Income Taxes

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The following table presents components of income tax expense for the three and nine months ended September 30, 2023 and 2022:

	Three months ended September 30,				Nine months ended September 30,
(in thousands, except percentages)	2023		2022		2023		2022
Income tax based on income from operations (1)	$	10,731	$	2,208	$	35,698	$	28,315
Provision for change in estimated tax rate	(119)		674		5		740
Income tax before discrete items	10,612		2,882		35,703		29,055
Discrete tax expense:
Exercise of U.S. stock options	—		(9)		—		(17)
Impact of amended tax returns	—		—		—		(98)
Reconciliation of prior year estimated taxes	(1,833)		(1,185)		(437)		(1,693)
Enacted tax legislation and rate change	—		—		313		—
Provision for/resolution of tax audits and contingencies, net	(602)		24		176		(116)
Impact of long range tax planning	—		—		(443)		—
Withholding tax related to internal restructuring	—		—		3,026		—
US Pension Settlement - Release of Residual Tax Effect	—		(5,217)		—		(5,217)
Impact of non-election of high tax exclusion under GILTI*	1,155		—		1,617		—
Other	(125)		322		(47)		359
Total income tax expense/(benefit)	$	9,207	$	(3,183)	$	39,908	$	22,273
(1) Income tax is calculated at estimated annualized effective tax rate of 29.5% and 28.9% for the three and nine months ended September 30, 2023 and 2022, respectively. * Global Intangible Low-Taxed Income

Income tax expense for the quarter was computed in accordance with ASC 740-270, Income Taxes – Interim Reporting. Under this method, loss jurisdictions which cannot recognize a tax benefit with regard to their generated losses are excluded from the annual effective tax rate calculation and their taxes will be recorded discretely in each quarter.

The Company's policy for releasing income tax effects from accumulated other comprehensive income is the specific identification approach, whereas these items are released to income tax expense when the individual items are disposed of, terminated or extinguished.

The Tax Cuts and Jobs Act lowered the U.S. corporate tax rate from 35% to 21% as of December 31, 2017, creating residual tax effects as a result of the remeasurement of deferred tax assets and liabilities originally established in other comprehensive income. As a result of the U.S. pension liability settlement (see Note 3, Pensions and Other Postretirement Benefit Plans), and consistent with the Company's policy, in the third quarter of 2022, the Company recorded a net tax benefit of $5.2 million for the release of the residual tax effects within other comprehensive income related to the U.S. pension settlement.