INCOME TAXES

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

During the three months ended June 30, 2023, the Company recognized income tax expense of $32.0 million on income of $191.8 million, an effective tax rate of 16.7%, as compared to income tax expense of $15.1 million on income of $89.2 million, an effective tax rate of 16.9%, for the three months ended June 30, 2022. The lower effective tax rate for the three months ended June 30, 2023 when compared with the three months ended June 30, 2022 is primarily due to lower tax expense on permanent items partially offset by higher tax related to geographic distribution of income.

During the six months ended June 30, 2023, the Company recognized income tax expense of $55.3 million on income of $325.0 million, an effective tax rate of 17.0%, as compared to income tax expense of $27.0 million on income of $153.4 million, an effective tax rate of 17.6%, for the six months ended June 30, 2022. The lower effective tax rate for the six months ended June 30, 2023 when compared with the six months ended June 30, 2022 is primarily due to lower tax expense on permanent items partially offset by higher tax related to geographic distribution of income.

On December 15, 2022, the European Union (“EU”) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15% for large corporations, as established by the Organization for Economic Co-operation and Development (“OECD”) Pillar Two Framework. The OECD continues to release additional guidance on the two-pillar approach with widespread implementation anticipated by 2026. The Company is continuing to evaluate the potential impact on future periods of the Pillar Two Framework.