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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The following table shows the components of income before income taxes, excluding affiliates, for the years ended December 31 (in millions):
202120202019
Income before Income Taxes
Domestic$40.9 $(2.0)$39.1 
Foreign154.2 127.3 106.1 
Total$195.1 $125.3 $145.2 

The following table shows income taxes, excluding domestic and foreign affiliates, for the years ended December 31 (in millions):
202120202019
Income Tax Expense
Current
Domestic:
Federal
$0.1 $(3.4)$(11.3)
State and local
0.3 0.3 (1.2)
$0.4 $(3.1)$(12.5)
Foreign
18.6 11.3 19.6 
Total Current
$19.0 $8.2 $7.1 
Deferred
Domestic:
Federal
6.7 3.6 19.6 
State and local
3.0 0.9 4.3 
$9.7 $4.5 $23.9 
Foreign
24.5 24.6 9.9 
Total Deferred
$34.2 $29.1 $33.8 
Income taxes
$53.2 $37.3 $40.9 

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):
202120202019
Income taxes at federal statutory rate
$41.0 $26.3 $30.5 
Adjust for effect of:
Foreign earnings taxed at applicable statutory rates10.2 9.8 9.8 
Foreign deferred tax rate change impact(0.3)(0.7)(2.8)
Nondeductible compensation1.9 0.6 0.2 
Share-based compensation(3.5)(1.2)(1.4)
State income taxes2.9 1.2 3.8 
Other1.0 1.3 0.8 
Income taxes
$53.2 $37.3 $40.9 
Effective income tax rate
27.3 %29.8 %28.2 %

In 2021, our effective tax rate was 27.3% compared to 29.8% in 2020 and 28.2% in 2019. The 2019 effective tax rate included a net benefit of $2.8 million associated with the reduction of the corporate income tax rate in Alberta, Canada.
The adjustment for foreign earnings in each year reflected the impact of applicable statutory tax rates on income earned at our foreign subsidiaries. Compensation is adjusted for the difference between the deductibility of these expenses under the U.S. tax law versus U.S. GAAP. State income taxes are recognized on domestic pretax income or loss. The amount of our domestic income subject to state taxes relative to our total worldwide income impacts the effect state income tax has on our overall income tax rate.

Separately, our affiliates incurred income taxes of $55.3 million, $33.6 million, and $18.0 million respectively in 2021, 2020, and 2019. During 2021 and 2020, changes in the statutory tax rate of the United Kingdom resulted in one-time tax expense adjustments of $39.7 million and $12.3 million, respectively.

The following table shows the significant components of our deferred tax liabilities and assets as of December 31 (in millions):
20212020
Deferred Tax Liabilities
Book/tax basis difference due to depreciation$1,093.5 $1,017.8 
Right-of-use assets68.3 93.8 
Investments in affiliated companies27.5 26.1 
Lease accounting29.1 33.4 
Intangible amortization1.9 — 
Other5.4 2.8 
Total deferred tax liabilities$1,225.7 $1,173.9 
Deferred Tax Assets
Lease liability$72.2 $95.9 
Federal net operating loss87.8 53.5 
Foreign tax credit0.8 0.8 
Valuation allowance on foreign tax credit(0.8)(0.8)
State net operating loss45.0 38.3 
Valuation allowance on state net operating loss(14.9)(13.9)
Foreign net operating loss1.6 2.1 
Accruals not currently deductible for tax purposes18.3 16.0 
Allowance for losses1.7 1.1 
Pension and post-retirement benefits9.8 16.4 
Other3.2 1.7 
Total deferred tax assets$224.7 $211.1 
Net deferred tax liabilities$1,001.0 $962.8 

Deferred income taxes are the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We expect at this time to continue reinvestment of foreign earnings outside the U.S. indefinitely. Consequently, our tax provision does not include any deferred tax costs that might arise due to book versus tax basis differences in investments in foreign subsidiaries. Under provisions of the territorial tax system, future dividend distributions from foreign subsidiaries and affiliates are generally exempt from U.S. income tax. Taxes may arise from withholding taxes or on foreign exchange or other gains recognized in connection with the basis differences in our investments in foreign subsidiaries. The ultimate tax cost of repatriating these earnings depends on tax laws in effect and other circumstances at the time of distribution.

At December 31, 2021, we had a U.S. federal tax net operating loss carryforward of $418.1 million that can be carried forward indefinitely until the loss is fully recovered. The utilization of net operating losses carried forward are limited to 80% of future taxable income. We also had foreign tax credits of $0.8 million that expire after 2027. We have recorded a $0.8 million valuation allowance related to these credits, as we believe it is more likely than not that we will be unable to utilize them.

At December 31, 2021, we had state tax net operating losses of $45.0 million, net of federal benefits that are scheduled to expire at various times beginning in 2022. We have recorded a $14.9 million valuation allowance related to state net operating losses, as we believe it is more likely than not that we will be unable to use all of these losses. Additionally, we had foreign net operating losses of
$1.6 million, which have an unlimited carryforward period. Our use of future operating losses depends on a number of variables, including the amount of taxable income and state apportionment factors for state net operating loss carryforwards.

At December 31, 2021, our gross liability for unrecognized tax benefits was $10.2 million. An increase of $8.6 million is attributed to our foreign operations. We recognize interest and penalties related to unrecognized tax benefits as income tax expense. We have not accrued any amounts for penalties. To the extent interest is not assessed or is otherwise reduced with respect to uncertain tax positions, we will record any required adjustment as a reduction of income tax expense.

We file one separate federal income tax return and one consolidated federal income tax return with our domestic subsidiaries in the U.S. jurisdiction, as well as tax returns in various state and foreign jurisdictions. As of December 31, 2021, all audits or statutes of limitations with respect to our federal tax returns for years prior to 2018 have been closed or expired. Additionally, we currently have no open federal income tax audits, four open state income tax audits, and one open income tax audit on our foreign operations.