
	Years ended December 31
In millions	2020		2019		2018
Currently payable (receivable)
Federal (1)	$	0.1	$	—	$	(0.1)

International (2)	70.3		64.2		62.3
Total current taxes	70.4		64.2		62.2
Deferred

International (2)	4.6		(18.4)		(4.1)
Total deferred taxes	4.6		(18.4)		(4.1)
Total provision for income taxes	$	75.0	$	45.8	$	58.1


	Years ended December 31
Percentages	2020		2019		2018
U.K. federal statutory income tax rate	19.0	%	19.0	%	19.0	%
Tax effect of international operations (1)	(3.9)		(8.2)		(9.9)
Change in valuation allowances	1.3		1.1		7.9


Excess tax benefits on stock-based compensation	(0.7)		(0.7)		(1.7)
Base erosion and anti-abuse tax	1.7		—		—
Tax effect of U.S. tax reform	—		—		(0.9)
Tax effect of early extinguishment of debt	—		—		0.9

Effective tax rate	17.4	%	11.2	%	15.3	%


	Years ended December 31
In millions	2020		2019		2018
Beginning balance	$	47.4	$	51.4	$	13.8
Gross increases for tax positions in prior periods	0.6		0.4		44.0
Gross decreases for tax positions in prior periods	—		(0.8)		(4.4)
Gross increases based on tax positions related to the current year	0.2		0.4		0.9
Gross decreases related to settlements with taxing authorities	(1.1)		(2.9)		(1.8)
Reductions due to statute expiration	(0.8)		(1.1)		(1.1)
Ending balance	$	46.3	$	47.4	$	51.4

We record gross unrecognized tax benefits in Other current liabilities and Other non-current liabilities in the Consolidated Balance Sheets. Included in the $46.3 million of total gross unrecognized tax benefits as of December 31, 2020 was $45.9 million of tax benefits that, if recognized, would impact the effective tax rate. It is reasonably possible that the gross unrecognized tax benefits as of December 31, 2020 may decrease by a range of zero to $10.6 million during 2021, primarily as a result of the resolution of non-U.K. examinations, including U.S. state examinations, and the expiration of various statutes of limitations.

Based on the outcome of these examinations, or as a result of the expiration of statute of limitations for specific jurisdictions, it is reasonably possible that certain unrecognized tax benefits for tax positions taken on previously filed tax returns will materially change from those recorded as liabilities in our financial statements. A number of tax periods from 2008 to present are under audit by tax authorities in various jurisdictions, including China, Germany, India, Italy, New Zealand, and the U.S. We anticipate that several of these audits may be concluded in the foreseeable future.

We record penalties and interest related to unrecognized tax benefits in Provision for income taxes and Net interest expense, respectively, in the Consolidated Statements of Operations and Comprehensive Income. As of December 31, 2020 and 2019, we have liabilities of $0.2 million and $0.4 million, respectively, for the possible payment of penalties and $4.6 million and $3.7 million, respectively, for the possible payment of interest expense, which are recorded in Other current liabilities in the Consolidated Balance Sheets.

Deferred taxes arise because of different treatment between financial statement accounting and tax accounting, known as “temporary differences.” We record the tax effect of these temporary differences as “deferred tax assets” (generally items that can be used as a tax deduction or credit in future periods) and “deferred tax liabilities” (generally items for which we received a tax deduction but the tax impact has not yet been recorded in the Consolidated Statements of Operations and Comprehensive Income).


	December 31
In millions	2020		2019
Deferred tax assets
Accrued liabilities and reserves	$	59.4	$	41.9
Pension and other post-retirement compensation and benefits	26.2		25.2
Employee compensation and benefits	18.5		19.6
Tax loss and credit carryforwards	744.5		712.0
Interest limitations	49.9		45.0
Total deferred tax assets	898.5		843.7
Valuation allowance	747.3		693.8
Deferred tax assets, net of valuation allowance	151.2		149.9
Deferred tax liabilities
Property, plant and equipment	5.3		8.5
Goodwill and other intangibles	209.0		200.4
Other liabilities	16.9		15.8
Total deferred tax liabilities	231.2		224.7
Net deferred tax liabilities	$	80.0	$	74.8

Included in tax loss and credit carryforwards in the table above is a deferred tax asset of $29.6 million as of December 31, 2020 related to foreign tax credit carryover from the tax period ended December 31, 2017 and related to transition taxes. The entire amount is subject to a valuation allowance. The foreign tax credit is eligible for carryforward until the tax period ending December 31, 2027.

As of December 31, 2020, tax loss carryforwards of $2,923.5 million were available to offset future income. A valuation allowance of $716.7 million exists for deferred income tax benefits related to the tax loss carryforwards which may not be realized. We believe sufficient taxable income will be generated in the respective jurisdictions to allow us to fully recover the remainder of the tax losses. The tax losses primarily relate to non-U.S. carryforwards of $2,824.9 million which are subject to varying expiration periods. Non-U.S. carryforwards of $1,785.0 million are located in jurisdictions with unlimited tax loss carryforward periods, while the remainder will begin to expire in 2021. In addition, there were $98.6 million of U.S. state tax loss carryforwards as of December 31, 2020. U.S. state tax losses of $61.1 million are in jurisdictions with unlimited tax loss carryforward periods, while the remainder will expire in future years through 2040.

Taxes have not been provided on undistributed earnings of subsidiaries where it is our intention to reinvest these earnings permanently or to repatriate the earnings only when it is tax effective to do so. It is not practicable to estimate the amount of tax that might be payable if such earnings were to be remitted.

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. For 2018 and subsequent years, the Company considered in its annual effective tax rate additional provisions of the Act including changes to the deduction for executive compensation and interest expense, a tax on global intangible low-taxed income provisions (“GILTI”), the base erosion anti-abuse tax, and a deduction for foreign-derived intangible income. The Company has elected to treat tax on GILTI income as a period cost and has therefore included it in its annual effective tax rate.

In April 2020, the IRS released final regulations as part of the Act that place limitations on the deductibility of certain interest expense for U.S. tax purposes. These regulations resulted in discrete tax expense of approximately $14.1 million in 2020, as well as an increase to our 2020 annual effective tax rate of approximately 0.3%.

On March 27, 2020, the U.S. enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) in response to the COVID-19 pandemic. The CARES Act contains numerous income tax provisions, such as relaxing limitations on the deductibility of interest and the ability to carryback net operating losses arising in taxable years from 2018 through 2020. The CARES Act provides positive cash benefits of approximately $26.9 million, offset by an increase to our 2020 annual effective tax rate of approximately 1.0% and $5.1 million in discrete tax items recorded in 2020, mainly attributable to base erosion and anti-abuse tax related to 2019.