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Income Taxes | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The Tax Act reduced the U.S. federal tax rate from 35% in 2017 to 21% in 2018 and eliminated the deduction for Domestic Production Activities. At the end of 2017, in accordance with SEC Staff Accounting Bulletin No. 118, we recorded a provisional benefit of $18.4 million resulting from the reduction in the carrying value of our U.S. deferred tax liabilities to reflect the change in the tax rate. Additionally, we calculated a provisional amount of zero for the transition tax on unrepatriated foreign earnings. During 2018, we revised our estimate of the amount of 2017 deferred taxes related to discretionary pension contributions; and recorded an additional benefit of $3.1 million as a discrete item in the second quarter. Our accounting for this and all other elements of the Tax Act is now complete, and there were no other adjustments to the provisional amounts previously recorded. Income Tax Provision Income from continuing operations before income taxes consists of the following:
| Year ended December 31,
Dollar amounts in millions | 2018 |  | 2017 |  | 2016
Domestic | $ | 359.1 |  |  | $ | 341.8 |  |  | $ | 98.4 |
Foreign | 162.0 |  |  | 168.4 |  |  | 71.7 |
Total | $ | 521.1 |  |  | $ | 510.2 |  |  | $ | 170.1 |
The following presents the components of our income tax provision (benefit) from continuing operations.
| Year ended December 31,
Dollar amounts in millions | 2018 |  | 2017 |  | 2016
Current tax provision (benefit): |  |  |  |  |
U.S. federal | $ | 55.5 |  |  | $ | 105.8 |  |  | $ | 60.4 |
State and local | 8.4 |  |  | 4.4 |  |  | 4.4 |
Foreign | 31.7 |  |  | 7.9 |  |  | 10.4 |
Net current tax provision (benefit) | 95.6 |  |  | 118.1 |  |  | 75.2 |
Deferred tax provision (benefit): |  |  |  |  |
U.S. federal | 11.2 |  |  | (19.3 | ) |  | (48.1 | )
State and local | 5.8 |  |  | 8.0 |  |  | 1.2 |
Foreign | 11.1 |  |  | 38.2 |  |  | 11.7 |
Net valuation allowance increase (decrease) | (1.4 | ) |  | (25.9 | ) |  | (20.2 | )
Net deferred tax benefit | 26.7 |  |  | 1.0 |  |  | (55.4 | )
Total income tax provision (benefit) | $ | 122.3 |  |  | $ | 119.1 |  |  | $ | 19.8 |
We received income tax refunds during 2018, 2017 and 2016 of $0.2 million, $0.3 million and $0.8 million and paid cash taxes of $89.9 million, $143.1 million and $8.7 million. Included in the Consolidated Balance Sheets at December 31, 2018 and 2017 are income tax receivables of $16.3 million and $2.2 million and income taxes payable of $21.0 million and $4.5 million. Deferred Taxes The tax effects of significant temporary differences creating deferred tax assets and liabilities were as follows:
| December 31,
Dollar amounts in millions | 2018 |  | 2017 1
Accrued liabilities | $ | 21.4 |  |  | $ | 26.6 |
Pension and post-retirement benefits | 8.3 |  |  | 19.9 |
Share-based compensation | 5.3 |  |  | 6.9 |
Benefit of capital loss and NOL carryovers | 15.8 |  |  | 38.9 |
Other | 13.1 |  |  | 10.2 |
Inventories | 7.7 |  |  | 6.6 |
Market value write down of ARS | 3.3 |  |  | 4.9 |
Benefit of tax credit carryovers | 0.4 |  |  | 3.5 |
Valuation allowance | (12.0 | ) |  | (13.6 | )
Total deferred tax assets | 63.3 |  |  | 103.9 |
Property, plant and equipment | (111.8 | ) |  | (118.2 | )
Timber and timberlands | (9.8 | ) |  | (11.4 | )
Installment sale gain deferral | — |  |  | (5.2 | )
Total deferred tax liabilities | (121.6 | ) |  | (134.8 | )
Net deferred tax liabilities | $ | (58.3 | ) |  | $ | (30.9 | )
Balance sheet classification |  |  |
Long-term deferred tax asset | 3.9 |  |  | 2.5 |
Long-term deferred tax liability | (62.2 | ) |  | (33.4 | )
| $ | (58.3 | ) |  | $ | (30.9 | )
1 Prior year information has been revised to further breakout accrued liabilities into pension and post-retirement liabilities and share-based compensation. The benefit relating to capital loss, net operating loss (NOL) and credit carryovers included in the above table at December 31, 2018 consists of:
Dollar amounts in millions | Expiration Beginning in | Benefit Amount | Valuation Allowance
State NOL carryovers | 2020 | $ | 9.9 |  | $ | (0.5 | )
State credit carryovers | 2019 | 0.3 |  | (0.1 | )
Canadian capital loss carryovers | Indefinitely | 5.7 |  | (5.7 | )
Canadian credit carryovers | 2026 | 0.1 |  | — |
Chilean NOL carryovers | Indefinitely | 0.2 |  | (0.2 | )
|  | $ | 16.2 |  | $ | (6.5 | )
We periodically review the need for valuation allowances against deferred tax assets and recognize these deferred tax assets to the extent that their realization is more likely than not. As part of our review, we consider all positive and negative evidence, including earnings history, the future reversal of deferred tax liabilities, and the relevant expirations of carryforwards. We believe that the valuation allowances provided are appropriate. If future years’ earnings differ from the estimates used to establish these valuation allowances, or other objective positive or negative evidence arises, we may be required to record an adjustment resulting in an impact on tax expense (benefit) for that period. As of December 31, 2018, certain of our foreign subsidiaries had accumulated undistributed earnings of approximately $100.0 million. These earnings have been, and are intended to be, indefinitely reinvested in our foreign operations, and we expect future US cash generation to be sufficient to meet our future US cash needs. As a result, no deferred taxes have been recorded with respect to the difference between the financial accounting value and the tax basis in these subsidiaries. Since most of these earnings have previously been subject to the one-time US transition tax on foreign earnings required by the 2017 Tax Act, they are eligible to be repatriated without additional US tax. Any additional taxes due with respect to such earnings, if repatriated to the US, would generally be limited to foreign withholding taxes, which we estimate could be up to $22.0 million. Tax Rate Reconciliation The following table summarizes the differences between the statutory U.S. federal and effective income tax rates on continuing operations:
| Year ended December 31,
| 2018 |  | 2017 |  | 2016
U.S. federal tax rate | 21 | % |  | 35 | % |  | 35 | %
State and local income taxes | 3 |  |  | 2 |  |  | 2 |
Effect of foreign tax rates | 2 |  |  | (3 | ) |  | (5 | )
Effect of foreign exchange on functional currencies | (1 | ) |  | 1 |  |  | 2 |
Tax credits | (1 | ) |  | (1 | ) |  | (12 | )
Capital gain - timber | — |  |  | — |  |  | (15 | )
Stock-based compensation | (1 | ) |  | — |  |  | (2 | )
Domestic manufacturing deduction | — |  |  | (2 | ) |  | (2 | )
Valuation allowance | — |  |  | (6 | ) |  | (12 | )
Uncertain tax positions | — |  |  | 1 |  |  | 21 |
Effect of U.S. federal rate change on deferred taxes | (1 | ) |  | (3 | ) |  | — |
Other, net | 1 |  |  | (1 | ) |  | — |
Effective tax rate (%) | 23 | % |  | 23 | % |  | 12 | %
We are subject to U.S. federal income tax as well as income taxes of multiple state jurisdictions. Our foreign subsidiaries are subject to income tax in Canada, Chile, Peru, Brazil, Colombia and Argentina. U.S. tax years are now closed through 2014, and no audits are currently in progress. We remain subject to U.S. federal examinations of tax years 2015 to 2017 as well as state and local tax examination for the tax years 2007-2017. In 2016, Canada completed its audits of tax years 2012 and 2013; tax years 2014 through 2017 are subject to examination. Quebec provincial audits have been effectively settled through 2016 and Quebec is currently reviewing 2017. Chilean returns for the 2010 through 2016 tax years have been audited and various issues that were appealed in the Chilean courts have recently been settled while others remain ongoing. Tax year 2017 is currently being reviewed. Brazilian returns for years 2013 to 2017 are subject to examination but no audits are currently in progress. Uncertain Tax Positions In accordance with the accounting for uncertain tax positions, the following is a tabular reconciliation of the total amount of unrecognized tax benefits at the beginning and end of the years presented:
| December 31,
Dollar amounts in millions | 2018 |  | 2017 |  | 2016
Beginning balance | $ | 40.3 |  |  | $ | 39.8 |  |  | $ | 4.1 |
Increases: |  |  |  |  |
Tax positions taken in current year | 0.7 |  |  | 0.6 |  |  | 26.9 |
Tax positions taken in prior years | 0.7 |  |  | 1.2 |  |  | 10.4 |
Decreases: |  |  |  |  |
Tax positions taken in current year | — |  |  | — |  |  | — |
Tax positions taken in prior years | — |  |  | (1.3 | ) |  | — |
Settlements during the year | (0.9 | ) |  | — |  |  | — |
Lapse of statute in current year | — |  |  | — |  |  | (1.6 | )
Ending balance | $ | 40.8 |  |  | $ | 40.3 |  |  | $ | 39.8 |
Included in the above balances at December 31, 2018 and 2017 is $40.2 million and $39.9 million of tax benefits that, if recognized, would affect our effective tax rate. We accrued interest of $0.3 million and paid no interest during 2018 and accrued interest of $0.7 million and paid no interest during 2017. In total, we have recognized a liability of $3.4 million and $3.7 million for accrued interest related to our uncertain tax positions as of December 31, 2018 and 2017.

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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 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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