Herbalife Ltd. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

Income Taxes	9 Months Ended
Sep. 30, 2021
Income Tax Disclosure [Abstract]
Income Taxes	8. Income Taxes Income taxes were $34.3 million and $33.6 million for the three months ended September 30, 2021 and 2020, respectively, and $104.2 million and $104.4 million for the nine months ended September 30, 2021 and 2020, respectively. The effective income tax rate was 22.6% and 19.5% for the three months ended September 30, 2021 and 2020, respectively, and 20.3% and 25.9% for the nine months ended September 30, 2021 and 2020, respectively. The increase in the effective tax rate for the three months ended September 30, 2021 as compared to the same period in 2020 was primarily due to a decrease in net benefits from discrete events, partially offset by changes in the geographic mix of the Company’s income. The decrease in the effective tax rate for the nine months ended September 30, 2021 as compared to the same period in 2020 was primarily due to changes in the geographic mix of the Company’s income and a decrease in expense from discrete events. As of September 30, 2021, the total amount of unrecognized tax benefits, including related interest and penalties, was $76.8 million. If the total amount of unrecognized tax benefits was recognized, $53.5 million of unrecognized tax benefits, $15.0 million of interest, and $2.5 million of penalties would impact the effective tax rate. The Company believes that it is reasonably possible that the amount of unrecognized tax benefits could decrease by up to approximately $9.1 million within the next twelve months due to the expiration of statute of limitations in various jurisdictions.

Income Taxes

9 Months Ended

Sep. 30, 2021

8. Income Taxes

Income taxes were $34.3 million and $33.6 million for the three months ended September 30, 2021 and 2020, respectively, and $104.2 million and $104.4 million for the nine months ended September 30, 2021 and 2020, respectively. The effective income tax rate was 22.6% and 19.5% for the three months ended September 30, 2021 and 2020, respectively, and 20.3% and 25.9% for the nine months ended September 30, 2021 and 2020, respectively. The increase in the effective tax rate for the three months ended September 30, 2021 as compared to the same period in 2020 was primarily due to a decrease in net benefits from discrete events, partially offset by changes in the geographic mix of the Company’s income. The decrease in the effective tax rate for the nine months ended September 30, 2021 as compared to the same period in 2020 was primarily due to changes in the geographic mix of the Company’s income and a decrease in expense from discrete events.

As of September 30, 2021, the total amount of unrecognized tax benefits, including related interest and penalties, was $76.8 million. If the total amount of unrecognized tax benefits was recognized, $53.5 million of unrecognized tax benefits, $15.0 million of interest, and $2.5 million of penalties would impact the effective tax rate.

The Company believes that it is reasonably possible that the amount of unrecognized tax benefits could decrease by up to approximately $9.1 million within the next twelve months due to the expiration of statute of limitations in various jurisdictions.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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