
	2021		2020		2019
Income taxes:
Currently payable:
Federal	$	151	$	152	$	104
State	34		26		19
Non-U.S.	6		3		5
	191		181		128
Deferred:
Federal	102		(12)		19
State	33		4		7
Non-U.S.	2		1		(3)
	137		(7)		23
	$	328	$	174	$	151


	2021		2020		2019
Earnings from continuing operations before income taxes:
United States	$	1,308	$	737	$	624
Non-U.S.	28		29		1
	$	1,336	$	766	$	625

The following is a reconciliation of the effective income tax rate on continuing operations to the U.S. federal statutory income tax rate:


	2021		2020		2019
Federal statutory income tax rate	21.0	%	21.0	%	21.0	%
State income taxes (net of federal tax benefit)	3.1		3.5		2.2
Tax effect of international items	0.2		(0.3)		—





Tax Cuts and Jobs Act - transition tax	—		—		0.3


Divestiture impact on deferred taxes	(0.9)		—		1.2
Legal entity reorganization	1.4		—		—
Capital loss on the sale of the Plum baby food and snacks business	(1.3)		—		—
Capital loss valuation allowance on the sale of the Plum baby food and snacks business	1.3		—		—
Benefit on sale of the European chips business	—		(1.3)		—
Other	(0.2)		(0.2)		(0.5)
Effective income tax rate	24.6	%	22.7	%	24.2	%

In 2021, we recorded a $19 deferred tax charge in connection with a legal entity reorganization as part of the continued integration of Snyder's-Lance.


	2021		2020
Depreciation	$	352	$	319
Amortization	869		856
Operating lease ROU assets	53		63
Pension	45		—
Other	9		9
Deferred tax liabilities	1,328		1,247
Benefits and compensation	127		144
Pension benefits	38		58
Tax loss carryforwards	24		31
Capital loss carryforwards	117		95

Operating lease liabilities	53		63
Other	61		65
Gross deferred tax assets	420		456
Deferred tax asset valuation allowance	(142)		(122)
Deferred tax assets, net of valuation allowance	278		334
Net deferred tax liability	$	1,050	$	913

At August 1, 2021, our U.S. and non-U.S. subsidiaries had tax loss carryforwards of approximately $294. Of these carryforwards, $27 may be carried forward indefinitely, and $267 expire between 2022 and 2038, with the majority expiring after 2028. At August 1, 2021, deferred tax asset valuation allowances have been established to offset $113 of these tax loss carryforwards. Additionally, as of August 1, 2021, our U.S. and non-U.S. subsidiaries had capital loss carryforwards of approximately $477, all of which were offset by valuation allowances. The increase in the total capital loss carryforwards in 2021 was primarily due to the sale of the Plum baby food and snacks business.

The net change in the deferred tax asset valuation allowance in 2021 was an increase of $20. The increase was primarily due to the sale of the Plum baby food and snacks business. The net change in the deferred tax asset valuation allowance in 2020 was a decrease of $305. The decrease was primarily due to the sale of the Arnott's and other international operations. The net change in the deferred tax asset valuation allowance in 2019 was an increase of $294. The increase was primarily due to the sale of Bolthouse Farms and the pending sale of the Arnott's and other international operations.

As of August 1, 2021, and August 2, 2020, other deferred tax assets included $13 of state tax credit carryforwards related to various states that expire between 2022 and 2031. As of August 1, 2021, and August 2, 2020, deferred tax asset valuation allowances have been established to offset the $13 of state credit carryforwards.

As of August 1, 2021, we had approximately $11 of undistributed earnings of foreign subsidiaries which are deemed to be permanently reinvested and for which we have not recognized a deferred tax liability. We estimate that the tax liability that might be incurred if permanently reinvested earnings were remitted to the U.S. would not be material. Foreign subsidiary earnings in 2021 are not considered permanently reinvested and we have therefore recognized a deferred tax liability and expense.


	2021		2020		2019
Balance at beginning of year	$	23	$	24	$	32
Increases related to prior-year tax positions	—		—		1
Decreases related to prior-year tax positions	(1)		(1)		(1)
Increases related to current-year tax positions	3		2		2
Settlements	—		(1)		(9)
Lapse of statute	(3)		(1)		(1)

Balance at end of year	$	22	$	23	$	24

The amount of unrecognized tax benefits that, if recognized, would impact the annual effective tax rate was $18 as of August 1, 2021, and as of August 2, 2020, and $17 as of July 28, 2019. The total amount of unrecognized tax benefits can change due to audit settlements, tax examination activities, statute expirations and the recognition and measurement criteria under accounting for uncertainty in income taxes.

Our accounting policy for interest and penalties attributable to income taxes is to reflect any expense or benefit as a component of our income tax provision. The total amount of interest and penalties recognized in the Consolidated Statements of Earnings were not material in 2021, 2020, and 2019. The total amount of interest and penalties recognized in the Consolidated Balance Sheets in Other liabilities was $4 as of August 1, 2021, and as of August 2, 2020.

We file income tax returns in the U.S. federal jurisdiction and various state and non-U.S. jurisdictions. In the normal course of business, we are subject to examination by taxing authorities, including the U.S. and Canada. With limited exceptions, we have been audited for income tax purposes in the U.S. through 2020 and in Canada through 2016. In addition, several state income tax examinations are in progress for the years 2015 to 2019.