

	Year Ended December 31,
	2019			2018			2017
	(in millions)
Current:
Federal	$	7.6		$	(5.4	)	$	29.3
State	3.0			0.8			0.5
Foreign	5.6			1.5			0.3
Total current	16.2			(3.1		)	30.1
Deferred:
Federal:
Effect of Tax Cuts and Jobs Act	—			(1.5		)	(6.2		)
Other	22.6			24.8			16.6
	22.6			23.3			10.4
State	(0.6		)	5.4			0.9
Foreign	(4.7		)	(6.3		)	(1.0		)
Total deferred	17.3			22.4			10.3
Provision	$	33.5		$	19.3		$	40.4

The provision for income taxes results in effective tax rates that differ from the statutory rates. The following is a reconciliation between the statutory U.S. federal income tax rate and the Company’s effective income tax rate on income before income taxes:



	Year Ended December 31,
	2019		2018		2017
Statutory rate	21.0	%	21.0	%	35.0	%
State taxes	3.1		3.1		2.5
Domestic production activities deduction	—		—		(2.1	)
Changes in valuation allowances and reserves	(1.3	)	(1.2	)	1.3
Changes in tax reserves	(0.3	)	(1.4	)	0.8
Effect of Tax Cuts and Jobs Act	—		(1.6	)	(5.0	)
Prior year true-ups	(0.5	)	(0.4	)	(2.2	)
Foreign adjustments	0.6		2.4		1.8
Other, net	0.2		(1.6	)	(1.0	)
Effective rate	22.8	%	20.3	%	31.1	%

The Tax Cuts and Jobs Act ("the Act") was enacted on December 22, 2017. The Act reduced the U.S. federal corporate income tax rate from 35% to 21%, required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and created new taxes on certain foreign-sourced earnings. For the year ended December 31, 2017, we recognized a provisional benefit of $6.2 million, primarily related to the impact of the Act on our deferred taxes. During the year ended December 31, 2018, we finalized the accounting for the enactment of the Act and recorded an additional $1.5 million benefit, primarily as a result of the true-up of our deferred taxes. There was no additional impact to the year-ended December 31, 2019.

Income (loss) before income taxes for the December 31, 2019, 2018, and 2017 was $143.6 million, $106.6 million, and $139.9 million, respectively, for U.S. operations, and $3.2 million, $(11.6) million, and $(9.8) million, respectively, for foreign operations, principally Mexico and Canada. The Company provides deferred income taxes on the unrepatriated earnings of its foreign operations where it results in a deferred tax liability.

Deferred income taxes represent the 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. The components of deferred tax liabilities and assets are as follows:



	December 31,
	2019			2018
	(in millions)
Deferred tax liabilities:
Depreciation, depletion, and amortization	$	109.1		$	103.2
Total deferred tax liabilities	109.1			103.2
Deferred tax assets:
Workers compensation, pensions, and other benefits	21.6			16.2
Warranties and reserves	1.7			2.2
Tax loss carryforwards and credits	14.8			31.0
Inventory	22.7			10.8
Accrued liabilities and other	1.0			(2.7		)
Total deferred tax assets	61.8			57.5
Net deferred tax assets (liabilities) before valuation allowances	(47.3		)	(45.7		)
Valuation allowances	4.8			5.7
Adjusted net deferred tax assets (liabilities)	$	(52.1	)	$	(51.4	)

At December 31, 2019, the Company had $22.0 million of federal consolidated net operating loss carryforwards, primarily from businesses acquired, and $0.6 million of tax-effected state loss carryforwards remaining. In addition, the Company had $36.9 million of foreign net operating loss carryforwards that will begin to expire in the year 2022.

Income tax has not been recognized on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that is indefinitely reinvested outside the United States. This amount becomes taxable upon a repatriation of assets from the subsidiary or a sale or liquidation of the subsidiary. The amount of such temporary differences totaled approximately $79.4 million as of December 31, 2019. Determination of the amount of any unrecognized deferred income tax liability on this temporary difference is not practicable because of the complexities of the hypothetical calculation.

We have multiple federal tax return filings that are subject to examination by the Internal Revenue Service. We filed the initial Arcosa, Inc. federal return for 2018 and it will remain open for three years. The 2015-2018 tax years are open for the ACG federal returns. We have various subsidiaries that file separate state tax returns and are subject to examination by taxing authorities at different times. The entities are generally open for their 2015 tax years and forward. We have various subsidiaries in Mexico that file separate tax returns and are subject to examination by taxing authorities at different times. The entities are generally open for their 2014 tax years and forward.



	December 31,
	2019			2018			2017
	(in millions)
Beginning balance	$	0.5		$	1.3		$	7.4
Additions for tax positions related to the current year	—			—			—
Additions for tax positions of prior years	—			0.1			0.2
Reductions for tax positions of prior years	—			—			—
Settlements	—			—			(6.0		)
Expiration of statute of limitations	(0.5		)	(0.9		)	(0.3		)
Ending balance	$	—		$	0.5		$	1.3

The additions for tax positions of prior years of $0.1 million and $0.2 million for the years ended December 31, 2018 and 2017, respectively, are due to foreign tax positions.

Expiration of statutes of limitations during the years ended December 31, 2019 and 2017 relate to foreign tax returns. Expiration of statutes of limitations during the year ended December 31, 2018 relate to state and foreign tax returns.

The total amount of unrecognized tax benefits including interest and penalties at December 31, 2018 and 2017, that would affect the Company’s effective tax rate if recognized was $0.5 million and $1.9 million, respectively. The total amount of tax benefit including interest and penalties recognized in 2019 due to lapses in statutes of limitations was $0.5 million.

Arcosa accounts for interest expense and penalties related to income tax issues as income tax expense. Accordingly, interest expense and penalties associated with an uncertain tax position are included in the income tax provision. The total amount of accrued interest and penalties as of December 31, 2019, 2018, and 2017 was $0.0 million, $0.0 million, and $0.9 million, respectively. Income tax expense for the years ended December 31, 2019, 2018, and 2017 included decreases of $0.0 million, $0.9 million, and $1.5 million, respectively, with regard to interest expense and penalties related to uncertain tax positions.