The Company’s tax rate is based on income and statutory tax rates in the various jurisdictions in which the Company operates. Tax law requires certain items to be included in the Company’s tax returns at different times than the items reflected in the Company’s financial statements. As a result, the Company’s annual tax rate reflected in its financial statements is different than that reported in its tax returns. Some of these differences are permanent, such as expenses that are not deductible in the Company’s tax return, and some differences reverse over time, such as depreciation expense. These temporary differences create deferred tax assets and liabilities. The Company establishes valuation allowances for its deferred tax assets if, based on the available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The components of the Company’s income before income taxes include the following:

Year Ended December 31,	2019		2018		2017
Domestic	$	2,201.1	$	1,775.2	$	1,347.8
Foreign		898.1		1,035.0		825.5
	$	3,099.2	$	2,810.2	$	2,173.3

The components of the Company’s provision for income taxes include the following:

Year Ended December 31,	2019			2018			2017
Current provision:
Federal	$	352.3		$	267.1		$	397.7
State		96.8			67.5			63.8
Foreign		191.4			263.0			210.5
		640.5			597.6			672.0
Deferred provision (benefit):
Federal		40.7			22.6			(173.8	)
State		(4.3	)		1.3			2.3
Foreign		34.4			(6.4	)		(2.4	)
		70.8			17.5			(173.9	)
	$	711.3		$	615.1		$	498.1

Tax benefits recognized for net operating loss carryforwards were $12.4, $5.0 and $4.3 for the years ended 2019, 2018 and 2017, respectively.

A reconciliation of the statutory U.S. federal tax rate to the effective income tax rate is as follows:

	2019			2018			2017
Statutory rate		21.0	%		21.0	%		35.0	%
Effect of:
Rate change on deferred taxes								(14.0	)
Transition tax					(.2	)		6.0
State		2.3			2.2			1.8
Federal domestic production deduction								(1.1	)
Tax on foreign earnings		.9			1.0			(4.0	)
Other, net		(1.2	)		(2.1	)		(.8	)
		23.0	%		21.9	%		22.9	%

On December 22, 2017, the U.S. enacted new federal income tax legislation, the Tax Cuts and Jobs Act (“the Tax Act”). The Tax Act lowered the U.S. statutory income tax rate from 35% to 21%, imposed a one-time transition tax on the Company’s foreign earnings, which previously had been deferred from U.S. income tax and created a modified territorial system. As a result, the Company recorded $304.0 of deferred tax benefits, due to the re-measurement of net deferred tax liabilities at the new lower statutory tax rate. In addition, the Company recorded $130.6 of tax expense on the Company’s foreign earnings, which previously had been deferred from U.S. income tax and no adjustments have been made to the amounts.

Based on the Company’s current operations, the Company does not expect that the repatriation of future foreign earnings will be subject to significant income tax as a result of the U.S. modified territorial system.

At December 31, 2019, the Company had net operating loss carryforwards of $460.9, of which $370.7 related to foreign subsidiaries and $90.2 related to states in the U.S. The related deferred tax asset was $123.3, for which a $99.6 valuation allowance has been provided. The carryforward periods range from four years to indefinite, subject to certain limitations under applicable laws. The future tax benefits of net operating loss carryforwards are evaluated on a regular basis, including a review of historical and projected operating results.

The tax effects of temporary differences representing deferred tax assets and liabilities are as follows:

At December 31,	2019			2018
Assets:
Accrued expenses	$	203.5		$	179.4
Net operating loss and tax credit carryforwards		132.0			112.1
Postretirement benefit plans		4.9
Allowance for losses on receivables		31.4			30.7
Goodwill and intangibles		18.7			24.2
Other		103.3			102.0
		493.8			448.4
Valuation allowance		(118.5	)		(118.3	)
		375.3			330.1
Liabilities:
Financial Services leasing depreciation		(777.5	)		(676.4	)
Depreciation and amortization		(159.4	)		(145.2	)
Postretirement benefit plans					(8.0	)
Other		(28.9	)		(32.9	)
		(965.8	)		(862.5	)
Net deferred tax liability	$	(590.5	)	$	(532.4	)

The balance sheets classification of the Company’s deferred tax assets and liabilities are as follows:

At December 31,	2019			2018
Truck, Parts and Other:
Other noncurrent assets, net	$	115.4		$	97.1
Other liabilities		(5.3	)		(2.5	)
Financial Services:
Other assets		36.8			37.7
Deferred taxes and other liabilities		(737.4	)		(664.7	)
Net deferred tax liability	$	(590.5	)	$	(532.4	)

Cash paid for income taxes was $586.0, $607.6 and $661.4 in 2019, 2018 and 2017, respectively.

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

	2019		2018			2017
Balance at January 1	$	21.2	$	22.9		$	17.3
Additions for tax positions related to the current year		6.5		11.2			5.6
Additions for tax positions related to prior years		3.0
Reductions related to settlements				(5.7	)
Lapse of statute of limitations				(7.2	)
Balance at December 31	$	30.7	$	21.2		$	22.9

The Company had $30.7, $21.2 and $22.9 of unrecognized tax benefits, of which $28.4, $18.9 and $16.8 would impact the effective tax rate, if recognized, as of December 31, 2019, 2018 and 2017, respectively.

The Company recognized $.8, $(.1) and $.2 of expense (income) related to interest in 2019, 2018 and 2017, respectively. Accrued interest expense and penalties were $1.9, $1.1 and $1.1 as of December 31, 2019, 2018 and 2017, respectively. Interest and penalties are classified as income taxes in the Consolidated Statements of Income.

The Company believes it is reasonably possible that approximately $7.9 of unrecognized tax benefits, resulting primarily from research and development tax credits, will be resolved within the next twelve months. As of December 31, 2019, the United States Internal Revenue Service has completed examinations of the Company’s tax returns for all years through 2014. The Company’s tax returns for other major jurisdictions remain subject to examination for the years ranging from 2011 through 2019.