Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Components of Consolidated Income Tax Provision

The following is an analysis of the components of the consolidated income tax provision (dollars in millions):



	2016			2015			2014
Current income tax provision (benefit) -
U.S. Federal	$	213.6		$	205.1		$	185.1
State and local	29.1			20.5			33.1
Foreign	0.2			0.4			0.9
Total current provision for taxes	242.9			226.0			219.1
Deferred -
U.S. Federal	(1.2		)	(3.8		)	(5.0		)
State and local	(3.0		)	5.6			7.6
Foreign	0.2			(0.1		)	—
Total deferred provision (benefit) for taxes	(4.0		)	1.7			2.6
Total provision (benefit) for taxes	$	238.9		$	227.7		$	221.7

Summary of Effective Tax Rate

The effective tax rate varies from the U.S. Federal statutory tax rate principally due to the following (dollars in millions):



	2016			2015			2014
Provision computed at U.S. Federal statutory rate of 35%	$	241.0		$	232.6		$	215.0
State and local taxes, net of federal benefit	19.8			20.0			20.5
Domestic manufacturers deduction	(21.1		)	(19.9		)	(16.5		)
Other	(0.8		)	(5.0		)	2.7
Total	$	238.9		$	227.7		$	221.7

Summary of Operating Loss Carryforwards

The following details the scheduled expiration dates of our tax effected net operating loss (NOL) and other tax carryforwards at December 31, 2016 (dollars in millions):



	2017 Through 2026		2027 Through 2036		Indefinite		Total
U.S. federal and foreign NOLs	$	—	$	65.3	$	—	$	65.3
State taxing jurisdiction NOLs	1.3		0.8		—		2.1
U.S. federal, foreign, and state tax credit carryforwards	—		0.1		—		0.1
U.S. federal capital loss carryforwards	5.2		—		—		5.2
Total	$	6.5	$	66.2	$	—	$	72.7

Deferred Income Tax Assets and Liabilities

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
	2016			2015
Deferred tax assets:
Accrued liabilities	$	18.1		$	18.3
Employee benefits and compensation	45.9			32.5
Inventories	9.9			3.9
Net operating loss carryforwards	67.4			73.2
Stock options and restricted stock	11.7			10.7
Pension and postretirement benefits	136.5			148.2
Derivatives	11.5			13.7
Capital loss, general business, foreign, and AMT credit carryforwards	5.3			5.2
Gross deferred tax assets	$	306.3		$	305.7
Valuation allowance (a)	(5.2		)	(5.1		)
Net deferred tax assets	$	301.1		$	300.6

Deferred tax liabilities:
Property, plant, and equipment	$	(537.0	)	$	(545.8	)
Goodwill and intangible assets	(98.8		)	(101.8		)
Total deferred tax liabilities	$	(635.8	)	$	(647.6	)
Net deferred tax liabilities (b)	$	(334.7	)	$	(347.0	)

___________

(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. Both the 2016 and 2015 valuation allowance 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 or all of the valuation allowance would be recognized as a benefit to income tax expense.

(b)

As of December 31, 2016, we did not recognize U.S. deferred income taxes on our cumulative total of undistributed foreign earnings for our foreign 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.

Summary of Uncertain Tax Position

The following table summarizes the changes related to PCA’s gross unrecognized tax benefits excluding interest and penalties (dollars in millions):



	2016			2015			2014
Balance as of January 1	$	(5.8	)	$	(4.4	)	$	(5.4	)
Increases related to prior years’ tax positions	—			(2.8		)	(1.0		)
Increases related to current year tax positions	(0.5		)	(0.4		)	(0.3		)
Decreases related to prior years' tax positions	0.1			—			0.9
Settlements with taxing authorities	0.3			0.7			0.5
Expiration of the statute of limitations	0.7			1.1			0.9
Balance at December 31	$	(5.2	)	$	(5.8	)	$	(4.4	)