(4) Income Taxes

Components of income tax expense (benefit) are as follows:



	Federal			State			Foreign			Total
2013:
Current	$	51,058		$	6,252		$	6,650		$	63,960
Deferred	(2,580		)	(209		)	(1,303		)	(4,092		)
	$	48,478		$	6,043		$	5,347		$	59,868
2012:
Current	$	50,911		$	6,482		$	3,368		$	60,761
Deferred	(6,083		)	414			12			(5,657		)
	$	44,828		$	6,896		$	3,380		$	55,104
2011:
Current	$	63,758		$	12,226		$	7,487		$	83,471
Deferred	1,003			(1,067		)	(3		)	(67		)
	$	64,761		$	11,159		$	7,484		$	83,404

Foreign income before income taxes was $60,851, $51,409 and $108,738 during the years ended December 31, 2013, 2012 and 2011, respectively.

Actual income taxes differed from that obtained by applying the statutory federal income tax rate to income before income taxes as follows:



	Years Ended December 31,
	2013			2012			2011
Computed expected income taxes	$	71,945		$	64,282		$	99,842
State income taxes, net of federal income tax benefit	4,435			3,562			6,912
Foreign rate differential	(16,399		)	(12,908		)	(24,783		)
Other	(113		)	168			1,433
	$	59,868		$	55,104		$	83,404

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities are presented below:



	2013			2012
Deferred tax assets (liabilities), current:
Uniform capitalization adjustment to inventory	$	5,492		$	6,870
Bad debt and other reserves	10,655			11,582
State taxes	508			799
Prepaid expenses	(2,193		)	(1,961		)
Accrued bonus	5,071			—
Foreign currency hedge	348			—
Total deferred tax assets, current	19,881			17,290
Deferred tax assets (liabilities), noncurrent:
Amortization and impairment of intangible assets	4,603			5,312
Depreciation of property and equipment	(6,034		)	(8,524		)
Share-based compensation	11,226			11,906
Foreign currency translation	667			244
Deferred rent	4,028			3,247
Acquisition costs	755			834
Other	—			111
Net operating loss carryforwards	506			242
Total deferred tax assets, noncurrent	15,751			13,372
Net deferred tax assets	$	35,632		$	30,662

In order to fully realize the deferred tax assets, the Company will need to generate future taxable income of approximately $94,000. The deferred tax assets are primarily related to the Company's domestic operations. The change in net deferred tax assets between December 31, 2013 and December 31, 2012 includes approximately $500 attributable to OCI and approximately $400 attributable to goodwill. Domestic taxable income for the years ended December 31, 2013 and 2012 was $151,204 and $141,660, respectively. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the net deferred tax assets and, accordingly, no valuation allowance was recorded in 2013 or 2012.

As of December 31, 2013, withholding and US taxes have not been provided on approximately $271,000 of unremitted earnings of non-US subsidiaries because the earnings are expected to be reinvested outside of the US indefinitely. Repatriation of all foreign earnings would result in approximately $80,000 of US income tax. Such earnings would become taxable upon the sale or liquidation of these subsidiaries or upon the remittance of dividends. As of December 31, 2013, the Company had approximately $95,000 of cash and cash equivalents outside the US that would be subject to additional income taxes if it were to be repatriated. If the Company were to repatriate foreign cash, the Company would record the US tax liability net of any foreign income taxes previously paid on this cash. The Company has no plans to repatriate any of its foreign cash. For the full year 2013, the Company generated approximately 11.0% of its pre-tax earnings from a country which does not impose a corporate income tax.

When tax returns are filed, some positions taken are subject to uncertainty about the merits of the position taken or the amount that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which management believes it is more likely than not that the position will be sustained upon examination. Tax positions that meet the more likely than not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement. A reconciliation of the beginning and ending amounts of total unrecognized tax benefits is as follows:



Balance at January 1, 2012	$	3,271
Gross decrease related to prior years' tax positions	—
Settlements	(3,271		)
Balance at December 31, 2012	$	—
Gross change related to current and prior years' tax positions	—
Balance at December 31, 2013	$	—

As of December 31, 2013 and 2012, interest of $360 and $452, respectively, was accrued in the consolidated balance sheets resulting from outstanding state liabilities as a result of resolved Federal examinations.

The Company files income tax returns in the US federal jurisdiction and various state, local, and foreign jurisdictions. With few exceptions, the Company is no longer subject to US federal, state, local, or non-US income tax examinations by tax authorities for years before 2008.

Although the Company believes its tax estimates are reasonable and prepares its tax filings in accordance with all applicable tax laws, the final determination with respect to any tax audits, and any related litigation, could be materially different from the Company's estimates or from its historical income tax provisions and accruals. The results of an audit or litigation could have a material effect on operating results or cash flows in the periods for which that determination is made. In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties, or interest assessments.

The Company has on-going income tax examinations under various state tax jurisdictions. It is the opinion of management that these audits and inquiries will not have a material impact on the Company's consolidated financial statements.