The tax effects of principal temporary differences between the carrying amounts of assets and liabilities and their tax basis are summarized below. Management believes it is more likely than not that the results of future operations will generate sufficient taxable income in the appropriate jurisdiction to realize deferred tax assets, net of valuation allowances. In arriving at this conclusion, we considered the profit before tax generated for the years 2017 through 2019, future reversals of existing taxable temporary differences, and projections of future profit before tax.

We reduce the carrying amounts of deferred tax assets by a valuation allowance if, based on the available evidence, it is more likely than not that such assets will not be realized. The need to establish valuation allowances for deferred tax assets is assessed quarterly. In assessing the requirement for, and amount of, a valuation allowance in accordance with the more likely than not standard for all periods, we give appropriate consideration to all positive and negative evidence related to the realization of the deferred tax assets. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, and our experience with operating loss and tax credit carryforward expirations. A history of cumulative losses is a significant piece of negative evidence used in our assessment. If a history of cumulative losses is incurred for a tax jurisdiction, forecasts of future profitability are not used as positive evidence related to the realization of the deferred tax assets in the assessment.

As of December 31, 2019 and 2018, we had $897.3 million and $954.5 million, respectively, of gross state net operating loss (“NOL”) carryforwards expiring between 2020 and 2039. As of December 31, 2019, we also had foreign tax credits (“FTC”) carryforwards of $13.1 million that expire between 2020 and 2028. U.S. FTC carryforwards as of December 31, 2018 were $19.1 million. As of December 31, 2019, we also had capital loss carryforwards of $16.0 million that expire between 2024 and 2034.

As of December 31, 2019 and 2018, we had valuation allowances of $75.5 million and $79.6 million, respectively. As of December 31, 2019, our valuation allowance consisted of $13.1 million for federal deferred tax assets related to FTC carryforwards, $46.4 million for state deferred tax assets related to operating loss carryforwards, and $16.0 million for federal and state deferred tax assets related to capital loss carryovers.

We estimate we will need to generate future federal taxable foreign source income of $62.4 million to fully realize FTC carryforwards before they expire in 2028. We estimate we will need to generate future taxable income of approximately $681.6 million for state income tax purposes during the respective realization periods (ranging from 2020 to 2039) in order to fully realize the net deferred income tax assets discussed above. We estimate we will need to generate capital gain income of $56.2 million to fully realize our capital loss carryforwards before they expire in 2034. Our ability to utilize deferred tax assets may be impacted by certain future events, such as changes in tax legislation or insufficient future taxable income prior to expiration of certain deferred tax assets.

	December 31, 2019			December 31, 2018
Deferred income tax assets (liabilities)
Net operating losses	$	54.8		$	58.7
Postretirement benefits		21.2			18.2
Pension benefit liabilities		12.9			14.3
Deferred compensation		10.5			11.8
Undistributed foreign earnings		-			32.5
Foreign tax credit carryforwards		13.1			19.1
State tax credit carryforwards		9.3			9.8
Capital loss carryforwards		16.0			-
Lease right-of-use liabilities		9.0			-
Other		9.0			17.1
Total deferred income tax assets		155.8			181.5
Valuation allowances		(75.5	)		(79.6	)
Net deferred income tax assets		80.3			101.9
Intangibles		(126.2	)		(132.3	)
Accumulated depreciation		(69.7	)		(62.0	)
Prepaid pension costs		(24.2	)		(11.5	)
Inventories		(4.5	)		(5.5	)
Lease right-of-use assets		(9.0	)		-
Other		(0.2	)		(0.2	)
Total deferred income tax liabilities		(233.8	)		(211.5	)
Net deferred income tax liabilities	$	(153.5	)	$	(109.6	)
Deferred income taxes have been classified in the Consolidated Balance Sheet as:
Deferred income tax assets - non-current	$	10.4		$	14.8
Deferred income tax liabilities - non-current		(163.9	)		(124.4	)
Net deferred income tax liabilities	$	(153.5	)	$	(109.6	)

	2019			2018			2017
Details of taxes
Earnings (loss) from continuing operations before income taxes:
Domestic	$	299.7		$	234.0		$	224.1
Foreign		(0.3	)		8.7			(2.0	)
Total	$	299.4		$	242.7		$	222.1

Income tax expense (benefit):
Current:
Federal	$	31.4		$	45.7		$	26.2
Foreign		0.8			2.1			1.4
State		6.3			8.0			4.7
Total current		38.5			55.8			32.3

Deferred:
Federal		15.1			(3.7	)		(36.6	)
Foreign		(0.3	)		-			(0.1	)
State		3.8			1.0			5.9
Total deferred		18.6			(2.7	)		(30.8	)

Total income tax expense	$	57.1		$	53.1		$	1.5

We reviewed our position with regards to foreign unremitted earnings and determined that unremitted earnings will not be permanently reinvested as a result of the Sale. Accordingly, in 2019, we had recorded foreign withholding taxes of $0.8 million on approximately $14.0 million of net undistributed earnings of foreign subsidiaries. In 2018, we had foreign withholding taxes accrued of $2.2 million on approximately $208.0 million of net undistributed earnings of foreign subsidiaries.

	2019			2018			2017
Reconciliation to U.S. statutory tax rate
Continuing operations tax at statutory rate	$	62.9		$	51.0		$	77.7
Increase in valuation allowances on deferred domestic income tax assets		0.1			10.0			9.1
State income tax expense, net of federal benefit		12.4			9.2			7.9
Domestic production activities		-			-			(5.8	)
Statute closures		(3.8	)		(9.6	)		(2.3	)
State deferred tax adjustments		(1.9	)		-			-
Capital loss utilization on WAVE earnings		(4.4	)		-			-
2017 Tax Act ⁽¹⁾		-			(1.2	)		(82.5	)
Excess tax benefits on share-based compensation		(3.2	)		(3.8	)		-
Tax on foreign and foreign-source income		(1.9	)		(4.4	)		-
Other		(3.1	)		1.9			(2.6	)
Tax expense at effective rate	$	57.1		$	53.1		$	1.5

We recognize the tax benefits of an uncertain tax position only if those benefits are more likely than not to be sustained based on existing tax law. Additionally, we establish a reserve for tax positions that are more likely than not to be sustained based on existing tax law, but uncertain in the ultimate benefit to be sustained upon examination by the relevant taxing authorities. Unrecognized tax benefits are subsequently recognized at the time the more likely than not recognition threshold is met, the tax matter is effectively settled or the statute of limitations for the relevant taxing authority to examine and challenge the tax position has expired, whichever is earlier.

We have $34.7 million of Unrecognized Tax Benefits (“UTB”) as of December 31, 2019, $17.2 million ($16.1 million, net of federal benefit) of this amount, if recognized in future periods, would impact the reported effective tax rate.

It is reasonably possible that certain UTB’s may increase or decrease within the next twelve months due to tax examination changes, settlement activities, expirations of statute of limitations, or the impact on recognition and measurement considerations related to the results of published tax cases or other similar activities. Over the next twelve months we estimate that UTB’s may decrease by $0.6 million related to state statutes expiring and increase by $1.8 million due to uncertain tax positions expected to be taken on domestic tax returns.

We account for all interest and penalties on uncertain income tax positions as income tax expense. We have $2.2 million of interest and penalties accrued in noncurrent income tax payable in the Consolidated Balance Sheet as of December 31, 2019.

We had the following activity for UTB’s for the years ended December 31, 2019, 2018 and 2017:

	2019			2018			2017
Unrecognized tax benefits balance at January 1,	$	42.6		$	53.4		$	86.9
Gross change for current year positions		2.2			3.6			(2.2	)
Increases for prior period positions		-			1.1			2.9
Decrease for prior period positions		(2.1	)		(2.0	)		(0.1	)
Decrease due to statute expirations		(8.0	)		(13.5	)		(34.1	)
Unrecognized tax benefits balance at December 31,	$	34.7		$	42.6		$	53.4

We file income tax returns in the U.S., various states and international jurisdictions. In the normal course of business, we are subject to examination by taxing authorities in Canada and the United States. Generally, we have open tax years subject to tax audit on average of between three years and six years. The statute of limitations is no longer open for U.S. federal returns before 2016. With few exceptions, the statute of limitations is no longer open for state or non-U.S. income tax examinations for the years before 2014. We have not significantly extended any open statutes of limitation for any major jurisdiction and have reviewed and accrued for, where necessary, tax liabilities for open periods.