INCOME TAXES

3 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company develops interim income tax provisions based on estimates of the effective tax rates expected to apply per tax domicile for the current annual reporting period. These estimates are reevaluated each quarter and updated as necessary. The tax effects of any discrete items are recorded in the period in which they occur and are excluded from the interim estimates of the effective annual rates.

On March 27, 2020, the U.S. federal government enacted tax legislation under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) in response to the economic impacts of the spread of COVID-19. The CARES Act provides relief to corporate taxpayers by permitting additional carryback allowances for net operating losses (“NOLs”) incurred for periods beginning after January 1, 2017 and before January 1, 2021. The CARES Act also provides changes to the limitations on interest expense deductibility for tax years beginning in 2019 and 2020. The Company is continuing to evaluate the overall impact of this tax legislation on its operations and income tax position, and has incorporated changes related to the CARES Act in the interim tax provision for the three months ended March 31, 2020.

The Company’s effective tax (benefit) rate for the three months ended March 31, 2020 and 2019 was (54.6)% and 26.6%, respectively. Changes in the effective tax rate for the first quarter ended March 31, 2020, as compared to the same period in 2019, were primarily driven by the impacts of the CARES Act, specifically the rate differential on the carryback of NOLs to years where the U.S. federal income tax rate was 35.0%, compared to the current rate of 21.0%. Additional factors impacting the change in rate include vesting of equity awards, discrete significant restructuring costs, and changes in the relative taxable income in the countries and states in which the Company operates.