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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Loss from continuing operations before income taxes for the years ended December 31, 2016, 2015 and 2014 consisted of the following:
| Year Ended December 31,
| 2016 |  | 2015 |  | 2014
| (Dollars in millions)
U.S. | $ | (49.7 | ) |  | $ | (515.9 | ) |  | $ | 268.9 |
Non-U.S. | (708.6 | ) |  | (1,474.4 | ) |  | (816.8 | )
Total | $ | (758.3 | ) |  | $ | (1,990.3 | ) |  | $ | (547.9 | )
Total income tax (benefit) provision for the years ended December 31, 2016, 2015 and 2014 consisted of the following:
| Year Ended December 31,
| 2016 |  | 2015 |  | 2014
| (Dollars in millions)
Current: |  |  |  |  |  |  |  |
U.S. federal | $ | (12.4 | ) |  | $ | (71.9 | ) |  | $ | 27.1 |
Non-U.S. | 14.4 |  |  | 3.7 |  |  | (61.1 | )
State | 0.5 |  |  | (0.6 | ) |  | 3.3 |
Total current | 2.5 |  |  | (68.8 | ) |  | (30.7 | )
Deferred: |  |  |  |  |  |  |  |
U.S. federal | (82.1 | ) |  | (117.4 | ) |  | 111.0 |
Non-U.S. | (2.3 | ) |  | 15.7 |  |  | 122.3 |
State | (2.1 | ) |  | (5.9 | ) |  | (1.4 | )
Total deferred | (86.5 | ) |  | (107.6 | ) |  | 231.9 |
Total income tax (benefit) provision | $ | (84.0 | ) |  | $ | (176.4 | ) |  | $ | 201.2 |
The following is a reconciliation of the expected statutory federal income tax benefit to the Company’s income tax (benefit) provision for the years ended December 31, 2016, 2015 and 2014:
| Year Ended December 31,
| 2016 |  | 2015 |  | 2014
| (Dollars in millions)
Expected income tax benefit at U.S. federal statutory rate | $ | (265.4 | ) |  | $ | (696.6 | ) |  | $ | (191.7 | )
Changes in valuation allowance, income tax | 2,462.8 |  |  | 462.0 |  |  | 569.4 |
Worthless partnership | (2,204.4 | ) |  | — |  |  | — |
Changes in tax reserves | 2.3 |  |  | (21.4 | ) |  | (81.5 | )
Excess depletion | (37.2 | ) |  | (53.7 | ) |  | (65.3 | )
Foreign earnings repatriation | — |  |  | — |  |  | (71.4 | )
Foreign earnings provision differential | 27.5 |  |  | 146.5 |  |  | 28.8 |
General business tax credits | (14.2 | ) |  | (15.7 | ) |  | (19.2 | )
Minerals resource rent tax, net of federal tax | — |  |  | — |  |  | 16.1 |
Remeasurement of foreign income tax accounts | (0.4 | ) |  | (0.5 | ) |  | (2.7 | )
State income taxes, net of federal tax benefit | (90.2 | ) |  | (20.1 | ) |  | (2.3 | )
Reorganization costs | 29.6 |  |  | — |  |  | — |
Other, net | 5.6 |  |  | 23.1 |  |  | 21.0 |
Total income tax (benefit) provision | $ | (84.0 | ) |  | $ | (176.4 | ) |  | $ | 201.2 |
Certain reconciliation items included in the above table exclude the remeasurement of foreign income tax accounts as these foreign currency effects are separately presented. The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities as of December 31, 2016 and 2015 consisted of the following:
| December 31,
| 2016 |  | 2015
| (Dollars in millions)
Deferred tax assets: |  |  |  |  |
Tax loss carryforwards and credits | $ | 4,284.4 |  |  | $ | 1,817.4 |
Accrued postretirement benefit obligations | 364.5 |  |  | 372.4 |
Asset retirement obligations | 163.6 |  |  | 160.9 |
Financial guarantees | 77.9 |  |  | 16.9 |
Employee benefits | 57.0 |  |  | 69.6 |
Payable to voluntary employee beneficiary association for certain Patriot retirees (1) | — |  |  | 52.9 |
Hedge activities | 21.0 |  |  | 26.6 |
Workers’ compensation obligations | 7.5 |  |  | 13.7 |
Other | 2.1 |  |  | 66.7 |
Total gross deferred tax assets | 4,978.0 |  |  | 2,597.1 |
Deferred tax liabilities: |  |  |  |  |
Property, plant, equipment and mine development, principally due to differences in depreciation, depletion and asset impairments | 900.4 |  |  | 966.6 |
Unamortized discount on Convertible Junior Subordinated Debentures | 127.7 |  |  | 130.3 |
Investments and other assets | 86.3 |  |  | 70.1 |
Total gross deferred tax liabilities | 1,114.4 |  |  | 1,167.0 |
Valuation allowance, income tax | (3,881.2 | ) |  | (1,447.3 | )
Net deferred tax liability | $ | (17.6 | ) |  | $ | (17.2 | )
Deferred taxes are classified as follows: |  |  |  |  |
Current deferred income taxes | $ | — |  |  | $ | 49.7 |
Noncurrent deferred income taxes | (17.6 | ) |  | (66.9 | )
Net deferred tax liability | $ | (17.6 | ) |  | $ | (17.2 | )
(1) | Refer to Note 27. "Matters Related to the Bankruptcy of Patriot Coal Corporation" herein for additional details related to this transaction.
During 2016, the Company determined that a foreign holding company was insolvent, resulting in a worthlessness deduction which increased the Company's federal net operating losses (NOL) by $6.3 billion. The Company's tax loss carryforwards and credits included federal NOL carryforwards of $2,340.4 million, state NOL carryforwards of $127.9 million, foreign tax credits of $267.9 million, U.S. alternative minimum tax (AMT) credits of $264.3 million, tax general business credits of $119.4 million, U.S. capital losses of $60.8 million, charitable contribution carryforwards of $1.3 million and foreign NOL carryforwards of $1,102.2 million as of December 31, 2016. The AMT credits and foreign NOLs have no expiration date. The federal NOLs expire in 2036. The U.S. capital losses and state NOLs begin to expire in 2017 and 2018, respectively. The foreign tax credits and general business credits begin to expire in 2020 and 2027, respectively. In assessing the near-term use of NOLs and tax credits and corresponding valuation allowance adjustments, the Company evaluated the expected level of future taxable income, available tax planning strategies, reversals of existing taxable temporary differences and taxable income in carryback years. During the year ended December 31, 2016, the Company continued to record valuation allowance against net deferred tax asset positions in the U.S. and Australia of $2,342.9 million and $91.0 million, respectively. Recognition of those valuation allowances was driven by recent cumulative book losses, as determined by considering all sources of available income (including items classified as discontinued operations or recorded directly to "Accumulated other comprehensive loss"), which limited the Company’s ability to look to future taxable income in assessing the realizability of the related assets. The $2,342.9 million recorded in U.S. valuation allowance during the year ended December 31, 2016, was reflected in "Income tax (benefit) provision". Unrecognized Tax Benefits Net unrecognized tax benefits (excluding interest and penalties) were recorded as follows in the consolidated balance sheets as of December 31, 2016 and 2015:
| December 31,
| 2016 |  | 2015
| (Dollars in millions)
Deferred income taxes | $ | 8.9 |  |  | $ | 7.9 |
Other noncurrent liabilities | 11.2 |  |  | 11.7 |
Net unrecognized tax benefits | $ | 20.1 |  |  | $ | 19.6 |
Gross unrecognized tax benefits | $ | 20.1 |  |  | $ | 22.9 |
The amount of the Company's gross unrecognized tax benefits decreased by $2.8 million since January 1, 2016 due to the finalization settlement of state audits, offset by additions for current positions. The amount of the net unrecognized tax benefits that, if recognized, would directly affect the effective tax rate was $20.1 million and $19.6 million at December 31, 2016 and 2015, respectively. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for the years ended December 31, 2016, 2015 and 2014 is as follows:
| Year Ended December 31,
| 2016 |  | 2015 |  | 2014
| (Dollars in millions)
Balance at beginning of period | $ | 22.9 |  |  | $ | 44.5 |  |  | $ | 143.9 |
Additions for current year tax positions | 1.5 |  |  | 2.3 |  |  | 12.0 |
Reductions for prior year tax positions | (2.8 | ) |  | (23.5 | ) |  | — |
Reductions for settlements with tax authorities | (1.5 | ) |  | (0.4 | ) |  | (111.4 | )
Balance at end of period | $ | 20.1 |  |  | $ | 22.9 |  |  | $ | 44.5 |
The Company recognizes interest and penalties related to unrecognized tax benefits in its income tax provision. The Company reversed gross interest and penalties of $0.4 million, $2.1 million and $8.0 million for the years ended December 31, 2016, 2015 and 2014, respectively. The Company had $2.4 million and $0.4 million of accrued gross interest and penalties related to unrecognized tax benefits at December 31, 2016 and 2015, respectively. The Company expects that during the next twelve months there will be no changes to its net unrecognized tax benefits due to potential audit settlements and the expiration of statutes of limitations. Tax Returns Subject to Examination The Company's federal income tax returns for the 2014 and 2015 tax years are subject to potential examinations by the Internal Revenue Service (IRS). The Company's state income tax returns for the tax years 1999 and thereafter remain potentially subject to examination by various state taxing authorities due to NOL carryforwards. Australian income tax returns for tax years 2010 through 2013 continue to be subject to potential examinations by the Australian Taxation Office (ATO). Foreign Earnings As of December 31, 2016, the Company has a consolidated earnings deficit outside the U.S. but with some immaterial unremitted earnings in certain jurisdictions. The Company continues to be permanently reinvested with respect to its current and historical earnings. However, when appropriate, the Company has the ability to access foreign cash without incurring a residual tax. Tax Payments and Refunds The following table summarizes the Company’s income tax refunds, net for the years ended December 31, 2016, 2015 and 2014:
| Year Ended December 31,
| 2016 |  | 2015 |  | 2014
| (Dollars in millions)
U.S. — federal | $ | (56.5 | ) |  | $ | (38.1 | ) |  | $ | (7.7 | )
U.S. — state and local | 1.4 |  |  | 0.4 |  |  | (6.8 | )
Non-U.S. | 15.0 |  |  | 11.9 |  |  | (2.2 | )
Total income tax refunds, net | $ | (40.1 | ) |  | $ | (25.8 | ) |  | $ | (16.7 | )

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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 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 2: 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 3: 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 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 + Details
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