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Income Taxes | 12 Months Ended
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Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The following is an analysis of the components of the consolidated income tax provision (dollars in millions):
| 2014 |  | 2013 |  | 2012
Current income tax provision (benefit) - |  |  |  |  |
U.S. Federal | $ | 185.1 |  |  | $ | 129.6 |  |  | $ | 27.1 |
State and local | 33.1 |  |  | 12.7 |  |  | 6.4 |
Foreign | 0.9 |  |  | 0.3 |  |  | — |
Total current provision for taxes | 219.1 |  |  | 142.6 |  |  | 33.5 |
Deferred - |  |  |  |  |
U.S. Federal | (5.0 | ) |  | (160.5 | ) |  | 179.1 |
State and local | 7.6 |  |  | 0.3 |  |  | 1.9 |
Foreign | — |  |  | (0.1 | ) |  | — |
Total deferred provision (benefit) for taxes | 2.6 |  |  | (160.3 | ) |  | 181.0 |
Total provision (benefit) for taxes | $ | 221.7 |  |  | $ | (17.7 | ) |  | $ | 214.5 |
The effective tax rate varies from the U.S. Federal statutory tax rate principally due to the following (dollars in millions):
| 2014 |  | 2013 |  | 2012
Provision computed at U.S. Federal statutory rate of 35% | $ | 215.0 |  |  | $ | 148.3 |  |  | $ | 131.1 |
Alternative fuel mixture and cellulosic biofuel producer credits | — |  |  | (166.0 | ) |  | 81.7 |
State and local taxes, net of federal benefit | 20.5 |  |  | 13.6 |  |  | 8.9 |
Domestic manufacturers deduction | (16.5 | ) |  | (11.7 | ) |  | (7.2 | )
Other | 2.7 |  |  | (1.9 | ) |  | — |
Total | $ | 221.7 |  |  | $ | (17.7 | ) |  | $ | 214.5 |
Tax benefits in 2013 included $166.0 million for the release of ASC 740 uncertain tax positions related to the taxability of the alternative energy tax credits acquired in the acquisition of Boise and the completion of the IRS audit of PCA's 2008 and 2009 Federal income tax returns including the Filer City mill's cellulosic biofuel tax credits. Tax expense in 2012 included $81.7 million for the reallocation of gallons from the cellulosic biofuel producer credit to the alternative energy tax credit claimed in the 2009 amended federal and state income tax returns filed in 2012. For further discussion regarding these credits, see Note 7, Alternative Energy Tax Credits. The following details the scheduled expiration dates of our tax effected net operating loss (NOL) and other tax carryforwards at December 31, 2014 (dollars in millions):
| 2015 Through 2024 |  | 2025 Through 2034 |  | Indefinite |  | Total
U.S. federal and non-U.S. NOLs | $ | 1.1 |  |  | $ | 76.6 |  |  | $ | 0.3 |  |  | $ | 78.0 |
State taxing jurisdiction NOLs | 3.6 |  |  | 3.6 |  |  | — |  |  | 7.2 |
U.S. federal, non-U.S., and state tax credit carryforwards | 0.2 |  |  | 0.4 |  |  | 0.6 |  |  | 1.2 |
U.S. federal capital loss carryforwards | 0.6 |  |  | — |  |  | — |  |  | 0.6 |
Total | $ | 5.5 |  |  | $ | 80.6 |  |  | $ | 0.9 |  |  | $ | 87.0 |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. Deferred income tax assets and liabilities at December 31 are summarized as follows (dollars in millions):
| December 31
| 2014 |  | 2013
Deferred tax assets: |  |  |  |  |
Accrued liabilities | $ | 19.0 |  |  | $ | 19.5 |
Employee benefits and compensation | 44.2 |  |  | 27.3 |
Net operating loss carryforwards | 85.2 |  |  | 126.8 |
Stock options and restricted stock | 8.9 |  |  | 8.9 |
Pension and postretirement benefits | 139.1 |  |  | 75.5 |
Derivatives | 16.0 |  |  | 18.2 |
Capital loss, general business, foreign, and AMT credit carryforwards | 1.8 |  |  | 2.6 |
Gross deferred tax assets | $ | 314.2 |  |  | $ | 278.8 |
Valuation allowance (a) | (1.7 | ) |  | (2.7 | )
Net deferred tax assets | $ | 312.5 |  |  | $ | 276.1 |
Deferred tax liabilities: |  |  |  |  |
Property, plant, and equipment | $ | (531.6 | ) |  | $ | (519.7 | )
Goodwill and intangible assets | (107.7 | ) |  | (111.9 | )
Inventories | (7.4 | ) |  | (28.5 | )
Investment in joint venture | — |  |  | (1.0 | )
Other | — |  |  | (2.2 | )
Total deferred tax liabilities | $ | (646.7 | ) |  | $ | (663.3 | )
Net deferred tax liabilities (b) | $ | (334.2 | ) |  | $ | (387.2 | )
___________
(a) | Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion of the deferred tax assets will not be realized. In 2014, of the $1.7 million valuation allowance, $1.1 million relates to foreign net operating loss carryforwards and credits and $0.6 million relates to capital losses. In 2013, of the $2.7 million valuation allowance, $1.6 million relates to foreign net operating loss carryforwards and credits and $1.1 million relates to capital losses. We do not expect to generate capital gains before the capital losses expire. If or when recognized, the tax benefits relating to the reversal of any of or all of the valuation allowance would be recognized as a benefit to income tax expense.
(b) | As of December 31, 2014, we did not recognize U.S. deferred income taxes on our cumulative total of undistributed foreign earnings for our non-U.S. subsidiaries. We indefinitely reinvest our earnings in operations outside the United States. It is not practicable to determine the amount of unrecognized deferred tax liability on these undistributed earnings because the actual tax liability, if any, is dependent on circumstances existing when the repatriation occurs.
Cash payments for federal, state, and foreign income taxes were $189.5 million, $90.7 million, and $9.7 million for the years ended December 31, 2014, 2013, and 2012, respectively. The following table summarizes the changes related to PCA’s gross unrecognized tax benefits excluding interest and penalties (dollars in millions):
| 2014 |  | 2013 |  | 2012
Balance as of January 1 | $ | (5.4 | ) |  | $ | (111.3 | ) |  | $ | (111.0 | )
Increase related to acquisition of Boise Inc. (a) | — |  |  | (65.2 | ) |  | — |
Increases related to prior years’ tax positions | (1.0 | ) |  | (0.1 | ) |  | (0.1 | )
Increases related to current year tax positions | (0.3 | ) |  | (1.5 | ) |  | (1.3 | )
Decreases related to prior years' tax positions (b) | 0.9 |  |  | 64.8 |  |  | — |
Settlements with taxing authorities (c) | 0.5 |  |  | 106.2 |  |  | — |
Expiration of the statute of limitations (d) | 0.9 |  |  | 1.7 |  |  | 1.1 |
Balance at December 31 | $ | (4.4 | ) |  | $ | (5.4 | ) |  | $ | (111.3 | )
___________
(a) | In 2013, PCA acquired $65.2 million of gross unrecognized tax benefits from Boise Inc. that relate primarily to the taxability of the alternative energy tax credits.
(b) | The 2013 amount includes a $64.3 million gross decrease related to the taxability of the alternative energy tax credits claimed in 2009 excise tax returns by Boise Inc. For further discussion regarding these credits, see Note 7, Alternative Energy Tax Credits.
(c) | The 2013 amount includes a $104.7 million gross decrease related to the conclusion of the Internal Revenue Service audit of PCA’s alternative energy tax credits. For further discussion regarding these credits, see Note 7, Alternative Energy Tax Credits.
(d) | In 2014, 2013, and 2012, various state statutes of limitations expired. As a result, the reserve for unrecognized tax benefits decreased by $0.9 million gross, $1.7 million gross, and $1.1 million gross, respectively.
At December 31, 2014, PCA had recorded a $4.4 million gross reserve for unrecognized tax benefits, excluding interest and penalties. Of the total, $3.5 million (net of the federal benefit for state taxes) would impact the effective tax rate if recognized. PCA recognizes interest accrued related to unrecognized tax benefits and penalties as income tax expense. Related to the unrecognized tax benefits noted in the table above, PCA accrued interest of $0.2 million gross and $3.3 million gross during 2014 and 2013, respectively. At both December 31, 2014 and 2013, after the decreases and settlements noted in the table above, PCA had a recorded liability for interest of $0.4 million gross. Penalties in 2014 and 2013 were not significant. PCA does not expect the unrecognized tax benefits to change significantly over the next 12 months. PCA is subject to taxation in the United States and various state and foreign jurisdicitions. A federal examination of the tax years 2008 and 2009 was concluded in November 2013, and tax years 2010 - 2012 were concluded in February 2015. The tax years 2013 - 2014 remain open to federal examination. The tax years 2010 - 2014 remain open to state examinations. Some foreign tax jurisdictions are open to examination for the 2008 tax year forward. Through the Boise acquisition, PCA recorded net operating losses and credit carryforwards from 2008 through 2011 and 2013 that are subject to examinations and adjustments for at least three years following the year in which utilized.

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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 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 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=26873400&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 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: 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 6: 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
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