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Income Taxes | 12 Months Ended
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Dec. 31, 2013
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The income tax provision (benefit) was as follows:
(in millions) |  | 2013 |  | 2012 |  | 2011
Continuing operations: |  |  |  |  |  |
Current: |  |  |  |  |  |
Federal |  | $ | (127.5 | ) |  | $ | 82.3 |  |  | $ | 40.3 |
State |  | (10.2 | ) |  | 8.7 |  |  | 7.5 |
Foreign |  | 7.9 |  |  | 9.0 |  |  | 12.5 |
Total |  | (129.8 | ) |  | 100.0 |  |  | 60.3 |
Deferred: |  |  |  |  |  |
Federal |  | 62.7 |  |  | (27.6 | ) |  | 48.4 |
State |  | 4.6 |  |  | 0.1 |  |  | 2.4 |
Foreign |  | (1.1 | ) |  | (0.1 | ) |  | (0.7 | )
Total |  | 66.2 |  |  | (27.6 | ) |  | 50.1 |
Income tax provision (benefit) from continuing operations |  | $ | (63.6 | ) |  | $ | 72.4 |  |  | $ | 110.4 |
Income tax provision from discontinued operations |  | $ | 161.4 |  |  | $ | 3.8 |  |  | $ | 5.9 |
Total company income tax provision |  | $ | 97.8 |  |  | $ | 76.2 |  |  | $ | 116.3 |
The following is a reconciliation of income taxes computed at the statutory U.S. Federal income tax rate to the actual effective income tax provision (benefit) from continuing operations:
|  | Income Tax Provision
(in millions) |  | 2013 |  | 2012 |  | 2011
Taxes computed at the federal rate |  | $ | (54.2 | ) |  | $ | 81.3 |  |  | $ | 112.7 |
State and local income taxes, net of federal tax benefit |  | (11.8 | ) |  | 0.6 |  |  | 3.8 |
Tax reserve adjustments |  | (10.2 | ) |  | (0.4 | ) |  | (1.7 | )
Repatriation of foreign earnings |  | 9.4 |  |  | 1.3 |  |  | 3.1 |
Valuation allowance |  | 9.1 |  |  | 2.2 |  |  | 1.2 |
Adjustment to prior years’ taxes |  | (5.3 | ) |  | 1.4 |  |  | 1.2 |
Foreign earnings taxed at different rate |  | (2.5 | ) |  | (10.2 | ) |  | (8.4 | )
Manufacturing deduction |  | — |  |  | (7.1 | ) |  | (3.3 | )
Other |  | 1.9 |  |  | 3.3 |  |  | 1.8 |
Income tax provision |  | $ | (63.6 | ) |  | $ | 72.4 |  |  | $ | 110.4 |
In general, the Company is responsible for filing consolidated U.S. Federal, foreign and combined, unitary or separate state income tax returns. The Company is responsible for paying the taxes relating to such returns, including any subsequent adjustments resulting from the redetermination of such tax liability by the applicable taxing authorities. No provision has been made for U.S. Federal, state or additional foreign taxes related to approximately $188 million of undistributed earnings of foreign subsidiaries which have been permanently re-invested. It is not practical to determine the deferred tax liability on these earnings. Income (loss) from continuing operations before income taxes for the Company’s U.S. and non-U.S. operations was as follows:
(in millions) |  | 2013 |  | 2012 |  | 2011
U.S. |  | $ | (180.0 | ) |  | $ | 178.4 |  |  | $ | 265.5 |
Non-U.S. |  | 25.2 |  |  | 53.9 |  |  | 56.6 |
Income (loss) from continuing operations before income taxes |  | $ | (154.8 | ) |  | $ | 232.3 |  |  | $ | 322.1 |
Income taxes paid and amounts received as refunds were as follows:
(in millions) |  | 2013 |  | 2012 |  | 2011
Income taxes paid |  | $ | 21.4 |  |  | $ | 101.7 |  |  | $ | 49.2 |
Income tax refunds received |  | (18.3 | ) |  | (15.8 | ) |  | (41.0 | )
Income taxes paid, net |  | $ | 3.1 |  |  | $ | 85.9 |  |  | $ | 8.2 |
ATI’s income tax payments have benefited over the last several years from provisions under the U.S. tax code allowing companies to immediately deduct a significant portion of the cost of new capital investments placed into service. Deferred income taxes result from temporary differences in the recognition of income and expense for financial and income tax reporting purposes, and differences between the fair value of assets acquired in business combinations accounted for as purchases for financial reporting purposes and their corresponding tax bases. Deferred income taxes represent future tax benefits or costs to be recognized when those temporary differences reverse. The categories of assets and liabilities that have resulted in differences in the timing of the recognition of income and expense at December 31, 2013 and 2012 were as follows:
(in millions) |  | 2013 |  | 2012
Deferred income tax assets |  |  |  |
Pensions |  | $ | 115.7 |  |  | $ | 247.1 |
Postretirement benefits other than pensions |  | 182.9 |  |  | 210.4 |
State net operating loss tax carryovers |  | 32.2 |  |  | 35.9 |
Federal and state tax credits |  | 42.0 |  |  | 39.9 |
Deferred compensation and other benefit plans |  | 29.4 |  |  | 28.1 |
Self insurance reserves |  | 10.1 |  |  | 10.4 |
Other items |  | 79.5 |  |  | 64.3 |
Gross deferred income tax assets |  | 491.8 |  |  | 636.1 |
Valuation allowance for deferred tax assets |  | (33.9 | ) |  | (24.8 | )
Total deferred income tax assets |  | 457.9 |  |  | 611.3 |
Deferred income tax liabilities |  |  |  |
Bases of property, plant and equipment |  | 488.1 |  |  | 400.2 |
Inventory valuation |  | 66.5 |  |  | 77.1 |
Bases of amortizable intangible assets |  | 67.1 |  |  | 70.5 |
Other items |  | 46.3 |  |  | 16.0 |
Total deferred tax liabilities |  | 668.0 |  |  | 563.8 |
Net deferred tax asset (liability) |  | $ | (210.1 | ) |  | $ | 47.5 |
The Company had $33.9 million and $24.8 million in deferred tax asset valuation allowances at December 31, 2013 and 2012, respectively, related to federal foreign tax credits and state deferred tax assets. The valuation allowance at December 31, 2013 includes $2.3 million for federal foreign tax credits, $18.6 million for state net operating loss tax carryforwards, $10.3 million for state tax credits and $2.7 million for state temporary differences, since the Company has concluded, based on current state tax laws, that it is more likely than not that these tax benefits would not be realized. For these state net operating loss tax carryforwards, expiration will generally occur within 20 years of the year generated and utilization of the tax benefit is limited to $4 million per year or 25% of apportioned income, whichever is greater. The changes in the liability for unrecognized income tax benefits for the years ended December 31, 2013, 2012 and 2011 were as follows:
(in millions) |  | 2013 |  | 2012 |  | 2011
Balance at beginning of year |  | $ | 29.2 |  |  | $ | 29.7 |  |  | $ | 17.1 |
Increases in prior period tax positions |  | 0.1 |  |  | 0.2 |  |  | 1.3 |
Decreases in prior period tax positions |  | (5.8 | ) |  | (0.3 | ) |  | (1.3 | )
Increases in current period tax positions |  | 60.4 |  |  | 1.2 |  |  | 0.1 |
Uncertain tax positions assumed in Ladish acquisition |  | — |  |  | — |  |  | 14.5 |
Expiration of the statute of limitations |  | (0.7 | ) |  | (2.0 | ) |  | (1.8 | )
Settlements |  | (8.6 | ) |  | (0.4 | ) |  | (0.7 | )
Interest and penalties, net |  | (1.8 | ) |  | 0.8 |  |  | 0.5 |
Balance at end of year |  | $ | 72.8 |  |  | $ | 29.2 |  |  | $ | 29.7 |
At December 31, 2013, interest and penalties included in the liability for unrecognized tax benefits were $4.7 million. For the year ended December 31, 2013, $59.4 million of the increases in current period tax positions relate to temporary differences, which would not impact the effective tax rate upon resolution of the uncertainty. Including tax positions for which the Company determined that the tax position would not meet the more-likely-than-not recognition threshold upon examination by the tax authorities based upon the technical merits of the position, the total estimated unrecognized tax benefit that, if recognized, would affect ATI’s effective tax rate was approximately $10 million. At this time, the Company believes that it is reasonably possible that approximately $0.2 million of the estimated unrecognized tax benefits as of December 31, 2013 will be recognized within the next twelve months based on the expiration of statutory review periods. The Company, and/or one of its subsidiaries, files income tax returns in the U.S. Federal jurisdiction and in various state and foreign jurisdictions. A summary of tax years that remain subject to examination, by major tax jurisdiction, is as follows:
Jurisdiction |  | Earliest Year Open to Examination
U.S. Federal |  | 2013
States: |  |
Alabama |  | 2011
Illinois |  | 2010
North Carolina |  | 2010
Oregon |  | 2010
Pennsylvania |  | 2010
Foreign: |  |
China |  | 2009
Germany |  | 2011
Poland |  | 2009
United Kingdom |  | 2011

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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