INCOME TAXES

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company's provision for income taxes represents federal, foreign, state and local income taxes. The Company's effective tax rate differs from the applicable federal statutory rate due to the effect of state and local income taxes, tax rates and income in foreign jurisdictions. The Company’s tax provision changes quarterly based on various factors including, but not limited to, the geographical level and mix of earnings; enacted tax legislation; foreign, state and local income taxes; changes in valuation allowances; tax audit settlements; and the interaction of various global tax strategies.

The Company recorded provision for income taxes of $2.8 million (Products Corporation - $2.8 million) for the three months ended September 30, 2022 and a provision for income taxes of $5.4 million (Products Corporation - $5.5 million) for the three months ended September 30, 2021, respectively. The $2.6 million decrease in the provision for income taxes for the third quarter of 2022, compared to the same quarter in 2021, was primarily due to the geographical mix of earnings and net change of valuation allowance on its net deferred tax assets for certain jurisdictions.

The Company recorded a provision for income taxes of $12.1 million (Products Corporation - $12.1 million) for the nine months ended September 30, 2022 and a provision for income taxes of $23.8 million (Products Corporation - $23.9 million) for the nine months ended September 30, 2021, respectively. The $11.7 million decrease (Products Corporation - $11.8 million) in the provision for income taxes in the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, was primarily due to the geographical level and mix of earnings and net change of valuation allowance on its net deferred tax assets for certain jurisdictions.

The Company's effective tax rate for the three and nine months ended September 30, 2022 and September 30, 2021 was lower than the federal statutory rate of 21% primarily due to losses for which no tax benefit can be recognized, as well as state taxes for certain U.S. entities.

In assessing the recoverability of its deferred tax assets, the Company continually evaluates all available positive and negative evidence to assess the amount of deferred tax assets which are more likely than not to be realized. Deferred tax assets are reduced by a valuation allowance if some portion or all of the deferred tax assets will not be realized. A valuation allowance is a non-cash charge, and it in no way limits the Company's ability to utilize its deferred tax assets, including its ability to utilize tax loss and credit carryforward amounts.

For further information, see Note 13, "Income Taxes," to the Consolidated Financial Statements in the Company's 2021 Form 10-K.