10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________

FORM 10-Q

_______________________________________________

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2014

or

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________  to ____________

Commission file number 1-15399

_______________________________________________

(Exact Name of Registrant as Specified in its Charter)

Delaware	36-4277050
(State or Other Jurisdiction of  Incorporation or Organization)	(I.R.S. Employer Identification No.)
1955 West Field Court, Lake Forest, Illinois	60045
(Address of Prinicpal Executive Offices)	(Zip Code)

Registrant's telephone number, including area code

(847) 482-3000

_____________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of October 31, 2014, the Registrant had outstanding 98,383,452 shares of common stock, par value $0.01 per share.

Table of Contents

	PART I
Item 1.	Financial Statements	1
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32
	PART II
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	33
Item 6.	Exhibits	34

All reports we file with the Securities and Exchange Commission (SEC) are available free of charge via the Electronic Data Gathering Analysis and Retrieval (EDGAR) System on the SEC website at www.sec.gov. We also provide copies of our SEC filings at no charge upon request and make electronic copies of our reports available through our website at www.packagingcorp.com as soon as reasonably practicable after filing such material with the SEC.

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PART I

FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

Packaging Corporation of America

Consolidated Statements of Income and Comprehensive Income

(unaudited, dollars in thousands, except per-share data)

	Three Months Ended September 30						Nine Months Ended September 30
	2014			2013			2014			2013
Statements of Income:
Net sales	$	1,518,940		$	845,440		$	4,418,653		$	2,400,877
Cost of sales	(1,198,607		)	(617,841		)	(3,486,108		)	(1,792,782		)
Gross profit	320,333			227,599			932,545			608,095
Selling, general, and administrative expenses	(119,645		)	(77,096		)	(359,007		)	(226,606		)
Other expense, net	(12,310		)	(7,721		)	(44,004		)	(22,510		)
Income from operations	188,378			142,782			529,534			358,979
Interest expense, net	(23,111		)	(11,850		)	(65,311		)	(30,333		)
Income before taxes	165,267			130,932			464,223			328,646
Income tax provision	(60,822		)	(46,250		)	(170,135		)	(115,418		)
Net income	$	104,445		$	84,682		$	294,088		$	213,228
Net income per common share:
Basic	$	1.06		$	0.88		$	2.99		$	2.21
Diluted	$	1.06		$	0.87		$	2.99		$	2.19
Dividends declared per common share	$	0.40		$	0.40		$	1.20		$	1.11
Statements of Comprehensive Income:
Net income	$	104,445		$	84,682		$	294,088		$	213,228
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment, net of tax of ($106), $0, ($76), and $0, respectively	(1,564		)	—			(1,656		)	—
Reclassification adjustments to cash flow hedges included in net income, net of tax of $553, $552, $1,668, and $1,658, respectively	870			870			2,599			2,609
Amortization of pension and postretirement plans actuarial loss and prior service cost, net of tax of$685, $2,153, $2,157, and $7,574, respectively	1,080			3,387			3,137			11,921
Changes in unfunded employee benefit obligation, net of tax of $0, $3,152, $0, and $8,522, respectively	—			4,963			—			13,418
Other comprehensive income	386			9,220			4,080			27,948
Comprehensive income	$	104,831		$	93,902		$	298,168		$	241,176

See accompanying condensed notes to unaudited quarterly consolidated financial statements.

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Packaging Corporation of America

Consolidated Balance Sheets

(unaudited, dollars and shares in thousands, except per-share data)

	September 30, 2014			December 31, 2013
ASSETS
Current assets:
Cash and cash equivalents	$	154,323		$	190,960
Accounts receivable, net of allowance for doubtful accounts and customer deductions of $12,118 and $10,567 as of September 30, 2014, and December 31, 2013, respectively	717,947			643,083
Inventories	616,962			594,291
Prepaid expenses and other current assets	76,195			32,101
Federal and state income taxes receivable	—			22,958
Deferred income taxes	32,280			47,616
Total current assets	1,597,707			1,531,009
Property, plant, and equipment, net	2,818,133			2,805,704
Goodwill	541,911			526,789
Intangible assets, net	299,096			310,539
Other long-term assets	73,902			69,738
Total assets	$	5,330,749		$	5,243,779
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt	$	6,500		$	39,000
Capital lease obligations	1,082			1,030
Accounts payable	387,854			357,432
Dividends payable	39,393			39,297
Federal and state income taxes payable	7,176			—
Accrued liabilities	228,758			214,058
Accrued interest	19,272			9,722
Total current liabilities	690,035			660,539
Long-term liabilities:
Long-term debt	2,350,484			2,508,845
Capital lease obligations	23,055			23,874
Deferred income taxes	426,086			434,835
Pension and postretirement benefit plans	204,286			193,548
Other long-term liabilities	84,764			65,318
Total long-term liabilities	3,088,675			3,226,420
Commitments and contingent liabilities
Stockholders' equity:
Common stock, par value $0.01 per share, 300,000 shares authorized, 98,383 and 98,172 shares issued as of September 30, 2014, and December 31, 2013, respectively	984			982
Additional paid in capital	427,844			401,761
Retained earnings	1,184,155			1,019,101
Accumulated other comprehensive loss	(60,944		)	(65,024		)
Total stockholders' equity	1,552,039			1,356,820
Total liabilities and stockholders' equity	$	5,330,749		$	5,243,779

See accompanying condensed notes to unaudited quarterly consolidated financial statements.

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Packaging Corporation of America

Consolidated Statements of Cash Flows

(unaudited, dollars in thousands)

	Nine Months Ended September 30
	2014			2013
Cash Flows from Operating Activities:
Net income	$	294,088		$	213,228
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, and amortization of intangibles and deferred financing costs	296,486			137,412
Share-based compensation expense	11,648			9,956
Deferred income tax provision	17,427			6,137
Alternative energy tax credits	—			76,280
Pension and postretirement benefits expense, net of contributions	19,230			10,600
Other, net	4,187			4,651
Changes in operating assets and liabilities, net of acquisitions:
Increase in assets —
Accounts receivable	(74,970		)	(57,583		)
Inventories	(22,520		)	(4,628		)
Prepaid expenses and other current assets	(27,882		)	(9,196		)
Increase (decrease) in liabilities —
Accounts payable	(12,957		)	46,418
Accrued liabilities	21,810			7,109
Federal and state income taxes payable / receivable	30,173			(20,216		)
Net cash provided by operating activities	556,720			420,168
Cash Flows from Investing Activities:
Additions to property, plant, and equipment	(254,865		)	(130,410		)
Acquisition of business, net of cash acquired	(20,290		)	—
Additions to other long term assets	(11,617		)	(2,459		)
Other	3,188			350
Net cash used for investing activities	(283,584		)	(132,519		)
Cash Flows from Financing Activities:
Repayments of debt and capital lease obligations	(590,641		)	(11,967		)
Proceeds from issuance of debt	398,864			—
Financing costs paid	(3,209		)	(8,220		)
Common stock dividends paid	(118,004		)	(69,883		)
Repurchases of common stock	—			(7,799		)
Proceeds from exercise of stock options	3,739			2,756
Excess tax benefits from stock-based awards	11,796			7,539
Shares withheld to cover employee restricted stock taxes	(12,051		)	(10,873		)
Other	(267		)	—
Net cash used for financing activities	(309,773		)	(98,447		)
Net (decrease) increase in cash and cash equivalents	(36,637		)	189,202
Cash and cash equivalents, beginning of period	190,960			207,393
Cash and cash equivalents, end of period	$	154,323		$	396,595

See accompanying condensed notes to unaudited quarterly consolidated financial statements.

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Condensed Notes to Unaudited Quarterly Consolidated Financial Statements

1.     Nature of Operations and Basis of Presentation

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 October 25, 2013, PCA acquired Boise Inc. ("Boise"). For more information, see Note 3, Acquisitions.

After the acquisition of Boise, we began reporting our business in three 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 16, Segment Information.

In these consolidated financial statements, certain amounts in prior periods' consolidated financial statements have been reclassified to conform with the current period presentation. In accordance with Accounting Standards Codification (“ASC”) 280, "Segment Reporting," we recast segment information for the three and nine months ended September 30, 2013, to conform with the current period presentation. In addition, we reclassified amounts previously disclosed in "Corporate overhead" in the Consolidated Statements of Income for the three and nine months ended September 30, 2013, into "Selling, general, and administrative expenses" given that Corporate and Other is now a separately disclosed segment. With the exception of the change in accounting principle relating to our inventories described below in Note 2, Change in Accounting Principle: Inventories, none of the reclassifications affected our results of operations, financial position, or cash flows.

The consolidated financial statements of PCA as of September 30, 2014, and for the three and nine months ended September 30, 2014 and 2013, are unaudited but include all adjustments (consisting only of normal recurring adjustments) that management considers necessary for a fair presentation of such financial statements. The preparation of the consolidated financial statements involves the use of estimates and accruals. Actual results may vary from those estimates. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with Article 10 of SEC Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete audited financial statements. Operating results for the period ended September 30, 2014, are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. These consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2013, and the updated consolidated financial statements included in our Current Report on Form 8-K filed on May 9, 2014 (referred to as "updated 2013 Financial Statements" throughout this document).

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 for periods after October 25, 2013.

2.     Change in Accounting Principle: Inventories

Effective January 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. Had the Company not made this change in accounting method, "Net income" for the three and nine months ended September 30, 2014, would have been $1.7 millionand $1.5 million, respectively,higher than reported in the Consolidated Statements of Income and "Inventories" at September 30, 2014, would have been $69.3 million lower than reported in the Consolidated Balance Sheets.

4

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. As a result of the retrospective change in accounting principle, opening retained earnings as of January 1, 2013, increased $38.8 million. Certain components of our financial statements affected by the change in valuation methodology as originally reported under the LIFO method and as adjusted for the change to the average cost method were as follows (in thousands, except per share data):

	Three Months Ended   September 30, 2013									Nine Months Ended   September 30, 2013
Consolidated Statements of Income and Comprehensive Income	As Previously Reported (a)			Effect of Change			As Adjusted			As Previously Reported (a)			Effect of Change			As Adjusted
Cost of sales	$	(618,663	)	$	822		$	(617,841	)	$	(1,799,285	)	$	6,503		$	(1,792,782	)
Gross profit	226,777			822			227,599			601,592			6,503			608,095
Income from operations	141,960			822			142,782			352,476			6,503			358,979
Income before taxes	130,110			822			130,932			322,143			6,503			328,646
Provision for income taxes	(45,930		)	(320		)	(46,250		)	(112,885		)	(2,533		)	(115,418		)
Net income	84,180			502			84,682			209,258			3,970			213,228
Comprehensive income	93,400			502			93,902			237,206			3,970			241,176
Net income per common share:
Basic	0.87			0.01			0.88			2.17			0.04			2.21
Diluted	0.86			0.01			0.87			2.15			0.04			2.19

___________

(a) Certain amounts in prior periods' consolidated financial statements have been reclassified to conform with the current period presentation.

	December 31, 2013
Consolidated Balance Sheet	As Previously Reported		Effect of Change			As Adjusted
Inventories	$	522,523	$	71,768		$	594,291
Deferred income tax assets	75,579		(27,963		)	47,616
Retained earnings	975,296		43,805			1,019,101

	Nine Months Ended   September 30, 2013
Consolidated Statement of Cash Flows	As Previously Reported		Effect of Change			As Adjusted
Net income	$	209,258	$	3,970		$	213,228
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income tax provision	3,604		2,533			6,137
Change in inventories	1,875		(6,503		)	(4,628		)

The components of inventories were as follows (dollars in thousands):

	September 30, 2014		December 31, 2013
Raw materials	$	239,673	$	212,027
Work in process	12,739		13,898
Finished goods	195,538		209,972
Supplies and materials	169,012		158,394
Inventories	$	616,962	$	594,291

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3.     Acquisitions

Crockett Packaging Acquisition

On April 28, 2014, we acquired the assets of Crockett Packaging, a corrugated products manufacturer, for $21.2 million, before $0.9 million of working capital adjustments. The assets included a corrugated plant and a sheet plant in Southern California. Sales and total assets of the acquired company are not material to our overall sales and total assets. Operating results of the acquired assets subsequent to April 28, 2014, are included in our Packaging segment's 2014 operating results. We have estimated the allocation of the purchase price to the assets acquired and liabilities assumed based on estimates of the fair value at the date of the acquisition, of which $10.7 million has been allocated to goodwill (which is deductible for tax purposes) and $5.5 million to intangible assets (to be amortized over a weighted average life of approximately ten years), primarily customer relationships, in the Packaging segment. The purchase price allocation continues to be preliminary, as estimates and assumptions are subject to change as more information becomes available.

Boise Acquisition

On October 25, 2013, we acquired 100% of the outstanding stock and voting equity interests of Boise for $2.1 billion including the assumption of debt. In connection with the acquisition, we allocated the purchase price to the assets acquired and liabilities assumed based on estimates of the fair value at the date of the acquisition. See Note 3, Acquisitions, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our updated 2013 Financial Statements. During the nine months ended September 30,2014, we recorded approximately $4.3 million of purchase price adjustments that increased goodwill. These adjustments related primarily to a true-up to the valuation of fixed assets and the associated impact to income tax liabilities. As of September 30,2014, the purchase price allocation continues to be preliminary. The primary areas of the purchase price allocation that are not yet finalized relate to valuation of fixed assets, income taxes, and residual goodwill.

Pro Forma Financial Information

The following pro forma financial information presents the combined results of operations as if Boise had been combined with us on January 1, 2013. The pro forma results are intended for informational purposes only and do not purport to represent what the combined companies' results of operations would actually have been had the transactions in fact occurred on January 1, 2013. They also do not reflect any cost savings, operating synergies, or revenue enhancements that we may achieve or the costs necessary to achieve those cost savings, operating synergies, or revenue enhancements, or costs relating to integration efforts (dollars in millions, except per-share amounts).

	Pro Forma (a)
	Nine Months Ended   September 30, 2013
Net sales	$	4,256
Net income (b)	$	248
Net income per share—diluted (b)	$	2.54

____________

(a) The pro forma financial information presented in the table above has been adjusted to give effect to adjustments that are directly related to the acquisition, factually supportable, and expected to have a continuing impact. These adjustments include, but are not limited to, the application of our accounting policies (including the deferral method of accounting for planned major maintenance activities, which increased pro forma net income $12.5 million for the nine months ended September 30,2013); elimination of intercompany transactions; depreciation and amortization related to fair value adjustments to property, plant, and equipment and intangible assets; interest expense on acquisition-related debt; and $7.5 million of pre-tax acquisition-related costs which primarily consist of advisory, legal, accounting, financing, and other professional or consulting fees.

(b) Included in pro forma net income for the nine months ended September 30,2013, are $16.2 million of pre-tax costs, related primarily to the restructuring of Boise's white paper mill in International Falls, Minnesota, and $15.2 million of incremental depreciation expense related to shortening the estimated useful lives of certain assets, primarily at the white paper mill in International Falls, Minnesota.

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4.     Other Expense, Net

The components of other (income) expense were as follows (in thousands):

	Three Months Ended September 30					Nine Months Ended September 30
	2014		2013			2014		2013
DeRidder restructuring (a)	$	4,270	$	—		$	5,690	$	—
Integration-related and other costs (b)	3,040		—			11,999		—
Class action lawsuit settlement (c)	—		—			17,600		—
Pension curtailment charges (d)	—		3,132			—		10,908
Acquisition-related costs (e)	—		1,479			—		1,479
Asset disposals and write-offs	2,854		3,486			6,912		9,508
Other	2,146		(376		)	1,803		615
Total	$	12,310	$	7,721		$	44,004	$	22,510

___________

(a) Costs relate primarily to the conversion of the Number 3 newsprint machine at our DeRidder, Louisiana, mill to produce lightweight linerboard and corrugating medium, and our exit from the newsprint business in September 2014.

(b) The three and nine months ended September 30, 2014, include Boise acquisition integration-related and other costs.

(c) The nine months ended September 30, 2014, includes $17.6 million of costs for the settlement of the Kleen Products LLC v Packaging Corp. of America et al class action lawsuit. See Note 18, Commitments, Guarantees, Indemnifications and Legal Proceedings, for more information.

(d) The three and nine months ended September 30, 2013, include $3.1 million and $10.9 million, respectively, of non-cash pension curtailment charges related to pension plan changes in which certain hourly corrugated plant and containerboard mill employees will transition from a defined benefit pension plan to a defined contribution (401k) plan.

(e) The three and nine months ended September 30, 2013, both include $1.5 million of acquisition-related costs, primarily for professional fees related to transaction-advisory services and expenses related to financing the acquisition of Boise.

5.     Earnings Per Share

The following table sets forth the computation of basic and diluted income per common share for the periods presented (dollars and shares in thousands, except per share data).

	Three Months Ended September 30					Nine Months Ended September 30
	2014			2013		2014			2013
Numerator:
Net income	$	104,445		$	84,682	$	294,088		$	213,228
Less: distributed and undistributed earnings allocated to participating securities	(1,451		)	—		(4,381		)	—
Net income attributable to common shareholders	$	102,994		$	84,682	$	289,707		$	213,228
Denominator:
Weighted average basic common shares outstanding	97,165			96,758		96,954			96,536
Effect of dilutive securities	57			839		53			976
Diluted common shares outstanding	97,222			97,597		97,007			97,512
Basic income per common share	$	1.06		$	0.88	$	2.99		$	2.21
Diluted income per common share	$	1.06		$	0.87	$	2.99		$	2.19

During the nine months ended September 30, 2014 and 2013, all outstanding options to purchase shares were included in the computation of diluted common shares outstanding. On June 29, 2014, all remaining options to purchase shares expired.

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6.     Income Taxes

For the three and nine months ended September 30, 2014, we recorded $60.9 million and $170.1 million of income tax expense and had an effective tax rate of 36.8% and 36.6%, respectively. For the three and nine months ended September 30, 2013, we recorded $46.2 million and $115.4 million of income tax expense and had an effective tax rate of 35.3% and 35.1%, respectively. During the three and nine months ended September 30, 2014 and 2013, the primary reasons for the difference from the federal statutory income tax rate of 35.0% were theeffect of state and local income taxes and the domestic manufacturers’ deduction.

During the three and nine months ended September 30, 2014, there were no significant changes to our uncertain tax positions. For more information, see Note 5, Income Taxes, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our updated 2013 Financial Statements.

During the nine months ended September 30,2014 and 2013, cash paid for taxes, net of refunds received, was $110.8 million and $45.7 million, respectively.

7.    Property, Plant, and Equipment

Property, plant, and equipment consist of the following (dollars in thousands):

	September 30, 2014			December 31, 2013
Land and land improvements	$	138,486		$	140,592
Buildings	645,173			628,948
Machinery and equipment	4,374,819			4,246,294
Construction in progress	253,150			168,808
Other	53,177			48,058
Property, plant, and equipment, at cost	5,464,805			5,232,700
Less accumulated depreciation	(2,646,672		)	(2,426,996		)
Property, plant, and equipment, net	$	2,818,133		$	2,805,704

Depreciation expense for the three months ended September 30, 2014 and 2013, was $95.1 million and $42.4 million, respectively. During the nine months ended September 30, 2014 and 2013, depreciation expense was $264.1 million and $125.2 million, respectively. The increase in depreciation expense relates primarily to the acquisition of Boise in fourth quarter 2013, as well as accelerated depreciation related to shortening the useful lives of our newsprint-related assets at the DeRidder, Louisiana, mill. During the three and nine months ended September 30, 2014, we recognized $18.2 million and $35.4 million, respectively, of incremental depreciation expense related to shortening the useful lives of our newsprint-related assets at the DeRidder, Louisiana, mill.

At September 30, 2014, purchases of property, plant, and equipment included in accounts payable was $49.6 million.

8.     Goodwill and Intangible Assets

Goodwill

Goodwill represents the excess of the cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. At September 30, 2014, and December 31, 2013, we had $487.9 million and $472.9 million of goodwill recorded in our Packaging segment, respectively, and $54.0 million and$53.9 million of goodwill recorded in our Paper segment, respectively, on our Consolidated Balance Sheets.

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Changes in the carrying amount of our goodwill were as follows (dollars in thousands):

	Goodwill
Balance at December 31, 2013	$	526,789
Acquisitions (a)	10,734
Adjustments related to purchase accounting (b)	4,388
Balance at September 30, 2014	$	541,911

___________

(a) In April 2014, we acquired the assets of Crockett Packaging, a corrugated products manufacturer, for $21.2 million, before $0.9 million of working capital adjustments, and recorded $10.7 million of goodwill in our Packaging segment.

(b) Adjustments relate primarily to the Boise acquisition, see Note 3, Acquisitions, for more information.

We have historically performed our annual goodwill impairment testing as of December 31. During the third quarter of 2014, we changed the annual goodwill impairment testing date from December 31 to October 1. We believe this change in measurement date, which represents a change in method of applying an accounting principle, is preferable. While remaining in the fourth quarter, the measurement date will lessen resource constraints in connection with the year-end close and financial reporting process by allowing us additional time to complete our annual impairment testing in advance of our year-end reporting. The change in accounting principle does not delay, accelerate, or avoid an impairment charge. We have determined that it is not practical to objectively determine projected cash flows and related valuation estimates that would have been used as of October 1 for periods prior to October 1, 2014, without the use of hindsight. As such, we prospectively applied the change in our annual goodwill impairment test date as of the first day of the fourth quarter of 2014.

Intangible Assets

Intangible assets are primarily comprised of customer relationships and trademarks and trade names.

The weighted average remaining useful life, gross carrying amount, and accumulated amortization of our intangible assets were as follows (dollars in thousands):

	September 30, 2014					December 31, 2013
	Weighted Average Remaining Useful Life (in Years)	Gross  Carrying Amount		Accumulated Amortization		Weighted Average Remaining Useful Life (in Years)	Gross  Carrying Amount		Accumulated Amortization
Customer relationships	14.5	$	311,461	$	31,759	15.4	$	306,361	$	16,509
Trademarks and trade names	13.6	21,770		2,455		14.7	21,370		794
Other	2.4	220		141		3.0	220		109
Total intangible assets (excluding goodwill)	14.4	$	333,451	$	34,355	15.4	$	327,951	$	17,412

Amortization expense for the three months ended September 30, 2014 and 2013, was $5.7 millionand $0.8 million, respectively. During the nine months ended September 30, 2014 and 2013, amortization expense was $16.9 million and $2.5 million, respectively. The increase in amortization expense relates primarily to the acquisition of Boise in fourth quarter 2013.

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9.    Accrued Liabilities

The components of accrued liabilities were as follows (in thousands):

	September 30, 2014		December 31, 2013
Compensation and benefits	$	136,996	$	130,455
Franchise, property, sales and use taxes	27,942		20,232
Medical insurance and workers’ compensation	26,185		26,399
Customer volume discounts and rebates	12,695		11,436
Environmental liabilities and asset retirement obligations	6,829		7,812
Severance	2,052		8,172
Legal contingencies	1,283		1,000
Other	14,776		8,552
Total	$	228,758	$	214,058

10.    Debt

Our long-term debt and interest rates on that debt were as follows (dollars in thousands):

	September 30, 2014				December 31, 2013
	Amount		Interest Rate		Amount		Interest Rate
Revolving Credit Facility, due October 2018	$	—	—	%	$	—	—	%
Five-Year Term Loan, due October 2018	65,000		1.53		650,000		1.54
Seven-Year Term Loan, due October 2020	645,125		1.78		650,000		1.79
6.50% Senior Notes, net of discounts of $22 and $26 as of September 30, 2014 and December 31, 2013, respectively, due March 2018	149,978		6.50		149,974		6.50
3.90% Senior Notes, net of discounts of $275 and $302 as of September 30, 2014 and December 31, 2013, respectively, due June 2022	399,725		3.90		399,698		3.90
4.50% Senior Notes, net of discount of $1,714 and $1,827 as of September 30, 2014 and December 31, 2013, respectively, due November 2023	698,286		4.50		698,173		4.50
3.65% Senior Notes, net of discount of $1,130 as of September 30, 2014, due September 2024	398,870		3.65		—		—
Total	2,356,984		3.56		2,547,845		3.08
Less current portion	6,500		1.78		39,000		1.59
Total long-term debt	$	2,350,484	3.56	%	$	2,508,845	3.10	%

On September 5, 2014, we issued $400.0 million of 3.65% fixed-rate senior notes due September 15, 2024, through a registered public offering. We used the proceeds of this offering and other cash from operations to repay $589.9 million of debt during the nine months ended September 30, 2014. In connection with the $400.0 million debt issuance, we paid $3.2 million of deferred financing costs, which will be amortized to interest expense using the effective interest method over the term of the debt.

For the nine months ended September 30,2014 and 2013, cash payments for interest were $50.0 million and $21.0 million, respectively.

Annual principal maturities for debt, excluding unamortized debt discount, as of September 30, 2014 were: $1.6 million for the remainder of 2014, $6.5 million for 2015, 2016, and 2017; $221.5 million for 2018; $6.5 million for 2019; and $2.1 billion for 2020 and thereafter.

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Included in interest expense, net, are amortization of treasury lock settlements and amortization of financing costs. For both the three months ended September 30, 2014 and 2013, amortization of treasury lock settlements was $1.4 million, and for both the nine months ended September 30, 2014 and 2013, amortization of treasury lock settlements was $4.2 million. During the three months ended September 30, 2014 and 2013, amortization of financing costs was $2.0 million and $2.9 million, respectively, and during the nine months ended September 30, 2014 and 2013, amortization of financing costs was $2.9 million and $3.3 million, respectively. In connection with our debt repayments during the three months ended September 30, 2014, we expensed $1.5 million of deferred financing costs.

At September 30, 2014, we have $1,646.9 million of fixed-rate senior notes and $710.1 million of variable-rate term loans outstanding. At September 30, 2014, the fair value of our fixed-rate debt was estimated to be $1,713.1 million. The difference between the book value and fair value is due to the difference between the period-end market interest rate and the stated rate of our fixed-rate debt. We estimated the fair value of our fixed-rate debt using quoted market prices (Level 2 inputs) within the fair value hierarchy, which is further defined in Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our updated 2013 Financial Statements.

11.     Employee Benefit Plans and Other Postretirement Benefits

The components of net periodic benefit cost for our pension plans were as follows (dollars in thousands):

	Pension Plans
	Three Months Ended September 30						Nine Months Ended September 30
	2014			2013			2014			2013
Service cost	$	5,828		$	5,825		$	17,428		$	18,322
Interest cost	11,507			4,269			34,400			12,250
Expected return on plan assets	(12,657		)	(3,796		)	(38,008		)	(11,297		)
Net amortization of unrecognized amounts
Prior service cost	1,641			163			4,922			3,284
Actuarial loss	155			2,217			465			5,221
Curtailment loss (a)	—			3,132			—			10,908
Net periodic benefit cost	$	6,474		$	11,810		$	19,207		$	38,688

___________

(a) In June 2013, the United Steelworkers (“USW”) ratified a master labor agreement with PCA under which we froze certain USW-represented corrugated plant employees pension accruals under PCA’s hourly pension plan. Additionally, in September 2013, the USW ratified a master labor agreement with PCA under which we froze certain USW-represented containerboard mill employees pension accruals under PCA’s hourly pension plan. Following the pension freezes, affected USW-represented employees will transition to a defined contribution 401k plan. We recorded a $3.1 million and $10.9 million pre-tax pension curtailment charge related to the unrecognized prior service costs of employees impacted by the pension freezes during the three and nine months ended September 30, 2013, respectively. We also remeasured the hourly pension plan benefit obligation using current fair values of plan assets and current assumptions, resulting in a decrease in the benefit obligation of $21.9 million with a corresponding decrease in accumulated other comprehensive income (loss) of $13.4 million and deferred taxes of $8.5 million.

PCA makes pension plan contributions that are sufficient to fund its actuarially determined costs, generally equal to the minimum amounts required by the Employee Retirement Income Security Act (ERISA). During the nine months ended September 30, 2014, we contributed $0.4 million to our pension plans, which exceeds our 2014 minimum required contributions, calculated under the pension provisions of the Highway and Transportation Funding Act passed in August 2014. We do not expect to make any additional contributions during the fourth quarter of 2014.

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The components of net periodic benefit cost for our postretirement plans were as follows (dollars in thousands):

	Postretirement Plans
	Three Months Ended September 30						Nine Months Ended September 30
	2014			2013			2014			2013
Service cost	$	392		$	515		$	1,177		$	1,545
Interest cost	311			311			933			934
Net amortization of unrecognized amounts
Prior service benefit	(57		)	(106		)	(170		)	(319		)
Actuarial loss	26			134			77			401
Net periodic benefit cost	$	672		$	854		$	2,017		$	2,561

12.     Share-based Compensation

The Company has a long-term equity incentive plan, which allows for grants of stock options, stock appreciation rights, restricted stock, and performance awards to directors, officers, and employees, as well as others who engage in services for PCA. The plan, as amended, terminates May 1, 2023, and authorizes 10.6 million shares of common stock for grant over the life of the plan. As of September 30, 2014, 1.9 million shares were available for future issuance under the plan. Forfeitures are added back to the pool of shares of common stock available to be granted at a future date.

The following table presents restricted stock and performance unit award activity for the nine months ended September 30, 2014:

	Restricted Stock				Performance Units
	Shares		Weighted Average Grant- Date Fair Value		Shares	Weighted Average Grant- Date Fair Value
Outstanding at December 31, 2013	1,463,694		$	31.48	70,600	$	47.83
Granted	229,489		70.24		56,889	71.19
Vested	(475,050	)	23.86		—	—
Forfeitures	(1,165	)	62.74		—	—
Outstanding at September 30, 2014	1,216,968		$	41.73	127,489	$	58.25

Compensation Expense

Our share-based compensation expense is recorded in "Selling, general, and administrative expenses". Compensation expense for share-based awards recognized in the Consolidated Statements of Income, net of forfeitures was as follows (dollars in thousands):

	Three Months Ended September 30						Nine Months Ended September 30
	2014			2013			2014			2013
Restricted stock	$	(3,453	)	$	(2,933	)	$	(10,501	)	$	(9,691	)
Performance units	(594		)	(249		)	(1,147		)	(265		)
Impact on income before income taxes	(4,047		)	(3,182		)	(11,648		)	(9,956		)
Income tax benefit	1,572			1,237			4,530			3,868
Impact on net income	$	(2,475	)	$	(1,945	)	$	(7,118	)	$	(6,088	)

The fair value of restricted stock and performance units is determined based on the closing price of the Company’s common stock on the grant date. As PCA’s Board of Directors has the ability to accelerate vesting of share-based awards upon an employee’s retirement, the Company accelerates the recognition of compensation expense for certain employees approaching normal retirement age.

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The unrecognized compensation expense for all share-based awards at September 30, 2014, was as follows (dollars in thousands):

	September 30, 2014
	Unrecognized Compensation Expense		Remaining Weighted Average Recognition Period (in years)
Restricted stock	$	30,543	2.7
Performance units	6,025		3.4
Total unrecognized share-based compensation expense	$	36,568	2.8

13.     Stockholders' Equity

Dividends

During the nine months ended September 30, 2014, we paid $118.0 million of dividends to shareholders. On August 28, 2014, PCA's Board of Directors approved a regular quarterly cash dividend $0.40 per share, which was paid on October 15, 2014, to shareholders of record as of September 15, 2014. The dividend payment was $39.4 million.

Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) (“AOCI”) by component follows (dollars in thousands). Amounts in parentheses indicate losses.

	Foreign Currency Translation Adjustments			Unrealized Loss On Treasury Locks, Net				Unrealized Loss on Foreign Exchange Contracts				Unfunded Employee Benefit Obligations				Total
Balance at December 31, 2013	$	(136	)	$	(28,191	)		$	(371	)		$	(36,326	)		$	(65,024	)
Other comprehensive income (loss) before reclassifications, net of tax	(1,656		)	—				—				—				(1,656		)
Amounts reclassified from AOCI, net of tax	—			2,584			(a)	15			(b)	3,137			(c)	5,736
Net current-period other comprehensive income (loss)	(1,656		)	2,584				15				3,137				4,080
Balance at September 30, 2014	$	(1,792	)	$	(25,607	)		$	(356	)		$	(33,189	)		$	(60,944	)

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The following table presents information about reclassifications out of AOCI (dollars in thousands). Amounts in parentheses indicate expenses in the Consolidated Statements of Income.

	Amounts Reclassified from AOCI
	Three Months Ended September 30						Nine Months Ended September 30						Affected Line Item in the Statement Where Net Income is Presented
Details about AOCI Components	2014			2013			2014			2013
Unrealized loss on treasury locks, net	$	(1,414	)	$	(1,414	)	$	(4,242	)	$	(4,242	)	See (a) below
	549			549			1,658			1,648			Tax benefit
	$	(865	)	$	(865	)	$	(2,584	)	$	(2,594	)	Net of tax
Unrealized loss on foreign exchange contracts	$	(9	)	$	(8	)	$	(25	)	$	(25	)	See (b) below
	4			3			10			10			Tax benefit
	$	(5	)	$	(5	)	$	(15	)	$	(15	)	Net of tax
Unfunded employee benefit obligations
Amortization of prior service costs	$	(1,584	)	$	(57	)	$	(4,752	)	$	(2,965	)	See (c) below
Amortization of actuarial losses	(181		)	(2,351		)	(542		)	(5,622		)	See (c) below
Curtailment loss	—			(3,132		)	—			(10,908		)	See (c) below
	(1,765		)	(5,540		)	(5,294		)	(19,495		)	Total before tax
	685			2,153			2,157			7,574			Tax benefit
	$	(1,080	)	$	(3,387	)	$	(3,137	)	$	(11,921	)	Net of tax

____________

(a) This AOCI component is included in interest expense, net. Amount relates to the amortization of the effective portion of treasury lock derivative instruments recorded in AOCI. The net amount of settlement gains or losses on derivative instruments included in AOCI to be amortized over the next 12 months is a net loss of $5.7 million ($3.5 million after tax). For a discussion of treasury lock derivative instrument activity, see Note 11, Derivative Instruments and Hedging Activities, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our updated 2013 Financial Statements.

(b) This AOCI component is included in cost of sales.

(c) These AOCI components are included in the computation of net pension and postretirement benefit costs. See Note 11, Employee Benefit Plans and Other Postretirement Benefits, for additional information.

14.     Concentrations of Risk

Our Paper segment has had a long-standing commercial and contractual relationship with OfficeMax Incorporated (OfficeMax), and OfficeMax is our largest customer in the Paper segment. Following a merger in late 2013, OfficeMax is now a wholly-owned subsidiary of Office Depot, Inc. This relationship exposes us to a significant concentration of business and financial risk. Our sales to Office Depot (including OfficeMax) represented 9% of our total company sales revenue, for both the three and nine months ended September 30, 2014, and 44%of our Paper segment sales revenue for both those periods, respectively. At September 30, 2014, and December 31, 2013, we had $64.6 millionand $39.2 million of accounts receivable due from Office Depot (including OfficeMax), which represents 9% and 6% of our total company receivables, respectively.

We cannot predict how the merger between OfficeMax and Office Depot will affect our business. Significant increases in paper purchases would intensify the concentration of risk. Significant reductions in paper purchases would cause our paper business to expand its customer base and could potentially decrease its profitability if new customer sales required either a decrease in pricing and/or an increase in cost of sales. Any significant deterioration in the financial condition of the post-merger entity affecting the ability to pay or causing a significant change in the willingness to continue to purchase our products could harm our business and results of operations.

Labor

At September 30, 2014, we had approximately 14,000employees and approximately 50%of these employees worked pursuant to collective bargaining agreements. Approximately 75% of our hourly employees are represented by unions. The majority of our unionized employees are represented by the United Steel Workers (USW), the International Brotherhood of

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Teamsters (IBT), the International Association of Machinists (IAM), and the Association of Western Pulp and Paper Workers (AWPPW). Approximately 22%of our employees work pursuant to collective bargaining agreements that will expire within the next twelve months.

15.     Transactions With Related Parties

Louisiana Timber Procurement Company, L.L.C. (LTP) is a variable-interest entity that is 50% owned by PCA and 50% owned by Boise Cascade Company (Boise Cascade). LTP procures sawtimber, pulpwood, residual chips, and other residual wood fiber to meet the wood and fiber requirements of PCA and Boise Cascade in Louisiana. PCA is the primary beneficiary of LTP, and has the power to direct the activities that most significantly affect the economic performance of LTP. Therefore, we consolidate 100% of LTP in our financial statements in our Corporate and Other segment. The carrying amounts of LTP's assets and liabilities (which relate primarily to noninventory working capital items) on our Consolidated Balance Sheets were both $6.4 million at September 30, 2014, and $5.0 million at December 31, 2013. During the three and nine months ended September 30, 2014, we recorded $21.9 million and $56.9 million, respectively, of LTP sales to Boise Cascade in "Net Sales" in the Consolidated Statements of Income and approximately the same amount of expenses in "Cost of Sales". The sales were at prices designed to approximate market prices.

During the three and nine months ended September 30, 2014, fiber purchases from related parties were $7.0 million and $21.3 million, respectively. Most of these purchases related to chip and log purchases by LTP from Boise Cascade's wood products business. These purchases are recorded in "Cost of Sales" in the Consolidated Statements of Income.

16.     Segment Information

Prior to the acquisition of Boise on October 25, 2013, we manufactured and sold packaging products and reported our results in one reportable segment. In connection with the acquisition, we expanded our packaging business and entered the paper business as the third largest producer of white papers in North America in terms of production capacity. As a result, we began managing our business in three reportable segments: Packaging, Paper, and Corporate and Other. These segments represent distinct businesses that are managed separately because of differing products and services. Each of these businesses requires distinct operating and marketing strategies. There are no differences in our basis of segmentation or in our basis of measurement of segment profit or loss from those disclosed in Note 19, Segment Information, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our updated 2013 Financial Statements.

Each segment's profits and losses are measured on operating profits before interest expense and interest income. After the acquisition of Boise, expenses that were historically included in "Corporate overhead" on our Consolidated Statements of Income, were reclassified to "Selling, general, and administrative expenses" to conform with the current year presentation. In addition, after increasing our product offerings to include both packaging and paper products after the Boise acquisition, we began allocating the amounts associated with running those businesses, previously included in "Corporate overhead", to our segments. For many of these allocated expenses, the related assets and liabilities remain in the Corporate and Other segment.

Effective January 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. The Company has applied this change in method of inventory costing retrospectively to all prior periods presented herein in accordance with U.S. generally accepted accounting principles relating to accounting changes. See Note 2, Change in Accounting Principle: Inventories, for additional information.

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An analysis of operations by reportable segment were as follows (dollars in millions):

	Sales, net								Operating Income (Loss)
Three Months Ended September 30, 2014 (a)	Trade		Inter- segment			Total
Packaging	$	1,174.2	$	1.5		$	1,175.7		$	164.7		(b)
Paper	312.5		—			312.5			43.0			(c)
Corporate and Other	32.2		37.0			69.2			(19.3		)	(d)
Intersegment eliminations	—		(38.5		)	(38.5		)	—
	$	1,518.9	$	—		$	1,518.9		188.4
Interest expense, net									(23.1		)	(e)
Income before taxes									$	165.3

	Sales, net						Operating Income (Loss)
Three Months Ended September 30, 2013	Trade		Inter- segment		Total
Packaging	$	845.4	$	—	$	845.4	$	154.9		(f)
Corporate and Other	—		—		—		(12.1		)	(g)
	$	845.4	$	—	$	845.4	142.8
Interest expense, net							(11.9		)	(h)
Income before taxes							$	130.9

	Sales, net								Operating Income (Loss)
Nine Months Ended September 30, 2014 (a)	Trade		Inter- segment			Total
Packaging	$	3,413.8	$	4.5		$	3,418.3		$	501.8		(b)
Paper	917.0		—			917.0			104.3			(c)
Corporate and Other	87.9		112.8			200.7			(76.6		)	(d)
Intersegment eliminations	—		(117.3		)	(117.3		)	—
	$	4,418.7	$	—		$	4,418.7		529.5
Interest expense, net									(65.3		)	(e)
Income before taxes									$	464.2

	Sales, net						Operating Income (Loss)
Nine Months Ended September 30, 2013	Trade		Inter- segment		Total
Packaging	$	2,400.9	$	—	$	2,400.9	$	395.1		(f)
Corporate and Other	—		—		—		(36.1		)	(g)
	$	2,400.9	$	—	$	2,400.9	359.0
Interest expense, net							(30.4		)	(h)
Income before taxes							$	328.6

____________

(a) On October 25, 2013, we acquired Boise. The 2014 results include Boise for the full period.

(b) Includes costs related primarily to the conversion of the Number 3 newsprint machine at our DeRidder, Louisiana, mill to produce lightweight linerboard and corrugating medium, and our exit from the newsprint business in September 2014. The three and nine months ended September 30, 2014, include $26.0 million and $47.8 million, respectively, of restructuring charges, primarily accelerated depreciation. The three and nine months ended September 30, 2014, includes $1.0 million and $5.4 million of Boise acquisition integration-related and other costs recorded in "Other expense, net".

(c) Includes $0.4 million of income, net of expenses, for the nine months ended September 30, 2014, of integration related and other costs recorded in "Other expense, net".

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(d) Includes $2.0 millionand $7.0 million, for the three and nine months ended September 30, 2014, of Boise acquisition integration-related and other costs recorded in "Other expense, net".

The nine months ended September 30, 2014, includes $17.6 million of costs for the settlement of the Kleen Products LLC v Packaging Corp. of America et al class action lawsuit. See Note 18, Commitments, Guarantees, Indemnifications and Legal Proceedings, for more information. These costs are recorded in "Other expense, net".

(e) Includes $1.5 million of expense related to the write-off of deferred financing costs in connection with the debt refinancing discussed in Note 10, Debt.

(f) Includes $3.1 million and $10.9 million, for the three and nine months ended September 30, 2013, respectively, of non-cash pension curtailment charges related to pension plan changes in which certain hourly corrugated plant and containerboard mill employees will transition from a defined benefit pension plan to a defined contribution (401k) plan.

(g) Includes $1.5 million of Boise acquisition-related costs primarily for professional fees related to transaction-advisory services.

(h) Includes $2.7 million of acquisition-related costs primarily related to financing the acquisition of Boise.

17.     New and Recently Adopted Accounting Standards

In August 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-15, Presentation of Financial Statements (Topic 205): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This ASU provides guidance that will explicitly require management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. The guidance is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. We do not believe the adoption of this update will affect our financial position and results of operations.

In May 2014, the FASB issued ASU 2014-09: Revenue from Contracts with Customers (Topic 606). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry-specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows from contracts with customers. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, and early adoption is prohibited. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We are currently assessing the impact the adoption of ASU 2014-09 may have on our financial position and results of operations.

In April 2014, theFASBissuedASU2014-08,Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU defines a discontinued operation as a disposal of a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. The standard also requires additional disclosures about discontinued operations. We adopted the provisions of this guidance in third quarter 2014, and it did not have a material effect on our financial position and results of operations.

In February 2013, the FASB issued ASU 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date. This ASU requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, as the sum of (a) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (b) any additional amount the reporting entity expects to pay on behalf of its co-obligors. This ASU also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. We adopted the provisions of this guidance January 1, 2014, and it did not have a material effect on our financial position and results of operations.

In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This ASU requires that liabilities related to unrecognized tax benefits offset deferred tax assets for net operating loss carryforwards, a similar tax loss, or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. In situations in which carryforwards cannot be used or the deferred tax asset is not intended to be used for such purpose, the unrecognized tax benefit should be recorded as a liability and should not offset deferred tax assets. We adopted the provisions of this guidance on December 31, 2013, and it did not have a significant effect on our financial position or results of operations.

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There were no other accounting standards recently issued that had or are expected to have a material impact on our financial position or results of operations.

18.     Commitments, Guarantees, Indemnifications and Legal Proceedings

We have financial commitments and obligations that arise in the ordinary course of our business. These include long-term debt, capital commitments, lease obligations, and purchase commitments for goods and services, which are discussed in Note 8, Debt, and Note 20, Commitments, Guarantees, Indemnifications, and Legal Proceedings, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our updated 2013 Financial Statements. Except as disclosed in Note 10, Debt, and in Legal Proceedings below, at September 30, 2014, there have been no other significant changes to commitments outside the normal course of business.

Guarantees and Indemnifications

We provide guarantees, indemnifications, and other assurances to third parties in the normal course of our business. These include tort indemnifications, environmental assurances, and representations and warranties in commercial agreements. At September 30, 2014, we are not aware of any material liabilities arising from any guarantee, indemnification, or financial assurance we have provided. If we determined such a liability was probable and subject to reasonable determination, we would accrue for it at that time.

Legal proceedings

During 2010, PCA and eight other U.S. and Canadian containerboard producers were named as defendants in five purported class action lawsuits filed in the United States District Court for the Northern District of Illinois, alleging violations of the Sherman Act. The lawsuits were consolidated in a single complaint under the caption Kleen Products LLC v Packaging Corp. of America et al. The consolidated complaint alleges that the defendants conspired to limit the supply of containerboard, and that the purpose and effect of the alleged conspiracy was to artificially increase prices of containerboard products during the period of August 2005 to October 2010 (the time of filing of the complaint). The complaint was filed as a class action suit on behalf of all purchasers of containerboard products during such period. On April 4, 2014, we reached an agreement with the representatives of the class to settle this lawsuit for $17.6 million. These costs were recorded in "Other expense, net" in our Consolidated Income Statement for the nine months ended September 30, 2014. On May 6, 2014, the court preliminarily approved the settlement. Notice of the proposed settlement was mailed to potential class members and $17.6 million was paid to the settlement fund escrow account in June 2014. The court granted final approval to the settlement on September 4, 2014.

We are also a party to other legal actions arising in the ordinary course of our business. These legal actions include commercial liability claims, premises liability claims, and employment-related claims, among others. As of the date of this filing, we believe it is not reasonably possible that any of the legal actions against us will, either individually or in the aggregate, have a material adverse effect on our financial condition, results of operations, or cash flows.

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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This management's discussion and analysis includes statements regarding our expectations with respect to our future performance, liquidity, and capital resources. Such statements, along with any other nonhistorical statements in the discussion, are forward-looking. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in our 2013 Annual Report on Form 10-K, as well as those factors listed in other documents we file with the Securities and Exchange Commission (SEC). We do not assume any obligation to update any forward-looking statement. Our actual results may differ materially from those contained in or implied by any of the forward-looking statements in this Form 10-Q.

Overview

PCA is the fourth largest producer of containerboard in the United States and the third largest producer of white papers in North America, based on production capacity. We operate eight mills and 100 corrugated products manufacturing plants. Our mills are comprised of five containerboard mills and three paper mills. Our corrugated products manufacturing plants produce a wide variety of corrugated packaging products, including conventional shipping containers used to protect and transport manufactured goods, multi-color boxes and displays with strong visual appeal that help to merchandise the packaged product in retail locations, and honeycomb protective packaging. In addition, we are a large producer of packaging for meat, fresh fruit and vegetables, processed food, beverages, and other industrial and consumer products. We also manufacture and sell white papers, including both commodity and specialty papers, which may have custom or specialized features such as colors, coatings, high brightness, and recycled content. We operate primarily in the United States and have some converting operations in Europe, Mexico, and Canada.

This Item 2 is intended to supplement, and should be read in conjunction with, “Management’s Discussion and Analysis of Financial Condition and Results of Operations" included with the updated 2013 Financial Statements.

Executive Summary

In third quarter 2014, sales grew 80% to $1,518.9 million, compared with $845.4 million in third quarter 2013. We reported $104.4 million of net income, or $1.06 per diluted share during third quarter 2014, compared with $84.7 million, or $0.87 per diluted share during the same period in 2013. Excluding the special items discussed below, we recorded $123.9 million of net income, or $1.26 per diluted share during third quarter 2014, compared with $89.4 million, or $0.92 per share in 2013. Sales grew 84% in the first three quarters of 2014 to $4,418.7 million, and we reported $294.1 million of net income, or $2.99 per diluted share, compared with $213.2 million of net income, or $2.19 per diluted share in the first nine months of 2013. Excluding special items, we recorded $344.2 million of net income, or $3.50 per diluted share during the first three quarters of 2014, compared with $222.9 million, or $2.29 per diluted share in the first nine months of 2013.

During the three and nine months ended September 30, 2014, our packaging segment generated $164.7 million and $501.8 million of operating income, respectively, and $262.3 million and $765.3 million of earnings before interest, taxes, depreciation, amortization and depletion (EBITDA) excluding special items, respectively. Our paper segment, during the three and nine months ended September 30, 2014, generated $43.0 million and $104.3 million of operating income, respectively, and $55.9 million and $141.1 million of EBITDA excluding special items, respectively.

Compared with the three and nine months ended September 30, 2013, our results were positively affected by the Boise acquisition, which closed in October 2013. The acquisition was meaningfully accretive to our earnings before special items due to earnings generated by Boise as well as the synergies generated from the integration of its packaging business and operational improvements in the white papers business, which have resulted in lower costs and higher margins.

On October 17, 2014, we completed the No. 3 newsprint machine conversion at the DeRidder, Louisiana, mill to produce containerboard. In addition to providing our containerboard mill system with needed capacity, we expect to benefit from grade optimization and freight savings with the operation of the D3 machine. 

The three and nine months ended September 30, 2014, included $30.5 million ($21.6 million non-cash and $8.9 million cash) and $78.9 million ($43.6 million non-cash and $35.3 million cash) of pre-tax special items, respectively. The three months ended September 30, 2014, included $26.0 million of expenses related to the DeRidder mill restructuring and $4.5 million of Boise acquisition integration-related, debt-refinancing, and other costs. The nine months ended September 30, 2014,

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included $47.8 million of expenses related to the DeRidder mill restructuring, $17.6 million of expenses related to the settlement of a class action lawsuit, and $13.5 million of integration-related and other costs.

Earnings per diluted share, excluding special items, during the three and nine months ended September 30, 2014 and 2013, were as follows.

	Three Months Ended September 30				Nine Months Ended September 30
	2014 (a)		2013		2014 (a)		2013
Earnings per diluted share, as reported	$	1.06	$	0.87	$	2.99	$	2.19
Special items (b):
DeRidder restructuring	0.17		—		0.31		—
Integration-related and other costs	0.03		—		0.09		—
Class action lawsuit settlement	—		—		0.11		—
Pension curtailment charges	—		0.02		—		0.07
Acquisition-related financing costs	—		0.02		—		0.02
Acquisition-related costs	—		0.01		—		0.01
Total special items	0.20		0.05		0.51		0.10
Earnings per diluted share, excluding special items	$	1.26	$	0.92	$	3.50	$	2.29

____________

(a) On October 25, 2013, we acquired Boise Inc. (Boise). The 2014 consolidated results include Boise for the full period.

(b) See "Reconciliations of Non-GAAP Financial Measures to Reported Amounts" in this Management's Discussion and Analysis of Financial Condition and Results of Operations for more information on the special items.

Management excludes special items and uses non-GAAP measures to focus on PCA’s on-going operations and assess its operating performance and believes that it is useful to investors because it enables them to perform meaningful comparisons of past and present operating results. A reconciliation of diluted EPS to diluted EPS excluding special items is included above and the reconciliations of other non-GAAP measures used in this Management's Discussion and Analysis of Financial Condition and Results of Operations, to the most comparable measure reported in accordance with GAAP, are included in Item 2 under “Reconciliations of Non-GAAP Financial Measures to Reported Amounts.” Any analysis of non-GAAP financial measures should be done in conjunction with results presented in accordance with GAAP. The non-GAAP measures are not intended to be substitutes for GAAP financial measures and should not be used as such.

Industry and Business Conditions

Trade publications reported that industry-wide corrugated products shipments increased 1.7% during third quarter 2014, compared with the same quarter in 2013. Reported industry containerboard production was 0.9% higher than third quarter 2013, with containerboard export shipments up 13.4%. In third quarter 2014, our containerboard production was 858,000 tons, up 12,000 tons compared with the second quarter, due in part to an additional production day. In third quarter 2014, our corrugated products shipments, including Boise, increased 33% over third quarter of last year and 31% per workday with one more workday in third quarter 2014. Excluding Boise shipments, corrugated products shipments increased 6.2% in total, or 4.5% per workday. The acquisition of Crockett Packaging in April 2014, contributed about 1.5% to the increase in shipments. With strong internal containerboard demand needed to supply our box plants, we reduced our outside sales of containerboard, both domestic and export, by 19,000 tons compared with last year's third quarter and we purchased 47,000 tons of containerboard from the outside market in third quarter 2014. Our domestic containerboard pricing remained steady throughout the quarter, while our export pricing decreased slightly.

The market for communication papers competes heavily with electronic data transmission and document storage alternatives. Increasing shifts to these alternatives have reduced usage of traditional print media and communication papers. In 2014, we elected to exit some business which lowered our office paper shipments. Our office paper shipments decreased 5% or 11,000 tons in third quarter 2014, compared with Boise's shipments in third quarter of last year. Our printing and converting papers and pressure sensitive papers shipments were down about 22,000 tons compared with third quarter 2013, as a result of closing two paper machines at our International Falls, Minnesota, mill in fourth quarter 2013. In third quarter 2014, our white paper mills ran well, producing 296,000 tons. Our paper inventories were up about 6,000 tons compared with the end of second quarter 2014. Our white paper prices increased in third quarter 2014 compared with third quarter 2013 due to previously

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announced price increases for office papers, printing and converting paper, and pressure-sensitive papers and were flat with the second quarter.

Outlook

Looking ahead to the fourth quarter, with the completed machine conversion in DeRidder, Lousiana, we expect higher containerboard mill production, which will allow us to reduce our outside purchases of containerboard. Corrugated products shipments are expected to be lower than in the third quarter with three less shipping days and some seasonal slowdown in demand that usually occurs during the holiday season. We also expect seasonally lower white paper shipments. Amortization of annual outage repair costs will be higher than the third quarter, and we expect seasonal increases in fuel and transportation costs. Considering these items, we expect fourth quarter 2014 earnings, excluding special items, to be lower than our third quarter earnings, excluding special items.

Results of Operations

Three Months Ended September 30, 2014, compared with Three Months Ended September 30, 2013

The historical results of operations of PCA for the three months ended September 30, 2014 and 2013, are set forth below (dollars in millions):

	Three Months Ended September 30
	2014 (a)			2013			Change
Packaging	$	1,175.7		$	845.4		$	330.3
Paper	312.5			—			312.5
Corporate and other and eliminations	30.7			—			30.7
Net sales	$	1,518.9		$	845.4		$	673.5
Packaging	$	164.7		$	154.9		$	9.8
Paper	43.0			—			43.0
Corporate and other and eliminations	(19.3		)	(12.1		)	(7.2		)
Income from operations	$	188.4		$	142.8		$	45.6
Interest expense, net	(23.1		)	(11.9		)	(11.2		)
Income before taxes	165.3			130.9			34.4
Income tax provision	(60.9		)	(46.2		)	(14.7		)
Net income	$	104.4		$	84.7		$	19.7
Net income excluding special items (b)	$	123.9		$	89.4		$	34.5
Earnings, before interest, taxes, depreciation, and amortization (EBITDA)	$	292.2		$	186.9		$	105.3
EBITDA excluding special items (b)	$	303.0		$	191.5		$	111.5

____________

(a) On October 25, 2013, we acquired Boise Inc. (Boise). The 2014 consolidated results include Boise for the full period.

(b) See "Reconciliations of Non-GAAP Financial Measures to Reported Amounts" included in this Item 2 for a reconciliation of non-GAAP measures to the most comparable GAAP measure.

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Net Sales

Net sales increased $673.5 million, or 79.7%, to $1,518.9 million during the three months ended September 30, 2014, compared with $845.4 million during the same period in 2013. The increase in third quarter 2014 related to a full quarter of Boise operations ($628.9 million) and increased sales in PCA's historical operations ($44.6 million).

Packaging. Sales increased $330.3 million, or 39.1%, to $1,175.7 million, compared with $845.4 million in third quarter 2013. A full quarter of Boise operations contributed $285.7 million of sales and the remaining $44.6 million increase related to higher sales volumes ($36.0 million) and higher sales price and mix ($8.6 million). In third quarter 2014, our corrugated products shipments increased 33.4% over the third quarter last year, or 31.4% per workday with one additional workday in third quarter 2014. Excluding Boise shipments, corrugated products shipments were up 6.2% compared with last year's third quarter, and increased 4.5% per workday. Our containerboard mills produced 858,000 tons, compared with 671,000 tons in third quarter 2013, prior to the acquisition of Boise.

Paper. Our paper segment sales include the sales for the white paper mills we acquired from Boise. Sales during the three months ended September 30, 2014, were $312.5 million. During this period, sales volumes of white paper were 287,000 tons.

Gross Profit

Gross profit increased $92.7 million, or 40.7%, during the three months ended September 30, 2014, compared with the same period in 2013. In third quarter 2014, gross profit included $21.8 million of special items, most of which related to incremental depreciation expense related to changing the estimated useful lives of newsprint-related assets in connection with our exit from the newsprint business in September 2014. Excluding special items, gross profit increased $114.5 million primarily related to a full quarter of Boise operations ($119.8 million). Gross profit from PCA's historical packaging operations decreased $5.4 million due to increased labor and fringe benefits, depreciation, freight, energy, and wood fiber, partially offset by higher sales price, volume, and mix. During the three months ended September 30, 2014, our gross profit as a percentage of net sales decreasedto 21.1% of net sales, compared with 26.9% in the same period in 2013, due primarily to the addition of the white papers business whose products generally have lower margins than the products sold in the packaging business and also due to the DeRidder restructuring charges described above.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses increased $42.5 million, or 55.2%, during the three months ended September 30, 2014, compared with the same period in 2013. Excluding selling, general, and administrative expenses associated with the acquired Boise businesses of $39.9 million, selling, general, and administrative expenses increased $2.6 million, primarily due to increased salary and related fringe benefits expense ($2.5 million).

Other Expense, Net

Other expense, net, during the three months ended September 30, 2014, was $12.3 million, compared with $7.7 million during the three months ended September 30, 2013. Third quarter 2014 included DeRidder restructuring charges ($4.3 million) and integration-related and other costs ($3.0 million), while third quarter 2013 included a $3.1 million pension curtailment charge and $1.5 million of Boise acquisition-related costs. We discuss these items in more detail in Note 4, Other Expense, Net of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in "Part I, Item1. Financial Statements" of this Form 10-Q.

Income from Operations

Income from operations increased $45.6 million, or 31.9%, during the three months ended September 30, 2014, compared with the same period in 2013. Third quarter2014 included $29.0 million of expense from special items, including cash charges of $8.9 million and non-cash charges of $20.1 million. Third quarter 2014 special items included $26.0 million of charges related to restructuring the DeRidder mill we acquired from Boise and $3.0 million of integration-related and other costs. Third quarter2013 income from operations included a $3.1 million pension curtailment charge and $1.5 million of Boise acquisition-related costs. Excluding these special items, income from operations increased $70.0 million during the three months ended September 30, 2014, compared with the same period in 2013. The increase in earnings, excluding special items, was driven by a full quarter of Boise operations, which contributed $77.8 million, and a $7.8 million decrease in PCA's historical earnings.

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Packaging. Segment income from operations increased $9.8 million, or 6.3%, to $164.7 million, compared with $154.9 million during the three months ended September 30, 2013. Excluding special items, which included $26.0 million of DeRidder restructuring charges and $1.0 million of integration-related and other costs in third quarter 2014 and $3.1 million of pension curtailment charges in third quarter 2013, segment income increased $33.7 million to $191.7 million from $158.0 million the previous year. The increase in third quarter 2014 related to a full quarter of Boise operations ($39.1 million) and slightly lower income in PCA's pre-acquisition operations, which related to increased costs for labor and fringe benefits ($9.0 million), depreciation ($4.0 million), freight ($3.0 million), energy ($2.6 million), and wood fiber ($1.4 million), partially offset by higher sales price and mix ($8.6 million), and increased sales volumes ($6.0 million).

Paper. Segment income from operations was $43.0 million during the three months ended September 30, 2014.

Interest Expense, Net, and Income Taxes

Interest expense, net, was $23.1 million during the three months ended September 30, 2014, compared with $11.9 million during the three months ended September 30, 2013. The increase in interest expense primarily related to higher average outstanding borrowings following the acquisition of Boise. In addition, in connection with our debt repayments during the three months ended September 30, 2014, we expensed $1.5 million of deferred financing costs.

During the three months ended September 30, 2014, we recorded $60.9 million of income tax expense, compared with $46.2 million of expense during the three months ended September 30, 2013. The effective tax rate for the three months ended September 30, 2014 and 2013, was 36.8% and 35.3%, respectively.

Nine Months Ended September 30, 2014, compared with Nine Months Ended September 30, 2013

The historical results of operations of PCA for the nine months ended September 30, 2014 and 2013, are set forth below (dollars in millions):

	Nine Months Ended September 30
	2014 (a)			2013			Change
Packaging	$	3,418.3		$	2,400.9		$	1,017.4
Paper	917.0			—			917.0
Corporate and other and eliminations	83.4			—			83.4
Net sales	$	4,418.7		$	2,400.9		$	2,017.8
Packaging	$	501.8		$	395.1		$	106.7
Paper	104.3			—			104.3
Corporate and other and eliminations	(76.6		)	(36.1		)	(40.5		)
Income from operations	$	529.5		$	359.0		$	170.5
Interest expense, net	(65.3		)	(30.4		)	(34.9		)
Income before taxes	464.2			328.6			135.6
Income tax provision	(170.1		)	(115.4		)	(54.7		)
Net income	$	294.1		$	213.2		$	80.9
Net income excluding special items (b)	$	344.2		$	222.9		$	121.3
Earnings, before interest, taxes, depreciation, and amortization (EBITDA)	$	818.3		$	488.8		$	329.5
EBITDA excluding special items (b)	$	860.3		$	501.2		$	359.1

____________

(a) On October 25, 2013, we acquired Boise Inc. (Boise). The 2014 consolidated results include Boise for the full period.

(b) See "Reconciliations of Non-GAAP Financial Measures to Reported Amounts" included in this Item 2 for a reconciliation of non-GAAP measures to the most comparable GAAP measure.

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Net Sales

Net sales increased $2,017.8 million, or 84.0%, to $4,418.7 million during the nine months ended September 30, 2014, compared with $2,400.9 million during the same period in 2013. The increase in the first three quarters of 2014 related to a full period of Boise operations ($1,839.5 million) and increased sales in PCA's historical operations ($178.3 million), which resulted from higher sales volumes and higher sales price and mix.

Packaging. Sales increased $1,017.4 million, or 42.4%, to $3,418.3 million, compared with $2,400.9 million in the first three quarters of 2013. A full period of Boise operations contributed $839.1 million of sales and the remaining increase related to higher sales volumes($108.1 million) and higher sales price and mix ($70.2 million) in PCA's historical operations. In the first three quarters of 2014, our corrugated products shipments increased 31.2% over the first three quarters of last year. Excluding Boise shipments, corrugated products shipments for the nine months ended September 30, 2014, were up 4.5% over the comparable period last year. Our containerboard mills produced 2,525,000 tons, or 1,967,000 tons excluding Boise, compared with 1,945,000 tons in 2013.

Paper. Our paper segment sales include the sales for the white paper mills we acquired from Boise. Sales during the nine months ended September 30, 2014, were $917.0 million. During this period, sales volumes of white paper were 847,000 tons.

Gross Profit

Gross profit increased $324.5 million, or 53.4%, during the nine months ended September 30, 2014, compared with the same period in 2013. In the first nine months of 2014, gross profit included $42.1 million of special items, most of which related to incremental depreciation related to changing the estimated useful lives of newsprint-related assets in connection with our exit from the newsprint business in September 2014. Excluding special items, gross profit increased $366.6 million, due primarily to a full nine months of Boise operations ($335.4 million). Gross profit from PCA's historical packaging operations increased $31.2 million due to higher sales price, volume, and mix, partially offset by increases in labor, depreciation, energy, freight, wood fiber, and chemicals. During the nine months ended September 30, 2014, our gross profit as a percentage of net sales decreasedto 21.1% of net sales, compared with 25.3% in the same period in 2013, due primarily to the addition of the white papers business whose products generally have lower margins than the products sold in the packaging business and also due to the DeRidder restructuring charges described above.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses increased $132.4 million, or 58.4%, during the nine months ended September 30, 2014, compared with the same period in 2013. Excluding selling, general, and administrative expenses associated with the acquired Boise businesses of $120.8 million, selling, general, and administrative expenses increased $11.6 million, primarily due to increased salary and related fringe benefit expense ($9.7 million) and other increases, which were individually insignificant.

Other Expense, Net

Other expense, net, during the nine months ended September 30, 2014, was $44.0 million, compared with $22.5 million during the nine months ended September 30, 2013. During the first nine months of 2014 we recorded costs for the settlement of the Kleen Products LLC v Packaging Corp. of America et al class action lawsuit ($17.6 million), integration-related and other costs ($12.0 million), and DeRidder restructuring charges ($5.7 million). During the nine months ended September 30, 2013, we recorded a $10.9 million pension curtailment charge and $1.5 million of Boise acquisition-related costs. We discuss these items in more detail in Note 4, Other Expense, Net, and Note 18, Commitments, Guarantees, Indemnifications and Legal Proceedings of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in "Part I, Item1. Financial Statements" of this Form 10-Q.

Income from Operations

Income from operations increased $170.5 million, or 47.5%, during the nine months ended September 30, 2014, compared with the same period in 2013. The first three quarters of 2014 included $77.4 million of expense from special items, including cash charges of $35.3 million and non-cash charges of $42.1 million. During the first nine months of 2014, special items included $47.8 million of charges related to restructuring the DeRidder mill we acquired from Boise, $17.6 million of costs incurred for the settlement of the Kleen Products LLC v Packaging Corp. of America et al class action lawsuit, and $12.0

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million of integration-related costs. The first nine months of 2013 included $12.4 million of expense related to special items. Excluding special items, income from operations increased $235.5 million during the nine months ended September 30, 2014, compared with the same period in 2013. The increase in earnings, excluding special items, was driven by a full nine months of Boise operations, which contributed $213.0 million, and a $22.5 million improvement in PCA's historical earnings.

Packaging. Segment income from operations increased $106.7 million, or 27.0%, to $501.8 million, compared with $395.1 million during the nine months ended September 30, 2013. Excluding $47.8 million of special items related to the DeRidder restructuring and $5.4 million of integration-related and other costs during the first nine months of 2014, and a $10.9 million pension curtailment charge in the first nine months of 2013, segment income increased $149.0 million. The increase in the the first three quarters of 2014 related to a full period of Boise operations ($122.4 million, excluding the special items discuss above) and increased income in PCA's pre-acquisition operations, which related to higher sales price and mix ($70.2 million), higher sales volumes ($12.8 million), partially offset by increased costs for depreciation ($12.1 million), labor ($12.1 million), energy ($8.7 million), freight ($7.9 million), wood fiber ($5.1 million), chemicals ($4.4 million), repairs ($2.8 million), and incentives ($2.4 million).

Paper. Segment income from operations was $104.3 million during the nine months ended September 30, 2014. During this period, sales volumes of white paper were 847,000 tons.

Interest Expense, Net, and Income Taxes

Interest expense, net, was $65.3 million during the nine months ended September 30, 2014, compared with $30.4 million during the nine months ended September 30, 2013. The increase in interest expense primarily related to higher average outstanding borrowings following the acquisition of Boise. In addition, in connection with our debt repayments during the nine months ended September 30, 2014, we expensed $1.5 million of deferred financing costs.

During the nine months ended September 30, 2014, we recorded $170.1 million of income tax expense, compared with $115.4 million of expense during the nine months ended September 30, 2013. The effective tax rate for the nine months ended September 30, 2014 and 2013, was 36.6% and 35.1%, respectively.

Liquidity and Capital Resources

Sources and Uses of Cash

Our primary sources of liquidity are net cash provided by operating activities and available borrowing capacity under our revolving credit facility. At September 30, 2014, we had $154.3 million of cash and $325.0 millionof unused borrowing capacity under the revolving credit facility, net of letters of credit. Currently, our primary uses of cash are for operations, capital expenditures, debt service (including voluntary payments of debt), and declared common stock dividends, which we expect to be able to fund from these sources. 

We believe that net cash generated from operating activities, cash on hand, available borrowings under our revolving credit facility, and available capital through access to capital markets will be adequate to meet our liquidity and capital requirements, including payments of any declared common stock dividends, for the foreseeable future. As our debt or credit facilities become due, we will need to repay, extend, or replace such facilities. Our ability to do so will be subject to future economic conditions and financial, business, and other factors, many of which are beyond our control.

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Below is a summary table of our cash flows, followed by a discussion of our sources and uses of cash through operating activities, investing activities, and financing activities (dollars in millions):

	Nine Months Ended September 30
	2014			2013			Change
Net cash provided by (used for):
Operating activities	$	556.7		$	420.2		$	136.5
Investing activities	(283.6		)	(132.5		)	(151.1		)
Financing activities	(309.8		)	(98.4		)	(211.4		)
Net increase (decrease) in cash and cash equivalents	$	(36.7	)	$	189.3		$	(226.0	)

Our foreign operations are not material to our financial position or results of operations. At September 30, 2014, we had $10.3 million of cash and short-term investments held in operations outside of the United States. We indefinitely reinvest our earnings in operations outside the United States; however, if foreign earnings were repatriated at a future date, we would need to accrue and pay taxes. It is not practical 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.

Operating Activities

During the nine months ended September 30, 2014, net cash provided by operating activities was $556.7 million, compared with $420.2 million in the same period in 2013, an increaseof $136.5 million. Cash provided by operating activities before changes in operating assets and liabilities increased $184.8 million in the first three quarters of 2014, compared with the first three quarters of 2013, primarily due to the increase in income from operations discussed above under "Results of Operations." Cash used for operating assets and liabilities totaled $86.3 million during the nine months ended September 30, 2014,compared with $38.1 million during the same period in 2013. The higher cash requirements for operating assets and liabilities were driven primarily by (a) higher accounts receivable due to increased sales, (b) higher levels of containerboard inventory needed to support our packaging business as a result of rail and truck service and availability issues, (c) higher deferred maintenance costs at our white paper mills related to planned annual mill outages, which are capitalized as assets and amortized over the remainder of the year, and (d) a decrease in accounts payable in the first three quarters of 2014 due to the timing of payments, compared with an increase in accounts payable in the first three quarters of 2013, partially offset by (1) an increase in accrued liabilities due primarily to higher accrued interest on our long-term debt and higher vacation accruals, and (2) an increase in federal and state income taxes payable in the first three quarters of 2014. Cash requirements for operating activities are subject to PCA’s operating needs and the timing of collection of receivables and payments of payables and expenses.

Investing Activities

Net cash used for investing activities during the nine months ended September 30, 2014, increased $151.1 million, to $283.6 million, compared with $132.5 million during the same period in 2013. We spent $254.9 millionfor capital investments during the nine months ended September 30, 2014, compared with $130.4 million during the same period in 2013. The increase in capital spending was due primarily to having a full nine months of Boise capital investments, including $79.5 million of investments related to the DeRidder conversion project discussed under "Executive Summary." On April 28, 2014, we acquired the assets of Crockett Packaging, a corrugated products manufacturer, for $21.2 million, before $0.9 million of working capital adjustments. The assets included a corrugated plant and a sheet plant in Southern California.

We expect capital investments to total about $410 million in 2014, including capital required to achieve Boise acquisition synergies, Boiler MACT spending, and the DeRidder conversion project. These expenditures could increase or decrease as a result of a number of factors, including our financial results, future economic conditions, and our regulatory compliance requirements. We currently estimate capital expenditures to comply with Boiler MACT regulations (as discussed below under "Environmental Matters") in 2014 of up to $25 million and we expect other environmental capital expenditures of about $1 million in 2014. Our estimated environmental expenditures could vary significantly depending upon the enactment of new environmental laws and regulations, including those related to greenhouse gas emissions and industrial boilers. For additional information, see "Environmental Matters" in this Management's Discussion and Analysis of Financial Condition and Results of Operations.

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Financing Activities

During the nine months ended September 30, 2014, we used $309.8 million for financing activities, compared with $98.4 million during the same period in 2013. The increase in cash used for financing activities primarily relates to an increase in debt principal payments, net of debt issued. In the first nine months of 2014, we made $590.6 million of principal payments on long-term debt and capital leases and received $398.9 million of proceeds (net of debt discount) from long-term debt issuances, for a net reduction in debt of $191.7 million.To reduce the earnings risk of potential interest rate increases on variable interest rate debt, on September 5, 2014, we issued $400 million of ten-year notes with a fixed interest rate of 3.65% and used the proceeds to pay down a portion of our five-year, variable-rate term loan. In the first nine months of 2013, we made principal payments on long-term debt and capital leases of $12.0 million. We also had $48.1 million of increased dividend payments during the nine months ended September 30, 2014, compared with the same period in 2013. We only paid $69.9 million of dividends during the first nine months of 2013 as we accelerated payment of the dividend that would have been paid in January 2013 to December 2012. During the nine months ended September 30, 2014, we withheld 168,464 shares from vesting equity awards to cover employee tax liabilities of $12.1 million, compared with $10.9 million in first nine months of 2013. Proceeds from the exercise of stock options and tax benefits from share-based awards contributed $15.5 million in the first three quarters of 2014, compared with $10.3 million in the same period in 2013. Cash payments of financing costs decreased $5.0 million in the first nine months of 2014, compared with 2013.

For more information about our debt, see Note 8, Debt, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our updated 2013 Financial Statements.

Contractual Obligations

There have been no material changes to the contractual obligations table disclosed in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our updated 2013 Financial Statements, except as disclosed in Note 10, Debt, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in "Part I, Item 1. Financial Statements" of this Form 10-Q.

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Reconciliations of Non-GAAP Financial Measures to Reported Amounts

Income from operations excluding special items, net income excluding special items, EBITDA, and EBITDA excluding special items are non-GAAP financial measures. Management excludes special items and uses non-GAAP measures to focus on on-going operations and assess its operating performance and believes that it is useful to investors because it enables them to perform meaningful comparisons of past and present operating results. Additionally, EBITDA and EBITDA excluding special items measures are presented because they provide a means to evaluate the performance of our segments and our company on an ongoing basis using the same measures that are used by our management and because these measures are frequently used by investors and other interested parties in the evaluation of companies and the performance of their segments. Any analysis of non-GAAP financial measures should be done in conjunction with results presented in accordance with GAAP. The non-GAAP measures are not intended to be substitutes for GAAP financial measures and should not be used as such. Reconciliations of the non-GAAP measures to the most comparable measure reported in accordance with GAAP for the three and nine months ended September 30, 2014 and 2013, follow (in millions, except per share amounts):

	Three Months Ended September 30
	2014 (a)				2013
	Income from Operations		Net  Income		Income from Operations		Net  Income
As reported in accordance with GAAP	$	188.4	$	104.4	$	142.8	$	84.7
Special items:
DeRidder restructuring (b)	26.0		16.6		—		—
Integration-related and other costs (c)(d)	3.0		2.9		—		—
Pension curtailment charges (e)	—		—		3.1		2.0
Acquisition-related financing costs (f)	—		—		—		1.7
Acquisition-related costs (f)	—		—		1.5		1.0
Total special items	29.0		19.5		4.6		4.7
Excluding special items	$	217.4	$	123.9	$	147.4	$	89.4

	Nine Months Ended September 30
	2014 (a)				2013
	Income from Operations		Net  Income		Income from Operations		Net  Income
As reported in accordance with GAAP	$	529.5	$	294.1	$	359.0	$	213.2
Special items:
DeRidder restructuring (b)	47.8		30.4		—		—
Integration-related and other costs (c)(d)	12.0		8.5		—		—
Class action lawsuit settlement (e)	17.6		11.2		—		—
Pension curtailment charges (f)	—		—		10.9		7.0
Acquisition-related financing costs (g)	—		—		—		1.7
Acquisition-related costs (g)	—		—		1.5		1.0
Total special items	77.4		50.1		12.4		9.7
Excluding special items	$	606.9	$	344.2	$	371.4	$	222.9

________

(a) On October 25, 2013, we acquired Boise Inc. (Boise). The 2014 consolidated results include Boise for the full period.

(b) Amounts relate primarily to the conversion of the Number 3 newsprint machine at our DeRidder, Louisiana, mill to produce lightweight linerboard and corrugating medium, and our exit from the newsprint business in September 2014. Most of the costs relate to accelerating the depreciation on the Number 3 newsprint machine.

(c) The three and nine months ended September 30, 2014, include $3.0 million and $12.0 million, respectively, of Boise acquisition integration-related and other costs recorded in "Other expense, net".

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(d) The three and nine months ended September 30, 2014, both include $1.5 million of expense related to the write-off of deferred financing costs in connection with the debt refinancing discussed in Note 10, Debt. These costs are recorded in "Interest expense, net".

(e) The nine months ended September 30, 2014, includes $17.6 million of costs for the settlement of the Kleen Products LLC v Packaging Corp. of America et al class action lawsuit. See Note 18, Commitments, Guarantees, Indemnifications and Legal Proceedings, for more information. These costs are recorded in "Other expense, net".

(f) The three and nine months ended September 30, 2013, both include non-cash pension curtailment charges related to pension plan changes in which certain hourly corrugated plant and containerboard mill employees will transition from a defined benefit pension plan to a defined contribution (401k) plan. These costs are recorded in "Other expense, net".

(g) The three and nine months ended September 30, 2013, both include acquisition-related costs, primarily for professional fees related to transaction-advisory services and expenses related to financing the acquisition of Boise.

The following table reconciles net income to EBITDA and EBITDA excluding special items for the periods indicated (dollars in millions):

	Three Months Ended September 30				Nine Months Ended September 30
	2014		2013		2014		2013
Net income	$	104.4	$	84.7	$	294.1	$	213.2
Interest expense, net	23.1		11.9		65.3		30.4
Income tax provision	60.9		46.2		170.1		115.4
Depreciation, amortization, and depletion	103.8		44.1		288.8		129.8
EBITDA	$	292.2	$	186.9	$	818.3	$	488.8
Special items:
DeRidder restructuring	$	7.8	$	—	$	12.4	$	—
Integration-related and other costs	3.0		—		12.0		—
Class action lawsuit settlement	—		—		17.6		—
Pension curtailment charges	—		3.1		—		10.9
Acquisition-related costs	—		1.5		—		1.5
EBITDA excluding special items	$	303.0	$	191.5	$	860.3	$	501.2

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The following table reconciles segment income (loss) to EBITDA and EBITDA excluding special items:

	Three Months Ended September 30						Nine Months Ended September 30
	2014			2013			2014			2013
Packaging
Segment income	$	164.7		$	154.9		$	501.8		$	395.1
Depreciation, amortization, and depletion	88.8			43.7			245.7			128.7
EBITDA	253.5			198.6			747.5			523.8
DeRidder restructuring	7.8			—			12.4			—
Integration-related and other costs	1.0			—			5.4			—
Pension curtailment charges	—			3.1			—			10.9
EBITDA excluding special items	$	262.3		$	201.7		$	765.3		$	534.7
Paper
Segment income	$	43.0		$	—		$	104.3		$	—
Depreciation, amortization, and depletion	12.9			—			37.2			—
EBITDA	55.9			—			141.5			—
Integration-related and other costs	—			—			(0.4		)	—
EBITDA excluding special items	$	55.9		$	—		$	141.1		$	—
Corporate and Other
Segment loss	$	(19.3	)	$	(12.1	)	$	(76.6	)	$	(36.1	)
Depreciation, amortization, and depletion	2.1			0.4			5.9			1.1
EBITDA	(17.2		)	(11.7		)	(70.7		)	(35.0		)
Integration-related and other costs	2.0			—			7.0			—
Class action lawsuit settlement	—			—			17.6			—
Acquisition-related costs	—			1.5			—			1.5
EBITDA excluding special items	$	(15.2	)	$	(10.2	)	$	(46.1	)	$	(33.5	)
EBITDA	$	292.2		$	186.9		$	818.3		$	488.8
EBITDA excluding special items	$	303.0		$	191.5		$	860.3		$	501.2

Market Risk and Risk Management Policies

PCA is exposed to the impact of interest rate changes and changes in the market value of its financial instruments. We periodically enter into derivatives to minimize these risks, but not for trading purposes. At September 30, 2014, we had no derivative instruments outstanding. For a discussion of derivatives and hedging activities, see Note 11, Derivative Instruments and Hedging Activities, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our updated 2013 Financial Statements.

The interest rates on approximately 70%of PCA’s debt are fixed. A one percent increase in interest rates related to variable-rate debt would have resulted in an increase in interest expense and a corresponding decrease in income before taxes of $7.1 million annually.

Off-Balance-Sheet Activities

The Company does not have any off-balance sheet arrangements as of September 30, 2014.

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Environmental Matters

There have been no material changes to the disclosure set forth in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Environmental Matters” filed with our updated 2013 Financial Statements.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, PCA evaluates its estimates, including those related to business combinations, goodwill and intangible assets, pensions and other postretirement benefits, environmental liabilities, income taxes, and long-lived asset impairment, among others. PCA bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

PCA has included in its updated 2013 Financial Statements, a discussion of its critical accounting policies and estimates which require management's most difficult, subjective, or complex judgments used in the preparation of its consolidated financial statements. PCA has not had any changes to these critical accounting estimates during the first nine months of 2014.

New and Recently Adopted Accounting Standards

For a listing of our new and recently adopted accounting standards, see Note 17, New and Recently Adopted Accounting Standards, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in "Part I, Item 1. Financial Statements" of this Form 10-Q.

Forward-Looking Statements

Some of the statements in this Quarterly Report on Form 10-Q, and in particular, statements found in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, that are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are often identified by the words “will,” “should,” “anticipate,” “believe,” “expect,” “intend,” “estimate,” “hope,” or similar expressions. These statements reflect management’s current views with respect to future events and are subject to risks and uncertainties. There are important factors that could cause actual results to differ materially from those in forward-looking statements, many of which are beyond our control. These factors, risks and uncertainties include the following:

• the impact of general economic conditions;

• the impact of the Boise acquisition and risks and uncertainties relating to the integration of Boise’s business into our business;

• containerboard, corrugated products, and white paper, general industry conditions, including competition, product demand and product pricing;

• fluctuations in wood fiber and recycled fiber costs;

• fluctuations in purchased energy costs;

• the possibility of unplanned outages or interruptions at our principal facilities; and

• legislative or regulatory actions or requirements, particularly concerning environmental or tax matters.

Our actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements, and accordingly, we can give no assurances that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do occur, what impact they will have on our results of operations or financial condition. Given these uncertainties, investors are cautioned not to place undue reliance on these forward-looking statements. We expressly disclaim any obligation to publicly revise any forward-looking statements that have been made to

31

reflect the occurrence of events after the date hereof. For a discussion of other factors, risks and uncertainties that may affect our business, see Item 1A. Risk Factors included in our Annual Report on Form 10-K for the year ended December 31, 2013.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For a discussion of market risks related to PCA, see Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Market Risk and Risk Management Policies” in this Quarterly Report on Form 10-Q.

Item 4. CONTROLS AND PROCEDURES

PCA maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934) that are designed to provide reasonable assurance that information required to be disclosed in PCA’s filings under the Securities Exchange Act is recorded, processed, summarized and reported within the periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to PCA’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Prior to filing this report, PCA completed an evaluation under the supervision and with the participation of PCA’s management, including PCA’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of PCA’s disclosure controls and procedures as of September 30, 2014. The evaluation of PCA’s disclosure controls and procedures included a review of the controls’ objectives and design, PCA’s implementation of the controls, and the effect of the controls on the information generated for use in this report. Based on this evaluation, PCA’s Chief Executive Officer and Chief Financial Officer concluded that PCA’s disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2014.

Changes in Internal Control Over Financial Reporting

On October 25, 2013, PCA acquired Boise Inc. ("Boise"). PCA is in the process of integrating Boise into its operations. PCA is analyzing, evaluating, and where necessary, implementing changes in controls and procedures relating to the Boise business as such integration proceeds. As a result, this process may result in additions or changes to PCA's internal control over financial reporting. Except as it relates to the acquisition of Boise, during the quarter ended September 30, 2014, there were no changes in internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, PCA’s internal control over financial reporting.

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PART II

OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

The disclosure set forth under the caption "Legal Proceedings" in Note 18, Commitments, Guarantees, Indemnifications and Legal Proceedings, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in "Part I, Item 1. Financial Statements" of this Form 10-Q is incorporated herein by reference.

Item 1A. RISK FACTORS

There have been no material changes to the risk factors disclosed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2013.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table presents information related to our repurchases of common stock made under our plan announced on December 14, 2011, and shares withheld to cover taxes on vesting of equity awards, during the three months ended September 30, 2014:

Issuer Purchases of Equity Securities
Period	Total Number of Shares Purchased (a)		Average Price Paid Per Share		Total Number of Shares  Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
July 1-31, 2014	2,607		$	71.49	—	$	98,086
August 1-31, 2014	1,529		68.73		—	98,086
September 1-30, 2014	—		—		—	98,086
Total	4,136	(a)	$	70.47	—	$	98,086

 ____________

(a) 4,136 shares were withheld from employees to cover income and payroll taxes on equity awards that vested during the period.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. OTHER INFORMATION

None.

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Item 6. EXHIBITS

Exhibit Number	Description
4.1	Officers’ Certificate, dated September 5, 2014, pursuant to Section 301 of the Indenture, dated July 21, 2003, by and between Packaging Corporation of America and U.S. Bank National Association (Incorporated herein by reference to Exhibit 4.1 to PCA’s Current Report on Form 8-K filed September 5, 2014, File No. 1-15399).
4.2	3.650% Senior Notes due 2024 (Incorporated herein by reference to Exhibit 4.2 to PCA’s Current Report on Form 8-K filed September 5, 2014, File No. 1-15399).
18	Letter of Independent Registered Public Accounting Firm regarding Change in Accounting Principle; Goodwill. †
31.1	Certification of Chief Executive Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. †
31.2	Certification of Chief Financial Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. †
32	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. §1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. †
101	The following financial information from Packaging Corporation of America’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2014 and 2013, (ii) Consolidated Balance Sheets at September 30, 2014 and December 31, 2013, (iii) Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013, and (iv) the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements. †

____________

† Filed herewith.

34

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Packaging Corporation of America

/s/    MARK W. KOWLZAN

Mark K. Kowlzan

Chief Executive Officer

/s/    RICHARD B. WEST

Richard B. West

Senior Vice President and Chief Financial Officer

Date: November 7, 2014

35

EX-18

Exhibit 18

November 7, 2014

Packaging Corporation of America

Lake Forest, Illinois

Ladies and Gentlemen:

We have been furnished with a copy of the quarterly report on Form 10-Q of Packaging Corporation of America (the Company) for the three and nine months ended September 30, 2014, and have read the Company’s statements contained in Note 8, Goodwill and Intangible Assets to the condensed consolidated financial statements included therein. As stated in Note 8, the Company changed the date of its annual goodwill impairment assessment from December 31 to October 1. The Company states that the newly adopted accounting principle is preferable because it will lessen resource constraints in connection with the year-end close and financial reporting process by allowing the Company additional time to complete its annual impairment testing in advance of year-end reporting. In accordance with your request, we have reviewed and discussed with Company officials the circumstances and business judgment and planning upon which the decision to make this change in the method of accounting was based.

We have not audited any financial statements of the Company as of any date or for any period subsequent to December 31, 2013, nor have we audited the information set forth in the aforementioned Note 8, Goodwill and Intangible Assetsto the condensed consolidated financial statements; accordingly, we do not express an opinion concerning the factual information contained therein.

With regard to the aforementioned accounting change, authoritative criteria have not been established for evaluating the preferability of one acceptable method of accounting over another acceptable method. However, for purposes of the Company’s compliance with the requirements of the Securities and Exchange Commission, we are furnishing this letter.

Based on our review and discussion, with reliance on management’s business judgment and planning, we concur that the newly adopted method of accounting is preferable in the Company’s circumstances.

Very truly yours,

/s/ KPMG LLP

EX-31.1

Exhibit 31.1

CEO CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Mark W. Kowlzan, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of Packaging Corporation of America (PCA);

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of PCA as of, and for, the periods presented in this report;

(4) PCA’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for PCA and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to PCA, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of PCA’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in PCA’s internal control over financial reporting that occurred during PCA’s most recent fiscal quarter (PCA’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, PCA’s internal control over financial reporting; and

(5) PCA’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to PCA’s auditors and the Audit Committee of PCA’s Board of Directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect PCA’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in PCA’s internal control over financial reporting.

/s/    MARK W. KOWLZAN

Mark W. Kowlzan

Chief Executive Officer

Date: November 7, 2014

EX-31.2

Exhibit 31.2

CFO CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Richard B. West, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of Packaging Corporation of America (PCA);

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of PCA as of, and for, the periods presented in this report;

(4) PCA’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for PCA and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to PCA, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of PCA’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in PCA’s internal control over financial reporting that occurred during PCA’s most recent fiscal quarter (PCA’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, PCA’s internal control over financial reporting; and

(5) PCA’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to PCA’s auditors and the Audit Committee of PCA’s Board of Directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect PCA’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in PCA’s internal control over financial reporting.

/s/    RICHARD B. WEST

Richard B. West

Senior Vice President and Chief Financial Officer

Date: November 7, 2014

EX-32

Exhibit 32

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND

CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 _______________________________________

I, Mark W. Kowlzan, Chief Executive Officer of Packaging Corporation of America (the “Company”), certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Quarterly Report of the Company on Form 10-Q for the period ended September 30, 2014 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in such Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/    MARK W. KOWLZAN

Mark W. Kowlzan

Chief Executive Officer

Date: November 7, 2014

I, Richard B. West, Chief Financial Officer of Packaging Corporation of America (the “Company”), certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Quarterly Report of the Company on Form 10-Q for the period ended September 30, 2014 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in such Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/    RICHARD B. WEST

Richard B. West

Senior Vice President and Chief Financial Officer

Date: November 7, 2014

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Nature of Operations and Basis of Presentation - Additional Information (Details)	9 Months Ended	10 Months Ended
	Sep. 30, 2014	Oct. 23, 2013
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of reportable segments	3	1

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Share-based Compensation - Additional Information (Details) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
Share-based Compensation [Abstract]
Long-term equity incentive plan, termination date	May 1, 2023
Number of shares authorized under plan	10.6
Number of shares available for future issuance under share-based plan	1.9

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Goodwill and Intangible Assets Goodwill (Details) (USD $)	9 Months Ended						0 Months Ended	9 Months Ended
	Sep. 30, 2014		Sep. 30, 2014 Packaging	Dec. 31, 2013 Packaging	Sep. 30, 2014 Paper	Dec. 31, 2013 Paper	Apr. 28, 2014 Crockett Packaging Packaging	Sep. 30, 2014 Crockett Packaging Packaging
Goodwill [Line Items]
Goodwill	$ 541,911,000		$ 487,900,000	$ 472,900,000	$ 54,000,000	$ 53,900,000		$ 10,700,000
Business acquisition, cost of acquired entity							21,200,000
Working capital adjustments								(900,000)
Goodwill [Roll Forward]
Balance at December 31, 2013	526,789,000		487,900,000	472,900,000	54,000,000	53,900,000
Acquisitions	10,734,000	[1]
Adjustments related to purchase accounting	4,388,000	[2]
Balance at September 30, 2014	$ 541,911,000		$ 487,900,000	$ 472,900,000	$ 54,000,000	$ 53,900,000		$ 10,700,000

[1] In April 2014, we acquired the assets of Crockett Packaging, a corrugated products manufacturer, for $21.2 million, before $0.9 million of working capital adjustments, and recorded $10.7 million of goodwill in our Packaging segment.

[2] Adjustments relate primarily to the Boise acquisition, see Note 3, Acquisitions, for more information.

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Share-based Compensation Summary of Restricted Stock and Performance Unit Award Activity (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
Restricted Stock
Restricted stock and performance unit award activity (shares) [Roll Forward]
Outstanding at December 31, 2013	1,463,694
Granted	229,489
Vested	(475,050)
Forfeitures	(1,165)
Outstanding at September 30, 2014	1,216,968
Restricted stock and performance unit award activity (weighted average grant-date fair value) [Abstract]
Weighted average grant-date fair value of outstanding shares at December 31, 2013	$ 31.48
Weighted average grant-date fair value of shares granted	$ 70.24
Weighted average grant-date fair value of shares vested	$ 23.86
Weighted average grant-date fair value of shares forfeitures	$ 62.74
Weighted average grant-date fair value of outstanding shares at June 30, 2014	$ 41.73
Performance Units
Restricted stock and performance unit award activity (shares) [Roll Forward]
Outstanding at December 31, 2013	70,600
Granted	56,889
Vested	0
Forfeitures	0
Outstanding at September 30, 2014	127,489
Restricted stock and performance unit award activity (weighted average grant-date fair value) [Abstract]
Weighted average grant-date fair value of outstanding shares at December 31, 2013	$ 47.83
Weighted average grant-date fair value of shares granted	$ 71.19
Weighted average grant-date fair value of shares vested	$ 0.00
Weighted average grant-date fair value of shares forfeitures	$ 0.00
Weighted average grant-date fair value of outstanding shares at June 30, 2014	$ 58.25

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Income Taxes (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Income Tax Disclosure [Abstract]
Income tax provision	$ 60,822,000	$ 46,250,000	$ 170,135,000	$ 115,418,000
Effective income tax rate, percent	36.80%	35.30%	36.60%	35.10%
Effective income tax rate, at federal statutory income tax rate, percent	35.00%	35.00%	35.00%	35.00%
Cash paid for taxes, net of refunds received			$ 110,800,000	$ 45,700,000

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Accrued Liabilities (Tables)

9 Months Ended

Sep. 30, 2014

Accrued Liabilities [Abstract]

Components of Accrued Liabilities

The components of accrued liabilities were as follows (in thousands):

	September 30, 2014		December 31, 2013
Compensation and benefits	$	136,996	$	130,455
Franchise, property, sales and use taxes	27,942		20,232
Medical insurance and workers’ compensation	26,185		26,399
Customer volume discounts and rebates	12,695		11,436
Environmental liabilities and asset retirement obligations	6,829		7,812
Severance	2,052		8,172
Legal contingencies	1,283		1,000
Other	14,776		8,552
Total	$	228,758	$	214,058

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Share-based Compensation Unrecognized Compensation Expense for Share-Based Awards (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense	$ 36,568
Remaining weighted-average recognition period	2 years 9 months 23 days
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense	30,543
Remaining weighted-average recognition period	2 years 8 months 25 days
Performance Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense	$ 6,025
Remaining weighted-average recognition period	3 years 4 months 13 days

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Nature of Operations and Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Use of Estimates

The preparation of the consolidated financial statements involves the use of estimates and accruals. Actual results may vary from those estimates.

Consolidation

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 for periods after October 25, 2013.

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Accrued Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Accrued Liabilities [Abstract]
Compensation and benefits	$ 136,996	$ 130,455
Franchise, property, sales and use taxes	27,942	20,232
Medical insurance and workers’ compensation	26,185	26,399
Customer volume discounts and rebates	12,695	11,436
Environmental liabilities and asset retirement obligations	6,829	7,812
Severance	2,052	8,172
Legal contingencies	1,283	1,000
Other	14,776	8,552
Total	$ 228,758	$ 214,058

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Acquisitions (Narrative) (Details) (USD $)	9 Months Ended			9 Months Ended	12 Months Ended				0 Months Ended	9 Months Ended
	Sep. 30, 2014		Dec. 31, 2013	Sep. 30, 2014 Boise Inc.	Dec. 31, 2013 Boise Inc.	Oct. 25, 2013 Boise Inc.	Sep. 30, 2014 Packaging	Dec. 31, 2013 Packaging	Apr. 28, 2014 Packaging Crockett Packaging	Sep. 30, 2014 Packaging Crockett Packaging
Business Acquisition [Line Items]
Business acquisition, cost of acquired entity					$ 2,100,000,000				$ 21,200,000
Working capital adjustments										(900,000)
Goodwill	541,911,000		526,789,000				487,900,000	472,900,000		10,700,000
Intangible assets acquired										5,500,000
Acquired finite-lived intangible assets, weighted average useful life										10 years
Outstanding stock and voting equity interests acquired						100.00%
Adjustments related to purchase accounting	$ 4,388,000	[1]		$ 4,300,000

[1] Adjustments relate primarily to the Boise acquisition, see Note 3, Acquisitions, for more information.

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2014

Equity [Abstract]

Components of Changes in Accumulated Other Comprehensive Income (AOCI)

Changes in accumulated other comprehensive income (loss) (“AOCI”) by component follows (dollars in thousands). Amounts in parentheses indicate losses.

	Foreign Currency Translation Adjustments			Unrealized Loss On Treasury Locks, Net				Unrealized Loss on Foreign Exchange Contracts				Unfunded Employee Benefit Obligations				Total
Balance at December 31, 2013	$	(136	)	$	(28,191	)		$	(371	)		$	(36,326	)		$	(65,024	)
Other comprehensive income (loss) before reclassifications, net of tax	(1,656		)	—				—				—				(1,656		)
Amounts reclassified from AOCI, net of tax	—			2,584			(a)	15			(b)	3,137			(c)	5,736
Net current-period other comprehensive income (loss)	(1,656		)	2,584				15				3,137				4,080
Balance at September 30, 2014	$	(1,792	)	$	(25,607	)		$	(356	)		$	(33,189	)		$	(60,944	)

Reclassifications Out of Accumulated Other Comprehensive Income (AOCI)

The following table presents information about reclassifications out of AOCI (dollars in thousands). Amounts in parentheses indicate expenses in the Consolidated Statements of Income.

	Amounts Reclassified from AOCI
	Three Months Ended September 30						Nine Months Ended September 30						Affected Line Item in the Statement Where Net Income is Presented
Details about AOCI Components	2014			2013			2014			2013
Unrealized loss on treasury locks, net	$	(1,414	)	$	(1,414	)	$	(4,242	)	$	(4,242	)	See (a) below
	549			549			1,658			1,648			Tax benefit
	$	(865	)	$	(865	)	$	(2,584	)	$	(2,594	)	Net of tax
Unrealized loss on foreign exchange contracts	$	(9	)	$	(8	)	$	(25	)	$	(25	)	See (b) below
	4			3			10			10			Tax benefit
	$	(5	)	$	(5	)	$	(15	)	$	(15	)	Net of tax
Unfunded employee benefit obligations
Amortization of prior service costs	$	(1,584	)	$	(57	)	$	(4,752	)	$	(2,965	)	See (c) below
Amortization of actuarial losses	(181		)	(2,351		)	(542		)	(5,622		)	See (c) below
Curtailment loss	—			(3,132		)	—			(10,908		)	See (c) below
	(1,765		)	(5,540		)	(5,294		)	(19,495		)	Total before tax
	685			2,153			2,157			7,574			Tax benefit
	$	(1,080	)	$	(3,387	)	$	(3,137	)	$	(11,921	)	Net of tax

____________

(a) This AOCI component is included in interest expense, net. Amount relates to the amortization of the effective portion of treasury lock derivative instruments recorded in AOCI. The net amount of settlement gains or losses on derivative instruments included in AOCI to be amortized over the next 12 months is a net loss of $5.7 million ($3.5 million after tax). For a discussion of treasury lock derivative instrument activity, see Note 11, Derivative Instruments and Hedging Activities, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our updated 2013 Financial Statements.

(b) This AOCI component is included in cost of sales.

(c) These AOCI components are included in the computation of net pension and postretirement benefit costs. See Note 11, Employee Benefit Plans and Other Postretirement Benefits, for additional information.

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Debt Additional Information (Details) (USD $)	3 Months Ended				9 Months Ended							3 Months Ended	9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014 Senior Notes 3.65% Senior Notes, due September 2024	Sep. 05, 2014 Senior Notes 3.65% Senior Notes, due September 2024	Dec. 31, 2013 Senior Notes 3.65% Senior Notes, due September 2024	Sep. 30, 2014 Write-Off of Deferred Financing Costs	Sep. 30, 2014 Write-Off of Deferred Financing Costs
Debt Instrument [Line Items]
Debt, face amount										$ 400,000,000
Stated interest rate									3.65%	3.65%	0.00%
Repayments of Long-term Debt					589,900,000
Financing costs paid					3,209,000		8,220,000
Cash payments paid for interest					50,000,000		21,000,000
Repayments of Long-term Debt [Abstract]
Remainder of 2014	1,600,000				1,600,000
2015	6,500,000				6,500,000
2016	6,500,000				6,500,000
2017	6,500,000				6,500,000
2018	221,500,000				221,500,000
2019	6,500,000				6,500,000
2020 and thereafter	2,100,000,000				2,100,000,000
Amortization of net (loss) gain on treasury lock	1,400,000		1,400,000		4,200,000		4,200,000
Amortization of financing costs	2,000,000		2,900,000		2,900,000		3,300,000
Write-off of deferred financing costs	(23,111,000)	[1],[2]	(11,850,000)	[3]	(65,311,000)	[1],[2]	(30,333,000)	[3]				1,500,000	1,500,000
Book value of fixed rate debt	1,646,900,000				1,646,900,000
Book value of variable rate debt	710,100,000				710,100,000
Long-term debt (fixed-rate debt), fair value	$ 1,713,100,000				$ 1,713,100,000

[1] Includes $1.5 million of expense related to the write-off of deferred financing costs in connection with the debt refinancing discussed in Note 10, Debt.

[2] On October 25, 2013, we acquired Boise. The 2014 results include Boise for the full period.

[3] Includes $2.7 million of acquisition-related costs primarily related to financing the acquisition of Boise.

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Concentrations of Risk (Details) (USD $) In Thousands, unless otherwise specified			9 Months Ended				3 Months Ended	9 Months Ended	2 Months Ended	9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014 Workforce Subject to Collective Bargaining Arrangements	Sep. 30, 2014 Workforce Subject to Collective Bargaining Arrangements Expiring within One Year	Sep. 30, 2014 Office Depot (including OfficeMax) Credit Concentration Risk	Dec. 31, 2013 Office Depot (including OfficeMax) Credit Concentration Risk	Sep. 30, 2014 Office Depot (including OfficeMax) Total Company Sales Revenue Customer Concentration Risk	Sep. 30, 2014 Office Depot (including OfficeMax) Total Company Sales Revenue Customer Concentration Risk	Dec. 31, 2013 Office Depot (including OfficeMax) Total Company Receivables Customer Concentration Risk	Sep. 30, 2014 Office Depot (including OfficeMax) Total Company Receivables Customer Concentration Risk	Sep. 30, 2014 Paper Office Depot (including OfficeMax) Paper Segment Sales Revenue Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage			50.00%	22.00%			9.00%	9.00%	6.00%	9.00%	44.00%
Accounts receivable, net, current	$ 717,947	$ 643,083			$ 64,600	$ 39,200
Number of employees of PCA	14,000
Percentage of hourly employees represented by unions	75.00%

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Property, Plant, and Equipment (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Property, Plant, and Equipment [Line Items]
Property, plant, and equipment, at cost	$ 5,464,805,000		$ 5,464,805,000		$ 5,232,700,000
Less accumulated depreciation	(2,646,672,000)		(2,646,672,000)		(2,426,996,000)
Property, plant, and equipment, net	2,818,133,000		2,818,133,000		2,805,704,000
Depreciation [Abstract]
Depreciation expense	95,100,000	42,400,000	264,100,000	125,200,000
Incremental depreciation	18,200,000		35,400,000
Purchases of property, plant, and equipment included in accounts payable			49,600,000
Land and Land Improvements
Property, Plant, and Equipment [Line Items]
Property, plant, and equipment, at cost	138,486,000		138,486,000		140,592,000
Buildings
Property, Plant, and Equipment [Line Items]
Property, plant, and equipment, at cost	645,173,000		645,173,000		628,948,000
Machinery and Equipment
Property, Plant, and Equipment [Line Items]
Property, plant, and equipment, at cost	4,374,819,000		4,374,819,000		4,246,294,000
Construction in Progress
Property, Plant, and Equipment [Line Items]
Property, plant, and equipment, at cost	253,150,000		253,150,000		168,808,000
Other
Property, Plant, and Equipment [Line Items]
Property, plant, and equipment, at cost	$ 53,177,000		$ 53,177,000		$ 48,058,000

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Acquisitions

9 Months Ended

Sep. 30, 2014

Business Combinations [Abstract]

Acquisitions

Acquisitions

Crockett Packaging Acquisition

On April 28, 2014, we acquired the assets of Crockett Packaging, a corrugated products manufacturer, for $21.2 million, before $0.9 million of working capital adjustments. The assets included a corrugated plant and a sheet plant in Southern California. Sales and total assets of the acquired company are not material to our overall sales and total assets. Operating results of the acquired assets subsequent to April 28, 2014, are included in our Packaging segment's 2014 operating results. We have estimated the allocation of the purchase price to the assets acquired and liabilities assumed based on estimates of the fair value at the date of the acquisition, of which $10.7 million has been allocated to goodwill (which is deductible for tax purposes) and $5.5 million to intangible assets (to be amortized over a weighted average life of approximately ten years), primarily customer relationships, in the Packaging segment. The purchase price allocation continues to be preliminary, as estimates and assumptions are subject to change as more information becomes available.

Boise Acquisition

On October 25, 2013, we acquired 100% of the outstanding stock and voting equity interests of Boise for $2.1 billion including the assumption of debt. In connection with the acquisition, we allocated the purchase price to the assets acquired and liabilities assumed based on estimates of the fair value at the date of the acquisition. See Note 3, Acquisitions, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our updated 2013 Financial Statements. During the nine months ended September 30,2014, we recorded approximately $4.3 million of purchase price adjustments that increased goodwill. These adjustments related primarily to a true-up to the valuation of fixed assets and the associated impact to income tax liabilities. As of September 30,2014, the purchase price allocation continues to be preliminary. The primary areas of the purchase price allocation that are not yet finalized relate to valuation of fixed assets, income taxes, and residual goodwill.

Pro Forma Financial Information

The following pro forma financial information presents the combined results of operations as if Boise had been combined with us on January 1, 2013. The pro forma results are intended for informational purposes only and do not purport to represent what the combined companies' results of operations would actually have been had the transactions in fact occurred on January 1, 2013. They also do not reflect any cost savings, operating synergies, or revenue enhancements that we may achieve or the costs necessary to achieve those cost savings, operating synergies, or revenue enhancements, or costs relating to integration efforts (dollars in millions, except per-share amounts).

	Pro Forma (a)
	Nine Months Ended   September 30, 2013
Net sales	$	4,256
Net income (b)	$	248
Net income per share—diluted (b)	$	2.54

____________

(a) The pro forma financial information presented in the table above has been adjusted to give effect to adjustments that are directly related to the acquisition, factually supportable, and expected to have a continuing impact. These adjustments include, but are not limited to, the application of our accounting policies (including the deferral method of accounting for planned major maintenance activities, which increased pro forma net income $12.5 million for the nine months ended September 30,2013); elimination of intercompany transactions; depreciation and amortization related to fair value adjustments to property, plant, and equipment and intangible assets; interest expense on acquisition-related debt; and $7.5 million of pre-tax acquisition-related costs which primarily consist of advisory, legal, accounting, financing, and other professional or consulting fees.

(b) Included in pro forma net income for the nine months ended September 30,2013, are $16.2 million of pre-tax costs, related primarily to the restructuring of Boise's white paper mill in International Falls, Minnesota, and $15.2 million of incremental depreciation expense related to shortening the estimated useful lives of certain assets, primarily at the white paper mill in International Falls, Minnesota.

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Transactions With Related Parties (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended		9 Months Ended	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014 Boise Cascade Co-Owner of LTP	Sep. 30, 2014 Boise Cascade Co-Owner of LTP Fiber	Sep. 30, 2014 Boise Cascade Co-Owner of LTP Fiber
Related Party Transaction [Line Items]
Variable interest entity, ownership percentage	50.00%		50.00%
Carrying amount of LTP's assets	$ 6.4	$ 5.0
Carrying amount of LTP's liabilities	6.4	5.0
Revenue from related parties				21.9	56.9
Fiber costs from related parties				$ 7.0	$ 21.3

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Acquisitions Pro Forma Financial Information (Unaudited) (Details) (Boise Inc., USD $) In Millions, except Per Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Business Acquisition [Line Items]
Net sales	$ 4,256	[1]
Net income	248.0	[1],[2]
Net income per share - diluted	$ 2.54	[1],[2]
Major Maintenance
Business Acquisition [Line Items]
Net income	12.5
Acquisition-Related Costs
Business Acquisition [Line Items]
Pre-tax income from operations	7.5
Restructuring Charges
Business Acquisition [Line Items]
Pre-tax income from operations	16.2
Incremental Depreciation
Business Acquisition [Line Items]
Pre-tax income from operations	$ 15.2

[1] The pro forma financial information presented in the table above has been adjusted to give effect to adjustments that are directly related to the acquisition, factually supportable, and expected to have a continuing impact. These adjustments include, but are not limited to, the application of our accounting policies (including the deferral method of accounting for planned major maintenance activities, which increased pro forma net income $12.5 million for the nine months ended September 30, 2013); elimination of intercompany transactions; depreciation and amortization related to fair value adjustments to property, plant, and equipment and intangible assets; interest expense on acquisition-related debt; and $7.5 million of pre-tax acquisition-related costs which primarily consist of advisory, legal, accounting, financing, and other professional or consulting fees.

[2] Included in pro forma net income for the nine months ended September 30, 2013, are $16.2 million of pre-tax costs, related primarily to the restructuring of Boise's white paper mill in International Falls, Minnesota, and $15.2 million of incremental depreciation expense related to shortening the estimated useful lives of certain assets, primarily at the white paper mill in International Falls, Minnesota.

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Other Expense, Net (Tables)

9 Months Ended

Sep. 30, 2014

Other Income and Expenses [Abstract]

Components of Other (Income) Expense

The components of other (income) expense were as follows (in thousands):

	Three Months Ended September 30					Nine Months Ended September 30
	2014		2013			2014		2013
DeRidder restructuring (a)	$	4,270	$	—		$	5,690	$	—
Integration-related and other costs (b)	3,040		—			11,999		—
Class action lawsuit settlement (c)	—		—			17,600		—
Pension curtailment charges (d)	—		3,132			—		10,908
Acquisition-related costs (e)	—		1,479			—		1,479
Asset disposals and write-offs	2,854		3,486			6,912		9,508
Other	2,146		(376		)	1,803		615
Total	$	12,310	$	7,721		$	44,004	$	22,510

___________

(a) Costs relate primarily to the conversion of the Number 3 newsprint machine at our DeRidder, Louisiana, mill to produce lightweight linerboard and corrugating medium, and our exit from the newsprint business in September 2014.

(b) The three and nine months ended September 30, 2014, include Boise acquisition integration-related and other costs.

(c) The nine months ended September 30, 2014, includes $17.6 million of costs for the settlement of the Kleen Products LLC v Packaging Corp. of America et al class action lawsuit. See Note 18, Commitments, Guarantees, Indemnifications and Legal Proceedings, for more information.

(d) The three and nine months ended September 30, 2013, include $3.1 million and $10.9 million, respectively, of non-cash pension curtailment charges related to pension plan changes in which certain hourly corrugated plant and containerboard mill employees will transition from a defined benefit pension plan to a defined contribution (401k) plan.

(e) The three and nine months ended September 30, 2013, both include $1.5 million of acquisition-related costs, primarily for professional fees related to transaction-advisory services and expenses related to financing the acquisition of Boise.

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Acquisitions (Tables)

9 Months Ended

Sep. 30, 2014

Business Combinations [Abstract]

Pro Forma Financial Information

Pro Forma Financial Information

The following pro forma financial information presents the combined results of operations as if Boise had been combined with us on January 1, 2013. The pro forma results are intended for informational purposes only and do not purport to represent what the combined companies' results of operations would actually have been had the transactions in fact occurred on January 1, 2013. They also do not reflect any cost savings, operating synergies, or revenue enhancements that we may achieve or the costs necessary to achieve those cost savings, operating synergies, or revenue enhancements, or costs relating to integration efforts (dollars in millions, except per-share amounts).

	Pro Forma (a)
	Nine Months Ended   September 30, 2013
Net sales	$	4,256
Net income (b)	$	248
Net income per share—diluted (b)	$	2.54

____________

(a) The pro forma financial information presented in the table above has been adjusted to give effect to adjustments that are directly related to the acquisition, factually supportable, and expected to have a continuing impact. These adjustments include, but are not limited to, the application of our accounting policies (including the deferral method of accounting for planned major maintenance activities, which increased pro forma net income $12.5 million for the nine months ended September 30,2013); elimination of intercompany transactions; depreciation and amortization related to fair value adjustments to property, plant, and equipment and intangible assets; interest expense on acquisition-related debt; and $7.5 million of pre-tax acquisition-related costs which primarily consist of advisory, legal, accounting, financing, and other professional or consulting fees.

(b) Included in pro forma net income for the nine months ended September 30,2013, are $16.2 million of pre-tax costs, related primarily to the restructuring of Boise's white paper mill in International Falls, Minnesota, and $15.2 million of incremental depreciation expense related to shortening the estimated useful lives of certain assets, primarily at the white paper mill in International Falls, Minnesota

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Share-based Compensation Compensation Expense for Restricted Stock and Performance Units (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Impact on income before income taxes	$ (4,047)	$ (3,182)	$ (11,648)	$ (9,956)
Income tax benefit	1,572	1,237	4,530	3,868
Impact on net income	(2,475)	(1,945)	(7,118)	(6,088)
Restricted Stock
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Impact on income before income taxes	(3,453)	(2,933)	(10,501)	(9,691)
Performance Units
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Impact on income before income taxes	$ (594)	$ (249)	$ (1,147)	$ (265)

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Other Expense, Net (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Other Expense, Net [Line Items]
DeRidder restructuring	$ 4,270	[1]	$ 0		$ 5,690	[1]	$ 0
Integration-related and other costs	3,040	[2]	0		11,999	[2]	0
Class action lawsuit settlement	0		0		17,600	[3]	0
Pension curtailment charges	0		3,132	[4]	0		10,908	[4]
Acquisition-related costs	0		1,479	[5]	0		1,479	[5]
Asset disposals and write-offs	2,854		3,486		6,912		9,508
Other	2,146		(376)		1,803		615
Total	12,310		7,721		44,004		22,510
Corporate and Other
Other Expense, Net [Line Items]
Class action lawsuit settlement					$ 17,600	[3]

[1] Costs relate primarily to the conversion of the Number 3 newsprint machine at our DeRidder, Louisiana, mill to produce lightweight linerboard and corrugating medium, and our exit from the newsprint business in September 2014.

[2] The three and nine months ended September 30, 2014, include Boise acquisition integration-related and other costs.

[3] The nine months ended September 30, 2014, includes $17.6 million of costs for the settlement of the Kleen Products LLC v Packaging Corp. of America et al class action lawsuit. See Note 18, Commitments, Guarantees, Indemnifications and Legal Proceedings, for more information.

[4] The three and nine months ended September 30, 2013, include $3.1 million and $10.9 million, respectively, of non-cash pension curtailment charges related to pension plan changes in which certain hourly corrugated plant and containerboard mill employees will transition from a defined benefit pension plan to a defined contribution (401k) plan.

[5] The three and nine months ended September 30, 2013, both include $1.5 million of acquisition-related costs, primarily for professional fees related to transaction-advisory services and expenses related to financing the acquisition of Boise.

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Computation of Basic and Diluted Income Per Common Share

The following table sets forth the computation of basic and diluted income per common share for the periods presented (dollars and shares in thousands, except per share data).

	Three Months Ended September 30					Nine Months Ended September 30
	2014			2013		2014			2013
Numerator:
Net income	$	104,445		$	84,682	$	294,088		$	213,228
Less: distributed and undistributed earnings allocated to participating securities	(1,451		)	—		(4,381		)	—
Net income attributable to common shareholders	$	102,994		$	84,682	$	289,707		$	213,228
Denominator:
Weighted average basic common shares outstanding	97,165			96,758		96,954			96,536
Effect of dilutive securities	57			839		53			976
Diluted common shares outstanding	97,222			97,597		97,007			97,512
Basic income per common share	$	1.06		$	0.88	$	2.99		$	2.21
Diluted income per common share	$	1.06		$	0.87	$	2.99		$	2.19

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Property, Plant, and Equipment (Tables)

9 Months Ended

Sep. 30, 2014

Property, Plant and Equipment [Abstract]

Property, Plant, and Equipment

Property, plant, and equipment consist of the following (dollars in thousands):

	September 30, 2014			December 31, 2013
Land and land improvements	$	138,486		$	140,592
Buildings	645,173			628,948
Machinery and equipment	4,374,819			4,246,294
Construction in progress	253,150			168,808
Other	53,177			48,058
Property, plant, and equipment, at cost	5,464,805			5,232,700
Less accumulated depreciation	(2,646,672		)	(2,426,996		)
Property, plant, and equipment, net	$	2,818,133		$	2,805,704

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Change in Accounting Principle: Inventories

9 Months Ended

Sep. 30, 2014

Inventory Disclosure [Abstract]

Change in Accounting Principle

Change in Accounting Principle: Inventories

Effective January 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. Had the Company not made this change in accounting method, "Net income" for the three and nine months ended September 30, 2014, would have been $1.7 millionand $1.5 million, respectively,higher than reported in the Consolidated Statements of Income and "Inventories" at September 30, 2014, would have been $69.3 million lower than reported in the Consolidated Balance Sheets.

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. As a result of the retrospective change in accounting principle, opening retained earnings as of January 1, 2013, increased $38.8 million. Certain components of our financial statements affected by the change in valuation methodology as originally reported under the LIFO method and as adjusted for the change to the average cost method were as follows (in thousands, except per share data):

	Three Months Ended   September 30, 2013									Nine Months Ended   September 30, 2013
Consolidated Statements of Income and Comprehensive Income	As Previously Reported (a)			Effect of Change			As Adjusted			As Previously Reported (a)			Effect of Change			As Adjusted
Cost of sales	$	(618,663	)	$	822		$	(617,841	)	$	(1,799,285	)	$	6,503		$	(1,792,782	)
Gross profit	226,777			822			227,599			601,592			6,503			608,095
Income from operations	141,960			822			142,782			352,476			6,503			358,979
Income before taxes	130,110			822			130,932			322,143			6,503			328,646
Provision for income taxes	(45,930		)	(320		)	(46,250		)	(112,885		)	(2,533		)	(115,418		)
Net income	84,180			502			84,682			209,258			3,970			213,228
Comprehensive income	93,400			502			93,902			237,206			3,970			241,176
Net income per common share:
Basic	0.87			0.01			0.88			2.17			0.04			2.21
Diluted	0.86			0.01			0.87			2.15			0.04			2.19

___________

(a) Certain amounts in prior periods' consolidated financial statements have been reclassified to conform with the current period presentation.

	December 31, 2013
Consolidated Balance Sheet	As Previously Reported		Effect of Change			As Adjusted
Inventories	$	522,523	$	71,768		$	594,291
Deferred income tax assets	75,579		(27,963		)	47,616
Retained earnings	975,296		43,805			1,019,101

	Nine Months Ended   September 30, 2013
Consolidated Statement of Cash Flows	As Previously Reported		Effect of Change			As Adjusted
Net income	$	209,258	$	3,970		$	213,228
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income tax provision	3,604		2,533			6,137
Change in inventories	1,875		(6,503		)	(4,628		)

The components of inventories were as follows (dollars in thousands):

	September 30, 2014		December 31, 2013
Raw materials	$	239,673	$	212,027
Work in process	12,739		13,898
Finished goods	195,538		209,972
Supplies and materials	169,012		158,394
Inventories	$	616,962	$	594,291

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in the Carrying Amount of Goodwill

Changes in the carrying amount of our goodwill were as follows (dollars in thousands):

	Goodwill
Balance at December 31, 2013	$	526,789
Acquisitions (a)	10,734
Adjustments related to purchase accounting (b)	4,388
Balance at September 30, 2014	$	541,911

___________

(a) In April 2014, we acquired the assets of Crockett Packaging, a corrugated products manufacturer, for $21.2 million, before $0.9 million of working capital adjustments, and recorded $10.7 million of goodwill in our Packaging segment.

(b) Adjustments relate primarily to the Boise acquisition, see Note 3, Acquisitions, for more information.

Components of Intangible Assets

The weighted average remaining useful life, gross carrying amount, and accumulated amortization of our intangible assets were as follows (dollars in thousands):

	September 30, 2014					December 31, 2013
	Weighted Average Remaining Useful Life (in Years)	Gross  Carrying Amount		Accumulated Amortization		Weighted Average Remaining Useful Life (in Years)	Gross  Carrying Amount		Accumulated Amortization
Customer relationships	14.5	$	311,461	$	31,759	15.4	$	306,361	$	16,509
Trademarks and trade names	13.6	21,770		2,455		14.7	21,370		794
Other	2.4	220		141		3.0	220		109
Total intangible assets (excluding goodwill)	14.4	$	333,451	$	34,355	15.4	$	327,951	$	17,412

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Change in Accounting Principle: Inventories (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended			9 Months Ended				3 Months Ended	9 Months Ended			3 Months Ended	9 Months Ended	3 Months Ended		9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013	Sep. 30, 2014		Sep. 30, 2013	Dec. 31, 2013	Sep. 30, 2013 Change in Accounting Method for Inventory Valuation Effect of Change in Accounting Principle	Sep. 30, 2013 Change in Accounting Method for Inventory Valuation Effect of Change in Accounting Principle	Dec. 31, 2013 Change in Accounting Method for Inventory Valuation Effect of Change in Accounting Principle	Dec. 31, 2012 Change in Accounting Method for Inventory Valuation Effect of Change in Accounting Principle	Sep. 30, 2014 Pro Forma Effect Had Inventory Change Not Been Made Change in Accounting Method for Inventory Valuation	Sep. 30, 2014 Pro Forma Effect Had Inventory Change Not Been Made Change in Accounting Method for Inventory Valuation	Sep. 30, 2013 As Previously Reported (under LIFO)		Sep. 30, 2013 As Previously Reported (under LIFO)		Dec. 31, 2013 As Previously Reported (under LIFO)
Consolidated Statements of Income and Comprehensive Income
Cost of sales	$ (1,198,607)		$ (617,841)	$ (3,486,108)		$ (1,792,782)		$ 822	$ 6,503					$ (618,663)	[1]	$ (1,799,285)	[1]
Gross profit	320,333		227,599	932,545		608,095		822	6,503					226,777	[1]	601,592	[1]
Income from operations	188,378	[2]	142,782	529,534	[2]	358,979		822	6,503					141,960	[1]	352,476	[1]
Income before taxes	165,267	[2]	130,932	464,223	[2]	328,646		822	6,503					130,110	[1]	322,143	[1]
Provision for income taxes	(60,822)		(46,250)	(170,135)		(115,418)		(320)	(2,533)					(45,930)	[1]	(112,885)	[1]
Net income	104,445		84,682	294,088		213,228		502	3,970			1,700	1,500	84,180	[1]	209,258	[1]
Comprehensive income	104,831		93,902	298,168		241,176		502	3,970					93,400	[1]	237,206	[1]
Net income per common share:
Basic (in dollars per share)	$ 1.06		$ 0.88	$ 2.99		$ 2.21		$ 0.01	$ 0.04					$ 0.87	[1]	$ 2.17	[1]
Diluted (in dollars per share)	$ 1.06		$ 0.87	$ 2.99		$ 2.19		$ 0.01	$ 0.04					$ 0.86	[1]	$ 2.15	[1]
Consolidated Balance Sheet
Inventories	616,962			616,962			594,291			71,768		(69,300)	(69,300)					522,523
Deferred income tax assets	32,280			32,280			47,616			(27,963)								75,579
Retained earnings	1,184,155			1,184,155			1,019,101			43,805	38,800							975,296
Consolidated Statement of Cash Flows
Net income	104,445		84,682	294,088		213,228		502	3,970			1,700	1,500	84,180	[1]	209,258	[1]
Deferred income tax provision				17,427		6,137			2,533							3,604
Inventories				$ (22,520)		$ (4,628)			$ (6,503)							$ 1,875

[1] Certain amounts in prior periods' consolidated financial statements have been reclassified to conform with the current period presentation.

[2] On October 25, 2013, we acquired Boise. The 2014 results include Boise for the full period.

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Employee Benefit Plans and Other Postretirement Benefits (Details) (USD $)	3 Months Ended			9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013		Sep. 30, 2014	Sep. 30, 2013
Defined Benefit Plan Disclosure [Line Items]
Net amortization of unrecognized amounts, Curtailment loss	$ 0	$ 3,132,000	[1]	$ 0	$ 10,908,000	[1]
Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Service cost	5,828,000	5,825,000		17,428,000	18,322,000
Interest cost	11,507,000	4,269,000		34,400,000	12,250,000
Expected return on plan assets	(12,657,000)	(3,796,000)		(38,008,000)	(11,297,000)
Net amortization of unrecognized amounts, Prior service cost	1,641,000	163,000		4,922,000	3,284,000
Net amortization of unrecognized amounts, Actuarial loss	155,000	2,217,000		465,000	5,221,000
Net amortization of unrecognized amounts, Curtailment loss	0	3,132,000	[2]	0	10,908,000	[2]
Net periodic benefit cost	6,474,000	11,810,000		19,207,000	38,688,000
Decrease in the benefit obligation		(21,900,000)
Decrease in accumulated other comprehensive income (loss)		13,400,000
Deferred taxes		8,500,000
Pension Contributions [Abstract]
Contributions to pension plans in 2014				400,000
Postretirement Plans
Defined Benefit Plan Disclosure [Line Items]
Service cost	392,000	515,000		1,177,000	1,545,000
Interest cost	311,000	311,000		933,000	934,000
Net amortization of unrecognized amounts, Prior service cost	(57,000)	(106,000)		(170,000)	(319,000)
Net amortization of unrecognized amounts, Actuarial loss	26,000	134,000		77,000	401,000
Net periodic benefit cost	$ 672,000	$ 854,000		$ 2,017,000	$ 2,561,000

[1] The three and nine months ended September 30, 2013, include $3.1 million and $10.9 million, respectively, of non-cash pension curtailment charges related to pension plan changes in which certain hourly corrugated plant and containerboard mill employees will transition from a defined benefit pension plan to a defined contribution (401k) plan.

[2] In June 2013, the United Steelworkers (“USW”) ratified a master labor agreement with PCA under which we froze certain USW-represented corrugated plant employees pension accruals under PCA’s hourly pension plan. Additionally, in September 2013, the USW ratified a master labor agreement with PCA under which we froze certain USW-represented containerboard mill employees pension accruals under PCA’s hourly pension plan. Following the pension freezes, affected USW-represented employees will transition to a defined contribution 401k plan. We recorded a $3.1 million and $10.9 million pre-tax pension curtailment charge related to the unrecognized prior service costs of employees impacted by the pension freezes during the three and nine months ended September 30, 2013, respectively. We also remeasured the hourly pension plan benefit obligation using current fair values of plan assets and current assumptions, resulting in a decrease in the benefit obligation of $21.9 million with a corresponding decrease in accumulated other comprehensive income (loss) of $13.4 million and deferred taxes of $8.5 million.

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Consolidated Statements of Income and Comprehensive Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Income Statement [Abstract]
Net sales	$ 1,518,940		$ 845,440		$ 4,418,653		$ 2,400,877
Cost of sales	(1,198,607)		(617,841)		(3,486,108)		(1,792,782)
Gross profit	320,333		227,599		932,545		608,095
Selling, general, and administrative expenses	(119,645)		(77,096)		(359,007)		(226,606)
Other expense, net	(12,310)		(7,721)		(44,004)		(22,510)
Income from operations	188,378	[1]	142,782		529,534	[1]	358,979
Interest expense, net	(23,111)	[1],[2]	(11,850)	[3]	(65,311)	[1],[2]	(30,333)	[3]
Income before taxes	165,267	[1]	130,932		464,223	[1]	328,646
Income tax provision	(60,822)		(46,250)		(170,135)		(115,418)
Net income	104,445		84,682		294,088		213,228
Net income per common share:
Basic (in dollars per share)	$ 1.06		$ 0.88		$ 2.99		$ 2.21
Diluted (in dollars per share)	$ 1.06		$ 0.87		$ 2.99		$ 2.19
Dividends declared per common share	$ 0.40		$ 0.40		$ 1.20		$ 1.11
Statements of Comprehensive Income:
Net income	104,445		84,682		294,088		213,228
Foreign currency translation adjustment, net of tax of ($106), $0, ($76), and $0, respectively	(1,564)		0		(1,656)		0
Reclassification adjustments to cash flow hedges included in net income, net of tax of $553, $552, $1,668, and $1,658, respectively	870		870		2,599		2,609
Amortization of pension and postretirement plans actuarial loss and prior service cost, net of tax of $685, $2,153, $2,157, and $7,574, respectively	1,080		3,387		3,137		11,921
Changes in unfunded employee benefit obligation, net of tax of $0, $3,152, $0, and $8,522, respectively	0		4,963		0		13,418
Other comprehensive income	386		9,220		4,080		27,948
Comprehensive income	$ 104,831		$ 93,902		$ 298,168		$ 241,176

[1] On October 25, 2013, we acquired Boise. The 2014 results include Boise for the full period.

[2] Includes $1.5 million of expense related to the write-off of deferred financing costs in connection with the debt refinancing discussed in Note 10, Debt.

[3] Includes $2.7 million of acquisition-related costs primarily related to financing the acquisition of Boise.

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Earnings Per Share Computation of Basic and Diluted Income Per Common Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Earnings Per Share [Abstract]
Net income	$ 104,445	$ 84,682	$ 294,088	$ 213,228
Less: distributed and undistributed earnings allocated to participating securities	(1,451)	0	(4,381)	0
Net income attributable to common shareholders	$ 102,994	$ 84,682	$ 289,707	$ 213,228
Weighted average basic common shares outstanding	97,165	96,758	96,954	96,536
Effect of dilutive securities	57	839	53	976
Diluted common shares outstanding	97,222	97,597	97,007	97,512
Basic income per common share (in dollars per share)	$ 1.06	$ 0.88	$ 2.99	$ 2.21
Diluted income per common share (in dollars per share)	$ 1.06	$ 0.87	$ 2.99	$ 2.19

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash Flows from Operating Activities:
Net income	$ 294,088	$ 213,228
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, and amortization of intangibles and deferred financing costs	296,486	137,412
Share-based compensation expense	11,648	9,956
Deferred income tax provision	17,427	6,137
Alternative energy tax credits	0	76,280
Pension and postretirement benefits expense, net of contributions	19,230	10,600
Other, net	4,187	4,651
Increase in assets —
Accounts receivable	(74,970)	(57,583)
Inventories	(22,520)	(4,628)
Prepaid expenses and other current assets	(27,882)	(9,196)
Increase (decrease) in liabilities —
Accounts payable	(12,957)	46,418
Accrued liabilities	21,810	7,109
Federal and state income taxes payable / receivable	30,173	(20,216)
Net cash provided by operating activities	556,720	420,168
Cash Flows from Investing Activities:
Additions to property, plant, and equipment	(254,865)	(130,410)
Acquisition of business, net of cash acquired	(20,290)	0
Additions to other long term assets	(11,617)	(2,459)
Other	3,188	350
Net cash used for investing activities	(283,584)	(132,519)
Cash Flows from Financing Activities:
Repayments of debt and capital lease obligations	(590,641)	(11,967)
Proceeds from issuance of debt	398,864	0
Financing costs paid	3,209	8,220
Common stock dividends paid	(118,004)	(69,883)
Repurchases of common stock	0	(7,799)
Proceeds from exercise of stock options	3,739	2,756
Excess tax benefits from stock-based awards	11,796	7,539
Shares withheld to cover employee restricted stock taxes	(12,051)	(10,873)
Other	(267)	0
Net cash used for financing activities	(309,773)	(98,447)
Net (decrease) increase in cash and cash equivalents	(36,637)	189,202
Cash and cash equivalents, beginning of period	190,960	207,393
Cash and cash equivalents, end of period	$ 154,323	$ 396,595

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Stockholders' Equity Changes in Accumulated Other Comprehensive Income by Component (Details) (USD $)	3 Months Ended		9 Months Ended									12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 Foreign Currency Translation Adjustments	Sep. 30, 2014 Unfunded Employee Benefit Obligations		Sep. 30, 2014 Treasury Lock Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges		Sep. 30, 2014 Foreign Exchange Contract Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges		Dec. 31, 2014 Scenario, Forecast
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at December 31, 2013			$ (65,024,000)		$ (136,000)	$ (36,326,000)		$ (28,191,000)		$ (371,000)
Other comprehensive income (loss) before reclassifications, net of tax			(1,656,000)		(1,656,000)	0		0		0
Amounts reclassified from AOCI, net of tax			5,736,000		0	3,137,000	[1]	2,584,000	[2]	15,000	[3]
Other comprehensive income	386,000	9,220,000	4,080,000	27,948,000	(1,656,000)	3,137,000		2,584,000		15,000
Balance at September 30, 2014	(60,944,000)		(60,944,000)		(1,792,000)	(33,189,000)		(25,607,000)		(356,000)
Net amount of settlement gains (losses) on derivative instruments included in accumulated OCI to be amortized over next 12 months, before tax												(5,700,000)
Net amount of settlement gains (losses) on derivative instruments included in accumulated OCI to be amortized over next 12 months, after tax												$ (3,500,000)

[1] These AOCI components are included in the computation of net pension and postretirement benefit costs. See Note 11, Employee Benefit Plans and Other Postretirement Benefits, for additional information.

[2] This AOCI component is included in interest expense, net. Amount relates to the amortization of the effective portion of treasury lock derivative instruments recorded in AOCI. The net amount of settlement gains or losses on derivative instruments included in AOCI to be amortized over the next 12 months is a net loss of $5.7 million ($3.5 million after tax). For a discussion of treasury lock derivative instrument activity, see Note 11, Derivative Instruments and Hedging Activities, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our updated 2013 Financial Statements.

[3] This AOCI component is included in cost of sales.

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Employee Benefit Plans and Other Postretirement Benefits (Tables)

9 Months Ended

Sep. 30, 2014

Pension Plans

Components of Net Periodic Benefit Costs

The components of net periodic benefit cost for our pension plans were as follows (dollars in thousands):

	Pension Plans
	Three Months Ended September 30						Nine Months Ended September 30
	2014			2013			2014			2013
Service cost	$	5,828		$	5,825		$	17,428		$	18,322
Interest cost	11,507			4,269			34,400			12,250
Expected return on plan assets	(12,657		)	(3,796		)	(38,008		)	(11,297		)
Net amortization of unrecognized amounts
Prior service cost	1,641			163			4,922			3,284
Actuarial loss	155			2,217			465			5,221
Curtailment loss (a)	—			3,132			—			10,908
Net periodic benefit cost	$	6,474		$	11,810		$	19,207		$	38,688

___________

(a) In June 2013, the United Steelworkers (“USW”) ratified a master labor agreement with PCA under which we froze certain USW-represented corrugated plant employees pension accruals under PCA’s hourly pension plan. Additionally, in September 2013, the USW ratified a master labor agreement with PCA under which we froze certain USW-represented containerboard mill employees pension accruals under PCA’s hourly pension plan. Following the pension freezes, affected USW-represented employees will transition to a defined contribution 401k plan. We recorded a $3.1 million and $10.9 million pre-tax pension curtailment charge related to the unrecognized prior service costs of employees impacted by the pension freezes during the three and nine months ended September 30, 2013, respectively. We also remeasured the hourly pension plan benefit obligation using current fair values of plan assets and current assumptions, resulting in a decrease in the benefit obligation of $21.9 million with a corresponding decrease in accumulated other comprehensive income (loss) of $13.4 million and deferred taxes of $8.5 million.

Postretirement Plans

Components of Net Periodic Benefit Costs

The components of net periodic benefit cost for our postretirement plans were as follows (dollars in thousands):

	Postretirement Plans
	Three Months Ended September 30						Nine Months Ended September 30
	2014			2013			2014			2013
Service cost	$	392		$	515		$	1,177		$	1,545
Interest cost	311			311			933			934
Net amortization of unrecognized amounts
Prior service benefit	(57		)	(106		)	(170		)	(319		)
Actuarial loss	26			134			77			401
Net periodic benefit cost	$	672		$	854		$	2,017		$	2,561

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Segment Information

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Segment Information

Segment Information

Prior to the acquisition of Boise on October 25, 2013, we manufactured and sold packaging products and reported our results in one reportable segment. In connection with the acquisition, we expanded our packaging business and entered the paper business as the third largest producer of white papers in North America in terms of production capacity. As a result, we began managing our business in three reportable segments: Packaging, Paper, and Corporate and Other. These segments represent distinct businesses that are managed separately because of differing products and services. Each of these businesses requires distinct operating and marketing strategies. There are no differences in our basis of segmentation or in our basis of measurement of segment profit or loss from those disclosed in Note 19, Segment Information, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our updated 2013 Financial Statements.

Each segment's profits and losses are measured on operating profits before interest expense and interest income. After the acquisition of Boise, expenses that were historically included in "Corporate overhead" on our Consolidated Statements of Income, were reclassified to "Selling, general, and administrative expenses" to conform with the current year presentation. In addition, after increasing our product offerings to include both packaging and paper products after the Boise acquisition, we began allocating the amounts associated with running those businesses, previously included in "Corporate overhead", to our segments. For many of these allocated expenses, the related assets and liabilities remain in the Corporate and Other segment.

Effective January 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. The Company has applied this change in method of inventory costing retrospectively to all prior periods presented herein in accordance with U.S. generally accepted accounting principles relating to accounting changes. See Note 2, Change in Accounting Principle: Inventories, for additional information.

An analysis of operations by reportable segment were as follows (dollars in millions):

	Sales, net								Operating Income (Loss)
Three Months Ended September 30, 2014 (a)	Trade		Inter- segment			Total
Packaging	$	1,174.2	$	1.5		$	1,175.7		$	164.7		(b)
Paper	312.5		—			312.5			43.0			(c)
Corporate and Other	32.2		37.0			69.2			(19.3		)	(d)
Intersegment eliminations	—		(38.5		)	(38.5		)	—
	$	1,518.9	$	—		$	1,518.9		188.4
Interest expense, net									(23.1		)	(e)
Income before taxes									$	165.3

	Sales, net						Operating Income (Loss)
Three Months Ended September 30, 2013	Trade		Inter- segment		Total
Packaging	$	845.4	$	—	$	845.4	$	154.9		(f)
Corporate and Other	—		—		—		(12.1		)	(g)
	$	845.4	$	—	$	845.4	142.8
Interest expense, net							(11.9		)	(h)
Income before taxes							$	130.9

	Sales, net								Operating Income (Loss)
Nine Months Ended September 30, 2014 (a)	Trade		Inter- segment			Total
Packaging	$	3,413.8	$	4.5		$	3,418.3		$	501.8		(b)
Paper	917.0		—			917.0			104.3			(c)
Corporate and Other	87.9		112.8			200.7			(76.6		)	(d)
Intersegment eliminations	—		(117.3		)	(117.3		)	—
	$	4,418.7	$	—		$	4,418.7		529.5
Interest expense, net									(65.3		)	(e)
Income before taxes									$	464.2

	Sales, net						Operating Income (Loss)
Nine Months Ended September 30, 2013	Trade		Inter- segment		Total
Packaging	$	2,400.9	$	—	$	2,400.9	$	395.1		(f)
Corporate and Other	—		—		—		(36.1		)	(g)
	$	2,400.9	$	—	$	2,400.9	359.0
Interest expense, net							(30.4		)	(h)
Income before taxes							$	328.6

____________

(a) On October 25, 2013, we acquired Boise. The 2014 results include Boise for the full period.

(b) Includes costs related primarily to the conversion of the Number 3 newsprint machine at our DeRidder, Louisiana, mill to produce lightweight linerboard and corrugating medium, and our exit from the newsprint business in September 2014. The three and nine months ended September 30, 2014, include $26.0 million and $47.8 million, respectively, of restructuring charges, primarily accelerated depreciation. The three and nine months ended September 30, 2014, includes $1.0 million and $5.4 million of Boise acquisition integration-related and other costs recorded in "Other expense, net".

(c) Includes $0.4 million of income, net of expenses, for the nine months ended September 30, 2014, of integration related and other costs recorded in "Other expense, net".

(d) Includes $2.0 millionand $7.0 million, for the three and nine months ended September 30, 2014, of Boise acquisition integration-related and other costs recorded in "Other expense, net".

The nine months ended September 30, 2014, includes $17.6 million of costs for the settlement of the Kleen Products LLC v Packaging Corp. of America et al class action lawsuit. See Note 18, Commitments, Guarantees, Indemnifications and Legal Proceedings, for more information. These costs are recorded in "Other expense, net".

(e) Includes $1.5 million of expense related to the write-off of deferred financing costs in connection with the debt refinancing discussed in Note 10, Debt.

(f) Includes $3.1 million and $10.9 million, for the three and nine months ended September 30, 2013, respectively, of non-cash pension curtailment charges related to pension plan changes in which certain hourly corrugated plant and containerboard mill employees will transition from a defined benefit pension plan to a defined contribution (401k) plan.

(g) Includes $1.5 million of Boise acquisition-related costs primarily for professional fees related to transaction-advisory services.

(h) Includes $2.7 million of acquisition-related costs primarily related to financing the acquisition of Boise.

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Share-based Compensation (Tables)

9 Months Ended

Sep. 30, 2014

Share-based Compensation [Abstract]

Summary of Restricted Stock and Performance Unit Award Activity

The following table presents restricted stock and performance unit award activity for the nine months ended September 30, 2014:

	Restricted Stock				Performance Units
	Shares		Weighted Average Grant- Date Fair Value		Shares	Weighted Average Grant- Date Fair Value
Outstanding at December 31, 2013	1,463,694		$	31.48	70,600	$	47.83
Granted	229,489		70.24		56,889	71.19
Vested	(475,050	)	23.86		—	—
Forfeitures	(1,165	)	62.74		—	—
Outstanding at September 30, 2014	1,216,968		$	41.73	127,489	$	58.25

Compensation Expense for Restricted Stock and Performance Units

Compensation expense for share-based awards recognized in the Consolidated Statements of Income, net of forfeitures was as follows (dollars in thousands):

	Three Months Ended September 30						Nine Months Ended September 30
	2014			2013			2014			2013
Restricted stock	$	(3,453	)	$	(2,933	)	$	(10,501	)	$	(9,691	)
Performance units	(594		)	(249		)	(1,147		)	(265		)
Impact on income before income taxes	(4,047		)	(3,182		)	(11,648		)	(9,956		)
Income tax benefit	1,572			1,237			4,530			3,868
Impact on net income	$	(2,475	)	$	(1,945	)	$	(7,118	)	$	(6,088	)

Unrecognized Compensation For Restricted Stock and Performance Units

The unrecognized compensation expense for all share-based awards at September 30, 2014, was as follows (dollars in thousands):

	September 30, 2014
	Unrecognized Compensation Expense		Remaining Weighted Average Recognition Period (in years)
Restricted stock	$	30,543	2.7
Performance units	6,025		3.4
Total unrecognized share-based compensation expense	$	36,568	2.8

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Commitments, Guarantees, Indemnifications and Legal Proceedings

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments, Guarantees, Indemnifications and Legal Proceedings

Commitments, Guarantees, Indemnifications and Legal Proceedings

We have financial commitments and obligations that arise in the ordinary course of our business. These include long-term debt, capital commitments, lease obligations, and purchase commitments for goods and services, which are discussed in Note 8, Debt, and Note 20, Commitments, Guarantees, Indemnifications, and Legal Proceedings, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our updated 2013 Financial Statements. Except as disclosed in Note 10, Debt, and in Legal Proceedings below, at September 30, 2014, there have been no other significant changes to commitments outside the normal course of business.

Guarantees and Indemnifications

We provide guarantees, indemnifications, and other assurances to third parties in the normal course of our business. These include tort indemnifications, environmental assurances, and representations and warranties in commercial agreements. At September 30, 2014, we are not aware of any material liabilities arising from any guarantee, indemnification, or financial assurance we have provided. If we determined such a liability was probable and subject to reasonable determination, we would accrue for it at that time.

Legal proceedings

During 2010, PCA and eight other U.S. and Canadian containerboard producers were named as defendants in five purported class action lawsuits filed in the United States District Court for the Northern District of Illinois, alleging violations of the Sherman Act. The lawsuits were consolidated in a single complaint under the caption Kleen Products LLC v Packaging Corp. of America et al. The consolidated complaint alleges that the defendants conspired to limit the supply of containerboard, and that the purpose and effect of the alleged conspiracy was to artificially increase prices of containerboard products during the period of August 2005 to October 2010 (the time of filing of the complaint). The complaint was filed as a class action suit on behalf of all purchasers of containerboard products during such period. On April 4, 2014, we reached an agreement with the representatives of the class to settle this lawsuit for $17.6 million. These costs were recorded in "Other expense, net" in our Consolidated Income Statement for the nine months ended September 30, 2014. On May 6, 2014, the court preliminarily approved the settlement. Notice of the proposed settlement was mailed to potential class members and $17.6 million was paid to the settlement fund escrow account in June 2014. The court granted final approval to the settlement on September 4, 2014.

We are also a party to other legal actions arising in the ordinary course of our business. These legal actions include commercial liability claims, premises liability claims, and employment-related claims, among others. As of the date of this filing, we believe it is not reasonably possible that any of the legal actions against us will, either individually or in the aggregate, have a material adverse effect on our financial condition, results of operations, or cash flows.

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Nature of Operations and Basis of Presentation

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations and Basis of Presentation

Nature of Operations and Basis of Presentation

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 October 25, 2013, PCA acquired Boise Inc. ("Boise"). For more information, see Note 3, Acquisitions.

After the acquisition of Boise, we began reporting our business in three 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 16, Segment Information.

In these consolidated financial statements, certain amounts in prior periods' consolidated financial statements have been reclassified to conform with the current period presentation. In accordance with Accounting Standards Codification (“ASC”) 280, "Segment Reporting," we recast segment information for the three and nine months ended September 30, 2013, to conform with the current period presentation. In addition, we reclassified amounts previously disclosed in "Corporate overhead" in the Consolidated Statements of Income for the three and nine months ended September 30, 2013, into "Selling, general, and administrative expenses" given that Corporate and Other is now a separately disclosed segment. With the exception of the change in accounting principle relating to our inventories described below in Note 2, Change in Accounting Principle: Inventories, none of the reclassifications affected our results of operations, financial position, or cash flows.

The consolidated financial statements of PCA as of September 30, 2014, and for the three and nine months ended September 30, 2014 and 2013, are unaudited but include all adjustments (consisting only of normal recurring adjustments) that management considers necessary for a fair presentation of such financial statements. The preparation of the consolidated financial statements involves the use of estimates and accruals. Actual results may vary from those estimates. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with Article 10 of SEC Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete audited financial statements. Operating results for the period ended September 30, 2014, are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. These consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2013, and the updated consolidated financial statements included in our Current Report on Form 8-K filed on May 9, 2014 (referred to as "updated 2013 Financial Statements" throughout this document).

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 for periods after October 25, 2013.

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Consolidated Statements of Income and Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Income Statement [Abstract]
Foreign currency translation adjustment, tax	$ (106)	$ 0	$ (76)	$ 0
Reclassification adjustments to cash flow hedges included in net income, tax	553	552	1,668	1,658
Amortization of pension and postretirement plans actuarial loss and prior service cost, tax	685	2,153	2,157	7,574
Changes in unfunded employee benefit obligations, tax	$ 0	$ 3,152	$ 0	$ 8,522

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Employee Benefit Plans and Other Postretirement Benefits

9 Months Ended

Sep. 30, 2014

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans and Other Postretirement Benefits

Employee Benefit Plans and Other Postretirement Benefits

The components of net periodic benefit cost for our pension plans were as follows (dollars in thousands):

	Pension Plans
	Three Months Ended September 30						Nine Months Ended September 30
	2014			2013			2014			2013
Service cost	$	5,828		$	5,825		$	17,428		$	18,322
Interest cost	11,507			4,269			34,400			12,250
Expected return on plan assets	(12,657		)	(3,796		)	(38,008		)	(11,297		)
Net amortization of unrecognized amounts
Prior service cost	1,641			163			4,922			3,284
Actuarial loss	155			2,217			465			5,221
Curtailment loss (a)	—			3,132			—			10,908
Net periodic benefit cost	$	6,474		$	11,810		$	19,207		$	38,688

___________

(a) In June 2013, the United Steelworkers (“USW”) ratified a master labor agreement with PCA under which we froze certain USW-represented corrugated plant employees pension accruals under PCA’s hourly pension plan. Additionally, in September 2013, the USW ratified a master labor agreement with PCA under which we froze certain USW-represented containerboard mill employees pension accruals under PCA’s hourly pension plan. Following the pension freezes, affected USW-represented employees will transition to a defined contribution 401k plan. We recorded a $3.1 million and $10.9 million pre-tax pension curtailment charge related to the unrecognized prior service costs of employees impacted by the pension freezes during the three and nine months ended September 30, 2013, respectively. We also remeasured the hourly pension plan benefit obligation using current fair values of plan assets and current assumptions, resulting in a decrease in the benefit obligation of $21.9 million with a corresponding decrease in accumulated other comprehensive income (loss) of $13.4 million and deferred taxes of $8.5 million.

PCA makes pension plan contributions that are sufficient to fund its actuarially determined costs, generally equal to the minimum amounts required by the Employee Retirement Income Security Act (ERISA). During the nine months ended September 30, 2014, we contributed $0.4 million to our pension plans, which exceeds our 2014 minimum required contributions, calculated under the pension provisions of the Highway and Transportation Funding Act passed in August 2014. We do not expect to make any additional contributions during the fourth quarter of 2014.

The components of net periodic benefit cost for our postretirement plans were as follows (dollars in thousands):

	Postretirement Plans
	Three Months Ended September 30						Nine Months Ended September 30
	2014			2013			2014			2013
Service cost	$	392		$	515		$	1,177		$	1,545
Interest cost	311			311			933			934
Net amortization of unrecognized amounts
Prior service benefit	(57		)	(106		)	(170		)	(319		)
Actuarial loss	26			134			77			401
Net periodic benefit cost	$	672		$	854		$	2,017		$	2,561

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Document and Entity Information	9 Months Ended
	Sep. 30, 2014	Oct. 31, 2014
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Trading Symbol	PKG
Entity Registrant Name	PACKAGING CORP OF AMERICA
Entity Central Index Key	0000075677
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		98,383,452

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Share-based Compensation

9 Months Ended

Sep. 30, 2014

Share-based Compensation [Abstract]

Share-based Compensation

Share-based Compensation

The Company has a long-term equity incentive plan, which allows for grants of stock options, stock appreciation rights, restricted stock, and performance awards to directors, officers, and employees, as well as others who engage in services for PCA. The plan, as amended, terminates May 1, 2023, and authorizes 10.6 million shares of common stock for grant over the life of the plan. As of September 30, 2014, 1.9 million shares were available for future issuance under the plan. Forfeitures are added back to the pool of shares of common stock available to be granted at a future date.

The following table presents restricted stock and performance unit award activity for the nine months ended September 30, 2014:

	Restricted Stock				Performance Units
	Shares		Weighted Average Grant- Date Fair Value		Shares	Weighted Average Grant- Date Fair Value
Outstanding at December 31, 2013	1,463,694		$	31.48	70,600	$	47.83
Granted	229,489		70.24		56,889	71.19
Vested	(475,050	)	23.86		—	—
Forfeitures	(1,165	)	62.74		—	—
Outstanding at September 30, 2014	1,216,968		$	41.73	127,489	$	58.25

Compensation Expense

Our share-based compensation expense is recorded in "Selling, general, and administrative expenses". Compensation expense for share-based awards recognized in the Consolidated Statements of Income, net of forfeitures was as follows (dollars in thousands):

	Three Months Ended September 30						Nine Months Ended September 30
	2014			2013			2014			2013
Restricted stock	$	(3,453	)	$	(2,933	)	$	(10,501	)	$	(9,691	)
Performance units	(594		)	(249		)	(1,147		)	(265		)
Impact on income before income taxes	(4,047		)	(3,182		)	(11,648		)	(9,956		)
Income tax benefit	1,572			1,237			4,530			3,868
Impact on net income	$	(2,475	)	$	(1,945	)	$	(7,118	)	$	(6,088	)

The fair value of restricted stock and performance units is determined based on the closing price of the Company’s common stock on the grant date. As PCA’s Board of Directors has the ability to accelerate vesting of share-based awards upon an employee’s retirement, the Company accelerates the recognition of compensation expense for certain employees approaching normal retirement age.

The unrecognized compensation expense for all share-based awards at September 30, 2014, was as follows (dollars in thousands):

	September 30, 2014
	Unrecognized Compensation Expense		Remaining Weighted Average Recognition Period (in years)
Restricted stock	$	30,543	2.7
Performance units	6,025		3.4
Total unrecognized share-based compensation expense	$	36,568	2.8

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 154,323	$ 190,960
Accounts receivable, net of allowance for doubtful accounts and customer deductions of $12,118 and $10,567 as of September 30, 2014, and December 31, 2013, respectively	717,947	643,083
Inventories	616,962	594,291
Prepaid expenses and other current assets	76,195	32,101
Federal and state income taxes receivable	0	22,958
Deferred income taxes	32,280	47,616
Total current assets	1,597,707	1,531,009
Property, plant, and equipment, net	2,818,133	2,805,704
Goodwill	541,911	526,789
Intangible assets, net	299,096	310,539
Other long-term assets	73,902	69,738
Total assets	5,330,749	5,243,779
Current liabilities:
Current maturities of long-term debt	6,500	39,000
Capital lease obligations	1,082	1,030
Accounts payable	387,854	357,432
Dividends payable	39,393	39,297
Federal and state income taxes payable	7,176	0
Accrued liabilities	228,758	214,058
Accrued interest	19,272	9,722
Total current liabilities	690,035	660,539
Long-term liabilities:
Long-term debt	2,350,484	2,508,845
Capital lease obligations	23,055	23,874
Deferred income taxes	426,086	434,835
Pension and postretirement benefit plans	204,286	193,548
Other long-term liabilities	84,764	65,318
Total long-term liabilities	3,088,675	3,226,420
Commitments and contingent liabilities
Stockholders' equity:
Common stock, par value $0.01 per share, 300,000 shares authorized, 98,383 and 98,172 shares issued as of September 30, 2014, and December 31, 2013, respectively	984	982
Additional paid in capital	427,844	401,761
Retained earnings	1,184,155	1,019,101
Accumulated other comprehensive loss	(60,944)	(65,024)
Total stockholders' equity	1,552,039	1,356,820
Total liabilities and stockholders' equity	$ 5,330,749	$ 5,243,779

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Income Taxes

9 Months Ended

Sep. 30, 2014

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For the three and nine months ended September 30, 2014, we recorded $60.9 million and $170.1 million of income tax expense and had an effective tax rate of 36.8% and 36.6%, respectively. For the three and nine months ended September 30, 2013, we recorded $46.2 million and $115.4 million of income tax expense and had an effective tax rate of 35.3% and 35.1%, respectively. During the three and nine months ended September 30, 2014 and 2013, the primary reasons for the difference from the federal statutory income tax rate of 35.0% were theeffect of state and local income taxes and the domestic manufacturers’ deduction.

During the three and nine months ended September 30, 2014, there were no significant changes to our uncertain tax positions. For more information, see Note 5, Income Taxes, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our updated 2013 Financial Statements.

During the nine months ended September 30,2014 and 2013, cash paid for taxes, net of refunds received, was $110.8 million and $45.7 million, respectively.

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Earnings Per Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

The following table sets forth the computation of basic and diluted income per common share for the periods presented (dollars and shares in thousands, except per share data).

	Three Months Ended September 30					Nine Months Ended September 30
	2014			2013		2014			2013
Numerator:
Net income	$	104,445		$	84,682	$	294,088		$	213,228
Less: distributed and undistributed earnings allocated to participating securities	(1,451		)	—		(4,381		)	—
Net income attributable to common shareholders	$	102,994		$	84,682	$	289,707		$	213,228
Denominator:
Weighted average basic common shares outstanding	97,165			96,758		96,954			96,536
Effect of dilutive securities	57			839		53			976
Diluted common shares outstanding	97,222			97,597		97,007			97,512
Basic income per common share	$	1.06		$	0.88	$	2.99		$	2.21
Diluted income per common share	$	1.06		$	0.87	$	2.99		$	2.19

During the nine months ended September 30, 2014 and 2013, all outstanding options to purchase shares were included in the computation of diluted common shares outstanding. On June 29, 2014, all remaining options to purchase shares expired.

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New and Recently Adopted Accounting Standards

9 Months Ended

Sep. 30, 2014

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New and Recently Adopted Accounting Standards

New and Recently Adopted Accounting Standards

In August 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-15, Presentation of Financial Statements (Topic 205): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This ASU provides guidance that will explicitly require management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. The guidance is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. We do not believe the adoption of this update will affect our financial position and results of operations.

In May 2014, the FASB issued ASU 2014-09: Revenue from Contracts with Customers (Topic 606). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry-specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows from contracts with customers. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, and early adoption is prohibited. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We are currently assessing the impact the adoption of ASU 2014-09 may have on our financial position and results of operations.

In April 2014, theFASBissuedASU2014-08,Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU defines a discontinued operation as a disposal of a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. The standard also requires additional disclosures about discontinued operations. We adopted the provisions of this guidance in third quarter 2014, and it did not have a material effect on our financial position and results of operations.

In February 2013, the FASB issued ASU 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date. This ASU requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, as the sum of (a) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (b) any additional amount the reporting entity expects to pay on behalf of its co-obligors. This ASU also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. We adopted the provisions of this guidance January 1, 2014, and it did not have a material effect on our financial position and results of operations.

In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This ASU requires that liabilities related to unrecognized tax benefits offset deferred tax assets for net operating loss carryforwards, a similar tax loss, or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. In situations in which carryforwards cannot be used or the deferred tax asset is not intended to be used for such purpose, the unrecognized tax benefit should be recorded as a liability and should not offset deferred tax assets. We adopted the provisions of this guidance on December 31, 2013, and it did not have a significant effect on our financial position or results of operations.

There were no other accounting standards recently issued that had or are expected to have a material impact on our financial position or results of operations.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2014

Equity [Abstract]

Stockholders' Equity

Stockholders' Equity

Dividends

During the nine months ended September 30, 2014, we paid $118.0 million of dividends to shareholders. On August 28, 2014, PCA's Board of Directors approved a regular quarterly cash dividend $0.40 per share, which was paid on October 15, 2014, to shareholders of record as of September 15, 2014. The dividend payment was $39.4 million.

Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) (“AOCI”) by component follows (dollars in thousands). Amounts in parentheses indicate losses.

	Foreign Currency Translation Adjustments			Unrealized Loss On Treasury Locks, Net				Unrealized Loss on Foreign Exchange Contracts				Unfunded Employee Benefit Obligations				Total
Balance at December 31, 2013	$	(136	)	$	(28,191	)		$	(371	)		$	(36,326	)		$	(65,024	)
Other comprehensive income (loss) before reclassifications, net of tax	(1,656		)	—				—				—				(1,656		)
Amounts reclassified from AOCI, net of tax	—			2,584			(a)	15			(b)	3,137			(c)	5,736
Net current-period other comprehensive income (loss)	(1,656		)	2,584				15				3,137				4,080
Balance at September 30, 2014	$	(1,792	)	$	(25,607	)		$	(356	)		$	(33,189	)		$	(60,944	)

The following table presents information about reclassifications out of AOCI (dollars in thousands). Amounts in parentheses indicate expenses in the Consolidated Statements of Income.

	Amounts Reclassified from AOCI
	Three Months Ended September 30						Nine Months Ended September 30						Affected Line Item in the Statement Where Net Income is Presented
Details about AOCI Components	2014			2013			2014			2013
Unrealized loss on treasury locks, net	$	(1,414	)	$	(1,414	)	$	(4,242	)	$	(4,242	)	See (a) below
	549			549			1,658			1,648			Tax benefit
	$	(865	)	$	(865	)	$	(2,584	)	$	(2,594	)	Net of tax
Unrealized loss on foreign exchange contracts	$	(9	)	$	(8	)	$	(25	)	$	(25	)	See (b) below
	4			3			10			10			Tax benefit
	$	(5	)	$	(5	)	$	(15	)	$	(15	)	Net of tax
Unfunded employee benefit obligations
Amortization of prior service costs	$	(1,584	)	$	(57	)	$	(4,752	)	$	(2,965	)	See (c) below
Amortization of actuarial losses	(181		)	(2,351		)	(542		)	(5,622		)	See (c) below
Curtailment loss	—			(3,132		)	—			(10,908		)	See (c) below
	(1,765		)	(5,540		)	(5,294		)	(19,495		)	Total before tax
	685			2,153			2,157			7,574			Tax benefit
	$	(1,080	)	$	(3,387	)	$	(3,137	)	$	(11,921	)	Net of tax

____________

(a) This AOCI component is included in interest expense, net. Amount relates to the amortization of the effective portion of treasury lock derivative instruments recorded in AOCI. The net amount of settlement gains or losses on derivative instruments included in AOCI to be amortized over the next 12 months is a net loss of $5.7 million ($3.5 million after tax). For a discussion of treasury lock derivative instrument activity, see Note 11, Derivative Instruments and Hedging Activities, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our updated 2013 Financial Statements.

(b) This AOCI component is included in cost of sales.

(c) These AOCI components are included in the computation of net pension and postretirement benefit costs. See Note 11, Employee Benefit Plans and Other Postretirement Benefits, for additional information.

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Accrued Liabilities

9 Months Ended

Sep. 30, 2014

Accrued Liabilities [Abstract]

Accrued Liabilities

Accrued Liabilities

The components of accrued liabilities were as follows (in thousands):

	September 30, 2014		December 31, 2013
Compensation and benefits	$	136,996	$	130,455
Franchise, property, sales and use taxes	27,942		20,232
Medical insurance and workers’ compensation	26,185		26,399
Customer volume discounts and rebates	12,695		11,436
Environmental liabilities and asset retirement obligations	6,829		7,812
Severance	2,052		8,172
Legal contingencies	1,283		1,000
Other	14,776		8,552
Total	$	228,758	$	214,058

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Stockholders' Equity Reclassifications Out of Accumulated Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest expense, net	$ (23,111)	[1],[2]	$ (11,850)	[3]	$ (65,311)	[1],[2]	$ (30,333)	[3]
Cost of sales	(1,198,607)		(617,841)		(3,486,108)		(1,792,782)
Income before taxes	165,267	[2]	130,932		464,223	[2]	328,646
Provision for income taxes	(60,822)		(46,250)		(170,135)		(115,418)
Net income	104,445		84,682		294,088		213,228
Unfunded Employee Benefit Obligations | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Amortization of prior service costs	(1,584)	[4]	(57)	[4]	(4,752)	[4]	(2,965)	[4]
Amortization of actuarial losses	(181)	[4]	(2,351)	[4]	(542)	[4]	(5,622)	[4]
Curtailment loss	0	[4]	(3,132)	[4]	0	[4]	(10,908)	[4]
Income before taxes	(1,765)		(5,540)		(5,294)		(19,495)
Provision for income taxes	685		2,153		2,157		7,574
Net income	(1,080)		(3,387)		(3,137)		(11,921)
Treasury Lock | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest expense, net	(1,414)	[5]	(1,414)	[5]	(4,242)	[5]	(4,242)	[5]
Provision for income taxes	549		549		1,658		1,648
Net income	(865)		(865)		(2,584)		(2,594)
Foreign Exchange Contract | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Cost of sales	(9)	[6]	(8)	[6]	(25)	[6]	(25)	[6]
Provision for income taxes	4		3		10		10
Net income	$ (5)		$ (5)		$ (15)		$ (15)

[1] Includes $1.5 million of expense related to the write-off of deferred financing costs in connection with the debt refinancing discussed in Note 10, Debt.

[2] On October 25, 2013, we acquired Boise. The 2014 results include Boise for the full period.

[3] Includes $2.7 million of acquisition-related costs primarily related to financing the acquisition of Boise.

[4] These AOCI components are included in the computation of net pension and postretirement benefit costs. See Note 11, Employee Benefit Plans and Other Postretirement Benefits, for additional information.

[5] This AOCI component is included in interest expense, net. Amount relates to the amortization of the effective portion of treasury lock derivative instruments recorded in AOCI. The net amount of settlement gains or losses on derivative instruments included in AOCI to be amortized over the next 12 months is a net loss of $5.7 million ($3.5 million after tax). For a discussion of treasury lock derivative instrument activity, see Note 11, Derivative Instruments and Hedging Activities, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our updated 2013 Financial Statements.

[6] This AOCI component is included in cost of sales.

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Property, Plant, and Equipment

9 Months Ended

Sep. 30, 2014

Property, Plant and Equipment [Abstract]

Property, Plant, and Equipment

Property, Plant, and Equipment

Property, plant, and equipment consist of the following (dollars in thousands):

	September 30, 2014			December 31, 2013
Land and land improvements	$	138,486		$	140,592
Buildings	645,173			628,948
Machinery and equipment	4,374,819			4,246,294
Construction in progress	253,150			168,808
Other	53,177			48,058
Property, plant, and equipment, at cost	5,464,805			5,232,700
Less accumulated depreciation	(2,646,672		)	(2,426,996		)
Property, plant, and equipment, net	$	2,818,133		$	2,805,704

Depreciation expense for the three months ended September 30, 2014 and 2013, was $95.1 million and $42.4 million, respectively. During the nine months ended September 30, 2014 and 2013, depreciation expense was $264.1 million and $125.2 million, respectively. The increase in depreciation expense relates primarily to the acquisition of Boise in fourth quarter 2013, as well as accelerated depreciation related to shortening the useful lives of our newsprint-related assets at the DeRidder, Louisiana, mill. During the three and nine months ended September 30, 2014, we recognized $18.2 million and $35.4 million, respectively, of incremental depreciation expense related to shortening the useful lives of our newsprint-related assets at the DeRidder, Louisiana, mill.

At September 30, 2014, purchases of property, plant, and equipment included in accounts payable was $49.6 million.

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Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Goodwill

Goodwill represents the excess of the cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. At September 30, 2014, and December 31, 2013, we had $487.9 million and $472.9 million of goodwill recorded in our Packaging segment, respectively, and $54.0 million and$53.9 million of goodwill recorded in our Paper segment, respectively, on our Consolidated Balance Sheets.

Changes in the carrying amount of our goodwill were as follows (dollars in thousands):

	Goodwill
Balance at December 31, 2013	$	526,789
Acquisitions (a)	10,734
Adjustments related to purchase accounting (b)	4,388
Balance at September 30, 2014	$	541,911

___________

(a) In April 2014, we acquired the assets of Crockett Packaging, a corrugated products manufacturer, for $21.2 million, before $0.9 million of working capital adjustments, and recorded $10.7 million of goodwill in our Packaging segment.

(b) Adjustments relate primarily to the Boise acquisition, see Note 3, Acquisitions, for more information.

We have historically performed our annual goodwill impairment testing as of December 31. During the third quarter of 2014, we changed the annual goodwill impairment testing date from December 31 to October 1. We believe this change in measurement date, which represents a change in method of applying an accounting principle, is preferable. While remaining in the fourth quarter, the measurement date will lessen resource constraints in connection with the year-end close and financial reporting process by allowing us additional time to complete our annual impairment testing in advance of our year-end reporting. The change in accounting principle does not delay, accelerate, or avoid an impairment charge. We have determined that it is not practical to objectively determine projected cash flows and related valuation estimates that would have been used as of October 1 for periods prior to October 1, 2014, without the use of hindsight. As such, we prospectively applied the change in our annual goodwill impairment test date as of the first day of the fourth quarter of 2014.

Intangible Assets

Intangible assets are primarily comprised of customer relationships and trademarks and trade names.

The weighted average remaining useful life, gross carrying amount, and accumulated amortization of our intangible assets were as follows (dollars in thousands):

	September 30, 2014					December 31, 2013
	Weighted Average Remaining Useful Life (in Years)	Gross  Carrying Amount		Accumulated Amortization		Weighted Average Remaining Useful Life (in Years)	Gross  Carrying Amount		Accumulated Amortization
Customer relationships	14.5	$	311,461	$	31,759	15.4	$	306,361	$	16,509
Trademarks and trade names	13.6	21,770		2,455		14.7	21,370		794
Other	2.4	220		141		3.0	220		109
Total intangible assets (excluding goodwill)	14.4	$	333,451	$	34,355	15.4	$	327,951	$	17,412

Amortization expense for the three months ended September 30, 2014 and 2013, was $5.7 millionand $0.8 million, respectively. During the nine months ended September 30, 2014 and 2013, amortization expense was $16.9 million and $2.5 million, respectively. The increase in amortization expense relates primarily to the acquisition of Boise in fourth quarter 2013.

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Debt

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Debt

Debt

Our long-term debt and interest rates on that debt were as follows (dollars in thousands):

	September 30, 2014				December 31, 2013
	Amount		Interest Rate		Amount		Interest Rate
Revolving Credit Facility, due October 2018	$	—	—	%	$	—	—	%
Five-Year Term Loan, due October 2018	65,000		1.53		650,000		1.54
Seven-Year Term Loan, due October 2020	645,125		1.78		650,000		1.79
6.50% Senior Notes, net of discounts of $22 and $26 as of September 30, 2014 and December 31, 2013, respectively, due March 2018	149,978		6.50		149,974		6.50
3.90% Senior Notes, net of discounts of $275 and $302 as of September 30, 2014 and December 31, 2013, respectively, due June 2022	399,725		3.90		399,698		3.90
4.50% Senior Notes, net of discount of $1,714 and $1,827 as of September 30, 2014 and December 31, 2013, respectively, due November 2023	698,286		4.50		698,173		4.50
3.65% Senior Notes, net of discount of $1,130 as of September 30, 2014, due September 2024	398,870		3.65		—		—
Total	2,356,984		3.56		2,547,845		3.08
Less current portion	6,500		1.78		39,000		1.59
Total long-term debt	$	2,350,484	3.56	%	$	2,508,845	3.10	%

On September 5, 2014, we issued $400.0 million of 3.65% fixed-rate senior notes due September 15, 2024, through a registered public offering. We used the proceeds of this offering and other cash from operations to repay $589.9 million of debt during the nine months ended September 30, 2014. In connection with the $400.0 million debt issuance, we paid $3.2 million of deferred financing costs, which will be amortized to interest expense using the effective interest method over the term of the debt.

For the nine months ended September 30,2014 and 2013, cash payments for interest were $50.0 million and $21.0 million, respectively.

Annual principal maturities for debt, excluding unamortized debt discount, as of September 30, 2014 were: $1.6 million for the remainder of 2014, $6.5 million for 2015, 2016, and 2017; $221.5 million for 2018; $6.5 million for 2019; and $2.1 billion for 2020 and thereafter.

Included in interest expense, net, are amortization of treasury lock settlements and amortization of financing costs. For both the three months ended September 30, 2014 and 2013, amortization of treasury lock settlements was $1.4 million, and for both the nine months ended September 30, 2014 and 2013, amortization of treasury lock settlements was $4.2 million. During the three months ended September 30, 2014 and 2013, amortization of financing costs was $2.0 million and $2.9 million, respectively, and during the nine months ended September 30, 2014 and 2013, amortization of financing costs was $2.9 million and $3.3 million, respectively. In connection with our debt repayments during the three months ended September 30, 2014, we expensed $1.5 million of deferred financing costs.

At September 30, 2014, we have $1,646.9 million of fixed-rate senior notes and $710.1 million of variable-rate term loans outstanding. At September 30, 2014, the fair value of our fixed-rate debt was estimated to be $1,713.1 million. The difference between the book value and fair value is due to the difference between the period-end market interest rate and the stated rate of our fixed-rate debt. We estimated the fair value of our fixed-rate debt using quoted market prices (Level 2 inputs) within the fair value hierarchy, which is further defined in Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" of our updated 2013 Financial Statements.

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Commitments, Guarantees, Indemnifications and Legal Proceedings (Details) (USD $) In Thousands, unless otherwise specified	2 Months Ended	3 Months Ended		9 Months Ended
	Oct. 31, 2010	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014		Sep. 30, 2013
Commitments and Contingencies Disclosure [Abstract]
Number of other U.S. and Canadian containerboard producers	PCA and eight other U.S. and Canadian containerboard producers were named as defendants
Number of lawsuits filed by the plaintiffs	5
Class action lawsuit settlement		$ 0	$ 0	$ 17,600	[1]	$ 0

[1] The nine months ended September 30, 2014, includes $17.6 million of costs for the settlement of the Kleen Products LLC v Packaging Corp. of America et al class action lawsuit. See Note 18, Commitments, Guarantees, Indemnifications and Legal Proceedings, for more information.

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Segment Information (Details) (USD $)	3 Months Ended				9 Months Ended				10 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013		Oct. 23, 2013
Segment Reporting Information [Line Items]
Number of reportable segments					3				1
Trade sales	$ 1,518,900,000	[1]	$ 845,400,000		$ 4,418,700,000	[1]	$ 2,400,900,000
Net sales	1,518,940,000		845,440,000		4,418,653,000		2,400,877,000
Operating income (loss)	188,378,000	[1]	142,782,000		529,534,000	[1]	358,979,000
Interest expense, net	(23,111,000)	[1],[2]	(11,850,000)	[3]	(65,311,000)	[1],[2]	(30,333,000)	[3]
Income before taxes	165,267,000	[1]	130,932,000		464,223,000	[1]	328,646,000
DeRidder restructuring	4,270,000	[4]	0		5,690,000	[4]	0
Integration-related and other costs	3,040,000	[5]	0		11,999,000	[5]	0
Class action lawsuit settlement	0		0		17,600,000	[6]	0
Curtailment loss	0		3,132,000	[7]	0		10,908,000	[7]
Acquisition-related costs	0		1,479,000	[8]	0		1,479,000	[8]
Packaging
Segment Reporting Information [Line Items]
Trade sales	1,174,200,000	[1]	845,400,000		3,413,800,000	[1]	2,400,900,000
Operating income (loss)	164,700,000	[1],[9]	154,900,000	[10]	501,800,000	[1],[9]	395,100,000	[10]
DeRidder restructuring	26,000,000				47,800,000
Paper
Segment Reporting Information [Line Items]
Trade sales	312,500,000	[1]			917,000,000	[1]
Operating income (loss)	43,000,000	[1],[11]			104,300,000	[1],[11]
Corporate and Other
Segment Reporting Information [Line Items]
Trade sales	32,200,000	[1]	0		87,900,000	[1]	0
Operating income (loss)	(19,300,000)	[1],[12]	(12,100,000)	[13]	(76,600,000)	[1],[12]	(36,100,000)	[13]
Class action lawsuit settlement					17,600,000	[6]
Intersegment Eliminations
Segment Reporting Information [Line Items]
Intersegment sales	0	[1]	0		0	[1]	0
Intersegment Eliminations | Packaging
Segment Reporting Information [Line Items]
Intersegment sales	1,500,000	[1]	0		4,500,000	[1]	0
Intersegment Eliminations | Paper
Segment Reporting Information [Line Items]
Intersegment sales	0	[1]			0	[1]
Intersegment Eliminations | Corporate and Other
Segment Reporting Information [Line Items]
Intersegment sales	37,000,000	[1]	0		112,800,000	[1]	0
Intersegment Eliminations | Intersegment Eliminations
Segment Reporting Information [Line Items]
Intersegment sales	(38,500,000)	[1]			(117,300,000)	[1]
Operating Segments
Segment Reporting Information [Line Items]
Net sales	1,518,900,000	[1]	845,400,000		4,418,700,000	[1]	2,400,900,000
Operating Segments | Packaging
Segment Reporting Information [Line Items]
Net sales	1,175,700,000	[1]	845,400,000		3,418,300,000	[1]	2,400,900,000
Operating Segments | Paper
Segment Reporting Information [Line Items]
Net sales	312,500,000	[1]			917,000,000	[1]
Operating Segments | Corporate and Other
Segment Reporting Information [Line Items]
Net sales	69,200,000	[1]	0		200,700,000	[1]	0
Operating Segments | Intersegment Eliminations
Segment Reporting Information [Line Items]
Net sales	(38,500,000)	[1]			(117,300,000)	[1]
Other Expense, Net | Paper
Segment Reporting Information [Line Items]
Integration-related and other costs					(400,000)
Boise Inc. | Corporate and Other
Segment Reporting Information [Line Items]
Acquisition-related costs			1,500,000				1,500,000
Boise Inc. | Other Expense, Net | Packaging
Segment Reporting Information [Line Items]
Integration-related and other costs	1,000,000				5,400,000
Boise Inc. | Other Expense, Net | Corporate and Other
Segment Reporting Information [Line Items]
Integration-related and other costs	2,000,000				7,000,000
Pension Plans
Segment Reporting Information [Line Items]
Curtailment loss	0		3,132,000	[14]	0		10,908,000	[14]
Pension Plans | Packaging
Segment Reporting Information [Line Items]
Curtailment loss			3,100,000				10,900,000
Write-Off of Deferred Financing Costs
Segment Reporting Information [Line Items]
Interest expense, net	1,500,000				1,500,000
Acquisition-Related Debt Financing Costs [Member] | Acquisition Financing Expense | Boise Inc.
Segment Reporting Information [Line Items]
Interest expense, net			$ 2,700,000				$ 2,700,000

[1] On October 25, 2013, we acquired Boise. The 2014 results include Boise for the full period.

[2] Includes $1.5 million of expense related to the write-off of deferred financing costs in connection with the debt refinancing discussed in Note 10, Debt.

[3] Includes $2.7 million of acquisition-related costs primarily related to financing the acquisition of Boise.

[4] Costs relate primarily to the conversion of the Number 3 newsprint machine at our DeRidder, Louisiana, mill to produce lightweight linerboard and corrugating medium, and our exit from the newsprint business in September 2014.

[5] The three and nine months ended September 30, 2014, include Boise acquisition integration-related and other costs.

[6] The nine months ended September 30, 2014, includes $17.6 million of costs for the settlement of the Kleen Products LLC v Packaging Corp. of America et al class action lawsuit. See Note 18, Commitments, Guarantees, Indemnifications and Legal Proceedings, for more information.

[7] The three and nine months ended September 30, 2013, include $3.1 million and $10.9 million, respectively, of non-cash pension curtailment charges related to pension plan changes in which certain hourly corrugated plant and containerboard mill employees will transition from a defined benefit pension plan to a defined contribution (401k) plan.

[8] The three and nine months ended September 30, 2013, both include $1.5 million of acquisition-related costs, primarily for professional fees related to transaction-advisory services and expenses related to financing the acquisition of Boise.

[9] Includes costs related primarily to the conversion of the Number 3 newsprint machine at our DeRidder, Louisiana, mill to produce lightweight linerboard and corrugating medium, and our exit from the newsprint business in September 2014. The three and nine months ended September 30, 2014, include $26.0 million and $47.8 million, respectively, of restructuring charges, primarily accelerated depreciation. The three and nine months ended September 30, 2014, includes $1.0 million and $5.4 million of Boise acquisition integration-related and other costs recorded in "Other expense, net".

[10] Includes $3.1 million and $10.9 million, for the three and nine months ended September 30, 2013, respectively, of non-cash pension curtailment charges related to pension plan changes in which certain hourly corrugated plant and containerboard mill employees will transition from a defined benefit pension plan to a defined contribution (401k) plan.

[11] Includes $0.4 million of income, net of expenses, for the nine months ended September 30, 2014, of integration related and other costs recorded in "Other expense, net".

[12] Includes $2.0 million and $7.0 million, for the three and nine months ended September 30, 2014, of Boise acquisition integration-related and other costs recorded in "Other expense, net".The nine months ended September 30, 2014, includes $17.6 million of costs for the settlement of the Kleen Products LLC v Packaging Corp. of America et al class action lawsuit. See Note 18, Commitments, Guarantees, Indemnifications and Legal Proceedings, for more information. These costs are recorded in "Other expense, net".

[13] Includes $1.5 million of Boise acquisition-related costs primarily for professional fees related to transaction-advisory services.

[14] In June 2013, the United Steelworkers (“USW”) ratified a master labor agreement with PCA under which we froze certain USW-represented corrugated plant employees pension accruals under PCA’s hourly pension plan. Additionally, in September 2013, the USW ratified a master labor agreement with PCA under which we froze certain USW-represented containerboard mill employees pension accruals under PCA’s hourly pension plan. Following the pension freezes, affected USW-represented employees will transition to a defined contribution 401k plan. We recorded a $3.1 million and $10.9 million pre-tax pension curtailment charge related to the unrecognized prior service costs of employees impacted by the pension freezes during the three and nine months ended September 30, 2013, respectively. We also remeasured the hourly pension plan benefit obligation using current fair values of plan assets and current assumptions, resulting in a decrease in the benefit obligation of $21.9 million with a corresponding decrease in accumulated other comprehensive income (loss) of $13.4 million and deferred taxes of $8.5 million.

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Debt (Tables)

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Summary of Debt

Our long-term debt and interest rates on that debt were as follows (dollars in thousands):

	September 30, 2014				December 31, 2013
	Amount		Interest Rate		Amount		Interest Rate
Revolving Credit Facility, due October 2018	$	—	—	%	$	—	—	%
Five-Year Term Loan, due October 2018	65,000		1.53		650,000		1.54
Seven-Year Term Loan, due October 2020	645,125		1.78		650,000		1.79
6.50% Senior Notes, net of discounts of $22 and $26 as of September 30, 2014 and December 31, 2013, respectively, due March 2018	149,978		6.50		149,974		6.50
3.90% Senior Notes, net of discounts of $275 and $302 as of September 30, 2014 and December 31, 2013, respectively, due June 2022	399,725		3.90		399,698		3.90
4.50% Senior Notes, net of discount of $1,714 and $1,827 as of September 30, 2014 and December 31, 2013, respectively, due November 2023	698,286		4.50		698,173		4.50
3.65% Senior Notes, net of discount of $1,130 as of September 30, 2014, due September 2024	398,870		3.65		—		—
Total	2,356,984		3.56		2,547,845		3.08
Less current portion	6,500		1.78		39,000		1.59
Total long-term debt	$	2,350,484	3.56	%	$	2,508,845	3.10	%

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Debt Summary of Debt (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 05, 2014	Dec. 31, 2013
Debt Instrument [Line Items]
Long-term debt	$ 2,356,984		$ 2,547,845
Less current portion	6,500		39,000
Long-term debt	2,350,484		2,508,845
Weighted-average interest rate	3.56%		3.08%
Line of Credit
Debt Instrument [Line Items]
Long-term debt	0		0
Stated interest rate	0.00%		0.00%
Credit facility, expiration date	Oct. 18, 2018
Five-Year Term Loan, due October 2018 | Unsecured Debt
Debt Instrument [Line Items]
Long-term debt	65,000		650,000
Stated interest rate	1.53%		1.54%
Debt instrument, maturity date	Oct. 18, 2018
Seven-Year Term Loan, due October 2020 | Unsecured Debt
Debt Instrument [Line Items]
Long-term debt	645,125		650,000
Stated interest rate	1.78%		1.79%
Debt instrument, maturity date	Oct. 18, 2020
6.50% Senior Notes, due March 2018 | Senior Notes
Debt Instrument [Line Items]
Long-term debt	149,978		149,974
Stated interest rate	6.50%		6.50%
Debt instrument, maturity date	Mar. 15, 2018
Senior notes, discount	22		26
3.90% Senior Notes, due June 2022 | Senior Notes
Debt Instrument [Line Items]
Long-term debt	399,725		399,698
Stated interest rate	3.90%		3.90%
Debt instrument, maturity date	Jun. 15, 2022
Senior notes, discount	275		302
4.50% Senior Notes, due November 2023 | Senior Notes
Debt Instrument [Line Items]
Long-term debt	698,286		698,173
Stated interest rate	4.50%		4.50%
Debt instrument, maturity date	Nov. 01, 2023
Senior notes, discount	1,714		1,827
3.65% Senior Notes, due September 2024 | Senior Notes
Debt Instrument [Line Items]
Long-term debt	398,870		0
Stated interest rate	3.65%	3.65%	0.00%
Debt instrument, maturity date	Sep. 15, 2024
Senior notes, discount	$ 1,130
Current Portion of Long-term Debt
Debt Instrument [Line Items]
Stated interest rate	1.78%		1.59%
Long-term Debt, Excluding Current Portion
Debt Instrument [Line Items]
Weighted-average interest rate	3.56%		3.10%

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Transactions With Related Parties

9 Months Ended

Sep. 30, 2014

Related Party Transactions [Abstract]

Transactions With Related Parties

Transactions With Related Parties

Louisiana Timber Procurement Company, L.L.C. (LTP) is a variable-interest entity that is 50% owned by PCA and 50% owned by Boise Cascade Company (Boise Cascade). LTP procures sawtimber, pulpwood, residual chips, and other residual wood fiber to meet the wood and fiber requirements of PCA and Boise Cascade in Louisiana. PCA is the primary beneficiary of LTP, and has the power to direct the activities that most significantly affect the economic performance of LTP. Therefore, we consolidate 100% of LTP in our financial statements in our Corporate and Other segment. The carrying amounts of LTP's assets and liabilities (which relate primarily to noninventory working capital items) on our Consolidated Balance Sheets were both $6.4 million at September 30, 2014, and $5.0 million at December 31, 2013. During the three and nine months ended September 30, 2014, we recorded $21.9 million and $56.9 million, respectively, of LTP sales to Boise Cascade in "Net Sales" in the Consolidated Statements of Income and approximately the same amount of expenses in "Cost of Sales". The sales were at prices designed to approximate market prices.

During the three and nine months ended September 30, 2014, fiber purchases from related parties were $7.0 million and $21.3 million, respectively. Most of these purchases related to chip and log purchases by LTP from Boise Cascade's wood products business. These purchases are recorded in "Cost of Sales" in the Consolidated Statements of Income.

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Change in Accounting Principle: Inventories (Policies)

9 Months Ended

Sep. 30, 2014

Inventory Disclosure [Abstract]

Inventory Valuation

Effective January 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.

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Goodwill and Intangible Assets Intangible Assets (Details) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Useful Life (in Years)			14 years 5 months 1 day		15 years 4 months 10 days
Gross Carrying Amount	$ 333,451,000		$ 333,451,000		$ 327,951,000
Accumulated Amortization	34,355,000		34,355,000		17,412,000
Intangible assets amortization expense	5,700,000	800,000	16,900,000	2,500,000
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Useful Life (in Years)			14 years 5 months 23 days		15 years 4 months 28 days
Gross Carrying Amount	311,461,000		311,461,000		306,361,000
Accumulated Amortization	31,759,000		31,759,000		16,509,000
Trademarks and Trade Names
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Useful Life (in Years)			13 years 7 months 13 days		14 years 8 months 16 days
Gross Carrying Amount	21,770,000		21,770,000		21,370,000
Accumulated Amortization	2,455,000		2,455,000		794,000
Other Intangible Assets
Finite-Lived Intangible Assets [Line Items]
Weighted Average Remaining Useful Life (in Years)			2 years 4 months 24 days		3 years
Gross Carrying Amount	220,000		220,000		220,000
Accumulated Amortization	$ 141,000		$ 141,000		$ 109,000

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Change in Accounting Principle: Inventories Components of Inventories (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Inventory Disclosure [Abstract]
Raw materials	$ 239,673	$ 212,027
Work in process	12,739	13,898
Finished goods	195,538	209,972
Supplies and materials	169,012	158,394
Inventories	$ 616,962	$ 594,291

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Allowance for doubtful accounts and customer deductions	$ 12,118	$ 10,567
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	300,000	300,000
Common stock, shares issued	98,383	98,172

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Other Expense, Net

9 Months Ended

Sep. 30, 2014

Other Income and Expenses [Abstract]

Other Expense, Net

Other Expense, Net

The components of other (income) expense were as follows (in thousands):

	Three Months Ended September 30					Nine Months Ended September 30
	2014		2013			2014		2013
DeRidder restructuring (a)	$	4,270	$	—		$	5,690	$	—
Integration-related and other costs (b)	3,040		—			11,999		—
Class action lawsuit settlement (c)	—		—			17,600		—
Pension curtailment charges (d)	—		3,132			—		10,908
Acquisition-related costs (e)	—		1,479			—		1,479
Asset disposals and write-offs	2,854		3,486			6,912		9,508
Other	2,146		(376		)	1,803		615
Total	$	12,310	$	7,721		$	44,004	$	22,510

___________

(a) Costs relate primarily to the conversion of the Number 3 newsprint machine at our DeRidder, Louisiana, mill to produce lightweight linerboard and corrugating medium, and our exit from the newsprint business in September 2014.

(b) The three and nine months ended September 30, 2014, include Boise acquisition integration-related and other costs.

(c) The nine months ended September 30, 2014, includes $17.6 million of costs for the settlement of the Kleen Products LLC v Packaging Corp. of America et al class action lawsuit. See Note 18, Commitments, Guarantees, Indemnifications and Legal Proceedings, for more information.

(d) The three and nine months ended September 30, 2013, include $3.1 million and $10.9 million, respectively, of non-cash pension curtailment charges related to pension plan changes in which certain hourly corrugated plant and containerboard mill employees will transition from a defined benefit pension plan to a defined contribution (401k) plan.

(e) The three and nine months ended September 30, 2013, both include $1.5 million of acquisition-related costs, primarily for professional fees related to transaction-advisory services and expenses related to financing the acquisition of Boise.

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Stockholders' Equity (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	0 Months Ended	3 Months Ended		9 Months Ended		3 Months Ended
	Aug. 28, 2014	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2014 Subsequent Event
Common stock dividends paid				$ 118,004	$ 69,883	$ 39,400
Dividends declared per common share	$ 0.40	$ 0.40	$ 0.40	$ 1.20	$ 1.11
Dividends payable date						Oct. 15, 2014
Dividends payable, date of record	Sep. 15, 2014

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Change in Accounting Principle: Inventories (Tables)

9 Months Ended

Sep. 30, 2014

Inventory Disclosure [Abstract]

Effect of Change on Consolidated Statement of Income and Comprehensive Income

Certain components of our financial statements affected by the change in valuation methodology as originally reported under the LIFO method and as adjusted for the change to the average cost method were as follows (in thousands, except per share data):

	Three Months Ended   September 30, 2013									Nine Months Ended   September 30, 2013
Consolidated Statements of Income and Comprehensive Income	As Previously Reported (a)			Effect of Change			As Adjusted			As Previously Reported (a)			Effect of Change			As Adjusted
Cost of sales	$	(618,663	)	$	822		$	(617,841	)	$	(1,799,285	)	$	6,503		$	(1,792,782	)
Gross profit	226,777			822			227,599			601,592			6,503			608,095
Income from operations	141,960			822			142,782			352,476			6,503			358,979
Income before taxes	130,110			822			130,932			322,143			6,503			328,646
Provision for income taxes	(45,930		)	(320		)	(46,250		)	(112,885		)	(2,533		)	(115,418		)
Net income	84,180			502			84,682			209,258			3,970			213,228
Comprehensive income	93,400			502			93,902			237,206			3,970			241,176
Net income per common share:
Basic	0.87			0.01			0.88			2.17			0.04			2.21
Diluted	0.86			0.01			0.87			2.15			0.04			2.19

___________

(a) Certain amounts in prior periods' consolidated financial statements have been reclassified to conform with the current period presentation.

Effect of Change on Consolidated Balance Sheet

	December 31, 2013
Consolidated Balance Sheet	As Previously Reported		Effect of Change			As Adjusted
Inventories	$	522,523	$	71,768		$	594,291
Deferred income tax assets	75,579		(27,963		)	47,616
Retained earnings	975,296		43,805			1,019,101

Effect of Change on Consolidated Statement of Cash Flows

	Nine Months Ended   September 30, 2013
Consolidated Statement of Cash Flows	As Previously Reported		Effect of Change			As Adjusted
Net income	$	209,258	$	3,970		$	213,228
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income tax provision	3,604		2,533			6,137
Change in inventories	1,875		(6,503		)	(4,628		)

Components of Inventories

The components of inventories were as follows (dollars in thousands):

	September 30, 2014		December 31, 2013
Raw materials	$	239,673	$	212,027
Work in process	12,739		13,898
Finished goods	195,538		209,972
Supplies and materials	169,012		158,394
Inventories	$	616,962	$	594,291

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Analysis of Operations by Reportable Segment

An analysis of operations by reportable segment were as follows (dollars in millions):

	Sales, net								Operating Income (Loss)
Three Months Ended September 30, 2014 (a)	Trade		Inter- segment			Total
Packaging	$	1,174.2	$	1.5		$	1,175.7		$	164.7		(b)
Paper	312.5		—			312.5			43.0			(c)
Corporate and Other	32.2		37.0			69.2			(19.3		)	(d)
Intersegment eliminations	—		(38.5		)	(38.5		)	—
	$	1,518.9	$	—		$	1,518.9		188.4
Interest expense, net									(23.1		)	(e)
Income before taxes									$	165.3

	Sales, net						Operating Income (Loss)
Three Months Ended September 30, 2013	Trade		Inter- segment		Total
Packaging	$	845.4	$	—	$	845.4	$	154.9		(f)
Corporate and Other	—		—		—		(12.1		)	(g)
	$	845.4	$	—	$	845.4	142.8
Interest expense, net							(11.9		)	(h)
Income before taxes							$	130.9

	Sales, net								Operating Income (Loss)
Nine Months Ended September 30, 2014 (a)	Trade		Inter- segment			Total
Packaging	$	3,413.8	$	4.5		$	3,418.3		$	501.8		(b)
Paper	917.0		—			917.0			104.3			(c)
Corporate and Other	87.9		112.8			200.7			(76.6		)	(d)
Intersegment eliminations	—		(117.3		)	(117.3		)	—
	$	4,418.7	$	—		$	4,418.7		529.5
Interest expense, net									(65.3		)	(e)
Income before taxes									$	464.2

	Sales, net						Operating Income (Loss)
Nine Months Ended September 30, 2013	Trade		Inter- segment		Total
Packaging	$	2,400.9	$	—	$	2,400.9	$	395.1		(f)
Corporate and Other	—		—		—		(36.1		)	(g)
	$	2,400.9	$	—	$	2,400.9	359.0
Interest expense, net							(30.4		)	(h)
Income before taxes							$	328.6

____________

(a) On October 25, 2013, we acquired Boise. The 2014 results include Boise for the full period.

(b) Includes costs related primarily to the conversion of the Number 3 newsprint machine at our DeRidder, Louisiana, mill to produce lightweight linerboard and corrugating medium, and our exit from the newsprint business in September 2014. The three and nine months ended September 30, 2014, include $26.0 million and $47.8 million, respectively, of restructuring charges, primarily accelerated depreciation. The three and nine months ended September 30, 2014, includes $1.0 million and $5.4 million of Boise acquisition integration-related and other costs recorded in "Other expense, net".

(c) Includes $0.4 million of income, net of expenses, for the nine months ended September 30, 2014, of integration related and other costs recorded in "Other expense, net".

(d) Includes $2.0 millionand $7.0 million, for the three and nine months ended September 30, 2014, of Boise acquisition integration-related and other costs recorded in "Other expense, net".

The nine months ended September 30, 2014, includes $17.6 million of costs for the settlement of the Kleen Products LLC v Packaging Corp. of America et al class action lawsuit. See Note 18, Commitments, Guarantees, Indemnifications and Legal Proceedings, for more information. These costs are recorded in "Other expense, net".

(e) Includes $1.5 million of expense related to the write-off of deferred financing costs in connection with the debt refinancing discussed in Note 10, Debt.

(f) Includes $3.1 million and $10.9 million, for the three and nine months ended September 30, 2013, respectively, of non-cash pension curtailment charges related to pension plan changes in which certain hourly corrugated plant and containerboard mill employees will transition from a defined benefit pension plan to a defined contribution (401k) plan.

(g) Includes $1.5 million of Boise acquisition-related costs primarily for professional fees related to transaction-advisory services.

(h) Includes $2.7 million of acquisition-related costs primarily related to financing the acquisition of Boise.

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Concentrations of Risk

9 Months Ended

Sep. 30, 2014

Risks and Uncertainties [Abstract]

Concentration of Risk

Concentrations of Risk

Our Paper segment has had a long-standing commercial and contractual relationship with OfficeMax Incorporated (OfficeMax), and OfficeMax is our largest customer in the Paper segment. Following a merger in late 2013, OfficeMax is now a wholly-owned subsidiary of Office Depot, Inc. This relationship exposes us to a significant concentration of business and financial risk. Our sales to Office Depot (including OfficeMax) represented 9% of our total company sales revenue, for both the three and nine months ended September 30, 2014, and 44%of our Paper segment sales revenue for both those periods, respectively. At September 30, 2014, and December 31, 2013, we had $64.6 millionand $39.2 million of accounts receivable due from Office Depot (including OfficeMax), which represents 9% and 6% of our total company receivables, respectively.

We cannot predict how the merger between OfficeMax and Office Depot will affect our business. Significant increases in paper purchases would intensify the concentration of risk. Significant reductions in paper purchases would cause our paper business to expand its customer base and could potentially decrease its profitability if new customer sales required either a decrease in pricing and/or an increase in cost of sales. Any significant deterioration in the financial condition of the post-merger entity affecting the ability to pay or causing a significant change in the willingness to continue to purchase our products could harm our business and results of operations.

Labor

At September 30, 2014, we had approximately 14,000employees and approximately 50%of these employees worked pursuant to collective bargaining agreements. Approximately 75% of our hourly employees are represented by unions. The majority of our unionized employees are represented by the United Steel Workers (USW), the International Brotherhood of Teamsters (IBT), the International Association of Machinists (IAM), and the Association of Western Pulp and Paper Workers (AWPPW). Approximately 22%of our employees work pursuant to collective bargaining agreements that will expire within the next twelve months.