NOTE 13 – INCOME TAXES:

(Loss) income before income taxes and equity losses in Chinese joint venture is comprised of the following:


	2014			2013			2012
Domestic	$	(1,182	)	$	25,269		$	14,754
Foreign		290			1,911			413
	$	(892	)	$	27,180		$	15,167
At December 31, 2014, the Corporation has state net operating loss carryforwards of $20,392, which begin to expire in 2018, foreign net operating loss carryforwards of $18 which begin to expire in 2026 and capital loss carryforwards of $940 which do not expire. The income tax provision consisted of the following:
	2014			2013			2012
Current:
Federal	$	3,458		$	5,535		$	2,550
State		210			139			184
Foreign		122			28			(61	)
		3,790			5,702			2,673
Deferred:
Federal		(4,678	)		(488	)		2,142
State		54			133			360
Foreign		101			622			175
Reversal of valuation allowance		(33	)		(156	)		(132	)
		(4,556	)		111			2,545
	$	(766	)	$	5,813		$	5,218
The income tax provision was affected by the reversal of valuation allowances previously provided against deferred income tax assets associated with state net operating loss carryforwards for each of the years. The difference between statutory U.S. federal income tax and the Corporation’s effective income tax was as follows:
	2014			2013			2012
Computed at statutory rate	$	(312	)	$	9,513		$	5,309
Tax differential on non-U.S. earnings		128			(340	)		(119	)
State income taxes		(227	)		741			619
Manufacturers deduction (I.R.C. Section 199)		(359	)		(566	)		(257	)
Meals and entertainment		224			205			198
Tax credits		(12	)		(145	)		(64	)
Chinese joint venture		(371	)		(3,125	)		(558	)
Reversal of valuation allowance		(33	)		(156	)		(132	)
Change in tax rates		301			(472	)		(143	)
Change in uncertain tax positions		(80	)		(172	)		87
Other – net		(25	)		330			278
	$	(766	)	$	5,813		$	5,218

Deferred income tax assets and liabilities as of December 31, 2014 and 2013 are summarized below. The current portion of net deferred income tax assets is included in other current assets in the consolidated balance sheets. Unremitted earnings of the Corporation’s non-U.S. subsidiaries and affiliates are deemed to be permanently reinvested and, accordingly, no deferred income tax liability has been recorded. It is not practical to estimate the income tax effect that might be incurred if cumulative prior year earnings not previously taxed in the United States were remitted to the United States.


	2014			2013
Assets:
Employment – related liabilities	$	10,726		$	11,946
Pension liability – foreign		4,041			2,434
Pension liability – domestic		15,849			5,137
Liabilities related to discontinued operations		733			959
Capital loss carryforwards		253			273
Asbestos-related liability		18,252			18,172
Net operating loss – state		2,029			1,654
Inventory related		3,458			2,644
Impairment charge associated with investment in UES-MG		2,344			2,316
Other		3,546			3,939
Gross deferred income tax assets		61,231			49,474
Valuation allowance		(3,254	)		(2,639	)
		57,977			46,835
Liabilities:
Depreciation		(30,429	)		(31,918	)
Mark-to-market adjustment – derivatives		(23	)		(73	)
Other		(1,993	)		(2,495	)
Gross deferred income tax liabilities		(32,445	)		(34,486	)
Net deferred income tax assets	$	25,532		$	12,349

The following summarizes changes in unrecognized tax benefits for the year ended December 31:


	2014			2013			2012
Balance at the beginning of the year	$	270		$	442		$	311
Gross increases for tax positions taken in the current year		0			8			233
Gross increases for tax positions taken in prior years		2			12			18
Gross decreases in tax positions due to lapse in statute of limitations		(61	)		0			(120	)
Gross decreases for tax positions taken in prior years		(17	)		(192	)		0
Gross decreases for tax settlements with taxing authorities		(142	)		0			0
Balance at the end of the year	$	52		$	270		$	442

If the unrecognized tax benefits were recognized, $34 would reduce the Corporation’s effective income tax rate. The amount of penalties and interest recognized in the consolidated balance sheets as of December 31, 2014 and 2013 and in the consolidated statements of operations for 2014, 2013 and 2012 is insignificant. Unrecognized tax benefits of $22 are to expire due to the lapse in the statute of limitations within the next 12 months.

The Corporation is subject to taxation in the United States, various states and foreign jurisdictions, and remains subject to examination by tax authorities for tax years 2011-2014. The combined Indiana income tax returns for 2010-2013 are under examination by the Indiana Department of Revenue which started during the first quarter of 2015.