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Income Tax Matters | 9 Months Ended
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Sep. 30, 2018
Income Tax Disclosure [Abstract] |
Income Tax Matters | Income Tax Matters The provision for in come taxes for each period presented consisted of the following (in millions of dollars):
| Quarter Ended |  | Nine Months Ended
| September 30, |  | September 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
Domestic | $ | 7.5 |  |  | $ | 15.7 |  |  | $ | 20.5 |  |  | $ | 35.8 |
Foreign | 0.7 |  |  | 0.4 |  |  | 1.4 |  |  | 1.0 |
Total | $ | 8.2 |  |  | $ | 16.1 |  |  | $ | 21.9 |  |  | $ | 36.8 |
The income tax provision for the quarters ended September 30, 2018 and September 30, 2017 was $8.2 million and $16.1 million, respectively, reflecting an effective tax rate of 27.3% and 44.7%, respectively. The difference between the effective tax rate and the projected blended statutory tax rate for the quarter ended September 30, 2018 was primarily due to: (i) an increase of $0.6 million (or 1.9% of taxable income) related to non-deductible compensation expense; (ii) an increase of $0.3 million (or 1.0% of taxable income) for an Advance Pricing Agreement settlement with Canada; and (iii) an increase of $0.2 million (or 0.7% of taxable income) for the sequestration of AMT credits, partially offset by a decrease of $0.4 million (or 1.3% of taxable income) to the valuation allowance for certain state net operating losses. The difference between the effective tax rate and the projected blended statutory tax rate for the quarter ended September 30, 2017 was due to an increase of $2.5 million (or 7.1% of taxable income) for the recognition of a deferred tax liability associated with earnings of our Canadian subsidiary that are no longer considered indefinitely reinvested. We determined our indefinite reinvestment assertion with respect to our Canadian foreign earnings was no longer applicable based primarily on expectations that productivity improvements will obviate the need to make sizable capital investments to increase capacity. The income tax provision for the nine months ended September 30, 2018 and September 30, 2017 was $21.9 million and $36.8 million, respectively, reflecting an effective tax rate of 24.3% and 37.8% respectively. The difference between the effective tax rate and the projected blended statutory tax rate for the nine months ended September 30, 2018 was due to: (i) a decrease of $2.0 million (or 2.3% of taxable income) for the recognition of excess tax benefits from stock-based compensation and (ii) a decrease of $0.9 million (or 1.0% of taxable income) to the valuation allowance for certain state net operating losses, partially offset by; (i) an increase of $1.7 million (or 1.9% of taxable income) related to non-deductible compensation expense; (ii) an increase of 0.6 million (or 0.6% of taxable income) for the sequestration of AMT credits; and (iii) an increase of $0.3 million (or 0.3% of taxable income) for an Advance Pricing Agreement settlement with Canada. The difference between the effective tax rate and the projected blended statutory tax rate for the nine months ended September 30, 2017 was due to: (i) a decrease of $1.7 million (or 1.7% of taxable income) for the recognition of excess tax benefits from stock-based compensation; (ii) a decrease of $0.5 million (or 0.6% of taxable income) to the valuation allowance for certain state net operating losses; (iii) a decrease of $0.2 million (or 0.2% of taxable income) related to unrecognized tax benefits, including interest and penalties; and (iv) an increase of $2.5 million (or 2.6% of taxable income) for the recognition of a deferred tax liability associated with earnings of our Canadian subsidiary that are no longer indefinitely reinvested. Our gross unrecognized benefits relating to uncertain tax positions were $1.5 million at both September 30, 2018 and December 31, 2017, of which, $0.4 million would be recorded through our income tax provision and thus impact the effective tax rate at both September 30, 2018 and December 31, 2017 if the gross unrecognized tax benefits were to be recognized. We do not expect our gross unrecognized tax benefits to significantly change within the next 12 months. The Tax Cuts and Jobs Act ("The Tax Act") was enacted on December 22, 2017. The Tax Act reduces the US federal corporate income tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. We are applying the guidance in Staff Accounting Bulletin No. 118 when accounting for the enactment-date effects of the Tax Act. Our accounting for the Tax Act is incomplete, as noted at year-end. However, we were able to reasonably estimate certain effects and, therefore, recorded provisional adjustments at December 31, 2017 associated with the reduction of the US federal corporate tax rate, the deemed repatriation transition tax and IRC Section 162(m). During the nine months ended September 30, 2018, we recognized no adjustments to the provisional amounts recorded at December 31, 2017, and have not completed our accounting for all of the tax effects of the Tax Act. We are awaiting further guidance from U.S. federal and state regulatory bodies with regards to the final accounting and reporting of these items in the several jurisdictions where we file tax returns. In all cases, we will continue to make and refine our calculations as additional analysis is completed. Our estimates may also be affected as we gain a more thorough understanding of the tax law.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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