INCOME TAXES

6 Months Ended

Jun. 30, 2019

NOTE 20. INCOME TAXES

The effective tax rate for the three months ended June 30, 2019 included a benefit associated with stock-based compensation, an expense associated with prior year tax positions and an expense from a change in tax contingencies. These factors resulted in a net $0.6 million tax expense. After giving consideration to these items, the effective tax rate for the three months ended June 30, 2019 of 22.1% was higher than the 21% U.S. federal statutory rate, primarily due to state and foreign income taxes, foreign income inclusions and a net increase in the valuation allowance related to losses in foreign jurisdictions, partially offset by favorable permanent salt depletion deductions. The effective tax rate for the three months ended June 30, 2018 included a benefit associated with stock-based compensation, a benefit from a change in tax contingencies, an expense associated with the estimated reduction of the one-time 2017 Tax Act provisional tax benefit, an expense from a net increase in the valuation allowance related to foreign net operating losses and an expense from the remeasurement of deferred taxes due to an increase in our state effective tax rates. These factors resulted in a net $1.5 million tax benefit. After giving consideration to these items, the effective tax rate for the three months ended June 30, 2018 of 23.1% was higher than

the 21% U.S. federal statutory rate, primarily due to state and foreign income taxes, partially offset by favorable permanent salt depletion deductions.

The effective tax rate for the six months ended June 30, 2019 included a benefit associated with stock-based compensation, a benefit associated with prior year tax positions, a benefit from a net decrease in the valuation allowance related to state deferred tax assets and an expense from a change in tax contingencies. These factors resulted in a net $0.3 million tax benefit. After giving consideration to these items, the effective tax rate for the six months ended June 30, 2019 of 24.1% was higher than the 21% U.S. federal statutory rate primarily due to state and foreign income taxes, foreign income inclusions and a net increase in the valuation allowance related to losses in foreign jurisdictions, partially offset by favorable permanent salt depletion deductions. The effective tax rate for the six months ended June 30, 2018 included a benefit associated with stock-based compensation, a benefit from a change in tax contingencies, a benefit related to a foreign dividend payment, an expense associated with the estimated reduction of the one-time 2017 Tax Act provisional tax benefit, an expense from a net increase in the valuation allowance related to foreign net operating losses and an expense from the remeasurement of deferred taxes due to an increase in our state effective tax rates. These factors resulted in a net $2.3 million tax benefit. After giving consideration to these items, the effective tax rate for the six months ended June 30, 2018 of 24.2% was higher than the 21% U.S. federal statutory rate primarily due to state and foreign income taxes, partially offset by favorable permanent salt depletion deductions.

As of June 30, 2019, we had $35.0 million of gross unrecognized tax benefits, which would have a net $34.1 million impact on the effective tax rate, if recognized. As of June 30, 2018, we had $33.2 million of gross unrecognized tax benefits, of which $32.4 million would have impacted the effective tax rate, if recognized. The amount of unrecognized tax benefits was as follows:



	June 30,
	2019		2018
	($ in millions)
Balance at beginning of year	$	33.8	$	36.3
Decreases for prior year tax positions	—		(4.1		)
Increases for current year tax positions	1.2		1.0
Balance at end of period	$	35.0	$	33.2

As of June 30, 2019, we believe it is reasonably possible that our total amount of unrecognized tax benefits will decrease by approximately $14.6 million over the next twelve months. The anticipated reduction primarily relates to settlements with taxing authorities and the expiration of federal, state and foreign statutes of limitation.

We operate globally and file income tax returns in numerous jurisdictions. Our tax returns are subject to examination by various federal, state and local tax authorities. None of our U.S. federal income tax returns are currently under examination by the Internal Revenue Service. We believe we have adequately provided for all tax positions; however, amounts asserted by taxing authorities could be greater than our accrued position. For our primary tax jurisdictions, the tax years that remain subject to examination are as follows:



	Tax Years
U.S. federal income tax	2013 - 2018
U.S. state income tax	2006 - 2018
Canadian federal income tax	2012 - 2018
Brazil	2014 - 2018
Germany	2015 - 2018
China	2014 - 2018
The Netherlands	2014 - 2018