Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

7.Income Taxes

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

	Year Ended December 31,
	2024			2023		2022
Current income tax provision -
U.S. federal	$	218.9		$	199.4	$	187.3
State and local		44.6			44.3		61.7
Total current provision for taxes		263.5			243.7		249.0
Deferred income tax provision (benefit) -
U.S. federal		(5.5	)		3.6		86.9
State and local		1.3			1.6		(0.7	)
Foreign		—			—		(0.2	)
Total deferred provision (benefit) for taxes		(4.2	)		5.2		86.0
Total provision for taxes	$	259.3		$	248.9	$	335.0

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

	2024			2023			2022
Provision computed at U.S. federal statutory rate of 21%	$	223.5		$	213.0		$	286.6
State and local taxes, net of federal benefit		39.8			38.6			51.6
Other		(4.0	)		(2.7	)		(3.2	)
Total	$	259.3		$	248.9		$	335.0

The following details the scheduled expiration dates of our tax effected net operating loss (NOL) and other tax carryforwards at December 31, 2024 (dollars in millions):

	2025 Through 2034		2035 Through 2044		Indefinite		Total
U.S. federal NOLs	$	12.1	$	—	$	—	$	12.1
State taxing jurisdiction NOLs		0.3		0.2		—		0.5
U.S. federal and non-U.S. capital loss carryforwards		0.3		—		—		0.3
U.S. federal tax credit carryforwards		0.1		—		—		0.1
Total	$	12.8	$	0.2	$	—	$	13.0

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,
	2024			2023
Deferred tax assets:
Lease obligations	$	71.9		$	72.8
Employee benefits and compensation		53.3			44.8
Accrued liabilities		31.6			30.4
Net operating loss carryforwards		12.6			16.2
Restricted stock and performance units		10.4			9.8
Inventories		8.8			13.4
Capital loss and general business credit carryforwards		0.4			0.4
Derivatives		0.1			0.1
Pension and postretirement benefits		—			12.7
Gross deferred tax assets		189.1			200.6
Valuation allowance (a)		(0.3	)		(0.3	)
Net deferred tax assets	$	188.8		$	200.3
Deferred tax liabilities:
Property, plant and equipment	$	(598.8	)	$	(609.2	)
Goodwill and intangible assets		(81.8	)		(79.0	)
Right-of-use assets		(68.9	)		(70.1	)
Pension and postretirement benefits		(1.2	)		—
Total deferred tax liabilities	$	(750.7	)	$	(758.3	)
Net deferred tax liabilities	$	(561.9	)	$	(558.0	)

(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 2024 and 2023 valuation allowances relate 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.

Cash payments for federal, state, and foreign income taxes were $269.4 million, $212.3 million, and $277.4 million for the years ended December 31, 2024, 2023, and 2022, respectively.

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

	2024			2023			2022
Balance as of January 1	$	(2.4	)	$	(1.7	)	$	(1.9	)
Increases related to prior years’ tax positions		(0.1	)		(0.4	)		(0.2	)
Increases related to current year tax positions		(0.9	)		(0.7	)		(0.4	)
Decreases related to prior years' tax positions		—			—			—
Settlements with taxing authorities		—			—			—
Expiration of the statute of limitations		0.2			0.4			0.8
Balance at December 31	$	(3.2	)	$	(2.4	)	$	(1.7	)

At December 31, 2024, PCA had recorded a $3.2 million gross reserve for unrecognized tax benefits, excluding interest and penalties. Of the total, $3.2 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. For the years ended December 31, 2024 and 2023, we had $0.2 million and $0.1 million of interest and penalties recorded for unrecognized tax benefits, respectively. PCA does not expect the unrecognized tax benefits to change significantly over the next 12 months.

PCA is subject to income taxation in the United States, various state and local jurisdictions, and Hong Kong. The tax years 2021-2024 remain open to federal examination. The tax years 2020-2024 remain open to state examinations. Some foreign tax jurisdictions are open to examination for the 2018 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.