Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Components of Deferred tax Assets and Liabilities

The following table shows the significant components of our deferred tax liabilities and assets as of December 31 (in millions):


	2020		2019
Deferred Tax Liabilities
Book/tax basis difference due to depreciation	$	1,017.8	$	901.3
Right-of-use assets	93.8		103.9
Investments in affiliated companies	26.1		38.5
Lease accounting	33.4		31.6
Other	2.8		—
Total deferred tax liabilities	$	1,173.9	$	1,075.3
Deferred Tax Assets
Lease liability	95.9		108.6
Federal net operating loss	53.5		15.1
Alternative minimum tax credit	—		1.7
Foreign tax credit	0.8		0.8
Valuation allowance on foreign tax credit	(0.8)		(0.8)
State net operating loss	38.3		31.1
Valuation allowance on state net operating loss	(13.9)		(12.9)
Foreign net operating loss	2.1		2.2

Accruals not currently deductible for tax purposes	16.0		19.2
Allowance for losses	1.1		1.2
Pension and post-retirement benefits	16.4		16.8
Other	1.7		3.8
Total deferred tax assets	$	211.1	$	186.8
Net deferred tax liabilities	$	962.8	$	888.5

Income before income taxes

The following table shows the components of income before income taxes, excluding affiliates, for the years ended December 31 (in millions):


	2020		2019		2018
Income before Income Taxes
Domestic	$	(2.0)	$	39.1	$	84.5
Foreign	127.3		106.1		86.2
Total	$	125.3	$	145.2	$	170.7

Consolidated federal income taxes

The following table shows income taxes, excluding domestic and foreign affiliates, for the years ended December 31 (in millions):


	2020		2019		2018
Income Tax Expense
Current
Domestic:
Federal	$	(3.4)	$	(11.3)	$	(5.6)
State and local	0.3		(1.2)		0.5
	$	(3.1)	$	(12.5)	$	(5.1)
Foreign	11.3		19.6		17.5
Total Current	$	8.2	$	7.1	$	12.4
Deferred
Domestic:
Federal	3.6		19.6		1.1
State and local	0.9		4.3		8.6
	$	4.5	$	23.9	$	9.7
Foreign	24.6		9.9		8.4
Total Deferred	$	29.1	$	33.8	$	18.1
Income taxes	$	37.3	$	40.9	$	30.5

Summary of reasons for difference between GATX's effective income tax rate and federal statutory income tax

The following table is a reconciliation between the federal statutory income tax rate and our effective income tax rate for the years ended December 31 (in millions):


	2020			2019			2018
Income taxes at federal statutory rate	$	26.3		$	30.5		$	35.8
Adjust for effect of:
Foreign tax credits	—			—			(1.4)
Foreign earnings taxed at applicable statutory rates	9.8			9.8			7.8
Foreign deferred tax rate change impact	(0.7)			(2.8)			—


Corporate owned life insurance	(0.6)			(0.8)			(1.0)
State income taxes	1.2			3.8			4.7

Other	1.3			0.4			1.1
Tax Act:
Revaluation of deferred tax liabilities	—			—			9.4
Transition tax on foreign earnings and profits	—			—			(23.1)
Other	—			—			(2.8)
Total Tax Act impact	$	—		$	—		$	(16.5)
Income taxes	$	37.3		$	40.9		$	30.5
Effective income tax rate	29.8		%	28.2		%	17.9		%