Income Tax Matters

9 Months Ended

Sep. 30, 2014

Income Tax Disclosure [Abstract]

Income Tax Matters

Income Tax Matters

The provision for incomes taxes, for each period presented, consisted of the following:

	Quarter Ended					Nine Months Ended
	September 30,					September 30,
	2014		2013			2014		2013
Domestic	$	9.2	$	14.7		$	32.2	$	41.1
Foreign	—		(4.4		)	0.9		(10.9		)
Total	$	9.2	$	10.3		$	33.1	$	30.2

The income tax provision for the quarters ended September 30, 2014 and September 30, 2013 was $9.2 and $10.3, reflecting an effective tax rate of 36.7% and 28.9%, respectively. There was no material difference between the effective tax rate and the projected blended statutory tax rate for the quarter ended September 30, 2014.

The difference between the effective tax rate and the projected blended statutory tax rate for the quarter ended September 30, 2013 was primarily the result of a decrease from a bilateral advance pricing agreement between Canada and the U.S. (the “Advance Pricing Agreement”) of $2.7, resulting in a 7.7% decrease in the effective rate.

The income tax provision for the nine months ended September 30, 2014 and September 30, 2013 was $33.1 and $30.2, reflecting an effective tax rate of 37.0% and 28.1%, respectively. There was no material difference between the effective tax rate and the projected blended statutory tax rate for the nine months ended September 30, 2014.

The difference between the effective tax rate and the projected blended statutory tax rate for the nine months ended September 30, 2013 was primarily the result of (i) a decrease in unrecognized tax benefits, including interest and penalties, of $7.7, resulting in a 7.1% decrease in the effective tax rate due to an audit settlement with the Canada Revenue Agency Competent Authority on February 28, 2013 for the 1998-2004 tax years and (ii) a decrease from the Advance Pricing Agreement of $2.7, resulting in a 2.5% decrease in the effective rate.

The audit settlement and the Advance Pricing Agreement with Canada resulted in a cash tax benefit of $10.6, which represents amounts previously paid against Canadian accrued taxes. As of September 30, 2014, $7.9 has been received by the Company, with the remaining $2.7 expected to be received within the next 12 months.

The Company’s gross unrecognized benefits relating to uncertain tax positions were $3.7 and $3.8 at September 30, 2014 and December 31, 2013, respectively, of which, $2.6 and $2.7 will go through the Company’s income tax provision and thus impact the effective tax rate at September 30, 2014 and December 31, 2013, respectively, if and when the gross unrecognized tax benefits are recognized.

The Company expects its gross unrecognized tax benefits to be reduced by $1.5 within the next 12 months.

See Note 6 of Notes to Consolidated Financial Statements included in Part II, Item 8. “Financial Statements and Supplementary Data” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 for additional information regarding income taxes.