12. Income Taxes

Income (loss) before income taxes consists of the following components for the fiscal years ended September 30:

	2015			2014			2013
United States	$	(93,321	)	$	(225,767	)	$	10,452
Foreign		180,826			191,760			173,906

	$	87,505		$	(34,007	)	$	184,358

Provision (benefit) for income taxes consists of the following for the fiscal years ended September 30:

	2015			2014			2013
Federal
Current	$	(2,037	)	$	10,668		$	6,831
Deferred		(17,628	)		(43,708	)		10,231
State
Current		3,335			3,495			2,727
Deferred		(5,725	)		(5,689	)		(4,106	)
Foreign
Current		42,050			44,863			40,027
Deferred		(6,908	)		516			(8,262	)

Total provision (benefit)	$	13,087		$	10,145		$	47,448

The following is a reconciliation of the (benefit) provision for income taxes computed using the statutory Federal income tax rate to the actual income tax expense (benefit) and the effective income tax rate for the fiscal years ended September 30:

	2015						2014						2013
	Amount			Percent of pretax income			Amount			Percent of pretax income			Amount			Percent of pretax income
Income tax expense at statutory rate	$	30,627			35	%	$	(11,902	)		35.0	%	$	64,525			35.0	%
State income taxes, net of federal income tax benefit		(3,090	)		(3.5	)%		(3,415	)		10.0	%		(1,379	)		(0.7	)%
Change in valuation allowance		(1,559	)		(1.7	)%		—			0.0	%		(1,259	)		(0.7	)%
Effect of international operations, including foreign export benefit and earnings indefinitely reinvested		(12,950	)		(14.8	)%		(38	)		0.1	%		(13,075	)		(7.1	)%
Domestic manufacturing deduction		(2,700	)		(3.1	)%		(1,071	)		3.1	%		(1,715	)		(0.9	)%
Goodwill Impairment		1,925			2.2	%		30,567			(89.9	)%		—			0.0	%
Change in tax reserves		(725	)		(0.8	)%		(4,801	)		14.1	%		—			0.0	%
Other		1,559			1.7	%		805			(2.4	)%		351			0.2	%

	$	13,087			15.0	%	$	10,145			(29.8	)%	$	47,448			25.7	%

The difference in the effective rate in fiscal 2015 as compared to the statutory rate is mainly attributable to the benefit related to the Company's assertion to reinvest $130,000 of foreign earnings indefinitely. The difference in the effective rate in fiscal 2014 as compared to the statutory rate is mainly attributable to the impact of the goodwill impairment during fiscal 2014 for which no income tax benefit was recorded. The difference in the effective rate in fiscal 2013 as compared to the statutory rate is mainly attributable to the restructuring which had a favorable impact on our state tax rate due to the closing of facilities in California (a relatively high tax state) and the partial indefinite reinvestment of foreign earnings.

The components of deferred tax assets and liabilities are as follows as of September 30:

	2015			2014
Deferred tax assets:
Inventory reserves and UNICAP	$	20,175		$	12,851
Accrued expenses and reserves not currently deductible		21,545			21,184
Other comprehensive income		2,343			8,670
R&D tax credit carryforward		1,048			—
Foreign and state tax credits		54,928			107,460
Foreign and state net operating losses		8,865			8,434
Valuation allowance		(7,984	)		(9,543	)

Total deferred income tax assets, net of valuation allowance		100,920			149,056

Deferred tax liabilities:
Depreciation		(40,145	)		(49,497	)
Intangibles		(585,448	)		(625,784	)
Prepaid rent		(1,064	)		(1,248	)
Undistributed foreign earnings		(81,092	)		(122,378	)

Total deferred income tax liabilities		(707,749	)		(798,907	)

Total net deferred income tax liabilities		(606,829	)		(649,851	)
Less current deferred income tax assets		(56,194	)		(26,242	)

Long-term deferred income tax liabilities	$	(663,023	)	$	(676,093	)

At September 30, 2015 and 2014, we had the following:

	2015		2014
Foreign net operating losses	$	17,022	$	19,600
Deferred foreign tax credit on unremitted foreign earnings		53,027		104,218
R&D tax credit carryforward		1,048		—
NYS investment tax credit carryforwards		1,901		2,537

At September 30, 2015 and 2014, we maintained the following valuation allowances:

	2015		2014
NYS investment tax credit carryforwards	$	1,901	$	2,537
Foreign loss carryforwards		6,083		7,005

The NYS investment tax credits expire primarily between 2016 and 2029 and the foreign net operating loss carryforwards expire in accordance with applicable tax law. We provide a valuation allowance for these credit and loss carryforwards because we do not consider realization of such assets to be more likely than not. We continue to monitor the need for these valuation allowances on an on-going basis.

At September 30, 2015, we had $241,547 of undistributed international earnings on which we have not provided any U.S. tax expense as we intend to permanently reinvest these earnings outside of the U.S. If these earnings are repatriated to the United States, or if the Company determines that such earnings will be remitted in the foreseeable future, additional tax provisions may be required. Due to the complexities in the tax laws and the assumptions that would have to be made, it is not practicable to estimate the amounts of income tax provisions that may be required.

The following table summarizes the changes in the valuation allowance for the fiscal years ended September 30:

	2015			2014			2013
Beginning balance	$	(9,543	)	$	(14,116	)	$	(14,867	)
NYS investment tax credit carryforwards utilized/(generated)		636			1,269			(321	)
Foreign net operating losses utilized/(generated)		923			3,304			1,580
Foreign net operating losses acquired		—			—			(508	)

Balance at September 30	$	(7,984	)	$	(9,543	)	$	(14,116	)

The following table summarizes the activity related to gross unrecognized tax benefits for the fiscal years ended September 30:

	2015			2014			2013
Beginning balance	$	8,029		$	13,635		$	12,888
Increases related to current year tax positions		1,005			1,260			—
Increases related to prior year tax positions		—			85			1,512
Decreases related to settlements with taxing authorities		(1,821	)		(5,305	)		(249	)
Decreases related to lapsing of statute of limitations		(1,985	)		(1,646	)		(516	)

Balance as of September 30	$	5,228		$	8,029		$	13,635

These liabilities are primarily included as a component of other liabilities in our Consolidated Balance Sheets because we generally do not anticipate that settlement of the liabilities will require payment of cash within the next twelve months.

Our total unrecognized tax benefits that, if recognized, would affect our effective tax rate were $3,760 and $5,961 as of September 30, 2015 and 2014, respectively. We do not believe that the amount will significantly change in the next 12 months.

We accrue interest and penalties related to unrecognized tax benefits in provision (benefit) for income taxes. This methodology is consistent with previous periods. At September 30, 2015, we had accrued $215 and $137 for the potential payment of interest and penalties, respectively. As of September 30, 2015, we were subject to U.S. Federal Income Tax examinations for the tax years 2012 through 2015, and to non-US examinations for the tax years of 2009 through 2015. In addition, we are generally subject to state and local examinations for fiscal years 2012 through 2015. In fiscal 2015 the Company finalized its IRS exam for tax years 2007 through 2010 which resulted in a reduction of its unrecognized tax benefit.