The income tax provision includes U.S. federal, state and local, and foreign income taxes and is based on the application of a

forecasted annual income tax rate applied to the current quarter's year-to-date pre-tax income or loss. In determining the

estimated annual effective income tax rate, the Company analyzes various factors, including projections of the Company's

annual earnings, taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, the

Company's ability to use tax credits and net operating loss carryforwards and capital loss carryforwards, and available tax planning alternatives. Discrete items, including the effect of changes in tax laws, tax rates and certain circumstances with respect to valuation allowances or the tax effect of other unusual or non-recurring transactions or adjustments are reflected in the period in which they occur as an addition to, or reduction from, the income tax provision, rather than included in the estimated effective annual income tax rate. Additionally, the Company's interim effective income tax rate is computed and applied without regard to pre-tax losses where such losses are not expected to generate a current-year tax benefit, as reflected in the interim adjustment line in the table below.

A reconciliation of the consolidated federal statutory to reported income tax rate is as follows:



	THREE MONTHS ENDED						SIX MONTHS ENDED
	JUNE 30						JUNE 30
	2017			2016			2017			2016
Income before income taxes	$	18.3		$	11.8		$	42.6		$	20.7
Statutory taxes at 35%	$	6.4		$	4.1		$	14.9		$	7.2
Interim adjustment	0.3			—			0.3			—
Permanent adjustments:
Non-U.S. rate differences	(2.4		)	(1.9		)	(4.8		)	(2.7		)
Other	—			(0.5		)	(0.5		)	(0.3		)
	$	(2.4	)	$	(2.4	)	$	(5.3	)	$	(3.0	)
Discrete items	$	(2.4	)	$	1.8		$	(1.8	)	$	(1.7	)
Income tax provision	$	1.9		$	3.5		$	8.1		$	2.5
Reported income tax rate	10.4		%	29.7		%	19.0		%	12.1		%

During the second quarter of 2017, the Company recognized a net discrete tax benefit of $4.4 million from an internal sale of a subsidiary between consolidated companies resulting in the repatriation of non-U.S. accumulated earnings taxed at higher rates, partially offset by a $1.6 million valuation allowance provided against deferred tax assets in China where the Company has determined that such deferred tax assets no longer meet the more likely than not standard for realization.

During the second quarter of 2016, the Company recognized a discrete tax expense of $1.6 million related to non-deductible acquisition expenses. In addition, during the first quarter of 2016, the Company recognized a discrete tax benefit of $4.0 million. As a result of the acquisition of Bolzoni, the Company changed its previous reinvestment assertion; and consequently, all of the earnings of its European operations were considered permanently reinvested and the previously provided deferred tax liability was no longer required.