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, excluding the impact of the pension settlement, generated for the years 2018 through 2020, 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 consider 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, 2020 and 2019, we had $806.9 million and $897.3 million, respectively, of gross state net operating loss (“NOL”) carryforwards expiring between 2021 and 2040. As of December 31, 2020, we had foreign tax credits (“FTC”) carryforwards of $17.7 million that expire between 2021 and 2022. U.S. FTC carryforwards as of December 31, 2019 were $13.1 million. As of December 31, 2020, we had capital loss carryforwards of $19.3 million that expire between 2024 and 2035. Capital loss carryforwards as of December 31, 2019 were $16.0 million.

As of December 31, 2020 and 2019, we had valuation allowances of $79.4 million and $75.5 million, respectively. As of December 31, 2020, our valuation allowance consisted of $17.7 million for federal deferred tax assets related to FTC carryforwards, $42.4 million for state deferred tax assets related to operating loss carryforwards, and $19.3 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 $84.4 million to fully realize FTC carryforwards before they expire in 2022. We estimate we will need to generate future taxable income of approximately $612.3 million for state income tax purposes during the respective realization periods (ranging from 2021 to 2040) to be able to fully realize the net deferred income tax assets discussed above. We estimate we will need to generate capital gain income of $67.4 million to fully realize our federal capital loss carryforwards before they expire in 2024 and 2025. We estimate we will need to generate capital gain income of $191.6 million to fully realize our state capital loss carryforwards before they expire between 2024 and 2035. 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, 2020			December 31, 2019
Deferred income tax assets (liabilities)
Net operating losses	$	48.7		$	54.8
Postretirement benefits		22.0			21.2
Pension benefit liabilities		12.0			12.9
Deferred compensation		9.0			10.5
Foreign tax credit carryforwards		17.7			13.1
State tax credit carryforwards		8.9			9.3
Capital loss carryforwards		19.3			16.0
Lease right-of-use liabilities		10.0			9.0
Other		16.2			9.0
Total deferred income tax assets		163.8			155.8
Valuation allowances		(79.4	)		(75.5	)
Net deferred income tax assets		84.4			80.3
Intangibles		(93.7	)		(96.6	)
Partnerships and investments		(28.1	)		(29.6	)
Accumulated depreciation		(75.5	)		(69.7	)
Prepaid pension costs		(30.7	)		(24.2	)
Inventories		(4.4	)		(4.5	)
Lease right-of-use assets		(10.2	)		(9.0	)
Other		(0.2	)		(0.2	)
Total deferred income tax liabilities		(242.8	)		(233.8	)
Net deferred income tax liabilities	$	(158.4	)	$	(153.5	)
Deferred income taxes have been classified in the Consolidated Balance Sheet as:
Deferred income tax assets - non-current	$	-		$	10.4
Deferred income tax liabilities - non-current		(158.4	)		(163.9	)
Net deferred income tax liabilities	$	(158.4	)	$	(153.5	)

	2020			2019			2018
Details of taxes
(Loss) earnings from continuing operations before income taxes
Domestic	$	(130.0	)	$	299.7		$	234.0
Foreign		3.3			(0.3	)		8.7
Total	$	(126.7	)	$	299.4		$	242.7

Income tax expense (benefit):
Current:
Federal	$	40.8		$	31.4		$	45.7
Foreign		1.0			0.8			2.1
State		5.6			6.3			8.0
Total current		47.4			38.5			55.8

Deferred:
Federal		(75.5	)		15.1			(3.7	)
Foreign		-			(0.3	)		-
State		(14.5	)		3.8			1.0
Total deferred		(90.0	)		18.6			(2.7	)

Total income tax (benefit) expense	$	(42.6	)	$	57.1		$	53.1

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 2020, we recorded foreign withholding taxes of $0.9 million on approximately $17.9 million of net undistributed earnings of foreign subsidiaries. In 2019, we recorded foreign withholding taxes of $0.8 million on approximately $14.0 million of net undistributed earnings of foreign subsidiaries.

	2020			2019			2018
Reconciliation to U.S. statutory tax rate
Continuing operations tax (benefit) expense at statutory rate	$	(26.6	)	$	62.9		$	51.0
Increase in valuation allowances on deferred domestic income tax assets		(0.1	)		0.1			10.0
State income tax (benefit) expense, net of federal impact		(7.3	)		12.4			9.2
Capital loss on sale of investment		(4.6	)		-			-
Statute closures		(1.3	)		(3.8	)		(9.6	)
State deferred tax adjustments		(1.5	)		(1.9	)		-
Capital loss utilization on WAVE earnings		-			(4.4	)		-
2017 Tax Act ⁽¹⁾		-			-			(1.2	)
Excess tax benefits on share-based compensation		(0.9	)		(3.2	)		(3.8	)
Tax on foreign and foreign source income		-			(1.9	)		(4.4	)
U.S. permanent differences		(2.2	)		(1.8	)		(1.6	)
Other		1.9			(1.3	)		3.5
Tax (benefit) expense at effective rate	$	(42.6	)	$	57.1		$	53.1

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 $41.7 million of Unrecognized Tax Benefits (“UTB”) as of December 31, 2020, $18.4 million ($17.4 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 $0.2 million related to state statutes expiring and increase by $1.5 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 $2.9 million of interest and penalties accrued in non-current income tax payable in the Consolidated Balance Sheet as of December 31, 2020.

We had the following activity for UTB’s for the years ended December 31, 2020, 2019 and 2018:

	2020			2019			2018
Unrecognized tax benefits balance at January 1,	$	34.7		$	42.6		$	53.4
Gross change for current year positions		2.3			2.2			3.6
Increases for prior period positions		8.7			-			1.1
Decrease for prior period positions		-			(2.1	)		(2.0	)
Decrease due to statute expirations		(4.0	)		(8.0	)		(13.5	)
Unrecognized tax benefits balance at December 31,	$	41.7		$	34.7		$	42.6

We file income tax returns in the U.S. and 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. With the exception of extending the 2016 statute of limitations to May 31, 2022 as a result of an ongoing Federal audit, 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.