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INCOME TAXES
9 Months Ended
Sep. 30, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
 Three Months Ended
September 30,
Nine Months Ended
September 30,
 2022202120222021
(in thousands, except percentages)
Income tax (expense) benefit$(135,910)$$(133,956)$455 
Effective tax rate(596.8)%— %(307.3)%(1.9)%
For the third quarter and first nine months of 2022, the effective tax rate varied from the federal statutory rate of 21% primarily due to expense of $139.7 million to record a full valuation allowance against our net deferred tax assets, excess tax expense of $1.8 million and $4.7 million, respectively, resulting from vesting of restricted stock in accordance with ASU 2016-09 and the effect of state taxes. For the third quarter and first nine months of 2021, the effective tax rate varied from the federal statutory rate of 21% in part due to an excess tax expense of $0.9 million and an excess tax benefit of $7.4 million, respectively, resulting from employee exercises of stock options and vesting of restricted stock in accordance with ASU 2016-09 and the effect of state taxes.
During the third quarter of 2022, the Company recorded tax expense of $139.7 million to establish a full valuation allowance against its net deferred tax assets due to historical cumulative pre-tax losses and continued pre-tax losses in the quarter. Management regularly reviews the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing taxable temporary differences, and tax planning strategies. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. In determining the amount of the valuation allowance, the Company considered the scheduled reversal of deferred tax liabilities. The Company will maintain a full valuation allowance on net deferred tax assets until there is sufficient evidence to support the reversal of some or all of the allowance. Should there be a change in the valuation allowance in the future, the income tax provision would increase or decrease in the period in which the allowance is changed.
The indefinite carryforward period for certain deferred tax assets means that indefinite-lived deferred tax liabilities can be considered as support for realization of such deferred tax assets including post December 31, 2017 net operating loss carryovers, which can affect the need to record or maintain a valuation allowance for deferred tax assets. At September 30, 2022 the Company maintains a valuation allowance of $146 million against its net deferred tax assets.
 Three Months Ended
September 30,
Nine Months Ended
September 30,
 2022202120222021
(in thousands)
Income tax benefit (expense) - excluding excess tax expense from valuation allowance and excess tax (expense) benefit on stock compensation$5,512 $939 $10,372 $(6,900)
Income tax expense from valuation allowance(139,670)— (139,670)— 
Excess tax (expense) benefit on stock compensation(1,752)(938)(4,658)7,355 
Income tax (expense) benefit$(135,910)$$(133,956)$455