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Income Taxes
9 Months Ended
Dec. 31, 2017
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes

Income tax expense as a percentage of income from continuing operations before income tax expense was 213% and 67% in the quarters ended December 31, 2017 and December 31, 2016, respectively and 65% and 36% for the nine-month periods then ended, respectively. Typically these percentages vary from the U.S. statutory rate primarily due to varying effective tax rates at the Company's foreign subsidiaries, and the jurisdictional mix of taxable income for these subsidiaries. Income tax expense as a percentage of income from continuing operations for the three and nine months ended December 31, 2017 were increased by 200 and 48 percentage points, respectively, as a result of accounting for the enactment of the Act on December 22, 2017, as discussed further below.

Income tax expense for the three and nine months ended December 31, 2016 was impacted by certain non-deductible STAHL related acquisition costs of $3,140,000 increasing the effective tax rate for the quarter and nine-months period by 29 and 2 percentage points, respectively.

The Company estimates that the effective tax rate related to continuing operations will be approximately 51% to 55% for fiscal 2018 which has been increased by approximately 36% due to the Act.

In the third quarter, the Company revised its estimated annual effective rate to reflect a change in the federal statutory rate from 35% to 21%, resulting from the enactment of the Act on December 22, 2017. The rate change is administratively effective at the beginning of the Company’s fiscal year, resulting in a blended rate for the annual period. As a result, the blended statutory tax rate for fiscal 2018 is 31.5%.

The Act requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. At December 31, 2017, the Company has not completed its accounting for the tax effects of enactment of the Act at this time; however, in certain cases, as described below, the Company has made a reasonable estimate of the effects on its existing deferred tax balances and the one-time transition tax. In other cases, the Company has not been able to make a reasonable estimate and continue to account for those items based on its existing accounting under ASC 740, Income Taxes, and the provisions of the tax laws that were in effect immediately prior to enactment. For the items for which it was able to determine a reasonable estimate, the Company recognized a provisional amount of $18,628,000, which is included as a component of income tax expense on the Company's condensed consolidated statement of operations and retained earnings for the fiscal 2018.

Provisional amounts

Deferred tax assets and liabilities: The Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. However, the Company is still analyzing certain aspects of the Act and refining its calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the remeasurement of the Company's deferred tax balance was $16,128,000.

Foreign tax effects: The one-time transition tax is based on the Company's total post-1986 earnings and profits (E&P) that it previously deferred from US income taxes. The Company recorded a provisional amount for its one-time transition tax liability for its foreign subsidiaries, resulting in an increase in income tax expense of $2,500,000. The Company has not yet completed its calculation of the total post-1986 E&P for these foreign subsidiaries. Further, the transition tax is based in part on the amount of those earnings held in cash and other specified assets. This amount may change when the Company finalizes the calculation of post-1986 foreign E&P previously deferred from US federal taxation and finalize the amounts held in cash or other specified assets. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations. Determining the amount of unrecognized deferred tax liability related to any remaining undistributed foreign earnings not subject to the transition tax and additional outside basis difference in these entities (i.e., basis difference in excess of that subject to the one-time transition tax) is not practicable.