INCOME TAXES

The components of income before income tax expense for 2013, 2012 and 2011 are as follows (in thousands):



	2013		2012		2011

United States	$	150,023	$	135,992	$	115,413
Other countries	174,079		152,468		123,429
Income before income tax expense	$	324,102	$	288,460	$	238,842

The components of income tax expense for 2013, 2012 and 2011 are as follows (in thousands):



	2013		2012			2011
Current:
United States	$	44,112	$	42,934		$	43,632
Other countries	25,103		20,965			11,515
State and provincial	4,903		4,344			5,600
Total current	74,118		68,243			60,747
Deferred:
United States	4,754		963			(8,905		)
Other countries	1,884		2,677			2,892
State and provincial	152		(35		)	(536		)
Total deferred	6,790		3,605			(6,549		)
Income tax expense	$	80,908	$	71,848		$	54,198

The differences in income tax expense computed using The Netherlands statutory income tax rate of 25%, 25% and 25% in 2013, 2012 and 2011, respectively, and our income tax expense as reported in the accompanying Consolidated Statements of Operations for 2013, 2012 and 2011 are as follows (in thousands):



	2013			2012			2011

Tax at The Netherlands income tax rate	$	81,026		$	72,115		$	59,711
International earnings taxed at rates other than The Netherlands statutory rate	(6,698		)	(864		)	(241		)
Non-deductible expenses	2,138			917			2,691
Change in valuation allowance	(1,156		)	(2,099		)	(1,279		)
State and provincial taxes	3,439			2,895			3,166
Adjustments of prior year taxes	(4,258		)	1,038			(17,229		)
Adjustments of income tax reserves	59			(4,374		)	7,050
Other	6,358			2,220			329
Income tax expense	$	80,908		$	71,848		$	54,198

Included in Adjustments of prior year taxes in 2011 is the reversal of $10.4 million in tax liabilities provided over the period 2007-2010 as a result of recently concluded audits of prior year returns. The remainder reflects adjustments between the tax accrual for prior year taxes and the tax liability reported in the filed tax returns.

Deferred tax assets and liabilities result from various temporary differences between the financial statement carrying amount and their tax basis. Deferred tax assets and liabilities as of December 31, 2013 and 2012 are summarized as follows (in thousands):



	2013			2012
Deferred tax assets:
Net operating loss carry-forwards	$	5,382		$	5,866
Tax credit carry-forwards	447			3,123
Reserves	8,305			13,497
Unrealized benefit plan loss	4,684			586
Other	657			5,419
Total deferred tax assets	19,475			28,491
Valuation allowance (1)	(6,087		)	(7,243		)
Net deferred tax asset	13,388			21,248
Deferred tax liabilities:
Intangibles	(3,050		)	(1,751		)
Property, plant and equipment	(4,494		)	(5,540		)
Other	(2,301		)	(3,624		)
Total deferred tax liabilities	(9,845		)	(10,915		)
Net deferred income taxes	$	3,543		$	10,333

	2013			2012

Current deferred tax assets	$	8,936		$	8,024
Current deferred tax liabilities	(975		)	(4,138		)
Long-term deferred tax assets	4,452			13,224
Long-term deferred tax liabilities	(8,870		)	(6,777		)
Total deferred tax assets (liabilities)	$	3,543		$	10,333

(1) Valuation allowance at 12/31/11 was $9.4 million.

At December 31, 2013, we had tax net operating loss carry-forwards in various tax jurisdictions of approximately $19.2 million. Although we cannot be certain that these operating loss carry-forwards will be utilized, we anticipate that we will have sufficient taxable income in future years to allow us to fully utilize the carry-forwards that are not subject to a valuation allowance as of December 31, 2013. If unused, those carry-forwards which are subject to expiration may expire during the years 2014 through 2024. During 2013, $0.2 million of operating loss carry-forwards which carried a full valuation allowance expired unused.

We file income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions. We are currently undergoing multiple examinations in various jurisdictions, and the years 1999 through 2012 remain open for examination in various tax jurisdictions in which we operate. In some of these jurisdictions we have received notices of audit assessment that could expose the Company to additional income taxes, including interest and penalty of approximately $14 million in excess of our current estimates. The ultimate settlement and timing of these additional tax assessments is uncertain but the Company will continue to vigorously defend its return filing position and does not view the assessments as probable at this time.

During 2013, adjustments were made to estimates for uncertain tax positions in certain tax jurisdictions based upon changes in facts and circumstances, resulting in a reduction to the unrecognized tax benefits. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):



	2013			2012			2011

Unrecognized tax benefits at January 1,	$	9,292		$	13,496		$	7,713
Tax positions, current period	1,747			1,848			1,656
Tax positions, prior period	(501		)	(425		)	6,666
Lapse of applicable statute of limitations	(2,117		)	(5,627		)	(2,539		)
Unrecognized tax benefits at December 31,	$	8,421		$	9,292		$	13,496

Changes in our estimate of unrecognized tax benefits would affect our effective tax rate.

Our policy is to record accrued interest and penalties on uncertain tax positions, net of any tax effect, as part of total tax expense for the period. The corresponding liability is carried along with the tax exposure as a non-current payable in Other Long-term Liabilities. For the years ended December 31, 2013, 2012 and 2011, we recognized approximately $0.9 million, $(0.1) million and $1.2 million respectively, in interest and penalties. For the years ended December 31, 2013, 2012 and 2011, we had approximately $7.6 million, $6.7 million and $6.8 million, respectively, accrued for the payment of interest and penalties.

During 2013, we recognized tax benefits of $3.7 million relating to tax deductions in excess of book expense for stock-based compensation awards. These tax benefits are recorded to Additional Paid-in Capital to the extent deductions reduce current taxable income as we are able to realize the tax benefits.