Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

U.S. and outside U.S. components of income (loss) before income taxes were as follows:



	Year Ended December 31,
(In millions)	2019			2018			2017
United States	$	(1,406.5	)	$	(197.0	)	$	284.3
Outside United States	$	(729.3	)	$	(1,291.1	)	$	395.4
Income (loss) before income taxes	$	(2,135.8	)	$	(1,488.1	)	$	679.7

The provision for income taxes consisted of:

Significant components of deferred tax assets and liabilities were as follows:



	December 31,
(In millions)	2019			2018
Deferred tax assets attributable to
Accrued expenses	$	124.4		$	128.0
Capital Loss	21.1			21.2
Non-deductible interest	84.7			89.3
Foreign tax credit carryforwards	135.3			105.9
Other tax credits	113.2			—
Net operating loss carryforwards	430.5			382.8
Inventories	6.3			3.2
Research and development credit	7.6			6.5
Foreign exchange	20.4			32.5
Provisions for pensions and other long-term employee benefits	84.1			72.4
Contingencies related to contracts	89.9			83.7
Other contingencies	73.4			28.7
Margin recognition on construction contracts	115.9			34.4
Leasing	219.8			—
Revenue in excess of billings on contracts accounted for under the percentage of completion method	10.9			—
Other	6.9			15.2
Deferred tax assets	1,544.4			1,003.8
Valuation allowance	(916.9		)	(683.4		)
Deferred tax assets, net of valuation allowance	627.5			320.4

Deferred tax liabilities attributable to
Revenue in excess of billings on contracts accounted for under the percentage of completion method	—			9.2
U.S. tax on foreign subsidiaries’ undistributed earnings not indefinitely reinvested	10.4			9.4
Property, plant and equipment, intangibles and other assets	279.6			278.6
Leasing	215.2			—
Deferred tax liabilities	505.2			297.2
Net deferred tax assets/(liabilities)	$	122.3		$	23.2

The following table presents a summary of changes in our unrecognized tax benefits:



(In millions)	Federal, State and Foreign Tax
Balance as of December 31, 2017	$	90.4
Reductions for tax positions related to prior years	(11.5		)
Additions for tax positions related to current year	21.1
Reductions for tax positions due to settlements	(9.0		)
Balance as of December 31, 2018	$	91.0
Reductions for tax positions related to prior years	(62.4		)
Additions for tax positions related to current year	72.9
Reductions for tax positions due to settlements	(20.8		)
Balance as of December 31, 2019	$	80.7

The effective income tax rate was different from the statutory U.K. income tax rate due to the following:



	Year Ended December 31,
	2019		2018		2017
Statutory income tax rate	19.0	%	19.0	%	19.3	%
Net difference resulting from
Foreign earnings subject to different tax rates	0.3	%	(9.7	)%	18.2	%
Net change in unrecognized tax benefits	1.3	%	(0.7	)%	4.3	%
Adjustments on prior year taxes	(0.4	)%	(0.7	)%	(4.4	)%
Change in valuation allowance	(8.8	)%	(14.4	)%	19.3	%
Deferred tax asset/liability revaluation for tax rate change	(0.5	)%	(1.7	)%	1.4	%
U.S. transition tax	—	%	(0.8	)%	17.1	%
Impairments	(21.9	)%	(16.5	)%	—	%
Non-deductible legal provision	(0.8	)%	(3.8	)%	—	%
Other	(1.1	)%	0.9	%	5.1	%
Effective income tax rate	(12.9	)%	(28.4	)%	80.3	%