years ended December 31 (in millions)	2020		2019			2018
Federal income taxes:
Current	$	91.9	$	83.9		$	15.3
Deferred		45.4		31.1			69.6
Total federal income taxes		137.3		115.0			84.9
State income taxes:
Current		21.0		20.5			6.0
Deferred		8.7		(1.5	)		14.1
Total state income taxes		29.7		19.0			20.1
Foreign income taxes:
Current		1.2		2.8			(1.4	)
Deferred		—		(0.5	)		2.1
Total foreign income taxes		1.2		2.3			0.7
Income tax expense	$	168.2	$	136.3		$	105.7

For the year ended December 31, 2018, the benefit related to the utilization of federal net operating loss (NOL) carryforwards, reflected in current tax expense, was $5.8 million. Additionally, for the year ended December 31, 2018, the Company completed the accounting for the impact of the 2017 Tax Cuts and Jobs Act and recorded a net income tax benefit of $18.9 million, primarily related to the accelerated deductions for pension funding, inventory and insurance prepayments that were claimed on the Company’s 2017 income tax returns.

For the years ended December 31, 2020, 2019 and 2018, foreign pretax earnings were $8.9 million, $15.1 million and $5.7 million, respectively.

The Company’s effective income tax rate varied from the statutory United States income tax rate because of the following
tax differences:

years ended December 31	2020			2019			2018
Statutory income tax rate		21.0	%		21.0	%		21.0	%
(Reduction) increase resulting from:
Effect of statutory depletion		(2.8	)		(3.4	)		(3.4	)
State income taxes, net of federal tax benefit		2.6			2.0			2.8
Railroad track maintenance credits		(1.3	)		—			—
Change in tax status of subsidiary		—			(1.7	)		—
Impact from 2017 Tax Cuts and Jobs Act		—			—			(3.3	)
Other items		(0.6	)		0.3			1.2
Effective income tax rate		18.9	%		18.2	%		18.3	%

The statutory depletion deduction for all years is calculated as a percentage of sales, subject to certain limitations. Due to these limitations, the impact of changes in the sales volumes and earnings may not proportionately affect the Company’s statutory depletion deduction and the corresponding impact on the effective income tax rate.

In 2020, the Company financed third-party railroad track maintenance. In exchange, the Company received a federal income tax credit and deduction.

The Company recognized a net tax benefit from the change in tax status of a subsidiary from a partnership to a corporation in 2019, which reduced income tax expense and increased consolidated net earnings by $15.2 million, or $0.24 per diluted share.

The principal components of the Company’s deferred tax assets and liabilities are as follows:

December 31	Deferred Assets (Liabilities)
(in millions)	2020			2019
Deferred tax assets related to:
Inventories	$	69.6		$	62.6
Valuation and other reserves		34.7			22.3
Net operating loss carryforwards		9.0			10.5
Accumulated other comprehensive loss		89.4			85.2
Lease liabilities		105.6			114.7
Other items, net		2.3			2.9
Gross deferred tax assets		310.6			298.2
Valuation allowance on deferred tax assets		(8.1	)		(9.0	)
Total net deferred tax assets		302.5			289.2
Deferred tax liabilities related to:
Property, plant and equipment		(743.3	)		(700.8	)
Goodwill and other intangibles		(154.6	)		(151.7	)
Right-of-use assets		(111.3	)		(112.1	)
Partnerships and joint ventures		(27.4	)		(27.4	)
Employee benefits		(47.4	)		(30.2	)
Total deferred tax liabilities		(1,084.0	)		(1,022.2	)
Deferred income taxes, net	$	(781.5	)	$	(733.0	)

The Company had $3.1 million and $4.1 million of domestic federal NOL carryforwards at December 31, 2020 and 2019, respectively. The Company had domestic state NOL carryforwards of $137.1 million and $161.0 million at December 31, 2020 and 2019, respectively. These carryforwards have various expiration dates through 2040. At December 31, 2020 and 2019, deferred tax assets associated with these carryforwards were $9.0 million and $10.5 million, respectively, net of the federal benefit of the state deduction, for which valuation allowances of $8.1 million and $9.0 million, respectively, were recorded. The Company also had domestic state tax credit carryforwards of $1.0 million and $1.1 million at December 31, 2020 and 2019, respectively, which have various expiration dates through 2040. At December 31, 2020 and 2019, deferred tax assets associated with these carryforwards were $0.8 million and $0.9 million, respectively, net of the federal benefit of the state deduction.

Deferred tax liabilities for property, plant and equipment result from accelerated depreciation methods being used for income tax purposes as compared with the straight-line method for financial reporting purposes.

Deferred tax liabilities related to goodwill and other intangibles reflect the cessation of goodwill amortization for financial reporting purposes, while amortization continues for income tax purposes.

The Company expects to permanently reinvest the earnings from its wholly-owned Canadian and Bahamian subsidiaries, and accordingly, has not provided deferred taxes on the subsidiaries’ undistributed net earnings or basis differences. The Company believes that the tax liability that would be incurred upon repatriation is immaterial at December 31, 2020.

The following table summarizes the Company’s unrecognized tax benefits, excluding interest and correlative effects of $0.2 million, $1.7 million and $0.6 million for the years ended December 31, 2020, 2019 and 2018 respectively:

years ended December 31 (in millions)	2020			2019			2018
Unrecognized tax benefits at beginning of year	$	25.5		$	24.1		$	22.4
Gross increases – tax positions in prior years		0.2			0.4			0.9
Gross decreases – tax positions in prior years		—			—			—
Gross increases – tax positions in current year		0.1			1.8			1.8
Gross decreases – tax positions in current year		(0.2	)		(0.8	)		(1.0	)
Lapse of statute of limitations		(17.4	)		—			—
Unrecognized tax benefits at end of year	$	8.2		$	25.5		$	24.1

Amount that, if recognized, would favorably impact the effective tax rate	$	6.4		$	15.5		$	12.8

Unrecognized tax benefits are reversed as a discrete event if an examination of applicable tax returns is not initiated by a federal or state tax authority within the statute of limitations or upon effective settlement with federal or state tax authorities. For the year ended December 31, 2020, $9.7 million was reversed into income upon the statute of limitations expiration for the 2016 and all prior open tax years. Management believes its accrual for unrecognized tax benefits is sufficient to cover uncertain tax positions reviewed during audits by taxing authorities.

The Company anticipates that it is reasonably possible that its unrecognized tax benefits may decrease up to $4.4 million, excluding interest and correlative effects, during the twelve months ending December 31, 2021, due to the expiration of the statutes of limitations for the 2017 tax year.

The Company’s tax years subject to federal, state or foreign examinations are 2016 through 2020.