Income Taxes

3 Months Ended

Mar. 31, 2020

For each interim reporting period, we make an estimate of the effective tax rate we expect to be applicable for the full year for our operations. This estimated effective tax rate is used in providing for income taxes on a year-to-date basis. Our effective tax rate was as follows:



	Successor	Predecessor
	Three Months Ended March 31, 2020	Three Months Ended March 31, 2019
Effective Tax Rate	32.3%	15.2%

The fluctuation in the effective tax rate over the periods presented above was primarily attributable to a jurisdictional mix of income between periods. The effective tax rate differs from the U.S. federal statutory rate due primarily to benefits derived from the U.S. foreign derived intangible income deduction, tax credits available in the U.S., and income in foreign jurisdictions that are taxed at different rates than the U.S. statutory tax rate.

Pursuant to the Ranpak Business Combination discussed in detail in Note 7, "Acquisition," the Company has preliminarily estimated the fair market value of assets and liabilities, including the impact on the deferred tax assets and liabilities in accordance with the guidance under ASC 805. The deferred tax assets and liabilities are provisional as the valuation analysis is not complete. The provisional deferred tax assets and liabilities will be adjusted accordingly with any changes to the fair market value of the underlying assets and liabilities. The provisional deferred tax impact was a net deferred tax liability of $122.9 million.

We are subject to taxation in the United States (federal, state, local) and foreign jurisdictions. As of March 31, 2020, tax years 2017 through 2020 are subject to examination by the tax authorities.

On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") into law. The CARES Act includes several significant business tax provisions that, among other things, would eliminate the taxable income limit for certain net operating losses ("NOL") and allow businesses and individuals to carry back NOLs arising in 2018, 2019, and 2020 to the five prior tax years; suspend the excess business loss rules under section 461(l); accelerate refunds of previously generated corporate AMT credits; generally loosen the business interest limitation under section 163(j) from 30 percent to 50 percent (special partnership rules apply); and fix the “retail glitch” for qualified improvement property in the 2017 tax code overhaul known informally as the Tax Cuts and Jobs Act (the "TCJA") (TCJA, Public Law 115-97). ASC 740, Income Taxes, requires that the tax effects of changes in tax laws or rates be recorded discretely as a component of the income tax provision related to continuing operations in the period of enactment. As such, we have recorded any applicable impact from the CARES Act in the first quarter of 2020.