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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Components of Income Tax Expense Benefit | Income from continuing operations before income taxes and equity in net income of unconsolidated investments, and current and deferred income tax expense (benefit) are composed of the following (in thousands):
| Year Ended December 31,
| 2014 |  | 2013 |  | 2012
Income from continuing operations before income taxes and equity in net income of unconsolidated investments: |  |  |  |  |
Domestic | $ | 45,689 |  |  | $ | 351,731 |  |  | $ | 311,195 |
Foreign | 167,490 |  |  | 186,711 |  |  | 57,017 |
Total | $ | 213,179 |  |  | $ | 538,442 |  |  | $ | 368,212 |
Current income tax expense: |  |  |  |  |
Federal | $ | 36,708 |  |  | $ | 53,953 |  |  | $ | 67,022 |
State | 3,209 |  |  | 2,195 |  |  | 6,107 |
Foreign | 25,700 |  |  | 18,414 |  |  | 19,672 |
Total | $ | 65,617 |  |  | $ | 74,562 |  |  | $ | 92,801 |
Deferred income tax expense (benefit): |  |  |  |  |
Federal | $ | (32,890 | ) |  | $ | 69,817 |  |  | $ | 928 |
State | (1,139 | ) |  | 2,416 |  |  | 648 |
Foreign | (13,104 | ) |  | (12,350 | ) |  | (13,944 | )
Total | $ | (47,133 | ) |  | $ | 59,883 |  |  | $ | (12,368 | )
Total income tax expense | $ | 18,484 |  |  | $ | 134,445 |  |  | $ | 80,433 |
Significant Differences Between United States Federal Statutory Rate and Effective Income Tax Rate | The reconciliation of the U.S. federal statutory rate to the effective income tax rate is as follows:
| % of Income Before Income Taxes
| 2014 |  | 2013 |  | 2012
Federal statutory rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State taxes, net of federal tax benefit | 0.2 |  |  | 0.7 |  |  | 1.4 |
Change in valuation allowance(a) | 1.0 |  |  | (2.2 | ) |  | 3.4 |
Impact of foreign earnings, net(b) | (23.6 | ) |  | (10.3 | ) |  | (6.3 | )
Depletion | (2.4 | ) |  | (0.9 | ) |  | (1.3 | )
Revaluation of unrecognized tax benefits/reserve requirements(c) | (0.6 | ) |  | (0.1 | ) |  | (1.7 | )
Domestic Manufacturing tax deduction(d) | (2.2 | ) |  | (0.9 | ) |  | (3.8 | )
Undistributed earnings of foreign subsidiaries(b) | (0.3 | ) |  | 2.9 |  |  | (4.9 | )
Other items, net | 1.6 |  |  | 0.8 |  |  | — |
Effective income tax rate | 8.7 | % |  | 25.0 | % |  | 21.8 | %
(a) | During 2013, the Avonmouth, United Kingdom legal entity was dissolved, therefore the corresponding valuation allowance and deferred tax assets were written off. During 2012, a valuation allowance was established for $15.9 million as a result of the planned shut-down of our Avonmouth, United Kingdom legal entity in connection with our exit of the phosphorus flame retardants business. See Note 20, “Restructuring and Other.”
(b) | In prior years, we designated the undistributed earnings of substantially all of our foreign subsidiaries as indefinitely invested. The benefit of the lower tax rates in the jurisdictions for which we made this designation are reflected in our effective income tax rate. During 2014, 2013 and 2012, we received distributions of $12.6 million, $12.3 million and $56.9 million, respectively, from various foreign subsidiaries and joint ventures, and realized an expense (benefit), net of foreign tax credits, of $2.8 million, $2.4 million and $(1.8) million, respectively, related to the repatriation of these high taxed earnings. We have asserted, for all periods being reported, indefinite investment of our share of the income of JBC, a Free Zones company under the laws of the Hashemite Kingdom of Jordan. The applicable provisions of the Jordanian law, and applicable regulations thereunder, do not have a termination provision and the exemption is indefinite. As a Free Zones company, JBC is not subject to income taxes on the profits of products exported from Jordan, and currently, substantially all of the profits are from exports. This gave us a rate benefit of 12.4%, 4.5%, and 5.8% for 2014, 2013, and 2012, respectively. The rate has also benefited from rate differences in various countries including Belgium, and the Netherlands. In 2012, undistributed foreign subsidiary earnings were primarily impacted by a $17.4 million change related to the closure of our Avonmouth, United Kingdom site in connection with our exit of the phosphorus flame retardants business.
(c) | During 2014, we released various tax reserves primarily related to the expiration of the applicable U.S. federal statute of limitations for 2009 through 2010 which provided a net benefit of approximately $2.5 million. During 2012, we released various tax reserves primarily related to the expiration of the applicable U.S. federal statute of limitations for 2008 which provided a net benefit of $5.2 million.
(d) | During 2012, we amended the calculation of the domestic manufacturing tax deduction for the year 2010 and filed the 2011 tax return. As a result, in 2012 we recognized tax benefits of $1.5 million and $3.0 million related to the 2010 and 2011 tax years, respectively.
Deferred Income Tax Assets and Liabilities Recorded on Consolidated Balance Sheets | The deferred income tax assets and liabilities recorded on the consolidated balance sheets as of December 31, 2014 and 2013 consist of the following (in thousands):
| December 31,
| 2014 |  | 2013
Deferred tax assets: |  |  |
Postretirement benefits other than pensions | $ | 221 |  |  | $ | 300 |
Accrued employee benefits | 20,834 |  |  | 31,089 |
Operating loss carryovers | 82,017 |  |  | 88,614 |
Pensions | 79,113 |  |  | 37,172 |
Tax credit carryovers | 34,469 |  |  | 35,170 |
Undistributed earnings of foreign subsidiaries | 540 |  |  | — |
Other | 21,845 |  |  | 15,447 |
Gross deferred tax assets | 239,039 |  |  | 207,792 |
Valuation allowance | (30,768 | ) |  | (33,757 | )
Deferred tax assets | 208,271 |  |  | 174,035 |
Deferred tax liabilities: |  |  |
Depreciation | (184,548 | ) |  | (213,575 | )
Foreign currency translation adjustments | (4,752 | ) |  | (3,104 | )
Undistributed earnings of foreign subsidiaries | — |  |  | (71 | )
Other | (18,420 | ) |  | (19,747 | )
Deferred tax liabilities | (207,720 | ) |  | (236,497 | )
Net deferred tax assets (liabilities) | $ | 551 |  |  | $ | (62,462 | )
Classification in the consolidated balance sheets: |  |  |
Current deferred tax assets | $ | 1,801 |  |  | $ | 3,912 |
Current deferred tax liabilities | (6,806 | ) |  | (2,853 | )
Noncurrent deferred tax assets | 62,440 |  |  | 65,667 |
Noncurrent deferred tax liabilities | (56,884 | ) |  | (129,188 | )
Net deferred tax assets (liabilities) | $ | 551 |  |  | $ | (62,462 | )
Changes in Balance of Deferred Tax Asset Valuation Allowance | Changes in the balance of our deferred tax asset valuation allowance are as follows (in thousands):
| Year Ended December 31,
| 2014 |  | 2013 |  | 2012
Balance at January 1 | $ | (33,757 | ) |  | $ | (49,562 | ) |  | $ | (36,419 | )
Additions | (1,895 | ) |  | (4,359 | ) |  | (20,182 | )
Deductions | 4,884 |  |  | 20,164 |  |  | 7,039 |
Balance at December 31 | $ | (30,768 | ) |  | $ | (33,757 | ) |  | $ | (49,562 | )
Reconciliation of Total Gross Liability Related to Uncertain Tax Positions | The following is a reconciliation of our total gross liability related to uncertain tax positions for 2014, 2013 and 2012 (in thousands):
| Year Ended December 31,
| 2014 |  | 2013 |  | 2012
Balance at January 1 | $ | 29,143 |  |  | $ | 28,398 |  |  | $ | 29,789 |
Additions for tax positions related to prior years | — |  |  | — |  |  | 4,242 |
Reductions for tax positions related to prior years | (214 | ) |  | (348 | ) |  | — |
Additions for tax positions related to current year | 2,232 |  |  | 2,061 |  |  | 3,639 |
Lapses in statutes of limitations | (5,057 | ) |  | (473 | ) |  | (10,057 | )
Foreign currency translation adjustment | (1,135 | ) |  | (495 | ) |  | 785 |
Balance at December 31 | $ | 24,969 |  |  | $ | 29,143 |  |  | $ | 28,398 |

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: 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 + Details
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- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: 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 + Details
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- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32687-109319 + Details
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- Definition Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions. + 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 + Details
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