Income Taxes

6 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Note 11. Income Taxes

The following table provides details of income taxes (in millions, except percentages):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Income before income taxes	$	86.1		$	77.8		$	114.4		$	122.3
Income tax provision	$	24.9		$	31.6		$	32.8		$	45.0
Effective tax rate	28.9		%	40.6		%	28.7		%	36.8		%

The Company’s effective tax rate differs from the federal statutory rate of 21% primarily due to the tax impact of state taxes, geographic mix of earnings including foreign-derived intangible income deductions and global intangible low-taxed income, research and development ("R&D") tax credits, tax audit settlements, nondeductible compensation, cost sharing of stock-based compensation, and other transfer pricing adjustments.

On June 7, 2019, the Ninth Circuit Court of Appeals issued an opinion in Altera Corp. v. Commissioner requiring related parties in an intercompany cost-sharing arrangement to share expenses related to stock-based compensation. On February 10, 2020, Altera appealed this decision to the U.S. Supreme Court, which on June 22, 2020, declined to review the decision. Based on the Supreme Court decision to not review the Ninth Circuit Court’s decision, stock-based compensation is subject to cost sharing, and the Company recorded a $18.2 million charge.

The Company’s effective tax rate during the six months ended June 30, 2020 reflects the cumulative impact of cost sharing for stock-based compensation of $18.2 million referenced above, partially offset by a reduction of income tax reserves of $15.2 million, which includes interest of $1.7 million.

The Company's effective tax rate during the six months ended June 30, 2019 reflected the impact of an international realignment and a related write-down of certain deferred tax assets.

As of June 30, 2020, the total amount of gross unrecognized tax benefits was $152.7 million.

The Company engages in continuous discussions and negotiations with tax authorities regarding tax matters in various jurisdictions. There is a greater than remote likelihood that the balance of the gross unrecognized tax benefits will decrease by a range of approximately $23.0 million to $44.0 million within the next twelve months due to the completion of tax review cycles in various tax jurisdictions and lapses of applicable statutes of limitations.