Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income tax expense of $(1.6) and $5.5 for the three months ended September 30, 2022 and 2021, respectively, represents taxes on both U.S. and foreign earnings at a combined effective income tax rate of (4.0)% and 25.9%, respectively. Income tax expense of $4.0 and $9.9 for the nine months ended September 30, 2022 and 2021, respectively, represents taxes on both U.S. and foreign earnings at a combined effective income tax rate of 5.8% and 17.0%, respectively.

The effective income tax rates of (4.0)% and 5.8% for the three and nine months ended September 30, 2022 differed from the U.S. federal statutory rate of 21% primarily due to income earned by our certain foreign entities being taxed at higher rates than the U.S. federal statutory rates more than offset by the release of a valuation allowance on certain foreign entities, excess tax benefits associated with share-based compensation, and global R&D tax credits. The release of the valuation allowance is due to continued improvement of on-going results in certain foreign jurisdictions over the prior three years and the current year resulting in the recognition of deferred tax assets (and the related deferred tax benefit) that were generated in prior years and year to date that had not been previously recognized.

The effective income tax rate of 25.9% for the three months ended September 30, 2021 differed from the U.S. federal statutory rate of 21% primarily due to income earned by our certain foreign entities being taxed at higher rates than the U.S. federal statutory rate combined with a reduction of our foreign-derived intangible income deduction (FDII) as a result of lower forecasted taxable income in the U.S.

The effective income tax rate of 17.0% for the nine months ended September 30, 2021 differed from the U.S. federal statutory rate of 21% primarily due to excess tax benefits associated with share-based compensation and income incurred by certain of our foreign operations with a full valuation allowance, partially offset by income earned by our certain foreign entities being taxed at higher rates than the U.S. federal statutory rate.