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						NINE MONTHS ENDED
	SEPTEMBER 30						SEPTEMBER 30
	2017			2016			2017			2016
Income before income taxes	$	15.9		$	6.9		$	58.5		$	27.6
Statutory taxes at 35%	$	5.6		$	2.4		$	20.5		$	9.7
Interim adjustment	(0.1		)	—			0.2			—
Permanent adjustments:
Non-U.S. rate differences	(1.9		)	(1.9		)	(6.7		)	(4.6		)
Equity interest earnings	(0.4		)	(0.4		)	(1.8		)	(1.1		)
Valuation allowance	1.0			0.5			2.2			1.0
Federal tax credits	(0.3		)	(0.6		)	(1.4		)	(1.1		)
State income taxes	0.3			(0.1		)	0.8			0.1
Other	(0.1		)	0.1			0.2			0.3
	$	(1.4	)	$	(2.4	)	$	(6.7	)	$	(5.4	)
Discrete items	$	(4.9	)	$	(5.1	)	$	(6.7	)	$	(6.9	)
Income tax provision	$	(0.8	)	$	(5.1	)	$	7.3		$	(2.6	)
Reported income tax rate	(5.0		)%	(73.9		)%	12.5		%	(9.4		)%

During the third quarter of 2017, the Company settled various federal obligations in Brazil through the utilization of its federal net operating loss carryforwards for which a valuation allowance was previously provided. As a result of the utilization of deferred tax assets, the Company released the associated valuation allowance previously provided of $4.7 million.

In addition, during the first nine months 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 third quarter of 2016, the Company received a notice from the Italian Tax Authority approving the transfer of certain tax losses as part of an internal restructuring. As a result, the Company believed it is more likely than not that deferred tax assets for such losses of approximately $3.2 million will be realized in the foreseeable future and released the valuation allowance previously provided. In addition, the Company recognized a discrete tax benefit of $2.0 million, related to provision-to-return items, primarily for a U.S. tax benefit for manufacturing activities, adjustments for certain foreign earnings and repatriations, and the research and development credit.

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