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Income Taxes | 6 Months Ended
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Jun. 30, 2015
Income Tax Disclosure [Abstract] |
Income Taxes | Note 12—Income taxes:
| Three months ended June 30, |  |  | Six months ended June 30, |
| 2014 |  |  | 2015 |  |  | 2014 |  |  | 2015 |
| (In millions) |
Expected tax expense (benefit), at U.S. federal statutory income tax rate of 35% | $ | 8.9 |  |  | $ | (10.1 | ) |  | $ | 11.8 |  |  | $ | (2.5 | )
Incremental net benefit on earnings and losses of non-U.S. and non-tax group companies |  | (1.1 | ) |  |  | (28.6 | ) |  |  | (1.2 | ) |  |  | (28.1 | )
Non-U.S. tax rates |  | (1.0 | ) |  |  | .5 |  |  |  | (1.7 | ) |  |  | (.6 | )
Valuation allowance |  | ─ |  |  |  | 150.3 |  |  |  | ─ |  |  |  | 150.3 |
Adjustment to the reserve for uncertain tax positions, net |  | (5.9 | ) |  |  | (.2 | ) |  |  | (5.6 | ) |  |  | (2.9 | )
Nondeductible expenses |  | .9 |  |  |  | (.6 | ) |  |  | 1.2 |  |  |  | (.1 | )
Domestic manufacturing credit |  | (.6 | ) |  |  | (.2 | ) |  |  | (.7 | ) |  |  | (1.0 | )
U.S. state income taxes and other, net |  | .3 |  |  |  | (.5 | ) |  |  | 1.5 |  |  |  | (.2 | )
Income tax expense | $ | 1.5 |  |  | $ | 110.6 |  |  | $ | 5.3 |  |  | $ | 114.9 |
Comprehensive provision for income taxes (benefit) allocable to: |  |  |  |  |  |  |  |  |  |
Income tax expense | $ | 1.5 |  |  | $ | 110.6 |  |  | $ | 5.3 |  |  | $ | 114.9 |
Other comprehensive income (loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Marketable securities |  | (2.4 | ) |  |  | (.5 | ) |  |  | (11.2 | ) |  |  | (.7 | )
Currency translation |  | (.9 | ) |  |  | 8.1 |  |  |  | (1.6 | ) |  |  | (8.1 | )
Pension plans |  | .9 |  |  |  | .2 |  |  |  | 1.9 |  |  |  | 1.5 |
OPEB plans |  | (.2 | ) |  |  | (.2 | ) |  |  | (.4 | ) |  |  | (.4 | )
Total | $ | (1.1 | ) |  | $ | 118.2 |  |  | $ | (6.0 | ) |  | $ | 107.2 |
The amount shown in the above table of our income tax rate reconciliation for non-U.S. tax rates represents the result determined by multiplying the pre-tax earnings or losses of each of our Chemicals Segment’s non-U.S. subsidiaries by the difference between the applicable statutory income tax rate for each non-U.S. jurisdiction and the U.S. federal statutory tax rate of 35%. The amount shown on such table for incremental net benefit on earnings and losses on non-U.S. companies includes, as applicable, (i) current income taxes (including withholding taxes, if applicable), if any, associated with any current-year earnings of our Chemicals Segment’s non-U.S. subsidiaries to the extent such current-year earnings were distributed to us in the current year, (ii) deferred income taxes (or deferred income tax benefit) associated with the current-year change in the aggregate amount of undistributed earnings of our Chemicals Segment’s Canadian subsidiary, which earnings are not subject to a permanent reinvestment plan, in an amount representing the current-year change in the aggregate current income tax that would be generated (including withholding taxes, if applicable) when such aggregate undistributed earnings are distributed to us, and (iii) current U.S. income taxes (or current income tax benefit), including U.S. personal holding company tax, as applicable, attributable to current-year income (losses) of one of our Chemicals Segment’s non-U.S. subsidiaries, which subsidiary is treated as a dual resident for U.S. income tax purposes, to the extent the current-year income (losses) of such subsidiary is subject to U.S. income tax under the U.S. dual-resident provisions of the Internal Revenue Code. As previously disclosed, our Chemicals Segment has substantial net operating loss (“NOL”) carryforwards in Germany (the equivalent of $738 million and $94 million for German corporate and trade tax purposes, respectively, at December 31, 2014) and in Belgium (the equivalent of $87 million for Belgian corporate tax purposes at December 31, 2014), both of which have an indefinite carryforward period. As a result, we have net deferred income tax assets recognized with respect to these two jurisdictions, primarily related to these NOL carryforwards. Prior to June 30, 2015, and using all available evidence, we had concluded no deferred income tax asset valuation allowance was required to be recognized with respect to these net deferred income tax assets under the more-likely-than-not recognition criteria, primarily because (i) the carryforwards have an indefinite carryforward period, (ii) we utilized a portion of such carryforwards during the most recent three-year period, and (iii) we expect to utilize the remainder of the carryforwards over the long term. We had also previously indicated that facts and circumstances could change, which might in the future result in the recognition of a valuation allowance against some or all of such deferred income tax assets. Given the trend of our operating results over the last few quarters, we do not presently have sufficient positive evidence to overcome the significant negative evidence of having twelve consecutive quarters of cumulative losses in both our German and Belgian jurisdictions at June 30, 2015. Accordingly, at June 30, 2015, we have concluded that we are now required to recognize a non-cash deferred income tax asset valuation allowance under the more-likely-than-not recognition criteria with respect to our German and Belgian net deferred income tax assets. Such valuation allowance aggregates $150.3 million at June 30, 2015. As disclosed in the 2014 Annual Report, we recognize deferred income taxes with respect to the excess of the financial reporting carrying amount over the income tax basis of our direct investment in Kronos common stock because the exemption under GAAP to avoid such recognition of deferred income taxes is not available to us. There is a maximum amount (or cap) of such deferred income taxes we are required to recognize with respect to our direct investment in Kronos, and we previously reached such maximum amount in the fourth quarter of 2010. Since that time and through March 31, 2015, we were not required to recognize any additional deferred income taxes with respect to our direct investment in Kronos because the deferred income taxes associated with the excess of the financial reporting carrying amount over the income tax basis of our direct investment in Kronos common stock continued to be above such cap. However, at June 30, 2015, the deferred income taxes associated with the excess of the financial reporting carrying amount over the income tax basis of our direct investment in Kronos common stock was, for the first time since the fourth quarter of 2010, below such cap, in large part due to the net loss reported by Kronos in the second quarter of 2015. Accordingly, our provision for income taxes in the second quarter of 2015 includes a non-cash income tax benefit of $29.3 million for the reduction in the deferred income taxes required to be recognized with respect to the excess of the financial reporting carrying amount over the income tax basis of our direct investment in Kronos common stock, to the extent such reduction related to our equity in Kronos’ net loss. Such amount is included in the above table of our income tax rate reconciliation for incremental net benefit on earnings and losses on non-U.S. companies (in addition to the other items indicated above). A portion of such reduction also related to our equity in Kronos’ other comprehensive income (loss) items, and the amounts shown in the table above for income tax expense (benefit) allocated to other comprehensive income (loss) includes amounts related to our equity in Kronos’ other comprehensive income (loss) items. Tax authorities are examining certain of our U.S. and non-U.S. tax returns and have or may propose tax deficiencies, including penalties and interest. Because of the inherent uncertainties involved in settlement initiatives and court and tax proceedings, we cannot guarantee that these matters will be resolved in our favor, and therefore our potential exposure, if any, is also uncertain. We believe we have adequate accruals for additional taxes and related interest expense which could ultimately result from tax examinations. We believe the ultimate disposition of tax examinations should not have a material adverse effect on our consolidated financial position, results of operations or liquidity. During the first six months of 2015, primarily in the first quarter, we recognized a non-cash income tax benefit of $2.9 million primarily related to the release of a portion of our reserve for uncertain tax positions due to the expiration of the applicable statute of limitations. We currently estimate that our unrecognized tax benefits will not further change materially during the next twelve 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 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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