INCOME TAXES

The components of income before income tax expense for the years ended December 31, 2018, 2017 and 2016 are as follows (in thousands):



	2018		2017		2016
United States	$	61,680	$	28,632	$	6,233
Other countries	43,614		70,602		69,646
Income before income tax expense	$	105,294	$	99,234	$	75,879

The components of income tax expense for the years ended December 31, 2018, 2017 and 2016 are as follows (in thousands):



	2018			2017			2016
Current:
United States	$	13,198		$	10,699		$	(2,469	)
Other countries	10,132			9,147			16,640
State and provincial	1,548			725			600
Total current	24,878			20,571			14,771
Deferred:
United States	(1,340		)	(2,948		)	1,844
Other countries	1,909			626			(5,845		)
State and provincial	—			—			85
Total deferred	569			(2,322		)	(3,916		)
Income tax expense	$	25,447		$	18,249		$	10,855

The differences in income tax expense computed using the Netherlands statutory income tax rate of 25% in 2018, 2017 and 2016 and our income tax expense as reported in the accompanying Consolidated Statements of Operations for the years ended December 31, 2018, 2017 and 2016 are as follows (in thousands):



	2018			2017			2016
Tax at the Netherlands income tax rate	$	26,189		$	25,427		$	18,652
International earnings taxed at rates other than the Netherlands statutory rate	(14,997		)	(12,496		)	(16,840		)
Non-deductible expenses	4,452			6,645			3,043
Change in valuation allowance	1,513			(1,744		)	(899		)
State and provincial taxes	1,566			829			600
Adjustments of prior year taxes	2,350			(4,272		)	2,412
Adjustments of income tax reserves	(1,613		)	1,869			(604		)
Foreign exchange	5,936			(1,792		)	3,381
Accrued withholding taxes	2,911			3,067			246
Other	(2,860		)	716			864
Income tax expense	$	25,447		$	18,249		$	10,855

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, 2018 and 2017 are summarized as follows (in thousands):



	2018			2017
Deferred tax assets:
Net operating loss carry-forwards	$	6,300		$	7,976
Tax credit carry-forwards	1,154			1,002
Accruals for compensation	7,160			9,399
Accruals for inventory capitalization	1,813			1,909
Unrealized benefit plan loss	3,417			4,006
Unrealized foreign exchange	7,542			5,932
Unearned revenue	2,760			2,649
Other	822			580
Total deferred tax assets	30,968			33,453
Valuation allowance (1)	(9,732		)	(8,219		)
Net deferred tax assets	21,236			25,234
Deferred tax liabilities:
Intangibles	(6,025		)	(5,939		)
Property, plant and equipment	(2,835		)	(2,968		)
Accrued interest	(3,260		)	(4,885		)
Accruals for compensation	—			(1,501		)
Accrued withholding taxes	(886		)	(2,191		)
Unrealized foreign exchange	(4,043		)	(1,995		)
Other	(569		)	(359		)
Total deferred tax liabilities	(17,618		)	(19,838		)
Net deferred income taxes	$	3,618		$	5,396

	2018			2017
Long-term deferred tax assets	$	11,252		$	10,719
Long-term deferred tax liabilities	(7,634		)	(5,323		)
Total deferred tax assets (liabilities)	$	3,618		$	5,396

(1) Valuation allowance at 12/31/16 was $10.0 million.

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the "TCJA") was signed into law reducing the U.S. corporate income tax rate to 21% effective January 1, 2018. During 2018, various proposed regulations were released, providing guidance on identified issues and topics regarding the TCJA. The most impactful changes for the company from the TCJA are the deduction limitations for compensation paid to executive officers and the benefit from the foreign derived intangible income regime.

We have not provided for deferred taxes on the unremitted earnings of certain subsidiaries that we consider to be indefinitely reinvested. Should we make a distribution of the unremitted earnings of these subsidiaries, we may be required to record additional taxes. As of December 31, 2018, we consider $237.5 million to be indefinitely reinvested. Repatriation of these earnings would be subject to income and withholding taxes estimated at $25.3 million. There are no restrictions preventing any of our subsidiaries from repatriating earnings, and there are no restrictions or income taxes associated with distributing cash to the parent company through loans or advances.

At December 31, 2018, we had tax net operating loss carry-forwards in various tax jurisdictions of $25.8 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, 2018, if unused, $2.0 million will expire between 2019-2021, $4.6 million will expire between 2022-2024, $13.4 million will expire between 2025-2028 and $0.4 million will expire beyond 2028. The remaining balance of $5.4 million is not subject to expiration. During 2018, less than $0.1 million of net 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 2001 through 2017 remain open for examination in various tax jurisdictions in which we operate. 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 2018, 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):



	2018			2017			2016
Unrecognized tax benefits at January 1,	$	10,124		$	8,557		$	9,964
Tax positions, current period	543			3,472			983
Tax positions, prior period	(304		)	180			83
Settlements with taxing authorities	(2,207		)	(1,154		)	(1,657		)
Lapse of applicable statute of limitations	(685		)	(931		)	(816		)
Unrecognized tax benefits at December 31,	$	7,471		$	10,124		$	8,557

Changes in our estimate of, or the recognition of, the unrecognized tax benefits shown in the table above 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, 2018, 2017 and 2016, we recognized $0.6 million, $0.6 million and $0.6 million, respectively, in interest and penalties. For the years ended December 31, 2018, 2017 and 2016, we had $3.9 million, $3.3 million and $2.7 million, respectively, accrued for the payment of interest and penalties. Changes in our estimate of unrecognized tax benefits would affect our effective tax rate. As of December 31, 2018, 2017 and 2016 there are $0.6 million, $1.8 million and $1.2 million, respectively, of unrecognized tax benefits that could be resolved within the next twelve months which could have a positive effect on the annual effective tax rate.