INCOME TAXES
 9 Months Ended
Sep. 30, 2014
Income Tax Disclosure [Abstract]  
INCOME TAXES
INCOME TAXES

The following table accounts for the difference between the actual tax provision and the amounts obtained by applying the statutory U.S. federal income tax rate of 35.0% to income from continuing operations before taxes.

 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
Effective Tax Rate Reconciliation (Percent)
2014
 
2013
 
2014
 
2013
Statutory federal tax rate
35.0
 %
 
35.0
 %
 
35.0
 %
 
35.0
 %
Foreign rate differential
(0.2
)
 
(0.1
)
 
(0.2
)
 
(0.1
)
Domestic manufacturing/export tax incentive
(1.7
)
 
(0.9
)
 
(2.1
)
 
(1.0
)
Dividends paid to CEOP
(0.6
)
 
(0.4
)
 
(0.4
)
 
(0.4
)
Return to provision
(0.3
)
 
(0.1
)
 
(0.8
)
 
—

State income taxes, net
1.7

 
2.1

 
2.0

 
2.2

Change in valuation allowance
1.0

 
1.2

 
1.7

 
(1.0
)
Change in tax contingencies
0.8

 
(9.5
)
 
—

 
(4.1
)
Section 41 research credit
—

 
(2.1
)
 
—

 
(0.9
)
Remeasurement of deferred taxes
—

 
0.2

 
0.3

 
0.1

Other, net
(0.5
)
 
(0.3
)
 
0.2

 
0.1

Effective tax rate
35.2
 %
 
25.1
 %
 
35.7
 %
 
29.9
 %

The effective tax rates from continuing operations for the three months ended September 30, 2014 and 2013 included the cumulative effect of changes to our annual estimated effective tax rate from continuing operations from prior quarters.

The effective tax rate from continuing operations for the nine months ended September 30, 2014 included a benefit of $1.2 million associated with return to provision adjustments for the finalization of our 2013 U.S. federal and state income tax returns. The effective tax rate from continuing operations for the nine months ended September 30, 2014 also included $1.6 million of expense primarily associated with increases in valuation allowances on certain state tax credit carryforwards associated with a change in a state tax law and $0.5 million of expense related to the remeasurement of deferred taxes due to an increase in state effective tax rates.

The effective tax rates from continuing operations for both the three and nine months ended September 30, 2013 included a benefit of $8.8 million and $9.1 million, respectively, primarily associated with decreases in unrecognized tax benefits due to the expiration of federal and state statutes of limitation. The effective tax rates from continuing operations for both the three and nine months ended September 30, 2013 included a benefit of $1.9 million associated with the Research Credit under Section 41 of the Internal Revenue Code (Research Credit) that was claimed on our 2011 and 2012 U.S. federal income tax returns. The effective tax rate from continuing operations for the nine months ended September 30, 2013 included a benefit of $3.4 million associated with the reduction of valuation allowance against certain capital loss carryforwards that we believe are more likely than not to be realized in future periods.

At September 30, 2014, the condensed balance sheet includes $6.6 million of income tax receivables that are classified as other noncurrent assets.

As of September 30, 2014, we had $36.5 million of gross unrecognized tax benefits, which would have a net $34.8 million impact on the effective tax rate from continuing operations, if recognized.  As of September 30, 2013, we had $34.9 million of gross unrecognized tax benefits, of which $32.1 million would have impacted the effective tax rate from continuing operations, if recognized.  The amount of unrecognized tax benefits was as follows:
 
September 30,
 
2014
 
2013
 
($ in millions)
Balance at beginning of year
$
34.5

 
$
40.1

Increases for prior year tax positions
0.2

 
3.2

Decreases for prior year tax positions
(0.2
)
 
(8.4
)
Increases for current year tax positions
2.2

 
—

Settlement with taxing authorities
(0.2
)
 
—

Balance at end of period
$
36.5

 
$
34.9


Income from discontinued operations, net for the nine months ended September 30, 2014, included $2.2 million of tax expense related to changes in tax contingencies.

As of September 30, 2014, we believe it is reasonably possible that our total amount of unrecognized tax benefits will decrease by approximately $7.2 million over the next twelve months.  The anticipated reduction primarily relates to settlements with taxing authorities and the expiration of federal, state and foreign statutes of limitation.

We operate primarily in North America and file income tax returns in numerous jurisdictions.  Our tax returns are subject to examination by various federal, state and local tax authorities.  Our U.S. federal income tax returns are under examination by the Internal Revenue Service (IRS) for tax years 2008, 2010 and 2011. Our Canadian federal income tax returns are under examination by Canada Revenue Authority (CRA) for tax years 2010 and 2011. Our Canadian provincial income tax returns are under examination by Quebec Revenue Authority for tax years 2008 to 2011. We believe we have adequately provided for all tax positions; however, amounts asserted by taxing authorities could be greater than our accrued positions.  For our primary tax jurisdictions, the tax years that remain subject to examination are as follows:
 
Tax Years
U.S. federal income tax
2008; 2010 – 2013
U.S. state income tax
2006 – 2013
Canadian federal income tax
2010 – 2013
Canadian provincial income tax
2008 – 2013