Income Taxes

9 Months Ended

Sep. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Grace’s effective tax rates for the nine months ended September 30, 2019 and 2018, were 26.9% and 34.0%, respectively. Grace’s effective tax rate for the nine months ended September 30, 2019, differed from the U.S. federal statutory rate primarily due to income taxed in jurisdictions with higher statutory tax rates than the U.S. and the net impact of the Global Intangible Low-Taxed Income (“GILTI”) tax in the U.S., partially offset by discrete benefits related to changes in tax law, the favorable resolution of uncertain tax positions, and adjustments to our tax provision related to the filing of the 2018 U.S. federal income tax return. Grace’s effective tax rate for the nine months ended September 30, 2018, was higher than the U.S. federal statutory rate primarily due to the use of net operating loss carryforwards, which limited specific deductions that would have otherwise reduced the GILTI tax. In 2019, Grace is forecasting U.S. federal taxable income in excess of available net operating losses, which will increase the deductions available to reduce the GILTI tax.

As of September 30, 2019, Grace has $296.5 million in federal tax credit carryforwards before unrecognized tax benefits.