Income Tax Matters

6 Months Ended

Jun. 30, 2015

The provision for (benefit from) incomes taxes, for each period presented, consisted of the following (in millions of dollars):



	Quarter Ended					Six Months Ended
	June 30,					June 30,
	2015			2014		2015			2014
Domestic	$	13.4		$	13.9	$	(162.4	)	$	23.0
Foreign	(1.4		)	0.6		(1.4		)	0.9
Total	$	12.0		$	14.5	$	(163.8	)	$	23.9

The income tax provision (benefit) for the quarters ended June 30, 2015 and June 30, 2014 was $12.0 million and $14.5 million, reflecting an effective tax rate of 37.2% and 37.0%, respectively. The difference between the effective tax rate and the projected blended statutory tax rate for the quarter ended June 30, 2015 was primarily due to an increase in the valuation allowance of $1.9 million, resulting in a 5.8% increase in the effective tax rate. This increase in the valuation allowance was due to unutilized state NOL carryforwards that are expected to expire. This was partially offset by a decrease in unrecognized tax benefits, including interest and penalties, of $1.8 million, resulting in a 5.4% decrease in the effective tax rate. The decrease in unrecognized tax benefits was a result of a decrease in prior year positions. There was no material difference between the effective tax rate and the projected blended statutory tax rate for the quarter ended June 30, 2014.

The income tax provision (benefit) for the six months ended June 30, 2015 and June 30, 2014 was $(163.8) million and $23.9 million, reflecting an effective tax rate of 37.6% and 37.2%, respectively. There was no material difference between the effective tax rate and the projected blended statutory tax rate for the six months ended June 30, 2015 and June 30, 2014.

The $(163.8) million income tax benefit for the six months ended June 30, 2015 included a $184.4 million tax benefit that was recorded as a result of removing the Union VEBA net assets and related deferred tax liabilities from our consolidated financial statements.

See Note 5 of Notes to Interim Financial Statements included in this Report for disclosure regarding employee benefits.

The audit settlement and advance pricing agreement in 2013 with Canada resulted in a cash tax benefit of $10.4 million in 2013, which represented amounts previously paid against Canadian accrued taxes. As of June 30, 2015, the Company had received $9.3 million, with the remaining $1.1 million expected to be received within the next 12 months.

Our gross unrecognized benefits relating to uncertain tax positions were $1.6 million and $2.2 million at June 30, 2015 and December 31, 2014, respectively, of which, $0.5 million and $1.1 million would go through our income tax provision and thus impact the effective tax rate at June 30, 2015 and December 31, 2014, respectively, if the gross unrecognized tax benefits were to be recognized.

The Company does not expect its gross unrecognized tax benefits to significantly change within the next 12 months.