Income Tax

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Tax

Income Tax

The Company’s effective income tax rates were 21.8% and 21.9% for the three and nine months ended September 30, 2023, respectively, and 27.0% and (8.8)% for the three and nine months ended September 30, 2022, respectively. The Company recorded income tax expense of $67.2 million and $74.2 million for the three and nine months ended September 30, 2023, respectively. The Company recorded income tax expense of $5.2 million for the three months ended September 30, 2022 and income tax benefit of $5.7 million for the nine months ended September 30, 2022.

The Company performs a continuing evaluation of its deferred tax asset valuation allowance on a quarterly basis. During the three months ended March 31, 2022, the Company concluded that it was more likely than not that the Company would generate sufficient taxable income within the applicable net operating loss carry-forward periods to realize a portion of its deferred tax assets, which resulted in a partial reversal of the deferred tax asset valuation allowance in that period. The partial reversal of the deferred tax asset valuation allowance during the three months ended March 31, 2022 resulted in the negative effective income tax rate and income tax benefit for the nine months ended September 30, 2022. The effective income tax rate and the income tax expense for the three and nine months ended September 30, 2023 differed from the federal tax rate of 21% primarily due to the limitation on tax deductions for executive compensation in excess of $1 million under Section 162(m) of the Internal Revenue Code.

As of September 30, 2023, the Company’s 2017 and 2018 federal tax returns were under audit by the IRS.

As of September 30, 2023 and December 31, 2022, the Company had no material uncertain tax positions.