INCOME TAXES

9 Months Ended

Sep. 30, 2019

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Our effective income tax rate was 22.0% and (39.2)% for the three months ended September 30, 2019 and 2018, respectively, and 13.7% and (3.1)% for the nine months ended September 30, 2019 and 2018, respectively. Our effective income tax rate can differ from the 21% U.S. federal statutory rate due to a number of factors, including foreign rate differences, tax incentives, increases or decreases in valuation allowances and liabilities for uncertain tax positions and excess tax benefits on stock compensation awards.

For the three months ended September 30, 2019, our effective income tax rate was substantially consistent with the 21% U.S. federal statutory rate as unfavorable return-to-provision adjustments in various jurisdictions were offset by excess tax benefits on stock compensation awards. For the nine months ended September 30, 2019, the difference between our effective tax rate and the U.S. federal statutory rate was primarily attributable to excess tax benefits on stock compensation awards and the recognition of tax benefits associated with a favorable tax ruling.

For the three months ended September 30, 2018, the difference between our effective income tax rate and the U.S. federal statutory rate was primarily driven by a benefit from an adjustment to the 2017 Tax Act provisional amounts as permitted by Staff Accounting Bulletin 118. Specifically, we released a $200 million valuation allowance related to our U.S. foreign tax credit deferred tax assets. For the nine months ended September 30, 2018, the difference between

our effective income tax rate and the U.S. federal statutory rate was primarily attributable to the adjustment to provisional amounts related to the 2017 Tax Act, nontaxable income from the settlement of certain claims with the seller of the acquired operations of Claris, excess tax benefits on stock compensation awards, a reduction of an uncertain tax position liability as a result of a settlement with the related taxing authority and the reversal of a valuation allowance as a result of continued profit improvements. Partially offsetting the foregoing benefits was interest on our uncertain tax position liabilities, the revaluation of Swedish net deferred tax assets due to a change in statutory rates and transfer pricing-related income tax accruals.