Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income from operations before provision for taxes by domestic and foreign source

Income from operations before provision for taxes by domestic and foreign source is as follows:

	2014		2013		2012
	(millions of dollars)
Income from continuing operations before income taxes and income from affiliates and joint ventures:
Domestic	$	54.8	$	66.6	$	56.9
Foreign		68.2		57.1		53.7
	$	123.0	$	123.7	$	110.6

Provision (benefit) for taxes on income

The provision (benefit) for taxes on income consists of the following:

	2014			2013		2012
	(millions of dollars)
Domestic
Taxes currently payable
Federal	$	28.1		$	13.7	$	14.9
State and local		3.4			2.6		1.3
Deferred income taxes		(15.1	)		2.5		3.2
Domestic tax provision		16.4			18.8		19.4

Foreign
Taxes currently payable		20.3			13.8		14.3
Deferred income taxes		(5.9	)		1.9		(1.8	)
Foreign tax provision		14.4			15.7		12.5
Total tax provision	$	30.8		$	34.5	$	31.9

Reconciliation of statutory federal tax rate to effective federal tax rate

The major elements contributing to the difference between the U.S. federal statutory tax rate and the consolidated effective tax rate are as follows:

	2014			2013			2012

U.S. statutory rate		35.0	%		35.0	%		35.0	%

Depletion		-7.8	%		-3.6	%		-3.8	%
Difference between tax provided on foreign earnings and the U.S. statutory rate		-9.5	%		-3.6	%		-4.0	%
State and local taxes, net of federal tax benefit		1.0	%		1.7	%		1.5	%
Tax credits and foreign dividends		4.1	%		-1.7	%		-0.1	%
Change in valuation allowance		1.7	%		0.3	%		-1.1	%
Impact of uncertain tax positions		0.4	%		-0.6	%		0.9	%
Impact of officer's non-deductible compensation		2.7	%		2.3	%		2.1	%
Manufacturing deduction		-3.3	%		-0.9	%		-0.8	%
Other		0.7	%		-1.0	%		-0.9	%
Consolidated effective tax rate		25.0	%		27.9	%		28.8	%

Deferred tax assets and liabilities

The Company believes that its accrued liabilities are sufficient to cover its U.S. and foreign tax contingencies. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:

	2014			2013
	(millions of dollars)
Deferred tax assets attributable to:
Accrued liabilities	$	39.9		$	9.4
Net operating loss carry forwards		25.6			9.6
Pension and post-retirement benefits costs		57.1			21.6
Other		18.9			14.3
Valuation allowance		(21.7	)		(5.9	)
Total deferred tax assets		119.8			49.0
Deferred tax liabilities attributable to:
Plant and equipment, principally due to differences in depreciation		264.3			14.3
Intangible assets		89.3			13.3
Other		5.4			1.6
Total deferred tax liabilities		359.0			29.2
Net deferred tax asset (liability)	$	(239.2	)	$	19.8

The current and long-term portion of net deferred tax assets is as follows:

	2014			2013
	(millions of dollars)

Net deferred tax asset (liability), current	$	19.6		$	4.0
Net deferred tax asset (liability), long-term		(258.8	)		15.8
	$	(239.2	)	$	19.8

The following table summarizes the activity related to our unrecognized tax benefits:

	2014			2013
	(millions of dollars)

Balance at beginning of the year	$	3.9		$	4.8
Increases related to current year tax positions		0.6			0.6
Increases related to new judgements		1.0			-
Decreases related to audit settlements and statue expirations		(0.5	)		(1.5	)
Balance at the end of the year	$	5.0		$	3.9

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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