Income Taxes

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The below discussion of the effective tax rate for the periods presented in the consolidated statements of operations is in comparison to the 21% U.S. statutory federal income tax rate.

Our effective tax rate was 31.9% in the second quarter of 2024. During the second quarter of 2024, our effective tax rate was unfavorably impacted primarily by the mix of income in higher tax rate jurisdictions.

During the second quarter of 2023, our effective tax rate was 28.9%. During the second quarter of 2023, our effective tax rate was unfavorably impacted primarily by an increase in the valuation allowance attributable to loss jurisdictions in which no benefit is anticipated to be realized.

For the first six months of 2024, the Company’s effective tax rate on its income before taxes was 32.3%. The effective tax rate for the first six months of 2024 was unfavorably impacted primarily by (i) the write-off of deferred tax assets related to stock compensation and, (ii) the mix of income in higher tax rate jurisdictions.

During the first six months of 2023, the Company’s effective tax rate on its income before taxes was 33.2%. The effective tax rate for the first six months of 2023 was unfavorably impacted by the increase in the valuation allowance attributable to loss jurisdictions in which no benefit is anticipated to be realized.

The OECD Pillar 2 guidelines published to date include transition and safe harbor rules around the implementation of the Pillar 2 global minimum tax of 15%. Based on current enacted legislation effective in 2024 and our structure, we do not expect a material impact in 2024. We are monitoring developments and evaluating the impacts these new rules will have on our future effective income tax rate, tax payments, financial condition, and results of operations.