INCOME TAXES

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company’s effective tax rate for both the nine-month period ended September 30, 2023 and September 30, 2022 was 20.1 percent. The effective tax rate differs from the U.S. statutory rate of 21 percent primarily due to the recognition of the U.S. foreign-derived intangible income (FDII) provisions, partially offset by state taxes, and certain discrete events including excess tax benefits from share-based compensation. For the third quarter of 2023, the effective tax rate was 20.2 percent compared to 18.5 percent for the third quarter of 2022.

The increase in the effective tax rates for the third quarter of 2023 compared to the comparable period in the prior year was a result of less favorable discrete events in 2023. During the third quarter of 2022, the Company recorded $1.1 million of benefit from the reconciliation of the domestic federal return to the provision predominantly related to additional FDII benefit.