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Income Taxes | 6 Months Ended
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Jun. 30, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Our income tax provision and the respective effective income tax rates are as follows (in millions, except for income tax rates):
|  | For the Three Months Ended |  |  |  | For the Six Months Ended |  |
|  | June 30, |  |  |  | June 30, |  |
|  | 2020 |  | 2019 |  | 2020 |  | 2019
Income tax provision |  | $ | 7.7 |  |  | $ | 20.0 |  |  | $ | 23.7 |  |  | $ | 34.0 |
Effective income tax rate |  | (258) | % |  | 35 | % |  | 43 | % |  | 31 | %
Our provision for income taxes for the three months ended June 30, 2020, was $7.7 million, resulting in an effective income tax rate of (258%). The provision includes a net discrete tax expense of $3.4 million for the period related primarily to return to provision adjustments resulting from tax return filings in several foreign jurisdictions. Without the $3.4 million in discrete items, the effective income tax rate would have been (144)%. Our provision for inc ome taxes for the three months ended June 30, 2019, was $20.0 million resulting in an effective tax rate of 35%. The provision includes a net discrete income tax expense of $0.8 million for the period. Without the $0.8 million in discrete items, the effective income tax rate would have been 33%. Our provision for income taxes for the six months ended June 30, 2020, was $23.7 million, resulting in an effective income tax rate of 43%. The provision includes a net discrete tax expense of $4.4 million for the period related primarily to return to provision adjustments resulting from tax return filings in several foreign jurisdictions. Without the $4.4 million in discrete items, the effective income tax rate would have been 35%. Our provision for income taxes for the six months ended June 30, 2019, was $34.0 million resulting in an effective tax rate of 31%. The provision includes a net discrete income tax benefit of $2.0 million for the period. Without the $2.0 million in discrete items, the effective income tax rate would have been 33%. Our income tax concession in Singapore, which reduces the income tax rate on qualified sales and derivative gains and losses decreased foreign income taxes by $0.8 million and $0.6 million for the three months ended June 30, 2020 and 2019, respectively. The impact of the income tax concession on basic earnings per common share was $0.01 and $0.01 for the three months ended June 30, 2020 and 2019, respectively and $0.01 and $0.01 on a diluted earnings per common share basis, respectively. Our income tax concession decreased foreign income taxes by $2.7 million and $1.5 million for the six months ended June 30, 2020 and 2019, respectively. The impact of the income tax concession on basic earnings per common share was $0.04 and $0.02 for the six months ended June 30, 2020 and 2019, respectively and $0.04 and $0.02 on a diluted earnings per common share basis, respectively. Our provision for income taxes for the three and six months ended June 30, 2020 and 2019 was calculated based on the estimated annual effective income tax rate for the 2020 and 2019 fiscal years. The actual effective income tax rate for the 2020 fiscal year may be materially different as a result of differences between estimated versus actual results and the geographic tax jurisdictions in which the results are earned. On July 20, 2020, the Internal Revenue Service (“IRS”) released final regulations relating to the high tax exception rules under the global intangible low-tax income ("GILTI") and Subpart F income provisions of the Code which are effective for years beginning after July 23, 2020; however taxpayers may choose to apply the regulations for tax years beginning after December 31, 2017. The company is in the process of reviewing the final regulations and determining the potential impact if any. We have various tax returns under examination both in the U.S. and foreign jurisdictions. The most significant of these are in Denmark for the 2013 to 2015 tax years, South Korea for the 2011 to 2014 tax years, and the U.S. for the 2017 to 2018 tax years. In 2018, one of our subsidiaries in Denmark received an audit inquiry from the Danish tax authorities regarding transfer pricing and other related matters for the tax years 2013 to 2015. In the second quarter 2019, it received a proposed tax adjustment of approximately $1.7 million (DKK 11.2 million) related to the 2013 tax year and on April 30, 2020, it received a proposed tax adjustment of approximately $1.3 million (DKK 8.6 million) related to the 2014 tax year. We are responding to the proposed income adjustments and other information requests from the Danish tax authorities. In 2017, the Korean Branch of one of our subsidiaries received income tax assessment notices for $9.4 million (KRW 11.3 billion) from the South Korea tax authorities. We believe that these assessments are without merit and are currently appealing the actions. On March 11, 2020, the U.S. Internal Revenue Service began the audit of our 2017 and 2018 tax years, and we are currently responding to their information requests. An unfavorable resolution of one or more of the above matters could have a material adverse effect on our result of operations or cash flows in the quarter or year in which the adjustments are recorded, or the tax is due or paid. As examinations are still in process or have not yet reached the final stages of the appeals process, the timing of the ultimate resolution or payments that may be required cannot be determined at this time.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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