Income Taxes

3 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our income tax expense and resulting effective tax rate are based upon the estimated annual effective tax rates applicable for the respective periods adjusted for the effect of items required to be treated as discrete in the interim periods. This estimated annual effective tax rate is affected by the relative proportions of revenue and income before taxes in the jurisdictions in which we operate. Based on the geographical mix of earnings our annual effective tax rate fluctuates based on the portion of our profits earned in each jurisdiction.

The effective tax rates for the three months ended March 31, 2020 and 2019 were 43.2% and 27.1%, respectively. The effective tax rate for the three months ended March 31, 2020 reflects the impact of the minimum tax on certain non-U.S. earnings, current year increase in valuation allowance against certain net operating losses and higher tax rates in most foreign jurisdictions. The effective tax rate for the three months ended March 31, 2019 reflects the minimum tax on certain non-U.S. earnings, higher tax rates in most foreign jurisdictions and adjustments to state net operating losses.

In June 2017, the IRS began an examination of our 2014 U.S. federal income tax return.  Although this examination is part of a routine and recurring cycle, we cannot predict the final outcome or expected conclusion date of the audit.  Various foreign and state tax returns are also currently under examination and some of these exams may conclude within the next twelve months.  The final outcomes of these audits are not yet determinable; however, management believes that any assessments that may arise will not have a material effect on our financial results.