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:



	2016		2015		2014
	(In thousands)
Domestic	$	47,407	$	39,447	$	41,022
Foreign	2,437		1,705		3,890
Total	$	49,844	$	41,152	$	44,912

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



	2016			2015			2014
	(In thousands)
Current:
Federal	$	14,435		$	15,324		$	14,362
State	1,275			2,227			1,086
Foreign	1,129			686			1,120
Deferred:
Federal	922			(2,568		)	(1,323		)
State	151			(353		)	208
Foreign	(363		)	(102		)	(219		)
Total	$	17,549		$	15,214		$	15,234

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:



	2016			2015			2014
	(In thousands)
Provision at statutory rate	$	17,445		$	14,403		$	15,720
State income taxes, net of federal tax benefit	923			1,242			841
Foreign - tax rate differential and other	(87		)	(13		)	(454		)
Domestic production activities deduction	(560		)	(521		)	(675		)
Other	(172		)	103			(198		)
Actual provision	$	17,549		$	15,214		$	15,234

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



	2016			2015
	(In thousands)
Deferred tax assets:
Reserve for receivables and inventories	$	2,931		$	2,979
Accrued compensation	1,131			1,180
Payables	1,107			1,237
Non-pension postretirement benefits	2,344			2,337
Net operating loss and credit carryforwards	968			1,193
Accrued pension benefits	413			1,398
Accrued employee benefits	4,103			3,969
Other	487			856
Total deferred tax assets	13,484			15,149

Deferred tax liabilities:
Depreciation	5,126			4,652
Amortization	8,992			9,850
Prepaids	567			—
Total deferred tax liabilities	14,685			14,502
Net deferred tax (liabilities) assets	$	(1,201	)	$	647

Under Accounting Standards Update ("ASU") 2015-17, all deferred tax assets and liabilities are to be classified in the balance sheet as noncurrent. ASU 2015-07 is generally effective for public entities for annual periods beginning after December 15, 2016. The Company, however, elected early adoption of the principles of ASU 2015-17 with its 2015 financial statements, and in accordance with the transition rules, the Company elected to apply ASU 2015-17 prospectively.

At December 31, 2016 and 2015, the Company had federal and state net operating loss carryforwards of $1.6 million and $2.8 million, respectively. The Company's U.S. federal and state net operating loss carryforwards expire between 2029 and 2033. The Company also has an immaterial amount of net operating losses in certain jurisdictions at December 31, 2016.

At December 31, 2016 and 2015, 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, 2016 were $21.9 million.

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



	2016			2015
	(In thousands)
Balance at beginning of year	$	533		$	846
Increases in unrecognized tax benefits as a result of positions taken during the prior period	88			22
Increases in unrecognized tax benefits as a result of positions taken during the current period	247			166
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	(54		)	(154		)
Balance at end of year	$	814		$	533

The Company does not expect a significant increase or decrease to the total amount of unrecognized tax benefits during the fiscal year ending December 31, 2017. 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 2013, and, with few exceptions, state and local income tax examinations by tax authorities for years prior to 2012. 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, 2016 and 2015, 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.