Income Taxes

(Loss) Income Before Income Taxes

(Loss) income before income taxes consists of the following:



	For the Year Ended December 31,
	2015			2014		2013
United States	$	(187,252	)	$	87,505	$	67,355
Foreign	(14,580		)	31,659		51,303
(Loss) income before income taxes	$	(201,832	)	$	119,164	$	118,658

Provision

Significant components of the provision for income taxes are as follows:



	Year Ended December 31,
	2015			2014			2013
Current:
Federal	$	22,846		$	22,608		$	19,421
State and local	1,138			1,406			1,618
Foreign	3,103			12,326			11,864
Total current	27,087			36,340			32,903
Deferred:
Federal	(25,707		)	3,135			21
State and local	(619		)	180			(364		)
Foreign	1,923			(3,563		)	(1,264		)
Total deferred	(24,403		)	(248		)	(1,607		)
Total provision	$	2,684		$	36,092		$	31,296

Effective Tax Rate Reconciliation

The reconciliation of income taxes computed at the U.S. federal statutory tax rate to income tax expense is as follows:



	Year Ended December 31,
	2015			2014			2013
Income tax expense at U.S. federal statutory rate	$	(70,641	)	$	41,708		$	41,530
State income taxes, net of federal tax benefit	361			841			757
Foreign income, net of credit on foreign taxes	12			(245		)	501
Effective tax rate differential of earnings outside of U.S.	(46		)	(5,411		)	(8,257		)
Change in valuation allowance	5,658			—			—
Research & experimentation credits	(860		)	(1,150		)	(2,105		)
Non-deductible items	2,745			1,947			865
Change in uncertain tax positions	60			(52		)	(347		)
Domestic production activities deduction	(2,133		)	(2,093		)	(2,237		)
Tax effect of asset impairments	67,340			—			—
Other items	188			547			589
Income tax expense	$	2,684		$	36,092		$	31,296

Deferred Taxes

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:



	December 31,
	2015			2014
Deferred tax assets:
Accruals and reserves	$	23,363		$	23,197
Pensions	6,276			6,161
Inventory	6,768			5,176
Share-based compensation	8,593			7,235
Tax credit carryforwards	1,046			553
Foreign net operating loss carryforwards	2,454			1,154
State net operating loss carryforwards	1,922			1,331
Other – net	2,714			3,230
Total deferred tax assets before valuation allowance	53,136			48,037
Valuation allowance	(8,842		)	(1,982		)
Total deferred tax assets, net of valuation allowance	$	44,294		$	46,055
Deferred tax liabilities:
Property, plant and equipment	$	20,482		$	24,063
Goodwill and intangible assets	25,474			47,771
Convertible notes	1,586			2,118
Total deferred tax liabilities	$	47,542		$	73,952
Net deferred tax liabilities	$	3,248		$	27,897
The net deferred tax liability is classified as follows:
Deferred income taxes	$	—		$	(17,248	)
Other assets	(1,898		)	(1,743		)
Long-term deferred tax liabilities	5,146			46,888
Net deferred tax liabilities	$	3,248		$	27,897

Federal, State and Local Net Operating Loss Carryforwards: As a result of the Company’s acquisition of SeQual in 2010, the Company has $29,379 of state net operating losses. California tax law limits the use of these state net operating losses. The remaining state net operating losses expire between 2016 and 2030. In addition, the Company has state net operating losses in various other states which begin to expire in 2017. The gross deferred tax asset for the state net operating losses of $1,922 is substantially offset by a valuation allowance of $1,514.

Foreign Net Operating Loss Carryforwards: As of December 31, 2015, cumulative foreign operating losses of $11,542 generated by the Company were available to reduce future taxable income. Approximately $10,747 of these operating losses expire between 2019 and 2023. The remaining $795 can be carried forward indefinitely. The deferred tax asset for the foreign operating losses of $2,454 is substantially offset by a valuation allowance of $2,319.

Other Tax Information

The Company has not provided for income taxes on approximately $190,681 of foreign subsidiaries’ undistributed earnings as of December 31, 2015, since the earnings retained have been reinvested indefinitely by the subsidiaries. It is not practicable to estimate the additional income taxes and applicable foreign withholding taxes that would be payable on the remittance of such undistributed earnings.

Cash paid for income taxes during the years ended December 31, 2015, 2014 and 2013 was $30,492, $31,208 and $24,977, respectively.

Unrecognized Income Tax Benefits

The reconciliation of beginning to ending unrecognized tax benefits is as follows:



	Year Ended December 31,
	2015			2014			2013
Unrecognized tax benefits at beginning of the year	$	948		$	941		$	3,339
Additions for tax positions of prior years	98			358			299
Reductions for tax positions of prior years	—			(329		)	(1,921		)
Lapse of statutes of limitation	(22		)	(22		)	(776		)
Unrecognized tax benefits at end of the year	$	1,024		$	948		$	941

Included in the balance of unrecognized tax benefits at December 31, 2015 and 2014 were $504 and $462, respectively, of income tax benefits which, if ultimately recognized, would impact the Company’s annual effective tax rate.

The Company had accrued approximately $121 and $94 for the payment of interest and penalties at December 31, 2015 and 2014, respectively. The Company accrued approximately $27 and $1 during the years ended December 31, 2015 and 2014, respectively in additional interest associated with uncertain tax positions. The Company recorded a net benefit of $8 for interest expense during the year ended December 31, 2013 due to the filing of an amended tax return which offset the accrual of interest expense related to existing uncertain tax positions.

The Company is subject to income taxes in the U.S. federal jurisdiction and various state and foreign jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state and local or non-U.S. income tax examinations by tax authorities for years prior to 2011.

Due to the expiration of various statutes of limitation, it is reasonably possible the Company’s unrecognized tax benefits at December 31, 2015 may decrease within the next twelve months by approximately $219.