INCOME TAXES

3 Months Ended

Mar. 31, 2020

The Company provides for income taxes at the end of each interim period based on the estimated effective tax rate (“ETR”) for the full fiscal year. Cumulative adjustments to the Company’s estimate are recorded in the interim period in which a change in the estimated annual ETR is determined. Under the provisions of the Internal Revenue Code of 1986, as amended, the Company may deduct amounts distributed to stockholders against the income generated by its real estate investment trust (“REIT”) operations. The Company continues to be subject to income taxes on the income of its domestic taxable REIT subsidiaries and income taxes in foreign jurisdictions where it conducts operations. In addition, the Company is able to offset certain income by utilizing its net operating losses, subject to specified limitations.

The Company provides valuation allowances if, based on the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Management assesses the available evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets.

The decrease in the income tax provision during the three months ended March 31, 2020 was primarily attributable to realized foreign exchange losses in the current period and the nonrecurrence of a one-time true up adjustment during the three months ended March 31, 2019.

As of March 31, 2020 and December 31, 2019, the total unrecognized tax benefits that would impact the ETR, if recognized, were approximately $144.3 million and $158.1 million, respectively. The amount of unrecognized tax benefits during the three months ended March 31, 2020 includes additions to the Company’s existing tax positions of $1.2 million, which were reduced by foreign currency exchange rate fluctuations of $12.4 million and remeasurement of acquired liabilities of $2.9 million related to the acquisition of Eaton Towers Holdings Limited. Unrecognized tax benefits are expected to change over the next 12 months if certain tax matters ultimately settle with the applicable taxing jurisdiction during this time frame, as described in note 13 to the Company’s consolidated financial statements included in the 2019 Form 10-K. The impact of the amount of these changes to previously recorded uncertain tax positions could range from zero to $47.8 million.

The Company recorded the following penalties and income tax-related interest expense during the three months ended March 31, 2020 and 2019:


	Three Months Ended March 31,
	2020		2019
Penalties and income tax-related interest expense	$	1.7	$	1.1

As of March 31, 2020 and December 31, 2019, the total amount of accrued income tax related interest and penalties included in the consolidated balance sheets were $28.0 million and $26.6 million, respectively.