Income Taxes

9 Months Ended

Sep. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision for income taxes consists of provisions for federal, state, and foreign incomes taxes. The effective tax rates for the periods ended September 30, 2019, and September 30, 2018, reflect the Company’s expected tax rate on reported income from continuing operations before income tax and tax adjustments. The Company operates in a global environment with significant operations in the U.S. and various other jurisdictions outside the U.S. Accordingly, the consolidated income tax rate is a composite rate reflecting the Company’s earnings and the applicable tax rates in the various jurisdictions where the Company operates.

On December 22, 2017, the Tax Cuts and Jobs Act (“TCJA”) was enacted in the U.S. The TCJA represents sweeping changes in U.S. tax law. Among other changes in tax law, the TCJA permanently reduced the U.S. corporate income tax rate to 21% beginning in 2018, imposed a one-time repatriation tax on deferred foreign earnings, established a participation exemption system by allowing a 100% dividends received deduction on qualifying dividends paid by foreign subsidiaries, limited deductions for net interest expense, and expanded the U.S. taxation of foreign earned income to include “global intangible low-taxed income” (“GILTI”).

The Company's effective tax rate for the three and nine months ended September 30, 2019 was 214.0% and 28.2%, respectively, compared to the effective tax rate for the three and nine months ended September 30, 2018 of 25.6% and (0.8)%, respectively.

The effective tax rate for the nine months ended September 30, 2019 differs from the U.S. statutory tax rate of 21%, due primarily to changes in valuation allowance positions related to certain foreign jurisdictions and the elimination of intercompany profit activity. The effective tax rate is adversely impacted by certain provisions of the TCJA, limiting the deductibility of U.S. interest expense.