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Income Taxes | 12 Months Ended
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Dec. 31, 2014
Current Income Tax Expense (Benefit), Continuing Operations [Abstract] |
Income Taxes | INCOME TAXES Income (loss) from continuing operations before income taxes consists of the following:
| Year ended December 31,
Dollar amounts in millions | 2014 |  | 2013 |  | 2012
Domestic | $ | (66.4 | ) |  | $ | 134.0 |  |  | $ | 31.0 |
Foreign | (34.2 | ) |  | 84.5 |  |  | 5.5 |
Total | $ | (100.6 | ) |  | $ | 218.5 |  |  | $ | 36.5 |
The following presents the components of LP’s income tax provision (benefit) from continuing operations.
| Year ended December 31,
Dollar amounts in millions | 2014 |  | 2013 |  | 2012
Current tax provision (benefit): |  |  |  |  |
U.S. federal | $ | (5.0 | ) |  | $ | 1.3 |  |  | $ | 12.6 |
State and local | 0.3 |  |  | 1.2 |  |  | 0.6 |
Foreign | 1.6 |  |  | 3.3 |  |  | 0.9 |
Net current tax provision (benefit) | (3.1 | ) |  | 5.8 |  |  | 14.1 |
Deferred tax provision (benefit): |  |  |  |  |
U.S. federal | (19.5 | ) |  | 44.6 |  |  | (7.3 | )
State and local | (1.2 | ) |  | 2.5 |  |  | — |
Foreign | (13.3 | ) |  | 13.4 |  |  | (0.3 | )
Net valuation allowance increase (decrease) | 9.9 |  |  | (25.2 | ) |  | 0.5 |
Net deferred tax benefit | (24.1 | ) |  | 35.3 |  |  | (7.1 | )
Total income tax provision (benefit) | $ | (27.2 | ) |  | $ | 41.1 |  |  | $ | 7.0 |
LP received income tax refunds during 2014, 2013 and 2012 of $1.6 million, $0.9 million and $1.9 million and paid cash taxes of $3.7 million, $6.8 million and $1.6 million. Included in the Consolidated Balance Sheet at December 31, 2014 and 2013 are income tax receivables of $1.4 million and $1.2 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 2013 and 2012 are recorded in “Provision (benefit) for income taxes” on the Consolidated Statements of Income, while LP’s share of such pre-tax income is recorded in “Equity in (income) 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 | 2014 |  | 2013
Property, plant and equipment | $ | 172.1 |  |  | $ | 178.9 |
Timber and timberlands | 17.8 |  |  | 10.5 |
Inventories | (8.1 | ) |  | (8.1 | )
Accrued liabilities | (84.9 | ) |  | (70.0 | )
Benefit of capital loss and NOL carryovers | (134.0 | ) |  | (97.1 | )
Benefit of federal & state tax credit carryovers | (17.8 | ) |  | (14.9 | )
Installment sale gain deferral | 129.2 |  |  | 129.9 |
Market value write down of ARS | (8.9 | ) |  | (8.9 | )
Other | (3.9 | ) |  | (6.0 | )
Valuation allowance | 32.3 |  |  | 23.5 |
Net deferred tax liabilities | $ | 93.8 |  |  | $ | 137.8 |
Balance sheet classification |  |  |
Current deferred tax asset | $ | (45.1 | ) |  | $ | (50.9 | )
Long-term deferred tax asset | (0.6 | ) |  | — |
Long-term deferred tax liability | 139.5 |  |  | 188.7 |
| $ | 93.8 |  |  | $ | 137.8 |
The $134.0 million of benefit relating to capital loss and net operating loss (NOL) carryovers included in the above table at December 31, 2014 consists of $36.1 million for federal NOL carryovers which will begin to expire in 2031, $31.8 million (net of federal taxes) for state NOL carryovers and $0.9 million for state capital losses which will expire in various years 2015 through 2033, $54.3 million for Canadian NOL carryovers which will expire starting in 2029 and $10.9 million for Canadian capital loss carryovers which may be carried forward indefinitely. At December 31, 2014, LP has recorded valuation allowances of $9.9 million related to state NOL carryover benefit; $0.9 million related to state capital loss carryover; $5.6 million related to Canadian NOL carryover; $13.7 million against the Canadian capital loss benefit; $0.8 million against the state tax credit carryovers and $1.4 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 their realization is more likely than not. As part of our review, we consider all positive and negative evidence, including earnings history, the future reversal of deferred tax liabilities, and the relevant expirations of carry forwards. LP believes that the valuation allowances provided are appropriate. If future years’ earnings differs from the estimates used to establish these valuation allowances or other objective positive or negative evidence arises, LP may be required to record an adjustment resulting in an impact on tax expense (benefit) for that period. In 2013, LP decreased its previously recorded valuation allowance against its state and Canadian deferred tax assets by approximately $22.1 million based on 2013 current operating results and an increase in deferred tax liabilities. As a result of certain realization requirements of ASC 718 Compensation -- Stock Compensation, the table of deferred tax assets and liabilities shown above does not include $13.9 million and $13.2 million of deferred tax assets as of December 31, 2014 and December 31, 2013 that arose directly from tax deductions related to amounts of equity compensation that are greater than the compensation recognized for financial reporting. Equity will be increased if and when such deferred tax assets are ultimately realized. LP uses the "with and without" method for determining when excess tax benefits have been realized. In 2013, LP recognized a current tax benefit of $0.3 million as adjustments to additional paid in capital arising from tax deductions for equity compensation that were more than the compensation recognized for financial reporting. U.S. taxes have not been provided on approximately $51.0 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,
| 2014 |  | 2013 |  | 2012
U.S. Federal tax rate | (35 | )% |  | 35 | % |  | 35 | %
State and local income taxes | (2 | ) |  | 2 |  |  | 2 |
Adjustments to previously recorded deferred tax liabilities | — |  |  | — |  |  | (12 | )
Uncertain tax positions | 1 |  |  | — |  |  | (1 | )
Effect of foreign tax rates | 5 |  |  | (3 | ) |  | (1 | )
Effect of foreign exchange on functional currencies | (6 | ) |  | (3 | ) |  | (2 | )
Valuation allowance | 10 |  |  | (12 | ) |  | 1 |
Other, net | — |  |  | — |  |  | (3 | )
Effective tax rate (%) | (27 | )% |  | 19 | % |  | 19 | %
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. LP protested certain proposed adjustments and requested review by the IRS Appeals Office. In the fourth quarter of 2014, the IRS Appeals conferences were completed and a tentative agreement was reached resolving all issues. The agreed upon changes are subject to approval by U.S. Joint Committee on Taxation which is expected to occur in 2015. During 2013, LP deposited $17.1 million with the IRS to suspend the accrual of interest pending the resolution of this matter. The deposit is included within Prepaid and other current assets on the Consolidated Balance Sheet at December 31, 2014. LP remains subject to U.S. federal examinations of tax years 2011 through 2013 as well as state and local tax examination for the tax years 2007-2013. Canadian federal income tax years are closed through 2009 and no examinations are currently in progress. Quebec provincial audits have been effectively settled through 2012. Chilean returns for the 2010 - 2012 tax years are under review by the Chilean Tax Office. Brazilian returns for years 2009 - 2013 are subject to audit but no examinations are currently in progress. 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: during
| December 31,
Dollar amounts in millions | 2014 |  | 2013 |  | 2012
Beginning balance | $ | 48.9 |  |  | $ | 49.9 |  |  | $ | 23.5 |
Increases: |  |  |  |  |
Tax positions taken in current year | 0.1 |  |  | — |  |  | 0.1 |
Tax positions taken in prior years | 1.3 |  |  | 0.4 |  |  | 33.9 |
Decreases: |  |  |  |  |
Tax positions taken in current year | — |  |  | — |  |  | — |
Tax positions taken in prior years | (8.1 | ) |  | — |  |  | (7.4 | )
Settlements during the year | — |  |  | — |  |  | (0.2 | )
Lapse of statute in current year | — |  |  | (1.4 | ) |  | — |
Ending balance | $ | 42.2 |  |  | $ | 48.9 |  |  | $ | 49.9 |
Included in the above balances at December 31, 2014 and 2013 is $14.6 million and $12.8 million of tax benefits that, if recognized, would affect LP’s effective tax rate. LP reversed interest of $1 million during 2014 and accrued interest of $0.2 million during 2013, and in total LP has recognized a liability of $4.7 million and $5.7 million for accrued interest related to its uncertain tax positions as of December 31, 2014 and 2013. While outcomes and timing cannot be predicted, it is possible that unrecognized tax benefits of up to $34.7 million, primarily related to the timing of fixed asset recovery and $4.1 million related to the timing of gain recognition could change as a result of the anticipated settlement of the 2007-2009 IRS audit and the lapse of statutes of limitation, respectively, during 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 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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