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Income Taxes | 9 Months Ended
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Sep. 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 Nine Months Ended
|  | September 30, |  | September 30,
|  | 2020 |  | 2019 |  | 2020 |  | 2019
Income tax provision |  | $ | 25.4 |  |  | $ | 21.5 |  |  | $ | 49.0 |  |  | $ | 55.5 |
Effective income tax rate |  | 24 | % |  | 30 | % |  | 30 | % |  | 31 | %
Our provision for income taxes for the three months ended September 30, 2020, was $25.4 million, resulting in an effective income tax rate of 24%. The provision includes a discrete tax expense of $16.1 million for the tax on the gain on the sale of MSTS and a net discrete tax expense of $2.7 million related to tax reserve provisions and adjustments resulting from tax return filings in several worldwide jurisdictions. For the three months ended September 30, 2019, our provision for income taxes was $21.5 million resulting in an effective tax rate of 30%, which included a net discrete income tax benefit of $1.3 million for the period. Our provision for income taxes for the nine months ended September 30, 2020, was $49.0 million, resulting in an effective income tax rate of 30%. The provision includes a discrete tax expense of $16.1 million for the tax on the gain on the sale of MSTS and a net discrete expense of $7.1 million related primarily to adjustments resulting from tax return filings in several worldwide jurisdictions. For the nine months ended September 30, 2019, our provision for income taxes was $55.5 million resulting in an effective tax rate of 31%, which included a net discrete income tax benefit of $3.3 million for the period. 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 $0.0 million and $2.0 million for the three months ended September 30, 2020 and 2019, respectively. The impact of the income tax concession on basic earnings per common share was $0.00 and $0.03 for the three months ended September 30, 2020 and 2019, respectively and $0.00 and $0.03 on a diluted earnings per common share basis, respectively. Our income tax concession decreased foreign income taxes by $1.5 million and $3.5 million for the nine months ended September 30, 2020 and 2019, respectively. The impact of the income tax concession on basic earnings per common share was $0.02 and $0.05 for the nine months ended September 30, 2020 and 2019, respectively and $0.02 and $0.05 on a diluted earnings per common share basis, respectively. Our provision for income taxes for the three and nine months ended September 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, as well as the finalization of the sales price allocation to the respective assets and entities related to the MSTS sale. 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 $1.8 million (DKK 11.2 million) related to the 2013 tax year and on April 30, 2020, it received a proposed tax adjustment of approximately $1.4 million (DKK 8.6 million) related to the 2014 tax year. We have responded to the proposed income adjustments and other information requests from the Danish tax authorities and are engaged in ongoing discussions with them regarding those responses and information. In 2017, the Korean Branch of one of our subsidiaries received income tax assessment notices for $9.7 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 continue to respond 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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