Income Taxes

The Company’s corporate organizational structure requires the filing of two separate consolidated U.S. Federal income tax returns. Taxable income of one group cannot be offset by tax attributes, including net operating losses, of the other group.

A reconciliation of the effective tax rate to the U.S. federal statutory tax rate is as follows:



	Three months ended March 31,
	2015		2014
Federal statutory tax rate	35.0	%	35.0	%
State income taxes, net of federal benefit	5.4		2.3
Non-US income taxed at different rates	(23.6	)	—
Non-deductible expenses	5.4		0.1
Domestic production activities deduction	(1.1	)	(2.7	)
Effective income tax rate	21.1	%	34.7	%

The decline in the effective tax rate for the three months ended March 31, 2015, compared to the three months ended March 31, 2014, was primarily due to the mix of pre-tax profit and loss between domestic and international taxing jurisdictions. The Company plans to permanently reinvest profits from international operations into opportunities to expand the Company’s international presence.

Deferred taxes are presented in the balance sheets as follows (in thousands):



	March 31, 2015			December 31, 2014
Current deferred tax assets	$	1,799		$	2,696
Non-current deferred tax assets	13,486			12,907
Non-current deferred tax liabilities	(23,297		)	(25,982		)
Net deferred tax assets (liabilities)	$	(8,012	)	$	(10,379	)