Note 16 - Income Taxes

The Company's provision for income taxes in interim periods is computed by applying the estimated annual effective tax rates to income or loss before income taxes for the period. In addition, non-recurring or discrete items, including interest on prior year tax liabilities, are recorded during the period(s) in which they occur.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Provision (benefit) for income taxes	$	13.5		$	(6.6	)	$	61.1		$	1.0
Effective tax rate	39.1		%	(11.4		)%	32.2		%	(3.2		)%

In accordance with ASC Topic 740, "Income Taxes," the effective tax rate in the third quarter of 2016 was calculated as the difference between the income taxes computed for the nine months, as described below, and the year-to-date income taxes recorded as of June 30, 2016. This computation resulted in an effective tax rate of 39.1% for the third quarter of 2016, including discrete items.

The effective tax rate in the first nine months of 2016 was computed based on an expected annual effective tax rate of 31.6%, excluding discrete items. Discrete tax items are recorded in the period in which they occur. Including the impact of discrete tax items, the effective tax rate was 32.2% in the first nine months of 2016, This rate was lower than the U.S. federal statutory rate of 35% primarily due to tax benefits related to foreign tax credits, earnings in certain foreign jurisdictions where the effective tax rate is less than 35% and other U.S. tax benefits, such as the U.S. Research and Experimentation credit and the U.S. manufacturing deduction. These factors were partially offset by U.S. taxation of foreign earnings, losses at certain foreign subsidiaries where no tax benefit could be recorded, U.S. state and local taxes and the net impact of discrete tax items.

The effective tax rate in the third quarter of 2015 was calculated as the difference between the income taxes computed for the nine months, as described below, and the year-to-date income taxes recorded as of June 30, 2015. This computation resulted in an effective tax rate of negative 11.4% for the third quarter of 2015, including discrete items. The effective tax rate of negative 11.4% was primarily due to the change in the Company's 2015 forecast and the variability caused by the large pension settlement charge recorded in the first quarter of 2015.

The effective tax rate in the first nine months of 2015 was computed based on an estimated overall annual effective tax rate of negative 3.2%, including discrete items (expected tax benefits on expected pretax income). The rate reflected an estimated full year loss in the U.S. primarily driven by pension settlement charges and earnings in foreign jurisdictions, which were expected to produce a net tax benefit on pre-tax income. The effective tax rate of negative 3.2% was lower than the U.S. federal statutory rate of 35% primarily due to earnings in certain foreign jurisdictions where the effective tax rate is less than 35%, tax benefits related to foreign tax credits, U.S. state and local tax benefits, non-taxable U.S. income and the U.S. manufacturing deduction. These factors were partially offset by U.S. taxation of foreign earnings, losses at certain foreign subsidiaries where no tax benefit could be recorded, non-deductible U.S. expenses and certain discrete tax expenses.

In the third quarter of 2016, the Company reclassified $18.6 million of tax payments in India to income taxes payable in order to apply these payments to the underlying liabilities to which they relate. This item was identified during a routine review of the balances in these accounts. Management of the Company concluded that this change from gross to net presentation of these items in the third quarter of 2016 and the presence of the gross presentation in prior periods was immaterial to all periods presented.