Income taxes

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income taxes

NOTE 9 — Income taxes

The following table outlines our pre-tax net loss and income tax amounts:

	Three months ended June 30,						Six months ended June 30,
In thousands	2022			2021			2022			2021
Income (loss) before income taxes	$	(31,542)		$	32,401		$	(42,251)		$	(119,409)
Provision for income taxes	22,158			17,692			14,551			8,583
Effective tax rate	(70.3)		%	54.6		%	(34.4)		%	(7.2)		%

The provision for income taxes is calculated by applying the estimated annual effective tax rate for the year to the current period income or loss before tax plus the tax effect of any significant or unusual items, discrete events, or changes in tax law.

The provision for income taxes for the three months ended June 30, 2022 was mainly driven by the valuation allowances on non-deductible interest expense carryforwards, the change in the estimated annual effective tax rate as a result of the change in the net income before tax forecast in the second quarter of 2022, and the global intangible low taxed income inclusion from our wholly owned U.K subsidiary. The provision was calculated using an estimated annual effective tax rate of negative 43.30%. The estimated annual effective tax rate is principally impacted by the valuation allowances on non-deductible interest expense carryforwards, the pre-tax book loss benefit, the global intangible low taxed income inclusion, and state and foreign income tax expense.

The provision for income taxes for the six months ended June 30, 2022 was mainly driven by the valuation allowances on non-deductible interest expense carryforwards, pre-tax loss benefit, and the global intangible low taxed income inclusion.

The total amount of unrecognized tax benefits that, if recognized, may impact the effective tax rate was approximately $46.5 million and $45.0 million as of June 30, 2022 and December 31, 2021, respectively. The amount of accrued interest and penalties payable related to unrecognized tax benefits was $4.0 million and $3.7 million as of June 30, 2022 and December 31, 2021, respectively.

It is reasonably possible that further adjustments to our unrecognized tax benefits may be made within the next twelve months due to audit settlements and regulatory interpretations of existing tax laws. At this time, an estimate of potential change to the amount of unrecognized tax benefits cannot be made.

The provision for income taxes for the three months ended June 30, 2021 was mainly driven by the pre-tax income and was impacted by the creation of valuation allowances on non-deductible interest expense carryforwards in combination with the U.K. enacted legislation to increase the statutory tax rate from 19% to 25%, effective April 1, 2023. While the U.K. corporate tax rate change does not impact 2021 or 2022 tax filings, the rate change impacts the tax effected value of the U.K. deferred tax liabilities. The provision was calculated using the estimated annual effective tax rate of 49.6%. The estimated annual effective tax rate is based on a projected tax expense for the full year.

The provision for income taxes for the six months ended June 30, 2021 was mainly driven by the pre-tax net loss generated during the first quarter of 2021. The tax provision was also impacted by the derivative revaluation, which is nondeductible for tax purposes, partially offset by the creation of valuation allowances on non-deductible interest expense carryforwards as well as state income tax and foreign tax expense.