Income Taxes

9 Months Ended

Sep. 28, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income tax expense was $9.0 million on pre-tax income from continuing operations of $17.6 million for the three months ended September 28, 2019, as compared to income tax expense of $1.0 million on pre-tax income from continuing operations of $9.5 million in the comparable prior year period. Income tax expense was $11.5 million on pre-tax income from continuing operations of $4.8 million for the nine months ended September 28, 2019, as compared to income tax expense of $4.0 million on pre-tax income from continuing operations of $29.3 million in the comparable prior year period. The effective income tax rates for the three and nine months ended September 28, 2019 were 51.1% and 239.6%, respectively, compared to 10.5% and 13.7% in the comparable prior year periods.

The effective tax rate for the three months ended September 28, 2019 varied from the effective tax rate for the three months ended September 29, 2018 due primarily to increased income in taxable jurisdictions. The effective tax rate for the nine months ended September 28, 2019 varied from the effective tax rate for the nine months ended September 29, 2018 due primarily to losses incurred in jurisdictions for which no tax benefit is recognized and an increase in U.S. federal income tax from related party interest payments.

The Tax Act enacted new Section 163(j) interest expense limitation rules on December 22, 2017. On November 26, 2018, the U.S. Department of the Treasury released proposed regulations to provide interpretative guidance for the new Section 163(j) rules, with early adoption permitted. The proposed regulations were open to public comment until the end of February 2019 and have not yet been finalized. We have not adopted the proposed regulations for our 2019 tax year. If the proposed regulations are finalized as currently written, they could have a material impact to our Consolidated Financial Statements in the year in which they are finalized.