Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Components of Consolidated Income Tax Provision

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

	Year Ended December 31
	2017			2016			2015
Current income tax provision (benefit) -
U.S. federal	$	209.3		$	213.6		$	205.1
State and local		34.9			29.1			20.5
Foreign		0.3			0.2			0.4
Total current provision for taxes		244.5			242.9			226.0
Deferred -
U.S. federal		(90.2	)		(1.2	)		(3.8	)
State and local		5.7			(3.0	)		5.6
Foreign		—			0.2			(0.1	)
Total deferred provision (benefit) for taxes		(84.5	)		(4.0	)		1.7
Total provision (benefit) for taxes	$	160.0		$	238.9		$	227.7

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):

	2017			2016			2015
Provision computed at U.S. federal statutory rate of 35%	$	290.0		$	241.0		$	232.6
Federal tax reform		(127.2	)		—			—
State and local taxes, net of federal benefit		24.0			19.8			20.0
Domestic manufacturers deduction		(21.1	)		(21.1	)		(19.9	)
Other		(5.7	)		(0.8	)		(5.0	)
Total	$	160.0		$	238.9		$	227.7

Details of Scheduled Expiration Dates of Tax Effected Net Operating Loss (NOL) and Other Tax Carryforwards

The following details the scheduled expiration dates of our tax effected net operating loss (NOL) and other tax carryforwards at December 31, 2017 (dollars in millions):

	2018 Through 2027		2028 Through 2037		Indefinite		Total
U.S. federal NOLs	$	—	$	35.8	$	—	$	35.8
State taxing jurisdiction NOLs		1.4		0.9		—		2.3
U.S. federal tax credit carryforwards		—		0.1		—		0.1
U.S. federal and non-U.S. capital loss carryforwards		3.0		—		0.1		3.1
Total	$	4.4	$	36.8	$	0.1	$	41.3

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
	2017			2016
Deferred tax assets:
Accrued liabilities	$	13.7		$	18.1
Employee benefits and compensation		21.1			45.9
Inventories		15.4			9.9
Net operating loss carryforwards		38.1			67.4
Restricted stock and performance units		9.0			11.7
Pension and postretirement benefits		90.6			136.5
Derivatives		6.1			11.5
Capital loss and general business credit carryforwards		3.2			5.3
Gross deferred tax assets	$	197.2		$	306.3
Valuation allowance (a)		(3.1	)		(5.2	)
Net deferred tax assets	$	194.1		$	301.1
Deferred tax liabilities:
Property, plant and equipment	$	(368.6	)	$	(537.0	)
Goodwill and intangible assets		(65.0	)		(98.8	)
Total deferred tax liabilities	$	(433.6	)	$	(635.8	)
Net deferred tax liabilities (b)	$	(239.5	)	$	(334.7	)

(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 2017 and 2016 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, 2017, 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 Changes Related to PCA’s Gross Unrecognized Tax Benefits Excluding Interest and Penalties

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

	2017			2016				2015
Balance as of January 1	$	(5.2	)	$	(5.8	)	$	(4.4	)
Increases related to prior years’ tax positions		—			—			(2.8	)
Increases related to current year tax positions		(0.4	)		(0.5	)		(0.4	)
Decreases related to prior years' tax positions		—			0.1			—
Settlements with taxing authorities		—			0.3			0.7
Expiration of the statute of limitations		0.8			0.7			1.1
Balance at December 31	$	(4.8	)	$	(5.2	)	$	(5.8	)