INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018


	Years Ended December 31,
(In millions)	2018		2017		2016
Current:
Federal	$	2.4	$	21.6	$	10.5
State		2.1		2.2		(1.3)
Discrete adjustments related to the Tax Act (1)		2.9		—		—
Total		7.4		23.8		9.2
Deferred:
Deferred tax expense		31.3		24.4		39.9
Remeasurement and discrete adjustments related to the Tax Act (2)		—		(154.0)		—
Total		31.3		(129.6)		39.9
Total income taxes	$	38.7	$	(105.8)	$	49.1

(1)

Current income taxes for the year ended December 31, 2018 includes a non-cash income tax expense of $2.9 million, which relates to discrete adjustments as a result of applying the provisions of the Tax Act.

(2)

Deferred income taxes for the year ended December 31, 2017 includes a non-cash income tax benefit of $154.0 million, which relates to the remeasurement of the Company’s deferred tax assets and liabilities and other discrete adjustments as a result of applying the provisions of the Tax Act.

Schedule of effective income tax rate


	Years Ended December 31,
	2018		2017		2016
Computed federal income tax expense	21.0	%	35.0	%	35.0	%
State income tax	3.4	%	2.6	%	1.8	%
Valuation allowance	(0.7)	%	1.4	%	0.3	%
Foreign taxes	0.6	%	0.1	%	0.4	%
Remeasurement and discrete adjustments related to the Tax Act (1)	2.0	%	(123.0)	%	—	%
Share-based payments	0.1	%	(1.4)	%	—	%
Other — net	(0.2)	%	0.8	%	0.1	%
Effective income tax rate	26.2	%	(84.5)	%	37.6	%

Effective income tax rate for the year ended December 31, 2018 and 2017 includes the impact of a non-cash income tax expense of $2.9 million, or 2.0 percent, and a non-cash income tax benefit of $154.0 million, or (123.0 percent), respectively, related to the remeasurement of the Company’s deferred assets and liabilities and other discrete adjustments as a result of applying the provisions of the Tax Act.

Schedule of tax effects of temporary differences

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2018 and 2017, were as follows:


	As of December 31,
(In millions)	2018		2017
Deferred tax assets:
Benefit plans	$	45.6	$	44.2
Federal net operating losses		15.2		21.6
Insurance reserves		5.6		6.8
State net operating losses		7.4		7.4
Foreign losses		5.1		6.6
U.S. State alternative minimum tax credits		5.9		4.2
Allowance for doubtful accounts		1.1		0.9
Other		1.8		1.9
Total deferred tax assets		87.7		93.6
Valuation allowance		(11.5)		(13.0)
Total deferred tax assets, net of valuation allowance		76.2		80.6

Deferred tax liabilities:
Basis differences for property and equipment		302.1		254.4
Lease financing		26.0		—
Capital Construction Fund		7.0		54.2
Intangibles		38.4		36.4
Deferred revenue		3.0		6.9
Terminal Joint Venture investment		11.4		9.6
Reserves		1.0		2.7
Total deferred tax liabilities		388.9		364.2
Deferred tax liability, net	$	312.7	$	283.6

Schedule of company’s net operating losses (“NOLs”) and tax credit carryforwards


(In millions)	Expiration Date	2018		2017
U.S. Federal income tax NOLs	Various dates beginning in 2027	$	74.5	$	183.8
U.S. State income tax NOLs	Various dates beginning in 2032	$	189.2	$	192.3
Foreign income tax NOLs	No expiration date	$	18.4	$	23.7
U.S. State alternative minimum tax credit	No expiration date	$	5.9	$	4.2

Reconciliation of unrecognized tax benefits

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:


Unrecognized Tax Benefits (in millions)	Amount
Balance at December 31, 2015	$	22.1
Changes in tax positions of prior years, net		(1.1)
Reductions for lapse of statute of limitations		(0.6)
Balance at December 31, 2016		20.4
Changes in tax positions of prior years, net		1.1
Reductions for lapse of statute of limitations		(0.1)
Revaluation of unrecognized tax benefits due to the Tax Act (1)		(5.5)
Balance at December 31, 2017		15.9
Changes in tax positions of prior years, net		(0.3)
Reductions for lapse of statute of limitations		(0.5)
Balance at December 31, 2018	$	15.1

Amount relates to the impact of applying the Tax Act during the year ended December 31, 2017.