Income Taxes

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company’s effective income tax rates were 24.9% and 22.0% for the three and nine months ended September 30, 2021, respectively. The effective income tax rates for both periods were higher than the 21% federal statutory rate primarily due to state income taxes and adjustments recorded when the final 2020 tax return information became available, partially offset by earnings attributable to noncontrolling interests, for which income taxes are not the responsibility of the Company.

The Company’s effective tax rates for the three and nine months ended September 30, 2020 were 0.1% and 12.2%, respectively. The effective income tax rates were lower than the 21% federal statutory rate primarily due to the favorable tax rate differential realized on the 2019 net operating loss ("NOL") carryback and earnings attributable to noncontrolling interests, for which income taxes are not the responsibility of the Company. Under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), enacted on March 27, 2020, the NOL generated in 2019 may be carried back up to five years, whereas under previous rules NOLs were only allowed to be carried forward. This allowed the Company to realize the benefit of the tax rate differential by carrying back the NOL to tax years when the federal statutory tax rate was 35% rather than the current rate of 21%. The majority of the NOL benefit was recorded in the third quarter of 2020 when final tax return information was received from the Company's joint venture partners. These benefits to the effective tax rates for both periods of 2020 were partially offset by state income taxes, the impact of cancelled stock options and the lower vested amounts or forfeiture of restricted stock units, for which some or all of the share-based compensation expense recognized in prior periods was not deductible for income tax purposes.