a result for the three and six months ended June 30, 2020. These benefits represented the value of future tax deductions for amortization of the assets in the acquiring jurisdiction. No such benefits are included in 2021. This drove a significant increase in the effective income tax rate period over period. In addition, during the second quarter of 2021, the United Kingdom enacted legislation raising its corporate tax rate from 19% to 25% effective April 2023, which increased the Company’s effective income tax rate for the three and six months ended June 30, 2021.

The Company had gross unrecognized tax benefits of $130.1 million on June 30, 2021 and $127.1 million on December 31, 2020. It is reasonably possible that gross unrecognized tax benefits will decrease by approximately $9.2 million within the next twelve months due to the anticipated closure of audits and the expiration of certain statutes of limitation.