Income Taxes (Notes)

3 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

11. Income Taxes

Income taxes for the interim periods presented have been included in the accompanying Consolidated Financial Statements on the basis of an estimated annual effective tax rate ("ETR"). The determination of the consolidated provision for income taxes requires management to make certain judgments and estimates. Changes in the estimated level of annual pre-tax earnings or loss, tax laws, and changes resulting from tax audits can affect the overall ETR, which impacts the level of income tax expense or benefit and net income or loss. Judgments and estimates related to the Company’s projections and assumptions are inherently uncertain and therefore, actual results could differ materially from projections.

The Company's ETR for the three and six months ended June 30, 2023 was 21.8% (inclusive of discrete items totaling $0.1 million of expense) and 36.8% (inclusive of discrete items totaling $0.7 million of expense), respectively. The discrete items impacting the tax provision for the three and six months ended June 30, 2023 were primarily attributable to stock-based compensation. Absent the discrete items, the ETR for the three and six months ended June 30, 2023 was 21.3% and 31.6%, respectively. The Company's ETR for the three and six months ended June 30, 2022 was (11.9)% (inclusive of discrete items totaling $0.6 million of benefit) and (14.6)% (inclusive of discrete items totaling $1.6 million of benefit), respectively. The discrete items impacting the tax provision for the three and six months ended June 30, 2023 were primarily attributable to stock-based compensation. Absent the discrete items, the ETR for the three and six months ended June 30, 2022 was (12.2)% and (15.5)%, respectively.

The Company's ETR is favorably impacted by tax holidays granted to the Company. The benefit for these incentives for the three and six months ended June 30, 2023 was approximately $0.5 million and $0.6 million, respectively, or $0.01 on a basic per share basis for both periods. The benefit for these incentives for the three and six months ended June 30, 2022 was approximately $2.4 million and $5.0 million, respectively, or $0.03 and $0.05 on a basic per share basis. The decrease in the tax holiday benefits is attributable to the Company not satisfying all of the conditions of our tax holiday in Malaysia during the year ended December 31, 2022 due to the rapid decline in demand for global consumer electronics. As a result, our tax holiday benefit in Malaysia ended on December 31, 2022.

The Company believes it is reasonably possible that a U.S. valuation allowance of approximately $11.6 million related to foreign tax credits will be released within the next twelve months.