XML 74 R22.htm IDEA: XBRL DOCUMENT
v2.4.0.6

INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2012
INCOME TAXES |
14. | INCOME TAXES
Following is an analysis of the components of the consolidated income tax provision:
|  | 2012 |  |  | 2011 |  |  | 2010 |
|  | (In thousands) |
Current — |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | 27,100 |  |  | $ | 41,452 |  |  | $ | 44,595 |
State and local |  |  | 6,437 |  |  |  | 16,678 |  |  |  | 23,653 |
Total current provision for taxes |  |  | 33,537 |  |  |  | 58,130 |  |  |  | 68,248 |
Deferred — |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  |  | 180,997 |  |  |  | 29,895 |  |  |  | (117,945 | )
State and local |  |  | 2,205 |  |  |  | (2,548 | ) |  |  | (2,634 | )
Total deferred provision for taxes |  |  | 183,202 |  |  |  | 27,347 |  |  |  | (120,579 | )
Total provision (benefit) for taxes |  | $ | 216,739 |  |  | $ | 85,477 |  |  | $ | (52,331 | )
The effective tax rate varies from the U.S. Federal statutory tax rate principally due to the following:
|  | 2012 |  |  | 2011 |  |  | 2010 |
|  | (In thousands) |
Provision computed at U.S. Federal statutory rate of 35% |  | $ | 133,196 |  |  | $ | 85,226 |  |  | $ | 53,586 |
Alternative fuel mixture and cellulosic biofuel producer credits |  |  | 81,695 |  |  |  | — |  |  |  | (104,785 | )
State and local taxes, net of federal benefit |  |  | 9,135 |  |  |  | 7,504 |  |  |  | 7,694 |
Domestic manufacturers deduction |  |  | (7,155 | ) |  |  | (7,670 | ) |  |  | (7,540 | )
Other |  |  | (132 | ) |  |  | 417 |  |  |  | (1,286 | )
Total |  | $ | 216,739 |  |  | $ | 85,477 |  |  | $ | (52,331 | )
Tax expense in 2012 included $81.7 million for the reallocation of gallons from the cellulosic biofuel producer credit to the alternative fuel mixture credit claimed in the 2009 amended federal and state income tax returns filed in 2012. Tax benefits recorded in 2010 included $104.8 million for the reallocation of gallons from the alternative fuel mixture credit to the cellulosic biofuel producer credit claimed in the 2009 federal tax return, and also included a reserve for unrecognized tax benefits of $102.0 million. For further discussion regarding the alternative fuel mixture and cellulosic biofuel producer credits recorded during 2012 and 2010, see Note 15. Deferred income tax assets and liabilities at December 31 are summarized as follows:
|  | December 31, |
|  | 2012 |  |  | 2011 |
|  | (In thousands) |
Deferred tax assets: |  |  |  |  |  |  |  |
Accrued liabilities |  | $ | 7,332 |  |  | $ | 5,287 |
Employee benefits and compensation |  |  | 16,002 |  |  |  | 15,100 |
Inventories |  |  | — |  |  |  | 6,809 |
Stock options and restricted stock |  |  | 8,389 |  |  |  | 8,596 |
Pension and postretirement benefits |  |  | 65,520 |  |  |  | 60,455 |
Derivatives |  |  | 20,381 |  |  |  | 15,072 |
Cellulosic biofuel tax credit carryforward |  |  | — |  |  |  | 167,452 |
Total deferred tax assets |  | $ | 117,624 |  |  | $ | 278,771 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Property, plant and equipment |  | $ | (210,486 | ) |  | $ | (216,109 | )
Goodwill and intangible assets |  |  | (7,267 | ) |  |  | (10,676 | )
Inventories |  |  | (1,533 | ) |  |  | — |
Investment in joint venture |  |  | (1,119 | ) |  |  | (1,121 | )
Total deferred tax liabilities |  | $ | (220,405 | ) |  | $ | (227,906 | )
Net deferred tax assets (liabilities) |  | $ | (102,781 | ) |  | $ | 50,865 |
The net deferred tax assets (liabilities) at December 31 are classified in the balance sheet as follows:
|  | December 31, |
|  | 2012 |  |  | 2011 |
|  | (In thousands) |
Current deferred tax assets |  | $ | 22,328 |  |  | $ | 62,789 |
Non-current deferred tax liabilities |  |  | (125,109 | ) |  |  | (11,924 | )
Net deferred tax assets (liabilities) |  | $ | (102,781 | ) |  | $ | 50,865 |
Cash payments for both federal and state income taxes were $9.7 million, $52.7 million and $19.1 million for the years ended December 31, 2012, 2011 and 2010, respectively. The following table summarizes the changes related to PCA’s gross unrecognized tax benefits excluding interest:
|  | 2012 |  |  | 2011 |
|  | (In thousands) |
Balance as of January 1 |  | $ | (111,013 | ) |  | $ | (112,311 | )
Increases related to prior years’ tax positions |  |  | (128 | ) |  |  | (56 | )
Increases related to current year tax positions |  |  | (1,267 | ) |  |  | (624 | )
Settlements with taxing authorities |  |  | — |  |  |  | — |
Expiration of the statute of limitations |  |  | 1,105 |  |  |  | 1,978 |
Balance at December 31 |  | $ | (111,303 | ) |  | $ | (111,013 | )
During the third and fourth quarters of 2012, various state statutes of limitations expired. As a result of these events, the reserve for unrecognized tax benefits decreased by $1.1 million gross or $0.7 million net of the federal benefit for state taxes during the third and fourth quarters of 2012. At December 31, 2012, PCA had recorded a $111.3 million reserve for unrecognized tax benefits, excluding interest and penalties. Of the total, $107.0 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 15. PCA recognizes interest and penalties related to unrecognized tax benefits as part of its income tax expense. During the years ended December 31, 2012 and 2011, PCA recorded $0.3 million gross ($0.2 million net) and $0.2 million gross ($0.16 million net), respectively, in its statement of income, increasing the accrual for interest to $2.5 million gross ($1.6 million net) and $2.2 million gross ($1.4 million, net) at December 31, 2012 and 2011, respectively. Less than $0.1 million of 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 — 2012 remain open to federal examination. The tax years 2002 — 2012 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. PCA expects the reserve for unrecognized tax benefits for alternative energy tax credits related to the Filer City mill process to change significantly within the next twelve months due to the anticipated conclusion of the IRS exam. PCA estimates the change in reserve for unrecognized tax benefits to be between $0 and $105.0 million.

X
- 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 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 2: 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 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: 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 5: 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 6: 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 7: 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 8: 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 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration