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Income Tax Matters | 12 Months Ended
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Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income Tax Matters | Income Tax Matters Tax Provision. Income before income taxes by geographic area was as follows:
| Year Ended December 31,
| 2014 |  | 2013 |  | 2012
Domestic | $ | 102.1 |  |  | $ | 138.9 |  |  | $ | 134.5 |
Foreign | 5.0 |  |  | 4.3 |  |  | 5.1 |
Income before income taxes | $ | 107.1 |  |  | $ | 143.2 |  |  | $ | 139.6 |
Income taxes are classified as either domestic or foreign, based on whether payment is made or due to the United States or a foreign country. Certain income classified as foreign is also subject to domestic income taxes. The provision for income taxes consisted of:
| Federal |  | Foreign |  | State |  | Total
2014 |  |  |  |  |  |  |
Current | $ | (1.0 | ) |  | $ | 1.0 |  |  | $ | (0.6 | ) |  | $ | (0.6 | )
Deferred | 6.4 |  |  | 0.3 |  |  | 5.1 |  |  | 11.8 |
Expense applied to decrease Additional paid in capital/ Other comprehensive income | (41.6 | ) |  | (0.5 | ) |  | (4.4 | ) |  | (46.5 | )
Total (expense) benefit | $ | (36.2 | ) |  | $ | 0.8 |  |  | $ | 0.1 |  |  | $ | (35.3 | )
2013 |  |  |  |  |  |  |
Current | $ | 1.1 |  |  | $ | 16.2 |  |  | $ | (0.2 | ) |  | $ | 17.1 |
Deferred | (49.7 | ) |  | (0.5 | ) |  | (6.7 | ) |  | (56.9 | )
Benefit (expense) applied to increase (decrease) Additional paid in capital/Other comprehensive income | 1.3 |  |  | (0.1 | ) |  | 0.2 |  |  | 1.4 |
Total (expense) benefit | $ | (47.3 | ) |  | $ | 15.6 |  |  | $ | (6.7 | ) |  | $ | (38.4 | )
2012 |  |  |  |  |  |  |
Current | $ | — |  |  | $ | (2.3 | ) |  | $ | 0.2 |  |  | $ | (2.1 | )
Deferred | (113.0 | ) |  | (0.2 | ) |  | (15.3 | ) |  | (128.5 | )
Benefit applied to increase Additional paid in capital/ Other comprehensive income | 67.4 |  |  | 0.2 |  |  | 9.2 |  |  | 76.8 |
Total expense | $ | (45.6 | ) |  | $ | (2.3 | ) |  | $ | (5.9 | ) |  | $ | (53.8 | )
A reconciliation between the provision for income taxes and the amount computed by applying the federal statutory income tax rate to income before income taxes is as follows:
| Year Ended December 31,
| 2014 |  | 2013 |  | 2012
Amount of federal income tax provision based on the statutory rate | $ | (37.5 | ) |  | $ | (50.1 | ) |  | $ | (48.9 | )
Decrease in federal valuation allowances | — |  |  | 0.1 |  |  | 0.1 |
Non-deductible compensation expense | (0.1 | ) |  | (0.3 | ) |  | (0.4 | )
Non-deductible expense | (0.3 | ) |  | (0.9 | ) |  | (0.3 | )
State income taxes, net of federal benefit 1 | — |  |  | (4.4 | ) |  | (3.8 | )
Foreign income tax (expense) benefit | 0.3 |  |  | — |  |  | (0.5 | )
Expiration of statute of limitations | 2.3 |  |  | 4.6 |  |  | — |
Settlement with taxing authorities | — |  |  | 4.4 |  |  | — |
Advance pricing agreement | — |  |  | 2.9 |  |  | — |
Competent Authority settlement | — |  |  | 5.3 |  |  | — |
Income tax provision | $ | (35.3 | ) |  | $ | (38.4 | ) |  | $ | (53.8 | )
___________________________
1 | State income taxes were $2.3 in 2014, but were offset by a $1.6 decrease due to lower tax rates in various states and a $0.7 decrease in the valuation allowance relating to certain state net operating losses. State income taxes of $4.4 in 2013 included a $1.2 increase in the valuation allowance relating to certain unused state net operating losses expected to expire.
The table above reflects a full statutory U.S. tax provision despite the fact that the Company is only paying U.S. federal alternative minimum tax (“AMT”) and some state income taxes. See “Tax Attributes” below. Deferred Income Taxes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. The components of the Company’s net deferred income tax assets were as follows:
| Year Ended December 31,
| 2014 |  | 2013
Deferred income tax assets: |  |  |
Loss and credit carryforwards | $ | 275.4 |  |  | $ | 321.8 |
VEBAs (see Note 6) | 5.1 |  |  | 6.1 |
Other assets | 35.0 |  |  | 34.4 |
Inventories and other | 21.5 |  |  | 2.5 |
Valuation allowances | (19.2 | ) |  | (19.9 | )
Total deferred income tax assets | 317.8 |  |  | 344.9 |
Deferred income tax liabilities: |  |  |
Property, plant and equipment | (74.1 | ) |  | (73.0 | )
VEBAs (see Note 6) | (120.6 | ) |  | (152.4 | )
Inventories | (6.7 | ) |  | (14.9 | )
Total deferred income tax liabilities | (201.4 | ) |  | (240.3 | )
Net deferred income tax assets 1 | $ | 116.4 |  |  | $ | 104.6 |
__________________________
1 | Of the total net deferred income tax assets of $116.4, $86.4 was included in Prepaid expenses and other current assets, $30.9 was presented as Deferred tax assets, net and $0.9 was presented as Deferred tax liabilities on the Consolidated Balance Sheet as of December 31, 2014. Of the total net deferred income tax assets of $104.6, $36.7 was included in Prepaid expenses and other current assets and $69.1 was presented as Deferred tax assets, net and $1.2 was presented as Deferred tax liabilities on the Consolidated Balance Sheet as of December 31, 2013.
Tax Attributes. At December 31, 2014, the Company had $606.1 of net operating loss (“NOL”) carryforwards available to reduce future cash payments for income taxes in the United States. Of the $606.1 of NOL carryforwards at December 31, 2014, $1.7 represents excess tax benefits related to the vesting of employee restricted stock, which will result in an increase in equity if and when such excess tax benefits are ultimately realized. The NOL carryforwards expire periodically through 2030. The Company also had $30.1 of AMT credit carryforwards with an indefinite life, available to offset regular federal income tax requirements. To preserve the NOL carryforwards available to the Company, the Company’s certificate of incorporation includes certain restrictions on the transfer of the Company’s common stock through July 2016. In assessing the realizability of deferred tax assets, management considers whether it is “more likely than not” that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers taxable income in carryback years, the scheduled reversal of deferred tax liabilities, tax planning strategies and projected future taxable income in making this assessment. Due to uncertainties surrounding the realization of some of the Company’s deferred tax assets, primarily including state NOL carryforwards sustained during the prior years and expiring tax benefits, the Company has a valuation allowance against its deferred tax assets. When recognized, the tax benefits relating to any reversal of this valuation allowance will be recorded as a reduction of income tax expense. The increase (decrease) in the valuation allowance was $(0.7), $1.2 and $(0.1) in 2014, 2013 and 2012, respectively. The decrease in the valuation allowance for 2014 was primarily due to the projected utilization of state NOL carryforwards. The increase in the valuation allowance in 2013 was primarily due to unutilized state NOL carryforwards that were expected to expire. The decrease in the valuation allowance for 2012 was primarily due to the projected utilization of state NOL carryforwards. Other. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. In 2013, the Company and the Canada Revenue Agency settled audits of the Company's Canadian tax returns for fiscal years 1998 through 2004 resulting in a cash tax benefit to the Company of $7.9, of which, $6.1 was received in 2013 and the remaining $1.8 was received in 2014. In addition, in 2013, the Company signed an advance pricing agreement with the Canada Revenue Agency, which resulted in an additional cash tax benefit of $2.6, which is expected to be refunded within the next 12 months. The Company’s tax returns for certain past years are still subject to examination by taxing authorities and the use of NOL carryforwards in future periods could trigger a review of attributes and other tax matters in years that are not otherwise subject to examination. The Company has gross unrecognized benefits relating to uncertain tax positions. A reconciliation of changes in the gross unrecognized tax benefits is as follows:
|  | Year Ended December 31,
|  | 2014 |  | 2013 |  | 2012
Gross unrecognized tax benefits at beginning of period |  | $ | 3.8 |  |  | $ | 15.7 |  |  | $ | 13.7 |
Gross increases for tax positions of prior years |  | — |  |  | — |  |  | 1.3 |
Gross decreases for tax positions of prior years |  | — |  |  | (7.6 | ) |  | (0.1 | )
Gross increases for tax positions of current years |  | — |  |  | — |  |  | 0.4 |
Gross decrease for tax positions relating to lapse of a statute of limitation |  | (1.4 | ) |  | (3.3 | ) |  | — |
Foreign currency translation |  | (0.2 | ) |  | (1.0 | ) |  | 0.4 |
Gross unrecognized tax benefits at end of period |  | $ | 2.2 |  |  | $ | 3.8 |  |  | $ | 15.7 |
If and when the $2.2 and $3.8 of gross unrecognized tax benefits at December 31, 2014 and December 31, 2013, respectively, are recognized, $1.1 and $2.7 will be reflected in the Company's income tax provision and thus affect the effective tax rate in future periods. For the year ended December 31, 2012, if and when the gross unrecognized tax benefits are ultimately recognized, they will be reflected in the Company’s income tax provision and affect the effective tax rate in future periods. The change during 2014 was due to the expiration of statutes and foreign currency fluctuations. The change during 2013 was primarily due to the expiration of statutes, settlements with taxing authorities, foreign currency fluctuations and change in tax positions. The change during 2012 was primarily due to foreign currency fluctuations and change in tax positions. In addition, the Company recognizes interest and penalties related to unrecognized tax benefits in the income tax provision. The Company had $1.4 and $2.3 accrued for interest and penalties at December 31, 2014 and December 31, 2013, respectively. Of these amounts, none were recorded as current liabilities and included in Other accrued liabilities on the Consolidated Balance Sheets at December 31, 2014 and December 31, 2013. The Company recognized a (decrease) increase in interest and penalty of $(0.9), $(5.2) and $0.9 in its tax provision in 2014, 2013 and 2012, respectively. In connection with the gross unrecognized tax benefits (including interest and penalties) denominated in foreign currency, the Company incurred a foreign currency translation adjustment. During 2014, 2013 and 2012, the foreign currency impact on such liabilities resulted in $0.3, $0.7 and $(0.5) currency translation adjustments, respectively, which increased (decreased)Other comprehensive income (loss). The Company does not expect its gross unrecognized tax benefits to significantly change within the next 12 months.

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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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