Income Taxes

Our estimated annual effective tax rate, adjusted for discrete tax items, is applied to interim periods’ pretax earnings. We believe that our recorded deferred tax assets and liabilities are reasonable. However, tax laws and regulations are subject to interpretation and tax litigation is inherently uncertain, and therefore our assessments can involve a series of complex judgments about future events and rely heavily on estimates and assumptions.

The effective tax rates for the three- and six-month periods ended June 30, 2016 were 28.3% and 26.0%, respectively. The effective tax rates for the three- and six-month periods ended June 30, 2015 were (30.4)% and 5.7%, respectively. The variance was primarily attributable to the earnings mix between our higher and lower tax rate jurisdictions.

Income taxes are provided based on the U.S. statutory rate of 35% and at the local statutory rate for each foreign jurisdiction adjusted for items that are allowed as deductions for federal and foreign income tax reporting purposes, but not for book purposes. The primary differences between the U.S. statutory rate and our effective rate are as follows:



	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015

U.S. statutory rate	35.0	%	35.0	%	35.0	%	35.0	%
Foreign provision	(8.3	)	(54.6	)	(9.3	)	(31.5	)
Other	1.6		(10.8	)	0.3		2.2
Effective rate	28.3	%	(30.4	)%	26.0	%	5.7	%