Income taxes

6 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income taxes

10. Income taxes

The income tax expense (benefit) and effective income tax rate for the three and six months ended June 30, 2020 and 2019 were as follows:

	Three months ended June 30,						Six months ended June 30,
(dollars in millions)	2020			2019			2020			2019
Income tax expense (benefit)	$	11.6		$	18.5		$	11.3		$	(4.8)
Effective income tax rate	86.6		%	52.1		%	16.4		%	8.3		%

Discrete tax benefits of $4.6 million and $13.5 million are included in the $11.6 million and $11.3 million income tax expense for the three and six months ended June 30, 2020, primarily attributable to the impairment of unrealizable assets and benefits from provisions under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), which was enacted on March 27, 2020. The Company’s effective income tax rate without discrete items was 32.1%, higher than the US federal statutory rate of 21.0%, primarily due to the impact of the higher tax rates in foreign jurisdictions, non-deductible expenses and US state income taxes.

Discrete tax benefits of $3.8 million and $14.0 million are included in the $18.5 million income tax expense and $4.8 million income tax benefit for the three and six months ended June 30, 2019, substantially attributable to the indirect effects of the Nexeo Plastics sale. The Company’s effective income tax rate without discrete items was 52.3%, higher than the US federal statutory rate of 21.0%, primarily due to the impact of non-deductible Nexeo related acquisition and integration

costs, along with state taxes, foreign rate differential, non-deductible compensation and other expenses, and an increase in the valuation allowance on certain income tax attributes.