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Income Taxes | 9 Months Ended
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Sep. 30, 2012
Income Tax Expense (Benefit) [Abstract] |
Income Taxes | INCOME TAXES Accounting standards state that companies account for income taxes using the asset and liability approach, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. This method also requires the recognition of future tax benefits, such as net operating loss carryforwards and other tax credits. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. Valuation allowances are recorded as necessary to reduce deferred tax assets to the amount thereof that is more likely than not to be realized. The likelihood of realizing deferred tax assets is evaluated by, among other things, estimating future taxable income only to the extent of its reversal of existing deferred tax liabilities to which the deferred tax assets may be applied and assessing the impact of tax planning strategies. For interim periods, accounting standards require that income tax expense be determined by applying the estimated annual effective income tax rate to year-to-date results unless this method does not result in a reliable estimate of year-to-date income tax expense. For the third quarter and first nine months of 2012, LP determined its tax provision using the discrete or cut-off method, which allows for the application to year-to-date results of the effective income tax rate that would actually apply to such results (rather than an estimated effective annual income tax rate which was used for the third quarter and first nine months of 2011). This approach is appropriate where a small change in a Company's estimated income could produce a large change in the estimated annual effective tax rate. Each quarter the income tax accrual is adjusted to the latest estimate and the difference from the previously accrued year-to-date balance is adjusted to the current quarter. For the first nine months of 2012, the primary differences between the U.S. statutory rate of 35% and the effective rate applicable to LP’s continuing operations relate to the effect of foreign tax rates, increases in valuation allowances attributed to net operating loss carryforwards in various jurisdictions and increase in LP's reserves for uncertain tax positions. For the first nine months of 2011, the primary differences between the U.S. statutory rate of 35% and the effective rate applicable to LP’s continuing operations relate to state income taxes, the effect of foreign tax rates and increases in valuation allowances attributed to net operating loss carryforwards in various jurisdictions. The income tax components and associated effective income tax rates for the nine months ended September 30, 2012 and 2011 are as follows:
| Quarter Ended September 30,
| 2012 |  | 2011
Dollars in millions | Tax Benefit |  | Tax Rate |  | Tax Benefit |  | Tax Rate
Continuing operations | $ | 7.9 |  |  | 20 | % |  | $ | (20.9 | ) |  | 26 | %
Discontinued operations | (0.1 | ) |  | 35 | % |  | (4.0 | ) |  | 39 | %
| $ | 7.8 |  |  | 20 | % |  | $ | (24.9 | ) |  | 28 | %
| Nine Months Ended September 30,
| 2012 |  | 2011
| Tax Benefit |  | Tax Rate |  | Tax Benefit |  | Tax Rate
Continuing operations | $ | (4.4 | ) |  | 21 | % |  | $ | (36.1 | ) |  | 24 | %
Discontinued operations | (0.2 | ) |  | 35 | % |  | (5.6 | ) |  | 39 | %
| $ | (4.6 | ) |  | 21 | % |  | $ | (41.7 | ) |  | 25 | %
LP and its domestic subsidiaries are subject to U.S. federal income tax as well as income taxes of multiple state jurisdictions. LP’s foreign subsidiaries are subject to income tax in Canada, Chile, Peru and Brazil. As of September 30, 2012, the U.S. Internal Revenue Service (IRS) was in the process of auditing tax years 2007 through 2009. All U.S. federal audits of prior years have been completed. LP remains subject to state and local tax examinations for the tax years 2005 through 2011. Canadian federal income tax returns have been audited and effectively settled through 2004, and no examinations are currently in progress. Years subsequent to 2004, with the exception of 2006 and 2007, remain subject to examination. Quebec provincial audits have been effectively settled through 2007, and an audit of years 2008 through 2010 is currently in progress. As of September 30, 2012, the Chilean Tax Office was in process of auditing tax years 2008 through 2010. In connection with the IRS audit of tax years 2007 through 2009 described above, the IRS has proposed an assessment based upon the disallowance of certain accelerated depreciation positions taken by LP. LP disagrees with the assessment and, based on its views of the merits of its positions, believes that no accrual is required at this time. However, if the IRS were to fully prevail on the matter, LP would be required to make a cash payment of $17.5 million plus interest, and would recover a comparable amount of the tax benefit in future years through additional depreciation deductions. 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 LP were to determine that it would not be able to realize a portion of an existing net deferred tax asset in excess of an existing valuation allowance, an adjustment to the net deferred tax asset would be charged to earnings in the period in which such determination was made. Conversely, if it were to make a determination that it is more likely than not that an existing deferred tax asset for which there is currently a valuation allowance would be realized, the related valuation allowance would be reduced and a benefit to earnings would be recorded in the period in which such determination was made.

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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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