Income Taxes (Notes)

9 Months Ended

Sep. 30, 2015

Income taxes recorded through September 30, 2015 and 2014, were estimated using the discrete method. Current year income taxes are based on the actual year-to-date pre-tax loss through September 30, 2015, as well as the related change in the valuation allowance on deferred tax assets. The Company is unable to estimate the annual effective tax rate for 2015 with sufficient precision for purposes of the effective tax rate method, which requires consideration of a projection of full-year income and the expected change in the valuation allowance. The estimated annual effective tax rate method was not reliable due to its sensitivity to small changes to forecasted annual pre-tax earnings and the effect of the Company’s valuation allowance, which create results with significant variations in the customary relationship between income tax expense and pre-tax income for the interim periods. As a result, the Company determined that the use of the discrete method is more appropriate than the annual effective tax rate method. The Company has estimated the change in valuation allowances required based on the year-to-date pre-tax loss and the change in value of the identified tax-planning strategy, which is determined based on year-to-date LIFO income. Included in income tax expense are non-cash charges of $10.1 and $154.8, respectively, for the three and nine months ended September 30, 2015, for changes in the valuation allowance on the Company’s deferred tax assets, compared to $6.4 and $45.5, respectively, in the three and nine months ended September 30, 2014. The Company incurred an income tax charge of $2.1 for the three and nine months ended September 30, 2014, related to changes in the value of deferred tax assets resulting from the Dearborn acquisition.