INCOME TAXES

3 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

For the three months ended March 31, 2020, the Company’s income tax benefit of $11.9 million on income before income taxes of $57.1 million, calculated using the annualized effective tax rate method, was primarily due to tax deduction from employee stock compensation as a discrete event in the three months ended March 31, 2020, partially offset by projected tax expense in the United States (U.S.) and foreign jurisdictions that are profitable. For the three months ended March 31, 2019, the Company’s income tax provision of $0.3 million on income before income taxes of $3.1 million, calculated using the discrete tax approach, was primarily related to income taxes attributable to its foreign operations.

For the three months ended March 31, 2020, in accordance with FASB guidance for interim reporting of income tax, the Company has computed its provision for income taxes based on a projected annual effective tax rate while excluding loss jurisdictions which cannot be benefited.

The Company used the discrete tax approach in calculating the tax expense for the three months ended March 31, 2019 due to the fact that a relatively small change in the Company’s projected pre-tax net income (loss) could result in a volatile effective tax rate. Under the discrete method, the Company determines its tax (expense) benefit based upon actual results as if the interim period was an annual period. The tax provision recorded was primarily related to income taxes attributable to its foreign operations.