Income Taxes

9 Months Ended

Sep. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective income tax rate on income before taxes was approximately 50% for the nine months ended September 30, 2019 compared to approximately 12% for the comparable period in 2018. The change in the components of the effective tax rate is primarily due to the prior year enactment of the U.S.Tax Cuts and Jobs Act (the "Tax Act"), specifically the revision of the transition tax estimate, and the remeasurement of Net Operating Losses ("NOLs") used to offset the transition tax. These prior year revisions reduced the prior year effective income tax rate by 18%. In 2019, the Dutch income tax matter described below resulted in $6.3 million of expense which increased the effective tax rate by 19%. See Note 14 for further information.

Business is conducted in various countries throughout the world and is subject to tax in numerous jurisdictions. A significant number of tax returns are filed and subject to examination by various federal, state and local tax authorities. Tax

examinations are often complex, as tax authorities may disagree with the treatment of items reported requiring several years to resolve. As such, the Company maintains liabilities for possible assessments by tax authorities resulting from known tax exposures for uncertain income tax positions. The Company’s policy is to accrue associated penalties in selling, general and administrative expenses and to accrue interest in net interest expense. Currently, the Company is under examination, or has been contacted for examination on income tax returns, for the years 2014 through 2017. During the quarter ended September 30, 2019, the Company's liability for unrecognized tax benefits was unchanged. The Company estimates the liability for unrecognized tax benefits will not change during the next twelve months. Other than the items mentioned above, as of September 30, 2019, no material adjustments have been proposed to the Company's tax positions and the Company currently does not anticipate any adjustments that would result in a material change to its financial position during the next twelve months.

Income taxes paid were $19.7 million and $16.6 million for the nine months ended September 30, 2019 and September 30, 2018, respectively.