
	Year Ended December 31,
	2020		2019		2018
	(Amounts in thousands)
Current:
U.S. federal	$	40,234	$	22,001	$	12,079
Foreign	42,487		61,976		29,968
State and local	5,894		4,506		2,647
Total current	88,615		88,483		44,694
Deferred:
U.S. federal	(50,038)		(1,644)		6,567
Foreign	25,356		(12,243)		(4,585)
State and local	(3,902)		897		(126)
Total deferred	(28,584)		(12,990)		1,856
Total provision	$	60,031	$	75,493	$	46,550


	Year Ended December 31,
	2020			2019			2018
	(Amounts in millions)
Statutory federal income tax at 21%	$	39.2		$	67.7		$	32.9
Foreign impact, net	(1.3)			4.5			(5.9)
Impact of U.S. Tax Reform Act	—			—			(5.7)
Change in valuation allowances	26.9			0.3			15.7
State and local income taxes, net	2.0			5.4			3.7
Research and development credit	(5.2)			(5.4)			—
Other, net	(1.6)			3.0			5.9
Total	$	60.0		$	75.5		$	46.6
Effective tax rate	32.1		%	23.4		%	29.8		%

In response to the COVID-19 pandemic, many governments have enacted or are contemplating measures to provide aid and economic stimulus. These measures may include deferring the due dates of tax payments or other changes to their income and non-income-based tax laws. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which was enacted on March 27, 2020 in the U.S., includes measures to assist companies, including temporary changes to income and non-income-based tax laws. For the year ended December 31, 2020, there were no material tax impacts to our condensed consolidated financial statements as they relate to the CARES Act or any other global COVID-19 measures. We continue to monitor additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service and others.

For the years ended December 31, 2020, 2019 and 2018 we have asserted indefinite reinvestment on certain earnings of our foreign subsidiaries. As of December 31, 2020, we have not recorded approximately $19.1 million of deferred tax liabilities associated with remaining unremitted earnings considered indefinitely reinvested, primarily related to foreign withholding taxes that would be due upon repatriation of the designated earnings to the U.S.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the consolidated deferred tax assets and liabilities were:


	December 31,
	2020		2019
	(Amounts in thousands)
Deferred tax assets related to:
Retirement benefits	$	29,754	$	25,214
Net operating loss carryforwards	109,020		101,193
Compensation accruals	20,290		24,685
Inventories	36,402		34,846
Credit and capital loss carryforwards	136,956		131,744
Warranty and accrued liabilities	27,483		18,741
Bad debt reserve	17,455		30,884
Operating lease liability	25,446		27,799
Other	38,457		25,339
Total deferred tax assets	441,263		420,445
Valuation allowances	(287,787)		(266,414)
Net deferred tax assets	153,476		154,031
Deferred tax liabilities related to:
Property, plant and equipment	(11,714)		(26,311)
Goodwill and intangibles	(101,818)		(114,122)
Foreign undistributed earnings	(50,332)		(67,930)
Operating lease right-of-use-assets	(25,799)		(27,799)
Other	(17,621)		(12,623)
Total deferred tax liabilities	(207,284)		(248,785)
Deferred tax liabilities, net	$	(53,808)	$	(94,754)

We have $481.7 million of U.S. and foreign net operating loss carryforwards at December 31, 2020. Of this total, $33.1 million are state net operating losses. Net operating losses generated in the U.S., if unused, will expire in 2024 through 2026 tax years. The majority of our foreign net operating losses carry forward without expiration. Additionally, we have $35.9 million of foreign tax credit carryforwards at December 31, 2020. The foreign tax credit carryforwards, if unused, will expire in 2026, 2028-2030 tax years.

Our valuation allowances primarily relate to the deferred tax assets established for U.S. foreign tax credit carryforwards of $35.9 million, a foreign capital loss carryforward of $97.8 million, and other foreign deferred tax assets of $154.1 million. The foreign capital loss carryforward was the result of a reorganization of certain foreign subsidiaries in the current year. Due to its capital nature, it is uncertain if the loss will be utilized within its ten year carryforward period and, therefore, has a full valuation allowance.


	2020		2019		2018
Balance — January 1	$	40.6	$	41.2	$	51.5
Gross amount of increase (decrease) in unrecognized tax benefits resulting from tax positions taken:
During a prior year	3.8		8.8		(6.6)
During the current period	11.1		6.3		4.0
Decreases in unrecognized tax benefits relating to:
Settlements with taxing authorities	(0.2)		(11.4)		(2.7)
Lapse of the applicable statute of limitations	(2.5)		(3.2)		(3.7)
Increase (decrease) in unrecognized tax benefits relating to foreign currency translation adjustments	2.0		(1.1)		(1.3)
Balance — December 31	$	54.8	$	40.6	$	41.2

The amount of gross unrecognized tax benefits at December 31, 2020, was $73.4 million, which includes $18.6 million of accrued interest and penalties. Of this amount $62.3 million, if recognized, would favorably impact our effective tax rate.

With limited exception, we are no longer subject to U.S. federal income tax audits for years through 2017, state and local income tax audits for years through 2014 or foreign income tax audits for years through 2013. We are currently under examination for various years in Canada, Germany, India, Indonesia, Italy, Mexico, the Netherlands, Philippines, Saudi Arabia, the U.S., and Venezuela.

It is reasonably possible that within the next 12 months the effective tax rate will be impacted by the resolution of some or all of the matters audited by various taxing authorities. It is also reasonably possible that we will have the statute of limitations close in various taxing jurisdictions within the next 12 months. As such, we estimate we could record a reduction in our tax expense up to approximately $8 million within the next 12 months.