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Income Taxes | 12 Months Ended
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Dec. 31, 2011
Income Tax Expense (Benefit) [Abstract] |
Income Taxes | INCOME TAXES Loss from continuing operations before income taxes consists of the following:
| Year ended December 31,
Dollar amounts in millions | 2011 |  | 2010 |  | 2009
Domestic | $ | (149.4 | ) |  | $ | (36.4 | ) |  | $ | (121.7 | )
Foreign | (61.6 | ) |  | (17.9 | ) |  | (58.2 | )
Total | $ | (211.0 | ) |  | $ | (54.3 | ) |  | $ | (179.9 | )
The following presents the components of LP’s income tax provision (benefit) from continuing operations. Certain corrections have been made to prior year amounts in order to present the components from continuing operations as opposed to LP’s total income tax provision (benefit). Such corrections were not considered material:
| Year ended December 31,
Dollar amounts in millions | 2011 |  | 2010 |  | 2009
Current tax provision (benefit): |  |  |  |  |
U.S. federal | $ | (0.9 | ) |  | $ | (1.1 | ) |  | $ | (43.9 | )
State and local | (1.3 | ) |  | 1.1 |  |  | (1.6 | )
Foreign | (8.6 | ) |  | (13.4 | ) |  | 0.5 |
Net current tax benefit | (10.8 | ) |  | (13.4 | ) |  | (45.0 | )
Deferred tax provision (benefit): |  |  |  |  |
U.S. federal | (39.7 | ) |  | (6.7 | ) |  | 5.6 |
State and local | (6.1 | ) |  | (3.6 | ) |  | (2.1 | )
Foreign | (11.4 | ) |  | 2.5 |  |  | (29.4 | )
Net valuation allowance increase (decrease) | 28.9 |  |  | (0.9 | ) |  | 7.5 |
Net deferred tax benefit | (28.3 | ) |  | (8.7 | ) |  | (18.4 | )
Total income tax benefit | $ | (39.1 | ) |  | $ | (22.1 | ) |  | $ | (63.4 | )
LP received income tax refunds during 2011, 2010 and 2009 of $25.8 million, $51.4 million and $91.1 million and paid cash taxes of $0.8 million, $5.7 million and $11.8 million. Included in the Consolidated Balance Sheet at December 31, 2011 and 2010 are income tax receivables of $3.5 million and $18.7 million. The income tax effects of LP’s share of the income or loss of U.S. GreenFiber and Canfor-LP OSB Limited Partnership in 2011, 2010 and 2009 are recorded in “Benefit for income taxes” on the Consolidated Statements of Income, while LP’s share of such pre-tax income is recorded in “Equity in loss of unconsolidated affiliates”. The tax effects of significant temporary differences creating deferred tax (assets) and liabilities at December 31 were as follows:
| December 31,
Dollar amounts in millions | 2011 |  | 2010
Property, plant and equipment | $ | 160.9 |  |  | $ | 175.9 |
Timber and timberlands | 11.4 |  |  | 12.8 |
Inventories | (12.4 | ) |  | (14.0 | )
Accrued liabilities | (81.5 | ) |  | (67.4 | )
Benefit of capital loss and NOL carryovers | (171.7 | ) |  | (118.1 | )
Benefit of federal & state tax credit carryovers | (24.4 | ) |  | (30.2 | )
Installment sale gain deferral | 166.7 |  |  | 166.7 |
Deferred financial income/loss | — |  |  | (6.9 | )
Market value write down of ARS | (8.9 | ) |  | (21.9 | )
Other | (4.2 | ) |  | 18.4 |
Valuation allowance | 49.1 |  |  | 20.2 |
Net deferred tax liabilities | $ | 85.0 |  |  | $ | 135.5 |
Balance sheet classification |  |  |
Current deferred tax asset | $ | (17.0 | ) |  | $ | (23.4 | )
Long-term deferred tax asset | (4.0 | ) |  | (5.9 | )
Long-term deferred tax liability | 106.0 |  |  | 164.8 |
| $ | 85.0 |  |  | $ | 135.5 |
The $171.7 million of benefit relating to capital loss and net operating loss (NOL) carryovers included in the above table at December 31, 2011 consists of $60.2 million for federal NOL carryovers which will begin to expire in 2029, $35.8 million (net of federal taxes) for state NOL carryovers and $1.3 million for state capital losses which will expire in various years through 2026, $62.2 million for Canadian NOL carryovers which will expire starting in 2029 and $12.2 million for Canadian capital loss carryovers which may be carried forward indefinitely. At December 31, 2011, LP has recorded valuation allowances of $16.1 million related to state NOL carryover benefit; $1.3 million related to state capital loss carryover; $16.7 million related to Canadian NOL carryover; $11.6 million against the Canadian capital loss benefit ; $1.5 million against the state tax credit carryovers and $1.9 million related to other items. LP periodically reviews the need for valuation allowances against deferred tax assets and recognizes these deferred tax assets to the extent that the realization is more likely than not. Based upon review of earnings history and trends, tax planning strategies already implemented, reversal of deferred tax liabilities and the relevant expiration of carry forwards, LP believes that the valuation allowances provided are appropriate. If future years’ taxable income differs from the estimates used to establish these valuation allowances, LP may be required to record an adjustment resulting in an impact on current tax expense. The current tax cost recognized upon the vesting of employee stock programs is a reduction in additional paid in capital of $0.6 million, $0.4 million and $1.4 million for 2011, 2010 and 2009. U.S. taxes have not been provided on approximately $29.8 million of undistributed earnings of LP’s foreign subsidiaries, which under existing law are not subject to U.S. tax until distributed as dividends. These earnings have been, and are intended to be, indefinitely reinvested in LP’s foreign operations. Determination of the amount of any unrecognized income tax liability on this temporary difference is not practical because of the complexities of the hypothetical calculation. Furthermore, any taxes paid to the foreign governments on these earnings may be used, in whole or in part, as credits against the U.S. tax on any dividends distributed from such earnings. The following table summarizes the differences between the statutory U.S. federal and effective income tax rates on continuing operations:
| Year ended December 31,
| 2011 |  | 2010 |  | 2009
U.S. Federal tax rate | (35 | )% |  | (35 | )% |  | (35 | )%
State and local income taxes | (3 | ) |  | (6 | ) |  | (2 | )
Effect of non-deductible goodwill impairments | — |  |  | 9 |  |  | — |
Effect of foreign debt structure | — |  |  | — |  |  | (4 | )
Uncertain tax positions | 5 |  |  | — |  |  | — |
Effect of foreign tax rates / foreign exchange | — |  |  | (11 | ) |  | — |
Valuation allowance | 13 |  |  | (1 | ) |  | 3 |
Other, net | 1 |  |  | 4 |  |  | 3 |
Effective tax rate (%) | (19 | )% |  | (40 | )% |  | (35 | )%
LP and its domestic subsidiaries are subject to U.S. federal income tax as well as income taxes of multiple state jurisdictions. Its foreign subsidiaries are subject to income tax in Canada, Chile, Peru and Brazil. During 2011, the U.S. Internal Revenue Service initiated an audit of tax years 2007 through 2009. All U.S. federal audits of prior years have been completed. LP settled various state income tax audits during 2011 and is subject to various state and local income tax examinations for the tax years 2005 through 2010. Canadian federal income tax returns have been audited and effectively settled through 2004 and no examinations are currently in progress. Quebec provincial audits have been effectively settled through 2007 and audits of 2008 through 2010 will begin in 2012. During 2011, the Chilean Tax Office initiated an audit of tax years 2008 through 2010. In accordance with the accounting for uncertain tax positions, the following is a tabular reconciliation of the total amount of unrecognized tax benefits at the beginning and end of the years presented:
| December 31, 2011
Dollar amounts in millions | 2011 |  | 2010 |  | 2009
Beginning balance | $ | 11.3 |  |  | $ | 13.0 |  |  | $ | 14.4 |
Increases: |  |  |  |  |
Tax positions taken in current and prior years | 12.7 |  |  | 0.7 |  |  | 1.3 |
Decreases: |  |  |  |  |
Tax positions taken in current year | (0.3 | ) |  | (0.7 | ) |  | (1.6 | )
Settlements during the year | (0.2 | ) |  | (1.7 | ) |  | (1.1 | )
Ending balance | $ | 23.5 |  |  | $ | 11.3 |  |  | $ | 13.0 |
Included in the above balances at December 31, 2011 and 2010 is $12.4 million and $1.2 million of tax benefits that, if recognized, would affect LP’s effective tax rate, and no penalties. LP accrued interest of $1.2 million and $1.0 million during 2011 and 2010, and in total LP has recognized a liability of $3.7 million and $2.5 million for accrued interest related to its uncertain tax positions as of December 31, 2011 and 2010. At this point, it is not possible to reasonably estimate whether the unrecognized tax benefit will change significantly within the next twelve months.

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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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