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Income Taxes | 9 Months Ended
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Sep. 30, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | Tredegar recorded tax expense of $9.7 million on pretax net income of $65.8 million in the first nine months of 2017. Therefore, the effective tax rate in the first nine months of 2017 was 14.7%, compared to 7.6% in the first nine months of 2016. The significant differences between the U.S. federal statutory rate and the effective income tax rate for the nine months ended September 30, 2017 and 2016 are as follows:
| Percent of Income Before Income Taxes
Nine Months Ended September 30, | 2017 |  | 2016
Income tax expense at federal statutory rate | 35.0 |  |  | 35.0 |
Foreign rate differences | 1.5 |  |  | 1.1 |
State taxes, net of federal income tax benefit | 1.3 |  |  | 0.7 |
Changes in estimates related to prior year tax provision | 0.5 |  |  | (1.6 | )
Non-deductible expenses | 0.5 |  |  | 1.6 |
Valuation allowance for foreign operating loss carry-forwards | 0.4 |  |  | 0.3 |
Unremitted earnings from foreign operations | 0.2 |  |  | (1.1 | )
Valuation allowance for capital loss carry-forwards | — |  |  | (0.4 | )
Income tax contingency accruals and tax settlements | (0.4 | ) |  | 1.3 |
Remitted earnings from foreign operations | (0.6 | ) |  | (23.8 | )
Research and development tax credit | (0.7 | ) |  | (1.8 | )
Domestic production activities deduction | (0.9 | ) |  | (3.8 | )
Foreign investment write-up | (3.5 | ) |  | 0.1 |
Settlement of Terphane acquisition escrow | (6.4 | ) |  | — |
Worthless stock deduction | (12.2 | ) |  | — |
Effective income tax rate | 14.7 |  |  | 7.6 |
During the second quarter of 2017, the Company initiated a plan to liquidate for tax purposes one of its domestic subsidiaries, which will allow it to claim an income tax benefit on the write-off of the stock basis of one of the Company’s U.S. subsidiaries (“worthless stock deduction”) on its 2017 federal income tax return. The Company recorded an income tax benefit during the second quarter of 2017 of $8.1 million related to the worthless stock deduction, net of valuation allowances and accrual for uncertain tax positions. Tredegar accrues U.S. federal income taxes on unremitted earnings of all foreign subsidiaries. Prior to the second quarter of 2016, deferred U.S. federal income taxes had not been recorded for the undistributed earnings for Terphane Ltda. because the Company had intended to permanently reinvest these earnings. Due to concerns about the political and economic conditions in Brazil, Terphane Ltda. began making cash distributions to the Company in 2016. During the second quarter of 2016, Terphane Ltda. paid a dividend of $10.7 million to the Company. During the second quarter of 2017, the Company recognized a net tax benefit of $0.4 million associated with additional U.S. tax related to this repatriation of cash from Brazil offset by the reversal of related tax contingencies. Because of the accumulation of significant losses related to foreign currency translations at Terphane Ltda., there were no deferred tax liabilities associated with the U.S. federal income taxes and foreign withholding taxes on Terphane Ltda.’s undistributed earnings as of September 30, 2017 and December 31, 2016. The Brazilian federal statutory income tax rate is a composite of 34.0% (25.0% of income tax and 9.0% of social contribution on income). Terphane Ltda.’s manufacturing facility in Brazil is the beneficiary of certain income tax incentives that allow for a reduction in the statutory Brazilian federal income tax rate to 15.25% levied on the operating profit on certain of its products. The incentives have been granted for a 10-year period, which has a commencement date of January 1, 2015. No benefit was recognized from these tax incentives in the first nine months of 2017 or 2016. Income taxes in 2017 included a partial reversal of a valuation allowance of less than $0.1 million related to the expected limitations on the utilization of assumed capital losses on certain investments that were recognized in prior years. Income taxes in 2016 included the partial reversal of a valuation allowance of $0.1 million related to the expected limitations on the utilization of assumed capital losses on certain investments. The Company had a valuation allowance for excess capital losses from investments and other related items of $11.2 million at September 30, 2017. Tredegar continues to evaluate opportunities to utilize these loss carryforwards prior to their expiration at various dates in the future. As events and circumstances warrant, allowances will be reversed when it is more likely than not that future taxable income will exceed deductible amounts, thereby resulting in the realization of deferred tax assets. Tredegar and its subsidiaries file income tax returns in the U.S., various states and jurisdictions outside the U.S. With exceptions for some U.S. states and non-U.S. jurisdictions, Tredegar and its subsidiaries are no longer subject to U.S. federal, state or non-U.S. income tax examinations by tax authorities for years before 2014.

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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 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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