Income Taxes

The components of loss from continuing operations before income taxes and equity in earnings (losses) of joint venture for the years ended December 31, 2016, 2015 and 2014 were as follows:



	2016			2015			2014
Domestic	$	(104,524	)	$	(201,375	)	$	(122,511	)
Non-U.S.	(7,935		)	(33,550		)	(30,841		)

The provision (benefit) for income taxes for the years ending December 31, 2016, 2015 and 2014 consisted of the following components:



	2016			2015			2014
Federal
current	$	—		$	—		$	—
deferred	(4,231		)	(21,700		)	(25,023		)
State
current	25			70			32
deferred	(114		)	(927		)	(3,959		)
Foreign
current	1,783			2,149			(1,898		)
deferred	(9		)	(3,162		)	7,905
	$	(2,546	)	$	(23,570	)	$	(22,943	)

The items accounting for differences between the income tax benefit computed at the federal statutory rate and the provision for income taxes for the years ended December 31, 2016, 2015 and 2014 were as follows:



	2016			2015			2014
Federal income tax at statutory rates	$	(39,361	)	$	(82,226	)	$	(53,673	)
State income taxes, net of federal income tax benefits	(5,118		)	(8,784		)	(651		)
Permanent items:
Section 956 inclusions	13,132			—			—
Convertible debt – non-deductible	3,024			—			—
Goodwill impairment	—			—			10,454
Other permanent differences	2,719			2,369			285
Federal and state income tax on joint venture	(1,660		)	(558		)	2,912
Rate differential on foreign income	795			3,305			11,512
Valuation allowance	23,746			63,511			4,888
Audit settlements	—			171			99
Other	177			(1,358		)	1,231
Income tax (benefit)	$	(2,546	)	$	(23,570	)	$	(22,943	)
Effective income tax (benefit) rate	2.3		%	10.0		%	15.0		%

Significant components of deferred tax assets and liabilities of December 31, 2016 and 2015 are as follows:



	2016			2015
Deferred tax assets:
Pension and postretirement benefits	$	809		$	4,139
Deferred compensation	595			1,357
Restructuring related and other reserves	4			842
Alternative minimum tax and net operating loss carryforward	91,769			66,709
Intangible assets and goodwill	11,647			5,993
Other, net	2,818			3,399
Deferred tax assets before valuation allowance	107,642			82,439
Valuation allowance	(79,908		)	(63,955		)
Total deferred tax assets	$	27,734		$	18,484
Deferred tax liabilities:
Depreciation	$	5,006		$	8,147
Inventory	20,172			6,071
Convertible debt discount	1,883			4,075
Other, net	292			3,982
Total deferred tax liabilities	27,353			22,275
Net deferred tax assets (liabilities)	$	381		$	(3,791	)

As of December 31, 2016, the Company had $197,930 of federal and $232,759 of state net operating loss carryforwards which will begin expiring in 2032 and 2017, respectively, $2,010 of federal credits which will carry forward for an indefinite period and $546 of state credit carryforwards which will begin expiring in 2024. The future utilization of a portion of the Company’s federal and state net operating losses is expected to be limited by IRC Section 382 due to ownership changes in 2016 and 2015; however, at this time that amount has not been quantified. As of December 31, 2016, the Company had $39,934 of foreign net operating loss carryforwards, of which a significant portion carry forward for an indefinite period.

The Company continues to maintain valuation allowances against substantially all U.S. and foreign deferred tax assets to reduce those deferred tax assets to amounts that are realizable either through future reversals of existing taxable temporary differences or through taxable income in carryback years for the applicable jurisdictions.

Activity in the Company's valuation allowances for the U.S. and non-U.S. operations were as follows for the years ended December 31, 2016, 2015 and 2014:



	2016			2015			2014
Domestic
Balance, beginning of year	$	55,474		$	—		$	—
Provision charged to expense	18,906			55,474			—
Provision charged to discontinued operations and other comprehensive income	(4,697		)	—			—
Balance, end of year	$	69,683		$	55,474		$	—
Foreign
Balance, beginning of year	$	8,481		$	4,888		$	—
Impact of foreign exchange on beginning of year balance	(702		)	(553		)	—
Provision charged to expense	2,446			4,146			4,888
Balance, end of year	$	10,225		$	8,481		$	4,888

The Company is subject to taxation in the United States, state jurisdictions and foreign jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes and recording the related income tax assets and liabilities. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not criterion, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

In the ordinary course of business, the Company is subject to review by domestic and foreign taxing authorities, including the IRS. In general, the Company is no longer subject to audit by the IRS for tax years through 2012 and state, local or foreign taxing authorities for tax years through 2011. Various other taxing authorities are in the process of auditing income tax returns of the Company and its subsidiaries. The Company does not anticipate that any adjustments from the audits would have a material impact on its consolidated financial position, results of operations or cash flows.

During 2016, the Company pledged its foreign assets as collateral for the Credit Facilities. This resulted in a foreign income inclusion in the U.S. under IRC Section 956, which was comprised of current and accumulated earnings and profits. There are no remaining undistributed earnings as of December 31, 2016 on which the Company would need to record any additional deferred tax liability.