Income Taxes (Notes)

9 Months Ended

Sep. 30, 2020

Note M – Income Taxes

The Company’s provision for income taxes for the three and nine months ended September 30, 2020 and 2019 is based on the estimated annual effective tax rate, plus or minus discrete items. The following table presents the provision for income taxes and the effective tax rates for the three and nine months ended September 30, 2020 and 2019:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020			2019
(Loss)/income before provision for income taxes	$	(2,910)	$	69,002	$	(51,457)		$	160,749
Income tax expense/(benefit)	$	4,236	$	15,886	$	(9,366)		$	36,257
Effective tax rate	(145.6)%		23.0%		18.2		%	22.6		%

The difference between the Company’s effective tax rates for the three and nine months ended September 30, 2020 and 2019 is primarily due to the tax benefit from the 2020 pre-tax loss in jurisdictions with higher tax rates, the tax benefit of the change in valuation of contingent considerations, partially offset by an increase in Global Intangible Low Taxed Income and an increase in a foreign uncertain tax position.

As of September 30, 2020, the Company determined that it is more likely than not that under audit, one of its foreign tax positions may not be sustained. The Company therefore recorded a liability for an uncertain tax position of $1,145.

The Company recognizes interest and penalties, if any, related to uncertain income tax positions in income tax expense. Accrued interest and penalties on unrecognized tax benefits, and interest and penalty expense are immaterial to the consolidated financial statements.

The Company files income tax returns in the U.S. for federal, state, and local purposes, and in certain foreign jurisdictions. The Company's tax years 2017 through 2019 remain open to examination by most taxing authorities.

In response to the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law on March 27, 2020, which includes significant corporate income tax and payroll tax provisions aimed at providing economic relief. The Company received and expects to continue to receive favorable cash flow benefits related to the employee retention credit, employer payroll tax deferral, and accelerated depreciation related to qualified improvement property. The Company will continue to assess the potential benefits from the CARES Act and other COVID-19 related incentives.