Income Taxes

3 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

13) Income Taxes

The Company’s effective tax rates for the three months ended March 31, 2020 and 2019 were 15.0 % and 18.8%, respectively. The effective tax rates for the three months ended March 31, 2020 and 2019 were lower than the U.S. statutory tax rate due to the U.S. deduction for foreign derived intangible income, the federal tax credit for research activities and the geographic mix of income earned by the Company’s international subsidiaries being taxed at rates lower than the U.S. statutory tax rate, offset by the U.S. global intangible low-taxed income inclusion, the $1 million limitation on the deduction of executive compensation and state income taxes.

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act which contains numerous income tax provisions among other tax and non-tax provisions. Some of these income tax provisions have retroactive effect on years before the date of enactment. The Company has evaluated the CARES Act legislation in relation to income taxes and does not expect the CARES Act income tax provisions to have a material impact on its financial position, results of operations and cash flows.

As of March 31, 2020 and December 31, 2019 the total amount of gross unrecognized tax benefits, which excludes interest and penalties, was approximately $44.1 and $43.5, respectively. As of March 31, 2020, if these benefits were recognized in a future period, the timing of which is not estimable, the net unrecognized tax benefit of $36.1, excluding interest and penalties, would impact the Company’s effective tax rate. The Company accrues interest expense, and if applicable, penalties, for any uncertain tax positions. Interest and penalties are classified as a component of income tax expense. As of March 31, 2020 and December 31, 2019, the Company had accrued interest on unrecognized tax benefits of approximately $0.6 and $0.5, respectively.

Over the next 12 months it is reasonably possible that the Company may recognize approximately $0.7 of previously net unrecognized tax benefits, excluding interest and penalties, related to various U.S. state and foreign tax positions primarily as a result of the expiration of certain statutes of limitations.

The Company and its subsidiaries are subject to examination by U.S. federal, state and foreign tax authorities. The U.S. statute of limitations remains open for tax years 2016 through the present.  The statute of limitations for the Company’s tax filings in other jurisdictions varies between fiscal years 2014 through present.  The Company has certain federal credit carry-forwards and state tax loss and credit carry-forwards that are open to examination for tax years 2000 through the present.