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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2013
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Provision (Benefit) The provision (benefit) for income taxes from continuing operations is as follows (in millions):
| Years Ended December 31,
| 2013 |  | 2012 |  | 2011
Current: |  |  |  |  |
Federal | $ | — |  |  | $ | (2.9 | ) |  | $ | (21.2 | )
State and local | (1.8 | ) |  | 2.0 |  |  | 0.6 |
Foreign | — |  |  | — |  |  | — |
| (1.8 | ) |  | (0.9 | ) |  | (20.6 | )
Deferred: |  |  |  |  |
Federal | (83.0 | ) |  | (0.2 | ) |  | 237.2 |
State and local | (1.7 | ) |  | 0.1 |  |  | 15.2 |
Foreign | — |  |  | — |  |  | — |
| (84.7 | ) |  | (0.1 | ) |  | 252.4 |
| $ | (86.5 | ) |  | $ | (1.0 | ) |  | $ | 231.8 |
In 2011, there was an insignificant amount of foreign income associated with the foreign income taxes of $0.1 million. Deferred Taxes Future tax consequences of temporary differences between the carrying amounts for financial reporting purposes and USEC’s estimate of the tax bases of its assets and liabilities result in deferred tax assets and liabilities, as follows (in millions):
| December 31,
| 2013 |  | 2012
Deferred tax assets: |  |  |
Plant lease turnover and other exit costs | $ | 17.4 |  |  | $ | 15.8 |
Employee benefits costs | 119.7 |  |  | 215.0 |
Inventory | 10.1 |  |  | 15.9 |
Property, plant and equipment | 508.8 |  |  | 490.5 |
Tax intangibles | — |  |  | 0.3 |
Depleted uranium and stored wastes | 2.9 |  |  | 3.4 |
Net operating loss and credit carryforwards | 89.2 |  |  | 35.5 |
Accrued expenses | 4.7 |  |  | 7.1 |
Prepaid expenses | — |  |  | 2.4 |
Other | 12.3 |  |  | 8.0 |
| 765.1 |  |  | 793.9 |
Valuation allowance | (763.5 | ) |  | (793.9 | )
Deferred tax assets, net of valuation allowance | 1.6 |  |  | — |
Deferred tax liabilities: |  |  |
Prepaid expenses | 1.6 |  |  | — |
Deferred tax liabilities | 1.6 |  |  | — |
| — |  |  | — |
The valuation allowance reduces the net deferred tax assets to their net realizable value. A full valuation allowance against net deferred taxes was first recorded in 2011 due to cumulative losses incurred in recent years and due to substantial uncertainty to generate future taxable income that would lead to realization of the net deferred tax assets. The ultimate realization of the net deferred tax assets is dependent upon generating sufficient taxable income in future years when deferred tax assets are recoverable or are expected to reverse. USEC has federal net operating losses of $226.5 million, federal tax credit carryforwards of $6.5 million that currently expire through 2033, and a minimum tax credit carryforward of $1.4 million which does not expire. USEC has state net operating losses of $45.0 million that currently expire in 2033. If certain substantial changes in USEC's ownership occur, there would be an annual limitation on the amount of the federal and state tax carryforwards that can be utilized. Effective Tax Rate A reconciliation of income taxes calculated based on the federal statutory income tax rate of 35% and the effective tax rate follows:
| Years Ended December 31,
| 2013 |  | 2012 |  | 2011
Federal statutory tax rate | 35 | % |  | 35 | % |  | 35 | %
State income taxes, net of federal | 2 |  |  | — |  |  | — |
Research and other tax credits | — |  |  | — |  |  | 1 |
Other nondeductible expenses | (1 | ) |  | — |  |  | (1 | )
Preferred stock issuance costs and dividends paid-in-kind | (2 | ) |  | — |  |  | (1 | )
Valuation allowance against deferred tax assets | 3 |  |  | (35 | ) |  | (123 | )
Restructuring costs | (1 | ) |  | — |  |  | — |
Impact of state rate changes on deferred taxes | (4 | ) |  | — |  |  | — |
| 32 | % |  | — | % |  | (89 | )%
Included in the effective tax rates is a benefit of $9.1 million in 2013 to reduce the valuation allowance against net deferred tax assets and a charge of $413.0 million in 2012 to increase the valuation allowance. The 2013 benefit of $9.1 million was recorded to continuing operations as a result of the intraperiod tax allocation rules discussed below. Included in the effective tax rates for 2011 through 2013 are the impacts of the $75.0 million investment by Toshiba and B&W and the quarterly dividends on the preferred stock that were issued or accrued in additional shares of preferred stock (paid-in-kind). The preferred stock and warrants are considered equity instruments for income tax purposes. The paid-in-kind dividends and issuance costs are permanent differences that are not deductible for tax purposes and are included in the effective tax rate calculation. Intraperiod Tax Allocation Intraperiod tax allocation rules require that all items, including other comprehensive income and discontinued operations, be considered for purposes of determining the amount of tax benefit that results from a loss in continuing operations. As a result, an income tax benefit of $86.5 million was recorded in continuing operations for the year ended December 31, 2013, with offsets of income tax expense of $75.0 million recorded in other comprehensive income and $11.0 million recorded in discontinued operations. Uncertain Tax Positions Accounting standards require that a tax position meet a minimum recognition threshold in order for the related tax benefit to be recognized in the financial statements. The liability for unrecognized tax benefits, included in other long-term liabilities, was $2.3 million at December 31, 2013 and $3.0 million at December 31, 2012. If recognized, these tax benefits would impact the effective tax rate. As a result of changes to unrecognized tax benefits, the tax provision decreased $0.4 million during 2013, $0.4 million during 2012, and $0.3 million during 2011. USEC believes that the liability for unrecognized tax benefits will be reduced by $1.0 million in the next 12 months. A reconciliation of the beginning and ending amount of unrecognized tax benefits follows (in millions):
| Years Ended December 31,
| 2013 |  | 2012
Balance at beginning of the year | $ | 3.0 |  |  | $ | 3.7 |
Reductions to tax positions of prior years | (0.7 | ) |  | (0.8 | )
Additions for tax positions of current year | — |  |  | 0.1 |
Balance at end of the year | $ | 2.3 |  |  | $ | 3.0 |
USEC and its subsidiaries file income tax returns with the U.S. government and various states and foreign jurisdictions. The IRS started an examination of USEC's 2008 through 2011 federal income tax returns during 2012. As of December 31, 2013, the federal statute of limitations is closed with respect to all tax years through 2007. As of December 31, 2013, the Kentucky statute of limitations for calendar tax years 2009 forward had not yet expired. USEC recognizes accrued interest related to uncertain tax positions as a component of interest expense. Reversals of previously accrued income tax related interest is typically offset to interest expense, but if the amount is significant, it is reclassified to interest income in the consolidated statement of operations. USEC recognizes the increase or decrease of accrued penalties for income taxes as a component of selling, general and administrative expense in the consolidated statement of operations. The impact of accrued interest and penalties was a reduction to expenses in the consolidated statement of operations of $0.2 million in 2013, $0.3 million in 2012, and less than $0.1 million in 2011. Accrued interest and penalties, included as a component of accounts payable and accrued liabilities, totaled $0.6 million as of December 31, 2013 and $0.8 million as of December 31, 2012.

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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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