Income Taxes

9 Months Ended

Sep. 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 September 30		Nine Months Ended September 30
	2020	2019	2020	2019
	(In thousands, excluding percentages)
Income tax expense (benefit)	$10,049	$4,086	$(4,375)	$10,780
Effective tax rate	63.7%	16.4%	(84.5)%	23.2%

The Company’s income tax expense for the three months ended September 30, 2020 totaled $10.0 million resulting in an effective tax rate of 63.7%, compared to an expense of $4.1 million, and an effective tax rate of 16.4%, for the same period of 2019. The Company’s income tax benefit for the nine months ended September 30, 2020 totaled $4.4 million resulting in an effective tax rate of (84.5)%, compared to an expense of $10.8 million, and an effective tax rate of 23.2%, for the same period of 2019.

The increase in tax expense for the three months ended September 30, 2020, compared to the same period of 2019, was primarily attributable to the mix of earnings across our jurisdictions including increased losses incurred in countries where the Company realizes no tax benefit. The decrease in the tax expense for the nine months ended September 30, 2020, compared to the same period of 2019, was attributable to lower pre-tax income during the nine months ended September 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 carried back these 2018 losses to prior periods 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.