
	Years Ended December 31,
	2020			2019			2018
U.S. Federal:
Current	$	(10,582)		$	(18,789)		$	(56,743)
Deferred	6,205			11,577			61,514
	(4,377)			(7,212)			4,771
U.S. State and Local:
Current	(2,569)			(9,142)			(12,214)
Deferred	4,016			8,043			866
	1,447			(1,099)			(11,348)
International:
Current	4,993			9,993			11,308
Deferred	4,664			(14,689)			1,685
	9,657			(4,696)			12,993

Total current	(8,158)			(17,938)			(57,649)
Total deferred	14,885			4,931			64,065
Total provision (benefit) for income taxes	$	6,727		$	(13,007)		$	6,416

Effective tax rate	(3.6)		%	(47.9)		%	3.4		%

The effective tax rate for 2020 includes a $12 million charge for the surrender of company owned life insurance policies, a $5 million benefit for the correction of tax balances in certain domestic and international tax jurisdictions, a $3 million benefit due to regulations enacted into law, a $2 million benefit for the carryback of net operating losses resulting from the CARES Act and a benefit of $2 million on the $198 million goodwill impairment charge as the majority of this charge is nondeductible.

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 the disposition of operations in certain international markets, 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.


	Years Ended December 31,
	2020		2019		2018
Federal statutory provision	$	(38,836)	$	5,700	$	39,505
State and local income taxes (1)	1,143		(868)		1,292
Impact of foreign operations taxed at rates other than the U.S. statutory rate (2)	(3,345)		(18,541)		(2,483)
Accrual/release of uncertain tax amounts related to foreign operations	1,802		191		(4,595)
U.S. tax impacts of foreign income in the U.S.	(2,300)		5,587		5,854
CARES Act carryback benefit	(1,646)		—		—
Tax incentives/credits/exempt income	(750)		(5,437)		3,526
Unrealized stock compensation benefits	2,312		2,176		1,941
Surrender of company-owned life insurance policies	10,313		—		—
Goodwill impairment	40,328		—		—
Remeasurement of U.S. deferred taxes	—		—		(13,121)
U.S. tax on unremitted earnings	—		—		(23,711)
Other, net (3)	(2,294)		(1,815)		(1,792)
Provision (benefit) for income taxes	$	6,727	$	(13,007)	$	6,416

(1) Includes a charge of $2 million for the surrender of company-owned life insurance for the year ended December 31, 2020 and a benefit from the release of tax uncertainties of $9 million for the year ended December 31, 2018.

(2) Includes a benefit of $3 million for tax balance corrections and a deferred tax rate change benefit of $2 million for the year ended December 31, 2020 and a foreign valuation allowance release of $23 million and a $3 million tax on the disposition of operations in certain international markets for the year ended December 31, 2019.


	December 31,
	2020		2019
Deferred tax liabilities:
Depreciation	$	(69,900)	$	(69,222)
Deferred profit (for tax purposes) on sale to finance subsidiary	(28,101)		(30,791)
Lease revenue and related depreciation	(190,852)		(174,083)
Intangible assets	(81,816)		(88,024)
Operating lease liability	(50,071)		(52,731)
Other	(27,865)		(24,941)
Gross deferred tax liabilities	(448,605)		(439,792)

Deferred tax assets:
Postretirement medical benefits	42,423		41,015
Pension	48,385		43,763
Operating lease asset	54,538		52,731
Inventory and equipment capitalization	2,494		2,735
Restructuring charges	2,022		2,944
Long-term incentives	12,905		12,929
Net operating loss	82,823		82,673
Tax credit carry forwards	64,070		64,430
Tax uncertainties gross-up	6,656		6,577
Other	42,079		38,247
Gross deferred tax assets	358,395		348,044
Less: Valuation allowance	(116,543)		(110,781)
Net deferred tax assets	241,852		237,263

Total deferred taxes, net	$	(206,753)	$	(202,529)

The deferred tax assets and liabilities disclosure at December 31, 2019 has been adjusted to reflect the gross deferred tax operating lease asset and related gross deferred operating lease liability recognized in accordance with ASC 842.

We have net operating loss carryforwards in international jurisdictions of $179 million as of December 31, 2020, of which $157 million can be carried forward indefinitely and the remainder expire over the next 20 years. We also have net operating loss carryforwards in most states totaling $1.1 billion that will 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 12 years.

As of December 31, 2020, we assert that we are permanently reinvested in our pre-1987 and post-2017 undistributed earnings of $288 million as well as all other outside basis differences. While a determination of the full liability that would be incurred if these earnings were repatriated is not practicable, we have estimated the withholding taxes would be approximately $1 million.


	2020		2019		2018
Balance at beginning of year	$	60,302	$	71,458	$	89,767
Increases from prior period positions	2,147		510		88
Decreases from prior period positions	(47)		(9,711)		(15,145)
Increases from current period positions	3,472		5,052		6,001

Decreases relating to settlements with tax authorities	(12,508)		(2,626)		(4,844)
Reductions from lapse of applicable statute of limitations	(3,302)		(4,381)		(4,409)
Balance at end of year	$	50,064	$	60,302	$	71,458

The amount of the unrecognized tax benefits at December 31, 2020, 2019 and 2018 that would affect the effective tax rate if recognized was $44 million, $54 million and $65 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 10% of our unrecognized tax benefits. We recognize interest and penalties related to uncertain tax positions in our provision for income taxes. Amounts included in our provision for income taxes related to interest and penalties on uncertain tax positions for each of the years ended December 31, 2020, 2019 and 2018 were not significant. We had $4 million and $3 million accrued for the payment of interest and penalties at December 31, 2020 and 2019, respectively.

The Internal Revenue Service examinations of our consolidated U.S. income tax returns for tax years prior to 2017 are closed to audit; however, various post-2014 U.S. state and local tax returns are still subject to examination, with some states in appeals from 2011. For our significant non-U.S. jurisdictions, Canada is closed to examination through 2014, France is closed through 2013, Germany is closed through 2016 and the U.K. is closed through 2017. 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.