Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

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:

	2017		2016		2015
	(millions of dollars)
Income from continuing operations before income taxes and income from affiliates and joint ventures:
Domestic	$	96.7	$	72.9	$	32.6
Foreign		94.2		97.4		100.0
	$	190.9	$	170.3	$	132.6

Provision (benefit) for taxes on income

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

	2017			2016			2015
	(millions of dollars)
Domestic
Taxes currently payable
Federal	$	46.0		$	18.7		$	1.4
State and local		2.4			4.4			1.2
Deferred income taxes		(78.1	)		(8.8	)		(3.2	)
Domestic tax provision (benefit)		(29.7	)		14.3			(0.6	)

Foreign
Taxes currently payable		21.1			23.2			22.7
Deferred income taxes		2.0			(2.2	)		0.7
Foreign tax provision		23.1			21.0			23.4
Total tax provision (benefit)	$	(6.6	)	$	35.3		$	22.8

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:

	2017			2016			2015

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

Depletion		(6.7	)%		(6.6	)%		(8.4	)%
Difference between tax provided on foreign earnings and the U.S. statutory rate		(3.8	)%		(6.4	)%		(8.3	)%
State and local taxes, net of federal tax benefit		1.1	%		1.1	%		0.3	%
Tax credits and foreign dividends		0.3	%		0.6	%		(0.5	)%
Change in valuation allowance		(1.9	)%		(1.1	)%		(0.9	)%
Impact of uncertain tax positions		0.4	%		0.4	%		(0.1	)%
Impact of officer's non-deductible compensation		0.8	%		0.1	%		2.9	%
Manufacturing deduction		(1.6	)%		(2.0	)%		(2.0	)%
Impact of US Tax Reform		(24.8	)%		0.0	%		0.0	%
Other		(2.3	)%		(0.4	)%		(0.8	)%
Consolidated effective tax rate		(3.5	)%		20.7	%		17.2	%

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:

	2017			2016
	(millions of dollars)
Deferred tax assets attributable to:
Accrued liabilities	$	28.6		$	49.7
Net operating loss carry forwards		33.2			34.6
Pension and post-retirement benefits costs		40.4			55.4
Other		22.0			35.0
Valuation allowance		(21.4	)		(24.8	)
Total deferred tax assets		102.8			149.9
Deferred tax liabilities attributable to:
Plant and equipment, principally due to differences in depreciation		161.6			251.3
Intangible assets		63.4			96.3
Other		11.6			14.0
Total deferred tax liabilities		236.6			361.6
Net deferred tax asset (liability)	$	(133.8	)	$	(211.7	)

Net deferred tax assets and net deferred tax liabilities are as follows:

	2017			2016
	(millions of dollars)

Net deferred tax asset, long-term	$	25.6		$	27.1
Net deferred tax liability, long-term		159.4			238.8
Net deferred tax asset (liability), long-term	$	(133.8	)	$	(211.7	)

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

	2017			2016
	(millions of dollars)

Balance at beginning of the year	$	13.7		$	4.0
Increases related to current year tax positions		1.2			8.8
Increases related to new judgements		1.2			0.9
Decreases related to audit settlements and statue expirations		(1.4	)		-

Balance at the end of the year	$	14.7		$	13.7