Income Taxes

6 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

(16) Income Taxes

The Company’s income tax (benefit) expense for the periods presented was as follows:

	Three Months Ended June 30		Six Months Ended June 30
	2020	2019	2020	2019
	(In thousands, excluding percentages)
Income tax (benefit) expense	$(10,687)	$3,565	$(14,424)	$6,694
Effective tax rate	84.8%	25.4%	136.1%	31.2%

The Company’s income tax benefit for the three months ended June 30, 2020 totaled $10.7 million resulting in an effective tax rate of 84.8%, compared to an expense of $3.6 million, and an effective tax rate of 25.4%, for the same period of 2019. The Company’s income tax benefit for the six months ended June 30, 2020 totaled $14.4 million resulting in an effective tax rate of 136.1%, compared to an expense of $6.7 million, and an effective tax rate of 31.2%, for the same period of 2019.

The decrease in the tax expense for the three months ended June 30, 2020, compared to the same period of 2019, was primarily attributable to the pre-tax losses incurred in the three months ended June 30, 2020, compared to the pre-tax income in the same period of 2019. The decrease in the tax expense for the six months ended June 30, 2020, compared to the same period of 2019, was attributable to the pre-tax loss incurred during the six months ended June 30, 2020 and to a non-recurring benefit from the carryback of net operating losses to prior tax years at the higher 35% U.S. tax rate, compared to the current tax rate of 21%, as a result of recent changes in U.S. tax law. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law in the U.S., which provided for an elective five-year carryback of net operating losses (NOLs) generated in taxable years beginning after December 31, 2017 and before January 1, 2021. As a result of this change in law and since the Company incurred net operating losses in 2018, the Company plans to carry back these 2018 losses to prior periods and expects to receive refunds of taxes paid at higher rates in earlier periods.

The Company assesses the need for any deferred tax asset valuation allowances at the end of each reporting period. The determination of whether a valuation allowance for deferred tax assets is needed is subject to considerable judgment and requires an evaluation of all available positive and negative evidence. The Company’s assessment concluded that maintaining valuation allowances on deferred tax assets in Australia, Canada, Mexico, and Spain was appropriate, as the Company currently believes that it is more likely than not that the related deferred tax assets will not be realized.

The deferred tax expenses and benefits associated with the Company’s net unrealized gains and losses on derivative instruments and foreign currency translation adjustments have been recorded in the Accumulated other comprehensive loss, net line in the Company's Consolidated Balance Sheets.

The Company currently believes that the unremitted earnings of certain of its subsidiaries will be reinvested for an indefinite period of time. Accordingly, no deferred taxes have been provided for the differences between the Company’s book basis and underlying tax basis in these subsidiaries or on the foreign currency translation adjustment amounts.