11. Income Taxes

The effective tax rate from continuing operations was 35.7% in 2015, 36.4% in 2014 and 33.5% in 2013. A reconciliation of the Federal statutory income tax rate to the Company’s effective tax rate is as follows:

	Percent of Income before Income Taxes
	2015			2014			2013
Statutory Federal income tax rate		35.0	%		35.0	%		35.0	%
State income taxes - net of Federal tax benefit		0.2			(4.5	)		2.9
Foreign tax rate differential		(2.4	)		1.8			(0.2	)
Domestic production deduction		(4.0	)		(6.6	)		(3.1	)
Non-deductible expenses		4.9			7.0			1.3
Changes in unrecognized tax benefits		(1.8	)		(2.5	)		(0.2	)
Foreign tax incentives		(2.3	)		(3.0	)		(2.2	)
Valuation allowances		4.8			9.0			—
Other		1.3			0.2			—
Effective tax rate for the year		35.7	%		36.4	%		33.5	%

Income from continuing operations before income taxes was attributable to the following sources:

	2015		2014			2013
United States	$	19,546	$	21,074		$	38,089
Foreign		2,316		(6,991	)		1,696
Totals	$	21,862	$	14,083		$	39,785

Income tax expense (benefit) from continuing operations consisted of the following:

	2015					2014						2013
	Current		Deferred			Current			Deferred			Current		Deferred
Federal	$	6,677	$	(368	)	$	8,298		$	(1,208	)	$	13,273	$	(1,413	)
Foreign		504		783			(277	)		(710	)		629		(920	)
State and local		943		(730	)		(234	)		(747	)		2,170		(396	)
	$	8,124	$	(315	)	$	7,787		$	(2,665	)	$	16,072	$	(2,729	)

Significant components of the Company’s deferred taxes as of December 31, 2015 and 2014 are as follows:

	2015			2014
Deferred income tax liabilities
Property, plant and equipment	$	12,989		$	11,629
Tax-deductible goodwill		7,871			7,728
Non-deductible intangibles		282			1,843
State deferred taxes		212			687
Other		1,010			483
		22,364			22,370
Deferred income tax assets
Compensation		7,081			6,716
Inventory valuation		945			636
Allowance for uncollectible accounts		194			260
Non-deductible accruals		3,892			2,631
Other		—			15
Net operating loss carryforwards		4,715			5,050
		16,827			15,308
Valuation Allowance		(3,664	)		(4,326	)
		13,163			10,982
Net deferred income tax liability	$	9,201		$	11,388

ASC 740 Income Taxes requires that deferred tax assets be reduced by a valuation allowance, if based on all available evidence, it is more likely than not that the deferred tax asset will not be realized. Available evidence includes the reversal of existing taxable temporary differences, future taxable income exclusive of temporary differences, taxable income in carryback years and tax planning strategies. At December 31, 2015, the Company has deferred tax assets of $4.7 million resulting from $14.2 million of foreign net operating tax loss carryforwards, as well as $3.7 million of related valuation allowances primarily related to Brazil. These net operating tax loss carryforwards will begin to expire in 2034.

The following table summarizes the activity related to the Company’s valuation allowance:

	2015			2014			2013
Balance at January 1	$	(4,326	)	$	(4,264	)	$	(5,128	)
(Charged) Credited to Expense		(763	)		414			25
Net write-offs		—			—			—
Foreign currency translation adjustment		1,425			(476	)		839
Balance at December 31	$	(3,664	)	$	(4,326	)	$	(4,264	)

No provision has been recorded for unremitted earnings of foreign subsidiaries as it is the Company’s intention to indefinitely reinvest the earnings of those subsidiaries. Accordingly, at December 31, 2015, the Company had not recorded a deferred tax liability related to investments in its foreign subsidiaries that are essentially permanent in duration. The amount of such temporary differences was estimated to be approximately $16.4 million and may become taxable in the U.S. upon a repatriation of assets or a sale or liquidation of the subsidiaries. It is not practical to estimate the related amount of unrecognized tax liability.

The following table summarizes the activity related to the Company’s unrecognized tax benefits:

	2015			2014			2013
Balance at January 1	$	483		$	840		$	910
Increases related to current year tax positions		—			—			—
Increases related to previous year tax positions		151			5			—
Reductions due to lapse of applicable statute of limitations		(483	)		(362	)		(48	)
Reduction due to settlements		—			—			(22	)
Balance at December 31	$	151		$	483		$	840

The total amount of gross unrecognized tax benefits that would reduce the Company’s effective tax rate was $0.2 million, $0.5 million and $0.8 million at December 31, 2015, 2014 and 2013, respectively. The amount of accrued interest expense included as a liability within the Company’s Consolidated Statements of Financial Position was less than $0.1 million for December 31, 2015 and 2014 and $0.1 million for December 31, 2013. The December 31, 2015 balance of unrecognized tax benefits includes approximately $0.2 million of unrecognized tax benefits for which it is reasonably possible that they will be recognized within the next twelve months. This amount represents a decrease in unrecognized benefits related to expiring statutes in U.S. Federal and state jurisdictions.

The Company and its subsidiaries file U.S. Federal, state and local, and non-U.S. income tax returns. As of December 31, 2015 the Company is no longer subject to U.S. Federal examinations by tax authorities for tax years before 2012. The Company is subject to state and local examinations for tax years of 2011 through 2015. In addition, the Company is subject to non-U.S. income tax examinations for tax years of 2010 through 2015.