2014 Q4 Form 10-K Financial Statement

#000007567715000007 Filed on February 27, 2015

View on sec.gov

Income Statement

Concept 2014 Q4 2013 Q4 2013 Q3
Revenue $1.434B $1.264B $845.5M
YoY Change 13.41% 71.66% 16.87%
Cost Of Revenue $1.137B $1.005B $617.8M
YoY Change 13.13% 78.92% 10.15%
Gross Profit $297.0M $259.4M $227.6M
YoY Change 14.49% 51.86% 39.7%
Gross Profit Margin 20.71% 20.52% 26.92%
Selling, General & Admin $110.5M $100.0M $77.10M
YoY Change 10.5% 79.53% 49.62%
% of Gross Profit 37.21% 38.55% 33.87%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $85.10M $80.50M $42.40M
YoY Change 5.71% 69.83% -1.17%
% of Gross Profit 28.65% 31.03% 18.63%
Operating Expenses $111.0M $99.70M $77.10M
YoY Change 11.33% 68.13% 49.62%
Operating Profit $173.2M $122.9M $142.8M
YoY Change 40.93% 29.51% 55.4%
Interest Expense -$23.10M -$28.00M -$11.85M
YoY Change -17.5% 5.26% -61.26%
% of Operating Profit -13.34% -22.78% -8.3%
Other Income/Expense, Net
YoY Change
Pretax Income $150.1M $95.00M $130.9M
YoY Change 58.0% 6.74% 112.96%
Income Tax $51.60M -$133.1M $46.25M
% Of Pretax Income 34.38% -140.11% 35.32%
Net Earnings $98.50M $228.1M $84.70M
YoY Change -56.82% 287.4% 113.45%
Net Earnings / Revenue 6.87% 18.04% 10.02%
Basic Earnings Per Share $1.00 $2.36 $0.88
Diluted Earnings Per Share $1.00 $2.34 $0.87
COMMON SHARES
Basic Shares Outstanding 98.38M shares 98.08M shares 96.76M shares
Diluted Shares Outstanding 97.60M shares

Balance Sheet

Concept 2014 Q4 2013 Q4 2013 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $124.9M $191.0M $396.6M
YoY Change -34.61% -7.91% 181.48%
Cash & Equivalents $124.9M $191.0M $396.6M
Short-Term Investments
Other Short-Term Assets $61.90M $79.60M $53.30M
YoY Change -22.24% 84.26% -12.48%
Inventory $664.9M $594.3M $266.9M
Prepaid Expenses
Receivables $646.1M $643.1M $409.7M
Other Receivables $5.100M $23.00M $9.400M
Total Short-Term Assets $1.503B $1.531B $1.136B
YoY Change -1.84% 56.51% 22.83%
LONG-TERM ASSETS
Property, Plant & Equipment $2.858B $2.806B $1.369B
YoY Change 1.85% 105.38% -0.54%
Goodwill $546.8M $546.8M $67.16M
YoY Change 0.0% 713.69% -6.14%
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $72.00M $69.70M $49.23M
YoY Change 3.3% 54.13% 3.53%
Total Long-Term Assets $3.756B $3.665B $1.521B
YoY Change 2.47% 141.66% -0.6%
TOTAL ASSETS
Total Short-Term Assets $1.503B $1.531B $1.136B
Total Long-Term Assets $3.756B $3.665B $1.521B
Total Assets $5.259B $5.196B $2.657B
YoY Change 1.2% 108.27% 8.23%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $330.5M $357.5M $163.9M
YoY Change -7.55% 204.23% 11.28%
Accrued Expenses $220.0M $214.1M $129.6M
YoY Change 2.76% 74.5% 12.91%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $6.500M $39.00M $15.00M
YoY Change -83.33% 160.0% 0.0%
Total Short-Term Liabilities $611.0M $660.6M $353.9M
YoY Change -7.51% 151.89% 15.18%
LONG-TERM LIABILITIES
Long-Term Debt $2.349B $2.509B $767.4M
YoY Change -6.37% 222.21% -1.91%
Other Long-Term Liabilities $72.80M $65.40M $33.66M
YoY Change 11.31% 123.75% 16.82%
Total Long-Term Liabilities $3.140B $3.226B $1.204B
YoY Change -2.67% 163.5% -0.31%
TOTAL LIABILITIES
Total Short-Term Liabilities $611.0M $660.6M $353.9M
Total Long-Term Liabilities $3.140B $3.226B $1.204B
Total Liabilities $3.751B $3.887B $1.558B
YoY Change -3.49% 161.45% 2.83%
SHAREHOLDERS EQUITY
Retained Earnings $1.242B $1.019B $787.7M
YoY Change 21.89% 37.25% 17.53%
Common Stock $433.1M $402.7M $397.5M
YoY Change 7.55% 6.04% 6.9%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $1.521B $1.357B $1.099B
YoY Change
Total Liabilities & Shareholders Equity $5.273B $5.244B $2.657B
YoY Change 0.55% 110.18% 8.23%

Cashflow Statement

Concept 2014 Q4 2013 Q4 2013 Q3
OPERATING ACTIVITIES
Net Income $98.50M $228.1M $84.70M
YoY Change -56.82% 287.4% 113.45%
Depreciation, Depletion And Amortization $85.10M $80.50M $42.40M
YoY Change 5.71% 69.83% -1.17%
Cash From Operating Activities $179.4M $188.0M $137.2M
YoY Change -4.57% 23.36% 34.77%
INVESTING ACTIVITIES
Capital Expenditures -$166.2M -$104.6M -$49.80M
YoY Change 58.89% 207.65% 101.62%
Acquisitions
YoY Change
Other Investing Activities -$1.300M -$1.174B $200.0K
YoY Change -99.89% -1174400.0%
Cash From Investing Activities -$167.5M -$1.279B -$49.60M
YoY Change -86.9% 3661.47% 101.63%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -41.30M 885.2M -60.90M
YoY Change -104.67% -1805.59% -86.51%
NET CHANGE
Cash From Operating Activities 179.4M 188.0M 137.2M
Cash From Investing Activities -167.5M -1.279B -49.60M
Cash From Financing Activities -41.30M 885.2M -60.90M
Net Change In Cash -29.40M -205.7M 26.70M
YoY Change -85.71% -409.32% -107.14%
FREE CASH FLOW
Cash From Operating Activities $179.4M $188.0M $137.2M
Capital Expenditures -$166.2M -$104.6M -$49.80M
Free Cash Flow $345.6M $292.6M $187.0M
YoY Change 18.11% 56.97% 47.83%

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2700000 USD
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2700000 USD
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2700000 USD
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2700000 USD
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CY2014Q4 us-gaap Capital Leases Future Minimum Payments Interest Included In Payments
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12600000 USD
CY2014Q4 us-gaap Capital Leases Future Minimum Payments Present Value Of Net Minimum Payments
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23900000 USD
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8700000 USD
CY2014Q4 us-gaap Capital Leases Lessee Balance Sheet Assets By Major Class Accumulated Deprecation
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10500000 USD
CY2012 us-gaap Capitalized Computer Software Amortization
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900000 USD
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CY2014 us-gaap Capitalized Computer Software Amortization
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2900000 USD
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CY2012Q4 us-gaap Cash And Cash Equivalents At Carrying Value
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CY2013Q4 us-gaap Cash And Cash Equivalents At Carrying Value
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51100000 USD
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CY2014Q4 us-gaap Commitments And Contingencies
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CY2014Q4 us-gaap Common Stock Par Or Stated Value Per Share
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CY2014Q4 us-gaap Common Stock Shares Authorized
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CY2013 us-gaap Comprehensive Income Net Of Tax
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CY2014 us-gaap Comprehensive Income Net Of Tax
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CY2013 us-gaap Cost Of Goods Sold
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CY2014 us-gaap Cost Of Goods Sold
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CY2012 us-gaap Current Federal Tax Expense Benefit
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27100000 USD
CY2013 us-gaap Current Federal Tax Expense Benefit
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CY2014 us-gaap Current Federal Tax Expense Benefit
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185100000 USD
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CY2013 us-gaap Current Foreign Tax Expense Benefit
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300000 USD
CY2014 us-gaap Current Foreign Tax Expense Benefit
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900000 USD
CY2012 us-gaap Current Income Tax Expense Benefit
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33500000 USD
CY2013 us-gaap Current Income Tax Expense Benefit
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142600000 USD
CY2014 us-gaap Current Income Tax Expense Benefit
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219100000 USD
CY2012 us-gaap Current State And Local Tax Expense Benefit
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6400000 USD
CY2013 us-gaap Current State And Local Tax Expense Benefit
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12700000 USD
CY2014 us-gaap Current State And Local Tax Expense Benefit
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CY2014 us-gaap Deferred Foreign Income Tax Expense Benefit
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CY2012 us-gaap Deferred Income Tax Expense Benefit
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181000000 USD
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CY2014 us-gaap Deferred Income Tax Expense Benefit
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2600000 USD
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CY2013 us-gaap Deferred State And Local Income Tax Expense Benefit
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CY2014 us-gaap Deferred State And Local Income Tax Expense Benefit
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276100000 USD
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CY2013 us-gaap Earnings Per Share Basic
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CY2014 us-gaap Earnings Per Share Basic
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CY2014 us-gaap Earnings Per Share Diluted
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CY2014Q4 us-gaap Employee Service Share Based Compensation Nonvested Awards Total Compensation Cost Not Yet Recognized
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32800000 USD
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P2Y7M6D
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4600000 USD
CY2013 us-gaap Employee Service Share Based Compensation Tax Benefit From Compensation Expense
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5800000 USD
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CY2012 us-gaap Excess Tax Benefit From Share Based Compensation Financing Activities
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CY2013 us-gaap Excess Tax Benefit From Share Based Compensation Financing Activities
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7800000 USD
CY2014 us-gaap Excess Tax Benefit From Share Based Compensation Financing Activities
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CY2013Q4 us-gaap Extinguishment Of Debt Amount
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CY2014 us-gaap Finite Lived Intangible Asset Useful Life
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CY2014Q4 us-gaap Finite Lived Intangible Assets Accumulated Amortization
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40000000 USD
CY2014Q4 us-gaap Finite Lived Intangible Assets Amortization Expense Next Twelve Months
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22600000 USD
CY2014Q4 us-gaap Finite Lived Intangible Assets Amortization Expense Year Five
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21300000 USD
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22200000 USD
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22400000 USD
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22500000 USD
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CY2012 us-gaap Gain Loss On Sale Of Property Plant Equipment
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CY2014 us-gaap Gain Loss On Sale Of Property Plant Equipment
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CY2012 us-gaap Gain Loss Related To Litigation Settlement
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0 USD
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0 USD
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CY2012 us-gaap Gains Losses On Extinguishment Of Debt
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CY2014 us-gaap Gains Losses On Extinguishment Of Debt
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CY2012Q4 us-gaap Goodwill
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CY2013Q4 us-gaap Goodwill
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CY2014Q4 us-gaap Goodwill
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CY2013Q3 us-gaap Gross Profit
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CY2013Q4 us-gaap Gross Profit
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CY2013 us-gaap Gross Profit
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CY2014Q1 us-gaap Gross Profit
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CY2014Q3 us-gaap Gross Profit
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CY2014Q4 us-gaap Gross Profit
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CY2014 us-gaap Gross Profit
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374700000 USD
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423600000 USD
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614300000 USD
CY2012 us-gaap Income Tax Expense Benefit
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214500000 USD
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CY2014 us-gaap Income Tax Expense Benefit
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221700000 USD
CY2012 us-gaap Income Tax Reconciliation Deductions Qualified Production Activities
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7200000 USD
CY2013 us-gaap Income Tax Reconciliation Deductions Qualified Production Activities
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11700000 USD
CY2014 us-gaap Income Tax Reconciliation Deductions Qualified Production Activities
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16500000 USD
CY2012 us-gaap Income Tax Reconciliation Income Tax Expense Benefit At Federal Statutory Income Tax Rate
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131100000 USD
CY2013 us-gaap Income Tax Reconciliation Income Tax Expense Benefit At Federal Statutory Income Tax Rate
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148300000 USD
CY2014 us-gaap Income Tax Reconciliation Income Tax Expense Benefit At Federal Statutory Income Tax Rate
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215000000 USD
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CY2013 us-gaap Income Tax Reconciliation Other Reconciling Items
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CY2014 us-gaap Income Tax Reconciliation Other Reconciling Items
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2700000 USD
CY2012 us-gaap Income Tax Reconciliation State And Local Income Taxes
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8900000 USD
CY2013 us-gaap Income Tax Reconciliation State And Local Income Taxes
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13600000 USD
CY2014 us-gaap Income Tax Reconciliation State And Local Income Taxes
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20500000 USD
CY2012 us-gaap Income Tax Reconciliation Tax Credits
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CY2013 us-gaap Income Tax Reconciliation Tax Credits
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166000000 USD
CY2014 us-gaap Income Tax Reconciliation Tax Credits
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0 USD
CY2012 us-gaap Income Taxes Paid
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9700000 USD
CY2013 us-gaap Income Taxes Paid
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90700000 USD
CY2014 us-gaap Income Taxes Paid
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189500000 USD
CY2013Q4 us-gaap Income Taxes Receivable
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23000000 USD
CY2014Q4 us-gaap Income Taxes Receivable
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CY2013 us-gaap Stock Issued During Period Value Restricted Stock Award Net Of Forfeitures
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9700000 USD
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22300000 USD
CY2013 us-gaap Stock Issued During Period Value Stock Options Exercised
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3700000 USD
CY2014 us-gaap Stock Issued During Period Value Stock Options Exercised
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6300000 USD
CY2011Q4 us-gaap Stock Repurchase Program Authorized Amount1
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150000000.0 USD
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98100000 USD
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1507659 shares
CY2013 us-gaap Stock Repurchased And Retired During Period Shares
StockRepurchasedAndRetiredDuringPeriodShares
171263 shares
CY2012 us-gaap Stock Repurchased And Retired During Period Value
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45200000 USD
CY2013 us-gaap Stock Repurchased And Retired During Period Value
StockRepurchasedAndRetiredDuringPeriodValue
7800000 USD
CY2011Q4 us-gaap Stockholders Equity
StockholdersEquity
971300000 USD
CY2012Q4 us-gaap Stockholders Equity
StockholdersEquity
1008300000 USD
CY2013Q4 us-gaap Stockholders Equity
StockholdersEquity
1356800000 USD
CY2014Q4 us-gaap Stockholders Equity
StockholdersEquity
1521400000 USD
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0 USD
CY2013 us-gaap Valuation Allowances And Reserves Reserves Of Businesses Acquired
ValuationAllowancesAndReservesReservesOfBusinessesAcquired
6100000 USD
CY2014 us-gaap Valuation Allowances And Reserves Reserves Of Businesses Acquired
ValuationAllowancesAndReservesReservesOfBusinessesAcquired
0 USD
CY2013Q4 us-gaap Variable Interest Entity Consolidated Carrying Amount Assets
VariableInterestEntityConsolidatedCarryingAmountAssets
5000000 USD
CY2014Q4 us-gaap Variable Interest Entity Consolidated Carrying Amount Assets
VariableInterestEntityConsolidatedCarryingAmountAssets
5200000 USD
CY2013Q4 us-gaap Variable Interest Entity Consolidated Carrying Amount Liabilities
VariableInterestEntityConsolidatedCarryingAmountLiabilities
5000000 USD
CY2014Q4 us-gaap Variable Interest Entity Consolidated Carrying Amount Liabilities
VariableInterestEntityConsolidatedCarryingAmountLiabilities
5200000 USD
CY2013Q4 us-gaap Supplemental Unemployment Benefits Severance Benefits
SupplementalUnemploymentBenefitsSeveranceBenefits
8200000 USD
CY2014Q4 us-gaap Supplemental Unemployment Benefits Severance Benefits
SupplementalUnemploymentBenefitsSeveranceBenefits
8300000 USD
CY2012 us-gaap Treasury Stock Acquired Average Cost Per Share
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29.96
CY2013 us-gaap Treasury Stock Acquired Average Cost Per Share
TreasuryStockAcquiredAverageCostPerShare
45.54
CY2011Q4 us-gaap Unrecognized Tax Benefits
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111000000 USD
CY2012Q4 us-gaap Unrecognized Tax Benefits
UnrecognizedTaxBenefits
111300000 USD
CY2013Q4 us-gaap Unrecognized Tax Benefits
UnrecognizedTaxBenefits
5400000 USD
CY2014Q4 us-gaap Unrecognized Tax Benefits
UnrecognizedTaxBenefits
4400000 USD
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0 USD
CY2013 us-gaap Unrecognized Tax Benefits Decreases Resulting From Prior Period Tax Positions
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64800000 USD
CY2014 us-gaap Unrecognized Tax Benefits Decreases Resulting From Prior Period Tax Positions
UnrecognizedTaxBenefitsDecreasesResultingFromPriorPeriodTaxPositions
900000 USD
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0 USD
CY2013 us-gaap Unrecognized Tax Benefits Decreases Resulting From Settlements With Taxing Authorities
UnrecognizedTaxBenefitsDecreasesResultingFromSettlementsWithTaxingAuthorities
106200000 USD
CY2014 us-gaap Unrecognized Tax Benefits Decreases Resulting From Settlements With Taxing Authorities
UnrecognizedTaxBenefitsDecreasesResultingFromSettlementsWithTaxingAuthorities
500000 USD
CY2012 us-gaap Unrecognized Tax Benefits Increases Resulting From Current Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromCurrentPeriodTaxPositions
1300000 USD
CY2013 us-gaap Unrecognized Tax Benefits Increases Resulting From Current Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromCurrentPeriodTaxPositions
1500000 USD
CY2014 us-gaap Unrecognized Tax Benefits Increases Resulting From Current Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromCurrentPeriodTaxPositions
300000 USD
CY2012 us-gaap Unrecognized Tax Benefits Increases Resulting From Prior Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromPriorPeriodTaxPositions
100000 USD
CY2013 us-gaap Unrecognized Tax Benefits Increases Resulting From Prior Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromPriorPeriodTaxPositions
100000 USD
CY2014 us-gaap Unrecognized Tax Benefits Increases Resulting From Prior Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromPriorPeriodTaxPositions
1000000 USD
CY2013Q4 us-gaap Unrecognized Tax Benefits Interest On Income Taxes Accrued
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400000 USD
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400000 USD
CY2013 us-gaap Unrecognized Tax Benefits Interest On Income Taxes Expense
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3300000 USD
CY2014 us-gaap Unrecognized Tax Benefits Interest On Income Taxes Expense
UnrecognizedTaxBenefitsInterestOnIncomeTaxesExpense
200000 USD
CY2012 us-gaap Unrecognized Tax Benefits Reductions Resulting From Lapse Of Applicable Statute Of Limitations
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1100000 USD
CY2013 us-gaap Unrecognized Tax Benefits Reductions Resulting From Lapse Of Applicable Statute Of Limitations
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1700000 USD
CY2014 us-gaap Unrecognized Tax Benefits Reductions Resulting From Lapse Of Applicable Statute Of Limitations
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900000 USD
CY2014Q4 us-gaap Unrecognized Tax Benefits That Would Impact Effective Tax Rate
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3500000 USD
CY2014Q4 us-gaap Unrecorded Unconditional Purchase Obligation Balance On Fifth Anniversary
UnrecordedUnconditionalPurchaseObligationBalanceOnFifthAnniversary
8000000 USD
CY2014Q4 us-gaap Unrecorded Unconditional Purchase Obligation Balance On Fourth Anniversary
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8000000 USD
CY2014Q4 us-gaap Unrecorded Unconditional Purchase Obligation Balance On Second Anniversary
UnrecordedUnconditionalPurchaseObligationBalanceOnSecondAnniversary
21400000 USD
CY2014Q4 us-gaap Unrecorded Unconditional Purchase Obligation Balance On Third Anniversary
UnrecordedUnconditionalPurchaseObligationBalanceOnThirdAnniversary
8600000 USD
CY2014Q4 us-gaap Unrecorded Unconditional Purchase Obligation Balance Sheet Amount
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142200000 USD
CY2014Q4 us-gaap Unrecorded Unconditional Purchase Obligation Due After Five Years
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9400000 USD
CY2014Q4 us-gaap Unrecorded Unconditional Purchase Obligation Due In Next Rolling Twelve Months
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86800000 USD
CY2011Q4 us-gaap Valuation Allowances And Reserves Balance
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5000000 USD
CY2012Q4 us-gaap Valuation Allowances And Reserves Balance
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5300000 USD
CY2013Q4 us-gaap Valuation Allowances And Reserves Balance
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13300000 USD
CY2014Q4 us-gaap Valuation Allowances And Reserves Balance
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13000000 USD
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32000000 USD
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42300000 USD
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46800000 USD
CY2012 us-gaap Valuation Allowances And Reserves Deductions
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31700000 USD
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40400000 USD
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ValuationAllowancesAndReservesDeductions
47100000 USD
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97500000 shares
CY2013 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
97500000 shares
CY2014 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
97100000 shares
CY2012 us-gaap Weighted Average Number Of Shares Outstanding Basic
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96400000 shares
CY2013 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
96600000 shares
CY2014 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
97000000 shares
CY2014 us-gaap Derivatives Methods Of Accounting Hedging Derivatives
DerivativesMethodsOfAccountingHedgingDerivatives
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-align:left;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Derivative Instruments and Hedging Activities </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company records its derivatives, if any, in accordance with ASC&#160;815, "Derivatives and Hedging." The guidance requires the Company to recognize derivative instruments as either assets or liabilities on the balance sheet at fair value. The accounting for changes in the fair value of a derivative depends on the intended use and designation of the derivative instrument. For a derivative designated as a fair value hedge, the gain or loss on the derivative is recognized in earnings in the period of change at fair value together with the offsetting gain or loss on the hedged item. For a derivative instrument designated as a cash flow hedge, the effective portion of the derivative&#8217;s gain or loss is initially reported as a component of accumulated other comprehensive income (loss) (AOCI) and is subsequently recognized in earnings when the hedged exposure affects earnings. The ineffective portion of the gain or loss is recognized in earnings. We were not party to any derivative-based arrangements at </font><font style="font-family:inherit;font-size:10pt;">December&#160;31, 2014</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">2013</font><font style="font-family:inherit;font-size:10pt;">.</font></div></div>
CY2014 us-gaap Nature Of Operations
NatureOfOperations
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Nature of Operations and Basis of Presentation</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Packaging Corporation of America ("we," "us," "our," "PCA," or the "Company") was incorporated on January 25, 1999. In April 1999, PCA acquired the containerboard and corrugated packaging products business of Pactiv Corporation (Pactiv), formerly known as Tenneco Packaging, Inc., a wholly owned subsidiary of Tenneco Inc. On </font><font style="font-family:inherit;font-size:10pt;">October&#160;25, 2013</font><font style="font-family:inherit;font-size:10pt;">, PCA acquired Boise Inc. (Boise). For more information, see Note </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">3</font><font style="font-family:inherit;font-size:10pt;">, </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">Acquisitions</font><font style="font-family:inherit;font-size:10pt;">. After the acquisition of Boise, we became a large diverse manufacturer of both packaging and paper products. We are headquartered in Lake Forest, Illinois, and we operate largely in the United States but also have operations in Europe, Mexico, and Canada. We have approximately </font><font style="font-family:inherit;font-size:10pt;">14,000</font><font style="font-family:inherit;font-size:10pt;"> employees.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">We report our businesses in </font><font style="font-family:inherit;font-size:10pt;">three</font><font style="font-family:inherit;font-size:10pt;"> reportable segments: Packaging, Paper, and Corporate and Other. Our Packaging segment produces a wide variety of corrugated packaging products. The Paper segment manufactures and sells a range of papers, including communication-based papers, and pressure sensitive papers (collectively, white papers), and market pulp. Corporate and other includes support staff services and related assets and liabilities, transportation assets, and activity related to other ancillary support operations. For more information about our segments, see Note </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">18</font><font style="font-family:inherit;font-size:10pt;">, </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">Segment Information</font><font style="font-family:inherit;font-size:10pt;">.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In these consolidated financial statements, certain amounts in prior periods' consolidated financial statements have been reclassified to conform with the current period presentation.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Effective January&#160;1, 2014, the Company elected to change its method of accounting for certain inventories from lower of cost, as determined by the LIFO method, or market, to lower of cost, as determined by the average cost method, or market. We applied this change in method of inventory costing retrospectively to all prior periods presented in accordance with U.S. generally accepted accounting principles relating to accounting changes. For more information about our inventory valuation, see Note </font><font style="font-family:inherit;font-size:10pt;">2</font><font style="font-family:inherit;font-size:10pt;">, </font><font style="font-family:inherit;font-size:10pt;">Summary of Significant Accounting Policies</font><font style="font-family:inherit;font-size:10pt;">.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The consolidated financial statements include the accounts of PCA and its majority-owned subsidiaries after elimination of intercompany balances and transactions. Boise's results are included in our results subsequent to </font><font style="font-family:inherit;font-size:10pt;">October&#160;25, 2013</font><font style="font-family:inherit;font-size:10pt;">, the date of acquisition.</font></div></div>
CY2014 us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Use of Estimates</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. We adjust such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates will be reflected in the consolidated financial statements in future periods.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div></div>

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