User blog comment:Deshiba/Season 3 Armor and Armor Penetration/@comment-5523473-20121110025051/@comment-4022742-20121110120355

Ye, according to Morello they are changing it in season 3 to actually be %reduction->flat reduction -> percentage pen -> flat pen.

Ah true, I hadn't thought about pen not going below 0. But still true damage on physical skills.