41
component of the provision for income taxes. There were no interest or penalties recognized in the Consolidated Statements of
Operations for 2013 and the Consolidated Balance Sheets at December 31, 2013. The Company does not currently anticipate that the
total amounts of unrecognized tax benefits will significantly increase within the next 12 months. The Company files income tax
returns in U.S. and various state and foreign jurisdictions. As of December 31, 2013, open tax years in the federal and some state
jurisdictions date back to 1996, due to the taxing authorities’ ability to adjust operating loss carryforwards.
ASC 740 requires that the net deferred tax asset be reduced by a valuation allowance if, based on the weight of available
evidence, it is more likely than not that some portion of the net deferred tax asset will not be realized. This process requires the
Company’s management to make assessments regarding the timing and probability of the ultimate tax impact. Additionally, the
Company establishes reserves for uncertain tax positions based upon our judgment regarding potential future challenges to those
positions. Actual income taxes could vary from these estimates due to future changes in income tax law, significant changes in the
jurisdictions in which the Company operates, our inability to generate sufficient future taxable income or unpredicted results from the
final determination of each year’s liability by taxing authorities. These changes could have a significant impact on the Company’s
financial position.
Deferred tax assets consist primarily of net operating loss and tax credit carryforwards as well as deductible temporary
differences. Prior to 2008 and at December 31, 2013, the Company provided a full valuation allowance for deferred tax assets based
on management’s evaluation that the Company’s ability to realize such assets did not meet the criteria of “more likely than not”. The
Company has continuously evaluated additional facts representing positive and negative evidence in the determination of its ability to
realize the deferred tax assets.
Net Income (loss)
2013 vs. 2012
2012 vs. 2011
($ in millions)
2013
2012
$
%
2011
$
%
Net income (loss) ........................................................ $ (58.6) $ (98.0) $ 39.4 40% $ 7.0 $ (105.0) NM
Net loss was lower in 2013 than 2012, due mainly to the large 2012 impairment charge and other factors discussed above. The
net loss in 2012 compares to a 2011 profit, due mainly to the 2012 impairment charge.
