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:



	2015		2014		2013
	(In thousands)
Domestic	$	39,447	$	41,022	$	34,687
Foreign	1,705		3,890		3,322
Total	$	41,152	$	44,912	$	38,009

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



	2015			2014			2013
	(In thousands)
Current:
Federal	$	15,324		$	14,362		$	12,630
State	2,227			1,086			2,394
Foreign	686			1,120			802
Deferred:
Federal	(2,568		)	(1,323		)	(2,174		)
State	(353		)	208			(228		)
Foreign	(102		)	(219		)	(32		)
Total	$	15,214		$	15,234		$	13,392

The provision for income tax from operations 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:



	2015			2014			2013
	(In thousands)
Provision at statutory rate	$	14,403		$	15,720		$	13,303
State income taxes, net of federal tax benefit	1,242			841			1,408
Foreign - tax rate differential and other	(13		)	(454		)	(393		)
Domestic production activities deduction	(521		)	(675		)	(498		)
Other	103			(198		)	(428		)
Actual provision	$	15,214		$	15,234		$	13,392

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



	2015		2014
	(In thousands)
Deferred tax assets:
Reserve for receivables and inventories	$	2,979	$	2,769
Accrued compensation	1,180		1,105
Payables	1,237		694
Non-pension postretirement benefits	2,337		2,601
Net operating loss and credit carryforwards	1,193		1,668
Accrued pension benefits	1,398		1,122
Accrued employee benefits	3,969		2,405
Other	856		858
Total deferred tax assets	15,149		13,222

Deferred tax liabilities:
Depreciation	4,652		4,570
Amortization	9,850		10,881
Total deferred tax liabilities	14,502		15,451
Net deferred tax assets (liabilities)	$	647	$	(2,229	)

Under new Accounting Standards Update (“ASU”) 2015-17, all deferred tax assets and liabilities are to be classified in the balance sheet as noncurrent. ASU 2015-17 is generally effective for public entities for annual periods beginning after December 15, 2016. The Company, however, has elected early adoption of the principles of ASU 2015-17 with its 2015 financial statements, and in accordance with the transition rules, the Company has elected to apply ASU 2015-17 prospectively.

At December 31, 2015 and 2014, the Company had federal and state carryforwards of $2.8 million and $4.1 million, respectively. The Company's U.S. federal and state net operating loss carryforwards expire between 2029 and 2033.

At December 31, 2015 and 2014, the Company had federal general business credit carryforwards of $0.2 million. The Company’s U.S. federal tax credit carryforwards expire in 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 net operating loss carryforwards must be fully utilized prior to the utilization of the federal 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, 2015 were $21.0 million.

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



	2015			2014
	(In thousands)
Balance at beginning of year	$	846		$	880
Increases in unrecognized tax benefits as a result of positions taken during the prior period	22			11
Increases in unrecognized tax benefits as a result of positions taken during the current period	166			185
Decreases in unrecognized tax benefits relating to settlements with taxing authorities	(347		)	—
Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations	(154		)	(230		)
Balance at end of year	$	533		$	846

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, 2016. 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 2012, and, with few exceptions, state and local income tax examinations by tax authorities for years prior to 2011. The Company's policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. Accrued interest was less than $0.1 million and $0.1 million at December 31, 2015 and 2014, respectively, 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.