Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Components of Income Tax Expense (Benefit)

The components of the Company’s income tax expense (benefit) are as follows:

years ended December 31 (in millions)	2019			2018			2017
Federal income taxes:
Current	$	83.9		$	15.3		$	129.2
Deferred		31.1			69.6			(239.3	)
Total federal income taxes		115.0			84.9			(110.1	)
State income taxes:
Current		20.5			6.0			14.8
Deferred		(1.5	)		14.1			(0.9	)
Total state income taxes		19.0			20.1			13.9
Foreign income taxes:
Current		2.8			(1.4	)		1.2
Deferred		(0.5	)		2.1			0.5
Total foreign income taxes		2.3			0.7			1.7
Income tax expense (benefit)	$	136.3		$	105.7		$	(94.5	)

Summary of Effective Income Tax Rate

The Company’s effective income tax rate varied from the statutory United States income tax rate because of the following
tax differences:

years ended December 31	2019			2018			2017
Statutory income tax rate		21.0	%		21.0	%		35.0	%
(Reduction) increase resulting from:
Effect of statutory depletion		(3.4	)		(3.4	)		(5.6	)
State income taxes, net of federal tax benefit		2.0			2.8			1.5
Change in tax status of subsidiary		(1.7	)		—			—
Stock based compensation		(0.5	)		(0.5	)		(1.0	)
Impact from 2017 Tax Act		—			(3.3	)		(41.7	)
Domestic production deduction		—			—			(2.2	)
Other items		0.8			1.7			(1.3	)
Effective income tax rate		18.2	%		18.3	%		(15.3	%)

Components of Deferred Tax Assets and Liabilities

The principal components of the Company’s deferred tax assets and liabilities are as follows:

December 31	Deferred Assets (Liabilities)
(in millions)	2019			2018
Deferred tax assets related to:
Inventories	$	62.6		$	52.6
Valuation and other reserves		22.3			22.4
Net operating loss carryforwards		10.5			11.0
Accumulated other comprehensive loss		85.2			84.2
Lease liability		114.7			—
Other items, net		2.9			3.0
Gross deferred tax assets		298.2			173.2
Valuation allowance on deferred tax assets		(9.0	)		(8.6	)
Total net deferred tax assets		289.2			164.6
Deferred tax liabilities related to:
Property, plant and equipment		(700.8	)		(478.3	)
Goodwill and other intangibles		(151.7	)		(170.6	)
Right-of-use assets		(112.1	)		—
Partnerships and joint ventures		(27.4	)		(204.3	)
Employee benefits		(30.2	)		(17.0	)
Total deferred tax liabilities		(1,022.2	)		(870.2	)
Deferred income taxes, net	$	(733.0	)	$	(705.6	)

Schedule of Unrecognized Tax Benefits Excluding Interest Correlative Effects

The following table summarizes the Company’s unrecognized tax benefits, excluding interest and correlative effects of $1.7 million and $0.6 million for the years ended December 31, 2019 and 2018, respectively:

years ended December 31 (in millions)	2019			2018			2017
Unrecognized tax benefits at beginning of year	$	24.1		$	22.4		$	21.8
Gross increases – tax positions in prior years		0.4			0.9			1.4
Gross decreases – tax positions in prior years		—			—			(0.7	)
Gross increases – tax positions in current year		1.8			1.8			5.0
Gross decreases – tax positions in current year		(0.8	)		(1.0	)		(0.9	)
Lapse of statute of limitations		—			—			(4.2	)
Unrecognized tax benefits at end of year	$	25.5		$	24.1		$	22.4

Amount that, if recognized, would favorably impact the effective tax rate	$	15.5		$	12.8		$	10.4