Income Taxes

3 Months Ended

Mar. 31, 2017

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 March 31,
	2017			2016

Provision for income taxes	$	15.5		$	29.1
Effective tax rate	28.9		%	30.7		%

In accordance with Accounting Standards Codification ("ASC") (Topic 740), "Income Taxes," the effective tax rate in the first quarter of 2017 was computed based on an expected annual effective tax rate of 30.9%, excluding discrete items. Discrete tax items are recorded in the period in which they occur. The effective tax rate of 28.9% in the first quarter of 2017 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 Research and Experimentation credit and the U.S. manufacturing deduction, and the impact of certain discrete tax items during the period. These factors were partially offset by U.S. taxation of foreign earnings, U.S. state and local taxes and losses at certain foreign subsidiaries where no tax benefit could be recorded.

The effective tax rate for the three months ended March 31, 2016, was computed based on an expected annual effective tax rate of 30.3%, excluding discrete items. The effective tax rate of 30.7% in the first quarter of 2016 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 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 impact of certain discrete items during the period.

As of March 31, 2017, the Company believes it is reasonably possible that the amount of unrecognized tax positions could decrease by approximately $25 million during the next 12 months. The potential decrease would be primarily driven by settlements with tax authorities and the expiration of various statutes of limitation. As of March 31, 2017, the Company had accrued $8.5 million of interest and penalties related to uncertain tax positions. The Company records interest and penalties related to uncertain tax positions as a component of income tax expense.