Income Taxes

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 11. INCOME TAXES

For the second quarter, our effective income tax rate was 22.4%, as compared to 24.2% in the corresponding period in 2022. For the first two quarters, our effective income tax rate was 20.5%, as compared to 22.7% in the prior year. The decreases were primarily due to an increase in tax benefits from foreign-derived intangible income, favorable geographic mix of earnings, and a tax charge associated with prior year divestiture gains, partially offset by lower stock-based compensation deductions.

Unrecognized tax benefits of $59.2 million and $51.6 million at the end of the second quarter of 2023 and at the end of 2022, if recognized, would favorably affect the effective income tax rate in future periods. At the end of the second quarter of 2023 and at the end of 2022, we accrued interest and penalties of $10.2 million and $8.4 million. Although the timing of the resolution and/or closure of audits is not certain, we do not believe that our gross unrecognized tax benefits would materially change in the next twelve months.