9. Income Taxes

The provision for income taxes for continuing operations was as follows:

(In thousands)	2015			2014			2013
Currently payable:
Federal	$	20,794		$	18,642		$	21,252
State		2,936			2,264			3,065
Foreign		23,873			25,435			25,175
		47,603			46,341			49,492
Deferred (benefit) expense:
Federal		5,779			1,532			(5,125	)
State		(772	)		(935	)		502
Foreign		(10,461	)		(14,111	)		(1,534	)
		(5,454	)		(13,514	)		(6,157	)
Income taxes	$	42,149		$	32,827		$	43,335

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities consisted of the following:

(in thousands)	2015			2014
Deferred tax assets:
Benefit plans	$	12,901		$	15,507
Liabilities and reserves		18,986			19,384
Operating loss and credit carryovers		59,013			57,128
Other		3,226			6,872
Gross deferred tax assets		94,126			98,891
Valuation allowance		(36,008	)		(43,055	)
Deferred tax assets		58,118			55,836
Deferred tax liabilities:
Property, plant and equipment		(1,850	)		(1,619	)
Other assets		(907	)		(1,462	)
Goodwill		(27,824	)		(28,583	)
Other		(8,000	)		(1,426	)
Deferred tax liabilities		(38,581	)		(33,090	)
Net deferred tax assets	$	19,537		$	22,746

As of December 31, 2015, $8.1 million of the net deferred tax asset balance, is a non-current asset and is reported in the other assets line item in the Consolidated Balance Sheet.

At December 31, 2015, foreign operating loss carryovers were $117.3 million. Included in the foreign operating loss carryovers are losses of $14.8 million that expire through 2030 and $102.5 million that do not have an expiration date. At December 31, 2015, state operating loss carryovers were $145.2 million, all of which expire through 2030.

The effective tax rate for continuing operations differed from the statutory federal income tax rate of 35% as described below:

	2015			2014			2013

Taxes at statutory rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal income tax benefit		1.7			1.9			1.1
Tax credits		(0.7	)		(0.4	)		(0.3	)
Taxes on foreign earnings		(0.8	)		(4.7	)		(5.3	)
Resolution of prior years’ tax matters		(0.3	)		(0.6	)		(0.7	)
U.S. manufacturing deduction		(1.9	)		(2.0	)		(1.6	)
Valuation allowance adjustments		(5.0	)		0.2			(0.8	)
Other, net		0.2			(0.8	)		0.1
Effective tax rate		28.2	%		28.6	%		27.5	%

Taxes on foreign earnings include the difference between the tax rates applied to foreign earnings relative to the U.S. statutory tax rate, accruals for foreign unrecognized tax benefits, and the impact of the U.S. foreign tax credit. The impact on the Company’s effective tax rate varies from year to year based on the mix of earnings, increases in foreign unrecognized tax benefits, and the expected realization of U.S. foreign tax credits generated each year.

The 2015 reduction in the effective tax rate from the valuation allowance adjustments is the result of a tax audit settlement and a change in projections on the utilization of certain deferred tax assets.

Earnings from continuing operations before income taxes were as follows:

(In thousands)	2015		2014		2013

United States	$	87,749	$	56,211	$	55,461
Foreign		61,647		58,387		102,172
Total	$	149,396	$	114,598	$	157,633

Federal and state income taxes are provided on international subsidiary income distributed to or taxable in the United States during the year. At December 31, 2015, federal and state taxes have not been provided for approximately $430.2 million of unremitted earnings of the foreign subsidiaries that are considered to be invested indefinitely. Determination of the deferred tax liability on such earnings is not practicable.

A reconciliation of the change in the liability for unrecognized tax benefits for 2015 and 2014 is as follows:

(in thousands)	2015			2014
Balance at beginning of year	$	13,940		$	5,295
Increases for tax positions taken in the current year		1,322			718
Increases for tax positions taken in prior years		1,061			10,238
Decreases related to settlements with tax authorities		(10,610	)		(1,044	)
Decreases as a result of lapse of the applicable statutes of limitations		(278	)		(751	)
Foreign currency exchange rate changes		(472	)		(516	)
Balance at the end of year	$	4,963		$	13,940

The amount of the unrecognized tax benefits that would affect the effective tax rate, if recognized, was approximately $4.3 million. The Company recognizes interest and penalties related to the unrecognized tax benefits in income tax expense. As of December 31, 2015 and 2014, $0.5 million of accrued interest and penalties were reported as an income tax liability in each period. The $10.6 million decrease related to Settlements with Tax Authorities was due to a 2015 audit settlement. A portion of this decrease reduced the Company’s deferred tax assets and an immaterial amount was recognized in net earnings. The liability for unrecognized tax benefits relates to multiple jurisdictions and is reported in Other liabilities on the Consolidated Balance Sheet at December 31, 2015.

The Company believes that it is reasonably possible that the total amount of liability for unrecognized tax benefits as of December 31, 2015, will decrease by approximately $0.5 million during 2016, of which $0.5 million is estimated to impact the effective tax rate. The potential decrease relates to various tax matters for which the statute of limitations may expire or will be otherwise settled in 2016. The amount that is ultimately recognized in the financial statements will be dependent upon various factors including potential increases or decreases in unrecognized tax benefits as a result of examinations, settlements and other unanticipated items that may occur during the year. With limited exceptions, the Company is no longer subject to federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2010.