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Income Taxes (Notes)
 9 Months Ended
Sep. 30, 2021
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
10. INCOME TAXES

We adjust our effective tax rate each quarter based on our estimated annual effective tax rate. We also record the tax impact of certain discrete, unusual or infrequently occurring items, including changes in judgment about valuation allowances and the effects of changes in tax laws or rates on deferred tax balances, in the interim period in which they occur. In addition, jurisdictions with a projected loss for the year or a year-to-date loss where no tax benefit can be recognized are excluded from the estimated annual effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing of actual earnings versus annual projections.

Our income tax benefit and effective income tax rate for the three and nine months ended September 30, 2021 and 2020 are as follows:

 Three Months EndedNine Months Ended
September 30,September 30,
2021202020212020
 (in millions)
   
Income tax benefit$(13.6)$(22.5)$(2.4)$(63.1)
Effective income tax rate85.0 %(23.8)%(4.8)%9.6 %

During the three months ended September 30, 2021, we recognized a net income tax benefit of approximately $5.2 million related to our ability to carry back prior year losses to tax years with the higher 35% corporate income tax rate.

During the three months ended September 30, 2020, we released a partial valuation allowance that had been established in the second quarter of 2020 as a result of final regulations issued on July 28, 2020 by the Internal Revenue Service and the U.S. Department of Treasury. This resulted in a tax benefit of approximately $36 million for the three months ended September 30, 2020.

In the nine months ended September 30, 2020, we finalized an advance pricing agreement in a foreign jurisdiction, which resulted in a tax benefit of approximately $6.8 million and we recognized a tax benefit of approximately $7.0 million related to our ability to carry back projected current year losses under the CARES Act. In addition, we recognized a net tax benefit of approximately $7.5 million related to our ability to carry back losses from prior years under the CARES Act. This income tax benefit was the result of our ability to carry back losses to tax years with the higher 35% corporate income tax rate.

Our effective income tax rates for the three and nine months ended September 30, 2021 vary from our effective income tax rates for the three and nine months ended September 30, 2020 primarily as a result of the items discussed above. In addition, our effective income tax rate for the nine months ended September 30, 2021 varies from our effective income tax rate for the nine months ended September 30, 2020 as a result of the impact of the goodwill impairment charge recorded during the first quarter of 2020, which had no corresponding income tax benefit. For the three and nine months ended September 30, 2021 and 2020, our effective income tax rates vary from the U.S. federal statutory rate of 21% primarily due to the items discussed above, as well as favorable foreign tax rates, the impact of tax credits, and the effect of the goodwill impairment charge in the first nine months of 2020.

In accordance with the guidance in ASC 740 - Income Taxes, we review the likelihood that we will realize the benefit of deferred tax assets and estimate whether recoverability of our deferred tax assets is "more likely than not" based on the available evidence. Due to the uncertainty associated with the extent and ultimate impact of COVID-19 and the semiconductor shortage on global automotive production volumes, we may experience lower than projected earnings in certain jurisdictions in future periods, and as a result, it is reasonably possible that changes in valuation allowances could be recognized in future periods.
We operate in multiple jurisdictions throughout the world and the income tax returns of several subsidiaries in various tax jurisdictions are currently under examination. We are currently under a U.S. federal income tax examination for the years 2015 through 2018. Based on the status of ongoing tax audits, and the protocol of finalizing audits by the relevant tax authorities, it is not possible to estimate the impact of changes, if any, to previously recorded uncertain tax positions. Negative or unexpected outcomes of these examinations and audits and any related litigation could have a material adverse impact on our results of operations, financial condition and cash flows. We will continue to monitor the progress and conclusions of all ongoing audits and other communications with tax authorities, and will adjust our estimated liability as necessary. As of September 30, 2021 and December 31, 2020, we have recorded a liability for unrecognized income tax benefits and related interest and penalties of $22.3 million and $22.2 million, respectively.