Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | NOTE N. INCOME TAXES For the three and nine months ended September 30, 2022, the Company recorded total income tax expense of $20 million and $86 million, respectively. The effective tax rate for the three and nine months ended September 30, 2022 was 13% and 18%, respectively. For the three and nine months ended September 30, 2021, the Company recorded total income tax expense of $30 million and $94 million, respectively. The effective tax rate for the three and nine months ended September 30, 2021 was 24% and 22%, respectively. The change in the effective tax rate in 2022 was due to enacted state tax rate legislation that resulted in a deferred tax benefit. The need to establish a valuation allowance against the deferred tax assets is assessed periodically based on a more-likely-than-not realization threshold, in accordance with authoritative accounting guidance. Appropriate consideration is given to all positive and negative evidence related to that realization. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carry-forward periods, experience with tax attributes expiring unused, and tax planning alternatives. The weight given to these considerations depends upon the degree to which they can be objectively verified.
The Company continues to provide for a valuation allowance on certain of its foreign deferred tax assets and an anticipated capital loss carryforward. The Company has determined, based on the evaluation of both objective and subjective evidence available, that this valuation allowance is necessary and that it is more likely than not that the deferred tax assets are not fully realizable. In accordance with the FASB’s authoritative guidance on accounting for income taxes, the Company has recorded a liability for unrecognized tax benefits related to a 2010 Research and Development Credit as of September 30, 2022 and December 31, 2021. The accounting guidance prescribes a recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company's returns will remain subject to examination by various taxing authorities for the duration of the applicable statute of limitations (generally three years from the later of the date of filing or the due date of the return). |