Income Taxes

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Note 11. Income Taxes

The following table provides details of income taxes (in millions, except percentages):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Income before income taxes	$	82.8		$	140.2		$	231.4		$	331.3
Income tax provision	$	5.0		$	16.6		$	39.6		$	38.1
Effective tax rate	6.0		%	11.9		%	17.1		%	11.5		%

The Company’s effective tax rate differs from the federal statutory rate of 21% primarily due to the tax impact of state taxes, geographic mix of earnings including foreign-derived intangible income deductions and the capitalization of research and development ("R&D") expenditures, R&D and foreign tax credits, tax audit settlements, non-deductible compensation, cost sharing of stock-based compensation, and other transfer pricing adjustments.

The Company’s effective tax rate for the nine months ended September 30, 2023 includes one-time benefits from tax legislation changes, restructuring charges, and excess tax benefits associated with stock-based compensation, partially offset by tax expense on adjustments for certain privately-held investments.

The Company’s effective tax rate for the nine months ended September 30, 2022 includes the net effect of the gain recognized on divestiture of the Company's silicon photonics business, one-time benefits from tax legislative changes, and excess tax benefits associated with stock-based compensation.

As of September 30, 2023, the current domestic tax payable was $321.6 million. This is primarily composed of the current year federal tax accrual and transition tax installment for which payment was postponed until October 2023 in accordance with a current year Internal Revenue Service ("IRS") announcement.

As of September 30, 2023, the total amount of gross unrecognized tax benefits was $119.6 million.

The Company engages in continuous discussions and negotiations with tax authorities regarding tax matters in various jurisdictions. There is a greater than remote likelihood that the balance of the gross unrecognized tax benefits will decrease by up to $45.7 million within the next twelve months due to the completion of tax review cycles in various tax jurisdictions and lapses of applicable statutes of limitation.

The Company is currently under examination by the IRS and the India tax authorities for the 2017 through 2018 tax years and the 2012 through 2020 tax years, respectively.