NOTE 14—INCOME TAXES

The following table reflects earnings (loss) from continuing operations before income taxes by domestic and foreign tax jurisdictions:

	Year Ended December 31,
(In millions)	2015			2014			2013
U.S.	$	(43.8	)	$	(8.5	)	$	(16.5	)
Foreign		3.0			—			—
Loss from continuing operations	$	(40.8	)	$	(8.5	)	$	(16.5	)

The following table summarizes income tax benefit, within continuing operations, for the years ended December 31, 2015, 2014 and 2013:

	Year Ended December 31,
(In millions)	2015			2014			2013
Current income tax expense (benefit):
Federal	$	(13.9	)	$	(3.1	)	$	(2.4	)
State		0.4			(0.7	)		(0.5	)
Foreign		6.5			—			—
Total current income tax benefit		(7.0	)		(3.8	)		(2.9	)
Deferred income tax expense (benefit):
Federal		1.3			(4.6	)		0.5
State		(0.1	)		—			0.1
Foreign		(3.3	)		—			—
Total deferred income tax expense (benefit)		(2.1	)		(4.6	)		0.6
Total income tax benefit	$	(9.1	)	$	(8.4	)	$	(2.3	)

The following table provides a reconciliation of the effective tax rates in the consolidated statements of operations from continuing operations with the statutory U.S. federal income tax rate of 34.0%:

	Year Ended December 31,
(In millions)	2015			2014			2013
U.S. federal statutory rate		34.0	%		34.0	%		34.0	%
State income taxes		(0.6	)%		4.9	%		2.2	%
Foreign income taxes		(0.4	)%		0.0	%		0.0	%
Deferred tax valuation allowance		(26.5	)%		(131.3	)%		(10.6	)%
Fair value adjustments		(1.2	)%		14.7	%		(14.9	)%
Revisions to prior years		19.1	%		171.4	%		2.1	%
Other permanent items		(2.1	)%		(0.1	)%		(0.2	)%
Other		0.0	%		4.7	%		2.3	%
Effective tax rate		22.3	%		98.3	%		14.9	%

The following table provides a summary of the activity in the amount of unrecognized tax benefits for the years ended December 31, 2015, 2014 and 2013:

	Year Ended December 31,
(In millions)	2015		2014			2013
Balance, beginning of period	$	—	$	0.3		$	0.4
Additions		0.3		0.3			—
Reductions		—		—			(0.1	)
Settlements		—		(0.6	)		—
Balance, end of period	$	0.3	$	—		$	0.3

Unrecognized tax benefits as of December 31, 2015 were $0.3 million, the recognition of which would impact the effective tax rate. Interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense. For the year ended December 31, 2015, the Company recognized no income tax expense related to interest and penalties.

The Company has not provided for U.S. income taxes on undistributed earnings of certain non-U.S. subsidiaries, as such amounts are considered permanently reinvested outside the U.S. To the extent foreign earnings previously treated as permanently reinvested are repatriated, the related U.S. tax liability may be reduced by any foreign income taxes paid on these earnings. It is not practicable to determine the U.S. federal income tax liability that would be payable, if any, should such earnings not be permanently reinvested. As of December 31, 2015, non-U.S. subsidiaries have cumulative unremitted earnings of $12.4 million.

Deferred income taxes are a component of continuing operations and include the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and for income tax reporting purposes. The components of the Company’s deferred tax assets, liabilities and valuation allowances as of December 31, 2015 and 2014 are summarized in the following table:

	December 31,
(In millions)	2015			2014
Deferred tax assets:
Net operating loss carryforwards	$	366.9		$	375.2
Alternative minimum tax credits		11.8			10.9
Repurchase reserve		0.2			2.1
Inventory		0.4			0.6
Compensation		1.1			0.9
Pension obligations		5.7			—
Other		2.1			1.0
Total deferred tax assets		388.2			390.7
Deferred tax valuation allowance		(382.4	)		(385.6	)
Deferred tax assets, net of valuation allowance		5.8			5.1
Deferred tax liabilities:
Property, plant and equipment		(11.4	)		—
Intangible assets		(1.1	)		(0.6	)
Other		—			0.4
Total deferred tax liabilities		(12.5	)		(0.2	)
Net deferred assets (liabilities)	$	(6.7	)	$	4.9

The Company assesses deferred tax assets to consider whether it is more likely than not that the deferred tax assets will be realized. The ultimate realization of deferred tax assets depends on the ability to generate taxable income during the periods and in jurisdictions in which the temporary difference become deductible. As a result of generating losses since 2006, among other factors, the Company determined that sufficient uncertainty existed as to the realizability of its deferred tax assets and placed a full valuation allowance on its U.S. deferred tax assets. Based on the Company’s analysis of estimated taxable income, including the NABCO sale and the Real Alloy Acquisition, $5.1 million of the deferred tax valuation allowance was released in the year ended December 31, 2014. The following table provides information about the activity of our deferred tax valuation allowance:

	Year Ended December 31,
(In millions)	2015			2014		2013
Balance, beginning of period	$	385.6		$	375.0	$	373.7
Additions (reductions) recorded in the provision for income taxes		(5.8	)		10.6		1.3
Business acquired		2.6			—		—
Balance, end of period	$	382.4		$	385.6	$	375.0

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, various state and local jurisdictions, as well as foreign jurisdictions located in Canada, Mexico, Germany, Norway, and the United Kingdom. With few exceptions, the 2009 through 2014 tax years remain open to examination. The activity in 2013 and 2014 relates to an IRS examination of the Company’s 2003, 2004, 2005 and 2008 tax years, which was completed in March 2014. Due to the existing NOL carryforwards, the Company is still subject to audit for certain loss years prior to 2008 by the Internal Revenue Service and by various state taxing authorities as the NOL for a particular year is utilized. As of December 31, 2015, the Company has no tax years under examination.

As of December 31, 2015, the Company has estimated U.S. NOLs of $871.8 million and non-U.S. net operating tax loss carryforwards of $27.6 million. The U.S. NOLs have a 20-year life and begin to expire after the 2027 tax year. Additionally, the Company has state net operating loss tax carryforwards in amounts that are comparable to the U.S. NOLs.