Income Taxes

3 Months Ended

Mar. 31, 2021

INCOME TAXES

The Company’s effective income tax rate is based on expected income, statutory rates, valuation allowances against deferred tax assets, and any tax planning opportunities available to the Company. For interim financial reporting, the Company estimates the annual effective income tax rate based on full year projections and applies the annual effective income tax rate against year-to-date pretax income (loss) to record income tax expense (benefit), adjusted for discrete items, if any. The Company refines annual estimates as new information becomes available. The Company’s tax rate does not bear a relationship to statutory tax rates due to permanent differences, which are primarily related to nondeductible compensation, and state taxes.

The Company’s income tax expense (benefit) consisted of the following:


	Three Months Ended
	March 31,
		2021		2020
Income (loss) before provision for income taxes		$	45,010	$	(4,209)
Income tax expense using estimated annual effective income tax rate		13,053		308




Impact of discrete items, net		—		(1,286)




Income tax expense (benefit)		$	13,053	$	(978)

The net discrete items for the three months ended March 31, 2020 primarily relates to income tax benefits on goodwill and trademark impairment charges and changes in value of certain contingent consideration partially offset by the income tax expense related to the equity in earnings from investments associated with the one-time gain on sale of LTS.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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