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Income Taxes | 12 Months Ended
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Dec. 31, 2011
Income Taxes [Abstract] |
Income Taxes |
15. | INCOME TAXES
Following is an analysis of the components of the consolidated income tax provision:
|  | 2011 |  |  | 2010 |  |  | 2009 |
|  | (In thousands) |
Current — |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | 41,452 |  |  | $ | 44,595 |  |  | $ | 52,704 |
State and local |  |  | 16,678 |  |  |  | 23,653 |  |  |  | 12,191 |
Total current provision for taxes |  |  | 58,130 |  |  |  | 68,248 |  |  |  | 64,895 |
Deferred — |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  |  | 29,895 |  |  |  | (117,945 | ) |  |  | (11,745 | )
State and local |  |  | (2,548 | ) |  |  | (2,634 | ) |  |  | (2,074 | )
Total deferred provision for taxes |  |  | 27,347 |  |  |  | (120,579 | ) |  |  | (13,819 | )
Total provision (benefit) for taxes |  | $ | 85,477 |  |  | $ | (52,331 | ) |  | $ | 51,076 |
The effective tax rate varies from the U.S. Federal statutory tax rate principally due to the following:
|  | 2011 |  |  | 2010 |  |  | 2009 |
|  | (In thousands) |
Provision computed at U.S. Federal statutory rate of 35% |  | $ | 85,226 |  |  | $ | 53,586 |  |  | $ | 110,939 |
Alternative fuel mixture and cellulosic biofuel producer credits |  |  | — |  |  |  | (104,785 | ) |  |  | (61,673 | )
State and local taxes, net of federal benefit |  |  | 7,504 |  |  |  | 7,694 |  |  |  | 4,566 |
Domestic manufacturers deduction |  |  | (7,670 | ) |  |  | (7,540 | ) |  |  | (2,956 | )
Other |  |  | 417 |  |  |  | (1,286 | ) |  |  | 200 |
Total |  | $ | 85,477 |  |  | $ | (52,331 | ) |  | $ | 51,076 |
The $104.8 million benefit in 2010 includes the reallocation of gallons from the alternative fuel mixture credit to the cellulosic biofuel producer credit claimed in the 2009 federal tax return, and includes a reserve for uncertain tax positions of $102.0 million. For further discussion regarding the alternative fuel mixture and cellulosic biofuel producer credits recorded during 2010 and 2009, see Note 16. Deferred income tax assets and liabilities at December 31 are summarized as follows:
|  | December 31, |
|  | 2011 |  |  | 2010 |
|  | (In thousands) |
Deferred tax assets: |  |  |  |  |  |  |  |
Accrued liabilities |  | $ | 5,287 |  |  | $ | 6,538 |
Employee benefits and compensation |  |  | 15,100 |  |  |  | 15,794 |
Inventories |  |  | 6,809 |  |  |  | 4,758 |
Stock options and restricted stock |  |  | 8,596 |  |  |  | 7,485 |
Pension and postretirement benefits |  |  | 60,455 |  |  |  | 41,930 |
Derivatives |  |  | 15,072 |  |  |  | — |
Cellulosic biofuel tax credit carryforward |  |  | 167,452 |  |  |  | 200,334 |
Total deferred tax assets |  | $ | 278,771 |  |  | $ | 276,839 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Property, plant and equipment |  | $ | (216,109 | ) |  | $ | (225,620 | )
Goodwill and intangible assets |  |  | (10,676 | ) |  |  | (8,174 | )
Investment in joint venture |  |  | (1,121 | ) |  |  | (1,049 | )
Derivatives |  |  | — |  |  |  | (954 | )
Total deferred tax liabilities |  | $ | (227,906 | ) |  | $ | (235,797 | )
Net deferred tax assets |  | $ | 50,865 |  |  | $ | 41,042 |
The net deferred tax assets (liabilities) at December 31 are classified in the balance sheet as follows:
|  | December 31, |
|  | 2011 |  |  | 2010 |
|  | (In thousands) |
Current deferred tax assets |  | $ | 62,789 |  |  | $ | 50,232 |
Non-current deferred tax liabilities |  |  | (11,924 | ) |  |  | (9,190 | )
Net deferred tax assets |  | $ | 50,865 |  |  | $ | 41,042 |
Cash payments for income taxes were $52.7 million, $19.1 million and $22.3 million for the years ended December 31, 2011, 2010 and 2009, respectively. As of December 31, 2011, the Company had federal income tax credit carryforwards included in deferred taxes of $167.5 million which can be used to offset federal taxes payable through December 31, 2015. The $167.5 million recognizes the full benefit of federal tax credit carryforwards as claimed on PCA's federal tax return for the cellulosic biofuel credits before an adjustment of $102.0 million for uncertain tax positions under ASC 740. The deferred tax asset from the cellulosic biofuel producer credit carryforwards of $167.5 million is described in more detail in Notes 16 and 20. The following table summarizes the changes related to PCA's gross uncertain tax positions excluding interest:
|  | 2011 |  |  | 2010 |
|  | (In thousands) |
Balance as of January 1 |  | $ | (112,311 | ) |  | $ | (9,041 | )
Increases related to prior years' tax positions |  |  | (56 | ) |  |  | (104,721 | )
Increases related to current year tax positions |  |  | (624 | ) |  |  | (692 | )
Settlements with taxing authorities |  |  | — |  |  |  | 424 |
Expiration of the statute of limitations |  |  | 1,978 |  |  |  | 1,719 |
Balance at December 31 |  | $ | (111,013 | ) |  | $ | (112,311 | )
During the third quarter of 2011, the statue of limitations for the federal tax year of 2007 expired. During the third and fourth quarters of 2011, various state statutes of limitations expired. As a result of these events, the reserve for uncertain tax positions was decreased by $2.0 million gross or $1.3 million net of the federal benefit for state taxes during the third and fourth quarters of 2011. At December 31, 2011, PCA had recorded a $111.0 million reserve for uncertain tax positions excluding interest. Of the total, $106.8 million (net of the federal benefit for state taxes) would impact the effective tax rate if recognized. The increase in reserve in 2010 is attributable to alternative energy tax credits as described in Note 16. During the years ended December 31, 2011 and 2010, PCA recorded $0.2 million gross ($0.16 million net) and $0.2 million gross ($0.09 million net), respectively, in its statement of income, increasing the accrual for interest to $2.2 million gross ($1.4 million net) and $2.0 million gross ($1.2 million, net) at December 31, 2011 and 2010, respectively. No accrual for penalties was made. PCA and its subsidiaries are subject to U.S. federal income taxes, as well as income taxes of multiple state and city jurisdictions. A federal examination of the tax years 2002 and 2004 has been concluded. The tax years 2008 — 2011 remain open to federal examination. The tax years 2002 — 2011 remain open to state examinations. During March of 2011, the Internal Revenue Service (IRS) started an audit of PCA's 2008 and 2009 tax years, which includes the cellulosic biofuel producer tax credits claimed in the 2009 federal income tax return. Pending the timing and outcome of the IRS audit, which is not determinable at this time, PCA expects the reserve for uncertain tax positions to change significantly. PCA estimates the change in uncertain tax positions to be between $0 and $104.7 million due to potential changes upon IRS examination.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 + Details
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