Income Taxes

6 Months Ended

Jun. 30, 2019

INCOME TAXES

Income tax expense and effective tax rates were:



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(in thousands, except effective tax rate)
Income before income taxes	$	44,676		$	37,377		$	75,005		$	64,589
Income tax expense	5,478			3,000			11,097			13,758
Effective tax rate	12.3		%	8.0		%	14.8		%	21.3		%

During the three months ended June 30, 2019, the increase in the effective tax rate, compared to the same period in 2018, was driven primarily by tax expense recorded in profitable jurisdictions, partially offset by operating losses in jurisdictions for which the Company has determined it is not more likely than not to realize the associated tax benefits and the release of valuation allowances in certain jurisdictions. The Company’s effective income tax rate, for each period presented, also differs from the federal U.S. statutory rate primarily due to differences in income tax rates between U.S. and foreign jurisdictions, as well as operating losses in certain jurisdictions for which tax benefits cannot be recognized. There were no significant or unusual discrete tax items during the six months ended June 30, 2019. The Company had unrecognized tax benefits of $4.4 million and $4.5 million at June 30, 2019 and December 31, 2018, respectively, and the Company does not expect any significant changes in tax benefits in the next twelve months.

During the six months ended June 30, 2019, income tax expense decreased $2.7 million compared to the same period in 2018. The effective tax rate for the six months ended June 30, 2019 was 14.8% compared to an effective tax rate of 21.3% for the same period in 2018, a 6.5% decrease. This decrease in the effective rate was due to operating losses in jurisdictions for which the Company has determined that it is not more likely than not to realize the associated tax benefits, partially offset by tax expense recorded in profitable jurisdictions. Our effective tax rate of 14.8% for the six months ended June 30, 2019 differs from the federal U.S. statutory rate due to differences in income tax rates between U.S. and foreign jurisdictions as well as book losses in certain jurisdictions for which tax benefits cannot be recognized.

Our tax rate is volatile and may increase or decrease with changes in, among other things, the amount of income or loss by jurisdiction, our ability to utilize net operating losses and foreign tax credits, changes in tax laws, and the movement of liabilities established pursuant to accounting guidance for uncertain tax positions as statutes of limitations expire, positions are effectively settled, or when additional information becomes available. There are proposed or pending tax law changes in various jurisdictions and other changes to regulatory environments in countries in which we do business that, if enacted, may have an impact on our effective tax rate.