Income Taxes

3 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The overall effective tax rate was 25.5% and 127.7% for the three months ended March 31, 2020 and 2019, respectively. The decrease in the effective rate is primarily the result of non-deductible transaction related expenses incurred during the three months ended March 31, 2019 as a result of the GE Transportation acquisition that did not recur in 2020. Additionally, there was a decrease in the estimated liabilities resulting from provisions of the Tax Cuts and Jobs Act.

As of March 31, 2020, the liability for income taxes associated with uncertain tax positions was $17.0 million, of which $17.0 million, if recognized, would favorably affect the Company’s effective income tax rate. As of December 31, 2019, the liability for income taxes associated with unrecognized tax benefits was $17.2 million, of which $17.2 million, if recognized, would favorably affect the Company's effective tax rate.

The Company includes interest and penalties related to uncertain tax positions in income tax expense. As of March 31, 2020 and December 31, 2019, the total interest and penalties accrued was approximately $4.0 million.

At this time, the Company believes it is reasonably possible that unrecognized tax benefits of approximately $7.4 million may change within the next 12 months due to the expiration of statutory review periods and current examinations.  

In response to the COVID-19 pandemic, legislation concerning taxes was passed during the three months ended March 31, 2020. While we are continuing to assess the impact of the legislation on our tax planning strategies, we do not expect there to be a material impact to our consolidated financial statements at this time.