

	Years Ended December 31,
	2019			2018			2017
U.S. Federal:
Current	$	(18,789	)	$	(56,743	)	$	25,774
Deferred	11,577			61,514			(23,863		)
	(7,212		)	4,771			1,911
U.S. State and Local:
Current	(9,142		)	(12,214		)	(3,022		)
Deferred	8,043			866			13,426
	(1,099		)	(11,348		)	10,404
International:
Current	9,993			11,308			(7,679		)
Deferred	(14,689		)	1,685			9,023
	(4,696		)	12,993			1,344

Total current	(17,938		)	(57,649		)	15,073
Total deferred	4,931			64,065			(1,414		)
Total (benefit) provision for income taxes	$	(13,007	)	$	6,416		$	13,659

Effective tax rate	(47.9		)%	3.4		%	7.1		%

The effective tax rate for 2019 includes benefits of $23 million from the release of a foreign valuation allowance and $9 million from the resolution of certain tax examinations. The effective tax rate for 2019 also includes a tax of $3 million on the $18 million book loss from Market Exits, primarily due to nondeductible basis differences. The effective tax rate for 2018 includes tax benefits of $37 million related to true-ups from the Tax Cuts and Jobs Act of 2017 and $17 million from the resolution of certain tax examinations. The effective tax rate for 2017 includes provisional tax benefits of $39 million from the Tax Cuts and Jobs Act of 2017 and $30 million from the resolution of tax examinations.



	Years Ended December 31,
	2019			2018			2017
Federal statutory provision	$	5,700		$	39,505		$	67,794
State and local income taxes ⁽¹⁾	(868		)	1,292			3,739
Impact of foreign operations taxed at rates other than the U.S. statutory rate ⁽²⁾	(18,541		)	(2,483		)	(12,054		)
Accrual/release of uncertain tax amounts related to foreign operations	191			(4,595		)	(17,919		)
U.S. tax impacts of foreign income in the U.S.	5,587			5,854			1,750
Tax incentives/credits/exempt income	(5,437		)	3,526			(14,587		)
Unrealized stock compensation benefits	2,176			1,941			3,778
Remeasurement of U.S. deferred taxes	—			(13,121		)	(108,176		)
U.S. tax on unremitted earnings	—			(23,711		)	90,916
Other, net⁽³⁾	(1,815		)	(1,792		)	(1,582		)
(Benefit) provision for income taxes	$	(13,007	)	$	6,416		$	13,659



	December 31,
	2019			2018
Deferred tax liabilities:
Depreciation	$	(69,222	)	$	(71,757	)
Deferred profit (for tax purposes) on sale to finance subsidiary	(30,791		)	(41,951		)
Lease revenue and related depreciation	(174,083		)	(149,176		)
Intangible assets	(88,024		)	(98,707		)
Other	(24,941		)	(34,425		)
Gross deferred tax liabilities	(387,061		)	(396,016		)

Deferred tax assets:
Nonpension postretirement benefits	41,015			42,422
Pension	43,763			60,063
Inventory and equipment capitalization	2,735			6,042
Restructuring charges	2,944			5,064
Long-term incentives	12,929			11,517
Net operating loss	82,673			106,029
Tax credit carry forwards	64,430			64,148
Tax uncertainties gross-up	6,577			6,692
Other	38,247			46,623
Gross deferred tax assets	295,313			348,600
Less: Valuation allowance	(110,781		)	(142,496		)
Net deferred tax assets	184,532			206,104
Total deferred taxes, net	$	(202,529	)	$	(189,912	)

A valuation allowance is recognized to reduce deferred tax assets to an amount that will more-likely-than-not be realized. The valuation allowance relates primarily to certain foreign, state and local net operating loss and tax credit carryforwards that will more-likely-than-not expire unutilized.

We have net operating loss carryforwards of $162 million as of December 31, 2019, of which $145 million can be carried forward indefinitely and the remainder expire over the next 20 years. In addition, we have tax credit carryforwards of $64 million, of which $52 million can be carried forward indefinitely and the remainder expire over the next 13 years.

As of December 31, 2019, we assert that we are no longer permanently reinvested in $421 million of post-1986 earnings generated from non-U.S. subsidiaries, which were subject to the deemed repatriation toll charge under the Act. We continue to be permanently reinvested in our remaining undistributed earnings of $261 million as well as other outside basis differences. While a determination of the full liability that would be incurred if these earnings were repatriated is not practical, we have estimated the withholding taxes would be approximately $3 million.



	2019			2018			2017
Balance at beginning of year	$	71,458		$	89,767		$	124,728
Increases from prior period positions	510			88			528
Decreases from prior period positions	(9,711		)	(15,145		)	(31,470		)
Increases from current period positions	5,052			6,001			5,951
Decreases relating to settlements with tax authorities	(2,626		)	(4,844		)	(6,953		)
Reductions from lapse of applicable statute of limitations	(4,381		)	(4,409		)	(3,017		)
Balance at end of year	$	60,302		$	71,458		$	89,767

The amount of the unrecognized tax benefits at December 31, 2019, 2018 and 2017 that would affect the effective tax rate if recognized was $54 million, $65 million and $74 million, respectively.

On a regular basis, we conclude tax return examinations, statutes of limitations expire, and court decisions interpret tax law. We regularly assess tax uncertainties in light of these developments. As a result, it is reasonably possible that the amount of our unrecognized tax benefits will decrease in the next 12 months, and we expect this change could be up to 15% of our unrecognized tax benefits. We recognize interest and penalties related to uncertain tax positions in our provision for income taxes. We recognized interest and penalties of $(1) million, $(1) million and $(4) million related to uncertain tax positions in the provision for income taxes for the years ended December 31, 2019, 2018 and 2017 respectively. We had $3 million and $4 million accrued for the payment of interest and penalties at December 31, 2019 and 2018, respectively.

As is the case with other large corporations, our tax returns are examined each year by tax authorities in the U.S. and other global taxing jurisdictions in which we have operations. The IRS examinations of our consolidated U.S. income tax returns for tax years prior to 2017 are closed to audit; however, various post-2011 U.S. state and local tax returns are still subject to examination. In Canada, the examination of our tax filings prior to 2015 are closed to audit. Other significant jurisdictions include France (closed through 2014), Germany (closed through 2016) and the U.K. (closed through 2016, except for an item under appeal). We also have other less significant tax filings currently subject to examination.

We regularly assess the likelihood of tax adjustments in each of the tax jurisdictions in which we have operations and account for the related financial statement implications. We believe we have established tax reserves that are appropriate given the possibility of tax adjustments. However, determining the appropriate level of tax reserves requires judgment regarding the uncertain application of tax law and the possibility of tax adjustments. Future changes in tax reserve requirements could have a material impact, positive or negative, on our results of operations, financial position and cash flows.