Income Taxes

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes 

Income tax expense related to continuing operations for the three and nine months ended September 30, 2023 was $4.1 million and $21.4 million, respectively, compared with $9.4 million and $7.5 million related to continuing operations for the three and nine months ended September 30, 2022, respectively. The decrease in the income tax expense for the three months ended September 30, 2023, compared with the three months ended September 30, 2022, is due to reduced taxable income as a result of higher interest expense on the Company's Senior Secured Credit Facilities and increased pension expense, as well as a change in geographical mix of income. The increase in the income tax expense for the nine months ended September 30, 2023, compared with the nine months ended September 30, 2022, is the result of higher earnings in CE, the gain on lease modification of an HE site, the increased disallowed interest expense in the U.S. resulting from higher interest expense on the Company's Senior Secured Credit Facilities, a valuation allowance for a deferred tax asset in a certain foreign entity of $3.7 million, as well as the tax benefit on a portion of the CE goodwill impairment in 2022 not recurring in 2023.

The Company has historically calculated its quarterly tax provision based on its best estimate of the full year tax rate applicable to the quarter. For the three and nine months ended September 30, 2023, due to the insignificant amount of pre-tax book loss relative to the size of permanent book-tax differences and a varying net income (loss) pattern projected for the year, the Company’s tax provision estimate was determined using an actual year-to-date method. In the prior year, the estimate was based on the forecasted full year rate.

The reserve for uncertain tax positions on September 30, 2023 was $4.4 million, including interest and penalties.  Within the next twelve months, it is reasonably possible that $1.0 million in unrecognized income tax benefits will be recognized upon settlement of tax examinations and the expiration of various statutes of limitations.