6. Income Taxes

The provision for income tax (benefit) on income before taxes (benefit) includes the following components:

	For the Year Ended May 31,
	2017		2016		2015
Current:
Federal	$	20.2	$	10.6	$	11.4
State		0.2		0.4		0.4
Foreign		3.1		3.8		1.5

		23.5		14.8		13.3
Deferred		0.6		4.8		(52.6	)

	$	24.1	$	19.6	$	(39.3	)

The provision for income taxes on pre-tax income differs from the amount computed by applying the U.S. federal statutory income tax rate of 35% for fiscal 2017, 2016, and 2015 to income before taxes (benefit), due to the following:

	For the Year Ended May 31,
	2017			2016			2015
Provision for income tax (benefit) at the federal statutory rate	$	26.0		$	20.3		$	(39.6	)
State income taxes, net of federal benefit and refunds		0.2			0.2			0.2
Federal adjustments		0.1			0.4			0.1
State net operating losses		(5.7	)		(1.1	)		(0.1	)
Valuation allowance for state deferred tax assets		5.7			1.1			0.1
Prior period adjustments		—			(1.3	)		—
Effective settlement of prior tax position		(2.2	)		—			—

Provision for income tax (benefit)	$	24.1		$	19.6		$	(39.3	)

During the third quarter of fiscal 2016, we completed a reconciliation of our tax basis assets and liabilities and an analysis of our income tax payable which identified prior year immaterial errors netting to $0.2 million with $1.5 million recognized as income tax expense in discontinued operations and $1.3 million recognized as income tax benefit within income from continuing operations.

Income (Loss) before provision for income tax (benefit) includes the following components:

	For the Year Ended May 31,
	2017		2016		2015
Domestic	$	54.9	$	44.7	$	(124.4	)
Foreign		19.4		13.2		11.2

	$	74.3	$	57.9	$	(113.2	)

Deferred tax liabilities and assets result primarily from the differences in the timing of the recognition of transactions for financial reporting and income tax purposes. Our deferred tax liabilities and assets consist of the following components:

	May 31,
	2017			2016
Deferred tax assets:
Inventory costs	$	21.3		$	19.9
Impairments		5.6			9.4
Advanced billings		1.7			11.1
Postretirement benefits		6.8			12.0
Employee benefits		12.3			10.0
State NOLs, tax credits and incentives		9.4			6.5
Other		1.7			0.6

Total deferred tax assets		58.8			69.5
Valuation allowance		(10.4	)		(4.7	)

Total deferred tax assets net of valuation allowance		48.4			64.8

Deferred tax liabilities:
Tangible and intangible assets		(85.5	)		(99.0	)
Other		(0.1	)		(0.1	)

Total deferred tax liabilities		(85.6	)		(99.1	)

Net deferred tax liabilities	$	(37.2	)	$	(34.3	)

As of May 31, 2017, we have determined that the realization of our deferred tax assets is more likely than not and that a valuation allowance is not required except for certain state deferred tax assets, net operating losses and credits. The change in the valuation allowance was primarily the result of state net operating losses in subsidiaries that are not expected to be utilized. The net operating losses have carry forward periods that range from 5 to 20 years. Our history of operating earnings, our expectations for continued future earnings, the nature of certain of our deferred tax assets and the scheduled reversal of deferred tax liabilities, primarily related to depreciation, support the recoverability of the majority of the deferred tax assets.

Income tax payable at May 31, 2017 and 2016 was $12.3 million and $1.1 million, respectively and is included in Accrued Liabilities on the Consolidated Balance Sheets.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits was as follows:

	For the Year Ended May 31,
	2017			2016		2015
Balance, beginning of year	$	12.9		$	2.2	$	2.2
Additions for tax positions of prior years		0.4			10.7		—
Effective settlement of prior tax position		(8.9	)		—		—

Balance, end of year	$	4.4		$	12.9	$	2.2

In fiscal 2017, the reserve for unrecognized tax benefits decreased primarily as a result of effective settlement of tax positions for prior tax years which occurred upon the settlement of an IRS examination. Income tax expense in fiscal 2017 included a benefit of $2.2 million and discontinued operations included a benefit of $6.7 million for these effective settlements.

All of our unrecognized tax benefits as of May 31, 2017 and 2016 would be recorded as a component of income tax expense or income from discontinued operations, if recognized. We accrue interest and penalties related to unrecognized tax benefits as a component of income tax expense.

Fiscal years 2015 and subsequent are open for examination. Various states and foreign jurisdictions also remain open subject to their applicable statute of limitations.