Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

INCOME TAXES

10.    INCOME TAXES

The provision for income taxes, relating to continuing operations, is composed of the following (in millions):

	2012			2011			2010
Current:
U.S. Federal benefit	$	(0.1	)	$	(0.1	)	$	(0.2	)
State and local tax (benefit)		0.1			(0.2	)		0.1
Total current		—			(0.3	)		(0.1	)
Deferred:
U.S. Federal tax (benefit)		—			—			(0.3	)
State and local tax		—			—			—
Total deferred		—			—			(0.3	)
Total income benefit	$	—		$	(0.3	)	$	(0.4	)

A reconciliation of income taxes based on the application of the statutory federal income tax rate to income taxes as set forth in the consolidated statements of operations follows:

	2012			2011			2010
Federal statutory rate		35.0	%		35.0	%		35.0	%
Increase (decrease) in taxes resulting from:
State and local taxes		2.0			2.0			2.0
Contingency accrual adjustment		—			2.6			0.4
Change in valuation allowance		96.6			(35.5	)		(36.5	)
Nondeductible items		(121.2	)		(1.5	)		(0.4	)
Discountinued operations utilization		—			—			1.5
Other, net		(12.4	)		(0.3	)		0.1
Effective income tax rate		—	%		2.3	%		2.1	%

In 2012, 2011 and 2010, the Company recorded a loss from continuing operations before income taxes of $0.1 million, $13.0 million and $19.8 million, respectively. The Company has recorded an increase in the valuation allowance of $0.7 million and $5.2 million for 2012 and 2011, respectively.

Deferred income taxes at December 31, 2012 and 2011 are comprised of the following (in millions):

	2012					2011
	Assets			Liabilities		Assets			Liabilities
Property, plant and equipment	$	1.0		$	—	$	0.6		$	—
Goodwill		1.2			—		0.9			—
Employee benefits related		2.3			—		1.5			—
Inventories		0.9			—		0.7			—
LIFO		—			7.4		—			8.3
Insurance related		1.1			—		1.2			—
Other accrued liabilities		0.9			—		1.1			—
Accounts receivables		0.3			—		0.2			—
Income tax loss carryforwards		32.1			—		34.2			—
Other		0.6			0.6		0.2			0.6
Gross deferred tax assets and liabilities		40.4			8.0		40.6			8.9
Valuation allowance		(32.4	)		—		(31.7	)		—
Total	$	8.0		$	8.0	$	8.9		$	8.9

Huttig has gross deferred tax assets of $40.4 million and a valuation allowance of $32.4 million netting to deferred tax assets of $8.0 million at December 31, 2012. After classifying $0.9 of short-term deferred tax assets with short-term deferred tax liabilities, the Company has current deferred tax liabilities of $7.1 million at December 31, 2012. The Company expects its deferred tax liabilities to be settled with utilization of its deferred tax assets. The deferred tax liabilities enable the Company to partially utilize the deferred tax assets at December 31, 2012 and the balance of the deferred tax assets are covered by the Company’s valuation allowance. The Company is not relying on future pre-tax income at December 31, 2012 to support the utilization of the deferred tax assets.

The Company has both federal and state tax loss carryforwards reflected above. The Company’s federal tax loss carryforwards of approximately $67 million will begin to expire in 2028. The state tax loss carryforwards have expiration dates extending out to 2031. The total deferred income tax assets (liabilities) as presented in the accompanying consolidated balance sheets are as follows (in millions):

	2012			2011
Net current deferred taxes	$	(7.1	)	$	(8.0	)
Net long-term deferred taxes		7.1			8.0

Huttig is subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. The Company has substantially concluded all U.S. federal income tax matters for years through 2008. Open tax years related to state jurisdictions remain subject to examination but are not considered material.