Income Taxes

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company's effective tax rate for the first half of 2022 was (267.2)% compared with 26.6% in the first half of 2021 and 21.9% for the full year 2021. The decrease in the effective tax rate in the first half of 2022 as compared with the rate for the full year 2021 was driven by the goodwill impairment charge of $68,194, which is not tax deductible for book purposes. Excluding the goodwill impairment charge, the effective tax rate for the first half of 2022 was 22.0%. Additional drivers in the effective tax rate in the first half of 2022, as compared with the full year 2021 rate, include the absence of benefits related to the realignment of tax basis goodwill and intangibles, and the favorable Mutual Aid Process Approval, both recorded in 2021. The effective tax rate is also impacted by higher income in jurisdictions with tax holidays.

The Aerospace and Industrial segments have several multi-year tax holidays in Singapore, China and Malaysia. The Company was granted a tax holiday in China that was approved in December 2021. As a result of this tax holiday, the China tax rate was reduced from 25% to 15% and is effective for a three year period commencing January 1, 2021 (retroactively). Aerospace was granted an income tax holiday for operations established in Malaysia. This holiday commenced effective November 2020 (retroactively) and remains effective for a period of ten years. The Singapore tax holiday is scheduled to expire in December 2022. These holidays are subject to the Company meeting certain commitments in the respective jurisdictions.