Income Taxes

The Company is subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes and recording the related deferred tax assets and liabilities.

Details of earnings before income taxes are as follows:



	2014		2013		2012
	(In thousands)
Domestic	$	41,022	$	34,687	$	40,650
Foreign	3,890		3,322		2,821
Total	$	44,912	$	38,009	$	43,471

The provision (benefit) for income taxes is as follows:



	2014			2013			2012
	(In thousands)
Current:
Federal	$	14,362		$	12,630		$	13,908
State	1,086			2,394			1,455
Foreign	1,120			802			507
Deferred:
Federal	(1,323		)	(2,174		)	(663		)
State	208			(228		)	(165		)
Foreign	(219		)	(32		)	397
Total	$	15,234		$	13,392		$	15,439

The provision for income taxes differs from the amount that would be provided by applying the statutory

U.S. corporate income tax rate in each year due to the following items:



	2014			2013			2012
	(In thousands)
Provision at statutory rate	$	15,720		$	13,303		$	15,215
State income taxes, net of federal tax benefit	841			1,408			1,018
Foreign income taxes	(454		)	(393		)	(87		)
Domestic production activities deduction	(675		)	(498		)	(529		)
Tax audit settlements	—			—			(101		)
Other	(198		)	(428		)	(77		)
Actual provision	$	15,234		$	13,392		$	15,439

The components of deferred income taxes as of December 31 are as follows:



	2014			2013
	(In thousands)
Deferred tax assets:
Reserve for receivables and inventories	$	2,769		$	2,850
Accrued compensation	1,105			1,087
Payables	694			364
Non-pension postretirement benefits	2,601			2,447
Net operating loss and credit carryforwards	1,668			2,645
Accrued pension benefits	1,122			—
Accrued employee benefits	2,405			1,681
Other	858			793
Total deferred tax assets	13,222			11,867

Deferred tax liabilities:
Depreciation	4,570			4,408
Amortization	10,881			12,165
Prepaid pension benefits	—			236
Other	—			14
Total deferred tax liabilities	15,451			16,823
Net deferred tax liabilities	$	(2,229	)	$	(4,956	)

At December 31, 2014 and 2013, the Company had federal carryforwards of $4.1 million and $5.0 million, respectively. At December 31, 2014 and 2013, the Company also had state net operating loss carryforwards of $4.1 million and $5.0 million, respectively. The Company’s U.S. federal and state net operating loss carryforwards expire between 2029 and 2033.

At December 31, 2014 and 2013, the Company had federal and state general business credit carryforwards of $0.2 million in each year. The Company’s U.S. federal and state tax credit carryforwards expire between 2029 and 2033.

The Company’s federal and state net operating loss and federal and state credit carryforwards are limited on an annual basis to $1.2 million under Internal Revenue Code Section 382 and Section 383. The federal and state net operating loss carryforwards must be fully utilized prior to the utilization of the federal and state credit carryforwards.

No provision for federal income taxes was made on the earnings of foreign subsidiaries that are considered indefinitely invested or that would be offset by foreign tax credits upon distribution. Such undistributed earnings at December 31, 2014 were $20.5 million.

Changes in the Company's gross liability for unrecognized tax benefits, excluding interest and penalties, are as follows:



	2014			2013
	(In thousands)
Balance at beginning of year	$	880		$	698
Increases in unrecognized tax benefits as a result of positions taken during the prior period	11			80
Increases in unrecognized tax benefits as a result of positions taken during the current period	185			216
Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations	(230		)	(114		)
Balance at end of year	$	846		$	880

The Company does not expect a significant increase or decrease to the total amounts of unrecognized tax benefits during the fiscal year ending December 31, 2015. To the extent these unrecognized tax benefits are ultimately recognized, they will impact the effective tax rate.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for years prior to 2011, and, with few exceptions, state and local income tax examinations by tax authorities for years prior to 2010. The Company's policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. Accrued interest was approximately $0.1 million at both December 31, 2014 and 2013, and there were no penalties accrued in either year.

The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter.