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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 provision (benefit) for income taxes from continuing operations for each of the three years in the period ended December 31 consisted of the following:
(in millions) | 2013 |  | 2012 |  | 2011
Current: |  |  |  |  |
Federal | $ | — |  |  | $ | (1.8 | ) |  | $ | (3.8 | )
Foreign | 2.4 |  |  | 3.2 |  |  | 2.1 |
State and local | 1.0 |  |  | 0.1 |  |  | 0.3 |
| 3.4 |  |  | 1.5 |  |  | (1.4 | )
Deferred: |  |  |  |  |
Federal | $ | (112.1 | ) |  | $ | 2.1 |  |  | $ | 4.7 |
Foreign | 0.2 |  |  | 0.3 |  |  | 0.2 |
State and local | 1.3 |  |  | — |  |  | — |
| (110.6 | ) |  | 2.4 |  |  | 4.9 |
Total income tax (benefit) provision | $ | (107.2 | ) |  | $ | 3.9 |  |  | $ | 3.5 |
Differences between the statutory federal income tax rate and the effective income tax rate from continuing operations for each of the three years in the period ended December 31 are summarized below:
| 2013 |  | 2012 |  | 2011
Statutory federal income tax rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State income taxes, net of federal tax benefit | 2.7 |  |  | 1.0 |  |  | 0.9 |
Valuation allowance | (231.7 | ) |  | 41.3 |  |  | 8.8 |
Domestic production deduction | (1.2 | ) |  | — |  |  | — |
Bad debt deduction | — |  |  | (24.9 | ) |  | — |
Asset dispositions and write-offs | (3.0 | ) |  | (29.5 | ) |  | — |
Repatriation effects | 1.5 |  |  | — |  |  | — |
Tax reserves | — |  |  | (1.0 | ) |  | 4.1 |
R&D tax credits | (1.5 | ) |  | — |  |  | (4.1 | )
Foreign tax rate effects | (4.4 | ) |  | (7.2 | ) |  | (22.5 | )
Other, net | 0.3 |  |  | 0.4 |  |  | (1.1 | )
Effective income tax rate | (202.3 | )% |  | 15.1 | % |  | 21.1 | %
Income from continuing operations before taxes for each of the three years in the period ended December 31 consisted of the following:
(in millions) | 2013 |  | 2012 |  | 2011
U.S. | $ | 38.9 |  |  | $ | 10.0 |  |  | $ | 2.5 |
Non-U.S. | 14.1 |  |  | 15.9 |  |  | 14.1 |
| $ | 53.0 |  |  | $ | 25.9 |  |  | $ | 16.6 |
ASC Topic 740, Income Taxes, requires that the future realization of deferred tax assets depends on the existence of sufficient taxable income in future periods. Possible sources of taxable income include taxable income in carryback periods, the future reversal of existing taxable temporary differences recorded as a deferred tax liability, tax-planning strategies that generate future income or gains in excess of anticipated losses in the carryforward period and projected future taxable income. If, based upon all available evidence, both positive and negative, it is more likely than not such deferred tax assets will not be realized, a valuation allowance is recorded. Significant weight is given to positive and negative evidence that is objectively verifiable. A company’s three-year cumulative loss position is significant negative evidence in considering whether deferred tax assets are realizable and the accounting guidance restricts the amount of reliance the Company can place on projected taxable income to support the recovery of the deferred tax assets. Throughout 2012 and 2011, the Company was in a three-year cumulative domestic loss position and continued to maintain a valuation allowance against domestic deferred tax assets due the uncertainty of the realization of certain deferred tax assets. The valuation allowance was initially recorded in 2010, and in 2011 and 2012, the Company continued to adjust its valuation allowance as the deferred tax assets increased or decreased, resulting in effectively no tax expense or benefit being recorded for domestic operations. However, in 2011 and 2012, the Company did record tax expense for the increase in the deferred tax liabilities of its domestic indefinite lived intangibles. Furthermore, an income tax provision was recorded in each of the three years in the period ended December 31, 2013 for foreign operations that were not in a cumulative loss position. We continue to evaluate the need to maintain a valuation allowance for deferred tax assets based on our assessment of whether it is more likely than not that deferred tax benefits will be realized through the generation of future taxable income. Appropriate consideration is given to all available evidence, both positive and negative, in assessing the need for a valuation allowance. In the second quarter of 2013, this evaluation resulted in the determination that $102.4 million of our valuation allowance on U.S. deferred tax assets could be released. The qualitative and quantitative analysis of current and expected domestic earnings, industry and market trends, tax planning strategies, and general business risks resulted in a more likely than not conclusion of being able to realize a significant portion of our U.S. deferred tax assets. We have been able to sustain positive earnings despite low demand for products and services that has occurred in many of our markets during the current and previous three years. Our earnings have become positive on a cumulative basis through this period. In addition, market demand and our performance in many of our markets have improved during the current year, and demand and earnings performance are expected to continue into the foreseeable future. In addition, in 2012, we exited a business segment that had produced losses. Upon releasing the significant portion of our valuation allowance on U.S. deferred tax assets in the second quarter of 2013, a valuation allowance of $10.4 million was maintained in accordance with the guidance provided in ASC 740-270-25-4 and was released through the effective tax rate as domestic income is recognized throughout the course of the year. An additional $3.4 million reduction in deferred tax valuation allowances was recorded in the year ended December 31, 2013. In the fourth quarter of 2013, the Company also executed a tax planning strategy that resulted in the release of $6.7 million of valuation allowance that was previously recorded against the Company’s foreign tax credits, which would have begun to expire in 2015. During the year ended December 31, 2013, changes in the United Kingdom (“U.K.”) and Finland tax rates were enacted. As a result, the Company recognized income tax expense of $0.8 million and an income tax benefit of $0.8 million related to the decrease in deferred tax assets and liabilities in the U.K. and Finland, respectively. Deferred income tax assets and liabilities at December 31 are summarized as follows:
(in millions) | 2013 |  | 2012
Deferred tax assets: |  |  |
Depreciation and amortization | $ | 10.8 |  |  | $ | 12.5 |
Accrued expenses | 28.8 |  |  | 27.9 |
Net operating loss, capital loss, alternative minimum tax, research and development, and foreign tax credit carryforwards | 62.8 |  |  | 75.0 |
Definite lived intangibles | 1.7 |  |  | 1.8 |
Pension benefits | 23.3 |  |  | 31.1 |
Other | 1.1 |  |  | 0.3 |
Deferred revenue | 0.1 |  |  | 0.1 |
Gross deferred tax assets | 128.6 |  |  | 148.7 |
Valuation allowance | (9.8 | ) |  | (131.8 | )
Total deferred tax assets | 118.8 |  |  | 16.9 |
Deferred tax liabilities: |  |  |
Depreciation and amortization | (3.7 | ) |  | (5.0 | )
Expenses capitalized for book | (1.0 | ) |  | (2.1 | )
Pension benefits | (11.5 | ) |  | — |
Indefinite lived intangibles | (56.8 | ) |  | (56.2 | )
Other | (0.3 | ) |  | — |
Gross deferred tax liabilities | (73.3 | ) |  | (63.3 | )
Net deferred tax assets (liabilities) | $ | 45.5 |  |  | $ | (46.4 | )
The deferred tax asset for tax loss carryforwards at December 31, 2013, includes federal net operating loss carryforwards of $7.5 million, which begin to expire in 2026, state net operating loss carryforwards of $7.7 million, which will begin to expire in 2014, foreign net operating loss carryforwards of $5.2 million of which $0.4 million has an indefinite life. The deferred tax asset for tax credit carryforwards includes U.S. research tax credit carryforwards of $7.9 million, which will begin to expire in 2019, U.S. foreign tax credits of $31.0 million, which will begin to expire in 2015, alternative motor vehicle credits of $0.2 million, which will begin to expire in 2029, and U.S. alternative minimum tax credit carryforwards of $3.3 million with no expiration. The deferred tax asset for tax loss carryforwards at December 31, 2012, include federal net operating loss carryforwards of $20.9 million, which begin to expire in 2018, state net operating loss carryforwards of $2.2 million, which will begin to expire in 2019; foreign net operating loss carryforwards of $8.2 million of which $0.5 million has an indefinite life and $7.7 million which will expire in 2030; and $12.8 million for capital loss carryforwards which will expire in 2013. The deferred tax asset for tax credit carryforwards includes U.S. research tax credit carryforwards of $6.3 million, which will begin to expire in 2022, U.S. foreign tax credits of $21.1 million, which will begin to expire in 2015 and U.S. alternative minimum tax credit carryforwards of $3.3 million with no expiration. We continue to maintain a valuation allowance on certain state and foreign (principally Spain) deferred tax assets that we believe, on a more likely than not basis, will not be realized. Valuation allowances totaling $9.8 million have been established at December 31, 2013 and include $4.7 million related to state net operating loss carryforwards, $5.1 million related to foreign net operating loss carryforwards. The $118.8 million of deferred tax assets at December 31, 2013, for which no valuation allowance is recorded, is anticipated to be realized through future taxable income or the future reversal of existing taxable temporary differences recorded as deferred tax liabilities at December 31, 2013. Should the Company determine that it would not be able to realize its remaining deferred tax assets in the future, an adjustment to the valuation allowance would be recorded in the period such determination is made. As of December 31, 2012, the total valuation allowance recorded was $131.8 million, which included $2.2 million related to state net operating loss carryforwards, $8.3 million related to foreign net operating loss carryforwards, $12.8 million related to capital loss carryforwards and $108.5 million related to domestic deferred tax assets. The net deferred tax asset at December 31 is classified in the balance sheet as follows:
(in millions) | 2013 |  | 2012
Current net deferred tax assets | $ | 12.5 |  |  | $ | 4.0 |
Current valuation allowance | (0.1 | ) |  | (14.6 | )
Total current net deferred tax assets (liabilities) | $ | 12.4 |  |  | $ | (10.6 | )
Long-term net deferred tax assets | $ | 42.8 |  |  | $ | 81.4 |
Long-term valuation allowance | (9.7 | ) |  | (117.2 | )
Long-term net deferred tax assets (liabilities) | $ | 33.1 |  |  | $ | (35.8 | )
Current net deferred tax assets of $12.4 million as of December 31, 2013 are included as a component of other current assets on the consolidated balance sheet. The Company paid income taxes of $4.0 million in 2013, $2.9 million in 2012, and $4.2 million in 2011. In the fourth quarter of 2013, in connection with the aforementioned tax planning strategy, the Company repatriated $24.3 million of previously undistributed earnings at one of the Company’s foreign subsidiaries. As a result of this change, the Company increased its deferred tax assets related to the $24.3 million by $9.9 million. The remainder of the foreign subsidiaries undistributed earnings are considered to be indefinitely reinvested. Federal and state income taxes have not been provided on accumulated undistributed earnings of certain foreign subsidiaries aggregating approximately $59.2 million and $87.8 million at December 31, 2013 and 2012, respectively, as such earnings have been reinvested in the business. The determination of the amount of the unrecognized deferred tax liability related to the undistributed earnings is not practicable. The following table summarizes the activity related to the Company’s unrecognized tax benefits in each of the three years in the period ended December 31, 2013:
(in millions) | 2013 |  | 2012 |  | 2011
Balance at January 1 | $ | 4.0 |  |  | $ | 4.3 |  |  | $ | 3.8 |
Increases related to current year tax | 1.4 |  |  | 0.2 |  |  | 1.3 |
Increases from prior period positions | 0.4 |  |  | 0.1 |  |  | — |
Decreases from settlements with tax authorities | — |  |  | — |  |  | (0.2 | )
Decreases from prior period positions | (0.2 | ) |  | (0.2 | ) |  | — |
Decreases due to lapse of statute of limitations | (0.8 | ) |  | (0.4 | ) |  | (0.6 | )
Balance at December 31 | $ | 4.8 |  |  | $ | 4.0 |  |  | $ | 4.3 |
Included in the unrecognized tax benefits of $4.8 million at December 31, 2013 was $4.8 million of tax benefits that if recognized, would impact our annual effective tax rate. The Company’s continuing practice is to recognize interest and penalties related to income tax matters in income tax expense. Interest and penalties amounting to $0.1 million are included in the consolidated balance sheet but are not included in the table above. Our unrecognized tax benefits may decrease by $2.3 million over the next 12 months due to potential expiration of statute of limitations and settlements with tax authorities. We file U.S., state and foreign income tax returns in jurisdictions with varying statutes of limitations. The 2010 through 2013 tax years generally remain subject to examination by federal and most state tax authorities. In significant foreign jurisdictions, the 2009 through 2013 tax years generally remain subject to examination by their respective tax authorities.

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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=26873400&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 + Details
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