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Income Taxes
 12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
Income Tax Expense Income Taxes
Our income before income tax expense, as well as our provision for income taxes is shown in the table below.
 Years Ended December 31,
(in thousands)202020192018
Income before income tax expense
Domestic$203,327 $183,907 $157,459 
Foreign127,960 147,683 132,826 
$331,287 $331,590 $290,285 
Income tax expense
Current income taxes
Federal$14,861 $29,955 $9,153 
State6,106 9,551 4,679 
Foreign32,198 30,414 27,192 
53,165 69,920 41,024 
Deferred income taxes
Federal4,498 1,671 16,545 
State1,090 630 2,888 
Foreign1,966 5,083 (4,906)
7,554 7,384 14,527 
Total income tax expense
$60,719 $77,304 $55,551 
The reconciliation of the U.S. federal statutory rate to the effective income tax rate follows.
 % of Income Before Income Tax Expense    
202020192018
Federal statutory rate21.0 %21.0 %21.0 %
State taxes, net of federal tax1.7 2.4 2.1 
Foreign operations0.7 1.7 (0.9)
Research tax credit(1.7)(1.7)(1.5)
Foreign-derived intangible tax benefit(0.4)(2.1)(2.4)
U.S. minimum tax on foreign income0.5 1.0 1.5 
Uncertain tax positions(1.7)0.8 0.7 
Taxes applicable to prior years(1.4)(0.3)(0.7)
Change in U.S. tax rate0.0 0.0 (2.0)
Other items and adjustments(0.4)0.5 1.3 
Effective income tax rate18.3 %23.3 %19.1 %
Our deferred income tax assets and liabilities follow.
 December 31,
(in thousands)20202019
Deferred income tax assets
Operating loss and credit carryforwards$14,965 $13,375 
Trademark expenses3,678 3,892 
Foreign currency translation adjustments3,728 4,772 
Other6,238 7,015 
Gross deferred income tax assets28,609 29,054 
Valuation allowance(12,548)(13,152)
Total deferred income tax assets16,061 15,902 
Deferred income tax liabilities
Depreciation and amortization59,847 56,618 
Future employee benefits1,670 4,064 
Other6,593 6,089 
Total deferred income tax liabilities68,110 66,771 
Net deferred income tax (liabilities) assets$(52,049)$(50,869)
Net deferred income tax (liabilities) assets in the table above are reflected in the Consolidated Balance Sheets on a net jurisdictional basis. Deferred income tax assets are included in deferred charges and other assets. See Note 11. Deferred income tax liabilities are included in other noncurrent liabilities. See Note 14.
Our deferred taxes are in a net liability position at December 31, 2020. Our deferred tax assets include $15 million of foreign operating loss carryforwards, foreign capital loss carryforwards, and foreign and state tax credits. The operating loss carryforwards expire in 2023 through 2037 and certain tax credits expire in 2026 through 2030. The largest change during 2020 on the carryforward items related to an increase in foreign tax credit carryforwards generated in 2019. Based on current forecasted operating plans and historical profitability, we believe that we will recover the full benefit of our deferred tax assets with the exception of $13 million of the aforementioned operating loss, capital loss, and tax credit carryforwards. Therefore, as of December 31, 2020, we have recorded an offsetting valuation allowance against these items. During 2020, we released the valuation allowance on $1 million of net operating losses that we utilized during the year.
As a result of the Tax Reform Act, we do not expect to distribute earnings from our foreign subsidiaries in a manner that would result in significant U.S. tax, as these earnings have been previously taxed in the U.S. or meet the requirements for a dividends received deduction. However, we have recorded a $2 million deferred tax liability for the currency impact and for the withholding taxes that will not be creditable upon distribution.
We have not provided a deferred tax liability on approximately $163 million of temporary differences related to investments in foreign subsidiaries that are essentially permanent in duration, as these earnings are considered to be indefinitely reinvested. If we were to repatriate these earnings, we could be subject to income taxes and withholding taxes in various countries. Determination of the amount of unrecognized deferred income tax liability is not practicable due to the complexity associated with the hypothetical calculation.
A reconciliation of the beginning and ending balances of the unrecognized tax benefits from uncertain positions is as follows:
 December 31,
(in thousands)202020192018
Balance at beginning of year$13,543 $10,660 $9,102 
Increases for tax positions of prior years363 3,176 2,123 
Increases for tax positions of the current year824 703 614 
Settlements0 (440)(252)
Lapses of statutes(7,825)(556)(927)
Balance at end of year$6,905 $13,543 $10,660 
At December 31, 2020, all of the amount of unrecognized tax benefits, if recognized, would affect our effective tax rate.
We expect the amount of unrecognized tax benefits to change in the next twelve months; however, we do not expect the change to have a material impact on our financial statements.
Our U.S. subsidiaries file a U.S. federal consolidated income tax return. We are currently under examination by various U.S. state and foreign jurisdictions and remain subject to examination until the statute of limitations expires for the respective tax jurisdiction. We are no longer subject to U.S. federal income examination for years before 2017. Foreign and U.S. state jurisdictions have statutes of limitations generally ranging from 3 years to 5 years. Years still open to examination by foreign tax authorities in major jurisdictions include: the U.K. (2019 and forward); Singapore (2016 and forward); Belgium (2018 and forward); and Mexico (2015 and forward).