Income Taxes

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For the three months ended March 31, 2023, income tax expense was $36.9 million, representing an effective tax rate of 25%, as compared to the federal statutory rate of 21%. The effective rate differs from the federal statutory rate due primarily to state and local income tax expense and tax expense for shortfalls related to share-based compensation.

For the three months ended March 31, 2022, income tax expense was $41.6 million, representing an effective tax rate of 27%, as compared to the federal statutory rate of 21%. The effective tax rate differs from the federal statutory rate due primarily to state and local income tax expense, tax expense related to non-deductible compensation and tax expense for an increase in the valuation allowance for foreign taxes.

At March 31, 2023, the Company had foreign tax credit carry forwards of approximately $50.2 million, expiring on various dates from 2024 through 2033. These carryforwards have been reduced by a valuation allowance of $50.2 million as it is more likely than not that these carry forwards will not be realized. For the three months ended March 31, 2023, $0.3 million relating to amortization of tax deductible second component goodwill was realized as a reduction in tax liability (as determined on a 'with-and-without' approach).

As of March 31, 2023, approximately $344.5 million of our consolidated cash and cash equivalents was held by foreign subsidiaries. Of this amount, approximately $225.0 million is expected to be repatriated to the United States with the remaining amount continuing to be reinvested in foreign operations. Tax expense related to the expected repatriation amount has been accrued in the current period and the Company does not expect to incur any significant, additional taxes related to the remaining balance.