PROVISION FOR INCOME TAXES	2018			2017			2016
Current
U.S. federal	$	31.6		$	53.4		$	79.2
Non-U.S.		192.7			162.8			167.6
U.S. state and local		10.1			9.9			3.5

Deferred
U.S. federal		0.8			21.8			(15.8	)
Non-U.S.		(0.2	)		(44.4	)		(9.7	)
U.S. state and local		(0.1	)		0.9			(0.5	)
Total income tax expense	$	234.9		$	204.4		$	224.3

EFFECTIVE INCOME TAX RATE	2018				2017				2016
U.S. federal income tax rate		21.0		%		35.0		%		35.0		%
Foreign tax rate variances		5.5				(7.4	)			(6.4	)
Tax credits		(3.9	)			(3.3	)			(2.8	)
Change in Valuation Allowances		(3.2	)			(4.8	)			1.3
Current year losses with no benefit		0.5				0.3				1.2
Net operating loss carry-forwards		(0.1	)			(3.7	)			(3.4	)
Changes in tax reserves		3.4				0.8				0.5
U.S. Expense Allocation		0.0				2.0				2.0
Earnings of equity investments		(0.1	)			(0.1	)			(0.1	)
Withholding taxes		3.5				2.1				2.5
State taxes, net of federal benefit		1.1				0.3				0.2
Antitrust settlement		9.9				—				—
U.S. GILTI Tax		1.7				—				—
Change in U.S. tax rate		—				3.0				—
Deemed mandatory repatriation		—				3.1				—
Other, net		(0.9	)			(1.5	)			(1.4	)
Effective income tax rate		38.4		%		25.8		%		28.6		%

The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act makes broad and complex changes to the U.S. tax code, including reducing the U.S. federal corporate income tax rate from 35% to 21% for years beginning after December 31, 2017, requiring companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously deferred and created new taxes on certain foreign sourced earnings. The SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) on December 22, 2017. SAB 118 was issued to address the application of U.S. GAAP in situations when a registrant did not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. In 2017, we made a reasonable estimate of the effects on our existing deferred tax balances and the one-time transition tax and recorded provisional amounts. In the fourth quarter of 2018, the Company filed its 2017 Federal and State tax returns and finalized calculations related to transition tax and deferred tax assets and liabilities previously recorded in the year ended December 31, 2017.

Deferred tax assets and liabilities: In December 2017, we remeasured certain deferred tax assets and liabilities based on the rates at which they were expected to reverse in the future, which is generally 21%. There was not a material difference between the provisional amounts recorded for deferred tax assets and liabilities in December 2017 and the final amounts updated in the fourth quarter 2018 after the completion of the 2017 tax returns.

Foreign tax effects: The one-time transition tax is based on our total post-1986 earnings and profits (E&P) that we previously deferred from U.S. income taxes. In December 2017, we recorded a provisional amount of income tax expense for the one-time transition tax. The final amount reported on the 2017 tax returns was not materially different from the amount previously recorded. However, due to the uncertainties inherent in the calculations of the transition tax and the determination of more than twenty years of E&P history, in the fourth quarter of 2018, we have recorded a tax reserve of $24 million related to the transition tax. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations. Determining the amount of unrecognized deferred tax liability relating to any remaining outside basis difference in these entities (i.e., basis difference in excess of that subject to the one-time transition tax) is not practical.

Global Intangible Low Taxed Income (“GILTI”): The Tax Act created a new requirement that certain income (i.e., GILTI) earned by foreign subsidiaries must be included currently in the gross income of the U.S. shareholder. Under U.S. GAAP, we are permitted to make an accounting policy election to either treat taxes due on future inclusions in U.S. taxable income related to GILTI as a current-period expense when incurred or to factor such amounts into our measurement of our deferred taxes. We have elected to treat the impact of GILTI as a current-period expense when incurred. In 2018, the negative impact of GILTI on our effective tax rate is approximately 1.7% due to the cost of expenses allocated against GILTI that limit the foreign tax credits available for offset against the U.S. tax cost on the GILTI inclusion.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. On December 31, 2018, the Company had net operating loss carryforwards (NOL’s) of approximately $283 million, of which approximately $266 million have no expiration date. The remaining losses expire on various dates through 2029. The Company also has $9 million of U.S. Foreign Tax Credit carry forwards, which begin to expire in 2026 and $7 million of U.S. capital loss carryforwards which begin to expire in 2022.

Valuation allowances have been established which partially offset the related deferred assets. Such allowances are primarily provided against NOL’s of companies that have perennially incurred losses, as well as the NOL’s of companies that are start-up operations and have not established a pattern of profitability. The Company assesses all available evidence, both positive and negative, to determine the amount of any required valuation allowance. In 2018, the Company recognized a tax benefit of $37 million due to the reversal of valuation allowances. This consisted primarily of the reversal of valuation allowances on deferred tax assets, net operating loss carryforwards, and foreign tax credits in Sweden and the reversal of valuation allowances against foreign tax credit carryforwards in the U.S. that were utilized in the final calculation of the transition tax.

The foreign tax rate variance reflects the fact that approximately two-thirds of the Company’s non-U.S. pre-tax income is generated by business operations located in tax jurisdictions where the tax rate is between 20-30%. The tax rate from quarter to quarter and from year to year is also impacted by the mix of earnings and tax rates in various jurisdictions compared to the same periods or prior years.

The Company has reserves for income taxes that may become payable in future periods as a result of tax audits. These reserves represent the Company’s best estimate of the potential liability for tax exposures. Inherent uncertainties exist in estimates of tax exposures due to changes in tax law, both legislated and concluded through the various jurisdictions’ court systems. The Company files income tax returns in the United States federal jurisdiction, and various states and non-U.S. jurisdictions.

At any given time, the Company is undergoing tax audits in several tax jurisdictions, covering multiple years. The Company is no longer subject to income tax examination by the U.S. Federal tax authorities for years prior to 2015. With few exceptions, the Company is no longer subject to income tax examination by U.S. state or local tax authorities or by non-U.S. tax authorities for years before 2010. The Company is undergoing tax audits in several non-U.S. jurisdictions and several U.S. state jurisdictions, covering multiple years. As of December 31, 2018, as a result of those tax examinations, the Company is not aware of any proposed income tax adjustments that would have a material impact on the Company’s financial statements, however, other audits could result in additional increases or decreases to the unrecognized tax benefits in some future period or periods.

The Company recognizes interest and potential penalties accrued related to unrecognized tax benefits in tax expense. As of December 31, 2017, the Company had recorded $34.6 million for unrecognized tax benefits related to prior years, including $6.3 million of accrued interest and penalties. During 2018, the Company recorded a net increase of $24.0 million to income tax reserves for unrecognized tax benefits related to the transition tax reported on the 2017 tax return due to uncertainty surrounding the calculations. Also during 2018, the Company recorded a net decrease of $4.2 million to income tax reserves for other unrecognized tax benefits based on tax positions related to the current and prior years. The Company had $6.6 million accrued for the payment of interest and penalties as of December 31, 2018. Of the total unrecognized tax benefits of $54.4 million recorded at December 31, 2018, $4.0 million is classified as current income tax payable, and $50.4 million is classified as non-current tax payable included in Other Non-Current Liabilities on the Consolidated Balance Sheets. Substantially all of these reserves would impact the effective tax rate if released into income. The following table summarizes the activity related to the Company’s unrecognized tax benefits:

UNRECOGNIZED TAX BENEFITS	2018			2017			2016
Unrecognized tax benefits at beginning of year	$	29.6		$	27.2		$	25.2
Increases as a result of tax positions taken during a prior period		24.0			2.0			4.5
Decreases as a result of tax positions taken during a prior period		—			—			(0.2	)
Increases as a result of tax positions taken during the current period		4.7			6.8			5.8
Decreases as a result of tax positions taken during the current period		(3.1	)		—			(1.7	)
Decreases relating to settlements with taxing authorities		(3.2	)		(7.1	)		(1.3	)
Decreases resulting from the lapse of the applicable statute of limitations		(1.5	)		(0.3	)		(3.5	)
Translation Difference		(0.9	)		1.0			(1.6	)
Total unrecognized tax benefits at end of year	$	49.6		$	29.6		$	27.2

The tax effect of temporary differences and carryforwards that comprise significant portions of deferred tax assets and liabilities were as follows.

DEFERRED TAXES
DECEMBER 31	2018			2017			2016
Assets
Provisions	$	104.9		$	107.3		$	101.5
Costs capitalized for tax		18.2			18.6			16.8
Property, plant and equipment		13.0			14.2			18.2
Retirement Plans		50.1			50.0			65.5
Tax receivables, principally NOL’s		113.9			150.2			211.7
Deferred tax assets before allowances	$	300.1		$	340.3		$	413.7
Valuation allowances		(71.0	)		(110.6	)		(199.6	)
Total	$	229.1		$	229.7		$	214.1

Liabilities
Acquired intangibles	$	(6.1	)	$	(6.6	)	$	(12.3	)
Statutory tax allowances		(0.5	)		—			—
Distribution taxes		(22.9	)		(22.8	)		(16.0	)
Other		(10.1	)		(3.9	)		(4.9	)
Total	$	(39.6	)	$	(33.3	)	$	(33.2	)
Net deferred tax asset	$	189.5		$	196.4		$	180.9

The following table summarizes the activity related to the Company’s valuation allowances:

VALUATION ALLOWANCES AGAINST DEFERRED TAX ASSETS DECEMBER 31	2018			2017			2016
Allowances at beginning of year	$	110.6		$	199.6		$	177.7
Benefits reserved current year		6.4			22.9			32.3
Benefits recognized current year		(36.9	)		(117.0	)		(13.8	)
Write-offs and other changes		—			(0.1	)		(0.5	)
Translation difference		(9.1	)		5.2			3.9
Allowances at end of year	$	71.0		$	110.6		$	199.6