INCOME TAXES

The components of income before income tax expense for 2014, 2013 and 2012 are as follows (in thousands):



	2014		2013		2012

United States	$	154,943	$	150,023	$	135,992
Other countries	180,988		174,079		152,468
Income before income tax expense	$	335,931	$	324,102	$	288,460

The components of income tax expense for 2014, 2013 and 2012 are as follows (in thousands):



	2014		2013		2012
Current:
United States	$	44,350	$	44,112	$	42,934
Other countries	23,546		25,103		20,965
State and provincial	4,727		4,903		4,344
Total current	72,623		74,118		68,243
Deferred:
United States	2,801		4,754		963
Other countries	1,675		1,884		2,677
State and provincial	206		152		(35		)
Total deferred	4,682		6,790		3,605
Income tax expense	$	77,305	$	80,908	$	71,848

The differences in income tax expense computed using The Netherlands statutory income tax rate of 25%, 25% and 25% in 2014, 2013 and 2012, respectively, and our income tax expense as reported in the accompanying Consolidated Statements of Operations for 2014, 2013 and 2012 are as follows (in thousands):



	2014			2013			2012

Tax at The Netherlands income tax rate	$	83,983		$	81,026		$	72,115
International earnings taxed at rates other than The Netherlands statutory rate	(6,721		)	(6,698		)	(864		)
Non-deductible expenses	2,807			2,138			917
Change in valuation allowance	1,150			(1,156		)	(2,099		)
State and provincial taxes	3,339			3,439			2,895
Adjustments of prior year taxes	(2,973		)	(4,258		)	1,038
Adjustments of income tax reserves	(1,570		)	59			(4,374		)
Other	(2,710		)	6,358			2,220
Income tax expense	$	77,305		$	80,908		$	71,848

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, 2014 and 2013 are summarized as follows (in thousands):



	2014			2013
Deferred tax assets:
Net operating loss carry-forwards	$	6,340		$	5,382
Tax credit carry-forwards	428			447
Reserves	16,424			8,305
Unrealized benefit plan loss	4,925			4,684
Other	1,804			657
Total deferred tax assets	29,921			19,475
Valuation allowance (1)	(7,236		)	(6,087		)
Net deferred tax asset	22,685			13,388
Deferred tax liabilities:
Intangibles	(5,650		)	(3,050		)
Property, plant and equipment	(6,993		)	(4,494		)
Other	(10,339		)	(2,301		)
Total deferred tax liabilities	(22,982		)	(9,845		)
Net deferred income taxes	$	(297	)	$	3,543

	2014			2013

Current deferred tax assets	$	6,130		$	8,936
Current deferred tax liabilities	(3,093		)	(975		)
Long-term deferred tax assets	3,876			4,452
Long-term deferred tax liabilities	(7,210		)	(8,870		)
Total deferred tax assets (liabilities)	$	(297	)	$	3,543

(1) Valuation allowance at 12/31/12 was $7.2 million.

We have not provided for deferred taxes on the unremitted earnings of certain subsidiaries that we consider to be permanently reinvested. Should we make a distribution of the unremitted earnings of these subsidiaries, we may be required to record additional taxes.

At December 31, 2014, we had tax net operating loss carry-forwards in various tax jurisdictions of approximately $23.5 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, 2014. If unused, those carry-forwards which are subject to expiration may expire during the years 2015-2025. During 2014, no 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 2013 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 $17 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 2014, 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):



	2014			2013			2012

Unrecognized tax benefits at January 1,	$	12,385		$	13,256		$	17,460
Tax positions, current period	1,441			1,747			1,848
Tax positions, prior period	56			(501		)	(425		)
Settlements with taxing authorities	(947		)	—			—
Lapse of applicable statute of limitations	(1,188		)	(2,117		)	(5,627		)
Unrecognized tax benefits at December 31,	$	11,747		$	12,385		$	13,256

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, 2014, 2013 and 2012, we recognized approximately $(1.1) million, $0.9 million and $(0.1) million respectively, in interest and penalties. For the years ended December 31, 2014, 2013 and 2012, we had approximately $2.5 million, $3.6 million and $2.7 million, respectively, accrued for the payment of interest and penalties.

During 2014, we recognized tax benefits of $3.0 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.