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Income Taxes | 12 Months Ended
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Nov. 30, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The provision for income taxes for the years ended November 30 consists of the following:
(millions) | 2020 | 2019 | 2018
Income taxes |  |  |
Current |  |  |
Federal | $ | 98.3 |  | $ | 52.3 |  | $ | 92.9 |
State | 14.8 |  | 10.7 |  | 11.0 |
International | 73.0 |  | 73.5 |  | 78.7 |
| 186.1 |  | 136.5 |  | 182.6 |
Deferred |  |  |
Federal | 4.6 |  | 26.4 |  | (340.3) |
State | 0.5 |  | 3.6 |  | 1.5 |
International | (16.3) |  | (9.1) |  | (1.1) |
| (11.2) |  | 20.9 |  | (339.9) |
Total income tax expense (benefit) | $ | 174.9 |  | $ | 157.4 |  | $ | (157.3) |
In December 2017, President Trump signed into law Pub. L. 115-97, “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018” (this legislation is referred to herein as the U.S. Tax Act). The U.S. Tax Act provides for significant changes in the U.S. Internal Revenue Code of 1986, as amended. Certain provisions of the U.S. Tax Act were effective during our fiscal year ended November 30, 2018 with all provisions of the U.S. Tax Act effective as of the beginning of our fiscal year beginning December 1, 2018. The U.S. Tax Act contains provisions with separate effective dates but is generally effective for taxable years beginning after December 31, 2017. The U.S. Tax Act creates a new requirement that certain income earned by foreign subsidiaries, known as Global Intangible Low-Taxed Income (GILTI), must be included in the gross income of the subsidiary’s U.S. shareholder. This provision of the U.S. Tax Act was effective for us for our fiscal year beginning December 1, 2018. Beginning on January 1, 2018, the U.S. Tax Act lowered the U.S. corporate income tax rate from 35% to 21% on our U.S. earnings from that date and beyond. The revaluation of our U.S. deferred tax assets and liabilities to the 21% corporate tax rate has reduced our net U.S. deferred income tax liability by $380.0 million and is reflected as a reduction in our income tax expense in our results for the year ended November 30, 2018. The U.S. Tax Act imposed a one-time transition tax on post-1986 earnings of non-U.S. affiliates that have not been repatriated for purposes of U.S. federal income tax, with those earnings taxed at rates of 15.5% for earnings reflected by cash and cash equivalent items and 8% for other assets. This transition tax, based on our fiscal 2018 tax return filed in fiscal 2019, was $76.0 million (we estimated the transition tax to be $75.3 million in fiscal 2018). The cash tax effects of the transition tax, reduced by the utilization of $21.1 million of current and carried forward excess foreign tax credits, as well as other items of $7.7 million, resulted in a net tax liability of $47.2 million, which can be remitted in installments over an eight-year period as we are doing. As of November 30, 2020, our remaining unpaid transition tax is $39.7 million. In addition to the estimated transition tax of $75.3 million recognized in 2018, we incurred additional foreign withholding taxes, net of a U.S. foreign tax credit, of $7.9 million and a $4.7 million reduction in our fiscal 2018 income taxes as a consequence of the transition tax, both of which we recognized as a component of our income tax expense for the year ended November 30, 2018, for a net transition tax impact recognized in 2018 of $78.5 million. The components of income from consolidated operations before income taxes for the years ended November 30 follow:
(millions) | 2020 | 2019 | 2018
Pretax income |  |  |
United States | $ | 624.3 |  | $ | 569.0 |  | $ | 492.2 |
International | 257.2 |  | 250.2 |  | 249.1 |
| $ | 881.5 |  | $ | 819.2 |  | $ | 741.3 |
A reconciliation of the U.S. federal statutory rate with the effective tax rate for the years ended November 30 follows:
| 2020 | 2019 | 2018
Federal statutory tax rate | 21.0 | % | 21.0 | % | 22.2 | %
State income taxes, net of federal benefits | 1.5 |  | 1.6 |  | 1.5 |
International tax at different effective rates | 1.3 |  | 1.6 |  | 0.4 |
U.S. tax on remitted and unremitted earnings | 0.8 |  | 0.5 |  | 0.6 |
Stock compensation expense | (1.5) |  | (2.8) |  | (2.9) |
U.S. manufacturing deduction | — |  | — |  | (0.8) |
Changes in prior year tax contingencies | (0.3) |  | (0.3) |  | (0.8) |
Non-recurring benefit of U.S. Tax Act | — |  | (0.2) |  | (40.7) |
Valuation allowance release | (1.4) |  | — |  | — |
Intra-entity asset transfer | (1.1) |  | (1.8) |  | — |
Other, net | (0.5) |  | (0.4) |  | (0.7) |
Total | 19.8 | % | 19.2 | % | (21.2) | %
Deferred tax assets and liabilities are comprised of the following as of November 30:
(millions) | 2020 | 2019
Deferred tax assets |  |
Employee benefit liabilities | $ | 121.9 |  | $ | 103.3 |
Other accrued liabilities | 40.3 |  | 32.3 |
Inventory | 10.6 |  | 7.5 |
Tax loss and credit carryforwards | 59.7 |  | 46.8 |
Operating lease liabilities | 33.0 |  | — |
Other | 47.9 |  | 48.1 |
Valuation allowance | (31.5) |  | (32.4) |
| 281.9 |  | 205.6 |
Deferred tax liabilities |  |
Depreciation | 89.1 |  | 82.6 |
Intangible assets | 815.1 |  | 770.5 |
Lease ROU assets | 32.2 |  | — |
Other | 4.5 |  | 5.5 |
| 940.9 |  | 858.6 |
Net deferred tax liability | $ | (659.0) |  | $ | (653.0) |
At November 30, 2020, we have tax loss carryforwards of $214.4 million. Of these carryforwards, $0.1 million expire in 2021, $9.6 million from 2022 through 2023, $77.9 million from 2024 through 2037 and $126.8 million may be carried forward indefinitely. In addition, one of our non-U.S. subsidiaries has a capital loss carryforward of $5.0 million which may be carried forward indefinitely. At November 30, 2020, we also have U.S. foreign tax credit carryforwards of $7.3 million which expire in 2030. A valuation allowance has been provided to cover deferred tax assets that are not more likely than not realizable. The net decrease of $0.9 million in the valuation allowance from November 30, 2019 to November 30, 2020 resulted primarily from the net reversal of valuation allowances for net operating losses, capital losses and other tax attributes in certain non-US jurisdictions. Prior to the U.S. Tax Act, we asserted that substantially all of the undistributed earnings of our international subsidiaries and joint ventures were considered indefinitely invested and accordingly, no deferred taxes were provided. Pursuant to the provisions of the U.S. Tax Act, these earnings were subjected to a one-time transition tax in 2018. The transition tax was recognized in 2018 and was based on cumulative earnings prior to the U.S. Tax Act. Our intent is to continue to reinvest undistributed earnings of our international subsidiaries and joint ventures indefinitely. As of November 30, 2020, we have $1.3 billion of earnings that are considered indefinitely reinvested. While federal income tax expense has been recognized as a result of the U.S. Tax Act, we have not provided any additional deferred taxes with respect to items such as foreign withholding taxes, state income tax or foreign exchange gain or loss. It is not practicable for us to determine the amount of unrecognized tax expense on these reinvested international earnings. The following table summarizes the activity related to our gross unrecognized tax benefits for the years ended November 30:
(millions) | 2020 | 2019 | 2018
Balance at beginning of year | $ | 32.0 |  | $ | 27.9 |  | $ | 39.1 |
Additions for current year tax positions | 7.8 |  | 6.6 |  | 6.5 |
Additions for prior year tax positions | 2.5 |  | 0.6 |  | 0.3 |
Reductions for prior year tax positions | — |  | (0.3) |  | (6.9) |
Settlements | — |  | — |  | — |
Statute expirations | (4.2) |  | (2.5) |  | (9.1) |
Foreign currency translation | 1.2 |  | (0.3) |  | (2.0) |
Balance at November 30 | $ | 39.3 |  | $ | 32.0 |  | $ | 27.9 |
As of November 30, 2020, November 30, 2019, and November 30, 2018, if recognized, $39.3 million, $32.0 million and $27.5 million, respectively, of the unrecognized tax benefits would affect the effective rate. We record interest and penalties on income taxes in income tax expense. We recognized interest and penalty expense of $0.8 million, $2.1 million and $0.1 million in 2020, 2019 and 2018, respectively. As of November 30, 2020 and 2019, we had accrued $8.3 million and $7.1 million, respectively, of interest and penalties related to unrecognized tax benefits. Tax settlements or statute of limitation expirations could result in a change to our uncertain tax positions. We believe that the reasonably possible total amount of unrecognized tax benefits as of November 30, 2020 that could decrease in the next 12 months as a result of various statute expirations, audit closures and/or tax settlements would not be material. We file income tax returns in the U.S. federal jurisdiction and various state and non-U.S. jurisdictions. The open years subject to tax audits vary depending on the tax jurisdictions. In the U.S federal jurisdiction, we are no longer subject to income tax audits by taxing authorities for years before 2017. In other major jurisdictions, we are no longer subject to income tax audits by taxing authorities for years before 2014. We are under normal recurring tax audits in the U.S. and in several jurisdictions outside the U.S. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, we believe that our reserves for uncertain tax positions are adequate to cover existing risks and exposures.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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