
Year ended December 31,	2020		2019		2018
Income (loss) from continuing operations before income taxes
United States	$	(316.3)	$	(148.4)	$	(125.8)
Foreign	44.5		87.8		196.8
Total income (loss) before income taxes from continuing operations	$	(271.8)	$	(60.6)	$	71.0
Provision (benefit) for income taxes
Current
United States	$	7.3	$	(17.7)	$	(13.6)
Foreign	51.5		41.0		51.4
Total	58.8		23.3		37.8
Deferred
Foreign	(13.4)		4.4		8.2
Total provision for income taxes	$	45.4	$	27.7	$	46.0

Following is a reconciliation of the provision (benefit) for income taxes at the United States statutory tax rate to the provision for income taxes as reported:


Year ended December 31,	2020		2019		2018
United States statutory income tax provision (benefit)	$	(57.1)	$	(12.7)	$	14.9
Income and losses for which no provision or benefit has been recognized	78.6		23.9		19.1
Foreign rate differential and other foreign tax expense	5.9		3.2		9.5
Income tax withholdings	16.8		17.6		19.3
Permanent items	0.8		(2.5)		(5.0)
Enacted rate changes	(4.0)		0.5		(2.3)
Change in uncertain tax positions	3.6		0.2		(1.2)
Change in valuation allowances due to changes in judgment	2.9		(2.3)		(5.9)
Income tax credits, U.S.	(2.1)		(0.2)		(2.4)
Provision for income taxes	$	45.4	$	27.7	$	46.0


As of December 31,	2020		2019
Deferred tax assets
Tax loss carryforwards	$	795.2	$	841.1
Postretirement benefits	253.0		434.4
Foreign tax credit carryforwards	201.3		211.5
Other tax credit carryforwards	29.2		30.3
Deferred revenue	31.1		42.8
Employee benefits and compensation	25.3		31.2
Purchased capitalized software	24.1		31.2
Depreciation	28.2		28.1
Warranty, bad debts and other reserves	10.5		5.9
Capitalized costs	8.1		7.1
Other	52.0		27.9
	1,458.0		1,691.5
Valuation allowance	(1,271.5)		(1,524.7)
Total deferred tax assets	$	186.5	$	166.8
Deferred tax liabilities
Capitalized research and development	$	47.4	$	44.7
Other	29.8		29.0
Total deferred tax liabilities	$	77.2	$	73.7
Net deferred tax assets	$	109.3	$	93.1

During 2020, the company’s valuation allowance declined by $253.2 million principally due to the recognition of a net income tax benefit of $189.0 million including net tax expense of $2.9 million, expired net operating losses/tax credits of $28.9 million, translation adjustments of $(20.9) million and other activity of $56.2 million.

Failure to achieve forecasted taxable income might affect the ultimate realization of the company’s net deferred tax assets. Factors that may affect the company’s ability to achieve sufficient forecasted taxable income include, but are not limited to, the following: increased competition, a decline in sales or margins, loss of market share, the impact of the economic environment, delays in product availability and technological obsolescence.

Under U.S. tax law, distributions from foreign subsidiaries to U.S. shareholders are generally exempt from taxation. Consequently, the deferred income tax liability on undistributed earnings is generally limited to any foreign withholding or other foreign taxes that will be imposed on such distributions. As the company currently intends to indefinitely reinvest the earnings of certain foreign subsidiaries, no provision has been made for income taxes that may become payable upon distribution of the earnings of such subsidiaries. The unrecognized deferred income tax liability at December 31, 2020 approximated $26.6 million.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


Year ended December 31,	2020		2019		2018
Balance at January 1	$	25.6	$	18.9	$	27.9
Additions based on tax positions related to the current year	8.5		11.1		2.6
Changes for tax positions of prior years	(0.7)		(0.6)		(6.1)
Reductions as a result of a lapse of applicable statute of limitations	(2.3)		(2.3)		(2.4)
Settlements	(1.8)		(1.1)		(1.5)
Changes due to foreign currency	1.6		(0.4)		(1.6)
Balance at December 31	$	30.9	$	25.6	$	18.9

The company recognizes penalties and interest accrued related to income tax liabilities in the provision for income taxes in its consolidated statements of income. At December 31, 2020 and 2019, the company had an accrual of $3.9 million and $3.0 million, respectively, for the payment of penalties and interest.

At December 31, 2020, all of the company’s liability for unrecognized tax benefits, if recognized, would affect the company’s effective tax rate. Within the next 12 months, the company believes that it is reasonably possible that the amount of unrecognized tax benefits may decrease by $2.3 million related to a statute of limitation expiration; however, various events could cause this belief to change in the future.

The company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. Several U.S. state and foreign income tax audits are in process. The company is under an audit in India, for which years prior to 2007 are closed. For the most significant jurisdictions outside the U.S., the audit periods through 2015 are closed for Brazil, and the audit periods through 2016 are closed for the United Kingdom. All of the various ongoing income tax audits throughout the world are not expected to have a material impact on the company’s financial position.

Internal Revenue Code Sections 382 and 383 provide annual limitations with respect to the ability of a corporation to utilize its net operating loss (as well as certain built-in losses) and tax credit carryforwards, respectively (Tax Attributes), against future U.S. taxable income, if the corporation experiences an “ownership change.” In general terms, an ownership change may result from transactions increasing the ownership of certain stockholders in the stock of a corporation by more than 50 percentage points over a three-year period. The company regularly monitors ownership changes (as calculated for purposes of

Section 382). The company has determined that, for purposes of the rules of Section 382 described above, an ownership change occurred in February 2011. Any future transaction or transactions and the timing of such transaction or transactions could trigger additional ownership changes under Section 382.

As a result of the February 2011 ownership change, utilization for certain of the company’s Tax Attributes, U.S. net operating losses and tax credits, is subject to an overall annual limitation of $70.6 million. The cumulative limitation as of December 31, 2020 is approximately $346.1 million. This limitation will be applied to any net operating losses and then to any other Tax Attributes. Any unused limitation may be carried over to later years. Based on presently available information and the existence of tax planning strategies, the company does not expect to incur a U.S. cash tax liability in the near term. The company maintains a full valuation allowance against the realization of all U.S. deferred tax assets as well as certain foreign deferred tax assets in excess of deferred tax liabilities.