Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Deferred Tax Assets and Deferred Tax Liabilities

The deferred tax assets and deferred tax liabilities and related valuation allowance were comprised of the following:

	December 31,
	2016			2015
Deferred tax assets:
Derivative financial instruments	$	—		$	267
Net operating losses		13,643			5,525
Research and development credits		23,012			21,494
Depreciation		5,457			3,886
Valuation reserves and accrued liabilities		9,667			5,553
Foreign tax credit		6,926			1,654
Stock compensation		4,508			3,129
Inventory		1,571			1,622
Patents		218			156
Defined benefit obligation		2,306			2,011
Other credits		639			639
Other		116			10
		68,063			45,946
Valuation allowance		(19,304	)		(13,418	)
Deferred tax liabilities:
Intangible assets		(8,442	)		(10,161	)
Unrealized foreign currency exchange gains		(285	)		(3,797	)
Undistributed profits of subsidiary		(12,002	)		(3,254	)
Property and equipment		(470	)		(696	)
Other		(319	)		(342	)
		(21,518	)		(18,250	)
Net deferred tax asset	$	27,241		$	14,278

Reconciliations Between Statutory Federal Income Tax Rate and Effective Rate

Reconciliations between the statutory Federal income tax rate of 34% and the effective rate of income tax expense for each of the three years in the period ended December 31, 2016 are as follows:

	Year Ended December 31,
	2016			2015			2014
Statutory Federal income tax rate		34.0	%		34.0	%		34.0	%
Increase (Decrease) resulting from:
U.S. Taxes on foreign income, net of taxes paid credit		1.3	%		1.0	%		0.3	%
Change in valuation allowance		5.3	%		(1.9	%)		(0.8	%)
Foreign, state and local tax, net of Federal benefit		1.1	%		1.6	%		1.9	%
Nondeductible expenses		2.4	%		1.8	%		1.8	%
Stock option compensation		—			(0.1	%)		(0.1	%)
Research and development credits		(0.7	%)		(0.9	%)		(0.5	%)
Effect of different tax rates of foreign jurisdictions		(15.0	%)		(12.1	%)		(10.0	%)
Undistributed profits of subsidiaries		7.9	%		2.4	%		—
Other tax exempt income		—			(0.1	%)		(0.9	%)
Tax effects of intercompany transfers		(5.3	%)		—			—
Other		(0.3	%)		0.3	%		(0.1	%)
Effective rate		30.7	%		26.0	%		25.6	%

Net Operating Loss Carryforwards

The Company has Net Operating Loss (“NOL”) carryforwards as follows:

Jurisdiction	Amount as of December 31, 2016		Years of Expiration
U.S. Federal and state income tax	$	25,364		2018- 2035
Foreign	$	9,879		2018-2037
Foreign	$	47,707		Indefinite

Earnings Before Income Taxes

The earnings before income taxes and our tax provision are comprised of the following:

	Year Ended December 31,
	2016		2015		2014
Income before income taxes:
Domestic	$	12,981	$	25,508	$	11,170
Foreign		97,582		103,430		83,051
Total income before income taxes	$	110,563	$	128,938	$	94,221

Provision for Income Taxes

	Year Ended December 31,
	2016			2015			2014
Current income tax expense:
Federal	$	9,215		$	8,428		$	4,005
State and local		749			606			(15	)
Foreign		32,844			24,622			24,737
Total current income tax expense	$	42,808		$	33,656		$	28,727
Deferred income tax expense (benefit):
Federal	$	(10,597	)	$	(3,051	)	$	(576	)
State and local		(742	)		(183	)		9
Foreign		2,496			3,123			(4,058	)
Total deferred income tax expense	$	(8,843	)	$	(111	)	$	(4,625	)
Total tax expense	$	33,965		$	33,545		$	24,102

Reconciliation of Unrecognized Tax Benefits

The reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


	Year Ended December 31,
	2016			2015			2014
Balance at beginning of year	$	4,443		$	4,651		$	2,241
Additions based on tax position related to current year		80			—			43
Additions based on tax positions related to prior year		366			262			2,991
Reductions from settlements and statute of limitation expiration		(299	)		(19	)		(432	)
Effect of foreign currency translation		(104	)		(451	)		(192	)
Balance at end of year	$	4,486		$	4,443		$	4,651