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 threshold, 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. The Company is subject to audit by the IRS and various states for tax years dating back to 2011. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense.

Income tax for 2015 and 2014 consisted of a benefit of $12 and expense of $23, respectively, of federal and state income taxes. The actual expense differs from the expected tax benefit (provision) as computed by applying the U.S. federal statutory income tax rate of 34 percent for 2015 and 2014, as follows:

	2015	2014

Income tax benefit at U.S. federal statutory rate	$440	$436
State tax benefit (provision) (net of federal income tax benefit)	(14)	42
Change in valuation allowance attributable to operations	4,146	(332)
Change in effective tax rate	(4,064)	-
Pension settlement	(466)	-
Other, net	(31)	(169)
Income tax benefit (provision)	$12	$(23)

The tax effects of temporary differences that give rise to significant portions of the deferred income tax assets and liabilities as of December 31, 2015 and 2014 are as follows:

	2015	2014

Property and equipment, principally due to differences in depreciation	$(722)	$845
Inventory reserves and other inventory-related temporary basis differences	696	663
Warranty, vacation, deferred rent and other liabilities	883	1,114
Retirement liabilities	1,088	2,427
Net operating loss carryforwards	62,194	63,511
Credit carryforwards	817	825
Other	1,227	944
Total deferred income tax assets	66,183	70,329
Less valuation allowance	(66,183)	(70,329)
Net deferred income tax assets	$-	$-

	2015	2014

United States	$(1,296)	$(1,282)
International	-	-
Total	$(1,296)	$(1,282)

	2015	2014
Current
U.S. federal	$-	$-
State	12	(23)
Total	$12	$(23)
Deferred
U.S. federal	$(4,068)	$985
State	(78)	(653)
Total	(4,146)	332
Valuation allowance (increase) decrease	4,146	(332)
Total	$-	$-

E&S has total federal net operating loss carryforwards of approximately $168,400 which expire from 2018 through 2033. No federal net operating loss carryforwards expired in 2015 or 2014. The Company has various federal tax credit carryforwards of approximately $800, a portion of which expire between 2015 and 2016. E&S also has state net operating loss carryforwards of approximately $149,700 that expire at various dates depending on the rules of the states to which the loss or credit is allocated.

During the years ended December 31, 2015 and 2014, the valuation allowance on deferred income tax assets decreased by $4,146 and increased by $332, respectively. Valuation allowances were established according to the belief that it is more likely than not that these net deferred income tax assets will not be realized.