7. Income Taxes

Income before income taxes by domestic and foreign locations consists of the following:

	December 31, 2016		December 31, 2015		December 31, 2014
Domestic	$	4,448	$	33,481	$	33,065
Foreign		29,437		17,606		30,053
Total	$	33,885	$	51,087	$	63,118

The components of the provision for income taxes consist of the following:

	December 31, 2016			December 31, 2015			December 31, 2014
Current:
Federal	$	3,525		$	8,866		$	12,545
State		287			467			299
Non-US		7,783			6,581			7,380
		11,595			15,914			20,224
Deferred:
Federal		(2,177	)		572			2,673
State		(300	)		280			198
Non-US		(373	)		(1,022	)		(159	)
		(2,850	)		(170	)		2,712
Provision for income taxes	$	8,745		$	15,744		$	22,936

A reconciliation from tax at the U.S. federal statutory rate to the Company’s provision for income taxes is as follows:

	December 31, 2016			December 31, 2015			December 31, 2014
Tax at US federal income tax rate	$	11,871		$	17,881		$	22,092
State taxes, net of federal income tax effect		(141	)		578			495
Change in tax rate		(102	)		32			11
Foreign reorganization		—			(710	)		3,786
Foreign taxes		(2,593	)		(2,050	)		(2,888	)
Adjustments to accrued income tax liabilities and uncertain tax positions		47			(18	)		(287	)
Valuation allowance		118			1,218			612
Tax credits and incentives		(296	)		(420	)		(666	)
Domestic manufacturing deduction		(486	)		(1,051	)		(1,201	)
Other		327			284			982
Provision for income taxes	$	8,745		$	15,744		$	22,936

The Company and its subsidiaries file a consolidated federal income tax return in the United States, as well as consolidated and separate income tax returns in various states. The Company and its subsidiaries also file consolidated and separate income tax returns in various non-U.S. jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities in all of these jurisdictions. With the exception of certain foreign jurisdictions, the Company is no longer subject to income tax examinations for the tax years prior to 2013. Additionally, the Company has indemnification agreements with the sellers of the Guardian, Svendborg, Lamiflex, Bauer and Stromag entities that provide for reimbursement to the Company for payments made in satisfaction of income tax liabilities relating to pre-acquisition periods.

A reconciliation of the gross amount of unrecognized tax benefits excluding accrued interest and penalties is as follows:

	December 31, 2016		December 31, 2015			December 31, 2014
Balance at beginning of period	$	409	$	434		$	627
Settlements		—		—			(176	)
Lapse of statute of limitations		—		(25	)		(17	)
Balance at end of period	$	409	$	409		$	434

The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. The Company accrued interest and penalties of $0.1 million during the years ended December 31, 2016, 2015 and 2014. The total gross amount of interest and penalties related to uncertain tax positions at December 31, 2016, 2015 and 2014 was $0.2 million, $0.2 million, and $0.2 million, respectively. Although it is reasonably possible that a change in the balance of unrecognized tax benefits might occur within the next twelve months, at this time it is not possible to estimate the range of change due to the uncertainty of the potential outcomes.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Significant components of the deferred tax assets and liabilities as of December 31, 2016 and 2015 are as follows:

	2016			2015
Deferred tax assets:
Post-retirement obligations	$	2,833		$	1,123
Tax credits		1,693			1,787
Expenses not currently deductible		12,987			13,222
Net operating loss carryover		5,228			5,629
Other		994			771
Total deferred tax assets		23,735			22,532
Valuation allowance for deferred tax assets		(6,183	)		(6,728	)
Net deferred tax assets		17,552			15,804
Deferred tax liabilities:
Property, plant and equipment		21,982			17,737
Intangible assets		39,044			19,989
Basis difference - convertible debt		7,670			12,741
Goodwill		7,430			6,321
Total deferred liabilities		76,126			56,788
Net deferred tax liabilities	$	58,574		$	40,984

On December 31, 2016 the Company had state net operating loss (NOL) carry forwards of $14.7 million, which expire between 2023 and 2032, and non U.S. NOL and capital loss carryforwards of $20.1 million, of which substantially all have an unlimited carryforward period. The NOL carryforwards available are subject to limitations on their annual usage. The Company also has federal and state tax credits of $2.0 million available to reduce future income taxes that expire between 2017 and 2030.

Valuation allowances are established for deferred tax assets when management believes it is more likely than not that the associated benefit may not be realized. The Company periodically reviews the adequacy of its valuation allowances and recognizes tax benefits only as reassessments indicate that it is more likely than not the benefits will be realized. Valuation allowances have been established due to the uncertainty of realizing the benefits of certain net operating losses, capital loss carryforwards, tax credits, and other tax attributes. The valuation allowances are primarily related to certain non-U.S. NOL carryforwards, capital loss carryforwards, and U.S. federal foreign tax credits.

A provision has not been made for U.S. or additional non-U.S. taxes on $95.1 million of undistributed earnings of international subsidiaries that could be subject to taxation if remitted to the U.S. because the Company plans to keep these amounts permanently reinvested outside the U.S. except for instances where the Company has already been subject to tax in the U.S. It is not practicable to determine the amount of deferred income taxes not provided on these earnings.